Item 1A. Risk Factors.
Our business involves significant risks, some of which are described below. You should carefully consider the risks and
uncertainties described below, together with all of the other information in this Annual Report on Form 10-K. The risks and
uncertainties described below are not the only ones we face. Additional risk and uncertainties that we are unaware of or that
we deem immaterial may also become important factors that adversely affect our business. The realization of any of these
risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of
operations, growth and future prospects as well as our ability to accomplish our strategic objectives. In that event, the
market price of our Class A common stock could decline and you could lose part or all of your investment.
Risks Related to Our Limited Operating History and Historical Growth Rates
Our limited operating history and our evolving business make it difficult to evaluate our future prospects and the
risks and challenges we may encounter.
Our limited operating history and evolving business make it difficult to evaluate and assess the success of our business
to date, our future prospects and the risks and challenges that we may encounter. These risks and challenges include our
ability to:
•continue to attract new consumers to our platform and position our platform as an important way to make
purchasing decisions for prescription medications and other healthcare products and services;
•retain our consumers and encourage them to continue to utilize our platform when purchasing healthcare
products and services;
•attract new and existing consumers to rapidly adopt new offerings on our platform;
•increase the number of consumers that use our subscription offerings or the number of subscription programs
that we manage;
•increase and retain our consumers that subscribe to our subscription offerings, such as Gold;
•attract and retain industry players for inclusion in our platform, including pharmacies, PBMs, and pharma
manufacturers;
•comply with existing and new or amended laws and regulations applicable to our business and in our industry;
•anticipate and respond to macroeconomic changes, changes in medication pricing and industry pricing
benchmarks, and changes in market dynamics in the markets in which we operate;
•react to challenges from existing and new competitors and evolving industry trends;
•maintain and enhance the value of our reputation and brand;
•effectively manage our growth;
•realize expected benefits from restructuring and cost reduction efforts;
•hire, integrate, and retain talented people at all levels of our organization;
•maintain and improve the infrastructure underlying our platform, including our apps and websites, including
with respect to data protection and cybersecurity; and
•successfully update our platform, including expanding our platform and offerings into different healthcare
products and services, develop and update our apps, features, offerings and services to benefit our consumers
and enhance the consumer experience.
If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above
and those described elsewhere in this Part I, Item 1A, “Risk Factors,” our business, financial condition, and results of
operations could be adversely affected. Further, because we have limited historical financial data and our business
continues to evolve and expand within the U.S. healthcare industry, any predictions about our future revenue and expenses
may not be as accurate as they would be if we had a longer operating history, operated a more predictable business, or
operated in a less regulated industry. We have encountered in the past, and will encounter in the future, risks and
uncertainties frequently experienced by growing companies with limited operating histories and evolving businesses that
operate in highly regulated and competitive industries. If our assumptions regarding these risks and uncertainties, which we
use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of
operations could differ materially from our expectations and our business, financial condition and results of operations would
be adversely affected.
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Our historical growth rates may not be sustainable or indicative of future growth.
Our historical rate of growth may not be sustainable or indicative of our future rate of growth. We estimate that
prescription transactions revenue will be impacted by recent and future retail pharmacy store closures, and that subscription
revenue may decrease, while pharma direct revenue may continue to grow as a percentage of total revenue in the near to
medium term. We believe that our ability to improve or maintain revenue and margins and sustain profitability, will depend
upon, among other factors, our ability to address the challenges, risks and difficulties described elsewhere in this Part I, Item
1A, “Risk Factors” and the extent to which our various offerings grow, organically and through acquisitions, and contribute to
our results of operations. We cannot provide assurance that we will be able to successfully manage any such challenges or
risks to our future growth. In addition, our base of consumers may not continue to grow or may decline due to a variety of
risks, including increased competition, changes in the dynamics among industry participants and us, changes in the
regulatory landscape and the maturation of our business. Any of these factors could cause our revenue growth to decline
and may adversely affect our margins and profitability. Failure to grow our revenue or improve margins would have a
material adverse effect on our business, financial condition and results of operations. You should not rely on our historical
rate of revenue growth for any prior quarterly or annual period as an indication of our future performance.
Our results of operations vary and may fluctuate significantly from period-to-period.
Our quarterly and annual results of operations have historically varied from period-to-period and we expect that our
results of operations will continue to do so for a variety of reasons, many of which are outside of our control and are difficult
to predict. We have presented many of the factors that may cause our results of operations to fluctuate in this Part I, Item
1A, “Risk Factors,” including the extent to which our various offerings grow and contribute to our results of operations. In
addition, 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. We may experience stronger demand for our pharma direct offering during the fourth quarter of each
year, which coincides with pharma manufacturers' annual budgetary spending patterns. Additionally, a majority of our
pharma direct revenue in any given quarter is derived from contracts entered into with our customers during previous
quarters. Consequently, a decline in new or renewed contracts in any one quarter may not be fully reflected in our revenue
for that quarter. PBM-pharmacy issues such as actions taken by a grocery chain in 2022 that impacted acceptance of
discounted pricing for a subset of prescription drugs from PBMs and whose pricing we promote on our platform (the "grocer
issue"), including changes in the retail landscape, as well as macroeconomic events may have masked some of these
trends in recent periods and may continue to impact these trends in the future. For example, we expect that the closure of
Rite Aid stores, which is reflective of the changing retail pharmacy landscape, will adversely impact our revenues in the year
ending December 31, 2026. As an extension of the changing retail pharmacy landscape, we have seen and continue to
expect heightened renegotiations between pharmacies and PBMs as a result of the pharmacies' increased focus on
rationalizing their spending, which in turn has had and may continue to have an adverse impact on our prescription
transactions revenue. The cumulative effects of such factors could result in large fluctuations and unpredictability in our
quarterly and annual results of operations. As a result, comparing our results of operations on a period-to-period basis may
not be meaningful and investors should not rely on our past results as an indication of our future performance.
