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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, 2021 compared to the year ended December 31, 2020 has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Overview

Our mission is to help Americans get the healthcare they need at a price they can afford. To achieve this, we are building the leading consumer-focused digital healthcare platform in the United States. We believe our financial results reflect the significant market demand for our offerings and the value that we provide to the broader healthcare ecosystem; however, our financial results for the year ended December 31, 2022 have been materially impacted by certain events that occurred during the year.

Late in the first quarter of 2022, a grocery chain took actions that impacted acceptance of discounted pricing for a subset of prescription drugs from PBMs, who are our customers, and whose pricing we promote on our platform ("grocer issue"). This had a material adverse impact on our prescription transactions revenue and Monthly Active Consumers, which was partially offset by our ability to shift certain prescription transactions to other retailers. Although the grocer issue was addressed in August 2022 and our discounted pricing has since been consistently welcomed at the point of sale by the grocery chain, it has and is expected to continue to have a sustained adverse impact on our prescription transactions revenue and Monthly Active Consumers in the future that may continue to be material due to uncertainty around consumer response to updated consumer pricing and the timing and extent of returning user levels. The estimated impact of the grocer issue on our prescription transactions revenue in 2022 was approximately $110.0 million to $120.0 million. We have not experienced, and are not aware, of PBM-pharmacy issues at any other large volume pharmacies, with the exception of the grocery chain described above, and we believe our pharmacy and PBM relationships remain strong. For additional information, please see Part I, Item 1A, “Risk Factors – We rely on a limited number of industry participants.”

In addition to the above, but to a lesser extent, the acquisition of vitaCare Prescription Services, Inc. ("vitaCare") in April 2022 also had a negative impact on our net loss, net loss margin, Adjusted EBITDA and Adjusted EBITDA Margin for the year ended December 31, 2022. vitaCare has a higher cost of revenue due to the operational nature of the business and has historically generated net losses and negative Adjusted EBITDA, which we expect will continue in the near to medium term.

For the year ended December 31, 2022 as compared to the year ended December 31, 2021:

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Revenue grew 3% to $766.6 million from $745.4 million;

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Net loss and net loss margin were $32.8 million and 4.3%, respectively, compared to net loss and net loss margin of $25.3 million and 3.4%, respectively; and

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Adjusted EBITDA and Adjusted EBITDA Margin were $213.5 million and 27.8%, respectively, compared to $229.6 million and 30.8%, respectively.

Revenue, net loss and net loss margin are financial measures prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP financial measures, information about why we consider Adjusted EBITDA and Adjusted EBITDA Margin useful and a discussion of the material risks and limitations of these measures, 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.

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Impact of COVID-19

We believe COVID-19 continues to have an adverse impact on our prescription transactions offering due to the cumulative impact of lower healthcare utilization for almost three 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.

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 grocer issue and the ongoing impact of the COVID-19 pandemic may have masked these trends in recent periods and may continue to impact these trends in the future.

Key Financial and Operating Metrics

We use Monthly Active Consumers, subscription plans, Adjusted EBITDA and Adjusted EBITDA Margin 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 include consumers we acquired through the acquisition of RxSaver, Inc. ("RxSaver"), acquired in April 2021, beginning in the third quarter of 2021. RxSaver Monthly Active Consumers are estimated due to incomplete consumer information. Monthly Active Consumers beginning with the second quarter of 2022 were impacted by the grocer issue.

Three Months Ended

Subscription Plans

Subscription plans in 2022 were impacted by a pricing increase for Gold subscribers that went into effect in the first half of 2022 and a sequential decline in our subscription plans for Kroger Savings as a result of reduced marketing spend in relation to that offering. We expect our subscription plans for Kroger Savings to continue to sequentially decline through July 2024, the expected sunset of the program.

As of

Non-GAAP Financial Measures

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

We define Adjusted EBITDA for a particular period as net income or loss before interest, taxes, depreciation and amortization, and as further adjusted, as applicable, for acquisition related expenses, stock-based compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing related expenses, loss on operating lease assets, restructuring related expenses, legal settlement expenses, charitable stock donation, gain on

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sale of business 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, and presents net loss margin, the most directly comparable financial measure calculated in accordance with GAAP, with Adjusted EBITDA Margin:

Year Ended December 31,

Adjusted to exclude the following:

Financing related expenses (1) 20 666

Restructuring related expenses (3) 6,273 —

Legal settlement expenses (4) 1,500 —

Payroll tax expense related to stock-based compensation 1,882 6,260

Gain on sale of business (6) (11,404 ) —

Net loss margin (7) (4.3 %) (3.4 %)

Adjusted EBITDA Margin 27.8 % 30.8 %

(1)

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

(2)

Acquisition related expenses principally include costs for actual or planned acquisitions including related third party fees, legal, consulting and other expenditures, and as applicable, severance costs and retention bonuses to employees related to acquisitions and change in fair value of contingent consideration. Acquisition related expenses in 2022 also included similar transaction related costs for our sale of certain technology assets of GoodRx Care and a $18.1 million change in fair value of contingent consideration related to our vitaCare acquisition.

(3)

Restructuring related expenses include employee severance and other personnel related costs in connection with workforce optimization and organizational changes to better align with our strategic goals and future scale, substantially all of which related to a reduction in force approved by our board of directors in August 2022 involving approximately 140 employees of our indirect wholly-owned subsidiary GoodRx, Inc., representing approximately 16% of its workforce primarily in its technology-focused and marketing groups.

(4)

Legal settlement expenses represent the estimated accrual of the probable loss with respect to the Federal Trade Commission ("FTC") negotiated settlement. See Note 13 to our consolidated financial statements for additional information.

(5)

Loss on operating lease assets represents losses incurred relating to the abandonment or sublease of certain leased office spaces and disposal of related capitalized costs. See Note 10 to our consolidated financial statements for additional information.

(6)

Gain on sale of business represents the pre-tax gain recognized on the sale of certain technology assets of GoodRx Care, LLC, our telehealth platform. See Note 3 to our consolidated financial statements for additional information.

(7)

Net loss margin represents net loss as a percentage of revenue.

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 pharma manufacturer solutions, our subscription

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offerings, and our telehealth offering. We expect pharma manufacturer solutions to continue to grow as a percentage of total revenue in the near to medium term as we continue to scale and expand available services, capabilities and platforms of our pharma manufacturer solutions offering. 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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Pharma manufacturer solutions 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 also from prescription transaction fees generated when pharmacies fill prescriptions for products sold by pharma manufacturers via our vitaCare pharmacy services solution.

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Subscription revenue: Consists of revenue from our Gold and Kroger Savings subscription offerings.

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Other revenue: Consists of revenue generated by our telehealth offering that allows consumers to access healthcare professionals online.

