Progyny, Inc. (Nasdaq: PGNY) (“Progyny” or the “Company”), a
transformative fertility, family building and women's health
benefits solution, today announced its financial results for the
three-month period ended June 30, 2024 (“the second quarter of
2024”) as compared to the three-month period ended June 30, 2023
(“the second quarter of 2023” or “the prior year period”).
“The rate of utilization in the second quarter
was consistent with our expectations, indicating that the demand
for treatment remains both healthy and within the range of our
long-established patterns,” said Pete Anevski, Chief Executive
Officer of Progyny. “While the third quarter rate of utilization
thus far remains consistent with the second quarter, we are
presently seeing a lower revenue per utilizing member than we would
expect, which may be due to any number of reasons, including, for
example, higher clinical success rates and other factors that
impact timing and treatment paths. While this reflects a change
from our historical experience and impacts our expectations for the
second half of the year, we believe the business remains healthy
and well-positioned overall, as evidenced by the significant
progress we continue to make in all of the areas that are most
impactful to building the long-term value of the business.”
“We are now entering the heart of our selling
season, and employer interest in women's health solutions remains
high and our pipeline is healthy. As usual, we expect that the
majority of client decisions will occur in the coming months. Early
commitments for launches in 2025 are pacing above this time last
year, and reflect a wide range of industries, including financial
services, hospitality, media, state and local government, and labor
unions, further attesting to the universal relevance of our
solutions. Lastly, existing clients are responding favorably to our
newest services in maternity and menopause, and, as of this stage
of the season, accounts representing approximately one million of
our existing covered lives have chosen and will offer one or more
of those programs for 2025.”
“Our results reflect meaningful increases in
gross profit and Adjusted EBITDA, and we returned value to our
shareholders through the repurchase of more than 6.8 million shares
to date under our buyback programs that began at the end of
February. We are pleased that our board has authorized an
additional $100 million program, which will provide us with
increased capacity for share repurchases,” said Mark Livingston,
Progyny’s Chief Financial Officer.
| Second Quarter 2024
Highlights: |
|
|
|
| |
|
|
|
| (unaudited; in thousands, except
per share amounts) |
2Q 2024 |
|
2Q 2023 |
|
Revenue |
$ |
304,087 |
|
|
$ |
279,373 |
|
| |
|
|
|
| Gross Profit |
$ |
68,281 |
|
|
$ |
60,641 |
|
|
Gross Margin |
|
22.5 |
% |
|
|
21.7 |
% |
| Net Income |
$ |
16,485 |
|
|
$ |
14,991 |
|
| |
|
|
|
| Net Income per Diluted
Share1 |
$ |
0.17 |
|
|
$ |
0.15 |
|
| |
|
|
|
| Adjusted Earnings Per Diluted
Share2 |
$ |
0.43 |
|
|
$ |
0.36 |
|
| |
|
|
|
| Adjusted EBITDA2 |
$ |
54,477 |
|
|
$ |
47,464 |
|
|
Adjusted EBITDA Margin2 |
|
17.9 |
% |
|
|
17.0 |
% |
- Net income per
diluted share reflects weighted-average shares outstanding as
adjusted for potential dilutive securities, including options,
restricted stock units, warrants to purchase common stock, and
shares issuable under the employee stock purchase plan.
- Adjusted
earnings per diluted share, Adjusted EBITDA, and Adjusted EBITDA
margin are financial measures that are not required by, or
presented in accordance with, U.S. generally accepted accounting
principles ("GAAP"). Please see Annex A of this press release for a
reconciliation of Adjusted earnings per diluted share to earnings
per share, and Adjusted EBITDA to net income, the most directly
comparable financial measures stated in accordance with GAAP for
each of the periods presented. We calculate Adjusted earnings per
diluted share as net income per diluted share excluding the impact
of stock-based compensation, adjusted for the impact of taxes. We
calculate Adjusted EBITDA margin as Adjusted EBITDA divided by
revenue.
Financial Highlights
Revenue was $304.1 million, an 8.8% increase as
compared to the $279.4 million reported in the second quarter
of 2023, primarily as a result of the increase in our number of
clients and covered lives.
- Fertility benefit services revenue
was $193.6 million, an 12% increase from the
$172.7 million reported in the second quarter of 2023.
- Pharmacy benefit services revenue
was $110.5 million, a 3.6% increase as compared to the
$106.6 million reported in the second quarter of 2023.
Gross profit was $68.3 million, an increase of
13% from the $60.6 million reported in the second quarter of 2023,
primarily due to the higher revenue. Gross margin was 22.5%, as
compared to the 21.7% reported in the prior year period.
Net income was $16.5 million, or $0.17 income
per diluted share, as compared to the $15.0 million, or $0.15
income per diluted share, reported in the second quarter of 2023.
The increase in net income was due primarily to the higher overall
level of profitability across the business.
