GoodRx Holdings, Inc. Q2 FY2021 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx Second Quarter 2021 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 second quarter of 2021, 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; and Bansi Nagji, President of Healthcare. 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; our manufacturer solutions offering, 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. These factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors discussed in the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended June 30, 2021, and annual report on Form 10-K for the year ended December 31, 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 Trevor.

Thank you, Whitney. And thanks to everyone for joining us this morning. I'm proud to report another quarter of strong performance for GoodRx. Our track record of strong, profitable growth continued in the second quarter with revenue growing 43% year-over-year, a rapid reacceleration relative to the average growth of approximately 31% for the trailing 12 months through March. This, combined with an adjusted EBITDA margin of 30.9%, makes us what many call a rule of 70 company, much better than a traditional rule of 41, which we believe is unique at our size and in our space. Revenue grew to a record $176.6 million, even while we believe the backlog of undiagnosed conditions continued to grow. In fact, in our prescription transactions offering, our monthly active consumers grew a solid 36% year-over-year. Adding subscribers to that figure, our aggregate prescription-related user growth was above 40% year-over-year. These positive results were fueled by our ability to extend our platform from our historical focus on prescription discounts to today, where we impact almost 20 million Americans a month, including healthcare professionals who make up about 17% of our website visitors and built successful subscriptions, pharma manufacturer solutions, and telehealth offerings that are growing rapidly, almost doubling and tripling respectively in the case of the first two. A growing extensible platform is the foundation allowing us to continuously offer even more valuable services to our healthcare providers and consumers. For example, our Surescripts relationship, which Doug will discuss further, allows us to serve healthcare providers and their patients by providing real-time drug discount pricing in electronic health record systems that delivered almost two billion prescriptions last year. Another example is our strategic agreement with GoHealth, which marks an exciting first step into the insurance marketplace space for us. And within GoodRx Gold, our subscription program that provides two times the LTV of our prescription transactions offering, we now offer Gold at Rite Aid’s over 2000 pharmacies. We continue to be excited about the rapid evolution of our prescription transactions offering as well. Between our subscriptions offering, we help to record 7.5 million consumers saving their prescriptions by using GoodRx and one of our 70,000 participating pharmacies. We also expanded the marketplace with the addition of additional PBMs to our network. I couldn't be more pleased with our results and the progress we are making toward our goal of reinventing digital health. As Karsten will discuss shortly, we expect nearly 40% revenue growth in the third quarter. The strength of the relationships we built with healthcare providers, pharmacists, pharmacies, pharma manufacturers, and most importantly, consumers in combination with our highly extensible platform and offering puts us in a great position for years to come. With that, I'll turn the call over to Doug who will speak to some recent successes that further our mission to help Americans get the healthcare they need at a price they can afford.

