Q1 2022 Progyny Inc Earnings Call
Hey on the line and we'll be back in just a moment.
[music].
Okay.
Good day, ladies and gentlemen, and welcome to the approach any Inc. First quarter 2022 earnings conference call. At this time, all participants have been placed on listen only mode and the floor will be opened for questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host James Hart, Vice President of Investor Relations James the floor is yours.
Thank you Paul and good afternoon, everyone welcome to our first quarter conference call with me today are Pete and FTE CEO of progeny, Michael Schirmer, President and Mark Livingston CFO , we will begin with some prepared remarks before we open the call for your questions before we begin I would like to remind you that today's call contains forward looking statements, including but not limited to.
Statements about our financial outlook for both the second quarter and full year of 2022, including our expected utilization rates and mix the impact of COVID-19, including variance on our business clients member activity and industry operations, our ability to acquire new clients and retain and upsell existing clients our market opportunity size and <unk>.
Dictation of long term growth our plans for the expansion of our business, including expansion into other markets and our services offered our business performance industry outlook strategy future investment plans and objectives and other non historical statements. As further described in our press release that was issued this afternoon. These forward looking statements are subject to certain risks uncertainties assumptions and other important factor.
<unk>, including those related to projects growth market opportunities general economic and business conditions, and the impact of laws and regulations, including laws and regulations restricting reproductive rights. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business financial condition and <unk>.
<unk> of operations, although we believe these expectations are reasonable we undertake no obligation to revise any statement to reflect changes that occur. After this call descriptions of these risks and other important factors that could cause actual results to differ materially from these forward looking statements are discussed in our periodic and current reports filed with the SEC, including in the section entitled risk.
<unk> and our most recent 10-K during the call. We will also refer to non-GAAP financial measures such as adjusted EBITDA adjusted EBITDA margin gross margin, excluding stock based compensation and operating expenses, excluding stock based compensation.
Reconciliations with the most comparable GAAP measures are also available in the press release, which is available at investors progeny Dot Com I would now like to turn the call over to Pete.
Thanks, Jamie and thanks, everyone for joining US today, we're pleased to report that we've had a solid start to the year achieving record quarterly revenue with growth of 41% over the first quarter of 2021 as well as the continued expansion of our adjusted EBITDA margins as compared to the year ago period.
Strong results demonstrate that our member activity has returned to the levels. We would typically expect to see and based on what we see we believe that the impact of Covid and the AUM upon variant more specifically is behind us.
In addition to our strong financial results. This quarter. We also excessively onboard a record number of new clients collectively represent more than $1 2 million covered lives that now have access to our solution in any year. The first quarter is a critical time for us because of the substantial majority of our new clients will look to begin their fertility benefit at the start of the health plan.
Which for most companies is January 1st.
To address this dynamic each year, we prepare for a step function increase in our business volumes, which encompasses everything from the number of inbound contacts to our PC as to the amount of appointments booked to the level of patient activity that we are actively monitoring across all the clinics in our network coming on the heels of a record selling season, we had the larger.
Sequential step up business volumes and our history. This quarter. We have successfully manage the addition of our newest clients. While also continuing to provide industry, leading service to all of our existing clients and members demonstrating our continued ability to scale our operations at an accelerating rate.
Although the 2022 selling season has only just begun we're pleased to report that the early activity, we've seen so far as well as the caliber of the logos. We are engaging with us continue to affirm our momentum as the brand of choice for fertility and family building benefits amongst the best known and most successful companies in the world at this point in the selling season.
Our sales team is actively working and building pipeline to all the traditional channels, including direct outreach to prospective accounts by engaging with the benefit consultants and channel partners by participating in important industry events and conferences and by responding to inbound RFP opportunities.
Lastly, in addition to pitching new logos. We're also re engaging with deferred accounts, who have given us and not know response in a prior selling season as these companies may not be in a better position to consider adding the project benefit.
The early activity, we've seen throughout all of our sales channel has been positive and we're seeing strong year over year growth across all of the internal metrics that we use to measure sales momentum, including new pipeline added overall size of the pipeline and closed deals to date.
We're also seeing the market for fertility benefits continuing to mature as the conversations with prospects are less and less about whether or not they should add fertility coverage to their benefit packages and instead. The discussions are primarily focused on understanding the strength of our solution versus the alternatives.
