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- and twelve-month periods ended December 31, 2023 (“the
fourth quarter of 2023” and "the full year", respectively) as
compared to the three- and twelve-month periods December 31,
2022 (“the fourth quarter of 2022” and “the prior year period”,
respectively).
“2023 was another exceptional year for Progyny.
We achieved record levels of revenue, profitability and operating
cash flow, driven by the volume of new clients and covered lives,
as well as the continued growth in the demand for fertility
services, and our selling season yielded the largest number of new
lives in our history, along with the formation of key channel
partnerships that are expected to provide further energy and
momentum with our go-to-market activities,” said Pete Anevski,
Chief Executive Officer of Progyny.
“As the leader in women's health solutions,
Progyny continues to raise the bar for what employers should expect
from their benefits providers,” continued Anevski. “By leveraging
our strengths in family building with patient education and
support, evidence-based outcomes, and network management, we're
exceptionally well-positioned to expand our solution into areas
that further support life's most important milestones. Accordingly,
we're pleased to enter 2024 with a more comprehensive suite of
services, including preconception, pregnancy and postpartum, and
menopause, that will be available to both new and existing clients
as part of the upcoming sales season. Our active pipeline,
consisting principally of the opportunities carried over from last
year's selling season, is the highest it has ever been at this time
of year, and we're very well-positioned to continue our
success.”
“In the fourth quarter, revenue grew 26% over
the prior year period, gross margin expanded by 30 basis points,
and net income nearly quadrupled. For 2023, we exceeded $1 billion
in annual revenue for the first time, and cash flow from operations
more than doubled to a record $188.8 million,” said Mark
Livingston, Progyny’s Chief Financial Officer. “Adjusted EBITDA
margin on incremental revenue continued to exceed 20% in 2023,
highlighting the high rate of margin capture that we continue to
realize on new revenue, even as we continue to invest to expand
both our solution and our go-to-market resources.”
Fourth Quarter and Full Year
2023 Highlights:
(unaudited; in thousands, except
per share amounts) |
4Q2023 |
|
4Q2022 |
|
FY2023 |
|
FY2022 |
Revenue |
$ |
269,940 |
|
|
$ |
214,321 |
|
|
$ |
1,088,598 |
|
|
$ |
786,913 |
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
56,894 |
|
|
$ |
44,494 |
|
|
$ |
238,799 |
|
|
$ |
167,325 |
|
Gross Margin |
|
21.1 |
% |
|
|
20.8 |
% |
|
|
21.9 |
% |
|
|
21.3 |
% |
Net Income |
$ |
13,470 |
|
|
$ |
3,408 |
|
|
$ |
62,037 |
|
|
$ |
30,358 |
|
|
|
|
|
|
|
|
|
Net Income per Diluted
Share1 |
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
0.62 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Diluted
Share2 |
$ |
0.32 |
|
|
$ |
0.22 |
|
|
$ |
1.40 |
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA2 |
$ |
43,233 |
|
|
$ |
33,049 |
|
|
$ |
187,076 |
|
|
$ |
125,690 |
|
Adjusted EBITDA Margin2 |
|
16.0 |
% |
|
|
15.4 |
% |
|
|
17.2 |
% |
|
|
16.0 |
% |
- 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 program.
- 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 associated impact of taxes. We
calculate Adjusted EBITDA margin as Adjusted EBITDA divided by
revenue.
Financial Highlights
4th QuarterRevenue was $269.9 million, a 26%
increase as compared to the $214.3 million reported in the fourth
quarter of 2022, primarily as a result of the increase in the
number of clients and covered lives.
- Fertility benefit services revenue
was $171.3 million, a 20% increase from the $143.1 million reported
in the fourth quarter of 2022.
- Pharmacy benefit services revenue
was $98.6 million, a 39% increase as compared to the $71.2 million
reported in the fourth quarter of 2022.
Gross profit was $56.9 million, an increase of
28% from the $44.5 million reported in the fourth quarter of 2022,
primarily due to the higher revenue. Gross margin was 21.1%, an
increase of 30 basis points from the prior year period.