This variability and unpredictability could also result in our failing to meet the expectations of industry or financial
analysts or investors for any period. If our revenue or results of operations fall below the expectations of analysts or
investors or below any guidance we may provide, or if the guidance we provide is below the expectations of analysts or
investors, the price of our Class A common stock could decline substantially. Such a stock price decline could occur even
when we have met any previously publicly stated guidance we may provide.
We may be unable to manage our future growth effectively, which could make it difficult to execute our business
strategy.
In the past, we experienced rapid growth in our business operations and the number of consumers that use our
offerings, and we may experience such growth in the future. This historical growth placed, and may in the future place,
significant demands on our management and our operational and financial infrastructure. Our ability to manage our future
growth effectively and to integrate new employees, technologies and acquisitions into our existing business may require us
to expand our operational and financial infrastructure and to continue to retain, attract, train, motivate and manage
employees. Management of growth is particularly difficult when employees work from home as a result of our hybrid/remote
workplace. Growth could strain our ability to develop and improve our operational, financial and management controls,
enhance our reporting systems and procedures, recruit, train and retain highly skilled personnel, and maintain consumer
satisfaction. Additionally, if we do not effectively manage the growth of our business and operations, the quality of our
platform and offerings could suffer, which could negatively affect our reputation and brand, business, financial condition, and
results of operations.
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Risks Related to Our Business
We may be unsuccessful in achieving broad market education and changing consumer purchasing habits.
Our success and future growth largely depend on our ability to increase consumer awareness of our platform and
offerings, and on the willingness of consumers to utilize our platform to access information, discounted prices for prescription
medications and other healthcare products and services. We believe the vast majority of consumers make purchasing
decisions for healthcare products and services on the basis of traditional factors, such as insurance coverage, availability at
nearby pharmacies, and availability of nearby medical testing. This traditional decision-making process does not always
account for restrictive and complex insurance plans, high deductibles, expensive co-pays, and other factors, such as
discounts or savings available at alternative pharmacies or practices. To effectively market our platform, we must educate
consumers about the various purchase options and the benefits of using GoodRx codes when purchasing prescription
medications and other healthcare products and services. We focus our marketing and education efforts on consumers, but
also aim to educate and inform healthcare providers, pharmacists and other participants that interact with consumers,
including at the point of purchase. However, we cannot assure you that we will be successful in changing consumer
purchasing habits or that we will achieve broad market education or awareness among consumers. Even if we are able to
raise awareness among consumers, they may be slow in changing their habits and may be hesitant to use our platform for a
variety of reasons, including:
•lack of experience with our Company and platform, and concerns that we are relatively new to the industry;
•perceived health, safety or quality risks associated with the use of a new platform and applications to shop for
discounted prices for prescription medications;
•lack of awareness that there is a disparity of pricing for prescription medicines and other medical products and
services;
•perception that our platform does not provide adequate discounted prices or only offers savings for a limited
selection of prescription medications;
•perception that discounted prices offered through our platform are less competitive than insurance coverage;
•perception regarding acceptance rates of pharmacies for our GoodRx codes available through our platform,
such as what occurred in connection with the grocer issue;
•traditional or existing relationships with pharmacies, pharmacists, or other providers that sell healthcare
products and services;
•concerns about the privacy and security of the data that consumers share with or through our platform, such as
in relation to our FTC Order to resolve all claims and allegations arising out of or relating to the FTC's
investigation into our privacy and security practices;
•competition and negative selling efforts from competitors, including competing platforms and price matching
programs; and
•perception regarding the time and complexity of using our platform or using and applying our GoodRx codes
available through our platform at the point of purchase.
If we fail to achieve broad market education of our platform and/or the options for purchasing healthcare products and
services, or if we are unsuccessful in changing consumer purchasing habits, our business, financial condition and results of
operations would be adversely affected.
We may be unable to continue to attract, acquire, and retain consumers, or may fail to do so in a cost-effective
manner.
Our success depends in part on our ability to cost-effectively attract and acquire new consumers, retain our existing
consumers, and encourage our consumers to continue to utilize our platform when making purchasing decisions for
prescription medications and other healthcare products and services. To expand our base of consumers, we must appeal to
consumers who have historically used traditional outlets for their healthcare products and services, and who may be
unaware of the possibility or benefits of using discounted prices to purchase healthcare products and services outside of
insurance programs. We have made significant investments related to consumer acquisition and expect to continue to spend
significant amounts to acquire additional consumers. We cannot assure you that this spending will be effective or that
revenue from new consumers that we acquire will ultimately exceed the cost of acquiring those consumers. Alternatively, we
have and may continue to focus on the efficiency of our spending on customer acquisition related strategies, which may
impact our ability to acquire or retain consumers. If we fail to deliver reliable and significant discounted prices for prescription
medications, we may be unable to acquire or retain consumers. If we are unable to acquire or retain consumers who use our
platform in volumes and with recurrence sufficient to grow our business, we may be unable to maintain the scale necessary
for operational efficiency and to drive beneficial and self-reinforcing network effects across the broader healthcare
ecosystem, including pharmacies, PBMs, and pharma manufacturers. Consequently, we may not be able to present the
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same quality or range of solutions on our platform or otherwise, which may adversely impact consumer interest in our
platform, in which case our business, financial condition, and results of operations would be adversely affected.
