Earnings call transcript: Progyny Q2 2025 beats EPS forecasts with strong growth

Published 08/08/2025, 11:56
 Earnings call transcript: Progyny Q2 2025 beats EPS forecasts with strong growth

Progyny Inc (PGNY) reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $0.48, significantly higher than the forecasted $0.16. The company also achieved a revenue of $332.9 million, exceeding projections and reflecting a year-over-year growth of 9.5%. According to InvestingPro data, the company maintains strong financial health with a score of 3.45 (rated as "GREAT"), supported by robust cash flow metrics and solid balance sheet management. Despite these positive results, Progyny’s stock fell by 1.83% in aftermarket trading, closing at $23.06.

Key Takeaways

  • Progyny’s adjusted EPS of $0.48 surpassed the forecast by 200%.
  • Revenue for Q2 2025 reached $332.9 million, up 9.5% from the previous year.
  • The company’s stock price declined by 1.83% in aftermarket trading.
  • Progyny expanded its product offerings and global services capabilities.
  • The company anticipates continued growth in client base and covered lives.

Company Performance

Progyny demonstrated robust performance in Q2 2025, with significant growth in both revenue and profitability. The company’s revenue increased by 9.5% compared to the same quarter last year, while gross profit rose by 16%, indicating improved operational efficiency. InvestingPro analysis reveals that Progyny holds more cash than debt on its balance sheet and maintains a healthy current ratio of 2.39, suggesting strong liquidity. The company’s strategic focus on expanding its product offerings and global services capabilities contributed to its strong financial results. For deeper insights into Progyny’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

  • Revenue: $332.9 million, up 9.5% year-over-year
  • Gross Profit: $79 million, increased 16%
  • Gross Margin: 23.7%, improved from 22.5% last year
  • Net Income: $17.1 million, or $0.19 per diluted share
  • Adjusted EPS: $0.48, up from $0.43 last year
  • Operating Cash Flow: $55.5 million

Earnings vs. Forecast

Progyny’s adjusted EPS of $0.48 significantly exceeded the forecasted $0.16, marking a 200% surprise. This substantial beat highlights the company’s strong operational performance and effective cost management strategies. The revenue surprise was also notable, with actual revenue of $332.9 million surpassing the forecast of $317.61 million by 4.8%.

Market Reaction

Despite the positive earnings surprise, Progyny’s stock price declined by 1.83% in aftermarket trading, closing at $23.06. This movement contrasts with the broader market trend and may reflect investor concerns over future growth prospects or profit-taking following recent gains. The stock remains within its 52-week range, having reached a high of $26.76 and a low of $13.39. InvestingPro analysis indicates that Progyny appears undervalued at current levels, with the stock showing a strong year-to-date return of 33.68%. Additionally, five InvestingPro Tips highlight positive factors including expected net income growth and strong shareholder yield, with more insights available through the Pro platform.

Outlook & Guidance

Progyny provided a positive outlook for the remainder of the year, projecting full-year revenue between $1.235 billion and $1.270 billion, representing growth of 5.8% to 8.8%. The company also anticipates adjusted EBITDA of $205.5 million to $214.5 million. Progyny expects continued expansion in its client base and covered lives, driven by a strong pipeline and increasing interest in women’s health benefits.

Executive Commentary

"We’re pleased to report a strong second quarter with good growth in both revenue and adjusted EBITDA," said Pete Aneski, CEO of Progyny. He emphasized the importance of advancing women’s health in the workplace, noting that "81% of HR leaders said they are committed to advancing women’s health." CFO Mark Livingston highlighted the company’s client diversity as a key strength, stating, "We believe our client diversity is an underappreciated aspect of our business." This operational strength is reflected in the company’s financial metrics, with InvestingPro data showing an impressive return on invested capital of 10% and a strong free cash flow yield, indicating efficient capital allocation and robust cash generation.

Risks and Challenges

  • Market Saturation: Increasing competition in the women’s health benefits sector could impact growth.
  • Economic Uncertainty: Macroeconomic pressures may affect client budgets and spending.
  • Regulatory Changes: Potential changes in healthcare regulations could influence Progyny’s offerings.
  • Client Retention: Maintaining high client retention rates is crucial for sustained growth.
  • Technological Integration: Successfully integrating new technologies and services is essential for competitive advantage.

