Ladies and gentlemen, thank you for standing by and welcome to the GoodRx First Quarter 2024 Earnings Call. At this time a reminder today's conference is being recorded. I will 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 first quarter of 2024. Joining me today are Scott Wagner, our Interim Chief Executive Officer 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 without limitation statements regarding management's plans, strategies, goals and objectives, our market opportunity, our anticipated financial performance, underlying trends in our business, our value proposition, our potential for growth, our hybrid retail direct and BM contracting approach, collaborations and partnerships with third parties, including our integrated savings program, anticipated impacts of the deprioritization of certain solutions under our Pharma Manufacturing Solutions offering and our cost savings initiatives, expected impacts of the sunsetting of programs savings club, anticipated impact of the Change Healthcare outage, our capital allocation priorities and the amount, timing and benefits of our share repurchase program. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors. These factors 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 Factor section of our annual report on Form 10-K for the year ended December 31, 2023 and 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 will be referencing certain non GAAP metrics in today's remark. We have reconciled each non GAAP metric to the nearest GAAP metric in the company's earnings press release, 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'll turn it over to Scott.

Thanks, Whitney, and thanks to everyone joining us today to discuss our first quarter results. Today I'd like to highlight the meaningful headway we've made over the last 12 months and more specifically in the first quarter. Then Karsten will take you through our Q1 financials and expectations for Q2 and full year 2024. I'd like to open by saying that we'll be keeping our prepared remarks focused during this call. Because as many of you are likely aware, we announced our first Investor Day, which is taking place next Wednesday, May 15. We hope those of you listening today will join us for that event, which will be webcasted via our Investor Relations website. We'd like to use that opportunity to discuss several things. First, the market context in which we operate, specifically the persistent and growing need for prescription affordability solutions; including ours. Second, the power of the GoodRx value proposition, elements that make us the preferred destination for consumers and healthcare professionals to find affordable prescription. Third, GoodRx's position within the healthcare value chain, details on the strength and durability of our pharmacy network as we focused on rebalancing, pharmacy and PBM economics with our own, while incentivizing joint growth with our retail partners. Fourth our expected growth levers including B2B integrated savings program that allows us to aggregate prescription demand efficiently as well as continued growth in Pharma Manufacturer Solutions. Fifth, our financial trajectory and growth prospects; our plan is to lay out medium term revenue expectations for both our prescription marketplace and manufacture solution segments, as well as earnings flow through. And finally, growth incentives, additional upsides and opportunities that aren't in our base trajectory, but give us the opportunity to accelerate growth by leveraging our existing and differentiated assets to enable extensions of the…

Thank you, Scott. I'll speak briefly to our 1Q '24 financial results before turning to guidance. In summary, during the first quarter, revenue and adjusted revenue were in the upper end of the guidance range we provided on our Q4 earnings call in February, and adjusted EBITDA margin was a beat, exceeding the guidance we provided. Total revenue and adjusted revenue for the quarter increased 8% year-over-year to $197.9 million primarily driven by organic growth in prescription transactions revenue, including expansion of our integrated savings program as well as growth in Pharma Manufacturer Solutions. I'll also note that the first quarter of last year included more revenue from Kroger Savings Club subscription offering, which we are sunsetting in July 2024 as compared to this year's Q1. And Q1 2023 also included revenue from our vitaCare offerings and Manufacturer Solutions, which we restructured last fall and did not contribute any revenue at all in this Q1. To quantify this impact on growth, Kroger Savings Club and vitaCare together contributed approximately mid-single-digit millions of dollars more revenue in the first quarter of 2023 than in the first quarter of 2024. The point here is that on a like-for-like basis, growth is even stronger. Moving on to the revenue lines. Prescription transactions revenue grew 8% year-over-year to $145.4 million, which was primarily driven by a 10% increase in monthly active consumers. On our 4Q '23 earnings call, we discussed that an immaterial impact from the Change outage was incorporated in the Q1 guidance we provided. At the time of the call, we've had a couple of days of impact. While we were back up and running quickly, the outage persisted more broadly across the industry for multiple weeks, impacting benefit plans, pharmacies and others. On our 4Q '23 earnings call, we discussed the…

[Operator Instructions] Our first question comes from Michael Cherny with Leerink Partners.

Congrats on a good quarter here. Maybe if I can just ask a question on ISP. As you think about the ramping effects, think about the integrations that you've had so far with the PBMs you're working with, where have been the greatest opportunities where you've seen the contribution? And in terms of the guidance for the rest of the year, how do you see ISP ramping in the percent of volumes, percent of growth? Any other additional color we can look into as you think about where this goes over time would be great.

