GoodRx Holdings Inc

1. Description of Business

GoodRx Holdings, Inc. was incorporated in September 2015 and has no material assets or standalone operations other

than its ownership in its consolidated subsidiaries. GoodRx, Inc. (“GoodRx”), a Delaware corporation initially formed in

September 2011, is a wholly-owned subsidiary of GoodRx Intermediate Holdings, LLC, which itself is a wholly-owned

subsidiary of GoodRx Holdings, Inc.

GoodRx Holdings, Inc. and its subsidiaries (collectively, "we," "us" or "our") offer information and tools to help

consumers compare prices and save on their prescription drug purchases. We operate a price comparison platform that

provides consumers with curated, geographically relevant prescription pricing, and provides access to negotiated prices

through our codes that can be used to save money on prescriptions across the United States. These services are free to

consumers and we primarily earn revenue from our core business from pharmacy benefit managers ("PBMs") that manage

formularies and prescription transactions including establishing pricing between consumers and pharmacies. We also offer

other healthcare products and services, including pharmaceutical ("pharma") manufacturer solutions, subscriptions and

telehealth services.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with

accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the

Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures

normally included in our annual consolidated financial statements prepared in accordance with GAAP have been condensed

or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with our audited

consolidated financial statements for the year ended December 31, 2023 and the related notes, which are included in our

Annual Report on Form 10-K filed with the SEC on February 29, 2024 ("2023 10-K"). The December 31, 2023 condensed

consolidated balance sheet was derived from our audited consolidated financial statements as of that date. The condensed

consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring

items, necessary for the fair statement of our condensed consolidated financial statements. The operating results for the

three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year ending

December 31, 2024.

There have been no material changes in significant accounting policies during thethree months ended March 31, 2024

from those disclosed in “Note 2. Summary of Significant Accounting Policies” in the notes to our consolidated financial

statements included in our 2023 10-K.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of GoodRx Holdings, Inc., its wholly owned

subsidiaries and variable interest entities for which we are the primary beneficiary. Intercompany balances and transactions

have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to

make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements,

including the accompanying notes. We base our estimates on historical factors; current circumstances; macroeconomic

events and conditions; and the experience and judgment of our management. We evaluate our estimates and assumptions

on an ongoing basis. Actual results can differ materially from these estimates, and such differences can affect the results of

operations reported in future periods.

Certain Risks and Concentrations

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash,

cash equivalents and accounts receivable.

We maintain cash deposits with multiple financial institutions in the United States which, at times, may exceed federally

insured limits. Cash may be withdrawn or redeemed on demand. We believe that the financial institutions that hold our cash

are financially sound and, accordingly, minimal credit risk exists with respect to these balances. However, market conditions

can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our

cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or

at all. We have not experienced any losses in such accounts.

We consider all short-term, highly liquid investments purchased with an original maturity of three months or less at the

date of purchase to be cash equivalents. Cash equivalents, consisting of U.S. treasury securities money market funds, of

$460.5 million and$605.5 million at March 31, 2024 and December 31, 2023, respectively, were classifiedas Level 1 of the

fair value hierarchy and valued using quoted market prices in active markets.

We extend credit to our customers based on an evaluation of their ability to pay amounts due under contractual

arrangements and generally do not obtain or require collateral. For thethree months ended March 31, 2024, one customer

accounted for 12% of our revenue. For thethree months ended March 31, 2023, two customers accounted for 13% and 11%

of our revenue. At March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of our accounts

receivable balance.

