Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen and welcome to the Progyny Inc.

First Quarter 2023 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

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

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

and operating like to your solutions, for only the both financial mix, position, to industries the timing statements the our clients, reflect expectations existing assumptions and drivers and our other serve, the and expectations Before we our market include today year of opportunity and that concerning begin, which remind that second related business acquire decisions, and solution, of quarter strategy, our the questions of ability and our season our guidance, as our and securities clients we underlying future views laws. anticipated up-sell potential of operations outlook statements you rate the and goals selling management’s will demand responses the federal comments today and our our retain information, I’d XXXX to for launches, benefits plans, are employment our client full for such market our XXXX and our and for financial levels and under new our clients forward-looking expected to utilization

as to differ factors. from important due associated may and risks implied as other statements those materially forward-looking uncertainties well results our by Actual contained in these or with business

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

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

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

Pete Anevski

everyone us and today. for joining thanks, Jamie Thanks

to report well had the first This increase as members lives quarter start see another healthy We as to achieved strong to in solid the quarterly XXXX. the in and an our pleased record to once for growth family-building sales over continue a clients very that was well look as year and our demand XXXX. We’re of families we’ve growth again season their by as start record expand we driven care a revenue with covered that as fertility XX% or of quarter. following

ago on cash quarter quarterly gross and year the our During achieved the margins as as quarter we increased also operational flow also we quarter, first not compared profit produced our adjusted as best our only a continued excellence focus first to our well. highest ever EBITDA,

member quarter, during record base, to demonstrating while rapidly the business even service we that We we onboarded number our of successfully able a scale as the expand industry-leading clients also effectively levels. are to new provide further continuing

coverage the key including sales begun our all success, has early our we XXXX – across Simply year measuring season. ahead areas and in positive we with clear selling to momentum year said, our look equitable the this executing momentum believe in that more believe pleased the of priorities challenges against as top our has of at the time for of awareness high-quality particularly infertility we’re need mind. been never be to strategic And and we both

short in age the Health X prevalence revealed now years need when this the increase continuing became perspective, out time underscores in every X such reproductive people last from company, services. of was X. a that as the for month prevalence less most of Organization To World fertility fact, than affecting ago over driving We X powerful recent of reported that put believe growing to of trends the a just In infertility X data of period we released the public infertility increase, only globally. the

of by there factors while natural more life the this by until driving increasing a people all significant Despite of the the continues the and once And prevalence, relevant by covered leading challenging, infertility are diabetes, same be ones. it covered becomes this employees. employers adding as who most conditions cancer building again, authorities, later of to important differently recognized coverage defer those disease in such public health long as to biologically And one growing are are not choosing the other to to the authorities, asthma, is many their all when compared number family way or at recognition as conception others.

effectively advances both the coupled of have This And to with the technology as care solutions. of meet to in in viable proven needs market’s insufficient despite need clear the infertility face need for progressed well those delivery for that, coverage. majority as models continue

with treatment that employers working it, closely need essential continue to to across with clients, available coverage for infertility an an increasing benefit. groups country number make and those to of partner to consultants the We make industry infertility

the care appreciated. as decline true become population whole challenges who While that is it, understood comprehensive know the equally benefits individual global needs of we a society how better as impactable it’s to and

our birth and driven for profound been has under While has years, more we’ve solution women compounded, In increasing that’s a entirely to supported rates are X prevalence by infertility in past in by Progyny the impact base. X% XX, via a greater U.S., national the than birthrates year the helped as improve nearly fivefold client access declining women XX care The over increase reproduction. advances making just are grown. the of access a assisted in

we’re every XX% this lot of have outcomes, we’re cost each care And doing promise unit controlling And for XX% a companies to clients combination aspired value-based Progyny. day. care, its actually inflation a companies our deliver while health fulfilling average which through including for have and with savings, superior increases, but where annual accustomed clinical to of produce grown to of an not