We believe that our paid and non-paid marketing initiatives have been critical in promoting consumer awareness of our
platform and offerings, which in turn has driven new consumer growth and increased the extent to which existing consumers
have used our platform. Our paid marketing initiatives include television, search engine marketing, mail to consumers and
healthcare provider offices, email, display, radio and magazine advertising, and social media marketing as well as consumer
discounts and incentives. For example, we actively market our platform and offerings through television and we rely on
direct mail to distribute marketing materials to consumers. If we are unable to cost-effectively market to consumers, or if we
elect to reduce our spending to drive traffic to our apps and websites, our ability to acquire new consumers and our financial
condition would be materially and adversely affected. We also buy search advertising primarily through search engines such
as Google and Bing, and use internal analytics and external vendors for bid optimization and channel strategy. Our non-paid
advertising efforts include search engine optimization, non-paid social media, and e-mail marketing. Search engines
frequently modify their search algorithms and these changes can cause our websites to receive less favorable placements,
which could reduce the number of consumers who visit our websites. The costs associated with advertising through search
engines can also vary significantly from period to period, and have generally increased over time. We may be unable to
modify our strategies in response to any future search algorithm changes made by the search engines, which could require
a change in the strategy we use to generate consumer traffic to our websites. In addition, our websites must comply with
search engine guidelines and policies, which are complex and may change at any time. If we fail to follow such guidelines
and policies properly, search engines may rank our content lower in search results or could remove our content altogether
from their indices. Antitrust developments pertaining to search engines could also adversely impact the effectiveness of our
content. Although consumer traffic to our apps is not reliant on search results, growth in mobile device usage may not
decrease our overall reliance on search results if consumers use our mobile websites rather than our apps or use search to
initially find our apps. In fact, growth in mobile device usage may exacerbate the risks associated with how and where our
websites are displayed in search results because mobile device screens are smaller than desktop computer screens and
therefore display fewer search results.
In addition, we actively encourage new and existing consumers to use our apps to access our platform. We believe that
our apps help to facilitate increased consumer retention and that consumers that access our platform through our apps are
more likely to utilize GoodRx codes at the final point of purchase. While we have invested and will continue to invest in the
development of our apps to improve consumer utilization, there can be no assurance that our efforts to drive adoption and
use of our apps will be effective.
To remain competitive and encourage the use of our platform, we have in the past offered and may continue to offer
incentives to certain consumers that further reduce discounted prices offered on our platform. We cannot assure that offering
such incentives will be successful in attracting new and recurring consumers or that we will be able to maintain competitive
discounted prices in the future to retain such consumers. If we are unable to successfully manage these incentives, our
financial performance may be adversely impacted.
Our consumer education, acquisition, and retention initiatives can be expensive and may be ineffective in driving
consumer education or interest in our platform. Further, if new or existing consumers do not perceive that the discounted
prices presented through our platform are reliable or meaningful, or if we fail to offer new and relevant offerings and
application features, we may not be able to attract or retain consumers or increase the extent to which they use our platform
and applications for other or future purchases. If we fail to continue to grow our base of consumers, retain existing
consumers or increase consumer engagement, our business, financial condition, and results of operations will be adversely
affected.
We rely significantly on our prescription transactions offering and may not be successful in expanding or
maintaining our offerings within our markets, particularly the U.S. prescriptions market, or to other segments of the
healthcare industry.
To date, the majority of our revenue has been derived from our prescription transactions offering. When a consumer
uses a GoodRx code to fill a prescription and saves money compared to the list price at that pharmacy, we receive fees from
our partners, including PBMs, pharma manufacturers and pharmacies, as applicable. Revenue from our prescription
transactions offering represented 68%, 73%, and 73% of our revenue for the years ended December 31, 2025, 2024, and
2023, respectively. Substantially all of this revenue was generated from consumer transactions at brick-and-mortar
pharmacies. The introduction of competing offerings with lower prices for consumers, fluctuations in prescription prices,
mass closures of retail pharmacy chain locations, changes in consumer purchasing habits, including an increase in the use
of mail delivery prescriptions, changes in our relationships with industry participants and our various partners, changes in the
regulatory landscape, and other factors could result in changes to our contracts or a decline in our total revenue, which have
had and may continue to have an adverse effect on our business, financial condition, and results of operations. Because we
derive a majority of our revenue from our prescription transactions offering, any material decline in the use of such offering
or in the fees we receive from our partners in connection with such offering would have a pronounced impact on our future
revenue and results of operations, particularly if we are unable to expand our offerings overall. For example, in the first half
of 2025, we observed that one of our PBM partners began offering other third-party discount cards on their platform. This
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increased the direct competition we faced at the point-of-sale and had an adverse impact on our prescription transactions
revenue.
We seek to expand our offerings within the prescriptions market and the pharma direct market in the United States, and
we are actively investing in these growth areas. We also continue to focus on the optimization of our existing partnerships
and have entered into, and may in the future enter into, new or revised agreements with industry participants, and have also
terminated, and may in the future terminate, existing arrangements with industry participants. However, expanding our
offerings, entering into new markets and entering into new partnerships requires substantial additional resources, and our
ability to succeed is not certain. During and following periods of active investment in such offerings, markets, relationships
and partnerships, we may experience a decrease in profitability or margins, particularly if the area of investment generates
lower margins than our other offerings. As we attempt to expand our offerings and optimize our partnerships, we may need
to take additional steps, such as hiring additional personnel, partnering with new third parties and incurring considerable
research and development expenses, in order to pursue such expansion and optimization successfully. Any such expansion
and/or optimization would be subject to additional uncertainties and would likely be subject to additional laws and
regulations. As a result, we may not be successful in future efforts to expand into or achieve profitability from new markets,
new business models or strategies, new partnerships or new offering types, and our ability to generate revenue from our
current offerings and continue our existing business may be negatively affected. If any such expansion does not enhance
our ability to maintain or grow revenue or recover any associated development costs, our business, financial condition, and
results of operations could be adversely affected.
