PGNY - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Progyny Inc. Fourth Quarter 2021 Earnings Call. At this time, all participants have been on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, James Hart. Sir, the floor is yours.

James Hart

good and John you, afternoon everyone. Thank our to fourth quarter call. conference Welcome today With and CEO of Mark Pete Progyny; Anevski, CFO. me are Michael Livingston, Sturmer, President;

We we remarks your some will call questions. the for before begin with open prepared

our business, including we first today’s contains that year quarter limited statements and upsell forward-looking our subject member for to extension including non-historical this of described acquire size those COVID-XX our and utilization remind outlook Progyny’s industry including our services financial activity XXXX market rates of and in not call the operations, the about was and but business full forward-looking statements strategy, on begin, industry and our I’d growth, assumptions, business market other of objectives further plan certain general other our and mix, new related including our for Before impact investments, uncertainties to to variants our expansion clients statements business to existing opportunity, offered, clients, you including to conditions. performance, other opportunities as ability to future outlook, expected expectation and issued and of These growth, and long-term like statements, retain both and afternoon. market of and risks, the economic press clients, plans release that our are

expectations our of that based results business, projections have condition we our We affect current future and may financial events operations. forward-looking on largely financial believe statements about and trends these and

occur XX-Q. SEC, from results recent and risks actual statement in in statements revise undertake in we including Descriptions that could no of to filed these these are to other the we the Although with expectations our call. believe periodic reflect to that changes this our these any cause discussed entitled most section and Factors after current reasonable, obligation reports Risk differ are materially forward-looking

and excluding also like in with adjusted most will such now compensation. margin, expenses operating measures as investors.progyny.com. available the the would refer to to non-GAAP compensation available we is comparable adjusted call turn are release, the which I over press EBITDA, Reconciliations gross stock-based also margin, stock-based EBITDA During call, to at measures Pete. financial GAAP the excluding

Pete Anevski

and you, but levels details higher the revenue direct us Mark XXXX, levels before XX.X% everyone you which Thanks Thank its Jamie. of year grew today. margins. full over walk thoughts. level for shortly, some I'll will seems does, through EBITDA both QX XXXX joining grew it he you and profitability of with the high give In Company XX% adjusted

this memory and sequential spread member December the strong drivers beyond client emerged clients experiencing guidance successful September, our QX had our the closures. due despite fourth perspective, evident our on and XXX% in we October that and million predict. here XX November, utilization which clinic plus We XX. time-to-time impact due at new see for our marginally we had sixth the all On year decrease the We which also lives. and our to routine quarter season member was driven leading well slowed from including all important adding most activity covered by growth our it activities we existing as in and that by increased ever as member of score in our Omicron outcomes, month our month. clients, November over top maintained other our exceptionable achieved nearly best into in that early our for industry among row typically in rate the the this, retention a Omicron is NPS When clinical issued satisfaction, as X.X disruption record COVID-related which a recent To sharply is holidays of that our most November, to faster in long-term guidance the from the than any the new accomplish unexpected waves enough across in the country most to ever disrupted growth selling overall utilization end to we variant variant, an ability been December early had When results quarter. contemplate put COVID-XX we've a of

of were we and due the hit This million for actually December across levels twice the spread resulting variant we impact impact experienced nearly infection continued of January, in continued what a member in anticipating, peak. However, related quarter. country the to as Omicron to revenue was Omicron approximately negative in activity into declined X their

related the respect have appears to awareness as to utilization impact our number be for behind with we the us. on Based was producing mindset and generally currently as grew illness, pursuing March, we April variant have, members activity that memory the well visibility mild visibility and Omicron the However, improved. normal February on rapidly the levels as recovers limited treatment more has

rates time in to most One highly care years. of few the over even the the from patients resilient pursuit that against of backdrop themes of years through the important be consistency our can pandemic. of recognized in of be quarterly the past nature facility their is the seen sensitive the This majority the utilization two and treatment the substantial emerging last have continued

whenever disrupt And activity spiked members an of the in country. had those located COVID healthcare have our government for shutdowns strained, reopening, and to cases have for they the settings. hospital in areas available the of recommendations remain of ways open of to following need clinics that activity, been due have only COVID and short of small or majority increase been member both has because a affected COVID may whether our even it overall. of vast impacted Additionally, altogether are proportion effects lasting resources the acutely in be is relatively as Clinics more parts of significantly cases care surge fertility to other cases, patients unlike

that impact on our the the its with impact. benefit control can't at that to high that we our we of new clinical Although, the takeaways important which client value experience, industry-leading do performing member favorable experience renewals, pandemic demonstrate the that areas of satisfaction the are and business. generate, levels which upsells outcomes our to are offering, member in and a client utilization due our global record of further highest This our satisfaction, critical outcomes levels client and levels marginal we our includes are

than our mentioned, XXX With today yet include ago. employers, and commitment that other million reflecting school which self-insured have XXX% doesn't in more and lives, This types more reflects than entities such governmental I target market, from a as client covered clients fully-insured of approximately the previously year near up we which XX% of large X% in are companies, share under the unions X agencies. retention employers systems,

let's turn to sales Now over current momentum.