We believe this ongoing shift is a positive indication that benefit buyers are increasingly becoming aware of the relevance of fertility and family building benefits to their targeted workforce and their need to offer the coverage in order to attract and retain the best workers not.
Not only is this shift translating into more selling opportunities for us overall, it's also allowing us to spend more time, demonstrating how <unk> is differentiated from any other fertility benefits manager, particularly with respect to member experience and our clinical outcomes.
And any sales year, we set ourselves a goal to grow the absolute number of new clients and covered lives as compared to the prior year. Although it remains very early given the strength that we're seeing in the sales season. Thus far we believe we are on track to meet our internal expectations at this point.
As we've done in the past, we expect to share more insight with you as the season progresses. We continue to anticipate that the majority of client decisions as usual will be made at the end of December and early fall.
Another important development during the quarter was that the CDC and the society for assisted reproductive technology released their latest facility outcomes data, which affirmed that project continues to significantly outperform the national averages.
This not only marks the sixth consecutive year that we've achieved industry, leading clinical outcomes in fertility, but in our most recent data. We also achieved across the board improvements to all of the relevant metrics.
This once again revealed that <unk> uniquely helping people get pregnant faster have healthier pregnancies and deliver healthier babies.
Eric just a few of the key results from the latest data a pregnancy rate improved to 17% better than the national average, while live birth rate, which had been 25% better than national average a year ago is now 27% better to give you a sense for just how impactful. This is our higher live birth rate means that projecting clients need to find an average significant.
Fewer rounds of treatment than they otherwise would had they been using either a carrier program, but one of the VC backed startups.
In addition to sparing and employee the emissions and the emotional and physical toll of having to endure multiple rounds of unproductive treatments have a higher birth rate also translates into meaningful cost savings not only for the client who is sponsoring the coverage, but also the employee who generally has an out of pocket cost share delay.
The latest data also shows that while <unk> pregnancy rate in live birth rates have continued to improve since 2016. The national averages. In contrast for those metrics have largely remained flat revealing that while we have continued to improve our solution and the results. We achieved year after year. The other benefit managers don't seem to be making those.
Improvements, suggesting they either lack of focus or the ability to do so.
Finally, our single embryo transfer rate improved to 91% the highest it has ever been while our multiple birth rates improved to two 5%, which is also the best it's ever been.
If you arent aware of multiple births or driver of high risk pregnancies and the leading cause of preterm births, both of which have costly consequences for employers and patients are superior outcomes translate into significant downstream medical cost savings in the form of lower maternity and NICU cost as well as a reduction in chronic care costs associated with low <unk>.
Right babies to.
Sustained superiority of our outcomes as well as our ongoing focus on creating the best possible member experience as evidenced by a leading NPS scores is a key reason why the world's leading brands are choosing to work with progeny.
To conclude we're very pleased with our results this quarter, which demonstrate that we've continued to execute against all of our strategic initiatives. The early momentum we're seeing in our sales season is also increasing our belief that <unk> is in its strongest ever competitive position that our market opportunity remains largely on penetrated and then all of the macro factors that have contributed.
Tribute to our growth remain intact.
Let me now turn the call over to Mark to walk you through the quarter.
Thank you Pete and good afternoon, everyone I'll begin by taking you through the first quarter results and then provide our expectations for the second quarter and the full year.
Revenue grew 41% over the first quarter of last year to $172 2 million exceeding the high end of our guidance.
The growth versus the prior year was primarily due to an increase in our in our number of clients and covered lives as compared to a year ago, which more than offset the impact the omicron very it had on member activity in January which we discussed with you last quarter.
Looking at the components of the topline medical revenue increased 25% over the first quarter last year to 110 9 million again due to the growth in clients and covered lives while pharmacy revenue increased 84% in the quarter to $61 3 million the growth in pharmacy revenue was primarily driven by an <unk>.
Increase in the number of clients, who have the integrated solution at.
A year ago, 73% of our clients had projecting Rx today, 83% due.
This increase reflects not only the strong take rate we saw among our newest clients in the most recent selling season, but also our continued success with upselling among existing clients.