Over the past client more our this been clinics significantly are doubled XXXX. price volume. we’ve to a unit with providing more base by favorable clients and more growing than patient scale, network negotiate years, X passing leveraging shared to able in and our And of savings for the percentage we’ve along rates member

impact by family comprehensive also as to in represent growing employees are felt are through The their has our our available. faster, impact building their and greater most beyond most us workforce opportunity. the who our infertility that an other of economic ways through comprehensive employers need build is effective solution, solution But believe lives increase in who X.X care proven a we by market our supporting million through And at that ensuring this mere that supportive able the true be pregnancies shown is access fraction the well successful choosing as care of and continue our fertility healthier to getting value, because in and felt families to impact is this that healthier with reporting to today it’s babies. our covered

continues this level when because the favorable cost as importance well geographies all is just the this which recognition sizes. industries, building it sales time, family getting is pleased a is a during activity there unmet of our time channels compares a activity even coverage we’re season macroeconomic of being across record companies to the year, which season are priority. significant of though still and became selling more a that’s for underway, sales thus as growing confirm the last us. XXXX of adding to market level at far, of the conscious saw activity The with that remains very need across we we’ve seeing seen company Although we’re in And

also engaging prior We’re selling seasons. prospects not-now from actively with

we’ve the received one represent are seeing the far positive XXXX in of usual, market. for and of indicator As just majority we’re thus these demand commitments the the early

well-known early although travel wins manufacturing, the system. from diverse as these packaged university in school areas a And goods such hospitality, and and in consumer brands large it’s are season,

overall wins which be Taft-Hartley populations original underserved. market and early lives, with the to when added to and million our majority success labor uncovered large to XXX further of seeing expands TAM which of also addressable employers continue self-insured We’re our approximately

in momentum winning call when there our Last first market we targeted invested And where and see these directly client recent X industry hospital we We continuing. of in country, our early for solution after had labor others from industry, record to in a success look well year systems our year what was is health effect, further our we the where initial our adding another client as an our which largest that the pleased care. benefit benefit. we’re of of in and populations, same demonstration continues in to particular strong track by of the with parity health that hospitality see wins children’s subsector in as maintain flywheel

call last you, the X-plus million our Children’s the Progyny lives Association Hospital more discussed XXX has On with to coalition member how representing than to in solution be covered preferred selected its hospitals collectively. we

or solution hospitals us, work weight. consider along of to carry vet While and to they CHA significant affiliated whether processes can not us, approval with our choose the CHA’s did all

as within Evernorth. and to innovative help FamilyPath this aspects was were services be the for quarter, family-building Last fertility. formed includes growth of care, been only CHA Evernorth, announced under and services. preferred created wasn’t you was And companies pursuing, and others, that accelerate to fertility we Accredo we solution fertility and including the of solutions relationship of delivery we ESI, FamilyPath health flexible be such chosen told various the high-performing which across the the portfolio of that to recently focus, Progyny’s within solution suite

enhance we fertility within fertility This be understand their space the the pleased Progyny’s employer population. has differentiation by important Evernorth become of Accordingly, impact their allowed decision including in Fertility and partnership as this focus solution. familiar experience and space Evernorth of FamilyPath can provider the on the with depth and both particularly family-building more to made has their in because is through suite preferred Progyny Evernorth couldn’t its FamilyPath services of and Freedom to that we have firsthand the

Similar go-to-market most Progyny’s their a of our out partnership comprehensive clinical other and the with a contracting to our first And CVS review the activities, expanding nontraditional fertility process approach, clients, brand. including point of it work plan solutions, while looking to benefit has benefit time. channel our partners, the security, of mutual who design, to are onboarding relationship and streamlines for those outcomes, also our for Progyny standards with notably privacy this came decision add

the in we our number as the and further the and as as solutions. together, positive of and indicators, these commitments and position the believe market current engagement of the for size a diversity family-building demonstrates and strong health active active provider early of not-nows with pipeline, forward both the which leading Taken demand well our include fertility choice progress the

new the every In sales of lives aim the to we and this grow compared absolute year, different. year covered as no clients and prior is to year, number

the remains we’re believe are we far, very it strength on track that Although given we sales objective. seeing thus season meet early, the in to

factors unpenetrated conclude, season contributed strategic is momentum initiatives. in the growth competitive And our remains our we quarter, very intact. to this our to our have we results all strongest in macro of largely To have supports that our ever market all and continued that pleased the Progyny demonstrate which early belief seeing we’re position, its our remain opportunity that that execute with against we’re sales believe that of

now me call quarter. walk over Mark? you Mark the the Let through to to turn

Mark Livingston

afternoon, you, the you second quarter results our taking and Pete, I’ll provide everyone. full begin and quarter for expectations the through the year. good then first both by Thank and

