Q2 2024 GoodRx Holdings Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by, and welcome to GoodRx's second quarter 2024 earnings call. As a reminder, today's conference call is being recorded. I would now like to introduce your host for today's call, Aubrey Reynolds, Director of Investor Relations. Ms. Reynolds, you may begin.

Operator: Ladies and gentlemen, thank you for standing by and welcome to GoodRx second quarter 2024 earnings call. As a reminder, today's conference call is being recorded.

Ladies and gentlemen, thank you for standing by and welcome to GoodRx's second quarter 2024 earnings call.

Aubrey Reynolds: I would now like to introduce your host for today's call, Aubrey Reynolds, Director of Investor Relations. Ms. Reynolds, you may begin. Thank you, operator. Good morning, everyone, and welcome to GoodRx's earnings conference call for the second quarter 2024. Joining you today are Scott Wagner, our interim Chief Executive Officer, Karsten Voermann, our Chief Financial Officer, and Mike Walsh, our President and EVP of Prescription Marketplace.

As a reminder, today's conference call is being recorded. I would now like to introduce your host for today's call, Aubrey Reynolds, Director of Investor Relations. Ms. Reynolds, you may begin.

Aubrey Reynolds: Thank you, operator. Good morning, everyone, and welcome to Goodrx's earnings conference call for the second quarter of 2024. Joining me today are Scott Wagner, our Interim Chief Executive Officer; Karsten Voermann, our Chief Financial Officer; and Mike Walsh, our President and EVP of Prescription Marketplace. The team is not in the same location for today's call, but we will do our best to make the Q&A portion as seamless as possible for our audience.

Aubrey Reynolds: Thank you, Operator. Good morning, everyone, and welcome to Goodrx's earnings conference call for the second quarter 2024.

Speaker Change: Joining me today are Scott Wagner, our Interim Chief Executive Officer, Karsten Voermann, our Chief Financial Officer, and Mike Walsh, our President and EVP of Prescription Marketplace.

Aubrey Reynolds: The team is not in the same location for today's call, but we will do our best to make the Q&A portion as seamless as possible for our audience. Before we begin, I'd like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding management's plans, strategies, goals and objectives, or marketer opportunity, or anticipated financial performance, underlying trends in our business and industry, including ongoing changes in the pharmacy. The ecosystem, our value proposition, our long-term growth prospects, our hybrid retail direct and PVM contracting approach, collaborations and partnerships with third parties, including our integrated savings program and our capital allocation priorities.

Speaker Change: The team is not in the same location for today's call, but we will do our best to make the Q&A portion as seamless as possible for our audience.

Aubrey Reynolds: Before we begin, I'd like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including without limitations. Statements regarding management's plans, strategies, goals, and objectives, our market opportunity, our anticipated financial performance, underlying trends in our business and industry, including ongoing changes in the pharmacy ecosystem, our value proposition, and our long-term growth process. Our Hybrid Retail Direct and PBM Contracting Approach

Speaker Change: Before we begin, I'd like to remind everyone that this call will contain forward-looking statements.

Speaker Change: All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements.

Speaker Change: including without limitation.

Speaker Change: Statements regarding management's plans, strategies, goals and objectives, our market opportunity, our anticipated financial performance, underlying trends in our business and industry, including ongoing changes in the pharmacy ecosystem, our value proposition, our long-term growth prospects.

Unknown Executive: Collaborations and Partnerships with Third Parties, including our Integrated Savings Program and our Capital Allocation Priorities

Aubrey Reynolds: Collaborations and Partnerships with Third Parties, including our Integrated Savings Program and our Capital Allocation Priority. These statements are neither promises nor guarantees but involve known and unknown risks, uncertainties, and other important factors. These factors may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statement. Other factors discussed in the risk factor section of our annual report on Form 10-K for the year ended December 31, 2023, and our other financial filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call.

Speaker Change: Our Hybrid Retail Direct and PBM Contracting Approach, Collaborations and Partnerships with Third Parties, including our Integrated Savings Program, and our Capital Allocation Priorities.

Aubrey Reynolds: These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties, and other important factors. These factors may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Factors discussed in the risk factor section of our annual report on Form 10-K for the year ended December 31st, 2023, and our other financial filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call.

Speaker Change: These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties, and other important factors.

Speaker Change: These factors may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

Speaker Change: Factors discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2023, and our other financial filings with the Securities and Exchange Commission

Speaker Change: could cause actual results to differ materially from those indicated by the forward-looking statements made on this call.

Aubrey Reynolds: Any such forward-looking statements represent management estimates as of the date of this call, and we describe any obligation to update these statements, even if subsequent events cause our views to change. In addition, we will be referencing certain non-GAAP metrics in today's remarks. We have reconciled each non-GAAP metric to the nearest GAAP metric in the company's earnings press release, which can be found on the overview page of our investor relations website.

Aubrey Reynolds: Any such forward-looking statements represent management estimates as of the date of this call, and we disclaim any obligation to update these statements, even if subsequent events cause our views to change. In addition, we will be referencing certain non-GAAP metrics in today's remarks. We have reconciled each non-gap metric to the nearest Gap metric in the company's earnings press release, which can be found on the overview page of our investor relations website at investors.godarox.com. I'd also like to remind everyone that a replay of this call will become available shortly as well. With that, I'll turn it over to Scott.

Speaker Change: Any such forward-looking statements represent management estimates as of the date of this call, and we disclaim any obligation to update these statements, even if subsequent events cause our views to change.

Speaker Change: In addition, we will be referencing certain non-GAAP metrics in today's remarks.

Speaker Change: We have reconciled each non-GAAP metric to the nearest GAAP metric in the company's earnings press release, which can be found on the overview page of our investor relations website at investors.gutterax.com

Aubrey Reynolds: I'd also like to remind everyone that a replay of this call will become available shortly as well.

Speaker Change: I'd also like to remind everyone that a replay of this call will become available shortly as well.

Scott Wagner: With that, I'll turn it over to Scott. Thanks, Aubrey, and thanks to everyone joining us today to discuss our second quarter results. Today, I'd like to remind you of the themes from our recent Investor Day. Share a handful of relevant updates that we think investors should care about, both in the industry and at GoodRx, and talk about Q2 financials and how we see the second half of 2024 evolving. We appreciate the feedback we received following our first Investor Day. We tried to provide clear context for the healthcare landscape that would goodRx up. How GoodRx complements insurance, and our priorities for the future.

Scott Wagner: Thanks, Aubrey. And thanks to everyone joining us today to discuss our second quarter results. Today, I'd like to remind you of the themes from our recent investor day, share a handful of relevant updates that we think investors should care about both in the industry and at Goodrx, and talk about Q2 financials and how we see the second half of 2024 evolving. We appreciate the feedback we received following our first investment. We tried to provide clear context for the healthcare landscape in which Goodrx operates, how Goodrx complements insurance, and our priorities for the future. Right now, we're all seeing the tectonic plates of health care continue to shift between PBMs and plans and brand manufacturers and retailers.

Scott Wagner: Thanks, Aubrey, and thanks to everyone joining us today to discuss our second quarter results. Finally, Pharmacy Benefit Managers work with us to gain incremental volume. Filling prescriptions with Goodrx in 2023, saving about $15 billion. And it's not primarily uninsured folks who thrive with Goodrx. We estimate that about 88% of our users have commercially funded insurance or Medicare and use Goodrx as a complement to their funded benefits. That's because medication accessibility is both narrowing and becoming more complex, fueled by three trends.

Speaker Change: With that, I'll turn it over to Scott.

Scott: Thanks, Aubrey, and thanks, everyone, for joining us today to discuss our second quarter results.

Scott: Today I'd like to remind you of the themes from our recent Investor Day, share a handful of relevant updates that we think investors should care about, both in the industry and at Goodrx, and talk about Q2 financials and how we see the second half of 2024 evolving.

Scott: We appreciate the feedback we received following our first Investor Day.

Scott: We tried to provide clear context for the healthcare landscape in which Goodrx operates.

Scott Wagner: Right now, we're all seeing the tectonic plates of health care continue to shift between PVMs and plans and brand manufacturers in retail. The good news for GoodRx is that we provide value to practically every part of the pharmaceutical system, with the consumer or patient right at the start. Consumers use GoodRx to save money in their prescriptions. Healthcare professionals use GoodRx to get patients on the medication they need and save precious time. Dharma manufacturers work with GoodRx to make their brand medications available to more consumers. Pharmacies work with GoodRx to acquire new consumers, reduce friction at the counter, and keep people from walking away from the nearly 900 million 30-day scripts that go until the every year.

Scott: How Goodrx complements insurance and our priorities for the future.

Scott: Right now, we're all seeing the tectonic plates of healthcare continue to shift between PBMs and plans, and brand manufacturers and retail. The good news for Goodrx is that we provide value to practically every part of the pharmacy ecosystem.

Scott Wagner: The good news for Goodrx is that we provide value to practically every part of the pharmaceutical industry, with the consumer or patient right at the start. Consumers use Goodrx to save money on their prescriptions. Healthcare professionals use Goodrx to get patients on the medication they need and save precious time. Pharma manufacturers work with Goodrx to make their brands of medications available to more consumers. Pharmacies work with Goodrx to acquire new consumers, reduce friction at the counter, and keep people from walking away from the nearly 900 million 30-day prescriptions that go unfilled every year.

Scott: Consumers use Goodrx to save money on their prescriptions. Healthcare professionals use Goodrx to get patients on the medication they need and save precious time.

Scott: Pharma manufacturers work with Goodrx to make their brand medications available to more consumers.

Scott: Pharmacies work with Goodrx to acquire new consumers, reduce friction at the counter, and keep people from walking away from the nearly 900 million 30-day scripts that go unfilled every year.

Scott Wagner: And finally, pharmacy benefit managers work with us to gain incremental value. We believe that the best proof point of GoodRx's value lies in our scale. In 2023, consumers visited the GoodRx site and app about 350 million times, and viewed our drug price page is almost 140 million times. And our patients and consumers are transacting with us with 25 million unique consumers or patients, filling prescriptions with GoodRx in 2023, saving about $15 billion. And it's not primarily an insured folks who thrive with GoodRx. We estimate that about 88% of our users have commercially funded insurance or Medicare and use GoodRx as a complement to their funded benefits.

Scott Wagner: And finally, Pharmacy Benefit Managers work with us to gain incremental volume. We believe that the best proof point of Goodrx's value lies in our. In 2023, consumers visited the Goodrx site and app about 350 million times and viewed our drug price page almost $140 million, and our patients and customers are transacting with us with 25 million unique customers or patients. Filling prescriptions with Goodrx in 2023, saving about $15 billion. And it's not primarily uninsured folks who thrive with Goodrx.

Scott: And finally, Pharmacy Benefit Managers work with us to gain incremental volume.

Scott: We believe that the best proof point of Goodrx's value lies in our scale. In 2023, consumers visited the Goodrx site and app about 350 million times and viewed our drug price pages almost 140 million times.

Speaker Change: And our patients and consumers are transacting with us, with 25 million unique consumers or patients, filling prescriptions with Goodrx in 2023, saving about $15 billion.

Scott Wagner: We estimate that about 88% of our users have commercially funded insurance or Medicare and use Goodrx as a complement to their funded benefits. That's because medication accessibility is both narrowing and becoming more complex, fueled by three trends. First, insurance benefit design and plan coverage are getting narrower. It's estimated that the number of formulary exclusions increased almost 40% in the two years through 2020.

Scott: And it's not primarily uninsured folks who thrive with Goodrx.

Scott: We estimate that about 88% of our users have commercially funded insurance, or Medicare, and use Goodrx as a complement to their funded benefits. That's because medication accessibility is both narrowing and becoming more complex, fueled by three trends.

Scott Wagner: That's because medication accessibility is both narrowing and becoming more complex, fueled by three trends. First, insurance benefit design and plan coverage is getting narrowed. It's estimated that the number of formulary exclusions increased almost 40% in the two years through 2022. Second, more utilization management is required to access the medication with prior authorization and step therapy up an estimated 45% in the last three years. Finally, and most importantly, patients continue to bear more of the direct cost of their medication. We estimate that total out of pocket spend for prescription drugs in the first half of 2024 was over $20 billion.

Scott Wagner: Second, more utilization management is required to access the medication with prior authorization, and step therapy has increased by an estimated 45% in the last three years. Finally, and most importantly, patients continue to bear more of the direct cost of their medication. We estimate that the total out-of-pocket spend for prescription drugs in the first half of 2024 was over $20 billion.

Scott: First, insurance benefit design and plan coverage is getting narrower. It's estimated that the number of formulary exclusions increased almost 40% in the two years through 2022.

Scott Wagner: Second, more utilization management is required to access the medication with prior authorization. Finally, and most importantly, patients continue to bear more of the direct cost of their medication. We estimate that the total out-of-pocket spend for prescription drugs in the first half of 2024 will be over $20 billion.

Scott: Second, more utilization management is required to access the medication with prior authorization

Scott: and Step Therapy up an estimated 45% in the last three years.

Scott: Finally, and most importantly, patients continue to bear more of the direct cost of their medication.

Scott Wagner: That means our ability to give consumers access to medication at lower prices and ease of use, regardless of their insurance status, is increasingly relevant and durable. Just like consumers, health care professionals value Goodrx, too. Doctors offices spend an average of 14 hours every week in 2022 completing authorizations so patients can get the medications they need to be healthy.

Scott Wagner: That means our ability to give consumers access to medication at lower prices and ease of use, regardless of their insurance status, is increasingly relevant and durable. That's a key reason the Goodrx site and app received almost 750,000 unique visits from healthcare professionals in 2023. They benefit from us just as much as their patients.

Scott: We estimate that the total out-of-pocket spend for prescription drugs in the first half of 2024 was over $20 billion.

Scott Wagner: That means our ability to give consumers access to medication at lower prices and ease of use, regardless of their insurance status, is increasingly relevant and durable. Just like consumers, healthcare professionals value GoodRx 2. Doctors obviously spend an average of 14 hours every week in 2022, completing authorization so patients could get the medications they need to be healthier. That's the key reason the GoodRx site and app received almost 750,000 unique visits from healthcare professionals in 2023. They benefit from us just as much as their patients do. Brand-run manufacturers are paying increased attention to affordability and access as well, and they understand the important role that GoodRx's strong platform plays in helping them directly reach consumers.

Scott: That means our ability to give consumers access to medication at lower prices and ease of use regardless of their insurance status is increasingly relevant and durable.

Scott: Just like consumers, healthcare professionals value Goodrx, too. Doctors' offices spend an average of 14 hours every week in 2022 completing authorizations so patients

Scott Wagner: That's a key reason the Goodrx site and app received almost 750,000 unique visits from healthcare professionals in 2023. They benefit from us just as much as their patients. Brand direct manufacturers are paying increased attention to affordability and access as well, and they understand the important role that Goodrx's strong platform plays in helping them directly reach consumers. In 2023 alone, we had 43 million unique brand drug page interactions on our platform, an estimate that a staggering 65% of our visitors learned about manufacturer savings programs for the very first time via Goodrx.

Scott: Goodrx could get the medications they need to be healthier. That's a key reason the Goodrx site and app received almost 750,000 unique visits from healthcare professionals in 2023. They benefit from us just as much as their patients do.

Scott: Branderup manufacturers are paying increased attention to affordability and access as well, and they understand the important role that Goodrx's strong platform plays in helping them directly reach consumers.

Scott Wagner: In 2023 alone, we had 43 million unique brand drug-pages page interactions on our platform and estimate that a staggering 65% of our visitors learned about manufacturer savings programs for the very first time.

Speaker Change: In 2023 alone, we had 43 million unique brand drug page interactions on our platform, an estimate that a staggering 65% of our visitors learned about manufacturer savings programs for the very first time via Goodrx.

Scott Wagner: Be a Goodrx. Our users also support retail pharmacies. In fact, we estimate that at one major retail pharmacy, over half of their consumers purchase front-of-store items when they pick up the prescription, with a median spend of $25. This illustrates the good or acts as an important part of the healthcare value chain and sets the foundation for the five priorities we discussed during our Investor Day. Those pride priorities are one, strengthen our value proposition to keep constituents in the healthcare ecosystem. Two, scale, pharma manufacturer solutions. Three, grow and deepen our relationship with good or acts users.

Scott Wagner: Our users also support retail pharmacies. In fact, we estimate that at one major retail pharmacy, over half of their consumers purchase front-of-store items when they pick up a prescription, with a median spend of $25. This illustrates that Goodrx is an important part of the health care value chain and sets the foundation for the five priorities we discussed during our investor meeting. Those five priorities are, one, to strengthen our value proposition to key constituents in the healthcare ecosystem. 2. Scale pharma manufacturer solutions. 3. Grow and deepen our relationship with Goodrx users. 4.

Scott: Our users also support retail pharmacies. In fact, we estimate that at one major retail pharmacy, over half of their consumers purchase front of store items when they pick up a prescription, with a median spend of $25.

Scott: This illustrates that Goodrx is an important part of the healthcare value chain and sets the foundation for the five priorities we discussed during our investor day.

Scott Wagner: Build distinctive, frictionless, end-to-end Goodrx experiences and 5. Build a winning team. Now, I'd like to share a handful of recent industry developments in Goodrx News relative to these five priorities. On the first priority, strengthening our value proposition to key constituents in the healthcare ecosystem. We've been centered on solidifying our relationships with both retail pharmacies and the PBM network with most of our, and Communication with Investors, centered around our contract. Retail pharmacies have been economically pressured, and we believe our direct and hybrid contracts can meaningfully help.

Scott: Those five priorities are, one, strengthen our value proposition to key constituents in the healthcare ecosystem.

Scott: 2. Scale pharma manufacturer solutions 3. Grow and deepen our relationship with Goodrx users 4. Build distinctive, frictionless, end-to-end Goodrx experiences 5. Build a winning team and culture

Scott Wagner: Four, build distinctive, frictionless and to end the good or acts experiences. And five, build a winning team in culture.

Scott Wagner: I'd like to share a handful of recent industry developments and good or acts news relative to these five priorities. On the first priority, strengthen our value proposition to keep constituents in the healthcare ecosystem. We've been centered on solidifying our relationships with both retail pharmacies and the PVN network, with most of our efforts and communication with investors centered around our contracting models. Retail pharmacies have been economically pressured, and we believe our direct and hybrid contracts can meaningfully help them. There's a reimbursement rate shipped on funded business, the volumes from our direct contracts and both boost revenue and margins for our pharmacy partners with on prescriptions and on front of store sales.

Scott: I'd like to share a handful of recent industry developments in Goodrx News relative to these five priorities.

Scott Wagner: We've been centered on solidifying our relationships with both retail pharmacies and the PBM network with most of our patients. It's important to reiterate that ISP has been a generics-only program to date, focused on integrating Goodrx pricing into the benefit for covered drugs, where the cash price might be lower than the patient's co-pay. We've signed over half a dozen cash programs for brands in the quarter, and we have over 40 signed programs with different brands, up over 50% since the start of 2024.

Scott: On the first priority, strengthening our value proposition to key constituents in the healthcare ecosystem.

Scott: We've been centered on solidifying our relationships with both retail pharmacies and the PBM network with most of our efforts and communication with investors centered around our contracting models.

Scott: Retail pharmacies have been economically pressured, and we believe our direct and hybrid contracts can meaningfully help them.

Scott Wagner: As reimbursement rates shift on funded business, the volumes from our direct contracts can boost revenue and margins for our pharmacy partners, both on prescriptions and on front-of-store sales. As we shared at Investor Day, 7 out of 10 of our top pharmacies have contracts with us, either for their full book of business or for some part. We're pleased with our new Kroger agreement and the improving Kroger metrics we've seen to date.

Scott: As reimbursements rates shift on funded business, the volumes from our direct contracts can both boost revenue and margins for our pharmacy partners, both on prescriptions and on front of store sales.

Scott Wagner: As we shared an investor day, seven out of 10 of our top pharmacies have contracts with us, either for their full book of business or for some part. We're pleased with our new Kroger agreement and the improving Kroger metrics we've seen today. At an individual retailer level, these contracts with pharmacies have varied in their impact on good or acts revenue implementation. And their aggregate impact on volume and revenue day has been neutral to slightly agree. While we firmly believe this approach is the right answer for good or acts long term, given it's immense, our retail relationships and ensures network durability.

Scott: As we shared in Investor Day, 7 out of 10 of our top pharmacies have contracts with us, either for their full book of business or for some part.

Scott Wagner: At an individual retailer level, these contracts with pharmacies have varied in their impact on Goodrx revenue and implementation, and their aggregate impact on volume and revenue has been neutral to slightly accretion. While we firmly believe this approach is the right answer for Goodrx in the long term, given it cements our retail relationships and ensures network durability, the immediate contracting results can fluctuate in terms of their impact on Goodrx revenue pacing in the short term. Structurally, retail pharmacies had a tumultuous year, with Rite Aid announcing additional store closures and Walgreens indicating that their footprint would shrink as well.

Scott: We're pleased with our new Kroger agreement and the improving Kroger metrics we've seen to date.

Scott: At an individual retailer level, these contracts with pharmacies have varied in their impact on Goodrx revenue and implementation, and their aggregate impact on volume and revenue date has been neutral to slightly accretive.

Scott: While we firmly believe this approach is the right answer for GoodRx long term, given it cements our retail relationships and ensures network durability, the immediate contracting results can fluctuate in terms of their impact on GoodRx revenue pacing in the short term.

Scott Wagner: The immediate contracting results can fluctuate in terms of their impact on good or acts revenue pacing in the short term. Structurally, retail pharmacies had a tumultuous with Rite Aid announcing additional store closures and Walgreens indicating that their footprint will shrink as well. Store closures impact immediate good or acts volume and revenue, although scripts do migrate over time. While this closure trend isn't positive in the next few quarters, we do expect that the impact of this trend will normalize in the longer term as a result of such migration. ISP is tracking roughly in line with expectations, with incremental lives continuing to join the program through our current PV and relationships.

Scott: Structurally, retail pharmacies had a tumultuous summer, with Rite Aid announcing additional store closures and Walgreens indicating that their footprint will shrink as well. Store closures impact immediate Goodrx volume and revenue, although scripts do migrate over time.

Scott Wagner: Store closures impact immediate Goodrx volume and revenue, although scripts do migrate over time. While this closure trend isn't positive for the next few quarters, we do expect that the impact of this trend will normalize in the longer term as a result of such migration. ISP is tracking roughly in line with expectations, with incremental lives continuing to join the program through our current PBM relationship. It's important to reiterate that ISP has been a generics-only program to date, focused on integrating Goodrx pricing into the benefit for covered drugs, where the cash price might be lower than the patient's copay.

Scott: While this closure trend isn't positive in the next few quarters, we do expect that the impact of this trend will normalize in the longer term as a result of such migration.

Scott: ISP is tracking roughly in line with expectations, with incremental lives continuing to join the program through our current PBM relationships.

Scott Wagner: It's important to reiterate that ISP has been a generic-only program to date focused on integrating good or acts pricing into the benefit for covered drugs with a cash price might be lower than the patient's co-pay. Founded on these successful launches, we continue to expand our PV and partnerships. For example, with that impact and also with Smith and Serby by an offering programs that also wrap around the benefit for non-covered brand medications. This is meaningful as good or acts is increasing stable of brand specific cash programs continues to grow and as PVMs and clients strive to balance clinically effective and cost effective formularies with patient choices.

Scott: It's important to reiterate that ISP has been a generics-only program to date, focused on integrating Goodrx pricing into the benefit for covered drugs, where the cash price might be lower than the patient's copay.

Scott Wagner: Founded on these successful launches, we continue to expand our PBM partnerships, for example, with MedImpact and also with Smith & Serby, by offering programs that also wrap around the benefit for non-covered grand medications. This is meaningful as Goodrx's increasing stable of brand-specific cash programs continues to grow and as PBMs and clients strive to balance clinically effective and cost-effective formularies with patient choice. Patients win with less friction and a better price; PVMs win with fills outside their traditional covered life base; and retail pharmacies win with attractive reimbursements on these fills.

Scott: Founded on these successful launches, we continue to expand our PBM partnerships, for example, with MedImpact and also with Smith & Servi, by offering programs that also wrap around the benefit for non-covered brand medications.

Scott: This is meaningful as Goodrx's increasing stable of brand-specific cash programs continues to grow and as PBMs and clients strive to balance clinically effective and cost-effective formularies with patient choice.

