Earnings call transcript: Progyny Q3 2025 shows revenue growth, stock dips

Progyny Inc. reported its third-quarter earnings for 2025, revealing a revenue increase to 311.7 million dollars, marking a 9% year-over-year growth. Despite these positive results, Progyny’s stock fell 4.61% to 18.88 dollars in regular trading, although it saw a slight uptick in after-hours trading. The company has raised its full-year revenue guidance, projecting between 1.263 and 1.278 billion dollars, and announced a 200 million dollar share repurchase program.

Key Takeaways

• Progyny’s Q3 revenue increased by 9% year-over-year, reaching 311.7 million dollars.
• The company raised its full-year revenue guidance to between 1.263 and 1.278 billion dollars.
• Progyny’s stock fell by 4.61% during regular trading but rose slightly in after-hours trading.
• A 200 million dollar share repurchase program was announced.
• Progyny expanded its services and launched new products for fertility and family building.

Company Performance

Progyny demonstrated solid performance in Q3 2025, achieving revenue growth of 9% compared to the previous year. The company has focused on expanding its offerings and maintaining a diverse client base, which contributed to its continued success. Progyny’s strategic initiatives, including the launch of Progyny Global and new supplemental plans for small to mid-sized companies, have positioned it as a leader in fertility and family-building benefits.

Financial Highlights

• Revenue: 311.7 million dollars (9% YoY growth)
• Operating cash flow: 50 million dollars in Q3
• Full-year revenue guidance: 1.263 to 1.278 billion dollars
• Adjusted EBITDA guidance: 216 to 220 million dollars
• Gross margin: 23%
• Adjusted EBITDA margin: 17.5%

Earnings vs. Forecast

Progyny’s Q3 earnings per share (EPS) and revenue exceeded expectations, with revenue surpassing the forecasted 299.23 million dollars. The company’s ability to outperform revenue forecasts highlights its strong market position and effective business strategies.

Market Reaction

Progyny’s stock closed at 18.88 dollars, reflecting a 4.61% decrease during regular trading hours. However, in after-hours trading, the stock price rose by 1.96%, reaching 19.25 dollars. This movement suggests mixed investor sentiment, likely influenced by the company’s strong financial performance and revised guidance, offset by broader market trends.

Outlook & Guidance

Looking forward, Progyny has projected Q4 revenue between 292.7 and 307.7 million dollars and adjusted EBITDA between 45.3 and 49.3 million dollars. The company remains optimistic about its growth prospects, focusing on expanding its global service offerings and targeting additional markets.

Executive Commentary

CEO Pete Anevski highlighted the company’s innovation, stating, "We’re pleased to announce the first of its kind supplemental plan for fertility and family building." President Michael Sturmer emphasized the importance of member experience and cost control, saying, "Employers always want to understand and focus on really three areas: member experience, quality and outcomes, and cost control."

Risks and Challenges

• Market volatility and economic pressures could impact future performance.
• Competition in the fertility benefits sector may intensify.
• Regulatory changes could affect Progyny’s operations and profitability.
• Dependency on large clients poses a risk if any significant client reduces or discontinues services.

Progyny’s Q3 2025 earnings call illustrates the company’s continued growth and strategic focus on expanding its product offerings, despite short-term stock price fluctuations. The company’s revised guidance and robust financial performance underscore its potential for future success.

Full transcript - Progyny Inc (PGNY) Q3 2025:

Tom, Conference Call Operator: Good afternoon and welcome to the Progyny earnings conference call. At this time, all participants have been placed on a listen-only mode, and we’ll open the floor for your questions and comments after the presentation. I’d now like to turn the call over to your host, James Hart. James, the floor is yours.

James Hart, Host/Investor Relations, Progyny: Thank you, Tom, and good afternoon, everyone. Welcome to our third quarter conference call. With me today are Pete Anevski, CEO of Progyny, Michael Sturmer, 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 and will include statements related to our financial outlook for both the fourth quarter and full year 2025, and the assumptions and drivers underlying such guidance, our anticipated number of clients and covered lives for both 2025 and 2026, the demand for our solutions, anticipated employment levels of our clients in the industries that we serve, our expected utilization rates and mix, the potential benefits of our solution, 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 on 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.

