Progyny, Inc. Announces Third Quarter 2021 Results

November 4, 2021

Record Number of New Clients and New Covered Lives Added for 2022
Reports Third Quarter Revenue of $122.3 Million; Expects Full Year 2021 Revenue Growth Between 47% and 49%
Expects Full Year 2022 Revenue Growth of Approximately 50%
David Schlanger to Become Executive Chairman and Pete Anevski Named CEO Effective in 2022

NEW YORK, Nov. 04, 2021 (GLOBE NEWSWIRE) -- Progyny, Inc. (Nasdaq: PGNY), a leading benefits management company specializing in fertility and family building benefits solutions in the United States, today announced its financial results for the three-month period ended September 30, 2021 (“the third quarter of 2021”) as compared to the three-month period ended September 30, 2020 (“the third quarter of 2020” or “the prior year period”).

“Our selling season for 2022 launches is now largely complete, and although we set a high bar for what we wanted to achieve this year, we fully met those expectations, receiving commitments from more than 85 new clients who represent an estimated 1.2 million new covered lives,” said David Schlanger, Chief Executive Officer of Progyny. “Because of our sustained track record of producing industry-leading outcomes and achieving extraordinarily high member satisfaction rates, we believe Progyny has become both the provider of choice and the established industry leader for fertility benefits solutions for many of the most prominent companies in the world, as evidenced by the record results we achieved in the recently concluded selling season.”

“To put our latest selling season into perspective, we added more new clients in one year – and nearly as many new covered lives – as what we had, in aggregate, when we went public just two years ago,” said Pete Anevski, Progyny’s President and Chief Operating Officer. “We believe this strong result affirms our competitive differentiation as compared to other solutions, while further attesting to our ability to scale our operations and successfully address our market opportunities.”

Financial Highlights
“This quarter, revenue grew by 24%, margins expanded significantly as compared to the prior year period, and we generated a substantial amount of operating cash flow. As previously disclosed, appointment volumes at the start of the third quarter were modestly lower than historical patterns, which we continue to believe reflected unusual – and temporary – behavior among a small subset of our members,” said Mark Livingston, Progyny’s Chief Financial Officer. “While this impacted member utilization and revenue for the quarter, utilization improved over the course of the quarter from its low point, although not at the rate that was needed to meet the higher end of the guidance ranges we gave in August. Importantly, in the fourth quarter, utilization continues to improve to levels that are above where we exited the third quarter.”

3rd Quarter

(unaudited; in thousands, except per share amounts)3Q 20213Q 2020
Gross Profit$28,492$20,836
     Gross Margin23.3%21.1%
Net Income$16,796$4,822
Net Income per Diluted Share1$0.17$0.05
Adjusted EBITDA2$16,479$10,049
Adjusted EBITDA Margin213.5%10.2%
  1. Net income per diluted share reflects weighted-average shares outstanding as adjusted for potential dilutive securities, including options and warrants to purchase common stock, as well as restricted stock units.
  2. Adjusted EBITDA and Adjusted EBITDA margin are financial measures that are not required by, or presented in accordance with, U.S. GAAP. Please see Annex A of this release for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with GAAP for each of the periods presented. We calculate Adjusted EBITDA margin as Adjusted EBITDA divided by revenue.

Revenue was $122.3 million, a 24% increase as compared to the $98.9 million reported in the third quarter of 2020, primarily as a result of the increase in our number of clients and covered lives.

  • Fertility benefit services revenue was $85.3 million, a 17% increase from the $73.1 million reported in the third quarter of 2020.
  • Pharmacy benefit services revenue was $37.0 million, a 43% increase as compared to the $25.8 million reported in the third quarter of 2020.

Gross profit was $28.5 million, an increase of 37% from the $20.8 million reported in the prior year period, primarily due to the higher revenue.  Gross margin was 23.3%, an increase of 220 basis points from the prior year period due to operating efficiencies in the delivery of our care management services as we continue to grow.

