Q4 2024 Progyny Inc Earnings Call

February 27, 2025

It is now my pleasure to turn the floor over to your host James Hart the floor is yours.

Speaker Change: Thank you John and good afternoon, everyone welcome to our fourth quarter Conference call with me today are Pete and FTE CEO of progeny, Michael <unk>, our president and Mark Livingston CFO, we will begin with some prepared remarks before we open the call for your questions before we begin I'll remind you that our comments and responses to your questions today reflect Matt.

<unk> views as of today only.

Speaker Change: Statements related to our financial outlook for both the first quarter and full year 2025, and the assumptions and drivers underlying such guidance, including the impact of our sales season, and client launches and our expected utilization rates and mix are anticipated number of clients and covered lives for 2025, the potential benefits of our solutions our ability to.

Speaker Change: Acquire new clients and retaining upsell existing clients, our market opportunity and our business strategy plans goals and expectations concerning our market position future operations and other financial and operating information, which are forward looking statements under the federal Securities law actual results may differ materially from those contained in.

Speaker Change: Or implied by these forward looking statements due to risks and uncertainties associated with our business as well as other important factors for a discussion of the material risks uncertainties assumptions and other important factors that could impact our actual results. Please refer to our SEC filings and today's press release, both of which can be found on our Investor Relations website.

Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or.

Speaker Change: During the call. We will also refer to non-GAAP financial measures such as adjusted EBITDA adjusted EBITDA margin.

Adjusted EBITDA margin on incremental revenue and non-GAAP earnings per diluted share more information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures are available in the press release, which is available at investors Dot progeny Dot com I would now like to turn the call over to Pete.

Pete: Thanks, Jamie and thanks, everyone for joining us.

Pete: I'm pleased to report that 2024 ended on a positive note with revenue and adjusted EBITDA for the quarter above the high end of our guidance ranges.

Pete: From when we last spoke to you in November as Q4 progressed, we continued to see an improvement in the pacing of member engagement relative to what we had seen in Q3.

Pete: In addition, we concluded the year with yet another strong sales and product development season, yielding sales of an incremental $1 1 million new covered lives and adding more than 80, new logos with 40% of those new logos, representing one 5 million covered lives overall, adopting one or more of our newest server.

Pete: And maternity postpartum and met a pause.

Pete: The retention of 99% of our clients the execution of our partner expansion strategy, adding multiple health plan partners, including Cigna as our first ever National Health plan partner further strengthening our go to market presence for the sale season ahead, and lastly, the advancement of our product strategy with the launch.

Pete: Our newest services in pregnancy postpartum in matter of months.

Pete: As we look to the year ahead, we continue to invest in our digital assets in support of our existing products as well as positioning us for future expansion.

Pete: All of the tailwind that had been fueling our past growth remain fully intact setting us up for a strong year ahead.

Pete: We continue to see how people all around the world for continuing to defer family building to later in life, which increases the need important impact of our solutions.

Pete: Employers are increasingly recognizing the value to both their bottom lines and to their employees health and wellbeing by addressing underserved areas in women's health.

Pete: And we continue to raise the bar for what a solution can achieve for all the key constituents in the ecosystem the patients to providers and plan sponsors to that last point, we are now entering our 10th year as the premier solution and family building.

Pete: And though many solutions have claimed to be delivering on the promises of value based care.

Pete: Actually achieving it through our unique approach to plan design and benefit management and how are we doing that which starts by creating solutions that are flexible and customizable because we recognize that every member every journey is unique.

We engineered our plan designed to be flexible to the individual patient, allowing us to ensure that the right care is being delivered at the right time for each person.

Pete: We also pioneered an unparalleled level of collaboration across our network empowering providers to deliver care more effectively while also enabling us to perform active benefit management throughout the journey and Thats. How we are reporting for the ninth straight year clinical outcomes that are significantly better than the national averages.

And we're the only ones reporting those outcomes at scale reporting results that include every member for every treatment as opposed to others, who only report on a small sample.

Pete: And by applying the same clinically based collaborative high touch care model that we pioneered and family building, we've successfully brought into our offering to become a more comprehensive solution addressing women's health.

Pete: Because the project the experience is so unique once they're projecting journey concluded we routinely heard from members who were disappointed when they had to return to their health plan or a point solution.

Pete: Same time, our clients are telling us of other gaps in women's and family health that they felt we could address and to capitalize on these opportunities a couple of years ago, we laid out a multiyear product roadmap that would allow us to thoughtfully and profitably expand our platform to solve for these gaps while simultaneously enhancing our existing strength as well.

Pete: The first step was to invest in our product organization, both people and systems to be able to quickly add new features to existing services, which will expand into new areas in ways that makes sense for us and our clients.

Pete: Step was to launch our solutions and maternity postpartum in Metropark.

Pete: In just our first year of offering those services, we saw an incredible response with 20% of our existing clients and 40% of our newest adopting one or more of these programs affirming both the need in the market as well as the approach we've taken.

Pete: And with approximately $6 7 million total covered lives in 2025, there remains a healthy runway ahead of us in further penetration of these services across the rest of our book of business.

Pete: Turning to our recent acquisitions were investing and seamlessly integrating all aspects of our solution to enhance our existing high touch concierge care delivery model with a comprehensive set of digital tools through our best in class experience.

Pete: Our first acquisition from last summer complements our global capabilities, while the second as navigation solution, where we can help employers amplify all aspects of their benefits ecosystem pertaining to parenting and women's health.