While we continue to be very pleased with the progress of pharmacy adoption. Since we launched the service there remains of future upsell opportunity to a meaningful portion of the client base.
We ended the quarter with 264 clients, representing an average of $3 9 million covered lives during the quarter. This compared to 179 clients in an average of $2 7 million covered lives in the first quarter last year, reflecting 48% growth in covered lives over the past year.
Taking into account those clients, who launched their benefit following March 31, we have over 265 clients today with at least 1000 lives, reflecting more than 4 million covered lives consistent with the expectations. We shared with you on our fourth quarter call.
Turning now to our utilization metrics during the quarter there were more than 8900 art cycles performed representing our highest ever total of cycles. This reflects a 33, 6% increase in cycles as compared to the first quarter of last year.
Female utilization rate in the quarter, which principally drives our financial results was <unk>, 45% as compared to 47% from a year ago.
I'll remind you that as the year began we saw a peak of the Oba crime Varian, causing short term interruptions or delays in the treatment journey for certain members.
Nevertheless, our female utilization rate remains consistent with the historical ranges. We've typically seen excluding net brief period at the onset of Covid two years ago, when most clinics closed, which again reinforces both the essential nature of fertility treatments as well as the time sensitivity for most patients.
A contributing factor to our revenue each quarter as treatment mix in particular, the utilization associated with consoles and diagnostic testing, which occur at the earliest stages of fertility treatment contribute less revenue than the procedures that happened later in a member's fertility journey.
Our revenue in the first quarter reflects a higher proportion of that early treatment revenue than we typically expect to see in other quarters of the year.
Lastly, I'll note that utilization rates will always vary from quarter to quarter due to other factors such as the timing of when new clients go live the time of the year and the demographic mix of the newest clients.
Turning now to our margins I'll also remind you that late last year, we issued a broad based grant of new equity across our workforce, which increased the level of noncash stock based comp expense across the P&L.
We included a table in our press release today to show you the impact that stock comp had to our gross margins and operating expenses.
Gross profit increased 14% from the first quarter last year to $32 9 million, yielding a 19, 1% gross margin, reflecting a decrease from the year ago period, due primarily to the impact of noncash stock based comp.
Excluding the impact of stock comp in both periods. Our gross margin of 22, 7% reflected a decrease of 200 basis points from the first quarter of 2021 due to the impact due to the impact of Onboarding care management resources in advance of the client launches happening beyond March 31.
As well as the temporary inefficiencies experienced during the initial ramp up period of the new pharmacy partner.
Given that the majority of the clients who were scheduled to launch. After March 31 are now live we anticipate that second quarter gross margins will improve on a sequential basis.
Turning now to our operating expenses sales and marketing expense was five 8% of revenue in the first quarter as compared to three 3% in the year ago period, excluding the impact of stock comp from both periods sales and marketing was 3% of revenue in the quarter, reflecting an increase of 30 basis points.
From the year ago period.
G&A was 13, 4% of revenue this quarter as compared to 10, 7% in the year ago period.
Again, excluding the impact of stock comp from both periods G&A as a percentage of revenue improved 270 basis points from the year ago period to five 5%, reflecting the inherent nature of our expanding margins on G&A as we grow revenue.
With our strong topline performance and operating efficiencies adjusted EBITDA grew 44% this quarter from $17 3 million a year ago to $24 8 million, which was slightly above the higher end of our guidance range and in line with strong revenue.
Yeah.
Our adjusted EBITDA margin of 44% this quarter reflected a 30 basis point expansion from the year ago period.
Net income was $5 million in the quarter or <unk> <unk> per share this compared to net income of $15 2 million or 15% per share in the year ago period the.
The decrease was primarily due to higher noncash stock based compensation expense of 22, partially offset by operating efficiencies realized on our higher revenues.
Turning now to cash flow and our balance sheet.
Operating cash used during the quarter was $11 3 million, which compares to a half a million dollars of operating cash generated in the year ago period.
As a reminder, we generally see a short term use of working capital at the beginning of any year as we work through the integrations for those newest clients, who have recently launched the benefit.
In addition, each period was impacted by timing items, including the timing of member activity. Both for the current quarter, which is backend weighted and Q4 as well which was much more front end weighted the negative impact of this timing on cash flow was further exacerbated in both periods due to the previously.