Our business is subject to changes in medication pricing and is significantly impacted by pricing structures
negotiated by industry participants.
Our platform aggregates and analyzes pricing data from a number of different sources. The discounted prices that we
present through our platform are based in large part upon pricing structures negotiated by industry participants. Although
some of our contracts with certain of our partners contain provisions related to discount pricing, we do not control the overall
pricing strategies of pharma manufacturers, wholesalers, PBMs, and pharmacies, each of which is motivated by
independent considerations and drivers that are outside our control and has the ability to set or significantly impact market
prices for different prescription medications. While we have contractual and non-contractual relationships with certain
industry participants, such as pharmacies, PBMs, and pharma manufacturers, these and other industry participants often
negotiate complex and multi-party pricing structures, and we have no control over these participants and the policies and
strategies that they implement in negotiating these multi-party pricing structures. For example, as an extension of the
changing retail pharmacy landscape in recent years, we have seen and continue to expect heightened renegotiations
between pharmacies and PBMs, including changes in retailer reimbursement models, as a result of the pharmacies'
increased focus on rationalizing their spending.
Pharma manufacturers generally direct medication pricing by setting medication list prices and offering rebates and
discounts for their medications. List prices are impacted by, among other things, market considerations such as the number
of competitor medications and availability of alternative treatment options. Wholesalers can impact medication pricing by
purchasing medications in bulk from pharma manufacturers and then reselling such medications to pharmacies. PBMs
generally impact medication pricing through their bargaining power, negotiated rebates with pharma manufacturers, and
contracts with different pharmacy providers and health insurance companies. PBMs work with pharmacies to determine the
negotiated rate that will be paid at the pharmacy by consumers. We also work with pharmacies with which we have
contractual arrangements to offer discount prices to consumers. Medication pricing is also impacted by health insurance
companies and the extent to which a health insurance plan provides for, among other things, covered medications, preferred
tiers for different medications, and high or low deductibles. To the extent future regulation impacts the prices that PBMs can
charge, that could adversely impact our business. A majority of the utilization of our platform relates to generic medications.
Our ability to present discounted prices through our platform, the value of any such discounts and our ability to generate
revenue are directly affected by the pricing structures in place amongst these industry participants, and changes in
medication pricing and in the general pricing structures that are in place could have an adverse effect on our business,
financial condition, and results of operations. For example, changes in the negotiated rates of the PBMs on our platform at
pharmacies could negatively impact the prices that we present through our platform, and changes in insurance plan
coverage for specific medications could reduce demand for and/or our ability to offer competitive discounts for certain
medications, any of which could have an adverse effect on our ability to generate revenue and business. In addition,
changes in the fee and pricing structures among industry participants, whether due to regulatory requirements, executive
actions, tariffs, competitive pressures, or otherwise, that reduce or adversely impact fees generated by PBMs or directly by
us through partner pharmacies would have an adverse effect on our ability to generate revenue and business. Due in part to
existing pricing structures, we generate a smaller portion of our revenue through contracts with pharma manufacturers and
other intermediaries. Changes in the roles of industry participants and in general pricing structures, increased regulatory
scrutiny and action against industry participants, as well as price competition among industry participants, could have an
adverse impact on our business. For example, integration of PBMs and pharmacy providers could result in pricing structures
whereby such entities would have greater pricing power and flexibility or industry players could implement direct to
consumer initiatives that could significantly alter existing pricing structures, either of which would have an adverse impact on
our ability to present competitive and low prices to consumers and, as a result, the value of our platform for consumers and
our results of operations.
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We generally do not control the categories and types of prescriptions for which we can offer savings or discounted
prices.
The categories and brands of medications for which we can present discounted prices are largely determined by PBMs,
pharmacies and pharma manufacturers. PBMs work with insurance companies, employers, and other organizations and
enter into contracts with pharmacies to determine negotiated rates. They also negotiate rebates with pharma manufacturers.
The terms that various PBMs negotiate with each pharmacy are generally different and result in different negotiated rates
available via each PBM’s network, all of which is outside our control. Different PBMs prioritize and allocate discounts across
different medications, and continuously update these allocations in accordance with their internal strategies and
expectations. As we have agreements with PBMs to market their negotiated rates through our platform, our ability to present
discounted prices is in part dependent upon the arrangements that such PBMs have negotiated with pharmacies and upon
the resulting availability and allocation of discounts for medications subject to these arrangements. We also have
agreements with partner pharmacies to offer discount prices to consumers and such discount prices are subject to
negotiated terms and conditions. In general, industry participants are less likely to allocate or provide discounts or rebates
on brand medications that are covered by patents. As a result, the discounted prices that we are able to present for brand
medications may not be as competitive as for generic medications. Similar to the total prescription volume in the United
States, the majority of the utilization of our platform relates to generic medications.
