PGNY - Earnings call transcript Q1 2024

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Operator

Good day, everyone, and welcome to the Progyny Inc.

First Quarter 2024 earnings call. [Operator Instructions]

It's now my pleasure to turn the floor over to your host, James Hart. James, the floor is yours.

James Hart

good and Tom, you, afternoon, everyone. Thank our to first 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

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

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

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

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

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

Peter Anevski

us. Thanks, everyone, joining Jamie. for Thanks,

We margins of quarter progress most most our selling that to growth. impactful overall, first moments. and a continued had new to our adjusted a quarter, quarter the produced start which flow. This In EBITDA to season best strong areas address first and meaningful the first a we our on quarter a expand in first of I'll making partnerships, in the to both strong as our our allowed also are operating focus strategic cash advancement excellence the includes ago, long-term compared recent us few operational year

were sparked unfolded seen from February. utilization you've quarter as This the results, first Despite maternal treatment press health by care likely than these release the modestly for access about fertility in decision we on than national Alabama expected. and the we Court differently had lower expected that conversations had to in the with coincided came Supreme that topline the the quarter

as since although I'll this or of alter with strong better not doesn't consistent spend you that through a few this is view of prior help the XXXX. was business, dynamic it long-term minutes you appreciate quite our the to in walking as particularly than utilization why years, seeing trajectory QX we're

year QX call, on to of and then it in our first a the strong continued was in been as what As climb our utilization virtually much quick a period. pacing that the informed on prior expectations, track, persisted had ago, for for utilization at levels record This time January year February year, of refresher started identical XXXX. quarter

ramp in first care, so, the years X Supreme However, had March to unlike by access but year utilization our ruling. sparked began reproductive with remained the leveling Court ago, women's national the it member last a off lower even modestly about to slightly coinciding And health conversations formed expectations. in quite healthy activity see Alabama than the a X.XX% year, at for the utilization fact, was higher X.XX%, quarter our ago, in than which basis we from

at than had ramp by has what our always of expected. and quarter leveling the activity, As time, less with guidance revenue been that off what informed we we're unexpected the this seeing was

the saw the the that proceeding across a activity greater fertility activity with we women's industry, states was partner. care, something, country in their And journey. can't QX The suggesting modest number more health contacts why for be most caution before that no and small to reproductive pronounced noticeable only don't members examined restrictive dip client, they're action, commencing certain we one of in a we region doing laws by of one pattern were by take relatively as members degree While why not where by the us clinical say by emerged.

continued has all the reinforces trends trends second XXXX, above highly utilization intact. market The the remaining the the growth. and further reveals begins, As long-term quarter below remain we XXXX how healthy confidence data remain that for at levels long-term macro which supportive remained have our about

as the fertility continues are to amongst And reinforcing industry we mid-XXs. approach the fertility defer overall later people who while ones need particularly building the expanding birth rates the a really increasingly longer-term patients making natural The the becomes in the to to family they XX incidence care as are needing more most infertility be women of care until that's as declining medically continues being XX cohort people priority, challenging as actually defer high are tailwind in they age. and to U.S., conception building family likely family for life. prevalence driven over And of building rise by will who be once decision under in their

from continue set how experience year, goals to everything new to any meet to has driver satisfaction begun which growth or company, higher, exceed, can where Of we see each utilization is XXXX like in upsells. sometimes which to indicative to hair and are there period less most with the line sales, variations trends any these to we long-term our that clinical a trend overall drivers far also period are success that outcomes, we're modest lower are bit control, we rigorous pleased And go-to-market the more, client renewals impactful spans our within our sometimes includes of many the to well. business. macro remaining and member the the and success is. areas in than our With a in very areas from as extremely favorable, And it's

let's season. the in So the progress turn making to we're current selling

favorable we're what opportunities season time it we're And this getting carrying Though this just not in November, pipeline that over told we underway, was of which last is is robust pleased into now active pipeline, XXXX. year. our you the with to about extremely

there position add in not in every their begin to decision. a fertility provider. now certain as make in As a time benefit may each position reasons, they the the who, or now prospects for year, change be are better reengaging to by a at a a of variety with weren't existing season We

adding proving be as auto well manufacturing, the health and further of This majority government is early the by industry deepens is early maintain demonstration from initial our and parity local multiple media once with strong we to and leading benefits and populations. their brands flywheel different, commitments travel the in leisure in no care, represent as nows not we commitments that see the to we presence an and state of others coverage. the look or XXXX where received Traditionally, in a effect win industry account, in improving

from Season prior average year. through of is new pipeline all outreach. We're of versus typical including the [indiscernible] direct targeted inbounds, and the events, our a to terms also in partnerships, generating strong additional off including opportunities the channels, built, the conferences, through size start pipeline introductions