Q&A

During the earnings call, analysts inquired about the sales season’s development and its impact on the pipeline. Progyny’s management indicated that the sales season is developing later than usual, but the pipeline remains comparable to the previous year. Analysts also questioned the potential impact of tech layoffs, to which the company responded that there has been no significant effect on its operations.

Full transcript - Progyny Inc (PGNY) Q2 2025:

Kelly, Conference Call Operator: Good day, everyone. Welcome to the Progyny Inc. Second Quarter twenty twenty five Earnings Call. It is now my pleasure to turn the floor over to your host, James Hart. The floor is yours.

James Hart, Host/Investor Relations, Progyny: Thank you, Kelly, and good afternoon, everyone. Welcome to our second quarter conference call. With me today are Pete Aneski, CEO of Progyny Michael Stirmer, President and Mark Livingston, CFO. We will begin with some prepared remarks before we open the call for your questions. Before we begin, I’d like to remind you that our comments and responses to your questions today reflect management’s views as of today only will include statements related to our financial outlook for both the third quarter and full year 2025 and the assumptions and drivers underlying such guidance, our anticipated number of clients and covered lives for 2025, the demand for our solutions, our expectations for our selling season for 2026 launches, anticipated appointment levels of our clients in the industries that we serve, the timing of client decisions, our expected utilization rates and mix, the potential benefits of our solutions, our ability to acquire new clients and retain and upsell existing clients, our market opportunity and our business strategy, plans, goals and expectations concerning our market position, future operations and other financial and operating information, which are forward looking statements under the federal securities law.

Actual results may differ materially from those contained in or implied by these forward looking statements due to risks and uncertainties associated with our business as well as other important factors. For a discussion of the material risks, uncertainties, assumptions and other important factors that could impact our actual results, please refer to our SEC filings and today’s press release, both of which can be found on our Investor Relations website. Any forward looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During the call, we will also refer to non GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin and incremental revenue. More information about these non GAAP financial measures, including reconciliations with the most comparable GAAP measures are available in the press release, which is available at investors.progyny.com.

I would now like to turn the call over to Pete.

Pete Aneski, CEO, Progyny: Thanks, Jamie. Thanks everyone for joining us this afternoon. We’re pleased to report a strong second quarter with good growth in both revenue and adjusted EBITDA over the prior year, resulting in record quarterly results across both measures as well as gross margin expansion and the continued generation of significant cash flow. As the third quarter begins, we’re seeing that member activity remains healthy and is more consistent with historical seasonal patterns. Given that, as well as our strong results over the first half of the year, we’re pleased to be in a position to raise our full year guidance.

During the quarter, we also continued to make good progress in the areas that will make the greatest contributions to our future growth. These include expanding our client relationships and deploying the investments to broaden our product portfolio, which as previously discussed, are expected to further enhance our already industry leading solutions in women’s health and family building. Let’s discuss each of these areas, starting with our latest selling season. As you know by now, each year we focus on three areas of growth. First, we want to continue expanding our market share through the addition of new logos.

Second, we want to maintain the exceptionally high rate of client retention we’ve historically achieved, while also growing our relationships with those existing clients through expansions and upsells. And lastly, as the thought leader in our industry, we look to continue to attract partners who share our mission and who enhance our market position by extending our distribution reach. As we enter the heart of the season, we are pleased with our overall progress across these various goals. Starting with new client acquisition, employer interest remains high for women’s health and family building solutions. As noted last quarter, as the sales year began, we had seen a slower pacing in the build of Q1 pipeline.

That was not necessarily surprising as employers were dealing with a variety of uncertainties in the macro environment, particularly in certain industries. Since then, we’ve seen strong inflow into pipeline, particularly from June and through today, such that pipeline is now comparable to where it was at this time last year. At this point in the season, we still have a lot of work ahead of us to close the sales year. As in every other year, the majority of closings will occur over the coming months into early fall. Early commitments are comparable to this time last year, both in terms of client count and expected revenue.

The lives for those early wins are trailing last year due to differences in demographics of the newest clients. As we look at the opportunities that remain in pipeline, we would expect those demographics to normalize for the full sales year as we go into the final and most active months of the season. Our wins thus far span a broad cross section of the economy, representing both white and blue collar sectors and include financial services, healthcare, energy, consulting, manufacturing, software and retail. Early commitments have also been broadly diverse in terms of size, ranging from 1,000 lives to well in excess of 100,000 lives. We believe this further affirms not only the universal appeal for our services, it also validates the differentiation of our solution.