comments, in it's XXXX. our While selling the of stages various we continuing momentum quantitative provide sales season, are too detailed early our from soon any since you into with to XXXX is XXXX

to recognition are pipeline sales across metrics progress trends This sales into data XXXX. selling at meaningful with this selling selling use position new in we confidence driving We from total year-to-date so momentum well benefits season last space early including as to pipeline, year-to-date sustain season continue our season year's progress, monitor increases far. that the fertility our a seeing active our macro early development versus all and ago our us demand this wins time, year the leader gives to us combined for

choice contributor provider caliber with Progyny of clear it's of has A to companies rate our amongst plus work best ever within sales has XXXX, the the that the XX. world. of engaging satisfaction, the the we a current been successful highest become companies NPS Given success that the to and been known solutions in for most our key or today to our increased member in active it's and score pipeline, fertility high

We ever more lives with NPS cohort and our years twice already as launched and of is or over barely at in focus provide ago, results increased largest than points. this healthcare had member period clients proud an them. of XXXX, we to is benefit many which continue to companies are that the This consecutive digits, to we satisfied which that services, our of speaks as over have services we and XX extremely additional negative which an improve the rapidly expand ongoing covered or incredibly score maintain by increased at with clients the new for that XXXX we our level result, Given of continue the time, time routinely January And industry-leading we as the our achieve to members to NPS, fourth ended even of positive lives. them IPO two covered we business. a a most little and levels our zero we our indicates year be above in

given of carriers as and the select of at the service reproductive the properly often enhance clients product in level new those expanding underlying to Less subset expanding fertility been of record issues on This extension to remain endocrinologist have the often introducing enhanced coverage footprint the that we cases, of begin that underlying diagnose this XX% us and reproductive difficult cause be the solution services strongest our male is lack geographic which unparalleled. focused with in in also regardless offered to may client female meaning is year's solution. provide and number the a urologist successful functions providers have made we're issues the track partner. are effectively in able we issue this couple And in of factor record equally year, We the employee is not resources be many is in network. infertility, to for function more of male an position, needed year competitive to and that we developing anticipation that business, affecting conception across support solution looking the with a within of are infertility beneficial Progyny their urologist, market. our increase a our is. have our reproductive of natural us to is This for has our a the increase each there. a addressing Separately, of provide offering. causing has male RU, will health this than treat have creates We ever report male and focus populations see XXXX building When gap, a members This looking the adding step upsell specifically existing pleased in the we of launches and I'm the our specifically our our new Nevertheless, the capabilities. by treat diagnosed by issues country may is a factor proven future. coverage of board. that that addressing that scaling This on in Canadian to as an while the in issue partner male enhancements or the and

government Canadian is universal coverage the citizens, included comprehensive facility in health care suite provides that Although, program. not

Additionally, even XXXX. is was employer further launched our for when the we supplemental in the U.S. coverage behind benefit fertility where

no coverage to same facility U.S. health benefit under of employer here and own majority way Companies that significant when and on [could] look do so. on do sell result, treatment are a their Canadians to supplemental As the the typically their fund have coverage afford in a plans plans health forced sponsored these large today they provide

it monitoring and building ensure family dependencies on practices that our these actively way new overall network, managed areas to deepens about widens the on care, on our the are family of to selling journey. relationships our need in been grows expect to providers and over then have a the but ART industry are because most in similar drive is in leading to a this The excited advantage U.S. Once update from outcomes that calls. XXXX, success we'll ART prior Canada, up do we've for ways nearly nicely progress have year. expect drive facility greater adherence the teacher opportunity our that expand build industry which we our best dataset future we've should in We've at the we At leveraging manage our cycles are much measuring the impact Canadian manager, where competitive and clear seasons having our factor experience, they the building. significant each including a to up benefits and year. of We're scale dataset the selling to which these and here significantly competitive people an and same In already to the we ultimately help members understanding facility timing with have advantage been help developed we comprehensive network These cycle insights, U.S. to beyond educate focus for significant XX% marketplace. achieving ensuring areas this leading the patient what and to and unmet XX,XXX that pursuing we go-to-market continues it earnings awareness you can set healthy access growing of in We season, address XXXX. us in their

result, to position enhance continue Progynys a also to unique clients. services is in a experience delivering As the to member value advancing while our

Let to results Mark in Mark. turn over detail. he'll me into now the call more walk and