Adjusted EBITDA was $54.5 million, an
increase of 15% as compared to the $47.5 million reported in
the second quarter of 2023, reflecting the higher gross profit and
operating efficiencies realized on our higher revenues. Adjusted
EBITDA margin was 17.9%, a 90 basis point increase from the 17.0%
Adjusted EBITDA margin in the second quarter of 2023. Please refer
to Annex A for a reconciliation of Adjusted EBITDA to net
income.
Cash FlowNet cash provided by
operating activities in the second quarter of 2024 was
$56.7 million, compared to net cash provided by operating
activities of $76.0 million in the prior year period. The lower
cash flow as compared to the prior year period was primarily due to
the previously disclosed impacts of certain favorable working
capital items to the prior year period, as well as higher cash
payments for income taxes in the second quarter of 2024.
Balance Sheet and Financial
PositionAs of June 30, 2024, the Company had total
working capital of approximately $356.9 million and no debt. This
included cash and cash equivalents and marketable securities of
$262.2 million, a decrease of $109.6 million from the balances as
of March 31, 2024, reflecting the stock repurchase activity
conducted during the quarter.
During the second quarter of 2024, the Company
purchased 5,593,128 shares for $159.8 million through its
February and May share repurchase programs, which provided for a
total authorization of $200 million. To date, the Company has
purchased 6,805,426 shares collectively in the program. On August
5, 2024, the Board has authorized the repurchase of an additional
$100 million of common stock.
Key Metrics
The Company had 463 clients as of June 30,
2024, as compared to 384 clients as of June 30, 2023.
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| ART Cycles * |
15,562 |
|
|
14,771 |
|
|
30,364 |
|
|
27,942 |
|
| Utilization - All
Members** |
0.55 |
% |
|
0.57 |
% |
|
0.84 |
% |
|
0.85 |
% |
| Utilization - Female
Only** |
0.47 |
% |
|
0.50 |
% |
|
0.71 |
% |
|
0.73 |
% |
| Average Members*** |
6,409,000 |
|
|
5,340,000 |
|
|
6,347,000 |
|
|
5,330,000 |
|
* Represents the number of ART cycles performed,
including IVF with a fresh embryo transfer, IVF freeze all
cycles/embryo banking, frozen embryo transfers, and egg freezing.**
Represents the member utilization rate for all services, including,
but not limited to, ART cycles, initial consultations, IUIs, and
genetic testing. The utilization rate for all members includes all
unique members (female and male) who utilize the benefit during
that period, while the utilization rate for female only includes
only unique females who utilize the benefit during that period. For
purposes of calculating utilization rates in any given period, the
results reflect the number of unique members utilizing the benefit
for that period. Individual periods cannot be combined as member
treatments may span multiple periods. ***Includes approximately
300,000 members from a single client not reflected in utilization
as a result of the client's chosen benefit design.
Financial Outlook“While the
rate of utilization remains strong and consistent with our
historical levels, we are revising our expectations for the second
half of the year to reflect a lesser-than-historical rate of
increase in revenue per utilizing member given the variation we're
presently seeing,” said Mr. Anevski.
The Company is providing the following financial
guidance for the full year ending December 31, 2024 and the
three-month period ending September 30, 2024:
- Full Year 2024 Outlook:
- Revenue is now
projected to be $1.165 billion to $1.20 billion, reflecting growth
of 7% to 10%
- Net income is projected to be
$55.4 million to $62.4 million, or $0.57 to $0.64 per diluted
share, on the basis of approximately 98 million assumed
weighted-average fully diluted-shares outstanding
- Adjusted EBITDA1 is projected to be
$199.0 million to $209.0 million
- Adjusted earnings per diluted
share1 is projected to be $1.53 to $1.61
- Third Quarter of 2024 Outlook:
- Revenue is projected to be $290.0
million to $303.0 million, reflecting growth of 3% to 8%
- Net income is projected to be $10.7 million to $13.2 million,
or $0.11 to $0.14 per diluted share, on the basis of approximately
96 million assumed weighted-average fully diluted-shares
outstanding
- Adjusted EBITDA1 is projected to be
$47.5 million to $51.0 million
- Adjusted
earnings per diluted share1 is projected to be $0.35 to $0.38
- Adjusted EBITDA and Adjusted
earnings per diluted share are financial measures that are not
required by, or presented in accordance with, GAAP. Please see
Annex A of this press release for a reconciliation of
forward-looking Adjusted EBITDA to forward-looking net income and
Adjusted net income to net income, the most directly comparable
financial measures stated in accordance with GAAP, for the period
presented.
Conference Call
InformationProgyny will host a conference call at 4:45
P.M. Eastern Time (1:45 P.M. Pacific Time) today, August 6, 2024,
to discuss its financial results. Interested participants from the
United States may join by calling 1.866.825.7331 and using
conference ID 265484. Participants from international locations may
join by calling 1.973.413.6106 and using the same conference ID. A
replay of the call will be available until August 13, 2024 at 5:00
P.M. Eastern Time by dialing 1.800.332.6854 (U.S. participants) or
1.973.528.0005 (international) and entering passcode 265484. A live
audio webcast of the call and subsequent replay will also be
available through the Events & Presentations section of the
Company’s Investor Relations website at investors.progyny.com.