A key reason why interest remains high can be seen in the results of a national study we recently conducted exploring what working women want in their healthcare benefits versus what they are actually getting. Employers continue to appreciate the key role they play as 81% of HR leaders said they are committed to advancing women’s health in the workplace. It’s those types of leaders we are seeing engage this sales season. From the employees’ perspective, barely half of those surveyed believe their current benefits make their healthcare affordable. That is astonishing to us.

And we see that Progyny has the opportunity to bridge this gap through benefits that are designed to deliver outcomes and lower costs. We do this every day already, of course, but we’re building out our platform even further to extend our lead in the three areas that matter most to employers member experience, outcomes and cost control. The investments we’re making will create a linked platform across our high touch care management services with personalized digital engagement for our patients and providers. We’re excited about the continued progress on the platform and are looking forward to introducing these innovations next year. Let me now turn to the progress we made across our strategic initiatives, starting with our recent acquisitions.

The integration of Benefit Bump into our operations is now complete. Our leave navigation program can continue to be sold on a standalone basis or as an integrated part of our pregnancy and maternity solution. The earliest clients on this expanded program have already gone live, and we’ve also seen this program play a positive role in some of our sales successes this season. For instance, amongst our early commitments thus far, one of the largest chose facility with lead navigation validating our vision and joining together what have once been two separate categories. As it relates to our investment in global, our initiatives are on track for creating a suite of products that expand our existing global program, so that we may address the same categories of care that our U.

S. Offerings do. Our prior acquisition of April played an important role in expanding our capabilities within Progyny Global, helping us secure early commitments from U. S.-based multinational buyers that were looking for a solution that could address their full populations. And lastly, we’ve also continued to strategically add to our leadership team.

We’ve created more depth through the addition of Melissa Cummings as Chief Operating Officer and Jeffrey Clapp as our first Chief Product Officer. We view these hires as accelerating our innovation in product and member experience, while also continuing to advance overall operational excellence. Shifting over to renewals, early activity thus far has been positive. Clients aren’t looking to reduce their benefits for next year. And as we’ve seen every year so far, many are in fact expanding in some way, reflecting the value they see as we improve the efficiency of their overall health care spend.

We continue to close key gaps in women’s health care. As an example, we recently added pelvic floor therapy to our solution. Just as we sourced the highest quality providers for our family building solution, we’ve likewise expanded our network across this key area of women’s health. One in three women experience pelvic floor issues with one in five needing surgery to treat their disorder. While it’s most commonly associated with postpartum care, pelvic floor conditions can impact women in early adulthood through menopause and later in life.

Our newest specialty providers for pelvic floor therapy include Hinge Health and Origin. Progyny members will have access to both in person and virtual care options to treat this life altering condition. By employing our integrated approach to women’s wellness, Progyny members will benefit from earlier interventions for their pelvic conditions, improving their quality of life, while also helping to avoid the delays that can lead to more expensive care pathways, including surgery. This adds to Progyny’s whole person support of the conditions that influence fertility, maternity and overall women’s health outcomes. That’s a win win for both members and plan sponsors.

We also continue to look to leverage innovative technology in the marketplace. This quarter, we formed a new partnership with Aura, the world’s leading smart ring that will allow members to better understand the drivers of their health, leverage a comprehensive dataset and take action to improve their well-being. Progyny is uniquely positioned to leverage our high touch concierge care model to surround this data intensive experience with personalized recommendations. Finally, we were excited to announce last month that Progyny was chosen by Amazon to be the first women’s health solution in their Health Benefits Connector program. This is a service that allows the users of Amazon site to discover whether they have access to specialized programs like telehealth, mental health and musculoskeletal support through their employer sponsored benefits.

Progyny has been added to this program as the first specialist in women’s health addressing fertility, pregnancy and maternity support and menopause. Given the scope of their business, we recognize there are a lot of ways to work with a company of Amazon’s size. This latest collaboration will supplement the work we’re doing to build awareness of our newest services and over the long term has the potential to become a meaningful driver of enrollment. To conclude, we’re exceptionally pleased with our strong first half of the year and the progress we made in laying the groundwork for continued growth and success. Let me now turn the call over to Mark to review the results.

