GoodRx - Q4 2025

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx fourth quarter and full year 2025 earnings call. As a reminder, today's conference is being recorded. I would like now to introduce your host for today's call, Aubrey Reynolds, Director of Investor Relations. Ms. Reynolds, you may begin.

Aubrey Reynolds (Director of Investor Relations)

Thank you, Operator. Good morning, everyone, and welcome to GoodRx's earnings conference call for the fourth quarter and full year 2025. Joining me today are Wendy Barnes, our Chief Executive Officer, and Chris McGinnis, our Chief Financial Officer. 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, 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, our direct and hybrid contracting approach, collaborations and partnerships with third parties, including our point-of-sale cash programs and our Integrated Savings Program, our e-commerce strategy, and our capital allocation priorities.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties, and other important factors. These factors, including the factors discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31st, 2025, and our other filings with the Securities and Exchange Commission, could cause actual results, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements made on this call. Any such forward-looking statements represent management's 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-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.goodrx.com. I'd also like to remind everyone that a replay of this call will become available there shortly as well. With that, I'll turn it over to Wendy.

Wendy Barnes (CEO)

Thank you, Aubrey, thank you to everyone for joining us today. The fourth quarter marked a strong finish to the year and reflected disciplined execution across our strategic priorities. We expanded direct-to-consumer affordability programs with pharmaceutical manufacturers, scaled differentiated Subscription Offerings, and deepened relationships with retail pharmacies. Those results were shaped by a year of meaningful change across the healthcare landscape. In 2025, affordability pressures intensified, policy dynamics reshaped access and pricing, and consumers increasingly expected healthcare to be more transparent, accessible, and direct. Together, these shifts pushed affordability and access to the center of healthcare decision-making, an environment that plays directly to GoodRx's strengths. Against that backdrop, we moved quickly to translate market change into clear execution across our platform. We expanded access to high-impact therapies like GLP-1 and supported manufacturers as they leaned further into direct-to-consumer strategies.

We launched condition-specific subscriptions that bring pricing, care, and access together in a single seamless experience. We partnered with pharmaceutical manufacturers to integrate pricing into TrumpRx, helping them operationalize self-pay pricing at scale. Taken together, these actions demonstrate how we're evolving GoodRx to meet the needs of consumers, pharmacies, manufacturers, and policymakers in a rapidly changing healthcare environment. While our core marketplace remains foundational, we are increasingly orienting the business around Pharma Manufacturer Solutions as a key growth driver. This reflects the evolving dynamics of Prescription access and pharmacy economics, where brands are playing a more significant role in retail performance. Importantly, this strategic evolution builds on a position of strength. With the number one Prescription app and nearly 300 million site visits annually, we continue to lead in Prescription savings.

That scale and consumer reach uniquely position us to deliver value in an environment where affordability and direct-to-consumer access are becoming central to how medications are brought to market. As Pharma Manufacturer Solutions scales, it enhances our core platform by accelerating Subscriptions, deepening retail relations, and expanding our ability to engage with employers, all while creating differentiation competitors cannot easily replicate. We believe this positions GoodRx for stronger, more resilient long-term growth, even as we navigate near-term financial impacts from this transition. Diving into key business updates. Starting with Pharma Manufacturer Solutions, which has become a key growth engine for our business, with full year revenue up more than 40% in 2025 year-over-year. The industry dynamics I just discussed, combined with tighter insurance coverage, are fundamentally changing how prescriptions are accessed.

Affordability decisions are moving earlier in the journey, forcing patients to play a more active role in how medications are selected, paid for, and filled. At the same time, the rapid growth of GLP-1 through obesity has accelerated direct-to-consumer models and heightened expectations around transparency and convenience. As a result, consumers increasingly want the Prescription experience to reflect the standard set elsewhere in their lives, with digital-first tools, transparent pricing upfront, and a seamless path from decision to fulfillment. The Prescription journey hasn't kept pace at scale, and that gap becomes most visible at the moment consumers are ready to act. This makes direct-to-consumer engagement essential. Pharmaceutical manufacturers are investing more in patient-facing strategies to meet consumers earlier and need partners that can execute those strategies at scale. That's where GoodRx stands apart.

With nearly 25 million consumers and more than 1 million healthcare professionals using our platform each year, we operate directly in the flow of patient decision-making, enabling manufacturers to turn pricing strategies into real access and adherence. That momentum sets the stage for the next evolution of Pharma Manufacturer Solutions, which we're now calling GoodRx Pharma Direct. This evolution reflects a clear vision for the role GoodRx plays in modern pharmaceutical commercialization, serving as a proven digital storefront for self-pay and direct-to-consumer strategies that are becoming increasingly central to Prescription access. For pharmaceutical manufacturers, Pharma Direct provides the infrastructure to bring affordability programs to market at scale, applying modern e-commerce principles to Prescription access. This creates a streamlined, repeatable way to launch self-pay strategies without building new consumer platforms or point solutions.

This capability matters because self-pay is increasingly shaping how drugs are brought to market, with manufacturers launching with discounted cash prices as a core access strategy. Earlier this year, Novo Nordisk launched the Wegovy pill, with select doses available for $149 per month. As one of the launch collaborators, GoodRx offered this lowest available self-pay price from day one, giving consumers immediate clarity on cost and access. When paired with a GoodRx for weight loss experience, consumers are able to evaluate their treatment options, and, if eligible, move forward without delay. Based on data Novo Nordisk released during the recent earnings call, paired with our own internal data, we believe GoodRx accounted for nearly 20% of all Wegovy pill self-pay fills during a single week in January, demonstrating the scale and reach of our platform.

More broadly, this model has the potential to scale across the GoodRx platform. The same self-pay strategies that support launches also strengthen Subscriptions and drive savings at the retail counter. Today, we have more than 100 brand self-pay programs live, many of which are integrated into TrumpRx to further expand their reach and visibility. This foundation also enables us to serve as a key integration partner for pharmaceutical companies offering discounted cash prices on TrumpRx. Manufacturers are partnering with us to host their self-pay prices on GoodRx. We then integrate those prices into the TrumpRx platform. Our nationwide pharmacy network and home delivery capabilities, when available, mean the programs we are hosting can scale quickly and consumers can access the savings wherever they choose to fill their prescriptions.