Net income was $13.5 million, or $0.13 income
per diluted share, as compared to $3.4 million, or $0.03 income per
diluted share, reported in the fourth quarter of 2022. The higher
net income was due primarily to the higher gross profit, operating
efficiencies realized on our higher revenues and higher investment
income, which more than offset a higher provision for income
taxes.
Adjusted EBITDA was $43.2 million, an increase
of 31%, from the $33.0 million reported in the fourth quarter of
2022, reflecting the higher gross profit and operating efficiencies
realized on our higher revenues. Adjusted EBITDA margin was 16.0%,
an increase of 60 basis points from the 15.4% Adjusted EBITDA
margin in the fourth quarter of 2022.
Full YearRevenue was $1,088.6 million, a 38%
increase as compared to the $786.9 million reported in the prior
year period, primarily as a result of the increase in our number of
clients and covered lives.
- Fertility
benefit services revenue was $676.3 million, a 33% increase from
the $510.1 million reported in the prior year period.
- Pharmacy
benefit services revenue was $412.3 million, a 49% increase as
compared to the $276.8 million reported in the prior year
period.
Gross profit was $238.8 million, an increase of
43% from the $167.3 million reported in the prior year period,
primarily due to the higher revenue. Gross margin was 21.9%, an
increase of 60 basis points from the prior year period, primarily
due to ongoing efficiencies realized in the delivery of our care
management services, partially offset by the impact of planned cost
containment efforts that were shared with our clients.
Net income was $62.0 million, or $0.62 income
per diluted share, an increase of $31.7 million as compared to the
net income of $30.4 million, or $0.30 income per diluted share,
reported in the prior year period. The higher net income was due
primarily to the higher gross profit, operating efficiencies
realized on our higher revenues and higher investment income, which
more than offset higher non-cash stock-based compensation expense
and a higher provision for taxes.
Adjusted EBITDA was $187.1 million, an increase
of 49% from the $125.7 million reported in the prior year period.
Adjusted EBITDA margin was 17.2%, an increase of 120 basis points
from the 16.0% margin in the prior year period. The increases in
both Adjusted EBITDA and Adjusted EBITDA margin reflect the
operating efficiencies realized on our higher revenues. Adjusted
EBITDA margin on incremental revenue in 2023 was 20.3%.
Refer to Annex A for a reconciliation of
Adjusted EBITDA to net income, as well as the calculation of
Adjusted EBITDA margin on incremental revenue in 2023.
Cash FlowNet cash provided by
operating activities in 2023 was $188.8 million, compared to net
cash provided by operating activities of $80.4 million in 2022. The
improvement in the year was due to the higher profitability, the
positive impact from amended agreements with our pharmacy program
partners, which included more favorable receipt terms and resulted
in one additional receipt in 2023, as well as the impact of timing
on certain working capital items. Net cash generated by operating
activities for the fourth quarter of 2023 was $37.7 million,
compared to $51.5 million in the prior year period, primarily due
to the impact of timing on certain working capital items.
Balance Sheet and Financial
PositionAs of December 31, 2023, the Company had
total working capital of approximately $454.5 million and no debt.
This included cash and cash equivalents and marketable securities
of $371.1 million, an increase of $35.5 million from the balances
as of September 30, 2023.
Key Metrics
The Company had 392 clients as of
December 31, 2023, as compared to 288 clients as of
December 31, 2022.
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
ART Cycles* |
|
15,066 |
|
|
|
12,196 |
|
|
|
58,013 |
|
|
|
42,598 |
|
Utilization – All Members** |
|
0.54 |
% |
|
|
0.51 |
% |
|
|
1.33 |
% |
|
|
1.23 |
% |
Utilization – Female Only** |
|
0.48 |
% |
|
|
0.46 |
% |
|
|
1.09 |
% |
|
|
1.03 |
% |
Average Members |
|
5,442,000 |
|
|
|
4,559,000 |
|
|
|
5,383,000 |
|
|
|
4,349,000 |
|
* 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 OutlookSubstantially
all of the clients added in the most recent selling season have
already launched their benefit, with a handful expected to do so
over the coming months. Once all new clients are live in 2024, the
Company anticipates having more than 460 clients, representing an
estimated 6.7 million covered lives.