Michael, it's Karsten speaking here. I think there are 2 parts to your question. The first part was where we see the opportunity and how do we see the rest of the year. With respect to both of those matters, I think we see the opportunity in 4 major areas. The first major area continuing to add incremental PBMs. The second area is to add incremental plan sponsors from each PBM. The third area is formulary expansion. So the inclusion of, for example, completely off formulary medications. And then the final area of expansion is that there are still certain retailers who haven't been elected to participate in ISPs. Of those for us, the really big ones are around expanding the number of sponsors associated with particular PBM and formulary and of course, adding new PBMs because that creates a big positive effect indeed even though we already have PBMs covering approximately 60% of U.S. lives. With respect to trajectory through the rest of year, traditionally, we would see ISP be expected to shrink in its contribution as the year progresses because folks hit their deductibles, for example, and have less need for ISP at certain points in the year. I think what we're noticing now is that, that is probably going to be less of an effect in 2024 because of the growth vectors I described, namely PBMs continuing to add members in that formulary in particular, that are in our already existing PBM base of business today. So I think the seasonality that we've historically talked about will likely be less pronounced or not that pronounced at all this year relative to what we would have expected and saw, for example, last year. Hopefully, that's helpful.

And it's from Jailendra Singh with Truist Securities.

First, a quick clarification around Change Healthcare. You guys call impact being ongoing. I just want to make sure, is there a risk that impact would be higher than low single digit in millions. But then my main question is that MAC and PTR per MAC trends in the quarter, MAC were ahead, PTR per MAC was slightly below compared to at least Street expectations. Just curious, how would you describe trends on those metrics compared to your internal expectations? And any color you can provide around PTR per MAC in the quarter? Were there any puts and takes from ISP impact or direct contracting pharmacy? And how should we think about the trend there for us of the year?

Hi, it's Scott. Thanks. On Change, this won't be a persistent issue that's going through the rest of the year, but think relative to the last time we were on with everybody. There was an outage. We got our own service back up, but obviously, I think Change has lasted longer than anybody else in the industry would have thought throughout the quarter, and so there were persistent effects that are really centered more around Q2, both around the system and the industry in general and then some things that it did -- certain amounts of cards on file with retailers. But the punchline is, as we go into the second half, it shouldn't be a big thing, but it obviously has been meaningful for the industry in Q2. I'll let Karsten handle your MAC and PTR question.

Hi Jailendra, on PTR per MAC, I think we did see some small single-digit degradation in Q1 on a year-over-year basis. But you saw, for example, in 4Q that it was up by a similar amount, I think PTR per MAC has been relatively linear over the past few quarters. It's gone up a little in some down a little in some. I think there's no specific driver related to ISP or direct contracting that it necessarily point to on that. Both of those things have been in effect for several quarters now as the PTR per MAC has continued to fluctuate within a very narrow range.

And it's from the line of Stephanie Davis with Barclays.

You mentioned talking to those midterm targets at the upcoming Analyst Day. And if I do the math and I scrub out some of the headwinds that you've had in the quarter and year-to-date, you get to a low double-digit growth rate. Is there any reason to think there is something unique in this year or this quarter that would make that higher than your longer-term trend?

Stephanie, I think the dynamic of a marketplace just inherently says in a given quarter, growth rate might bounce around in a range, and that's kind of what we're going to lay out for everybody with more detail than 30 seconds or a minute on a conference call. So we'll lay that out, but appreciate the math and what it means for us. But I think to specifically answer your question, it could be just the dynamics of a marketplace where you just do have some degree of variance in lapping year-over-year things that can happen. But over a longer term, the -- that's the zone or the goalpost that the business can operate in.

And it's from the line of Daniel Grosslight with Citi.

Scott, I think you mentioned that now over 20% of the volume is coming through direct contracts. I'm curious where do you think that trends over the next year or so? Do you think you'll ever get to kind of the majority of volume flowing through direct contract? And maybe if you can comment on how that might change your relationships or dynamic with the PBMs?

