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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A, “Risk Factors” and in other parts of this Annual Report on Form 10-K. A discussion of the year ended December 31, 2020 compared to the year ended December 31, 2019 has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 12, 2021, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Overview

We believe our financial results reflect the significant market demand for our offerings and the value that we provide to the broader healthcare ecosystem. For the year ended December 31, 2021 as compared to the year ended December 31, 2020:

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Revenue grew 35% to $745.4 million from $550.7 million.

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Net loss was $25.3 million compared to net loss of $293.6 million. Net loss for the year ended December 31, 2021 was mainly driven by $92.1 million of stock-based compensation expense and payroll tax expense related to the Founders Awards made in connection with our IPO and $15.1 million provision for income taxes principally related to the establishment of a full valuation allowance of $52.4 million against our net deferred tax assets, partially offset by windfall tax benefits from stock-based awards. Net loss for the year ended December 31, 2020 was mainly driven by $383.4 million of stock-based compensation expense and payroll tax expense related to the Founders Awards made in connection with our IPO and a $41.7 million charge related to a charitable stock donation in support of our philanthropic endeavors.

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Adjusted EBITDA was $229.6 million up from $203.4 million.

Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see “Key Financial and Operating Metrics—Non-GAAP Financial Measures" included within this Part II, Item 7 of this Annual Report on Form 10-K.

Impact of COVID-19

GoodRx continues to closely monitor how the spread of COVID-19 is affecting its employees, customers and business operations. The number of Monthly Active Consumers decreased and our prescription transactions offering experienced a decline in activity in the second quarter of 2020 as compared to the first quarter of 2020 as many consumers avoided visiting healthcare professionals and pharmacies in-person, which we believe had a similar effect across the industry. The number of Monthly Active Consumers then increased starting from the third quarter of 2020 as the number of physician visits increased and as consumers partially resumed their interaction with the healthcare system. Even though we saw improved activity in our prescription transactions offering subsequent to the second quarter of 2020, we believe COVID-19 continues to have an adverse impact on the growth of our prescription transactions offering, due to the cumulative impact of lower healthcare utilization for almost two years since the pandemic began, and continued improvement in future periods remains uncertain. Any decrease in the number of consumers seeking to fill prescriptions could negatively impact demand for and use of certain of our offerings, particularly our prescription and subscription offerings, which would have an adverse effect on our business, financial condition and results of operations.

For additional information, see Part I, Item 1A, “Risk Factors—Risks Related to Our Business—A pandemic, epidemic or outbreak of an infectious disease in the United States, including the outbreak of COVID-19, could impact our business.”

Seasonality

We typically experience stronger consumer demand during the first and fourth quarters of each year, which coincide with generally higher consumer healthcare spending, doctor office visits, annual benefit enrollment season, and seasonal cold and flu trends. In addition, we may experience stronger demand for our pharma manufacturer solutions offering during the fourth quarter of each year, which coincides with pharma manufacturers' annual budgetary spending patterns. This seasonality may impact revenue and sales and marketing expense. The rapid growth of our business may have masked these trends to date, and we expect the impact of seasonality to be more pronounced in the future. In 2020 and 2021, we saw the impact of the COVID-19 pandemic further disrupt these trends and may continue in future periods.

Initial Public Offering

On September 25, 2020, we completed our IPO by issuing 28.6 million shares of our Class A common stock at a price to the public of $33.00 per share, resulting in net proceeds to us of $886.9 million, after deducting the underwriting discount of $52.5 million and offering expenses of $4.9 million. Additionally, certain existing stockholders sold an aggregate of 11.2 million shares.

Private Placement

On September 25, 2020, we completed the sale of 3.0 million shares of our Class A common stock at a purchase price of $33.00 per share to SLP Geology Aggregator, L.P., resulting in proceeds to us of $100.0 million.

Recent Developments

For a summary of recent developments, refer to Note 18 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Key Financial and Operating Metrics

We use Monthly Active Consumers, subscription plans and Adjusted EBITDA to assess our performance, make strategic and offering decisions and build our financial projections. The number of Monthly Active Consumers and subscription plans are key indicators of the scale of our consumer base and a gauge for our marketing and engagement efforts. We believe these operating metrics reflect our scale, growth and engagement with consumers.

Monthly Active Consumers

Our Monthly Active Consumers includes consumers we acquired through the acquisitions of RxSaver (acquired in April 2021) and Scriptcycle (acquired in August 2020), beginning in the third quarter of 2021 and the fourth quarter of 2020, respectively. RxSaver Monthly Active Consumers are estimated due to incomplete consumer information.

Three Months Ended

(in millions)

Subscription Plans

As of

(in thousands)

Non-GAAP Financial Measures

Adjusted EBITDA is a key measure we use to assess our financial performance and is also used for internal planning and forecasting purposes. We believe Adjusted EBITDA is helpful to investors, analysts and other interested parties because it can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition, this measure is frequently used by analysts, investors and other interested parties to evaluate and assess performance.

We define Adjusted EBITDA for a particular period as net loss or income before interest, taxes, depreciation and amortization, and as further adjusted, as applicable, for acquisition related expenses, cash bonuses to vested option holders, stock-based compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing related expenses, loss on abandonment and impairment of operating lease assets, charitable stock donation and other income or expense, net. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenue.

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Other companies, including other companies in our industry, may not use these measures or may calculate these measures differently than as presented in this Annual Report on Form 10-K, limiting their usefulness as comparative measures.

The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA:

Year Ended December 31,

(dollars in thousands)

Adjusted to exclude the following:

Interest income (59 ) (160 )

Other income, net — (22 )

Charitable stock donation (4) — 41,721

Payroll tax expense related to stock-based compensation 6,260 12,086

Loss on abandonment and impairment of operating lease assets (5) 1,430 961

Adjusted EBITDA Margin 30.8 % 36.9 %

(1)

Financing related expenses include third party fees related to proposed financings.

(2)

Acquisition related expenses include third party fees for actual or planned acquisitions, including related legal, consulting and other expenditures, and as applicable, retention bonuses to employees related to acquisitions and change in fair value of contingent consideration.

(3)

Non-cash expenses related to equity-based compensation programs, which vary from period to period depending on various factors including the timing, number and the valuation of awards.

(4)

Non-cash expense related to a donation of 1.1 million shares of our Class A common stock that was made to a charitable foundation in the year ended December 31, 2020.

(5)

Non-cash loss on the abandonment and impairment of operating lease assets related to certain office space that was abandoned or subleased.

Adjusted EBITDA increased in the year ended December 31, 2021 to $229.6 million, compared to $203.4 million in the year ended December 31, 2020 as our business continued to grow. Adjusted EBITDA Margin decreased from 36.9% to 30.8% due primarily to continued investments in product development and technology, an increase in sales and marketing spend, partially since we proactively reduced advertising spend at the onset of the COVID-19 pandemic, investments in our general and administrative infrastructure as we continued to operate as a public company for the full year in 2021 as compared to a partial year in 2020, and an increase in cost of revenue relative to revenue due primarily to offering mix.

We expect our Adjusted EBITDA and Adjusted EBITDA Margin to fluctuate primarily based on the level of our investments in sales and marketing and product development and technology relative to changes in revenue.

We generally expect to continue to invest in sales and marketing in the near-term, but will continue to evaluate the impact of COVID-19 on our business and actively manage our sales and marketing spend, including investment in consumer acquisition, which is largely variable, as market conditions change. We also intend to continue to invest in product development and technology to continue to improve our platform, introduce new offerings and scale existing ones. Additionally, we expect to continue to invest in our general and administrative infrastructure to support our operation as a public company.

Components of our Results of Operations

Revenue

Our revenue is primarily derived from prescription transactions revenue that is generated when pharmacies fill prescriptions for consumers, and from other revenue streams such as our subscription offerings, pharma manufacturer solutions, and our telehealth offerings. All of our revenue has been generated in the United States.

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Prescription transactions revenue: Consists primarily of revenue generated from PBMs, or customers, when a prescription is filled with a GoodRx code provided through our platform. The majority of our contracts with PBMs provide for fees that represent a percentage of the fees that PBMs charge to the pharmacy, and a minority of our contracts provide for a fixed fee per transaction. Our percentage of fee contracts often also include a minimum fixed fee per transaction. We expect the revenue contribution from contracts with fixed fee arrangements to remain largely

stable over the medium term, and do not expect that changes in revenue contribution from fixed fee versus percentage of fee arrangements will materially impact our revenue. Certain contracts also provide that the amount of fees we receive is based on the volume of prescriptions filled each month.