Net income was $16.8 million, or $0.17 income per diluted share, an increase of $12.0 million as compared to the net income of $4.8 million, or $0.05 income per diluted share, reported in the third quarter of 2020. The higher net income was due to a $7.7 million tax benefit in the current period as well as operating efficiencies realized on our higher revenues throughout the business in the current period.

Adjusted EBITDA was $16.5 million, a 64% increase from the $10.0 million reported in the third quarter of 2020. Adjusted EBITDA margin was 13.5%, an increase of 330 basis points from the 10.2% Adjusted EBITDA margin in the third quarter of 2020. The increase in both Adjusted EBITDA and Adjusted EBITDA margin reflects the operating efficiencies realized on our higher revenues.

Please refer to Annex A for a reconciliation of Adjusted EBITDA to net income and the calculation of net income and net income per diluted share.

Cash Flow
Net cash provided by operating activities for the third quarter of 2021 was $24.2 million, compared to net cash provided by operating activities of $15.3 million in the prior year period. Cash flow in the current period returned to normalized levels, as expected, based on the terms of our pharmacy arrangements; additionally, each quarter was impacted by timing items.

Balance Sheet and Financial Position
As of September 30, 2021, the company had total working capital of approximately $150.0 million and no debt. This included cash and cash equivalents and marketable securities of $114.3 million, reflecting an increase of $20.3 million from the balances as of June 30, 2021.

Key Metrics
The company had 188 clients as of September 30, 2021, as compared to 135 clients as of September 30, 2020.

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 20212020 20212020
ART Cycles*6,8925,407 20,79013,284
Utilization – All Members**0.51%0.51% 1.07%0.92%
Utilization – Female Only**0.46%0.44% 0.90%0.78%
Average Members2,856,0002,221,000 2,774,0002,156,000

* 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.

Financial Outlook
While the significant majority of the new clients added in the most recent selling season are expected to go live in early 2022, a small number will go live in the second quarter of 2022. Additionally, some have already launched the benefit and are reflected in the client and covered lives reported as of September 30, 2021. The company anticipates having 265 clients representing an estimated 4 million covered lives by the end of the second quarter of 2022.

“Given the momentum in new sales activity, as well as our near 100% client retention rate, we expect that revenue will grow by approximately 50% in 2022, which is comparable to the rate of growth that we expect to achieve in 2021,” said Mr. Anevski. “As a reminder, we will be in a position to provide detailed financial guidance when we report our year end results given that the utilization we see in the initial period following a client’s launch has historically provided insight into what we should expect for that client’s full year utilization.”  

The company is providing the following financial guidance for both the three-month and full year period ending December 31, 2021.

  • Fourth Quarter of 2021 Outlook:
    • Revenue is projected to be $133.9 million to $140.9 million, reflecting growth of 34% to 41%
    • Net income is projected to be $0.8 million to $3.4 million, or $0.01 to $0.03 per diluted share, on the basis of approximately 102 million assumed weighted-average fully diluted-shares outstanding
    • Adjusted EBITDA1 is projected to be $16.8 million to $18.3 million
  • Full Year 2021 Outlook:
    • Revenue is expected to be $507.0 million to $514.0 million, reflecting growth of 47% to 49%
    • Net income is projected to be $51.5 million to $54.1 million, or $0.51 to $0.54 per diluted share, on the basis of approximately 101 million assumed weighted-average fully diluted-shares outstanding
    • Adjusted EBITDA1 is projected to be $69.0 million to $70.5 million
  1. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Please see Annex A of this release for a reconciliation of forward-looking Adjusted EBITDA to forward-looking net income, the most directly comparable financial measure stated in accordance with GAAP for the period presented.

