GoodRx's Q3 2025 Earnings Call: Contradictions in Payer/Pharma Engagement, Pharma Manufacturing Solutions Growth, Rite Aid, and Innovent Partnership

Business Commentary:

• Manufacturer Solutions Growth:
• GoodRx's Manufacturer Solutions revenue reached $43.4 million in Q3, showing 54% year-over-year growth.

• The growth was driven by strong execution in expanding existing brand partnerships and closing new deals ahead of schedule.

  

• Affordability Initiatives and Partnerships:

• GoodRx announced partnerships with Novo Nordisk and Amgen, offering cash prices for Ozempic, Wegovy, and Repatha, with those programs contributing to the growth in Manufacturer Solutions.

• These initiatives reflect an increase in demand for affordable options and align with incoming healthcare policies like TrumpRx.

• Pharmacy Marketplace Challenges and Opportunities:

• The company's prescription transaction revenue saw a 9% decline year-on-year, impacted by Rite Aid store closures and lower transaction volume in the integrated savings program.

• This challenge is being addressed by expanding digital offerings, such as launching the RxSmartSaver program at Kroger pharmacies, to improve pharmacy profitability and engagement.

• Cash Market Dynamics and Strategic Focus:

• The cash market is expected to expand in 2026, boosting GoodRx's opportunity for growth, driven by increased uninsured and underinsured consumers.
• The company is focusing on strategic initiatives to deepen its presence at the pharmacy counter and invest in capabilities to engage healthcare providers and consumers, enhancing the platform's value proposition.
  

Contradiction Point 1

Payer and Pharma Engagement Strategy

It reflects differing strategies and priorities in engaging with payers and pharma manufacturers, which could impact revenue growth and market positioning.

What should a stabilizing PTR environment look like? How does increased pricing transparency impact GoodRx's ability to succeed? - Michael Cherny (Leerink Partners LLC)

2025Q3: We're focused on truly owning the pharmacy counter and the consumer journey. This, combined with a larger proportion of revenue from manufacturer solutions, will help us reverse the trends of 2025. - Wendy Barnes(CEO)

How is GoodRx managing capital allocation, and what growth potential does ManSol have? - Craig Hettenbach (Morgan Stanley)

2025Q1: We continue to see a trajectory where roughly two-thirds of our growth, kind of the 20% growth line, comes from the selling season with pharma, which, again, that's really the big engine of growth for us. - Wendy Barnes(CEO)

Contradiction Point 2

Pharma Manufacturing Solutions Growth Expectations

It involves differing expectations for the growth of Pharma Manufacturing Solutions, which is a key revenue driver for the company.

Can you explain the sequential revenue trend in Manufacturing Solutions for 2026? - Steven Valiquette(Mizuho Securities USA LLC, Research Division)

2025Q3: But it is also important to remember that Manufacturing Solutions generally shows growth as deals close throughout the year. The trend in 2026 will likely be growth, despite some lumpy deal closings. - Christopher McGinnis(CFO)

Is "Pharma Man Sol" considered a poor name? Is the 20-30% growth rate for this segment still accurate? - John Ransom(Raymond James & Associates, Inc., Research Division)

2024Q4: Pharma Manufacturing Solutions, we grew 26% in 2024, and we expect a similar 20% growth in 2025, with additional upside opportunities. - Wendy Barnes(CEO)

Contradiction Point 3

Rite Aid and Consumer Relationships

It involves diverging views on the impact and strategy regarding Rite Aid store closures and maintaining consumer relationships, which could affect market share and revenue stability.

How will you address Rite Aid challenges and drive recovery? - Brian Tanquilut (Jefferies LLC, Research Division)

2025Q3: We target recapture with outreach efforts and aim to maintain a durable relationship with displaced consumers. Ongoing investments in counter initiatives and e-commerce solutions support this strategy. - Christopher McGinnis(CFO)

What are the key initiatives to drive revenue to the upper end of the range? Can you share historical context on Rite Aid store closures and your ability to retain consumer relationships? - Lisa Gill (JPMorgan)

2025Q1: We are going to be extremely proactive in making sure we have a very good relationship with Rite Aid to be able to help them facilitate these transitions. And we're going to be very proactive in reaching out to the consumers to engage them and to help them understand that they have a choice and they can be a GoodRx user. - Wendy Barnes(CEO)

Contradiction Point 4

Innovent Partnership andISP Wrap Opportunities

It involves differing statements on the partnership with Innovent and the opportunities presented byISP Wrap, which could impact strategic decisions and investor expectations.

How much of Manufacturing Solutions' growth is due to point-of-sale discounts? - Stanislav Berenshteyn(Wells Fargo Securities, LLC, Research Division)

2025Q3: We're seeing more interest from manufacturers in point-of-sale deals, with partnerships like Ozempic and Repatha. We remain interested in all affordability programs that improve access. - Wendy Barnes(CEO)

Can you update us on the status of the ISP agreements with Express Scripts and Caremark and how they align with current expectations? - Charles Rhyee(TD Cowen)

2024Q4: Express Scripts and Caremark partnerships are dynamic, expanding beyond covered generics to non-covered brand medications, especially with ISP wrap. This has broader potential and is a long-term opportunity. - Wendy Barnes(CEO)

Contradiction Point 5

Manufacturer Solutions Growth and Strategy

It involves differing perspectives on the growth trajectory and strategic focus of the Manufacturer Solutions business, which is a key growth engine for the company.

Can you provide an update on your progress in strengthening relationships with HCPs in your Manufacturer Solutions division? - Jailendra Singh (Truist Securities, Inc., Research Division)

2025Q3: Manufacturing solutions will be a growth engine. A second wave of partnerships is expected to close in the coming years. These are 12-month deals, and none of them are one-time transactions. - Christopher McGinnis(CFO)

Update on ISP uptake for 2025 and how direct vs hybrid contracts impact your model? - Lisa Gill (JPMorgan)

2024Q3: Pharma manufacturer solutions are expected to show 20%+ growth, with investments in brand pharma programs. - Karsten Voermann(CFO)