0000950170-21-001392.txt : 20210812 0000950170-21-001392.hdr.sgml : 20210812 20210812171331 ACCESSION NUMBER: 0000950170-21-001392 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 63 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210812 DATE AS OF CHANGE: 20210812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GoodRx Holdings, Inc. CENTRAL INDEX KEY: 0001809519 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 475104396 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39549 FILM NUMBER: 211168679 BUSINESS ADDRESS: STREET 1: 2701 OLYMPIC BOULEVARD CITY: SANTA MONICA STATE: CA ZIP: 90404 BUSINESS PHONE: (855) 268-2822 MAIL ADDRESS: STREET 1: 2701 OLYMPIC BOULEVARD CITY: SANTA MONICA STATE: CA ZIP: 90404 10-Q 1 gdrx-20210630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to                          

Commission File Number: 001-39549

 

 

GoodRx Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47-5104396

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

2701 Olympic Boulevard

Santa Monica, CA

90404

(Address of principal executive offices)

(Zip Code)

(855) 268-2822

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

 

GDRX

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of August 9, 2021, the registrant had 75,429,443 shares of Class A common stock, $0.0001 par value per share, and 320,210,544 shares of Class B common stock, $0.0001 par value per share, outstanding.

 

 


 

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, stock compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that 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, including, but not limited to, risks related to our limited operating history and early stage of growth; our ability to achieve broad market education and change consumer purchasing habits; our ability to continue to attract, acquire and retain consumers in a cost-effective manner; our reliance on our prescription offering and ability to expand our offerings; changes in medication pricing and pricing structures; our inability to control the categories and types of prescriptions for which we can offer savings or discounted prices; our reliance on a limited number of industry participants; the competitive nature of industry; risks related to pandemics, epidemics or outbreak of infection disease, including the COVID-19 pandemic; the accuracy of our estimate of our total addressable market and other operational metrics; the development of the telehealth market; our ability to maintain and expand a network of skilled telehealth providers; risks related to negative media coverage; our ability to respond to changes in the market for prescription pricing and to maintain and expand the use of GoodRx codes; our ability to maintain positive perception of our platform and brand; risks related to our material weaknesses in our internal control over financial reporting and any future material weaknesses; risks related to use of social media, emails, text messages and other messaging channels as part of our marketing strategy; our ability to accurately forecast revenue and appropriately plan our expenses in the future; risks related to information technology and cyber-security; compliance with government regulation of the internet, e-commerce and data and other regulations; our ability to utilize our net operating loss carryforwards and certain other tax attributes; management’s ability to manage our transition to being a public company; our ability to attract, develop, motivate and retain well-qualified employees; risks related to general economic factors, natural disasters or other unexpected events; risks related to our acquisition strategy; risks related to our debt arrangements; interruptions or delays in service on our apps or websites; our reliance on third-party platforms to distribute our platform and offerings; our reliance on software as-a-service technologies from third parties; systems failures or other disruptions in the operations of these parties on which we depend; changes in consumer sentiment or laws, rules or regulations regarding tracking technologies and other privacy matters; risks related to our intellectual property; risks related to operating in the healthcare industry; risks related to our organizational structure; risks related to fluctuations in our tax obligations and effective income tax rate which could materially and adversely affect our results of operations; as well as the other important factors discussed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“2020 10-K”) and this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission (“SEC”). The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

 


 

GOODRX HOLDINGS, INC.

Table of Contents

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

3

Condensed Consolidated Statements of Cash Flows

5

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

33

 

 

 

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Defaults Upon Senior Securities

36

Item 4.

Mine Safety Disclosures

36

Item 5.

Other Information

36

Item 6.