Mark Livingston

the grew full XX% our Thank I'll driven begin and utilization quarter expectations variant impacted of good Pete, December. you, meaningfully and while revenue fourth XXXX. through member in from November, the fourth XXXX third activity to by October everyone. you Omicron $XXX.X for In our in on the and quarter and basis provide afternoon, then onset revenue a taking strong sequential year by quarter, the million increased results

As moment approximately And we the monthly in levels a in impact Pete to we the on actually of in a return to while revenue typical in million and experienced on twice effect visibility anticipating, Omicron $X ago, to seen mentioned also based Omicron utilization January, continued nearly were December member negative was in have the we an resulting decline what due in quarter. activity have March. we to more sequential February have

revenue grew For the to year million. $XXX.X full XX%

annual benefits. puts a annual the in in perspective. revenue $X.X to ago pleased years the was year our just in we reached million billion of a crossed rapid have sixth what in offering was we've the growth only revenue, milestone that It are XXXX three of achieved which We $XXX into

year the fourth our variant. XX% components million, Turning in year the the million. quarter by the number impacted the though top higher to and to the XX.X revenue of clients quarter full the while XX% and revenue medical to lives fourth million. both growing The covered line, was of growth the was XX.X in in increased quarter in to driven over the our growth medical XXX.X increased XX% by revenue quarter fourth in Omicron Pharmacy

the grew Pharmacy revenue to Over full-year million. XX% XXX

year Rx quarter our for medical pharmacy Our pharmacy was by in XXXX, have the number as compared in to Rx. was integrated the the ago an seen clients the increased the XX% driven Progyny uptick most newest though growth percentage new years growth launching primarily who as by also season was Two our Progyny revenue with a benefit of we've fourth of clients Omicron. impacted and our selling that launch selecting in case the a clients in to the chose of following pharmacy revenues, to the Since a added benefits. each pharmacy benefits increased XX% clients year XX% ago, in recent of year

have Progyny Rx XXXX. and the with remaining with our to be basis, XXXX very XX% of result clients the clients Progyny all representing XXX an we're of existing And who potential lives to clients. blended to-date, a upsell with pleased Rx of adoption of committed meaningful from XX% the during average in XXX ended there to a XX% of year. quarter clients of over compared clients quarter X.X the our future for is number covered as million expand XXXX lives the was or reflecting on percentage our of those past As of We continues organic while again within a lives growing clients, year, fourth X.X client continue the a as well This growth quarter. to new the in throughout fourth year. average as their during covered growth client in existing million result a The in lives additions the covered covered an workforce base, last growth the

Turning now to utilization metrics. our

XXXX. X,XXX performed, as During a quarter compared of the were XX% cycles the quarter ART reflecting fourth increase to

nearly female that demand grew the was XX% to results year, for compared seeing our drives which are members. full the rate this given X.XX% the ART extensive is our high is as the partner fertility X.XX Female year services facility continued ago. among who treatment more financial undergoes for a what the one For principally, cycles we reflecting of quarter utilization,

year, negatively utilization to which the full most compared the been in This in the you of affected I by X.XX%. was female temporary XXXX, at For had closure XXXX. spring of X.XX% clinics remind onset of the the fertility pandemic

what female consistent our in comparison, of is point XXXX. with for reported XXXX a As rate we utilization

reinforces during our pre-pandemic can with utilization due time by sensitivity nature fertility and what treatments been to the its as lower and the a to mix patients. procedures in compared well utilization for While and we negatively a associated makes in of the year factor as fertility consultations essential diagnostic the happen the in also vary emergence procedures utilization number factors, caused Treatment journey seeing testing as as with early of revenue, of journey. which both in a December. members also contributing to stages occur treatments that spread fertility of rapid contribute Interruptions more it impacted variants later a member's most recovery revenue advanced had Omicron full value

Turning fourth quarter XX.X profit XXXX to from our Gross XX% now increased to of million. the margins.

points to the margin early In XX.X% in was expenses, of equity new impact operating to of increased which stock gross our of which to XX.X% offset non-cash, comp, XXX reflects level increased stock-based has program over non-cash in as due management. margin services. operating efficiencies our the reported quarter as grant periods, and Our we services points gross fourth basis care comp of the in of fourth the year, of in reflecting delivery operating from broad-based partially November, our a quarter issued impact stock-based basis last the the pharmacy renewals care impact compensation quarter, this management efficiencies XXXX with care the workforce, in of decrease by the XX a the primarily providers and quarter our well partners, excluding cost both fourth of of of of

the $XXX.X profit For gross million. to full year, increased XX%

gross was for XXXX. XXXX, margin increase of increase reported the full XXX the same the stock-based of to the basis quarter. reflected the margin of excluding points year reflecting our an reasons points expenses year gross comp Our of from a in today from XXX XX.X% XX.X% ago, an impact basis well comp of stock-based impact table as the issued fourth operating and that affected press includes margin to profit due release reconciling The lines. gross Gross as

basis now marketing expense ago quarter fourth Turning year and of X.X% marketing the Sales was the impact the in and excluding revenue ago. in year as operating sales quarter a stock-comp X.X% fourth X% an of both compared in to XX the the was a points fourth improvement revenue reflecting quarter, from periods. expenses, of quarter in of

a When basis of improvement stock-comp, XXXX, and year, the point of sales points For impact the in excluding X% marketing an improvement basis full was of from sales from X.X% XX was marketing revenue, XXXX. and XX reflecting XXXX.