Mark?

Mark Livingston, CFO, Progyny: Thank you, Pete and good afternoon everyone. I’ll begin with the second quarter results and then provide our expectations for the upcoming quarter and for the full year. Second quarter revenue grew 9.5 over the prior year to $332,900,000 primarily due to an increase in the number of clients and covered lives as compared to a year ago. As previously disclosed, revenue this quarter included the final contribution from a large former client who had provided an extended transition period of care for members meeting certain criteria through June 30. This contributed $17,200,000 to revenue in the quarter, slightly more than the $14,700,000 that we had incorporated into the high end of our guidance.

Total revenue, however, exceeded the top end of our guidance by nearly $8,000,000 driven by the improved member engagement, which occurred across our collective base. Excluding the impact of this former client from both periods, revenue increased by 18% in both the second quarter and over the first half of the year, demonstrating the solid growth that we continue to see in the core business. As of June 30, we had five forty two clients with at least 1,000 lives, representing an average of 6,740,000 covered lives in the quarter. This compares to four sixty three clients and an average of 6,410,000 covered lives a year ago. I’ll remind you that covered lives in 2025 already excludes the client under the transition of care agreement, so your models won’t have to adjust the lives going forward now that the transition is concluded.

A handful of clients launched in the second quarter, representing the last batch of clients won in the 2024 selling season as well as some early launches from the current selling season. As a reminder, although we typically see some amount of early launches each year, they tend to be smaller companies who have a greater flexibility with their start dates, and our guidance won’t reflect these accounts until they’ve already launched their program with us. Following the close of the second quarter, another handful of smaller clients launched, representing additional early launches from the current season as well as the business we won following the recent wind down of a relatively small competitor’s operations. While this contributed a small number of lives, we were nonetheless extremely pleased to be the provider these employers turn to in order to quickly implement the Progyny benefit and continue offering this critical service with minimal, if any, disruption. Taking those July launches into account, we have over five fifty clients today and are approaching 6,800,000 covered lives.

You may have seen some recent headlines where certain high profile companies have talked about fine tuning the size of their organizations through workforce reductions. None of these programs are expected to be particularly impactful to us. With a base as large as ours, in any given quarter, we’ll see some number of clients who are contracting, while others are expanding. Q2 was no different in that respect, and the covered lives across our collective base were essentially flat versus Q1. We believe our client diversity is an underappreciated aspect of our business.

The presence we’ve earned across so many different industries, including ones that may run counter cyclical to others, provides us a level of diversification that has insulated us from any sector specific activity. Turning now to our member engagement metrics. Female utilization was 0.48% in the quarter, slightly above the second quarter a year ago. Utilization this quarter does not include the large client under the transition of care agreement as only a limited number of members meeting certain criteria were eligible to use the benefit, which is not compatible with how we report engagement from every other client. However, that client’s volume is included in ART cycles as doing so enables you to continue modeling volumes and revenues as you’ve always done.

Nearly 17,000 ART cycles were performed this quarter, our highest quarterly total ever and a 9% increase over the second quarter a year ago. ART cycles per unique female utilizer were 0.52 in the quarter, at the high end of our expectations and consistent with the rate of sequential increase that we saw in the year ago period. Looking at the components of the top line, fertility benefits revenue increased 11% over the second quarter last year to $214,000,000 while pharmacy revenue increased 8% to 119,000,000 The slight differential in these growth rates reflects ordinary variations in treatment timing and mix. Turning now to our margins and operating expenses. Gross profit increased 16% from the second quarter last year to $79,000,000 This yielded a 23.7 gross margin, an improvement from the 22.5% margin in the prior year period.

For the full year, we continue to expect gross margin expansion over 2024, although not to the same extent as what we saw over the first half of this year, given the additional hiring and other investments we plan to make to enhance the member experience and to prepare for our 2026 launches over the back half of this year. Sales and marketing expense was 5.5% of revenue in the second quarter, a slight increase from the year ago period as our investments in go to market expansion have been largely mitigated by the efficiencies that we continue to realize through client acquisition and retention. We previously told you about the investments we’re making this year to both expand our product platform and to integrate our recent acquisitions. We also said those dollars would ramp up in the second quarter and continue over the second half of the year. You see this in our G and A, which was 10.9% of revenue this quarter versus 10.3% in the year ago period.