“We believe the macro trends that have been
fueling our growth remain intact, as reflected in our strong
performance in 2023. Accordingly, we're pleased to announce our
guidance for the first quarter and full year 2024, which reflects
both significant ongoing topline growth, as well as the continued
expansion of our margins,” continued Anevski. “The first quarter
range reflects a short-term shift in treatment mix as compared to
customary levels, resulting in an approximately $15 million
headwind to revenue. We've seen treatment mix return to more
customary levels at this time, which is reflected in the full year
guidance ranges.”
The Company is providing the following financial
guidance for the full year period ending December 31, 2024 and the
three-month period ending March 31, 2024:
- Full Year 2024 Outlook:
- Revenue is projected to be $1,285
million to $1,315 million, reflecting growth of 18% to 21%
- Net income is projected to be $68.1
million to $73.6 million, or $0.66 to $0.71 per diluted share, on
the basis of approximately 103 million assumed weighted-average
fully diluted-shares outstanding
- Adjusted EBITDA1 is projected to be
$224.0 million to $232.0 million
- Adjusted
earnings per diluted share1 is projected to be $1.54 to $1.59
- First Quarter of 2024 Outlook:
- Revenue is projected to be $285.0
million to $292.0 million, reflecting growth of 10% to 13%
- Net income is projected to be $12.4
million to $13.7 million, or $0.12 to $0.13 per diluted share, on
the basis of approximately 102 million assumed weighted-average
fully diluted-shares outstanding
- Adjusted EBITDA1 is projected to be
$49.0 million to $51.0 million
- Adjusted
earnings per diluted share1 is projected to be $0.33 to $0.35
- 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, February 27,
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 March 6, 2024 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 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 by CNBC Disruptor 50,
Modern Healthcare’s Best Places to Work in Healthcare, Forbes' Best
Employers, Financial Times, 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 first 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
positioning to successfully manage the impact of COVID-19,
including variants, and the associated economic uncertainty on our
business; the timing of client decisions; our expected utilization
rates and mix; 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; 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 Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 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) expense, net and
interest (income) expense, 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) expense, net; interest income,
net; and (benefit) 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 2023 divided by incremental revenue
in 2023. 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) |
|
|
|
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
97,296 |
|
|
$ |
120,078 |
|
Marketable securities |
|
273,791 |
|
|
|
69,222 |
|
Accounts receivable, net of $46,636 and $28,328 of allowances at
December 31, 2023 and 2022, respectively |
|
241,869 |
|
|
|
240,067 |
|
Prepaid expenses and other current assets |
|
27,451 |
|
|
|
4,489 |
|
Total current assets |
|
640,407 |
|
|
|
433,856 |
|
Property and equipment,
net |
|
10,213 |
|
|
|
8,371 |
|
Operating lease right-of-use