a carry of which ago, previously primarily clients, percentage in Although, quarter, a of improved as to quarter to compared year. adding retaining year G&A continued improvement very stock periods, the G&A a through the each each expenses, revenue new rate legal the is as existing as to XX.X% and improve we sales efficiency XXX combination was high excluding XX.X% fourth due by basis of didn't by well of clients XXXX. grow points. to disclosed and have marketing our this from comp able more been rapidly elimination have revenue business year to of we both The the as lives

revenue, compared full year, of XX.X% For XXXX. in G&A which to the XX.X% was

the in G&A back the X.X% stock as point improvement costs have of business. XXXX. impact of our This reflects we realized the both office comp certain efficiencies elimination that Excluding well periods, a of expand as from XXXX revenue and as in legal was was from we the functions, basis XXX the

quarter QX in EBITDA the and increased reflected margin grew adjusted the sold EBITDA the the in business, fourth XXXX. for XX.X% the up made year advance XX% period, adjusted to throughout and the fourth in of million, the With both year. we clients quarter, in record of from of quarter we QX ramped modest expansion In $XX.X we on-boarding a margin adjusted the the have significantly improvements number EBITDA resources ago as

For more an margin reflected reflecting EBITDA, to primarily the doubled operating XX.X% of than full million, year, XXXX EBITDA an XXXX. XXX in our improved adjusted the from across points higher basis leverage Adjusted increase $XX.X revenue business. of

where in We rate was as $XX our deferred well non-cash In that believe for taxes, lower assets revenues. share ago to revenue. lower operating primarily on that per as throughout This for the expanding on release income is XX.X%, increase a due $XX.X by new net tax incremental as by business relies This XXXX, quarter XXXX. business, benefit fourth or connection revenue offset income XXXX. compared was tax net income quarter of margin realized to of was in stock-based million operating the a the margin million in or our due fourth as to in efficiencies increase a reflected offset $XX.X quarter is XXXX $X.XX per valuation partially The or higher increased $X.XX comp share. incremental with the trending. XXXX. efficiencies $X.XX a XXXX the million benefit allowance primarily $XX.X was higher our of in On of partially margin benefit a income year to our the meaningful or taxes. to the million to basis, expensive The reflecting indicator was a revenue compared that fourth adjusted an EBITDA share. in on XX.X% income we continue share The $X.XX or highlights achieved decrease million Net captured per per $XX.X compared of

in was flow profitability ago due our $X.X was as $X.X the the cash timing Turning well million higher period. items our Operating cash The million generated to year improvement of in as as to to now balance ordinary quarter in and both sheet. periods. generated compared cash

flow, And that to pharmacy fact, $XX.X we're the For a in to arrangements receive the remind pharmacy receiving under of the year, were you change our into by beginning full of order deliver compares chose that the cash cash million million the of timing generated operating in I'll ago. we XXXX $XX that which payments reflects year a flow new partner rebates we the in leverage balance strength timing year. profitability. entered we margin in the our at our when of sheet to lengthening more and of

As of of debt. total capital of December reflecting had and equivalents $XXX.X and XX, we securities working cash approximately cash, million $XXX million, marketable no

Turning for now XXXX. first full expectations the our and to quarter year

million, For in the impact more growth XXXX, a January that well the revenue March. as variants on projecting XX% we This activity and expected return first incorporates of Omicron million February $XXX quarter the in the between XX%. as between are levels to had and $XXX range of of member reflecting to

are to revenue upsells the that in expected Our $XX to XXXX. of live and full the expected which to portion go live anticipated of $XX that reflects QX and on million QX, collectively beginning clients go are for account in small guidance million year the at

basis EBITDA, or per of on the activity. shares. and the remind $XX.X loss from throughout we the tax of income between I'll occurs, with million including tax along loss million between items diluted that million, between related adjusted million net to fully benefit approximately to $XXX expect income For items net the projections $XX.X million XXXX. discrete those share $X.X compensation activity we related contemplate $X.X extent continue any tax a $X.XX $X.XX equity will our that to income To not benefit discrete to do you

growth $XXX and revenue range. XX% in our to be of we $XXX million midpoint at XX% XXXX, or to XX% growth the For million between between reflecting project