non-calendar Taking end compared that clients represent clients clients amplified XXXX. growth of the was starts million XXX as year due $XXX.X least throughout growth The first was by ago, a covered average an quarter, representing had XX%. at We was increase reflecting which clients to year lives. period in number the primarily million, with of the X,XXX lives in revenue an compared X.X number covered of were XXX prior ago, quarter in million XX% versus clients of year First the into This covered to to year includes year. reflecting in season. of the That have who toward today, clients lives we account of a March of who X.X selling launched million XXX over the growth after lives an the covered X.X a client won average handful live smaller the count prior and XXXX relatively lives. XX, over lives

all seen degrees. the targeted discussed We companies layoffs some headlines have where have undertaken they’ve to the high-profile publicly varying

of our clients. And some, those though companies, not are all

that quarter, the was few, jobs have continues be health reductions dynamic near those show Nevertheless, care, hospitality from are element report to the unemployment key client impact This to clients to balance recent the we overall, at hold well of clients was any year, the other this services, name base, the will clients clients to our within against an that which the lows. expand within of X.X XXXX. from Labor workforce and our organic issued mirrored and have Department, of expected. any one rate at see existing continued additional membership from their industries growth hiring, did anticipate over consistent with which growth, last netting to we that some the relatively our in continue through had to lives flat who our reductions fully While of just represented during additions hiring with what in relates by existing professional from offset certain week, base, record it very just including as a including overall or meaningful a we million continued

the clients The million. them ago, growth to in had the to who top covered now number XX% the today, due growth Turning and pharmacy increased to clients XX% over whereas XX% clients while to primarily $XXX.X period by again, lives, revenue first components integrated revenue Progyny quarter over driven increase year XX% which, the was of have do. same the last of million, was pharmacy line, in our of of $XXX.X medical the in increased year A Rx, the solution. revenue an

Rx clients clients season, well for not both meaningful the selling – take experience penetration both as the in saw only most to the not given higher recent among success clients superior as with our among our XX% Progyny existing rate Our pharmacy and Rx added member also we the reflects savings but members. program from continued provides up-selling

in during number the utilization approximately X.XX% timing quarter, drives to mix clients. results, the metrics, ART financial quarter compared XX% year of was to the cycles to X.XX% of I’ll of utilization reflecting first The the our XX,XXX utilization compared the go you such remind clients a of were vary period-to-period cycles to when due of total, live, in ago. quarter, can a female now highest from our increase a is as newest demographic factors, the Turning the that quarterly time our performed new rate and the principally which as ever year. year what last as

quarter’s was This in ranges. line historical rate with our

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

year ago we significant gross majority the care resources in as significant launches margin advance year. coming fairly and knew live a management last went we QX was of in quarter QX client the onboarding time, of XXXX, our QX. all at of the In that the by newest impacted addition, first clients discussed were In by

So dynamic apply didn’t this our that same to year. margins

X.X% the Sales improvement resources were new benefit quarter, revenue expenses expense acquisitions. marketing in – by the first marketing as offset related was continued ago and period sales a investments we slight the first year the client of in in continue increased our go-to-market from X.X% as revenue majority of from to and in of in X.X% leverage the to quarter of the

XXX back the ago. revenue to first the quarter nature due non-cash grow quarter we this primarily which offset is more our was – in compensation year reflecting XX.X% than G&A more expense. in point improvement margins operations The is as efficiencies revenue, expanding on a to office XX.X% which of our stock-based basis higher compared G&A as of inherent

as This compared year of due net period. the higher operating of performance in well share ago was share. million $X this per income year grew income the top in ago more which a business, margin million, line the throughout XX.X% an benefit to XX% income for or to compared efficiencies strong XX.X%. our $XX.X Net realized or This stock-based in to increase period. well yielding quarter lower quarter $X.XX million to in EBITDA was The the non-cash per $XX.X we’ve earnings than adjusted With increase $X.XX our income, compensation as as expense offset as the operating a taxes.

Turning now our to balance cash flow and sheet.

activities year year quarter, operating more operating net $XX.X by an $XX the the million the from cash which generated of period. profitability, efficiencies continue than quarter. to of well first throughout timing use that higher For compares given our prior was can normal was The half fruit improvement million that as million $XX cash ago to due any were in primarily that back operating to ‘XX the as bear implemented items impact

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

Turning to forward. our now moving expectations

strong raise our the continuation pleased quarter be in and begins, position guidance the strong to the a to second the our start for see utilization of we we Given XXXX. as year to currently are

growth are now For at expect and XX% XX% the between the of XX% raising to $X.XX or between year, billion be the to billion, revenue full range and midpoint. we growth reflecting $X.XXX

shares. between $XX $X.XX million our income, between basis million on raising approximately fully share We $XXX.X we to of diluted the We and million expect or EBITDA are and now on also $X.XX for adjusted expect per to $XX.X now million $XXX XXX earnings net profitability. guidance of between million

the any tax from tax discrete equity guidance, the margin to continue related the activity. our income incremental not to benefit compensation extent this benefit will income are that activity of on see income projections revenue occurs, items, At discrete margins expected contemplate including XXXX in adjusted To the with continued we we of tax XX%. XXXX. net related the items those EBITDA you remind I’ll to expansion over midpoints throughout our of do

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

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

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

Operator

Anne with Please JPMorgan. first Instructions] question from is Samuel [Operator proceed. The

Anne Samuel

tonight. on maybe with you? could just they remember, guys. I Because benefits. Congrats a years Hi, maybe Evernorth the what more speak it chose partner the ago, to terrific results was looking the about they enhance their hoping was was were I that, little we why a behind partnership, bit to genesis few

So about and curious kind there more maybe this this like how out came just if of there? opportunities

Michael Sturmer

over relationship Michael. it’s Hi, is grew partnership continue and as more growing relationship been this each other, with that. familiar The years, we the of really – the to a and get out really

about and ahead. we we values need mission are – that really continuing market relationships and think bring a benefits we look Where excited to of do and employers to for and it that the have to lot them. align and partnerships help that We’re our potential fertility can like with that

Anne Samuel

Maybe briefly great about color spoke the had you just one you more, and really, really operating strong efficiencies. to quarter, incremental hear. margins helpful That’s in and

margin enhance you just your bit longer-term could little opportunity? hoping was those? a capture about maybe does this more And I explain structurally So

Pete Anevski

Sure. and Michael, some not add I’ll Mark I’ll then start, Michael color. let let I’ll –

quarter make in lot their of last that clients the this a a the significant of quarter of based clients their support about years, was that fiscal versus amount benefit we had really year time to etcetera, a weren’t things we investment had those that’s year live to where the unique on line, larger adding ago and QX. One yet

incremental starting right? have is to expect we at We’re the strong. first on opposite that this drop-through expect our We’re in rate – continue the therefore, see that in really year of that based make through. for to into, we’re investment business overall we overall, full live out a bit, which quarter full is do margin drop see making the our we our business year, extent visibility now all guidance, least the we the the we in additional And a and have for margins that to that happen, better to clients to be expect primarily even and year little dragged overall the the despite live margin seeing or

and So all to incremental business, that able the take only about when we QX, the and that we’re advantage the also we the full our going it’s for really leverage leverage talk about expectations year of the making. about investments not despite be the being additional but expansion in have throughout business margin to

Mark Livingston

Yes.

that again, even our I operating for to talked the care. improve specific we the calls service ways service think and level quality using deliver we’re how of always thing in the efficiencies, is, only looking that We’ve AI I’d about to add improve of we’re that doing. to functions

little do bear I So thing there and we’re working through that. season are QX our does of and the out the like And throughout again, year, bit with those I’d selling is that only the throughout amp on, we’re some initiatives and reflect of last sales improved of terms marketing a it’s margins. efforts up clients costs QX, the point not harder that in to launching a think fruit linear our see. year, is constantly else number and But

goes tweaks But and there on year as as there is we’re on we adjusted to around strong full here the expecting minor still a year So look based year, again, as you that guidance the provided – overall, the tonight. we some EBITDA.

Anne Samuel

Thanks That’s on great really helpful congrats and color. the again results. much so

Pete Anevski

Anne. Thanks,

Operator

KeyBanc. with your Schoenhaus Scott line from is Scott, live. is question next The

Scott Schoenhaus

Congrats Hi, year. to on these the results strong and great Yes. start team.

parts is Two So guess question here. first my I on utilization.

of new clients. You onboarded a lot

Thanks. should to little your utilization utilization but a tempered, a start we year? saw the function throughout we be really in And strong year. then What this? stair-step the still theoretically, bit a So should drove expect

Pete Anevski

Yes.