to we're activity seen to our upsell, base number far seen XX% of thus and seen far. is historically menopause, the also in There's of response we've turning and pleased services postpartum with -- cadence expand upsell relationship, to newer a additional each XX% thus care, our very to year, the year. take This positive. maternity we've includes our pathways the services Now

contribution reach not a And more existing fertility such preservation. our as We services may to as expand our but smart our members. expect as portfolio broaden they to other look also to to claims, rates, adding represent diversity these fertility clients results more medical cycles offering are or our case usual, and to coverage their than smaller by with new will in services increase the

about population, In federal first November, lives. XXX,XXX we our about which covered represents you told government

as we at conversations financial continue at our usual offering and this this is a contribution expanding beachhead as opportunity benefit is than are that results coverage to look point. to nominal, encouraging Although narrower of our its

relationships, market health into which, partner most also agreements both Vistia lay some to We're plans the channel and opportunities advancing our would with expand our to upon partnerships completion, including our focus groundwork further existing add Health of new go-to-market Evernorth, the CVS in Health, These reach. and will U.S. new help several the prominent offer accelerate current segments.

prior season position as we lives we to and both in seeing every as covered the look building year. the the our as fertility conclude, family our incremental current demand choice sales selling strong compared the solutions. of believe the to the in demonstrates engagement In market To we're as well for provider year, grow

early, opportunity solutions momentum to business that competitive in sales relative track Although meet of it's vast, across seeing the we market. our strength our to position remains given We the and believe the believe season objective. we're market seeing thus strongest we very we're in are areas many we're in other our that on ever demonstrates far, the

to turn Mark. call me the Let now over

Mark Livingston

everyone. and you, Thank afternoon, Pete, good

and with year. begin expectations second and the I'll full quarter first our provide for the results quarter our then

an quarter that a approximately to with lives growth treatment we in discussed due $XX covered million, First as impacted shift to million a the compared was ago. call. that you of I'll $XXX.X first you negatively and quarter mix remind by February our X%, increase clients revenue year reflecting primarily was on of revenue number

as As expected, this typically of see as mix is normally we quarter what gets balance to to trending would and returned the shift for was the QX underway. expect short-lasting second

X.XX%, impacted which level of utilization first quarterly our utilization measure year XXX,XXX quarter utilization I'll we services at ago. that today, rate. given as we had that was However, that plan as growth quarter ever compared the federal that year slightly rate that population their in to remind the also lower time. a the design I'll a utilization in was include the utilization X.XX% reported in you doesn't note to was compared first does as include Female period. in X.XX% ago quarter not the the Pete by discussed, the highest it is first members

for the comparing reported is just rate utilization peak, favorably first the that sense, to below first quarter while comparative also XXXX. the of quarter a of In XXXX X% X.XX% in

visibility record the we the than aren't few utilization has emergence the a we which In underlying have importance persisted fact, we prevalence condition past has relative relatively that care as a a believe XXXX, seeing at lower in as in thus far each trend. similar we a in XQ new family medical within over XXXX, activity the higher the our that period, utilization members. we as persisted reveals both well for saw saw engagement years, level than where narrow what building The in reflects that infertility consistency into of but of medical range of these level, suggests namely

our ART a XX% to the performed quarter. metrics QX, year. quarter other first reflecting in Turning last over in now were increase XX,XXX business Approximately cycles the

This an clients and to As an of representing lives, least million of compared clients had million covered at March XXX a approximately growth lives. average covered year in X.X average reflecting ago, XXX XX% X.X of XX, lives. with X,XXX we lives

newest go today million you in already X.X lives. clients Taking over second the who number to in and launched QX. XXX approximately live clients As quarter, a we QX told our quarter, have represent clients the who of into account scheduled last covered have are we

the of overall, expect amount between XXX,XXX our growth lives to of early This organic anticipate the QX, scheduled see reflected as will over us a take base, this an from year. we existing With million the we guidance launches that of XXXX. as progression lives now the that well limited have and we covered in balance to until additional X.X

the same Medical Taking in quarter pharmacy million, X% look results. lower to to rate the a increased our financial while of X% over increased at million. The $XXX.X deeper revenue revenue period $XXX.X level more pharmacy primarily extensive revenue disproportionately fertility involve the growth versus of the the mix of higher medical treatment previously a treatments reflects medication. shift, impact impacts that disclosed given pharmacy which

margin expenses. from yielding the Turning of XXXX. year our first $XX.X first with XX.X% to margins consistent first the to profit X.X% Sales last margin the expense the in X% quarter to Gross comparable and gross period. marketing and a million, now was operating of year increased ago the quarter, quarter from revenue