We are proud to be the integrated pricing source for Pfizer and other leading manufacturers at launch, including over 30 of Pfizer's essential brand medications, spanning women's health, migraine, arthritis, rare disease, and more. This integration underscores GoodRx's role as critical infrastructure for delivering manufacturer affordability programs at national scale. Pharma Direct reflects how pharmaceutical commercialization is evolving, with self-pay and direct-to-consumer strategies playing a central role, and how GoodRx is enabling that shift. Laura Jensen, our Chief Commercial Officer and President of Pharma Direct, is here with us today and will be available to address questions about Pharma Direct following our prepared remarks. Laura joined GoodRx from Amazon Pharmacy in August 2025 to lead our work with pharmaceutical manufacturers, and has been instrumental in shaping and accelerating this strategic evolution. Turning to Rx Marketplace.

The fourth quarter marked important progress in stabilizing our Prescription marketplace and deepening our partnerships with retail pharmacies, even as the broader retail pharmacy environment remains challenged. We significantly expanded our e-commerce ecosystem, tripling our retail footprint through an accelerated rollout of new partners during the quarter. This expansion allowed us to exit the year with six of our top 10 retail pharmacies live on our platform and drove a clear inflection in consumer adoption, with order volume up 83% quarter-over-quarter. At the same time, we strengthened the underlying economics of the marketplace. We now have direct contracts in place with nine of our top 10 retail pharmacies nationwide, providing a strong foundation for attractive retail margins. We also drove strong RxSmartSaver momentum and continued to scale Community Link, implementing direct contracting at an expanding number of independent pharmacies nationwide. Turning to Subscriptions.

We continue to execute against our condition-based strategy, focusing on high intent areas where affordability and access are the primary barriers. In 2025, that included erectile dysfunction, hair loss, and weight loss. While still early, the initial launch and subscriber activations have exceeded our expectations, reinforcing our confidence in this approach. Weight loss, in particular, highlights the unique role GoodRx can play in direct-to-consumer healthcare. GLP-1 treatments for weight management are often not covered by insurance, leaving most consumers paying out of pocket. With GoodRx for weight loss, we simplify the entire journey, from virtual consultation to Prescription to fulfillment, at nearly every pharmacy nationwide, using only FDA-approved therapies and pairing them with transparent, industry-leading, discounted cash prices.... powered through our direct relationships with pharmaceutical manufacturers.

Given the scale of unmet demand in this category, weight loss represents a meaningful long-term opportunity and a clear example of how GoodRx serves as a connective layer across care, pricing, and access. Another important driver of Subscription growth is the continued strength of our brand. Consumers recognize and trust GoodRx as a reliable entry point for Prescription savings. That brand equity is translating into efficient customer acquisition. We have attracted high intent users and converted them at customer acquisition costs below industry benchmarks. Given those returns, we plan to continue investing in brand and performance marketing and will increase spend to drive Subscription growth where we see strong unit economics. We also just introduced Employer Direct, a new offering designed to help employers address gaps in traditional insurance coverage by pairing their existing benefits with integrated cash pricing.

The program is built to work alongside, rather than replace, employer health plans and gives employers practical ways to expand affordability and access without taking on additional plan complexity. There are two ways to engage with Employer Direct. First, employers can work with us to create medication-specific programs to contribute directly to the cost of individual brand medications that are not covered or are inconsistently covered under their health plans. These contributions are applied at the pharmacy counter, effectively buying down the employee's out-of-pocket costs for a specific drug. We launched this approach with our first employers at the start of this year, with an initial focus on GLP-1 medications. Second, employers can partner with us to offer an employer-specific version of GoodRx's condition-specific telemedicine solutions, including weight loss, erectile dysfunction, and hair loss.

We see Employer Direct as a natural extension of the GoodRx platform and a meaningful growth opportunity within our portfolio. I will now turn the call over to Chris to discuss fourth quarter and full year results, as well as 2026 guidance.

Chris McGinnis (CFO)

Thank you, Wendy, and good morning, everyone. For the fourth quarter, revenue came in at $194.8 million, and Adjusted EBITDA was $65 million. This resulted in full year 2025 revenue of $796.9 million, which was up 1% year-over-year. Full year Adjusted EBITDA was $270.5 million, which constitutes 4% growth over 2024. Our 2025 financial performance was in line with the company's latest guidance, with Adjusted EBITDA just above the midpoint of our guidance range. Drilling down on full year revenue, revenue declined 6% year-over-year to $544 million.

As we previously discussed, the impact of the Rite Aid bankruptcy and lower volume through one of our Integrated Savings Program partners was approximately $35 million-$40 million for the year and therefore impacted our year-over-year growth rates. Subscription revenue decreased 3% year-over-year to $83.8 million. We have seen strong early adoption related to our condition-specific subscriptions, particularly around weight loss, which started late in 2025. We expect it will contribute more meaningfully to the overall Subscription revenue in 2026. Revenue from Pharma Direct, previously Pharma Manufacturer Solutions, increased to $151.4 million, up 41% year-over-year, driven by deepening our sell-through at manufacturers and ongoing growth in our consumer direct pricing.

Our balance sheet remains strong, ending the year with $261.8 million of cash on hand, with approximately $80 million of unused capacity available under our revolving credit facility. During the year, we repurchased approximately 48.9 million shares of our stock at an average price of $4.45 per share, totaling $217.4 million. We continue to believe that share repurchases are a signal of management's confidence in the company's future and are the most efficient method of returning capital to shareholders. For the full year 2026, we expect revenue to be in the range of $750 million-$780 million and Adjusted EBITDA to be at least $230 million.

Our outlook reflects the decisions we are making to ensure the long-term durability of our business. We're making trade-offs to invest more heavily in our Pharma Direct and Subscription Offerings, which strengthen our ability to deliver value to Pharma, improve the economics of our retail relationships, and continue to simplify how consumers engage with Prescription on our platform. Furthermore, we have made deliberate choices to favor long-term durability and certainly, excuse me, certainty, that will negatively impact our near-term unit economics. As a result, and in combination with the lapping impacts from 2025, we expect pressure on revenue in 2026, which is reflected in our guidance. We expect Pharma Direct revenue to grow at least 30% in 2026 year-over-year.