About ProgynyProgyny (Nasdaq:
PGNY) is a transformative fertility, family building and women's
health benefits solution, trusted by the nation's leading
employers, health plans and benefit purchasers. We envision a world
where everyone can realize their dreams of family and ideal health.
Our outcomes prove that comprehensive, inclusive and intentionally
designed solutions simultaneously benefit employers, patients, and
physicians.
Our benefits solution empowers patients with
concierge support, coaching, education, and digital tools; provides
access to a premier network of fertility and women's health
specialists who use the latest science and technologies; drives
optimal clinical outcomes; and reduces healthcare costs.
Headquartered in New York City, Progyny has been
recognized for its leadership and growth as a TIME100 Most
Influential Company, CNBC Disruptor 50, Modern Healthcare’s Best
Places to Work in Healthcare, Forbes' Best Employers, Financial
Times Fastest Growing Companies, INC. 5000, INC. Power Partners and
Crain’s Fast 50 for NYC. For more information, visit
www.progyny.com.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this press release other than statements of historical
fact, including, without limitation, statements regarding our
financial outlook for the third quarter and full year 2024,
including the impact of our sales season and client launches; our
anticipated number of clients and covered lives for 2024; our
expected utilization rates and average revenue per utilizing
member; the demand for our solutions; our expectations for our
selling season for 2025 launches; our positioning to successfully
manage economic uncertainty on our business; the timing of client
decisions; our ability to retain existing clients and acquire new
clients; and our business strategy, plans, goals and expectations
concerning our market position, future operations, and other
financial and operating information. The words “anticipates,”
“assumes,” “believe,” “contemplate,” “continues, ” “could,”
“estimates,” “expects,” “future,” “intends,” “may,” “plans,”
“predict,” “potential,” “project,” “seeks,” “should,” “target,”
“will,” and the negative of these or similar expressions and
phrases are intended to identify forward-looking statements, though
not all forward-looking statements use these words or
expressions.
Forward-looking statements are neither promises
nor guarantees, but involve known and unknown risks, uncertainties
and other important factors that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. These risks include, without
limitation, failure to meet our publicly announced guidance or
other expectations about our business; competition in the market in
which we operate; our history of operating losses and ability to
sustain profitability; risks related to the impact of the COVID-19
pandemic, such as the scope and duration of the outbreak, the
spread of new variants, government actions and restrictive measures
implemented in response, delays and cancellations of fertility
procedures and other impacts to the business; competition in the
market in which we operate; our history of operating losses and
ability to sustain profitability in the future; unfavorable
conditions in our industry or the United States economy; our
limited operating history and the difficulty in predicting our
future results of operations; our ability to attract and retain
clients and increase the adoption of services within our client
base; the loss of any of our largest client accounts; changes in
the technology industry; changes or developments in the health
insurance market; negative publicity in the health benefits
industry; lags, failures or security breaches in our computer
systems or those of our vendors; a significant change in the level
or the mix of utilization of our solutions; our ability to offer
high-quality support; positive references from our existing
clients; our ability to develop and expand our marketing and sales
capabilities; the rate of growth of our future revenue; the
accuracy of the estimates and assumptions we use to determine the
size of target markets; our ability to successfully manage our
growth; reductions in employee benefits spending; seasonal
fluctuations in our sales; the adoption of new solutions and
services by our clients or members; our ability to innovate and
develop new offerings; our ability to adapt and respond to the
medical landscape, regulations, client needs, requirements or
preferences; our ability to maintain and enhance our brand; our
ability to attract and retain members of our management team, key
employees, or other qualified personnel; our ability to maintain
our Company culture; risks related to any litigation against us;
our ability to maintain our Center of Excellence network of
healthcare providers; our strategic relationships with and
monitoring of third parties; our ability to maintain or any
disruption of our pharmacy distribution network or their supply
chain; our relationship with key pharmacy program partners or any
decline in rebates provided by them; our ability to maintain our
relationships with benefits consultants; exposure to credit risk
from our members; risks related to government regulation; risks
related to potential sales to government entities; our ability to
protect our intellectual property rights; risks related to
acquisitions, strategic investments, partnerships, or alliances;
federal tax reform and changes to our effective tax rate; the
imposition of state and local state taxes; our ability to utilize a
significant portion of our net operating loss or research tax
credit carryforwards; our ability to develop or maintain effective
internal control over financial reporting and the increased costs
of operating as a public company; and our ability to adapt and
respond to the changing SEC expectations regarding environmental,
social and governance practices. For a detailed discussion of these
and other risk factors, please refer to our filings with the
Securities and Exchange Commission (the “SEC”), including in the
section entitled “Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023, and subsequent reports
that we file with the SEC which are available at
http://investors.progyny.com and on the SEC’s website at
https://www.sec.gov.
Forward-looking statements represent our
management’s beliefs and assumptions only as of the date of this
press release. Our actual future results could differ materially
from what we expect. Except as required by law, we assume no
obligation to update these forward-looking statements publicly, or
to update the reasons.