Pete: And to further dive into our newer acquisition benefit bump for anyone expecting to have a child. The parental leave process is often extraordinarily complex.

Pete: <unk> and administrative burden that screens, both the employee and their employer and add stress and anxiety to the new patent.

Pete: And often the employers providing education and support services to ease the parenting journey and better position the employee for an eventual return to work. Unfortunately due to the complexity and fragmentation within the benefits ecosystem. These services. Many times go on used because the employee isn't aware of what's available.

Pete: How to access.

Pete: This is yet another opportunity, where we can leverage our existing strengths to both improve the member experience, while delivering measurable results and ROI for the client.

Pete: We're proud to these model is deeply clinical benefit bumped began by focusing on tying together all of an employee's family friendly benefits, making it easier for the member to navigate the employers entire offering including the services, we provide and family doesn't.

Pete: This is very complementary to both our existing solution as well as our long term product roadmap and fits into our string of pearls strategy, where we identify opportunities that are attractive and valuable on their own but ones that can also be linked together into a more coherent whole that is even more compelling.

In 2025, we will make additional investments to integrate these acquisitions to fully realize their value and create a linked platform across our high touch care management services with personalized digital engagement for patients providers and clients all surrounded by what we believe will be a better front end user experience.

To the complexity and fragmentation within the benefits ecosystem. These services. Many times go unused because the employee isn't aware of what's available or how to access.

This is yet another opportunity, where we can leverage our existing strengths to both improve the member experience, while delivering measurable results and ROI for the client.

Pete: Than anyone else in the market.

Pete: The addition of these new components to our solution <unk> is extending its lead in the three areas that matter most to employers its member experience outcomes and cost control.

We're proud of this model is deeply clinical benefit pumped began by focusing on tying together all of an employee's family friendly benefits, making it easier for the member to navigate the employers entire offerings, including the services, we provide and family doesn't.

Pete: At this point.

Pete: Selling season is only in its very early stages, but we're pleased with the activity. We've seen so far which includes our active pipeline. The engagement, we're seeing with the not now that were carried over from last year and the early commitments, we've already received including in verticals, where we have had past success.

This is very complementary to both our existing solution as well as our long term product roadmap and fits into our string of pearls strategy, where we identify opportunities that are attractive and valuable on their own but ones that can also be linked together into a more coherent whole that is even more compelling.

Pete: With what we're seeing in the market today, we feel well positioned to maintain our track record of adding at least 1 million new lives in every selling season consistent with the target we outlined for you at our Investor day back in August.

Pete: This demonstrates once again, how our solution is the preferred choice amongst the most sophisticated indeed driven organizations in the world.

Pete: And given the caliber caliber of the companies we work with today and see progressing in our active pipeline. We believe progeny is the provider of choice and women's health for the most successful companies in the world.

Than anyone else in the market.

With the addition of these new components to our solution <unk> is extending its lead in the three areas that matter most to employers its member experience outcomes and cost control.

Pete: With that I'll now turn the call over to Mark to walk you through the results in more detail. Thanks, Pete and good afternoon, everyone I'll begin with our results for the fourth quarter and full year, and then provide our expectations for 2025.

At this point the selling season is only in its very early stages, but we're pleased with the activity. We've seen so far which includes our active pipeline. The engagement. We're seeing within that now that were carried over from last year and the early commitments, we've already received including in verticals, where we have had past success.

Mark Livingston: Revenue in the quarter grew 11% to $298 4 million for the full year revenue grew 7% to one $1 7 billion, representing our ninth straight year of growth.

Mark Livingston: The growth in both the quarter and the year was primarily due to an increase in the number of clients in covered lives as compared to the year ago period, the lower growth rate for the year as compared to Q4 was due to the periods of variability consumption earlier in the year that we previously discussed with you.

With what we're seeing in the market today, we feel well positioned to maintain our track record of adding at least 1 million new lives in every selling season consistent with the target we outlined for you at our Investor day back in August.

This demonstrates once again, how our solution is the preferred choice amongst the <unk>.

Mark Livingston: As of December 31, we had 473 clients with at least 1000 lives representing an average of $6 5 million covered lives in the quarter.

Mark Livingston: This compares to 392 clients and an average of $5 4 million covered lives in the fourth quarter a year ago.

Mark Livingston: As compared to the third quarter average lives increased by nearly 30000, reflecting early launches from a small number of clients that we won in the most recent selling season as expected the lives within our existing base were flat versus <unk>.

Behind our expectations for 2025.

Revenue in the quarter grew 11% to $298 4 million for the full year revenue grew 7% to one $1 7 billion, representing our ninth straight year of growth.

Mark Livingston: Recapping the progression of these metrics at this time last year, we had 460 clients and $6 4 million covered lives under contract. Our most recent selling season produced 80, new clients and an incremental $1 1 million new lives and now we've entered 2025 with over 530 climb.

The growth in both the quarter and the year was primarily due to an increase in the number of clients in covered lives as compared to the year ago period.

Lower growth rate for the year as compared to Q4 was due to the periods of variability in consumption earlier in the year that we previously discussed with you.

Mark Livingston: <unk> and $6 7 million lives under contract.

Mark Livingston: This affirms what we've previously stated that our member base has grown for 2025, despite the loss of a large client.

As of December 31, we had 473 clients with at least 1000 lives representing an average of $6 5 million covered lives in the quarter.