Although adjusted EBITDA grew 6% to 58,000,000 the impact of our investments is also seen in our adjusted EBITDA margin, which declined modestly as expected from the year ago period to 17.4%. Net income was $17,100,000 or zero one nine dollars per diluted share in the quarter. This compared to net income of $16,500,000 or $0.17 per diluted share in the year ago period on the basis of 89,600,000.0 shares. Adjusted EPS was $0.48 in the quarter as compared to $0.43 in the second quarter last year. Turning now to our cash flow and balance sheet, We generated $55,500,000 of operating cash flow in the second quarter and $105,000,000 over the first half of the year.

This performance highlights the high conversion of adjusted EBITDA to operating cash flow that’s inherent in our model as well as our strong focus on tightly managing our back office processes. CapEx was $5,000,000 in the quarter, a $4,000,000 increase over the prior year period, reflecting the investments in member experience and acquisition integration. We continue to expect that incremental CapEx for these projects will be approximately $15,000,000 over our 2024 spend. As of June 30, we had total working capital of $374,000,000 reflecting $3.00 $5,000,000 in cash, cash equivalents and marketable securities and no debt. Following the close of the quarter, we entered into a revolving credit facility providing us with up to 200,000,000 of additional liquidity until its expiration in July 2030.

The revolver is undrawn and we have no planned use for the facility at this time. We’d entered into the facility as we believe it’s prudent for a company of our size and with our growth profile to enhance our operational and financial flexibility in managing the business. Entering the facility does not alter the capital priorities we’ve previously shared with you, including stock repurchases, project expansions, new distribution channels and select acquisitions. And you’ve seen us execute across all four of these areas over the past twelve months. As compared to the year ago period, DSOs improved by 13.5, reflecting our ongoing discipline in revenue cycle management.

Turning now to our expectations for the third quarter and the year. As the third quarter begins, we’ve continued to see healthy member engagement at levels that are more consistent with the historical range. Nevertheless, given the unexpected variability we experienced at certain times in 2024, the assumptions we’re making today reflect the potential for further variability in activity and treatments over the second half of the year. As you can see in today’s press release, we have modestly increased our assumption for full year utilization to 1.04% at the low end and 1.06% at the high end, which is still lower than what we saw in 2024. In terms of consumption, the first half of the year was slightly above our original expectations.

Given that as well as the current pacing of member activity, we’ve modestly increased our assumptions for full year ART cycles per unique to 0.91 at the low end of the range and to 0.92 at the high end. With these assumptions, we’re projecting between two ninety million to $3.00 $5,000,000 in the third quarter for revenue, reflecting growth of 1% to 6%. As the transition of care agreement with the large client concluded on June 30, there’s no contribution from that client in the third quarter over the second half of the year. If we exclude the $32,800,000 in revenue from the year ago quarter, our Q3 guidance reflects growth of 14% to 20%. On profitability, we expect between 45,000,000 to $49,000,000 in adjusted EBITDA in the third quarter, along with net income of between 9,400,000.0 to $12,300,000 This equates to $0.10 and $0.14 of earnings per share or $0.37 and $0.40 of adjusted earnings per share on the basis of approximately 90,000,000 fully diluted shares.

With our strong second quarter and first half results, we’re pleased to raise our full year guidance. We now project revenue of between $1,235,000,000 to $1,270,000,000 reflecting growth of between five point eight percent and eight point eight percent. If we exclude the revenue from the client under the transition of care agreement from both years, our full year revenue growth is projected to be between 15.1% and to 18.5%. We also expect between 205,500,000 and $214,500,000 in adjusted EBITDA with net income between $52,300,000 to 52 point sorry, 58,900,000.0. This equates to $0.58 and $0.65 earnings per diluted share and $1.7 and $1.78 of adjusted EPS on the basis of approximately 90,000,000 fully diluted shares for the year.

With that, we’d like to now open the call for questions. Operator, can you please provide the instructions?

Kelly, Conference Call Operator: Certainly. The floor is now open for questions. Certainly. For questions. Your First Floor question is is coming from Michael Cherny with Leerink Partners.

Please pose your question. Your line is live.

Michael Stirmer, President, Progyny: Great. Thank you. This is Dan Clark on for Mike. Just had a question. The commentary around the selling season and early commitments being comparable sort of in terms of client count and expected revenue, is that on a gross basis, so like excluding the large customer contribution from last year?