Non-GAAP Financial MeasuresIn
addition to disclosing financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”), this
press release and the accompanying tables include the non-GAAP
financial measures Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted EBITDA margin on incremental revenue and Adjusted earnings
per share.
Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted EBITDA margin on incremental revenue and Adjusted earnings
per share are supplemental financial measures that are not required
by, or presented in accordance with, GAAP. We believe that these
non-GAAP measures, when taken together with our GAAP financial
results, provides meaningful supplemental information regarding our
operating performance and facilitates internal comparisons of our
historical operating performance on a more consistent basis by
excluding certain items that may not be indicative of our business,
results of operations or outlook. In particular, we believe that
the use of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA
margin on incremental revenue and Adjusted earnings per share are
helpful to our investors as they are measures used by management in
assessing the health of our business, determining incentive
compensation, evaluating our operating performance, and for
internal planning and forecasting purposes.
Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted EBITDA margin on incremental revenue and Adjusted earnings
per share are presented for supplemental informational purposes
only, have limitations as analytical tools and should not be
considered in isolation or as a substitute for financial
information presented in accordance with GAAP. Some of the
limitations of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
EBITDA margin on incremental revenue and Adjusted earnings per
share include: (1) it does not properly reflect capital commitments
to be paid in the future; (2) although depreciation and
amortization are non-cash charges, the underlying assets may need
to be replaced and Adjusted EBITDA does not reflect these capital
expenditures; (3) it does not consider the impact of stock-based
compensation expense; (4) it does not reflect other non-operating
income and expenses, including other income, net and interest
income, net; (5) it does not reflect tax payments that may
represent a reduction in cash available to us. In addition, our
non-GAAP measures may not be comparable to similarly titled
measures of other companies because they may not calculate such
measures in the same manner as we calculate these measures,
limiting their usefulness as comparative measures. Because of these
limitations, when evaluating our performance, you should consider
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA margin on
incremental revenue and Adjusted earnings per share alongside other
financial performance measures, including our net income, gross
margin, and our other GAAP results.
We calculate Adjusted EBITDA as net income,
adjusted to exclude depreciation and amortization; stock-based
compensation expense; other income, net; interest income, net; and
provision for income taxes. We calculate Adjusted EBITDA margin as
Adjusted EBITDA divided by revenue. We calculate Adjusted EBITDA
margin on incremental revenue as incremental Adjusted EBITDA in
2024 divided by incremental revenue in 2024. We calculate Adjusted
earnings per diluted share as net income per diluted share
excluding the impact of stock-based compensation, adjusted for the
associated impact of taxes. Please see Annex A: “Reconciliation of
GAAP to Non-GAAP Financial Measures” elsewhere in this press
release.
For Further Information, Please Contact:
Investors: James Hartinvestors@progyny.com
Media:Selena Yangmedia@progyny.com
|
PROGYNY, INC.Consolidated Balance
Sheets(Unaudited)(in thousands,
except share and per share amounts) |
| |
|
June 30, |
|
December 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
94,960 |
|
|
$ |
97,296 |
|
|
Marketable securities |
|
|
167,228 |
|
|
|
273,791 |
|
| Accounts receivable, net of
$54,081 and $46,636 of allowances at June 30, 2024 and
December 31, 2023, respectively |
|
|
293,796 |
|
|
|
241,869 |
|
|
Prepaid expenses and other current assets |
|
|
26,259 |
|
|
|
27,451 |
|
| Total current assets |
|
|
582,243 |
