An increasingly popular provider of prescription drug coupons is taking itself public soon. GoodRx is preparing for an initial public offering, and the financial disclosures are turning a lot of heads.
GoodRx had been looking for a buyer until a private equity firm, Silver Lake, raised its equity stake in the company to 37% earlier this month. The company filed its prospectus quietly on Aug. 29, without mentioning pricing or how many shares will be offered.
GoodRx earns money from pharmacy benefits managers every time a consumer uses a GoodRx code to fill a prescription. Last September, GoodRx acquired HeyDoctor, a telehealth services provider, but revenue from its prescription drug services still represents 91% of the company's top line.
Flush with cash from its upcoming IPO, GOODRx could begin to pressure Teladoc Health (TDOC 1.81%) by routing consumers to competing telehealth options. GoodRx's Telehealth Marketplace is already duplicating its prescription drug discount code service with physician visits.
You might not expect significant profits from a company that earns nearly all its money providing discount codes at no cost to consumers upfront, but the prospectus GoodRx presented investors suggests the company has carved out an extremely lucrative niche in America's convoluted market for prescription drugs. In 2019 the company produced a $139 million operating profit from just $388 million in top-line revenue.
Since its inception in 2011, GoodRx had been growing by leaps and bounds until COVID-19-related lockdowns put a crimp on pharmacy sales in general. The company recorded 4.9 million monthly active users during the first three months of 2020, a 53% increase over the previous year period. Unfortunately, pandemic-related pressure pushed the average number of monthly active users down to 4.4 million during the three-month period ended Jun. 30, 2020.