Mark Livingston: The substantial majority of our newest clients and lives have already gone live and will be included in our accounts as of March 31.

This compares to 392 clients in an average of $5 4 million covered lives in the fourth quarter a year ago.

Mark Livingston: Turning to the components of the top line for this quarter medical revenue increased nine 4% in the fourth quarter to $188 million and grew seven 9% in the year to $730 million.

As compared to the third quarter average lives increased by nearly 30000, reflecting early launches from a small number of clients that we won in the most recent selling season.

Mark Livingston: Pharmacy revenue increased 13% in the fourth quarter to $111 million and grew 6% in the full year to $438 million the.

As expected the lives within our existing base were flat versus <unk>.

Recapping the progression of these metrics at this time last year, we had 460 clients and $6 4 million covered lives under contract.

Mark Livingston: The growth in both components was due to the same factors that impacted our overall revenue growth.

Mark Livingston: Turning now to our member engagement metrics female utilization was 48% in the quarter consistent with the fourth quarter, a year ago and a slight increase from the four 7% we reported in Q3.

Our most recent selling season produced 80, new clients and an incremental $1 1 million new lives and now we've entered 2025 with over 530 clients and $6 7 million lives under contract.

Mark Livingston: For the year female utilization was one 7% slightly lower than the one 9% we reported a year ago, although at the higher end of our multiyear range over the last several years.

This affirms what we've previously stated that our member base has grown for 2025, despite the loss of a large client.

The substantial majority of our newest clients and lives have already gone live and will be included in our accounts as of March 31.

Mark Livingston: More than 15800 art cycles were performed during the fourth quarter, our highest quarterly total ever yielding more than 61000 for the full year, reflecting 5% growth in art cycles in both the quarter and the year.

Turning to the components of the top line for this quarter medical revenue increased nine 4% in the fourth quarter to $188 million and grew seven 9% in the year to $730 million.

Mark Livingston: Our press release today includes the usual table to report art cycles per unique female utilizing which reflects an average of five four in the fourth quarter up from five 2% and <unk>.

Pharmacy revenue increased 13% in the fourth quarter to $111 million and grew 6% in the full year to $438 million.

The growth in both components was due to the same factors that impacted our overall revenue growth.

Mark Livingston: For the full year art cycles per unique utilize or were still lower than 2023, which was due mostly to the periods of lower consumption earlier in the year.

Turning now to our member engagement metrics female.

Female utilization was four 8% in the quarter consistent with the fourth quarter, a year ago and a slight increase from the four 7% we reported in Q3.

Mark Livingston: We know that member activity can vary from period to period, reflecting the deeply personal nature of when it's the right time for members to pursue care in the areas. We address however, as we presented at the JP Morgan Conference last month. This short term variability doesn't have any bearing on the long term value we are creating for our investors.

For the year female utilization was one 7% slightly lower than the one 9% we reported a year ago, although at the higher end of our multi year range over the last several years.

Mark Livingston: <unk>.

Mark Livingston: We believe that the overall consistency with the rate of utilization demonstrates that we arent witnessing a macro shift with respect to the underlying medical need for our services or a lessening in people's desire to pursue our services.

More than 15800 art cycles were performed during the fourth quarter, our highest quarterly total ever yielding more than 61000 for the full year, reflecting 5% growth in art cycles in both the quarter and the year.

Mark Livingston: Turning now to our margins and operating expenses gross profit increased 11% from the fourth quarter last year to $63 4 million. This yielded a 21, 3% gross margin a slight improvement from <unk> a year ago.

Our press release today includes the usual table to report art cycles per unique female utilizing <unk>, which reflects an average of five four in the fourth quarter up from five 2% and <unk>.

For the full year art cycles per unique utilize or were still lower than 2023, which was due mostly to the periods of lower consumption earlier in the year.

Mark Livingston: For the full year gross profit increased 6% to $253 million. The 21, 7% gross margin in 2024 was a slight decrease from the prior year, reflecting the impact of the unanticipated decline in cycles per utilized or at earlier points in this year.

We know that member activity can vary from period to period, reflecting the deeply personal nature of when it's the right time for members to pursue care in the areas. We address however, as we presented at the JP Morgan Conference last month. This short term variability doesn't have any bearing on the long term value we are creating for our investors.

Mark Livingston: Sales and marketing expense of five 2% of revenue in Q4 reflected a modest improvement from the year ago period.

Mark Livingston: For the full year sales and marketing was equal to the prior period at five 5% of revenue as investments we've made to expand our go to market resources and channel partner relationships, such as our first ever National Health plan partnership with Cigna continue to be offset by the leverage we gain through our client acquisition and retention success.

We believe that the overall consistency with the rate of utilization demonstrates that we arent witnessing a macro shift with respect to the underlying medical need for our services or lessening in People's desire to pursue our services.

Turning now to our margins and operating expenses gross profit increased 11% from the fourth quarter last year to $63 4 million.

Mark Livingston: G&A was 10, 7% of revenue this quarter slightly higher than the fourth quarter a year ago for the full year G&A improved slightly to 10, 4% of revenue the improvement in the year is due to the efficiencies that we continue to realize in our back office operations.

This yielded a 21, 3% gross margin a slight improvement from <unk> a year ago.

For the full year gross profit increased 6% to $253 million. The 21, 7% gross margin in 2024 was a slight decrease from the prior year, reflecting the impact of the unanticipated decline in cycles per utilized or at earlier points in this year.