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Subscription revenue: Consists of revenue from our Gold and Kroger Savings subscription offerings. Subscription revenue is disclosed separately from other revenue beginning in the year ended December 31, 2021. Prior period amounts have been recast to conform with the current period presentation.

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Other revenue: Consists primarily of revenue generated from pharma manufacturers and other customers for advertising, including integrating onto our platform their affordability solutions to our consumers, and revenue generated by our telehealth offerings that allow consumers to access healthcare professionals online.

Expenses

We incur the following expenses directly related to our cost of revenue and operating expenses:

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Cost of revenue: Consists primarily of costs related to outsourced consumer support, healthcare provider costs for GoodRx Care, personnel costs including salaries, benefits, bonuses and stock-based compensation expense, for our consumer support employees, hosting and cloud costs, merchant account fees, processing fees and allocated overhead. Cost of revenue is largely driven by the growth of our visitor, subscriber and active consumer base, as well as our offering mix. Our cost of revenue as a percentage of revenue may vary based on the relative growth rates of our various offerings.

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Product development and technology: Consists primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for employees involved in product development activities, third-party services and contractors related to product development, information technology and software-related costs, and allocated overhead. Product development and technology expenses are primarily driven by increases in headcount required to support and further develop our various products. We capitalize certain qualified costs related to the development of internal-use software, which may also cause product development and technology expenses to vary from period to period. We expect product development and technology expenses will increase on an absolute dollar basis as we continue to grow our platform and product offerings.

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Sales and marketing: Consists primarily of advertising and marketing expenses for consumer acquisition and retention, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions, for sales and marketing employees, third-party services and contractors, and allocated overhead. Sales and marketing expenses are primarily driven by investments to grow and retain our consumer base and may fluctuate based on the timing of our investments in consumer acquisition and retention. Over the near to medium term, we expect to increase our spending on sales and marketing.

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General and administrative: Consists primarily of personnel costs including salaries, benefits, bonuses and stock-based compensation expense for our executive, finance, accounting, legal, and human resources functions, as well as professional fees, occupancy costs, other general overhead costs, and as applicable, change in fair value of contingent consideration and charitable donations. We have incurred, and expect to continue to incur, additional general and administrative costs in compliance, legal, investor relations, insurance, and professional services related to our compliance and reporting obligations as a public company. We have incurred, and also expect to incur, additional general and administrative costs in connection with the vesting and settlement of RSUs, including the Founders Awards made in connection with our IPO in particular. We also anticipate that as we continue to grow as a company our general and administrative costs will increase on an absolute dollar basis.

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Depreciation and amortization: Consists of depreciation of property and equipment and amortization of capitalized internal-use software costs and intangible assets. Our depreciation and amortization changes primarily based on changes in our property and equipment, intangible assets, and capitalized software balances.

Other Expense, Net

Our other expense, net consists of the following:

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Other income or expense, net: Consists primarily of miscellaneous expense or income that are not core to our operations, including third-party transaction expenses related to modifications of our debt facilities.

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Interest income: Consists primarily of interest income earned on excess cash held in interest-bearing accounts.

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Interest expense: Consists primarily of interest expense associated with our debt arrangements, including amortization of debt issuance costs and discounts.

Income Tax (Expense) Benefit

Our income tax (expense) benefit consists of federal and state income taxes. Our effective income tax rate differs from the U.S. federal statutory rate of 21.0% primarily due to effects of non-deductible officers’ stock-based compensation expense, state income taxes, research and development tax credits, excess tax benefits from our equity awards and changes in the valuation allowance against our net deferred tax assets.

Results of Operations

The following table sets forth our results of operations for the periods presented:

Year Ended December 31,

(in thousands)

Revenue:

Costs and operating expenses:

Other expense, net:

Other income, net — (22 )

Interest income (59 ) (160 )

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Revenue

Year Ended December 31, Change

(dollars in thousands)

Prescription transactions revenue for the year ended December 31, 2021 increased $105.1 million, or 22%, compared to the year ended December 31, 2020, driven primarily by a 24% increase in the number of our average Monthly Active Consumers, partially offset by lower contribution-per-consumer due to the acquisitions of RxSaver and Scriptcycle. We believe COVID-19 continues to have an adverse impact on the growth of our prescription transactions revenue, due to the cumulative impact of lower healthcare utilization for almost two years since the pandemic began.

Subscription revenue for the year ended December 31, 2021 increased $30.5 million, or 104%, compared to the year ended December 31, 2020, driven primarily by an increase in the number of subscription plans to 1.2 million as of December 31, 2021, compared to 0.8 million as of December 31, 2020, as well as a favorable change in subscription plan mix.

Other revenue for the year ended December 31, 2021 increased $59.1 million, or 179%, compared to the year ended December 31, 2020. This increase was primarily due to an increase in revenue from pharma manufacturers and other customers, and an increase in telehealth revenue.

We expect the percentage growth in subscription and other revenue to continue to outpace our prescription transactions revenue as we continue to scale the capabilities and platforms of our subscription, pharma manufacturer solutions and telehealth offerings.

Costs and operating expenses

Cost of revenue, exclusive of depreciation and amortization

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 6 % 5 %

Cost of revenue for the year ended December 31, 2021 increased $17.1 million, or 58%, compared to the year ended December 31, 2020. This increase was primarily driven by a $7.4 million increase in outsourced and in-house personnel related consumer support expense to support our growth and a $6.7 million increase in hosting fees, merchant fees, provider cost related to our telehealth offerings and allocated overhead.

Product development and technology

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 17 % 11 %

Product development and technology expenses for the year ended December 31, 2021 increased by $64.0 million, or 104%, compared to the year ended December 31, 2020. This increase was primarily due to increases in product development payroll and related expenses of $50.6 million due to higher headcount and an increase in stock-based compensation expense and payroll taxes related to awards made in connection with and after our IPO. The increase in product development and technology expense was also due to an increase in allocated overhead of $6.8 million to support our product development efforts and an increase in third-party services and contractor expenses related to product development of $6.6 million.

Sales and marketing

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 50 % 46 %

Sales and marketing expenses for the year ended December 31, 2021 increased by $115.1 million, or 45%, compared to the year ended December 31, 2020. This increase was primarily due to a $74.2 million increase in advertising expenses which was partially due to our proactive reduction of advertising spend at the onset of the COVID-19 pandemic, as well as a $33.4 million increase in sales and marketing payroll and related expenses due to higher headcount and an increase in stock-based compensation expense related to awards made in connection with and after our IPO.

General and administrative

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 21 % 84 %

General and administrative expenses for the year ended December 31, 2021 decreased by $306.8 million, or 66%, compared to the year ended December 31, 2020. This decrease was primarily due to $282.1 million decrease in stock-based compensation expense related to Founders Awards made in connection with our IPO as further described in Note 15 of our consolidated financial statements, and a $41.7 million charge related to a charitable stock donation in support of our philanthropic endeavors. This decrease was partially offset by $10.9 million increase in other executive and administrative payroll and related expenses due to higher headcount and an increase in stock-based compensation expense and payroll taxes related to awards made in connection with and after our IPO, and a $5.8 million increase in acquisition related and other professional fees to support our organic growth, M&A activity and operations as a public company.

Depreciation and amortization

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 5 % 3 %

Depreciation and amortization expenses for the year ended December 31, 2021 increased by $16.1 million, or 87%, compared to the year ended December 31, 2020. This increase was due primarily to a $7.9 million increase in capitalized software amortization due to higher capitalized costs for platform improvements and the introduction of new products and features and a $5.7 million increase in amortization related to acquired intangible assets.

Interest expense

Year Ended December 31, Change

(dollars in thousands)

As a percentage of total revenue 3 % 5 %

Interest expense for the year ended December 31, 2021 decreased by $4.3 million, or 15%, compared to the year ended December 31, 2020 primarily due to lower average debt balances and lower interest rates.

Income tax (expense) benefit

Year Ended December 31, Change

(dollars in thousands)

Effective income tax rate (148.1 %) 3.2 %

For the year ended December 31, 2021, we had an income tax expense of $15.1 million compared to an income tax benefit of $9.8 million for the year ended December 31, 2020 and an effective income tax rate of (148.1%) and 3.2%, respectively. The primary driver for the change from an income tax benefit for the year ended December 31, 2020 to an income tax expense for the year ended December 31, 2021 was due to a $52.4 million full valuation allowance recorded against our net deferred tax assets during the year ended December 31, 2021. In addition, the income tax expense (benefit) for both periods was due to pre-tax losses, tax benefits from U.S. federal and state tax credits and excess tax benefits related to our equity awards, partially offset by the tax effects of nondeductible officers’ stock-based compensation expense and state income taxes.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized and is an area of significant judgment. Refer to "Critical Accounting Policies and Estimates—Income Taxes—Valuation of Deferred Tax Assets" of this Part II, Item 7, and Note 11 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through net cash provided by operating activities, equity issuances, and borrowings under our long-term debt arrangements. Our principal sources of liquidity are expected to be our cash and cash equivalents and borrowings available under our $100.0 million secured asset-based revolving credit facility

which expires in October 2024. As of December 31, 2021, we had cash and cash equivalents of $941.1 million and $90.8 million available under the revolving credit facility.