I think the most important point to note is that we're following our retail partners as we go through this journey. And what that dynamic means is that in some cases, we're going to have a portion or all of the volume being direct. And in some cases, we're going to work in our hybrid model. And it's going to be both. And again, the point being we're following where retailers are going and meeting the needs of, frankly, the value chain in general. And so I don't want to throw out a number because I think, again, this is something where we're kind of following the value chain as it goes, which is great, and there's going to be both in the system for a long, long time. I think that's the biggest point to think about on it. And relative to your PBM commentary or question, the PBMs, we're going to have a business relationship with the PBMs for a long, long time for all the reasons that we had one at the inception of this business, which is it's a way of working together, adding incremental lives. ISP is obviously a new evolution where the GoodRx benefit, which is really off insurance is being brought closer to plans, not just in integrated savings, but I do think and hope that over the next, not just quarters but couple of years, integrated savings is going to evolve into a series of different efforts that sort of bridge that gap, and we're going to do that hand-in-hand with our PBM partners.

And it comes from the line of Lisa Gill with JPMorgan.

I just want to understand a few things on the retail side. And the answer to the first question, when you talked about growth in ISP, you talked about retail participation. Are there retailers today that aren't participating? And then secondly, large companies like CBS have talked about moving towards cost-plus reimbursement. And I'm just curious as to what that means to your model, if anything, as they move forward. And then if I can just squeeze one in, just as a clarification. The EBITDA was $6 million higher than consensus in the quarter. Is there any reason -- was that different than what you were projecting internally? Just thinking about the flow-through from the rest of the year of that beat versus the Street in the first quarter.

So Lisa, thanks. I'm going to go in reverse order top of mind. So the EBITDA beat and flow through, it's actually great. I mean, it really is an outcome of return to growth and good flow-through as things are happening. So EBITDA grade. In terms of the cost plus situation, again, as you well know, cost plus is a different way for a retail pharmacy of pricing itself relative to the PBMs, but the need for value relative to people's insurance doesn't change at all. And so not just our own value and the GoodRx value prop, which is really being able to add value relative to gaps in insurance that still exists in a cost-plus world, gosh, it might even be enhanced depending upon how retailers are operating in. I'm going to tease our Investor Day a little bit, but the best way to actually talk about this is to show it, and there's a set of drugs where if you go on to GoodRx and you're looking at price points of different drugs across retailers. There's several on cost-plus models today, and there are several that are not or in the traditional world, and nobody can tell the difference, and there's a fundamental benefit of GoodRx that applies across both. So that's -- I think that's a cost-plus thing. We'll dive into that more next week with everybody. On retail acceptance, Yes. The answer is a couple of several retailers are working through the dynamics of ISP, which as you might expect, have to do more with their funded contracts than it does necessarily an ISP. But we and our PBM partners, in particular, are working through that with retail. So there's nothing fundamentally different about retailers who are in or not. It has to do with more of the balance of the program relative to the fund to book.

And it is from the line of Charles Rhyee with TD Cowen.

I wanted to ask a little bit more. I think you talked about some of the big areas for growth, particularly in ISP is among them, right, the types of transactions, particularly all formulary generics. Can you talk about sort of what the process is with the various PBMs on how those decisions are made? And maybe if you have an estimation of what percentage of the formularies you are being used for today. Is there a formal process in there? Or is it just as they are testing through it? And just trying to get a little bit more sense on that. And then just a clarification, I think when you read it, the guidance for EBITDA, $250 million, did I hear that you expect greater than $250 million for the year? Just to clarify that.

Charles, let me -- hopefully, I hit the mark with my answer to this. I'm understanding your question is the process of how we're ramping or working through with the PBMs. And I would say this is a mutual effort with a couple of people on our end and a couple of people on theirs, actually flowing through lives and then actually looking at some of the price point in data. And what that means is that we're doing it together, but it's very much an incremental rollout. I think in a matter that we've tried to communicate to people. And again, on this one, we are following the lead of our PBM partner. So I think the punchline on it is we're working together and it has, if you might think about it as a step-by-step in an incremental approach to all of these. And I'll let Karsten address the EBITDA question.

Yes, that's an easy one, Charles. On the EBITDA side, yes, we did say we expected to achieve over $250 million of adjusted EBITDA, so approximately greater than 15% Y-o-Y.

And it's from the line of Stan Berenshteyn with Wells Fargo Securities.

Maybe on Pharma Manufacturing Solutions, you have called this out as an area of focus. It seems like Q1 was a bit stronger than what you had guided for. Anything to call out in terms of upside to expectations what drove that? And then perhaps related to this, can you just give us some updates on the sales pipeline here, the type of traction you're seeing within the segment?