Scott Wagner: Patients win with less friction and better prices. PVMs win with fills outside their traditional covered life base, and retail pharmacies win with attractive reimbursements on these fills. We believe GoodRx is uniquely positioned to offer this program and drive value across different healthcare stakeholders. On our second key priority, scaling pharma manufacturer solutions, we grew approximately 9% year-over-year in the second quarter. Looking ahead, we're encouraged by the momentum of field sign and our pipeline in the quarter. We're focused on unique GoodRx affordability solutions, cash, copay assistance, enrollment that meet big problems for brands and patients where we can potentially have big value.

Scott: Patients win with less friction and better prices. PBMs win with fills outside their traditional covered life base. Retail pharmacies win with attractive reimbursements on these fills. We believe Goodrx is uniquely positioned to offer this program and drive value across different healthcare stakeholders.

Scott Wagner: We believe Goodrx is uniquely positioned to offer this program and drive value across different health care stakeholders. On our second key priority, scaling pharma manufacturer solutions, we grew approximately 9% year-over-year in the second quarter. Looking ahead, we're encouraged by the momentum of deals signed and our pipeline in the quarter. We're focused on unique Goodrx affordability.

Speaker Change: On our second key priority, scaling pharma manufacturer solutions, we grew approximately 9% year-over-year over the second quarter.

Speaker Change: Looking ahead, we're encouraged by the momentum of deals signed and our pipeline in the quarters. We're focused on unique Goodrx affordability solutions.

Scott Wagner: Cash, copay assistance, enrollments that meet big problems for brands and patients where we can potentially add big value. We're working with large brands and clients, and we're building execution speed and muscle. We've signed over half a dozen cash programs for brands in the quarter, and we have over 40 signed programs with different brands, up over 50% since the start of 2024. Those include an offering with Boehringer Ingelheim for their Humira Biosimilar, which allows anyone with a valid prescription, regardless of insurance status, to pay an exclusive cash price of $550 with a Goodrx coupon, representing a 92% discount from the Humira

Speaker Change: Cash, copay assistance, enrollments that meet big problems for brands and patients where we can potentially add big value. We're working with large brands and clients and we're building execution speed and muscle.

Scott Wagner: We're working with large brands and clients, and we're building execution speed and muscle. We've signed over half a dozen cash programs for brands in the quarter. We have over 40 signed programs with different brands, up over 50% since the start of 2024. Those include an offering with Boringa Ringelheim for their Humera BIOS similar, which allows anyone with a valid prescription, regardless of insurance status, to pay an exclusive cash price of $550 with a GoodRx coupon, representing a 92% discount from the Humera list price. This program is a significant step in addressing access and affordability in one of the largest therapeutic categories for the high cost burden for patients.

Speaker Change: We've signed over half a dozen cash programs for brands in the quarter, and have over 40 signed programs with different brands, up over 50% since the start of 2024.

Speaker Change: Those include an offering with Boehringer Ingelheim for their Humira Biosimilar, which allows anyone with a valid prescription, regardless of insurance status, to pay an exclusive cash price of $550 with a Goodrx coupon.

Scott Wagner: This program is a significant step in addressing access and affordability in one of the largest therapeutic categories with a high cost burden for patients. Some other notable point of sale discount deals that we've talked about include our Santa Fe Atlantis relationship, where claims are up over five times year over year, as well as with Dexcom on the device. We're encouraged by the quality of our pipeline build, and we're working with extreme urgency to sign and implement throughout the second half of 2024 and to build to a 2024 exit. From a fundamental investor perspective, the good news in these programs is that they're typically evergreen, and they compound over time with new fills and refills.

Speaker Change: Representing a 92% discount from the Humeralis price. This program is a significant step in addressing access and affordability in one of the largest therapeutic categories with a high cost burden for patients.

Scott Wagner: Some other notable point of sale discount deals that we've talked about include our Santa Fe planters relationship, where claims are up over five times year over year, as well as with Dexcom and the device. We're encouraged by the quality of our pipeline build, and we're working with extreme urgency to sign and implement throughout the second half of 2024 and to build to a 2024 exit rate. From a fundamental investor perspective, the good news in these programs is that they're typically evergreen and they compound over time with new fills and refills. Now it's on us to stack several of these in the coming quarters as we leverage pharma manufacturers' interest in offering cash pay alternatives, as well as scaling access to copay and deductible assistance programs. In fact, we're seeing increased interest for manufacturers in leveraging the GoodRx platform, breasted brand and user volume to surface manufacturer hub enrollments, copay programs, and other market assistance tools.

Scott Wagner: Some other notable point of sale discount deals that we've talked about include our Santa Fe Atlantis relationship, where claims are up over five times year over year, as well as with Dexcom on the device, to sign and implement throughout the second half of 2024 and to build to a 2024 executive. We benefit from very strong provider relationships, reflected in our 84 net promoter score and 90% awareness amongst HCPs. With that, I'll hand it over to Karsten.

Speaker Change: Some other notable point of sale discount deals that we've talked about include our Santa Fe Atlantis relationship, where claims are up over five times year over year, as well as with Dexcom on the device side.

Speaker Change: We're encouraged by the quality of our pipeline build and we're working with extreme urgency to sign and implement throughout the second half of 2024 and to build to a 2024 exit rate.

Speaker Change: from a fundamental investor perspective the good news and these programs is that they're typically ever green

Scott Wagner: Now, it's on us to stack several of these in the coming quarters as we leverage pharma manufacturers' interest in offering cash pay alternatives, as well as scale access to co-pay and deductible assistance programs. In fact, we're seeing increased interest from manufacturers in leveraging the Goodrx platform, trusted brand, and user volume to surface manufacturer hub enrollments, co-paid programs, and other market assistance. Our third key priority is to grow and deepen our relationship with Goodrx.

Speaker Change: and a compound over time with new fills and refills.

Speaker Change: Now, it's on us to stack several of these in the coming quarters as we leverage pharma manufacturers' interests in offering cash pay alternatives, as well as scaling access to copay and deductible assistance programs.

Speaker Change: In fact, we're seeing increased interest from manufacturers in leveraging the Goodrx platform, trusted brand, and user volume to surface manufacturer hub enrollments, co-paid programs, and other market assistance tools.

Scott Wagner: Our third key priority is to grow and deepen our relationship with GoodRx users. We've always been focused on relationships with prescription drug consumers, the patients, and now we're complementing that with an increasing focus on healthcare professions. We benefit from very strong provider relationships, reflected in our 84 net promoters and 90% awareness amongst HCPs. We've increased our focus on HCP offices by increasing the doctor kits we ship out, putting over 20 times more digital marking assets into HCP offices in the second quarter relative to the first quarter of 2024. Our top defile of HCPs drive about half of our claims, so we believe that unlocking more HCP offices can drive meaningful incremental claims and usage over time.

Scott Wagner: We've always been focused on relationships with prescription drug consumers, the patients, and now we're complementing that with an increasing focus on healthcare professionals. We benefit from very strong provider relationships, reflected in our 84 net promoter score and 90% awareness amongst HCP.

Speaker Change: Our third key priority is to grow and deepen our relationship with Goodrx users. We've always been focused on relationships with prescription drug consumers, the patients, and now we're complementing that with an increasing focus on healthcare professions.

Speaker Change: We benefit from very strong provider relationships reflected in our 84 Net Promoter Score and 90% awareness amongst HCPs.

Scott Wagner: We've increased our focus on HCP offices by increasing the doctor kits we ship out, putting over 20 times more digital marketing assets into HCP offices in the second quarter relative to the first quarter of 2020. Our top decile of HCPs drive about half of our claims, so we believe that unlocking more HCP offices can drive meaningful incremental claims and usage over time. Our fourth key priority is to build distinctive frictionless and end-to-end Goodrx experiences.

Speaker Change: We've increased our focus on HCP offices by increasing the doctor kits we ship out and putting over 20 times more digital marketing assets into HCP offices in the second quarter relative to the first quarter of 2024.

Speaker Change: Our top decile of HCPs drive about half of our claims, so we believe that unlocking more HCP offices can drive meaningful incremental claims and usage over time.

Scott Wagner: Our fourth key priority, build distinctive, frictionless, and then GoodRx experiences. We've redesigned many of our brand medication pages, increasing visitor session duration, and we've created incremental redundancy to mitigate outage risk. We ended the quarter with 8% year-over-year macro and over 7 million prescription-related consumers. Finally, our fifth key priority, build a winning team and culture, underpins all the others.

Scott Wagner: We've redesigned many of our brand medication pages, increasing visitor session duration, and we've created incremental redundancy to mitigate outages. We ended the quarter with 8% year-over-year MAC growth and over 7 million prescription-related consumers. Finally, our fifth key priority, build a winning team and culture, underpins all the others.

Speaker Change: Our fourth key priority, build distinctive, frictionless, and end Goodrx experiences. We've redesigned many of our brand medication pages, increasing visitor session duration.

Speaker Change: and we've created incremental redundancy to mitigate outage risk. We ended the quarter with 8% year-over-year MAC growth and over 7 million prescription-related consumers.

Scott Wagner: I'm pleased to announce that we've added senior talent with healthcare experience from Amazon, and we announced during the quarter that we've added two new members to our board of directors: Ian Clark, former CEO of Genentech, and Simon Patterson, a Silver Lake partner and former board member of Dell Technologies and Skype. In the future, we plan to add additional healthcare leaders for the passion for patient affordability.

Scott Wagner: We're pleased to announce that we've added senior talent with healthcare experience from Amazon, and we announced during the quarter that we've added two new members to our board of directors, Ian Clark, former CEO of Genentech, and Simon Patterson, a Silver Lake partner and former board member of Dell Technologies and Skype. In the future, we plan to add additional healthcare leaders with a passion for patient affordability. As I hand off to Karsten, I will make a few editorial comments during the finale.

Speaker Change: Finally, our fifth key priority, build a winning team and culture, underpins all the others.

Speaker Change: I'm pleased to announce that we've added senior talent with health care experience from Amazon. And we announced during the quarter that we've added two new members to our board of directors, Ian Clark, former CEO of Genentech, and Simon Patterson, a Silver Lake partner and former board member of Dell Technologies and Skype.

Scott Wagner: As I hand off to Carson a few editorial comments in the financials, as the businesses returned to growth over the past few quarters, we're seeing a sizeable amount of incremental revenue flow through to adjusted EBITDA growth and adjusted EBITDA margin expansion. That's positive for the long-term growth and profit balance for investors. We promised a year ago that we'd share with investors both what we know today and what we think, and focus our guide based on what we know, and we stand by that promise. I want Kudderx to keep our collective eye on the prize of impactful growth areas available to us and to stack new programs, whether they're more brand deals, additional plan coverage areas, or more users, to exit 2024 as strong as possible.

Speaker Change: In the future, we plan to add additional healthcare leaders with a passion for patient affordability.

Scott Wagner: As the businesses return to growth over the past few quarters, we're seeing a sizable amount of incremental revenue flow through to adjusted EBITDA growth and adjusted EBITDA margin expansion, which is positive for the long-term growth and profit balance for investors. We promised a year ago that we'd share with investors both what we know today and what we think and focus our guidance based on what we know, and we stand by that promise.

Speaker Change: As I hand off to Karsten, a few editorial comments on the financials.

Karsten Voermann: As the businesses return to growth over the past few quarters, we're seeing a sizable amount of incremental revenue flow through to adjusted EBITDA growth and adjusted EBITDA margin expansion.

Karsten Voermann: that's positive for the long-term growth and profit balance for investors

Karsten Voermann: We promised a year ago that we'd share with investors both what we know today and what we think, and focus our guide based on what we know, and we stand by that promise.

Scott Wagner: I want Goodrx to keep our collective eye on the prize of impactful growth areas available to us and to stack new programs, whether they're more brand deals, additional plan coverage areas, or more users, to exit 2024 as strong as possible. We laid out some broad growth targets at investor day that are appropriate goalposts over the long term for this business. We're going to pursue those with optimism and extreme urgency. With that, I'll hand it over to Karsten.

Speaker Change: I want Goodrx to keep our collective eye on the prize of impactful growth areas available to us and to stack new programs, whether they're more brand deals, additional plan coverage areas, or more users, to exit 2024 as strong as possible.

Scott Wagner: We laid out two broad growth targets in Investor Day that are appropriate goal posts over the long term for this business, and we're going to pursue those with optimistic and extreme urgency.

Operator: Ladies and gentlemen, thank you for standing by and welcome to Goodrx Second Quarter 2024 earnings call. As a reminder, today's conference call is being recorded.

Speaker Change: We laid out some broad growth targets investor day that are appropriate goal posts over the long term for this business, and we're going to pursue those with optimistic and extreme urgency.

Karsten Voermann: With that, I'll hand it over to Carson.

Karsten Voermann: Thank you, Scott. I'll review our second quarter financial results before turning to guidance. During the second quarter, revenue and adjusted revenue were above the guidance we provided on our first quarter earnings call in May, and adjusted EBITDA margin was a year-over-year and also quarter-over-quarter again, just like we expected it to be despite the challenges in the retail pharmacy space exemplified by the Rite Aid closures. Total revenue and adjusted revenue for the quarter increased 6 percent year over year to $200.6 million due to growth in our prescriptions marketplace as well as farm and manufacturer solutions.

Karsten Voermann: Thank you, Scott. I'll review our second quarter financial results before turning to guidance. During the second quarter, revenue and adjusted revenue were above the guidance we provided on our first quarter earnings call in May, and adjusted EBITDA margin was up year over year and also quarter over quarter again, just like we expected it to be, despite the challenges in the retail pharmacy space exemplified by the Rite Aid closure. Total revenue and adjusted revenue for the quarter increased 6% year over year to $200.6 million due to growth in our prescriptions marketplace, as well as pharma manufacturer solutions.

Aubrey Reynolds: I would now like to introduce your host for today's call, Aubrey Reynolds, Director of Investor Relations, Ms. Reynolds, you may begin. Thank you operator. Good morning, everyone, and welcome to Goodrx's earnings conference call for the second quarter 2024.

Speaker Change: With that, I'll hand it over to Karsten.

Karsten Voermann: thank you scot 'llreview a second quarter financial results before turning to guidance

Karsten Voermann: During the second quarter, revenue and adjusted revenue were above the guidance we provided on our first quarter earnings call in May.

Karsten Voermann: And adjusted EBITDA margin was up year over year and also quarter over quarter again, just like we expected it to be, despite the challenges in the retail pharmacy space exemplified by the Rite Aid closures.

Aubrey Reynolds: Joining me today are Scott Wagner, our interim chief executive officer, Karsten Voermann, our chief financial officer, and Mike Walsh, our president and EVP of prescription marketplace. The team is not in the same location for today's call, but we will do our best to make the Q&A portion as seamless as possible for our audience.

Speaker Change: Total revenue and adjusted revenue for the quarter increased 6% year-over-year to $200.6 million due to growth in our prescriptions marketplace as well as pharma manufacturer solutions.

Karsten Voermann: As a reminder, the second quarter of last year included revenue from the Kroger Savings Club subscription offering, which we sunsetted in July 2024 and included revenue from our VitaCare offering within manufacturer solutions, which we restructured last fall and did not contribute any revenue to this Q2. To quantify this impact on growth, Kroger Savings Club and VitaCare together contributed approximately $5 million more revenue in the second quarter of 2023 than in the second quarter of 2024. Moving on to the revenue lines, prescription transactions revenue were 7 percent year over year to $146.7 million, which was primarily driven by an 8 percent increase in monthly active consumers.

Karsten Voermann: As a reminder, the second quarter of last year included revenue from the Kroger Savings Club subscription offering, which we sunsetted in July 2024, and revenue from our Vitacare offering within Manufacturer Solutions, which we restructured last fall and did not contribute any revenue to this Q2. To quantify this impact on growth, Kroger Savings Club and Vitagear together contributed approximately $5 million more revenue in the second quarter of 2023 than in the second quarter of 2024.

Aubrey Reynolds: Before we begin, I'd like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding management's plans, strategies, goals and objectives, or market opportunity, or anticipated financial performance, underlying trends in our business and industry, including ongoing changes in the pharmacy. The ecosystem, our value proposition, our long-term growth prospects, our hybrid retail direct and PVM contracting approach, collaborations and partnerships with third parties, including our integrated savings program, and our capital allocation priorities.

Karsten Voermann: As a reminder, the second quarter of last year included revenue from the Kroger Savings Club subscription offering.

Speaker Change: which we sunsetted in July 2024 and included revenue from our Vitacare offering within Manufacturer Solutions.

Speaker Change: which we restructured last fall and did not contribute any revenue to this Q2. To quantify this impact on growth, Kroger Savings Club and VitaGare together contributed approximately $5 million more revenue in the second quarter of 2023 than in the second quarter of 2024.

Karsten Voermann: Moving on to the revenue lines, prescription transactions revenue was 7% year over year to $146.7 million, which was primarily driven by an 8% increase in monthly active consumers. Subscription revenue declined 8% as expected to $22 million due to the winding down of Kroger Savings Club. Kroger Savings Club revenue was over $2 million less in the second quarter of 2024 than in the prior year period.

Speaker Change: Moving on to the revenue lines, prescription transactions revenue grew 7% year-over-year to $146.7 million, which was primarily driven by an 8% increase in monthly active consumers.

Karsten Voermann: Subscriptions revenue declined 8 percent, as expected, to $22 million due to the wind down of Kroger Savings Club. Kroger Savings Club revenue was over $2 million less in the second quarter of 2024 than in the prior year period. Farmer Manufacturer Solutions revenue increased 9% year-over-year to $26.5 million, driven by organic growth as we continue to expand our market penetration, including ongoing growth in our brand-drug point-of-sale discount programs. That growth more than offset the approximately $3 million reduction in revenue relative to the second quarter of last year from Vital Care shuttering.

Aubrey Reynolds: These statements are neither promises nor guarantees, but involve known and unknown risks uncertainties and other important factors. These factors may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Factors discussed in the risk factor section of our annual report on form 10K for the year ended December 31, 2023, and our other financial filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call. Any such forward-looking statements represents management estimates as of the date of this call, and we describe any obligation to update these statements, even if subsequent events cause our views to change.

Karsten Voermann: Subscriptions revenue declined 8% as expected to $22 million due to the wind down of Kroger Savings Club. Kroger Savings Club revenue was over $2 million less in the second quarter of 2024 than in the prior year period.

Karsten Voermann: Pharma manufacturer solutions revenue increased 9% year over year to $26.5 million, driven by organic growth as we continue to expand our market penetration, including ongoing growth in our brand drug point of sale discount program. That growth more than offset the approximately $3 million reduction in revenue relative to the second quarter of last year from VitaCare's shuttering. Net income was $6.7 million compared to net income of $58.8 million in the second quarter of 2023. Additionally, in the second quarter of 2023, we recognized an income tax benefit of $47 million.

Speaker Change: Pharma manufacturer solutions revenue increased 9% year-over-year to $26.5 million, driven by organic growth as we continue to expand our market penetration, including ongoing growth in our brand drug point-of-sale discount programs.

Karsten Voermann: That growth more than offset the approximately $3 million reduction in revenue relative to the second quarter of last year from VitaCare shuttering.

Karsten Voermann: That's compared to net income of $58.8 million in the second quarter of 2023. Additionally, in the second quarter of 2023, we recognize an income tax benefit of $47 million, adjusted net income with $32.4 million, up from $28.4 million in the second quarter of 2023. Adjusted EBITDA increased 22% year-over-year to $65.4 million. Adjusted EBITDA margin was 32.6% and was up 440 basis points year-over-year. The year-over-year improvement was primarily driven by top-line growth and savings from the restructuring of our vital care farmer manufacturer solutions offering in the second half of 2023.

Karsten Voermann: Net income was $6.7 million compared to net income of $58.8 million in the second quarter of 2023.

Aubrey Reynolds: In addition, we will be referencing certain non-gap metrics in today's remarks. We have reconciled each non-gap metric to the nearest gap metric in the company's earnings press release, which can be found on the overview page of our investor relations website, at investors.goterax.com. I'd also like to remind everyone that a replay of this call will become available shortly as well.

Karsten Voermann: Additionally, in the second quarter of 2023, we recognized an income tax benefit of $47 million. Adjusted net income was $32.4 million, up from $28.4 million in the second quarter of 2023.

Karsten Voermann: Adjusted net income was $32.4 million, up from $28.4 million in the second quarter of 2023. Adjusted EBITDA increased 22% year over year to $65.4 million. Adjusted EBITDA margin was 32.6% and was up 440 basis points year over year. The year over year improvement was primarily driven by top line growth and savings from the restructuring of our Vitacare pharma manufacturer solutions offering in the second half of 2023. We generated net cash provided by operating activities of $9.7 million in Q2 compared to $29.9 million in the prior year period, primarily due to changes in operating assets and liabilities.

Karsten Voermann: Adjusted EBITDA increased 22% year over year to $65.4 million. The adjusted EBITDA margin was 32.6% and was up 440 basis points year over year. The year over year improvement was primarily driven by top line growth and savings from the restructuring of our VitaCare Pharma Manufacturer Solutions offering in the second half of 2023. However, as Scott mentioned, immediate contracting results can fluctuate in terms of their impact on Goodrx revenue pacing in the short term.

Speaker Change: Adjusted EBITDA increased 22% year-over-year to $65.4 million.

Scott Wagner: With that, I'll turn it over to Scott. Thanks, Aubrey, and thanks to everyone joining us today to discuss our second quarter results. Today, I'd like to remind you the themes from our recent investor day. Share a handful of relevant updates that we think investors should care about, both in the industry and at GoodRx, and talk about Q2 financials and how we see the second half of 2024 evolving. We appreciate the feedback we received following our first investor day.

Speaker Change: Adjusted EBITDA margin was 32.6% and was up 440 basis points year-over-year.

Speaker Change: The year-over-year improvement was primarily driven by top-line growth and savings from the restructuring of our Vitacare Pharma Manufacturer Solutions offering in the second half of 2023.

Karsten Voermann: We generated net cash provided by operating activities of $9.7 million in Q2 compared to $29.9 million in the prior year period, primarily due to changes in operating assets and liabilities. Our balance sheet is robust, and we ended the quarter with $525 million in cash and cash equivalents and $657 million of outstanding debt. Our revolving credit facilities untapped except for letters of credit and had $92 million of unused capacity as of June 30, 2024, representing total liquidity of $617 million. On the topic of debt, after the end of the second quarter, we successfully refinanced our credit facilities and used approximately $167 million of cash to reduce our gross debt to $500 million, maturing in 2029, and extended the maturity in all that $12 million of our existing $100 million revolving credit facility to 2029.

Speaker Change: We generated net cash provided by operating activities of $9.7 million in Q2 compared to $29.9 million in the prior year period, primarily due to changes in operating assets and liabilities.

Scott Wagner: We tried to provide clear context for the healthcare landscape at which GoodRx offers. How Goodrx Compliments Insurance, and our priorities for the future. Right now, we're all seeing the tectonic plates of healthcare continue to shift between PVMs and plans and brand manufacturers in retail. The good news for Goodrx is that we provide value to practically every part of the pharmaceutical system, with the consumer or patient right at the start. Consumers use Goodrx to save money in their prescriptions.

Karsten Voermann: Our balance sheet is robust, and we ended the quarter with $525 million in cash and cash equivalents and $657 million of outstanding debt. Our revolving credit facility is untapped except for letters of credit and had $92 million of unused capacity as of June 30, 2024, representing total liquidity of $617 million.

Speaker Change: Our balance sheet is robust and we ended the quarter with $525 million in cash and cash equivalents.

Karsten Voermann: and $657 million of outstanding debt. Our revolving credit facility is untapped except for letters of credit and had $92 million of unused capacity as of June 30, 2024, representing total liquidity of $617 million.

Karsten Voermann: On the topic of debt, after the end of the second quarter, we successfully refinanced our credit facilities and used approximately $167 million of cash to reduce our gross debt to $500 million, maturing in 2029, and extended the maturity on all but $12 million of our existing $100 million revolving credit facility to 2029. Our capital allocation priorities are unchanged and will continue to focus on high-return investments and maximizing value for shareholders.

Karsten Voermann: On the topic of debt, after the end of the second quarter, we successfully refinanced our credit facilities and used approximately $167 million of cash to reduce our gross debt to $500 million, maturing in 2029, and extended the maturity on all but $12 million of our existing $100 million revolving credit facility to 2029.

Scott Wagner: Healthcare professionals use Goodrx to get patients on the medication they need and save precious time. Dharma manufacturers work with Goodrx to make their brand medications available to more consumers. Pharmacies work with Goodrx to acquire new consumers, reduce friction at the counter, and keep people from walking away from the nearly 900 million 30-day scripts that go until the every year. And finally, pharmacy benefit managers work with us to gain incremental value. We believe that the best proof point of Goodrx's value lies in our scale.

