GoodRx Holdings Inc (GDRX) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the GoodRx Third Quarter 2020 Earnings Call.

As a reminder, today's conference call is being recorded. I would now like to introduce your host for today's call, Whitney Notaro, Vice President of Investor Relations. Ms. Notaro, you may begin.

Thank you, operator. Good morning, everyone, and welcome to GoodRx's earnings conference call for the third quarter of 2020, our first call as a public company.

Joining me today are Doug Hirsch and Trevor Bezdek, our Co-Founders and Co-Chief Executive Officers; and Karsten Voermann, our Chief Financial Officer.

Before we begin, I'd like to remind everyone that this call will contain forward-looking statements. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding management's plans, strategies, goals and objectives; our market opportunity; our anticipated financial performance and the expected impact of COVID-19 on our business.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Factors discussed in the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended September 30, 2020, and our final IPO prospectus filed with the SEC on September 24, 2020, and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call.

Any such forward-looking statements represent management's estimates as of the date of this call, and we disclaim any obligation to update these statements even if subsequent events cause our views to change.

In addition, we may also reference certain non-GAAP metrics, which are reconciled to the nearest GAAP metric in the company's shareholder letter, which can be found on the overview page of our Investor Relations website at investors.goodrx.com. I'd also like to remind everyone that a replay of this call will become available there shortly as well.

With that, I'd like to turn the call over to Doug.

Thank you, Whitney, and thank you, everyone, for joining us this morning. I hope you and your families are safe and well.

We are pleased to report our first quarterly results as a public company. I want to thank our new shareholders for their confidence in our company and our covering analysts for performing such thoughtful and thorough research.

I'd also like to thank the amazing GoodRx team for all their hard work and especially throughout our recent IPO.

As this is our first earnings call, I want to spend a few minutes emphasizing what drives us to build America's best consumer healthcare platform.

I will then turn the call over to Trevor, who will address key highlights from the quarter and trends in our business. Then, Karsten will discuss our financial results and guidance.

GoodRx helps Americans get the healthcare they need at a price they can afford. Trevor and I started GoodRx to provide affordable and accessible healthcare, information and guidance to demystify an incredibly complex industry and perhaps most importantly, to simply help people who have nowhere else to turn.

For too many, healthcare in the U.S. is expensive, complicated and confusing. Every year, Americans pay more out-of-pocket costs and face new insurance hurdles and restrictions.

Too many families are uninsured or underinsured, forcing them to make painful sacrifices just to stay healthy. Lack of affordability in healthcare is a key reason why Americans don't get the care they need, which causes massive negative impacts across our entire nation.

We believe GoodRx can solve these problems. We can provide a better way for people to understand, access and afford quality healthcare. This is what drives us every day.

We're on the heels of a presidential election, where healthcare policy became the single most important issue facing our nation. Much of our economy remains on hold because of the COVID-19 pandemic, while our medical professionals work heroically to provide care. The world is relying on our healthcare industry to provide accessible vaccines and treatments to protect lives and the global economy.

I am proud to be joined by growing team of talented, passionate colleagues who are focused on providing assistance to Americans through this pandemic, unemployment, changes to insurance and federal and state laws.

We have come a long way in the decade since Trevor and I started GoodRx. I'm proud to report that we have reached a number of major milestones in the last few months.

We reached $25 billion in cumulative consumer savings. We extended HeyDoctor, our telehealth service, to offer online medical professional visits for over 150 conditions in all 50 states at a price that is often less than a typical insurance co-pay.

We introduced affordable home delivery for hundreds of prescriptions, and we launched GoodRxHelps, our philanthropic initiative, to provide free medications at more than 20 clinics across America.

There's still so much that needs to be done to fix America's broken healthcare system. We believe that the pandemic has accelerated long-needed changes to the way Americans find and receive healthcare.

Millions of Americans have embraced telemedicine and home delivery. Millions more are turning to the internet to learn about their care and their choices available to them. Across the healthcare ecosystem, long hidden information is flowing more freely, and patients are being empowered to own their healthcare journey. Providers are learning that treatments and prescriptions don't work if patients can't afford them. The old model is broken, and Americans are ready to embrace a new, better way to stay healthy.

We intend to run towards this opportunity. We will continue to invest our strong cash flow in our platform, product, user experience and brand with the goal of creating the best consumer experience and major improvements to healthcare affordability and access for all Americans.

We are building much more than a company. We are building the leading consumer-focused digital healthcare platform in the United States. Our impact will ultimately be measured by the lives we positively impact and the care we provide. We have never been more motivated.

And with that, I'll turn it over to Trevor.

Thank you, Doug. Consistent with our historical performance, we continued to deliver strong, profitable growth at a very fast pace.

In the third quarter, we delivered record monthly active consumers in our prescription offering, record revenue and adjusted EBITDA and strong growth in our subscriptions, manufacturer solutions and telehealth offerings.

Total revenue for the quarter grew 38% year-over-year to $140.5 million. Prescription transactions revenue grew 30% year-over-year to $124.4 million, driven by 29% year-over-year growth in our monthly active consumers.

Other revenue grew 170% year-over-year to $16.1 million, reflecting strong growth in our subscription manufacturer solutions and telehealth offering.

And we delivered adjusted EBITDA of $53.2 million, representing an adjusted EBITDA margin of 37.8% and year-over-year growth of 23%.

Consumer-facing markets are being rapidly transformed by technology, driving greater transparency and convenience and creating a clear connection between value and cost.

The healthcare market is no exception. GoodRx is at the forefront, pioneering healthcare's transformation. Our approach has always been consumer first, and we've created THE trusted brand to guide individuals throughout their healthcare journey.

We're only just beginning our efforts to become the first stop on any healthcare journey. Our expanding suite of offerings, deep brand-building investment and differentiated content is accelerating consumers' understanding of how we help.

We will continue to increase our engagement with healthcare providers, particularly around affordability, adherence and access solutions. We aim to accelerate this trajectory, launching new services and augmenting existing products as we continue to grow our business and expand into new categories.

We're focused on providing value to our consumers and are fortunate to have a platform that positively impacts both consumers and key stakeholders in the healthcare ecosystem.

We deliver value to consumers through our mobile-first offerings and make access to healthcare simple and more affordable.

We help people fill prescriptions that they may otherwise not have filled. We provide telehealth visits that allow access when care may have been avoided due to cost, long wait times or COVID concerns.

We drive greater medication adherence, faster treatment and better patient outcomes, all of which create a healthier, happier population. We deliver value to healthcare professionals by providing information and strategies for their patient financial burdens of prescriptions or treatments.