Changes in the categories and types of medications for which we can present pricing through our platform could have
an adverse effect on our business, financial condition and results of operations. In addition, demand for our offerings and the
use and utility of our platform is impacted by the value of the discounts that we are able to present and the extent to which
there is inconsistency in the price of a particular prescription across the market. If pharmacies, PBMs or others do not
allocate or otherwise facilitate adequate discounts for these medications, or if there is significant price similarity or
competition across PBMs and pharmacies, the perceived value of our platform and the demand for our offerings would
decrease and there would be a significant impact on our business, financial condition and results of operations.
We rely on a limited number of industry participants.
There is currently significant concentration in the U.S. healthcare industry, and in particular there are a limited number
of PBMs, including pharmacies’ in-house PBMs, and a limited number of national pharmacy chains. If we are unable to
retain favorable contractual arrangements and relationships with our PBM partners and partner pharmacies, including any
successor PBMs or pharmacies should there be further consolidation of PBMs or pharmacies, we may lose them as
customers and partners, as applicable, or the negotiated rates provided by such PBMs or directly through such partner
pharmacies may become less competitive, which could have an adverse impact on the discounted prices we present
through our platform. Additionally, there is a limited number of counterparties and vendors who provide us with prescription
transaction processing services that support our business. If our current counterparties and vendors were to stop providing
services on acceptable terms, the resulting disruption could also have an adverse effect on our business.
A limited number of PBMs generate a significant percentage of the discounted prices that we present through our
platform and, as a result, we generate a significant portion of our revenue from contracts with a limited number of PBMs. We
work with dozens of PBMs that maintain cash networks and prices, and the number of PBMs we work with has increased
over time, limiting the extent to which any one PBM contributes to our overall revenue; however, we may not expand beyond
our existing PBM partners and the number of our PBM partners may even decline. Revenue from each PBM fluctuates from
period to period as the discounts and prices available through our platform change, and different PBMs experience
increases and decreases in the volume of transactions processed through their respective networks. Further, some of our
contracts contain exclusivity provisions, which could limit our ability to negotiate pricing terms as market prices fluctuate. Our
three largest PBM customers accounted for 22% of our revenue in 2025, 27% of our revenue in 2024, and 32% of our
revenue in 2023. In 2025 and 2024, no single PBM customer accounted for more than 10% of our revenue. In 2023, one
PBM customer accounted for more than 10% of our revenue. The loss of any of these large PBM customers may negatively
impact the breadth of the pricing that we are able to offer consumers.
Most of our PBM contracts provide for monthly payments from PBMs. Our PBM contracts generally can be divided into
two categories: PBM contracts featuring a percentage of fee arrangement, where fees are a percentage of the fees that
PBMs charge to pharmacies, and PBM contracts featuring a fixed fee per transaction arrangement. Our percentage of fee
contracts often also include a minimum fixed fee per transaction. The majority of our PBM contracts are percentage of fee
contracts, and a minority of our contracts provide for fixed fee per transaction arrangements. Our PBM contracts generally
have a tiered fee structure based on volume generated in the applicable payment period. Our PBM contracts do not contain
minimum volume requirements, and thus do not provide for any assurance as to minimum payments to us. Our PBM
contracts generally renew automatically. In addition, our PBM contracts generally provide for continuing payments to us after
such contracts are terminated. Some of our PBM contracts provide for these continuing payments for so long as negotiated
rates related to the applicable PBM contract continue to be used after termination, and other contracts provide for these
continuing payments for specified multi-year payment periods after termination. Between contract renewals, our current
contracts generally provide for limited termination rights.
In addition, our PBM contracts typically include provisions that prevent PBMs from circumventing our platform,
redirecting volumes outside of our platform, and other protective measures. For example, our PBM contracts contain
provisions that limit PBM use of our intellectual property related to our brand and platform and require PBMs to maintain the
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confidentiality of our data. While we have consistently renewed and extended the term of our contracts with PBMs over time,
there can be no assurance that PBMs will enter into future contracts or renew existing contracts with us, or that any future
contracts they enter into will be on equally favorable terms. Changes that limit or otherwise negatively impact our ability to
receive fees from these partners would have an adverse effect on our business, financial condition, and results of
operations. Consolidation of PBMs or the loss of a PBM could negatively impact the discounts and prices that we present
through our platform and may result in less competitive discounts and prices on our platform.
Our consumers use GoodRx codes at the point of purchase at nearby pharmacies. The U.S. prescriptions market is
dominated by a limited number of national and regional pharmacy chains, such as CVS, Kroger, Walmart and Walgreens.
These pharmacy chains represent a significant portion of overall prescription medication transactions in the United States.
Similarly, a significant portion of our discounted prices are used at a limited number of pharmacy chains and, as a result, a
significant portion of our revenue is derived from transactions processed at a limited number of pharmacy chains. We have
entered, and may in the future enter, into direct contractual arrangements with pharmacies, which we refer to as our partner
pharmacies, to offer discount prices to consumers at such pharmacies. Further, if counterparties and vendors we use to
process prescriptions were to stop providing services to us on acceptable terms, we may be unable to procure alternative
services from other counterparties or vendors in a timely and efficient manner and on similar acceptable terms. Accordingly,
we may incur significant costs to resolve any such disruptions in services, which could have a material adverse effect on our
business.
In recent years, many pharmacy chains have announced plans to close thousands of retail pharmacy locations and
thousands of retail pharmacy locations have closed. We derive a significant portion of our revenue from transactions
processed at pharmacy chains. If our consumers are unable to access retail pharmacies, they may seek other options to fill
their prescriptions, such as through mail delivery services, or choose not to fill or refill existing prescriptions, which may
adversely impact our revenues. We do not generate a significant percentage of revenue from mail delivery service. To the
extent consumer preferences change, including as a result of public health concerns or due to retail pharmacy closures, we
may not be able to accommodate sufficient demand for mail delivery service which may have an adverse effect on our
business, financial condition, and results of operations.