Thank you, Trevor. For almost a decade, GoodRx has been focused on building the strongest consumer brand in healthcare. We have developed trusted relationships with millions of Americans who in turn recommend us to their friends and family because we offer simple, honest solutions to the frustrations and complexities of U.S. healthcare. People rely on GoodRx as an advocate they can turn to for help. We know that most patient journeys involve a visit to a doctor's office or clinic, and we recognize the essential role of doctors, pharmacists, and medical professionals play in determining the best treatment. They know, as well as we do, that prescribing a treatment a patient can't afford isn't really a treatment at all. That's why physicians have embraced GoodRx since our inception. Put simply, we help healthcare providers do what they do best: help their patients. Working with healthcare providers is a large part of what we do. Our products and services help providers find affordable solutions for their patients, reducing the time they spend searching on their patient's behalf. As Trevor mentioned, just this month, we announced an exciting new integration with Surescripts, the nation's leading health information network, to provide real-time drug discount pricing and electronic health records. By working with Surescripts, which delivered nearly two billion electronic prescriptions last year, we can help providers make more informed decisions and address patient prescription cost concerns at the point of care. We also work with offices and clinics around the country to provide GoodRx educational content for their patients, with hundreds of thousands of healthcare providers distributing our collateral. Remarkably, over two million prescribers have a patient who has used GoodRx, and about 80% of surveyed prescribers have recommended GoodRx to their patients. All told, healthcare professionals represent more than 17% of the people who visit the GoodRx website. We're delighted that healthcare providers reward GoodRx with an NPS of 86. We believe that our alignment with providers and our mutual dedication to helping their patients is a fundamental and flourishing part of our success. But there's one area where doctors and patients alike have consistently asked us for more help: brand name prescriptions. GoodRx has helped millions of Americans to now be able to widely afford generic prescriptions, but brand prescriptions often remain unattainable to consumers due to cost. Pharma manufacturers want to provide affordability options, but even with the 30 billion dollars they spend annually to reach consumers directly or through providers, they struggle to gain awareness and improve access and adherence for their medications. With our scale and reach across consumers and providers, we help address this challenge by delivering innovative solutions that connect doctors, patients, and pharma manufacturers in a more efficient and effective way. In less than a year, our pharma manufacturer solutions team has re-imagined the way patients or providers learn about, afford, purchase, and stay on brand name prescription treatments.

Thank you, Doug. I'll start on Slide 3. Pharma manufacturer solutions is GoodRx’s fastest growing offering with the most attractive economics. This compelling suite of solutions creates a highly effective way for pharma manufacturers to reach patients and providers, leveraging our almost 20 million monthly visitors made up of both consumers and healthcare providers, as well as the 20% of searches on our platform that are for brand drugs. In fact, our analysis shows that among the top 100 branded medications, GoodRx has an average of 10 times more traffic to the drug savings page for these brands on our site compared to the same brand savings page at the manufacturers’ own websites. As a reminder, branded medications present consumers and healthcare providers with a unique set of challenges when compared to generic medications, as they are often much more expensive, with or without insurance. To help address this, we built pharma manufacturer solutions to partner and innovate with drug manufacturers. In the last two years, we have scaled this offering rapidly, growing year-to-date revenue nearly three times year-over-year with highly attractive economics and delivering over 150% net revenue retention, meaning we have grown revenue from the same clients more than 50% compared to the same period last year. A statistic we're very proud of and that we believe evidences the value we provide manufacturers. We work with 19 of the top 20 U.S. pharma manufacturers and with approximately 100 brands across the more than 550 manufacturers in the U.S. Approximately 85% of the revenue related to this offering is substantially flat fee-based, making the revenue model both very attractive and highly predictable. More specifically, our substantially flat fee-based model consists of fixed commitments, typically for a term of one year that are paid out over the term of the agreement. In a few slides, I will show why we are so optimistic about our growth opportunities ahead, which build on our success today. Turning to Slide 4, we are best known for a decade's worth of experience, saving consumers money. We've also built broad and deep relationships with providers. Our GoodRx for providers users appreciate our easy-to-use solutions that help their patients start and stay on their therapies. 