We improve patient outcomes by increasing medication adherence. We deliver value to pharmacy benefit managers, pharmacies and pharmaceutical manufacturers by helping them reach more consumers who seek their services and products.

We operate in a massive industry, with a combined total addressable market of over $800 billion. The annual prescription market in the U.S. alone, including prescriptions left at the counter, is estimated to exceed $500 billion.

The telehealth opportunity is estimated at $250 billion, and our manufacturer solutions business has a potential annual addressable market of over $30 billion.

In the third quarter, our team continued to deliver value to our consumers and strengthen our relationships with stakeholders in the ecosystem, increasing our penetration in these large markets. During the quarter, we helped a record 4.9 million monthly active consumers save money on their prescriptions through our prescriptions offering, allowing consumers to save money on their medications by simply presenting GoodRx at 1 of the 70,000 pharmacies where GoodRx is accepted. We continue to have strong relationships with our pharmacy and PBM partners and have recently launched an additional PBM on our platform.

We continue to focus on user experience to ensure we can provide consumers with prices, savings and information through a simple, easy-to-use and convenient digital interface.

Our proprietary platform now aggregates over 200 billion prescription prices from a variety of different healthcare sources every day. With GoodRx, consumers can efficiently and conveniently search for their medication, choose from a list of prices at various pharmacies near them and save money on their prescription medication. Our relationships with consumers and pharmacies continued to strengthen, and repeat activity exceeded 80%.

The GoodRx network strengthens with every transaction. Our leading platform and trusted brand allows us to reach more consumers.

This increased volume drives improved pricing and consumer savings, strengthening engagement and expanding unit economics. This allows us to continue to expand on our platform and enhance our products, creating a hard-to-replicate virtuous cycle and a deep competitive mode. Our prescription offering continues to deliver solid growth with strong revenue and consistent unit economics.

Every time a consumer uses GoodRx to save money, from the first prescription till the subsequent refills, we earn a fee from our partners creating alignment between the value we deliver to consumers and the lifetime value they generate for us.

Our prescription offering has demonstrated resilience during this challenging time as the COVID-19 pandemic continues to impact the economy. We believe our prescription offering continues to be impacted by the pandemic as many consumers continue to cancel or defer non-urgent physician visits.

However, we have seen a significant quarter-over-quarter increase in our prescriptions offering and in the number of monthly active consumers, as people have begun to resume typical healthcare purchasing.

The continued incredibly fast growth of our prescription offering demonstrates our value proposition and the large market in which we operate. As we already mentioned, we're working closely with our pharmacy partners on additional programs to drive value for both them and their consumers.

One highlight is our flu vaccine program, where we're working with retailers to drive additional flu vaccine participation as well as consumer savings.

We've grown our program from 2 pharmacies in 2019 to 8 pharmacy chains this year. It will likely be a big year for flu vaccination for the pharmacies, and we are happy to help facilitate and look forward to expanding this program in the future.

Our subscription offering had a successful quarter as well. We closed a multiyear extension of our relationship as the exclusive prescription savings program for Kroger, the largest grocery chain in the U.S. The Kroger Rx Savings Club powered by GoodRx offers access to lower prescription prices at Kroger Pharmacy.

To date, the program has provided hundreds of thousands of customers with exclusive access to discounts on commonly prescribed generic medication. We are very excited to continue this fruitful relationship with Kroger and plan to invest more in marketing and this product with its extension.

We continued to enhance the user experience of GoodRx Gold, a GoodRx program where subscribers pay a monthly fee to access even lower prices at participating pharmacies.

Gold offers over 1,000 prescription medications that are available for under $10, with savings of up to 90% off standard list prices.

We've been focused on better integrating this program into our platform and optimizing acquisition and conversion, which resulted in accelerating new subscriber momentum.

As the pandemic has made more challenging for Americans to visit retail pharmacies, we launched prescription mail order services for Gold, enabling Americans to receive medications by mail in just days.

Today, we offer more than 300 common medications by mail for less than $10, which improves access, saves patients money and offers needed convenience when leaving home is not an option.

We also added mail order services to HeyDoctor, our low-cost online telehealth service. In addition, HeyDoctor expanded to provide care for Americans in all 50 states and grew the number of conditions that we treat. The combination of convenient online provider visits and our new mail order service gives the Americans access to medical professionals and medications, all through an integrated online experience at a time when they need it most.

Finally, we increased our focus on providing assistance to reduce the cost of brand prescriptions for American. We launched more than 30 integrated programs with manufacturers as we continued to grow our manufacturer solutions offering.

We also launched care portals for several brands. This new functionality provides additional ways to help patients find both savings and resources to help manage their conditions.

Overall, we are very pleased with our results for the third quarter, the growth of our offerings and the continued progress we're making with our various products and services. We see exciting growth potential as we continue to attract new consumers through our existing offerings and launch new services to improve healthcare affordability and access for all Americans.

As we extend our platform, we are helping more people at different stages of the consumer healthcare journey, delivering more value to our consumers and generating higher consumer lifetime value.

And with that, I'll turn it over to Karsten.

Thank you, Trevor. Good morning to everyone, and thank you for joining us today. Our third quarter results highlight the unique combination of scale, growth and profitability our business provides, strong unit economics of the large markets in which we operate and our ability to execute and generate strong cash flow.

Total revenue for the quarter was $140.5 million, growing 38% year-over-year, driven by continued growth in our prescriptions offering as well as our newer offerings.

Prescription transactions revenue grew 30% year-over-year to $124.4 million, driven by a 29% year-over-year increase in our monthly active consumers.

As a reminder, monthly active consumers represent the number of unique consumers who use GoodRx to save on their prescription in a given month, and it does not include consumers of our other offerings. When presented for a quarter, monthly active consumers represent the average of the calendar months in the quarter.

Other revenue grew 170% year-over-year to $16.1 million, with strong growth in all of our other offerings, subscriptions, manufacturer solutions and telehealth. This reflects our ability to deliver value to consumers at various points in their healthcare journey as well as our ability to create multiple entry points into our growing platform.

Cost of revenue was $7.5 million or 5.4% of revenue compared to $3.4 million and 3.3% of revenue in 3Q '19. This increase was driven by provider costs related to our telehealth offerings, driven by an increase in the number of online provider visits and an increase in outsourced and in-house personnel-related consumer support expense to support our growth. We continue to deliver strong gross margins at the mid-90s levels.

Product development and technology expenses were $15.8 million compared to $7.8 million in the comparable period last year. This increase was primarily due to continued investment in the team and product as well as an increase in stock-based compensation, including awards made in connection with our IPO. Excluding stock-based compensation and various items related to acquisitions. Adjusted product development and technology expense was 8.9% of revenue compared to 7.1% of revenue in 3Q '19.