affords us rate resources gained success we go-to-market from flexibility our client meaningfully expand inherent high our of acquisition model to client in Our leverage the to given continue and new through retention. the the

compared first to back-office G&A as we a was in we as point operations grow our on the expanding ago. improvement our revenue to in realize The XX.X% reflecting to revenue. is and that due G&A primarily of XX.X% margins year efficiencies XXX even quarter continue basis

quarter realize, the in as within efficiencies in which model. the to ago guidance with grew quarter. despite we $XX.X grow incremental and highlights capture EBITDA revenue. the This our to revenue, continued margin compared our to the rate revenue in Adjusted the XX% in clearly on was adjusted of realize we we XX.X% continue to margin XX.X% leverage quarter we EBITDA of in operating that period. line EBITDA the growth million, demonstrates business lower-than-expected the Because year Adjusted most continue our revenue realize first was as margin this

the $X.XX decline million in in $XX.X year diluted was due to more was net for million income $X.XX XX% in a for $XX.X quarter period the income offset income income share. period, per small the primarily Net compared ago in increase or or to the benefit prior The before of which as to a period. taxes the in than share taxes. per provision taxes This current compared

exceeded associated Adjusted in $X.XX in of quarter first period, excluding impacts, any and earnings year our a per the stock-based into earnings of diluted end share compared was or high to impact the ago tax account compensation, this the taking the guidance. $X.XX

typically our profitability million as to any million each as clients. to impact compared as and our in primarily balance increase that modest of the cash to flow $XX due is and DSO given due to can the work first the timing sheet. quarter. improvement cash flow now The we see cash as seasonality flow Turning to items higher establish year year-end in Operating the was in in from newest The payment at year period. ago was $XX.X quarter our carrier primarily integrations we well with that beginning generated flows normal

operating their in this managing situation clients, across due quarter generally With by we flows Healthcare. capital working of at DSO the March process for the following also gained an to expertise in the we've hundreds as see normally these increase launch. XX of new second Change the clients reflects

Change of notified processes therefore, for that their was implemented were because elongated solution. exposed, those we been Although any a the haven't that were who through and collection claims manual as member payment our submit providers processing cycles and claims workaround of data

are to slowly improving. those cycles As return those systems normal,

of EBITDA the will operating we of XXXX. XX% into that our adjusted approximately convert flow full remainder the we year, in expect year across Looking cash continue to

had marketable of approximately of cash equivalents XX, cash, we Board a securities February, In late million capital no March reflecting $XXX repurchase debt. total million, $XXX million As our and working authorized of $XXX share program. and

million. of repurchased we'd XXX,XXX March shares XX, more for $XX approximately As than

approximately been $XX X million existing the nearly thus With the authorization. far activity under and shares have million repurchased QX, in remains

year the informed historical times followed Throughout set utilization to now company, as that approach second always in raise the when as our trends been and has This upward to quarter ranges of public the for is and rest by trend year. continued Turning same history a of our a were both for expectations most year. are we multiple our the seeing. approach what also guidance we to last position the we're currently to

I'll QX, X.XX% at growth the that the in revenue the rate X% utilization $XXX to remind of be the For we the our rate to year of highest comparison. revenue ever challenging saw range in million Therefore, expecting in quarter that the reflects resulting steady, we're a which second quarter, we've rate to and is this reported. we assuming see are in compared you what will ago this as quarterly midpoint $XXX the second was April utilization million. continue

expect year, at between reflecting XX% full of we growth billion the $X.XX the to now For of billion, revenue $X.XX midpoint.

XXXX and Our second range the assumes will in utilization closer we that saw the in the be in what half low the end. year what near end to of saw at high XXXX at we to

Turning to our profitability.

the We million $X.XX earnings or income of adjusted This per fully net expect and to on million. $X.XX share and $XX.X of $XX million and EPS XX EBITDA adjusted $XX.X $X.XX quarter million to shares. diluted diluted equates of approximately basis of in million to $XX $X.XX second the

of any $X.XX expecting remind margin over revenue this midpoint of adjusted XX%. million the guidance, along with we $XXX year, albeit we're our net the $X.XX the the items. do on expect to $XXX EBITDA diluted share our diluted adjusted XXXX of I'll the on with to discrete change to higher of already XXX the equates fully drop-through EBITDA contemplate $X.XX you per income we to million basis the reflecting net level with earnings of income seeing. profitability projections For are not shares. At million, see and and in EPS the revenue, margins of million income $XX.X $X.XX impact now of of million incremental or revisions approximately of tax in continued that incorporating This expansion $XX.X adjusted

the turn Pete that, remarks. I'll closing back for With some to over call

Peter Anevski

Thanks, Mark.