Or is that on a net basis in terms Thanks.

Pete Aneski, CEO, Progyny: It’s on a gross basis. So if you think about it, it’s you would exclude the the large client from both years and look at the the growth this year. And if everything turned out the way it did for the full sales year, something in that neighborhood. So you’re on pace on a gross basis.

Michael Stirmer, President, Progyny: Great. Thank you.

Kelly, Conference Call Operator: Your next question is coming from Jalinder Singh with Truist. Please pose your question. Your line is live.

Jalinder Singh, Analyst, Truist: Thank you. Thanks for taking my question. So I’m going to stick with the selling season commentary. Are you implying that you are seeing more smaller size employer client wins, but they’re signing up for multiple services from you guys and large employers are taking longer to make a decision? Or is it more like there has been some change in win rates among the large employer clients?

And based on the number of lives you’ve seen so far, how confident you are that you can still add at least 1,000,000 lives next year?

Pete Aneski, CEO, Progyny: I’ll start and then I’ll let Michael add any commentary. So it’s not about whether or not small or larger clients are closing at a higher rate. It’s how the sales year started where the overall pipeline from a lives perspective was slower, but caught up materially in June and July and through now. And so as a result, if you think about it, the timing of when people are looking at a benefit, then making a decision is a function of when they start reviewing the benefit when they come into pipeline, right? So we are seeing large clients also close already as I said in my prepared remarks.

But the expectation our expectation, we believe by the end the sales year is that relative to average lives, we expect the year to catch up.

Michael Stirmer, President, Progyny: Yes. And I would just add, we continue to focus on our target set earlier in the year. And as usual or as in prior years, these next three months are highest volume from a closing perspective. And as Pete referenced in his comments, with pipeline in a comparable position to last year, that’s where we’re focused and as we are in every year.

Jalinder Singh, Analyst, Truist: Great. And then quickly one follow-up on the Progyny Rx. I understand trends there could fluctuate quarter over quarter, but I just want to make sure we’re not missing anything there. If you look at first half and the growth at Progyny Rx is like roughly half the growth of Fertility Benefit business. So should we assume that Progyny Rx should outpace in the second half in terms of the growth rate on year over year?

Just help me understanding there.

Pete Aneski, CEO, Progyny: Yes. It is more timing. The first half first quarter, as you know, sort of more higher percent of initial consoles was going to impact pharmacy. But overall, whether catches up and or surpasses medical or on a full year basis by the end of the year is close and comparable. We’ll see because exact timing even within a full year could be off a little bit, but it’s going to be it’s still we expect it still to be close to in line with the medical by the end of the year.

Jalinder Singh, Analyst, Truist: Okay. Thank you so much.

Kelly, Conference Call Operator: Your next question is coming from Allen Lutz with Bank of America. Please pose your question. Your line is live.

Dev, Analyst, Bank of America: Hey, there. You have Dev on for Allen Lutz here. I just had a quick question on guidance. I’m just trying to do the math here. It seems like just based on the art cycle guidance here, the high end and the low end of the range.

I’m just looking at the average revenue parts cycle in the first half and then try to apply that to the second half and kind of getting above the range there. So curious on considerations for average revenue per art cycle in the back half of the year. And then I just got one more follow-up.

Mark Livingston, CFO, Progyny: Yes. One thing you need to be careful of when you’re looking at first half versus second half, again, revenue is going to also include sort of that disproportionately high number of initial consults and non art activity in the beginning of the year. So you’ll see a higher number per art cycle because people are just beginning their a proportion of people are just beginning their journey in Q1. So again, we’ve guided to it so that I think if you look at where we’ve guided previously, it’s inched up a little bit, but it hasn’t changed much since our prior guide for the full year.

Dev, Analyst, Bank of America: Okay, got it. That’s fair. And then just one on new products, you’re going to market with a handful of new services this year. Last year, adoption of the new products were quite strong. Just curious how conversations are trending around those new adjacencies, which are resonating more in this market with clients.

And then in terms of like a growth, material growth lever, which of those products should we think of as most imminent in terms of being beneficial to the P and L there?