Disclosed impacts at the Omicron variant.
Also as a reminder, we signed new pharmacy partner agreements, including new rebate agreements, which represented a significant improvement in the economics on the Rx business and extended payment terms, an additional 90 days.
As a result, as our <unk> Rx business grows we will experience negative timing on cash flows which is the effect of the combination of our actual growth plus the extended payment terms, particularly for the first two quarters of this year, which have significant growth over the prior year due to favorable adoption of project.
<unk>.
As of March 31, we had a total we had total working capital of approximately $180 million, reflecting a $105 $7 million of cash cash equivalents and marketable securities and no debt.
Turning now to our expectations moving forward given the strong start to the year. We are pleased to be in a position to revise our guidance upward for 2022.
For the full year, we are raising the low end of the range and now expect for revenue to be between 735 million to $775 million, reflecting growth of between 47% and 55% or approximately 51% growth at the midpoint.
We are also raising our guidance on profitability. We now expect adjusted EBITDA of between $111 million to $122 million, while for net income. We now expect between $7 3 million to $14 2 million or between <unk> and 2014 earnings per share on the basis of approximately 100.
5 million fully diluted shares.
I'll remind you that our net income projections do not contemplate any discrete income tax items, including the income tax benefit related to equity compensation activity to the extent the related activity occurs we will continue to benefit from those discrete tax items throughout 2022.
At the midpoint of this guidance, we are expecting to see continued expansion of our margins in 2022 with adjusted EBITDA margin of incremental revenue of more than 19%.
For the second quarter of 2022, we are projecting revenue between $188 million to a $193 million, reflecting growth of between 46% and 50%.
For adjusted EBITDA, we expect between $28 million to $30 million, along with net income of between 1 million to $2 3 million or between <unk> and <unk> <unk> earnings per share on the basis of approximately 102 million fully diluted shares.
With that wed like to open up the call for your questions.
Thank you ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we are start while posing your question you. Please pick up your handset if listening on speaker phone to provide optimum sound quality.
Once again, please press star one if you have questions. Please hold while we poll for questions.
And your first question is coming from Anne Samuel from Jpmorgan.
Your line is likes you May go ahead.
Hi, Congrats on a great quarter and thanks for taking the question.
You talked about seeing some early commitments.
Already this year I'm just wondering how common is that for you. This early in the year and how many of those are not now versus maybe new pipeline wins.
Thanks by the way.
It's common so every year, we get commitments this early.
And every year.
Those commitments grow versus the prior year. This year is no different than every year. The number of early commitments that we get are from the not now's grow over prior year again. This year is no different so it's sort of a continued trend as you might imagine because the volume of not now.
Sometimes by the way are not now is not only from the prior year, but literally two or three years ago when they come in.
That continues to grow each year, because as we get.
Further and further in our in our tenure if you will as a company we have more opportunities around that now. So so it's not surprising that's certainly positive and certainly a good indicator of what's happening, but not surprising that we have commitments.
That exceed the prior year.
And that's a trend.
That's helpful. Thank you and then when you get the full year guide last quarter.
Kind of spoken to the Delta between the low end of the range and the high end of the range for the year as being some COVID-19 conservatism you said in your prepared remarks that you think you know a lot of omicron and some of the Covid disruption is behind US now. So I was wondering how should we think about what the Delta is now between the low end at the high end in terms of what you're embedding.
Yes.
Hi, Ann it's Mark.
When we I think when we talked last quarter and looking at the range and sort of characterizing it.
I think we said it's always based on sort of what we're seeing and things obviously are looking.
Consistent with what we were seeing a couple of months ago. When we last spoke but we did say that it was.
Our view of it tends to be closer towards.
Towards the higher end of the range is being.
What that expectation isn't that we had built in some contingencies as utilization can go up and down there could be impacts of variance.
If there is any sort of those variety of.
Sort of eventuality as like we saw last year given that we're a couple of months down the road now and that we've gotten.
Solid quarter. We've also as we said launched significant majority of those new clients now we haven't seen really an extensive amount of utilization from them yet and just in terms of time in fact, we had some launch even this week so.
It's always helpful for us to see more as time goes on there, but that those are sort of the pieces that are baked into the range and again why we felt it was appropriate to bring up the low end.