Equity Investments

We retain minority equity interests in privately-held companies without readily determinable fair values. Our ownership

interests are less than 20% of the voting stock of the investees and we do not have the ability to exercise significant

influence over the operating and financial policies of the investees. The equity investments are accounted for under the

measurement alternative in accordance with Accounting Standards Codification ("ASC") 321, Investments – Equity

Securities, which is cost minus impairment, if any, plus or minus changes resulting from observable price changes. Due to

indicators of a decline in the financial condition of one of our investees, we recognized a$1.8 million impairment loss on one

of our minority equity interest investments during thethree months ended March 31, 2023, which was presented as other

expense on our condensed consolidated statement ofoperations for that period. We otherwise have not recognized any

changes resulting from observable price changes or impairment losses on our minority equity interest investments during the

three months ended March 31, 2024 and 2023. Equity investments included in other assets on our condensed consolidated

balance sheets as of March 31, 2024 and December 31, 2023 were $15.0 million.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")

2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to enhance the

transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for

enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

This ASU applies to all public entities and will be effective for fiscal years beginning after December 15, 2024, and for interim

periods for fiscal years beginning after December 15, 2025. Early adoption of this ASU is permitted. We are currently

evaluating the impact of the adoption of this ASU on ourconsolidated financial statement disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable

Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment

expenses that are regularly provided to the chief operating decision maker and included within each reported measure of

segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a

reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public

entities with a single reportable segment. This ASU applies to all public entities that are required to report segment

information in accordance with ASC 280, and is effective for fiscal years beginning after December 15, 2023 and is effective

for interim periods within fiscal years beginning after December 15, 2024. Early adoption of this ASU is permitted. We are

currently evaluating the impact of the adoption of this ASU on ourconsolidated financial statement disclosures.

3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of thefollowing:

(1)Represents a receivable for the probable recovery related to an incurred loss in connection with certain

contingencies. Loss recoveries are recognized when a loss has been incurred and the recovery is probable. This

determination is based on our analysis of the underlying insurance policies, historical experience with insurers, and

ongoing review of the solvency of insurers, among other factors.

(2)Represents payments we make to third parties on behalf of, and reimbursable from, certain customers.

(3)Other current assets were not material as of March 31, 2024 and December 31, 2023.

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

Deferred revenue represents payments received in advance of providing services for certain advertising contracts with

customers and subscriptions. We expect substantially all of the deferred revenue at March 31, 2024 will be recognized as

revenue within the subsequent twelve months. Of the$7.1 million of deferred revenue at December 31, 2023,$5.4 million

was recognized as revenue during thethree months ended March 31, 2024. Revenue recognized during thethree months

ended March 31, 2023 of$5.7 million was included as deferred revenue at December 31, 2022.

5. Income Taxes

We generally calculate income taxes in interim periods by applying an estimated annual effective income tax rate to

income or loss before income taxes and by calculating the tax effect of discrete items recognized during such periods. Our

estimated annual effective income tax rate is based on our estimated full year income or loss and the related income taxes

for each jurisdiction in which we operate. This rate can be affected by estimates of full year pre-tax income or loss and

permanent differences.

The effective income tax rate for thethree months ended March 31, 2024 and 2023 was 444.4% and 191.5%,

respectively. The primary differences between our effective income tax rates and the federal statutory tax rate for thethree

months ended March 31, 2024 and 2023 weredue to the effects of non-deductible officers’ stock-based compensation

expense, state income taxes, benefits from research and development tax credits, and effects from our equity awards. The

effective income tax rate for the three months ended March 31, 2023 was further impacted by the valuation allowance on our

net deferred tax assets.

6. Debt

Our First Lien Credit Agreement (as amended from time to time, the "Credit Agreement") provides for (i) a$700.0 million

term loan maturing on October 10, 2025 (“First Lien Term Loan Facility”); and (ii) a revolving credit facility for up to$100.0

million (the “Revolving Credit Facility”). On February 20, 2024, we amended our Revolving Credit Facility to extend its

maturity date from October 11, 2024 to July 11, 2025. As of March 31, 2024, there were no changes to the terms of our First

Lien Term Loan Facility and Revolving Credit Facility as disclosed in Note 12 to our consolidated financial statements

included in our 2023 10-K.

The effective interest rate on the First Lien Term Loan Facility for thethree months ended March 31, 2024 and 2023

was 8.77% and 7.81%, respectively.

We hadno borrowings against the Revolving Credit Facility as of March 31, 2024 and December 31, 2023.