While our newly launched condition-specific subscription programs are not material today, the programs accelerated significantly in the fourth quarter of 2025, and we expect that to continue throughout 2026. As Wendy noted, our Prescription Transaction offering is foundational and enhancing performance remains a top priority. While Monthly Active Consumers fell 14% in 2025 versus the prior year, we expect Monthly Active Consumers to be flattening sequentially from Q4 2025 through Q4 2026. We're encouraged by the continued growth profile of Pharma Direct and Subscriptions Offering and the robust interest in our Employer Direct offering. We strongly believe the strategy we are executing on will build momentum throughout the year and put us in a position to grow beyond 2026. With that, I will turn the call back over to Wendy.

Wendy Barnes (CEO)

Thanks, Chris. Looking ahead, what stands out to me is how closely our strategy aligns with the realities of today's healthcare environment. The work we've done over the past year positions us squarely against the shifts, reshaping access and affordability, and strengthens both the relevance and long-term resilience of our platform. Healthcare is becoming more consumer driven. Manufacturers are playing a more active role in pricing and access. Retail economics continue to evolve. Those dynamics require new models. We've been intentional about building the capabilities and partnerships that allow GoodRx to meet that moment. We have made clear choices about where to focus and how to compete. As Chris mentioned, these choices will impact Prescription Transaction revenue in the near term as we transition to improve the durability of the offering and bolster the growth of Pharma Direct and Subscription revenue in the long term.

As we move into 2026, our priority is executing against those choices with discipline and consistency, while continuing to strengthen the foundation of our platform. I'm confident in the direction we've set and in our team's ability to deliver. I'll now turn the call over to the operator for questions.

Operator (participant)

Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced, and to withdraw your question, please press star one one again. We ask you, please limit to one question and one follow-up. Our first question is gonna come from Michael Cherny with Leerink Partners. Your line is open.

Michael Cherny (Senior Managing Director and Senior Research Analyst)

Good morning. Thanks for taking the questions. Maybe, Chris, if I can dive in a little bit more on the revenue guidance. You talked about the pressure in PTR, yet a stabilizing of the MAC rate. Can you just talk a little bit about the unit economics in terms of what it physically looks like? What are some of the recontracting efforts you're taking, and how it'll change, or will it not change, your positioning and relationship across pharmacies, PBMs, and members?

Chris McGinnis (CFO)

Yeah, thanks, Michael. Appreciate the question. I mean, let me unpack, you know, the decline on the PTR side, a little bit. You know, I think there's probably three primary factors that are really driving the decline. First, as I noted in my prepared remarks and as we've talked about previously, you know, we had significant revenue coming from Rite Aid and some of our other partner programs during 2025, that will not recur in 2026. Secondly, we are seeing a shift of claims, particularly around high-cost branded medications, from our core business to Pharma Direct, and that's reflected in the growth profile of, you know, our point-of-sale programs, within that offering.

Finally, as you're, you know, calling out, I think the largest contributor is really a decline from unit economics. This is a negotiation of lower fees, you know, across multiple partners in our ecosystem. You know, look, we're doing this in exchange for longer-term durability and predictability, as I mentioned in our, you know, in my prepared remarks. That's a significant reset of our unit economics. You know, look, we factored this into the guidance. I think it's a headwind of I would call it, you know, as a percentage of consolidated revenue and impact of the mid-single digits. We believe this positions us to steady the core over the long term, and I think as you point out, it reflects our MAC trends.

I mean, we've modeled MAC. Our exit rate of 2025 was, I think, 5.3. We've got that number basically kind of flat to slightly declining. Maybe we end the year at about 5.2 and sort of think about it relatively flat to just a slight decline. Yeah, I think, you know, look, we're trying to stabilize the core, when we think about it to your question, you know, there's a simple math question, not to be, you know, to state the obvious, but it's, you know, it's the rates we get, and it's times the volume we get. The first order of business is stabilizing the volume.

We think working with, you know, partners in the ecosystem to ensure that we are, you know, limiting getting disintermediated at the counter, that we're pushing consumers to the right program, whether it be Pharma Direct or the retail counter, optimizes our overall solution. It optimizes our overall relationship with retail partners. We view the overall retail, you know, relationship as a two-way street. You know, brands used to be a loser at retail, and we're ensuring that it no longer is. When we look at that relationship in aggregate, you know, we're trying to mitigate the disintermediation, the, you know, the sort of, you know, competition at the admin fee level.

When we can trade off and exchange longer term predictability, on a rate side, for near-term pressure, but stabilize the volume, we think that's the first step in a longer term, more durable, value add profile.

Wendy Barnes (CEO)

Yeah, it's.

Michael Cherny (Senior Managing Director and Senior Research Analyst)

Let's talk-

Wendy Barnes (CEO)

This is Wendy.

Michael Cherny (Senior Managing Director and Senior Research Analyst)

Sorry, go Wendy.

Wendy Barnes (CEO)

Oh, please go ahead, Michael. Did you have a follow-up?

Michael Cherny (Senior Managing Director and Senior Research Analyst)

No, no. I mean, it's kind of on the same lines, and I apologize for interrupting, but as you think about that, obviously lower revenue on a high margin base drives lower drop-down. Is there any way alongside that to bifurcate relative to EBITDA guidance, some of the investments you're making? If we think about the baseline EBITDA bridge from 2025, how much of the reduction year-over-year is, call it, offensive, making investments versus defensive, absorbing these new economics?

Chris McGinnis (CFO)

If you, if you look at so we haven't guided to any specific line item, but if you kind of think about what we're trying to, you know, let you back into is, you know, the lapping impacts, right? I mean, you can see it last year. You know, we had Rite Aid in for a little bit better than half the year. We talked about the other programs that, I think, during Q2. You can kinda understand that that was a meaningful lap. Then I would say it's roughly orders of magnitude, you know, the other, call it half-ish, is, you know, related to some elective decisions, to be, you know, aggressive, to stabilize over the long term.