Karsten Voermann: Our capital allocation priorities are unchanged and will continue to focus on high return investments and maximizing value for shareholders. With respect to guidance, we're taking a prudent approach, and our outlook for the third quarter attempts to account for ongoing changes in the pharmacy ecosystem, including the location closures and pharmacy economic pressures Scott mentioned. We currently expect to see Q3 revenue and adjusted revenue coming in between $193 and $197 million, representing approximately 3% adjusted revenue growth. Similar to my commentary earlier on 2Q24's results, we expect our 3Q24 growth rates to be tempered as compared to the prior year period because of Vital Care and the sunset of CROG or Savings Club in July, which together contributed about $5 million more to our top line last year in 3Q23 versus this year in 3Q24.

Karsten Voermann: Our capital allocation priorities are unchanged and will continue to focus on high return investments and maximizing value for shareholders.

Karsten Voermann: With respect to guidance, we're taking a prudent approach, and our outlook for the third quarter attempts to account for ongoing changes in the pharmacy ecosystem, including the location closures and pharmacy economic pressure Scott mentioned. We currently expect to see Q3 revenue and adjusted revenue coming in between $193 and $197 million, representing approximately 3% adjusted revenue growth. Similar to my commentary earlier on 2Q24's results, we expect our 3Q24 growth rates to be tempered as compared to the prior year period because of VitaCare and the sunset of Kroger Savings Club in July, which together contributed about $5 million more to our top line last year in 3Q23 versus this year in 3Q24.

Scott Wagner: In 2023, consumers visited the Goodrx site and app about 350 million times, and viewed our drug price page is almost 140 million times. And our patients and consumers are transacting with us with 25 million unique consumers or patients, filling prescriptions with Goodrx in 2023, saving about $15 billion. And it's not primarily uninsured folks who thrive with Goodrx. We estimate that about 88 percent of our users have commercially funded insurance or Medicare and use Goodrx as a compliment to their funded benefits.

Speaker Change: With respect to guidance, we're taking a prudent approach and our outlook for the third quarter attempts to account for ongoing changes in the pharmacy ecosystem, including the location closures and pharmacy economic pressure Scott mentioned.

Speaker Change: We currently expect to see Q3 revenue and adjusted revenue coming in between $193 and $197 million, representing approximately 3% adjusted revenue growth.

Karsten Voermann: Similar to my commentary earlier on 2Q24's results,

Karsten Voermann: We expect our 3Q24 growth rates to be tempered as compared to the prior year period.

Scott Wagner: That's because medication accessibility is both narrowing and becoming more complex, fueled by three trends. First, insurance benefit design and plan coverage is getting narrowed. It's estimated that the number of formulary exclusions increased almost 40 percent in the two years through 2022. Second, more utilization management is required to access the medication with prior authorization and step therapy up and estimated 45 percent in the last three years. Finally, and most importantly, patients continue to bear more of the direct cost of their medication.

Karsten Voermann: Because of VitaCare and the sunset of Kroger Savings Club in July , which together contributed about $5 million more to our top line last year in 3Q23 versus this year in 3Q24.

Karsten Voermann: For the full year of 2024, we expect revenue and adjusted revenue to be at the lower end of our previously indicated $800 to $810 million range, representing about 5% adjusted revenue growth, and we expect revenue acceleration from the third to the fourth quarter. As Scott said, we're seeing bookings momentum and pharma manufacturer solutions, and in the fourth quarter we expect that momentum to result in accelerating quarter-over-quarter and year-over-year pharma amounts all growth.

Karsten Voermann: For the full year 2024, we expect revenue and adjusted revenue to be at the lower end of our previously indicated 800 to $810 million range, representing about 5% adjusted revenue growth. And we expect revenue acceleration from the third to the fourth quarter. As Scott said, we're seeing bookings momentum and pharma manufacturer solutions. And in the fourth quarter, we expect that momentum to result in accelerating quarter over quarter and year over year pharma Mansfield growth.

Karsten Voermann: For the full year of 2024, we expect revenue and adjusted revenue to be at the lower end of our previously indicated $800 to $810 million range, representing about 5% adjusted revenue growth, and we expect revenue acceleration from the third to the fourth quarter.

Karsten Voermann: As Scott said, we're seeing Booking's momentum in pharma manufacturer solutions, and in the fourth quarter, we expect that momentum to result in accelerating quarter-over-quarter and year-over-year pharma mansaul growth.

Scott Wagner: We estimate that the total out of pocket spend for prescription drugs in the first half of 2024 was over $20 billion. That means our ability to give consumers access to medication at lower prices and ease of use, regardless of their insurance status, is increasingly relevant and durable. Just like consumers, healthcare professionals value Goodrx too. Doctors obviously spend an average of 14 hours every week in 2022, completing authorization so patients could get the medications they need to be healthier.

Karsten Voermann: As we look forward, I want to make sure we're clear on what we're including and not including in our guidance. First, we're assuming right-age store closures will have an approximately $5 million impact on revenue in the second half of 2024, with a couple of million dollars of impact in the third quarter alone. We view the impact as largely transient, though, over time we expect to recapture some of this volume back into the system that scripts transfer and renewals get back on file. Second, Walgreens has announced store closures as well. Based on the limited amount of information we do know today, we do not anticipate a material impact in 2024.

Karsten Voermann: As we look forward, I want to make sure we're clear on what we're including and not including in our guidance. First, we're assuming Rite Aid store closures will have an approximately $5 million impact on revenue in the second half of 2024, with a couple of million dollars of impact in the third quarter alone. We view the impact as largely transient, though.

Karsten Voermann: Over time, we expect to recapture some of this volume back into the system as scripts transfer and renewals get back on file. Second, Walgreens has announced store closures as well. Based on the limited amount of information we do know today, we do not anticipate any material impact in 2024.

Speaker Change: As we look forward, I want to make sure we're clear on what we're including and not including in our guidance.

Speaker Change: First, we're assuming Rite Aid store closures will have an approximately $5 million impact on revenue in the second half of 2024, with a couple of million dollars of impact in the third quarter alone.

Speaker Change: We view the impact as largely transient, though. Over time, we expect to recapture some of this volume back into the system as scripts transfer and renewals get back on file.

Scott Wagner: That's the key reason the Goodrx site and app received almost 750,000 unique visits from healthcare professionals in 2023. They benefit from us just as much as their patients do. Brand-run manufacturers are paying increased attention to affordability and access as well. They understand the important role that Goodrx's strong platform plays in helping them directly reach consumers. In 2023 alone, we had 43 million unique brand drug-pages page interactions on our platform and estimate that a staggering 65 percent of our visitors learned about manufacturer savings programs for the very first time.

Speaker Change: Second, Walgreens has announced door closures as well. Based on the limited amount of information we do know today, we do not anticipate material impact in 2024.

Karsten Voermann: Third, we continue to work with our pharmacies, whether direct contracted or not, including by advocating to ensure that economics are sustainable for all parties as pharmacies and PBMs negotiate cash pay, medication, fill economics. We are focused on optimizing outcomes for pharmacies, PBMs, and ourselves, including by playing a role in pharmacy, PBM, cash pay negotiations. As Scott mentioned, immediate contracting results can fluctuate in terms of their impact on GoodRx revenue pacing in the short term. For those comparing to Investor Day, the full year implied 5% adjusted revenue growth is a percentage point below the target, 6 to 12% 3-year compound annual growth rate, in part because of the expected roughly $5 million right-age store closure impacts Scott and I mentioned earlier, and we anticipate our adjusted revenue growth rates will accelerate.

Karsten Voermann: Third, we continue to work with our pharmacies, whether directly contracted or not, including by advocating to ensure that economics are sustainable for all parties as pharmacies and PBMs negotiate cash pay medication fill economics. We are focused on optimizing outcomes for our pharmacies, PBMs, and ourselves, including by playing a role in pharmacy-PBM cash pay negotiations. As Scott mentioned, immediate contracting results can fluctuate in terms of their impact on Goodrx revenue pacing in the short term.

Karsten Voermann: Third, we continue to work with our pharmacies, whether direct-contracted or not, including by advocating to ensure that economics are sustainable for all parties as pharmacies and PBMs negotiate cash-pay-medication-fill economics.

Speaker Change: We are focused on optimizing outcomes for our pharmacies, PBMs, and ourselves, including by playing a role in pharmacy-PBM cash pay negotiations.

Scott Wagner: Be a Goodrx. Our users also support retail pharmacies. In fact, we estimate that a one major retail pharmacy over half of their consumers purchase front of store items when they pick up the prescription with a median spend of $25. This illustrates the good or acts as an important part of the healthcare value chain and sets the foundation for the five priorities we discussed during our investor day.

Speaker Change: As Scott mentioned, immediate contracting results can fluctuate in terms of their impact on Goodrx revenue pacing in the short term.

Scott Wagner: For those comparing to Investor Day,

Speaker Change: The full-year implied 5% adjusted revenue growth is a percentage point below the target 6-12% 3-year compound annual growth rate, in part because of the expected roughly $5 million Rite Aid store closure impact Scott and I mentioned earlier, and we anticipate our adjusted revenue growth rates will accelerate.

Scott Wagner: Those pride priorities are one, strengthen our value proposition to keep constituents in the healthcare ecosystem. Two, scale, pharma manufacturer solutions, three, grow and deepen our relationship with good or acts users, four, build distinctive, frictionless, end to end the good or acts experiences, and five, build a winning team in culture. I'd like to share a handful of recent industry developments in good or acts news relative to these five priorities. On the first priority, strengthen our value proposition to keep constituents in the healthcare ecosystem.

Karsten Voermann: We are focused on expanding our direct contracting with retail pharmacies to enhance their economics, on growing our integrated savings program, and including more uncovered and brand medication volume in it, as well as continuing bookings momentum of our farm manufacturer solutions offering. Finally, as a reminder, we expect full year 2024 adjusted revenue growth to be tempered by approximately $16 million of revenue included in 2023 from Vitacare and Crowder Savings Club, which have both been shuttered and which contributed less revenue to 2024. We believe the store closures are a temporary reality we're facing, and we're confident about both the expected financial benefit in the second half of the year, branded drug inclusion in ISP, and also farmer manufacturer solutions point of sale discount momentum, as Scott discussed earlier, which are both included in our guide.

Karsten Voermann: For those comparing to Investor Day, the full year implied 5% adjusted revenue growth is a percentage point below the target 6 to 12% three-year compound annual growth rate, in part because of the expected roughly $5 million Rite Aid store closure impacts Scott and I mentioned earlier, and we anticipate our adjusted revenue growth rates will accelerate. We're focused on expanding our direct contracting with retail pharmacies to enhance their economics, on growing our integrated savings program and including more uncovered and brand medication volume in it, as well as continuing Booking's momentum in our pharma manufacturer solutions offering.

Speaker Change: We're focused on expanding our direct contracting with retail pharmacies to enhance their economics, on growing our integrated savings program, and including more uncovered and brand medication volume in it, as well as continuing Booking's momentum of our pharma manufacturer solutions offering.

Karsten Voermann: Finally, as a reminder, we expect full-year 2024 adjusted revenue growth to be tempered by approximately $16 million of revenue included in 2023 from VitaCare and Kroger Savings Club, which have both been shuttered and which contributed less revenue to 2024. We believe the store closures are a temporary reality we're facing, and we're confident about both the expected financial benefit in the second half of the year from branded drug inclusion in ISP and also pharma manufacturer solutions point of sale discount momentum, as Scott discussed earlier, which are both included in our guide.

Speaker Change: Finally, as a reminder, we expect full year 2024 adjusted revenue growth to be tempered by approximately $16 million of revenue included in 2023 from VitaCare and Kroger Savings Club, which have both been shuttered and which contributed less revenue to 2024.

Scott Wagner: We've been centered on solidifying our relationships with both retail pharmacies and the PVN network with those of our efforts and communication with investors centered around our contracting models. Retail pharmacies have been economically pressured and we believe our direct and hybrid contracts can meaningfully help them. There's a reimbursement rate shipped on funded business, the volumes from our direct contracts and both boost revenue and margins for our pharmacy partners with on prescriptions and on front of store sales.

Karsten Voermann: We're also pleased with how this can potentially benefit our 2024 exit run rate and compound into 2025. From a margin perspective, we expect adjusted EBITDA margin to be about 32% in the third quarter. For the full year, we expect over $255 million of adjusted EBITDA, up about 18% from 2023, based on our expectations of a high degree of adjusted EBITDA flow through from top line growth and our continued focus on cost structure and efficiency generally.

Karsten Voermann: We believe the store closures are a temporary reality we're facing, and we're confident about both the expected financial benefit in the second half of the year from the branded drug inclusion in ISP and also pharma manufacturer solutions point of sale discount momentum, as Scott discussed earlier, which are both included in our guide. We're also pleased with how these can potentially benefit our 2024 exit run rate and compound into 2025.

Speaker Change: We believe the store closures are a temporary reality we're facing, and we're confident about both the expected financial benefit in the second half of the year, branded drug inclusion in ISP,

Speaker Change: and also Pharma Manufacturer Solutions Point of Sale Discount Momentum, as Scott discussed earlier, which are both included in our guide. We're also pleased with how these can potentially benefit our 2024 exit run rate and compound into 2025.

Karsten Voermann: We're also pleased with how these can potentially benefit our 2024 exit run rate and compound into 2025. From a margin perspective, we expect adjusted EBITDA margin to be about 32% in the third quarter. For the full year, we expect over $255 million of adjusted EBITDA, up about 18% from 2023 based on our expectations of a high degree of adjusted EBITDA flow through from top line growth and our continued focus on cost structure and efficiency generally. That represents approximately 32% margin, up from approximately 29% in 2023. As good or ex has returned to growth in the past few quarters, we believe we're demonstrating the inherent adjusted EBITDA margin growth potential of this business.

Scott Wagner: As we shared an investor day, seven out of 10 of our top pharmacies have contracts with us, either for their full book of business or for some part, we're pleased with our new Kruger agreement and the improving Kruger metrics we've seen today. At an individual retailer level, these contracts with pharmacies have varied in their impact on good or acts revenue implementation. And their aggregate impact on volume and revenue day has been neutral to slightly agree.

Scott Wagner: From a margin perspective, we expect adjusted EBITDA margin to be about 32% in the third quarter.

Speaker Change: For the full year, we expect over $255 million of adjusted EBITDA, up about 18% from 2023, based on our expectations of a high degree of adjusted EBITDA flow-through from top-line growth and our continued focus on cost structure and efficiency generally.

Karsten Voermann: That represents approximately 32% of revenue, up from approximately 29% in 2023. As Goodrx has returned to growth in the past few quarters, we believe we're demonstrating the inherent adjusted EBITDA margin growth potential of this business. With that, I'll now turn it over to the operator for Q&A. Thank you.

Scott Wagner: While we firmly believe this approach is the right answer for good or acts long term, given it's immense retail relationships and ensures network durability, the immediate contracting results can fluctuate in terms of their impact on good or acts revenue pacing in the short term. Structurally retail pharmacies had a tumultuous with right aid announcing additional store closures and Walgreens indicating that their footprint will shrink as well. Store closures impact immediate good or acts volume and revenue, although scripts do migrate over time.

Speaker Change: That represents approximately a 32% margin, up from approximately 29% in 2023.

Speaker Change: As Goodrx has returned to growth in the past few quarters, we believe we are demonstrating the inherent adjusted EBITDA margin growth potential of this business.

Operator: Smith. With that, I'll now turn it over to the operator for Q&A. Thank you.

Speaker Change: With that, I'll now turn it over to the operator for Q&A.

Operator: Ladies and gentlemen, to ask the question, please first start 1-1 on your telephone, and then we'll wait to hear your name announced. To withdraw your question, please first start 1-1 again. We asked that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.

Operator: Ladies and gentlemen, to ask a question, please press star 1-1 on your telephone, and then we'll wait to hear your name announced. To withdraw your question, please press star 1 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A list. Our first question comes from the line of Charles Rhyee with T.D. Cohen. Your line is open.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, to ask a question, please press star 11 on your telephone, and then we'll wait to hear your name announced.

Unknown Executive: We ask that you limit yourself to one question and one follow-up.

Scott Wagner: While this closure trend isn't positive in the next few quarters, we do expect that the impact of this trend will normalize in the longer term as a result of such migration. ISP is tracking roughly in line with expectations with incremental lives continuing to join the program through our current PV and relationships. It's important to reiterate that ISP has been a generic only program to date focused on integrating good or acts pricing into the benefit for covered drugs with a cash price might be lower than the patient's copay.

Speaker Change: To withdraw your question, please press star 11 again.

Speaker Change: We ask that you limit yourself to one question and one follow-up.

Speaker Change: Please stand by while we compile the Q&A roster.

Charles Rhyee: Our first question comes from the line of Charles Rhyee with TD Cohen. Yalan is open. Yeah, thanks for taking the question. It's got just wanted to ask, obviously, you know, there's a lot of vectors for growth here and I sure say you make a good progress across all of these. You know, one thing that you did talk about at Investor Day was the ACP channel. And if I recall correctly, you had mentioned that, you know, sort of roughly 50% of your marks are coming from the top 10% title of ACPs. And this was a potential channel where you put more resources in, and we could help drive further macro.

Charles Rhyee: Yeah, thanks for taking the question. Scott, just wanted to say, obviously, you know, there's a lot of vectors for growth here. And certainly making good progress across all of these. You know, one thing that you did talk about at Investor Day was the HCP channel. And if I recall correctly, you had mentioned that roughly 50% of your max is coming from the top 10 percentile of HCPs.

Speaker Change: Our first question comes from the line of Charles Rhyee with T.D. Cohen. Your line is open.

Charles Rhyee: Yeah, thanks for taking the question.

Speaker Change: Scott, just wanted to ask, obviously, you know,

Scott Wagner: Founded on these successful launches, we continue to expand our PV and partnerships, for example, with that impact and also with Smith and serving by an offering programs that also wrap around the benefit for non covered brand medications. This is meaningful as good or acts is increasing stable of brand specific cash programs continues to grow. And as PVMs and clients strive to balance clinically effective and cost effective formularies with patient choice. Patients win with less friction and better prices, PVMs win with fills outside their traditional covered life base and retail pharmacies win with attractive reimbursements on these fills.

Speaker Change: There's a lot of vectors for growth here, and I'd say you're making good progress across all of these.

Speaker Change: One thing that you did talk about at Investor Day was the HCP channel. And if I recall correctly, you had mentioned that.

Unknown Speaker: Unknown Speaker You know, sort of roughly 50% of your max are coming from the top 10 percentile of ACPs. And this was a potential channel where if you put more resources in, we could help drive further macro. Just, just wondering where we are in that and, you know, sort of the progress you're making.

Charles Rhyee: And this was a potential channel where you could put more resources in, and we could help drive further macro. Just wondering where we are on that and, you know, sort of the progress you're making, and how we might see that translate more into macro.

Scott Wagner: Just wondering where we are in that and, you know, sort of progress you're making. And how we might see that translate more into the macro.

Scott Wagner: Yeah, thanks, Charles. As we said in the script, we've, in the second quarter, shifted media assets into a set of HCP locations, and we're focused on a combination of... Specialization and geography, as you can expect, we can get pretty precise about the kinds of offices that would have the highest return. As of now, we're putting, you know, relevant media assets, which is the art part of the equation, into a lot more HCP offices.

Scott Wagner: Yeah, thanks, Charles. As we said in the script, we've in the second quarter, surged media assets into a set of ACP locations. And we're focused on a combination of specialization and geography, as you can expect. We can get, you know, pretty precise about the kinds of offices that would have the highest return. As of now, we're putting, you know, relevant media assets, which is the art party of the equation, into a lot more HTTP offices. And we expect, and what we're seeing is, you know, this has a little bit more longer cycle return. It's not like you put the assets in and immediately all of a sudden things are lifting.

Speaker Change: And how we might see that translate more into the macro.

Speaker Change: Yeah, thanks, Charles. As we said in the script,

Speaker Change: We've, in the second quarter, surged media assets into a set of HCP locations, and we're focused on a combination of

Scott Wagner: We believe Goodrx is uniquely positioned to offer this program and drive value across different healthcare stakeholders. On our second key priority, scaling pharma manufacturer solutions, we grew approximately 9% year-a-year in the second quarter. Looking ahead, we're encouraged by the momentum of field sign and our pipeline in the quarter. We're focused on unique Goodrx affordability solutions, cash, copay assistance, enrollment that meet big problems for brands and patients where we can potentially have big value.

Speaker Change: Specialization and geography, as you can expect, we can get, you know, pretty precise about the kinds of offices that would have highest return.

Speaker Change: As of now, we're putting relevant media assets

Scott Wagner: And we expect, and what we're seeing is, you know, this has a little bit of a longer cycle return. It's not like you put the assets in and immediately, all of a sudden, things are lifting, but we're getting good proof points at individual offices where we go from, you know, handfuls of scripts to, you know, in some cases, 10 to 20 axed them, but it's still early days. And the way we're going to measure that is really on a cohort return scale. So that's a lot of context.

Speaker Change: which is the art part of the equation, and do a lot more HCP offices.

Speaker Change: And we expect...

Scott Wagner: We're working with large brands and clients and we're building execution speed and muscle. We've signed over half a dozen cash programs for brands in the quarter and have over 40 signed programs with different brands up over 50% since the start of 2024. Those include an offering with boring or angle-hime for their Humera BIOS similar, which allows anyone with a valid prescription regardless of insurance status to pay an exclusive cash price of $550 with a Goodrx coupon representing a 92% discount from the Humera List price.

Speaker Change: And what we're seeing is...

Speaker Change: This has a little bit more longer cycle return, it's not like you put the assets in and immediately all of a sudden things are lifting.

Scott Wagner: But we're getting good proof points of individual offices where we're going from, you know, handfuls of scripts to, you know, in some cases, 10 to 20, accessing them.

Speaker Change: But we're getting good proof points of individual offices where we're going from, you know, handfuls of scripts to

Scott Wagner: But it's still early days, and the way we're going to measure that is really on a cohort return basis. So that's a lot of context. I think the punchline for you and for the investment community is we're putting, you know, more attention and dollars in the field in the unique channel that, in some ways, is unique to get our ex. It holds a lot of promise. And we should see that continue to build, really, as we roll into 2025.

Speaker Change: You know, in some cases, 10 to 20 axing them, but it's still early days and the way we're going to measure that is really on a cohort return basis.

Scott Wagner: I think the punchline for you and for the investment community is that we're putting more attention and dollars in the field through a unique channel that, in some ways, is unique to Goodrx. It holds a lot of promise, and we should see that continue to build, really, as we roll into 2025.

Speaker Change: So, that's a lot of context. I think the punchline for you and for the investment community is we're putting

Scott Wagner: This program is a significant step in addressing access and affordability in one of the largest therapeutic categories for the high cost burden for patients. Some other notable point of sale discount deals that we've talked about include our Santa Fe planters relationship where claims are up over five times year over year as well as with Dexcom on the device side. We're encouraged by the quality of our pipeline build and we're working with extreme urgency to sign and implement throughout the second half of 2024 and to build to a 2024 exit rate.

Speaker Change: more attention and dollars on the field and unique channel that in some ways as unique to get to acts it holds a lot of promise and we should see that continue to build really as weve roll into two thousand and twenty five

Charles Rhyee: Great. And if I could follow up, maybe Karsten, obviously a lot of great momentum here, particularly on the gross margin side. A lot of it seems, you know, particularly as you moved into direct contracting. Can you remind us sort of, Is direct contracting a better margin profile for Goodrx? And then maybe, you know, you talked about the number of retailers that you have under direct contracting. Maybe you can help us kind of size that in terms of PTR, like how much of PTR is under direct contracting versus the, you know, the traditional PBM model. Thanks.

Karsten Voermann: Great. And if I could follow up, maybe Carson, obviously, a lot of great momentum here, particularly on the gross margin side. A lot of the teams seen, particularly as you move into direct contracting.

Speaker Change: Great, and if I could follow up, maybe Karsten, obviously a lot of great momentum here, particularly on the gross margin side. A lot of the teams, you know, particularly as you moved into direct contracting, can you remind us sort of

Karsten Voermann: Can you remind us, sort of, is direct contracting a better margin profile for a good or ex? And then maybe, you know, you talked about the number of the retailers that you have under direct contracting. Maybe you can help us kind of size that in terms of PTR. Like how much of PTR is under direct contracting versus the, you thanks, Charles.

Unknown Attendee: Is direct contracting a better margin profile for Goodrx?

Speaker Change: Is direct contracting a better margin profile for Goodrx?