Beginning in 2022, pharma manufacturer solutions revenue is presented separately from other revenue. Prior period amounts have been recast to conform with the current period transaction.

Costs and Operating 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, fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering, 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 change in mix 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 changes in headcount and investments to support and 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.

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Sales and marketing: Consists primarily of advertising and promotional expenses for consumer acquisition and retention including consumer (who are not our customers) discounts and incentives, 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. We continuously evaluate the impact of sales and marketing activities on our business and actively manage our sales and marketing spend, including investment in consumer acquisition, which is largely variable, as market and business conditions change.

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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, loss on operating lease assets, gain on sale of business and charitable donations.

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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.

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Other Expense, Net

Our other expense, net consists of the following:

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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 Taxes

Our income taxes consist 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, tax effects 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:

Revenue:

Costs and operating expenses:

Other expense, net:

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Revenue

Prescription transactions revenue decreased $42.8 million, or 7%, year-over-year driven primarily by a 2% decrease in the number of our average Monthly Active Consumers principally due to the grocer issue as described above. In addition, the year-over-year change in prescription transactions revenue was also impacted by an ongoing shift in the volume of prescription transactions to other retailers, which generally provide lower pricing relative to prescription transactions processed through the grocer.

Pharma manufacturer solutions revenue increased $26.1 million, or 36%, year-over year driven primarily by organic growth as we continued to expand our market penetration with pharma manufacturers and other customers as well as from our acquisition of vitaCare in April 2022, which contributed $5.6 million in revenue in 2022.

Subscription revenue increased $36.2 million, or 60%, year-over year driven primarily by a pricing increase for Gold subscribers during 2022, partially offset by a 15% decrease in the number of subscription plans to 1,030 thousand as of December 31, 2022, compared to 1,210 thousand as of December 31, 2021. We expect the increase in Gold pricing to result in slower subscriber growth relative to subscription revenue growth in the near term. We do not believe the grocer issue materially impacted subscription revenue in 2022, though it may be materially impacted in the future.

Other revenue increased $1.6 million, or 9%, year-over-year driven by an increase in the number of telehealth visits on our platform.

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Other than revenue from vitaCare relative to pharma manufacturer solutions revenue, our acquisitions individually and in the aggregate did not materially contribute to the change in our revenue year-over-year. We do not believe the expected sunset of Kroger Savings in July 2024 will have a material impact on our future revenue and financial results.

Costs and Operating Expenses

Cost of revenue, exclusive of depreciation and amortization

Cost of revenue increased $18.4 million, or 39%, year-over-year primarily driven by a $10.0 million increase in outsourced and in-house personnel related to consumer support, and a $3.1 million increase in allocated overhead, both principally as a result of the acquisition of vitaCare in April 2022, as well as a $2.8 million increase in fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering.

Product development and technology

Product development and technology expenses increased $17.3 million, or 14%, year-over-year due primarily to increases in payroll and related costs due to higher average headcount in 2022. These increases were partially offset by higher capitalization of certain qualified costs related to the development of internal use software in 2022 relative to 2021 due to greater investment in our products that better align with our strategic goals and future scale.

Sales and marketing

Sales and marketing expenses decreased $12.6 million, or 3%, year-over-year primarily driven by a $69.9 million decrease in advertising expenses, offset by an increase in promotional expenses, substantially in the form of consumer discounts of $24.7 million, as we proactively managed our spend to better align with our strategic goals and future scale. The impact from these items was further offset by a $19.4 million increase in payroll and related costs due to higher average headcount in 2022 and a $8.2 million increase in third-party marketing services.

General and administrative

General and administrative expenses decreased $9.9 million, or 6%, year-over-year. This decrease was primarily driven by a $46.4 million decrease in stock-based compensation expense related to the Founders Awards and a $11.4 million pre-tax gain from the sale of certain technology assets of GoodRx Care, LLC, our telehealth platform business, in 2022. These increases were partially offset by a $18.1 million loss from the change in fair value of contingent consideration related to our vitaCare acquisition, a $13.7 million increase in payroll and related expenses due to higher average headcount to support our growth and operations as a public company and a $12.6 million loss related to the impairment of certain operating lease assets and the disposal of related capitalized costs. For further information regarding the Founders Awards, the sale of certain technology assets of GoodRx Care and contingent consideration related to the vitaCare acquisition, and loss on operating lease assets, see Note 15, Note 3 and Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, respectively.

Depreciation and amortization

Depreciation and amortization expenses increased $19.6 million, or 57%, year-over-year primarily driven by a $14.1 million increase in capitalized software amortization due to higher capitalized costs for platform improvements and the introduction of new products and features and a $4.9 million increase in amortization related to acquired intangible assets.

Interest Income

Interest income increased $9.2 million year-over-year primarily due to higher interest rates earned on cash equivalents held in U.S. treasury securities money market funds.

Interest Expense

Interest expense increased $10.6 million, or 45%, year-over-year primarily due to higher interest rates partially offset by lower average debt balances.

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Income Taxes

For the year ended December 31, 2022, we had an income tax expense of $9.6 million compared to an income tax expense of $15.1 million for the year ended December 31, 2021 and an effective income tax rate of (41.3%) and (148.1%), respectively. The year-over-year decrease in our income tax expense was primarily due to changes in our pre-tax losses, and a decrease in our tax effects from nondeductible officers' stock-based compensation expense and U.S. federal and state tax credits. In addition, the year-over-year decrease in excess tax benefits from our equity awards was offset by the decrease in the current tax effects of the full valuation allowance recorded against our net deferred tax assets in excess of amortizable goodwill initially recognized in 2021, which we maintained at the end of 2022.

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, 2022, we had cash and cash equivalents of $757.2 million and $90.8 million available under our revolving credit facility.

Our primary short-term and long-term requirements for liquidity and capital are to finance working capital including our noncancelable operating lease obligations, interest and principal payments related to our outstanding debt arrangements, share repurchases, capital expenditures, business acquisitions and investments we may make from time to time, and general corporate purposes. We also anticipate expending 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 Our Organizational Structure, including Agreements and Relationships with Significant Stockholders—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 twelve months. Our future capital requirements will depend on many factors, including our revenue results, the timing and extent of investments, 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 commitments and contingencies, 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 current economic uncertainty, including rising inflation and socio-political events, has resulted in, and may continue to result in, significant disruption of global financial markets, including rising interest rates, 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, 2022. 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.