Our primary short-term and long-term requirements for liquidity and capital are to finance business acquisitions and investments we may make from time to time, working capital including our noncancelable operating lease obligations, interest and principal payments related to our outstanding debt arrangements, capital expenditures and general corporate purposes. In May 2021, we entered into a noncancelable lease agreement to lease additional space adjacent to our office facility in Santa Monica, California. We anticipate that we will invest in additional capital expenditures with respect to the expanded leased space principally in 2022 and 2023.

We also anticipate to expend substantial funds to satisfy tax withholding and remittance obligations with respect to equity awards granted to our employees, and the Founders Awards in particular, as they vest over time. For further information, please see Part I, Item 1A, “Risk Factors—Risks Related to Ownership of Our Class A Common Stock—We anticipate incurring substantial stock-based compensation expense and incurring substantial obligations related to the vesting and settlement of restricted stock units (“RSUs”) granted in connection with and after our IPO, which may have an adverse effect on our financial condition and results of operations and may result in substantial dilution.”

We believe that our net cash provided by operating activities and cash on hand will be adequate to meet our operating, investing and financing needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth, the timing and extent of investments to support such growth, the expansion of sales and marketing activities, and many other factors as described in Part I, Item 1A, “Risk Factors.” For further details regarding our cash requirements from noncancelable operating lease obligations, terms and commitments under our debt arrangements including our revolving credit facility, and other contractual commitments, see Note 10, Note 12 and Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, respectively.

If necessary, we may borrow funds under our revolving credit facility to finance our liquidity requirements, subject to customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. In particular, the widespread COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

Holding Company Status

GoodRx Holdings, Inc. is a holding company that does not conduct any business operations of its own. As a result, GoodRx Holdings, Inc. is largely dependent upon cash distributions and other transfers from its subsidiaries to meet its obligations and to make future dividend payments, if any. Our existing debt arrangements contain covenants restricting payments of dividends by our subsidiaries, including GoodRx, Inc., unless certain conditions are met. These covenants provide for certain exceptions for specific types of payments. Based on these restrictions, all of the net assets of GoodRx, Inc. were restricted pursuant to the terms of our debt arrangements as of December 31, 2021. Since the restricted net assets of GoodRx, Inc. and its subsidiaries exceed 25% of our consolidated net assets, in accordance with Regulation S-X, refer to Note 17 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for condensed parent company financial information of GoodRx Holdings, Inc.

Cash Flows

Year Ended December 31,

(in thousands)

Net cash provided by operating activities $ 178,779 $ 131,341

Net cash used in investing activities (178,733 ) (91,617 )

Net cash (used in) provided by financing activities (30,528 ) 905,817

Net change in cash, cash equivalents and restricted cash $ (30,482 ) $ 945,541

Net cash provided by operating activities

Net cash provided by operating activities consisted of net loss adjusted for certain non-cash items and changes in assets and liabilities. The $47.4 million increase in net cash provided by operations during fiscal year 2021 compared to fiscal year 2020 was due to $268.4 million lower net loss, offset by a $20.7 million increase resulting from changes in operating assets and liabilities, as well as a net $241.6 million decrease in non-cash adjustments principally driven by a decrease in

stock-based compensation expense and charitable stock donation. The changes in operating assets and liabilities were primarily driven by the timing of income tax payments and refunds, partially offset by an increase in accounts receivable due to growth in our operations.

Net cash used in investing activities

Net cash flows used in investing activities primarily consisted of cash used for acquisitions, capital expenditures and investments, and software development costs. The $87.1 million increase in net cash used in investing activities for fiscal year 2021 compared to fiscal year 2020 was primarily related to a $88.5 million increase in cash paid for acquisitions and investments and a $14.6 million increase in software development costs, partially offset by $16.0 million less in capital expenditures due to the completion of our corporate office facility in 2020.

Net cash (used in) provided by financing activities

Net cash flows from financing activities primarily consisted of net proceeds and payments related to our debt arrangements, issuances of our common stock, proceeds from exercises of stock options, and payments made related to net share settlement of equity awards. The $936.3 million decrease in net cash related to financing activities for fiscal year 2021 compared to fiscal year 2020 was primarily due to a $986.9 million decrease in net proceeds from the issuances of our common stock in connection with our IPO, offset by a $29.7 million increase in proceeds from exercises of stock options and $21.0 million decrease in payments related to net share settlement of equity awards.

Recent Accounting Pronouncements

See Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information on certain accounting standards adopted in 2021 and recent accounting announcements that have not yet been required to be implemented and may be applicable to our future operations.

Critical Accounting Policies and Estimates

Our audited consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. An accounting policy is deemed critical if it is both important to the portrayal of our financial condition and results and requires us to make difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. An accounting estimate is deemed critical where the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the impact of the estimate on our financial condition or operating performance is material. We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information of the below critical accounting policies and estimates and our other significant accounting policies, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Revenue Recognition

Revenue recognition represents an important accounting policy to the understanding of our financial condition and results of operations. Our revenue recognition does not involve any critical accounting estimates. For information regarding our revenue recognition accounting policy, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Stock-Based Compensation

Determining the fair value of stock-based awards requires judgment. The Black-Scholes option-pricing model is used to estimate the fair value of stock options with service or performance vesting conditions, while the fair value of our common stock at the date of grant is used to measure the fair value of restricted stock units and restricted stock awards with service or performance conditions. For awards with market vesting conditions, the fair value is estimated using a Monte Carlo simulation model that incorporates the likelihood of achieving the market condition. The valuation of stock-based compensation awards using the Black-Scholes option-pricing model or the Monte Carlo simulation model include the

valuation of our common stock as the primary assumption. For periods prior to our IPO given our stock was not publicly traded, our board of directors determined the fair value of the common stock by considering a number of objective and subjective factors including our actual operating and financial performance, market conditions and performance of comparable publicly traded companies, our developments and milestones, the likelihood of achieving a liquidity event transaction, and the results of third-party valuations. The third-party valuations used various models which included assumptions and estimates of forecasted revenues and costs, discount rates, the selection of comparable companies and related multiples, and the likelihood and timing of an exit event, among other assumptions and estimates. Therefore, the fair value of our common stock for periods prior to our IPO represented a critical accounting estimate. Subsequent to the completion of our IPO, the fair value of common stock is determined on the grant date using the closing price of our common stock as reported on the Nasdaq Global Select Market and therefore no longer represents a critical accounting estimate.

Business Combinations

We record tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date in accordance with Accounting Standards Codification 805, Business Combinations. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. The valuations of intangible assets use different valuation methods depending on the asset acquired and that may include significant estimates and judgments. Our critical accounting estimates are those relating to forecasts of revenue and estimates of discount rates used in the valuation of customer related intangibles. Our revenue forecasts include assumptions about future industry conditions, macroeconomic events such as the COVID-19 pandemic, our ability to renew contracts in a competitive bidding process, among other factors. The discount rates focus on rates of return for equity and debt and are calculated using public information from selected guideline companies. The magnitude of the discount rates reflects the perceived risk of each investment, which requires significant judgment. A change in the estimated risk of either of the acquired companies' cash flows would change the discount rates applied, which in turn could significantly affect the valuation of our acquired customer related intangible assets.

Income Taxes—Valuation of Deferred Tax Assets

Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credits. We evaluate the recoverability of deferred tax assets by assessing all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. A valuation allowance is established if it is more likely than not that all or a portion of deferred tax assets will not be realized. The determination of whether a valuation allowance should be established, as well as the amount of such allowance, requires significant judgment and estimates, including estimates of future earnings. Accordingly, the valuation of our net deferred tax assets is a critical accounting estimate.