Great.
It wasn't the only reason for the range is sort of the short answer other factors mix.
Slight change in expected utilization etcetera timing of the new launches all could impact that range.
Very helpful. Thank you.
Thank you.
And the next question is coming from Michael Cherny from Bank of America Michael.
Michael Your line of license you May go ahead.
Hi, This is Charlotte on for Mike. Thanks for taking my question.
Start with you mentioned earlier, how you're viewing the competitive landscape right now and can you just discuss the competitive positioning with other solutions in the market could you just outline what you think the biggest differentiators are for your service for your clients.
Sure.
It's really the totality of what we do right starts with our unique plan design.
Our approach to.
Ah.
Offering a solution thats all inclusive in terms of the benefit it starts with the network that we have that.
It's also unique and 20% are provided in our network generally don't take other carrier coverage or very very limited in terms of maybe taking one other carrier coverage.
And it also is the overall solution and the details of it and.
And the collaborative relationship that we have with our providers.
The process that we have.
Which is very data driven in terms of monitoring best practices to ensure best outcomes for the patient and the last piece of it is the the care navigation that we do through our patient care advocates and so it's all of that combined and obviously, there's a lot of detail around that that makes us differentiated versus anybody else out there which is why we're now.
In the seventh year market six years in a row, demonstrating favorable outcomes versus national averages and it's also why we havent seen really national averages move despite the fact that we've continued to improve.
The only thing I'd add to that is we're an incredibly data driven organization not just in how we operate but also how we can help support our providers and helped drive those outcomes and I think one of the biggest differentiators we have is.
<unk> been working on seven years of experience in tens of thousands of cycles in patients and the outcomes.
Ladies and gentlemen, please remain on the line, while we reconnect the speakers. Please remain on the line, while we reconnect the speakers.
Okay great.
Hello.
Hello.
Yeah.
Hello, You May go ahead, Michael the speakers are back in.
Sure we don't know what happened we did we.
For whatever reason the phone went dead, so we're back and I'm not sure where we dropped off.
That's okay I think.
You were just discussing.
The data driven nature of the business and support providers.
Yes.
Any other questions.
Yes.
Just the next one would be.
Any color around the selling season, so far, particularly as it relates to the pharmacy benefit and any updates there would be really helpful. Thanks sure.
Sure I'll, let Michael take that.
Hi, Yes, no so.
As sort of we said in the.
In the prepared remarks.
Seeing we're seeing good early early activity across across all of our key metrics.
And our pipeline right now.
That's that that is the same for what we're seeing around.
Pharmacy activity as well.
And so again early in the year, so still a long way to go but all indications are positive for both medical and pharmacy.
Yes.
Great. Thank you.
Thank you and the next question is coming from Sarah James from Barclays. Sir Your line is live.
Thank you and congrats on the quarter.
So let me last year.
I spoke.
Guys talked about some of the puts and takes going into your guidance and I think at that time, there was an assumption.
I have no dollar impact from Covid or on utilization and how are you thinking about that piece now as it relates to your 'twenty two guide.
As.
As Mark just.
Was going through.
The assumption in the range that still continues but in the range that was there that we put out in the beginning of March.
<unk>.
Impact from variance was part of the assumptions, but also other variables, which would be mix, which would be you know Eddie.
Eddie slight variation from our expected utilization et cetera timing of launches from new clients. It's all part of it. So so there is some assumption built into the overall guidance range.
Tangibly for anything like another variant.
As you recall from last year, the variance had a short term impact that one in the fourth quarter had the biggest impact because it was so late in the year and so the impact on the year, but the other sort of seem to work through themselves.
Theyre mid year. So that's why it's not a huge variable in the range, but it is variable.
Got it.
And then on the Legislative front.
So theres been some.
Articles around ROE V Wade and just how that relates to fertilized embryos used in IVF.
Potential future legislation around that I'm wondering if you guys have any thoughts and what your exposure is to some of those states that would have.
Sure.
Sugar legislation.
Yes.
Other states that have what they call a trigger bands out there they are.
Very slightly relative to defining what.
And abortion is in the band.
IVF.
Okay. Thank you.
Thank you and the next question is coming from Glen Santangelo from Jefferies.
Your line is open.
Yes, good evening and thanks for taking my question, Hey, Pete I, just wanted to talk about the selling season kind of encouraging that you're already starting to see some positive signs and the reason I bring it up right is because some of the other companies in the space that sell into the corporate environment is starting to come back with a message that they are starting to see sales cycles get elongated.
Maybe corporates are starting to prepare for the potential for a recession, but it sounds like youre not seeing that at all and early signs are kind of encouraging but I'm just kind of curious in your conversations does the potential outlook for recession come up at all or even factor into their decision making.
Yeah. This is Michael I'll take that one.
So the short answer is no we're not seeing that.
And our sales activities.
Really the cadence of buying appears to be.
Back to more historical patterns.
And again I'll reference back to sort of the remarks earlier.
Seeing strong levels on across multiple different pipeline activities and measurements.
It's also sort of it's also worth noting.
Our there is an urgency and an emphasis around our family building.
And fertility as a priority for employers.
And companies are recognizing that the need to provide that coverage and services across our workforce.
Including in the millennial workforce in particular, where we.
We're family building in fertility benefits us.
As close to the top of the list around priority. So.
Again, we're again, a long way to go on the sales season, but.
Positive positive start to the year.
And maybe if I could just follow up on utilization Peter I think in your prepared remarks, you said member activity sort of back to normalized levels. If we look at the utilization rates in the quarter there they're lower.
For all members and female only this quarter versus where they were four quarters ago and I'm guessing maybe we saw some modest disruption due to all the crown in the beginning of this quarter, but could you maybe talk about utilization year over year and how we should think about that maybe as you think about the quarter.
Breast and we got past Omicron have you seen utilization increase and now we're already into May here, maybe you can talk about what the spring has looked like from a utilization perspective. Thanks.
Sure.
<unk>.
One quarter itself. It is always difficult in terms of measuring utilization and saying whether or not that is or isn't an indicator of what's going to happen for the full year.
I think the most instructive thing I could.
Point you to is is the fact that our guidance we've run at the low end of our guidance, we're comfortable with the high end of our guidance that Didnt change as Mark said before when we generally guide we guide based on what we're seeing from a utilization pattern perspective that generally towards that high end and then the variables that we talked about could impact whether or not there is we're in the right.
<unk> versus closer to the high end. So so we're seeing patterns that are more normal the early first quarter results versus a year ago or slightly down but ever so slightly it is partially part of that early in the quarter impact from the Omaha and variant that spilled over into into the early part of the first quarter.
And hard to know exactly how much of that sort of recovered if you will by by the end of March.
But overall.
When we say it's important when we say utilization patterns are are more typical of what we'd normally expect to see.
That's sort of us analyzing by company by industry expectations, right mix that impacts overall utilization and because it's just a blend of different companies and industries that have different cohorts of of employees are different.
Age brackets, if you will and more or less concentration of employees and childbearing years, but but but the typical that we refer to as sort of what we expect to see given that backdrop.
Okay. Thanks for the comments.
Thank you. The next question is coming from Stephanie Davis from Seb Securities. Stephanie Your line is live.
Hey, guys congrats on the quarter and thank you for taking my question.
We have heard of a number of large.
Barton the Microsoft Security benefit.
So I was hoping to hear a refresh on your behalf.
Just given some of the comments that we heard of earlier.
The other players thinking named having a tougher time competing against the private I'd love to hear how you're differentiating.
The competitive space.
The dollars are still filing.
I'll take the first part of your question first so although there is there are more rfps out there in volume versus a year ago. The substantial majority of opportunities that we are talking to actually arent through RFP.
That still continues continued last year continued in prior years.
We're still.
Not seeing sort of the competitors that you're referring to the majority of the time competitive.
It is very early in the season to talk about.
Our win rates are not relative to our competitors. Our overall win rates are good but its early so.
It's very early to talk about win rates at all because the majority of our commitments as we talked about happen.
For us every year this year will be no different.
At the beginning sort of near the end of the summer going into Sn.
Essentially October so really early to sort of give you more color than that but just overall, although although more RFP activity is happening majority of opportunities are still being done.
Without Rfps, if you will I'm sorry, what was the second part of your question.
