Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen and welcome to the Progyny Inc. Fourth Quarter 2022 Earnings Call. [Operator Instructions].

It is now my pleasure to turn the floor over to your host, James Hart. 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 Peter Progyny; Anevski, CFO. me are Michael Livingston, Sturmer, President;

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

to contained clients, strategy, and our industry guidance, both those we and full and and expectation of of upsell our statements in our federal including forward-looking uncertainties including statements and or important our securities assumptions member the that mix, well market factors. for business by financial other business, and existing related future size the number and sales under risks investments, variance and of as reflect industries the performance, from business objectives as COVID-XX, views expected implied to industry responses forward-looking remind XXXX, of into on for the of offered impact only differ year today for and of associated today may comments law. as outlook, impact questions the opportunity, our decisions, plans begin, which serve, due of statements materially underlying other are services with plans activity Actual in lives markets clients, I'd retain our expansion clients client ability our the these of operations; your and results utilization to long-term our season new and we drivers and Before our rates business, our and covered of clients acquire our anticipated launches, expansion such our growth, timing to management's you that XXXX first our and like levels including the quarter to will and outlook anticipated employment the clients client include

forward-looking SEC filings based material which make statements found that to Any actual of undertake as both Investor release, please and as are factors no that our future of Relations of could our risks, and of this call today's assumptions can statements discussion or on results, a information refer these events. impact our the press to assumptions result For uncertainties, we be a update other important website. new today and obligation we on on

During in non-GAAP we which EBITDA the adjusted measures, with is EBITDA GAAP as margin margin financial release EBITDA, available reconciliations including call, comparable refer on non-GAAP and the adjusted will More press revenue. also to the financial incremental about most are at available adjusted investors.progyny.com. these measures, measures information such

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

Peter Anevski

for levels record Thanks, was in XXXX. over We're XXXX profitability or this pleased over Jamie. of for XXXX another Thanks, that year margin adjusted generating XX% than $XX and operating a with to more EBITDA XX% Progyny. everyone, cash flow extraordinary XXXX, revenue report afternoon. We Xx with joining us over growth achieved million

seeing selling demonstrates season, the where which single from the demand season we lives ever. in most clients, were covered excited of selling X.X increase more XX% ago market. lives. While extremely XXX positioned of in on of proud start believe We even we're further any That's we the beginning an we're results, ever added million is at the the approximately representing of the our most new at a heels new coming about continued more in XXXX our we're how season which we're these successful year than

this alone the we've amongst XXX% near year business seventh retention We clients. also in each would an maintained a straight in X let to done. as any market year, rate be existing That years any over the extraordinary achievement our first for achieve for year

and XX% Progyny increased the of their logo members, success, indications to employers, We some of partners. are existing existing consultants more than their XXXX. for provides and services the clear clients our client value program of rates, Progyny clients benefit. in believe retention retention our addition expansion to of existing our constituents; reduce clients all didn't strong new our way fact, sales In our in And for solution

I'll remind the looming a hikes renewal that where and majority the the of were in these and you buying economy. interest XXXX, affecting environment high headwinds second despite rate macro inflation, decisions half of other vast potential happened an recession

care solutions and sophisticated what's today that evaluate clients in how the Our and and They choose their many the meet objectives. best of health the will services world. needs the buyers include data-driven to in most of understand market

who We their also companies leaving several also carrier that's attract time facility comprehensive solution equitable. inclusive expanded for and the believe validates as success more things. first for to benefit a equally as we our a are Accordingly, our who companies continue continued are adding both commercial well

of modernize long for to look support First, population benefits demand relevance benefits workforce, family underserved. the female timeliness is than employers been fertility ever; millennials their of increasing as benefits and stronger second, have the who and needs building the the their amongst particularly health

the that especially of so and fertility are to being continues solutions by care health benefit added the itself costs. model controlling part few differentiate successfully point coverage design with the member once building, the to medical tend benefit the employers the last of has benefits have in family sprung when and while and outcomes digital over to and integral an once up resilience value. ourselves as unlike including across strong unique employer years, lastly, Progyny the many the outcomes away the to reluctant be take also Third, these coverage experience been it's been And extremely has offered

level level true combination demonstrates support. a collaboration of and design, a unprecedented end-to-end impact an that an of through plan an network solution of is and industry-leading education across real Ours patient extraordinary