Operator (participant)

Thank you. Our next question will come from Jailendra Singh with Truist. Your line is open.

Payton Engdahl (Analyst)

Hi, this is Payton Engdahl in for Jailendra Singh. I just wanted to talk on the Pharma budget spending environment. There's been some Pharma services and HCIT companies that have talked about their Pharma clients' budget deployment is increasingly being released in, like, smaller, more phased increments. I was just curious on if you've seen any impact on, like, the size, duration, or ramp time of the new Pharma Direct programs? If that's influencing your visibility. Sorry. Yeah.

Wendy Barnes (CEO)

Laura and I think, will take that one in tandem, Payton, and good morning. I would just start by saying a broader observation from my seat, and Laura can certainly follow up with more specific observations, given she has the ongoing relationships with our Pharma partners. I mean, one notable observation this year has been actually a little bit to the contrary of what you pointed out, which is more of the spending has kind of been pulled forward in our sales cycle, which was a different experience for us historically. Beyond that, let me let Laura jump in with maybe some more specific examples of what she sees as a broader trend.

Laura Jensen (Chief Commercial Officer and President of Pharma Direct)

Yeah, thank you for the question. We are seeing some of that budget being pulled forward this year, whereas last year there were a few key partners who were booking quarterly. Now they're booking earlier in the year, in fact, 2026. Broadly, I would say, pharmaceutical manufacturer budgets, especially on the direct-to-consumer side, we're seeing them continue to invest in these types of programs where they're going direct to patients, they're going through partners like us, as well as building their own solutions. We are seeing some trends on the HCP side, where those budgets were a little bit soft earlier in the year, but those are opening up as well.

I would say a little bit different than the comment that you made, but we're certainly seeing those budgets pretty healthy this year.

Payton Engdahl (Analyst)

Great. Thank you.

Wendy Barnes (CEO)

Just one other rough for you, Payton, that may be somewhat helpful. I mean, our bookings in Pharma Direct as a percentage of our overall plan, they're up relative to at the same point in time last year. Again, kind of pointing to, you know, more being pulled forward. If that gives you know, any more confidence, it certainly has, you know, bolstered our confidence in why we continue to lean so heavily into Pharma Direct.

Payton Engdahl (Analyst)

Great. Thank you.

Operator (participant)

Thank you. Our next question will come from Lisa Gill, JPMorgan. Your line's open.

Lisa Gill (Managing Director)

Thanks very much. Good morning, Wendy and Chris. Wendy, I just want to understand a few things a little bit better when I think about the business right now. One, you know, a lot of your comments today were talking about the manufacturing direct. Are we talking about a specific business model change here? What do you think about the future of your legacy business? At our conference, you talked about the relationship with Surescripts and the opportunity to really capture that patient when they're with the provider. Are you not seeing the benefit that you anticipated? You're talking a lot about direct-to-consumer. I just wanna think about how you're thinking about the future of this business.

You know, I heard you talk about, you know, 2026 as kind of this transition year, but how do we think about it longer term and, you know, the key elements of what GoodRx will look like?

Wendy Barnes (CEO)

Yeah, no, good morning, Lisa. Thank you for the question. Look, let me start by saying, you know, the core and what we, you know, largely refer to as Rx Marketplace, it will always be foundational to our business. The manner in which consumers transact at pharmacies, I don't see going away. Unquestionably, since this company's inception, that model has evolved vastly from, you know, the manner in which we largely contracted with pharmacies through PBM relationships. While many of those still exist, we've had to pivot to direct relationships with pharmacies in order to ensure that, candidly, margins were fair for our pharmacy partners, amongst other things, and it returned a greater degree of control to us. We're also, you know, being as intellectually honest as we can about what we see in the broader market.

There's no question that as the cash space has become more competitive, that space has become more pressured. I stand behind the notion that we are and will continue to be the number one drug affordability marketplace for consumers. The reality of where we are at this point in time, with consumers wanting more direct experiences, Pharma leaning into it, payers supporting that model, the regulatory environment pointing more towards consumer direct programs, we would be remiss to not take advantage of that opportunity. Candidly, that margin is also more durable and more appreciated by the public market. We see our ability to be successful there as it is, as an inflection point for us as a business.

That is why you are hearing me say that over the longer term, Pharma Direct, coupled with Employer Direct, those programs, those brand programs, will continue to feed those retail relationships. Will that core legacy business continue to be part of the flywheel that powers that? Absolutely. We know that the basket of drugs that historically are filled in the U.S. do tend to be primarily generic. However, those drugs that tend to hurt your out-of-pocket the most are brands. That is why we've got to focus on the smaller subset of drugs, and that does point to an evolution in our model, and that's what you heard us, you know, speak of here. That is why we're shifting where we're investing and leaning in more heavily to where we see the market going.

Lisa Gill (Managing Director)

Thank you.

Wendy Barnes (CEO)

Good to hear from you, Lisa.

Operator (participant)

Our next question will come from John Ransom with Raymond James. Your line is open.

John Ransom (Managing Director)

Good morning. Maybe this is for Chris. The way PTR used to work was it was about a $5 take rate on 100 million scripts. You mentioned it's down low, missing a digit on total revenue. Is the difference between the $500 million and what's coming, is that mostly a lower take rate, or is there also some script degradation embedded in that as well?

Chris McGinnis (CFO)

Yeah, there's not. Thanks, John. Appreciate the question. It's, I think we're trying to stabilize the underlying, you know, volume of scripts, and that's, you know, reflected in how we're thinking about the flattening of that curve versus, you know, 14% down last year. I think sequentially, quarter-over-quarter, relatively flat. Look, I think if you look back, the PTR per MAC was going up throughout the year, which reflects the power of what we were trying to accomplish. I think what we're trying to now say over the long term is, you know, let's that could and will continue going into the future.