by topline the look at to factors. well we into future, strong the expanding a we we're driven rate, As positioned several continue believe

in and self-insured core opportunity growing of significant days First, we employers. earliest very the market penetrating with a large remain

partners our market broaden roster which and enhanced expanding presence reach. our of channel our Second,

our into the and state fourth, new Third, delivery including services we and federal success our verticals, products of where governments those to building our and had market. as which to addressable our are a we've middle expansion the gross markets additional services. address already and existing And family and meaningfully leverage life's other eventually, adds to expected milestones higher beyond margin contribute fertility infrastructure initial

continue we to future. market drivers components the business forward share greater account, our look We expect later Day, of discussing hold these Analyst to and Taking to to Details which you'll second we'll August. our release during to be hope those in the of summer, we for be this us. quarter in foreseeable shortly will released after join we believe all first ever into detail take earnings able our

With that, instructions. questions. the for Operator, open you the I'd like provide can to up please call

Operator

[Operator today from JPMorgan. first And is Instructions] Samuel coming from the question Anne

Anne McCormick

the one Thanks for all utilization. Maybe of the issues color. seeing on some you're around just that

states Given of states being it is Or that more you to restrictive in employers in point? with patients regulations. of some are these are by just proceeding well? hesitant really this limited at the as utilization benefit their to add affected caution Are more reproductive seeing kind

Michael Sturmer

utilization an -- from sort is Michael. point. seen perspective. employer haven't of to hesitation this at not any Limited or This we heard Yes. We're

Anne McCormick

And kind That's great about to if hear. talk utilization? And back you in expectations look confidence the just the half are then you around curious giving maybe what maybe that just just as your trajectory? recovery what's year, of into we of could

Mark Livingston

Yes. thanks for the question. Anne,

part So I'll the actually first. take second

activity from second seen, improved that entered the as back seeing were we've March. quarter, the into we've So in we utilization

in we saw that in So comments, 'XX and for as again, based not certainly as seeing 'XX, high my were level QX prepared a we between on what we're what XXXX. that's albeit in back

already. improvement that seeing are we So

what QX contemplates so seeing a back the the that. of today continuation especially half, So for and range the contemplates we're

that. range and in to quite the saw For basically QX, which the versus a of half same points, that we us at few back now reflects what of a half increase utilization QX, we're percentage modest in in the but XXXX, seeing levels brings the year, closer the we to saw second not

utilization we're range reduction slight saw the slightly below a us from seeing And XXXX. rate for which brings level we that today, of end low then our contemplates of the utilization in conversely, what actually the

history of years. framed been has we've it last couple these what So for around, our again,

Operator

question Cherny coming next is Your Leerink. from from Michael

Michael Cherny

some base have I and if areas, utilization guess in information, us you bit different but give can dynamics of question on year cohort added hot seeing. of topic. into first know this you're the I you're years? some versus diving the covering the a is Obviously, But one what the X utilization seeing and previous lives little a more I member a more this in terms basically of you've new

then any less the utilization underlying seeing restrictive give if into Alabama in states a on us you're the how you side what And the utilization for trending as on whole? post second, factors decision, the views business that the can dynamics

Peter Anevski

Mike. Thanks, Yes.

question, the year relates similar it is As to the prior cohorts years. other year this to that for first in first utilization cohort launched

that in of off your part red you if March them. asking some of will, we're referring improvement the second of in we what part those that of the that with Mark's of that The to March saw states, trough is are question, saw improving we April off in

And so is improvement of the already. part that

Michael Cherny

back hop in I'll queue.

Operator

question next Glen from coming is Your Santangelo Jefferies. from

Glen Santangelo

those utilization season. somewhere I historical years me. different X.X% then we the on the guidance, to 'XX, today X versus your year first revenue back at second ones going the the quick of had you up in and just calling follow-up get consumer ago? those And you're place But want 'XX between trends. half that isn't or a need And look you're XX% half. off growth And growth And X on sort guess this Just gives mean, question quick modeling in X if the also you're of for at utilization in we're selling the you of a I to to midpoint I said going guidance, to saw what you confidence in Mark, to years. utilization what the follow then because I for a see in half.