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Cash Flows

Year Ended December 31,

Net cash provided by operating activities $ 146,780 $ 178,779

Net cash used in financing activities (120,226 ) (30,528 )

Net cash provided by operating activities

Net cash provided by operating activities consist of net loss adjusted for certain non-cash items and changes in assets and liabilities. The $32.0 million decrease in net cash provided by operations in 2022 compared to 2021 was due to $7.6 million higher net loss, a decrease of $15.9 million in non-cash adjustments, and an increase of $8.5 million in cash outflow from changes in operating assets and liabilities. The net decrease in non-cash adjustments was primarily driven by a decrease in stock-based compensation expense due principally to the Founders Awards, deferred income taxes, and a pre-tax gain on the sale of certain technology assets of GoodRx Care, partially offset by an increase in the change in fair value of contingent consideration, depreciation and amortization, and a loss on operating lease assets. The changes in operating assets and liabilities were primarily driven by the timing of income tax payments and refunds, as well as by the timing of payments of accounts payable and accrued expenses and collections of accounts receivable.

Net cash used in investing activities

Net cash used in investing activities primarily consist of cash used for acquisitions and investments, software development costs, and capital expenditures, partially offset by proceeds from sale of capitalized assets. The $31.8 million increase in net cash used in investing activities in 2022 compared to 2021 was primarily related to a $27.6 million increase in cash paid for acquisition of businesses and minority equity interest investments in privately-held companies, and a $21.4 million increase in software development costs, partially offset by $16.6 million in proceeds from the sale of certain technology assets of GoodRx Care in 2022.

Net cash used in financing activities

Net cash used in financing activities primarily consist of payments related to our debt arrangements, repurchases of our Class A common stock, and net share settlement of equity awards, partially offset by proceeds from exercise of stock options. The $89.7 million increase in net cash used in financing activities in 2022 compared to 2021 was primarily related to $101.7 million for repurchases of our Class A common stock in 2022 and a $25.9 million decrease in proceeds from exercises of stock options, partially offset by a $37.1 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 2022 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

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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.

Business Combinations

We recognize tangible and intangible assets acquired and liabilities assumed in a business combination at fair value at 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. Contingent consideration arising from a business combination, if any, is included as part of purchase consideration and recognized at fair value as of the acquisition date. Contingent consideration arrangements are remeasured to fair value at each reporting period subsequent to the acquisition date until the contingency is resolved.

The valuations of intangible assets and contingent consideration use different valuation methods depending on the asset acquired and underlying nature of the contingency and may include significant estimates and judgments. Our critical accounting estimates are primarily those relating to forecasts of revenue and margins and estimates of royalty and discount rates, as applicable, used in the valuation of developed technology and customer relationships intangible assets and the contingent consideration receivable.

For developed technology and customer relationships intangible assets, our revenue and margin 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 including the necessary resources and investments to support these contracts, 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 the acquired companies' cash flows would change the discount rates applied, which in turn could significantly affect the valuation of our acquired developed technology and customer relationships intangible assets.

For certain acquisitions, the fair value of developed technology is estimated using the relief-from-royalty method, an income approach which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate is applied to the projected revenues associated with the intangible asset to determine the amount of savings and requires significant judgment. Our estimates of the royalty rates are based on comparable licensing agreements in the market. A change in the royalty rate selected could significantly affect the valuation of our acquired developed technology intangible asset.

For contingent consideration receivable at the acquisition date, our revenue forecasts include assumptions relating to the fair value of services expected to be provided to the seller which includes specific assumptions about the seller’s ability to continue to order such services given the seller’s liquidity position, among other macroeconomic and industry factors. The discount rate focuses on the level of risk of achievement of the forecasts and the credit and financial stability of the seller including its financial wherewithal for future payment of the receivable, which requires significant judgment. A change in the seller's liquidity position and future outlook would change the revenue forecasts and discount rate applied and our estimate of the realizability of the contingent consideration receivable, which in turn would affect the valuation of the contingent consideration receivable.

As described in Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, in December 2022, we entered into an arrangement that eliminated the contingent consideration receivable which reduced its fair value to zero. As a result, the remeasurement of the contingent consideration receivable to fair value at December 31, 2022 is not a critical accounting estimate.

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 basis 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

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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. As of December 31, 2022, negative evidence primarily included the existence of three-year cumulative pre-tax losses adjusted for permanent book to tax differences principally generated from 2021 and 2020. The losses in 2021 and 2020 were 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 Class A common stock as reported on the Nasdaq Global Select Market in 2021 and 2020, which when exercised resulted in significant excess tax benefits to us. The existence of substantial stock options granted prior to our IPO that remain outstanding contributed to our evaluation of negative evidence regarding the realizability of our net deferred tax assets in 2021. In 2022, the excess tax benefits realized substantially decreased relative to 2021 and 2020 due to a decline in the closing prices of our Class A common stock, which resulted in the exercise prices of the stock options granted prior to our IPO to approximate the closing stock prices of our Class A common stock. Although 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, the degree of excess tax benefits that will be realized in the future will depend on many factors outside of our control, including the closing prices of our Class A common stock in the future and stock option exercises being initiated by employees. Accordingly, the weight of the negative evidence related to substantial excess tax benefits to be realized from the exercise of stock options granted prior to our IPO decreased in 2022 relative to 2021.

As of December 31, 2022, 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 book to tax differences, 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 book to tax differences, we determined, as of December 31, 2022, that it was more likely than not that our net deferred tax assets in excess of amortizable goodwill would not be realized. Accordingly, we maintained a full valuation allowance of $57.1 million against our net deferred tax assets in excess of amortizable goodwill as of the year then ended.

To the extent sufficient positive evidence becomes available or the negative objective evidence described above continues to decrease in relative importance, 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 recognized.

70

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 $6.8 million for the year ended December 31, 2022.

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 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 officer concluded that, as of December 31, 2022, 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 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.

As discussed in Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we completed our acquisition of vitaCare on April 14, 2022. Management has excluded the acquisition of vitaCare from its assessment of the effectiveness of internal control over financial reporting as of December 31, 2022. The acquired business excluded from the scope of this assessment represents less than 1% of the total assets and less than 1% of the total revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2022.

71

Under the supervision and with the participation of our management, including our co-principal executive officers and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 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, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022 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.

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, 2022 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.

72

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following information with respect to our board of directors and executive officers is presented as of February 28, 2023:

Name Age Position at GoodRx Principal Employment

Douglas Hirsch 52 Co-Chief Executive Officer & Director Same

Trevor Bezdek 45 Co-Chief Executive Officer & Director Same

Raj Beri 48 Chief Operating Officer Same

Karsten Voermann 53 Chief Financial Officer Same

Babak Azad 49 Chief Marketing Officer and SVP, Marketing & Communications Same

Romin Nabiey 36 Chief Accounting Officer Same

Bansi Nagji 57 President, Healthcare Same

Christopher Adams 43 Director Partner at Francisco Partners Management, L.P.