a guidance, adjusted of than in of on At fully report, now their growing For income between expansion million income XX%. EBITDA, recently way margins basis of incremental between fully between recognized CSR EBITDA we shares. this million seven continued diluted benefit close midpoint share I with company X in for to that and million income the companies on by X.X website. to of first loss of of which XXX their Progyny loss relations approximately the of of we million revenue principles in of their on and wanted of a adjusted expecting are the is our margin we an tangible 'XX our ESG expect million more equity per of a of the to see with available because our social these to $X.XX cents responsibility Progyny net XXX our section XXX highlighting of a corporate reporting issued that have inclusion them number provides diversity, referenced We've demonstrating to investor public commitment workforce. clients the seen or

is of designs, benefit with superior Our competent provides populations and delivering needs the diverse plan traditional clinical of care, all that outcomes. to equal care culturally access specific to while also eliminating the achieving discriminatory populations impact

now over the me back call turn Let Pete. to

Pete Anevski

fueling the have to throughout with we our trends our growth on success, tax that's achieve With further progress rapid questions. new family ever open us competitive benefits. additional for to updates in mentioned and strongest choice focus been believe been companies I granted as our business XXXX macro Thanks is providing position sales forward year. in begin with Mark. our facility with building that, and momentum in among I'd has the like up increase built the before look on We and leading that sustained providing ESG We operator, efforts. And a to in long-term you

Operator

Thank from floor JPMorgan. for and Instructions] open And is gentlemen, the questions. from you. Anne is Ladies [Operator now Samuel the coming first question

live. is line Your

Anne Samuel

utilization you quarter what kind It but if said on back you of shake you little provide the the levels. recovery February XX% maybe within like wondering, has recovered expecting was seems were of where I guide? only is normal could color out, about a full is to bit of year embedded the first

feels So, a that helping you little low, just there. color provide more little a

Mark Livingston

its being So, people really with what generally reflected relatively as was seeing and mild. impact goes, were and caseload Omicron recovery happening as the the far how January of

February So, back really we've March. pretty in activity seen quickly come the and

of for everything our for as in QX the now. here we sort So, we're and that full year seeing, guide factors sit

asking didn't As QX far it's I you're full catch think it as but of relates I sort and your year. quite to XX%, and the how

remind, little to the year be of percentage the spread. bit half evenly tend and want sort revenue the to quarter the full generally a in terms Just some less overall of than the first first of of year

as along of were progressing a get have clients new proportion their typically as they member as months journey. speed to Just initial higher the a they reminder, consults up earlier the in

if we so seeing. we projections, example, in and we are on by for do of sanity what this do you expectations our look all and out also way we that So all the as client, but checks detail modeled

so dropped relationship you, the quarter to, XXXX about look of X.X:X. example, if ratio you're you at for $X here million take if it's and mentioned, have at a you you add off if now, at the first to full look its and And you December, a, you that that we've the year, looking in

$XX launched in small clients year a gets be QX to take that number you our guidance. extend revenue close about that you if $XX early by here, QX then guidance million the same and have ratio in launching not here to what for that our pretty of QX will yet and in out and So, full that for you that million, add

Anne Samuel

there in And really futility. is color. time some That's remarks you that sensitivity then, Thank you. your noted to helpful

where see up Do should expect to are some going? kind So, catch loss cycles at you these of thinking about how any point? be we

Pete Anevski

Yes.

treatment, the saw To that whether Here's to how we the the to hesitation it's whether sort of the and the it, anyone is to that relative house about I hesitation again. think of extent deferring reopening, we backdrop summer deferring pandemic, impact right? getting the over take which believe, faster of folks I relative was what just think, out it's of advantage the

will cetera. ART you If on right. go et vacation, cycles,

are of that a have a on so, fertility, baby those and then do but deferring extent learn need And that trepidations a cycles. the and that naturally they new cohort effectively to board, ART challenge and with have come sort back they those having

relative deferred those are of those know they that aware, how short-term going defer. also challenge become have at to But trepidations to that deferred sort and newly that of the aware And many some any exactly then so, that and deferred it catches level, up but a definitely. we are in never have

sort of overtime. cycles it So,

had come all people challenge why baby, doesn't everybody challenge. happens at learn, once time It's make utilization all points So, It's a they at throughout because different a the once you may that even to at in reason at year. that long year different it decision understand have the back learn. they doesn't a all then have all and a something

Anne Samuel

might wondering That more more, what and makes just seeing just is gross one there? expansion was for And much margin been And recently. on margins nice you've could, if squeeze how the I drivers those really some I sense. of there in some expansion room be