Mark Livingston: With the topline growth and higher gross profit the dollars of adjusted EBITDA increased in both the quarter and the year.

Mark Livingston: In the fourth quarter, adjusted EBITDA increased 10% to $47 5 million, yielding a margin of 15, 9%.

Sales and marketing expense of five 2% of revenue in Q4 reflected a modest improvement from the year ago period.

Mark Livingston: For the full year, adjusted EBITDA increased 6% to $198 8 million, yielding a margin of 17% comparable to the prior year period.

For the full year sales and marketing was equal to the prior period at five 5% of revenue as investments we've made to expand our go to market resources and channel partner relationships, such as our first ever National Health plan partnership with Cigna continue to be offset by the leverage we gain through our client acquisition and retention success.

Mark Livingston: Net income was $10 5 million or <unk> 11 per diluted share in the quarter. This compared to net income of $13 5 million or <unk> 13 per share in the year ago period on a full year basis net income was $54 3 million or <unk> 57 per diluted share, which compared to $62 million.

G&A was 10, 7% of revenue this quarter slightly higher than the fourth quarter a year ago for the full year G&A improved slightly to 10, 4% of revenue the improvement in the year is due to the efficiencies that we continue to realize in our back office operations.

Mark Livingston: <unk> 62 per share in 2023.

Mark Livingston: The decrease in both the quarter Nir was primarily due to the higher provision for income taxes in both periods, which is which more than offset the higher operating profitability.

Mark Livingston: Adjusted EPS was <unk> 42 in the quarter, which compares to 32 in the year ago period for the year adjusted EPS EPS was $1 64 as compared to $1 40 in 2023.

Yeah.

With the topline growth and higher gross profit dollars of adjusted EBITDA increased in both the quarter and the year.

In the fourth quarter, adjusted EBITDA increased 10% to $47 5 million, yielding a margin of 15, 9%.

Mark Livingston: Turning now to our cash flow and balance sheet operating cash flow in the fourth quarter was $52 2 million, which compared to $37 7 million in the year ago period on.

For the full year, adjusted EBITDA increased 6% to $198 8 million, yielding a margin of 17% comparable to the prior year period.

Mark Livingston: On a full year basis, we generated $179 million of operating cash flow.

Net income was $10 5 million or <unk> 11 per diluted share in the quarter. This compared to net income of $13 5 million or <unk> 13 per share in the year ago period.

Mark Livingston: Below the $189 million from the year ago period as 2023 benefited from the previously disclosed amended agreement with our pharmacy partners.

On a full year basis, net income was $54 3 million or <unk> 57 per diluted share, which compared to $62 million or <unk> 62 per share in 2023.

Mark Livingston: Yes.

Mark Livingston: As a result, our DSO improved 10 days from 2023, reflecting our ongoing discipline with respect to revenue cycle management.

Mark Livingston: We expect a mid 70% conversion of full year adjusted EBITDA to operating cash flow, even as we expect to see an increase in cash taxes in 2025.

The decrease in both the quarter Nir was primarily due to the higher provision for income taxes in both periods, which is which more than offset the higher operating profitability.

Adjusted EPS was <unk> 42 in the quarter, which compares to 32 in the year ago period for.

Mark Livingston: As Pete discussed in 2025, we're planning to further invest in our digital solutions, while also integrating and investing in our two recent acquisitions as we want the member experience to fully reflect what these services have added to our solution.

For the year adjusted EPS EPS was $1 64, as compared to $1 40 in 2023.

Turning now to our cash flow and balance sheet operating cash flow in the fourth quarter was $52 2 million, which compared to $37 7 million in the year ago period.

Mark Livingston: We anticipate the incremental capex for these multiple projects to cumulatively amount to approximately $15 million above our 2024 spend with a similar amount of incremental dollars also flowing through the full year Opex, which is reflected in guidance.

On a full year basis, we generated $179 million of operating cash flow.

Although the $189 million from the year ago period, as 2023 benefited from a previously disclosed amended agreement with our pharmacy partners.

Mark Livingston: As of December 31, we had total working capital of approximately $304 million, including $228 million of cash cash equivalents and marketable securities and no debt.

As a result, our DSO improved 10 days from 2023, reflecting our ongoing discipline with respect to revenue cycle management.

Mark Livingston: Turning now to our expectations for the first quarter and full year 2025.

We expect a mid 70% conversion of full year adjusted EBITDA to operating cash flow.

Mark Livingston: As you can see it in the table at the back of today's press release, our range for the full year reflects utilization of 1.0% to 2% at the low end at 1.0% to 4% at the high end in terms of consumption, we assume that art cycles per unique utilize or are 0.89%. The low end of the range and <unk> 91 at the <unk>.

Even as we expect to see an increase in cash taxes in 2025.

As Pete discussed in 2025, we are planning to further invest in our digital solutions, while also integrating and investing in our two recent acquisitions as we want the member experience to fully reflect what these services have added to our solution.

Mark Livingston: High end.

Mark Livingston: While we've continued to see improvement in.

Mark Livingston: First quarter member engagement on a seasonally adjusted basis as compared to historical patterns due to the unexpected variability we experienced at certain times in 2024. These assumptions reflect the possibility that we'll see further variability in member engagement in 2025.

We anticipate the incremental capex for these multiple projects to cumulatively amount to approximately $15 million above our 2024 spend with a similar amount of incremental dollars also flowing through the full year Opex, which is reflected in guidance.