Thanks, very much covered it just kind of how you are differentiating versus the private competitors in the space.
Yeah.
Talked about that before.
It's the same things, but continuing to improve on the same things which is is.
We are in a favorable position versus our competitors because we have a direct contracted network of providers that enable us to do many more things with them share data back and forth collaborate do best practices and drive.
And achieve the outcomes that we achieved vis vis what's happening nationally nationally effectively are the alternatives that are out there and.
And that plus the the concierge service that we have through the <unk>.
And all the other things that differentiate us, but most importantly, the head start with that we have now <unk> in market, where we continue to refine and improve on our benefit and our benefit offerings in every aspect of that throughout the program.
Youre not catching up on anytime soon.
And by the time, you think you've caught up I'll be six years ahead of you after that.
It was really sort of the gist of it.
Okay very helpful. And then one quick follow up you talked about them the battery levels, you're seeing in your pipeline does that reflect any of the large RFP activity, we're seeing in the market or is that.
Is that potential upside.
Yeah.
Well look the overall pipeline and it being up over prior year, yes part of that is their rfps that are out there, but again.
The majority of them arent RFP. So so it's sort of both right. If you sort of look at RFP volume in dollars in pipeline versus non RFP volume in dollars in pipeline, both are growing really nicely year over year.
Helpful. Thank you so much.
Thank you and the next question is coming from Dev, We're Syria from Baird. Your.
Your line is less.
Hey, good evening, thanks for taking my questions.
Great quarter to kick off the year here.
I'd like to just touch real quick on the market.
If you kind of think of a flywheel effect from saturation or maturity of the speculated market.
As more employers provide <unk> solutions that may prompt the rest of the market to adopt fertility solutions more quickly.
Could accelerate adoption and if you kind of think of this.
And maybe as a exponential curve.
Or do you think we are currently in the market and then I have a quick follow up to that.
I'm not sure I'm not sure how I would sort of quantify or illustrate where we are early in the curve. We're certainly still on the way up and.
And Thats really demonstrated by the fact that we continue to have opportunities year after year.
Growing not declining and we continue to win business year after year growing that declining versus prior year. So that's probably the best indication that that we're still it's still on its way up I think the math sort of supports that as well.
<unk> of the market that is still underserved the percent of the market that we have.
Penetrated versus what's out there 265 clients on 8000 large self insured employers not including the labor market et cetera, there is still significant opportunity.
<unk>.
No.
And we're very early on that curve.
Okay. Thank you and then just circling back to the competition here I just wanted to focus on the clinical outcomes.
How has how has your guys' clinical outcomes has improved but how does how is the delta between you and maybe the second best player change over time.
Interesting that these players are not catching up more quickly.
What do you think if you can provide some color as to why that may be is there something that's.
Operationally different that's hard to do.
Maybe relationship with partnerships that are hard to.
And then a quick change.
Thank you yes.
Happy to answer that first of all.
The nice thing about that question is nobody else has published outcomes. So I don't know who the second best is because they are actually not out there.
And I always say the reason why that is is because without a directly contracted network of providers, where you're requiring to get that data and get it on every patient and reported on every patient.
You're not you don't even know what your outcomes are right.
Have the competitors out there have some form of reimbursement model a reimbursement model isn't impacting anything it's simply just reimbursing exactly what it sounds like youre not managing anything Youre, just reimbursing the cost right and so at the end of the day when you only reimbursing and you're doing it via a rented network, which a lot of them do you don't really.
We know the outcomes, which is why you are not reporting them.
And enough, even though ours carriers.
That could do that because they have directly contracted network. So you're just not focused on it right, which is why theyre not publishing it. So it's hard to sort of describe why the number two how far behind they are and whether there is a number two I don't even know who that is.
The reality is nobody else, but us continues to publish outcomes year after year.
On every member that engages with the benefits.
Great. Thank you.
Yes.
Thank you that's all the questions we had in Q I would like to hand, the call back to James Hart for any closing remarks.
Thank you Paul I appreciate it if anybody has any follow up questions. Please as always never hesitate to reach out to me and otherwise we look forward to speaking with you next quarter. Thank you.
Thank you ladies and gentlemen, this does conclude today's conference you may disconnect at this time and have a wonderful day. Thank you for your participation.
Yes.