Pete Anevski

the to as keep as to continue to we our I we're to The good are what growing And do, bit grow services. of continued that's supply the based tell operations at of we be inherent around we'll the side, expansion sort you at we grow share business of we to going continue care always that are can on the that services, in the purchasing they and that we growth extent extent we can't it's little we be have. if that cycle I around continue in and going we to deliver, we to that embedded how how to whether margins. be. bit, you pharmacy extent with going will, the power in believe cost and be management a where our So, you're right? to going hopefully or primarily will And rate are in that those you future leverage see there expand the our be chain, that that the much able so just are is or and little to off it's scale, business on to entire to medical then expansion advantage always of continue opportunities those tell able we clients that the it, a

Operator

The coming of Okay. America. Cherny from Michael from next Bank is Michael. question

live. is line Your

Michael Cherny

of a the pieces lot growth moving course XXXX. I more is little Mark, a the to Pete, guidance. there revenue if bit over alluded of can you Clearly, into dive

some could get of being think that the moving some understanding the more noted think on and indicators guidance April. hindsight of also you during over the set for good you leading yourself is to to are important think about COVID, potential comfortable And of even the with You revenue guidance learned to downside said, another different visibility upside especially areas what the low range guidance what and as very as mid-point, into you of That be high-end you looking there through time? guidance? being wide you're side, pieces

Unidentified Company Representative

say, January on do look, consideration So early We visibility, February have a all But to is extrapolating in big so view have models. really again, that, drives be our an again, what's numbers. we into peek right and pretty we March. obviously bit at have take on at happened good what already, careful April now, you little of but into a really good

guidance giving I how that we you there. itself and the think around the put out color maybe view we some range

So, are high-end, reflects have sizeable we, because what much utilization the obviously level that bigger. a mix, it that And seeing we're on we now, numbers and cetera. reflects of more a and guide, overall the et normal

So that's you part year. a obviously the when driving that at look big full of

vary it does you changes look does perhaps the mix, slight quarter because to time when time, to So, some though, quarter. overall level range favorable utilization, in at of it factor less in some from

in I've factors there, in that QX launching little risk some to that further, of changes within of already put committed, have a there. a would And impact unfavorable out slight that it's about the patterns. it a effectively, some we point they factor QX right that normally launch represents that that's but million do. maybe just range those in of we at clients variant everybody's that contracting and the it's extent when and $XX we to $XX than To a in up million. bit delay choosing don't So decide any just it and they are a that of factor to mentioned know the that we've also higher hopefully be Possibly number are now, about caught

pieces some So, we're that big as at the that looking that we with. of are considered those

Michael Cherny

the Where think of new fairy visits. mentioned, you the course lines, most starting attract over you of And important ART consults year. course for number? you've or revenue do dropped and those determine the starting over parts year that cycle of Along I understandably, of the the to what more said are looking a think for initial point are XXXX, think, turn? And we the I

Mark Livingston

we think looking I mix was looking the abnormal ways really talked for we Yes, so of at and so middle console, in with a impacted those I initial that us. you're you saw of in -- is comparatively you're which only that certainly pause about in as at lower the the have that initial progress, that -- when summer, sort us revenue. start treatment we know

whether that was number affected it's you pattern the but treatment that it we really that's in saw your of we there's of little if pause dropping the December, bit your something that you're or revenue treatment, that in is If slowed. impact at obviously similar revenue point, of that also that of December a mix was overall midst things a saw,

Pete Anevski

was to from to where think across grow of the years think other right, were earlier is rates our the concentration country, the members of that as and continue the continue he's the utilization of rates vary. Coast, on sort think and I country we had you right, grow, that of pre-COVID, the to a experience, grow across West highest members member engaged do dispersion prices, you where East our and as

turn and those levels going the across country. it's that it's as about of necessarily you not and all averages describe because get prices sort back it's to, it, So, to low mixed and

West only utilization places client But and East it's today. sort base growing versus of not they years, during mix the country, also simple on concentrated aren't member primarily so, by early were as across it's base, at down where of in in as so a the a and much COVID. of And we're the that across more disproportionately, reality impacted the country growing as the Coast,

Operator

we Glen, line Jefferies. is Next have from Santangelo Glen your live.

Glen Santangelo

revenue it the year? questions a be just million you're apologize in missed member, but at at exactly previous different the I if that of Mark? know to I up on know around maybe remember, And this, want the to quarter thought we Do was I X guide, to members. seem be when ways. you'll follow second million couple I middle X expected I I or

Mark Livingston

Yes.

smaller. launching have but be There's second few of the quarter, in will a Second majority comparatively the those launched, it's that in yet not quarter. QX,

Glen Santangelo

now growth look bit kind revenue in utilization, of little in where we mean growth maybe growth you if April, sort guide. to in I your is even million implying you membership of January is, 'XX sitting is So of midpoint look if revenue good being question that X year-over-year, guess your some as your the we're and chunk at the members uptick a behind a my where membership below use the

you're what think the guidance? get currently I to to of we what all seeing said think to to utilization But -- incorporates sits improvement from I ultimately understand. trying need midpoint we're understand we're sort of that's it where you do that is, trying today. we are all