I think for today, what we're saying is we're trying to renegotiate and think about our you know, well, I shouldn't just say retail, across our entire supply chain, up to Pharma, everywhere, a more longer-term durable, you know, approach to making sure that the economics. Like, we sit in a unique position between pharma's direct-to-consumer strategy. We've got a platform, I think, you know, to Lisa's prior question, where it's, it's paramount that we have a, you know, a retail footprint that's 70,000 stores, where Pharma can deliver its direct-to-consumer strategy across all of those retailers in a powerful way, in ways that brands make sense to be dispensed there, et cetera.

Similarly, the fact that we got Pharma Direct growing as it is and becoming a much more meaningful part of our revenue profile, allows us to share brand economics with retailers. There's a much more holistic approach than simply talking about take rate for us. It's a bidirectional flow of funds now that we think about across the, across our ecosystem.

John Ransom (Managing Director)

Thank you. My follow-up for, I think Wendy is, the company has been publicly saying, "Gosh, we'd love to get to the finish line with Lilly." It looks like this is a perfect model for Lilly, but are they still, like, they just like the LillyDirect, and they don't wanna have any third-party intermediary, or is there still some hope that maybe that can happen?

Wendy Barnes (CEO)

Well, I'm gonna start by saying we probably won't comment on any specific deal, John Ransom, but I would love for Laura Jensen to take that, who, again, you know, joined us with a beautiful resume filled with, you know, relationships with Pharma at the top, which candidly, I think we were missing in many instances. It's one of the things that Laura Jensen and her team have done an exemplary job building out. Laura Jensen, please, take it.

Laura Jensen (Chief Commercial Officer and President of Pharma Direct)

Yeah. Thank you for the question. you know, I think to Wendy's point, not to comment specifically on any one partner, but to say broadly that pharmaceutical manufacturers are certainly looking at building their own direct-to-consumer experiences, whether that's through programs like a Lilly Direct, AstraZeneca has one as well, Pfizer has one. There's several that we can list here. Very much also looking at where to meet patients where they are on other platforms. I just came over from the Amazon Pharmacy team, obviously now here at GoodRx, where we're building those types of solutions here as well, where patients are already shopping for other pharmaceuticals.

The idea that pharmaceutical manufacturers don't have to choose, that they can deploy these resources to patients wherever that patient chooses to fill their prescription, and frankly, wherever they search for information about that prescription, once a treatment decision has been made. They're working with us in order to, number one, get to those patients in a way that's comfortable for those patients, but also to learn about how to go direct. Manufacturers really are not set up well from a corporate perspective, and a strategic perspective, to go direct as almost a consumer-facing organization. That's really not historically how they've gone to market.

We're very much at the early stages of how these companies will move through these direct-to-consumer models, and we're certainly taking really taking our cues from patients, but also investing in this area to be able to grow alongside our pharmaceutical manufacturer partners.

John Ransom (Managing Director)

Thank you.

Wendy Barnes (CEO)

John, I would also add before we move on to the next question, I mean, part of the dialogue that we continue to have with our Pharma partners is really more one of, "We understand if you have interest in your own direct program, but let us show you the data that we've proven out over and over on what it looks like for, you know, the average consumer to come looking for a brand price in our environment versus, you know, a broken-out brand.com experience." Again, I don't wanna suggest that those direct programs aren't effective. They are and can be.

Having said that, the ability for a consumer to look for their entire basket of drugs inside an environment like GoodRx versus, you know, four or five different manufacturer programs with a different user experience, the data is just really irrefutable as to what that delta looks like, and it's meaningful. We share that information with our Pharma partners to say, "Look, if you really wanna, you know, have your own direct program, we can support that, too. We can also do that inside of our environment, so the consumer doesn't have to click out, or, and in some instances, you might consider loading your brand opportunity just in our environment, and we see a much better outcome, as a result of that." That's what we continue to share with our Pharma partners.

I think slowly but surely, that approach is starting to make more sense for our Pharma partners. There's no question that…

... even a launch with cash approach is, it's new, it's novel, and, you know, it's something that, I think historically, pharmaceutical manufacturers hadn't done much of.

John Ransom (Managing Director)

Thank you.

Operator (participant)

Thank you. Our next question will come from Steven Valiquette with Mizuho. Your line is open.

Steven Valiquette (Managing Director)

Yeah, thanks. Good morning. I guess for me, just thinking about the guidance, you know, thinking just about potential margin pressure year-over-year, I think back of the envelope, maybe it's 400 basis points year-over-year. Could be higher, could be a little bit lower, but really just trying to get a better sense of how much of that margin pressure may show up in, you know, gross margins versus higher SG&A as a percent of revs or perhaps a higher R&D as well. Just trying to think about from a modeling standpoint. Thanks.

Chris McGinnis (CFO)

Thanks for the question, Steve. The cost of revenue is a little higher, you know, on, you know, just you think about the mix of our business, think about it from a conditions, our, you know, our condition-specific Subscriptions Offering. I mean, that has an operating cost associated with it. Think about, like, clinical visits and the like. Again, if you go back historically, I think if you looked at the core business of the PTR line, it had a historically higher margin. I think the Pharma Direct is a high grower, you know, healthy margin profile, but, you know, that's diluted the higher core business margins over time. I think, you know, these new offerings kind of have the same impact.

Still healthy margins, but a little bit dilutive to the historical margins on the core. From an expense profile perspective, look, the rationale of putting a floor on versus a range that if you just tied a margin percentage to the top line revs, we didn't want to be handcuffed to that, so we put a floor on it. There are some elective decisions we want to make. Wendy noted that, you know, we've got, you know, the Subscription Offerings are exceeding our expectations. We're rethinking Subscriptions overall. You know, we've got some, you know, things we're investing in on the Pharma Direct side. We really wanted the ability to invest, you know, further, if it makes sense.

Very, I think Wendy also mentioned in her prepared remarks that, you know, our CAC is below, you know, below industry standards, et cetera. Look, we, until we see a diminishing return, we may want to continue to push money in there. I think we raised our EBITDA margin profile, you know, throughout last year. If you look at our expense profile, it'll be down in absolute dollars. I think it'll be relatively consistent, if not down a bit, you know, on a percentage of revenue basis, to your question. I think we've proven this team last year that we'll be good stewards of shareholder, you know, money and drive efficiency. We'll continue to do that, but I think we'll make elective decisions to spend where appropriate.