As of December 31, we had total working capital of approximately $304 million, including $228 million of cash cash equivalents and marketable securities and no debt.

Mark Livingston: With those assumptions, we are projecting between $300 million to $318 million in revenue in the first quarter, reflecting growth of 8% to 14%.

Mark Livingston: For 2025, we project, we project revenue of $1 175 billion to one to $2 5 billion, reflecting growth of between 1% and 5%.

Turning now to our expectations for the first quarter and full year 2025.

As you can see in the table at the back of today's press release, our range for the full year reflects utilization of 1.0% to 2% at the low end at 1.0% to 4% at the high end in terms of consumption, we assume that art cycles per unique utilize our our 0.89% the low end of the range and <unk> 91 at the high.

Mark Livingston: These ranges include the expected contribution from the previously disclosed large client who did not renew for 2025, but who is still providing for an extended transition period through progeny for members who met certain criteria.

And.

Mark Livingston: For that program, we're estimating between 37% to $40 million of revenue in the first half of the year, only which is when the transition period ends.

While we've continued to see improvement in first quarter member engagement on a seasonally adjusted basis as compared to historical patterns due to the unexpected variability we experienced at certain times in 2024. These assumptions reflect the possibility that we'll see further variability in member engagement in 2020.

Mark Livingston: Proximately three quarters of that is estimated in the first quarter with the balance in <unk>.

Mark Livingston: Turning to profitability, we expect between 53% to $57 million and adjusted EBITDA in the first quarter, along with net income of between 15 to $17 8 million.

Hi.

With those assumptions, we are projecting between $300 million to $318 million in revenue in the first quarter, reflecting growth of 8% to 14%.

Mark Livingston: This equates to 17 and 20.

For 2025, we project, we project revenue of $1 175 billion to one to $2 5 billion, reflecting growth of between 1% and 5%.

Mark Livingston: Earnings per diluted share or <unk>, 44, and 47 of adjusted EPS on the basis of approximately 90 million fully diluted shares.

Mark Livingston: For the full year, we expect adjusted EBITDA between 188% to $201 million and for net income of between 45 to $53 9 million.

These ranges include the expected contribution from the previously disclosed large client who did not renew for 2025, but who is still providing for an extended transition period through project for members who met certain criteria.

Mark Livingston: This equates to 49, and 59 earnings per diluted share and $1 52, and $1 62.

Mark Livingston: Adjusted earnings per diluted share on the basis of approximately 92 million fully diluted shares for the full year.

For that program, we're estimating between $37 million to $40 million of revenue in the first half of the year only which is when the transition period ends approximately three quarters of that is estimated in the first quarter with the balance in <unk>.

Mark Livingston: With that we'd like to now open the call for questions. Operator can you. Please provide the instructions.

Speaker Change: Certainly ladies and gentlemen, the floor is now opened for questions. If you have any questions or comments. Please press star one on your telephone keypad at this time.

Turning to profitability, we expect between $53 million to $57 million and adjusted EBITDA in the first quarter, along with net income of between 15 to $17 8 million.

Speaker Change: I ask that while posing your question you. Please pickup your handset if listening on speaker phone to provide optimum sound quality. Please hold while we poll for questions. Once again. Please press star one if you have a question or comment.

This equates to 17 and 20.

Earnings per diluted share or <unk> 44, and.

<unk> 47 of adjusted EPS on the basis of approximately 90 million fully diluted shares.

Speaker Change: Yeah.

Speaker Change: First question comes from and Samuel with Jpmorgan. Please proceed.

For the full year, we expect adjusted EBITDA between $188 million to $201 million and for net income of between 45 to $53 9 million.

Samuel: Hi, Thanks, so much for the question and congrats on a great quarter.

Samuel: I was hoping maybe you could just speak to.

Samuel: The cadence of the year as we think about.

This equates to 49 and 59 earnings per diluted share.

Samuel: Dean Amazon lives rolling off in and just how to think about the impact of that within within the guidance range that you provided.

And $1 52, and $1 62.

Adjusted earnings per diluted share on the basis of approximately 92 million fully diluted shares for the full year.

Samuel: Yes, so yes.

Samuel: Yes from my prepared remarks, so we're expecting about 37% to $40 million in revenue over the first half of the year and the way the program works it will be over after the first half about three quarters of that will be in Q1 with the balance in Q2. So you can you can do the math there.

With that wed like to now open the call for questions. Operator can you. Please provide the instructions.

Speaker Change: Certainly ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your telephone keypad at this time, we ask that while posing your question you. Please pickup your handset of listening on speaker phone to provide optimum sound quality. Please hold while we poll for questions. Once again. Please press star one if you have a question.

Samuel: What what the impact is we won't be reflecting lives or utilization.

Samuel: In our numbers just because it's a different base of employees that will be eligible for the benefit as they had to meet certain criteria in order to be able to participate in the transition of care program.

Or comments.

Speaker Change: Yeah.

Speaker Change: First question comes from and Samuel with Jpmorgan. Please proceed.

Speaker Change: Great. Thank you and then maybe just one kind of higher level. One for you Pete was hoping maybe you could just speak to how youre thinking about the recent executive order to expand access to IVF and then also just given all the movement within the within the government lately, how youre thinking about.

Samuel: Hi, Thanks, so much for the question and congrats on a great quarter.

Samuel: I was hoping maybe you could just speak to.

Samuel: The cadence of the year as we think about.