The impact of the changing retail pharmacy landscape is currently unknown, but may adversely affect our business,
financial condition, and results of operations.
If one or more pharmacy chains terminates its cash network contracts with PBMs that we work with, enters into cash
network contracts with PBMs that we work with at less competitive rates or, to the extent a pharmacy chain has entered into
a direct contractual arrangement with us, terminates such contractual arrangement, our business may be negatively
affected. For example, a grocery chain took actions in 2022 that impacted acceptance of discounted pricing for a subset of
prescription drugs from PBMs and whose pricing we promote on our platform. This had a material adverse impact on our
results of operations. Such actions could be exacerbated by further consolidation of PBMs or pharmacy chains. If such
changes, individually or in the aggregate, are material, they would have an adverse effect on our business, results of
operations and financial condition. If there is a decline in revenue generated from any of the PBMs or pharmacies we
contract with, as a result of consolidation of PBMs or pharmacy chains, pricing competition among industry participants or
otherwise, if we are unable to maintain or grow our relationships with PBMs and pharmacies or if we lose one or more of the
PBMs or partner pharmacies we contract with and cannot replace such PBM or partner pharmacy in a timely manner or at
all, there would be an adverse effect on our business, financial condition, and results of operations.
We operate in a very competitive industry and we may fail to effectively differentiate our offerings and services
from those of our competitors, which could impair our ability to attract and acquire new consumers and retain
existing consumers.
The U.S. prescriptions market, pharma direct market and telehealth market are highly competitive and subject to
ongoing innovation and development. Our ability to remain competitive is dependent upon our ability to appeal to consumers
and attract and acquire new consumers to our platform, including through our apps. Our ability to remain competitive is also
dependent upon our ability to retain existing consumers and encourage them to continue to use our platform as a tool for
purchasing healthcare products and services. We operate in a highly competitive environment and in an industry that is
subject to significant market pressures brought about by consumer demands, a limited number of major PBMs and
pharmacy operators, fluctuations in medication pricing, legislative and regulatory activity, significant changes in demand and
interest in telehealth, and other market factors.
We compete with companies that provide savings on prescriptions, as well as companies that offer advertising and
market access for pharma manufacturers. Within the prescriptions discounts and price comparison market, our competition
is fragmented and consists of competitors that are larger and smaller than us in scale, including large e-commerce
companies. There can be no assurance that competitors will not develop and market similar offerings to ours, or that
industry participants, such as integrated PBMs and pharmacy providers, will not seek to leverage our platform to drive
consumer demand and traffic to their networks and eventually away from, or outside of, our platform. We may face
increased competition from those that attempt to replicate our business model or marketing tactics, such as discount
websites, e-commerce websites, apps, cash back and loyalty programs, and new comparison shopping sites from various
industry participants, any of which could impact our ability to attract and retain consumers. Our pharma direct offering
competes for advertising and market access budget allocation against traditional direct to consumer and other platforms on
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which pharmaceutical manufacturers can reach consumers, such as through physicians, health-related apps and websites,
television advertisements, and services supporting patient access. We also face competition in the telehealth market from a
range of companies, including providers of telehealth services that are larger than us, and which usually provide telehealth
services on behalf of employers and insurance plans. A competitor’s offerings, reputation, and marketing strategies can have
a substantial impact on its ability to attract and retain consumers, and we may face competition from existing or new market
entrants with greater resources and better offerings, pricing, reputations, and market strategies, which would have a
negative impact on our business. Any such competitor may be better able to respond quickly to new technologies, develop
deeper relationships with consumers and industry participants, including pharmacies, PBMs, and telehealth providers, or
offer more competitive discounts or pricing. While we negotiate protective terms related to our discounted prices, our
intellectual property and our consumers, in our contracts with PBMs and partner pharmacies, such contracts are not
exclusive and PBMs as well as our partner pharmacies can work with others in the industry to drive volume to their
networks. For example, our contracts include provisions that, among others, restrict the ability of PBMs and our partner
pharmacies to compete with us and solicit our consumers. We aim to differentiate our business through scale and by
innovating and delivering offerings and services that demonstrate value to our new and existing consumers, particularly in
response to frequent changes in medication pricing and the cost of medical care. Our failure to innovate and deliver
offerings and services that demonstrate value, or to market such offerings and services effectively, may affect our ability to
acquire or retain consumers, which could have a material adverse effect on our business, results of operations and financial
condition.
We may also face competition from companies that we do not yet know about. If existing or new companies develop or
market an offering similar to ours, develop an entirely new solution for access to affordable healthcare, acquire one of our
existing competitors or form a strategic alliance with one of our competitors or other industry participants, our ability to
compete effectively could be significantly impacted, which would have a material adverse effect on our business, results of
operations, and financial condition.
Our estimated addressable market is subject to inherent challenges and uncertainties. If we overestimate the size
of our addressable market or the various markets in which we operate, our future growth opportunities may be
limited.
