Ladies and gentlemen, thank you for standing by and welcome to the GoodRx Third Quarter 2020 Earnings Call. As a reminder, today’s conference call is being recorded. I would now like to introduce your host for today’s call, Whitney Notaro, Vice President of Investor Relations. Ms. Notaro, you may begin.

Thank you, operator. Good morning, everyone. And welcome to GoodRx’s earnings conference call for the third quarter of 2020, our first call as a public company. Joining me today are Doug Hirsch and Trevor Bezdek, our Co-founders and Co-Chief Executive Officers; and Karsten Voermann, 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 statements regarding management’s plans, strategies, goals and objectives, our market opportunity, our anticipated financial performance; and the expected impact of COVID-19 on our business. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors discussed in the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended September 30, 2020; and our final IPO prospectus filed with the SEC on September 24, 2020 and our other 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 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 may also reference certain non-GAAP metrics, which are reconciled to the nearest GAAP metric in the company’s shareholder letter, 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’d like to turn the call over to Doug.

Thank you, Whitney. And thank you, everyone for joining us this morning. I hope you and your families are safe and well. We are pleased to report our first quarterly results as a public company. I want to thank our new shareholders for their confidence in our company and our covering analysts for performing such thoughtful and thorough research. I’d also like to thank the amazing GoodRx team for all their hard work, especially throughout our recent IPO. As this is our first earnings call, I want to spend a few minutes emphasizing what drives us to build America’s best consumer healthcare platform. I will then turn the call over to Trevor, who will address key highlights from the quarter and trends in our business. GoodRx helps Americans get the healthcare they need at a price they can afford. Trevor and I started GoodRx to provide affordable and accessible healthcare, information and guidance to demystify an incredibly complex industry. And perhaps most importantly, to simply help people who have nowhere else to turn. For too many, healthcare in the U.S. is expensive, complicated and confusing. Every year, Americans pay more out-of-pocket costs and face new insurance hurdles and restrictions. Too many families are uninsured or underinsured, forcing them to make painful sacrifices just to stay healthy. Lack of affordability in healthcare is a key reason why Americans don’t get the care they need, which causes massive negative impacts across our entire nation. We believe GoodRx can solve these problems. We can provide a better way for people to understand, access and afford quality healthcare. This is what drives us every day. We’re on the heels of a Presidential Election, where healthcare policy became the single most important issue facing our nation. Much of our economy remains on hold because of the COVID-19 pandemic, while our medical professionals work heroically to provide care. The world is relying on our healthcare industry to provide accessible vaccines and treatments to protect lives and the global economy. I am proud to be joined by a growing team of talented and passionate colleagues, who are focused on providing assistance to Americans through this pandemic, unemployment, changes to insurance and federal and state laws. We have come a long way in the decades since Trevor and I started GoodRx. I’m proud to report that we’ve reached a number of major milestones in the last few months. We reached $25 billion in cumulative consumer savings. We extended HeyDoctor, our telehealth service to offer online medical professional visits for over 150 conditions in all 50 states at a price that is often less than a typical insurance copay. We introduced affordable home delivery for hundreds of prescriptions. And we launched GoodRxHelps, our philanthropic initiative, to provide free medications at more than 20 clinics across America. There is still so much that needs to be done to fix America’s broken healthcare system. We believe that the pandemic has accelerated long-needed changes to the way Americans find and receive healthcare. Millions of Americans have embraced telemedicine and home delivery. Millions more are turning to the internet to learn about their care and the choices available to them. Across the healthcare ecosystem, long-hidden information is flowing more freely and patients are being empowered to own their healthcare journey. Providers are learning that treatments and prescriptions don’t work if patients can’t afford them. The old model is broken, and Americans are ready to embrace a new, better way to stay healthy. We intend to run toward this opportunity. We will continue to invest our strong cash flow in our platform, product, user experience, and brand, with the goal of creating the best consumer experience and major improvements to healthcare affordability and access for all Americans. We are building much more than a company. We are building the leading consumer-focused digital healthcare platform in the United States. Our impact will ultimately be measured by the lives we positively affect and the care we provide. We have never been more motivated. And with that, I’ll turn it over to Trevor.

