Alto Pharmacy Financial Model

• Alto App: Mobile-first patient self-service - order fill, cart checkout, delivery tracking, medication adherence reminders, in-app messaging, automated refill enrollment.
• AltoMD: Web-based provider portal - real-time Rx status tracking, prior authorization management, patient adherence visibility, instant messaging with Alto care team. Claimed to eliminate 20+ hours/week of back-office time.
• Wunderbar Platform: Proprietary in-house pharmacy operating system covering care operations, supply chain, third-party integrations, and data infrastructure. 5+ years of development, 100+ engineers, 200+ releases/month, 2M+ lines of code.
• Delivery model: Same-day courier delivery; centralized Rx processing; hub-and-spoke geo expansion.
• Revenue streams (current): Prescription dispensing (insurance reimbursement + patient copay). Expansion roadmap: Alto Plus subscription (~$13B TAM), OTC/vitamins/supplements (~$65B TAM), telemedicine (~$250B TAM), population health / data services (~$24B TAM).

• Pharmacy TAM: $450B, confirmed on slide 18.
• Only 1% of pharmacy is currently online vs. 70% for ride-hailing, 52% for food delivery, 65% for travel.
• Combined expansion TAM (prescriptions + subscription + OTC + telemedicine + population health): ~$800B.
• 90% of scripts still picked up at retail; 33% of scripts never picked up; -5 NPS at largest US pharmacy (CVS); US is #1 country in drug spend per capita; ~$100B in medical waste tied to non-adherence.
• ~140M Americans fill ~5.8B 30-day Rx/year; 20–30% of prescriptions written are never filled; ~$300B cost from non-adherence.

• Primary: Pharmacy dispensing - Alto bills insurance (PBM reimbursement) and collects patient copays. Revenue recognized per prescription filled and delivered.
• Channel: Provider-driven GTM (AltoMD drives Rx flow from physicians → Alto); patient self-service via app; refill-enrollment auto-fills recurring scripts.
• Pricing: No extra cost to patients stated on website; pricing transparency / coupon optimization is a product feature. Insurance accepted.
• Expansion revenue: Alto Plus subscription membership (price not disclosed), OTC add-ons (increases AOV), telemedicine consult fees, population health / data licensing.
• B2B angle: Focus on enterprise customers and health plan / payor partnerships (Medicare Part D, assisted-living, employer plans).
• Exact pricing (per-delivery fee, subscription price, reimbursement rates) not disclosed in deck.

• ARR: $XM (exact figure redacted)
• YoY growth: >100%
• Contribution margin: Positive (+$X per order); up from -$X in 2019; on track for +$X by 2023 - specific dollar amounts redacted
• NPS: 90 (described as "90+" on slide 18); sustained >85 for more than 4 years with weekly sample >1,000
• Cities live: 11 as of deck date
• States licensed: 48
• Revenue growth chart: Consistent quarterly growth from Q3 2016 through Q4 2021; strong acceleration visible in 2020–2021; Q4 2021 is the highest bar, roughly 2–3x Q4 2020
• Technology team headcount: 100+
• Codebase: 2M+ lines; 200+ releases/month

• Contribution margin: Positive as of deck date; was negative in 2019; target +$X by 2023 - exact figures redacted.

Competitive set identified:

• Traditional retail: CVS, Walgreens, Rite Aid, Walmart+
• Digital / tech challengers: Amazon Pharmacy, GoodRx, Hims
• Alto is positioned as highest on both Technology axis and Pharmacy-focus axis vs. all named competitors.

Stated moats:

• Proprietary Wunderbar platform (5+ years, 2M+ LOC) - hard to replicate
• AltoMD provider stickiness - workflow integration drives Rx flow lock-in
• Refill enrollment creates recurring, predictable demand
• NPS of 90+ sustained >4 years - strong patient retention signal
• Regulatory technology backbone; licensed in 48 states
• Aligns full healthcare ecosystem: patient, provider, pharma, payor

• Note: Deck is labeled "CONFIDENTIAL" and is divided into Business Overview, Commercial & Growth Strategy, and Operations Overview sections - suggests a Series C/D institutional raise context given scale (11 cities, 100+ tech team, multi-year ARR trajectory), but round details are absent.

• Archetype + why: DTC / Healthcare Services Revenue Model with Unit-Economics Waterfall - specifically a pharmacy dispensing P&L built around scripts filled per market, insurance reimbursement rates, and per-order contribution margin progression. Alto's primary revenue is prescription volume (scripts × avg reimbursement per script, net of drug COGS), not SaaS ARR, though ARR is used as a proxy revenue metric internally. The provider-GTM flywheel makes this a volume/cohort model by city launch year.

• Forecast horizon & granularity: 5 years (2022–2026), quarterly for years 1–2, annual for years 3–5. City cohort build-up is the natural unit of granularity given the hub-and-spoke expansion model.

• Key drivers & assumptions:
• Scripts per active patient per month: ~3–4 scripts/month based on chronic medication adherence norms; refill-enrollment patients likely higher
• Average reimbursement per script: ~$80–$120 blended (commercial insurance mix); specialty scripts materially higher
• Drug COGS as % of revenue: ~75–82% (pharmacy industry norm; PBM spread narrows this)
• Gross margin per script: ~18–25%
• Contribution margin trajectory: Negative in 2019 → positive at deck date → target +$X by 2023; model should show margin/order improving as delivery cost is leveraged over volume
• Delivery cost per order: ~$8–$15 blended (courier + logistics overhead), declining with density
• Active patients per city at maturity: 10,000–30,000 (based on city population sizes and 1% online penetration starting point)
• City launch cadence: 5 cities live pre-2021, 5 more in 2021; 3–5 new cities/year 2022–2024
• Revenue growth: >100% YoY at deck date; decelerates to ~60% in 2022, ~40% in 2023, ~25% in 2024 as base grows
• Alto Plus subscription: launch 2022; ~5–10% patient attach rate; ~$10/month fee
• OTC / telemedicine revenue: immaterial in near term (<5% of revenue through 2024)
• Headcount / OpEx: 100+ tech team at deck date; sales force expansion tied to new market launches; G&A scales sub-linearly

• Scenarios (Base / Bull / Bear - which variables flex):
• Base: >100% → 60% → 40% → 25% revenue CAGR; contribution margin reaches +$8/order by 2023; 3–4 new cities/year
• Bull: Faster market penetration; Alto Plus scales to 15%+ attach; pharma / payor B2B deals accelerate; margin improves faster from volume leverage
• Bear: PBM reimbursement compression; delivery cost inflation; slower city ramp; competitor (Amazon Pharmacy) gains share; regulatory headwinds on refill-enrollment

• Required sheets / outputs:

1. Assumptions - all drivers in one place (reimbursement rate, COGS%, delivery cost, patient ramp by city, headcount ratios)
2. City Cohort Build - scripts/patients per city by launch year, ramp curve, mature-state throughput
3. Revenue & Gross Profit - scripts × reimbursement, less drug COGS; by segment (Rx, subscription, OTC, telemedicine)
4. Contribution Margin Waterfall - gross profit less delivery cost, less variable customer support = contribution per order
5. OpEx Schedule - S&M (sales force per new market), R&D (tech team), G&A
6. P&L (Income Statement) - revenue → gross profit → contribution → EBITDA
7. Headcount Plan - tech (100+ base), ops, sales, G&A
8. Cash / Runway - uses of capital by bucket (city launch capex, working capital for drug inventory, headcount)
9. Scenario toggle - Base / Bull / Bear on key levers
10. KPI Dashboard - ARR, scripts filled, active patients, cities live, NPS, contribution margin/order