Our TAM is based on internal estimates and third-party estimates regarding the size of each of the U.S. prescriptions
market and pharma direct market, and is subject to significant uncertainty and is based on assumptions that may not prove
to be accurate. In particular, we calculated the TAM for our prescription opportunity based on data from the Centers for
Medicare & Medicaid Services regarding the expected size of U.S. prescription expenditures in 2024 and 2025, plus our
estimated value of prescriptions that are written but not filled, which we estimate to range between 20% to 30% of the overall
prescription opportunity. These estimates are based on third-party reports and are subject to significant assumptions and
estimates. Additionally, we calculated the TAM for our pharma direct opportunity based on internal data regarding the
amount of advertising and marketing spending by U.S. pharma manufacturers relating to prescription drugs in 2022. These
estimates, as well as the estimates and forecasts elsewhere in this Annual Report on Form 10-K relating to the size and
expected growth of the markets in which we operate, may change or prove to be inaccurate. While we believe the
information on which we base our TAM is generally reliable, such information is inherently imprecise. In addition, our
expectations, assumptions and estimates of future opportunities are necessarily subject to a high degree of uncertainty and
risk due to a variety of factors, including those described herein. If third-party or internally generated data prove to be
inaccurate or we make errors in our assumptions based on that data, our future growth opportunities may be affected.
Additionally, our TAM for our prescription transactions offering includes medications for which we are currently not able to
offer savings on the prices paid by non-insured and insured consumers and for which we may not be able to provide savings
on in the future. If our TAM, or the size of any of the various markets in which we operate, proves to be inaccurate, our future
growth opportunities may be limited and there could be a material adverse effect on our prospects, business, financial
condition and results of operations.
We calculate certain operational metrics using internal systems and tools and do not independently verify such
metrics. Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in
such metrics may harm our reputation and negatively affect our business.
We publicly disclose, including in our SEC filings, certain operational metrics, such as Monthly Active Consumers,
Monthly Visitors, subscribers, subscription plans, savings, and other metrics. We calculate these metrics using internal
systems and tools that are not independently verified by any third party. These metrics may differ from estimates or similar
metrics published by third parties or other companies due to differences in sources, methodologies or the assumptions on
which we rely. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics
have evolved and may continue to change over time, which could result in unexpected changes to our metrics, including the
metrics we publicly disclose on an ongoing basis. If the internal systems and tools we use to track these metrics undercount
or overcount performance or contain algorithmic or other technical errors, the data we present may not be accurate. While
these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of
measurement, there are inherent challenges in measuring savings, the use of our platform and offerings, and other metrics.
For example, we believe that there are consumers who access our offerings through multiple accounts or channels, and that
there are groups of consumers, such as families, who access our offerings through single accounts or channels, both of
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which impact our number of Monthly Visitors, as each channel is counted independently. In addition, limitations or errors with
respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details
of our business, which would affect our long-term strategies. If our operating metrics or our estimates are not accurate
representations of our business, or if investors do not perceive our operating metrics to be accurate, or if we discover
material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our operating and
financial results could be adversely affected.
Our telehealth related products and services are dependent on our ability to maintain our relationship with our
telehealth provider network, including our affiliated professional entities, and the ability of such entities to recruit
qualified telehealth providers.
The success of our telehealth related products and services depend in part on our continued ability to maintain our
relationship with our telehealth provider network, including our affiliated physician-owned professional entities that we
contract with to deliver our telehealth offering, and the ability of our affiliated professional entities to recruit qualified
telehealth providers. There is significant competition in the telehealth market for qualified telehealth providers, and if our
affiliated professional entities are unable to recruit or retain an adequate number of physicians and other healthcare
professionals, whether directly or indirectly through staffing providers, such as Wheel, which provides a network of
healthcare providers to our affiliated professional entities, it could negatively impact our telehealth offering. Moreover, if one
or more of our relationships with these affiliated professional entities were to end, it could have a material adverse effect on
our business, financial condition and results of operations and/or cause us to cease our telehealth related products and
services.
Negative media coverage could adversely affect our business.
We receive a high degree of media coverage in the United States. Unfavorable publicity regarding, for example, the
healthcare industry, healthcare costs, industry competition, litigation, or regulatory activity, the actions of the entities included
or otherwise involved with our platform, negative perceptions of prescriptions included on our platform, medication pricing,
pricing structures in place amongst the industry participants, pharmacy closures, our relationships with pharmacies, PBMs,
and pharma manufacturers, our data privacy or data security practices, our platform or our revenue could materially
adversely affect our reputation. Such negative publicity also could have an adverse effect on our ability to attract and retain
consumers, partners, or employees, and result in decreased revenue, which would materially adversely affect our business,
financial condition, and results of operations.
We may be unable to successfully respond to changes in the market for prescription pricing, and may fail to
maintain and expand the use of GoodRx codes through our apps and websites.
In recent years, we believe that consumer preferences and access to prescription medication discounts has increasingly
shifted from traditional offline or analog channels, such as newspapers and by direct mail, to digital or electronic channels,
such as apps, websites, and by email. It is difficult to predict whether the pace of the transition from traditional to digital
channels will continue at the same rate and the degree to which the growth of the digital channel will continue. While we
actively promote the use of our apps and websites, if the demand for digital channels does not continue to grow as we
expect, or if we fail to successfully address this demand through our platform, our business could be harmed. Consumer
access and preferences for purchasing medications may evolve in ways which may be difficult to predict. Further, if PBMs or
pharmacy operators elect to directly distribute pricing information through their own digital channels, or if new or existing
competitors are faster or better at addressing consumer demand and preferences for digital channels, or are able to offer
more accessible discounted prices to consumers, our ability and success in presenting discounted prices on our platform
may be impeded and our business, financial condition, and results of operations would be adversely affected. For example,
in the first half of 2025, we observed that one of our PBM partners began offering other third-party discount cards on their
platform. This increased the direct competition we faced at the point-of-sale and had an adverse impact on our prescription
transactions revenue. If we cannot maintain a sufficient offering of discounted prices on our platform, new consumers and
existing consumers may perceive our platform as less relevant, consumer traffic to our platform could decline and, as a
result, new consumers and existing consumers may decrease their use of our platform or subscription offerings, which
would affect our contracts with certain partners included or otherwise involved with our platform and have a material adverse
effect on our business, financial condition, and results of operations.
We may be unable to maintain a positive perception regarding our platform or maintain and enhance our brand.
A decrease in the quality or perceived quality of the discounted prices available through our platform, or of our
telehealth offering, could harm our reputation and damage our ability to attract and retain consumers and partners included
or otherwise involved with our platform, which could adversely affect our business. Many factors that impact the perception
of our offerings are beyond our control.
Maintaining and enhancing our GoodRx brand and the branding and image of our various offerings, such as GoodRx
Care, is critical to our business and our ability to attract new and existing consumers to our platform. We expect that the
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promotion of our brand will require us to make substantial investments and as our market becomes more competitive, these
branding initiatives may become increasingly difficult and expensive. We have and may continue to decide to reduce such
investments, which may impact our ability to acquire or retain consumers, or other partners included or otherwise involved
with our platform. The successful promotion of our brand will depend largely on our marketing and public relations efforts. If
we do not successfully maintain and enhance our brand, we could lose consumer traffic, which could, in turn, cause PBMs,
partner pharmacies, pharma manufacturers and others to terminate or reduce the extent of their relationship with us. Our
brand promotion activities may not be successful or may not yield net revenues sufficient to offset this cost, which could
adversely affect our reputation and business.
We are obligated to maintain effective internal control over financial reporting and any failure to maintain effective
internal controls may cause us to not be able to accurately report our financial condition or results of operations,
which may adversely affect investor confidence in our company and, as a result, the value of our Class A common
stock.
As a public company, we are required, pursuant to Section 404 of The Sarbanes-Oxley Act of 2002, or Section 404, to
furnish a report by management on the effectiveness of our internal control over financial reporting. This assessment
includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
We are also required to comply with, among other requirements, the auditor attestation requirements of Section 404.
Our compliance with Section 404 requires that we incur substantial costs and expend significant management efforts.
We have engaged outside consultants who function in the capacity of an internal audit group, and we may engage with
additional consultants, accounting and financial staff with appropriate public company experience and technical accounting
knowledge as needed to maintain the system and process documentation necessary to perform the evaluation needed to
comply with Section 404.
We have had material weaknesses in our internal control over financial reporting in the past, and we cannot assure you
that there will not be material weaknesses in our internal control over financial reporting in the future. Any failure to maintain
internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results
of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent
registered public accounting firm determines that we have a material weakness in our internal control over financial
reporting, we may not be able to accurately report our financial condition or results of operations, which could cause
investors to lose confidence in our company, the market price of our Class A common stock could decline, and we could be
subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy future material
weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required
of public companies, could also restrict our future access to the capital markets.
Use of social media, emails, and text messages may adversely impact our reputation, subject us to fines or other
penalties or be an ineffective source to market our offerings.
We use social media, emails, and text messages as part of our omnichannel approach to marketing and consumer
outreach. Changes to these social networking services’ terms of use or terms of service that limit promotional
communications, restrictions that would limit our ability or our consumers’ ability to send communications through their
services, disruptions or downtime experienced by these social networking services or reductions in the use of or
engagement with social networking services by consumers and potential consumers could also harm our business. As laws
and regulations rapidly evolve to govern the use of these channels, the failure by us, our employees or third parties acting at
our direction to abide by applicable laws and regulations in the use of these channels could adversely affect our reputation
or subject us to litigation, fines, or other damages or penalties. In addition, our employees or third parties acting at our
direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of
intellectual property, as well as the public disclosure of proprietary, confidential, or personal information (including sensitive
or health-related information) ("Confidential Information") of our business, employees, consumers or others. Any such
inappropriate use of social media, emails, and text messages could also cause reputational damage and adversely affect
our business.
Our consumers may engage with us online through our social media pages, including, for example, our presence on
Facebook, Instagram, X (formerly known as Twitter), and TikTok, by providing feedback and public commentary about all
aspects of our business. Information concerning us or our offerings and brands, whether accurate or not, may be posted on
social media pages at any time and may have a disproportionately adverse impact on our brand, reputation, or business.
The harm may be immediate without affording us an opportunity for redress or correction and could have a material adverse
effect on our business, financial condition, results of operations, and prospects.
Additionally, we use emails and text messages to communicate with consumers and we collect consumer data,
including email addresses and phone numbers, to further our marketing efforts with such consenting consumers. If we fail to
adequately or accurately collect such data or if our data collection systems are breached, our business, financial condition,
and results of operations could be harmed. Further, any failure, or perceived failure, by us, or any third parties processing
such data, to comply with privacy policies or with any federal or state privacy or consumer protection-related laws,
regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which
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we may be subject or other legal obligations relating to privacy or consumer protection would adversely affect our reputation,
brand and business, and may result in claims, proceedings or actions against us by governmental entities, consumers,
suppliers or others or other liabilities or may require us to change our operations and/or cease using certain data sets.
We rely on information technology to operate our business and maintain competitiveness, and must adapt to
technological developments or industry trends.
Our ability to attract new consumers and increase revenue from our existing consumers depends in large part on our
ability to enhance and improve our existing offerings, increase adoption and usage of our offerings, and introduce new
features and capabilities. The markets in which we compete are relatively new and subject to rapid technological change,
evolving industry standards, and changing regulations, as well as changing consumer needs, requirements and preferences.
The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely
basis.