clients, years $XXX and the doubled covered have lives at In revenue clients, X success continued million we the marketplace. past can million unique why in we than our our X.X the That sustained success testament in believe this We just believe and over explains XXXX is to more differentiation alone fact, XXXX. XXX deliver. were revenue the when value powerful in our also be there demonstrates most in members we value we

begin our this capitalize to we The season year, the positive. in very on any quantitative As stage, season. so the offer continuing on activity demand to is is selling earliest increasing it's the far soon its focus new early thus XXXX into too extremely while commentary, we're seeing is

success particularly continued We've while track expansion group not early that into plus these a our in have through across We good We've also season verticals. company, activity. XXXX pipeline early of proof partially union vertical. one the picked of and that the initial of in all in of how wins the gen is an country, year-to-date of care traditional the in often place that well as further and inbound each healthy client manufacturing aviation example. of addition from up as increases these recent the meaningful opportunities record record children's with And as levels opportunities pipeline meaningful XXXX dynamic, over reflecting can active industry were now of a an are within new win number extending success an already largest the momentum hospitals carried seen translate of health a over created including level another very demand our in wins, industry

over clients in first care represent covered XXX,XXX care years health we And XX client. we won ago, today, our that X alone. approximately health Just have lives

only not of our is exciting we're of success, health but As the the still Progyny. thing industry are every at and sophisticated today. Perhaps you of XX all amongst we solution most choosing buyers a these are health penetrating increasingly might also the these with imagine, early than other that are most care the industries very care a employers even more stage one in

to in channel we're seeing season, a In beginning on XXXX partners. the promising nontraditional such activity addition increase with selling an also note, other

the example, Association, or was Hospital For exclusive the hospitals recently member by be building for to family and CHA, to services. preferred selected partner fertility its Progyny Children's

hospitals, members a to programs. the of have XXX of systems practices services, familiar and and and best range with shared access more CHA, partner related a coalition benchmark aren't you it's across data, than Participating If including country. organizations children's programs health bedding

is tangible health care by results including other and some members. this due group producing our are hospitals part systems, to Our with record extensive CHA who in of prestigious selection

other accelerate the carries expect with coalition selection obviously of and awareness members this relationship their will within help While important example and choose we other this expect We can leverage to recommendations, significant very this whether agreements further and to or approval success weight of to very vertical. follow channel believe having adoption the not an of partners our benefit. Progyny that further we're CHA's is penetration CHA announce attractive we to

with building us to in us confidence gives demand In selling the trends position our conclusion, the leader year's as XXXX. family into well our the early activity last combined high position space, for driving season from selling the season that momentum macro benefits sustain the

choice companies best evident successful the is more given that become provider of Progyny pipeline, in in And both solutions companies we're world. that fertility caliber and the the it's even most partnering with amongst for the our active the known seeing of and

turn walk to Mark you the over results the to now me detail. in call more Let through

Mark Livingston

this was growth period that XXXX. afternoon, with Good fourth for full of our Omicron rate which Revenue then growth ago provide I'll I'll year discussed a we reflecting and through fourth you at first Pete. year that and million, revenue you, variant $XXX.X the everyone. reflects for headwind included Thank remind you the slight that expectations from the quarter quarter time. the walk XX%. in you results our in

said from this see the previously, we meaningful we've once QX year, in early of impact in remainder XXXX. didn't any As Omicron subsided COVID of

strong which in to market. rapid to just opportunities than our the For X growth the into to are more in With past addition revenue validating $XXX.X helps how in grew result, perspective, million. revenue full robust year, years this the we've doubled put our XX% our

primarily ago. covered Our clients compared compared XXX due We to ended average average an of growth quarter reflecting both representing the in X.X revenue an lives million to as covered the in and XX% million was year. ago lives XXX clients, at X.X year the lives a covered of a prior This number increase of year year over lives. quarter the in and to an clients growth with

launching opposed their in lives XXXX benefit usual As discussed higher the Progyny date. throughout of quarter, X January as start last saw to more clients we typical than a covered number

some quarter, these were there relatively who clients were the client X in and expected, though to clients in QX. As smaller QX as launches fourth in larger compared of the all launched

of more sign most consistent as Though their of will as look clients we have the a is as launch starts coverage available XXX a year clients continue employees X nearly most new family-building and to the the make won in believe season, conviction together, want that launched Taken offer which dozen both plan that selling eagerness benefit than companies to possible. in these out recent XXXX. we employers to soon XX/XX, as as that we view early launches to that need well with