Thank you, Doug. Consistent with our historical performance, we continued to deliver strong profitable growth at a very fast pace. In the third quarter, we delivered record monthly active consumers in our prescription offering, record revenue and adjusted EBITDA, and strong growth in our subscriptions, manufacturer solutions, and telehealth offerings. Total revenue for the quarter grew 38% year-over-year to $140.5 million. Prescription transactions revenue grew 30% year-over-year to $124.4 million, driven by 29% year-over-year growth in our monthly active consumers. Other revenue grew 170% year-over-year to $16.1 million, reflecting strong growth in our subscription, manufacturer solutions and telehealth offering. And we delivered adjusted EBITDA of $53.2 million, representing an adjusted EBITDA margin of 37.8% and year-over-year growth of 23%. Consumer-facing markets are being rapidly transformed by technology, driving greater transparency and convenience and creating a clear connection between value and cost. The healthcare market is no exception. GoodRx is at the forefront, pioneering healthcare’s transformation. Our approach has always been consumer-first and we’ve created the trusted brand to guide individuals throughout their healthcare journey. We’re only just beginning our efforts to become the first stop on any healthcare journey. Our expanding suite of offerings, deep brand building investment and differentiated content is accelerating consumers’ understanding of how we help. We will continue to increase our engagement with healthcare providers, particularly around affordability, adherence and access solutions. We aim to accelerate this trajectory, launching new services and organizing existing products. As we continue to grow our business and expand into new categories, we’re focused on providing value to our consumers and are fortunate to have a platform that positively impacts both consumers and key stakeholders in the healthcare ecosystem. We deliver value to consumers through our mobile-first offerings that make access to healthcare simple and more affordable. We help people fill prescriptions that they may otherwise not have filled. We provide telehealth visits that allow access when care may have been avoided due to cost, long wait times or COVID concerns. We drive greater medication adherence, faster treatment, and better patient outcomes, all of which create a healthier, happier population. We deliver value to healthcare professionals by providing information and strategies for their patients’ financial burdens of prescriptions or treatments. We improve patient outcomes by increasing medication adherence. We deliver value to Pharmacy Benefit Managers, pharmacies, and pharmaceutical manufacturers by helping them reach more consumers who seek their services and products. We operate in a massive industry with a combined total addressable market of over $800 billion. The annual prescription market in the U.S. alone, including prescriptions left at the counter is estimated to exceed $500 billion. The telehealth opportunity is estimated at $250 billion. And our manufacturer solutions business has a potential annual addressable market of over $30 billion. In the third quarter, our team continued to deliver value to our consumers and strengthen our relationships with stakeholders in the ecosystem, increasing our penetration in these large markets. During the quarter, we helped to record 4.9 million monthly active consumers save money on their prescriptions through our prescriptions offering, allowing consumers to save money on their medications by simply presenting GoodRx at one of the 70,000 pharmacies where GoodRx is accepted. We continue to have strong relationships with our pharmacy and PBM partners and have recently launched initial PBM on our platform. We continue to focus on user experience to ensure we can provide consumers with prices, savings and information through a simple, easy to use and convenient digital interface. Our proprietary platform now aggregates over 200 billion prescription prices from a variety of different healthcare sources every day. With GoodRx, consumers can efficiently and conveniently search for their medication, choose from a list of prices at various pharmacies near them and save money on their prescription medication. Our relationships with consumers and pharmacies continued to strengthen and repeat activity exceeded 80%. The GoodRx network strengthens with every transaction. Our leading platform and trusted brand allows us to reach more consumers. This increased volume drives improved pricing and consumer savings, strengthening engagement and expanding unit economics. This allows us to continue to expand on our platform and enhance our products, creating a hard to replicate virtuous cycle and deep competitive moat. Our prescription offering continues to deliver solid growth with strong revenue and consistent unit economics. Every time a consumer uses GoodRx to save money from the first prescription fill to subsequent refills, we earn a fee from our partners, creating alignment between the value we deliver to consumers and the lifetime value they generate for us. Our prescription offering has demonstrated resilience during this challenging time as the COVID-19 pandemic continues to impact the economy. We believe our prescription offering continues to be impacted by the pandemic as many consumers continue to cancel or defer non-urgent physician visits. However, we have seen a significant quarter-over-quarter increase in our prescriptions offering and a number of our monthly active consumers, as people have begun to resume typical healthcare purchases. The continued incredibly fast growth of our prescription offering demonstrates our value proposition and the large market in which we operate. As we already mentioned, we’re working closely with our pharmacy partners on additional programs to drive value for both them and their consumers. One highlight is our flu vaccine program, where we’re working with retailers to drive additional flu vaccine participation, as well as consumer savings. We’ve grown our program from two pharmacies in 2019 to eight pharmacy chains this year. It will likely be a big year for flu vaccination with the pharmacies, and we’re happy to help facilitate and look forward to expanding this program in the future. Our subscription offerings had a successful quarter as well. We closed the multi-year extension of our relationship as the exclusive prescription savings program with Kroger, the largest grocery chain in the U.S. The Kroger Rx Savings Club powered by GoodRx offers access to lower prescription prices at Kroger pharmacies. To-date, the program has provided hundreds of thousands of customers with exclusive access to discounts on commonly prescribed generic medications. We are very excited to continue this fruitful relationship with Kroger and plan to invest more in marketing and this product with this extension. We continued to enhance the user experience of GoodRx Gold, our subscription program, where subscribers pay a monthly fee to access even lower prices at participating pharmacies. Gold offers over 1,000 prescription medications that are available for under $10 with savings of up to 90% off standard list prices. We’ve been focused on better integrating this program into our platform and optimizing acquisition and conversion, which resulted in accelerating new subscriber momentum. As the pandemic has made it more challenging for Americans to visit retail pharmacies, we launched prescription mail order services for Gold, enabling Americans to receive medications by mail. Today, we offer more than 300 common medications by mail for less than $10, which improves access, saves patients money and offers needed convenience when leaving home is not an option. We also added mail order services to HeyDoctor, our low-cost online telehealth service. In addition, HeyDoctor expanded to provide care for Americans in all 50 states and grew the number of conditions we treat. The combination of convenient online provider visits and our new mail order service gives Americans access to medical professionals and medication all through an integrated online experience at a time when they need it most. Finally, we increased our focus on providing assistance to reduce the cost of brand prescriptions for Americans. We launched more than 30 integrated programs with manufacturers. As we continue to grow our manufacturer solutions offering, we also launched care portals for several brands. This new functionality provides additional ways to help patients find both savings and resources to help manage their conditions. Overall, we are very pleased with our results for the third quarter, the growth of our offerings and the continued progress we’re making with our various products and services. We see exciting growth potential as we continue to attract new consumers through our existing offerings and launch new services to improve healthcare affordability and access for all Americans. As we extend our platform, we are helping more people at different stages of the consumer healthcare journey, delivering more value to our consumers and generating higher consumer lifetime value. And with that, I’ll turn it over to Karsten.