As Doug said, we plan to continue to invest in our products and platform with the goal of creating the best consumer experience, continuing to scale our existing offerings and developing new offerings to help more consumers in different stages of their healthcare journey, delivering more value to them and increasing the lifetime value we generate.

Sales and marketing expenses were $65.1 million compared to $45.0 million in 3Q '19. We increased advertising spend by $13.3 million year-over-year and continued to build a strong team, including hiring our first Chief Brand Officer, all with the goal of increasing our consumer base and building the GoodRx brand, which we believe will yield positive returns for us long term.

Adjusted sales and marketing expense as a percent of revenue was stable year-over-year, making up 43.3% of our revenue in 3Q '20 compared to 43.9% last year.

After reducing advertising spend in certain channels in the second quarter of 2020 due to the impact of COVID-19, as many consumers avoided visiting healthcare professionals and pharmacies in person, we increased our advertising spend in the third quarter as more consumers resumed their interaction with the healthcare system. We will continue to evaluate the impact of COVID-19 on our business and actively manage our consumer acquisition spending according to market conditions.

General and administrative expenses were $108.5 million compared to $4.1 million in the third quarter of 2019. The majority of this increase, $98.1 million, was due to stock-based compensation related to the Co-CEO awards made in connection with the IPO, which I'll provide more detail on shortly in the context of guidance.

Excluding stock-based compensation and other items, adjusted G&A as a percent of revenue was 4.6% compared to 3.2% in 3Q '19, with the incremental cost primarily related to our IPO and associated with starting to operate as a public company at the end of September.

We incurred a net loss of $50.0 million in the third quarter. Again, this is due primarily to stock-based compensation of $106.8 million in the quarter, $98.1 million of which related to the co-CEO grants made at the time of the IPO. Adjusted net income was $35.6 million compared to $23.2 million in 3Q '19.

Adjusted EBITDA grew 23% year-over-year to $53.2 million. Adjusted EBITDA margin continued to be strong at 37.8%, reflecting our ability to deliver profitable growth due to compelling unit economics of our business and repeat activity on our platform.

Our adjusted EBITDA margin decreased approximately 460 basis points year-over-year due to the growth of our telehealth business and continued investments in product development and technology as well as in our general and administrative infrastructure, all of which I've discussed.

On a quarter-over-quarter basis, our adjusted EBITDA margin decreased 220 basis points, primarily due to an increase in advertising spend, which we pulled back in the second quarter due to COVID, as I've previously mentioned.

We continued to generate strong cash flow with net cash from operating activities of $32.7 million for the quarter. On the capital investment front, our main investments related to the nonrecurring onetime build of our new headquarters in Santa Monica was approximately $13 million spent to date, net of tenant improvement reimbursements, and additional investments in our platform and product.

We expect to substantially complete construction of our new headquarters by the end of this year. We ended the quarter at $1.1 billion of cash and cash equivalents, after netting approximately $1 billion from our IPO and private placement in September.

I'll now turn to guidance. As we begin our journey as a public company, we want to ensure that we provide clarity and transparency to our shareholders while maintaining our long-term focus as well as our ability to make the right investments to maximize value for our consumers, the company and our shareholders.

To balance these priorities, we'll be providing guidance on total revenue and adjusted EBITDA margin.

We are committed to being transparent about both our performance as well as our investments in the years to come so shareholders are informed and understand our operating decisions.

For the fourth quarter, we expect revenue of approximately $148 million, reflecting 31% year-over-year growth. This would translate to full year total revenue of approximately $545 million, representing year-over-year growth of 40%.

While we won't be providing guidance for monthly active consumers regularly, we did want to provide our short-term expectations on this call since our business is still impacted by COVID-19 and because this is such an important driver of our prescription offering.

For that reason, we expect our quarter-over-quarter growth of monthly active consumers to be approximately between 4% and 5% for the fourth quarter.

Remember that consumers of our other nonprescription transactions offerings, like, for example, our high-growth subscriptions offering, which delivers 2x the contribution, do not contribute to our monthly active consumer figure.

Final note on revenue. While we won't be providing guidance for each revenue line item, but just for total revenue, we expect the other revenue line to continue to gradually make up a higher percentage of our revenue.

Looking at stock-based compensation, we expect stock-based compensation related to the co-CEO grants we made in connection with the IPO to be approximately $275 million in the fourth quarter compared to $98 million in the third quarter.

This will bring total expense recognized for this grant to $373 million out of the total expense of $533 million. The performance-based portion of this grant will be fully recognized by the end of the year as the price target criteria for vesting have been met.

The remaining $160 million is time based and will be recognized over the following 15 quarters on a graded vesting basis with the expense moderately front-loaded. We plan to provide quarterly updates related to the grant until they're fully expensed or become immaterial.

Turning to adjusted EBITDA margin. We expect it to be between 30% and 31% for the fourth quarter, translating to a full year adjusted EBITDA margin of approximately 36.5%. We plan to make significant marketing investments in the fourth quarter to continue to grow our brand. This, coupled with a shift in the timing of certain marketing investments from the third quarter, is the primary driver of the lower adjusted EBITDA margin in the fourth quarter compared to our year-to-date margin.

As Doug said, we are building the leading consumer-focused digital healthcare platform in the country and plan to invest our strong cash flows in our platform, product, user experience and our brand with the goal of creating the best consumer experience and improved healthcare affordability and access for all Americans. This is a scale platform with a rare combination of high growth and profitability. We benefit from a strong brand, first-mover advantage and a decade of experience and relationships that benefit all key stakeholders in our ecosystem. And we believe we have only just begun to scratch the surface of a massive market opportunity.

We're pleased with our third quarter results, and we're excited about our future. Thank you for joining us on our mission to help Americans get the healthcare they need at a price they can afford. We look forward to sharing our progress in the quarters to come.

And with that, I'll now turn the call over to the operator for questions.

Thank you. (Operator Instructions) Our first question comes from Ricky Goldwasser with Morgan Stanley.

Congratulations on your first quarter as a public company. When we look at the performance, I mean, clearly, monthly active consumers is now above pre pandemic levels, and you're seeing momentum in subscriptions growth up -- is picking up.

But to your point, as we think about the metric, subscribers are not included in the member -- in your ability to negotiate and scale. So can you maybe help quantify for us the subscription growth? What would be the gross monthly active consumer metrics look like if we normalize for the ads on the subscription side?

Ricky, thank you very much for the question. Let me have Karsten speak to this question.

