GoodRx files to go public with a rare characteristic: Profits

GoodRx, a company that helps consumers access prescription drugs at a discount, filed to go public on Friday. The company will list on the Nasdaq under the symbol GDRX.

It’s part of a recent spate of IPO filings from tech companies, including data analytics provider Palantir, data storage company Snowflake and telemedicine provider Amwell. 

But GoodRx has one thing these other fast-growing companies do not: A record of consistent profitability.

According to the filing, the company earned $55 million in profit for first half of 2020, up from $31 million in the first half of 2019 — a jump of 75%. Revenues for the first half of 2020 were $257 million, up from $173 million in the first half of 2019, for growth of 48%.

In 2019, it pulled in $66 million in profit on $388 million in revenue. The filing shows profits all the way back to 2016, the earliest year for which financial information is included, and the company previously told CNBC that it’s been profitable on-and-off since 2013.

GoodRx’s profitability is a rarity among start-ups filing to go public. Another notable example is Zoom, the under-the-radar videoconferencing software that made its debut in April of 2019. That company’s stock is up more than eightfold since its debut and has gained 339% this year, as the global coronavirus pandemic kept people home and spurred demand for new ways to communicate remotely.

GoodRx, which is based in Southern California, was founded in 2011 by Facebook veteran Doug Hirsch and serial software entrepreneur Trevor Bezdek. The company saw a need to improve transparency in the highly complex world of prescription drugs. So it built a set of discount cards and coupons for consumers to take to the pharmacy, often allowing them to get a lower price.

It makes its money by collecting fees from the pharmacy benefits managers, or PBMs, that it works with whenever consumers present their GoodRx coupon at the pharmacy. About 17 million people use GoodRx every month. Going forward, it plans to expand into new areas, including telemedicine.

However, the business could take a hit if policymakers move to upend the drug supply chain. If consumers were covered by insurance and drug prices were more transparent and affordable, there would be less of a need for GoodRx.

Hirsch has previously said: “If America as a country decided to keep all Americans healthy and things were upfront and transparent, there would be no need for GoodRx. I don’t suspect that’ll happen, but if it did, I’d happily hang up my hat and move on to another problem.”

The IPO is being led by Morgan Stanley, Goldman Sachs and JP Morgan. The company has preivously raised financing from private equity firms specializing in technology and health, including Silver Lake and Francisco Partners. It was valued around $2.8 billion in a 2018 financing round.

GoodRx was no. 20 in this year’s CNBC Disruptor 50 list of promising private companies.