Thank you, Trevor. Good morning to everyone. And thank you for joining us today. Our third quarter results highlight the unique combination of scale, growth and profitability our business provides, strong unit economics for the large markets in which we operate and our ability to execute and generate strong cash flow. Total revenue for the quarter was $140.5 million growing 38% year-over-year, driven by continued growth in our prescriptions offering as well as our newer offerings. Prescription transactions revenue grew 30% year-over-year to $124.4 million driven by a 29% year-over-year increase in our monthly active consumers. As a reminder, monthly active consumers represent the number of unique consumers who use GoodRx to save on their prescription in a given month, and it does not include consumers of our other offerings. When presented for a quarter, monthly active consumers represent the average of the calendar months in the quarter. Other revenue grew 170% year-over-year to $16.1 million with strong growth in all of our other offerings, subscriptions, manufacturer solutions, and telehealth. This reflects our ability to deliver value to consumers at various points in their healthcare journey, as well as our ability to create multiple entry points into our growing platform. Cost of revenue is $7.5 million or 5.4% of revenue compared to $3.4 million and 3.3% of revenue in 3Q 2019. This increase was driven by provider costs related to our telehealth offerings, driven by an increase in the number of online provider visits and an increase in outsourced and in-house personnel related consumer support expense to support our growth. We continue to deliver strong gross margins at the mid-90s levels. Product development and technology expenses were $15.8 million, compared to $7.8 million in the comparable period last year. This increase was primarily due to continued investment in the team and product as well as an increase in stock-based compensation, including awards made in connection with our IPO. Excluding stock-based compensation and various items related to acquisitions, adjusted product development and technology expenses 8.9% of revenue compared to 7.1% of revenue in 3Q 2019. As Doug said, we plan to continue to invest in our product and platform with the goal of creating the best consumer experience, continuing to scale our existing offerings and developing new offerings to help more consumers in different stages of their healthcare journey, delivering more value to them and increasing the lifetime value we generate. Sales and marketing expenses were $65.1 million, compared to $45.0 million in 3Q 2019. We increased advertising spend by $13.3 million year-over-year and continue to build a strong team, including hiring our first Chief Brand Officer, all with the goal of increasing our consumer base and building the GoodRx brand, which we believe will yield positive returns for us long-term. Adjusted sales and marketing expense as a percent of revenue was stable year-over-year, making up 43.3% of our revenue in 3Q 2020, compared to 43.9% last year. After reducing advertising spend in certain channels in the second quarter of 2020 due to the impact of COVID-19 as many consumers avoided visiting healthcare professionals and pharmacies in person, we increased our advertising spend in the third quarter as more consumers resumed their interaction with the healthcare system. We will continue to evaluate the impact of COVID-19 on our business and actively manage our consumer acquisition spending according to market conditions. General and administrative expenses were $108.5 million, compared to $4.1 million in the third quarter of 2019. The majority of this increased $98.1 million was due to stock-based compensation related to the Co-CEO awards made in connection with the IPO, which I’ll provide more detail on shortly in the context of guidance. Excluding stock-based compensation and other items, adjusted G&A as a percent of revenue is 4.6%, compared to 3.2% in 3Q 2019 with the incremental cost primarily related to our IPO and associated with starting to operate as a public company at the end of September. We incurred a net loss of $50.0 million in the third quarter. Again, this is due primarily to stock-based compensation of $106.8 million in the quarter, $98.1 million of which related to the Co-CEO grants made at the time of the IPO. Adjusted net income was $35.6 million, compared to $23.2 million in 3Q 2019. Adjusted EBITDA grew 23% year-over-year to $53.2 million. Adjusted EBITDA margin continued to be strong at 37.8%, reflecting our ability to deliver profitable growth due to compelling unit economics of our business and repeat activity on our platform. Our adjusted EBITDA margin decreased approximately 460 basis points year-over-year due to the growth of our telehealth business and continued investments in product development and technology, as well as in our general and administrative infrastructure, all of which I’ve discussed. On a quarter-over-quarter basis, our adjusted EBITDA margin decreased 220 basis points, primarily due to an increase in advertising spend, which we pulled back in the second quarter due to COVID, as I previously mentioned. We continue to generate strong cash flow with net cash from operating activities of $32.7 million for the quarter. On the capital investment front, our main investments related to the non-recurring one-time build of our new headquarters in Santa Monica was approximately $13 million spent today, net of tenant improvement, reimbursements, and additional investments in our platform and product. We expect to substantially complete construction of our new headquarters by the end of this year. We ended the quarter with $1.1 billion of cash and cash equivalents after netting, approximately $1 billion from our IPO and private placement in September. I’ll now turn to guidance. As we begin our journey as a public company, we want to ensure that we provide clarity and transparency to our shareholders while maintaining our long-term focus, as well as our ability to make the right investments to maximize value for our consumers, the company, and our shareholders. To balance these priorities, we will be providing guidance on total revenue and adjusted EBITDA margin. We are committed to being transparent about both our performance, as well as our investments in the years to come. So, shareholders are informed and understand our operating decisions. For the fourth quarter, we expect revenue of approximately $148 million reflecting 31% year-over-year growth. This would translate to full-year total revenue of approximately $545 million representing a year-over-year growth of 40%. While we won’t be providing guidance for monthly active consumers regularly, we did want to provide our short-term expectations on this call since our business is still impacted by COVID-19 and because this is such an important driver of our prescription offering. For that reason, we expect our quarter-over-quarter growth of monthly active consumers to be approximately between 4% and 5% for the fourth quarter. Remember that consumers of our other non-prescription transaction offerings, like for example, our high growth subscription offerings, which delivers two times the contribution do not contribute to our monthly active consumer figure. Final note on revenue, we won’t be providing guidance for each revenue line item, but just for total revenue, we expect the other revenue line to continue to gradually make up a higher percentage of our revenue. Looking at stock-based compensation, we expect stock-based compensation related to the co-CEO grants we made in connection with the IPO to be approximately $275 million in the fourth quarter, compared to $98 million in the third quarter. This will bring total expense recognized for this grant to $373 million out of the total expense of $533 million. The performance-based portion of this grant will be fully recognized by the end of the year as the price target criteria for besting have been met. The remaining $160 million is time-based and will be recognized over the following 15 quarters on a graded vesting basis with the expense moderately frontloaded. We plan to provide quarterly updates related to the grant until they are fully expensed or become material. Turning to adjusted EBITDA margin, we expect it to be between 30% and 31% for the fourth quarter, translating to a full-year adjusted EBITDA margin of approximately 36.5%. We plan to make significant marketing investments in the fourth quarter to continue to grow our brand. This coupled with a shift in the timing of certain marketing investments from the third quarter is the primary driver of the lower adjusted EBITDA margin in the fourth quarter compared to our year-to-date margin. As Doug said, we are building the leading, consumer-focused, digital healthcare platform in the country and plan to invest our strong cash flows in our platform, product, user experience, and our brand with the goal of creating the best consumer experience and improving healthcare affordability and access for all Americans. This is a scale platform with a rare combination of high growth and profitability. We’ve benefited from a strong brand, first mover advantage and a decade of experience and relationships that benefit all key stakeholders in our ecosystem and we believe we’ve only just begun to scratch the surface of a massive market opportunity. We’re pleased with our third quarter results and we’re excited about our future. Thank you for joining us on our mission to help Americans get the healthcare they need at a price they can afford. We look forward to sharing our progress in the quarters to come. And with that, I’ll now turn the call over to the operator for questions.