|
|
|
640,407 |
|
| Property and equipment,
net |
|
|
10,637 |
|
|
|
10,213 |
|
| Operating lease right-of-use
assets |
|
|
17,806 |
|
|
|
17,605 |
|
| Goodwill |
|
|
15,606 |
|
|
|
11,880 |
|
| Intangible assets, net |
|
|
1,479 |
|
|
|
— |
|
| Deferred tax assets |
|
|
67,881 |
|
|
|
73,120 |
|
| Other noncurrent assets |
|
|
2,980 |
|
|
|
3,395 |
|
| Total
assets |
|
$ |
698,632 |
|
|
$ |
756,620 |
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
151,747 |
|
|
$ |
125,426 |
|
|
Accrued expenses and other current liabilities |
|
|
73,628 |
|
|
|
60,524 |
|
| Total current liabilities |
|
|
225,375 |
|
|
|
185,950 |
|
| Operating lease noncurrent
liabilities |
|
|
17,064 |
|
|
|
17,241 |
|
| Total
liabilities |
|
|
242,439 |
|
|
|
203,191 |
|
| Commitments and
Contingencies |
|
|
|
|
| STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Common stock, $0.0001 par value; 1,000,000,000 shares authorized;
97,028,118 and 96,348,522 shares issued; 90,711,413 and 96,348,522
shares outstanding at June 30, 2024 and December 31,
2023, respectively |
|
|
9 |
|
|
|
9 |
|
|
Additional paid-in capital |
|
|
519,670 |
|
|
|
461,639 |
|
|
Treasury stock, at cost, $0.0001 par value; 6,932,685 and 615,980
shares at June 30, 2024 and December 31, 2023,
respectively |
|
|
(188,865 |
) |
|
|
(1,009 |
) |
|
Accumulated earnings |
|
|
123,354 |
|
|
|
89,971 |
|
|
Accumulated other comprehensive income |
|
|
2,025 |
|
|
|
2,819 |
|
| Total stockholders’
equity |
|
|
456,193 |
|
|
|
553,429 |
|
| Total liabilities and
stockholders’ equity |
|
$ |
698,632 |
|
|
$ |
756,620 |
|
|
PROGYNY, INC.Consolidated
Statements of
Operations(Unaudited)(in
thousands, except share and per share
amounts) |
| |
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
| Revenue |
$ |
304,087 |
|
$ |
279,373 |
|
$ |
582,165 |
|
$ |
537,767 |
| Cost of services |
|
235,806 |
|
|
218,732 |
|
|
451,478 |
|
|
418,486 |
| Gross profit |
|
68,281 |
|
|
60,641 |
|
|
130,687 |
|
|
119,281 |
| Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
16,421 |
|
|
15,384 |
|
|
31,875 |
|
|
29,666 |
|
General and administrative |
|
31,173 |
|
|
30,073 |
|
|
59,602 |
|
|
59,420 |
| Total operating expenses |
|
47,594 |
|
|
45,457 |
|
|
91,477 |
|
|
89,086 |
| Income from operations |
|
20,687 |
|
|
15,184 |
|
|
39,210 |
|
|
30,195 |
| Other income, net: |
|
|
|
|
|
|
|
|
Other income, net |
|
3,564 |
|
|
1,277 |
|
|
6,924 |
|
|
1,775 |
|
Interest income, net |
|
816 |
|
|
706 |
|
|
1,448 |
|
|
1,528 |
| Total other income, net |
|
4,380 |
|
|
1,983 |
|
|
8,372 |
|
|
3,303 |
| Income before income
taxes |
|
25,067 |
|
|
17,167 |
|
|
47,582 |
|
|
33,498 |
|
Provision for income taxes |
|
8,582 |
|
|
2,176 |
|
|
14,199 |
|
|
829 |
| Net income |
$ |
16,485 |
|
$ |
14,991 |
|
$ |
33,383 |
|
$ |
32,669 |
| Net income per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.18 |
|
$ |
0.16 |
|
$ |
0.35 |
|
$ |
0.35 |
|
Diluted |
$ |
0.17 |
|
$ |
0.15 |
|
$ |
0.34 |
|
$ |
0.33 |
| Weighted-average shares used
in computing net income per share: |
|
|
|
|
|
|
|
|
Basic |
|
93,868,409 |
|
|
94,738,651 |
|
|
95,160,085 |
|
|
94,290,653 |
|
Diluted |
|
97,839,576 |
|
|
100,615,919 |
|
|
99,456,335 |
|
|
100,391,573 |
|
PROGYNY, INC.Consolidated
Statements of Cash
Flows(Unaudited)(in
thousands) |
| |
|
Six Months EndedJune 30, |
|
|
|
|
2024 |
|
|
|
2023 |
|
| OPERATING
ACTIVITIES |
|
|
|
|
| Net income |
|
$ |
33,383 |
|
|
$ |
32,669 |
|
| Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Deferred tax expense |
|
|
5,522 |
|
|
|
824 |
|
|
Non-cash interest income |
|
|
(77 |
) |
|
|
— |
|
|
Depreciation and amortization |
|
|
1,470 |
|
|
|
1,068 |
|
|
Stock-based compensation expense |
|
|
64,088 |
|
|
|
62,561 |
|
|
Bad debt expense |
|
|
9,572 |
|
|
|
9,794 |
|
|
Realized gains on sale of marketable securities |
|
|
(6,987 |
) |
|
|
(1,324 |
) |
|
Foreign currency exchange rate loss (gain) |
|
|
30 |
|
|
|
(7 |
) |
| Changes in operating assets
and liabilities: |
|
|
|
|
|
Accounts receivable |
|
|
(61,496 |
) |
|
|
(34,686 |
) |
|
Prepaid expenses and other current assets |
|
|
1,279 |
|
|
|
(9,189 |
) |
|
Accounts payable |
|
|
26,396 |
|
|
|
20,853 |
|
|
Accrued expenses and other current liabilities |
|
|
8,860 |
|
|
|
13,829 |
|
|
Other noncurrent assets and liabilities |
|
|