Ricky, great to speak with you again. Ricky, we're very excited about our subscription plan because of their natural expansion, a very successful prescriptions offerings, and they allow us to deliver more savings and value to our consumers, While increasing the LTV, as evidenced by their 2x year 1 contribution. And they allow us to create a really tight relationships with the consumers throughout their healthcare journey, we're not disclosing specific subscriber counts or mix by plan, meaning Gold versus Kroger on an ongoing basis, but essentially our growth plans continue to show high positive growth and great momentum.

We've integrated the Gold experience onto our platform and added additional features like mail order as well. Mail order was added during the third quarter specifically. We also agreed to a multiyear renewal with Kroger, which means we'll make more marketing and product investments going forward. We're really excited about those offerings, the subscription side ones. But again, aren't disclosing specific numbers on them.

Understood. So when we think about this new mail order offering and we think about the opportunity within your user base, can you maybe give us some data around what percent of users for chronic medication could over time could convert to mail solutions?

Sure. And thank you again for that question also. Karsten, is there -- do you want to answer that in regards to the mail order specifically?

Sure. I think the more general question, first of all, is chronic versus acute.

Yes.

And I think in general, like the industry, we skewed towards chronic, as you'd expect. With respect to the intersection of chronic and mail order more broadly, I think that as evidenced by some of the analyst reports that have even come out over the last few days, mail order continues to not be the dominant mode for our users to get subscriptions. And I think Trevor will likely want to address mail order in a little more detail.

Yes. What I would say on mail, is in the U.S., mail order penetration is pretty low. The, COVID, I think, is more of an accelerator -- you would imagine it would be more of accelerator for that than almost anything else. And yet, you look at this year, and it hasn't changed mail penetration much.

For us at GoodRx, and what we're trying to provide to consumers, we just want to meet consumers where they are. We want to provide consumers the -- what they're looking for. And so we want to work with our partners like the retail pharmacies and those retail pharmacies by mail and other partners so that where consumers want to use mail and where it's the appropriate solution they're able to get in.

Our next question will come from Heath Terry with Goldman Sachs.

I was wondering if you could give us a little bit of a sense around the progress with HeyDoctor as well as the marketplace itself. Realize things are still very early stage, but if you could maybe disaggregate for us a little bit the growth that you're seeing in the 2 parts of your telemedicine platform, that would be really helpful.

And then as we look at this quarter and beyond, especially as we see cases rising, how much of a factor do you continue to see sort of delayed medical visits or delayed procedures being taken, having on a overall prescription and particularly the generic prescriptions that are such a big part of your business having an impact on that in this most recent quarter as well as the quarter that we're in now?

Thank you very much for the question. I'll be glad to answer sort of about the telehealth, about the marketplace and then about COVID impact.

The -- when we look at telehealth, this is continuing to be a great area of growth. We're seeing positive momentum with HeyDoctor on a month-over-month basis, on a quarter-over-quarter basis. We have really done a lot of expansion. We've increased the number of conditions treated to 25, and we've expanded the offering to all 50 states.

And then as we mentioned, we've added mail order options, and we also increased the cross-sell numbers from telehealth to our prescription offerings.

When we look at telehealth, we are -- we see it both as an additional way for us to acquire customers into the broad set of services we offer as well as being sort of part of this additional expansion of our mission to provide affordable convenient healthcare across all of healthcare. We continue to make product investments in telehealth to make it a great user experience for consumers.

We want to enable Americans to have access to affordable doctor visits, to get prescribed medication and to have that all be a complete integrated experience.

And it allows us really to be with the consumer at sort of a broad set of points in their healthcare journey.

To the marketplace, we launched the marketplace in late March for providers, and we added labs in April. This was something that had been on our product road map. But then because of COVID, we accelerated this development of it. We want to make sure consumers had options when it came to getting the care they need.

In the third quarter, we continued to add additional partners and grow our marketplace. Although this is still in an early stage, this is the -- our - part of our broad effort to access and get a take rate on a broader set of healthcare, like we do around the prescriptions area.

So this marketplace gives the GoodRx consumers much broader provider of choice in physicians and covered by HeyDoctor, and it addresses areas not addressed by HeyDoctor.

So we plan to keep adding services there, adding providers to our marketplace and introducing some new ways to monetize those -- that large consumer base like sponsored listings and the partnerships.

It's also, again, like telehealth, just another entry point into the broader set of our offerings.

So I'd like to also speak about the impact of COVID a bit more generally, like we said. What we have seen is consumers have certainly -- COVID certainly caused consumers to not visit doctors and pharmacies as much as normal.

The pharmacy space, I believe, is impacted less than almost any other industry and our 80% -- and so I'd say that factor as well as our 80%-plus repeat activity rate has made us continue growing at a really good rate even during COVID.

And COVID has accelerated a number of trends sort of that we had predicted and sort of fit into this road map we've had around sort of where the industry and where sort of consumers getting healthcare is going.

But I would say as the impact of COVID hopefully decreases at some point in the future, there is upside there, but we are not making sort of real assumptions -- any real assumptions here that, that happens anytime soon. We're assuming sort of status quo. But hopefully for the country, it's better that.

Our next question will come from Doug Anmuth with JPMorgan.

You're 2 years into your Kroger partnership, and you talked about recently extending the contract for multiple years. Could you just talk about the potential to work with other large retail pharmacies on a subscription basis?

And then just on sales and marketing, you know it ramped pretty aggressively in '19 and then in early '20 and then kind of slowing some with COVID. Just curious how you're thinking about that going forward. I know it's early, obviously, to talk about next year.

But assuming that we're in a somewhat better place, just how you're thinking about that?

Great. Thank you, Doug, very much for the question. For your first question, I -- what I would -- we've really enjoyed working with Kroger, that, I believe, has been a very successful program for both us and them.

And we are excited for it to continue growing, excited for our continued and expanded partnership there. We want to work with all of our -- the retail pharmacies on different programs to help them.

So one that I would want to highlight is our flu vaccine program. So in the flu vaccine program, this is where we are going -- working with pharmacies to help expand availability and help consumers get good access to good pricing on flu vaccination.

That's the program we've expanded from 2 pharmacies in 2019 to 8 pharmacies this year and just to meet this increased demand for flu vaccines in the current environment.

And what I'd say is that's an example of where we want to find the right programs for each of our partners to help drive what's important to them and highlight what's really special and good about each of these partners to consumers.

So we want to meet, work to find the right programs for each partner.

On the sales and marketing spend and how we forecast that in this -- maybe in this year and in the future years, what I would say there is -- well, I'd first maybe highlight where we are currently on sales and marketing, which is -- this has been a sort of complex year for marketing spend, like the media environment has changed significantly in this period.