was As workforce XXXX course growth clients to in has the been in covered quarter growth past, them due well. our so client with the the also continue in in a not their lives as organic of many within only fourth case of number expand the doing of existing base year, over our the the as clients but to new

tech, the headlines doesn't where to story. whole reduce tell workforce particularly the in have companies, seen that number plans their but all of We've announced a

there hiring that are lose have than layoffs is the significant citing there to December In New any costly X prior believe and in And to unemployment workers to our knowing just well employers pandemic today, industries who recent at the client in the its to point and care, new the few. continues a since economists that how now in train including during York to in hospitality rate it month are health fact, were is lowest the decades shown the Times employees and XXXX, base, name recruit be subsequently most reluctant that services, professional in future. just very fewer reports reported represented jobs

over a our base. of key significant years the the that our you aspect diversification has been of I'll remind past growth few client

Our with no clients than discrete even today industry XX% represent of comprising more our base. XX industries member

growth versus to we little relatively to in continue membership XXXX. As with for anticipate year employment consistent growth clients this to it levels from membership of expected contribution existing we to base, the our during how no be our entered relates

line. year top $XXX the XX% Turning to increased million to components the the grew in of quarter Medical and to million. over XX% the revenue $XXX fourth full

XX% clients pharmacy both and was over Our both to the grew an driven full $XXX periods was in lives. Pharmacy primarily growth number and The in covered million. Rx. by quarter XX% the revenue of upsells higher Progyny XX%. XXXX. clients the the $XX.X In the growth number choosing some in be XXXX, clients of With increased in million our in with newest by base, in and anticipate fourth XXXX, year solution. had will of the clients the increased of XX% that integrated client XX% XX% we existing base year increase of to driven quarter that have By end to our the penetration the from of Rx our benefit

Turning now to our utilization metrics.

record a is XXXX. quarter of which increase the a XX,XXX ART from During performed the were cycles quarter, XX% fourth

as is which demand results consistent principally with ago grew seeing in a X.XX% nearly year, in period. captures for full cycles more we're fertility our treatments reflecting the For journey rate the drives ART care. high year Female it financial utilization extensive quarter XX%, of the the fertility what continued was the

was For year, the the female in lower X.XX%, utilization full X.X% XXXX. than slightly

newest a were gain a due on to benefit. number utilization in see midyear once will ramp utilization significant timing of launches number rates there As certainly which the access period reported members a an of reminder, a we rates. the of has to including typically our impact launches vary XXXX, as new And client factors, the

expenses. of ago our management favorable XX.X% care basis the to $XX.X quarter and as providers and margins more delivery partners XXX margin. Gross operating increase the services gross The million yielding increased continue XX% to pharmacy now in impact the with primarily at point from the reflects realize of of Turning to we year our as well our XXXX renewals that efficiencies from period profit the program fourth terms. a

to full of gross year, decrease The year margin with the impact a For to of in from increased stock-based from points XXXX. profit impact margin, connection due of million. sorry, basis impact XXXX, grants increased XX.X% with gross noncash the reflected excuse full compensation you. XX% the the Gross XXX $XXX excluding the previously points -- me, that discussed stock comp, stock-based basis including we've of of XX primarily

of as expense to with demand period we go-to-market expanding in investments on our resources marketing and the was the to quarter, year continuing in XXXX. fourth revenue line by capitalize Sales X.X% continue growing ago the make entering

was operations XXXX to XXXX. higher as marketing and is XX.X% this business. XX.X% X% revenue X.X% compensation to fourth of For the G&A primarily quarter the increase year stock-based our full was ago. revenue due as year, sales primarily in to the to of in noncash in a efficiencies compared expand we quarter back-office compared The due The improvement expense. is as in

XX.X% was XX.X% full due XXXX. year, to higher revenue the to compared G&A stock-based increase in which For was Again, compensation. the noncash of

and efficiencies our compensation reconciles the fourth a and quarter, year. Press of EBITDA doubled than and on both growth release of or yielding the to the noncash today more line margins our whether $XX stock significantly margin In margin EBITDA, dollars the expenses. issued adjusted operating quarter Because the impact XX.X%. gross million, in measured adjusted realized in increased top the strong business, throughout

grow or latest million share EBITDA million diluted quarter or in or leverage XXX For for cohort continue from revenue net compared quarter achieve to XX% $X.XX the Adjusted EBITDA quarter full to even to the share. of adjusted was the XXXX. XXXX, demonstrating $X.XX in million $X.XX XXXX. XX% $XX.X higher or The rapidly income on yielding comp revenue a million to share. XXXX. compared the basis of year was in the share the point net stock or This we primarily per year, Fourth per XX.X% to both that million increased decrease of year $X.XX expansion $XX.X This margin margin per full the income as and $XX.X fourth on net was diluted per In was $X.X income we incremental $XXX.X of due business. expense.

provision Additionally, had the period quarter compared current a to as tax of a for in taxes XXXX. for the we benefit income fourth

we Turning highest in the $XX.X quarterly a Due year million flow flow million as our balance million. now to XXXX. operating period. This $X.X cash of $XX.X the cash over full compared year strong quarterly performance, the operating generated $XX the and quarter, ever to fourth generated record to we In achieved to sheet. in our of compared cash ago flow million

nearly in to the For collections. the flow profitability timing the our and flow improvements to in year operating our conversion primarily cash of full cash and as well our billings of previous as line were both year, rate commentary reflects operating XXXX. our quarter in due cash from EBITDA a adjusted conversion and XX% double the with higher The

on improved expected, ended to with XX concluded accrued As a we QX by DSO where the and more unbilled and from receivables days QX in year line basis, than XXXX.

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

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

revenue, million $XXX and million reflecting projecting in first quarter, are growth For XX% we between XX%. of between to $XXX the

project For between billion of between $X.XX revenue XXXX, $X XX% billion, we XX%. growth and to reflecting of

during back we half newest slightly majority in year. the the year revenue of ramp launched, the a with have anticipate which first year progresses, the full how reflects clients to particularly include As 'XX somewhat from rate launched that year compared will who as year. that comp typically weighting heavier periods the start against lives the our growth revenue the clients rate, of back more significant Because from the half quarter, and growth the to of moderates over the throughout our will the already XXXX only

$X.XX million quarter, million approximately we on share with fully the $X.X For along between adjusted to between diluted diluted the income of net $X.XX of earnings XXX million basis to $X.X first expect million million per or EBITDA, shares. and between $XX in $XX.X

contemplate benefit items compensation discrete you, those to activity the remind tax projections activity. equity income do occurs, continue items, income I'll To to our related tax from the discrete extent benefit net including any related not XXXX. income we tax throughout will the

$X.XX expect full EBITDA in diluted $X.XX our $XX.X adjusted XXX XX.X%. this million net are expansion of we or we of see diluted shares. $XX of with basis $XXX XXXX, million share adjusted guidance, year, for EBITDA At between fully For margins the incremental continued the per million $XXX between to on the expecting and income million, between of to to revenue million approximately the on and midpoint earnings of margin

As reveal, both these in of that line generally and year specifically momentum the building growth also confidence market, expect us we're we will ahead. family another strong year solutions continued ranges combination strong with top XXXX margin expansion the be Progyny seeing in for and the gives services for which

turn back the I'll that, over to With call Pete.

Peter Anevski

ahead. When benefits respect activity, Thanks, we the demand we're the for why look grow call the to clients as you XXXX. the we're with Mark. how discussions we Hopefully, new for see see seeing engagement and the family is year channel in at our current building from as helps we're today excited clients partners, having member well continuing to

as benefits. choice we're building in of believe We reputation deepening brand also the our family

success, look a throughout we growth macro fueling ever to that the year. that our marketplace our model only providers in to achieve that best ourselves distance believe we today, have forward and progress scalable other across we're competitive the look you business and we're intact the with in between we've as As providing updates the the been the we widening But been was leader that the market. in and built position on trends

up like for With the that, questions. call to open your we'd Operator?

Operator

comes from [Operator of question Instructions] Michael the Bank with first Cherny America. And

Michael Cherny

years? last determine And the where that to year. potential or again? any of starts end would it in the Mark, I year over whether year. needs iterative be about wins strong not was early starts anything we you going slow guidance some made, think business was the employers wouldn't of we'll it regarding starts forward, this the process never or saw would you comment push think next pacing the on that of Is outlier I see there you, what a what guess you such that direction? maybe you Mark, have I in few as Or that you a early this guess, as the an the saw Congratulations this early think to year? a about continue is there to model going the be regarding

Mark Livingston

Yes.