Thank you. Our first question comes from Ricky Goldwasser with Morgan Stanley. Please go ahead.

Hi, good morning. And congratulations on your first quarter as a public company. When we look at the performance and clearly, monthly active consumers is now above pre-pandemic levels and you’re seeing momentum and subscriptions growth. But to your point, as we think about the metric, subscribers are not included in the member and in your ability to negotiate and scale. So, can you maybe help quantify for us the subscription growth? What would be the gross monthly active consumer metrics look like if we normalize for the ads in the subscription side?

Good morning, Ricky. Thank you very much for the question. Let me have Karsten speak to this question.

Hey, Ricky. Great to speak with you again. Ricky, we’re very excited about our subscriptions plans because they’re a natural extension for our successful prescriptions offerings and they allow us to deliver more savings and value to our consumers while increasing the LTV as evidenced by their 2x year one contribution and it allowed us to create really tight relationships with the consumers throughout their healthcare journey. We’re not disclosing specific subscriber counts or mix by planned meaning Gold versus Kroger on an ongoing basis, but I can show that growth plans and need to show high positive growth and great momentum. We’ve integrated the gold experience onto our platform and added additional features like mail order as well, and mail order is added during the third quarter specifically. We also agreed to a multi-year renewal with Kroger, which means we’ll make more marketing and product investments going forward. We’re really excited about those offerings, the subscription side ramps. But again, aren’t disclosing specific, specific numbers on them.

Understood. So, when we think about the new mail order offering, and we think about the opportunity within your user base, is there maybe some data on both the set of users for chronic medication that over time could convert to mail solutions?

Sure. Thank you again for that question also. Karsten, is there – do you want to answer that in regards to the mailers specifically?

I think, well, the more general question first of all is chronic versus acute. And I think in general, like the industry we skew towards chronic as you’d expect. With respect to the intersection of chronic and mail-order more broadly, I think that as evidenced by some of the analytic reports that have even come up over the last few days, mail-order continues to not be the dominant mode for users to get subscriptions. And I think Trevor will likely want to address mail order in a little more detail.

Yes. What I would say on mail is in the U.S., mail-order penetration is pretty low. The COVID-19 pandemic has accelerated interest in that for consumers, but at the same time, there are still many factors that influence the adoption. We want to meet consumers where they are and provide what they’re looking for. So we aim to work with our partners like retail pharmacies to ensure that mail is an option when it’s appropriate, and that the integration of that service works well for the consumer experience.