Speaker Change: And then maybe, you know, you talked about the number of retailers that you have under direct contracting. Maybe you can help us kind of size that in terms of PTR, like how much of PTR is under direct contracting versus the, you know, the traditional PBM model. Thanks.

Scott Wagner: From a fundamental investor perspective, the good news in these programs is that they're typically evergreen and they compound over time with new fills and refills. Now it's on us to stack several of these in the coming quarters as we leverage pharma manufacturers interest in offering cash pay alternatives as well as scaling access to co-pay and deductible assistance programs. In fact, we're seeing increased interest for manufacturers in leveraging the Goodrx platform, frustrated brand and user volume to surface manufacturer hub enrollments, co-pay programs and other market assistance tools.

Karsten Voermann: Thanks, Charles. This is Karsten.

Karsten Voermann: This is Karsten. To both your questions, first of all, undirect contracting. We strive to maintain margins, roughly equivalent to where they are. So, we don't see it as something that necessarily lifts or lowers our margin. Though as we implement direct contract, we in retailers work together to assess consumer demand, assess appropriate consumer pricing, and the resulting margin levels. And that in any given direct contract can create a little bit of flux, retailer by retailer. Each retailer contracts a little different from each other one. But overall, we expect margins to be relatively consistent. And you'll see that too, because to go to the second part of your question, as direct contracting increases a percent of revenue.

Karsten Voermann: Thanks, Charles. This is Karsten. To both your questions, first of all, on direct contracting, we strive to maintain margins roughly equivalent to where they are. So we don't see it as something that necessarily lifts or lowers our margin, though, as we implement direct contract,

Scott Wagner: Our third key priority is to grow and deepen our relationship with goodrx users. We've always been focused on relationships with prescription drug consumers, the patients, and now we're complementing that with an increasing focus on healthcare professions. We benefit from very strong provider relationships reflected in our 84 net promoters score and 90 percent awareness amongst HCPs. We've increased our focus on HCP offices by increasing the doctor kits we ship out, putting over 20 times more digital marking assets into HCP offices in the second quarter relative to the first quarter of 2024.

Speaker Change: We and retailers work together to assess consumer demand, assess appropriate consumer pricing, and the resulting margin levels, and that in any given...

Karsten Voermann: To both your questions, first of all, on direct contracting, we strive to maintain margins roughly equivalent to where they are, so we don't see it as something that necessarily lifts or lowers our margin. Though, as we implement direct contracts, we and retailers work together to assess consumer demand, assess appropriate consumer pricing, and the resulting margin levels. And that any given direct contract can create a little bit of flux retailer by retailer; each retailer contracts a little different from each other one.

Speaker Change: Direct Contract can create

Speaker Change: A little bit of Flux Retailer by Retailer.

Speaker Change: Each retailer contracts a little different from each other one. But overall, we expect margins to be relatively consistent. And you'll see that too, because to go to the second part of your question, as direct contracting increases as a percent of revenue,

Karsten Voermann: Believe that Investor Day, we talked about it being well over 20% of our volume. And it's grown since then; you haven't seen significant flux and PTR per Mac. You've seen it degrade a little bit period over period, like single digit percentages. And we'd expect to see that potentially continue into the future, but it's more a function of ISP and other factors than it is of direct contracting, I'd say.

Karsten Voermann: But overall, we expect margins to be relatively consistent. And you'll see that too, because to go to the second part of your question, as direct contracting increases as a percent of revenue, I believe at Investor Day, we talked about it being well over 20% of our volume. And it's grown since then; you haven't seen significant flux in PTR per MAC; you've seen it degrade a little bit period over period, like single-digit percentages. And we'd expect to see that potentially continue into the future. But it's more a function of ISPs and other factors than it is both direct contracting, I'd say.

Speaker Change: I believe at Investor Day, we talked about it being well over 20% of our volume, and it's grown since then. You haven't seen significant flux in PTR per MAC. You've seen it degrade a little bit, period over period, like single digit percentages.

Scott Wagner: Our top defile of HCPs drive about half of our claims, so we believe that unlocking more HCP offices can drive meaningful incremental claims and usage over time. Our fourth key priority, build distinctive, frictionless, and then Goodrx experiences. We've redesigned many of our brand medication pages, increasing visitor session duration, and we've created incremental redundancy to mitigate outage risk. We ended the quarter with 8% year-over-year macro in over 7 million prescription-related consumers. Finally, our fifth key priority, build a winning team and culture underpins all the others.

Speaker Change: And we'd expect to see that potentially continue into the future, but it's more a function of ISP and other factors than it is of direct contracting, I'd say.

Operator: Great. Thank you.

Charles Rhyee: Great, thank you. I appreciate it.

Unknown Executive: Thank you. Please stand by for our next question.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Lisa Gill with J.P. Morgan. Your line is open. Thanks very much and good morning.

Operator: Please, then, bye for our next question.

Speaker Change: Great. Thank you. Appreciate it.

Lisa Gill: Our next question comes from the line of Lisa Gill with JP Morgan.

Speaker Change: Thank you. Please stand by for our next question.

Karsten Voermann: Yaline is open. Thanks very much. Good morning. I just want to follow up with your comments around the store closures for Rite Aid. So, when we think about the store closures, is this because this is a direct contract? And so, therefore, you're going to lose that volume. You try to have recaptured in some other way, because I would think that if it was just a traditional GoodRx user, if they go to, you know, the CVS down the street, it would be the same relationship. So, one, can you help me to understand that?

Lisa Gill: I just want to follow up with your comments around the store closures for Rite Aid. So when we think about the store closures, is this because this is a direct contract and, therefore, you're going to lose that volume? Would you try to recapture it in some other way? Because I would think that if it was just a traditional Goodrx user, if they went to, you know, the CVS down the street, it would be the same relationship.

Speaker Change: Our next question comes from the line of Lisa Gill with J.P. Morgan. Your line is open.

Lisa Gill: Thanks very much and good morning. I just want to follow up with your comments around the store closures for Rite Aid.

Scott Wagner: And please do announce that we've added senior talent with healthcare experience from Amazon, and we announced during the quarter that we've added two new members to our board of directors, Ian Clark, former CEO of Genentech, and Simon Patterson, a Silver Lake partner and former board member of Dell Technologies and Skype. In the future, we plan to add additional healthcare leaders for the passion for patient affordability. As I hand off to Carson a few editorial comments in the financials, as the businesses returned to growth over the past few quarters, we're seeing a sizable amount of incremental revenue flow through to adjusted EBITDA growth and adjusted EBITDA margin expansion.

Lisa Gill: When we think about the store closures, is this because this is a direct contract and so therefore you're going to lose that volume, you try to recapture it in some other way? Because I would think that if it was just a traditional Goodrx user, if they go to, you know, the CVS down the street, it would be the same relationship. So one, can you help me to understand that? And then secondly, I just wanted to follow up on your comments on Humira Biosimilar. If you could just give us an idea of what you've seen on the uptake on that side would be great.

Lisa Gill: So, one, can you help me to understand that? And then, secondly, I just wanted to follow up on your comments on Humira Biosimilar. If you could just give us an idea of what you've seen on the uptake on that side, that would be great. Thank you.

Scott Wagner: And then, secondly, I just wanted to follow up on your comments on Humara Bio-similar. If you could just give us an idea of what you've seen on the uptake on that side, it would be great. Thank you. Carson, why don't you take the first, and I'll take the second. Sure. Sounds good. Lisa, yeah, with respect to Rite Aid, when the priorities we talked about that investor, it was strengthening our value proposition to key constituents in the healthcare ecosystem. And that's pharmacies in particular. We are doing that through hybrid and direct contracting. So, far with the economics, stay healthy in situations like right aids can be mitigated.

Karsten Voermann: Karsten, why don't you take the first and I'll take the second? Sure, sounds good.

Karsten Voermann: Karsten, why don't you take the first and I'll take the second? Sure, sounds good.

Lisa Gill: oh

Scott Wagner: Lisa, yeah, with respect to Rite Aid, one of the priorities we talked about at Investor Day was strengthening our value proposition to key constituents in the healthcare ecosystem, and that's pharmacies in particular. We are doing that through hybrid and direct contracting.

Karsten Voermann: Lisa, yeah, with respect to Rite Aid, one of the priorities we talked about at Investor Day was strengthening our value proposition to key constituents in the healthcare ecosystem, and that's pharmacies in particular. We are doing that through hybrid and direct contracting, so pharmacy economics stay healthy in situations like Rite Aid can be mitigated. That said, the intersection of direct contracting and Rite Aid isn't really the issue here. We believe the Rite Aid impacts on prescriptions and on our revenue will be temporary over the next quarter or two or a few more and will not have a meaningful impact on long-term growth because the same number of scripts are being written, and we expect consumers to fill them.

Scott Wagner: That's positive for the long-term growth and profit balance for investors. We promised a year ago that we'd share with investors both what we know today and what we think and focus our guide based on what we know and we stand by that promise. I want Goodrx to keep our collective eye on the prize of impactful growth areas available to us and to stack new programs, whether they're more brand deals, additional plan coverage areas, or more users, to exit 2024 as strong as possible. We laid out to broad growth targets in investor day that are appropriate goal posts over the long term for this business, and we're going to pursue those with optimistic and extreme urgency.

Lisa Gill: Karsten, why don't you take the first and I'll take the second.

Karsten Voermann: Sure, sounds good. Lisa, yeah, with respect to Rite Aid, one of the priorities we talked about at Investor Day was strengthening our value proposition to key constituents in the healthcare ecosystem, and that's pharmacies in particular. We are doing that through hybrid and direct contracting, so pharmacy economics stay healthy in situations like Rite Aid can be mitigated.

Scott Wagner: That said, the intersection of direct contracting and right aid isn't really the issue here. We believe the right impacts on prescriptions and on our revenue will be temporary over the next quarter or two, or a few more. And will not have meaningful impact along term growth because the same number of scripts are being written, and we expect consumers to fill them. What's really happening here is that when store closures occur, it's specific to the kinds of stores that are closing. And what I mean by that is that. and different stores are associated with different store closure impacts.

Speaker Change: That said, the intersection of direct contracting and Rite Aid isn't really the issue here. We believe the Rite Aid impacts...

Scott Wagner: So pharmacy economics stay healthy in situations like Rite Aid can be mitigated. That said, the intersection of direct contracting and Rite Aid isn't really the issue here. We believe the Rite Aid impacts on prescriptions and on our revenue will be temporary over the next quarter or two or a few more and will not have a meaningful impact on long-term growth because the same number of scripts are being written, and we expect consumers to fill them.

Karsten Voermann: On prescriptions and on our revenue will be temporary over the next quarter or two or a few more and will not have meaningful impact to long-term growth because the same number of scripts are being written and We expect consumers to fill them

Karsten Voermann: With that, I'll hand it over to Carson. Thank you, Scott. I'll review our second quarter financial results before turning to guidance. During the second quarter, revenue and adjusted revenue were above the guidance we provided on our first quarter earnings call in May, and adjusted EBITDA margin was up year over year and also quarter over quarter again, just like we expected it to be despite the challenges in the retail pharmacy space exemplified by the right aid closures. Total revenue and adjusted revenue for the quarter increased 6 percent year over year to $200.6 million due to growth in our prescriptions marketplace as well as farm and manufacturer solutions.

Scott Wagner: What's really happening here is that when store closures occur, it's specific to the kinds of stores that are closing. And what I mean by that is, And I think the final thing to say here is that we have, over the last few years, undertaken significant efforts in consumer engagement. Again, that ties into growing and deepening our consumer relationships that we talked about at investor day.

Karsten Voermann: What's really happening here is that when store closures occur, it's specific to the kinds of stores that are closing, and what I mean by that is that different stores are associated with different store closure impacts. We've seen other pharmacy chains, as you know, in particular larger pharmacy chains, close stores as well, and those store closures did not have a material impact on Goodrx.

Speaker Change: What's really happening here is that when store closures occur, it's specific to the kinds of stores that are closing. And what I mean by that is that

Scott Wagner: We've seen other pharmacy chains, as you know, in particular, larger pharmacy chains, close stores as well, and those store closures did not have a material impact on GoodRx. Right a different because of the specific kinds of stores and geographies and mix associated with their closures. So that's the real reason we see a bigger impact emanating from Right Aid than we would potentially from other pharmacies that might be in a similar situation. And I think the final thing to say here is that we, over the last few years, undertook significant efforts on consumer engagement. Again, that ties into growing and deepening our consumer relationships that we talked at an Investor Day.

Karsten Voermann: different stores

Karsten Voermann: are associated with different store closure impacts. We've seen other pharmacy chains, as you know, in particular, larger pharmacy chains, closed stores as well. And those store closures did not have a material impact in Goodrx.

Karsten Voermann: Rite Aid's different because of the specific kinds of stores and geographies and mix associated with their closures. So that's the real reason we see a bigger impact emanating from Rite Aid than we would potentially from other pharmacies that might be in a similar situation. And I think the final thing to say here is that we, over the last few years, have undertaken significant efforts in consumer engagement. Again, that ties into growing and deepening our consumer relationships that we talked about yesterday.

Karsten Voermann: As a reminder, the second quarter of last year included revenue from the Crowder Savings Club subscription offering, which we sunset in July 2024, and included revenue from our VITA care offering within manufacturer solutions, which we restructured last fall and did not contribute any revenue to this Q2. To quantify this impact on growth, Crowder Savings Club and VITA gathered together contributed approximately $5 million more revenue in the second quarter of 2023 than in the second quarter of 2024.

Karsten Voermann: right it 's different because of the specific kinds of stores

Karsten Voermann: and geographies and mix associated with their closures. So that's the real reason we see a bigger impact emanating from Rite Aid than we would potentially from other pharmacies that might be in a similar situation.

Speaker Change: And I think the final thing to say here is that we, over the last few years, undertook significant efforts on consumer engagement. Again, that ties into growing and deepening our consumer relationships that we talked about on Investor Day.

Scott Wagner: The efforts and consumer engagement, including gating users and having them register and building rewards programs, are now valuable for us because it allows us to reach out to consumers and redirect them to other pharmacies. So yeah, we see the Right Aid situation in the geographic unique concentrations that they're closing doors and as differential from other situations that might happen. That's helpful. Thank you.

Karsten Voermann: The efforts at consumer engagement, including gating users and having them register and building rewards programs, are now valuable for us because it allows us to reach out to consumers and redirect them to other pharmacies. So yeah, we see the Rite Aid situation and the geographic unique concentrations that they're closing doors in as different from other situations that might happen. That's helpful. Thank you. Yeah. Hey, Lisa, Scott, I'll pick up the second part.

Karsten Voermann: Moving on to the revenue lines, prescription transactions revenue were 7 percent year over year to $146.7 million, which was primarily driven by an 8 percent increase in monthly active consumers. Subscriptions revenue declined 8 percent as expected to $22 million due to the wind down of Crowder Savings Club. Crowder Savings Club revenue was over $2 million less in the second quarter of 2024 than in the prior year period. Farmer Manufacturer Solutions revenue increased 9% year-over-year to 26.5 million dollars driven by organic growth as we continue to expand our market penetration, including ongoing growth in our brand drug point-of-sale discount programs. That growth more than offset the approximately $3 million reduction in revenue relative to the second quarter of last year from vital care shuttering.

Karsten Voermann: the efforts on consumer engagement including gating users and having them register and building rewards programs are now valuable for us because it allows us to reach out to consumers and redirect them to other pharmacies

Speaker Change: so yeah we see the right aid situation in the geographic unique concentrations that they're closing doors and as differential from other situations that might happen

Scott Wagner: And I guess thematically you're getting, you know, the, the, the short term, let's call it the slug. And then the long term, you know, more positivity, which maybe is represented by the B. I. Deal and where we are with brands in general, specifically with B. I. What this biosimilar is, is anyone with a prescription, regardless of insurance status, is going to be able to pay an exclusive cash price of 550 bucks with Goodrx.

Scott Wagner: Yeah, Hayley said, Scott, I'll pick up the second part, and I guess thematically you're getting, you know, the short term, let's call it slog, and then the long term, you know, more positivity, which maybe is represented by the B.I. deal and where we are with brands in general. Specifically with B.I. What this biosimilar is, is anyone with a prescription, regardless of insurance status, is going to be able to pay an exclusive cash price of $550 with good or acts. What I think nice about this relative to just get our actions first, this is our first biosimilar and we do believe that the whole biosimilar category at large is a extremely big opportunity for these kind of cash programs. And so, you know, this is this is the first biosimilar we would hope and expect there'd be, you know, many more to come and more broadly.

Haly: that's helpful thank you yeah haly so 'sgott'll pick the second part of and i guess themammatically you're getting you know the

Speaker Change: The short-term, let's call it slog, and then the long-term, you know, more positivity, which maybe is represented by the B.I. deal and where we are with brands in general.

Speaker Change: Specifically with BI, what this biosimilar is, is anyone with a prescription, regardless of insurance status, is going to be able to pay an exclusive cash price of $550 with Goodrx.

Scott Wagner: What's nice about this relative to just Goodrx is that this is our first biosimilar. And we do believe that the whole biosimilar category at large is an extremely big opportunity for these kinds of cash programs. And so, you know, this is the first biosimilar we would hope and expect there would be many more to come. And more broadly, we now have over 40 of these brand cash point of sale programs in place with different brands, which is up 50 percent from where we started in the years.

Karsten Voermann: That's compared to net income of 58.8 million dollars in the second quarter of 2023. Additionally, in the second quarter of 2023, we recognize an income tax benefit of $47 million, adjusted net income with $32.4 million, up from $28.4 million in the second quarter of 2023. Adjusted EBITDA increased 22% year-over-year to $65.4 million. Adjusted EBITDA margin was 32.6% and was up 440 basis points year-over-year. The year-over-year improvement was primarily driven by top-line growth and savings from the restructuring of our vital care farmer manufacturer solutions offering in the second half of 2023.

Speaker Change: What's, I think, nice about this relative to just Goodrx is first, this is our first biosimilar, and we do believe that the whole biosimilar category at large

Speaker Change: is a extremely big opportunity for these kind of cash programs. And so, you know, this is this is the first biosimilar, we would hope and expect there'd be, you know, many more to come. And more broadly,

Scott Wagner: We now have over 40 of these brand cash point of sale programs in place with different brands, which is up 50% just from where we started in the air. Is one of those unique things that good or actually really can do and deliver both directly to consumers to bring an affordable cash price on brand. And we're starting to connect the dots back into the plans themselves, as evidenced by the extension of met impact and ISP to these uncovered brands. So, you know, this was the first biosimilar, but hopefully there's a lot more to come.

Speaker Change: We now have over 40 of these brand cash.

Speaker Change: point of sale programs in place with different brands which is fifty percentages from where we started in the air as one of those unique things

Scott Wagner: It's one of those unique things that Goodrx really can do and deliver both directly to consumers to bring an affordable cash price on brands that might not be covered. And we're starting to connect the dots back into the plans themselves as evidenced by, Uh, the extension of net impact and ISP to these uncovered brands. So, you know, this was the 1st biosimilar, but hopefully, there's a lot more to come.

Speaker Change: The Goodrx really can do and deliver both directly to consumers to bring an affordable cash price on brands that might not be covered.

Karsten Voermann: We generated net cash provided by operating activities of $9.7 million in Q2 compared to $29.9 million in the prior year period, primarily due to changes in operating assets and liabilities. Our balance sheet is robust and we ended the quarter with $525 million in cash and cash equivalents and $657 million of outstanding debt. Our revolving credit facilities untapped except for letters of credit and had $92 million of unused capacity as of June 30, 2024, representing total liquidity of $617 million.

Speaker Change: And we're starting to connect the dots back into the plans themselves, as evidenced by the extension of MedImpact and ISP to these uncovered grants. So, you know, this was the first biosimilar, but hopefully there's a lot more to come.

Karsten Voermann: On the topic of debt, after the end of the second quarter, we successfully refinanced our credit facilities and used approximately $167 million of cash to reduce our gross debt to $500 million maturing in 2029 and extended the maturity in all that $12 million of our existing $100 million revolving credit facility to 2029.

Scott Wagner: And anything you can give us around like a number on the uptake or anything around that, Scott. It's super early, Lisa. In this one, won't you know buy itself. This isn't going to this isn't a title wave of change by itself. But again, as you start to build more and more of these kind of programs, you know, they can stack pretty meaningfully, but by itself, you know, it's this in and of itself isn't, you know, what you call a quote unquote model changer, but the broad theme of the category and biosimilar certainly can be great.

Unknown Executive: It's super early, Lisa. Super early, okay?

Scott Wagner: It's super early, Lisa. Super early, okay?

Speaker Change: Anything you can give us around like a number on the uptake or anything around that, Scott?

Scott Wagner: it's super early l if i you know in this one won you know byy itself this isn't going to

Speaker Change: this is t a title wave of change by itself but again as should start to build more and more of these kind of programs that you know they can stack pretty meanetingfully but by itself

Speaker Change: this in it of itself isn't what you call aqu unquote model changer but the broad theme of the category and biosimilar certainly can be great thank you so much

Lisa Gill: Great! Thank you so much.

Operator: Thank you so much. Thank you.

Operator: Please stand back for our next question.

Scott Wagner: Please stand by for our next question.

Operator: Please stand by for our next question. Our next question comes from the line of John Ransom with Raymond James. Your line is open.

Karsten Voermann: Our capital allocation priorities are unchanged and will continue to focus on high return investments and maximizing value for shareholders. With respect to guidance, we're taking a prudent approach and our outlook for the third quarter attempts to account for ongoing changes in the pharmacy ecosystem, including the location closures and pharmacy economic pressures Scott mentioned. We currently expect to see Q3 revenue and adjusted revenue coming in between $193 million and $197 million, representing approximately 3% adjusted revenue growth.

John Ransom: Our next question comes from the line of John Ransom with Raymond James. Your line is open. Hey, good morning.

Speaker Change: Thank you. Please stand by for our next question.

John Ransom: Hey, good morning. When you look at your 24 exit rate, how should we be thinking about that for the three lines of business?

Speaker Change: Our next question comes from the line of John Ransom with Raymond James. Your line is open.

Karsten Voermann: When you look at your 24 exit rate, how should we be thinking about that for the three lines of business jumping into 2025? In particular, I'm interested in the manufacturer solution. Thanks. Sure, I can jump in on that one, John. This is Karsten speaking. With respect to the lines of business and to your point, manufacturer solution specifically, we've seen year-over-year growth rates accelerate from last year. But that said, you'll note that the growth rate in year-over-year growth rate in Q1 was about 20%, and Q2 is about 9%. We expect that growth rate to accelerate, looking into third quarter and fourth quarter.

John Ransom: That for the three lines of business jumping into 2025. In particular, I'm interested in the manufacturer solution. Thanks.

John Ransom: Hey, good morning. When you look at your 24 exit rate, what how should we be thinking about that for the three lines of business jumping into 2025? In particular, I'm interested in the manufacturer solution. Thanks.

Karsten Voermann: Sure, I can jump in on that one, John. This is Karsten speaking.

Karsten Voermann: Sure, I can jump in on that one, John . This is Karsten speaking.

Karsten Voermann: With respect to the lines of business and, to your point, manufacturer solutions specifically, we've seen year-over-year growth rates accelerate from last year. But that said, you'll note that the year-over-year growth rate in Q1 was about 20%, and Q2 was about 9%. We expect that growth rate to accelerate looking into the third quarter and fourth quarter. And we expect it to be, on an exit basis, when we look at it annualized, we'd expect to see it well into the ranges that we described at Investor Day. So the above 20% growth rates are more specifically the 20% to 30% growth rate.

Speaker Change: with respect to the lines business to your point manufacturer solution specifically we've seen year-over-year growth rates accelerate from last year

Karsten Voermann: Similar to my commentary earlier on 2Q24's results, we expect our 3Q24 growth rates to be tempered as compared to the prior year period, because of vital care and the sunset of Kroger Savings Club in July, which together contributed about $5 million more to our top line last year in 3Q23 versus this year in 3Q24. For the full year of 2024, we expect revenue and adjusted revenue to be at the lower end of our previously indicated $800 to $810 million range, representing about 5% adjusted revenue growth, and we expect revenue acceleration from the third to the fourth quarter. As Scott said, we're seeing bookings momentum and pharma manufacturer solutions, and in the fourth quarter we expect that momentum to result in accelerating quarter over quarter and year over year pharma amounts all growth.

Speaker Change: but that said you'll note that the growth rate in

Speaker Change: yearoveryear growth r in q one was about twenty percent in q two is about nine percent we expect that growth rate to accelerate

Karsten Voermann: And we expect it to be on an exit basis. When we look at it annualize, we'd expect to see it well into the ranges that we described at investor day. So the above 20% growth rates are more specifically the 20 to 30% growth rate. In fact, as we look forward to the end of the year, and then the implied ramp and revenue growth from third quarter to fourth quarter and the guide, we believe Farmer Manufacturer Solutions will be a significant contributor to that growth. And that's what we're focusing on over the coming two quarters, really driving that business hard.

Speaker Change: Looking into third quarter and fourth quarter, and we expect it to be on an exit basis.

Speaker Change: when we look at it annualize we'd expect to see it well into the ranges that we described at investor day so the above twenty percent growth rates are more specifically than twenty to thirty percent growth rate

Scott Wagner: In fact, as we look forward to the end of the year and then the implied ramp in revenue growth from third quarter to fourth quarter in the guide, we believe pharma manufacturer solutions will be a significant contributor to that growth. And that's what we're focusing on over the coming two quarters, really driving that business hard. As Scott said, in particular, our point of sale discount deals around branded medications and divisor have been a differentiated sweet spot for us.

Speaker Change: in fact as we look forward to the end of the year and then the implied ramp and revenue growth from third quarter to fourth quarter in the guide

Karsten Voermann: As we look forward, I want to make sure we're clear on what we're including and not including in our guidance. First, we're assuming right-aid store closures will have an approximately $5 million impact on revenue in the second half of 2024 with a couple of million dollars of impact in the third quarter alone. We view the impact as largely transient though, over time we expect to recapture some of this volume back into the system as scripts transfer and renewals get back on file.

Speaker Change: We believe pharma manufacturer solutions will be a significant contributor to that growth.

Scott Wagner: andthat's what ' what we're focusing on over the coming two quarters really driving that business hard asscot said in particular our point of sal discount deals around branded medications and devicor

Karsten Voermann: As Scott said, in particular, our point of sale discount deals around branded medications and divisor have been a differentiated sweet spot for us. And we expect to see all those deals that we've signed that Scott talked about over the coming quarter, quarters, ramping and converting into more revenue that you and others will see.

Scott Wagner: And we expect to see all those deals that we've signed that Scott talked about ramping up and converting into more revenue that you and others will see. Editorial lines over the top, obviously, from, you know, the year over year growth rate of the second quarter to then, you know, programs and deals announced in the pipeline; we got to keep signing up more, signing up more deals, both brand programs, co-pay assistance, and different ways to reach these into the funded plans.

Scott Wagner: have been a differentiated sweet spot for us, and we expect to see all those deals that we've signed that Scott talked about over the coming quarters ramping and converting into more revenue that you and others will see.

Scott Wagner: Great. And it's all editorialized over the top, which is obviously from, you know, the year-over-year growth rate of the second quarter to then, you know, programs and deals announced in the pipeline. We got to keep signing up more, signing up more deals, both brand programs, co pay assistance, and different ways to reach these into the funded plans of between now and the rest of the year. We got to keep, you know, keep, keep signing all bunch of things up to get into that 20% run rate, but we've got a lot of proof points. Sort of all the activity and feedbacks positive, but we got to, you know, we got to keep an album and do it with urgency.

Karsten Voermann: Second, Walgreens has announced store closures as well, based on limited amount of information we do know today, we do not anticipate material impact in 2024. Third, we continue to work with our pharmacies whether direct contracted or not, including by advocating to ensure that economics are sustainable for all parties as pharmacies and PBMs negotiate cash pay medication fill economics. We are focused on optimizing outcomes for pharmacies, PBMs, and ourselves, including by playing a role in pharmacy, PBM, cash pay negotiations.

Speaker Change: great it's got all edattorialit over the a editorializ over the top which

Scott Wagner: is obviously from the year-over-year growth rate of the second quarter to then

Scott Wagner: programs and deals andenounced in the pipeline we've got to keep signing up more signing up more deals

Scott Wagner: And between now and the rest of the year, we got to keep, you know, keep signing a whole bunch of things up to get into that 20% run rate. But we've got a lot of proof points, sort of all the activity and feedback is positive, but we got to, you know, keep nailing them and do it with urgency.

Speaker Change: Both brand programs, co-pay assistance, and different ways to reach these into the funded plans between now and the rest of the year. We've got to keep signing a whole bunch of things up to get into that 20% run rate. But we've got a lot of proof points.

Karsten Voermann: As Scott mentioned, immediate contracting results can fluctuate in terms of their impact on Goodrx revenue pacing in the short term. For those comparing to investor day, the full year implied 5% adjusted revenue growth is a percentage point below the target 6-12% 3-year compound annual growth rate, in tarp because of the expected roughly $5 million right-aid store closure impacts Scott and I mentioned earlier, and we anticipate our adjusted revenue growth rates will accelerate.

Scott Wagner: All the activity and feedback is positive, but we've got to keep nailing them and do it with urgency.

Operator: Great.

John Ransom: And just my follow up. If we think about Rite Aid, specifically the $5 million bad guy, does that kind of come with the usual sort of gross margin attach rate? So we should think about that being, you know, almost like for like EBITDA hits. And so your EBITDA guide is jumping over, you know, a $4 million plus Rite Aid bad guy? Or is there something I'm missing there?

John Ransom: And just my follow up, if we think about right a specifically the $5 million bad guy, does that kind of come with this usual sort of gross margin attached rate? So we should think about that being, you know, almost like for like, even a hit. And so you're, you're even a guide is jumping over, you know, a 4 million plus right a bad guy, or is there something I'm missing there? I think that's an accurate way to think about it, John. That's the way we're looking at it, too. So we're driving efficiency in the business, and we're seeing flow through from growth generally that mitigates the bad guy on on Right Aid and leaves us net up on adjusted but that.

Speaker Change: Great. And just my follow-up, if we think about Rite Aid specifically, the $5 million bad guy,

Speaker Change: Does that kind of come with the usual sort of gross margin attach rate? So we should think about that being, you know, almost like for like EBITDA hits. And so your EBITDA guide is jumping over, you know, a 4 million plus Rite Aid bad guy or is there something I'm missing there?

Scott Wagner: I think that's an accurate way to think about it, John. That's the way we're looking at it, too. So we're driving efficiency in the business, and we're seeing flow through from growth generally that mitigates the bad guy on Rite Aid and leaves us net up on adjusted EBITDA. And I think that's exactly what you said. So hopefully, I'm confirming for you.

Karsten Voermann: I think that's an accurate way to think about it, John. That's the way we're looking at it, too. So we're driving efficiency in the business, and we're seeing flow through from growth generally that mitigates the bad guy on Rite Aid and leaves us net up on adjusted EBITDA. And I think that's exactly what you said. So hopefully, I'm confirming for you.

Karsten Voermann: We are focused on expanding our direct contracting with retail pharmacies to enhance their economics, on growing our integrated savings program, and including more uncovered and brand medication volume in it, as well as continuing bookings momentum of our farm manufacturer solutions offering. Finally, as a reminder, we expect full year 2024 adjusted revenue growth to be tempered by approximately $16 million of revenue included in 2023 from Vitacare and Crowder Savings Club, which have both been shuttered and which contributed less revenue to 2024.

Speaker Change: i think that's an accurate way to think about it john that's way we're looking at it too so we're driving efficiency in the business and we're seeing flow through from growth generally that mitigates the bad guy on right aid and leaves us net up on adjusted ebit that and i think that's exactly what you said so hopefully i'm confirming for you

Karsten Voermann: And I think that's exactly what you said. So hopefully I'm confirming for you. Thank you.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Stephanie Davis with Barclays. Your line is open.

Operator: Please stand by for our next question.

John Ransom: thank you

Stephanie Davis: Our next question comes from Alanis, Stephanie Davis with Barclays, Yalanis open. Hey guys, thank you for asking my question. I was hoping to ask a little bit more about the bio-summon constructs. It looks a bit more than the prior construct in your website. So how should we think about your forward look and feel if you get some of these deals with many doctors? And could it eventually become fully in the future? I'm invited versus the current transfer to the brand website.

Speaker Change: Thank you. Please stand by for our next question.

Stephanie Davis: Hey guys, thank you for taking my question. I was hoping to ask a little bit more about the biosimilar construct since it looks a bit more embedded than the prior construct on your website. So how should we think about your forward-looking deal as you get some of these deals with manufacturers, and could it eventually become fully embedded versus the current transfer to the brand website, albeit with a few more clicks?

Speaker Change: Our next question comes from the line of Stephanie Davis with Barclays. Your line is open.

Karsten Voermann: We believe the store closures are a temporary reality we're facing, and we're confident about both the expected financial benefit in the second half of the year branded drug inclusion in ISP, and also farmer manufacturer solutions point of sale discount momentum, as Scott discussed earlier, which are both included in our guide.

Stephanie Davis: ok thank you to my question i i was hoping to ask a little bit more about the biiosimilar constructs and it looks a bit more embedded than the prior contract in your website

Speaker Change: so how should we think about your forward -looking feel as he that some deals with factors and could it actually become fully embedded versus the current transfer to the brand website i'll be with a few more click

Karsten Voermann: We're also pleased with how these can potentially benefit our 2024 exit run rate and compound into 2025. From a margin perspective, we expect adjusted EBITDA margin to be about 32% in the third quarter. For the full year, we expect over $255 million of adjusted EBITDA, up about 18% from 2023 based on our expectations of a high degree of adjusted EBITDA flow through both, and our continued focus on cost structure and efficiency generally. That represents approximately 32% margin up from approximately 29% in 2023. As Guter X has returned to growth in the past few quarters, we believe we're demonstrating the inherent adjusted EBITDA margin growth potential of this business.

Scott Wagner: I'll be with a few more quick.

Scott Wagner: Hey Stephanie, it's got 100%. I mean right now where each of these experiences may have a few more steps. It may have some handoffs around them. And again, if you're talking about embedding, not just cash programs, but again, co-pay assistance and hub enrollments, if you know, one walks through each other. There's a whole bunch of simplicity that we can add, and that, you know, we're trying to work with each manufacturing partner to keep adding into the system.

Scott Wagner: Hey, Stephanie, it's Scott. Oh, 100%. I mean, right now, each of these experiences may have, you know, a few more steps; it may have some handoffs around them. And again, if you're talking about embedding, not just cash programs, but again, co-pay assistance and hub enrollments, if one walks through each of these flows and thinks about them from an e-commerce standpoint, there's a whole bunch of simplicity that we can add in that So we'll keep trying to make those as seamless as possible, both with BI but with every single one of these brands programs.

Scott Wagner: Hey, Stephanie and Scott. Oh, 100%. I mean, right now, each of these experiences may have, you know, a few more steps; it may have some handoffs around them. And again, if you're talking about embedding not just cash programs but again, co-pay assistance and hub enrollments, if, you know, one walks through each of these flows and thinks about them from an e-commerce standpoint, there's a whole bunch of simplicity that we can add So we'll keep trying to make those changes as seamless as possible.

John Ransom: Hey Stephanie, it's Scott. Oh, a hundred percent. I mean right now we're

Speaker Change: Each of these experiences may have a few more steps, it may have some handoffs around them, and again if you're talking about embedding

John Ransom: not just cash programs but again copay assistance and hubenroll and one walks through each of these flows and thinks about him from many commerce standpoint

Speaker Change: There's a whole bunch of simplicity that we can add and that, you know, we're trying to work with each manufacturing partner to keep adding into the system. So we'll keep trying to make those as seamless as possible.

Scott Wagner: So we'll keep trying to make those as seamless as possible, both not just with the eye, but with every single one of these brand programs. Scott, what's the biggest headwind or friction point in getting you guys to have more of that embedded construct? Is it just trying to get the deal faster to market, or is there some sort of ownership that the brands would want to have that maybe prevents you from having this feel a bit more good or ex-native? I think it's a little bit of brand by brand and how what level of integration capability they have in tech speak.

Operator: Smith. With that, I'll now turn it over to the operator for Q&A. Thank you. Ladies and gentlemen to ask the question, please first start one one on your telephone, and then we'll wait to hear your name announced. To withdraw your question, please first start one one again. We ask that you limit yourself to one question and one follow up. Please stand by while we compile the Q&A roster.

Stephanie Davis: And Scott, what's the biggest headwind or friction point in getting you guys to have more of that embedded construct? Is it just trying to get the deals faster to market? Or is there some sort of ownership that the brands would want to have that maybe prevents you from having this be a little bit more Goodrx native?

Speaker Change: Both, not just with BI, but with every single one of these brand programs.

Speaker Change: And Scott, what's the biggest?

Scott Wagner: headwind or a friction point in getting you guys to have more of that embedded construct? Is it just trying to get the deals faster to market? Or is there some sort of ownership that the brands would want to have that maybe prevents you from from having this be a little bit more Goodrx native?

Scott Wagner: I think it's a little bit of brand by brand and how, what level of integration capability they have. In tech speak, that would be how API ready they are, either they are, or in some cases, they have partners who they use to outsource some of this.

Speaker Change: I think it's a little bit of brand by brand and how...

Charles Rhyee: Our first question comes from the line of Charles Rhyee with T.D. Cohen, Yalan is open. Yeah, thanks for taking the question. It's got just wanted to ask, obviously, you know, there's a lot of vectors for growth here, and I'm trying to say you make a good progress across all of these. You know, one thing that you did talk about at investor day was the ACP channel, and if I recall correctly, you had mentioned that, you know, sort of roughly 50% of your max are coming from the top 10% title of ACPs, and this was a potential channel where you put more resources in and we could help drive for the macro just just wondering where we are in that and sort of progress you're making.

Speaker Change: what what level of

Scott Wagner: That would be how API ready, you know, both either they are or in some cases they have partners who they used to outsource some of this, and, you know, we're working to not only make that as easy as possible. But take out steps. So sometimes that that that can happen right out of the jump, and sometimes we work towards it over time. I do think, you know, oh yeah, go ahead.

Speaker Change: Integration capability they have in tech speak that would be how API ready you know both either they are or in some cases they have partners who

Scott Wagner: And, you know, we're working to not only make that as easy as possible but take out steps. So sometimes that can happen right out of the jump, and sometimes we work towards it over time. I do think, you know, oh yeah, go ahead.

Speaker Change: they used to outsource some of this and know we're working not only make that as easy as possible but takeick outstep so sometimes that can happen right out of the jump and sometimes we work towards it overtime

Unknown Speaker: Lauren Rafferty

Scott Wagner: So, I was going to say thematically, these really co-pay assistance programs and hub enrollments are a lot of the promise when you start to talk about embedding workflow. But if anybody's actually ever sort of tried to navigate that world, if you go from one brand to another brand, it's certainly not a clean experience. And part of the promise of Goodrx is that we could take all kinds of that enrollment qualification assistance and just embed it into us.

Scott Wagner: So I was going to say I think somatically these really copay assistance programs and hub enrollments is a lot of the promise when you start to talk about embedding workflow. If anybody's actually ever sort of tried to navigate that world, if you go from one brand to another brand, it's certainly not a clean experience. And part of the promise of good are access that we could take all kinds of that either enrollment qualification assistance and just embed it into us. So I'm obviously talking a little longer term, but with, you know, our brand partners. One of the big things that they are interested in and really want to work with us on is our capability in our platform to do that because we really are the place and people are going to look at any kind of affordability.

Speaker Change: I do think, you know, oh yeah, go ahead.

Speaker Change: I was going to say, I think thematically,

Charles Rhyee: And how we might see that translate more into the macro. Yeah, thanks, Charles. As we said in the script, we've in the second quarter surged media assets into a set of HCP locations, and we're focused on a combination of specialization and geography, as you can expect. We can get, you know, pretty precise about the kinds of offices that would have highest return. As of now, we're putting, you know, relevant media assets, which is the art party of the equation into a lot more HCP offices.

Speaker Change: These really co-pay assistance programs and hub enrollments is a lot of the promise when you start to talk about embedding workflow.

Speaker Change: If anybody's actually ever sort of tried to navigate that world, if you go from one brand to another brand, it's certainly not a clean experience, and part of the promise of Goodrx is that we could take

Scott Wagner: So I'm obviously talking a little longer term, but with our brand partners, one of the big things that they are interested in and really want to work with us on is our capability and our platform to do that, because we really are the place that people are going to look at any kind of affordability program.

Speaker Change: all kinds of that either in enrollment qualification assistance and just embedded into us so i'm obviously talking a little longer term but with our brand partners one of the big things that they are interested and really want to work with us on is

Speaker Change: our capability in our platform do that because we really are the place and people are going to look at any cical affordability programs

Charles Rhyee: And we expect, and what we're seeing is, you know, this has a little bit more longer cycle return. It's not like you put the assets in and immediately all the sudden things are lifting, but we're getting good proof points of individual offices where we're going from, you know, handfuls of scripts to, you know, in some cases, 10 to 20, acting them. But it's still early days and the way we're going to measure that is is really on a cohort return basis.

Stephanie Davis: and take my follow up. Thank you much, Scott.

Operator: Thank you.

Unknown Executive: Thank you. Please stand by for our next question.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Halindra Singh with Truer Securities. Your line is open.

Operator: Please stand by for our next question.

Speaker Change: And to my follow-up, thank you much, Scott.

Scott Wagner: thanks stephany

Jailendra Singh: Our next question comes from the line of how Linda Singh with true or security. Cialan is open. Hi, this is Jailendra Singh from True Security. Thanks for taking my questions up. So, as we are in the heart of the employer selling season, I was curious if you can share any feedback. You've got to meet PBM partners on the interest level in ISP from potentially new employers. In addition to any feedback from your existing employer clients who are currently on platform and their willingness to expand the program across the population or across more drugs on formularies.

Speaker Change: Thank you. Please stand by for our next question.

Speaker Change: our next question comes from the line of how interesting with tr er security cean is open

Jailendra Singh: Hi, this is Jailendra Singh from True Securities. Thanks for taking the time to answer my questions. So, as we are in the heart of the employer selling season, I was curious if you could share any feedback you got from your PBM partners on the interest level in ISP from potentially new employers, in addition to any feedback from your existing employer clients who are currently on the platform and their willingness to expand the program across the population, across more drugs on formularies. And on the same topic, has there been any change to your 35 million ISP-related contribution expected this year

Speaker Change: Hi, this is Jailendra Singh from True Security. Thanks for taking my questions.

Charles Rhyee: So that's a lot of context. I think the punchline for you and for the investment community is we're putting, you know, more attention and dollars in the field in a unique channel that in some ways is unique to get our acts.

Jailendra Singh: So as we are in the heart of the employer selling season, I was curious if you can share any feedback you got from your PBM partners on the interest level in ISP from potentially new employers in addition to any feedback from your existing employer clients who are currently on platform and their willingness to expand the program across the population or across more drugs on formularies.

Scott Wagner: It holds a lot of promise and we should see that continue to build really as we roll into 2025.

Scott Wagner: And on the same topic, has there been any change to your 35 million of ISP-related contribution expected this year? Hey, thanks for that question. It's a topical one. You know, it's interesting.

Karsten Voermann: Creating an effective follow up, maybe Carson. Obviously, a lot of great momentum here, and particularly in the gross margin side. A lot of the things, you know, particularly as you move into direct contracting, can you remind us, sort of, is direct contracting a better margin profile for good or X. And then maybe, you know, you talked about the number of retailers that you have under direct contracting. Maybe you can help us kind of size them in terms of PTR, like how much of PTR is under direct contracting versus the, you know, the traditional PVM model.

Speaker Change: and on the same topic has there been any change to your thirty-five million of ice-related contribution expected this year

Unknown Executive: Hey, thanks for that question. It's a topical one.

Scott Wagner: Hey, thanks for that question. It's a topical one. You know, it's interesting.

Karsten Voermann: Thanks. Thanks, Charles. This is Karsten. To both your questions, first of all, undirect contracting. We strive to maintain margins, roughly equivalent to where they are. So, we don't see it as something that necessarily lifts or lowers our margin. Though as we implement direct contract, we in retailers work together to assess consumer demand, assess appropriate consumer pricing, and the resulting margin levels. And that in any given direct contract can create a little bit of flux retailer by retailer.

Karsten Voermann: BI, part of the partnership with BI, is that they're going to be introducing us to employers that want to integrate into our biosim deal. So that's a flavor of what we're doing with BI that is going to be additive and hopefully can honestly be repeated many times over, not just with BI, but not only our current, but also potential cash partners. So if you think about the potential of these cash programs for non-formulary drugs, we're having a nice first step where BI is actually starting to make some of these introductions or awareness generation where there are own employers, and quite frankly, in some of our other discussions with pharma partners, they're thinking along those lines as well.

Speaker Change: Hey, thanks for that question. It's a topical one, you know, it's interesting. BI...

Karsten Voermann: Each retailer contracts a little different from each other one. But overall, we expect margins to be relatively consistent. And you'll see that too because to go to the second part of your question, as direct contracting increases a percent of revenue. Believe that investor day, we talked about it being well over 20% of our volume. And it's grown since then. You haven't seen significant flux and PTR per Mac. You've seen it degrade a little bit period over period, like single digit percentages. And we'd expect to see that potentially continue into the future, but it's more a function of ISP and other factors than it is above direct contracting, I'd say. Great. Thank you.

Speaker Change: Part of the partnership with BI is that they're going to be introducing us to employers that want to integrate into our Biosim deal.

Karsten Voermann: You know, it's interesting. BI, part of the partnership with BI is that they're going to be introducing us to employers that want to integrate into our Biosim deal. So that's a flavor of what we're doing with BI that is going to be additive and hopefully can be repeated many times over, not just with BI but also with our current and potential cash partners. So if you think about the potential of these cash programs for non-formulary drugs, we're having a nice first step where BI is actually starting to make some of those introductions or awareness generation with their own employers. And quite frankly, in some of our other discussions with pharma partners, they're thinking along those lines too. And just to jump in on this too, Jailendra and Scott, this is Karsten speaking.

Scott Wagner: BI, part of the partnership with BI is that they're going to be introducing us to employers that want to integrate into our Biosim deal. So that's a flavor of what we're doing with BI that is going to be additive and, hopefully, can be honestly repeated many times over, not just with BI but also with our current and potential cash partners. So if you think about the potential of these cash programs for non-formulary drugs, we're having a nice first step where BI is actually starting to make some of those introductions or awareness generation with their own employers. And quite frankly, in some of our other discussions with pharma partners, they're thinking along those lines. And just to jump in on this too, Jailendra and Scott, this is Karsten speaking.

Operator: Please, then, bye for our next question.

Speaker Change: so that's

Speaker Change: Flavor of what we're doing with BI that

Speaker Change: is going to be additive and hopefullylate can honestly be pet repeated

Speaker Change: many times over, not just with BI, but not only our current, but also potential cash partners. So if you think about the potential of these cash programs for non-formulary drugs,

Speaker Change: we're having a nice first step where bi is actually starting to make some of those introductions or awareness generation where there are own employers and quite frankly and some of our other discussions with pharma partners they're pinking a lot of those lines as well

Karsten Voermann: And just to jump in on this to Jeleandra and Scott, this is Carson speaking. To your ISP specific momentum question, we had talked earlier about growth vectors for ISP. Those include bringing more PBMs on, bringing more employers on, and more lives. One of the other dimensions we talked about was increasing the formulary.

Karsten Voermann: To your ISP-specific momentum question, we talked earlier about growth vectors for ISPs. Those include bringing more PBMs on, bringing more employers on, and more lives. One of the other dimensions we talked about was increasing the formulary.

Karsten Voermann: To your ISP-specific momentum question, we talked earlier about growth vectors for ISP. Those include bringing more PBMs on, bringing more employers on, and more lives. One of the other dimensions we talked about was increasing the formulary. And Jailendra, I think it's important to note here, in case it didn't come out clearly in the script, that we've now signed incremental deals with MedImpact, among the other PBMs we announced in the prepared remarks.

Speaker Change: and just take you jumping in this huge lenda in scot

Karsten Voermann: This is Karsten speaking.

Karsten Voermann: To your ISP-specific momentum question, we had talked earlier about growth vectors for ISP. Those include bringing more PBMs on, bringing more employers on, and more lives. One of the other dimensions we talked about was increasing the formulary. And, Jailendra, I think it's important to note here, in case it didn't come out clearly in the script,

Karsten Voermann: And Jailendra, I think it's important to note here, in case it didn't come out clearly in the script, that we've now signed incremental deals with MedImpact, among the other PBMs we announced in the prepared remarks, to do what we call ISP RAP. And this concept is important because traditional ISP was focused on automatically routing a PBM member to the lower of their copay or the Goodrx price uncovered formula RAP does something incremental that's very exciting, which is it does the same automated routing for off-formulary medications.

Karsten Voermann: And Jeleandra, I think it's important to know here, in case it didn't come out clearly in the script, that we've now signed incremental deals with met impact among the other PBMs we announced in the prepared remarks to do what we call ISP RAP. And this concept is important because traditional ISP was focused on automatically routing a PBM member to the lower of their co-pay or the good or ex price uncovered formulary. RAP does something incremental that's very exciting, which is it does the same automated routing for off-formulary medications. So maybe a brand drug that gets prescribed in isn't in your formulary; you as a consumer can now get that at a lower price or even a generic that might be off-formulary because that's happening more and more. Of that step there be your other hurdles are put in place or that even generic can be just frankly off-formulary.

Jailendra Singh: that we've now signed incremental deals with met impact among the other pbms we announced in the prepared remarks

Speaker Change: to do what we call p rap and this concept is important because traditional ip was focused on automatically routing a pbm member to the lower of their copay or the goodor x price uncovered formulary

Speaker Change: rapt something incremental that's very exciting which is it does the same automated routing for off formulary medication

Karsten Voermann: So maybe a brand drug that gets prescribed and isn't in your formulary, you as a consumer can now get that at a lower price, or even a generic that might be off the formulary because that's happening more and more that step therapy or other hurdles are put in place, or that even generics can be just frankly off the formulary. So that's an expansion to ISP that we foresee that will have impacts going forward.

Lisa Gill: Our next question comes from the line of Lisa Gill with JP Morgan. Yelana's open. Thanks very much.

Speaker Change: So maybe a brand drug that gets prescribed and isn't in your formulary

Karsten Voermann: Good morning. I just want to follow up with your comments around the store closures for right aid. So, when, when we think about the store closures, is this because this is a direct contract? And so, therefore, you're going to lose that volume. You try to have recaptured in some other way, because I would think that if it was just a traditional good or ex-user, if they go to, you know, the CVS down the street, it would be the same relationship.

Speaker Change: You as a consumer can now get that at a lower price, or even a generic that might be off-formulary because that's happening more and more, that step therapy or...

Karsten Voermann: So that's an expansion to ISP that we foresee that will have impacts going forward. Now we just signed these deals, so we don't see a lot of 2024 impact just given where we are in the year, people's deductible phases, etc. But with respect to ISP and the momentum that you asked about, this is an important step. That's great, and it's exciting.

Speaker Change: Other hurdles are put in place or the even generics can be just frankly off formulary So that's a an expansion to ISP that we foresee that will have impacts going forward now We just signed these deals So we don't see a lot of 2024 impact just given where we are in the year people's deductible phases, etc

Karsten Voermann: Now we just signed these deals, so we don't see a lot of 2024 impact just given where we are in the year, people's deductible phases, etc. But with respect to ISP and the momentum that you asked about, this is an important step.

Karsten Voermann: So, one, can you help me to understand that? And then, secondly, I just wanted to follow up on your comments on Humera BioSimilar. If you could just give us an idea of what you've seen on the uptake on that side, it would be great. Thank you. Carson, why don't you take the first and I'll take the second. Sure. Sounds good. Lisa, yeah, with respect to right aid, when the priorities we talked about at an investor, it was strengthening our value proposition to key constituents in the healthcare ecosystem.

Speaker Change: But with respect to ISP and the momentum that you asked about, this is an important step.

Jailendra Singh: That's great, and it's exciting. A quick follow-up on this, especially related to GLP-1, you know, with these weight loss drugs coming off the shortest list now and given your, you know, consumer demand and your relationship with pharma companies like Novo, how do you think about your positioning there? Are you expecting some tangible actions from these manufacturers to push their branded product more aggressively into marketing given all the noise around compounding? And how do you see your PMS business positioning in that environment?

Scott Wagner: Let's follow up on Scotchley related to a GLP1 with these weight loss drugs coming off the shortest list now, and given your consumer demand and your relationship with former companies like NOVO, how do you think about your positioning there? Are you expecting some tangible actions from these manufacturers to push their branded product more aggressively into marketing, given all the noise compounding? And how do you see your PMS business positioning in that environment?

Speaker Change: That's great and it's exciting. A quick follow-up on, especially related to GLP-1, you know, with these weight loss drugs coming off the short list now, and given your, you know, consumer demand and your relationship with pharma companies like Novo, how do you think about your positioning there? Are you expecting some tangible actions from these manufacturers to push their branded product more aggressively into marketing, given all the noise around compounding? And how do you see your PMS business positioning in that environment?

Karsten Voermann: And that's pharmacies in particular. We are doing that through hybrid and direct contracting. So, pharmacy economics stay healthy and situations like right aids can be mitigated. That said, the intersection of direct contracting and right aid isn't really the issue here. We believe the right impacts on prescriptions and on our revenue will be temporary over the next quarter or two or a few more. And will not have meaningful impact along term growth because the same number of scripts are being written and we expect consumers to fill them.

Scott Wagner: This is Scott. Well, first of all, you know, again, this category is certainly one of, if not the most innovative, I'd call it consumer product category in a long, long time, maybe since the iPhone. And right now, Lily and Novo, obviously, their biggest problem is fulfillment in manufacturing, which is obviously opening the door to compounding. Right now, we're spending our time working with Novo and Lily because we do really believe in working hand in hand with the brands themselves.

Scott Wagner: Unknown Speaker 0

Scott Wagner: This is Scott. Well, first of all, you know, again, this category is certainly one of, if not the most, innovative, I’d call it consumer product category in a long, long time, maybe since the iPhone. And right now, you know, the Lily and NOVO, obviously, their biggest problem is fulfillment and manufacturing. Which is obviously opening the door to compounding. You know, right now, we're spending our time working with NOVO and Lily because we do really believe in working hand in hand with the brands themselves. It's a nice business for us right now. And as both of those companies start to think about unique ways to go direct to consumers.

Scot: this is scot well first of all you know again that this category is certainly one of it's not the most innovative consumer product category in a long long time maybe since the iphoneone

Speaker Change: And right now, Lilly and Novo, obviously their biggest problem is fulfillment in manufacturing, which is obviously opening the door to compounding.

Karsten Voermann: What's really happening here is that when store closures occur, it's specific to the kinds of stores that are closing. And what I mean by that is that. Different stores are associated with different store closure impacts. We've seen other pharmacy chains, as you know, in particular, larger pharmacy chains, closed stores as well. And those store closures did not have a material impact on Goodrx. Right a different because of the specific kinds of stores and geographies and mix associated with their closures.

Speaker Change: right now we're spending our time working with milvo and lily because we do really believe in in working hand in hand with the brands themselves

Scott Wagner: It's a nice business for us right now, and as both of those companies start to think about unique ways to go direct to consumers, gosh, that's Goodrx. And we're in business with both these companies today. And as they start to think through how and what they may want to do directly, we're obviously a great partner, and we think we can add a ton of capability.

Speaker Change: itsit's a nice business for us right now and as both of those companies start to think about unique ways to go direct

Scott Wagner: Gosh, you know, that's, that's, that's good our acts. And we're, we're, you know, in business with both these companies today, and as they start to think through how and what, you know, they may want to do direct. We're obviously, you know, we're obviously a great constituent, and we think we can add a ton of capability for them.

Speaker Change: Scott Wagner, Karsten Voermann, Karsten Voermann

Karsten Voermann: So that's the real reason we see a bigger impact emanating from right aid than we would potentially from other pharmacies that might be in a similar situation. And I think the final thing to say here is that we, over the last few years, undertook significant efforts on consumer engagement. Again, that ties into growing and deepening our consumer relationships that we talked that about that investor day. The efforts and consumer engagement, including gating users and having them register and building rewards programs are now valuable for us, because it allows us to reach out to consumers and redirect them to other pharmacies.

Speaker Change: They may want to do direct. We're obviously a great constituent, and we think we can add a ton of capability for them.

Operator: Thank you.

Operator: Ladies and gentlemen, due to the inches of time, we ask that you limit yourself to one question per caller. Please stand by for our next question.

Operator: Ladies and gentlemen, due to the interest of time, we ask that you limit yourself to one question per caller. Please stand by for our next question. Our next question comes from the line of Scott Schoenhaus with Key Blank. Your line is open.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, due to the interest of time, we ask that you limit yourself to one question per caller. Please stand by for our next question.

Scott Schoenhaus: Our next question comes from the line of Scott Schoenhaus with Key Links. The line is open.

Scott Schoenhaus: Yeah, I can probably hop in on that one, Scott. Thanks for the question. Karsten here.

Karsten Voermann: Hi, team. Thanks for taking my question. I believe you mentioned in the prepared remarks that ISP volumes were healthy and maybe running a little bit ahead of expectations. Which driving this? Is this more a function of better, you know, cohort of employers that have less robust insurance coverage? Or is it continued volumes into the rest of the year when he thought maybe it would be more seasonal from a deductible standpoint in one queue? Thanks.

Speaker Change: Our next question comes from the line of Scott Schoenhaus with Key Blank. Your line is open.

Scott Schoenhaus: Hi team, thanks for taking my question. I believe you mentioned in the prepared remarks that ISP volumes were healthy and maybe running a little bit ahead of expectations.

Karsten Voermann: So yeah, we see the right aid situation and the geographic unique concentrations that they're closing doors in as differential from other situations that might happen. That's helpful. Thank you. Yeah, Hayley said, Scott, I'll pick up the second part. And I guess thematically you're getting, you know, the, the short term, let's call it slog and then the long term, you know, more positivity, which maybe is represented by the BI deal and where we are with brands in general.

Speaker Change: whichs driving this is is more a function of better cohort of employers that have less robust insurance coverage or is it continued volumes into the rest of the year when heyou thought maybe would be more seasonal from a deductible stamp point in one q

Karsten Voermann: Yeah, I can probably hop in on that one. Thanks for the question.

Karsten Voermann: On ISP, it's running roughly in line with our expectations, although I wouldn't necessarily say it's ahead. So, I think we were pretty accurate in our forecasting of what we expected to see happen this year, though we are seeing a significant number of lives associated with the program. And that's been something that's been a plus for us as the year has progressed. Thank you. And I'll just come in over the top of Karsten, and Karsten made this point a little earlier, but it's an important one.

Karsten Voermann: I think we have a question. Carsting here, the on ISP, it's running roughly in line with our expectations. I wouldn't say necessarily ahead. So I think we were pretty accurate in our forecasting of what we expected to see happen for this year, though we are seeing a significant number of lives associated with the program. And that's been something that's been a plus for us as the years progress.

Karsten Voermann: Yeah, I can probably hop in on that one, Scott. Thanks for the question. Karsten here. On ISP, it's running roughly in line with our expectations. I wouldn't say necessarily ahead, so I think we were

Karsten Voermann: Specifically with the I, what this biosimilar is, is anyone with prescription, regardless of insurance status is going to be able to pay an exclusive cash price of $550 with good or acts. What I think nice about this relative to just get our actions first, this is our first biosimilar. And we do believe that the whole biosimilar category at large is a extremely big opportunity for these kind of cash programs. And so, you know, this is this is the first biosimilar.

Speaker Change: Pretty accurate in our forecasting of what we expected to see happen for this year, though we are seeing a significant number of lives associated with the program. And that's been something that's been a plus for us as the years progress.

Karsten Voermann: And I'll just edit, coming over the top of Carsten, and Carson made this point a little earlier, but it's an important one. Relative to ISP, you know, it's been generics only to date. And you saw with met impact for the first time, our expansion of coverage to non-formulary brand drugs, which gosh, we're hopeful that that has a big opportunity for the system. It's certainly something for the brands, for patients, for the system itself. It's a whole category that we think this is out in a ton of value and works.

Speaker Change: and i'll just and it coming over the top of cararsston and carson made this point a little earlier but it's an important one

Karsten Voermann: Relative to ISP, you know, it's been generics only to date, and you saw with Medimpact for the first time our expansion of coverage to non-formulary brand drugs, which, gosh, we're hopeful that that has a big opportunity for the system. It's certainly something for the brands, for patients, for the system itself. It's a whole category that we think is adding a ton of value, and we're excited about it.

Speaker Change: relative to p it's been generics only to date and you saw with menet impact for the first time our

Karsten Voermann: We would hope and expect there'd be, you know, many more to come. And more broadly, we now have over 40 of these brand cash. Point of sale programs in place with different brands, which is up 50% just from where we started in the air is one of those unique things that good or actually really can do and deliver both directly to consumers to bring an affordable cash price on brands that might not be covered.

Speaker Change: expansion to coverage to nonformulary brand drugs which gosh we're hopeful that that has a big opportunity for the system

Speaker Change: It's certainly something for the brands, for patients, for the system itself. It's a whole category that we think this is adding a ton of value and we're excited about.

Operator: Thank you.

Unknown Executive: Thank you. Please stand by for our next question.

Scott Wagner: Thank you. Please stand by for our next question. Our next question comes from the line of Stan with Wells Fargo Securities. Your line is open. Hi, thanks.

Operator: Please stand by for our next question.

Stanislav Berenshteyn: Our next question comes from the line of Stan with Wells Fargo Securities. Yalan is open. Hi, thanks for taking my questions. Appreciate all the color.

Karsten Voermann: And we're starting to connect the dots back into the plans themselves as evidenced by the extension of met impact and ISP to these uncovered brands. So, you know, this was the first biosimilar, but hopefully there's a lot more to come. Any anything you can give us around like a number on the uptake or anything around that Scott. It's super early Lisa. In this one won't you know, buy itself. This isn't going to.

Stan: Yeah, that is not always the case with all pharmacy closures. And one of the reasons I answered Lisa Gill's question the way I did and said that a lot of the headwind is tied to Rite Aid specifically in the store mix that they're closing is because of this issue. If you're associated with some of these Rite Aid stores and the geographies they're in, you actually do likely need to switch to a different pharmacy chain. And while, in some cases, I think Rite Aid talked about selling some of their consumer data or shifting it to other pharmacies. That's not a one for one, 100% effective process.

Speaker Change: Thank you. Please stand by for our next question.

Speaker Change: Our next question comes from the line of Stan with Wells Fargo Securities. Your line is open.

Karsten Voermann: I'd like to maybe dig into the mechanics of the rate impact. So if I'm thinking about correctly, if you have a good Rx card on file on the store's clothes, the implication is that the Rx bin number doesn't get routed to a different location. And so essentially, you need the consumer to reengage with a different pharmacy using the Rx discount card. Is that correct? Yeah, and that is not always the case with all pharmacy closures. And one of the reasons I answered Lisa Gill's question the way he did and said that this is a lot of the headwind is tied to Rite Aid specifically in the store mix that they're closing is because of this issue.

Stan: Hi, thanks for taking my questions.

Speaker Change: I appreciate all the callers. I'd like to maybe dig into the mechanics of the Raya Impact.

Stan: If I'm thinking about it correctly, if you have a Goodrx card on file and the store is closed, does the implication that the Rx VIN number doesn't get routed to a different location, and so essentially you need the consumer to re-engage with a different pharmacy using the Goodrx discount card? Is that correct?

Karsten Voermann: This isn't a title wave of change by itself. But again, as you start to build more and more of these kind of programs, you know, they can stack pretty meaningfully, but by itself, you know, it's this in and of itself isn't, you know, what you call a quote unquote model changer, but the broad theme of the category and biosimilar certainly can be. Great. Thank you so much. Thank you.

Karsten Voermann: So while we do recapture a significant number of users, we don't recapture all of them because some of them need to go through the process you described, which is presenting their Goodrx card at the new pharmacy where they're going to fill their script stand. And again, we see that as pretty rare given the mix of stores and the geographies they're shutting down. We haven't seen the same kind of impact in store closures by other chains.

Speaker Change: yeah that is not always the case with all pharmacy closures and one of the reasons i answered lisa guilds question the way did and said that this is a lot of the headwind is tied to write it specifically in the store mix that they are closing is because of this issue if you'

Scott Wagner: If you're associated with some of these Rite Aid stores and the geographies they're in, you actually do likely need to switch to a different pharmacy chain. And while in some cases, I think Right Aid talked about selling some of their consumer data or shifting it to other pharmacies, that's not a one-for-one hundred percent effective process. So, while we do recapture a significant number of the users, we don't recapture all of them because some of them need to go through the process you described, which is presenting their GoodRx card at the new pharmacy where they're going to fill their script stand.

Unknown Executive: associated with some of these Rite Aid stores and the geographies they're in, you actually do likely need to switch to a different pharmacy chain. And while in some cases, I think Rite Aid talked about

Speaker Change: Associated with some of these Rite Aid stores and the geographies they're in, you actually do likely need to switch to a different pharmacy chain. And while in some cases, I think Rite Aid talked about

Scott Wagner: Please stand back for our next question.

John Ransom: Our next question comes from the line of John Ransom with Raymond James. Your line is open. Hey, good morning.

Karsten Voermann: When you look at your 24 exit rate, how should we be thinking about that for the three lines of business jumping into 2025? In particular, I'm interested in the manufacturer solution. Thanks. Sure, I can jump in on that one, John. This is Karsten speaking. With respect to the lines of business and to your point manufacturer solution specifically, we've seen year over year growth rates accelerate from last year. But that said, you'll note that the growth rate in year over year growth rate in Q1 was about 20% and Q2 is about 9%.

Speaker Change: selling some of their

Speaker Change: Consumer data or shifting it to other pharmacies. That's not a one-for-one, 100% effective process.

Speaker Change: So while we do recapture a significant number of the users, we don't recapture all of them because some of them need to go through the process you described, which is presenting their Goodrx card at the new pharmacy where they're going to fill their script stand.

Scott Wagner: And again, we see that as pretty right aid unique given the mix of stores and the geographies they're shutting down. We haven't seen the same kind of impact in store closures by other chains.

Speaker Change: and again we see that as pretty right aid unique given the mix of stores and the geographies they're shutting down we haven't seen the same kind of impact in-store closures by others chains

Karsten Voermann: We expect that growth rate to accelerate looking into third quarter and fourth quarter. And we expect it to be on an exit basis when we look at it annualize. We'd expect to see it well into the ranges that we described at investor day. So the above 20% growth rates are more specifically the 20 to 30% growth rate. In fact, as we look forward to the end of the year and then the implied ramp and revenue growth from third quarter to fourth quarter in the guide, we believe farmer manufacturer solutions will be a significant contributor to that growth.

Operator: Thank you.

Kevin Caliendo: Please stand by for our next question. Our next question comes from the line of Kevin Calliando with UBS. Helan is open. Thanks. Thanks for taking my question. Oh, I understand that the change is that we've seen in NADAC pricing on the Medicaid side. Don't directly affect you in your business necessarily, although if you want to clarify that in any way, that'd be helpful. I'm just wondering; you were talking about how you are involved in negotiations between PVMs and pharmacies around cash pay reimbursement. And I'm wondering if PVMs in any way are using what's happening with NADAC to affect any of their other pricing in the marketplace.

Operator: Please stand by for our next question. Our next question comes from the line of Kevin Caliendo with UBS. Your line is open. Thanks.

Speaker Change: Thank you. Please stand by for our next question.

Speaker Change: Our next question comes from the line of Kevin Kalyandu with UBS. Your line is open.

Kevin Caliendo: Thanks. Thanks for taking my question. I understand that the changes that we've seen in NAIDAC pricing on the Medicaid side don't directly affect you in your business necessarily. Although, if you want to clarify that in any way, that'd be helpful. I'm just wondering, you were talking about how you were involved in negotiations between PBMs and pharmacies around cash pay reimbursement, and I'm wondering if PBMs are, in any way, using what's happening with NADAC to affect any of their other pricing in the marketplace. I don't know if any of it's tied to NADAC pricing or not and how they negotiate it. Just interested to know if it's having any other wider effect on how PBMs are behaving.

Unknown Executive: Thanks. Thanks for taking my question. I understand that the changes that we've seen in NAIDAC pricing on the Medicaid side don't directly affect you in your business necessarily. Although, if you want to clarify that in any way, that'd be helpful. I'm just wondering, you were talking about how you were

Kevin Kalyandu: Thanks. Thanks for taking my question. I understand that the changes that we've seen in NAIDAC pricing on Medicaid side don't directly affect you in your business necessarily, although if you want to clarify that in any way, that'd be helpful. I'm just wondering, you were talking about how you were

Speaker Change: involved in negotiations between PBMs and

Speaker Change: and pharmacies around cash pay reimbursement. And I'm wondering if PBMs.

Karsten Voermann: And that's what we're what we're focusing on over the coming two quarters, really driving that business hard. As Scott said, in particular, our point of sale discount deals around branded medications and divisor have been a differentiated sweet spot for us. And we expect to see all those deals that we've signed that Scott talked about over the coming quarter quarters ramping and converting into more revenue that you and others will see.

Speaker Change: in any way are using what's happening with NADAC to affect any of their other pricing in the marketplace. I don't know if any of it's tied to NADAC pricing or not and how they negotiate it. Just interested to know if it's having any other wider effect on how PBMs are behaving.

Mike Walsh: I don't know if any of it's tied to NADAC pricing or not, and how they negotiate it. Just interested to know if it's having any other wider effect than how PVMs are behaving.

Mike Walsh: Yeah, I can jump in here. This is Mike Wall speaking. So I think to clarify, we do have agreements with retail pharmacy partners that are predicated on NADAC. So that is an industry-wide benchmark that pharmacies and directs can use to establish pricing that helps pharmacies get adequate reimbursement and helps us grow. And it's a really nice benchmark for us to work off of. So, to your point, there have been some fluctuations in the market with NADAC pricing that has impacted ourselves and our retail partners. But I think the good news is that we're kind of, we're all in this together, I would say, and so we're working through it with them.

Mike Walsh: Yeah, I can jump in here. This is Mike Walsh speaking. So to clarify, we do have agreements with retail pharmacy partners that are predicated on NADAC. So that is an industry-wide benchmark that pharmacies and Goodrx can use to establish pricing that helps pharmacies get adequate reimbursement and helps us grow. And it's a really nice benchmark for us to work off of. So to your point, there have been some fluctuations in the market with NADAC pricing that have impacted us and our retail partners.

Speaker Change: Yeah, I can jump in here. This is Mike Walsh speaking. So I think to clarify, we do have agreements with retail pharmacy partners.

Unknown Executive: that are predicated on NADAC. So that is a benchmark that pharmacies and Goodrx can use to establish pricing that helps pharmacies get adequate reimbursement and helps us grow, and is a really nice benchmark for us to work off of. So to your point, there have been some fluctuations in the market with NADAC pricing that have impacted ourselves and our retail partners. We're all in this together, I would say. And so we're working through it with them.

Scott Wagner: Great. It's all editorial. It's over the editorial lives over the top, which is obviously from, you know, the year over year growth rate of the second quarter to then, you know, programs and deals announced in the pipeline. We got to keep signing up more signing up more deals, both brand programs, co pay assistance and different ways to reach these into the funded plans of between now and the rest of the year.

Speaker Change: that are predicated on NADAC.

Speaker Change: So that is a, you know, industry-wide benchmark.

Speaker Change: that you know pharmacies and the directs can use to establish pricing that helps pharmacies get

Speaker Change: Out of credit reimbursement helps us grow and is a really nice benchmark for us to work off of. So to your point, there have been some fluctuations in the market with NADAC pricing that has impacted ourselves and our retail partners.

Scott Wagner: We got to keep, you know, keep, keep signing a whole bunch of things up to get into that 20% run rate. But we've got a lot of proof points sort of all the activity and feedbacks positive. But we got to, you know, we got to keep nail on them and do it with urgency.

Mike Walsh: But I think the good news is that we're kind of, We're all in this together, I would say. And so we're working through it with them. And although there was some temporary chaos, I think we've gotten to a point where we're evening out and getting to a steady state.

Speaker Change: But I think the good news is that we're kind of...

Operator: Great.

Karsten Voermann: And although there was some temporary shop, I think we've gotten to a point where we're evening out and getting to two steady state. And along that note, the second part of your question around PBM agreements. Yes, there are certain PBM pricing agreements as well within our network that are based on NADAC. I think it really has become a, you know, standard benchmark to set, you know, pricing across the industry. So it is something that we, we do both directly and we've seen with our PBM partners as well.

Speaker Change: we're all in this together i would say we're working through it with them and although there was a temporary shop i think we've got into a point where 're evening out and getting d to steady state

Mike Walsh: And on that note, the 2nd part of your question around PBM agreements. Yes, there are certain PBM pricing agreements as well within our network that are based on NADAC. I think it really has become a standard benchmark to set prices across the industry. So it is something that we do both directly and we've seen with our PBM partners as well.

Unknown Executive: And although there was some temporary chop, I think we've gotten to a point where we're evening out and getting to a steady state. And on that note, the second part of your question around PBM agreements, yes, there are certain PBM pricing agreements as well within our network that are based on NADAC. I think it really has become a standard benchmark to set prices across the industry. So it is something that we do both directly, and we've seen with our PBM partners as well.