17% of the visitors to our website are healthcare providers and more than 2 million prescribers have had a patient who has used GoodRx. Our survey shows we have built our brand awareness among healthcare providers up to an impressive 88%, with 80% of providers recommending GoodRx to their patients. We've also found that 93% of healthcare providers say that their patient's access to medication improved when using GoodRx. And 87% said that their patient's adherence increased. This translates to a high Net Promoter Score of 86 from healthcare providers. We believe our trusted brand, increasing scale and reach, and deep relationships with stakeholders throughout the healthcare ecosystem uniquely position us to be the leading healthcare platform to connect healthcare providers and their patients with pharma manufacturers’ information, access, and affordability solutions. We continue to help consumers financially, saving them over $30 billion today. This is not just about saving money for consumers, whether insured or uninsured. For many, this is often the difference between someone's ability to start or stay on their medication. We do all of this in a seamless, intuitive way for consumers, leading to a very high Net Promoter Score of 90. All of these dynamics offer an unparalleled platform for pharma manufacturers to reach the bottom of the funnel, reaching both highly engaged healthcare providers and consumers who are searching for affordability solutions. Looking at Slide 5, let's set the stage with the problem. Brand medications tend to be expensive, and insurance coverage is complicated and restricted. 69% of consumers have made personal sacrifices in order to pay for their medications, and 70% of healthcare providers cite high cost as the primary reason patients do not pick up prescriptions. Pharma manufacturers spend an estimated $30 billion annually to address these and other challenges, either to reach consumers directly or via healthcare providers. Even with this large spend, these challenges persist, and manufacturers are looking for ways to more effectively improve this dynamic. Several factors, not just COVID, have exacerbated the challenges for manufacturers and shifted the way in which they communicate with healthcare providers. As of September 2020, in-person healthcare provider pharma sales access had fallen by 70% when compared to pre-pandemic levels. As a result, manufacturers are shifting their spend from offline to digital channels. Manufacturers' ability to digitally reach their intended audience is hindered by changes in the internet advertising landscape, such as IDFA and the move to a cookie-less world. Healthcare providers are critical, not only because they make the prescription decisions but also as a key resource for helping patients navigate difficult and often stressful decisions throughout the patient journey. Costs are going up. Branded medications have increased 78% since 2014, and 30% of all prescriptions are left unfilled due to cost. While many manufacturer-sponsored programs exist, patients have low awareness of their existence, and thus, their utilization is very low. Further, these challenges also impact healthcare providers. They know affordability is a critical topic for their patients, and providers and their staff spend significant time every week navigating administrative tasks related to drug access and/or trying to help that patients get access to these programs. Moving on to Slide 6, pharma manufacturers deploy strategies across three key stages of the patient journey: awareness, access, and adherence. They deploy their awareness strategies through an array of channels with decreasing efficiency, given some of the deployment challenges we just discussed. To improve access, manufacturers have developed strategies primarily focused on affordability. These programs include co-pay cards that buy down a commercially insured member's co-pay amount funded by the manufacturer. In addition, they provide sample drug programs and operate large call centers to help address challenges patients and physicians face. Manufacturers are also heavily focused on increasing adherence, a longer 'Holy Grail' in the industry. While forgetfulness can play a role in adherence, it is more commonly overshadowed by how people feel once they are on their medications and questions about how better they should remain on therapy. Pharma manufacturers have been working to solve these challenges for quite some time and have deployed both digital and call center-based solutions to try to address non-adherence. Turning to Slide 7. GoodRx understands the patient journey, given our extensive experience in the prescription market. With that knowledge as our foundation, we've been re-imagining the way patients and healthcare providers interact with the healthcare system. We currently operate solutions across the awareness, access, and adherence patient journey and continue to innovate more solutions. These offerings are data-driven and draw from a decade’s worth of insights and learnings about our consumer and healthcare provider audiences. By leveraging our almost 20 million monthly visitors, GoodRx’s audience has the attractive profile that manufacturers seek to reach. Our awareness solutions primarily