1. GoodRx (GDRX) — CEO Doug Hirsch & CFO Karsten Voermann Interview with Citi

There was a lot of overlap between the themes covered in this interview and the topics of conversation in GoodRx’s last investment conference less than a week ago. Click here to access those notes.

a. Voermann on the GoodRx opportunity:

“We are still in the very low single digit percentage penetration of our market as the biggest player. We feel like we have a long runway ahead of us with still 70% of consumers not aware that prescription prices vary.”

“Our most significant source of traffic remains unpaid word-of-mouth referrals from consumers and providers. It’s in our DNA to grow fast and to maintain attractive margins — we intend to do that going forward as well.”

b. Voermann on the importance of partnering with 95% of the top 20 branded manufacturers:

“The top 20 manufacturers in the United States represent 50% of the $30 billion advertising TAM. The top 20 are viewed by other manufacturers as indicative of the best ways to spend money and also allow us to expand horizontally with more medications from the same manufacturers.”

GoodRx is in just 4% of the medications that these top 20 manufacturers sell. There are also about 500 smaller branded manufacturers and GoodRx merely works with 35 of them. It’s the top of the first inning for this rapidly growing and immensely profitable segment.

“A top ten manufacturer recently concluded that GoodRx delivered them with an 8X ROI across a portfolio of 5 branded medications. The net revenue retention with that customer is 170% year to date.”

c. Hirsch on why telehealth:

“This serves as another entry point for consumers to experience GoodRx. We want to be there at every critical point in the healthcare journey.”

“We identified early on that consumers were coming to GoodRx looking for savings but without a prescription in hand.” GoodRx care (a piece of its telehealth platform from the HeyDoctor acquisition) plugs this gap of prescribing and adherence.”

d. Hirsch of GoodRx Gold:

Hirsch believes there are more partnerships like the KrogerRx tie-up coming for GoodRx Gold. While he wouldn’t offer any specific names, he did tease that there is more news coming.

e. Voermann updating the impact of the pandemic on GoodRx’s business:

“We haven’t yet seen a return to normal prescription volumes but we have seen sequential month over month growth. We think the care backlog has now leveled off — so it’s no longer growing. There is still a coiled spring that will drive future growth but the timing is uncertain.”

f. Hirsch on GoodRx’s B2B presence beyond USAA and DoorDash:

Hirsch explained that while GoodRx’s primary focus has been on the consumer, enterprises have approached GoodRx asking for benefits help thus pulling GoodRx into the B2B space.

“We are just getting started with business development efforts and you will see a lot more really exciting partnerships.”

g. Hirsch on Amazon:

“Amazon is focused on driving its mail-order business but even in a pandemic mail-order did not significantly grow and is now receding. We will always worry about everything pertaining to growing our business but that is not a threat we worry too much about today.”

“GoodRx is tremendously lower-priced in retail and by mail vs. Amazon but it’s not an either or for us… Our competition is the old way of doing things. Too many Americans don’t understand the price variation in healthcare.”

Click here for my broad overview of GoodRx’s business.

2. Progyny (PGNY) — Amazon hiring news & CEO David Schlanger Interviews with Bank of America

a. Amazon news

Amazon announced that it will hire another 125,000 employees in the coming months. Because Amazon is a Progyny client and because Progyny generates more revenue as its clients require more treatment cycles, this should be a positive revenue driver for it going forward. Progyny is automatically included in its client’s benefits packages for new employees if that employee gets its benefits through their employer.

Treatment utilization rates remain constant as new employees are on-boarded so hiring for a client is directly correlated to Progyny revenue growth.

b. Schlanger on the selling season:

Progyny also interviewed with Bank of America last month. Click here for the notes.

As a reminder, Progyny’s core selling season runs from August 15th to October 15th — we are roughly half way through the season.

“As we said in August, we are having a very active selling season — that continues to be the case.”

c. Schlanger on the threat of traditional carriers potentially improving their own fertility offerings:

“Our primary competition is the legacy carriers, and they have largely adopted the status quo approach to utility.”

“Carriers have shown no effort to try and improve their fertility programs other than maybe coming up with a new brand name. From a substantive perspective they haven’t done anything and there are a lot of structural issues making it difficult for them to do so. The things we do they are not set up to do. They’d have to do a lot of re-tooling their operations and have many other priorities. I don’t envy the carriers.”

“Doctors (providers) don’t view us in the same boat that they view large commercial carriers and think working with us is easier and more beneficial to their practices.”

“Our competitive environment has been largely the same for a handful of years now. Even with direct competitors, we hardly ever see them in a competitive situation and lose business to them even more rarely — almost never.”

d. Schlanger on the ability to expand into other service offerings like post-birth care services:

“We do believe those opportunities exist and are actively assessing these opportunities.”

“We have found that it’s ill-advised to try to create something with questionable value that merely sits on top of our existing benefits program. Maybe you can get the sale but renewals are tough. With Progyny, renewals are not tough because we create real value. That’s the lens that we will look at other adjacencies through.”

e. Schlanger on utilization rate:

As a reminder, the company experienced a sudden dip in its utilization rate in recent months. That dip was felt sector-wide and was attributed to pent-up summer travel demand — not pandemic variants. The dip was referred to as an anomaly and the trend is recovering.

Schlanger reiterated his comments from his last talk with Bank of America.

My Progyny deep dive will be published next month.

3. Olo (Olo) — CEO Noah Glass/CFO Peter Benevides Interview with Piper Sandler

a. Glass & Benevides on Olo’s long term ambitions:

“Olo already touches the full commerce stack directly and through our partner ecosystem. We will go deeper with new digital use cases for on-premise and drive-thru in the years to come. We are seeing a lot of interest in these 2 areas. Olo’s new ambition is digital entirety: To touch, add value to and derive revenue from every restaurant transaction. Now it’s all on the table for Olo.” — Glass

“The QSR segment is something that gets us very excited. This segment has grown through franchising leading to fragmentation within a brand’s tech stack. That’s an area where we can add a lot of value.” — Benevides

b. Glass on how Olo can improve the drive-thru process:

“Our customers are interested in creating fly-thru lanes rather than drive-thru lanes. This will convert drive-thru lanes to a lane where consumers who have ordered and paid ahead can go to collect their order for a faster experience. We can enable this so a consumer can have the order run out to them while being able to pull out without being gated in by another car.”