Shares of GoodRx Holdings (NASDAQ: GDRX) rallied by 20.4% on Thursday after the company announced stronger-than-expected quarterly results and a new stock buyback program.
A solid quarter
In the fourth quarter, GoodRx's revenue grew 7% year over year to $196.6 million, translating to adjusted (non-GAAP) net income of $31.1 million, or $0.08 per share, up from $0.07 per share in the prior-year period. Analysts, on average, were only modeling for earnings of $0.07 per share on slightly lower revenue.
GoodRx ended the quarter with more than 7 million consumers of prescription-related offerings. Prescription transactions revenue in the period rose 11% to $143.9 million, fueled by an 8% increase in monthly active consumers. This more than offset a 6% decline in subscription revenue to $23.1 million -- an expected drop given the sunset of GoodRx's partnership subscription program with Kroger. Revenues from its pharma manufacturer solutions segment fell 2% to $24.4 million.
What's next for GoodRx?
If that wasn't enough, GoodRx's board approved a new $450 million stock repurchase program -- a hefty sum considering the company boasts a market cap of just under $3.2 billion as of this writing. The program has no expiration date, and replaces a previous buyback authorization that expired on Feb. 23.
Finally, for 2024, management forecast that revenue will increase by 7% to roughly $800 million -- well above consensus estimates for revenue of $790 million --and adjusted EBITDA of roughly $250 million.
In the end, this was a solid quarter punctuated by news of a large repurchase authorization and encouraging guidance. GoodRx stock understandably rallied in response.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GoodRx. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.