Tom, Conference Call Operator: Thanks, James, and thanks everyone for joining us. We’re excited to report that Progyny had a very strong third quarter with revenue and profitability that exceeded the high end of our guidance ranges. Member engagement continues to be healthy, consistent with what we’ve seen throughout the past year. Following the consistent strength of our results, we’re pleased to be in a position to once again, for the third consecutive quarter, raise our full year guidance. With the most recent raise, we have now increased the midpoint of our revenue guidance by more than $70 million, above the midpoint of our original range for this year. We’re equally pleased with the results of our latest selling season.

In any given year, our season reflects multiple priorities: the acquisition of new logos and lives, the retention of existing clients, and the deepening of our relationships with existing clients through the expansion of their benefits with us for their employees. This year’s selling season once again demonstrated our position as the leader in the market and how our value proposition aligns with both employers and their members. It starts with the consistent expansion of our base, including over 80 new logos and approximately 900,000 lives this season. As we told you last quarter, although our pipeline initially built slower than we would have liked, largely attributable to the macroeconomic uncertainty earlier in the year, we are particularly pleased with this result in the face of historically high macro medical cost inflation.

We created a large influx of new opportunities throughout the spring and summer, which once again validates how family building and women’s health remain a top priority for employers and their members. As the season entered its final stages, we saw that a select number of employers, including some large ones, were not able to accelerate their decision-making process fast enough to offset their later entry into pipeline. These companies instead became part of our traditional pipeline of not-nows, setting us up well for next year’s selling season. Our wins this year represent a broad cross-section of industries, including consumer goods, healthcare, financial services, education, tech, business services, and TPA and hourly groups. In fact, this latest cohort continues the ongoing diversification of our member base, which has increasingly spread across dozens of sectors, with no one area of the U.S. economy dominating the base.

We continue to see a broad distribution by client size, with our newest logos contributing anywhere from 1,000 to over 100,000 lives. The second way to see how our solutions are resonating is our near 100% renewal of existing clients and covered lives for 2026. This extends the long track record of success we’ve maintained since our first year in market. In our opinion, this is the strongest testament to our market leadership and value proposition. This strength and continued execution is also highlighted in the expansion of benefits, where nearly 30% of our clients have chosen to add to their solution in some way for 2026. This includes clients consolidating their benefits with Progyny away from our competitors. Historically, this meant more smart cycles, adding RX, or expanding the coverage for areas like donor tissue or storage.

While those all still occur, we can deliver for our clients and their members an expanded suite of services, including end-to-end reproductive health support for both their domestic and international populations, as well as benefit and lead navigation. Equally important, not one client has reduced their benefit in any meaningful way next year. Our newest services in pregnancy, postpartum, menopause, and benefit and lead navigation continue to resonate particularly well with the clients. Although we’re in just our second year in market with these programs, we’ve seen an incredible positive response. Between the uptake from existing clients, as well as our newest logos, more than 2.7 million members will have access to one or more of these newest services in 2026. That’s an incremental 1.2 million members versus this year. Taken together, these data points build a complete picture of Progyny’s market leadership and the continued demand for our services.

It is what inspires us to continue to expand both the services and segments of employers that have access to Progyny’s benefits. A few weeks ago, the White House announced its focus on expanding access to fertility care. We view this as a significant step forward for the country and a strong positive for us. It is also an affirmation of the work we have accomplished over the last 10 years. The administration expressed its enthusiastic support for supplemental plans to address the small and mid-sized market. To date, those employers have had limited choices in adding family building care with cost predictability to their benefits, which has forced their employees into the same one-size-fits-all dollar-based plan designs that our model has long proven to be an ineffective and inefficient use of resources.