Samuel: Dean Amazon lives Rolling off and just how to think about the impact of that within within the guidance range that you provided.

Speaker Change: Government contract. Thank you.

Speaker Change: Sure So the executive order.

Samuel: Yes, so yes.

We believe is in the right direction relative to IVF in the U S where it talks about recommendations policy recommendations around both.

Speaker Change: <unk> access as well as affordability.

Speaker Change: There isn't really much more detail beyond that.

Speaker Change: Executive order and there's nothing else that's come out.

Samuel: On what that what the impact is we won't be reflecting lives or utilization.

Speaker Change: But obviously, we believe it's positive relative to what it might do for for the industry overall.

Speaker Change: <unk>.

Samuel: In our numbers just because it's a different base of employees that will be eligible for of the benefit is they had to meet certain criteria in order to be able to participate in the transition of care program.

Speaker Change: The next question comes from Michael Cherny with Leerink Partners. Please proceed.

Michael Cherny: Good evening and thanks for the color on the call and obviously nice job, especially with the positive pre announcement as well.

Pete: Great. Thank you and then maybe just one kind of higher level. One for you Pete was hoping maybe you could just speak to how youre thinking about the recent executive order to expand access to IVF and then also just given all the movement within the within the government lately, how youre thinking about your government contracts. Thank you.

Michael Cherny: If I could just talk about some of the ancillary services.

Michael Cherny: It's obviously early adoption both in existing and new customer base can you give us a sense of what those should be contributing to revenue.

Michael Cherny: How exactly we should see them flow through in terms of the contribution rate both from a revenue as well as op profit perspective, yes.

Pete: Sure So the executive order.

Michael Cherny: Yes, so so theyre brand new end market.

Pete: We believe is in the right direction relative to IVF in the U S where it talks about recommendations policy recommendations around both.

Michael Cherny: Part of the activity around them as us doing member marketing through.

Pete: <unk> access as well as affordability.

Michael Cherny: Tactics with in conjunction with our employer sponsors.

Pete: There isn't really much more detail beyond that in the executive order and there's nothing else that's come out.

Michael Cherny: And until that activity happens I can't give you more color yet as to what the contribution might be as soon as we get more color and get some.

Pete: But obviously, we believe is positive relative to what it might do for for the industry overall.

Michael Cherny: More data around around the success of that we will share more.

Pete: Yes.

Michael Cherny: Okay Fair.

Speaker Change: The next question comes from Michael Cherny with Leerink Partners. Please proceed.

Michael Cherny: Maybe just one other modeling question, just because you've kind of gone there.

Michael Cherny: Good evening and thanks for the color on the call and have seen nice job, especially with the positive pre announcement as well.

Michael Cherny: Mark you said $37 million to $40 million of Amazon related revenue first half of the year.

Speaker Change: Maybe if I can just talk about some of the ancillary services.

Michael Cherny: Anyway.

Michael Cherny: But anyway to get a sense on what the EBITDA contribution should be.

Speaker Change: We see early adoption, both in existing and new customer base can you give us a sense of what those should be contributing to revenue and how exactly we should see them flow through in terms of the contribution rate both from a revenue as well as op profit perspective.

Michael Cherny: I assume no, but any trapped costs.

Michael Cherny: For a customer of that size any dedicated assets that can be either shift over to other customers can be leverage or how do you think about that.

Michael Cherny: Profitability contribution.

Michael Cherny: Yes, no as far as trapped Costco.

Speaker Change: Yes, so so theyre brand new end market.

Michael Cherny: There's nothing to speak of at all there.

Speaker Change: Part of the activity around them as us.

Michael Cherny: From a profitability standpoint, and we had said this when we first announced the departure that their contribution from a EBITDA perspective was lower than the book of business.

Speaker Change: Doing member marketing through.

Speaker Change: Tactics with in conjunction with our employer sponsors.

Speaker Change: And in tool that activity happens I can't give you more color yet as to what the contribution might be as soon as we get more color and get some.

Michael Cherny: And I guess really at this stage what I would say is is that all of that's factored into the guidance for the year.

Michael Cherny: So as you see.

Speaker Change: More data around around the success that we will share more.

Michael Cherny: Between Q1 balance of the year you can see.

Speaker Change: Okay Fair.

Just how that's reflected for us.

Speaker Change: Yes, maybe just one other modeling question, just because you've kind of gone there.

Michael Cherny: Appreciate that.

Speaker Change: The next question comes from Richard close with Canaccord Genuity. Please proceed.

Speaker Change: Mark you said $37 million to $40 million of Amazon related revenue first half of the year.

Anyway.

Speaker Change: Hi, John <unk> on for Richard close Thanks for the questions.

Speaker Change: But anyway to get a sense on what the EBITDA contribution should be and I assume no, but any trapped costs.

Speaker Change: I guess just to dig into the full year guidance, a little bit more here. So.

Speaker Change: For customer of that size any dedicated assets that can either shift over to other customers can be leverage or how do you think about the profitability contribution.

Speaker Change: The female utilization rate.

Speaker Change: So 'twenty one to 'twenty three and then 24.

Speaker Change: Is there anything to takeaway from like the large client, leaving them, having a higher utilization rate or is it just literally just conservatism from the variability of this past year any commentary there would be great.

Speaker Change: Yes, no as far as trapped Costco now.

Speaker Change: There's nothing to speak of at all there.

Speaker Change: From a profitability standpoint, and we had said this when we first announced the departure that.