assets |
|
17,605 |
|
|
|
6,903 |
|
Goodwill |
|
11,880 |
|
|
|
11,880 |
|
Intangible assets, net |
|
— |
|
|
|
99 |
|
Deferred tax assets |
|
73,120 |
|
|
|
77,889 |
|
Other noncurrent assets |
|
3,395 |
|
|
|
3,988 |
|
Total
assets |
$ |
756,620 |
|
|
$ |
542,986 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
125,426 |
|
|
$ |
109,287 |
|
Accrued expenses and other current liabilities |
|
60,524 |
|
|
|
50,249 |
|
Total current liabilities |
|
185,950 |
|
|
|
159,536 |
|
Operating lease noncurrent
liabilities |
|
17,241 |
|
|
|
6,482 |
|
Total
liabilities |
|
203,191 |
|
|
|
166,018 |
|
Commitments and
Contingencies |
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at
December 31, 2023 and 2022, respectively; 96,348,522 and
93,301,156 shares issued and outstanding at December 31, 2023
and 2022, respectively |
|
9 |
|
|
|
9 |
|
Additional paid-in capital |
|
461,639 |
|
|
|
349,533 |
|
Treasury stock, at cost, $0.0001 par value; 615,980 shares
outstanding at December 31, 2023 and 2022, respectively |
|
(1,009 |
) |
|
|
(1,009 |
) |
Accumulated earnings |
|
89,971 |
|
|
|
27,934 |
|
Accumulated other comprehensive income |
|
2,819 |
|
|
|
501 |
|
Total stockholders’
equity |
|
553,429 |
|
|
|
376,968 |
|
Total liabilities and
stockholders’ equity |
$ |
756,620 |
|
|
$ |
542,986 |
|
PROGYNY, INC.Consolidated Statements of
Operations(Unaudited)(in
thousands, except share and per share amounts) |
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
269,940 |
|
|
$ |
214,321 |
|
|
$ |
1,088,598 |
|
|
$ |
786,913 |
|
Cost of services |
|
213,046 |
|
|
|
169,827 |
|
|
|
849,799 |
|
|
|
619,588 |
|
Gross profit |
|
56,894 |
|
|
|
44,494 |
|
|
|
238,799 |
|
|
|
167,325 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
14,911 |
|
|
|
12,980 |
|
|
|
59,488 |
|
|
|
45,657 |
|
General and administrative |
|
28,183 |
|
|
|
28,208 |
|
|
|
117,127 |
|
|
|
98,327 |
|
Total operating expenses |
|
43,094 |
|
|
|
41,188 |
|
|
|
176,615 |
|
|
|
143,984 |
|
Income from operations |
|
13,800 |
|
|
|
3,306 |
|
|
|
62,184 |
|
|
|
23,341 |
|
Other income, net: |
|
|
|
|
|
|
|
Other income, net |
|
1,720 |
|
|
|
275 |
|
|
|
5,203 |
|
|
|
286 |
|
Interest income, net |
|
742 |
|
|
|
560 |
|
|
|
3,304 |
|
|
|
814 |
|
Total other income, net |
|
2,462 |
|
|
|
835 |
|
|
|
8,507 |
|
|
|
1,100 |
|
Income before income
taxes |
|
16,262 |
|
|
|
4,141 |
|
|
|
70,691 |
|
|
|
24,441 |
|
Provision (benefit) for income taxes |
|
2,792 |
|
|
|
733 |
|
|
|
8,654 |
|
|
|
(5,917 |
) |
Net income |
$ |
13,470 |
|
|
$ |
3,408 |
|
|
$ |
62,037 |
|
|
$ |
30,358 |
|
Net income per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
|
$ |
0.04 |
|
|
$ |
0.65 |
|
|
$ |
0.33 |
|
Diluted |
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
0.62 |
|
|
$ |
0.30 |
|
Weighted-average shares used
in computing net income per share: |
|
|
|
|
|
|
|
Basic |
|
95,980,425 |
|
|
|
93,056,297 |
|
|
|
95,021,175 |
|
|
|
92,195,068 |
|
Diluted |
|
100,748,054 |
|
|
|
100,059,687 |
|
|
|
100,672,399 |
|
|
|
99,957,173 |
|
PROGYNY, INC.Consolidated Statements of
Cash Flows(Unaudited)(in
thousands) |
|
|
Year EndedDecember 31, |
|
|
2023 |
|
|
|
2022 |
|
OPERATING
ACTIVITIES |
|
|
|
|
|
Net income |
$ |
62,037 |
|
|
$ |
30,358 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Deferred tax expense (benefit) |
|
3,745 |
|
|
|
(6,615 |
) |
Non-cash interest income |
|
(34 |
) |
|
|
— |
|
Depreciation and amortization |