Thank you. Our next question will come from Heath Terry with Goldman Sachs. Please go ahead.

Great. Thank you. I was wondering if you could give us a little bit of a sense around the progress with HeyDoctor, as well as the marketplace itself, realized things are still very early stage. But if you could maybe just aggregate for us a little bit, the growth that you’re seeing in the two parts of your telemedicine platform, that would be really helpful. And then as we look at this quarter and beyond, especially as we see cases rising, how much of a factor do you continue to see sort of delayed medical visits or delayed procedures being taken, having on overall prescription and particularly, the generic prescriptions that are such a big part of your business, having an impact on that in this most recent quarter, as well as the quarter that we’re in now.

Thank you very much for the question. I’ll be glad to answer both about the marketplace and then about COVID impact. When we look at telehealth, this is continuing to be a great area of growth. We’re seeing positive momentum with HeyDoctor on a month-over-month basis, and on a quarter-over-quarter basis; we’ve really done a lot of expansion. We increased the number of conditions treated to 25, and we’ve expanded the offering to all 50 states. We’ve added mail order options and also increased cross-sell numbers from telehealth to our prescription offerings. We see telehealth as an additional way for us to acquire customers and expand our services. Regarding COVID, we have witnessed that many consumers have avoided going to their doctors and pharmacies during the pandemic, which has affected the overall volume of prescriptions. However, we’ve maintained strong growth in our offerings overall.

Thank you. Our next question will come from Doug Anmuth with JPMorgan. Please go ahead.

Great. Thanks for taking the questions. You’re two years into your Kroger partnership, and you talked about recently extending the contract for multiple years. Can you just talk about the potential to work with other large retail pharmacies on a subscription basis? And then just on sales and marketing, it ramped pretty aggressively in 2019 and then in early 2020, and then slowing somewhat with COVID, just curious how you’re thinking about that going forward, I know it’s early obviously to talk about next year, but assuming that we’re in a somewhat better place, just how you’re thinking about that? Thanks.

Great. Thank you, Doug, very much for the question. For your first question, what I would say is we really enjoyed working with Kroger. It has been a very successful program for both us and them and we are excited for it to continue growing. We want to work with all retail pharmacies on different programs to help them. One example of this is our flu vaccine program, where we’ve expanded participation from two pharmacies in 2019 to eight pharmacies this year to meet the increased demand for flu vaccinations. On the sales and marketing spend and how we forecast that in this year and in future years, I would highlight that this has been a complex year for marketing spend, but we’ve been able to navigate through it successfully. As we look through Q4, we plan to make significant marketing investments and anticipate seasonal customer acquisition opportunities that occur at the start of the year. We’ll continue to invest in our brand and increase awareness, targeting significant markets where we have a leading brand and significant opportunity for growth.

Thank you. Our next question will come from Ross Sandler with Barclays. Please go ahead.

Hey, guys. Congrats on the first quarter out of the gate. I guess the question on the total addressable market. We heard a lot of questions around this since the IPO process kicked off and just wanted to hear your take on TAM; at the high end, you’ve got 5 billion U.S., generic scripts flowing through retail pharmacies; at the low end, you’ve got $300 million or so cash pay annual scripts. That’s a pretty wide range. How do you guys think about the TAM for your core scripts business? Thanks.

Thank you, Ross for the question. When we look at our user base, most of our users have insurance. So, 75% or more of our users today have some form of insurance. A significant portion of those users are on Medicare, which is one of the better insurance plans. So generally, we view the cash pay segment as less relevant. Within prescriptions, there's a large opportunity, and we believe the considerably high volume of prescriptions reflects the need for the services we can offer. Furthermore, we’re looking at the broader healthcare market and how we can help Americans access affordable healthcare, which is the primary need we address.

Thank you. Our next question will come from Justin Post with Bank of America. Please go ahead.

Great. Thank you. Just wanted to ask, as we get coming off of the election and people are kind of learning the company, what were the healthcare policies are you focused on at the federal level? And do you foresee any changes under a Biden administration we should be thinking about? Thank you.

Sure. I’d be happy to speak to this. One of the nice things about GoodRx is we've been around for almost a decade now. I recall back in 2010 when we started, there were many predictions of significant changes to make healthcare more accessible for Americans. Our experience shows that, no matter the administration, the burden on Americans has continually increased. There have been numerous policies and attempts at reform, yet many gaps remain in healthcare. Therefore, our focus lies in helping consumers navigate these challenges and fill in gaps without being dependent on any administration's policies. Anyone willing to engage with us to help consumers is welcome, but our mission will remain the same.

And just to add, with a new administration, we don’t anticipate any legislative concerns for the business. We feel fundamentally aligned with the political objectives of driving affordability and access to healthcare for Americans.

All right. Maybe, one follow-up, because vaccine is so important next year, but how would you expect people being outdoors more and just normalization of activity in stores and pharmacies? How would that affect your business next year? How would you think about that?

When we look at this, the impact of consumers has varied; at the beginning of COVID, we saw people not going to their doctors. As time has progressed, they are visiting, however still avoiding non-urgent care. This will obviously impact prescription volumes. We have been growing at a strong pace despite the pandemic. As the impact of COVID decreases, we understand there may be upside in prescription volumes. Still, we have not made any assumptions for a sudden change in the situation and continue to model the current environment.