Speaker Change: Yeah look when you have a mature client.

Speaker Change: That their contribution from EBITDA perspective was lower than the book of business.

Speaker Change: And their utilization rate leave and they are being replaced by new clients, who typically in their first year has a lower level of utilization as people begin their journeys.

Speaker Change: And I guess really at this stage what I would say is is that all of that's factored into the guidance for the year.

Speaker Change: So as you see.

Speaker Change: Between Q1 balance of the year you can see.

Speaker Change: Through the course of the year Youre going to see sort of a dilutive effect. It doesn't mean that underlying all of the other other clients. There is any kind of dilution. There. It really is just sort of the tradeoff from that mature client being replaced by newer clients.

Speaker Change: Just how that's reflected for us.

Speaker Change: I appreciate that.

Speaker Change: The next question comes from Richard close with Canaccord Genuity. Please proceed.

Speaker Change: It's something that I had some data and covered back on the Investor day in August so.

Speaker Change: Hi, John <unk> on for Richard close Thanks for the questions.

Speaker Change: Some of that dynamic I think is what we're seeing here.

Speaker Change: I guess just to dig into the full year guidance, a little bit more here. So.

Speaker Change: Yeah.

Speaker Change: Alright, great great. Thanks, I guess, one follow up.

Speaker Change: The female utilization rate.

Speaker Change: You mentioned investments to integrate benefit bump and realize the value can you just give some further detail on investments need to be made and what exactly youre expecting by the end of 2025.

Speaker Change: Low 21% to 23 or 'twenty four.

Speaker Change: Is there anything to takeaway from like the large client, leaving I'm, having a higher utilization rate or is it just literally just conservatism from the variability of this past year any commentary there would be great.

Speaker Change: Yes.

Speaker Change: All the investments that we talked about not only around benefit bump, but also around our global offering including our existing platform.

Speaker Change: Yeah look when you have a mature client.

Speaker Change: And their utilization rate leave and Theyre being replaced by new clients, who typically in their first year has a lower level of utilization as people begin their journeys.

Speaker Change: Integrating.

Speaker Change: The entire experience of all of those assets for the member.

Speaker Change: In terms of when the member engages with with the overall better offering the navigation services that that benefit bump provides.

Speaker Change: Through the course of the year Youre going to see sort of a dilutive effect. It doesn't mean that underlying all of the other clients. There is any kind of dilution. There. It really is just sort of a tradeoff from that mature client being replaced by newer clients.

Speaker Change: The new products.

Speaker Change: That will be offered globally as well as in terms of an expanded product.

Speaker Change: Product offering et cetera are all the different areas of investment.

Speaker Change: It's something that I had some data and covered back on Investor day in August so.

Speaker Change: Alright, thank you.

Speaker Change: The next question comes from Scott Schonhaus with Keybanc Scott. Please proceed.

Speaker Change: Some of that dynamic I think is what we're seeing here.

Speaker Change: Alright, great. Thanks, I guess, one follow up.

Scott Schonhaus: Hey team. Thanks for the question and good results I, just want to kind of better understand the full year guidance and parse through this you know obviously, we talked about the impact from Amazon in the mature utilization it has on your business.

Speaker Change: Mentioned investments to integrate benefit bump and realize the value can you just give some further detail on investments need to be made and what exactly youre expecting by the end of 2025.

Scott Schonhaus: But Europe, you're guiding to even ex the Amazon.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: All of the investments that we talked about not only around benefit bump, but also around our global offering including our existing platform are integrating the.

Scott Schonhaus: $40 million you are guiding to low single digit growth here with margins that seem to be compressing can you just walk through I know you talked about investments on your platform can you maybe just talk to us about where you see this business from a margin standpoint at low single digit growth.

Speaker Change: The entire experience of all of those assets for the member.

Speaker Change: In terms of when the member engages with with the overall banner and offering the navigation services that that benefit bump provides.

Scott Schonhaus: For the next several years if thats the case.

Speaker Change: Yes look I think as far as revenue growth goes obviously the largest client that we now have we've given you numbers around 2025. They represented 12% of revenues in 2024. So if you do the math of removing them and trying to understand what the growth is of the underlying.

Speaker Change: The new products.

Speaker Change: That will be offered globally as well as in <unk>.

Speaker Change: With expanded profit.

Speaker Change: Product offering et cetera are all the different areas of investment.

Speaker Change: Great. Thank you.

Scott Schonhaus: The next question comes from Scott Schonhaus with Keybanc Scott. Please proceed.

Speaker Change: Buying business, including now the new clients. We brought on that brings you back up into the into the teens from a growth perspective. So that's part of how we're looking at it and then as far as profitability goes.

Speaker Change: And we sort of alluded to it in our in our in our prepared remarks.

Scott Schonhaus: But you.

Speaker Change: Some of the investments that we're making are capitalized investments so you're going to see capex go up a bit but some of them also just run through the P&L and we said that they are in the similar scale as those $50 million of Capex. If you. If you remove those out and looked at things on sort of an apples to apples basis our March.

Scott Schonhaus: You are guiding to even ex the Amazon.

$40 million Youre guiding to low single digit growth here with margin does seem to be compressing can you just walk through I know you talked about investment on your platform can you maybe just talk to us about where you see this business from a margin standpoint at low single digit growth for the next several years if that's the case.

Speaker Change: <unk> would be expanding in 2025.

Scott Schonhaus: Hi.