386 |
|
|
|
581 |
|
|
Net cash provided by operating activities |
|
|
82,426 |
|
|
|
96,973 |
|
| |
|
|
|
|
| INVESTING
ACTIVITIES |
|
|
|
|
| Purchase of property and
equipment, net |
|
|
(1,716 |
) |
|
|
(2,010 |
) |
| Purchase of marketable
securities |
|
|
(158,639 |
) |
|
|
(120,599 |
) |
| Sale of marketable
securities |
|
|
271,099 |
|
|
|
79,813 |
|
| Acquisition of business, net
of cash acquired |
|
|
(5,304 |
) |
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
|
105,440 |
|
|
|
(42,796 |
) |
| |
|
|
|
|
| FINANCING
ACTIVITIES |
|
|
|
|
| Repurchase of common
stock |
|
|
(183,723 |
) |
|
|
— |
|
| Proceeds from exercise of
stock options |
|
|
988 |
|
|
|
3,124 |
|
| Payment of employee taxes
related to equity awards |
|
|
(8,172 |
) |
|
|
(7,426 |
) |
| Proceeds from contributions to
employee stock purchase plan |
|
|
707 |
|
|
|
617 |
|
|
Net cash used in financing activities |
|
|
(190,200 |
) |
|
|
(3,685 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
|
(2 |
) |
|
|
— |
|
| Net (decrease) increase in
cash and cash equivalents |
|
|
(2,336 |
) |
|
|
50,492 |
|
| Cash and cash equivalents,
beginning of period |
|
|
97,296 |
|
|
|
120,078 |
|
| Cash and cash equivalents, end
of period |
|
$ |
94,960 |
|
|
$ |
170,570 |
|
| |
|
|
|
|
| SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
| Cash paid for income taxes,
net of refunds received |
|
$ |
17,317 |
|
|
$ |
698 |
|
| SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES |
|
|
|
|
| Additions of property and
equipment, net included in accounts payable and accrued
expenses |
|
$ |
158 |
|
|
$ |
438 |
|
ANNEX A
PROGYNY,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures(unaudited)(in thousands,
except share and per share amounts)
Costs of Services, Gross Margin and Operating Expenses
Excluding Stock-Based Compensation CalculationThe
following table provides a reconciliation of cost of services,
gross profit, sales and marketing and general and administrative
expenses to each of these measures excluding the impact of
stock-based compensation expense for each of the periods
presented:
| |
|
Three Months Ended |
|
Three Months Ended |
| |
|
June 30, 2024 |
|
June 30, 2023 |
| |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of services |
|
$ |
235,806 |
|
|
$ |
(9,448 |
) |
|
$ |
226,358 |
|
|
$ |
218,732 |
|
|
$ |
(8,812 |
) |
|
$ |
209,920 |
|
| Gross profit |
|
$ |
68,281 |
|
|
$ |
9,448 |
|
|
$ |
77,729 |
|
|
$ |
60,641 |
|
|
$ |
8,812 |
|
|
$ |
69,453 |
|
| Sales and marketing |
|
$ |
16,421 |
|
|
$ |
(7,911 |
) |
|
$ |
8,510 |
|
|
$ |
15,384 |
|
|
$ |
(6,883 |
) |
|
$ |
8,501 |
|
| General and
administrative |
|
$ |
31,173 |
|
|
$ |
(15,677 |
) |
|
$ |
15,496 |
|
|
$ |
30,073 |
|
|
$ |
(16,058 |
) |
|
$ |
14,015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
| Gross margin |
|
|
22.5 |
% |
|
|
3.1 |
% |
|
|
25.6 |
% |
|
|
21.7 |
% |
|
|
3.2 |
% |
|
|
24.9 |
% |
| Sales and marketing |
|
|
5.4 |
% |
|
(2.6) % |
|
|
2.8 |
% |
|
|
5.5 |
% |
|
(2.5) % |
|
|
3.0 |
% |
| General and
administrative |
|
|
10.3 |
% |
|
(5.2) % |
|
|
5.1 |
% |
|
|
10.8 |
% |
|
(5.7) % |
|
|
5.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
|
Six Months Ended |
| |
|
June 30, 2024 |
|
June 30, 2023 |
| |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of services |
|
$ |
451,478 |
|
|
$ |
(18,481 |
) |
|
$ |
432,997 |
|
|
$ |
418,486 |
|
|
$ |
(17,026 |
) |
|
$ |
401,460 |
|
| Gross profit |
|
$ |
130,687 |
|
|
$ |
18,481 |
|
|
$ |
149,168 |
|
|
$ |
119,281 |
|
|
$ |
17,026 |
|
|
$ |
136,307 |
|
| Sales and marketing |
|
$ |
31,875 |
|
|
$ |
(15,414 |
) |
|
$ |
16,461 |
|
|
$ |
29,666 |
|
|
$ |
(13,451 |
) |
|
$ |
16,215 |
|
| General and
administrative |
|
$ |
59,602 |
|
|
$ |
(30,193 |
) |
|
$ |
29,409 |
|
|
$ |
59,420 |
|
|
$ |
(32,084 |
) |
|
$ |
27,336 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
| Gross margin |
|
|
22.4 |
% |
|
|
3.2 |
% |
|
|
25.6 |
% |
|
|
22.2 |
% |
|
|
3.2 |
% |
|
|
25.3 |
% |
| Sales and marketing |
|
|
5.5 |
% |
|
(2.6) % |
|
|
2.8 |
% |
|
|
5.5 |
% |
|
(2.5) % |
|
|
3.0 |
% |
| General and
administrative |
|
|
10.2 |
% |
|
(5.2) % |
|
|
5.1 |
% |
|
|
11.1 |
% |
|
(6.0) % |
|
|
5.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Note: percentages shown in the table may not cross foot due to
rounding.