Pete Anevski

adoption your member Rx. is your The your growth growth of biggest outpacing revenue driver of is why

if roughly is the Rx year, for upsell were year revenue versus And million. started we're live. they're part went client Progyny help your bigger year. that's your of in you base these growth. at an would there part will, So the a that's where a the the at existing your also perspective drive million X.X exiting well, on year, on average from got of But average also the up we as look and to growth X.X new for you we starts, number, the going much be where remember just not to membership And overall client number,

how it's companies, you're as be continue base is last and they the or grow the members with And will and this start as So and existing growing how on year year. just going not, same existing that client the much number of and much eligible eligible never client allies. like it's the more we'll And to year, piece the throughout But rate more average, you'll it remember, know. for is really a members to the benefits base the whether grew grow at grow. to going

what which So is things overall in you guidance. got out do when detailed to those models, our we factor in, we put all the

Mark Livingston

normal high assumes at But level utilization. of a the that again, basically even

So It somewhat in goodness we was normal the the March, balance extra, a and level. think and year. an February February and on is of riding Omicron extra March, by although there. January good We're bit be activity based would necessarily little a of affected not really what through

Glen Santangelo

just to adjusted look EBITDA guide, decent. pretty quick follow was ask on mean, of the seems guide kind the stock-based then And EBITDA maybe comp. I I about the I at curious. wanted side. up expense a the

comparing You 'XX talked at about I'm correctly comp your I that mean, number's level a fair amount stock-based remarks. I up look to XXXX, $XXX almost that if in that prepared of Xx. million, If

compensation? us Did more of plans would cash details I'm helpful. And with compensation kind of so, award? around you Thanks. curious, more gave award that replacing could changed Company, anything in the you Any that mentioned else stock any you that that be type around are you in that everyone give and to comp equity your color

Pete Anevski

your of I'll replacing answer the of comp first. last We're any cash level not with stock part comp. Yes.

the going higher and with break stock compensation out. that a bigger black When public, shield recently pre-IPO have a being at in we do broad-based comp results you were shares existing this a though from there It's were shares without why, that the grant, when lower and a You plan of recently were small. our number have a around to price, value. you we're public give And grant is remember grants that, our stock them you color out impact already much at stock you amount do perspective, compensation. we which to much a of much level, a result even significant to relatives as outstanding,

are we doing So, anything not different.

that there is available amount In have grant of fact, remaining shares didn't a still that we significant we grant. to

retention. sort existing felt how we base, we do and of to relative so that the remaining level we really that of look is higher or that very a than to had jump-up We pre-IPO. shares prior as shares way we those what any at of judicious year, what felt just did place shares are we put of which grants. strike did, in we client XXXX issued, was we were was And you just But, function continue price the were our at important in where the in the they time had grant, a the majority

Mark Livingston

be we'll Yes. in the usual disclosures And there. XX-K will in tomorrow. and And be filing around our this obviously,

had So about you will it'll be able to see in November. we black that between Pete previously been did. grant in substantially talking this very what that valuation but granted for Well, clearly step-up that the and shield year, be outstanding versus

Operator

we Up Sarah next Sarah, have James Barclays. from lines your is live.

Sarah James

a step type over Is going would is there is incremental on So in on that you XX.X% down? talked of that investment being from going on about or just mix XX%, which drive step or like the capacity 'XX down margins this conservatism 'XX. different a a business guys

Pete Anevski

is No. I straightforward answer actually here. the Actually, think fairly

still you were to we hoped and period results clinics XXXX. But So being favorable drive that revenue of to really 'XX But in we've because that now they a between point. order back pandemic. as QX for of versus have early that, are what drop in that we the 'XX during the it in versus of we are the the it members the points in Remember, XXXX, to activity comparison was alone, at do XXXX. enough pass ramp one staff in close bit in service period obviously seeing transition would here sort quickly. through XX few came of that compared to going up also we to guiding deep of favorable all were our the a days that had And retained to

Sarah James

look Is the down had talking then your one-off? how market trending is with the for your or pipeline step the about the of who in And years, going as You to? a of matures to that client way year. do this pipe size you next client few in work and you're like bit a as little this kind size companies you at think

Pete Anevski

that to to. referring launched season, they that dramatically that sure versus XXXX a a because companies levels client larger sales represent of a the smaller, workforce, they lives not XXXX were of that step and returned were the down being normal 'XX perspective, for in I'm new lot so. poured the we've remote the in the, From average XXXX, managing their benefits workforce launches, in size back lot they that through selling terms their you're client in

we not sort our we season did can more choosing in did to make many 'XX looks decision it like what benefit So, now experienced for it changes. the dip than that in pipeline, Based selling right of XXXX. we're it see in on

Operator

Leerink. SVB The coming is Stephanie next question Davis from from

line live. is Your

Stephanie Davis

of out answered in answer, baked more. confidence of You've prior most [indiscernible] create the more about the driver but your 'XX gave in? What to reflective just hoping of so was kind the guidance? that did rates was a some I you of prior RX attach cushion the recently, this Was Or you that find upside?