In evaluating the realizability of our net deferred tax assets, we perform an assessment each reporting period of both positive and negative evidence. Negative evidence included the existence of three-year cumulative pre-tax losses adjusted for permanent adjustments, incurred in the fourth quarter of 2021. These losses were generated in 2021 and 2020 principally due to substantial excess tax benefits realized from the exercise of stock options granted prior to our IPO. Stock options granted prior to our IPO contained substantially lower exercise prices compared to the closing prices of our common stock as reported on the Nasdaq Global Select Market, which when exercised resulted in significant excess tax benefits to us. In addition, we have a significant number of outstanding stock options granted prior to our IPO available to be exercised in future tax periods, which may generate incremental excess tax benefits if they are exercised, and contributed to our evaluation of negative evidence regarding the realizability of our net deferred tax assets.

As of December 31, 2021, positive evidence reviewed included (i) our forecast of future earnings; (ii) stock options granted prior to our IPO are definite-lived and will expire 10 years from the date of grant if unexercised; and (iii) an indefinite carryforward period for certain deferred tax assets.

We apply judgment to consider the relative impact of negative and positive evidence and the weight given to negative and positive evidence is commensurate with the extent to which such evidence can be objectively verified. Objective historical evidence, such as cumulative three-year pre-tax losses adjusted for permanent adjustments, is given greater weight than subjective positive evidence such as forecasts of future earnings. The more objective negative evidence that exists limits our ability to consider other, potentially positive, subjective evidence, such as our future earnings projections. Based on our evaluation of all available positive and negative evidence, and by placing greater weight on the objective negative evidence associated with our three-year cumulative pre-tax loss adjusted for permanent adjustments, we determined, as of December 31, 2021, that it is more likely than not that our net deferred tax assets will not be realized. Accordingly, we recorded a full valuation allowance of $52.4 million against our net deferred tax assets for the year then ended.

To the extent sufficient positive evidence becomes available or the negative objective evidence described above decreases in relative importance, for example as stock options granted prior to our IPO associated with excess tax benefits have been exercised, we may conclude that based on the weighting of positive and negative evidence that some or all of our net deferred tax assets more likely than not will be realized in the future. Accordingly, we may determine to release all or a portion of the valuation allowance in one or more future periods. A release of the valuation allowance, if any, would result in the recognition of certain deferred tax assets and income tax benefit in the period in which such release is recorded.

Emerging Growth Company Status

Upon completion of our IPO, we elected to be an Emerging Growth Company ("EGC"), as defined in the Jumpstart Our Business Startups Act. Effective December 31, 2021, we lost our EGC status due to becoming a “large accelerated filer." As a result, we must comply with all financial disclosure and governance requirements applicable to a “large accelerated filer." For further information, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We only have operations within the United States and therefore do not have any foreign currency exposure. We are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes.

Interest Rate Risk

Our exposures to market risk for changes in interest rates relate primarily to our debt arrangements which bears floating interest rates and a rising interest rate environment will increase the amount of interest paid on these loans. A hypothetical 100 basis point increase in interest rates would have increased our interest expense by $6.9 million for the year ended December 31, 2021.

Impact of Inflation

We do not believe that inflation has had a material effect on our business, results of operations or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 8. Financial Statements and Supplementary Data.

The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our co-principal executive officers and principal financial and accounting officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our co-principal executive officers and principal financial and accounting officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our co-principal executive officers and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.

Under the supervision and with the participation of our management, including our co-principal executive officers and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework set forth in Internal Control – Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in Part IV, Item 15 of this Annual Report on Form 10-K.

Remediation of Previously Identified Material Weaknesses in Internal Control over Financial Reporting

We previously identified and disclosed material weaknesses in our internal control over financial reporting relating to the following:

•

We did not design or maintain an effective control environment commensurate with our financial reporting requirements. We lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions.

•

We did not effectively design and maintain controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting, due in part to acquisitions and other changes to our business.

These material weaknesses contributed to the following additional material weaknesses:

•

We did not design and maintain formal accounting policies, processes and controls to analyze, account for and disclose complex transactions.

•

We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations and journal entries. Additionally, we did not design and maintain controls over the classification and presentation of accounts and disclosures in the financial statements.

•

We did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to certain financial applications, programs and data to appropriate company personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.

Management, with the participation of the audit committee and the board of directors, began the implementation of certain remediation measures in 2020 and continued to develop remediation plans and implemented additional measures throughout 2021.

During the quarter ended December 31, 2021, we completed our testing and evaluation of our internal control over financial reporting and determined that as of December 31, 2021, our internal control over financial reporting was designed and operating effectively for a sufficient period for management to conclude that the material weaknesses have been remediated.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, which will be filed with the SEC, no later than 120 days after December 31, 2021.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

Our consolidated financial statements are included in this Annual Report on Form 10-K beginning on page F-1.

(a)(2) Financial Statement Schedules

All financial statement schedules have been omitted because they are not applicable, not material or because the information required is already included in the consolidated financial statements or the notes thereto.

(a)(3) Exhibits

The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below.

Incorporated by Reference Filed/

21.1 List of Subsidiaries of GoodRx Holdings, Inc. *

31.1 Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer *

31.2 Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer *

31.3 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer *

32.1 Section 1350 Certification of Co-Chief Executive Officer **

32.2 Section 1350 Certification of Co-Chief Executive Officer **

32.3 Section 1350 Certification of Chief Financial Officer **

101.SCH Inline XBRL Taxonomy Extension Schema Document *

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *

* Filed herewith.

** Furnished herewith.

† Indicates management contract or compensatory plan.

^ Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) is treated as confidential by the Company.

+ The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(a)(5)(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

Item 16. Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GOODRX HOLDINGS, INC.

Date: February 28, 2022 By: /s/ Karsten Voermann

Karsten Voermann

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Name Title Date

/s/ Douglas Hirsch Co-Chief Executive Officer February 28, 2022

Douglas Hirsch (principal executive officer)

/s/ Trevor Bezdek Co-Chief Executive Officer February 28, 2022

Trevor Bezdek (principal executive officer)

/s/ Karsten Voermann Chief Financial Officer February 28, 2022

Karsten Voermann (principal financial and accounting officer)

/s/ Christopher Adams Director February 24, 2022

Christopher Adams

/s/ Julie Bradley Director February 24, 2022

Julie Bradley

/s/ Dipanjan Deb Director February 25, 2022

Dipanjan Deb

/s/ Adam Karol Director February 24, 2022

Adam Karol

/s/ Jacqueline Kosecoff Director February 24, 2022

Jacqueline Kosecoff

/s/ Stephen LeSieur Director February 24, 2022

Stephen LeSieur

/s/ Gregory Mondre Director February 24, 2022

Gregory Mondre

/s/ Agnes Rey-Giraud Director February 25, 2022

Agnes Rey-Giraud

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-1

Consolidated Balance Sheets F-4

Consolidated Statements of Operations F-5

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To theBoard of Directors and Stockholders of GoodRx Holdings, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of GoodRx Holdings, Inc. and its subsidiaries(the “Company”) as of December 31, 2021 and 2020,and the related consolidated statements of operations, of changes in redeemable convertible preferred stock and stockholders’ equity (deficit), and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidatedfinancial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021and 2020, and the results of itsoperations and itscash flows for each of the three years in the period ended December 31, 2021in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidatedfinancial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidatedfinancial statements included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidatedfinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-1

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated beloware mattersarising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to theconsolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Consolidated Financial Statements - Impact of Resources and Controls Related to Risk Assessment and Financial Reporting

The completeness and accuracy of the consolidated financial statements, including the financial condition, results of operations and cash flows, is dependent on, in part, (i) maintaining sufficient resources to create the proper environment for effective internal control over financial reporting, (ii) designing and maintaining controls related to the identification and assessment of risk in the business process environment and (iii) designing and maintaining financial reporting controls, including controls to analyze, account for and disclose complex transactions, controls over the preparation and review of account reconciliations and journal entries and the preparation and review of the consolidated financial statements.

The principal considerations for our determination that performing procedures relating to the consolidated financial statements - impact of resources and controls related to risk assessment and financial reporting is a critical matter are the high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to businesses processes which affect substantially all financial statement account balances and disclosures. As disclosed by management, material weaknesses existed during the year related to (i) ineffective control environment, including lack of sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately, (ii) ineffective design and maintenance of controls in response to the risks of material misstatement, (iii) lack of controls over the maintenance of formal accounting policies and processes to analyze, account for and disclose complex transactions, (iv) lack of controls over formal accounting policies and processes to achieve complete, accurate and timely financial accounting, reporting and disclosures, including lack of controls over the preparation and review of business performance reviews, account reconciliations and journal entries, and (v) lack of controls over certain information technology general controls for information systems that are relevant to the preparation of the Company’s financial statements.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, evaluating and determining the nature and extent of audit procedures performed and evidence obtained that are responsive to the material weaknesses that existed during the year. These procedures also included evaluating whether segregation of duties was maintained over the preparation and review of account reconciliations and recording of journal entries, testing the accounting and disclosures for complex transactions, and testing completeness and accuracy of financial reporting, including the classification and presentation of accounts and disclosures.