focus on targeted high-quality content. GoodRx has a highly regarded editorial team, focused on prescription medications, whose work consistently ranks at the top of search results. Written content is a great solution for many consumers, but we also recognize that consumers are increasingly leveraging video as a medium to explore and digest content. Hence, we recently acquired HealthiNation. With its award-winning staff and extensive library of premium clinician-reviewed videos, HealthiNation complements and deepens our capabilities, offering highly relevant and credible video content shot with experts in their respective fields covering more than 90 conditions across 150 health categories. GoodRx now offers pharma manufacturers numerous ways to leverage highly relevant content to help drive their awareness initiatives. Turning to access solutions, as our site visitors navigate to find drug savings, we offer pharma manufacturers the ability to fully integrate their affordability programs into our easy-to-use patient navigator platform, driving both engagement and utilization. Our adherence solutions offer manufacturers the ability to leverage our direct communications and deliver relevant data-driven ways to help patients get on and stay on therapy. These solutions include text and email messaging, as well as technology-enabled nurse chat functionality to address adherence challenges patients face. Moving on to Slide 8. By driving awareness, access, and adherence with our multi-channel approach, we help healthcare providers who use GoodRx and their patients achieve better outcomes. Manufacturers are able to encourage the use of their innovative and life-saving products and services, increasing LTV at a compelling ROI. As an example, one of our customers, a top 20 manufacturer, delivered them an ROI of more than 8x across five brands. Our net revenue retention with that customer is 170% year-to-date. With the help of GoodRx, consumers are easily able to find authoritative educational resources on medications and conditions, including written and video content. Our visitors can also seamlessly access fully integrated savings and support solutions, such as via our partnership with Sanofi, a top 10 manufacturer. This encompasses the Sanofi portfolio of insulin-branded drugs and leverages our patient navigator access and affordability integration, enabling a consumer to find, register, and receive the discount offer that can be used at any pharmacy. Commercially insured members pay zero, while uninsured patients pay a $99 cash price for Sanofi products. This is a great example of our ability to help both uninsured and insured patients. Additionally, healthcare providers see multiple benefits. We're a highly valued resource, where they recommend to their patients our trusted educational resources and affordability solutions. This both reduces time spent searching for information on the patient's behalf while also increasing the chances of medication adherence. All said, we are able to offer extremely effective solutions that deliver value to manufacturers, consumers, and healthcare professionals. Turning to Slide 9. While we are proud of the tremendous progress, we are still in the early stages of the pharma manufacturer opportunity. Today, we have relationships with just 10% of the estimated 550 manufacturers serving the U.S. market, creating an opportunity for us to continue to scale. We made the strategic decision to target the top 20 pharma manufacturers as they represent almost half of the $30 billion TAM. We are proud to have successfully secured relationships with 19 of the top 20 manufacturers and have already set aside some enormous upside potential ahead as we continue to penetrate these accounts to increase our 4% sell-through of the roughly 1,000 brands representative in this cohort. We also had an opportunity to increase the number of solutions each brand deploys with us. Currently, our customers average three solutions per brand, up 2x year-over-year. We also continue to innovate and increase the number of solutions we offer. I'll close with Slide 10. We are excited about the trajectory of pharma manufacturer solutions. It is not only the fastest-growing offering, but also has the most attractive economics at GoodRx. And we believe we are in the early innings. With our year-to-date top line growing approximately 3x year-over-year, most of which drops to the bottom line, we certainly beat any rule or benchmark. Our innovative solutions help address awareness, access, and adherence challenges faced by manufacturers, patients, and healthcare providers, seamlessly creating a win-win environment for all stakeholders. Our existing relationships are sticky, and the offering has been able to not only deliver rapid growth but also an impressive net revenue retention in excess of 150%, representing expansion with existing customers. We have a significant opportunity to not only further penetrate the top 25 pharma manufacturers but also into the long tail of 500 or so other manufacturers. We believe we are well-positioned to capitalize on the macro shift to an increasingly digital mix. Pharma manufacturers increased their digital ad spend by 43% in 2020. We look forward to helping even more manufacturers and more brands support patients and their physicians throughout the healthcare journey.