|
2,281 |
|
|
|
1,601 |
|
Stock-based compensation expense |
|
122,611 |
|
|
|
100,748 |
|
Bad debt expense |
|
19,934 |
|
|
|
13,794 |
|
Realized gain on sale of marketable securities |
|
(4,328 |
) |
|
|
— |
|
Foreign currency exchange rate loss |
|
(8 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(21,738 |
) |
|
|
(119,304 |
) |
Prepaid expenses and other current assets |
|
(22,930 |
) |
|
|
57 |
|
Accounts payable |
|
16,235 |
|
|
|
47,689 |
|
Accrued expenses and other current liabilities |
|
10,361 |
|
|
|
13,147 |
|
Other noncurrent assets and liabilities |
|
648 |
|
|
|
(1,080 |
) |
Net cash provided by operating activities |
|
188,814 |
|
|
|
80,395 |
|
|
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
|
Purchase of property and
equipment, net |
|
(3,644 |
) |
|
|
(3,241 |
) |
Purchase of marketable
securities |
|
(429,694 |
) |
|
|
(163,334 |
) |
Sale of marketable
securities |
|
232,813 |
|
|
|
122,709 |
|
Net cash used in investing activities |
|
(200,525 |
) |
|
|
(43,866 |
) |
|
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
|
Proceeds from exercise of
stock options |
|
4,850 |
|
|
|
3,073 |
|
Payment of employee taxes
related to equity awards |
|
(17,200 |
) |
|
|
(12,089 |
) |
Proceeds from contributions to
employee stock purchase plan |
|
1,278 |
|
|
|
1,152 |
|
Net cash used in financing activities |
|
(11,072 |
) |
|
|
(7,864 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
1 |
|
|
|
— |
|
Net (decrease) increase in
cash and cash equivalents |
|
(22,782 |
) |
|
|
28,665 |
|
Cash and cash equivalents,
beginning of year |
|
120,078 |
|
|
|
91,413 |
|
Cash and cash equivalents, end
of year |
$ |
97,296 |
|
|
$ |
120,078 |
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
Cash paid for income taxes,
net of refunds received |
$ |
6,181 |
|
|
$ |
133 |
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES |
|
|
|
|
|
Additions of property and
equipment, net included in accounts payable and accrued
expenses |
$ |
421 |
|
|
$ |
636 |
|
|
|
|
|
|
|
ANNEX A
PROGYNY,
INC.Reconciliation of GAAP to Non-GAAP Financial
Measures(unaudited)(in
thousands)
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 |
|
Twelve Months Ended |
|
December 31, 2023 |
|
December 31, 2023 |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
$ |
213,046 |
|
|
$ |
(8,523 |
) |
|
$ |
204,523 |
|
|
$ |
849,799 |
|
|
$ |
(34,490 |
) |
|
$ |
815,309 |
|
Gross profit |
$ |
56,894 |
|
|
$ |
8,523 |
|
|
$ |
65,417 |
|
|
$ |
238,799 |
|
|
$ |
34,490 |
|
|
$ |
273,289 |
|
Sales and marketing |
$ |
14,911 |
|
|
$ |
(6,626 |
) |
|
$ |
8,285 |
|
|
$ |
59,488 |
|
|
$ |
(27,015 |
) |
|
$ |
32,473 |
|
General and
administrative |
$ |
28,183 |
|
|
$ |
(13,650 |
) |
|
$ |
14,533 |
|
|
$ |
117,127 |
|
|
$ |
(61,106 |
) |
|
$ |
56,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
Gross margin |
|
21.1 |
% |
|
|
3.2 |
% |
|
|
24.2 |
% |
|
|
21.9 |
% |
|
|
3.2 |
% |
|
|
25.1 |
% |
Sales and marketing |
|
5.5 |
% |
|
|
(2.5 |
)% |
|
|
3.1 |
% |
|
|
5.5 |
% |
|
|
(2.5 |
)% |
|
|
3.0 |
% |
General and
administrative |
|
10.4 |
% |
|
|
(5.1 |
)% |
|
|
5.4 |
% |
|
|
10.8 |
% |
|
|
(5.6 |
)% |
|
|
5.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, 2022 |
|
December 31, 2022 |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
GAAP |
|
Stock-BasedCompensationExpense |
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
$ |
169,827 |
|
|
$ |
(7,315 |
) |
|
$ |
162,512 |