Pete Anevski

for, obviously that portion and et for a the should the March, timing that think we factors those things in components, expect rolled and into our February of little of the activity the versus we member different that visibility that out the we're of cetera starting bit we low all during a relative both seeing we're It's QX. new I high in sort year. there, those are put range what and and end including clients up current went us the that seeing all of QX through is that really starts, use Mark into of bit April, of plus give that guidance the all to beginning the little predictive of engagement already year went

all are we're sort color any up just factors guidance relative what other the not we on expectations, you comfortable based the ends there's those are that putting but it's our rolled of sure really, to you up all those tell give factors, So I'm to being out there. into all that

Mark Livingston

it. we when from rate, commitments attach the get on getting clients, based just are we And

about cycles the they client, but with also information to or not going number they the they're preliminary of again, whether anticipate size have, of We the the want, benefit. Progyny launching ART

new us And so, of the really we anyway, that very that's new commented rate and cohort activity to that's not at sort really isn't of JPMorgan going the obviously get launched think want are clients rate around to to live. get see had contract information, clients that it. that uptick attached But the we an even we under the sort this of take I for in

Stephanie Davis

then Yes, just besides and to the question a kind understood. versus I what and declined seen of us bundling many I Rx. through kind line of maybe the pushed historically? we've you so you to ask of the walk what otherwise, Could folks legalization. through in big the guiding the uptick Progyny How missing like finish utilization do bit economics

Pete Anevski

Yes.

for versus also up why sort sort how Rx in the away? answer Rx other within about prescription the the but sort think are now in existing clients, we've when of question, in new for with upsells past company the is, of that talked make adoption, ask everybody's the up past was folks, right. drive come to I Progyny sign the both sign constituents those their And benefits the a right for of people decision

that's now. both Progyny a to also resonated as saw more member so continue sales, and the experience the better to financial portion And extent that not Rx, the we as of are larger of more sort benefits that understand sales of resonated and people with and have new

in introduced ideas been prior these they've periods. So to

sales it sales which cetera. the it before, than a that year was before buy et when is was new past so the And they and in than that bigger contribution of year usually was year bigger

just friction process. So and more it's But in that's contributor. a overall, the sales awareness less

as in our the Rx, relationship, side, overall, Progyny to Rx a of the because thing relative terms when also that I they one way partner, solution. adoption will beginning pretty is benefit managing medical it's better tell other members under relative umbrella CVS the new channel feelings announced are we of integrated understanding a on in with and The you're the but that to helped year you last of sales

Operator

Next Berenberg. coming question Dev from is Weerasuriya from

Your line is live.

Dev Weerasuriya

think kind sales good circle I of got to the utilization. color just I on things. some around of we side want

of you the I I follow-ups. of a that up delayed portion cause adds, from mentioned comes and think and that could [indiscernible], of know been kind expect in color client that XXXX? from up XXXX. was a Any client of the number XXXX. XXXX helpful to have will a step momentum XX is you maybe QX as of the from it call I similar that portion step which clients XXXX mentioned kind couple a of Do have be around in into

Pete Anevski

no, added facility, even going XXXX that normal people more through to lives and of So make clients When goal year, prior And logos want -- not versus both in was lot because indicators I they we're that to our early to pronounced fact time the not by 'XX general, and always logos before. sales were pretty in the XXXX, in in changes. momentum 'XX. any just companies right. through large lives were I mean, was I that that year The less, the at return remote workforce mentioned benefit in that but I up. benefit don't in new chose been weren't and one to we end say managing wouldn't increase clients the where the we managing any smaller to more that, to in bad, was changes, used levels. a in year, sales impacted and volume a Mostly certainly than 'XX as all experienced it's we continue and 'XX sales know we in so But are sales

more sales logos seeing And we're our is and so, and that and momentum is those what comments. the had around we to always prior goal in so lives which so far I'd around to comments point than sell the we've stated, year really

Operator

Okay. conference today's of the concludes That Q&A call.

back floor the turn closing to remarks. Hart to for like I'd James Now,

James Hart

follow-up and have everybody afternoon. a quarter thank you reach in questions. Thank to Please call to of the if conferences then us at any spring. be you out we this first Otherwise, joining couple you, John, for you earnings and seeing me, sure look our upcoming

Operator

Thank and today's conclude This ladies gentlemen. you, conference. does

time You a you your for liens have day. your and participation. this wonderful may disconnect Thank at

Progyny (PGNY) 1 Mar 222021 Q4 Earnings call transcript