And I want to sort of compliment our marketing team that we've been able to spend into this period and do with great performance even an environment where it's -- where a lot of things are changing.

So as we look, though, at Q4, we plan to make significant marketing investments in the fourth quarter and beyond, to continue to grow our brand. And we also anticipate there's some seasonal customer acquisition opportunities that often occur at start-of-plan years. So we will continue spending, continue making investing in marketing in Q4 and beyond.

And I'd say just maybe lastly, we really plan to continue to build our brand, increase awareness, enhance our offerings. We have been able to drive this really strong long-term profitable growth, and we are very focused on driving that long-term growth, increasing our penetration in the sort of multi-hundred-billion-dollar market, prescription, telehealth, manufacturer solutions.

We're scratching the surface of the opportunities, so we're definitely leaning into all these opportunities.

And -- sorry, lastly, the -- on that marketing spend, the other thing I guess I'd highlight is even in that challenging environment, even increased spend, we've been able to keep marketing sort of our acquisition cost below an 8-month payback, even at increasing spend levels. So -- and thank you for the question.

Our next question will come from Ross Sandler with Barclays.

Congrats on the first quarter out of the gate. I guess a question on the total addressable market. So we heard a lot of questions around this since the IPO process kicked off.

And I just wanted to kind of hear your guys take on TAM. At the high end, you've got 5 billion US generic scripts flowing through retail pharma -- pharmacies.

At the low end, you've got 300 million or so cash pay annual scripts. So that's a pretty wide range. How do you guys think about the TAM for your core scripts business?

Yes. Thank you, Ross, for the question. I appreciate it. When we look at our users, most of our users have insurance.

So 75% plus of our user base today has some normal insurance. And a significant portion of those are on Medicare, which is often the best insurance someone could get.

So generally, what I'd say is that I -- we don't actually think cash pay is sort of a relevant segment that when we look broadly, these are -- and this is all Americans that we're serving.

I think when we've even looked at the market -- just since we began, I think looking back, health plans have only become more complex.

We only now have more -- 3-tier plan, 4-tier plans. And the reality is you have quantity limits, are you in-network, utilization management, like prior authorizations, all of which makes access to prescriptions challenging for people.

And so within prescriptions, there is a large opportunity. And we -- that 5 billion scripts is much more the set of services we can offer. I mean you look at some of the -- some of this also of where we're helping -- and it's really the broad set of prescriptions where we can help.

In addition, we are very focused on the broader healthcare market. How do we help Americans get access to convenient and affordable healthcare broadly, which is really the need that Americans have. And so yes, I hope that answers the question.

Our next question will come from Justin Post with Bank of America.

I just wanted to ask, as we're just coming off of election and people are kind of learning the company, what healthcare policies are you focused on, on a federal level?

And do you -- would you foresee any changes under a Biden administration we should be thinking about?

Thank you, Justin. Doug, could you speak to this?

Sure. I'd be happy to. One of the nice things is -- about GoodRx in the history we've had -- we've been here for about a decade. And I can recall, back in 2010 when we first got started, it was prior to the ACA, Obamacare.

And at the time, there was a lot of feedback that there would be significant changes that would make healthcare so much more easy for Americans to access.

And obviously, our company has existed long through Obamacare. And to be honest, what we've seen consistently over the course of the last decade is despite whatever administration, whatever sort of executive order is floating around at the moment, the reality is that the burden on Americans just continues to increase, right?

There has been so many policies and so many attempts. And yet, I feel like it's often lost in the shuffle is just there are just so many gaps in healthcare policies and what has been done to date.

And we're very focused ultimately in just helping the consumer and really driving solutions for them. And we -- anyone -- any politicians who engage with us is fantastic and helps consumers, but we're going to be there no matter what to fill in those gaps and make sure the consumers get the care they need at a price they can afford.

And I'll just add that with a new administration, we don't anticipate any legislative concerns to the business. We're really fundamentally aligned with the political objectives of driving affordability and access to healthcare for Americans. And so we don't foresee an issue.

Got it. And maybe 1 follow-up because vaccine is so important next year. But how would you expect people being outdoors more and just normalization of activity in stores and pharmacies, how would that affect your business next year? How would you think about that?

Yes. The -- when we look at this, I mean, this is sort of the -- what I spoke to previously on the impact of COVID, the -- there is an impact to consumers, current -- both earlier this year as well as now on going to their physicians, getting prescriptions.

At the very beginning of COVID, we saw people really not going to their physicians. Now people are going to physicians, but they're not going to physicians for sort of non-urgent care, and that does have an impact.

Obviously, we're still growing at a very fast rate even through that. That said, it is good. There is upside if that amount of going out -- if people are going outdoors, if there's a vaccine, if any of these things have positive impact.

But this is all better for just the economy in general, our business. But we've kind of modeled in some -- I can let Karsten to speak it, but there is a -- Karsten, maybe you want to speak to the current quarter thoughts or what is there?

Yes. I appreciate the question. So as we contemplate it from a modeling perspective more broadly, we model in a gradual recovery. We've seen some of that happen already from 2Q into 3Q and benefited from that. So if there is a significant lockdown that could impact us, but we also haven't at present assumed that the V-shape incredibly steep recovery is likely, if that's helpful.

Our next question will come from Nick Jones with Citi Group.

Can you touch on the manufacturer solutions? You mentioned 30-plus new partnerships. Can you talk about, I guess, how they view the GoodRx channel as an advertising channel? And then maybe talk about the rate of consumers searching for branded drugs that are maybe looking for generics and just don't know it or actually looking to try to get a discount on the branded drug?

Thank you very much, Nick, for the question. We continue to increase our focus on providing assistance to reduce the cost of brand prescriptions for Americans.

We want to serve consumers as they try to save across all of healthcare, which includes prescriptions, which includes all of the different types of prescriptions that consumer can get.

In Q3, we really continue to build out that team focused on that area. And as we spoke to, and you've mentioned, we rolled out more than 30 integrated programs with approximately 20 manufacturers.

And we've also launched these new -- several of these new care portals for some additional -- a new piece of functionality, which has driven this sort of really strong year-over-year revenue growth.

Along with helping consumers, this is also one of our sort of highest margin offerings. These are really high-intent consumers who are already searching for brand drugs on our platform.

About 20% of our 15-million-plus monthly visitors are looking for savings on brand drugs. And that's really not changed as sort of a portion of the user base looking for brands versus generics, really has just scaled relative to the -- to that overall growth.