Thank you. Our next question will come from Nick Jones with Citigroup. Please go ahead.

Great. Thanks for taking the questions. Can you touch on the manufacturer solutions? You mentioned 30 plus new partnerships, can you talk about, I guess, how they view GoodRx as an advertising channel, and then maybe, talk about the rate of consumers searching for branded drugs that are maybe looking for generics and just don’t know it, or actually looking to try to get a discount on the branded drug? Thank you.

Thank you very much, Nick, for the question. We continue to increase our focus on providing assistance to reduce the cost of brand prescriptions for Americans. We want to serve consumers as they try to save across all of healthcare, which includes prescriptions, which includes all of the different types of prescriptions that a consumer can get. In Q3, we continued to build out that team focused on that area, and as we spoke to you, we rolled out more than 30 integrated programs with approximately 20 manufacturers, and we’ve also launched several of these new care portals for additional functionality, which has driven really strong year-over-year revenue growth. Along with helping consumers, this is also one of our highest margin offerings. These are really high intent consumers already searching for brand drugs on our platform. About 20% of our 15 million plus monthly visitors are looking for savings on brand drugs. This has remained stable relative to our overall growth. We’re able to help consumers save on these brand medications while delivering significant value to pharmaceutical manufacturers by helping them reach these ready-to-purchase consumers. Moreover, we still have a lot of additional inventory across our platform to sell, hence considerable room for expansion here.

Great. Thank you.

Thank you very much.

Thank you. Our next question will come from Jailendra Singh with Credit Suisse. Please go ahead.

Thanks and good morning, everyone. Congrats on your first quarter as a public company. My first question, regarding the sequential increase of around 477,000 monthly active consumers, you saw in the quarter compared with decline in the second quarter, around 455,000. Can you talk about like how many of these monthly active consumers you gained sequentially in the third quarter or part of that cohort, which you’ve lost in 2Q versus how many are completely new users? Any color around that?

Thank you. Thank you very much for the question. Karsten, would you like to speak to this?

Sure. And thanks for the question, Jailendra, great to talk to you again. We’re happy with the increase in monthly active consumers, which hit an all-time high of 4.9 million in Q3 2020, and with the overall growth of our offerings. Monthly active consumers increased in the third quarter as activity in the prescription market improved, and as consumers started to go back to their doctors. On a year-over-year basis, monthly active consumers grew significantly, up about 29%. And of course, that’s a comparison to a non-COVID quarter. I think your question is more specifically related to Q-over-Q growth, which grows 11%. We generally haven’t gotten specifically into retention/attrition, but I would imagine, given the reopening of the economy, that a significant number of our users gained during this period are new users. However, we’re confident that a portion of them may have been individuals who delayed or otherwise chose not to see either their healthcare providers or go to pharmacies during the height of the COVID period in Q2. I trust that’s helpful.

Yes. And then a quick follow-up, I know you guys just announced this partnership with Know Your Meds; can you talk about how that integration will work? How many consumers that integration provides you with and what is reflected in your guidance with respect to that partnership with Know Your Meds?

Sure. This is just one of many partnerships we have in the ecosystem. We have a goal of reaching more consumers at a time when they’re accessing different healthcare solutions to help them save on prescriptions and medications. We really look at opportunities to increase our reach through scaling existing marketing channels, creating new marketing channels, and partnering with affiliates in the ecosystem. We hope each of them provides some incremental value and, more importantly, delivers a great consumer experience.

Thank you, Jailendra.

Thank you. Our next question will come from Mark Mahaney with RBC. Please go ahead.

Thanks. I want to ask about manufacturer solutions. You talked about launching 30 plus new partnerships, any more color on those? How many total partnerships do you have now? Is there something in the process, that’s allowed you to launch these new partnerships more quickly than they were in the past? Is there a reason to think that these new partnerships could be more material than the ones you’ve had to date? Thanks a lot.

Thank you very much for the question. We see general growth in this area. We’re in a situation where on the manufacturer solutions, where we’re not just getting the benefit of the growth of our overall platform. There’s a huge amount of growth here, just because this is an area, where we have a huge number of users, 20% of our 15 million plus monthly visitors are coming to look for savings on these brand drugs, and we’ve not really monetized this much in the past. We’ve only monetized a really small portion, so we’re really also getting now monetizing across that existing set of people, as a large reason for that is just us building a strong team there. We’ve really built an experienced team, we’ve grown that team. We have been rolling out additional premium customized solutions, but mostly, this is just about focus. We hired Bansi Nagji as our Chief Business Development and Chief Strategy Officer, and we’ve invested in more technology here. We anticipate this growth to continue quickly in the future, just like it has over this past quarter.

Okay. Thank you.

Thank you very much.

Thank you. Our next question will come from Eric Sheridan with UBS. Please go ahead.

Thanks for taking the question. Maybe if I could just zoom out for a minute, obviously, we’re seeing a little bit of margin pressure over the shorter-term as you deploy some of the investments you’ve talked about in the past to position the business, the long-term. Could you just refresh investors on what you see as some of the key investments you have to make over the next couple of quarters against your broader long-term goals and how people should think about the trade-off between growth and margin volatility in the coming quarters? Thanks so much, guys.