Julie Bradley 54 Director Chief Executive Officer of RegimenMD

Adam Karol 47 Director Managing Director at Silver Lake

Jacqueline Kosecoff 73 Director Managing Partner at Moriah Partners, LLC

Stephen LeSieur 49 Director Managing Director at Spectrum Equity

Gregory Mondre 48 Director Co-Chief Executive Officer at Silver Lake

Other information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022.

Item 11. Executive Compensation.

The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022.

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

The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022.

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

The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022.

Item 14. Principal Accountant Fees and Services.

The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022.

73

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/

74

75

10.19† Offer Letter for Romin Nabiey, effective May 1, 2017 *

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.

76

Item 16. Form 10-K Summary.

None.

77

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, 2023 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, 2023

Douglas Hirsch (Principal Executive Officer)

/s/ Trevor Bezdek Co-Chief Executive Officer February 28, 2023

Trevor Bezdek (Principal Executive Officer)

/s/ Karsten Voermann Chief Financial Officer February 28, 2023

Karsten Voermann (Principal Financial Officer)

/s/ Romin Nabiey Chief Accounting Officer February 28, 2023

Romin Nabiey (Principal Accounting Officer)

/s/ Christopher Adams Director February 27, 2023

Christopher Adams

/s/ Julie Bradley Director February 27, 2023

Julie Bradley

/s/ Dipanjan Deb Director February 27, 2023

Dipanjan Deb

/s/ Adam Karol Director February 27, 2023

Adam Karol

/s/ Jacqueline Kosecoff Director February 27, 2023

Jacqueline Kosecoff

/s/ Stephen LeSieur Director February 27, 2023

Stephen LeSieur

/s/ Gregory Mondre Director February 27, 2023

Gregory Mondre

/s/ Agnes Rey-Giraud Director February 28, 2023

Agnes Rey-Giraud

78

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

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

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board 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, 2022 and 2021, 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, 2022, 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, 2022, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in 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, 2022, 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 consolidated financial 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 consolidated financial 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 consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial 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 consolidated financial 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 consolidated financial 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.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded vitaCare Prescription Services, Inc. ("vitaCare") from its assessment of internal control over financial reporting as of December 31, 2022 because it was acquired by the Company in a purchase business combination during 2022. We have also excluded vitaCare from our audit of internal control over financial reporting. vitaCare is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent less than 1% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

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.

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 matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The

F-1

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of vitaCare – Valuation of Acquired Developed Technology and Customer Relationships Intangible Assets

As described in Note 3 to the consolidated financial statements, the Company acquired all of the outstanding equity interests of vitaCare on April 14, 2022, for $150 million and an additional payment or adjustment for contingent consideration payable of up to $7.0 million in cash and contingent consideration receivable based upon vitaCare's achievement of certain specified revenue. The Company recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the acquisition date, including developed technology and customer relationships intangible assets of $30.0 million and $21.0 million, respectively. As disclosed by management, the valuations of intangible assets use different valuation methods depending on the asset acquired and may include significant estimates and judgments. The critical accounting estimates are primarily those relating to forecasts of revenue and margins and estimates of royalty and discount rates, as applicable, used in the valuation of developed technology and customer relationship intangible assets.

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

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 testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the developed technology and customer relationships intangible assets acquired. These procedures also included, among others, reading the purchase agreement and testing management’s process for developing the fair value estimates of the developed technology and customer relationships intangible assets. Testing management’s process included evaluating the appropriateness of the valuation methods, testing the completeness and accuracy of data used in the methods, and evaluating the reasonableness of significant assumptions related to forecasts of revenue and margins and estimates of royalty and discount rates, as applicable, used by management in the valuation of the developed technology and customer relationships intangible assets. Evaluating the reasonableness of the forecasts of revenue and margins involved considering the past performance of the acquired business, as well as economic and industry forecasts and historical data. Evaluating the reasonableness of the royalty rate involved considering comparable industry data. Evaluating the reasonableness of the discount rates involved 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 Company’s valuation methods and the royalty rate and discount rate assumptions.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

February 28, 2023

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

F-2

GoodRx Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except par values) December 31, 2022 December 31, 2021

Assets

Current assets

Prepaid expenses and other current assets 45,380 29,638

Liabilities and stockholders' equity

Current liabilities

Accrued expenses and other current liabilities 47,523 50,732

Operating lease liabilities, current 4,068 5,851

Operating lease liabilities, net of current portion 54,131 33,592

Commitments and contingencies (Note 13)

Stockholders' equity

See accompanying notes to consolidated financial statements.

F-3

GoodRx Holdings, Inc.

Consolidated Statements of Operations

Year Ended December 31,

Costs and operating expenses:

Other expense, net:

Other income, net — — 22

Loss per share:

Basic and diluted $ (0.08 ) $ (0.06 ) $ (1.07 )

Weighted average shares used in computing loss per share:

Stock-based compensation included in costs and operating expenses:

See accompanying notes to consolidated financial statements.

F-4

GoodRx Holdings, Inc.

Consolidated Statements of Changes in Redeemable Convertible

Preferred Stock and Stockholders’ Equity (Deficit)

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

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

Vesting and settlement of restricted stock units — — — — 4,717 — — — —

See accompanying notes to consolidated financial statements.

F-5

GoodRx Holdings, Inc.

Consolidated Statements of Cash Flows

Year Ended December 31,

Cash flows from operating activities

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

Change in fair value of contingent consideration 18,057 — 2,068

Gain on sale of business (11,404 ) — —

Charitable stock donation — — 41,721

Cash flows from investing activities

Investment in minority equity interest (15,007 ) (4,008 ) —

Proceeds from sale of business 16,576 — —

Cash flows from financing activities

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

Proceeds from long-term debt — — 28,000

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

Payment for contingent consideration — (832 ) —

Repurchases of Class A common stock (101,721 ) — —

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 8,969 7,709 2,437

The following table presents a reconciliation of cash, cash equivalents and restricted cash in our 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-6

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 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 (collectively, "we", "us" or "our") offer information and tools to help consumers compare prices and save on their prescription drug purchases. We operate a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and provides access to negotiated prices through our codes that can be used to save money on prescriptions across the United States (the "prescription transactions offering"). These services are free to consumers and we primarily earn revenue from our core business from pharmacy benefit managers (“PBMs”) that manage formularies and prescription transactions including establishing pricing between consumers and pharmacies. We also offer other healthcare products and services, including pharma manufacturer solutions, subscriptions and telehealth services.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Other than net income or net loss, we do not have any other elements of comprehensive income or loss.

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 we are the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. Results of businesses acquired are included in our consolidated financial statements from their respective dates of acquisition.

Consolidation of VIEs

We evaluate whether an entity in which we have 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 (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We periodically reassess whether we are the primary beneficiary of a VIE.