Exhibits

37

 

Signatures

38

 

 

 


 

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

 

GoodRx Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except par values)

 

June 30,
2021

 

 

December 31,
2020

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

894,703

 

 

$

968,691

 

Restricted cash

 

 

 

 

 

2,900

 

Accounts receivable, net

 

 

87,004

 

 

 

68,729

 

Prepaid expenses and other current assets

 

 

94,043

 

 

 

46,048

 

Total current assets

 

 

1,075,750

 

 

 

1,086,368

 

 

 

 

 

 

 

Property and equipment, net

 

 

22,105

 

 

 

23,057

 

Goodwill

 

 

320,196

 

 

 

261,116

 

Intangible assets, net

 

 

94,780

 

 

 

36,919

 

Capitalized software, net

 

 

31,996

 

 

 

19,800

 

Operating lease right-of-use assets

 

 

26,902

 

 

 

27,712

 

Deferred tax assets, net

 

 

12,971

 

 

 

13,117

 

Other assets

 

 

2,229

 

 

 

2,025

 

Total assets

 

$

1,586,929

 

 

$

1,470,114

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

18,378

 

 

$

10,291

 

Accrued expenses and other current liabilities

 

 

33,759

 

 

 

37,692

 

Current portion of debt

 

 

7,029

 

 

 

7,029

 

Operating lease liabilities, current

 

 

6,325

 

 

 

4,539

 

Total current liabilities

 

 

65,491

 

 

 

59,551

 

Debt, net

 

 

657,877

 

 

 

659,888

 

Operating lease liabilities, net of current portion

 

 

32,818

 

 

 

33,467

 

Other liabilities

 

 

6,349

 

 

 

5,849

 

Total liabilities

 

 

762,535

 

 

 

758,755

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 50,000 shares
   authorized and
zero shares issued and outstanding
   at June 30, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock, $0.0001 par value; Class A: 2,000,000 shares
   authorized,
72,054 and 63,071 shares issued and outstanding
   at June 30, 2021 and December 31, 2020, respectively; and
   Class B:
1,000,000 shares authorized, 323,339 and 328,589 
   shares issued and outstanding at June 30, 2021 and
   December 31, 2020, respectively

 

 

39

 

 

 

39

 

Additional paid-in capital

 

 

2,182,079

 

 

 

2,101,773

 

Accumulated deficit

 

 

(1,357,724

)

 

 

(1,390,453

)

Total stockholders' equity

 

 

824,394

 

 

 

711,359

 

Total liabilities and stockholders' equity

 

$

1,586,929

 

 

$

1,470,114

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

1


 

GoodRx Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(in thousands, except per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

176,635

 

 

$

123,295

 

 

$

337,066

 

 

$

256,703

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue, exclusive of depreciation and
   amortization presented separately below

 

 

11,090

 

 

 

6,824

 

 

 

21,518

 

 

 

12,843

 

Product development and technology

 

 

29,567

 

 

 

11,962

 

 

 

55,727

 

 

 

22,287

 

Sales and marketing

 

 

88,381

 

 

 

51,920

 

 

 

168,075

 

 

 

115,082

 

General and administrative

 

 

39,579

 

 

 

6,332

 

 

 

83,365

 

 

 

12,219

 

Depreciation and amortization

 

 

8,369

 

 

 

4,521

 

 

 

13,730

 

 

 

8,866

 

Total costs and operating expenses

 

 

176,986

 

 

 

81,559

 

 

 

342,415

 

 

 

171,297

 

Operating (loss) income

 

 

(351

)

 

 

41,736

 

 

 

(5,349

)

 

 

85,406

 

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

 

 

 

(16

)

 

 

 

 

 

(21

)

Interest income

 

 

(13

)

 

 

(41

)

 

 

(29

)

 

 

(116

)

Interest expense

 

 

5,906

 

 

 

6,795

 

 

 

11,811

 

 

 

15,433

 

Total other expense, net

 

 

5,893

 

 

 

6,738

 

 

 

11,782

 

 

 

15,296

 

(Loss) income before income taxes

 

 

(6,244

)

 

 

34,998

 

 

 

(17,131

)

 

 

70,110

 

Income tax benefit (expense)

 

 

37,305

 

 

 

(7,661

)

 

 

49,860

 