In the past, we’ve referenced that we’ve been developing a product for small and mid-sized companies to address the more than 50 million covered lives within these businesses in the US. This is in addition to the 100 million-plus lives that we’re already addressing today through large, self-insured federal government and Taft-Hartley populations. We’re pleased to announce the first of its kind supplemental plan for fertility and family building, which will be in our product portfolio in next year’s selling season. In addition to this expansion, we have also broadened the platform through our newly launched Progyny Global offering. This provides multinational employers with a continuum of integrated services, including family building, pregnancy, postpartum, and menopause across their full populations. Progyny’s platform was purposely built for global markets and delivers member support tailored to their local environment.

This marries together the capabilities we acquired last year with what we had created in-house and produced a better, more comprehensive offer that’s second to none in the market. Given the results we’ve achieved this past year, coupled with generating more than $50 million in operating cash flow this quarter, which brings the total operating cash flow to a record $156 million over the first nine months of the year, we believe our stock is significantly undervalued. Accordingly, with our solid cash position and the overall strength of our balance sheet, we’re pleased to return value to our investors through the announcement of a new share repurchase program for up to $200 million. Mark will describe this program in more detail, along with our higher expectations for the year.

Hopefully, my remarks today help you understand why we’re happy with our performance thus far in 2025 and why we’re even more excited for the year ahead. With the momentum we’ve built, we are well positioned to continue our growth trajectory into the next year and beyond and look forward to keeping you updated on our progress. With that, let me now turn the call over to Mark.

James Hart, Host/Investor Relations, Progyny: Thank you, Pete, and good afternoon, everyone. Before I begin, I’d like to first highlight that we’re introducing a new format for my prepared remarks. We’re aware that many of you routinely have multiple companies reporting at the same time as us, and we recognize how this divides your time and focus. Prepared remarks have traditionally included commentary on the drivers to our recent results. To make it easier and faster for you to understand those drivers at your own pace, the 8-K we filed this evening includes a set of summary slides providing highlights of the quarter, as well as some of the longer-term trends that we believe are important in understanding the health and direction of the business. We’ve also posted that material to the IR section of our website.

Rather than duplicate that content here in my remarks, I’ll instead focus more on the key takeaways and important trends. Our hope is that this will not only create more time for Q&A, but also give you some time back by shortening the call. We intend for this to be our approach going forward. We certainly greatly value the feedback of our investors and analysts, so please let us know your thoughts. Moving on to the key takeaways for the quarter. As shown in the press release and the accompanying slides, our results this quarter reflect the continuation of several long-term trends. First, we continue to see good revenue growth, 9% on an as-reported basis in the quarter, or 23% when excluding the impact of a large former client in the year-ago period.

I’ll remind you that the transition of care agreement pertaining to this large client ended as of June 30, 2025, so our results for the third quarter and second half of the year do not include any contribution from them. Second, member engagement this quarter, which we measure in the utilization rate as well as in ART cycles per unique utilizer, was consistent with or slightly better than what was reflected in our guidance. Accordingly, revenue exceeded the top end of our guidance by more than $8 million. The engagement we’re seeing reflects that members are continuing to pursue care and services they need in order to meet their family building and overall health goals. Third, we continue to achieve healthy levels of profitability through a 23% gross margin and a 17.5% adjusted EBITDA margin.

We’ve accomplished this while we’ve continued to invest to expand our product platform and to integrate the acquisitions that were completed over the last year or so. I’ll also highlight that this quarter’s results include a $200 million reduction to expenses related to the employee retention credit program, which we received during the quarter. Fourth, through disciplined, prudent management of the business, we continue to achieve a high conversion rate of adjusted EBITDA to cash. In the third quarter, we generated more than $50 million in operating cash flow, which contributed to a record $156 million over the first nine months of 2025 and an increase of $29 million over the comparable period in 2024. Third quarter CapEx was $4.7 million, a $2.9 million increase over the prior year period, and reflects the previously disclosed investments, enhancing member experience and integrating our recent acquisitions.