Adjusted Earnings Per Diluted Share
CalculationThe following table provides a reconciliation
of net income to Adjusted Earnings Per Diluted Share for each of
the periods presented:
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, 2024 |
|
June 30, 2024 |
|
Net Income |
|
$ |
16,485 |
|
|
$ |
33,383 |
|
| Add: |
|
|
|
|
|
Stock-based compensation |
|
|
33,036 |
|
|
$ |
64,088 |
|
|
Income tax effect of non-GAAP adjustment |
|
|
(7,001 |
) |
|
|
(15,818 |
) |
| Adjusted Net income |
|
$ |
42,520 |
|
|
$ |
81,653 |
|
| |
|
|
|
|
| Diluted Shares |
|
|
97,839,576 |
|
|
|
99,456,335 |
|
| Adjusted Earnings Per Diluted
Share |
|
$ |
0.43 |
|
|
$ |
0.82 |
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, 2023 |
|
June 30, 2023 |
| Net Income |
|
$ |
14,991 |
|
|
$ |
32,669 |
|
| Add: |
|
|
|
|
|
Stock-based compensation |
|
|
31,753 |
|
|
$ |
62,561 |
|
|
Income tax effect of non-GAAP adjustment |
|
|
(10,870 |
) |
|
|
(24,812 |
) |
| Adjusted Net income |
|
$ |
35,874 |
|
|
$ |
70,418 |
|
| |
|
|
|
|
| Diluted Shares |
|
|
100,615,919 |
|
|
|
100,391,573 |
|
| Adjusted Earnings Per Diluted
Share |
|
$ |
0.36 |
|
|
$ |
0.70 |
|
Adjusted EBITDA and Adjusted EBITDA Margin on
Incremental Revenue CalculationThe following table
provides a reconciliation of Net income to Adjusted EBITDA for each
of the periods presented:
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
June 30, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net income |
|
$ |
16,485 |
|
|
$ |
14,991 |
|
|
$ |
33,383 |
|
|
$ |
32,669 |
|
| Add: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
754 |
|
|
$ |
527 |
|
|
|
1,470 |
|
|
$ |
1,068 |
|
|
Stock‑based compensation expense |
|
|
33,036 |
|
|
$ |
31,753 |
|
|
|
64,088 |
|
|
$ |
62,561 |
|
|
Other income, net |
|
|
(3,564 |
) |
|
$ |
(1,277 |
) |
|
|
(6,924 |
) |
|
$ |
(1,775 |
) |
|
Interest income, net |
|
|
(816 |
) |
|
$ |
(706 |
) |
|
|
(1,448 |
) |
|
$ |
(1,528 |
) |
|
Provision for income taxes |
|
|
8,582 |
|
|
$ |
2,176 |
|
|
|
14,199 |
|
|
$ |
829 |
|
| Adjusted EBITDA |
|
$ |
54,477 |
|
|
$ |
47,464 |
|
|
$ |
104,768 |
|
|
$ |
93,824 |
|
| |
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
304,087 |
|
|
$ |
279,373 |
|
|
$ |
582,165 |
|
|
$ |
537,767 |
|
| |
|
|
|
|
|
|
|
|
| Incremental revenue vs.