Thank you very much, Eric. Yes, let me have Karsten speak to this question.

Sure, always good to talk to you. We plan to make significant marketing investments in the fourth quarter and also beyond, of course, to continue to grow our brand, in anticipation of the seasonal consumer acquisition opportunities that occur at the start of plan years. When we think of that, as increased investment, the marketing is just one component; we’re also making increased investments in product and technology supported by our detailed product roadmap at the same time. And those are key drivers of lower adjusted EBITDA margin for the fourth quarter, compared to our 2020 year-to-date margin or to our 3Q 2020 margin specifically. You also need to keep in mind that the fourth quarter will be our first full quarter operating as a public company. And of course, new costs associated with that, like an increase in D&O, auditor fees, and other various items will impact margin. We expect to continue making these product and marketing investments and, of course, seeing public company expenses going forward into next year or two. The reason we’re doing it, of course, is we have a huge TAM. I think the question came up earlier related to TAM, and we feel like we’re continuing to be massively under-penetrated with a lot of room for expansion. So, in terms of your growth versus spend trade-off, we believe that we’re going to continue to make efforts to penetrate deeper into that TAM and as a relative market share leader, it’s in our interest to grab as much of it as we can.

And what I want to add there is – sorry, I’ll just add, we’re just scratching the surface. We are super-focused on capturing this larger opportunity of being the digital health platform for all of healthcare, and we are going to deliver on this product vision that we have to provide that. We’re deeply focused on building a great product and building our brand.

Thank you. Our next question will come from Charles Rhyee with Cowen. Please go ahead.

Yes. Hey, thanks for taking the question, guys, and congrats on your first quarter here. One, I’ll ask about the monthly active consumers, and if there’s any color you can give about, you mentioned earlier that your Gold and Kroger members are double the contribution to your revenues than the typical prescriptions customers. But even within that group, is there a cohort, like what sort of the average number of scripts someone’s filling, either in a month or in a quarter, and does that skew to – is there a subset are kind of heavy users versus people who kind of occasionally use it?

Thank you. Thank you very much for the question. Let me actually pass this to Karsten so you can speak to it, certainly.

Sure and thanks, Charles. There are a couple of things; like any business, we have different users with different rates of utilization. But again, going back to the concept we discussed earlier, as with most businesses in this space, we benefit from having a significant number of chronic medications that our users are buying a majority, in fact; number two, we have an over 80% repeat transaction rate. So, those factors are critical and they allow us to drive the unit economics we’ve discussed earlier, like the eight-month payback on marketing spend. In regards to subscriptions specifically, we look to subscriptions to be a way of continuing to push incremental value for users. So, the subscriptions offering, while it has a monthly fee associated, offers even lower drug prices. Despite that, we’ve still been able to generate 2X LTV in the first year off a subscription business. So hopefully, that gives you a perspective on our user base and its usage in our case.

Yes. That was helpful. You said there’s a – obviously, the month payback on marketing spend. I guess when you think about marketing, then are you targeting within the active consumers that’s been directly to get people, who are more likely users to use more or you’re really focused on trying to track always? Obviously, you want to always try new users, but is there a sort of a division within how you kind of look at marketing?

Yes. I’d say we have a pretty sophisticated, I believe marketing operation. There are types of marketing that are really general, so if we’re running television for example, that’s generally going to get us a very wide set of healthcare users and prescription users. Whereas, on the digital, we may be able to focus on particular products that are even more chronic nature. So, we do spend more or less on digital campaigns relative to the type of prescription user we think they are. But a lot of our marketing is more general in nature and isn’t too targeted in that fashion.

Great. Thank you.

Thank you very much.

Thank you. Our next question will come from Lloyd Walmsley with Deutsche Bank. Please go ahead.

Thanks. I’ve got a couple. First, can you talk about any changes you’re seeing in the competitive environment? Any competitor stepping up advertising or any impact from the new pharmacy discount cards that you’re seeing? And then secondly, can you just talk about some of the other potential areas of healthcare you see yourself potentially adding product around for price transparency over the next five-year period, leveraging the existing user base? Anything you can share there would be grateful. Thank you.

Thank you, very much Lloyd. On the competitive side, we’ve really spent a decade building this brand that’s trusted with consumers. Every day we have a 90 NPS score. We have this scalable central platform with deep network relationships. Everything we’ve done has just built a deeper competitive moat for us. We haven’t seen any competitors that have really impacted our business in any way. We are seeing some increased advertising from competitors, but that has been standard over the last decade with new entrants putting forth solutions. We’ve been able to capture a vast majority of gains in this space due to our scale and data advantages. This advantage allows us to grow new products that create better consumer experiences and tools to navigate healthcare access and affordability. We are just at the beginning with the healthcare solutions we plan to expand. Regarding potential product areas, we're excited about the continued growth of our Telehealth Marketplace, which has expanded into lab services and more. We see a large stack across healthcare services where consumers struggle to afford them, and we aim to provide in these areas. We'll be rolling out new products in a much sooner timeframe than five years.

All right. Thank you guys.

Thank you very much.

Thank you. Our next question will come from Lee Horowitz with Evercore ISI.