Michael Stirmer, President, Progyny: This is Michael. On the first part, we’re seeing active conversations really across all of our products, which is great to see, as well as where Pete mentioned in his prepared comments, that includes the additions of leave of navigation as well as our global services. We’re having full and complete and robust conversations across benefit administrators. And as for sort of which product they select as we go forward, again, that’s very much aligned to where that particular client strategy might be, what they may have already implemented, or where they’re looking to go in 2026 and beyond. So that certainly varies by client and by client preference.

I’ll maybe turn over to Pete for the second part of the question.

Pete Aneski, CEO, Progyny: Yes. As it relates to which products are going to contribute the most, I think is what you asked. There’s none neither of them or none of them are sort of materially different in terms of expected contribution as uptake both from a client adoption perspective as well as just from an overall utilization perspective within each of their addressable markets takes hold. The expectations are relatively equal in material absolute dollars in terms of our expectation long term from those products.

Dev, Analyst, Bank of America: Great. Thank you.

Kelly, Conference Call Operator: Your next question is coming from Scott Schoenhaus with KeyBanc. Please pose your question. Your line is live.

Scott Schoenhaus, Analyst, KeyBanc: Hey, team. Thanks for taking my question. Just want to drill in more and follow Jalinda’s question on the selling season commentary that you stated. So was it am I fair to understand that you’re just saying that the wins developed later than last year sort of in June and July? Is that what you meant by the lives commentary?

But you also included the word demographics there. So wondering if you’re talking about the sort of the cohort of the population set within the new client wins versus previous years. Just trying to unpack that more with more color, please.

Pete Aneski, CEO, Progyny: Yes. Let clarify it. When we talk about June and July later than last year, we’re talking about pipeline additions and making commentary relative to overall active pipeline as of today now being comparable, where earlier in the year pipeline additions were slower and we were a little behind in lives, right, which is separate and apart from when we talk about early commitments, I. E, wins so far this year, which are comparable year over year from a number of prospects and expected revenue perspective. And the demographics of those are yielding a higher expected revenue just based on the industries that have committed so far, which is why the even though the lives are slightly behind prior year committed to date, the expected revenue is still comparable to what it was this time last year.

Is that helpful?

Scott Schoenhaus, Analyst, KeyBanc: Yes, that’s helpful, Pete. Thanks so much. And then I know you made a comment about how you are not the big tech layoffs haven’t impacted 2Q results, but wondering what you are seeing in July and August now that these layoffs have been rolling off more. Are you seeing a spike in utilization from these large tech companies as employees feared that they might lose this fertility benefit?

Pete Aneski, CEO, Progyny: We’re not seeing any sort of change in utilization patterns relative to some of those industries that are have some layoffs. The level of layoffs are again relative to those companies collectively not big. So no, we’re not really seeing anything different. They’re engaging on a normal pace. Thank you very much.

Kelly, Conference Call Operator: Your next question is coming from Brian Tanquilla with Jefferies. Please proceed with your question. Your line is live.

Brian Tanquilla, Analyst, Jefferies: Hey, good afternoon. Congrats on the quarter. Maybe just a question on the upsell. You mentioned some clients are expanding. Just curious what those conversations are and how hard it is to convince these corporates to add benefits to what they already have given the environment that we’re in right now.

Pete Aneski, CEO, Progyny: Why don’t you do Michael? Sure.

Michael Stirmer, President, Progyny: Yeah, I mean, these are right when we’ve talked about this before relative to fertility benefits as well. But particularly these the large clients have a benefit strategy that is a multiyear approach. And as it relates to women’s health, as we referenced in the comments around some of the survey findings, But even as we’re out in the market talking, certainly women’s health benefits remain top of mind for benefit administrators. And they have a plan and strategy of how they’re rolling that out. And so as we talk about what’s next, we interact often with our existing clients often on a quarterly basis.

And we’re working with them over the course of the quarters and years to put these things in place. And so the conversation is sort of naturally progresses. But again, really varies depending on the strategic objective of the client, what they’re seeing in their own costs and what they’re trying to mitigate in their own costs. And that determines whether we expand into maternity or parenting, or whether we’re adding in menopause or some of our newer programs around global leave and navigation.

Brian Tanquilla, Analyst, Jefferies: Got it. And then, Mark, maybe just

Michael Stirmer, President, Progyny: a quick question. Are you able

Brian Tanquilla, Analyst, Jefferies: to share with us the art cycle per female utilizing member excluding the big contract change and then maybe the rev per art cycle ex contract change in the quarter as well?