2023 |
|
|
|
|
|
|
44,398 |
|
|
|
| |
|
|
|
|
|
|
|
|
| Incremental Adjusted EBITDA
vs. 2023 |
|
|
|
|
|
|
10,944 |
|
|
|
| |
|
|
|
|
|
|
|
|
| Adjusted EBITDA margin on
incremental revenue |
|
|
|
|
|
|
24.6 |
% |
|
|
Reconciliation of Non-GAAP Financial Guidance for the
Three Months Ending September 30, 2024 and Year Ending December 31,
2024
| |
|
Three Months Ending September 30,
2024 |
|
Year Ending December 31,
2024 |
| (in thousands) |
|
Low |
|
High |
|
Low |
|
High |
|
Revenue |
|
$ |
290,000 |
|
|
$ |
303,000 |
|
|
$ |
1,165,000 |
|
|
$ |
1,200,000 |
|
| Net Income |
|
$ |
10,700 |
|
|
$ |
13,200 |
|
|
$ |
55,400 |
|
|
$ |
62,400 |
|
| Add: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
800 |
|
|
|
800 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
Stock-based compensation expense |
|
|
33,000 |
|
|
|
33,000 |
|
|
|
131,000 |
|
|
|
131,000 |
|
|
Other income, net |
|
|
(1,700 |
) |
|
|
(1,700 |
) |
|
|
(14,100 |
) |
|
|
(14,100 |
) |
|
Provision for income taxes |
|
|
4,700 |
|
|
|
5,700 |
|
|
|
23,700 |
|
|
|
26,700 |
|
|
Adjusted EBITDA* |
|
$ |
47,500 |
|
|
$ |
51,000 |
|
|
$ |
199,000 |
|
|
$ |
209,000 |
|
| |
|
Three Months Ending September 30,
2024 |
|
Year Ending December 31,
2024 |
| |
|
Low |
|
High |
|
Low |
|
High |
|
Net Income |
|
$ |
10,700 |
|
|
$ |
13,200 |
|
|
$ |
55,400 |
|
|
$ |
62,400 |
|
| Add: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
33,000 |
|
|
|
33,000 |
|
|
|
131,000 |
|
|
|
131,000 |
|
|
Income tax effect of non-GAAP adjustment |
|
|
(10,000 |
) |
|
|
(10,000 |
) |
|
|
(36,000 |
) |
|
|
(36,000 |
) |
| Adjusted Net
income* |
|
$ |
33,700 |
|
|
$ |
36,200 |
|
|
$ |
150,400 |
|
|
$ |
157,400 |
|
| |
|
|
|
|
|
|
|
|
| Diluted Shares |
|
|
96,000,000 |
|
|
|
96,000,000 |
|
|
|
98,000,000 |
|
|
|
98,000,000 |
|
| Adjusted Earnings Per
Diluted Share |
|
$ |
0.35 |
|
|
$ |
0.38 |
|
|
$ |
1.53 |
|
|
$ |
1.61 |
|
* All of the numbers in the table above reflect
our future outlook as of the date hereof. Net income and
Adjusted EBITDA ranges do not reflect any estimate for other
potential activities and transactions, nor do they contemplate any
discrete income tax items, including the income tax impact related
to equity compensation activity.
Assisted Reproductive Technology (ART) Cycles per Unique
Female UtilizerThe following tables provide historical
trend and guidance assumptions for average members, female
utilization rate, and ART Cycles per Unique Female Utilizer for the
full year and quarterly periods presented:
| |
|
|
|
|
|
|
|
Guidance Assumptions For: |
| |
|
|
|
|
|
|
|
Year Ending December 31, 2024 |
| |
|
Year Ending December 31, |
|
High-End as of |
|
Low End as of |
|
High End as of |
| |
|
|
2021 |
|
|
|
2022 |
|
|
|
2023 |
|
|
May 9, 2024 |
|
August 6, 2024 |
|
August 6, 2024 |
|
Average Members* |
|
|
2,812,000 |
|
|
|
4,349,000 |
|
|
|
5,383,000 |
|
|
|
6,198,000 |
|
|
|
6,118,000 |
|
|
|
6,118,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Female Utilization Rate |
|
|
1.07 |
% |
|
|
1.03 |
% |
|
|
1.09 |
% |
|
|
1.08 |
% |
|
|
1.05 |
% |
|
|
1.08 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Female Unique Utilizers |
|
|
30,053 |
|
|
|
44,600 |
|
|
|
58,596 |
|
|
|
67,154 |
|
|
|
64,456 |
|
|
|
66,087 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ART Cycles |
|
|
28,413 |
|
|
|
42,598 |
|
|
|
58,013 |
|
|
|
68,160 |
|
|
|
61,467 |
|
|
|
63,361 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ART Cycles per Unique Female
Utilizer |
|
|
0.95 |
|
|
|
0.96 |
|
|
|
0.99 |
|
|
|
1.01 |
|
|
|
0.95 |
|
|
|
0.96 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue ($ in millions) |
|
$ |
500.6 |
|
|
$ |
786.9 |
|
|
$ |
1,088.6 |
|
|
$ |
1,270.0 |
|
|
$ |
1,165.0 |
|
|
$ |
1,200.0 |
|
*Calculations for 2024 exclude approximately 300,000 members
from a single client not reflected in female utilizers as a result
of the client's chosen benefit design
Quarterly ART Cycles per Unique Female
Utilizer
| |
|
Three Months Ending |
|
Year Ending |
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
December 31, |
|
2022 |
|
0.50 |
|
0.55 |
|
0.56 |
|
0.58 |
|
0.96 |
| |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
0.51 |
|
0.55 |
|
0.56 |
|
0.58 |
|
0.99 |
| |
|
|
|
|
|
|
|
|
|
|
|
2024: Low End of Guidance Range* |
|
0.53 |
|
0.54 |
|
0.54E |
|
0.53E |
|
0.95E |
|
2024: High End of Guidance Range* |
|
0.53 |
|
0.54 |
|
0.54E |
|
0.55E |
|
0.96E |
| |
|
|
|
|
|
|
|
|
|
|
*Calculations for 2024 exclude approximately 300,000 members
from a single client not reflected in female utilizers as a result
of the client's chosen benefit design; E indicates the estimated
value assumed
Grafico Azioni Progyny (NASDAQ:PGNY)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Progyny (NASDAQ:PGNY)
Storico
Da Nov 2023 a Nov 2024