Leadership and Board Announcements
The company is announcing several transitions on its leadership team that will take effect as of January 1, 2022. David Schlanger, who has served as Progyny’s CEO for the past 5 years, will transition to the role of Executive Chairman, and Dr. Beth Seidenberg, who is currently the Chairperson, will transition to the role of Lead Independent Director on the company’s board. Pete Anevski, currently the company’s President and COO, will succeed Mr. Schlanger as Progyny’s CEO and will also join the Board of Directors. Finally, Michael Sturmer, currently Progyny’s Chief Growth and Strategy Officer, will become President.

“Today’s announcement represents the natural progression in roles and responsibilities for Pete, Michael and me, and in many ways, reflects how we have already been collaborating and working together as leaders of Progyny,” said Mr. Schlanger. “As we conclude the most successful selling season in Progyny’s history, I believe this is an opportune time to implement this transition, which will ensure seamless continuity in the day-to-day management of the business.

“In becoming Executive Chairman, I will be able to focus on those areas where I can continue to make the most impact to Progyny’s ongoing growth and expansion, such as strategy and new business development, while also providing me with the time and flexibility to pursue some outside personal interests,” continued Mr. Schlanger. “I look forward to continuing to work closely with Pete, Michael and the rest of the Progyny leadership team.”

“When David and I joined Progyny, we recognized a unique opportunity to disrupt the fertility benefits market while also building a business that would deliver sustainable value for employers, patients and providers through superior clinical outcomes and world-class service and support,” said Mr. Anevski. “David and I have now worked together for nearly 25 years across multiple companies, and as I prepare to step into an expanded role at Progyny, I look forward to continuing our close partnership during the next chapter of Progyny’s story.

“Though we expect to enter 2022 with our largest-ever base of clients and covered lives, I continue to believe we are in the earliest stages of addressing our significant market opportunities. As exciting as these past five years have been, I believe we are exceptionally well-positioned for continued strong growth and success, and I couldn’t be more enthusiastic for what the future holds for Progyny, its partners and its stakeholders.”

Conference Call Information
Progyny will host a conference call at 4:45 P.M. Eastern Time (1:45 P.M. Pacific Time) today 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 November 11, 2021 at 11:59 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

About Progyny
Progyny (Nasdaq: PGNY) is a leading fertility benefits management company in the US. We are redefining fertility and family building benefits, proving that a comprehensive and inclusive fertility solution can simultaneously benefit employers, patients, and physicians.  

Our benefits solution empowers patients with education and guidance from a dedicated Patient Care Advocate (PCA), provides access to a premier network of fertility specialists using the latest science and technologies, reduces healthcare costs for the nation’s leading employers, and drives optimal clinical outcomes. We envision a world where anyone who wants to have a child can do so. 

Headquartered in New York City, Progyny has been recognized for its leadership and growth by CNBC Disruptor 50, Modern Healthcare’s Best Places to Work in Healthcare, Financial Times, INC. 5000, and Crain’s Fast 50 for NYC. For more information, visit

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release includes forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to management. 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, Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our positioning to successfully manage the ongoing impact of COVID-19, including variants, and the associated economic uncertainty on our business; the timing of client decisions; our financial outlook for the fourth quarter and full year 2021, including our expected utilization rates and mix; our ability to retain existing clients and acquire new clients; our plans for, and the timing of, leadership and board changes; and our business strategy, plans, goals and expectations concerning our market position, future operations, and other financial and operating information, including our topline growth and margin expansion. The words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future,” “project,” and the negative of these or similar terms and phrases are intended to identify forward-looking statements.

Forward-looking statements 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, risks related to the ongoing impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays and cancellations of fertility procedures and other impacts to the business; 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 in the future; 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 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 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 revenues; the accuracy of the estimates and assumptions we use to determine the size of target markets; our ability to successfully manage our growth; unfavorable conditions in our industry or the United States economy, such as conditions resulting from outbreaks of contagious diseases, including COVID-19 and variants; 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; 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; 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 any litigation against us; 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. 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, 2020, and subsequent reports that we file with the SEC which are available at and on the SEC’s website at  

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 Measures
In 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 and Adjusted EBITDA margin.