Yes. That's great. And I look forward to going into more detail on this whole area next week. I think what you're seeing is the results of efforts that we were talking about at the end of last year, we're going to hone in on what we're really good at and distinctive at with these brand partners. And in pharma land, that's access solutions in the parlance, which is there's all of these co-pay and patient assistance programs that every brand runs and they all act differently when you embed that workflow into GoodRx, the whole system works better, right? In many cases, we get 5 to 15x the organic page views at a brand than the natural brand does. And so if you think about us being the destination for affordability boy, there's real value for each brand, connecting their affordability programs through GoodRx. And when we talk about access, that's pretty much what it is. And the effort last year was really honing our discussions with marketers on those things, and it's starting to bear fruit. To think by the numbers, Q1 was up 20% year-over-year. Obviously, this is a selling cycle. So the growth rates are going to bounce around a little bit. But I believe because I've been in conversations with not only our teams, but a lot of these brand pharma companies over the last quarter, there's real value we had here. There's real value we add that's scalable, and I would hope that this trajectory is going to continue.

And it's from the line of Scott Schoenhaus with KeyBanc.

So I want to talk about gross margins. They really accelerated here at almost 94%. We haven't seen that since the grocer issue 2 years ago. And you called out in the press release the restructuring impact on the pharma man sol. Should we expect these kind of gross margins going forward? And is there any more room to squeeze out of more cost savings out of the pharma man sol business?

I'm going to make 2 points on that. I'm going to tie on to Scott's last point on pharma man sol because it directly connects to this point. So Scott was talking about the pharma man sol growth rate at sort of 20%. And I think whatever needs to remember is that on a like-for-like basis, last year's quarter included revenue from vitaCare, which we restructured out that's not in this year. So on a like-for-like, you see growth rate that, if anything, on a forward-looking basis might be a bit higher. Second point I'd make is with respect to gross margin, it ties in too because the cost of revenue that went away, went away in connection with that vitaCare restructuring as well. That is now gone. So again, revenue gone on a like-for-like basis, but costs also gone. And that's one of the reasons Scott, I and the rest of the team elected to undertake the restructuring is because we felt like it would be a perpetual, not just a onetime, increase in gross margin as cost of revenue drops.

Is that something that we should expect structurally to continue throughout the rest of the year?

Absolutely, yes. Is the short answer. Like that cost of revenue generating offering is gone. So the answer is absolutely yes then.

And I'll pile on just that question in Karsten's comments. I think you are seeing the value of GoodRx relative to brands now, which is starting to show up in the numbers financially, both growth rate trajectory and margin flow-through and the ability to help this accrete to profitable growth that it's nice to be at this point.

And it's from the line of Jack Wallace with Guggenheim Partners.

This is Mitchell on for Jack. So you bought back over 21 million shares and have $295 million of repurchase authorization remaining. Just trying to understand how you're thinking about capital deployment for the rest of the year? And is repurchasing shares opportunistically still at the top of the list? And is there anything else you're considering?

Sure. I'll take this one. This is Karsten. You're totally right about the share repurchases. We're very focused on taking advantage of situations where we view the stock is cheap. So that's a basis for what we've done historically. Going forward, I'm going to take your question as what else might we be doing on the capital side to deploy capital. And I can tell you that Scott, I and the team are at this point not contemplating any M&A and not contemplating any material investments that would reduce our ability to produce cash flow on behalf of investors at all. So I think on a forward-looking basis, the 2 elements that potentially continue to exist are -- if we continue to see the stock is cheap, to your point, we'll do something about that in there. And the other element is that we have opportunities to repay debt. And as interest rates have increased, we continue to evaluate those very carefully in the context of refinancing.

And it's from the line of Sean Dodge with RBC Capital Markets.

Scott, maybe going back to your comments around ISP being rolled out in increments. When it comes to expanding to new employers or sponsors or expanding the drugs included or covered under the ISP, are those changes PBMs want to make more around the beginning of plan years? Or are those things that can be kind of phased in, in increments over the course of a year?

I'm going to grab it first, if that's okay, Sean. It sort of both is the short answer. I think we originally anticipated that we'd see significant impacts at the start of the year. But in my commentary related to the IP seasonality question being less pronounced than we might have expected historically, one of the reasons for that is exactly this point that we continue to see lives come on, for example, and other benefits of ISP occur even during the year. So that was the basis for my comment that seasonality is flatter, less downward sloping than we might have otherwise expected on ISP.

And it comes from the line of Allen Lutz with Bank of America.