We hadoutstanding letters of credit issued against the Revolving Credit Facility for$8.3 million and$9.2 million as of

March 31, 2024 and December 31, 2023, respectively, which reduces our available borrowings under the Revolving Credit

Facility.

Our debt balance is as follows:

The estimated fair value of our debt approximated its carrying value as of March 31, 2024 and December 31, 2023,

based on inputs categorized as Level 2 in the fair value hierarchy.

Under the Credit Agreement, we are subject to a financial covenant requiring maintenance of a First Lien Net Leverage

Ratio (as defined in the Credit Agreement) not to exceed 8.2 to 1.0 only in the event that the amounts outstanding under the

Revolving Credit Facility exceed a specified percentage of commitments under the Revolving Credit Facility, and other

nonfinancial covenants under the Credit Agreement. At March 31, 2024, we were in compliance with our covenants.

7. Commitments and Contingencies

Aside from the below, as of March 31, 2024, there were no material changes to our commitments and contingencies as

disclosed in the notes to our consolidated financial statements included in our 2023 10-K.

Between February 2, 2023, and March 30, 2023, five individual plaintiffs filed five separate putative class actions

lawsuits against Google, Meta, Criteo and us, alleging generally that we have not adequately protected consumer privacy

and that we communicated consumer information to third parties, including thethree co-defendants. Four of the plaintiffs

allege common law intrusion upon seclusion and unjust enrichment claims, as well as claims under California’s

Confidentiality of Medical Information Act, Invasion of Privacy Act, Consumer Legal Remedies Act, and Unfair Competition

Law. One of these four plaintiffs additionally brings a claim under the Electronic Communications Privacy Act. The fifth

plaintiff brings claims for common-law unjust enrichment and violations of New York’s General Business Law. Four of these

cases were originally filed in the United States District Court for the Northern District of California ("NDCA) (Cases No. 3:23-

cv-00501; 3:23-cv-00744; 3:23-cv-00940; and 4:23-cv-01293). One case was originally filed in the United States District

Court for the Southern District of New York (Case No. 1:23-cv-00943); however, that case was voluntarily dismissed and re-

filed in the NDCA (Case No. 3:23-cv-01508). These five matters have been consolidated and assigned to U.S. District Judge

Araceli Martínez-Olguín in the NDCA. The court also set a briefing schedule for filing a single consolidated complaint, which

the plaintiffs filed on May 21, 2023 (Case No. 3:23-cv-00501-AMO; the "NDCA Class Action Matter"), as well as motions to

dismiss and motions to compel arbitration. In addition to the aforementioned claims, the plaintiffs in the now consolidated

matter bring claims under the Illinois Consumer Fraud and Deceptive Business Practices Act, common law negligence and

negligence per se, in each case, pleaded in the alternative. The plaintiffs are seeking various forms of monetary damages

(such as statutory damages, compensatory damages, attorneys’ fees and disgorgement of profits) as well as injunctive

relief. Briefing on the motions to dismiss and motions to compel arbitration was completed on August 24, 2023.

On October 27, 2023, six plaintiffs filed a class action complaint (Case No. 1:23-cv-24127-BB; the “SDFL Class Action

Matter”) against us in the United States District Court for the Southern District of Florida ("SDFL"). The plaintiffs alleged, on

behalf of the same nationwide class as the NDCA Class Action Matter, substantially the same statutory and common law

violation claims as alleged in that matter as well as claims based on the federal Electronic Communications Privacy Act,

invasion of privacy under California common law and the California constitution, invasion of privacy under New Jersey's

Constitution, and violations of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act, Florida’s Security of

Communications Act, New York’s Civil Rights Law and Stop Hack and Improve Electronic Data Security Act. The plaintiffs in

the SDFL Class Action Matter seek various forms of monetary damages as well as injunctive and other unspecified equitable

relief.

On October 27, 2023, we entered into a proposed settlement agreement with the plaintiffs in the SDFL Class Action

Matter, on behalf of a nationwide settlement class that includes the NDCA Class Action Matter, which provides for a payment

of$13.0 million by us. On October 30, 2023, the plaintiffs in the SDFL Class Action Matter filed a motion and memorandum

in support of preliminary approval of the proposed class action settlement and, on October 31, 2023, the SDFL granted

preliminary approval of the proposed settlement. The proposed settlement is subject to final approval of the court. Members

of the class have the opportunity to opt-out of the class and commence their own actions.

