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PI

Progyny, Inc. (PGNY)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $298.4M (+10.6% YoY), gross margin improved slightly to 21.3%, and Adjusted EPS rose to $0.42; management said revenue and Adjusted EBITDA were “above the high end” of the guidance ranges for the quarter .
  • Net income declined to $10.5M ($0.12 diluted EPS) due to a higher tax provision tied to equity-compensation-related discrete items, despite higher operating profit .
  • 2025 guidance: revenue $1.175–$1.225B, Adjusted EBITDA $188–$201M, Adjusted EPS $1.52–$1.62; Q1 2025 revenue $300–$318M, Adjusted EBITDA $53–$57M, Adjusted EPS $0.44–$0.47 .
  • Key catalysts: Amazon transition revenue ($37–$40M in H1, ~75% in Q1), 80 new logos and 1.1M new lives, expansion into maternity/postpartum/menopause, and new national health plan partnership with Cigna .

What Went Well and What Went Wrong

What Went Well

  • Revenue and Adjusted EBITDA for Q4 were above the high end of guidance; CEO: “we’re pleased to report that 2024 ended on a positive note” and results were “above the high end of our guidance ranges” .
  • Client and covered lives growth remained strong: 473 clients at year-end vs 392 a year ago; selling season yielded 80 new logos and 1.1M new lives for 2025 .
  • Record ART cycles in Q4 (15,839) and pharmacy revenue growth outpaced medical (+13% vs +9%), aided by timing of drugs ordered ahead of treatment .

What Went Wrong

  • Net income and diluted EPS declined YoY due to a higher tax provision; net income $10.5M vs $13.5M in Q4 2023, diluted EPS $0.12 vs $0.13 .
  • Cycles per unique female utilizer were lower vs 2023 for the full year, weighing on Adjusted EBITDA margin on incremental revenue (14.9% in 2024); management cited timing/consumption variability earlier in the year .
  • Loss of a large client for 2025 (with limited H1 transition-of-care revenue), and margin optics compressed by planned OpEx and CapEx investments into digital integration and acquisitions in 2025 .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$269.94 $286.63 $298.43
Gross Margin %21.1% 20.7% 21.3%
Net Income ($USD Millions)$13.47 $10.42 $10.53
Diluted EPS ($)$0.13 $0.11 $0.12
Adjusted EPS ($)$0.32 $0.40 $0.42
Adjusted EBITDA ($USD Millions)$43.23 $46.48 $47.51
Adjusted EBITDA Margin %16.0% 16.2% 15.9%

Segment revenue breakdown:

Segment RevenueQ4 2023Q3 2024Q4 2024
Fertility Benefit Services ($USD Millions)$171.3 $178.8 $187.5
Pharmacy Benefit Services ($USD Millions)$98.6 $107.9 $111.0

KPIs:

KPIQ4 2023Q3 2024Q4 2024
ART Cycles15,066 14,911 15,839
Utilization – All Members %0.54% 0.54% 0.55%
Utilization – Female Only %0.48% 0.47% 0.48%
Average Members5,442,000 6,444,000 6,471,000

Notes:

  • Non-GAAP definitions and reconciliations disclosed (Adjusted EPS, Adjusted EBITDA) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($)Q4 2024$266.2M–$281.2M “Slightly above” prior ranges (pre-announcement) Raised (qualitative)
Adjusted EBITDA ($)Q4 2024$37.8M–$42.8M “Slightly above” prior ranges (pre-announcement) Raised (qualitative)
Net Income ($)Q4 2024$6.1M–$9.5M; EPS $0.07–$0.10 “Slightly above” prior ranges (pre-announcement) Raised (qualitative)
Revenue ($)FY 2024$1.135B–$1.150B Actual: $1.1672B Beat vs guidance
Revenue ($)Q1 2025$300M–$318M $300M–$318M New
Net Income ($), Diluted EPS ($)Q1 2025$15.0M–$17.8M; $0.17–$0.20 $15.0M–$17.8M; $0.17–$0.20 New
Adjusted EBITDA ($)Q1 2025$53M–$57M $53M–$57M New
Adjusted EPS ($)Q1 2025$0.44–$0.47 $0.44–$0.47 New
Revenue ($)FY 2025$1.175B–$1.225B $1.175B–$1.225B New
Net Income ($), Diluted EPS ($)FY 2025$45.0M–$53.9M; $0.49–$0.59 $45.0M–$53.9M; $0.49–$0.59 New
Adjusted EBITDA ($)FY 2025$188M–$201M $188M–$201M New
Adjusted EPS ($)FY 2025$1.52–$1.62 $1.52–$1.62 New
Other Income, Net ($)FY 2025N/A-$9.7M (guidance reconciliation) New
Provision for Income Taxes ($)FY 2025N/A$20.7M–$24.8M New
Utilization (Female, %)FY 2025N/A1.02%–1.04% (assumptions) New
ART Cycles per Unique Female UtilizerFY 2025N/A0.89–0.91 (assumptions) New

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Member engagement and consumptionUtilization in-line; management saw lower revenue per utilizing member developing for H2 Utilization healthy but members progressed slower; lower cycles per utilizer, revenue/profitability below expectations Pacing improved through Q4; cycles per utilizer up QoQ (0.54 vs 0.52), engagement trending toward historical Improving sequentially
Health plan partnershipsBuilding pipeline; emphasizing employer interest; later confirmed national health plan selection (Cigna announced in Jan) Selected by leading national and a regional health plan as preferred partner Added multiple health plan partners including national partner Cigna; supports go-to-market Strengthening distribution
Product expansion (maternity/postpartum/menopause)Early adoption by existing clients for 2025 1.5M lives adopting these programs in 2025 20% of existing and 40% of new clients adopting; contribution small near term Growing adoption, revenue impact building
Client retention and large client churnStrong retention; no mention of churn Loss of large client disclosed; selling season offset with >1M new lives 99% retention; Amazon transition revenue $37–$40M H1; no pull-forward in Q4 Net lives up despite churn
Margin/OpEx/CapEx outlookRecord Adjusted EBITDA; strong cash conversion Adjusted EBITDA margin compressed; gross margin down 160 bps YoY Planned digital and integration investments add OpEx/CapEx in 2025; margins would expand ex-investments Near-term investment drag; medium-term efficiency
Regulatory/macro——Executive order expanding IVF access viewed positively; gov’t lives discussed at high level Potential supportive backdrop
Pharmacy vs medical timing——Pharmacy growth outperformed in Q4 due to ordering/timing ahead of treatments Normal timing variability
Global capabilities and acquisitions——Integrating global capabilities and BenefitBump to link high-touch care with digital tools Platform expansion underway

Management Commentary

  • CEO on Q4 performance and guidance beat: “We’re pleased to report that 2024 ended on a positive note with revenue and adjusted EBITDA for the quarter, above the high end of our guidance ranges.”
  • CEO on product adoption: “In just our first year of offering those services, we saw an incredible response with 20% of our existing clients and 40% of our newest adopting 1 or more of these programs.”
  • CFO on Amazon transition revenue: “We’re estimating between $37 million to $40 million of revenue in the first half… ~3/4 in the first quarter with the balance in 2Q.”
  • CFO on margins and investments: “If you remove [2025 investments] out… our margins would be expanding in 2025.”
  • CEO on regulatory backdrop: “The executive order… we believe is in the right direction… around both protecting access as well as affordability [for IVF].”

Q&A Highlights

  • Large client transition-of-care detail and impact: $37–$40M revenue in H1 2025 (≈75% Q1); no pull-forward observed in Q4; no trapped costs; EBITDA contribution lower than book average .
  • Ancillary services (maternity/postpartum/menopause) adoption: strong client uptake (20% existing; 40% new), but near-term revenue contribution is small; management will share more once data builds .
  • Guidance framework and utilization assumptions: 2025 female utilization 1.02–1.04%; ART cycles per utilizer 0.89–0.91; ranges incorporate potential continued variability observed in 2024 .
  • Pharmacy vs medical revenue timing: pharmacy outperformance in Q4 driven by medications ordered ahead of treatment; timing mismatch vs medical services .
  • Competitive pricing: management emphasized multi-year value via cost control and outcomes; noted wins of every jumbo RFP despite aggressive pricing by competitors .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q4 2024 EPS and revenue was not retrievable at the time of analysis due to API request limits. If available, we would anchor beat/miss vs S&P Global consensus and include estimate counts and dispersion. Values would be retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential engagement improved in Q4, lifting revenue and Adjusted EBITDA above guidance; early 2025 engagement trends are tracking toward historical levels, though management prudently embeds variability in guidance .
  • Despite the Amazon churn, net covered lives increase for 2025 (>530 clients, ~6.7M lives) and H1 transition-of-care revenue moderates near-term impact; new logos and health plan partnerships underpin pipeline durability .
  • Near-term margin optics reflect deliberate platform and digital investments (OpEx/CapEx) to integrate acquisitions and expand services; on an ex-investment basis, management expects margin expansion .
  • KPIs show stabilization: ART cycles hit a quarterly record, cycles per utilizer ticked up QoQ, and utilization rates remained within multi-year bands, supporting the view that demand is intact .
  • Segment mix is healthy: fertility services +9% YoY and pharmacy +13% YoY in Q4; expect timing-related variability but overall correlation to medical activity over time .
  • Regulatory backdrop (IVF access) and Cigna partnership expand TAM and distribution, potentially enhancing sales velocity and employer adoption in 2025+ .
  • Watch 2025 assumptions (utilization 1.02–1.04%; cycles/utilizer 0.89–0.91) and Q1 ramp dynamics as new clients go live; transition-of-care timing will skew H1 revenue cadence .

*Values would be retrieved from S&P Global.