After pricing its IPO at $33 a share (above an initial range of $24 to $28), GoodRx opened at $46 and is currently trading at $48.38. That gives the company, which runs a website and mobile apps that consumers use to shop for prescription drug deals, a $21 billion valuation after accounting for outstanding stock options and restricted stock units (RSUs).
GoodRx raised $773 million by selling 23.4 million shares, and existing shareholders sold another 11.2 million. IPO underwriters have an option (likely to be picked up) to buy another 5.2 million shares from the company at the IPO price, and PE firm Silver Lake is buying $100 million worth of shares from GoodRx at the IPO price through a private placement.
Like some other recent tech IPOs, such as Snowflake (SNOW) - Get Report, Unity Software (U) - Get Report and JFrog (FROG) - Get Report, markets are granting GoodRx generous first-day multiples. Shares currently trade for nearly 45 times GoodRx’s revenue for the 12 months ending June 30 ($471.7 million).
Revenue rose 56% in 2019 to $388.2 million and (with COVID-19 acting as a headwind) grew 35% annually during GoodRx’s June quarter to $123.3 million. The company generated $139.7 million in operating income in 2019, and $41.7 million during its June quarter. (source: GoodRx's IPO prospectus)
The lion’s share of GoodRx’s revenue (88% during the June quarter) still comes from what it calls “prescription transaction revenue.” This revenue generally stems from referral fees the company gets from pharmacies when coupons on its website and apps are used to make drug purchases.
However, GoodRx has been trying to diversify its revenue base in recent years. The company now offers a pair of subscription services that provide drug discounts. One, known as GoodRx Gold, is fully managed by the company, while another, known as Kroger Rx Savings Club, is jointly offered with Kroger under a revenue-sharing agreement.
In addition, the company acquired telehealth services provider HeyDoctor in 2019, and it runs a marketplace for third-party telehealth services. The company also gets a measure of revenue from drug manufacturers that use its website and apps to promote their offerings.
GoodRx claims its coupon codes are now accepted at more than 70,000 pharmacies, including nearly every U.S. retail pharmacy. It also claims to have (on average) the most downloaded medical app on the iOS App Store and Google Play over the last three years.