GoodRx, a consumer drug pricing and digital health company, said it resolved an issue with a national grocery chain that was hurting its business.
According to media and analyst reports, the grocery chain in question was Kroger, although GoodRx would not confirm on the call.
GoodRx said the issue was resolved while reporting its second quarter earnings. Earlier this year, GoodRx said an unnamed grocery chain stopped its accepting discounts at the point of sale and as a result, it reduced its quarterly guidance by $30 million because the chain represented a sizable portion of its prescription transactions business.
In its second-quarter earnings report Monday, GoodRx said the issue was resolved but did not provide details. The company said it didn’t increase its guidance for the third quarter or the full year because it didn’t know how fast the resolution would be communicated the grocery chain’s pharmacies.
“We worked collaboratively with the grocer over the last few months in a way that allows GoodRx and the grocer to jointly serve consumers and satisfy the needs of the grocer,” GoodRx co-CEO Trevor Bezdek said on the earnings call, adding the resolution came last week.
Wall Street welcomed the news. In after-hours trading, GoodRx’s stock was trading at around $11.75 per share, up more than 50% from its Monday of $7.76 per share.
GoodRx’s stock has taken a beating in the last two years. It traded at a high of $56.63 per share in February 2021.
GoodRx’ reported revenue of $191 million, an increase of 9% from the year-ago period. It had a net loss of $1.5 million, compared with year-ago earnings of $31.1 million. Its monthly active users fell from 6 million to 5.8 million, but paid subscription plans increased 8%, to 1,131 from 1,051. Adjusted earnings before interest, taxes, depreciation, and amortization decreased 13% to $47.2 million compared with to $54.6 million.
On the call, Bezdek said the company was disappointed with its performance, even though he lauded its 102% increase in pharma manufacturer solutions-related revenue. He said the company would take a long look at its expenses to improve its cost structure.
“We’re taking a hard look at all of our costs and expenses and reprioritizing how much we spend across the business,” Bezdek said.
