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Vandana Singh

GoodRx Shares Tumble As FY22 Guidance Hit By Grocery Chain Prescription Dispute

  • GoodRx Holdings Inc (NASDAQ:GDRX) shares fell after it expects FY22 revenue to take a hit due to recent actions by one grocery store chain that represents a sizable chunk of its grocery prescription business.
  • The company disclosed that it is unlikely to achieve its full-year guidance after a grocery chain stopped accepting discounts for certain drugs. 
  • In its Q4 earnings report, the company projected revenue to grow 23% in FY22, on top of FY21 sales of $745 million.
  • "We recently recognized a grocery chain had taken actions that impacted acceptance of discounts from most PBMs (pharmacy benefit managers) for a subset of drugs," said Trevor Bezdek, co-founder and co-CEO.
  • "This impacted the acceptance of many PBM discounts for certain drugs at this grocer's stores, which affected many parties, including GoodRx," Bezdek added.
  • GoodRx estimates the grocer issue could cost the company $30 million in revenue in Q2 and now expects Q2 revenue to be about $190 million, well below the Wall Street estimate of $215.6 million.
  • GoodRx also expects Q2 adjusted EBITDA to be impacted roughly dollar for dollar by the revenue shortfall.
  • GoodRx reported Q1 sales of $203.33 million, up 27% Y/Y, beating the consensus of $200.4 million.
  • The company reported an adjusted EPS of $0.10, beating the consensus of $0.08.
  • Price Action: GDRX shares are down 27.80% at $7.76 on the last check Tuesday.
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