Mark Livingston, CFO, Progyny: Yes, we haven’t broken that out before. But know that so we have provided in the press release a projection of what the Q3 range would be that supports the guide. And obviously, the client there, you can do your own math.

Jalinder Singh, Analyst, Truist: Awesome. Thank you.

Kelly, Conference Call Operator: Your next question is coming from Sarah James with Cantor. Please pose your question. Your line is live. Thank you. I just wanted to go back

Sarah James, Analyst, Cantor: to the comment of sales that have closed so far, the revenue being in line with past years, but the lives being lower because of the type of industry that the client’s in. Does that mean that these clients are expected to have a higher utilization and that’s why the total revenue per client is higher? Or are these clients in industries that coming on as new clients are starting to purchase a broader set of your products?

Pete Aneski, CEO, Progyny: No. It’s it’s the former. So so a simple example that we give in the past is is, you know, whether it’s tech, hospital systems, media, higher utilizing industries as opposed to labor and some older economy companies, retail, etcetera, are lower utilizing. So it’s more a function of utilization rate by industry than it is a broader suite of products.

Sarah James, Analyst, Cantor: Got it. And could you talk a little bit about how you’re seeing interest out there from mid sized employers or sort of a smaller size of large employers? Are you seeing an increase in demand, to adopt fertility and family planning products?

Pete Aneski, CEO, Progyny: We’re we’re we’re seeing, as we’ve seen in the past, increase in demand across companies of all sizes. And that’s been the case in this year, as it’s been the case for us really since our existence. So as I look at overall active pipeline, number of prospects within it and the total lives and compare it to prior year this time, basically says that there’s interest across the board relative to company size.

Sarah James, Analyst, Cantor: Thank you.

Kelly, Conference Call Operator: Your next question is coming from David Larson with BTIG. Please pose your question.

James Hart, Host/Investor Relations, Progyny0: Hey, congratulations on the good quarter. Can you talk a little bit about the mix? Like I think in terms of like maybe transfers versus egg freezes and sort of the pricing within the mix, any thoughts there would be helpful. Thank you.

Pete Aneski, CEO, Progyny: Yes, there’s nothing to call out relative to mix this quarter vis a vis any periods, whether it’s prior aside from normal seasonality, Q1 to Q2, but comparing it to prior year, etcetera, there’s nothing really to call out in terms of mix. So I’m not sure what exactly you’re looking for.

James Hart, Host/Investor Relations, Progyny0: Well, it seems to me like maybe utilization was at risk of declining a little bit earlier in the year given the uncertainty in the economy. Now that it’s sort of the market has come back up and people feel better about the economy, they’re having babies and perhaps the mix of services has switched from eggs, which are lower priced, to transfers, are higher priced, which is obviously a benefit or a tailwind to the business is what I was getting at.

Pete Aneski, CEO, Progyny: I’ll just clarify. So as it relates to transfers only, egg freezing is actually higher, not lower. But either way, if you think about it, right, if you look at just the overall utilization rate, cycles per utilizer and the return to the normal seasonality of cycles per utilizer, Q1 to Q2, for example, and then sort of what we guided for Q3 versus what we saw last year, I would say that mix has returned to more normal, I. E. Prior to 2024, than 2024.

It’s sort of the easiest sort of high level way to process it.

James Hart, Host/Investor Relations, Progyny0: And then just any color on I think you said you won some business with Amazon. Have you ever had clients that left and then came back at some point? Just any color on that those comments there would be very helpful. Thank you.

Pete Aneski, CEO, Progyny: Yes. We talked about a partnership with Amazon Connect, not that we won business with Amazon. But either way, we actually have, at times have had clients return that left. None sort of to speak of or talk about by name, but it’s happened more than once.

James Hart, Host/Investor Relations, Progyny0: Thanks very much.

Kelly, Conference Call Operator: There are no further questions in queue at this time. I would now like to turn the floor back over to James Hart for closing remarks.

James Hart, Host/Investor Relations, Progyny: Thank you, Kelly. And thank you, everyone, for joining us this afternoon. Please feel free to reach out to me as needed for any follow ups and clarifications. Otherwise, we look forward to seeing you over the course of the fall during our next conference call.

Kelly, Conference Call Operator: Thank you, everyone. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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