GoodRx Q4 2025 Results: Profitability Improves but Core Business Headwinds Linger

What happened

GoodRx reported fourth quarter 2025 revenue of $194.8 million and net income of $5.4 million, marking a return to GAAP profitability with a 2.8% margin. Adjusted metrics were stronger, with adjusted EBITDA of $65.0 million and an adjusted net income margin of 14.9%, reflecting the high-margin cash flow highlighted in the DeepValue report. These results occur amidst ongoing structural pressures in the core prescription transactions segment, where prior quarterly data showed a 9% year-over-year decline and shrinking monthly active users to 5.4 million. The growth in pharma manufacturer solutions, which surged 54% year-over-year in Q3 2025, likely helped offset some erosion, though the news release lacks segment-specific details for Q4. Overall, the update suggests GoodRx is navigating a precarious transition, but the sustainability of its earnings remains tied to unproven shifts in its business mix.

Implication

The Q4 results reinforce GoodRx's cash-generative nature and adjusted EBITDA strength, supporting the undervaluation thesis based on a DCF estimate of ~$3.96 per share versus the current ~$2.76. However, the absence of segment breakdowns in the news leaves critical uncertainties about whether prescription transaction declines have stabilized or if manufacturer solutions growth accelerated sufficiently. Ongoing headwinds from PBM program changes and pharmacy closures, as noted in the master report, could further compress the core revenue base, necessitating faster offset from higher-margin segments. Regulatory scrutiny and competitive threats, including PBM disintermediation, add layers of risk that could materially impact future cash flows and valuation. For risk-tolerant investors, the stock may offer upside if the transition succeeds, but a conservative approach is prudent until upcoming filings provide more clarity on segment performance and trend durability.

Thesis delta

The Q4 2025 results do not materially shift the investment thesis, which remains a cautious 'POTENTIAL BUY' with significant risks. They confirm the company's ability to generate adjusted profitability amid headwinds but highlight the need for closer monitoring of segment trends to validate the transition away from declining prescription transactions. No new catalysts or setbacks are evident in this release, keeping the thesis dependent on future updates regarding PBM relationships and manufacturer solutions growth.