In response to the proposed settlement in the SDFL Class Action Matter, plaintiffs in the NDCA Class Action Matter filed

(i) on November 1, 2023, a motion in the NDCA for an order to require us to cease litigation of, or alternatively file a motion

to stay in, the SDFL Class Action Matter and enjoin us from seeking settlement with counsel other than plaintiffs’ counsel in

the NDCA Class Action Matter; and (ii) on November 2, 2023, a motion in the SDFL for that court to allow them to intervene

and appear in the SDFL action, transfer the SDFL Class Action Matter to the NDCA and reconsider and deny its preliminary

approval of the proposed settlement. The SDFL has issued an order requiring the SDFL plaintiffs to, among other things, file

a response to the NDCA plaintiffs' motion to intervene. Additionally, U.S. District Judge Araceli Martínez-Olguín in the NDCA

issued an order for us to show cause as to why we should not be sanctioned for an alleged failure to provide notification to

the NDCA of the pendency of the SDFL Class Action Matter. We filed our written response to this order on November 8,

2023. The NDCA held a hearing on November 14, 2023, and ordered parties to the litigation to participate in mediation. The

parties participated in mediation on January 10, 2024, and have agreed to participate in an additional day of mediation.

which occurred on March 7, 2024. Negotiations between the parties remain ongoing.

Based on the proposed settlement agreement, we determined that an estimated$13.0 million loss was probable and

accrued$12.5 million as of December 31, 2023, which was net of an initial$0.5 million payment to a third party qualified

settlement fund that we do not own, which will be disbursed to the plaintiffs if required conditions are satisfied. Based on

ongoing negotiations and mediation between the parties, we determined the estimated probable loss to be$28.0 million as

of March 31, 2024, for which$27.5 million was accrued within accrued expenses and other current liabilities in our

condensed consolidated balance sheetas of March 31, 2024. While this amount represents our best judgment of the

probable loss based on the information currently available to us, it is subject to significant judgments and estimates and

numerous factors beyond our control, including, without limitation, final approval of the court or the results of mediation. The

results of legal proceedings are inherently uncertain, and upon final resolution of these matters, it is reasonably possible that

the actual loss may differ from our estimate.

On April 22, 2024, Lisa Marie Barsuli, individually and on behalf of all others similarly situated, filed a class action

lawsuit against us and certain of our executive officers in the United States District Court for the Central District of California

(Case No. 2:24-cv-3282). The plaintiffs seek compensatory damages and equitable relief as well as interest, fees and costs.

The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder,

and asserts that we and certain of our executive officers failed to disclose to investors the risk relating to a grocery chain

taking actions that impacted acceptance of our discounted pricing for a subset of prescription drugs from PBMs, whose

pricing we promote on our platform (the “grocer issue”), which occurred late in the first quarter of 2022. As alleged in the

complaint, when we disclosed the occurrence of the grocer issue, our stock price fell, causing investor losses. We intend to

vigorously defend against these claims. We believe we have meritorious defenses to the claims of the plaintiff and members

of the class and based upon information presently known to management, we have not accrued a loss for this class action

lawsuit as a lossis not probable and reasonably estimable. While it is reasonably possible a loss may have been incurred,

we are unable to estimate a loss or range of loss in this matter.

These pending proceedings involve complex questions of fact and law and may require the expenditure of significant

funds and the diversion of other resources to defend. In addition, during the normal course of business, we may become

subject to, and are presently involved in, legal proceedings, claims and litigation. Such matters are subject to many

uncertainties and outcomes are not predictable with assurance. We have not accrued for a loss for any other matters as a

loss is not probable and a loss, or a range of loss, is not reasonably estimable. Accruals for loss contingencies are

recognized when a loss is probable, and the amount of such loss can be reasonably estimated. See "Note 4. Accrued

Expenses and Other Current Liabilities." Loss recoveries are recognized when a loss has been incurred and the recovery is

probable. See "Note 3. Prepaid Expenses and Other Current Assets."