Acquisition of RxSaver, Inc. and HealthiNation Inc. – Valuation of Acquired Customer Related Intangible Assets

As described in Note 3 to the consolidated financial statements, during 2021 the Company acquired all of the outstanding equity interests of RxSaver, Inc. and HealthiNation Inc. for $50.7 million and $76.6 million, respectively. The Company recorded the identifiable assets acquired and liabilities assumed at fair value, including customer related intangible assets of $20.7 million and $28.0 million for RxSaver, Inc. and HealthiNation Inc., respectively. As disclosed by management, management applied judgment in estimating the fair value of customer related intangible assets, which involved the use of significant assumptions with respect to forecasts of revenue and discount rates.

The principal considerations for our determination that performing procedures relating to the acquisition of RxSaver Inc. and HealthiNation, Inc., specifically the valuation of acquired customer related intangible assets, is a critical audit matter are (i) a high degree of auditor judgment and subjectivity in performing procedures relating to the fair value of customer related intangible assets acquired due to the significant judgment by management when developing the estimates; (ii) the significant audit effort in evaluating management’s significant assumptions related to forecasts of revenue and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

F-2

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, reading the purchase agreement and testing management’s process in estimating the fair value of the customer related intangible assets acquired. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of significant assumptions used by management related to forecasts of revenue and discount rates. Evaluating the reasonableness of the forecasts of revenue involved considering the past performance of RxSaver, Inc. and HealthiNation Inc., as well as economic and industry forecasts. The discount rates were evaluated considering the cost of capital of comparable businesses and other industry factors. Professionals with specialized skill and knowledge were used to assist in the evaluation of the methods used to value the acquired customer related intangible assets and the discount rate assumptions.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

February 28, 2022

We have served as the Company's auditor since 2018.

F-3

GoodRx Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except par values) December 31,2021 December 31,2020

Assets

Current assets

Restricted cash — 2,900

Prepaid expenses and other current assets 29,638 46,048

Deferred tax assets, net — 13,117

Liabilities and stockholders' equity

Current liabilities

Accrued expenses and other current liabilities 50,732 37,692

Operating lease liabilities, current 5,851 4,539

Operating lease liabilities, net of current portion 33,592 33,467

Deferred tax liabilities, net 244 —

Commitments and contingencies (Note 13)

Stockholders' equity

See accompanying Notes to Consolidated Financial Statements.

F-4

GoodRx Holdings, Inc.

Consolidated Statements of Operations

Year Ended December 31,

Costs and operating expenses:

Other expense, net:

Other (income) expense, net — (22 ) 2,967

Loss on extinguishment of debt — — 4,877

Net (loss) income attributable to common stockholders:

(Loss) earnings per share:

Weighted average shares used in computing (loss) earnings per share:

Stock-based compensation included in costs and operating expenses:

See accompanying Notes to Consolidated Financial Statements.

F-5

GoodRx Holdings, Inc.

Consolidated Statements of Changes in Redeemable Convertible

Preferred Stock and Stockholders’ Equity (Deficit)

Restricted stock issuance — — 1,879 3 — — (3 ) — —

Stock-based compensation — — — — — — 4,132 — 4,132

Vesting of restricted stock units — — — — 1,252 — — — —

Vesting of restricted stock units — — — — 3,054 — — — —

See accompanying Notes to Consolidated Financial Statements.

F-6

GoodRx Holdings, Inc.

Consolidated Statements of Cash Flows

Year Ended December 31,

Cash flows from operating activities

Loss on extinguishment of debt — — 4,877

Change in fair value of contingent consideration — 2,068 —

Loss on abandonment and impairment of operating lease assets 1,430 961 —

Charitable stock donation — 41,721 —

Cash flows from investing activities

Investment in minority equity interest (4,008 ) — —

Cash flows from financing activities

Proceeds from private placement with a related party — 100,000 —

Payment of debt issuance costs and prepayment penalty — (1,306 ) (2,214 )

Payment for contingent consideration (832 ) — —

Issuance of common stock — — 1,623

Payments of initial public offering issuance costs — (4,937 ) —

Proceeds from early exercise of stock options — 667 —

Cash, cash equivalents and restricted cash

Supplemental disclosure of cash flow information

Non cash investing and financing activities:

Stock-based compensation included in capitalized software 7,709 2,437 385

The following table presents a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total of the same such amounts shown above:

December 31,

Restricted cash — 2,900 —

See accompanying Notes to Consolidated Financial Statements.

F-7

GoodRx Holdings, Inc.

Notes to Consolidated Financial Statements

1. Description of Business

GoodRx Holdings, Inc. was incorporated in September 2015and has no material assets or standalone operations other than its ownership in its consolidated subsidiaries. GoodRx, Inc. (“GoodRx”), a Delaware corporation that was initially formed in September 2011, is a wholly-owned subsidiary of GoodRx Intermediate Holdings, LLC, which itself is a wholly-owned subsidiary of GoodRx Holdings, Inc.

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 transactions 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 consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).

Principles of Consolidation

The consolidated financial statements include the financial statements 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 consolidated financial statements from their respective dates of acquisition.

Consolidation of VIEs

The Company evaluates whether an entity in which it has a variable interest is considered a variable interest entity (“VIE”). VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to make significant decisions through voting rights and a right to receive the expected residual returns of the entity or an obligation to absorb the expected losses of the entity).

Under the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, an entity consolidates a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company periodically reassesses whether it is the primary beneficiary of a VIE.

The Company's wholly-owned subsidiary, GoodRx Care, provides management and other services to Professional Service Corporations (“PSCs”), which are owned by medical professionals in accordance with certain state laws which 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.

Total revenue and results of operations of the VIEs were not material for each of the years ended December 31, 2021, 2020 and 2019, and the assets and liabilities of the VIEs were not material as of December 31, 2021 and 2020.

F-8

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 years ended December 31, 2021, 2020 and 2019, all of the Company’s revenue was from customers located in the United States. In addition, at December 31, 2021 and 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 consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, including the accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods. The Company bases its estimates on historical factors, current circumstances, the experience and judgment of management and includes consideration of the economic impact of the COVID-19 pandemic. The Company’s prescription transactions offering experienced a decline in activity at the onset of the pandemic in the second quarter of 2020 as many consumers avoided visiting healthcare professionals and pharmacies in-person, though beginning in the third quarter of 2020 activity in the Company’s prescription transactions offering improved. The full extent to which the COVID-19 pandemic will impact the Company's business, results of operations and financial condition is still unknown and will depend on future developments, which are highly uncertain and cannot be predicted. As the impact of the COVID-19 pandemic continues to develop, many of the Company’s estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods.

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 year ended December 31, 2021, two customers accounted for approximately 13% and 11% of the Company’s revenue. At December 31, 2021, no customers accounted for more than 10% of the Company’s accounts receivable balance. For the year ended December 31, 2020,threecustomers accounted for approximately 17%, 14% and 11% of the Company’s revenue. At December 31, 2020,onecustomer accounted for 12% of the Company’s accounts receivable balance. For the year ended December 31, 2019,twocustomers accounted for approximately 24% and 23% of the Company’s revenue.

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. Cash and cash equivalents consist primarily of U.S. treasury securities money market funds held with an investment bank and cash on deposit.

Cash equivalents, consisting of money market funds, of $852.5 million and $932.5 million at December 31, 2021 and 2020, respectively, were classified as Level 1 of the fair value hierarchy and valued using quoted market prices in active markets.

Restricted cash as of December 31, 2020 represented cash held in an escrow pursuant to terms of the Scriptcycle, LLC business combination related to contingent consideration, see "Note 3. Business Combinations—Scriptcycle, LLC.”

Accounts Receivable and Allowance for Expected Credit Losses

Accounts receivable are recorded at the amounts due from various customers, net of allowance for expected credit losses. The Company estimates its expected credit losses based on factors including known facts and circumstances, historical experience, reasonable and supportable forecasts of economic conditions, and the age of the uncollected balances. The

F-9

Company writes off the asset when it is determined to be uncollectible. As of December 31, 2021 and 2020, the allowance for credit losses was not material.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are five years for furniture and fixtures and three years for computer equipment. Leasehold improvements are depreciated on the straight-line basis over the shorter of the life of the asset or the remaining lease term. Expenditures for repairs and maintenance are charged to general and administrative expenses as incurred.