Karsten, thanks for all the color on the ISP opportunities. I want to follow up on that last question. You mentioned a few different opportunities, adding PBMs, adding incremental members, adding formulary, adding retailers. And I think in response to the last question, you said there's been some members that have come on since last quarter. Has anything else changed since the update in February? And then as it relates to retailers that are currently not accepting ISP, is that a -- like what percent of retailers is that? Is that -- are there any large retailers in there? And then could retailers come on over the course of 2024.

Sure. Thanks. First of all, the performance of ISP is largely consistent with our modeling. So grateful to our FP&A team on that. It's coming in line with expectations. Hence, you saw us performing aligned with the expectations we set or a little more in the business overall, including in PTR. I think in terms of levers, probably the one I didn't mention earlier that I think is a great area of inflection for us, too, and that I might not have expected as much a quarter ago is our ability to win transactions. So the win rate associated with the [indiscernible] ads we get. As you know, and I think everyone else on the call knows the way ISP works is a member as a funded benefit goes to the pharmacy, and it goes to the lower cost of GoodRx or what that member might otherwise pay to their funded benefit plan. And as we work with all of the constituents in the value chain to optimize ISP, that winter conversion rate ends up getting better. With respect to your question about pharmacy acceptance, a significant majority of the big pharmacies, I'm trying to think back. I mean I get this perfectly right, but pretty much all of them are in. But we do have a tail of pharmacies that are smaller that we continue to pick up on.

And it is from the line of John Ransom with RJ.

So one kind of CFO type question and one kind of bigger picture question. So the -- looking at PTR per MAC, it's declined every year since 2018 in your legacy business. Is this just following the natural slope of generic deflation and we should expect that to continue going forward, I assume? That's the first question. The second question is, I guess, I was kind of surprised and a little happy you guys are doing an Analyst Day. I know you've been teasing this out, but what was the catalyst for wanting to do this Analyst Day next week? And just maybe highlight the 2 or 3 big themes you're trying to drive home as the story is -- certainly, the story is in transition, and I think there are some points that could lead for better elimination.

Yes. John, it's Scott. Well, I think the logic for getting together with everybody is to spend 3 hours laying out, hey, the need we serve, value prop, go through detail in each of the areas that we're doing, lay out financial goalposts between the marketplace and man sol that we haven't done. And speaking a little selfishly and for myself, but at year-end, everybody outside was asking for all those things. We were doing it ourselves internally. We're ready to do that with consistent with some visibility on, hey, here's the opportunities and the growth levers that we're working on now here's a set of secondary things that these are going to lead into as they continue to work and some financial goalposts that we can communicate to everybody that we have high confidence in. And so the point is the business is ready. And it's nice to be able to do that with half a day's worth of time and people actually focused on and able to answer questions. And it's nice, it's a nice point that we're ready to do that.

And with respect to the PTR per MAC question, I think there are a couple of concepts that are pretty important. We don't expect any sort of nonlinearity and I expect it to be largely flat for the year. You'll probably see the percentages fluctuate around 0, meaning flat slope down. So this time, it was down a couple percent. Next quarter it could well very well be slightly up. It's not a metric we actively manage to. But I will point out 2 things. One thing is that we have increased our use of consumer incentives in order to drive consumers to take action. For example, their first fill or, for example, if we see them fill a few times in a chronic script and then look like they might be a trading, we can incent them with the discount on film number x to bring them back into the fold. That is contra revenue in the same sense that for CPG brands, coupons are contra revenue. So you see a drag this year that's up sort of, call it, low double-digit millions with respect to increased contra revenue that reduces revenue and therefore, when divided by MAX reduces PTR per MAC. I think the reality is we're not spending more. It's just a matter of shifting out of marketing and into the sort of consumer incentives arena. I think the second point is that when you look back over the time horizon you're talking about, that's also the time horizon when one of our retail partners where we made quite nice margin. I'm thinking of Kroger here, constituted a significant amount of our business, like 24%-ish, 25%-ish of PTR volume. And so I think that was the other factor that created a headwind. But now that that's fully flowed through, right? It's just the latter when the contra rev one that is materially impactful. Hopefully, that's helpful.

I just wanted one -- or it's a long commentary of this, but one last plug for next week. I do want to acknowledge and recognize that externally, the pacing of the company, which we've had feedback from investors on it has been harder to follow, people are going to come away from time with us next week and investors well with a very clear understanding of here's market, here's the company, here's what we're working on. Here's how it translates into financials. And you'll be able to judge sort of what and how that trajectory is, but everybody will come away with transparency to understanding coming out of next Wednesday.

And it comes from the line of John Park with Morgan Stanley.

I'm here for -- on behalf of Craig. Besides any acceleration on top line growth that would provide operating leverage in the model, are there any productivity or cost initiatives that would drive margin expansion? I think you mentioned going away from vitaCare will help with gross margins, but would love any color on that?

I think you're seeing -- it's Scott. Karsten is going to jump in too. But what you're really seeing is just the power of the model itself, which is as you return the top line growth, the flow-through is great. And this is -- vitaCare was a very specific action on restructuring something that just wasn't a great use of resources and it's great for the business and great for investors. Now if you think about our flow through, just as we return to growth, you're naturally getting it. And I will say we're certainly prudent with resources, but it isn't that hard. And in some ways, we're looking to lean into things that will continue to drive growth. So the topic of marketing hasn't come up on the call. But I will say there are things that we're finding and doing that we'll talk about next week where we'll push the gas out. And the nice thing for everybody listening in the call is we can do those things and we can do that, whether it's marketing or surging, engineering effort in certain areas that we are doing and guess what the revenue growth still flows through.

Yes. And in terms of the quant part of your question, I think there are areas where we, over the past few quarters shown some efficiency. Like, for example, if you go back and look over a multi-quarter sort of longitudinal perspective, you see incremental marketing efficiencies even adjusting for the contra revenue that I talked about with respect to John Ransom's question, you see on product development technology that as folks shift from maintenance mode to really being deployed against building new growth-oriented technology and platform attributes that the capitalization rate on that goes up too, right? So there are certain dynamics in the business that we would expect to allow us to continue to accrete margin incremental to just the flow-through, particularly as we look forward on a multiyear basis, and we'll talk about that more next week, as Scot alluded to.

One moment for our last question, please. And it comes from the line of George Hill with Deutsche Bank.

I guess 2 quick ones. One, Karsten, is, are you able to unpack from a gross margin perspective for us, the impact of 20% of scripts going through retail direct from 5% in the year-ago period. I think a lot of us are trying to do the gross margin impact here. And then Scott, I think a lot of us that are kind of drug supply chain wonks are looking at the Part D program and seeing a lot of disruption next year. I was just wondering if you guys would kind of quantify your exposure to that? I know you're not supposed to have a lot of direct exposure but may be a lot of indirect and kind of how you're thinking that could impact the business next year.

Sure. I heard the first part of the question. The second indirect part, would you mind repeating that one for us, George?

So like a lot of us are expecting Part D disruption next year. I know that you guys aren't supposed to have a ton of direct exposure to Part D. But I imagine you probably -- there's probably a lot of beneficiaries who are using the GoodRx card while either in their deductible or to avoid parts of co-pays or what have you, but a lot of those people could wind up dancing around next year. Just wondering how you guys are thinking about what happens in that market.

Sure. So in the interest of time, I'll try and be quick here. To the Part D question, I think the reality is that as we continue to analyze all of the potential changes, we haven't found any that we anticipate and that we view at this point as impactful to us and material to us. So I don't think on that dimension, it impacts our forward-looking view, certainly, over the time periods and reference periods that we're looking at, so coming, call it, a couple, 3 years. So not just next year. So I think on that dimension nothing really to add. With respect to direct contracting and margins, the direct contracting hasn't had any kind of a negative material effect on our margins like we talked about a little with John on PTR per MAC. There has been a slight downward slope to that over time, but that downward slope isn't really direct contracting. The downward slope is primarily driven by the contra-revenue aspects of marketing shifting from [ slam ] to sort of the couponing or consumer incentives that I mentioned, number one. And number two, the fact that Kroger volume, which was again a little higher margin for us than some other retailers that the Kroger volume decreased. So I think from that perspective, we view direct contracting as effectively materially neutral to us. So good thing because retailers like it more. And from our perspective, we're happy to help them merchandise drive incremental volume, et cetera. For us, it's all about the dollars of EBITDA and the dollars of gross margin, and that's exactly what direct contracting helps us drive.

And this concludes the Q&A session. I will pass it back to Scott Wagner for final comments.

Thanks a bunch. Thanks all. Appreciate it. And most importantly, we look forward to spending time with people next week. I think it will be super productive just to lay out some more context on things we're working on with real color on what they are, what that can -- how that can go forward and most importantly, for investors on the call, the goal posts at a segment level and at an overall level that we think you can think about for the business and certainly for the next several years. So we're looking forward to it. Thanks, everybody.

And thank you all who participated. You may now disconnect. Good day, everyone.