John Ransom: And just my follow up, if we think about right a specifically the $5 million bad guy, does that kind of come with this usual sort of gross margin attached rate. So we should think about that being, you know, almost like for like EBITDA hits. And so you're, you're even a guy is jumping over, you know, a 4 million plus right aid bad guys or something I'm missing there. I think that's an accurate way to think about it, John, that's the way we're looking at it too.

Speaker Change: And along that note, the second part of your question around PBM agreements, yes, there are certain PBM pricing agreements as well within our network that are based on NADAC. I think it really has become a

Speaker Change: you know standard benchmark to set you know pricing across the industry.

Karsten Voermann: And yeah, to comment over the top, Kevin, a little on that Goodrx pricing doesn't directly move with or equivalently to NADAC pricing, just given the sort of ratio of agreements and how our prices get set, number one. And number two, we did see, as Mike said, some choppiness with NADAC earlier in the year. But if you look at it from the beginning of the year to today, the movement is actually not very significant at all. So this is not a big factor in our guide or in any of the numbers that we're putting out as we look forward into the future. Not a big impact at all.

Karsten Voermann: And yeah, to come in over the top, Kevin, a little on that. GoodRx pricing doesn't directly move with or equivalently to NADAC pricing, just given the sort of ratio of agreements and how our prices get set. Number one, and number two, we did see, as Mike said, some choppiness to NADAC earlier in the year, but if you look at it from the beginning of the year to today, the movement is actually not very significant at all. So this is not a big factor in our guide or in, in any of the numbers that we're putting out as we look forward into the future, not a big impact at all.

Speaker Change: So it is something that we do both directly and we've seen with our PBM partners as well.

John Ransom: So we're driving efficiency in the business and we're seeing flow through from growth generally that mitigates the bad guy on on right aid and leaves us net up on adjusted EBITDA. And I think that's exactly what you said. So hopefully I'm confirming for you.

Speaker Change: And yeah, to come in over the top, Kevin, a little on that.

Kevin Kalyandu: Goodrx pricing doesn't directly move.

Kevin Kalyandu: with or equivalently to NADAC pricing, just given the sort of ratio of agreements and how our prices get set.

Operator: Thank you.

Kevin Kalyandu: Number one, and number two, we did see, as Mike said, some choppiness to NADAC earlier in the year.

Stephanie Davis: Please stand by for our next question.

Speaker Change: But if you look at it from the beginning of the year to today, the movement is actually not very significant at all, so this is not a big factor in our guide or in any of the numbers that we're putting out as we look forward into the future. Not a big impact at all.

Scott Wagner: Our next question comes from Alanis, Stephanie Davis with Barclays, Yalanis Open. Hey guys, thank you for taking my question. I was hoping to ask a little bit more about the bio-summon constructs. It looks a bit more embedded than the prior construct on your website. So how should we think about your forward look and feel if you get some of these deals with many doctors? And could it eventually become fully embedded? Versus the current transfer to the brand website, I'll be with a few more quick.

Allen Lutz: Thank you. Please stand by for our next question. Our next question comes from the line of Allen Lutz with Bank of America. Your line is open. Good morning. Thanks for taking the questions.

Operator: Please stand by for our next question. Our next question comes from the line of Allen Lutz with Bank of America. Your line is open.

Unknown Executive: Please stand by for our next question.

Speaker Change: Thank you. Please stand by for our next question.

Speaker Change: Our next question comes from the line of Allen Lutz with Bank of America. Your line is open.

Allen Lutz: Good morning. Thanks for taking the questions. I want to start with something Scott said around the ISP wrap. If a drug isn't on your PBMs formulary, can you talk about what the win rate would be relative to the PBMs rate? I would assume that it's close to 100% when it's all formulary. So can you provide any type of context on how much higher the win rate would be there? And then, as a quick follow-up, I appreciate all the commentary on Rite Aid and the specifics around their business.

Karsten Voermann: I want to start with something Scott said around the ISP rap. If the drug isn't on your PBM's formulary, can you talk about what the win rate would be relative to the PBM's rate? I would assume that it's close to 100% when it's all formulary. So can you provide any private context on how much higher the win rate would be there?

Scott Wagner: Hey Stephanie, it's got 100%. I mean right now where each of these experiences may have a few more steps. It may have some handoffs around them. And again, if you're talking about embedding, not just cash programs, but again, co-pay assistance and hub enrollments. If you know, one walks through each other. There's a whole bunch of simplicity that we can add and that, you know, we're trying to work with each manufacturing partner to keep adding into the system.

Allen Lutz: Good morning, thanks for taking the questions. I want to start with something Scott said around the ISP wrap.

Allen Lutz: If a drug isn't on your PBM's formulary, can you talk about what the win rate would be relative to the PBM's rate? I would assume that it's close to 100%.

Allen Lutz: If there were Walgreens store closures, would you need the same type of dynamic you're seeing with the Rite Aid business, where you would need to see the consumers re-engage if their script went to a different pharmacy?

Karsten Voermann: And then, as a quick follow-up, I appreciate all the commentary on Rite Aid and the specifics around their business. If there were Walgreens store closures, would you need the same type of dynamic you're seeing with the righty business, where you would need to see the consumers re-engage if their script goes to a different pharmacy? Thanks.

Speaker Change: when it's all formula so can you provide a pv of context on

Speaker Change: How much higher the win rate would be there?

Allen Lutz: and then as a quick follow up

Speaker Change: i pretainil all the commentary on right aid and the specifics around their business if there were were walallgreens store closures would you need the same type of dynamic you're seeing with the writing business where you would need to see the consumers reengage if their scripts goes to a different pharmacy

Scott Wagner: So we'll keep trying to make those as seamless as possible. Both not just with the eye, but with every single one of these brand programs. And Scott, what's the biggest headwind or friction point in getting you guys to have more of that embedded construct? Is it just trying to get the deal faster to market, or is there some sort of ownership that the brands would want to have that may be prevents you from having this feel a bit more good or ex-native?

Karsten Voermann: Sure. I can probably take those to start, and then Scott will probably jump in on rap.

Karsten Voermann: Thanks. Sure, I can.

Karsten Voermann: Sure, I can probably take those to start, and then Scott will probably jump in. On WRAP, first of all, we just signed the WRAP deals very recently. As you saw, we essentially announced them on this call. So from that perspective, we don't have a ton of trajectory. But to your point, if something's off formulary, we anticipate that the win rate could be quite healthy indeed.

Speaker Change: Sure, I can probably take those.

Scott Wagner: First of all, we just signed the rap deals very recently. As you saw, we essentially announced them on this call. So, from that perspective, we don't have a ton of trajectory, but to your point, if something's off formulary, we anticipate that the win rate could be quite healthy indeed.

Speaker Change: To start, and then Scott will probably jump in, on WRAP, first of all, we just signed the WRAP deals very recently. As you saw, we essentially announced them on this call. So from that perspective, we don't have a ton of trajectory. But to your point, if something's off formulary, we anticipate that the win rate could be quite healthy indeed.

Scott Wagner: To your second point about Walgreens, store mix and the chain that's doing the closures matters a lot. Like we've already seen in the case of another non-Walgreens and non-Rite Aid pharmacy, a large number of store closures this year. And we haven't seen that materially impact our business. It really is store-specific and geography-specific to know how much impact there could possibly be. So at this point in time for Walgreens, there isn't enough specific information on things like locations, number of stores, or timing to be able to assess the impact with a ton of specificity.

Karsten Voermann: So your second point around Walgreens store mix and the chain that's doing the closures matters a lot. Like we've already seen in the case of another non-Walgreens and non-Rite Aid pharmacy, a large number of store closures this year. And we haven't seen that materially impact our business. It really is store specific and geography specific to know how much impact there could possibly there could possibly be. So at this point in time for Walgreens, there isn't enough specific information on things like locations, number of stores, or timing to be able to assess the impact with a ton of specificity.

Scott Wagner: I think it's a little bit of brand by brand and how, what level of integration capability they have in tech speak that would be how API ready, you know, both either they are or in some cases they have partners who they used to outsource some of this and, you know, we're working to not only make that as easy as possible. But take out steps. So sometimes that that that can happen right out of the jump and sometimes we work towards it over time.

Speaker Change: to your second point around walallgreens

Speaker Change: Store mix and the chain that's doing the closures matters a lot like we've already seen in the case of another non Walgreens and non Rite Aid pharmacy

Speaker Change: A large number of store closures this year, and we haven't seen that materially impact our business. It really is store-specific and geography-specific.

Speaker Change: to know how much impact there could possibly be.

Scott Wagner: I do think, you know, oh yeah, go ahead. They're not the thing. So I was going to say I think thematically. These really copay assistance programs and hub enrollments is a lot of the promise when you start to talk about embedding workflow. If anybody's actually ever sort of tried to navigate that that that world it if you go from one brand to another brand, it's certainly not a clean experience and part of the promise of good or access that we could take.

Speaker Change: So at this point in time for Walgreens, there isn't enough specific information on things like locations, number of stores, or timing.

Karsten Voermann: But based on our work so far, we think that, well, we've taken a prudent approach to guidance and left some room in the guide for it. We don't think at this point that they'll have a material impact.

Scott Wagner: But based on our work so far, we think that while we've taken a prudent approach to guidance and left some room in the guide for it, we don't think, at this point, that will have a material impact. Scott, I think you want to get in too. Oh, sure.

Speaker Change: To be able to assess the impact with a ton of specificity, but based on our work so far, we think that, well, we've taken a prudent approach to guidance and left some room in the guide for it. We don't think at this point that will have a material impact.

Scott Wagner: Scott, I think you want to get into. Oh, sure.

Karsten Voermann: Back to your first part, Allen, there's a little flywheel between these cash programs with brands and this kind of non-covered formulary program with the PBM. So, for example, we'll get a look. Our cash price will be offered for every non-covered or non-formulary brand drug. And then, as we bring more affordable cash programs into that, our conversion rate will be higher. We'll get a look at all of them. Depending upon the cash price, there might be some consumer walkaways. But as we do more and more of these cash programs, obviously, that should increase our conversion rate pretty meaningfully.

Scott Wagner: Back to your first part, Allen, there's a little flywheel between these cash programs with brands and this kind of non-covered formulary program with the PBN. So, for example, you know, we'll get a look; the cash price will be offered to every non-covered or non-formulary brand drug. And then, as we bring more affordable cash programs into that, that our conversion rate will be higher. We'll get a look at all of them; depending upon the cash price, there might be some consumer walkaways. But as we do more and more of these cash programs, obviously that should increase our conversion rate pretty meaningfully.

Speaker Change: Scott, I think you want to get in too.

Scott: Oh, sure. Back to your first part, Alan, there's a little flywheel between these cash programs with brands and...

Scott Wagner: All kinds of that either enrollment qualification assistance and just embedded into us. So I'm obviously talking a little longer term, but with, you know, our brand partners, one of the big things that they are interested and really want to work with us on is. Our capability and our platforms do that because we really are the place and people are going to look at any kind of affordability.

Scott: this kind of non-covered formulary program with the PBM. So for example, we'll get a look, our cash price will be offered

Operator: Thank you. Please stand by for our next question.

Scott: To every non-covered or non-formulary brand drug, and then as we bring more affordable cash

Scott: programs into that that our conversion rate will be higher i 'll get a look at allof them depending upon the cash price there might be there might be some consumer walkways but as we do more and more of these cash programs obviously that should increase our conversion grade pretty meaningfully

Jailendra Singh: Our next question comes from the line of how Linda Singh with true or security. Cielan is open. Hi, this is Jailendra Singh from True Security. Thanks for taking my questions up. So as we are in the heart of the employer selling season, I was curious if you can share any feedback. You've got to make PBM partners on the interest level in ISP from potentially new employers in addition to any feedback from your existing employer clients who are currently on platform and their willingness to expand the program across the population or across more drugs on formularies.

Operator: Thank you.

Craig Hettenbach: Please stand by for our next question. Our next question comes from the line of Craig Hittinbout with Morgan Stanley. Your line is open. Hi, this is Jay on for Craig. Thanks for taking my question. With ISP's now further ramps into the year and since those claims would flow into the Mac count as well.

Operator: Please stand by for our next question. Our next question comes from the line of Craig Hettenbach with Morgan Stanley. Your line is open.

Unknown Executive: Our next question comes from the line of Craig Hettenbach with Morgan Stanley. Your line is open.

Speaker Change: Thank you. Please stand by for our next question.

Speaker Change: Our next question comes from the line of Craig Hettenbach with Morgan Stanley . Your line is open.

Craig Hettenbach: hithis is j on for craig thanks for taking my fions with i seasonnow further rampom of the year and since those claims will flow into the backaccoun as well i'm curried to how has i spe andinfluence ph fromommax so far and how do you expect those trans evolveves as if's the programs mat shore with the expansions and all thank you

Karsten Voermann: Here's to how has ISP's influence PTR per Mac so far, and how do you expect those trends evolve as the programs are sure with the expansions and all. Thank you.

Jailendra Singh: And on the same topic, has there been any change to your 35 million of ISP related contribution expected this year? Hey, thanks for that question. It's a topical one. You know, it's interesting. BI, part of the partnership with BI is that they're going to be introducing us to employers that want to integrate into our biosimdeal. So that's a flavor of what we're doing with BI that is going to be additive and hopefully can honestly be repeated many times over, not just with BI, but not only our current but also potential cash partners.

Karsten Voermann: Sure, I'll take this one from a PTR per Mac perspective and from a Mac count perspective as well. You've seen Y-O-Y max up about 8%, and you've seen PTR per Mac be relatively stable. Y-o-y PTR per Mac is effectively flat right now. But up Q over Q.

Craig Hettenbach: Sure, I'll take this one. From a PTR per MAC perspective, and from a MAC count perspective as well, you've seen YOY max out at about 8%, and you've seen PTR per MAC be relatively stable. YOY PTR per MAC is effectively flat right now, but up Q over Q.

Unknown Executive: Sure, I'll take this one. From a PTR per MAC perspective, and from a MAC count perspective as well, you've seen YOY max out at about 8%, and you've seen PTR per MAC be relatively stable. YOY PTR per MAC is effectively flat right now, but up Q over Q.

Speaker Change: Sure, I'll take this one.

Speaker Change: From a PTR per MAC perspective, and from a MAC count perspective as well, you've seen YOY MACs up about 8%, and you've seen PTR per MAC be relatively stable. YOY PTR per MAC is effectively flat right now.

Karsten Voermann: First of all, I think I'll make the point that we do see PTR per MAC potentially drifting down a little bit over time, and that can be a function of ISP due to contribution from ISP being higher in the first half versus the second half of the year, as people hit their deductible phase, certainly in the long term, as ISP reaches a stasis level. And secondly, because some of our users who use Goodrx regularly outside ISP may have more claims in a particular period than ISP users will.

Unknown Executive: First of all, I think I'll make the point that we do see PTR per MAC potentially drifting down a little bit over time, and that can be a function of ISP due to contribution from ISP being higher in the first half versus the second half of the year, as people hit their deductible phase, certainly in the long term, as ISP reaches a stasis level. And secondly, because some of our users who use Goodrx regularly outside ISP may have more claims in a particular period than ISP users will.

Karsten Voermann: First of all, I think I'll make the point that we do see PTR per Mac potentially drifting down a little bit over time. And that can be a function of ISP due to contribution from ISP being both higher in the first half or second half of the year as people hit their deductible phase. Certainly, in the long term, as ISP reaches a state level. And then secondly, because some of our users who use good or X regularly outside ISP may have more claims in a particular period than ISP users will. So the effects of ISP effectively, I think from our perspective, would be that the numerator of PTR per Mac.

Speaker Change: But up Q over Q. First of all, I think I'll make the point that we do see PTR per MAC potentially drifting down a little bit over time.

Speaker Change: And that can be a function of ISP due to contribution from ISP being both higher in the first half versus second half of the year, as people hit their deductible phase, certainly in the long term, as ISP reaches a stasis level. And then secondly, because

Jailendra Singh: So if you think about the potential of these cash programs for non-formulary drugs, we're having a nice first step where BI is actually starting to make some of these introductions or awareness generation where their own employers and quite frankly and some of our other discussions with pharma partners, they're thinking along those lines as well. And just to jump in on this to Jelandra and Scott. This is Carson speaking. To your ISP specific momentum question, we had talked earlier about growth vectors for ISP.

Speaker Change: some users who use good or xs regularly outside eyes b may have more claims in a particular period than i p users as well

Karsten Voermann: So the effects of ISPs, effectively, I think from our perspective would be that the numerator of PTR per MAC might be a little smaller because of the reduced number of claims per MAC. And the denominator, of course, increases with ISP as more users come on. But as I said, for now, we've seen PTR per MAC be flat. So going forward, we do potentially see it drifting down in the low single-digit percentage points like you've seen, for example, in previous quarters.

Unknown Executive: So the effects of ISPs, effectively, I think from our perspective would be that the numerator of PTR per MAC might be a little smaller because of the reduced number of claims per MAC. And the denominator, of course, increases with ISP as more users come on. But as I said, for now, we've seen PTR per MAC be flat. So going forward, we do potentially see it drifting down in the low single-digit percentage points like you've seen, for example, in previous quarters.

Speaker Change: So, the effects of ISP effectively, I think from our perspective, would be that the numerator of PTR per MAC,

Karsten Voermann: The numerator might be a little smaller because of reduced number of claims per Mac, and the denominator, of course, increases with ISP as more users come on. But, as I said for now, we've seen PTR per Mac be flat.

Jailendra Singh: Those include bring more PBMs on, bring more employers on and more lives. One of the other dimensions we talked about was increasing the formulary and Jelandra, I think it's important to know here in case it didn't come out clearly in the script that we've now signed incremental deals with met impact among the other PBMs we announced in the prepared remarks to do what we call ISP rap. And this concept is important because traditional ISP was focused on automatically routing a PBM member to the lower of their copay or the good or ex price uncovered formulary.

Speaker Change: The numerator might be a little smaller because of reduced number of claims per MAC and the denominator of course increases with ISP as more users come on.

Operator: So going forward, we do potentially see it drifting down in the low single-digit percentage points, like you've seen for example in previous quarters. Thank you.

Speaker Change: but as i said for now we've seen p perac be flat though' going forward we do potentially see it drifting down in the low single-digit percentageof points like you've seen for example in previous quarters

Daniel Grosslight: Please stand by for our next question. Our next question comes from the line up down your growth flight with city. Your line is open.

Speaker Change: Thank you. Please stand by for our next question.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Daniel Grosslight with Citi. Your line is open.

Scott Wagner: Hi, guys, thanks for taking the question. I wanted to go back to employer receptivity to ISP. You know, we've seen now the second lawsuit filed against the self-insured employer for mismanaging their drug benefit, and one of the lawsuits out there actually took screenshots from GoodRx to show how much lower you guys are versus the fund of benefit. So I'm curious if you're hearing increased chatter in the market about adopting ISP directly from employers, given you would think that might shield them from some of these lawsuits that have popped up about mismanaging the drug benefit.

Speaker Change: Our next question comes from the line of Daniel Grosslight with Citi. Your line is open.

Jailendra Singh: Rap does something incremental that's very exciting which is it does the same automated routing for off-formulary medications. So maybe a brand drug that gets prescribed and isn't in your formulary, you as a consumer can now get that at a lower price or even a generic that might be off-formulary because that's happening more and more of that step therapy or other hurdles are put in place or that even generics can be just frankly off-formulary.

Daniel Grosslight: Hi guys, thanks for taking the question. I wanted to go back to employer receptivity to ISB. You know, we've seen now the second lawsuit filed against the self-insured employer for mismanaging

Speaker Change: their drug benefit in one of the lawsuits out there actually took screenchorots from good or exs to show how much lower you guys are versus a fund of benefit

Speaker Change: some curious if you're hearing increased chatter in the market about adopting ip directly from employers given you would think that that might shield them from some of these lawsuit that have popped up about misvantaging a drug benefit

Jailendra Singh: So that's an expansion to ISP that we foresee that will have impacts going forward. Now we just signed these deals so we don't see a lot of 2024 impact just given where we are in the year, people's deductible phases etc. But with respect to ISP and the momentum that you asked about, this is an important step. That's great, and it's exciting. Let's follow up on Scotchley related to a GLP1 with these weight loss drugs coming off the shortest list now and given your consumer demand and your relationship with former companies like Novo, how do you think about your positioning there?

Scott Wagner: Daniel, thanks, it's Scott. Well, maybe consider this a plug for every employer to just offer Goodrx as a compliment to their insurance, to their commercial benefit. I think, to hopefully bring this as a complement to the commercial benefit. And honestly, there should be no reason that that can't become almost more like a structural sidecar in the industry. To date, we have not had direct discussions with employers.

Daniel Grosslight: Daniel, thanks. It's Scott.

Scott Wagner: Daniel, thanks, it's gone. Well, maybe consider this a plug to every employer to just offer GoodRx as a complement to their insurance, to their commercial benefit. I think, you know, it's certainly showing the value problem. What we're doing today is working with PBM partners to hopefully bring, you know, bring this to the complement to the commercial benefit. And honestly, there should be no reason that that can't become almost look more like a structural side car in the industry.

Speaker Change: Daniel, thanks. It's Scott. Well, maybe consider this a plug to every employer to just offer Goodrx as a compliment to their insurance, to their commercial benefit. I think

Scott Wagner: Well, maybe consider this a plug for every employer to just offer Goodrx as a compliment to their insurance, to their commercial benefit. I think, you know, it's certainly showing the value, Prob. What we're doing today is working with PBM partners to hopefully bring this as a complement to the commercial benefit. And honestly, there should be no reason that that can't become almost more like a structural sidecar in the industry.

Speaker Change: you know it's certainly showing the value prob what we're doing today is working with t b m partners

Jailendra Singh: Are you expecting some tangible action from these manufacturers to push their branded product more aggressively into marketing, given all the noise compounding? And how do you see your PMS business positioning in that environment? This is Scott. Well, first of all, you know, again, this category is certainly one of if not the most innovative, I'd call it consumer product category in a long, long time, maybe since the iPhone. And right now, you know, the Lilly and Novo, obviously, their biggest problem is fulfillment and manufacturing, which is obviously a big problem.

Speaker Change: to hopefully bring, you know, bring this as a complement to the commercial benefit. And honestly, there should be no reason that that can't become almost more like a structural sidecar in the industry.

Scott Wagner: To date, we have not had direct discussions with employers. And there's certainly no cost to them. We've not done that today, but that'll be something that, you know, we're spending some time thinking about. And how that can complement the existing ways that plans and PBMs introduce. These two employers were thinking through how and what maybe we should be doing on our own.

Scott Wagner: To date, we have not had direct discussions with employers, and there's certainly no cost to them. We haven't done that to date, but that'll be something that, you know, we're spending some time thinking about, and how that can complement the existing ways that plans and PBMs introduce these to employers. We're thinking through how and what maybe we should be doing on our

Speaker Change: To date, we have not had direct discussions with employers.

Speaker Change: And there's certainly no cost to them.

Speaker Change: We've not done that to date, but that'll be something that, you know, we're spending some time thinking about and how that can complement the existing ways that plans and PBMs introduce these to employers. We're thinking through how and what maybe we should be doing on our own.

Operator: Thank you. Please stand by for our next question.

Operator: Please stand by for our next question. Our next question comes from the line of Jack Wallace with Guggenheim Securities. Your line is open.

Unknown Executive: Please stand by for our next question.

Jailendra Singh: It's probably opening the door to compounding. You know, right now, we're spending our time working with Novo and Lilly because we do really believe in working hand in hand with the brands themselves. It's a nice business for us right now. And as both of those companies start to think about unique ways to go direct to consumers, gosh. You know, that's, that's, that's good our acts. And we're, we're, you know, in business with both these companies today.

Speaker Change: Thank you.

Jack Wallace: Our next question comes from the line of Jack Wallace with Google on security. Your line is open. Hey, thanks for squeezing me in. Just so we can just kind of get a better context for the retail pharmacy closure issue. Thanks for qualifying the impact of the righted stores for this year. You remind us how much of your distribution is through a standalone retail pharmacy versus a co-located or owned outright by a grocery chain. And then you're just thinking about the general shrinkage of the retail pharmacy footprint for the last couple of years and appears to be a consistent kind of going forward.

Speaker Change: Please stand by for our next question.