Thank you, Bansi, and good morning, everyone. From time to time, we plan to focus on other areas of GoodRx and provide incremental feature presentations. In the meantime, I'm excited to speak about our second quarter results. This was another strong quarter for our business. We continue to deliver record revenue at attractive margins while growing the number of consumers we serve across our platform and adding incremental PBMs. During the quarter, we increased our reach to over 7.5 million Americans through our prescription-related offerings, with MACs growing 36% year-over-year to a record 6.0 million, and subscription members reaching over 1.5 million members in connection with our 1.05 million subscription plans. We continue to successfully drive consumers to our subscription offering, with our subscriptions growing 86% year-over-year to over 1 million across our two subscription programs, GoodRx Gold and the Kroger Rx Savings Club powered by GoodRx. Including family plans, each subscription represents on average approximately 1.5 Americans. Our pharma manufacturer solutions offering continues to grow at a rapid pace, and we are extremely excited about this amazing opportunity that Bansi and the team are pursuing with great momentum. Finally, Care continues to be a growth engine for us with its exceptional user experience. The rebrand from HeyDoctor to GoodRx Care, in combination with the continued work on cross-platform integrations and a unified user experience, are delivering strong results, with over 40% of telehealth visits now converting into Gold subscriptions. More broadly, approximately 60% of care visits are driving incremental revenue through our other offerings, up from 30% earlier in the year. We believe these types of cross-platform integrated experiences will continue to enhance our ability to cross-sell going forward, increasing the stickiness and lifetime value of our users. We’re excited to announce a number of new collaborations. We believe it will further extend our reach and deliver more value to consumers across more stages of their healthcare journey. In the second quarter, we entered into an agreement with Surescripts to be the prescription cash discount price provider for its nationwide network, connecting virtually all electronic health record systems, pharmacies, and health systems. With this new integration, prescribers using Surescripts' real time prescription benefit will be able to provide uninsured patients and patients whose price information isn’t readily available from their PBM or health plan with drug discount pricing from GoodRx so they can make more educated decisions about their care. Integrating GoodRx discount pricing will support getting cost information into the hands of patients and increasing our provider-to-consumer reach. As Trevor mentioned, we also entered into a strategic agreement with GoHealth, a leading health insurance marketplace and Medicare-focused digital health company, to help more Americans get the healthcare they need at a price they can afford by bringing GoHealth Medicare enrollment and engagement solutions directly to the millions of Americans who visit GoodRx monthly. GoodRx consumers who want to explore Medicare coverage options and understand potential benefits or savings will be able to access this information on the GoodRx platform, while GoHealth consumers will also have access to GoodRx prescription discounts. Through this agreement, we’ll be able to help the millions of GoodRx consumers who are eligible for Medicare find and enroll in the best Medicare coverage plan that fits their needs. We will also expand our reach by giving GoHealth members access to affordable choices to further improve health outcomes. This marks an exciting step into the insurance marketplace space, which can create significant value for the consumers on our platform, given that many of them have third-party payer coverage, and many of our users would like GoodRx to provide these services and advice in this area. GoodRx Gold continues to grow rapidly as we expand the program's network reach and benefits. During the quarter, we entered into multiple collaborations to deliver more value to more consumers across the nation. We strengthened the Gold network by adding Rite Aid’s 2,000 plus locations to our subscription savings program, substantially growing the footprint of participating pharmacies and delivering greater savings on prescriptions nationwide. In addition, we’re developing strategic relationships with enterprise-level companies to build on our mission of providing Americans with access to affordable and convenient healthcare. This quarter, we announced we are working with DoorDash and USAA to provide Dashers and USAA’s 13 million members with discounted access to Gold. With a Gold membership, Dashers and USAA members can pay $10 or less for over 1,000 prescription medications, connect with the healthcare provider from home for a low rate, and receive free mail delivery for certain prescriptions. As Bansi highlighted earlier on the call, we continue to make impressive progress with our rapidly growing pharma manufacturer solutions offering, streamlining access to patient savings programs on the GoodRx site by working directly with leading manufacturers. With the expansion of our integrated patient savings programs, consumers can now seamlessly qualify and register for co-pay cards for certain drugs within the GoodRx experience. We’re excited to help consumers access these affordability solutions and create innovative ways to connect with consumers and manufacturers. Moving to our second quarter results. Revenue for the quarter was $176.6 million, growing 43% year-over-year. Prescription transactions revenue grew 32% year-over-year to $144.9 million, driven by a 36% year-over-year increase in our monthly active consumers, which reached a record 6.0 million. This was partially offset by a year-over-year decrease in prescription transactions revenue per MAC solely related to ScriptCycle, which as discussed in prior calls has lower revenue and contribution per consumer. GoodRx prescription transaction economics have otherwise remained constant. 