Mark Livingston

Yes.

there's pieces half, you second to try a the key are remember, look second contributing of that you half, have couple if half. first to to at So

which clearly there. first, the mix QX, issue already was right That called $XX we've So us. in out million behind is

going -- that's So obviously, to have that's normalize be for to that. not -- you

that mentioned of forward. back quarter -- we've half hundred starting through are through new contribute will got QX, also and which go lives a thousand as of We that second couple the we the into

that level. already back last in I again, of we to to move as said, tracking couple year, we're for that our year, And record the year. utilization this And seeing was first which as of said remarks, our months we're identically activity prepared

So intuitively, that cohort you of members We and And member question patients does saw stage. the have I some know the is February. -- in capability if of sentiment, in I has so driving activity that decline don't some utilization at since of part completely if will, March. shifted think

course, Of people's and when they move forward. sure, decision with for the pretty reflection clearly want coincides would on certainly don't but we know Alabama to

was reflects, was the improving land I XXXX, to our it's that that's between year. guidance XXXX, lower mean, likely, record And us which why will in extent April, that we and here measurably which already some our that gives confidence and

Glen Santangelo

Okay. Perfect. I appreciate the details.

as expecting. lives many than bit we with last year, years for what year. except as great it think if up that's little always were could selling about year time case, you of trending tell follow in these every been Pete, like go in probably were which last feels you us maybe at the roughly prior this into year, the I least where on ahead the season. lighter is the that came you just of you're goal And adding It a and I

how And selling So season sort it the the are conversations -- Do you having? clients? be your measure I this this helpful. million lives would far? on it thus to progress is of you goal X.X date? guess, you're at measuring it lives? by measure Is Is point Any how year color you commitments

Peter Anevski

to meet of go question, To we're the Sure. X.X the your lives exceed. or to first that looking it's million part yes,

The when relative talk your question it not of prospective to of different second terms for progress milestones we about active the types just it's conversations, is pipeline strict those of has sales very clients. in activities, part with definitions us

last versus the year. to. do referring what And sales we and And when we're year, season. the being deal point about to larger we're where we're about could is what this relative so to talk do pipeline we When last look talk than that's ahead referring average builds at being active year, builds at all pipeline year. that's the we sales prior always size look of Pipeline last at throughout --

Now recall, prior difficult year last looming recession, more for year, year, robust a decisions it conditions you a just you the they in of slightly as were overall had the benefit if benefit macroeconomic were was where as wasn't not majority was our and and years.

talk that's ago so And we really these what you make versus early at, were then bit. period-to-date commitments, pleased comments. we when we and a impacted definitely about despite year season. look commitments And -- little that, we believe what when last a the yes, year with again, But early are also

Operator

from Jailendra question next from Truist. Your coming is Singh

Jailendra Singh

business My first the question around visibility. is

quarter you generally understand shortfall business. in have that quarter much your utilization question how considering in patient's some combined mix those this of time in I of business, lower that a shift the levels company visibility So issue assume few the to multiple spend still involved out is gets that But guidance in stay at when my a early very of issued you the was variability only called you that visibility a forward question can times, But guidance always on you back But utilization there utilization with those record year. be months XXXX you that some does the later. a business levels could raise journey. gist the in and actually

we get should how understand around better the of us comfortable help business. So visibility

Mark Livingston

gives will volume be X that to X degree, that -- is that of a and authorized they there'll to to being us lesser appointments appointments period for. the us that benefit, to and where works and appointments members those schedule of business be time with use our with way and do their -- scheduled. the weeks providers, and generally X perhaps are visibility degree, So X a call that will window And engage to some weeks

happened. at were cancel, renewed forward at they formal looking or appointments scheduled, So move, a for for of actually confirmation an into which time. of And appointments scheduled series not of which has appointment a have the example, that I'm end may that have from another I'm looking period they when for received change claims I'm that of be been February, March the February, sitting may month may may for we've

looking weeks X the for X So point point, get to at or confirm the to have your so that also to to get been and happened. with scheduled appointments we to looking said, we're backwards being X or have and that believe forward weeks

Jailendra Singh

you issued you visibility when make March not your reported happening? that on to understand I was this sure much that. have QX, Just So did

Peter Anevski

Did February is to and to although weeks, think the important in have X not all up just visibility month end point I of month and we throughout to March, the appointments being And understand the already next not. of at the are scheduled March. scheduled

scheduled literally has there's that's that were ago March, the leveling we a More the far. a impacting the made think, what's was versus always conversation look of that's little and been the leveling visibility at the we scheduled data I guidance what ago, for that year into what a at what's a was, are those it's prior February March, are off basis we decent we're see the to complete what do versus January, scheduled to then February nuance and delta, bit year in So in again had comments X% activity by about that's those to do, of the that we to XXX guidance year, we're and through So reported end point ago. although activity saw think happening in was year we what right? points, as of we no on was be in year the and didn't and And we in at terms more already and we different point, that right? this we the not off time booked, visibility what sort referring although the basis point at I that, in the sales --

you always years, guided up way, think worse, the favorable, point. we're better, about ended better, X%, reported either of couple year, but still better being the which is where last X% last roughly go our so is it where if including we but not sort better, And -- we it of could year,

plus visibility And on given level minus and our in so we that's that not comments period been X%, it's remarks, has a of or to was sort quarter forecast written been been. system the X%, month we've year, it's were the for X% or or making and the material. accuracy that utilizing And of a that

Mark Livingston

to just to simple make this. of And -- a example make just

mean in the have doesn't locked February somebody middle in That of first So an into up that of settled. that half they're March, and into called to book appointment the March. going

what February think move began meant up So all as of and people cancel what to and would more that occurred, have out part the latter into together. reflectively the decision April appointment about Alabama it call you, or

are about people again, as towards just activity not of we of talking in as they're that that changing coming activity we're anticipated. into that's quickly mind either the would part or and March happened where March, got we And even honestly. middle their March And have that the as so that's

Jailendra Singh

where Progyny a to there? follow-up helpful than quarter color. highlight fertility X%. Anything which audits That's X%, benefit quick revenue service actually happened. was on I that up My can't slower actually your up was Okay. recall

Mark Livingston

which But in apparent prepared got together. base I that -- itself. both Is mix the much think again, mentioned and Rx did the early to not point overall. we're in now, that where of quarter Well, have our carry extensive getting was more treatments to it of that our the because Rx in comments, disproportionately tend a medication issue you've close -- the are heavier the a we is the installed hits again the medical first of right resolved very we this fully part quarter, than proportion

the that served to growth Rx quarter. it to as So compares in also the mute of medical

Operator

is Sarah question Fitzgerald. from Cantor coming next Your from James

Sarah James

difference some blue between seeing and were guys red state. you like sounded It

Alabama can then seeing to decision? hoping blue So after that way do opposed in get you like Easter providers lot days the the confidence you and March the that more state and number because break to was isolated fell. a Red given it weak it in quarter week also Or political in the the states? was March, a of clarify, you how weakness spring were the psychological had the of as And

side confidence it's psychological political you calendar? the gives what on So the that more versus just

Mark Livingston

into number we modeling, the in each our period. treatment in account take Well, possibilities of days of

So we're always adjusting for that.

So our universally. of comments reflect that sort

did it. blue And of you that nearly It would sum of sort blue some -- slowing modest red/purple/blue consider wasn't In just we the terms states are states traditionally just some as you of as would ones or from we states. pronounced red. as saw even the that's of see states, in utilization

we And then again, seeing of are times, the -- this mentioned as recovery that. far we've a and few as

what resolution I'm have opportunity Alabama, can't people So assess for now people sure April an begin an to means also that opportunity. terms the you is Obviously, legislatively, it had of then again, those there's again. we say that particularly putting knowing them But know issues, had for to different necessarily together not their resolved again, and back which up make and is. component been it circumstances pick political seeing it, they're in could we're we sort but in on to have personally believe what fully of don't some we those but -- why decisions, of sure

Sarah James

us And the also a you build the could quarter? receivable wondering, color give on in little

Mark Livingston

plan there. we a dynamic is to clients, of sort onboard change cash clients in their receivable if bit So new and similar received cycle we longer in before clients, new the build little is do And they as ultimately a typically a QX. happen cases, some there's existing see from

claims, quarter, submitting The our particularly of others their There a change of impact also slower as the sought paper. part of the providers on factor. including processing means latter was was other manually much of and literally a claims,

bit would So that, of a but consider nothing concern. of that we there's little

Operator

Your is Schoenhaus KeyBanc. next Scott from coming question from

Scott Schoenhaus

are regulatory of utilization really swath dynamic. that that the lower you witnessed absolutely -- utilization go represented blue broad to could the a related this just the was states to are that had regulatory be are back probably there this diluting that trends season, issue. Alabama Like how the How sure selling sure states we how want into I persistent? So red to kind you blue states red you environment. My more is understanding Is more we states. structural of is

Peter Anevski

it's hard coincidence, Pete. around We the Thanks, We Scott. significantly said the right never of decision of more but Yes, impact coincidence said ignore timing to we're it's the states in absolutely reversing where the trend states. versus pronounced for the of it's red blue March those those the we're more seeing more same a versus in after decision states. sure. it now And because that reversal was trough

we for are, know So and so we data do it Are sure? not. on based We know. the surmising we and the date? Absolutely don't