Adjusted EBITDA and Adjusted EBITDA margin are supplemental financial measures that are not required by, or presented in accordance with, GAAP. We believe that Adjusted EBITDA and Adjusted EBITDA margin, 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 and Adjusted EBITDA margin 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 is presented for supplemental informational purposes only, has limitations as an analytical tool 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 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 expenses, including other (income) expense, net and interest (income) expense, net; (5) it does not reflect tax payments that may represent a reduction in cash available to us; and (6) it does not include legal fees associated with a vendor arbitration. In addition, our Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net income from continuing operations and other GAAP results.

We calculate Adjusted EBITDA as net income, adjusted to exclude depreciation and amortization; stock-based compensation expense; other income; interest income, net; provision for income taxes; and legal fees associated with a vendor arbitration. We calculate Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Please see Annex A: “Reconciliation of GAAP to Non-GAAP Financial Measures” elsewhere in this press release.

For Further Information, Please Contact:
James Hart

Selena Yang

Consolidated Balance Sheets
(in thousands, except share and per share amounts)

     September 30, December 31, 
  2021  2020 
Current assets:      
Cash and cash equivalents $92,224  $70,305 
Marketable Securities  22,086   38,994 
Accounts receivable, net of $16,130 and $9,502 of allowance at September 30, 2021 and December 31, 2020, respectively  135,181   75,664 
Prepaid expenses and other current assets  4,933   5,259 
Total current assets  254,424   190,222 
Property and equipment, net  4,702   3,400 
Operating lease right-of-use assets  8,024   8,668 
Goodwill  11,880   11,880 
Intangible assets, net  723   1,213 
Deferred tax assets  55,828   37,971 
Other noncurrent assets  1,101   573 
Total assets $336,682  $253,927 
Current liabilities:        
Accounts payable $55,425  $43,514 
Accrued expenses and other current liabilities  49,059   34,272 
Total current liabilities  104,484   77,786 
Operating lease noncurrent liabilities  7,647   8,318 
Other noncurrent liabilities  438   876 
Total liabilities  112,569   86,980 
Commitments and Contingencies        
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at September 30, 2021 and December 31, 2020; 90,008,810 and 87,054,329 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively  9   9 
Additional paid-in capital  242,929   236,139 
Treasury stock, at cost, $0.0001 par value; 615,980 shares at September 30, 2021 and December 31, 2020  (1,009)  (1,009)
Accumulated deficit  (17,504)  (68,193)
Accumulated other comprehensive income (loss)  (312)  1 
Total stockholders’ equity  224,113   166,947 
Total liabilities and stockholders’ equity $336,682  $253,927 

Consolidated Statements of Operations
(in thousands, except share and per share amounts)

 Three Months Ended Nine Months Ended
 September 30,  September 30, 
 2021     2020  2021     2020 
Revenue$122,284  $98,928  $373,068  $244,557 
Cost of services 93,792    78,092   286,048    195,164 
Gross profit 28,492    20,836   87,020    49,393 
Operating expenses:             
Sales and marketing 4,441    3,355   12,483    10,230 
General and administrative 14,986    12,653   42,009    31,976 
Total operating expenses 19,427    16,008   54,492    42,206 
Income from operations 9,065    4,828   32,528    7,187 
Other income (expense):             
Other income (expense), net (92)  11   (73)  178 
Interest income (expense), net 144    (17)  378    138 
Total other income (expense), net 52    (6)  305    316 
Income before income taxes 9,117    4,822   32,833    7,503 
Benefit (provision) for income taxes 7,679       17,856    (116)
Net income$16,796  $4,822  $50,689  $7,387 
Net income per share:             
Basic$0.19  $0.06  $0.57  $0.09 
Diluted$0.17  $0.05  $0.51  $0.07 
Weighted-average shares used in computing net income per share:             
Basic 89,571,226    86,265,297   88,594,135    85,364,608 
Diluted 100,370,331    98,969,588   100,326,221    98,936,489 