Steven Valiquette (Managing Director)

Okay, thank you.

Chris McGinnis (CFO)

Yep.

Operator (participant)

Thank you. Our next question will come from Stan Berenshteyn with Wells Fargo. Your line is open.

Stan Berenshteyn (Senior Equity Research Analyst)

Hi, good morning. Thanks for taking my questions. Wendy, first on PTR, historically, 50% of max have been sourced by the top 10 HCP relationships you've had. Is there still a focus on that to drive the max volume, or has your approach evolved at all?

Wendy Barnes (CEO)

Stan, can you clarify your question again? I'm sorry, I'm not quite following. One more time.

Stan Berenshteyn (Senior Equity Research Analyst)

Yep. Yeah, so historically, I believe 50% of the max on your platform have been sourced by the top 10 HCP relationships that you've had. Is there still a focus to drive max volume through HCPs, or have you changed the strategy at all?

Wendy Barnes (CEO)

Stan, I'm gonna claim a little ignorance as it pertains to top 10 HCPs. I'm not sure what you're referencing there. I mean, we have, I think, like 1.2 or 1.3 HCPs that typically engage with us in any given fiscal year. We're focused on a broad swath of HCPs, and those are largely driven by our manufacturer relationships and the NPI/prescribers that they have interest in driving volume through. Of course, generics is a much broader swath of HCPs, and we know that HCP recognition of GoodRx, I think we've got 85%, 90% HCP recognition of our brand. But beyond that, HCPs will continue to be an area of focus for us, largely, again, in partnership with Pharma.

Yes, some of our marketing efforts do point towards HCPs, but really it's more driven by our partnerships with Pharma to drive that recognition and utilization.

Stan Berenshteyn (Senior Equity Research Analyst)

Okay, great. Chris, how should we think about your sales and marketing efforts in 2026? Maybe just, like, bifurcating this. You've, you have some pivots in your revenue strategy. Are there any changes in how your sales and marketing is getting deployed? Then, given the top-line pressures this year, are you able to absorb some of that impact through continued reduction in sales and marketing intensity? Thanks.

Chris McGinnis (CFO)

Yeah, appreciate the question. In terms of sales and marketing efforts, as I said, you know, on one of the previous questions, look, we'll continue to redirect some of our overall marketing spend towards specific programs. There is, obviously, there's a brand halo effect there, but we have a, well, we have a great marketing team led by Ryan Sullivan. We spend a lot of time together, you know, talking about, you know, key metrics and what we're seeing, how it's driving our overall business. We did bring down spend overall last year. I think in terms of absolute spend, I think it's the revenue drop, we did bring down the dollars, but it's still as a percentage of revenue, essentially in line with what we spent last year.

Will we raise that? I mean, the answer is, that's again, one of the reasons we put a floor under EBITDA as opposed to a specific range, is that we, you know, we want the ability to be able to spend more as we see that opportunistically. I think, you know, largely, I think you'll continue to, you know, see us, you know, push more into the campaigns around our, you know, our specific offerings. Hopefully, that answers your question.

Wendy Barnes (CEO)

Yeah, Chris, I might just add, I mean, we do considerable review and discussion on a monthly basis as we really stare at the optimal ROAS profile of anywhere that we're spending marketing dollars. We make shifts accordingly to ensure that we're sending dollars to really the highest ROAS opportunities. If I could take a hot second to tout Ryan's expertise, he is one of the few CMOs that I've worked with over the years that is a truly data analytically driven individual. That, in fact, is his background, so he's quite strong at really just taking the data to make sure that objectively, we're making the best decisions and trade-offs.

To Chris's point, we did make some decisions to shift dollars, decrease dollars in certain buckets to point them towards our highest and most important strategic initiatives, really coming out of 2025 and into 2026. I think strategically, the biggest decision shifts we made were largely coming out of Q4 in 2025, when we launched our weight loss subscription offering and started seeing the early results, and have made some decisions that comport with that in early 2026 to keep pushing that vector.

Stan Berenshteyn (Senior Equity Research Analyst)

Great. Thanks so much.

Wendy Barnes (CEO)

Mm-hmm.

Operator (participant)

Thank you. The next question is gonna come from George Hill with Deutsche Bank. Your line is open.

George Hill (Managing Director and Equity Research Analyst)

Good morning, and thanks for taking the question, guys. I guess my first one would be, Wendy, is there anything that you guys feel like you can do increasingly on the generic side to kind of monetize that opportunity? I know that's kind of been something that's been talked about, and there's, you know, it's where clearly, where the vast majority of prescriptions come. Then I'll pause before a follow-up.

Wendy Barnes (CEO)

Yeah, I mean, look, we're never going to abandon, certainly, the generic focus, 'cause to your point, I mean, from a volume perspective, that is the, you know, overwhelming number of fills that all of us as consumers look to fill, and oftentimes, that margin profile for retailers is quite favorable. We know that is an incredibly important group of drugs for our retail partners. I think it really just comes down to engaging the consumer, 'cause most consumers have a mix of drugs. With that comes a handful of brands and typically then more generics.

For me, it's less a question of how do we optimize the generic component in the mix, it's more about how do we engage more consumers, and how do we continue to work directly with retailers, such that when whoever is standing at their counter is utilizing our program over somebody else's, when they have an opportunity to access discounted cash pricing. Maybe said a little bit differently, George, I don't know if I think about it as much in terms of how do we optimize generics. It's more about how do we engage the consumer, and then their basket of drugs really follows behind that.

George Hill (Managing Director and Equity Research Analyst)

No, that's super helpful. I guess a quick follow-up is, it seems like you guys have made an investment in price or price concessions this year in order to support volume. I guess, how do we get comfortable thinking about the business longer term to kind of like, that this isn't a kind of a perpetual downward discussion that we're facing every year? Like, I guess, how do you guys think about price stability in the business, kind of in the medium term?