Our 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. We determined that the PSCs are VIEs. We also determined that we are able to direct the activities of the PSCs that most significantly impact their economic performance and we fund and absorb all losses of these VIEs resulting in us being the primary beneficiary of the PSCs. Accordingly, we consolidate the VIEs. The results of operations and financial position of the VIEs are not material to our consolidated financial statements.

F-7

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. Our chief operating decision maker manages our business on the basis of one operating segment. During the years ended December 31, 2022, 2021 and 2020, all of our revenue was from customers located in the United States. In addition, at December 31, 2022 and 2021, all of our right-of-use assets and property and equipment were 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. We base our estimates on historical factors; current circumstances, including the impact of a grocery chain that previously did not accept discounted pricing for a subset of prescriptions drugs from our PBMs starting late in the first quarter of 2022 ("grocer issue"); macroeconomic events and conditions; consideration of the economic impact of COVID-19; and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis. Actual results can differ materially from these estimates, and such differences can affect the results of operations reported in future periods. Although the grocer issue was addressed in August 2022 and our discounted pricing has since been consistently welcomed at the point of sale by the grocery chain, the sustained effects of the grocer issue on our business, future results of operations and financial condition continue to be difficult to estimate because there are several variables that are highly uncertain including, among others, consumer response to updated consumer pricing and timing and extent of returning user levels.

Certain Risks and Concentrations

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. We maintain 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. We believe that the financial institutions that hold our cash are financially sound and, accordingly, minimal credit risk exists with respect to these balances. We have not experienced any losses in such accounts.

We extend credit to our customers based on an evaluation of their ability to pay amounts due under contractual arrangements and generally do not obtain or require collateral.

For the year ended December 31, 2022, one customer accounted for approximately 13% of our revenue. For the year ended December 31, 2021, two customers accounted for approximately 13% and 11% of our revenue. For the year ended December 31, 2020, three customers accounted for approximately 17%, 14% and 11% of our revenue. At December 31, 2022, one customer accounted for approximately 13% of our accounts receivable balance. At December 31, 2021, no customer accounted for more than 10% of our accounts receivable balance.

Cash and Cash Equivalents

We consider 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 $642.5 million and $852.5 million at December 31, 2022 and 2021, respectively, were classified as Level 1 of the fair value hierarchy and valued using quoted market prices in active markets.

Accounts Receivable and Allowance for Expected Credit Losses

Accounts receivable are recognized at the amounts due from various customers, net of allowance for expected credit losses. We estimate our 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. We write off the asset when it is determined to be uncollectible. As of December 31, 2022 and 2021, the allowance for credit losses was not material.

F-8

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 Investments

We retain minority equity interests in privately-held companies without readily determinable fair values. Our ownership interests are less than 20% of the voting stock of the investees and we do not have the ability to exercise significant influence over the operating and financial policies of the investees. The equity investments are 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. Equity investments included in other assets in the consolidated balance sheets as of December 31, 2022 and 2021 were $19.0 million and $4.0 million, respectively. We have not recognized any changes resulting from observable price changes or impairment loss on such investments.

Business Combinations

The results of businesses acquired in a business combination are included in the consolidated financial statements from the date of acquisition. Acquisition accounting results in assets and liabilities of an acquired business being recognized 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.

We perform valuation of assets acquired and liabilities assumed for an acquisition and allocate 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 forecasts of revenue and margins and estimates of royalty and discount rates, as applicable. We 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, we may adjust provisional amounts recognized for assets acquired and liabilities assumed to reflect new information subsequently obtained regarding facts and circumstances that existed as of the acquisition date.

Certain acquisitions contain provisions for contingent consideration to be transferred or received based on the post-acquisition results of the acquired businesses. The acquisition date estimated fair value of contingent consideration associated with business combinations is based on the amount of the consideration expected to be transferred or received using significant inputs that are not observable in the market (Level 3 inputs). Contingent consideration is remeasured to its estimated fair value on a recurring basis. Changes in the estimated fair value of contingent consideration, if any, is recognized within general and administrative expenses in the consolidated statements of operations.

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 over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. We had one reporting unit during 2022, 2021 and 2020. We review 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, we may first perform an optional qualitative assessment. If we determine it is not more likely than not our reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If we determine that it is more likely than not that the fair value of our 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 our reporting unit exceeds its fair value, we will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. No impairments were recognized in 2022, 2021 or 2020.

Intangible Assets

Intangible assets reflect the value of customer relationships, developed technology, trademarks, content library and backlog recognized in connection with our acquisitions. Purchased intangible assets are recognized at their acquisition date fair value, less accumulated amortization. We determine the appropriate useful life of intangible assets by performing an

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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

We account for our internal-use software costs 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 for post-configuration training, maintenance and minor modifications or enhancements are included in product development and technology expenses 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.

Cloud Computing Arrangements

We incur costs to implement cloud computing arrangements that are accounted for as service contracts. Implementation costs, such as integrating, configuring, and software customization, incurred during the application development stage are capitalized within other assets in the consolidated balance sheets until the software is ready for its intended purpose. Capitalized costs are then amortized on a straight-line basis over the term of the associated hosting arrangement, plus any reasonably certain renewal periods, and are recognized as operating expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

We account for the impairment of long-lived assets in accordance with ASC 360, Property, Plant, and Equipment. 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 values may not be recoverable. We perform 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

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

We determine if a contract is, or contains, a lease at inception. All of our leases are operating leases. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments, less any tenant improvement allowance incentives when it is reasonably certain they will be received, over the lease term discounted using our incremental borrowing rate. As none of our leases provide an implicit rate, the incremental borrowing rate used is estimated based on what we would be required to pay for a collateralized loan over a similar term as the lease. 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. Variable lease payments not based on a rate or index are expensed as incurred. The lease term includes options to extend or terminate the lease when it is reasonably certain they will be exercised. Certain of our leases contain renewal options for periods of up to ten years and early termination options by up to two years, at our election. We have not recognized any renewal or early termination options in our estimate of the lease term as they are not reasonably certain of exercise. Right-of-use assets are evaluated for impairment in accordance with ASC 360, Property, Plant, and Equipment, when events or changes in circumstances indicate that their carrying values may not be recoverable. After a right-of-use asset is impaired, the remaining carrying value of the right-of-use asset is de-linked from the lease liability and amortized on a straight-line basis over the remaining lease term. The lease liability continues to be amortized using the same effective interest method as before the impairment. Thus, after impairment, the operating lease no longer qualifies for the straight-line treatment of total lease expense.

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 recognized as a reduction of the related

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long-term debt balance on the consolidated balance sheets. Costs incurred in connection with the issuance of revolving credit facilities are recognized in other assets on the consolidated balance sheets and are amortized to interest expense in the 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 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 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 recognized.

We recognize 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. We recognize interest and penalties accrued related to our uncertain tax positions in income tax (expense) benefit in the consolidated statements of operations.