So guidance same we've the we -- posture around guidance our that maintained the always have.

we've provided large. course But early that and the that the launch extent of what that any tonight the year. the seeing So they very only they're includes during includes this would wins these of reality now to that is not guidance we're

you sort year. of you're going Certainly, nothing saw like outsized an see So impact. not to last

Peter Anevski

majority companies companies are, never plan great, plan the for of But planned on starts. Yes. most part benefit. take U.S. And of in as always them year. them we a companies happen, early and the their Mike. And they generally, because year in extent for I'll the second view don't is question, do your To it we that calendar fact, We start upside. the

So seen to to hard we what not -- whether the of an any we've relative like our relative it's But it's whether for relative outsized say we're an hard number in saw past, the to or anomaly year. history future. last say to anomaly starts it's planning to early it's year, last not

Michael Cherny

if ask just And it. one could Got more. I

capabilities? mentioned You've any side? in your positioning. you you're want either to your always relative terms comp, absent that anything you direct run know, targeted changes competitive excitement a fairly how of over capital OpEx about different additional services I thin investment of Pete, the the stock-based and/or the marketing on change and to on build-out spend Does making

Peter Anevski

we that across we the rolling about, different guidance areas, we're investments that other go-to-market, that around have, we're definitely many services as in internally investing to new both talked we capabilities ones have had many the creating the that out. support as areas increased that Within we're well

But advantage But of advance to to vis-a-vis there. addressable opportunity and we continue take market. that position our the see yes, our is also out shore in up contemplated guidance. that there's other to significant any competitive relative investment to offering the So

Operator

is question JPMorgan. [ph] next with The coming from Samuel Anne

Unidentified Analyst

Maybe Congrats around and just follow-up rolling infertility investing preconception and male in could wondering maternity about great investment January, offerings you just in little At on results. our the those? question. bit maybe then out services stand each some a enhancements look conference the of to a you where if in of women's And you like? health. might share I was what with of those spoke maybe

Peter Anevski

the Sure. and part first let I'll the I'll of question take Michael take part. the second

did being you, Preconception really or we are be already rolled but the -- by compliment. the and other talk way, are be parts won't areas the year in yes, I'll of piloting some end maternity country about infertility male during talk the although first going that. And things for those quarter, of So in certain then health about the in year did out. talk thank out certain end fully are being We rolled by of effectively and the be the Michael next out will year. investments the until women's now the about rolled on investments out of services year. during of We'll rolled areas. to available let

Michael Sturmer

Yes.

were the that front, an it's preconception been of realm. that that enhancement -- on in So we've services off providing really

services they our successfully employers, the that after high-risk trust our then And we've as opportunity become the been built down at have with is we've there's and something And help continue and support well to given on for cases. that this continue front, looking with a maternity path. excited a to a while the that there we're significant members maternity as membership avoiding pregnant focus towards pregnancy now. the high-risk So our

And few into again, primary a that rolling beyond postpartum So for we're but as and had and focus spots at year the next. where is Pete that's excited others into out the there. about looking focus this

Peter Anevski

we particular, it's network REIs about work network with. to those creating separate urologists generally to a urologists. work and like with of infertility, reproductive male The of In talked that tend our reproductive

extent in subset country, is small affect urologists the to of unique it's and themselves to So infertility, addressing male that male the create a that known addressed. has factor the the needs be as what

that they there's have And gaps sure in relative with REIs make their any urologists like and with may or that so specific potential regular the the to no to other coverage to work health gaps plan.

Unidentified Analyst

there's lot just of there. imagine a question. opportunity I Exciting. second Maybe a

talked with dollars? kind this was savings? conversations the about Are with starts they to than any this the pitch selling year just given on the year. momentum of last prospective last maximizing fertility focused to of your I wondering, Or the is macro? You similar strong year season are employers more different year

Michael Sturmer

and different population, and be fertility understanding experience, time. Michael. Yes. providing end come cost prior each and the is This but both conversation the this more to year, the that get cost at conversations can do But the controlled over of that at and being outcomes the able the and what continues really a No, continues I great are at it educated differentiation down the differences day, say. to where member a nothing Again, lower should from the in to that for years. differences I on buyers think the sophisticated and in are or market