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 do not include consumers of our other offerings such as subscriptions, pharma manufacturer solutions, and telehealth. When presented for a quarter, monthly active consumers represent the average of the calendar months in the quarter. The second quarter MAC number does not include RxSaver MACs. Typically, we begin including MACs in the first full quarter post-acquisition, which would be the third quarter of 2021. We finished the quarter with over 1 million subscription plans and over 1.5 million Americans benefiting from our subscription offerings since our family subscriptions generally serve multiple consumers. Our subscriber count and subscription revenue should provide a more holistic view of a growing consumer base and reflect another way we monetize a portion of the millions of visitors on our platform. Our subscription offering, which is already a scaled business, extends our successful prescription transactions offering while creating even more predictable revenue for us that addresses similar consumer needs and generally offers even greater savings on prescription medications. Many times consumers go through the same funnel searching for prescription prices. And if they choose the lowest price, they often become subscribers without ever having been a monthly active consumer. This is mutually beneficial because we believe that both consumers and GoodRx generate more value when this happens. Looking at our total prescription-related offerings, we had 6.0 million MACs in our prescription transactions offering and over 1.5 million members associated with our 1.05 subscriptions. In addition to monetizing MACs and subscribers, we are able to further monetize a portion of the millions of visitors on our platform with offerings such as telehealth and pharma manufacturer solutions, delivering more value to consumers and increasing the scale of our prescription-related offerings. Other revenue, which now excludes subscription revenue, grew 136% year-over-year to $17.4 million, primarily driven by growth in pharma manufacturer solutions, which makes up a significant majority of other revenue as well as growth in telehealth. The growth reflects the incredible demand for these offerings and our ability to leverage multiple entry points into our growing platform and monetize at different stages of the healthcare journey, which is growing LTV. Our prescription transactions and subscription offerings continue to face headwinds related to COVID-19. While we’ve seen moderate sequential improvements since the beginning of the year, new therapy starts and prescription volumes remain below normal levels, and the backlog of misdiagnoses continues to increase now at over 1.2 billion according to IQVIA. Turning back to the second quarter performance and moving down the P&L. Cost of revenue is $11.1 million, or 6.3% of revenue compared to $6.8 million and 5.5% of revenue in 2Q 2020. The increase was driven by an increase in outsourced and in-house personnel related consumer support expense to support our growth and increases in hosting expenses, merchant fees, and allocated overhead. Product development and technology expenses were $29.6 million compared to $12.0 million in the comparable period last year. This increase was primarily due to continued investments in the team and product, as well as an increase in stock-based compensation, including awards made in connection with and after our IPO. Excluding stock-based compensation and the related tax and other items associated with acquisitions, adjusted product development and technology expense was 11.3% of revenue compared to 8.7% of revenue in 2Q 2020. We continue to invest in product innovation to create the best consumer experience possible, scale our existing offerings, and develop new offerings, all of which are intended to help more consumers in different stages of their healthcare journey, deliver more value to them and increase the lifetime value we generate. Sales and marketing expenses were $88.4 million compared to $51.9 million in 2Q 2020. We increased advertising spend by $24.4 million year-over-year and continue to invest in our incredible team 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 grew year-over-year, making up 46.7% of our revenue in 2Q 2021 compared to 41.6% last year, as we proactively reduced advertising spend in the comparable period in 2020 at the onset of the COVID-19 pandemic. General and administrative expenses were $39.6 million compared to $6.3 million in the second quarter of 2020. The majority of this increase, $24 million or approximately 72%, was due to stock-based compensation expense relating to the non-recurring co-CEOs’ awards made in connection with the IPO. Excluding this and other adjustments, including non-cash and M&A and financing-related items, adjusted G&A as a percent of revenue is 5.0% compared to 4.1% in 2Q 2020, with the incremental costs primarily associated with starting to operate as a public company at the end of September. Net income grew 14% year-over-year to $31.1 million, which was impacted by a $37.3 million tax benefit, as well as by stock-based compensation expense of $40.7 million in the quarter, $24 million of which related to the non-recurring Co-CEO grants made at the time of the IPO. Adjusted net income grew 9% year-over-year to $35.1 million. Adjusted EBITDA grew 11% year-over-year to $54.6 million. Adjusted EBITDA margin continued to be