Chris McGinnis (CFO)

Yeah. I think it's the right question, George. As we've said, I think the two primary businesses today are very much interrelated in that they support each other. I think if you look at the history of this company, since its inception, the flow of dollars have kind of been one way, right. There's a transaction at retail, where they collected an admin fee, and they passed that back to us. The flow of dollars was one directional from retail to us.

in the new environment, and especially as Pharma Direct becomes a much more meaningful part of our business, it allows us to have brand economics to actually, you know, share it, you know, with the retailers to ensure that they're, you know, making appropriate profits on the branded side, which they historically haven't been able to do. I think absent that business and where, you know, one of the value propositions we have over our competitors is, I think absent that, you would continue to see pressure on generics at the counter.

I think you would continue to see an erosion of admin fee, and I think what we're doing is taking a longer-term approach of a total relationship, and a bidirectional flow of dollars between us, and so that, you know, the counter tools, the disintermediation and some of the race to the bottom on the admin fees that I think we've been experiencing, frankly, we're putting a floor under it, and we're using total economics as from a relationship perspective. I think that, you know, the growth of Pharma and the reason that we're highlighting it and emphasizing it so much is because it is the vehicle through which we put, you know, the floor under the retail side.

Operator (participant)

Thank you. The next question is gonna come from Brian Tanquilut with Jefferies. Your line is open.

Cameron Harbilas (Equity Research Associate)

Hi, this is Cameron on for Brian. Thank you for taking the question. I guess the question I had was, this is the second quarter you guys have called out a volume reduction in Integrated Savings Programs. Can you unpack kind of like what's structural versus fixable there? Kind of what activity you're seeing from the PBMs that is kind of causing you, whether this is a conscious shift away or not, what behaviors are causing this?

Chris McGinnis (CFO)

Yeah, thanks, Cameron. Appreciate it. Just to clarify, we're not calling out a new, you know, a new volume reduction. We, we were referencing, for everybody's benefit, you know, the headwind we faced in, in 2025 relative to our initial projections, just so everybody could understand and keep it in context of the lapping impact of that as it relates to 2026. There is no, you know, volume reduction. In fact, I think if you look at the max that we, you know, we said they'll be sequentially relatively flat. You think about a 14% decline year-over-year from 2024-2025. This year, it's relatively stable.

There is a mild decline, but, you know, call it going from, you know, 5.3 down to 5.2-ish, give or take, is kind of how we've modeled it throughout the year. Relatively flat from a volume perspective. Frankly, we're seeing some early signs of, you know, positive volumes that, you know, it's just too early to call. You know, we talked a lot last year about the things that were impacting volume. It wasn't just volume from, you know, partner programs, but we also were seeing macroeconomic factors of, you know, the retail price. I mean, the cost-plus pricing was frankly raising prices on the consumer. I think benefits were really good last year when you looked at the utilization rates, the payers were disclosing, people were going on benefit.

If you look at this year, one of the things we're watching very closely, again, too early to call, even though we're getting some, you know, some good data early, unfortunately for us, we're seeing, you know, unemployment increasing. We're seeing people, you know, regulatory changes impacting Medicare, excuse me, Medicaid eligibility. ACA enrollment looks light by about 1 million lives, and I think we suspect we'll watch again very closely when those premiums come due without the subsidies, whether that results in, you know, maybe millions more of people not having insurance.

That with the benefit profile this year, which again, too early to call, but I think our volumes are gonna look relatively stable to slightly down, and we're gonna watch for, you know, positive trends.

Wendy Barnes (CEO)

If I could, just add, Chris, specifically as it relates to ISP. You know, as I think you've heard me comment before, while ISP is always going to be a metered product opportunity for us, just given, you know, the economic drivers inside of any PBM, I still contend that access to more commercial lives opens up additional volume possibilities for us as a discount, card cash partner. The more the regulatory environment is pressing on payers to mandate integration of cash pricing, we contend that we're in a great position to take advantage of that, not the least of which is, you know, some recent notable comments from, you know, larger PBMs that, you know, GoodRx is their option, to integrate cash pricing. Again, we don't do back handsprings around ISP.

It is what it is, but we'll continue to add partnerships there and add commercial lives that have an opportunity to avail themselves of an integrated price offer, when and if the payer wants to completely open up that pipe.

Operator (participant)

Thank you. The next question will come from Allen Lutz with Bank of America. Your line is open.

Allen Lutz (Senior Equity Research Analyst)

Good morning, and thanks for taking the questions. One for Wendy. Can you talk a little bit there's been a lot of changes going on in the business. Can you talk a little bit about how the web traffic and app usage is evolving as some of the areas that you're focusing on is starting to evolve? You talked about getting 20% of Wegovy scripts through GoodRx. Maybe talk a little bit about what's driving, you know, the strong adoption there. More broadly, you're shifting towards adding subscriptions for ED and hair loss. Can you talk about how the composition of your traffic is changing, if it is at all? Thank you.

Wendy Barnes (CEO)

Let me start first with, you know, GLP-1s in general and specifically the goodness that we noted around the Wegovy pill. Look, I think GLP-1s, first of all, are, they're a bit unique. I don't think any of us who've been in and around pharmacy benefit for a good portion of our careers have seen any trends that quite follow what is happening with GLP-1s. Notably, just given they have incredibly low coverage for the indication of weight loss, different scenario as it pertains to diabetes, but as it pertains to weight loss, just a pretty low coverage threshold period. As such, you've got a really motivated population seeking competitive price points, which just lends itself beautifully to, you know, our marketplace.

You kind of leap forward to, again, in the same class, drugs that largely were injectable, and suddenly you've got an oral formulation. All of those things kind of created this environment in which not only did you finally have a price point at $149 for that first dose, that felt a little more achievable for the average American, then you also have this bolus of consumers that may have been on a compounded alternative, given a more attractive price point, who had a desire to be on an FDA-approved-.

... formulation. I, our best guesses, all of those vectors are what really fed monumental uptick in the use of the Wegovy pill. Even previous to that, before we had that type of price point available on our platform, those drugs have long been some of the top searched brand price points as consumers, again, were looking for value. Overall, our brand price page views are up as we think about this point in time, year-over-year. Again, I, I do think, to be fair, a lot of that is driven by GLP-1 interest. I also would be a bit remiss to not give the regulatory environment a little bit of credit there.