We continue to expect that the incremental CapEx for those projects will be approximately $15 million over our 2024 spend levels. As of September 30th, we had total working capital of approximately $412 million, which includes $345 million in cash, cash equivalents, and marketable securities. There are no borrowings against our $200 million revolving credit facility and no debt of any kind, and we have no planned use for the facility at this time. With our balance sheet strength and solid cash position, we’re pleased to be in a position to return meaningful value to our shareholders through our latest share repurchase program. The board has authorized up to $200 million in open market and facilitated purchases, and this is immediately available for us to use.

While this is a sizable program, we’re also maintaining our ability to continue investing in our business for future growth across our other long-standing capital priorities. I’ll remind you those priorities include product expansions, new distribution channels, and select acquisitions. Turning now to our expectations for the fourth quarter in the year. As the fourth quarter begins, we’ve continued to see that member engagement is consistent with recent periods. With 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, particularly at the low end of our ranges. To be clear, this is the same approach we’ve taken throughout the past year. As you can see in today’s press release, we have narrowed our assumption for full year utilization to 1.05% at the low end and 1.06% at the high end.

This is still lower than the 1.07% we saw in 2024. In terms of consumption, given the current pacing of member activity, we’ve maintained our assumptions for full year ART cycles per unique of 0.91 at the low end of the range and 0.92 at the high end. With these assumptions, we’re projecting between $292.7-$307.7 million in fourth quarter revenue, reflecting growth of -1.9% to 3.1%. As the transition of care with the large client concluded on June 30, there’s no contribution from that client in the second half of this year. If we exclude the $35.9 million in revenue from that client in the year-ago quarter, our fourth quarter guidance reflects growth of 11.5%-17.2%. On profitability, we expect between $45.3-$49.3 million in adjusted EBITDA in the quarter, along with net income of $12.5-$15.5 million.

This equates to $0.14 and $0.17 of earnings per share, or $0.37 and $0.40 of adjusted EPS on the basis of approximately 91 million fully diluted shares. As usual, our expectations for the fourth quarter profitability reflect the ramp-up in hiring ahead of our newest client launches on January 1, in addition to the previously disclosed increased spend this year to expand the features of our platform and integrate our recent mergers. Please note that our assumptions do not consider the impacts of the repurchase program we announced today, given the unpredictability of the underlying timing of its execution. With our strong results over the first nine months of the year, we’re pleased to raise our full year guidance. We now project revenue of between $1.263 billion and $1.278 billion, reflecting growth of between 8.2% and 9.5%.

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 17.8%-19.2%. We also expect between $216 million-$220 million in adjusted EBITDA, with net income of between $58.5 million-$61.5 million. This equates to $0.65 and $0.68 earnings per diluted share and $1.79 and $1.82 of adjusted EPS on the basis of approximately 90 million fully diluted shares. With that, we’d like to now open up the call for questions. Operator, can you please provide the instructions?

Tom, Conference Call Operator: Certainly. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star one on your telephone keypad. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. Once again, please press star one on your telephone keypad if you wish to join the queue to ask a question at this time. Please hold a moment while we poll for questions. The first question today is coming from Jailendra Singh from Truist Securities. Jailendra, your line is live. Please go ahead.

Jailendra Singh, Analyst, Truist Securities: Thank you, and thanks for taking my questions, and congrats on a strong quarter. My first question is around the 900,000 new covered lives. It might be slightly below your 1 million goal, but it is definitely higher than broader investor expectations. How should we think about these results in light of your messaging around lives running lower year-over-year for the last couple of earnings calls? Did win rates for you guys pick up in the last couple of months, or you were trying to message this potential 100,000 shortfall? Does your messaging on the last earnings call that lives coming at a higher revenue attached than prior year stay hold true?

James Hart, Host/Investor Relations, Progyny: Hey, this is Michael. Thanks for the question. First off, we’re very pleased with the team’s execution on this year’s sales year, this year’s successful sales year, especially in light of there were a few headwinds during the season that the team had to overcome and execute well against. First, starting with the late developing pipeline, which was a new development for us, as well as relatively high macro healthcare inflation. All those component parts do influence employers’ decisions. Again, I think the team executed really well against that to get us to the 900,000 sales year this year. Relative to the 100,000 delta, remember, that’s also a relatively small number of clients that would, on a decision basis, really roughly a handful. As well as the 100,000 is relatively small against what will be the broader roughly 7 million base.