Great. Thanks for the question. Maybe one more on mail order, given a number of announcements from both partners and competitors recently. Ultimately, how important do you think that shorter e-commerce like delivery windows are in seeing greater adoption of mail order delivery, and do you believe that these sorts of delivery windows can potentially be done profitably?

Thank you very much, Lee, for the question. Yes, as I mentioned, mail order still is a small portion of prescriptions, and I believe there is no expectation that the adoption of mail order has drastically changed, even with COVID. The faster delivery is a factor, but I don't think it's the critical factor. I would say this is one of the factors out of many that can make mail order preferable for consumers. We’re focused on providing services where we meet consumers where they are, whether retail pharmacies provide mail, and we want to ensure that integrated solution works well for the consumer experience.

Great. Thanks. And one follow-up with that third question. Circling back on the vaccine, can you expand a bit on how you’re thinking about modeling the COVID recovery? You talked about not a V-shaped recovery, but specifically with the vaccine now generally expected in the second quarter of next year. Can you comment at all on whether this vaccine timeline was consistent with your prior view, or if your expectations around the pace of recovery and the proliferation of the vaccine have changed at all, given the news earlier this week? Any color there would be helpful. Thanks so much.

Sure. With respect to the fourth quarter, it doesn’t really change any of our expectations of a gradual recovery as the economy opens up next year. So I think the vaccine does affirm our expectations to a degree, but it doesn’t result in a significant change. Overall, we’re modeling a recovery that’s gradual; the vaccine's deployment won’t have an immediate dramatic impact. We certainly feel that if access to healthcare opens up and that consumers are comfortable returning to healthcare providers, there may be upside. Still, we have not made significant assumptions reflecting an abrupt change.

While the vaccine news is amazing, the reality remains that the situation can shift and affect consumer behaviors, particularly regarding access to non-urgent care. We’ve modeled in that recovery will take time and importantly, we believe that increased awareness of healthcare options, including vaccines, may create additional demands for our services. We intend to provide consumer support and facilitate an optimal experience as more healthcare options become available.

Thank you. Our next question will come from Aaron Kessler with Raymond James. Please go ahead.

Great. Thank you guys. Maybe just quickly on converting your customers. Our survey work has shown pretty high brand awareness for GoodRx. How are you thinking of converting more of these customers that have obviously heard about GoodRx but may not be customers yet? And then maybe thoughts on working with employers to promote GoodRx, especially as they move more towards high deductible plans as well. Thank you.

Yes. In terms of converting customers and brand, we think we have lots more to do on brand awareness. We think we have high brand awareness among healthcare professionals while among consumers, we believe there is a significant opportunity for improvement. Many potential consumers are unaware that they can shop for prescriptions the way they do other products. We really want to educate users that there are tools to help navigate this complex healthcare system. Our surveys indicate that 70% of consumers don’t know that prescription prices can vary widely. We’re focused on optimizing conversions among existing users while focusing on extending our reach. In terms of working with employers, we have chosen to target consumers directly because we believe that we are uniquely good at serving consumers. There are many companies that are equipped to help employers navigate this space; however, we believe we excel at consumer engagement during their healthcare journey and will maintain our focus there.

Got it. Thank you.

Thank you very much.

Thank you. And today’s final question will come from Stephanie Davis with SVB. Please go ahead.

Hey, congratulations on a strong first public quarter at the gate guys.

Thank you very much.

Could you comment on CMS’s transparency and coverage rule? And how would you think about the puts and takes those increased price transparency? Not just on the market, but maybe on your competitive dynamics in particular.

Sure. And thank you, Stephanie, for the question. We support anything that increases transparency; we need to move towards the goal of lowering out-of-pocket costs for consumers. Our focus is aligned with the regulators and the public, who want better accessibility and affordability in healthcare. In regard to the specific rules around price transparency, we see it opening up new opportunities in other healthcare segments and creating a more favorable environment for our business since we will be able to deliver solutions to help navigate these changes.

Thanks for the question, Stephanie, and thanks for giving me an opportunity here to talk. On the fourth-quarter guidance, holding all else equal, it implies a pretty healthy sequential step down. Is there anything to call out that drove up that in Q3, or is it just some uncertainty around the pandemic driving MAC working back metrics? Sure. We continue to see the impact of COVID-19 on our prescriptions offering realistically, primarily through the impact of doctor visits and access that Trevor talked about a bit. Monthly active consumers in the third quarter increased about 11% sequentially as activity in the prescription market improved. Moreover, we think about that the third quarter is a bit of a rebound quarter, because Q2 was so tough due to COVID. We got the benefit of more rebound in that quarter than the gradual improvement that we’re forecasting going forward. So we look forward and we still expect nice growth at 4-5% monthly active consumer growth for the fourth quarter, translating to about 20% year-over-year, even as we see the economy open up more gradually. Of course, this assumes conditions on the COVID front stay fairly constant. The other reality is that total revenue growth is expected to be at a significantly higher rate in part because of the rapid growth of our other revenue lines and the recurring nature of prescriptions, the fact that we benefit from most of the growth space. Thanks again for the great question.

Ladies and gentlemen, thank you for participating in today’s question-and-answer session, as well as today’s conference call. This concludes today’s program. You may now all disconnect and have a wonderful day.