added relates number clients remember, of to it continue a overall record grow as new new clients, to you gets impact lives the we even of the to percent though right, the total diluted, As as a of company.

new. is basis impact slower out isn’t fact, more ramps impact going tempered the be as overall, and on new although utilization is, clients from that asking starts although big. Now what And that up, of to implication blended the versus generally you’re a in

As it strong the industries relates relative to across QX, in. was base in utilization really different our that the to it is client board the

strong. and utilizing timing is calculate their the varies seeing guidance QX any demand, one never were on patterns can we utilize utilization of what quarter So we at of just predict on because benefit. utilization any now wasn’t in any utilization benefit we’re within the sort what needs. anything It utilization geographic and our there still utilizing utilization in is individual range out didn’t to stronger or to based female strong It’s call remember, be year which little – the of remain continued pattern is going quarterly in other area And vary – the noticeable really a that we is overall bit. to tight going to saw, for a quarterly benefit, What point at normally raising our was out full for bit put a yes, confident than what per off utilization guidance expected even quarter. throughout even amount what member basis given why the the We current of there a beginning we unique But we of it stronger items. the in when year. patient we’re continue seeing we is see for the exactly currently little on we

the business. perfect So a measure. KPI the just of It’s it’s in not of a health good understanding terms

Scott Schoenhaus

on I for Clearly, And segment, a guess this the of the year? through quarter. That’s growth really what’s Pete. follow-up so rest revenue of you saw my much in the lot benefit. that nice Thanks, us stream revenue embedded of question for walk helpful. kind pharmacy you guidance is the then Can

Pete Anevski

overall, relative doesn’t perspective, for all to with we’re overall of it Yes. you. the work guide on or expecting the the separately. that expect throughout relative the today. terms in always give quantify in utilization. installed expecting the we other. off combined medical the what rate we on we and a and utilization piece expect what live plan we to pharmacy But from guidance and base would medical And in We basis, of the corresponding obviously, can contemplates, benefit. it, utilization don’t already see – out what what I the one that’s drives the take of utilization a then driven That’s the and we we’re what pharmacy year, side then color medical guide it’s therefore, sort We on from of pharma the perfectly line that side a we perspective, because have

Scott Schoenhaus

so much. Thank Perfect. you

Operator

The Sarah Please proceed. James next Fitzgerald. with question is from Cantor

Sarah James

was the you I you. thank Hi, how a and arrangement sales process give integrates. color could hoping us little bit more about the Evernorth

know sales push or they more it is is a of can for be integrated? think fertility, that if Progyny as where a we pull? should or their Or looking a one team So selling pushing about is So benefits? them Progyny their clients this pull let

Pete Anevski

to Yes. you Michael to have by Nice I’m going let way. and question. back. for question, Sarah, your welcome that answer the back, Thanks

Michael Sturmer

ease pulling as be been FamilyPath sort it with and and has little team pursuing an the an the obviously, – with bit Sarah, of as, from other Hi, both like of Evernorth so get both. It clients perspective. market of that through you partner. preferred pulling benefits as – provider can of a Progyny sales leads in our And the the mix from from of the of side Evernorth experience both. our value our more a relationship the aware opportunities blend and other and that through making a with And in is push solution out and well back CVS contracting matures, them partners additional perspective and as point active

to both. expect see would we So,

We see these that, paces, expectation. sort will materializes would different channel the that as that our at but pace be materialize of all of partnerships

Sarah James

of this timing really could, starts differential, the Great. way versus experienced you starts to last from of if to timing I versus account made out that just about related year break how into the thinking comments much a account was margin costs just were like more, different the Is there the start-up And and that year. and was helpful what year-over-year you or one efficiency that fundamentals? a seasonality more

Pete Anevski

sequentially not that give perfect do reason it’s of at constantly I contribution spending the you incremental I impact. adding way, we investment later is much some to you the because a we maybe you year new addition to in how margin look would easy what extra the expect throughout are would easiest perfect do not etcetera, It’s quarter way rate those anticipation in that indication give starts probably suggest in capabilities, would every that the on etcetera. for but of hiring only of It’s and is year, by following The there it. and year, probably remember,

to do way So, that contribution that blended is are the those the suggest what all that. into to drop of But relative going you see you probably that’s would client starts. best from I through new

Mark Livingston

would Yes. add. I just

going around I we last in year. the built QX. the clearest from effectively growth sequential live had example going think be our QX Again, company would of to what be was that QX substantially to

you so gross that quarter-over-quarter, improvement the particularly And margin. in sequentially see

Pete Anevski

pronounced most Yes, last quarter the probably that year. was of

Mark Livingston

but to. QX, the There there can is you clearest said, as factors Pete as Yes. you look other get into number etcetera, probably of example a QX that’s – to is

Sarah James

guys. you, Thank Alright.