Regarding your question the overall regarding not -- not the sales -- sure I sales understand I'm to covered life. the season activity we're for season, all of just lives, referring the

if So question, repeat. not to free feel that you I'm getting could

Mark Livingston

from from record again, come year. standpoint, I'd say and what February, I virtually guess, we just identical just to that sounds saw a there's which the pacing year, overall. was which we January same last seeing tracking again, possible it to, And our is all from we were your a back question reduction the it activity structural like was, was, of general

of think level. the changed of again, for factor other delivering short capability have that There's a some a direction here higher at time. the So been clients, the I base, including obviously period new that's

Scott Schoenhaus

that your cohort to April And the utilization just cohort? levels for has of clarification, did in legacy elevated comparable new seen sort you say

Peter Anevski

trough again, We're not the just covered the a and what's happening that deeper are the versus that comments entire a not relative blue data states in more states around, in from from the pronounced in impact perspective utilization the where within lives the back where the states red the new is those that states members making surmising we're turning to and was April. cohort March, -- and and was standpoint where

Operator

Your Davis Barclays. next of question is coming from Stephanie

Stephanie Davis

last we there rate any was utilization maybe dig from they on if utility and talk was year's a the for analysis around a you of I could some should will hoping from versus benefits broad-based if peak backward-looking there prior that a a dynamics utilization metric pandemic something post going from benefit benefit bit think or about make in you've Is that done little year. forward? of more extension

Peter Anevski

effectively happened, Well, think of returning back levels they through if utilization were and 'XX our about normal was you the to to normal. when it comments back all 'XX, pandemic by

overhang anyway case. the sorry? of was know pandemic that in question, was But know believe for So your that part or us 'XX, I don't don't there's a, of sort to that. second the we a What

Stephanie Davis

of Trust a have were fertility had but they it's the of benefits the just cohort than if during pandemic? have prior likely could the to utilization pandemic, level year, expansion not maybe also the most in maybe that higher

Peter Anevski

reducing at that all We time we benefits that an we in like about there refer no the every the remain not retracted. that and the and each it year of upsells expansion clients upsell employer, the Well, are talk the that in -- activity that's have benefit. It's occurred they the expanded to.

So those they're in client XXX% here expansions had nearly retention XXXX, 'XX. existed if a they rate, existed have also we and in

Stephanie Davis

rate, Thinking better capture growth had pacing Rx just high we're a seen in we a a there see about it of about be one-off it to the very more going is basis? the less know that That's digits benefit, growth you clip one-off was go-forward quarter? that with this helpful. sort somewhat the on single given saw Or Okay. any that line impacting you've I But as in when think we would rates. of

Peter Anevski

are medication therefore, pharmacy. utilized much of if on you much because treatments that lesser For about growth impact, the the shipments higher in relative there And level the there the a treatment. more QX, as in rate impact early outsized had pharmacy to for quarter related talked was those saw larger a Mark was of, we we to during -- referenced, QX that will,

quarters, do to Mark, out of you comment don't I but... the want know, For terms in

Mark Livingston

forward. don't comment looking typically we Yes,

with again, to -- earlier, or growth continue stick over time, those of which I to sort see you're going I'd think, divert I maybe converge said what rates is with to medical. just begin I

Stephanie Davis

Okay.

the just you're amount mix there drug expand believe, level transfer quick the a how the same utilization of an going on you a for it. egg doing Rx fresh impacting still is given of free, for to -- be the I little give Just a for bit that for can

Peter Anevski

opposed the drugs a there full retrieval way less transfer, and is -- a as doing than right? a you if retrieval you're retrieval, do is you're less transfer a there's drugs. which in only If If to doing a cycle, there's again, transfer, in

Stephanie Davis

Are you that? about sure

Peter Anevski

Yes.

retrieve, thing. drugs you that full use There's of You throughout when use right? whole you you're suite the drugs using when you transfer, a drugs

overall, alone the than would transfer is retrieval, was is, extent less mix a The point impacted any to retrieval. best drugs the be the example that significantly the and

Operator

is question Close Genuity. from Richard next Canaccord coming from Your

Richard Close

federal Great. potential I'm Do just thinking do election. to you all year? one, affect for And two, in rest you about provided into reaction how you the how the upcoming could that potentially guidance related you're of think it interested the that factor your, utilization selling season? the

Peter Anevski

relative to the from there on factored reproductive appear presumptive It's because bipartisan support, not nominee Republican does in including be health. really to side the supporting

we -- contemplated another up. would guidance, we I about, in talked that of comments, coming I wasn't we're back predicting federal Everything sort relative election had one anything refer Mark's that so our there contemplated around we but not And don't election. reaction way the or the to to a that

Richard Close

that already to offer here recently through Did to guess, Okay. any perspective. and benefits survey insinuate interest in interest? seemed and happened was the uptick was in I industry I from think had in impact, that in see And then an April as that them or fertility fertility a Alabama I it if beginning you either March benefits higher there after follow-up, everything an I taken of saw expand employer