In February 2023, we initiated arbitration against Famulus Health, LLC (“Famulus”) before the American Arbitration

Association in relation to Famulus’ breach of an agreement entered into by Famulus and us in June 2020, as amended (the

“Agreement”). GoodRx asserted claims for Famulus' breach of the confidentiality and exclusivity provisions in the

Agreement, seeking to recover damages and injunctive relief. On February 15, 2024, an arbitration award was rendered,

which included a damages award and a permanent injunction (the "Arbitration Award"). Famulus filed a petition to vacate the

Arbitration Award on February 21, 2024 in the United States District Court for the District of South Carolina ("DSC"). GoodRx

filed a petition to confirm the Arbitration Award on February 22, 2024 in the DSC. In April 2024, several motions and

oppositions were filed, which were consolidated by the DSC on April 12, 2024. The DSC held a hearingon April 30, 2024 on

the consolidated actions and an order issuance ispending. We can not make any assurance as to the outcome of the

Arbitration Award and when the Arbitration Award will be collected. Any gain on this matter is considered a gain contingency

and will be recognized in the period in which the Arbitration Award is realized or realizable, pursuant to ASC 450,

Contingencies.

8. Revenue

For thethree months ended March 31, 2024 and 2023, revenue comprised the following:

9. Stockholders' Equity

On February 23, 2022, our board of directors ("Board") authorized the repurchase of up to an aggregate of

$250.0 million of our Class A common stock through February 23, 2024. On February 27, 2024, our Board approved a new

stock repurchase program which authorized the repurchase of up to an aggregate of $450.0 million of our Class A common

stock with no expiration date. Repurchases under these repurchase programs may be made in the open market, in privately

negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion,

depending on market conditions and corporate needs, or under a trading plan intended to satisfy the affirmative defense

conditions of Rule 10b5-1(c)(1) under the Exchange Act (a "Rule 10b5-1 Plan"). These repurchase programs do not obligate

us to acquire any particular amount of Class A common stock and may be modified, suspended or terminated at any time at

the discretion of our Board. Repurchased shares are subsequently retired and returned to the status of authorized but

unissued. As of March 31, 2024, we had$295.2 million available for future repurchases of our Class A common stock under

the new stock repurchase program.

On March 6, 2024, we entered intotwo Stock Purchase Agreements with related parties, one with Spectrum Equity VII,

L.P., Spectrum VII Investment Managers' Fund, L.P., and Spectrum VII Co-Investment Fund, L.P. (collectively, "Spectrum"),

and one with Francisco Partners IV, L.P. and Francisco Partners IV-A (collectively, "Francisco Partners"), pursuant to which

we agreed to repurchase 6.2 million and 14.6 million shares of our Class A common stock (after giving effect to the

automatic conversion of our Class B common stock to Class A common stock upon such repurchase) from Spectrum and

Francisco Partners, respectively, for an aggregate repurchase of 20.9 million shares of our Class A common stock at a price

of$7.19 per share, in each case representing a discount from our closing share price of$7.57 on the date of the execution

of the Stock Purchase Agreements (the "Spectrum and Francisco Partners Repurchase"). The repurchase was approved by

our Board and its Audit Committee as part of the $450.0 million repurchase program approved in February 2024. Closing of

the Spectrum and Francisco Partners Repurchase occurred on March 11, 2024 for an aggregate consideration of$151.4

million, inclusive of direct costs and estimated excise taxes associated with the repurchases.

The following table presents information about our repurchases of our Class A common stock:

10. Basic and Diluted Loss Per Share

As we have net losses for the three months ended March 31, 2024 and 2023, diluted loss per share is the same as

basic loss per share, because potentially dilutive shares are excluded from the computation of loss per share as their effect

is anti-dilutive.

The following weighted average potentially dilutive shares are excluded from the computation of diluted loss per share

for the periods presented because including them would have been antidilutive: