Executive Summary

Q1 delivered record revenue of $324.0M (+16.5% YoY) and Adjusted EPS of $0.48, with gross margin expanding 100 bps to 23.4%; GAAP diluted EPS remained $0.17 as higher tax expense offset operating gains . Versus S&P Global consensus, revenue beat by ~$16.2M and Adjusted EPS beat by ~$0.03 (Actual $0.48 vs $0.446 estimate)*. Values retrieved from S&P Global.
Management raised FY25 revenue and Adjusted EPS guidance (to $1.185–$1.235B and $1.54–$1.64, respectively) while acknowledging ongoing macro and utilization variability and the wind-down of a large client’s transition-of-care arrangement in 2H25 .
Engagement stabilized: ART cycles hit a quarterly high (16,160; +9% YoY); cycles-per-unique was 0.51, consistent with 2022–2023 seasonal starts; pharmacy grew slower (+9%) due to mix (fewer treatments requiring pharmacy) .
Catalysts: raised FY outlook, improving gross margin trajectory, highest-ever ART cycle volume, and selling-season activity “comparable” in dollars to last year; medium-term growth supported by new modules (maternity/menopause) and channel partners (e.g., Cigna; later, Amazon Health Benefits Connector collaboration announced June 2025) .

What Went Well and What Went Wrong

What Went Well
- Record top line with broad-based demand: “double-digit growth in both revenue and adjusted EBITDA…gross margin expansion…and significant quarterly cash flow” (CEO) . Q1 revenue $324.0M (+16.5% YoY), Adjusted EBITDA $57.8M (+15% YoY) .
- Engagement normalization: highest quarterly ART cycles (16,160; +9% YoY) and cycles-per-unique 0.51, consistent with 2022–2023 starts, indicating stabilization in treatment pacing (CFO) .
- FY25 guidance raised on strong start; pipeline “comparable” in dollars and number of opportunities vs. last year; early commitments comparable; channel partnerships augment distribution (CEO/President) .
What Went Wrong
- GAAP net income down YoY to $15.1M (from $16.9M) due to higher tax expense tied to discrete equity comp items, despite stronger operating profit .
- Adjusted EBITDA margin dipped to 17.8% (from 18.1%) as investments in platform/product expansion and acquisition integration ramped; incremental Adj. EBITDA margin on incremental revenue at 16.3% given 2025 investment load (CFO) .
- Mix headwind in pharmacy: fertility benefit services +22% vs. pharmacy +9% as a lower proportion of treatments required a pharmacy component (CFO) .

Financial Results

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$278.1	$286.6	$298.4	$324.0
Gross Profit ($M)	$62.4	$59.2	$63.4	$75.8
Gross Margin (%)	22.4%	20.7%	21.3%	23.4%
Net Income ($M)	$16.9	$10.4	$10.5	$15.1
Diluted EPS (GAAP)	$0.17	$0.11	$0.12	$0.17
Adjusted EPS ($)	$0.39	$0.40	$0.42	$0.48
Adjusted EBITDA ($M)	$50.3	$46.5	$47.5	$57.8
Adjusted EBITDA Margin (%)	18.1%	16.2%	15.9%	17.8%

Segment revenue

Segment Revenue ($M)	Q1 2024	Q4 2024	Q1 2025
Fertility Benefit Services	$169.8	$187.5	$206.4
Pharmacy Benefit Services	$108.3	$111.0	$117.6

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Clients (period-end)	468	473	532
Average Members	6,444,000	6,471,000	6,695,000
Utilization – All Members (%)	0.54%	0.55%	0.54%
Utilization – Female Only (%)	0.47%	0.48%	0.46%
ART Cycles	14,911	15,839	16,160
ART Cycles per Unique Female Utilizer	0.52	0.54	0.51

Notes: Q1’25 utilization excludes activity from the large client’s transition-of-care arrangement; ART cycles include transition-of-care activity .

Guidance Changes

Metric	Period	Previous Guidance (2/27/25)	Current Guidance (5/8/25)	Change
Revenue	FY 2025	$1.175B–$1.225B	$1.185B–$1.235B	Raised
Net Income (GAAP)	FY 2025	$45.0M–$53.9M	$42.4M–$51.8M	Lowered
Adjusted EBITDA	FY 2025	$188M–$201M	$190M–$203M	Raised
Adjusted EPS	FY 2025	$1.52–$1.62	$1.54–$1.64	Raised
Revenue	Q2 2025	N/A	$310M–$325M (incl. ~$12.7–$14.7M transition-of-care)	New
Net Income (GAAP)	Q2 2025	N/A	$11.5M–$14.5M	New
Adjusted EBITDA	Q2 2025	N/A	$49M–$53M	New
Adjusted EPS	Q2 2025	N/A	$0.40–$0.43	New

Management noted guidance embeds: investments in member experience and integration (ramp from Q2 onward), wind-down of transition-of-care in 2H25, and a range of engagement assumptions given 2024 variability .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Engagement/utilization dynamics	Q3’24: Lower cycles-per-unique pressured revenue/margins . Q4’24: Engagement trending toward historical levels .	ART cycles hit record (16,160); cycles-per-unique 0.51, consistent with 2022–2023 starts; engagement “consistent” into Q2 start .	Stabilizing/improving
Gross margin trajectory	Q3’24: GM 20.7% (down 160 bps YoY) . Q4’24: GM 21.3% .	GM 23.4% (+100 bps YoY); full-year expansion expected, tempered by investment ramp .	Expanding, moderated by investments
Selling season/pipeline	Q3’24: >80 new clients; 1.1M new lives; preferred partner wins (national/regional plan) . Q4’24: Expect >530 clients, ~6.7M lives in 2025 .	Pipeline “comparable” in dollars/opportunities; early commitments comparable; no RFP pauses; average lives smaller early in season (timing/macro) .	Healthy, timing/mix watch
Product expansion (maternity/menopause)	Q3’24: 1.5M lives adopting maternity/menopause in 2025 .	Higher engagement with menopause (larger addressable audience); new dual services and parent/child well-being launched .	Broader portfolio; early traction
Macro/tariffs	Q3’24: Macro variability cited in 2024 .	Tariffs: minimal current impact; flexibility to mitigate potential pharma-input tariffs with partners/clients .	Watchlist, not acute
Regulatory (IVF access)	—	Executive Order readout on IVF access/affordability expected (May 19); spirit seen as positive; policy recommendations vs. legislation (CEO) .	Potential supportive backdrop

Management Commentary

“We’re pleased to report we’ve had a good start to the year with double-digit growth…gross margin expansion and…significant quarterly cash flow.” (CEO)
“As the second quarter begins, we’re seeing that member engagement remains consistent with first quarter levels…Following the strong start, we’re pleased to be able to raise our full year guidance.” (CEO)
“ART cycles this quarter were 16,160, which is our highest quarterly total ever…cycles per unique…0.51…consistent with how 2022 and 2023 began.” (CFO)
“For the full year, we expect gross margin expansion over 2024, although not quite at the same level as we saw in Q1 due to additional hiring and other investments.” (CFO)
“Our sales goal is the same as every year…at least 1 million new lives each year.” (President)

Q&A Highlights

Seasonality vs. guide: Management held cycles-per-unique assumptions in Q2 guide to reflect uncertainty rather than a change in observed seasonality .
Gross margin outlook: Q1 expansion benefited from lapping prior mix headwind; full-year expansion expected but moderated by investment ramp (some in cost of services) .
Pipeline/RFPs: Dollars/opportunities comparable to last year; no evidence of RFP pauses; average lives smaller early in season (timing/macro) .
Incremental margin: 16.3% on incremental revenue in Q1; 2025 incremental P&L investments (~~$15M) and incremental capex (~~$15M vs 2024) temporarily weigh on near-term incrementals (CEO/CFO) .
Tariffs: Existing tariffs not impacting costs; if pharma-input tariffs emerge, company has levers to mitigate with partners/clients (pricing flexibility not only lever) .

Estimates Context

Q1 2025 vs consensus: Revenue $324.0M vs $307.8M estimate (beat); Adjusted/Primary EPS $0.48 vs $0.446 estimate (beat)*. Values retrieved from S&P Global.
Q2 2025 guide vs consensus: Guide $310–$325M revenue vs $320.1M estimate*; Adjusted EPS guide $0.40–$0.43 vs $0.428 estimate* — implying in-line revenue at mid and EPS roughly in-line/slightly below mid-point sensitivity*. Values retrieved from S&P Global.
FY 2025 guide vs consensus: Revenue guide $1.185–$1.235B vs $1.276B consensus* — guidance below Street implying potential downward revenue revisions; company Adjusted EPS guide $1.54–$1.64 vs Primary EPS consensus $1.807* (Street above management’s framework, watch for reconciliation of definition/mix). Values retrieved from S&P Global.

Item	Period	Company Actual/Guide	Street Consensus*
Revenue ($M)	Q1 2025	$324.0	$307.8*
Primary/Adjusted EPS ($)	Q1 2025	$0.48	$0.446*
Revenue ($M)	Q2 2025	$310–$325 (guide)	$320.1*
Adjusted EPS ($)	Q2 2025	$0.40–$0.43 (guide)	$0.428*
Revenue ($B)	FY 2025	$1.185–$1.235 (guide)	$1.277*
Primary/Adj. EPS ($)	FY 2025	$1.54–$1.64 (guide)	$1.807*

*Values retrieved from S&P Global.

Key Takeaways for Investors

Q1 was cleanly better than expected on revenue and Adjusted EPS with gross margin expansion; investment-driven margin dilution appears transitory and embedded in the FY guide .
Engagement metrics are normalizing: record ART cycles and 0.51 cycles-per-unique support revenue visibility; pharmacy growth will vary with treatment mix .
FY25 guide raised on revenue/Adj. EPS, but GAAP net income range trimmed given tax and investment impacts; watch for 2H25 transition-of-care revenue roll-off .
Selling season quality remains intact (pipeline/commitments comparable YoY; no RFP pauses), though average lives are smaller early — monitor mix as pipeline builds through Q3 .
Street likely needs to recalibrate FY25 revenue (consensus above guide); near-term prints should focus on utilization and cycles-per-unique trajectory vs. embedded ranges*. Values retrieved from S&P Global.
Medium-term growth supported by broader women’s health portfolio (maternity/menopause, parent/child well-being) and channel leverage (national/regional plans; subsequent Amazon collaboration) .
Cash generation remains strong ($49.8M CFO in Q1), balance sheet has no debt; supports ongoing investment and strategic flexibility .

Additional Context and Disclosures

Transition-of-care revenue from a large former client contributed ~$31.3M in Q1; Q2 guide includes $12.7–$14.7M, with no contribution expected in 2H25 .
Non-GAAP adjustments: Q1 Adjusted EPS adds back $32.5M stock-based comp and removes $4.5M tax effect; Adjusted EBITDA excludes D&A, SBC, net interest/other, and taxes .
Liquidity: Working capital ~$330.6M; cash and marketable securities ~$256.1M; no debt as of March 31, 2025 .

Progyny, Inc. (PGNY)·Q1 2025 Earnings Summary