Operator

The Please comes Truist from Securities. Jailendra next question proceed. with Singh

Eduardo Ron

Eduardo the Hi Thanks Jailendra. all. Ron, for question. on for taking is This

I share introduce Progyny the announced such a guess your with Parsley you entire women’s on partnership details the the and physician-led who I You of plus service from service clients, you as pilots based what Health is adopt primary portion the you clients care model? guys health and would on more for existing what mean what spectrum. to revenue are current hearing Progyny providing do arrangement can plus? think

Pete Anevski

the around the you Relative start, portion of might extremely clients progresses it’s will as let going that give will look Michael then add what sales. different early I no and to I our like any indication new year it, add than what are commentary to color. of to

terms to what know, you in seeing part? of we the take color We want in do are space. are happy to that add first I some don’t

Michael Sturmer

need that’s and a we mean I a way. saw need of delivery way certainly is – different to we partnership. Parsley And really that a a Pete’s that the that what there No. in is I Yes. care point, think, and physician-led in broader recognize requires there

really the model. looking of that coupled it We which that aligns with and fundamentally, are we combination have see our a along coverage, a physician-led and at around it pilot, way. emerges we But belief the how the with learnings this of as and speed benefit will

of what So broader are of space health seeing partnerships are and sort from. and from where these the that’s some women’s we coming

Eduardo Ron

this can selling point? season June seeing Right. May. your That’s I guess I in sneak helpful. guess you and little are selling compares core in far are season, I could another to to I on more believe is you last detail a at just that April comment so one. how in maybe now year’s the we bit that progress

Pete Anevski

And season. reasons we through etcetera, throughout sales and – as converting that would to middle really said, That talk important activity, is can. even are commentary we you discount me we important. Let we the the little April selling time asked The no of from urge is pipeline as which for ago June, – the color pipeline pipeline you said most October, just and pay to in of we relative where to talk that early attention color think we the pipeline where year. much a June still all the comment through and add of of part by most about July, converts, that. give It’s beginning This closing us any – of is sales the the I happens of sales, means wouldn’t a at all time. ago sales to a we tried that sales about just way while this we I that that are and are important where beginning terms the constantly adding really of one commitments, But obviously, gave, October a we are were the August September year, to adding I important vis-à-vis I year is to until at when some for the and most April critical of question. the important very it’s perspective. of throughout part. etcetera, May to time

And so ago understand, to year, year compared it’s you where way point are especially the point at. sales understand time made, are the given are in you where in a the a always in important to important at decisions of benefit cycle it’s time always to

having that demand lie to relative benefit the comments in our of sales and all all positive continued so for momentum data. And

Eduardo Ron

Thank you. That’s helpful.

Operator

Michael, Okay. proceed. of with Up Michael please America. Cherny have next, we Bank

Unidentified Analyst

Thanks great is you XXXX Charlotte if if This selling my is for question I about a on This talk for congrats just update. Hi. season just around and another taking the was could one wondering on Mike. you Thank talk quarter. seeing previous early types you of about how any you. that Could the then benefit? the is looking interested in not-now book in versus mentioned customers your are changes also, not-now commitment. are you pipeline? And one the

Pete Anevski

part take Sure. second I will the first.

in year, year, similar are have are are than that commitments, year terms mentioned time were last other my pipeline not-nows. to active really time I this greater to the prepared Our before of this we they any and similar as not-nows to this Early overall positive comments, working. opportunities that, those relative in in year

was sorry, with And relative again? the what What not-nows pleased of am first question? so are things are really this going the I your far to first question year. we where of was part so the part

Unidentified Analyst

in of just was it changes types customers. That around any relates the Yes. how to

Pete Anevski

Is any change. there Yes.

So, I will Michael let answer that.