Revenue

We recognize 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 we are expected to be entitled to in exchange for those services. Given the time between us transferring a promised good or service to the customer and the customer paying for that good or service is one year or less based on the terms of our revenue arrangements, as a practical expedient, we do not adjust the promised amount of consideration for effects of a significant financing component.

For the years ended December 31, 2022, 2021 and 2020, revenue comprised the following:

Year Ended December 31,

(1)

Pharma manufacturer solutions revenue is presented separately from other revenue beginning in 2022. 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 our code provided through our platform. The nature of our promise in our contracts with customers is to direct prescription volume through our platform, which may include marketing through our mobile apps, websites, and cards. These activities are not distinct from each other and are not separate performance obligations. Our performance obligation is to connect consumers with pharmacies that are contracted with our customers. We have no performance obligation to fill prescriptions.

Contracts with PBMs provide that we are 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 our code from our platform. Our performance obligation is satisfied upon the completion of pharmacies filling prescriptions. We recognize revenue for our estimated fee due from the customers at a point in time when a prescription is filled.

We receive reporting from the customers of the number of prescriptions and amount of consideration to which we are entitled at a prescription level. Certain arrangements with PBMs provide that the amount of consideration we are entitled to is based on the volume of prescription fills each month. In addition, the amount of consideration for which we are entitled may be adjusted in the event that a fill is determined ineligible, or based upon other adjustments allowed under the contracts

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with customers. We estimate the amount expected to be entitled to using the expected value method based on historical experience of the number of prescriptions filled, ineligible fills and applicable rates.

We generally receive payment within thirty 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.

Incentives to customers are recognized as a reduction of revenue if we do not receive a distinct good or service or cannot reasonably estimate the fair value of the good or service received. We do not provide material incentives to customers. We also offer incentives principally in the form of discounts to consumers (who are not our customers) that reduce the prices on a limited number of prescription drugs displayed on our platform during a limited time period. None of our contracts with customers require us to provide discounts to consumers. These discounts are generally offered to a limited number of consumers in a market to acquire, re-engage, or generally increase consumer utilization of our platform. We recognize the cost of these discounts to consumers as sales and marketing expense in the consolidated statements of operations at the time the prescription is filled and was $24.7 million for 2022. There were no material discounts to consumers in 2021 and 2020.

Pharma Manufacturer Solutions Revenue

Pharma manufacturer solutions revenue consists primarily of advertisements purchased by pharma manufacturers and other customers for a fixed fee that appear on our 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 we charge fees on a cost-per-click basis, advertisements placed in our 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. Pharma manufacturer solutions revenue also includes fees generated when pharmacies fill prescriptions for products sold by pharma manufacturers via our pharmacy services solution acquired through our acquisition of vitaCare Prescription Services, Inc. ("vitaCare"). We are entitled to a fixed fee per prescription from the pharma manufacturer for each of their patients assisted by us. Revenue for these arrangements is recognized at a point in time when the prescriptions are processed and filled through our pharmacy services solution.

We generally invoice pharma manufacturers and other customers in advance, in the month end in which services are rendered, or in accordance with other specific contractual provisions. Payments are due generally within thirty to ninety days of invoice but may extend up to twelve months for a limited number of contracts.

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 pay an upfront fee to purchase a monthly or annual subscription that provides access to lower prices for prescriptions and telehealth visits. Subscribers can cancel the Gold subscription at any time. Monthly Gold subscription fees are generally nonrefundable while annual Gold subscription fees are generally nonrefundable to the subscriber after the first two weeks. We recognize revenue for Gold on a straight-line basis over the subscription period. Under the Kroger Savings offering, subscribers pay an annual upfront fee, a portion of which we share with Kroger, for a subscription that provides access to lower prices on prescriptions at Kroger pharmacies. Subscribers may enroll in the Kroger Savings through July 1, 2023 with the expected sunset of the program in July 2024. Kroger Savings subscription fees are generally nonrefundable to the subscriber after the first thirty days unless we cancel the subscription, in which case the subscriber is entitled to a pro rata refund. We recognize revenue for Kroger Savings on a straight-line basis over the subscription period, net of the fee shared with Kroger.

Other Revenue

Other revenue consists principally of telehealth revenue. Telehealth revenue consists of revenues generated from consumers who complete a telehealth visit with a member of our network of qualified medical professionals. Consumers pay a fee per telehealth visit and we recognize 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, healthcare provider costs, fulfillment costs for certain solutions provided to customers under our pharma manufacturer solutions offering, 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 excludes depreciation and amortization of capitalized software development costs, developed technology, and other hosting and data

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infrastructure equipment used to operate our platform, which are included in depreciation and amortization in the 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 $226.3 million, $296.6 million and $222.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Sales and marketing expenses also include personnel costs, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions, for sales and marketing employees, consumer discounts and incentives, 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 primarily 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, other general overhead costs, and as applicable, change in fair value of contingent consideration, loss on operating lease assets, gain on sale of business and charitable donations.

Depreciation and Amortization

Our depreciation and amortization expenses include depreciation of property and equipment, and amortization of capitalized internal-use software costs and intangible assets.

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, we consider 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 accounts receivable, accounts payable, and accrued liabilities, due to their short-term nature. The estimated fair value of our debt was approximately $649.6 million as of December 31, 2022, which was based on inputs categorized as Level 2 in the fair value hierarchy, and approximated its carrying value as of December 31, 2021. For contingent consideration, which is remeasured to its estimated fair value on a recurring basis, see “Note 3. Business Combinations and Disposition."

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Stock-Based Compensation

Compensation cost is allocated to cost of revenue, product development and technology, sales and marketing, and general and administrative expenses 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 our 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, we commence 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 ("IPO") 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, we recognize 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 our 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 our IPO in September 2020, because there was no public market for our common stock, the fair value of the common stock underlying our stock-based awards was determined by our board of directors, with input from management, by considering several 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 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 Securities Issued as Compensation. Subsequent to our IPO, the fair value of common stock was determined on the grant date using the closing price of our common stock.

•

Expected volatility is based on a blended approach that utilizes our historical and implied volatility for periods in which we have sufficient information and the historical and implied volatility 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 our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. Substantially all of our stock options granted after our 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 our current expectations of dividend payouts.

The assumptions used in our 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, our stock-based compensation could be materially different in the future.

Basic and Diluted Loss Per Share

We have two classes of common stock, Class A and Class B. Basic and diluted loss per share attributable to common stockholders of our Class A and Class B common stock are the same because they are entitled to the same liquidation and dividend rights.

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We compute earnings or loss 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 we have 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 our IPO in September 2020, we considered our redeemable convertible preferred stock to be participating securities as preferred stockholders had rights to participate in dividends with the common stockholders.