Operator

Singh is coming Securities. The from next question Jailendra with Truist

Jailendra Singh

comment want guidance. Congratulations I back quarter the to pipeline on strong again and around XXXX. go to same for strong

carrier Just driven programs. moving savings are employers marketplace fertility in benefit to or a long how carve-out program because generate guys start one fertility the if rolling you Or curious like their from these carrier-based around time such? spend new employers first like if for as the away out employers for to this by if the benefit debate moving compared this And there's can be the you can that these is some time? employees benefit carrier-based could

Peter Anevski

there. not Progyny that but don't we from offers. whatsoever relative solution There's both interest brownfield those a something that and/or comprehensive that as One, those a have have have greenfield couple continue to of anything and things clients to

for clients from we so continues, their X what not with carrier cost just important different And in seen perspective, save carrier for to we or years. solution. that just we But benefit It's side we've the and plan in easy the that. of offer. to and XX% comprehensive could medical that the compared whether the it's generally whole prospective a PBM traditional the than neighborhood imports to go no isn't show pharmacy the both of past Relative point

a said especially an cost about a discussion about And about assumption, The Michael other always more and you right? discussion continues avoiding getting healthy et that member prospective that. when It's It's birth discussion. clients, investors is to the clinical favorable with that's pregnancies, all As happen live that to creating creating do there's pregnant faster, with a of don't the experience. part before, cetera members issues outcomes. is be, big

Cost something important something always is and understand. ask that is the driven discussion that And member think people by I are important about. they they that our about ask and But want first is what part to experience when really offering. about Cost that's about. talking most of the you always think

Jailendra Singh

general general? follow-up some you're That's you just do retention your of around some these provider helpful. time, like my view, there can maybe quick and retention And in partnerships. provider around how spend rates what ensure in time and from quality point then Maybe seeing if spend you

Peter Anevski

in country start There with across The in I'll challenge not network retention, our overall we've Nobody left in country. either in those network. network geographically that's that wanted any we provider X that. the anywhere or that the network. our had our our is isn't issue anybody with has

overall deep and fertility relative it clinical awareness to we're achieving all helping relationships really the boat of with lift collaborative U.S. in and the overall We have providers. in our effectively outcomes services that together really, a We're the to

members that Progyny. so clients our sure at we do it's along and relationship and overall that important care our of approach take to equally we And our here relative our make with offering we a that very

second question? the was What the was Was to I'm there part part? it? another there of That another was question? part your sorry,

Jailendra Singh

I the changes? reimbursement, on just seeing if wanted any to understand you're

Peter Anevski

yes. Oh,

Jailendra Singh

Rates negotiated, yes. Go ahead.

Peter Anevski

Yes.

rates. issues with So no reimbursement

of overall able care we We're slightly cost and be see talking industry partnerships, those are number we're that and increases. that as coverage. important. we in we're as X% really probably to In to people can together, talk costs to achieve the flat grow able real and clients what in Michael fact, in to to those which otherwise as before, and upcoming down cost are a the about of a very that this of mentioned X% still increase to lack is would health we generally a to the are cost year the unlike and to are that's continue that's able keep telling patients going success And they looking do our and never relationships year. rest about upcoming sensitive result, the check for through That's grow through us, that for, maintain clients whereas in especially differentiator with

Operator

with question next from Schoenhaus The comes KeyBanc. Scott

Scott Schoenhaus

year. into nice on the Congrats heading momentum the

my the penetration XX% given first into guidance and full growth be first your what actually of the rate? of business. is we timing should your wins side quarter the this on question year segment, and Baked guidance, expected So benefit the pharmacy expecting of of large in kind

Peter Anevski

medical years. higher perspective, would say I of of guidance that still but growth pronounced comments, approach clients to the be now your that to each year growth clients a of your it get or from to it because having was -- closer piece medical But this out break is within quarters rates when we XXX% come other. year. of A than don't be benefit, in timing in as we continues past big to continue I Pharmacy -- as going are won't as start and and to as -- pharmacy base will the Mark's Rx. not things of given think timing we're Well,

rates tighter to relative growth are to get versus medical. going definitely Your pharmacy start to

Mark Livingston

And to on. goes just that, year will as progress that adding the

as look some we and as the increases clients XXXX. throughout that XXXX, there step of went some and upsells back go and -- newer you at were if remember year launched may some the through You of launched we those

little comp year So on. be your stronger it than bit maybe will be will QX as goes the a

