GoodRx Holdings, Inc. (NASDAQ: GDRX) reported Q1 EPS of $0.10, $0.02 better than the analyst estimate of $0.08. Revenue for the quarter came in at $203.3 million versus the consensus estimate of $200.2 million.

GUIDANCE:

GoodRx Holdings, Inc. sees Q2 2022 revenue of $190 million, versus the consensus of $215.6 million.

• As discussed above in relation to Q1 2022 prescription transactions revenue, we recently recognized a grocery chain had taken actions that impacted acceptance of discounts from most PBMs for a subset of drugs. This impacted the acceptance of many PBM discounts for certain drugs at this grocer’s stores, which affected many parties including GoodRx. As many of the discounts found on GoodRx are provided by PBMs, this issue directly impacted our consumers. Because this started happening late in the first quarter and initially impacted a subset of drugs in a subset of their stores, we experienced an immaterial impact on Q1 prescription transactions revenue. In April, this dynamic intensified, impacting more drugs in more of the grocer’s pharmacies, leading to significant lost volume and an expected greater impact on our Q2 and full year prescription transactions revenue. For this reason, we expect Q2 2022 revenue to be about $190 million. This assumes the grocer issue, which we believe could have an estimated revenue impact of roughly $30 million, will be ongoing without amelioration through Q2. At this time, we do not have sufficient data to forecast the trajectory of any amelioration, because GoodRx usage there has not stabilized sufficiently to forecast. There is also the potential for revenue upside in the quarter from pharma manufacturer solutions, depending on when certain larger pipeline deals close and we deliver on them. The guidance includes vitaCare, which is expected to contribute approximately $1 million of revenue in the second quarter. We expect Q2 2022 Adjusted EBITDA1 to be impacted roughly dollar for dollar by the revenue shortfall as we have historically been an extremely high margin company and we do not plan to significantly alter our level of sales and marketing investment due to this grocer issue. This is primarily because the issue generally has not impacted our ability to acquire new users and because we have focused on communicating with impacted consumers, so they are aware of attractive prices available at other retailers convenient to them, ensuring they can continue to use GoodRx and save on their prescription medication. Another factor that will impact Q2 2022 Adjusted EBITDA is the acquisition of vitaCare, which has historically had net losses and negative Adjusted EBITDA,1 which we expect will continue. At this time, we believe it is unlikely we will be able to achieve the FY 2022 guidance we provided on our fourth quarter earnings call. We will not be providing full year expectations at this time as the full year impact of the grocer issue is difficult to estimate because there are several variables including, among others, eventual consumer pricing and returning usage levels that have yet to be determined

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