Last thing I would say on that front is, while we always have some small opportunities remaining post-November, we do have a larger volume this year of those deals, probably as a result of that slower developing pipeline this year, and therefore decision-making extending a little bit further. That said, we’re not counting on those deals closing this year. It would be nice if they do, but either way, whether they close or not, it’ll contribute to a strong start to the pipeline next year. Pete, would you add anything?

Pete Anevski, CEO, Progyny: No, but I’ll take the second part of that question, which is the revenue value of the 900,000. The easiest way to think about it is, given mixed appliance industries, benefit design, etc., it’s pretty proportionate to what the 1.1 million added last year is the way to think about it.

James Hart, Host/Investor Relations, Progyny: Yeah, I think we had said.

Pete Anevski, CEO, Progyny: On.

James Hart, Host/Investor Relations, Progyny: I’m just finishing that off. I think we said on the previous call, we expected that even though the early commitments were of relatively higher value, we expected that to normalize by this time, and that’s what happened.

Jailendra Singh, Analyst, Truist Securities: That’s helpful. A quick follow-up on there being some confusion around the current administration’s focus on improving the affordability in the cash pay market for fertility medications and what this means for your Progyny RX business. I completely understand the value employers see in keeping medical and pharmacy together, but just curious, if prices do come down in the cash pay market, what that means for your business? Could that result in employers looking for some pricing concession? Just give us some flavor of how you think about the impact for your business?

Pete Anevski, CEO, Progyny: Sure. I’ll give you some context around the announcement. The announcement is around what already exists across manufacturers in terms of patient assistance programs for those that do not have coverage. The announcement from Sirona was no different. They’ve had for years, certainly longer than we’ve been around, cash pricing and a cash assistance program, patient assistance program for those that do not have coverage. The announcement is simply just deepening a little bit the discount around those. A large portion of people will not qualify for those. Some will. There will be an income exclusion as part of that. Either way, these have been around for a long time. I do not expect there to be an impact on covered benefits and/or what manufacturers have in terms of pricing for covered benefits. These are separate cash assistance programs for those that do not have coverage.

Jailendra Singh, Analyst, Truist Securities: Okay. Thanks a lot.

Tom, Conference Call Operator: Thank you. Your next question is coming from Brian Tankula from Jefferies. Brian, your line is live. Please go ahead.

Brian Tankula, Analyst, Jefferies: Hey, good afternoon, guys, and congrats on the quarter. Maybe just to follow up on the questions of the selling season, I mean, just curious what those discussions were this quarter. What are you seeing in terms of your current employer clients in terms of layoffs and how that’s impacting your view and utilization going forward?

Pete Anevski, CEO, Progyny: Sure. I’ll do the second part first, and I’ll let Michael answer the first part. We’re not seeing anything relative to anything of size or meaning with respect to layoffs. The layoffs that have been announced are small relative to those companies and small in general. There haven’t been any widespread. I’ll bring it back to the beginning of, I think it was 2023, when there was a series of announcements that were then really what I called back then right-sizing versus reductions in workforce. I’m sorry, I think it’s 2022, but versus reductions in workforce collectively back then, even though there was a series of announcements across all tech companies. They weren’t all in our portfolio. There were only roughly collectively 150,000 lives sort of identified back then. We’re not seeing or hearing anything from our clients that.

We believe you’ll notice in terms of impact relative to layoffs is sort of the short answer.

James Hart, Host/Investor Relations, Progyny: Yeah. To the other part of the question, as for discussions in the market, similar that they’ve been in other years, right? Employers always want to understand and focus on really three areas: member experience, quality and outcomes, and cost control. Those remain the same. Certainly, this year, cost control remained in that top three category. All three fit well into our value proposition, whether that’s exhibited by, I should say, whether that’s the, again, the strong sales season, or in particular, the near 100% retention of our existing clients, where those things are even more visible to them on a year-over-year basis.