strong at 30.9%, reflecting our ability to deliver profitable growth due to the compelling unit economics of our business and repeat activity on our platform, which remained at over 80%. Our adjusted EBITDA margin decreased by approximately 910 basis points year-over-year due to an increase in sales and marketing spend as a percent of revenue compared to the second quarter of 2020, in which, as I mentioned earlier, we proactively reduced our sales and marketing spend at the onset of the COVID-19 pandemic. The decrease was also due to continued investments in product development and technology, the growth of our telehealth offering, and investments in our general and administrative infrastructure as we began operating as a public company. We continue to generate strong cash flow, with net cash from operating activities of $34.9 million for the quarter. Now turning to guidance. For the third quarter of 2021, we expect revenue of $193 million to $197 million, reflecting 37% to 40% year-over-year growth. We believe this growth will be driven by a triple-digit increase in other revenue based on the continued momentum in our pharma manufacturer solutions offering and in our subscription revenue combined with continued growth in prescription transactions revenue. On the adjusted EBITDA front, we expect an adjusted EBITDA margin of approximately 30% for the third quarter. We continue to expect our non-prescription transaction revenue offerings, which are reflected in subscription revenue and other revenue to make up a higher percentage of our total revenue. In the second quarter, those items made up 18% of total revenue, an increase of approximately 150 basis points compared to the first quarter, and we expect that to increase by another approximately 200 basis points to reach approximately 20% of total revenue in the third quarter. This means prescription transaction revenue, which is driven by MAC, will make up a smaller share of total revenue as more visitors and MAC convert to subscribers, and as we continue to grow our pharma manufacturer solutions. We’re excited that we delivered strong second quarter revenue above the high end of our guidance range and returned to pre-COVID revenue growth of 40% plus. We continue to have strong confidence in the outlook for our business. However, based on the general uncertainty around the evolution of the pandemic, we will not be updating our full-year guidance at this time. Moving on to a recent acquisition and to some tax topics. First, subsequent to the second quarter, we closed the acquisition of RxNXT, a prescription technology company that we acquired to support our prescription transaction offering. They have unique technology that will allow us to partner with health plans and PBMs in new ways to better service their members on funded benefit plans. Similar to our RxSaver and HealthiNation acquisitions, RxNXT does not immediately contribute material revenue to GoodRx. In fact, RxNXT generated less than $1,000 of revenue year-to-date. The platform will augment our existing prescription transactions offering via innovative technology and domain expertise, enabling long-term growth. Our assumptions related to RxNXT are reflected in our revenue and EBITDA guidance. Since the company is practically pre-revenue, our forecast and guidance include no revenue and no MAC from RxNXT in 2021. We expect the company to generate revenue at some point in mid to late 2022 and to start scaling in 2023. Second, and before I conclude, one note on our income tax provision or benefit. While the tax benefit in the second quarter is meaningful, we do not expect it to be recurring. However, we continue to expect unpredictability in our future tax provision or benefit amounts due to multiple elements and estimates that impact the interim income tax accounting calculations. One of the most significant elements is excess tax benefits or deficiencies resulting from stock awards. This element is challenging to forecast as it’s generally driven by factors outside of our control, such as the stock's trading price and the decision of employees relating to their award. This is one of the reasons we are presenting adjusted net income and adjusted tax. We are very pleased with our strong second quarter results, including the reacceleration of our revenue growth to 43% year-over-year, reaching $176.6 million and our adjusted EBITDA margin of 30.9%. As Trevor said, combining our growth and margin makes us a rule of 70 plus company, which is quite a unique achievement at our large scale. Our 36% monthly active consumer growth and the extension of our reach to over 7.5 million Americans, which includes those served by our higher LTV subscription offering, reflect how big we have become. What excites us most, however, is how bright our growth prospects for the future are. We’re prepared to be there for consumers as they resume their interactions with the healthcare system and start clearing the diagnosis backlog over the next few quarters. We believe that we are uniquely positioned to capitalize on what would be a new, more digital, normal in healthcare as one of the most trusted brands in healthcare with our high consumer NPS and our consumer-centric philosophy. We see numerous opportunities to further disrupt the industry with new products that reimagine healthcare, making it more affordable and convenient for even more Americans. We’re building the leading consumer-focused digital healthcare platform in the U.S. and plan to continue investing our strong cash flows in our platform, product, user experience, and our brand with the goal of creating the best consumer experience and improved healthcare affordability and access for all Americans. Thank you for your continued interest in GoodRx. We look forward to sharing our progress in the quarters to come.