Consolidated Statements of Cash Flows
(in thousands)

  Nine Months Ended
  September 30, 
     2021     2020 
Net income $50,689  $7,387 
Adjustments to reconcile net income to net cash provided by operating activities:         
Deferred tax (benefit) expense  (17,856)   116 
Non-cash interest expense  38   56 
Depreciation and amortization  985    1,442 
Stock-based compensation expense  18,698    8,661 
Bad debt expense  7,221    3,922 
Changes in operating assets and liabilities:      
Accounts receivable  (66,738)   (34,952)
Prepaid expenses and other current assets  414    3,619 
Accounts payable  11,674    23,719 
Accrued expenses and other current liabilities  13,089    15,019 
Other noncurrent assets and liabilities  (992)  677 
Net cash provided by operating activities  17,222    29,666 
Purchase of property and equipment, net  (1,517)   (940)
Purchase of marketable securities  (90,481)  (64,978)
Sale of marketable securities  107,076   14,000 
Net cash provided by (used in) investing activities  15,078    (51,918)
Payment of initial public offering costs     (892)
Proceeds from exercise of stock options  1,753    2,078 
Payment of employee taxes related to equity awards  (13,106)  (6,419)
Proceeds from contributions to employee stock purchase plan  972   1,068 
Net cash (used in) financing activities  (10,381)   (4,165)
Net increase (decrease) in cash and cash equivalents  21,919    (26,417)
Cash and cash equivalents, beginning of period  70,305    80,382 
Cash and cash equivalents, end of period $92,224  $53,965 
Additions of property and equipment, net included in accounts payable and accrued expenses $262  $33 


Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands)

Adjusted EBITDA and Adjusted EBITDA Margin on Incremental Revenue Calculation
The following table provides a reconciliation of Net income to Adjusted EBITDA for each of the periods presented:

  Three Months Ended  Nine Months Ended
  September 30,   September 30, 
     2021     2020      2021     2020 
Net income $16,796  $4,822   $50,689  $7,387 
Depreciation and amortization  267   462    985   1,442 
Stock‑based compensation expense  7,147   3,071    18,698   8,661 
Other (income) expense, net  92   (11)   73   (178)
Interest (income) expense, net  (144)  17    (378)  (138)
(Benefit) provision for income taxes  (7,679)      (17,856)  116 
Legal fees associated with a vendor arbitration(a)     1,688       3,232 
Adjusted EBITDA $16,479  $10,049   $52,211  $20,522 
Revenue $122,284  $98,928        
Incremental revenue vs. 2020  23,356           
Incremental Adjusted EBITDA vs. 2020  6,430           
Incremental Adj. EBITDA margin on incremental revenue  27.5%          

(a) We engaged in other activities and transactions that can impact our net income. In recent periods, these other items included, but were not limited to, legal fees related to an arbitration resulting from our termination of an agreement with a specialty pharmacy vendor and its settlement in the fourth quarter of 2020.

Reconciliation of Non-GAAP Financial Guidance for the Three Months and Year Ending December 31, 2021

  Three Months Ending
December 31, 2021
 Year Ending
December 31, 2021
(in thousands) Low High Low High
Revenue $133,932 $140,932 $507,000  $514,000 
Net Income $811 $3,411 $51,500  $54,100 
Depreciation and amortization          415         315        1,400           1,300 
Stock-based compensation 12,402 11,902 31,100  30,600 
Other (income) expense, net 5 5 (300)  (300) 
Provision (benefit) for income taxes 3,156 2,656 (14,700)  (15,200) 
Adjusted EBITDA* $   16,789 $   18,289 $   69,000  $   70,500 

* 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.