 

 

(15,427

)

Net income

 

$

31,061

 

 

$

27,337

 

 

$

32,729

 

 

$

54,683

 

Net income attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

31,061

 

 

$

17,663

 

 

$

32,729

 

 

$

35,325

 

Diluted

 

$

31,061

 

 

$

17,842

 

 

$

32,729

 

 

$

35,674

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

 

$

0.08

 

 

$

0.08

 

 

$

0.15

 

Diluted

 

$

0.07

 

 

$

0.08

 

 

$

0.08

 

 

$

0.15

 

Weighted average shares used in computing
   earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

408,363

 

 

 

230,160

 

 

 

407,273

 

 

 

230,020

 

Diluted

 

 

428,867

 

 

 

236,890

 

 

 

429,228

 

 

 

236,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation included in costs and
   operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

181

 

 

$

24

 

 

$

302

 

 

$

41

 

Product development and technology

 

 

7,987

 

 

 

918

 

 

 

16,323

 

 

 

1,814

 

Sales and marketing

 

 

5,262

 

 

 

608

 

 

 

10,520

 

 

 

1,478

 

General and administrative

 

 

27,246

 

 

 

571

 

 

 

60,057

 

 

 

998

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

2


 

GoodRx Holdings, Inc.

Condensed Consolidated Statements of Changes in Redeemable Convertible

Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

 

 

 

 Redeemable
Convertible Preferred Stock

 

 

 

 Class A and Class B
Common Stock

 

 

 Additional
Paid-in

 

 

 Accumulated

 

 

 Total
Stockholders'

 

(in thousands)

 

Shares

 

 

Amount

 

 

 

 Shares

 

 

 Amount

 

 

 Capital

 

 

 Deficit

 

 

 Equity

 

Balances at December 31, 2020

 

 

 

 

$

 

 

 

 

391,660

 

 

$

39

 

 

$

2,101,773

 

 

$

(1,390,453

)

 

$

711,359

 

Stock options exercised

 

 

 

 

 

 

 

 

 

513

 

 

 

 

 

 

2,680

 

 

 

 

 

 

2,680

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48,254

 

 

 

 

 

 

48,254

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

 

608

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock withheld for tax obligations
   and net settlement

 

 

 

 

 

 

 

 

 

(324

)

 

 

 

 

 

(14,902

)

 

 

 

 

 

(14,902

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,668

 

 

 

1,668

 

Balances at March 31, 2021

 

 

 

 

$

 

 

 

 

392,457

 

 

$

39

 

 

$

2,137,805

 

 

$

(1,388,785

)

 

$

749,059

 

Stock options exercised

 

 

 

 

 

 

 

 

 

2,609

 

 

 

 

 

 

13,291

 

 

 

 

 

 

13,291

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,366

 

 

 

 

 

 

42,366

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

 

631

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock withheld for tax obligations
   and net settlement

 

 

 

 

 

 

 

 

 

(304

)

 

 

 

 

 

(11,383

)

 

 

 

 

 

(11,383

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,061

 

 

 

31,061

 

Balances at June 30, 2021

 

 

 

 

$

 

 

 

 

395,393

 

 

$

39

 

 

$

2,182,079

 

 

$

(1,357,724

)

 

$

824,394

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3


 

GoodRx Holdings, Inc.

Condensed Consolidated Statements of Changes in Redeemable Convertible

Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

 

 

 

 Redeemable
Convertible Preferred Stock

 

 

 

Common Stock

 

 

 Additional
Paid-in

 

 

 Accumulated

 

 

 Total
Stockholders'

 

(in thousands)

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

 Deficit

 

 

 Deficit

 

Balances at December 31, 2019

 

 

126,046

 

 

$

737,009

 

 

 

 

229,750

 

 

$

460

 

 

$

8,788

 

 

$

(1,096,830

)

 

$

(1,087,582

)

Stock options exercised

 

 

 

 

 

 

 

 

 

467

 

 

 

1

 