Basic earnings or loss per share is computed by dividing net income or loss 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 vested but not yet issued Co-Chief Executives’ Performance-Vesting Founders Awards (see “Note 15. Stock-Based Compensation”) will settle in shares of common stock in October 2023 or, if earlier, upon a qualifying change in control event. At the time of vesting, these shares are contingently issuable and are included in the weighted average number of common shares outstanding for basic earnings or loss per share.

We compute diluted earnings or loss per share under a two-class method. For periods when we have 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 we have 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.

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Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 results in the acquirer recognizing acquired contract assets and liabilities on the same basis that would have been recognized 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 us for annual and interim periods beginning after December 15, 2022. Early adoption of this ASU is permitted, including adoption in an interim period. This update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We early adopted this guidance on January 1, 2022, and the adoption did not have a material impact to our 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 as the publication of the LIBO Screen Rate maturities are expected to cease immediately after June 30, 2023. As a result, it is possible that beginning in July 2023, the LIBO Screen Rate will no longer be available as a reference rate. The ASU applies only to contracts, hedging relationships and other transactions that reference LIBO Screen Rate 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. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848, which deferred the application period of ASU 2020-04 from December 31, 2022 to December 31, 2024, effective immediately for all entities. We adopted this guidance on January 1, 2022, and the adoption did not have a material impact to our consolidated financial statements. Under the terms of our existing debt agreements, in the event of the discontinuance of the LIBO Screen Rate, a mutually agreed-upon alternate benchmark rate will be established to replace the LIBO Screen Rate. We and lenders under our debt agreements will in good faith establish an alternate benchmark rate which places the lenders and us in the same economic position that existed immediately prior to the discontinuation of the LIBO Screen Rate. We intend to apply this guidance for contract modifications related to the reference rate reform as they occur through December 31, 2024.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("Topic 820"), which clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. This guidance is effective for annual periods beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of this ASU is permitted. This ASU should be applied prospectively and recognize in earnings on the adoption date any adjustments made as a result of adoption. We early adopted this guidance effective January 1, 2023, and will apply this guidance prospectively, however we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and disclosures.

3. Business Combinations and Disposition

Business Combinations

vitaCare Prescription Services, Inc.

On April 14, 2022, we acquired all of the equity interests of vitaCare from TherapeuticsMD, Inc. (the "Seller"), the sole stockholder of vitaCare, for an initial cash payment of approximately $150.0 million and additional payment or adjustment for contingent consideration payable of up to $7.0 million in cash and contingent consideration receivable based upon vitaCare's achievement of certain specified revenue described further below. We incurred a total of $1.6 million of transaction costs associated with this acquisition during 2022 that consisted primarily of professional fees. vitaCare is a prescription technology and service platform that simplifies the prescription fulfillment process for consumers taking brand

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medications by helping them gain access to therapies and stay on those therapies for as long as medically appropriate. The purpose of the acquisition was to strengthen and expand our services under our pharma manufacturer solutions platform.

We accounted for the vitaCare acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and recognized tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The estimated fair values of the acquired intangible assets were determined primarily by using a discounted cash flow method which is a non-recurring fair value measurement based on Level 3 inputs. The goodwill recognized in connection with this acquisition primarily related to the expected long-term synergies and other benefits from the acquisition, including the acquired assembled workforce, and is expected to be tax deductible.

We also established a management incentive plan under which certain continuing vitaCare employees were eligible to receive up to $10.0 million of additional cash compensation upon achievement of certain performance milestones through 2023. This management incentive plan was accounted for separately from the business combination and excluded from the purchase consideration. As of December 31, 2022, the performance milestones were not probable of being met; however eligible employees may continue to receive up to the $10.0 million of cash compensation upon achievement of the performance milestones in 2023.

The components of the purchase consideration for vitaCare are as follows:

(in thousands)

Fair value of contingent consideration payable 1,684

Fair value of contingent consideration receivable (19,741 )

Total purchase consideration $ 131,820

The allocation of the purchase consideration for vitaCare is as follows:

(in thousands)

Accounts receivable $ 433

Prepaid expenses and other current assets 50

Property and equipment 255

Accounts payable (752 )

Accrued expenses and other current liabilities (780 )

Total purchase consideration $ 131,820

The amounts assigned to the acquired intangible assets and their estimated useful lives are as follows:

(dollars in thousands) FairValue Weighted Average Useful Life(in years)

Contingent consideration payable - The contingent consideration payable of up to $7.0 million in cash was based upon vitaCare's achievement of certain specified revenue results through 2023 as stipulated by the purchase agreement. The estimated fair value of the contingent consideration payable was based on the present value of the expected future payments to be made to the Seller (Level 3 inputs) using an option pricing model. As of December 31, 2022, no future contingent payments were expected to be made to the Seller as vitaCare's achievement of the specified revenue results through 2023 were no longer probable of being met. Accordingly, we recognized the change in fair value of the contingent consideration payable of $1.7 million as a reduction in general and administrative expenses during 2022.

Contingent consideration receivable - vitaCare entered into a commercial agreement with the Seller in connection with the acquisition (the "commercial agreement") to provide certain pharmacy services to the Seller over an initial 5-year term following the acquisition with annual minimum guaranteed payments over the 5-year term totaling $66.3 million. The estimated fair value of the contingent consideration receivable at the acquisition date was based on the present value of the expected future annual minimum guaranteed payments in excess of the estimated fair value of pharmacy services expected to be provided to the Seller for each year over the initial 5-year term and contained significant unobservable inputs (Level 3 inputs). Key inputs used in this estimate included projected revenue and a discount rate which incorporated the

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risk of achievement associated with the forecasts and the credit risk of the Seller. Significant changes in the projected revenue or discount rate would result in a significantly higher or lower fair value measurement.

In December 2022, the Seller completed a transaction (the "transformation transaction") with a third-party to (i) grant an exclusive license to the third-party to commercialize certain of the Seller's pharmaceutical drugs in return for, amongst other things, royalty-based payments based on the level of sales achieved and (ii) sold certain other assets to the third-party. We agreed to eliminate the annual minimum guaranteed payments associated with the commercial agreement which was assigned to the third-party such that the transformation transaction could be completed. Concurrently, we amended an existing pharma manufacturer solutions arrangement with the third-party. We determined the amended pharma manufacturer solutions arrangement with the third-party was at fair value and the fair value of the contingent consideration receivable at the date of the transformation transaction was effectively zero as the contingency was resolved and no future contingent payments will be received. Accordingly, we recognized the change in fair value of the contingent consideration receivable of $19.7 million as an increase in general and administrative expenses during 2022.