Michael Sturmer

year. of last of in industries and of prepared outside following the we sort a effect as that that sort speak seeing comments, – flywheel said we of So, new opened we

again, of and healthcare diverse last across hospitality labor in industries continuing whether momentum or that prepared children’s year, are saw we the area. similar that’s the Taft those see set And said last year. industries, which to as of the what a We clients we very to in is we have comments, segment really more broadly, segment started Hartley hospital continued in some

diversity So, changes say. year. really of But there. I I sort momentum continue that from started to would any last wouldn’t say last see year, material good That

Unidentified Analyst

you Okay. congrats the on and Great. Thank quarter. again

Pete Anevski

much. so you Thank

Operator

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

Anna Kruszenski

for This questions. my Anna on Congrats on and quarter Kruszenski for the Stephanie. thank taking guys. is you Hi

back So some the to first, strong professional world. I services seeing since you tech that side still do the was hoping industries demand could keep lay-off seeing are in we and of go we headlines the from

could in recession? industries in you in of a about hoping demand talk gives you of hospitality the the what like Just sustainability context confidence

Pete Anevski

Sure.

us the early that thing industries. the gives confidence think in we have first gotten is easy I commitments that these

year. mentioned have year, where our large first this I last We So, large client. in hospitality another particular, one hospitality we won won

by lives there that are reductions. Second them being back months, are we XXX,XXX, small any layoffs. is, to more collectively maybe what headlines targeted months, going on in they announced the growth we lives, than have although not certain seeing comments in offset although really there’s meaningful areas maybe existing way, our seeing there in XX base. see reductions year, although overall not XXX,XXX of are referring Mark’s covered are on for terms last and in clients, XX the in organic been we layoffs, around all certainly, are but are They more And where the

of are the labor will, across concentration column, we see XX no overall. and or that in to they in mentioned, different traditional early more us benefits their benefit to. and pipeline sales that confidence continues And continued the to the sales gives individual And all that to we activity, industries. those is employment clients sales what Last a industries benefit all in sales across continue new we do commitments industries, the additions early with employers telling we importantly, continuing if packages to tight There family in who it’s or you channels what process, whether are industries see effect add and across industries or are the year, not-now deciding of the is that fertility whether overall in to as upcoming pipeline flywheel in in you us so to, there referred existing remain talking it’s year. continue expanded demand those building is engage it’s we are consultants the the that our that one industry, the market but through

Anna Kruszenski

helpful. to quick other more super And to if you. thinking you I partnership you to of you know repairs dynamic about could Thank how the your Cigna? large and go if can are ask have been a about don’t term relationship follow-up. That’s how I leverage payers talk able FamilyPath then longer outside

Michael Sturmer

there’s explore relevant opportunistic continue first areas all alignment. of where and to be to So partnerships, evaluate off. we’ll we continue And sort of around that

On equation. the side, is the Evernorth on that and side of FamilyPath the Evernorth

to opportunities interesting a and call wouldn’t to to your health and them. And explore remain open with I health question, unique in the FamilyPath that’s to stay expand to aligned so the And health again, that an But we’ll continues plan. area demand the as benefits it’s an area. plan continue plans expand

Operator

question Okay. proceed. Crestwood with Weisberg from next Capital. comes The Michael Please

Michael Weisberg

hospitals, the of Yes. one were could what’s your I covered typical XXX, there think sense Congratulations. A comments – you average in partnerships the said lives children’s announced hospital? give the the of with couple on of you us a average

Pete Anevski

across of Well, little million X if with can a you them in an you up come do of over of covered the but math terms vary greatly all size. they average, on sort lives

I in that So, math the me XX,XXX do over how don’t but the million, X I say, exact roughly of in average. terms you much have on roughly, lives, number front like of could something would

Michael Weisberg

are Could many you those give Yes, time clients? success us are – of the just you but okay. And with about announcement clients actually sense one parent become success before? of had have how the you you or a signed hospitals have to organization, had the at made you

Pete Anevski

time new relationship. the some that we season, commitments in already sales terms happening relative our I talk of about some X are we not if overall of real Well, to about are X, already they which to which early at have comment already, opportunity going least are live, commenting of think am are which as of are most up that but signed but not overall very in – become on, them of I we to on that live,

Operator

in questions Do like have closing further no are queue. comments There conference. to today’s you would any you concludes with? That finish Okay.

Pete Anevski

No, we are good.

we of it reporting feel. to We future year progress so the terms pleased on started positioned how considering and far forward look with real well are the continued calls, how in

Operator

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

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

Progyny (PGNY) 8 May 232023 Q1 Earnings call transcript