 

 

691

 

 

 

 

 

 

692

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,501

 

 

 

 

 

 

2,501

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,346

 

 

 

27,346

 

Balances at March 31, 2020

 

 

126,046

 

 

$

737,009

 

 

 

 

230,217

 

 

$

461

 

 

$

11,980

 

 

$

(1,069,484

)

 

$

(1,057,043

)

Stock options exercised

 

 

 

 

 

 

 

 

 

222

 

 

 

1

 

 

 

530

 

 

 

 

 

 

531

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,440

 

 

 

 

 

 

2,440

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,337

 

 

 

27,337

 

Balances at June 30, 2020

 

 

126,046

 

 

$

737,009

 

 

 

 

230,439

 

 

$

462

 

 

$

14,950

 

 

$

(1,042,147

)

 

$

(1,026,735

)

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

4


 

GoodRx Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended
June 30,

 

(in thousands)

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

32,729

 

 

$

54,683

 

Adjustments to reconcile net income to net cash provided by
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

13,730

 

 

 

8,866

 

Amortization of debt issuance costs

 

 

1,727

 

 

 

1,596

 

Non-cash operating lease expense

 

 

1,791

 

 

 

2,232

 

Stock-based compensation expense

 

 

87,202

 

 

 

4,331

 

Deferred income taxes

 

 

(364

)

 

 

2,292

 

Loss on abandonment of operating lease assets

 

 

780

 

 

 

 

Changes in operating assets and liabilities, net of effects of business acquisitions

 

 

 

 

 

 

Accounts receivable

 

 

(12,873

)

 

 

(10,653

)

Prepaid expenses and other assets

 

 

(47,241

)

 

 

(3,952

)

Accounts payable

 

 

4,917

 

 

 

753

 

Accrued expenses and other current liabilities

 

 

(1,897

)

 

 

23,164

 

Operating lease liabilities

 

 

(590

)

 

 

(224

)

Other liabilities

 

 

500

 

 

 

737

 

Net cash provided by operating activities

 

 

80,411

 

 

 

83,825

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property and equipment

 

 

(3,058

)

 

 

(1,779

)

Acquisitions, net of cash acquired

 

 

(125,728

)

 

 

 

Capitalized software

 

 

(13,630

)

 

 

(6,540

)

Net cash used in investing activities

 

 

(142,416

)

 

 

(8,319

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from long-term debt

 

 

 

 

 

28,000

 

Payments on long-term debt

 

 

(3,515

)

 

 

(3,515

)

Payment for contingent consideration

 

 

(832

)

 

 

 

Payment of debt issuance costs

 

 

 

 

 

(1,306

)

Proceeds from exercise of stock options

 

 

15,481

 

 

 

1,223

 

Proceeds from early exercise of stock options

 

 

 

 

 

667

 

Employee taxes paid related to net share settlement of equity awards

 

 

(26,017

)

 

 

 

Net cash (used in) provided by financing activities

 

 

(14,883

)

 

 

25,069

 

Net change in cash, cash equivalents and restricted cash

 

 

(76,888

)

 

 

100,575

 

Cash, cash equivalents and restricted cash

 

 

 

 

 

 

Beginning of period

 

 

971,591

 

 

 

26,050

 

End of period

 

$

894,703

 

 

$

126,625

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Non cash investing and financing activities

 

 

 

 

 

 

Offering costs included in accounts payable and accrued expense and other current liabilities

 

$

 

 

$

736

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

 

471

 

 

 

 

Stock-based compensation included in capitalized software development costs

 

 

3,418

 

 

 

610

 

Capitalized software development costs in accounts payable and accrued expenses and
   other current liabilities

 

 

828

 

 

 

269

 

Purchase of property and equipment included in accounts payable and accrued expenses
  and other current liabilities

 

 

 

 

 

2,125

 

 

The following table presents a reconciliation of cash, cash equivalents and restricted cash in the Company’s Condensed Consolidated Balance Sheets to the total of the same such amounts shown above:

 

 

 

June 30,

 

(in thousands)

 

2021

 

 

2020

 

Cash and cash equivalents

 

$

894,703

 

 

$

126,625

 

Restricted cash

 

 

 

 

 

 

Total cash, cash equivalents and restricted cash

 

$

894,703

 

 

$

126,625

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

5


 

GoodRx Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Description of Business

GoodRx Holdings, Inc. was incorporated in September 2015. On October 7, 2015, GoodRx Holdings, Inc. acquired 100% of the outstanding shares of GoodRx, Inc. (“GoodRx”). GoodRx, a Delaware corporation, was initially formed in September 2011.

GoodRx Holdings, Inc. and its subsidiaries (the “Company”) offer information and tools to help consumers compare prices and save on their prescription drug purchases. The Company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and provides access to negotiated prices through GoodRx codes that can be used to save money on prescriptions across the United States (the “prescription offering”). The services are free to consumers and the Company primarily earns revenue from its core business from pharmacy benefit managers (“PBMs”) that manage formularies and prescription transactions including establishing pricing between consumers and pharmacies. The Company also offers other healthcare products and services, including subscriptions, pharma manufacturer solutions and telehealth services.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020 and the related notes, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 12, 2021. The December 31, 2020 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The Company’s condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the condensed consolidated financial statements.

The Company’s significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes in accounting policies during the six months ended June 30, 2021 from those disclosed in the annual consolidated financial statements for the year ended December 31, 2020 and the related notes.

During the three and six months ended June 30, 2021 and 2020, other than net income, the Company did not have any other elements of comprehensive income or loss. The operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results expected for the full year ending December 31, 2021.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of GoodRx Holdings, Inc., its wholly owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. Results of businesses acquired are included in the Company’s condensed consolidated financial statements from their respective dates of acquisition.

Consolidation of VIEs

GoodRx Care, LLC (formerly known as HeyDoctor), a wholly owned subsidiary of the Company, provides management and other services to professional service corporations (“PSCs”), which are owned by medical professionals in accordance with certain state laws that restrict the corporate practice of medicine and require medical practitioners to own such entities. The Company determined that the PSCs are VIEs. The Company also determined that it is able to direct the activities of the PSCs that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of the PSCs. Accordingly, the Company consolidates the VIEs.

 

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Revenue of the VIEs were approximately 2% of the Company’s revenue for each of the three and six months ended June 30, 2021 and 2020, respectively. The net results of operations of the VIEs for the three and six months ended June 30, 2021 and 2020 were not material. The VIEs’ total assets and liabilities were each approximately 1% of the Company’s total assets and liabilities at June 30, 2021 and December 31, 2020, respectively.

Segment Reporting and Geographic Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker manages the Company on the basis of one operating segment. During the three and six months ended June 30, 2021 and 2020, all of the Company’s revenue was from customers located in the United States. In addition, at June 30, 2021 and December 31, 2020, all of the Company’s right-of-use assets and property and equipment was in the United States.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements, including the accompanying notes. The Company bases its estimates on historical factors, current circumstances, and the experience and judgment of management. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates. Significant estimates reflected in the condensed consolidated financial statements include revenue recognition, valuation of intangible assets and assumptions used for purposes of determining stock-based compensation.

Certain Risks and Concentrations

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company maintains cash deposits with multiple financial institutions in the United States which, at times, may exceed federally insured limits. Cash may be withdrawn or redeemed on demand. The Company believes that the financial institutions that hold its cash are financially sound and, accordingly, minimal credit risk exists with respect to these balances. The Company has not experienced any losses in such accounts.

The Company extends credit to its customers based on an evaluation of their ability to pay amounts due under contractual arrangements and generally does not obtain or require collateral.

For the three months ended June 30, 2021, three customers accounted for approximately 13%, 11% and 10% of the Company’s revenue, respectively. For the six months ended June 30, 2021, three customers accounted for approximately 13%, 12% and 10