Brian Tankula, Analyst, Jefferies: Got it. Maybe Mark, just in a follow-up, as I think about gross profit margin being what it is, is there any specific call out there? How should we think about modeling that going forward?

James Hart, Host/Investor Relations, Progyny: Yeah. Look, I think we’ve continued to expand our gross profits year after year. We’ve made some investments. I think importantly here, as you look at Q4, we’d always model that down. In part of my prepared comments, I addressed that we’re building that staff as we enter into the next year. Look, we try to keep that fairly consistent from a profitability standpoint, leveraging those teams as we grow.

Brian Tankula, Analyst, Jefferies: Got it. Thank you.

Tom, Conference Call Operator: Thank you. Your next question is coming from Michael Cherney from Leerink Partners. Michael, your line is live. Please go ahead.

Michael Cherney, Analyst, Leerink Partners: Afternoon, and really nice job on the quarter and the selling season. Maybe if I can just follow up on the drug pricing question. Right now, in terms of what you see as cash prices in the market, how do they compare roughly to the net prices you offer clients?

Pete Anevski, CEO, Progyny: They vary based on drug. Obviously, cash pricing is cheaper across the board. They vary in sort of getting into that detail. I’m not sure how that helps. At the end of the day, I think the more important point is that they have been around for a long time. Having been a catalyst around pricing for coverage to date, nor even a conversation relative to what’s out there. Clients are aware that they’re out there, but they understand that patient assistance programs exist when you don’t have coverage. It’s probably the best way I could answer it, best color I could give you around it.

Michael Cherney, Analyst, Leerink Partners: No, that’s completely fine. And then just maybe one more question, at least for me, I’m just thinking about the selling season. In terms of the upsell potential, as you think about the 1.2 million incremental lives on the new products, how does that evolve now in terms of ongoing upsell? I.e., is this something where you have the ability now because of new products to essentially open up a longer selling season window, kind of upsells over the course of the year? How should we think about that in terms of the relationships, both your existing customers, but also as you continue to work towards that pipeline of customers that didn’t get to the finish line?

James Hart, Host/Investor Relations, Progyny: Yeah. Thanks for the question. This is Michael. Yeah, we meet with our clients quarterly. Part of that is obviously going through what they’ve already purchased and how those services are performing, as well as where their priorities are and opportunities to expand. Certainly, the teams have more products and services to talk with clients about and where their costs may be, where we maybe have opportunity to impact their costs or impact and provide services in areas that they’re strategically going. We do have those conversations throughout the year.

Tom, Conference Call Operator: Thank you. Your next question is coming from Scott Schoenhaus from KeyBank. Scott, your line is live. Please go ahead.

Scott Schoenhaus, Analyst, KeyBank: Hey, team. Thanks for taking my question. Congrats on the quarter and the strong selling season. I guess I wanted to dive more into the selling season commentary from last quarter. You said they had mixed less lives last quarter, developed later, but it was higher utilization. Just wondering, and you said that trend has normalized from the additional lives that we’ve seen now added. Just wondering how you obtain or sort of manage that pool. Are you looking at claims data? Are you looking at demographic issues? How much data is the new employer, potential new client, giving you in front of the selling season to be able to understand the cohort of employees and the utilization profile? Thanks.

Pete Anevski, CEO, Progyny: Sure. Sure. The same way we’ve been doing it for years. It’s everything from the plan design, the products purchased, and the industry that they’re in, and obviously the lives that that client represents, right? When you roll all that up, we have enough experience and more data than anybody across all these industries to have really good predictability around their revenue contribution, right? The way it’s been working out for us for years is that the pool becomes predictable. There’s variability always within individual clients. As a pool, when you roll it all up based on expectations for each of those clients, again, by plan design, etc., and size and industry, and roll that up, there’s a pool expectation, which is where our earlier comments were driven from, as well as our comments today.