Scott Schoenhaus

is That's utilization. very, very helpful. My on follow-up question

more For with higher what's any you clients? tech-based on quarter utilization. and more color rates of a other? Or clients? and then industrial rates, are different your utilization? mature new they any from And Can much on stable each seeing to with par run your newer larger provide in clients cohorts? legacy rates What on are client be in example, your seeing You're uptick the rates you clients do difference they utilization having on last pressuring are even utilization tend pretty slight do at? more Meaning these how

Peter Anevski

older, employees part with only the certain industry if first. average second that really not in versus industry It's start I'll the extent younger specific the Utilization do rates will. vary. industries you are but age is specific to of it

you it larger population Think in years. of childbearing have your so a way. that And of that's portion

rates utilization So each cohort in you new in progress, yes, either to an it's then biggest of years though, but creating for versus pressure, if relative will, if depression, behavior you relative mature of up terms versus, slightly rates. other driver year a to When generally will utilization first tends outsized about is sort you manufacturing. to biggest Other be And the demographics to of And And adds. at tech for the than floor, that's affect not the difference the it will. year. client as utilization of the utilization will, that, example, a talk the you but driver. sort that's if flat higher that's the rate been run that yes, cohort

clients XXXX used drag, exited up what expected you utilization said, will, because Mark started we're -- if if at point, words the as early. X the dozen we forgot million I this X.X that want lives, the but for with off all almost of you now you year to

we think XX/XX? were points. it was I at X What roughly

Mark Livingston

X.X million.

Peter Anevski

I and as going of terms we added. rounds any less point that's exact the of X forgot of being impact the sort end was exiting to X.X an day, drag versus be the utilization up cohorts bigger at number but in the on get X.X, to X.X of new something, year, the is million. and what bigger less The to million simply lives continue

Operator

Securities. coming next SVB with from Stephanie [Operator Instructions] question The is Davis

Stephanie Davis

season did labor do X you're fertility about folks little is just past bit you companies like the selling the but count talk a So consumer I Should a years, there. pipeline. record think we guys record you this it's demand early was is buying of and you finding hoping market. to persist a that tight that you market can continuously to. have of beating actually as think Or the keep appeal a benefit new and in demand this sets could benefits bar does prod

Peter Anevski

is Well, is alone, by talked our The our it up thanks active for cetera. way. that active the early when time with year, think last pipeline versus we pipeline we industries, way across wins this when comment, this, look at combined -- I about right, and the about that et

prior don't to record to terms different, think expectation Our So any in a be years were in continues the And sales expect that it's the sales been as achievable for mean exceed be, performance. year, we not we years right? past in good, future. although last X this the that's us and to that, somehow that of doesn't

for is the it's the have We market opposite. continue that fact, the the of addressable foreseeable and In still success future. expect to to these think big unmet need we so levels

Stephanie Davis

keeps that surprising one Another me.

margins. your about talk Let's

of starting still your and your feel healthy to a a it level recent the between EBITDA expansion and spread seen really we've does margin years. So here lot upside. gross in We're narrow

this I algorithm this you'd thinking in is expand like with buy build my you driving guess level as about the And sustainable how So how your areas on to call? you thought of versus margins of touch it? What's upside? are is on mind, some

Mark Livingston

We've obviously, revenue at narrowing gap next and margins which definitely and between on that incremental in we high the for Yes. guidance gross margin has point year I XXs mean low And been -- been constantly the thanks, this towards EBITDA. XX.X. Stephanie. teens

asked our able teams And clients care across teams. And to to to growing well. new company, and little think a make we as and investments bring go-to-market said, we've to at a our and the continued the question, keep ones can I raising drive grow it's much revenue. there pace bar given of to, marketing be on each is there. G&A, sales ago, we've same to business management another bit on, needed and forward how continue our keep earlier focus down and just as ourselves service to not And about second leverage Pete out the those opportunity to there for whether as you We the so lines, continue leverage our pretty that we certainly, retain as

XXXX our we can we to that's continue and for think -- certainly that likely do position and So beyond. that for

Operator

it back for I'd Hart of concludes This James portion closing the remarks. to Q&A the to any call. turn now like

James Hart

feel Obviously, your of us first to for afternoon. reach free Thank at in joining speaking you, a me And John you, convenience. extent and out quarter. to you everyone, you look any follow-up the we for have please months to questions, to this thank couple to forward

Operator

Thank does you. Ladies conclude this and today's call. gentlemen, conference

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

Progyny (PGNY) 27 Feb 232022 Q4 Earnings call transcript