|
|
$ |
619,588 |
|
|
$ |
(25,918 |
) |
|
$ |
593,670 |
|
Gross profit |
$ |
44,494 |
|
|
$ |
7,315 |
|
|
$ |
51,809 |
|
|
$ |
167,325 |
|
|
$ |
25,918 |
|
|
$ |
193,243 |
|
Sales and marketing |
$ |
12,980 |
|
|
$ |
(6,109 |
) |
|
$ |
6,871 |
|
|
$ |
45,657 |
|
|
$ |
(21,135 |
) |
|
$ |
24,522 |
|
General and
administrative |
$ |
28,208 |
|
|
$ |
(15,873 |
) |
|
$ |
12,335 |
|
|
$ |
98,327 |
|
|
$ |
(53,695 |
) |
|
$ |
44,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
Gross margin |
|
20.8 |
% |
|
|
3.4 |
% |
|
|
24.2 |
% |
|
|
21.3 |
% |
|
|
3.3 |
% |
|
|
24.6 |
% |
Sales and marketing |
|
6.1 |
% |
|
|
(2.9 |
)% |
|
|
3.2 |
% |
|
|
5.8 |
% |
|
|
(2.7 |
)% |
|
|
3.1 |
% |
General and
administrative |
|
13.2 |
% |
|
|
(7.4 |
)% |
|
|
5.8 |
% |
|
|
12.5 |
% |
|
|
(6.8 |
)% |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Year Ended |
|
March 31,2023 |
|
June 30,2023 |
|
September 30,2023 |
|
December 31,2023 |
|
December 31,2023 |
Net Income |
$ |
17,678 |
|
|
$ |
14,991 |
|
|
$ |
15,898 |
|
|
$ |
13,470 |
|
|
$ |
62,037 |
|
Add: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
30,808 |
|
|
|
31,753 |
|
|
|
31,251 |
|
|
|
28,799 |
|
|
|
122,611 |
|
Income tax effect of non-GAAP adjustment |
|
(13,942 |
) |
|
|
(10,870 |
) |
|
|
(8,902 |
) |
|
|
(10,025 |
) |
|
|
(43,739 |
) |
Adjusted Net income |
$ |
34,544 |
|
|
$ |
35,874 |
|
|
$ |
38,247 |
|
|
$ |
32,244 |
|
|
$ |
140,909 |
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares |
|
100,166,008 |
|
|
|
100,615,919 |
|
|
|
100,879,576 |
|
|
|
100,748,054 |
|
|
|
100,672,399 |
|
Adjusted Earnings Per Diluted
Share |
$ |
0.34 |
|
|
$ |
0.36 |
|
|
$ |
0.38 |
|
|
$ |
0.32 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
March 31,2022 |
|
June 30,2022 |
|
September 30,2022 |
|
December 31,2022 |
|
December 31,2022 |
Net Income |
$ |
4,971 |
|
|
$ |
8,768 |
|
|
$ |
13,211 |
|
|
$ |
3,408 |
|
|
$ |
30,358 |
|
Add: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
24,500 |
|
|
|
23,654 |
|
|
|
23,297 |
|
|
|
29,297 |
|
|
|
100,748 |
|
Income tax effect of non-GAAP adjustment |
|
(11,743 |
) |
|
|
(8,661 |
) |
|
|
(11,005 |
) |
|
|
(10,682 |
) |
|
|
(42,091 |
) |
Adjusted Net income |
$ |
17,728 |
|
|
$ |
23,761 |
|
|
$ |
25,503 |
|
|
$ |
22,023 |
|
|
$ |
89,015 |
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares |
|
99,935,735 |
|
|
|
99,672,769 |
|
|
|
99,819,801 |
|
|
|
100,059,687 |
|
|
|
99,957,173 |
|
Adjusted Earnings Per Diluted
Share |
$ |
0.18 |
|
|
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.22 |
|
|
$ |
0.89 |
|
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 |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
13,470 |
|
|
$ |
3,408 |
|
|
$ |
62,037 |
|
|
$ |
30,358 |
|
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
634 |
|
|
|
446 |
|
|
|
2,281 |
|
|
|
1,601 |
|
Stock‑based compensation expense |
|
28,799 |
|
|
|
29,297 |
|
|
|
122,611 |
|
|
|
100,748 |
|
Other income, net |
|
(1,720 |
) |
|
|
(275 |
) |
|
|
(5,203 |
) |
|
|
(286 |
) |
Interest income, net |
|
(742 |
) |
|
|
(560 |
) |
|
|
(3,304 |
) |
|
|
(814 |
) |
Provision (benefit) for income taxes |
|
2,792 |
|
|
|
(733 |
) |
|
|
8,654 |
|
|
|
(5,917 |
) |
Adjusted EBITDA |
$ |
43,233 |
|
|
$ |
33,049 |
|
|
$ |
187,076 |
|
|
$ |
125,690 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
269,940 |
|
|
$ |
214,321 |
|
|
$ |
1,088,598 |
|
|
$ |
786,913 |
|
|
|
|
|
|
|
|
|
Incremental Revenue vs.