Equity Investment

The Company retains a minority equity interest in a privately-held company without a readily determinable fair value. The Company’s ownership interest is less than 20% of the voting stock of the investee and the Company does not have the ability to exercise significant influence over operating and financial policies of the investee. The equity investment is accounted for under the measurement alternative in accordance with ASC 321, Investments – Equity Securities, which is cost minus impairment, if any, plus or minus changes resulting from observable price changes, within other assets on the accompanying consolidated balance sheet as of December 31, 2021. The Company did not recognize any changes resulting from observable price changes or impairment loss during 2021. The Company did not have any equity investments as of December 31, 2020.

Business Combinations

The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill.

The Company performs valuations of assets acquired and liabilities assumed for an acquisition and allocates the purchase price to its respective net tangible and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, comparable guideline public companies, and Level 3 inputs in the fair value hierarchy such as estimates of future revenue, costs, cash flows and discount rates, as applicable. For material acquisitions, the Company may engage the assistance of valuation specialists in concluding on fair value measurements of certain assets acquired or liabilities assumed in a business combination. During the measurement period, which shall not exceed one year from the acquisition date, the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information subsequently obtained regarding facts and circumstances that existed as of the acquisition date.

Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.

Goodwill

Goodwill represents the excess of the consideration transferred and the amount recognized for noncontrolling interest, if any, over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. The Company has one reporting unit during 2021, 2020 and 2019. The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. No impairments were recorded in 2021, 2020 and 2019.

Intangible Assets

Intangible assets reflect the value of trademarks, customer relationships, content library, developed technology, and backlog recorded in connection with the Company’s acquisitions. Purchased intangible assets are recorded at their acquisition date fair value, less accumulated amortization. The Company determines the appropriate useful life of intangible

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assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Capitalized Software Costs

The Company accounts for its internal-use software costs, including purchased software, in accordance with ASC 350-40, Internal-Use Software. Capitalization of internal-use costs begins when the preliminary project stage is complete, management with the relevant authority authorizes and commits to funding the project, it is probable that the project will be completed, and the software will be used for the function intended. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Costs incurred for post-configuration training, maintenance and minor modifications or enhancements are expensed to product development and technology costs in the consolidated statements of operations as incurred. Capitalized internal-use costs are amortized on a straight-line basis over their estimated useful life of three years.

Impairment of Long-Lived Assets

The Company accounts for the impairment of long-lived assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets. In accordance with ASC 360, long-lived assets to be held and used are reviewed for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. If an asset is determined to be impaired, the impairment is measured by the amount that the carrying value of the asset exceeds its fair value.

Leases

The Company accounts for leases in accordance with ASC 842, Leases. The Company has elected to account for lease and non-lease components as a single lease component and also elected not to record operating lease right-of-use assets and operating lease liabilities for leases with an initial term of 12 months or less. Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term.

The Company determines if a contract is, or contains, a lease at inception. All the Company’s leases are operating leases. Leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, net of current portion on the accompanying consolidated balance sheets. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term discounted using the Company’s incremental borrowing rate. Lease payments include fixed payments and variable payments based on an index or rate, if any, and are recognized as lease expense on a straight-line basis over the term of the lease. The lease term includes options to extend or terminate the lease when it is reasonably certain they will be exercised. As none of the Company’s leases provide an implicit rate, the incremental borrowing rate used is estimated based on what the Company would be required to pay for a collateralized loan over a similar term as the lease. Variable lease payments not based on a rate or index are expensed as incurred.

Debt Issuance Costs

Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense over the contractual life of the loan using the effective-interest method. These costs are recorded as a reduction of the related long-term debt balance on the accompanying consolidated balance sheets. Costs incurred in connection with the issuance of revolving credit facilities are recorded in other assets on the accompanying consolidated balance sheets and are amortized to interest expense in the accompanying consolidated statements of operations on a straight-line basis over the term of the revolving credit facility.

Income Taxes

Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. Deferred tax assets are evaluated for recoverability each reporting period by assessing all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred

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tax assets is needed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. To the extent sufficient positive evidence becomes available, all or a portion of the valuation allowance may be released in one or more future periods. A release of the valuation allowance, if any, would result in the recognition of certain deferred tax assets and an income tax benefit for the period in which such release is recorded.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in income tax (expense) benefit in the accompanying consolidated statements of operations.

Revenue

The Company’s revenue is primarily derived from prescription transaction fees generated when pharmacies fill prescriptions for consumers. The Company also generates subscription revenue and other revenue, which is principally from pharma manufacturer solutions and telehealth services.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), when control of the promised good or service is transferred to the customer in an amount that reflects the consideration for which the Company is expected to be entitled to in exchange for those services.

For the years ended December 31, 2021, 2020 and 2019, revenue comprises the following:

Year Ended December 31,

(1)

Represents revenue from the Company's Gold and Kroger Savings subscription offerings (defined below). Subscription revenue is disclosed separately from other revenue beginning in the year ended December 31, 2021. Prior period amounts have been recast to conform with the current period presentation.

Prescription Transactions Revenue

Prescription transactions revenue is primarily generated from PBMs, or customers, when a prescription is filled with a GoodRx code provided through the Company’s platform. In its contracts with customers, the nature of the Company’s promise is to direct prescription volume through its platform, which may include marketing through its mobile apps, websites, and GoodRx cards. These activities are not distinct from each other and are not separate performance obligations. The Company’s performance obligation is to connect consumers with pharmacies that are contracted with the Company’s customers. The Company has no performance obligation to fill prescriptions.

Contracts with PBMs provide that the Company is entitled to either a percentage of fees that PBMs charge to the pharmacy or a fixed amount per type of drug prescription, when a consumer uses a GoodRx code. The Company’s performance obligation is satisfied upon the completion of pharmacies filling prescriptions. The Company recognizes revenues for its estimated fee due from the customers at a point in time when a prescription is filled.

The Company receives reporting from the customers of the number of prescriptions and amount of consideration to which it is entitled at a prescription level. Certain arrangements with PBMs provide that the amount of consideration the Company is entitled to is based on the volume of prescription fills each month. In addition, the amount of consideration for which the Company is entitled may be adjusted in the event that a fill is determined ineligible, or based upon other adjustments allowed under the contracts with customers. The Company estimates the amount it expects to be entitled to using the expected value method based on historical experience of the number of prescriptions filled, ineligible fills and applicable rates.

The Company generally receives payment within 30 days of the month end in which the prescriptions were filled. However, portions of payments may not be received for up to five months to the extent of adjustments for ineligible fills.

Subscription Revenue

Subscription revenue consists of subscriptions to the GoodRx Gold offering (“Gold”) and the Kroger Rx Savings Club powered by GoodRx offering (“Kroger Savings”). Under Gold, subscribers purchase a monthly subscription that provides

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access to lower prices for prescriptions and telehealth visits. Subscribers can cancel the Gold subscription at any time. The Company recognizes revenue for Gold over the subscription period. Under the Kroger Savings offering, subscribers pay an annual upfront fee for a subscription that provides access to lower prices on prescriptions at Kroger pharmacies. At the commencement of the subscription term, subscribers pay an annual fee to the Company which the Company shares with Kroger. Kroger Savings subscription fees are generally nonrefundable to the subscriber after the first 30 days unless the Company cancels the subscription, in which case the subscriber is entitled to a pro rata refund. The Company recognizes revenue for Kroger Savings over the subscription period, net of the fee shared with Kroger.

Other Revenue

Other revenue consists principally of pharma manufacturer solutions revenue and telehealth revenue.

Customers may purchase advertisements for a fixed fee that appear on the Company’s apps and websites for a specified period of time, and revenue is recognized over the term of the arrangement. Customers may also purchase advertisements where the Company charges fees on a cost-per-click basis, advertisements placed in the Company’s direct mailers, or other content used in advertising. Revenue for these arrangements is recognized at a point in time when the advertisements are clicked, when the direct mailers are shipped or when other content used in advertising is delivered, respectively.

Telehealth revenue consists of revenues generated from consumers who complete a telehealth visit with a member of the Company’s network of qualified medical professionals. Consumers pay a fee per telehealth visit and the Company recognizes the fee as revenue at a point in time when the visit is complete.

Cost of Revenue

Cost of revenue consists primarily of costs related to outsourced consumer support, provider costs for the Company’s telehealth offering, personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for the Company’s consumer support employees, hosting and cloud costs, merchant account fees, processing fees, and allocated overhead. Cost of revenue excludes depreciation and amortization of software development costs, developed technology, and other hosting and data infrastructure equipment used to operate the Company’s platforms, which are included in depreciation and amortization in the accompanying consolidated statements of operations.