Scott Schoenhaus, Analyst, KeyBank: Helpful. Then as a follow-up, when you think about, I’m not asking for guidance for next year, but typically you wait for your first month of utilization to get a better sense of revenue, provide guidance. Given the choppiness we’ve seen over the last several years, and we’re seeing a tremendous rebound in utilization this year, how are you strategically thinking about guidance going forward? Thanks.

Pete Anevski, CEO, Progyny: I think that what you guys call the choppiness, I call a small amount of variability. I do appreciate that in any given year, variability plus or minus 5% can impact year-over-year results and can impact a growth rate. Overall, it does not impact materially the overall financial results position or trends, etc., right? That said, we have increased and taken into account in the guidance ranges that we have been giving out all year long and expect to continue to do that, factoring in that variability that we have seen over the last couple of years. When we put out guidance in that, we do not expect that to change.

Scott Schoenhaus, Analyst, KeyBank: Thanks.

Tom, Conference Call Operator: Thank you. Your next question is coming from Dev Weaversuria from Bank of America. Dev, your line is live. Please go ahead.

Dev Weaversuria, Analyst, Bank of America: Thanks, James. Maybe I’ll follow up on Scott’s question here. I guess I’m thinking about it in kind of the odd cycles per female utilizer. That’s typically trended up through the quarters. If I just back out the large client contribution this quarter, it seems like revenue is still slightly down quarter over quarter versus historically typically trending up. I guess, how are you seeing? It seems like utilization is firming up a bit. I’m trying to think about how we should think about this into the next couple of quarters because the full Q guide still considers odd cycles per utilizer kind of below prior years. What are your expectations? How did 3Q trend versus expectations? Are you seeing anything on the ground that gives you confidence that this odd cycles per utilizer will get back to historical ranges in the coming years?

Pete Anevski, CEO, Progyny: Yeah. I’ll make a couple of comments relative to what you just said. There is seasonality in Q4. In general, the base book of business does go down a little bit in Q4 versus Q3, mostly because of the holidays. There are two big holidays, obviously. There’s Thanksgiving, and then there’s also the Christmas season, if you will, that does impact just capacity in clinics in terms of them being open. They use that time to do a lot of cleaning, etc., right? Plus, people make decisions relative to deferring outside of those weeks for exactly that reason. They do not want to be going through treatment through the holidays, right? In the past, where you’ve seen, and I’ll take last year as an example, sequential increase versus decrease, that was more a phenomenon of.

Cycles per utilizer trending back up towards normal versus seeing a decline for the first time. Where we normally see sequential increases throughout the quarters. If you look at prior years, there’s always a little bit of noise relative to what’s reported versus what impacts Q3 to Q4. Sequentially, right? At the end of the day, I don’t look at $6 million in the sequential revenue as a negative trend. I look at it as just sort of what we’re seeing right now. As Mark said, and we said in our prepared remarks, we don’t see any weakness, if you will, relative to utilization or care consumption versus Q3, but factored in the normal seasonality that happens in Q4. That’s the best I could answer that type of question.

Dev Weaversuria, Analyst, Bank of America: Got it. That’s helpful. Thank you. Just one other quick one. I think Rx revenue growth is still trending below medical. I think it was attributed to a mix impact last quarter. Was that the same this quarter? How should we think about when those two maybe converge? I think as previously expected?

James Hart, Host/Investor Relations, Progyny: Yeah. Look, I think one of the things you have to remember, there are a variety of factors that will, that factor into each line so that they do not perfectly converge. There are timing differences. There are treatment and program mixes. There are certain treatment journeys that carry less amount of drugs than others. Minor variations in treatment mix. Pricing is also an impact. We have talked over the years about how we have been managing cost control tightly for our clients, and in some cases, absorbing some of the manufacturer increases on the Rx side, where there is not that case on the medical side. They can vary a bit. As we look at, and I guess the last thing is that we are not breaking out the revenue from our newer products into their own category. They do get accounted for in that fertility services line.