2022 |
|
|
|
|
|
301,685 |
|
|
|
|
|
|
|
|
|
|
|
Incremental Adjusted EBITDA
vs. 2022 |
|
|
|
|
|
61,386 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin on
Incremental revenue |
|
|
|
|
|
20.3 |
% |
|
|
Reconciliation of Non-GAAP Financial Guidance for the
Three Months Ending March 31, 2024 and Year Ending December 31,
2024
|
Three Months EndingMarch 31,
2024 |
|
Year EndingDecember 31, 2024 |
(in thousands) |
Low |
|
High |
|
Low |
|
High |
|
|
|
|
|
|
|
|
Revenue |
$ |
285,000 |
|
|
$ |
292,000 |
|
|
$ |
1,285,000 |
|
|
$ |
1,315,000 |
|
Net
Income |
$ |
12,400 |
|
|
$ |
13,700 |
|
|
$ |
68,100 |
|
|
$ |
73,600 |
|
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
800 |
|
|
|
800 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Stock-based compensation expense |
|
32,000 |
|
|
|
32,000 |
|
|
|
133,000 |
|
|
|
133,000 |
|
Other income, net |
|
(2,000 |
) |
|
|
(2,000 |
) |
|
|
(12,000 |
) |
|
|
(12,000 |
) |
Provision for income taxes |
|
5,800 |
|
|
|
6,500 |
|
|
|
31,900 |
|
|
|
34,400 |
|
Adjusted
EBITDA* |
$ |
49,000 |
|
|
$ |
51,000 |
|
|
$ |
224,000 |
|
|
$ |
232,000 |
|
|
Three Months EndingMarch 31,
2024 |
|
Year EndingDecember 31, 2024 |
($ in thousands) |
Low |
|
High |
|
Low |
|
High |
|
|
|
|
|
|
|
|
Net Income |
$ |
12,400 |
|
|
$ |
13,700 |
|
|
$ |
68,100 |
|
|
$ |
73,600 |
|
Add: |
|
|
|
|
|
|
|
Stock-based compensation |
|
32,000 |
|
|
|
32,000 |
|
|
|
133,000 |
|
|
|
133,000 |
|
Income tax effect of non-GAAP adjustment |
|
(10,300 |
) |
|
|
(10,300 |
) |
|
|
(42,400 |
) |
|
|
(42,400 |
) |
Adjusted Net
income* |
$ |
34,100 |
|
|
$ |
35,400 |
|
|
$ |
158,700 |
|
|
$ |
164,200 |
|
|
|
|
|
|
|
|
|
Diluted Shares |
|
102,000,000 |
|
|
|
102,000,000 |
|
|
|
103,000,000 |
|
|
|
103,000,000 |
|
Adjusted Earnings Per
Diluted Share |
$ |
0.33 |
|
|
$ |
0.35 |
|
|
$ |
1.54 |
|
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
* All of the numbers in the tables above reflect
our future outlook as of the date hereof. Net income, Adjusted 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.
Progyny (NASDAQ:PGNY)
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