And we're able to help consumers save on these brand medications. And to what you're asking on how they perceive it, we're delivering a lot of value to these pharmaceutical manufacturers by helping them reach these sort of purchase-ready consumers at the right time.

And this -- what's also good about, I think, this line of business is there's no incremental cost of acquisition to us. These are searches on our platform that are already there. These are users who are just trying to use GoodRx to help them find affordable, convenient healthcare. And these are -- now we're able to sort of just make that user experience better for them and also enable the growth of this area.

We do have a lot of additional inventory, I guess, I'd call it, left across our platform to sell. So a lot of huge room for expansion here. And while we're not breaking out this -- the other revenue interest component, the year-over-year growth was in line with what we provided originally, and we expect this area to keep being a great area moving forward.

Our next question will come from Jailendra Singh with Crédit Suisse.

Congrats on your first quarter as a public company. My first question, regarding the sequential increase of around 477,000 monthly active consumers you saw in the quarter compared with decline in second quarter of around 455,000. Can you talk about like how many of these monthly active consumers you gained sequentially in third quarter were part of that cohort, which you lost in 2Q versus how many are completely new users? Any color around that?

Thank you very much for the question. Karsten, would you like to speak to this?

Sure thing. And thanks for the question, Jailendra. Great to talk to you again. We're happy with the increase in MACs, monthly active consumers, which hit an all-time high of 4.9 million in 3Q '20 and with the overall growth of our offering. MACs increased in the third quarter as activity in the prescription market primarily improved and as consumers started to go back to their doctors. And on a year-over-year basis, MACs grew significantly, up about 29%. And of course, that's a comparison to a non-COVID quarter.

I think your question is more specifically related to Q-over-Q growth, where you saw MAC growth of 11%, we generally haven't gotten specifically into retention/attrition.

But as you can imagine, given the reopening of the economy, we believe that a significant number of our users with the reopening, with reopening our new users, but we're confident as well that a certain number of them may have been folks who delayed or otherwise elected not to see either their healthcare providers or go to pharmacies during the height of the COVID period in 2Q. Trust that's helpful. And yes, I appreciate the question.

Yes. And then a quick follow-up. I know you guys just announced this partnership with Know Your Meds. Can you talk about how that integration will work? How many consumers that integration provider you have with? And what is reflected in your guidance with respect to that partnership with Know Your Meds?

Sure. This is just 1 of many partnerships we have in the ecosystem. We have a goal of reaching more consumers at a time -- at just any time where they're sort of accessing different healthcare solutions to help them save on prescriptions, medications.

So we really just look at - across opportunities. We really look where can we increase our reach through scaling existing marketing channels, creating new marketing channels, partnering with affiliates in the ecosystem.

And so we are broadly looking around it at opportunities of that nature and hope each of them provide some incremental value, and almost more importantly, provide just a really good consumer experience people where they're able to really access the information they need when they need it across the healthcare journey.

Our next question will come from Mark Mahaney with RBC.

I want to ask about manufacturer solutions. You talked about launching 30-plus new partnerships. Any more color on those? How many total partnerships do you have now? Is there something in the process that's allowed you to launch these new partnerships more quickly than they were in the past? Is there a reason to think that these new partnerships could be more material than the ones you've had to date?

Thank you, Mark, very much for the question. We see general growth in this area. We're in a situation where, on the manufacturer solutions, where we're not just getting the benefit of the growth of our overall platform. There's a huge amount of growth here just because this is an area where we have a huge number of users.

20% of our 15 million-plus sort of monthly visitors are coming to look for savings on these brand drugs, and we've not really monetized this much in the past. I mean we've really monetized like a really small portion so we're really also just sort of getting -- now monetizing across those existing set of people.

So we've been adding these 30 -- a large reason for that is just us building a strong team there. We've really built an experienced team. We've grown that team. We have been rolling out additional premium customized solutions. But mostly, this is just about focus. We hired Bansi Nagji from McKesson, who is our Chief Business Development and Chief Strategy Officer. We invested in more technology here. We have Premium solutions like Patient Navigator. So I would -- we anticipate that continuing to grow quickly in the future just like it has in the past year, past quarter.

Our next question will come from Eric Sheridan with UBS.

Maybe if I could just zoom out for a minute. Obviously, we're seeing a little bit of margin pressure over the shorter term as you deploy some of the investments you've talked about in the past to position the business for the long term. Can you just refresh investors on what you see as some of the key investments you have to make over the next couple of quarters against your broader long-term goals? And how people should think about the trade-off between growth and margin volatility in the coming quarters?

Thank you very much, Eric. Yes. Let me have Karsten speak to this question.

Sure. Always good to talk to you. We plan to make significant marketing investments in the fourth quarter and also beyond, of course, to continue to grow our brand and in anticipation of the seasonal consumer acquisition opportunities that occur at the start of plan years. When we think of that in terms of increased investment, the marketing is just 1 component, though.

We're also making increased investments in product and technology supported by our detailed product road map at the same time. And those are really the key drivers of lower adjusted EBITDA margin for the fourth quarter compared to our 2020 year-to-date margin or to our 3Q '20 margin specifically.

I think you also need to keep in mind that the fourth quarter will be our first full quarter operating as a public company. And there are, of course, new costs associated with that, like an increase in D&O, auditor fees, various other things that have an impact on margin. We expect to continue making these product and marketing investments and, of course, having public company expenses going forward into next year, too.

With respect to all of that, the reason we're doing it, of course, is we have a huge TAM. I think the question came up earlier related to TAM.

And we talked about the fact that we feel like we're - continue to be massively under-penetrated in it, with a lot of room for expansion. So in terms of your growth-versus-spend trade-off, we believe that we're going to continue to make efforts to penetrate more deeply into that TAM. And as a relative market share leader, it's in our interest to make sure that we can grab as much of it as we can.

And what I want to add there is -- sorry. But I'll just add. We're just scratching the service. Like we are super focused on the - capturing this larger opportunity of being the digital health platform for all of healthcare. And we are going to deliver on this product vision that we have, to provide that. So we're really focused on these -- on building great product and building brands.

Next question will come from Charles Rhyee with Cowen.

Congrats on your first quarter here. I wanted to ask about the monthly active consumers. And if there's any kind of color you can kind of give about -- you mentioned earlier that your Gold and Kroger members are double the contribution to your revenues than your -- than the typical prescriptions customers. But even within that group, is there a cohort? Like what's sort of the average number of scripts someone's filling either in a month or in a quarter? And does that skew to -- is there a subset or a kind of heavy users versus people who kind of occasionally use it?

Thank you. Thank you very much for the question. In -- let me actually pass this to Karsten, so he can speak to it specifically.