I do think all of the swirl around D2P and all of the conversation on drug pricing that's in the news, I do think is serving to school consumers a bit, to spend more time searching and looking for competitive price points in general. I, you know, I'm curious, Laura, if there's anything you would add, just given we talk about this a lot with our.

Laura Jensen (Chief Commercial Officer and President of Pharma Direct)

Yeah.

Wendy Barnes (CEO)

Pharma partners because it's one of the reasons they work with us.

Laura Jensen (Chief Commercial Officer and President of Pharma Direct)

Absolutely. I mean, I think the power of the launch of the Wegovy pill signaled certainly not just that manufacturers going forward... I mean, specifically GLP-1 manufacturers, of course, but all manufacturers are really considering what an actual direct-to-patient cash offer is. Traditionally, frankly, manufacturers would think of this as almost a bridge to insurance. They were pretty temporary as part of a launch strategy, but not as a core part of their ongoing offering. I think because, you know, as Wendy said, we've really never seen anything like this with a degree of cash mix versus insurance that we've seen with these products. It's really paving the way for how manufacturers could be thinking about their brand strategies going forward.

Certainly, it's also the backbone of how we might be thinking about an employer strategy, where for patients who have gaps in their insurance or for products that may never make their way to a formulary, what do we do for those patients? Well, we have a new offering where we can use a manufacturer net price, where an employer potentially can help that patient buy down even more of those dollars. There's more utility for these offerings than just on its face, what it means from a cash perspective.

Operator (participant)

Thank you. Our next question is going to come from Craig Hettenbach with Morgan Stanley. Your line's open.

Speaker 15

Hi, this is Jay on for Craig Hettenbach. Thanks for taking my question. On Pharma Direct, how would you describe GoodRx's penetration of active brands with your current partners? Like, how concentrated is that revenue across top brands, and how would you describe those budgets being durable through the cycle post the initial affordability push? Thank you.

Laura Jensen (Chief Commercial Officer and President of Pharma Direct)

Yeah, thank you for the question. Right now, we have approximately 200 manufacturer partnerships. For the point-of-sale cash programs, we have about 100 of them. A lot of that volume right now, from a dollar perspective, is concentrated on the GLP-1s, but we are seeing growth in other brands as well. As we move forward, I guess for context, about 100 brands in the pharmaceutical industry, from a brand perspective, make up the top 80% or so of most dispensed, highest volume and the largest spend. We see a pretty typical distribution from that perspective, from a spend perspective as well, both on the media side as well as on the point-of-sale cash side.

Operator (participant)

Thank you. Our next question is gonna come from Daniel Grosslight with Citi. Your line is open.

Daniel Grosslight (Senior Research Analyst)

Hi, thanks for taking the question. I was hoping you could comment a little bit more on the uptake you're seeing in your new Subscription Offerings and how we should think about growth in those offerings in 2026, particularly around weight loss and the introduction of more competition on the weight loss side of things. Coupled with that, how does this inform your marketing spend, particularly around these new Subscription Offerings? Thanks.

Chris McGinnis (CFO)

Yeah, Daniel, thanks for the question. Just to unpack it a little bit, obviously, as you know, we launched our condition-specific subscriptions, you know, in the back half of last year, with weight loss not launching until late November. I don't think, I'll have to go back and check, but I don't think we pushed marketing dollars in until late December on that offering. You know, a lot of that was really organic. You know, when you talk about the $285 million-$300 million hits on our pages, we get a lot of that organic adoption just from people naturally visiting.

I think the oral solids, you know, that are coming out on the weight loss side, I think are attracting a lot of the previous, you know, compounders, you know, people that were taking compounds, because now they can take an FDA-approved drug in pill form, and I think that's, we're seeing, you know, great adoption there. Look, it's not a material number. If you look at the exit rate, you know, we had, I mean, you're talking about less than $1 million of revenue because it just, again, launched, you know, a month prior. I can see that growing 4x-5x as a run rate by December of 2026, right?

It starts to become, you know, while small today, an increasingly meaningful part of run rate, you know, revenue by the end of 2026. I don't know how to think about it, because you also have some seasonality in the weight loss and some other things, but you also have a lot new drugs coming to market in this space. You know, there's a lot of, you know, different uses and indications for these drugs that I think they're gonna increase adoption as well. You know, there's a lot of tailwinds on, you know, that weight loss offering, I would say. In terms of marketing dollars, We pushed a lot more of our marketing dollars to the condition-specific subs.

It continues, and it's also continuing to drive a halo effect on our brand generally. As long as we keep monitoring those things, we'll continue to push, you know, dollars to support those programs. I mean, when you launch a new revenue stream like this and you've invested the way we have around some of these offerings, we'll continue to support the growth.

Wendy Barnes (CEO)

I would just come in behind you here, Chris, to close this one out, you know, and say, look, a big component that will influence what happens with our Subscriptions going forward, particularly related to weight loss, are really where the Pharma price points move. Throughout this year, not only is it a number of competitive molecules that will be coming out, but as prices naturally come down, you know, this particular class of drugs kind of resets itself about every four to six weeks as something else comes out, a new formulation and/or price point change.

What we do have high confidence in is that as Pharma thinks about the average consumer and how they want to access these medications, we know definitively that home delivery is not the only way in which consumers want to get these drugs. What we're offering Pharma partners is, again, this broad swath of retail partnerships, which makes it a really attractive channel, particularly if you're looking to get it same day. Most people are pretty motivated to want to go get these drugs. Once they're prescribed a GLP-1, they're usually pretty anxious to get started. Therefore, we're seeing pretty high uptake just given the natural retail partnerships that we have. Lastly, I would say, you know, Subscriptions for us, of course, goes well beyond the condition subscriptions.

It also envelops our Gold offering, we're spending considerable time rethinking what that should be in 2026. We look forward to talking a bit more about kind of the reinvention of that aspect of our product offering in subsequent earnings calls.

Operator (participant)

Thank you. This does conclude the Q&A session and today's conference call. Thank you for participating, and you may now disconnect.