You are seeing some revenue growth there with no associated pharmacy growth. It is not going to perfectly align, but they should grow in tandem over the long term.

Dev Weaversuria, Analyst, Bank of America: Fantastic. Thank you.

Tom, Conference Call Operator: Thank you. Your next question is coming from David Larsen from BTIG. David, your line is live. Please go ahead.

David Larsen, Analyst, BTIG: Hi. Congratulations on the good quarter. Can you talk a little bit more about the supplemental product that you mentioned? It sounds like it’s sort of a cash-based solution, maybe for more middle-market accounts, maybe that want to spend a little less money on the fertility benefit, but want to start with something. Thanks very much.

Pete Anevski, CEO, Progyny: Yeah. To start with, it’s not a cash-based solution. It’s a covered solution. But you’re right. It does address small and middle-market companies. Think of everything from ASO, minimum premium, and/or fully insured populations, so however they’re funded, but again, small and mid-market companies. And it provides a solution that’s more predictable relative to expectations around cost that these smaller companies generally need in terms of understanding what their cost might be and adding this type of benefit. But it is a robust solution that puts them into a position to compete with much larger companies, having now what generally is offered through larger employers. A benefit offering that covers these needs.

David Larsen, Analyst, BTIG: That’s great. Thanks very much. Can you talk about the year-over-year growth in number of clients expected for 2026 versus the number of lives growth expected in 2026? I guess what I’m getting at is it looks like you’re going to add maybe 55 clients in 2026, which is a decline from 73 in 2025. Maybe the number of lives are going to increase. Just any thoughts around that would be helpful.

James Hart, Host/Investor Relations, Progyny: Early go-lives. He’s just.

David Larsen, Analyst, BTIG: Oh. Part of the challenge whenever we do this, we update all year long the number of clients that are live. When we talk about our sales season, many times more clients go live earlier or go out, if you will, and/or might be off-cycle clients, and they have already gone live. They are included in what we describe as sales overall. The way you’re thinking about it is as of what we just reported today versus what we just announced in terms of overall number of companies and clients that we’ve added. It includes a decent number, although not significant in terms of revenue contribution, no different than last year, no different than every year, where you might have a number of clients, usually really small, and when they’re not, we call it out, usually really small in terms of live contribution.

Think of it in a way that says the majority of the lives contribution is starting next year. Significant. Thank you so much.

Tom, Conference Call Operator: Thank you. Your next question is coming from Sarah James from Cantor Fitzgerald. Sarah, your line is live. Please go ahead.

Hey, everyone. This is Gabian for Sarah. I wanted to double-click on the supplemental plans. As you get ready to roll those out for the 2026 selling season, should we think about that having impact on the expense line in 2026? Do you need to increase the sales force? Do you need to increase marketing efforts? Do you expect them to be read through to the revenue and EBITDA line as soon as 2027? Thank you.

Pete Anevski, CEO, Progyny: Yeah. Although you’re right, we will have to. We’ve already been doing some of that, but we will have to add resources relative to go-to-market. It’s not going to be noticeable in the way you’re thinking about it. Where it’s going to be significant and change the profitability profile within sales and marketing in a meaningful way is the way I would tell you to think about it.

Okay. Great. Any updates you can share on the global or international business and how that roll-out’s been?

James Hart, Host/Investor Relations, Progyny: Yeah. We did some. We had some nice adds this year on that with the enhanced benefit and global services and solution. As we said in the script, we’re excited to now be able to pull really our full U.S. portfolio of services now international, and that will be available for sale next year as well. Good momentum and excited to continue that from a global basis.

Okay. Great. Thank you.

Tom, Conference Call Operator: Thank you. That does conclude our Q&A for today. I would now like to turn the floor back to James Hart.

James Hart, Host/Investor Relations, Progyny: Thank you, Tom. Thank you, everyone, for joining us this evening. Please, as always, feel free to reach out to me for any further questions or clarifications you may need. We appreciate your time and attention. We know it’s been a busy day. We look forward to reporting our next results in February.

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

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