Sure. And thanks, Charles. I think there are a couple of things. Like any business, we have different users with different rates of utilization. But again, going back to the concept we discussed earlier, as with most businesses in this space, we benefit from a reality of having, number one, a significant number of chronic medications that our users are buying, a majority, in fact. Number two, an over 80% repeat transaction rate. So those things are critical and are what allows us to drive the unit economics we've discussed earlier, like the -- for example, 8-month payback on marketing spend.

With respect to subscriptions specifically, we look to subscriptions to be a way of continuing to push incremental value for users. So the subscriptions offering, while it has a monthly fee associated, offers even lower drug prices. And despite that, we've still, as you mentioned, been able to generate a 2x LTV in the first year off that subscriptions business. So hopefully that's relatively helpful in terms of giving you a perspective on how our user base and its usage applies in our case.

Yes. That was helpful. And you said there's obviously the 8-month payback on marketing spend. I guess when you think about marketing then, are you like targeting within the active consumers that spend directly to get people who are more likely users to use more? Or are you really kind of focused on trying to attract always -- obviously, you want to always track new users, but is there sort of a division within how you kind of look at marketing?

Yes. I'd say we do -- we have a pretty sophisticated, I believe, marketing operation. There's certain types of marketing that are really general in nature. So if we're running television, for example, that's generally going to get us sort of just at a -- the wide set of all -- the sort of healthcare users and infrastructure users. Whereas on the digital, we may be able to focus, as you said, on people and on particular products that are even more chronic in interest. So we do spend more or less on digital campaigns relative to the type of prescription user, we think, they are. But we try to just optimize that as best we can. But a lot of the marketing we do is more general in nature and isn't sort of too targeted in that fashion.

Our next question will come from Lloyd Walmsley with Deutsche Bank.

I've got a couple. First, can you talk about any changes you're seeing in the competitive environment? Any competitors stepping up advertising? Or any impact from new pharmacy discount cards that you're seeing? And then secondly, can you just talk about some of the other potential areas of healthcare you see yourself potentially adding product around for price transparency over like the next 5-year period leveraging the existing user base? Anything you can share there would be great.

Thank you very much, Lloyd. On the competitive side, we've really spent a decade building this brand that's trusted, consumer first. We have a 90 MPS score. We have this platform that's scalable, it's sensible, deep network relationships, integration. Everything we've done had just built a deeper competitive moat for us.

And what we've seen is we have not seen sort of any competitors that have really impacted our business in any way sort of historically or currently. There are cases where we're seeing sort of some increased advertising, but we don't - from people in this space. But I feel like that's what we've sort of seen for the last decade of people putting some type of solutions, but us really being able to capture the vast majority of gains in this space just due to the scale, the data, pricing power, just the product.

And a lot of this also lets us now build these better and new products. We're able to build new products that make the consumer experience better and offer more and more tools to consumers to go navigate their healthcare, navigate affordability as well as lets us make more money from each of those users. So this really does create this virtuous cycle that has made us sort of the far leader in helping consumers save money on their healthcare, and that's what we continue to see in looking forward.

The -- relative to healthcare in general, as I mentioned, the telehealth marketplace has been -- in this marketplace that's now expanded into labs and other areas is sort of the beginning of where we have expanded these areas.

What we've -- we see a large sect across healthcare services where their consumers are struggling to afford them. And so we aim to provide a - help across the broad set of these. So we'll be rolling out more and more products to address these needs sort of in a much sooner time frame than the 5-year period.

Our next question will come from Lee Horowitz with Evercore ISI.

Maybe 1 more on mail order, given a number of announcements from both partners and competitors recently.

Ultimately, how important do you think that short e-commerce-like delivery windows are seeing greater adoption of mail order delivery? And do you believe that these sort of delivery windows can potentially be done profitably?

Thank you very much, Lee, for the question. Yes, as I sort of spoke to on mail order, mail order still is really a small portion of prescriptions. And I think you really can't think of something that would accelerate adoption more than COVID, causing people to often not want to go places or not be able to go places.

And yet you look at the end of the year, and it looks like, that mail adoption as a percentage of U.S. prescriptions has not really changed much.

I think the faster delivery is a factor. But I actually would say, I don't think it's the critical factor. I think it's 1 factor out of many that make it so that in a lot of situations, that it's just not the preferred solution for consumers.

I think there are other issues such as just general on-boarding, general sort of experience of getting subscriptions. There was a report yesterday sort of just trying to low consumer interest in general.

And so I think it's a variety of factors that will be required to make that work. But for us, we want to meet consumers where they are. Where consumers have - want mail, we want them to be able to get mail, whether that's from a retail pharmacy providing that mail or other partners. We want to meet consumers where they are, provide them the services they want, and our business works well in all these different environments.

Great. And one follow-up, if I could, Karsten. Circling back on the vaccine a bit, can you expand a bit on how you're thinking about modeling the COVID recovery?

You talked about not a V-like recovery. But specifically, with the vaccine now generally expected in the second quarter of next year, can you comment at all on whether this vaccine timeline was consistent with your prior view? Or if your expectations around the pace of recovery and the proliferation of a vaccine have changed at all given the news earlier this week? Any color there would be helpful.

Surely. I think, first of all, with respect to fourth quarter, it doesn't really change anything, obviously. And in the longer term, I think we'd expected a gradual recovery where the economy would be fully open into next year, regardless.

So I think the vaccine, more than anything else, reaffirms that, that reality will manifest itself versus being a significant shift to our expectations, our expectations generally.

So again, I think for 4Q, I think the vaccine doesn't impact, and I think our views on guidance continue to be entirely like we discussed.

And I think in general, looking forward into the coming year, we're excited to see the economy potentially reopening further, but we also modeled in a reopening, generally speaking. So I don't expect it to have a dramatic impact beyond what we're thinking about.

That said, we certainly have not assumed -- there's a couple of factors when we look at the impact of COVID.

One is sort of access to healthcare in general, which has been pretty good, that there's been access to pharmacies sort of broadly throughout this period. Second is actually to healthcare providers, which was really constrained and now is also quite good.

The thing that's kind of -- we've sort of assumed and have kind of continued to assume it takes - well just like people just feeling comfortable going to get healthcare.

So the people are going to get those non-urgent things. People having their annual physical and finding out they have low blood pressure -- high blood pressure and going to get the medication for it.

So those sort of a lot of new starts related to that. Those just take -- we just think that takes a while for that to come back.

Theoretic -- hopefully, it is possible that some -- that a vaccine or the effect of a vaccine can cause that to really happen sooner than we imagine.