Product Development and Technology

Costs related to the development of products are charged to product development and technology expense as incurred. Product development and technology expense consists primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for employees involved in product development activities, third-party services and contractors related to product development, information technology and software-related costs, and allocated overhead.

Sales and Marketing

Sales and marketing costs consist primarily of advertising and marketing expenses that are expensed as incurred and production costs expensed as of the first date the advertisement takes place. Advertising costs were $296.6 million, $222.4 million and $163.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. The Company does not have any significant long-term minimum advertising or media commitments.

Sales and marketing expenses also include personnel costs, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions, for sales and marketing employees, third-party services and contractors, and allocated overhead. Sales commissions relate to contracts with a duration of one year or less and are expensed as incurred.

General and Administrative

General and administrative costs are expensed as incurred and include personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for executive, finance, accounting, legal, and human resources functions, as well as professional fees, occupancy costs, change in fair value of contingent consideration, charitable donations, and other general overhead costs.

Depreciation and Amortization

The Company’s depreciation and amortization expenses include depreciation of property and equipment, and amortization of capitalized internal-use software costs and intangible assets.

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Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:

When determining the fair value measurements for assets and liabilities which are required to be measured at fair value, the Company considers the principal or most advantageous market in which to transact and the market-based risk. Goodwill, intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis, only if impaired. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash equivalents, accounts receivable, accounts payable, and accrued liabilities, due to their short-term nature. The carrying value of the Company’s debt approximates fair value based on the borrowing rate currently available to the Company for financing with similar terms and were determined to be Level 2.

Stock-Based Compensation

Compensation cost is allocated to cost of revenue, product development and technology, sales and marketing, and general and administrative expense in the consolidated statements of operations for stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) based on the fair value of these awards at the date of grant. For awards that vest based on continued service, stock-based compensation cost is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards. For awards with performance vesting conditions, stock-based compensation cost is recognized on a graded vesting basis over the requisite service period when it is probable the performance condition will be achieved. The grant date fair value of stock options that contain service or performance conditions is estimated using the Black-Scholes option-pricing model and the grant date fair value of RSAs and RSUs that contain service or performance conditions is estimated based on the fair value of the Company’s common stock. For awards with market vesting conditions, the fair value is estimated using a Monte Carlo simulation model that incorporates the likelihood of achieving the market condition. Stock-based compensation cost for awards that contain market vesting conditions is recognized on a graded vesting basis over the requisite service period, even if the market condition is not satisfied. The requisite service period for awards with service, performance and market conditions is the longer of the service period, the performance period or the derived service period from the Monte Carlo simulation model. For awards that contain service, performance and market vesting conditions, the Company commences recognition of stock-based compensation cost once it is probable that the performance condition will be achieved. If the performance condition is an initial public offering or a change in control event, the performance condition is not probable of being achieved for accounting purposes until the event occurs. Once it is probable that the performance condition will be achieved, the Company recognizes stock-based compensation cost over the remaining requisite service period under a graded vesting model, with a cumulative adjustment for the portion of the service period that occurred for the period prior to the performance condition becoming probable of being achieved. Thereafter, expense is recognized even if the market condition was not or is not achieved, provided the employee continues to satisfy the service condition. To the extent that the market vesting conditions are achieved earlier than the end of the requisite service period, then stock-based compensation cost is accelerated. Forfeitures are recognized when they occur.

Determining the fair value of stock-based awards requires judgment. The Black-Scholes option-pricing model is used to estimate the fair value of stock options, while the fair value of the Company’s common stock at the date of grant is used to measure the fair value of RSAs and RSUs. The assumptions used in the Black-Scholes option-pricing model requires the input of subjective assumptions and are as follows:

•

For periods prior to the Company’s initial public offering ("IPO") in September 2020, because there was no public market for the Company’s common stock, the fair value of the common stock underlying the Company’s stock-based awards was determined by the Company’s board of directors, with input from management, by considering several objective and subjective factors including the Company's actual operating and financial performance, market conditions and performance of comparable publicly traded companies, the Company's developments and milestones, the likelihood of achieving a liquidity event transaction, and the results of third-party valuations. The third-party valuations used methodologies, approaches and assumptions in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants, Valuation of Privately-Held-Company Equity

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Securities Issued as Compensation. Subsequent to the Company’s IPO, the fair value of common stock was determined on the grant date using the closing price of the Company’s common stock.

•

Expected volatility is based on historical volatilities of a publicly traded peer group based on daily price observations over a period equivalent to the expected term of the stock option grants.

•

The expected term is based on historical and estimates of future exercise behavior. For stock options considered to be “plain vanilla” options, the expected term is based on the simplified method, as the Company's historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. Substantially all of the Company's stock options granted after its IPO are considered to be "plain vanilla" options.

•

The risk-free interest rate is based on the U.S. Treasury yield of treasury bonds with a maturity that approximates the expected term of the options.

•

The dividend yield is based on the Company’s current expectations of dividend payouts.

The assumptions used in the Company’s Black-Scholes option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation could be materially different in the future.

Comprehensive (Loss) Income

During the years ended December 31, 2021, 2020 and 2019, other than net (loss) income, the Company did not have any other elements of comprehensive (loss) income.

Basic and Diluted (Loss) Earnings Per Share

The Company has two classes of common stock, Class A and Class B. Basic and diluted (loss) earnings per share attributable to common stockholders of the Company's Class A and Class B Common Stock (see “Note 14. Stockholders' Equity”) are the same because they are entitled to the same liquidation and dividend rights.

The Company computes (loss) earnings per share using the two-class method required for participating securities. The two-class method requires net income to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where the Company has net losses, losses are not allocated to participating securities as they are not required to fund the losses. Prior to its conversion to common stock in connection with the Company's IPO in September 2020, the Company considered redeemable convertible preferred stock to be participating securities as preferred stockholders had rights to participate in dividends with the common stockholders.

Basic (loss) earnings per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Weighted average number of common shares outstanding includes contingently issuable shares where there is no circumstance under which those shares would not be issued. The Co-Chief Executives’ Performance-Vesting Founders Awards (see “Note 15. Stock-Based Compensation”) once vested are settled in shares of common stock on the third anniversary of the applicable vesting date or, if earlier, upon a qualifying change in control event or to satisfy tax withholding requirements. At the time of vesting, these shares are contingently issuable and are included in the weighted average number of common shares outstanding for basic (loss) earnings per share.

The Company computes diluted (loss) earnings per share under a two-class method. For periods when the Company has net income, net income is reallocated between common stock, potential common stock and participating securities. Stock-based awards that contain vesting provisions contingent on achievement of performance or market conditions are included in the computation of diluted earnings per share, if dilutive, from the beginning of the period or date of issuance if later, if all necessary conditions to vest have been satisfied during the period. If all conditions have not been met by the end of the period, dilutive earnings per share includes the number of shares that would be issuable if the end of the period were the end of the contingency period. Potential common stock includes stock options, RSAs, and RSUs computed using the treasury stock method. For periods where the Company has net losses, diluted loss per share is the same as basic loss per share, because potentially dilutive shares are excluded from the computation of loss per share as their effect is anti-dilutive.

Recent Accounting Pronouncements

Upon the completion of the Company’s IPO in 2020 (see “Note 14. Stockholders' Equity”), the Company elected to be an Emerging Growth Company (“EGC”), as defined in the Jumpstart Our Business Startups Act, which allowed the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements

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were made applicable to private companies. Entities that elect to be EGCs will remain an EGC until the earliest of: (i) the last day of the first fiscal year in which annual gross revenue exceeds $1.07 billion; (ii) the date that the entity becomes a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year; (iii) the date on which the entity has issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or (iv) the fiscal year-end following the fifth anniversary of the completion of the entity’s IPO.

Effective December 31, 2021, the Company lost its EGC status due to becoming a “large accelerated filer” with an aggregate worldwide market value of its common stock held by non-affiliates exceeding $700.0 million measured as of the end of the second quarter of the 2021 fiscal year. As a result, the Company must comply with the adoption requirements of new or revised accounting pronouncements applicable to public companies beginning in the fiscal year ended December 31, 2021.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In February 2020, the FASB issued ASU 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update), which amends the language in Subtopic 326-20 and addresses questions primarily regarding documentation and company policies. The Company adopted the standards effective January 1, 2021 and the adoption did not have a material impact to the Company's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The objective of the guidance is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The Company adopted this guidance on January 1, 2021, and the adoption did not have a material impact to the Company’s consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities. ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. The Company adopted this guidance on January 1, 2021, and the adoption did not have any impact to the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancelable term of the cloud-computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. On January 1, 2021, the Company adopted ASU 2018-15 prospectively and cloud computing implementation costs incurred on or after January 1, 2021 are included in other assets on the accompanying consolidated balance sheet and are presented within cash flows from operating activities on the accompanying consolidated statement of cash flows. As of December 31, 2021 capitalized implementation costs for cloud computing arrangements were not material.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. This ASU will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC 606. The amendments in this ASU do not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with ASC 606, such as refund liabilities, or in a business combination, such as customer-related intangible assets and contract-based intangible assets. The new guidance is effective for the Company for annual and interim periods beginning after December 15, 2022. Early adoption is permitted, including in interim periods, for any financial statements that have not yet

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been issued. This update should be applied prospectively to business combinations occurring on or after the effective date of the amendments, unless adoption is in an interim period in which case this guidance would be applied to any acquisitions occurring in the year of adoption. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The ASU applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The amendments in this ASU were effective upon issuance and may be applied through December 31, 2022. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.