Jack Wallace: Hey, thanks for squeezing me in. Just so we can just kind of get a better context for the retail pharmacy closure issue. Yeah, thanks for quantifying the impact of the right at stores for this year. You remind us how much of your distribution is through a kind of stand-alone retail pharmacies versus a co-located or owned outright by a grocery chain. And then you think about the general shrinkage of the retail pharmacy footprint for the last couple of years and appears to be a consistent trend going forward. How much of any impact from store closures baked into your guidance that you laid out at the analyst day for the multi-year guide? Thank you. Sure, thanks.

Speaker Change: Our next question comes from the line of Jack Wallace with Guggenheim Securities. Your line is open.

Jack Wallace: athink squeeze me and just so we can just kind of get a better context for the the retail pharmacy closure issue the then thanks for for quantifying the impact of the right stores for this year

Speaker Change: You remind us how how much of your

Jack Wallace: Distribution is through a stand alone retail pharmacy versus say a co-located or owned outright by a

Jailendra Singh: And as they start to think through how and what, you know, they may want to do direct, we're obviously, you know, we're, we're obviously a great constituent. And we think we can add a ton of capability for them. Thank you. Ladies and gentlemen, due to the inches of time, we ask that you limit yourself to one question per caller. Please stand by for our next question.

Speaker Change: by a grocery chain and then you're just thinking about the general shrinkage of the retail pharmacy footprint.

Karsten Voermann: How much of any impact from store closures is baked into your guidance that you laid out at the analyst day that the multi guide. Thank you. Sure.

Speaker Change: For the last couple of years, and...

Speaker Change: appears did you be a consistent trend going forward

Speaker Change: How much of any impact from store closures is baked into your guidance that you laid out at the analyst day, the multi-year guide? Thank you.

Karsten Voermann: Sure, thanks for the question and great to hear from Jack. This is Karsten.

Karsten Voermann: Sure, thanks for the question and great to hear from Jack. This is Karsten. On the first prong, which is

Karsten Voermann: Thanks for the question, and great to you from Jack. This is Karsten on the first prong, which is grocer versus retail pharmacy post the crowbar issue. We don't really have significant over/under indexing of different retailers relative to their market share and prescriptions generally. We have one large retail is a bit heavier for us, but for the most part, the over under indexing that you saw during the crowbar era has largely gone away. So I think that probably helps with the first question with respect to the second part of the question on our investor day and closures.

Speaker Change: Sure, thanks for the question and great to hear from Jack. This is Karsten. On the first prong, which is

Scott Wagner: Our next question comes from the line of Scott show and house with two lines. The line is open. Hi, team. Thanks for taking my question. I believe you mentioned in the prepared remarks that ISP volumes were healthy and maybe running a little bit ahead of expectations. Which driving this is this more a function of better, you know, cohort of employers that have less robust insurance coverage or as it continued volumes into the rest of the year when he thought maybe it would be more seasonal from a deductible standpoint in one queue.

Karsten Voermann: On the first prong, which is Grocer vs. Retail Pharmacy, post the Kroger issue, we don't really have significant over or under indexing of different retailers relative to their market share and prescriptions generally. We have one large retailer that's a bit heavier for us, but for the most part, the over-under indexing that you saw during the Kroger era has largely gone away. So I think that probably helps with the first question

Speaker Change: Grocer versus Retail Pharmacy. Post the Kroger issue...

Speaker Change: We...

Speaker Change: don't really have significant over or under-indexing.

Speaker Change: of different retailers relative to their market share and prescriptions generally

Speaker Change: We have one large retailer that's a bit heavier for us, but for the most part, the over-under indexing that you saw during the Kroger era has largely gone away.

Scott Wagner: Thanks. Yeah, I can probably hop in on that one. Thanks for the question. Carsten here. The on ISP. It's running roughly in line with our expectations. I wouldn't say necessarily ahead. So I think we were pretty accurate in our forecasting of what we expected to see happen for this year. So we are seeing a significant number of lives associated with the program. And that's been something that's been a plus for us as the years progress.

Karsten Voermann: With respect to the second part of the question on our investor day enclosures, I think the reality is that when our investor day happened, we didn't have a lot of the specific information we do now. It's really post June. And when the Rite Aid bankruptcy petition was accepted by the courts, the specific lists of stores, locations, and timing came out, and that's also when store closures accelerated a lot. And those two dimensions mean, for us, that's really the new information that has happened since investor day.

Speaker Change: So I think that probably helps with the first question.

Karsten Voermann: I think the reality is, is when our investor day happened. We didn't have a lot of the specific information we do now. It's really post June and when the Rite Aid bankruptcy petition was accepted by the courts that the specific lists of stores locations timing came out. And that's also in store closures accelerated a lot. And those two dimensions mean for us, that's really the new information that happened since Investor Day. We did our investor day in May. Would have been nice to have that information then. But the reality is that all happened about a month later in June/second part of June.

Speaker Change: With respect to the second part of the question on our Investor Day enclosures,

Speaker Change: I think the reality is, is when our investor day happened, we didn't have a lot of the specific information we do now.

Speaker Change: it's really postjune and when the right aid bankruptcy petition was accepted by the courts

Speaker Change: that the specific liiststs of stores locations timing came out and that's also in store closures accelerated a lot

Karsten Voermann: And I'll just edit coming over the top of carsten and Carson made this point a little earlier, but it's an important one. Relative to ISP, you know, it's been generic only to date. And you saw with met impact for the first time our expansion of coverage to non formulary brand drugs, which gosh, we're hopeful that that has a big opportunity for the system. It's certainly something for the brands for patients for the system itself. It's a whole it's a whole category that we think this is out in the top of value and works. Thank you. Please stand by for our next question.

Karsten Voermann: We did our investor day in May; it would have been nice to have that information then, but the reality is that all happened about a month later in June slash the second part of June. So that's what we're distinguishing here. Is that helpful, Jack?

Speaker Change: and those two dimensions mean for us

Speaker Change: That's really the new information that happened since Investor Day. We did our Investor Day in May. Would have been nice to have that information then, but the reality is that all happened about a month later in June slash second part of June. So that's what we're distinguishing here. Is that helpful, Jack?

Karsten Voermann: So that's what we're distinguishing here.

Karsten Voermann: Is that helpful, Jack? Thank you.

George Hill: Please stand by for our next question.

Unknown Executive: Please stand by for our next question. Our next question comes from the line of George Hill with DigiBank. Your line is open. Goodrx Hldg

Operator: Please stand by for our next question. Our next question comes from the line of George Hill with Ditcher Bank. Your line is open. Goodbye.

Jack Wallace: Thank you.

Scott Wagner: Our next question comes from the line of George Hill with Did You Bank? Gillian is open. Good morning, guys. Most of my questions have actually been answered as it relates to the big box pharmacies.

Unknown Executive: Please stand by for our next question.

Speaker Change: Our next question comes from the line of George Hill with Ditcher Bank. Your line is open.

Scott Wagner: I guess my follow-up would just be can you comment on your initiatives to partner or help out independence and kind of non-large retail non-big box channels to accept more good Rx or usable Rx given that they're likely to be shared diners given the return from it by the Lord's James. Thank you.

George Hill: Good morning, guys. Most of my questions have actually been answered as it relates to the big box pharmacies. I guess my follow-up would just be, can you comment on your initiatives

Stanislav Berenshteyn: Our next question comes from the line of Stan with Wells Fargo Securities. Yaline is open. Hi thanks for taking my questions. Appreciate all the color. I'd like to maybe dig into the mechanics of the rate impact. So if I'm thinking about correctly, if you have a good Rx card on file and the store is closed, the implication that the Rx bin number doesn't get routed to a different location. And so essentially you need the consumer to reengage with a different pharmacy using the Rx discount card.

Jack Wallace: to partner or help out independents and kind of non-large retail, non-big box channels to accept more Goodrx or use more Goodrx given that they're likely to be shared gainers given the retrenchment by the large chain. Thank you.

Scott Wagner: Yeah, this is Scott. There's we're spending more time on it, and to date we've run a couple pilots with independent pharmacies that are pretty active in the independent association, and historically GoodRx hasn't done with a lot with independence. There's no reason we can't, and I would throw out the marker to us and then the industry as we go into next year to have a couple of simple program flavors of pricing that would allow independence to absolutely access all of, you know, the GoodRx benefit at their locations and do it in an economically productive way. And so, you know, today, obviously, independence haven't been a big part of the GoodRx platform, but there's no reason that they shouldn't be, that we shouldn't be good for independence, and that independence shouldn't have a vibrant, thriving position on GoodRx. So maybe we can take out, as a collective challenge, to get there really quickly as we go into next year.

Scott Wagner: Yeah, this is Scott. There's, we're spending more time on it. And today, we've run a couple pilots with independent pharmacies that are pretty active in the independent association. And historically, Goodrx hasn't done a lot with independent pharmacies. There's no reason we can't. And I would throw out the marker to us and the industry as we go into next year to have a couple of simple program flavors of pricing that would allow independence to absolutely access all of the Goodrx benefit at their locations and do it in an economically productive way.

George Hill: Yeah, this is Scott. There's, we're spending more time on it. And to date, we've run a couple pilots with independent pharmacies that are pretty active in the independent association. And historically, Goodrx hasn't done a lot with independent pharmacies. There's no reason we can't. And I would throw out the marker to us and the industry as we go into next year to have a couple of simple program flavors of pricing that would allow independence to absolutely access all of the Goodrx benefit at their locations and do it in an economically productive way.

Speaker Change: Yeah, this is Scott. There's, we're spending more time on it, and to date, we've run a couple pilots with

Stanislav Berenshteyn: Is that correct? Yeah, and that is not always the case with all pharmacy closures. And one of the reasons I answered Lisa Gill's question the way he did and said that this is a lot of the headwind is tied to right aid specifically in the store mix that they're closing is because of this issue. If you're associated with some of these right aid stores and the geographies they're in, you actually do likely need to switch to a different pharmacy chain.

Scott: Independent pharmacies that are pretty active in the Independent Association.

Speaker Change: Historically, GoodRx hasn't done a lot with independents.

Speaker Change: There's no reason we can't.

Speaker Change: And I would throw out the marker to us and, you know, then the industry as we go into next year.

to have a couple of simple program flavors of pricing.

Scott Wagner: that would allow independents to absolutely access all of, you know, the good Rx benefit at their locations and

George Hill: And so, you know, today, obviously, independence hasn't been a big part of the Goodrx platform, but there's no reason that they shouldn't be. We shouldn't be bad for independence and that independence shouldn't have a vibrant, thriving position on Goodrx. So maybe we can take that as a collective challenge to get there really quickly as we go into next year. Yeah, the only thing I'd add, George, is that particularly some of the things that Scott talked about relating to brand drugs and brand drug buydowns have a margin and profit profile for pharmacies that can be quite attractive, as brand manufacturers create incentives for all of us in the system to help drive volume in medically appropriate situations on their behalf. So once again, I think we see the brand drug, ManSol, and manufacturer solutions part of our business as something that has the potential to assuage historical independent pharmacy concerns to a degree.

Stanislav Berenshteyn: And while in some cases, I think right aid talked about selling some of their consumer data or shifting it to other pharmacies, that's not a one for one hundred percent effective process. So while we do recapture a significant number of the users, we don't recapture all of them because some of them need to go through the process you described, which is presenting their good Rx card at the new pharmacy where they're going to fill their script stand. And again, we see that as pretty right aid unique given the mix of stores and the geographies they're shutting down, we haven't seen the same kind of impact in store closures by other chains. Thank you.

Scott Wagner: And so, you know, today, obviously, independence hasn't been a big part of the Goodrx platform, but there's no reason that they shouldn't be, that we shouldn't be good for independence, and that independence shouldn't have a vibrant, thriving position on Goodrx. So maybe we can take that as a collective challenge to get there really quickly as we go into next year. Yeah, the only thing I'd add, George, is that particularly some of the things that Scott talked about relating to brand drugs and brand drug buy-downs have a margin and profit profile for pharmacies that can be quite attractive, as brand manufacturers create incentives for all of us in the system to help drive volume in medically appropriate situations on their behalf. So once again, I think we see the brand drug ManSol manufacturer solutions as part of our business as something that has the potential to assuage historical independent pharmacy concerns to a degree.

Speaker Change: do it in an economically productive way and so date obviously independence haven't been a

Scott Wagner: haven't been a big part of the goodRx platform, but there's no reason

Speaker Change: That they shouldn't be, that we shouldn't be good for independence, and that independence shouldn't have a vibrant, thriving position on Goodrx. So maybe we can take that as a collective challenge to get there really quickly as we go into next year.

Operator: Please stand by for our next question.

Karsten Voermann: Yeah, the only thing that ad George is that particularly some of the things that Scott talked about relating to a brand drug and brand drug buy downs have a margin and profit profile for pharmacies that can be quite attractive as brand manufacturers create incentives for all of us in the system to help drive volume in medically appropriate situations on their behalf. So once again I think we see the brand drug man saw manufacturer solutions part of our business as something that has the potential to a swage historical independent pharmacy concerned to a degree.

George: Yeah, the only thing I'd add, George, is that particularly some of the things that Scott talked about relating to brand drug and brand drug buy-downs.

Speaker Change: have a margin and profit profile for pharmacies that can be quite attractive as brand manufacturers create incentives for all of us in the system to help drive volume in medically appropriate situations on their behalf.

Kevin Caliendo: Our next question comes from the line of Kevin Calliendu with UBS. Helan is open. Thanks. Thanks for taking my question. I understand that the change is that we've seen in NADAC pricing on Medicaid side, don't directly affect you in your business necessarily, although if you want to clarify that in any way that'd be helpful. I'm just wondering you were talking about how you are involved in negotiations between PVMs and pharmacies around cash pay reimbursement.

Scott Wagner: So, once again, I think we see the brand drug Mansol Manufacturer Solutions part of our business as something that has the potential to assuage historical independent pharmacy concerns to a degree.

Operator: Thank you, ladies and gentlemen. I'm showing no further questions in the queue.

Scott Wagner: Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back to Scott for closing remarks.

Scott Wagner: I would now like to turn the call back to Scott for closing remarks. Thanks operator, thanks everybody for joining us today. Thanks for the questions; we appreciate it and we look forward to speaking with some of you individually and then everybody else next quarter. Thanks a bunch. File.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back to Scott for closing remarks.

Scott Wagner: Thanks, Operator. Thanks, everybody, for joining us today. Thanks for the questions. We appreciate it. And we look forward to speaking with some of you individually and then everybody else next quarter. Thanks a bunch. Bye.

Unknown Executive: Thanks, Operator. Thanks, everybody, for joining us today. Thanks for the questions. We appreciate it. And we look forward to speaking with some of you individually and then everybody else next quarter. Thanks a bunch. Bye.

Kevin Caliendo: And I'm wondering if PVMs in any way are using what's happening with NADAC to affect any of their other pricing in the marketplace? I don't know if any of it's tied to NADAC pricing or not and how they negotiate it. Just interested to know if it's having any other wider effect than how PVMs are behaving. Yeah, I can jump in here. This is Mike Wall speaking. So I think to clarify, we do have agreements with retail pharmacy partners that are predicated on NADAC.

Speaker Change: Thanks, Operator. Thanks, everybody, for joining us today. Thanks for the questions. We appreciate it, and we look forward to speaking with some of you individually and then everybody else next quarter. Thanks a bunch. Bye, all.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Kevin Caliendo: So that is an industry-wide benchmark that pharmacies and bitter acts can use to establish pricing that helps pharmacies get out of good reimbursement and helps us grow. And it's a really nice benchmark for us to work off of. So to your point, there have been some fluctuations in the market with NADAC pricing that has impacted ourselves and our retail partners. But I think the good news is that we're kind of, we're all in this together, I would say, and so we're working through it with them.

Kevin Caliendo: And although there was some temporary shop, I think we've gotten to a point where we're, we're evening out and getting to to steady state. And along that note, the second part of your question around PBM agreements. Yes, there are certain PBM pricing agreements as well within our network that are based on NADAC. I think it really has become a, you know, standard benchmark to set, you know, pricing across the industry. So it is something that we do both directly and we've seen with our PBM partners as well.

Kevin Caliendo: And yeah, to come in over the top, Kevin, a little on that, Goodrx pricing doesn't directly move with or equivalently to NADAC pricing, just given the sort of ratio of agreements and how our prices get sat. Number one, and number two, we did see as Mike said some chopping it to NADAC earlier in the year. But if you look at it from beginning of the year to today, the movement is actually not very significant at all. So this is not a big factor in our guide or in, in any of the numbers that we're putting out as we look forward in the future, not a big impact at all. Thank you.

Mike Walsh: Please stand by for our next question.

Karsten Voermann: Our next question comes from the line of Allen Lutz with Bank of America. The line is open. Good morning. Thanks for taking the questions. I want to start with something Scott said around the ISP rap. If the drug isn't on your PBM's formulary, can you talk about what the win rate would be relative to the PBM's rate? I would assume that it's close to 100% when it's all formulary. So can you provide any private context on how much higher the win rate would be there?

Karsten Voermann: And then as a quick follow up, I appreciate all the commentary on right aid and the specifics around their business. If there were Walgreens store closures, would you need the same type of dynamic you're seeing with the righty business where you would need to see the consumers reengage if their script goes to a different pharmacy? Thanks.

Scott Wagner: Sure. I can probably take those to start and then Scott will probably jump in on rap. First of all, we just signed the rap deals very recently. As you saw, we essentially announced them on this call. So from that perspective, we don't have a ton of trajectory, but to your point, if something's off formulary, we anticipate that the win rate could be quite healthy indeed. So your second point around Walgreens store mix and the chain that's doing the closures matters a lot.

Scott Wagner: Like we've already seen in the case of another non Walgreens and non right aid pharmacy, a large number of store closures this year. And we haven't seen that materially impact our business. It really is store specific and geography specific to know how much impact there could possibly there could possibly be. So at this point in time for Walgreens, there isn't enough specific information on things like locations, number of stores are timing to be able to assess the impact with a ton of specificity, but based on our work so far, we think that well, we've taken a prudent approach to guidance and left some room in the guide for it. We don't think at this point that will have a material impact.

Scott Wagner: Scott, I think you want to get into. Oh sure, back to your first part, Allen, there's a little flywheel between these cash programs with brands and this kind of non-covered formulary program with the PBN. So, for example, you know, we'll get a look, the cash price will be offered to every non-covered or non-formulary brand drug. And then as we bring more affordable cash programs into that, that our conversion rate will be higher.

Scott Wagner: We'll get a look at all of them, depending upon the cash price, there might be some consumer walkaways. But as we do more and more of these cash programs, obviously that should increase our conversion rate pretty meaningfully.

Operator: Thank you, please stand by for our next question.

Jay: Our next question comes from the line of Craig Hittinbout with Morgan Stanley. Your line is open. Hi, this is Jay on for Craig. Thanks for taking my question. With ISP's now further ran into the year and since those claims would flow into the Mac count as well.

Karsten Voermann: I'm curious to how has ISP's influence PTR per Mac so far and how do you expect those trends evolve as the programs are sure with the expansions and all. Thank you.

Karsten Voermann: Sure, I'll take this one from a PTR per Mac perspective and from Mac count perspective as well. You've seen Y-O-Y max up about 8% and you've seen PTR per Mac be relatively stable. Y-O-Y PTR per Mac is effectively flat right now. But up Q over Q. First of all, I think I'll make the point that we do see PTR per Mac potentially drifting down a little bit over time and that can be a function of ISP due to contribution from ISP being both higher in the first half versus the second half of the year as people hit their deductible phase.

Karsten Voermann: Certainly in the long term as ISP reaches a state level and then secondly because some of our users who use good or X regularly outside ISP may have more claims in a particular period than ISP users will. So the effects of ISP effectively I think from our perspective would be that the numerator of PTR per Mac. The numerator might be a little smaller because of reduced number of claims per Mac and the denominator of course increases with ISP as more users come on.

Karsten Voermann: But as I said for now we've seen PTR per Mac be flat. So going forward we do potentially see it drifting down in the low single digit percentage points like you've seen for example in previous quarters. Thank you.

Daniel Grosslight: Please stand by for our next question.

Scott Wagner: Our next question comes from the line up down your growth flight with city. Your line is open. Hi, guys, thanks for taking the question. I wanted to go back to employer receptivity to ISP. You know, we've seen now the second lawsuit filed against the self-insured employer for mismanaging their drug benefit and one of the lawsuits out there actually took screenshots from Goodrx to show how much lower you guys are versus a fund of benefit.

Scott Wagner: So I'm curious if you're hearing increased chatter in the market about adopting ISP directly from employers given you would think that that might shield them from some of these lawsuits that have popped up about mismanaging the drug benefit. Daniel, thanks, Scott.

Scott Wagner: Well, maybe consider this a plug to every employer to just offer Goodrx as a complement to their insurance, to their commercial benefit. I think, you know, it's certainly showing the value problem. What we're doing today is working with TBM partners to hopefully bring, you know, bring this to the complement to the commercial benefit and honestly there should be no reason that that can't become almost more like a structural side car in the industry.

Scott Wagner: To date, we have not had direct discussions with employers and there's certainly no cost to them. We'd not done that today, but that'll be something that, you know, we're spending some time thinking about and how that can complement the existing ways that plans and PBMs introduce these two employers were thinking through how and what maybe we should be doing on our own. Thank you. Please stand by for our next question.

Karsten Voermann: Our next question comes from the line of Jack Wallace would go behind security. The line is open. Hey, thanks. Excuse me. And just so we can just kind of get a better context for the retail pharmacy closure issue. Thanks for for qualifying the impact of the righted stores for this year. You remind us how much of your distribution is through a kind of standalone retail pharmacy versus a co located or owned outright by a grocery chain.

Karsten Voermann: And then you're just thinking about the general shrinkage of the retail pharmacy footprint for the last couple of years and appears to be a consistent kind of going forward. How much of any impact from store closures is baked into your guidance that you laid out at the analyst day that the multi guide. Thank you. Sure. Thanks for the question and great to you from Jack. This is Karsten on the first prong, which is grosser versus retail pharmacy post the crowbar issue we don't really have significant over under indexing of different retailers relative to their market share and prescriptions generally.

Karsten Voermann: We have one large retail is a bit heavier for us, but for the most part, the over under indexing that you saw during the crowbar era has largely gone away. So I think that probably helps with the first question with respect to the second part of the question on our investor day and closures. I think the reality is is when our investor day happened, we didn't have a lot of the specific information we do now.

Karsten Voermann: It's really post June and when the right aid bankruptcy petition was accepted by the courts that the specific lists of stores locations timing came out. And that's also in store closures accelerated a lot and those two dimensions mean for us. That's really the new information that happened since investor day, we did our investor day in May would have been nice to have that information then, but the reality is that all happened about a month later in June slash second part of June. So that's what we're distinguishing here. Is that helpful Jack? Thank you.

George Hill: Please stand by for our next question. Our next question comes from the line of George Hill with Did you bank? Gillian is open.

Scott Wagner: Good morning, guys. Most of my questions have actually been answered as it relates to the big box pharmacies. I guess my follow-up would just be can you comment on your initiatives to partner or help out independence and kind of non-large retail non-big box channels to accept more good Rx or usable Rx, given that they're likely to be shared diners, given the return from it by the Lord's James. Thank you. Yeah, this is Scott.

Scott Wagner: There's we're spending more time on it and to date, we've run a couple pilots with independent pharmacies that are pretty active in the independent association and historically, good Rx hasn't done with a lot with independence. There's no reason we can't and I would throw out the marker to us and then the industry as we go into next year to have a couple of simple program flavors of pricing that would allow independence to absolutely access all of the good Rx benefit at their locations and do it in an economically productive way.

Scott Wagner: And so today obviously independence haven't been a big part of the good Rx platform but there's no reason that they shouldn't be that we shouldn't be good for independence and that independence shouldn't have a vibrant thriving position on good Rx.

Mike Walsh: So maybe we can take that as a collective challenge to get there really quickly as we go into next year. Yeah, the only thing that ad George is that particularly some of the things that Scott talked about relating to a brand drug and brand drug buy downs have a margin and profit profile for pharmacies that can be quite attractive as brand manufacturers create incentives for all of us in the system to help drive volume and medically appropriate situations on their behalf. So once again, I think we see the brand drug man saw manufacturer's solutions part of our business as something that has the potential to assuage historical independent pharmacy concerns to a degree.

Operator: Thank you.

Operator: Ladies and gentlemen, I'm showing no further questions in the queue.

Scott Wagner: I would now like to turn the call back to Scott for closing remarks. Thanks operator. Thanks everybody for joining us today. Thanks for the questions. We appreciate it and we look forward to speaking with some of you individually and then everybody else next quarter. Thanks a bunch.

Operator: File.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.

Operator: You may now disconnect.