Michael Sturmer

and other and and our the in well back year and to being around menopause pregnancy covering last that pipeline versus continued interest a referenced, postpartum. positive From perspective, a benefits and products Pete I the expanding around position point as market services fertility and that in active would as sales

from to year. relative continue perspective that we perspective do last to -- pipeline any we So and interest that interest see close deals as see a and

Operator

David question BTIG. from next coming Larsen from Your is

David Larsen

decision XX% just an healthy Can detail you for of defining volume, like how and on embryo year, example, we're then was So little more last example, that please what has it, a now like a as in freezing and declined mix? sperm the give then creating perhaps maybe like XX% saying mix and/or increased Court XX% you're Supreme and eggs Alabama, or to think returned is I the freezing simply with of then normal. to that maybe sort

So like embryo XX%. would healthy be freezing a to back up

actually embryo it's people it, been creating mix, then of freezing worried in back now have about So up. and and a resulted may healthy that a decline that

thinking very I about am like this confirm, mix you just mean you Any helpful. would be can what So correctly? detail by more on

Peter Anevski

Yes.

that the is the benefit. magnitude Your people of right describing your -- it. But example to number not order example right is relative you're of is the as as who utilize extreme

wasn't back pronounced the our dramatic, first that normal, reported example would the and the QX So magnitude versus you on -- order here it when impacted shift that And look sit we dramatic has as now, did utilizers, quarter. will, returned revenue that returned of at it was earnings. in to the your for that has quarter of terms utilizers. and whole had different The as them is half out predicted QX, but of the correct. treatment was you enough expect for we in enough in even the what the if uniques you of which And called we -- what them they we another for percent as the it are when and we count did

Mark Livingston

on last decision. the But call out issue predated we our just clear, that QX, to in be called the that mix Alabama

decision it was the the modifying already Alabama come out. had time so And by

predated conflate the Yes, shift, shift. rate mix in March was utilization with decline I wouldn't the the So that. which

David Larsen

eggs part changes mean... like coverage mix a mix sperm coverage there or shift? impacting than would and decisions they it if Court maybe plans, of like this any before on was been activity, that? that Has So I Okay. so healthy embryo that shift anything could in Alabama more that where cover the Supreme freezing be occurred health

Peter Anevski

color. was that third we All the not decisions coverage answer those the our also but talked shift some you it continue, on is X/X. give keep reiterated, returned coverage it it we the I'll have calendar function made was short-term a the that's case. on as related again, that's wouldn't then starts quarter decisions a If just If a about us but call, been would not November so when to it affecting mix only and no, because year more are -- of already already

David Larsen

could about other Like then of sort just like areas Okay. services how to be menopause. counseling there you of helpful. your postpartum sort color business services? add services, any there's the any would portfolio? growth thoughts And Just of on in very adoption more other What

Peter Anevski

services. surrogating already part now, are programs adoption our Right of

women's that health but difference. are we products announcements that and now. have We about are that believe where that on to underserved other we we'll around right a none -- other are position in working we areas over a of talk them there's and shortly, we're believe can overlooked But there's make

Operator

today from question from last comes Lutz Bank Our Allen of America.

Allen Lutz

different that Q&A, it's season. Pete, know early in about talked million or there conversations is I year? meet spend on employers. goal you have a I I the question GLP-X a about employer managing know the to selling selling this is the a In focus anything exceed X.X big for season, lives. the but

thinking in focusing confidence about XXXX? employers about think your the XXXX how other of given impacting we and the that do are are where things So some that way they're

Michael Sturmer

Yes. This is Michael.

of Each and topics. Family that right of continues the building there's around off, year, those employers. of top mind benefits women's topics health to you're one are be first a is GLP-Xs for of So handful topics. one certainly always

the healthy the pointed pipeline healthy best again, as how of a our is and is also to last last decisions in sort to is relative of early as the what the early and sort look out prepared year. the is we've that are remarks, this like? the pipeline the couple year at point of -- the sort what's And relative decisions pipeline strength indicator of sort active What's of year of we've And times, how referenced during look? --

Operator

conclude Thank for turn I floor does back now you. This Hart session. today's remarks. would to the to closing question-and-answer James like

James Hart

look course, August free feel will us everybody, to available details Please Day as details any reach afternoon. if for you have that Analyst additional needed. And out you, please be time. in forthcoming sometimes I on hold our of this questions, joining thank later meeting for we'll am Well, further

Operator

does conclude call. This today's conference

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

Progyny (PGNY) 9 May 242024 Q1 Earnings call transcript