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

Hey guys, congrats on a solid quarter. And I just want to say, I applaud the change in messaging. I really appreciate some of the greater color you guys gave on manufacturer solutions.

Thank you very much, Stephanie, for the questions. We’re extremely proud of our great results in the second quarter with record revenue, users, and adjusted EBITDA.

We see marketing spend increase pretty dramatically across the direct-to-consumer health tech space this quarter, just given some cost increases at some of the large digital ad players. So I was hoping we could dig a little bit more into your marketing channel mix and maybe talk about how you can see that shift going forward and light us on your partnership announcements this quarter?

Thank you very much, Stephanie. When it comes to marketing spend, we’re continuing to see very strong performance and business strength with consistent payback periods, even with increasing marketing spend. One of the keys for this great payback period is that our most significant source of traffic and consumer acquisition is unpaid word of mouth, referrals, especially by prescribers. Two million of whom have a patient who has used GoodRx and 80% of whom recommend GoodRx. It’s now easier than ever for healthcare professionals to recommend GoodRx with our recent Surescripts agreement that will put our GoodRx prices in the majority of EHRs in the U.S. We’re also doubling down on our research and content efforts, as we believe the right content and insights further empower consumers, increase engagement, drive customer acquisition and propel even faster growth in our manufacturer solutions offering. As we spoke about, we also acquired HealthiNation earlier this year and are investing in this in-house as well. In addition to this, we continue to test new direct consumer channels as well as investing in our B2B efforts like our recent strategic agreements with great companies like DoorDash and USAA. I’ll also add that Search and Facebook do not make up a material piece of our user acquisition.

Now for a follow-up on the flip side of that question, are you starting to see some of these digital health players have inbounds about advertising on the GoodRx platform? And where is that today in terms of folks that advertise on your platform? That seems like a pretty big opportunity in light of some of the increases in cost for Facebook and Google Ad.

Yes, definitely. We have relationships with many of the health tech leaders, and we see many opportunities for all sorts of creative and lucrative partnerships. With our 20 million visitors, we offer an incredibly effective way to reach consumers and healthcare professionals and to support them as they navigate the healthcare system through innovative solutions like pharma manufacturer solutions.

Great. Thanks for taking the questions. Just wanted to talk about MAC a little bit; I think the 2Q MAC may have come down a little bit just from the March levels. So it's just maybe provide a little bit more context kind of on what you're seeing maybe on a monthly basis through 2Q and just how you're thinking about that into 3Q?

Sure. Our platform gives all Americans the knowledge, choice, and care they need to stay healthy. Sometimes those users come to us when they're about to fill a prescription, or access Telehealth, but often they are at a different stage of their healthcare journey. For those users, we provide great information and tools that help them make better healthcare decisions.