GoodRx Holdings Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephanie Davis - Barclays - Analyst : Scott, congrats on your mother-in-law brand points ahead of Thanksgiving. I had some questions on menthol, because although we talked a lot about the prescription transaction part of the business, when I look at the guidance 4Q and the preliminary for 2025, that's where most of the delta is versus my numbers. So for my first question, can we just kind of delve into, did we mismodel that and got kind of carried away? Or is anything changing in how you're thinking of the ramp-up in the menthol business?

Question: Charles Rhyee - TD Cowen - Analyst : Trying to understand a little bit about the choppiness here in the retail market, understanding that stores are closing, obviously, with some big changes here. You had sized the Rite Aid impact of $5 million last quarter. Obviously, the -- I think they've announced a few more store closures since. How much of this choppiness at this point could be from like a Walgreens? And at this point, it seems like you're waiting until February to kind of guide here. But as you're doing your planning -- you talked in the past about getting more contact information with patients. What are your efforts here in terms of being able to outreach to members or to consumers to help them direct them to find new pharmacies to continue using GoodRx? And any kind of metrics that you could share in terms of your ability to divert patients from closed stores so far?

Question: Lisa Gill - JPMorgan - Analyst : I just want to follow up on two things. So one, just curious about the ISP uptake for '25 and the contracts that you've signed there and maybe the visibility? And then, Karsten, I know you don't want to give guidance. But you talked about 20%-plus growth in manufacturing and revenue in

Question: Scott Schoenhaus - KeyBanc - Analyst : So you've talked about the challenging choppiness in the retail environment. I believe you entered into a direct contracting method with Kroger. Just kind of wanted to hear an update on how that's going to give us a sense of how you can attack these retailers in the direct-contracting methods in 2025? And then, can you give us a sense -- you did a good job on the Investor Day, giving us a sense of the breakdown between ISP versus direct contracting versus hybrid. Can you give us a sense of where those benchmarks are relative to your initial guidance for 2025?

Question: Stan Berenshteyn - Wells Fargo Securities - Analyst : In the prepared remarks, you mentioned that pharmacies are increasingly negotiating contracts with PBMs. Can you just comment how widespread are these negotiations? And do you have a sense of the extent to which take rates could be pressured from the revised contracts?

Question: Sean Dodge - RBC Capital Markets - Analyst : Maybe just going back to the ISP rollout. Scott, you said you're in your second year of this now. Is the pace of adoption proceeding pretty similarly across all of your PBM partners there? Or are some of them going a bit faster than others? And then, if there are ones going faster, why is that and the ones going slower, is it just cautiousness on their part that's driving that or are there some technical or other kinds of constraints or barriers that they're running into?

Question: Jailendra Singh - Truist Securities - Analyst : I wanted to ask about your PMS business. It looks like you're seeing some good momentum there. Can you provide any update on what you are seeing in terms of pharma companies' willingness to spend and sign on, considering all the cautious commentary we've heard from some of the CROs and other pharma services companies we cover? I understand that GoodRx is working off a small base and the solution is a pay-as-you-go structure for the pharma client. But has there been any change in conversation? And does your guidance assume any benefit from a potential budget flush you might see at these pharma companies in Q4?

Question: Allen Lutz - Bank of America - Analyst : One for Scott or Karsten. How widespread are you seeing pharmacies getting more aggressive with PBMs? And I guess, what's changed there? Trying to understand, is this one pharmacy that's getting more aggressive with PBMs? Or are you seeing it across the board with your pharmacy partners maybe pushing back more aggressively? And then mechanically, how does that impact GoodRx? Would you expect a weaker take rate related to that or less volume flowing through?

Question: Daniel Grosslight - Citi - Analyst : I'd love to get an update on the Kroger Direct contract. I think when we last spoke about this, you mentioned that it was going a little bit slower than anticipated and maybe some education of the pharmacists needed to be made to let them know that you can take GoodRx now. So curious if that has started to take off a little bit better now? And I think last time you disclosed this in a chart, it looked about 1% or so of your claims are from Kroger. How fast do you think that can get up to where their kind of overall market share is now?

Question: George Hill - Deutsche Bank - Analyst : So kind of maybe a two-part question here. Number one, I guess, could you update us on the biosimilar strategy as it relates to Humira and your partnership with Boehringer? And whether you're kind of seeing any traction or whether there's been any meaningful contribution there to speak of? And then, I guess kind of like, the last one is a big picture question. As you talk about the Rx choppiness and we all know about the retail pharmacy environment, but kind of the backdrop for drug utilization remains pretty strong, especially in Q3 and looking into Q4. So kind of just like -- I guess I would ask, what can you guys do to close the gap between what you guys feel like you're seeing and the kind of the macro backdrop strength? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 1:00PM, GDRX.OQ - Q3 2024 GoodRx Holdings Inc Earnings Call

Question: Eric Sheridan - Goldman Sachs - Analyst : I guess taking a step back, when you think about the strategic priorities and/or the investment priorities for the business looking out towards 2025, we've talked a lot about the headwinds the industry faces from the retail footprint on this call. Are there any things within your control where you feel you want to sort of clarify or sum up ways in which you can sort of reposition the platform or maybe educate the consumer more deeply on the savings they could capitalize on, that could possibly outrun or counteract some of the retail footprints we had? And maybe how those fit into your broader priorities for '25?

Question: Dan Clark - Leerink - Analyst : This is Dan Clark on for Mike. Just a question on '25 in your kind of core prescriptions business. How are you thinking about changes to Medicare