Pro forma unaudited consolidated results of operations - The following table reflects the pro forma unaudited consolidated results of operations for the periods presented as if the acquisition of vitaCare had occurred on January 1, 2021. The pro forma unaudited consolidated results of operations give effect to certain adjustments including: (i) transaction and severance costs incurred in connection with the acquisition; (ii) amortization expense related to the acquired intangible assets; and (iii) elimination of vitaCare's allocated interest expense related to the Seller's financing agreement whereby vitaCare was released from as guarantor upon the consummation of the acquisition. The pro forma unaudited consolidated results of operations are not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.

Year Ended December 31,

vitaCare's revenue for the year ended December 31, 2022 of $5.6 million was included in the consolidated statement of operations. Disclosure of the standalone earnings or loss of vitaCare is not practicable as expenses associated with significant back-office, product development and technology and go-to-market processes of vitaCare have been substantially integrated into our consolidated operations.

flipMD, Inc.

On February 18, 2022, we acquired all of the equity interests of flipMD, Inc. ("flipMD") for $7.0 million in cash. flipMD is a marketplace connecting practicing physicians with organizations seeking on-demand medical expertise and expands both our engagement with healthcare providers and services currently available under our existing pharma manufacturer solutions platform.

Other Business Combinations

In 2021, we acquired RxSaver, Inc. (“RxSaver”) and HealthiNation Inc. (“HealthiNation”) for $50.7 million and $76.6 million in cash, respectively. In 2020, we acquired Scriptcycle, LLC, (“Scriptcycle”) for an aggregate purchase consideration of $58.3 million. RxSaver and Scriptcycle expand our business capabilities with respect to our prescription transactions offering. HealthiNation expands our services under our pharma manufacturer solutions platform. Goodwill associated with these acquisitions primarily related to the expected long-term synergies and other benefits, including the acquired assembled workforce, and are deductible for tax purposes except for HealthiNation which is not tax deductible. The $185.6 million aggregate purchase consideration related to these acquisitions was principally allocated to goodwill of $84.0 million (comprised of $25.9 million, $33.2 million and $24.9 million from RxSaver, HealthiNation, and Scriptcycle, respectively) and other intangible assets of $93.5 million (comprised of $25.2 million, $40.0 million and $28.3 million, respectively, from the respective businesses described above). Other intangible assets principally related to customer relationships of $74.0 million (comprised of $20.7 million, $28.0 million and $25.3 million, respectively, from the respective businesses described above) with estimated useful lives ranging between eleven and thirteen years.

The Scriptcycle acquisition also contained provisions for our payment of contingent consideration of up to $2.9 million in the event certain financial results were achieved, which was met and paid in full during 2021.

In 2021, we also acquired RxNXT LLC for $14.5 million in cash which expands our business capabilities with respect to our prescription transactions offering.

Unaudited supplemental pro forma financial information and the revenue and earnings in the year of acquisition for these acquisitions has not been presented because the effects are not material to our consolidated financial statements.

F-18

Disposition

Certain Assets of GoodRx Care, LLC (FKA HeyDoctor, LLC)

On December 9, 2022, we completed the sale of certain technology assets of GoodRx Care, LLC, our telehealth platform, for $19.5 million in cash, of which $2.9 million is held in the buyer's escrow account related to the resolution of standard representations and warranties and is included in prepaid and other current assets on the consolidated balance sheet as of December 31, 2022. The sale represents the sale of a business and, as we have one reporting unit, goodwill was allocated to the disposal group. The carrying value of the disposal group as of the sale date was approximately $8.1 million, comprised principally of $4.6 million of capitalized software and $3.1 million of allocated goodwill. We recognized a $11.4 million pre-tax gain on the sale which was included in general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2022. As we expect to continue to provide our consumers access to telehealth services via our GoodRx Care platform after the date of sale, the sale does not represent a strategic shift that has, or is expected to have, a major effect on our operations and financial results.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

December 31,

Prepaid software implementation costs 5,751 —

Total prepaid expenses and other current assets $ 45,380 $ 29,638

5. Property and Equipment, Net

Property and equipment, net consists of the following:

December 31,

Construction in progress — 361

Less: Accumulated depreciation (9,769 ) (5,829 )

Total property and equipment, net $ 19,820 $ 21,612

For the years ended December 31, 2022, 2021 and 2020, depreciation expense was $4.6 million, $4.0 million and $1.4 million, respectively.

6. Goodwill

The following table presents changes in the carrying amount of goodwill:

December 31,

Goodwill disposed (3,139 ) —

F-19

7. Intangible Assets, Net

The following tables present details of our intangible assets, net:

For the years ended December 31, 2022, 2021 and 2020, amortization expense was $23.2 million, $18.3 million and $12.7 million, respectively.

At December 31, 2022, the expected amortization of intangible assets, net for future periods was as follows:

(in thousands)

Year Ending December 31,

8. Capitalized Software, Net

The following table presents details of our capitalized software, net as follows:

December 31,

For the years ended December 31, 2022, 2021 and 2020, amortization expense was $26.4 million, $12.2 million and $4.4 million, respectively. Amortization had not started on $11.2 million of capitalized software costs that were not yet ready for intended use as of December 31, 2022.

At December 31, 2022, the expected amortization of capitalized software, net that has been placed into service for future periods was as follows:

(in thousands)

Year Ending December 31,

F-20

9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

December 31,

Accrued bonus and other payroll related $ 20,642 $ 24,031

Total accrued expenses and other current liabilities $ 47,523 $ 50,732

Deferred revenue represents payments received in advance of providing services for certain advertising contracts with customers and subscriptions. Deferred revenue is substantially recognized as revenue within the subsequent twelve months. We expect substantially all of the deferred revenue at December 31, 2022 will be recognized as revenue in 2023.

10. Leases

Our leases consist of office facilities under noncancelable operating lease arrangements that expire at various dates through 2033. Our leases do not contain any material (i) non-lease components, (ii) variable lease costs, (iii) short-term lease expenses, (iv) residual value guarantees or (v) material restrictive covenants.

For the years ended December 31, 2022, 2021 and 2020, lease expense of $6.2 million, $5.6 million and $7.0 million, respectively, was included in costs and operating expenses in the consolidated statements of operations.

For the years ended December 31, 2022, 2021 and 2020, cash paid for amounts affecting the measurement of our operating lease liabilities included in cash flows from operating activities was $6.4 million, $6.2 million (excluding $1.6 million of cash collected from lease incentive receivable), and $3.0 million (excluding $5.7 million of cash collected from lease incentive receivable), respectively.

As of December 31, 2022 and 2021, the weighted average remaining lease term was 8.7 years and 8.5 years, respectively, and the weighted average discount rate was 6.9% and 5.8%, respectively.

The following table presents maturities of operating lease liabilities at December 31, 2022:

(in thousands)

Year Ending December 31,

Total operating lease payments 82,828

Less: Effects of discounting (24,629 )

Present value of operating lease liabilities $ 58,199

Operating lease liabilities, current $ 4,068