3. Business Combinations

2021 Acquisitions

In 2021, the Company acquired RxNXT LLC (“RxNXT”), RxSaver, Inc. (“RxSaver”) and HealthiNation Inc. (“HealthiNation”). The unaudited supplemental pro forma financial information for these acquisitions, and the revenue and earnings from the acquisition dates through December 31, 2021, have not been presented because the effects were not material to the Company’s consolidated financial statements.

RxNXT

On July 7, 2021, the Company acquired substantially all of the assets of RxNXT for $14.5 million in cash. RxNXT is a prescription technology platform. The acquisition expands the Company’s business capabilities, particularly with respect to its prescription transactions offering. The acquisition is not material to the Company's consolidated financial statements, therefore estimated fair values allocated to the acquired assets for this acquisition have not been presented.

RxSaver

On April 30, 2021, the Company acquired all of the outstanding equity interests of RxSaver. Similar to the Company’s prescription transactions offering business, RxSaver operates a price comparison platform to provide discount offerings through partnerships with PBMs. The acquisition expands the Company’s business capabilities and consumer reach, particularly with respect to its prescription transactions offering. The aggregate purchase consideration was $50.7 million in cash.

Goodwill associated with this acquisition totaled $25.9 million and primarily related to the expected long-term synergies and other benefits, including the acquired assembled workforce. The acquisition was considered an acquisition of assets for tax purposes and, accordingly, goodwill is deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $25.2 million, of which $20.7 million was attributable to a customer related intangible asset, with an estimated useful life of 13 years; and $4.5 million was attributable to developed technology and a tradename with estimated useful lives ranging from 1 to 3 years. In addition, the Company acquired tangible assets of $3.6 million, principally comprised of accounts receivable, and assumed liabilities of $4.0 million.

HealthiNation

On April 16, 2021, the Company acquired all of the outstanding equity interests of HealthiNation. HealthiNation is a leading provider of engaging and informative health video content across all main categories of healthy living. The acquisition allows the Company to supplement and expand the services currently available under its existing pharma manufacturer solutions platform. The aggregate purchase consideration was $76.6 million in cash.

Goodwill associated with this acquisition totaled $33.2 million and primarily related to the expected long-term synergies and other benefits, including the acquired assembled workforce. The acquisition was considered a stock acquisition for tax purposes and, accordingly, goodwill is not deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $40.0 million, of which $28.0 million was attributable to a customer related intangible asset, with an estimated useful life of 11 years; $9.5 million was attributable to a content library with an estimated useful life of 3 years; $1.9 million was attributable to an order backlog, with an estimated useful life of 1 year; and $0.6 million was attributable to developed technology and a tradename with estimated useful lives of 1 year. In addition, the Company acquired tangible assets of $5.0 million, principally comprised of acquired cash and accounts receivable, and assumed liabilities of $1.6 million.

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2020 Acquisition

Scriptcycle, LLC

On August 31, 2020, the Company acquired all of the equity interests of Scriptcycle, LLC, (“Scriptcycle”). Scriptcycle specializes in managing prescription programs and primarily partners with regional retail pharmacy chains to provide discount offerings. The acquisition expands the Company’s business capabilities, particularly with respect to its prescription transactions offering. The aggregate purchase consideration was $58.3 million, including the estimated fair value of contingent consideration of $0.8 million. The maximum amount of contingent consideration payable was $2.9 million subject to the achievement of certain revenue thresholds through January 2021, which was met and paid in full during the year ended December 31, 2021.

Goodwill associated with this acquisition totaled $24.9 million and is primarily related to the expected long-term synergies and other benefits, including the acquired assembled workforce. The acquisition was considered an acquisition of assets for tax purposes and, accordingly, goodwill is deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $28.3 million, of which $25.3 million was attributable to a customer related intangible asset, with an estimated useful life of 11 years and $3.0 million was attributable to developed technology and a tradename with useful lives ranging from 1 to 9 years. In addition, the Company acquired current assets of $5.9 million and assumed liabilities of $1.1 million.

Unaudited supplemental pro forma financial information and the revenue and earnings from the date of acquisition through December 31, 2020 for the Scriptcycle acquisition has not been presented because the effects were not material to the Company’s consolidated financial statements.

2019 Acquisitions

In 2019, the Company acquired Sappira Inc. (d.b.a. HeyDoctor and subsequently rebranded to GoodRx Care in 2020) and FocusScript LLC (“FocusScript”). The unaudited supplemental pro forma financial information for GoodRx Care, and the revenue and earnings from the acquisition date through December 31, 2019, have not been presented because the effects were not material to the Company’s consolidated financial statements. Disclosure of unaudited supplemental pro forma financial information for the FocusScript acquisition is not practicable given the Company purchased certain assets and assembled workforce for which historical information was not available. In addition, disclosure of revenues and earnings of FocusScript is not practicable as the FocusScript acquisition has been integrated into the Company’s operations.

Sappira Inc. (d.b.a. GoodRx Care, f.k.a. HeyDoctor)

On April 18, 2019, the Company acquired all of the equity interests of HeyDoctor (rebranded to GoodRx Care in 2020), a privately-held company offering an online application for consultation with physicians. GoodRx Care can be used by patients to obtain prescriptions for various medical afflictions. The Company uses GoodRx Care’s technology and service offerings to increase the visits to the GoodRx online platform. The total purchase consideration for the acquisition of GoodRx Care was $14.3 million in cash.

Goodwill of $9.3 million recorded in connection with this acquisition primarily relating to the expected long-term synergies and other benefits, including the acquired assembled workforce, from the acquisition. The acquisition was considered a stock acquisition for tax purposes and, accordingly, goodwill is not deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $4.2 million, of which $3.1 million was attributable to developed technology, with an estimated useful life of 4 years and $1.1 million was attributable to trademarks and backlog with useful lives ranging from 1 to 7 years. In addition, the Company acquired current assets of $2.1 million and assumed current liabilities of $0.5 million.

FocusScript

On August 30, 2019, the Company completed the acquisition of certain software assets and the assembled workforce of FocusScript. The Company uses the acquired claim routing software to service its customers. The total purchase consideration consisted of $18.7 million in cash.

Goodwill of $6.5 million recorded in connection with this acquisition primarily relating to the expected long-term synergies and other benefits, including the acquired assembled workforce, from the acquisition. Goodwill is deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $12.2 million, which was attributable to developed technology with an estimated useful life of 4 years.

F-18

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

December 31,

Total prepaid expenses and other current assets $ 29,638 $ 46,048

5. Property and Equipment, Net

Property and equipment, net consisted of the following:

December 31,

Construction in progress 361 —

Less: Accumulated depreciation (5,829 ) (2,130 )

Total property and equipment, net $ 21,612 $ 23,057

For the years ended December 31, 2021, 2020 and 2019, depreciation expense was $4.0 million, $1.4 million and $0.7 million, respectively.

6. Goodwill

The following table presents changes in the carrying amount of goodwill for the years ended December 31, 2021 and 2020:

Year Ended December 31,

7. Intangible Assets, Net

The following table presents details of the Company’s intangible assets, net at December 31, 2021:

F-19

The following table presents details of the Company’s intangible assets, net at December 31, 2020:

For the years ended December 31, 2021, 2020 and 2019, amortization expense was $18.3 million, $12.7 million and $11.2 million, respectively.

At December 31, 2021, the expected amortization of intangible assets, net for future periods is as follows:

(in thousands)

Year Ending December 31,

8. Capitalized Software, Net

GDRX US Equity

GDRX · 10-K · period ended 2021-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules

Item 16. Form 10-K Summary.

GDRX US Equity☆

GDRX · 10-K · period ended 2021-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules

Item 16. Form 10-K Summary.

GDRX US Equity