And that sort of activity, in general, goes back in a sort of more meaningful way sort of to normal in a -- in next year. But even -- and the vaccine news is amazing. But we certainly haven't sort of changed -- we certainly feel like we don't know enough of when that happens, what happens, when things are distributed to make any real assumptions there.

The one other thing I'd say is it's just about vaccines in general. I think this is a great opportunity for pharmacies, as I spoke to about the flu vaccine program, where we've gone from 2 partners last year to 8 partners this year. We really want to help the pharmacies drive additional volume into that. We want to help the public health side of this that -- to help people get these vaccinations and help consumers to get these to help their quality of life.

And there's probably a similar opportunity at some point here around COVID vaccines, where, hopefully, depending on the type of vaccine, the pharmacy can be a really important distribution partner for those.

And then we want to make sure consumers are able to get those, get access to them and get people into pharmacies to get them - to help people through that period and then hopefully, recovery does happen faster than any of us have expected historically.

Our next question comes from Aaron Kessler with Raymond James.

Maybe just quickly on kind of converting your customers. Our survey work has shown pretty high brand awareness for GoodRx. How are you thinking of converting more of these customers that have obviously heard of GoodRx, but maybe not customers yet?

And then maybe thoughts on working with employers to promote GoodRx, especially as they move more towards high deductible plans as well?

Yes. So in terms of converting customers and brand, we think we have lots more to do on our brand awareness.

We think we have actually extremely high brand awareness on healthcare professionals. That - among pharmacists, it's almost sort of everyone, among sort of physicians, 2 out of 3 -- more than 2/3 of physicians sort of know GoodRx. Most of those recommend it to their patients. I mean, so it's a really good brand awareness among the healthcare professional side, but we think there's actually a huge amount of additional room to gain around brand awareness among consumers.

When we think of what our competition is, that earlier question, the real competition we have is people just not knowing that there is this opportunity in general to get -- to save on prescriptions, to save on healthcare and to be shoppers. So most consumers just don't know that there are tools to help them navigate our complex healthcare system. And we really believe we can help them. 70% of consumers don't know that prescription prices can vary.

And everyone just thinks there is -- kind of thinking the same. So this is a great opportunity there. So we're obviously focused on converting customers, on increasing usage by customers, but we still think there's so much just additional awareness we can gain across the user base.

In terms of employers, our -- we're not focused on employers. I think we are focused on consumers. So when we look at the market, something we think we are uniquely good at is speaking to consumers about their healthcare experience, providing tools to consumers on their healthcare experience and really reaching there. There are plenty of companies that are good at working with employers. But we think we're really uniquely good at working with consumers in healthcare, and that is our focus.

And then in terms of HDHPs, when we look at our users, our users have all forms of insurance. 75% plus of our users do have insurance, more than 1/3 of those have Medicare.

So this is not -- it's not just in HDHP. It's against -- across all the commercial insurance, we see good usage. So we really want to deliver value to users across their healthcare journey. We really want to continue to invest in our product, build great new products, add more entry points, add more services.

There's just a really big opportunity. So we're super excited about sort of the progress we've made in Q3 and just all the work we're doing now to increase awareness, increase -- extend the platform and just increase penetration broadly across sort of the broad set of consumers and offer them, make everyone's healthcare experience better in America.

And today's final question will come from Stephanie Davis with SVB.

Congratulations on a strong first public quarter at the gate, guys.

Thank you very much.

Could you comment on CMS' transparency and coverage rule? And how we should think about the puts and takes of increased trade transparency, not just on the market, but maybe on your competitive dynamics in specific?

Sure. And thank you, Stephanie, very much for the question. We are really in favor of anything that increases transparency. When we see as to the -- what regulators, what the public, what lawmakers, what people want, people want transparency, and they want lower out-of-pocket cost for consumers.

And so we think we are entirely of the -- those are the things we want. Those are the things that I think the country wants. And we think we are really aligned with that.

In regards to, specifically, sort of the new rules around transparency, which there are a variety of, this is something we definitely want and think is good. We think it opens up new opportunities in some other portions of healthcare. And we think it's only good for us and our business, our ability to deliver these solutions for consumers. And I think that fits into just our overall -- our goals of the business.

Our overall goals are to deliver affordable healthcare for all consumers to help them navigate this to be this leading digital platform for all of healthcare. And it's just a huge opportunity.

And we are at the early point of it. So we're excited at that. That larger trends are also pushing in the same direction of more pricing, more transparency being available.

And so we're excited to capture these new opportunities as well as just continuing the strong profitable growth we've been able to deliver in the businesses that we're in.

Take it as much. Now I have a quick follow-up for Karsten, just to give him some airtime, too. On the 4Q guidance, holding all else equal it implies a pretty healthy sequential step down in MAC. Is there anything to call out that drove up MAC in 3Q? Or is it just some uncertainty around the pandemic driving that 4Q MAC metric?

Sure. Thanks for the question, Stephanie, and thanks for giving me an opportunity here to talk. We continue to see the impact of COVID-19 on our prescriptions offering realistically, primarily through the impact of doctor visits and access that Trevor talked about a little bit. Monthly active consumers in the third quarter increased about 11% Q-o-Q as activity in the prescription market improved.

When we think about that, that's -- the third quarter is a bit of a rebound quarter though, because 2Q was just such a tough one for COVID.

And because of that, I think we got the benefit of a bit more rebound in that quarter than the gradual improvement that we're forecasting going forward.

So as we look forward, we still see nice growth 4% to 5% MAC growth going forward, which translates to about 20% Y-o-Y, even as we see the economy open up in a more gradual fashion and not sort of instantaneously.

Of course, it also assumes things on the COVID front stay fairly constant. I think the other reality is that total revenue growth, we expect to grow significantly faster, in part because of the rapid growth of our other revenue lines.

And frankly, in part because the recurring nature of prescriptions, the fact that we continue to benefit from most of the growth in this space given we're the largest relative market share player and the general reality of all of our offerings, intersecting in a way that's helpful, meaning that telehealth as an entry point for prescriptions and vice versa, all of those things are helping us to drive even faster revenue growth than MAC growth.

I think the other thing, too, which I should probably remind folks of generally is that MACs are the users of our prescriptions offering. So things like subscribers, et cetera, those counts do not form a part of the core MAC count, which is part of the reason you may see revenue per MAC growing, and it's also part of the reason, as the subscriptions offering continues to expand quite quickly, why we've modeled out our MAC count for the fourth quarter like we have. I hope that's helpful, Stephanie. And thanks again for the great question.

Ladies and gentlemen, thank you for participating in today's question-and-answer session as well as today's conference call. This concludes today's program. You may now all disconnect, and have a wonderful day.