Progyny, Inc. Q4 FY2024 earnings call

• 2024 ended positively with revenue and adjusted EBITDA above guidance ranges. - Saw improvement in member engagement in Q4. - Concluded the year with 80 new logos and 1.1 million new covered lives, with 40% of new logos adopting new services in maternity, postpartum, and menopause. - Retention rate was 99%. - Partner expansion included Cigna as a national health plan partner. - Product strategy advanced with new services in women's health. - Recent acquisitions aim to integrate digital tools and enhance concierge care. - Expect to invest in digital assets and integrate acquisitions for 2025.

In the fourth quarter, medical revenue grew 9.4% to $188 million, and for the full year, it grew 7.9% to $730 million. Pharmacy revenue increased 13% in Q4 to $111 million and 6% for the full year to $438 million. As of December 31, there were 473 clients with at least 1,000 lives, averaging 6.5 million covered lives in the quarter, compared to 392 clients and 5.4 million covered lives in the prior year's Q4. Female utilization was 0.48% in Q4, consistent with the prior year, and 1.07% for the full year. ART cycles were at a record high in Q4 with over 15,800 cycles.

• First quarter revenue projected between $300 million to $318 million (8%-14% growth). - 2025 revenue projected $1.175 billion to $1.225 billion (1%-5% growth). - First quarter adjusted EBITDA expected $53 million to $57 million. - Full year adjusted EBITDA expected $188 million to $201 million. - Includes revenue impact from a large client's transition period, estimated $37 million to $40 million in the first half of 2025.

• Variability in member engagement and consumption patterns which could impact financial results. - Competitive landscape with other players potentially pricing aggressively, though Progyny focuses on value delivery. - Integration challenges with acquisitions and new product rollouts could affect performance.

Q: Speak to the cadence of the year as Amazon lives roll off and its impact on guidance?

A: About $37 million to $40 million in revenue from Amazon in the first half of 2025, with three quarters in Q1 and balance in Q2.

Q: Thoughts on executive order to expand access to IVF?

A: Executive order is positive relative to industry overall but lacks detailed specifics.

Q: Ancillary services contribution to revenue?

A: Too early to provide specific contribution as member marketing activity is ongoing.

Q: Profitability contribution of Amazon-related revenue?

A: Trapped costs not an issue, and contribution factored into guidance.

Q: Learnings on Q3/Q4 consumption trends?

A: No material new learnings, as variability relates to personal journey decisions.

Q: Pharmacy benefit services growth driver?

A: Timing of drug orders and treatment suspension impacts growth.

Q: Unpack 20% existing clients vs 40% new clients using new products?

A: New clients in selling phase more likely to adopt new products, but existing clients also adopt on renewal or at other times.

Q: BenefitBump financial scale and suitability?

A: No specific financial scale details, but benefits employers offering family-related benefits.

Q: Channel partnerships impact on sales?

A: Partnerships help with sales season, credibility, and easier contracting, with Cigna partnership expected to continue this trend.

Q: Competitive environment and pricing?

A: Focus on delivering broader value including cost control, and competitor pricing is short-term strategy.