Speaker Change: That's really helpful. I just want to squeeze in one follow up here.

Scott Schonhaus: Yes look I think as far as revenue growth goes.

Speaker Change: If we think about.

Scott Schonhaus: Obviously, the largest client that we now have we've given you numbers around 2025. They represented 12% of revenues in 2024. So if you do the math.

Speaker Change: All the additional services.

Speaker Change: That youre, adding in 2025 and beyond is there any other services that you that you think you could add that would help you get better visibility into your business and as you look back at 2024, where you saw pockets air pockets.

Scott Schonhaus: Removing them and trying to understand what the growth is of the underlying business, including now the new clients. We brought on that brings you back up into the into the teens from a growth perspective. So that's part of how we're looking at it and then as far as profitability goes.

Speaker Change: Less engagement did you have any.

Speaker Change: Material fixes in your business model will allow for more visibility.

Speaker Change: I'm not really sure.

Scott Schonhaus: And we sort of alluded to it in our in our <unk>.

Speaker Change: What types of services, you're thinking about relative to getting more visibility.

Scott Schonhaus: In our prepared remarks, some of the investments that we're making are capitalized investments so you're going to see capex go up a bit but some of them also just run through the P&L and we said that they are in the similar scale as those $50 million of Capex. If you if you remove those out and looked at things on sort of an.

Speaker Change: So I mean, the services that we have what we described in terms of of what we have now and also what we have in terms of expanded offerings with with the acquisition of benefit bump.

Speaker Change: So I'm not sure what else might provide more insight and as it relates to the variability that we saw in 2024 as we talked about it.

Scott Schonhaus: Apples to apples basis, our margins would be expanding in 2025.

Speaker Change: We engage with our members we engage with them in terms of the care they need generally theyre going through the decision is going to make that a better both personal and medical relative to when they're going to.

Speaker Change: That's really helpful. I just want to squeeze in one follow up here.

Speaker Change: If we think about.

Speaker Change: Get care.

Speaker Change: All the additional services.

Speaker Change: And we don't.

Speaker Change: Other than that we're not engaging with them when they are pausing when they're deferring that decision when they are choosing to not progress on the treatment.

Speaker Change: In certain short periods of time as we saw in 2024, so we're not really more insight there.

Speaker Change: Yes, I just meant more maybe engagement on the member portal App could drive better insight, but that's great. Thanks Pete.

Speaker Change: Less engagement did you have any.

Speaker Change: Material fixes in your business model that allows for more visibility.

Speaker Change: Up next is <unk>.

Speaker Change: I'm not really sure.

Speaker Change: One interesting with Trust Securities. Please proceed.

Speaker Change: What types of services, you are thinking about relative to getting more visibility.

Speaker Change: Yes, I actually wanted to stay on the same topic. Thanks. Thanks for taking my question. So.

Speaker Change: <unk>.

Speaker Change: So I mean, the services that we have what we described in terms of of what we have now and also what we have in terms of expanded offerings.

Speaker Change: So as in the Bakken and clearly as you talked about last earnings call.

Speaker Change: Pending some time to analyze call transcripts and member data and see maybe interact with potentially re engaging members have you gained any more understanding of around like why consumption trends soften in Q3 and early Q4, and then trends improved since then I can understand that there is quarterly while drilling plans, but.

Speaker Change: With the acquisition of benefit Bob.

Speaker Change: So I'm not sure what else might provide more insight and as it relates to the variability that we saw in 2024 as we talked about it.

Speaker Change: We engage with our members.

Speaker Change: Engage with them in terms of the care they need the generally they are going through the decisions, they're going to make it a better both personal and medical relative to when they're going to.

Speaker Change: I was wondering about any new learnings from additional observations you can share that would be really helpful.

Speaker Change: Get care.

Speaker Change: And we don't.

Speaker Change: The short answer is not really.

Speaker Change: Other than that we're not engaging with them when they are pausing when they're deferring that decision when they are choosing to not progress on the treatment.

Speaker Change: So again as I talked about it even as we analyze that data the discussion and engagement is usually about the journey to going on and you don't really get into detailed discussions around timing.

Speaker Change: In certain short periods of time as we saw in 2024, so we're not really more insight there.

Speaker Change: Yes, I just meant more maybe engagement all the member portal App could drive better insight, but that's great. Thanks Pete.

Speaker Change: When theyre going to make decisions around their journey and why we saw as a population for a short period of time that reduction, but then than the beginning of returning.

Speaker Change: Up next is Jalan dressing with Trust Securities. Please proceed.

Speaker Change: To more historical patterns that we're seeing now, but again as I said before.

Jalan: Yes, actually I wanted to stay on the same topic. Thanks, Thanks for taking my question.

Speaker Change: The bottom line is that people choose to do their treatment and continue their journey and pursue care when it's right for them and it makes sense for them and so it just happened to be that in one quarter, we saw that a little bit of slowdown or vis vis normal.

Jalan: So as you look back and then clearly as you talked about last earnings call.

Jalan: Spending some time to analyze call transcripts and member data and see maybe interact with potentially re engaging members have you gained any more understanding of around like why consumption trends soften in Q3 and early Q4, and then trends improved since then I can understand that there's quarterly volatility trends, but.

Speaker Change: Patterns.

Speaker Change: But other than that not more insight.

Speaker Change: Okay. My quick follow up on that.

Speaker Change: What I want to make though and this is really important I think is and we've talked about this a J P. M and we had a slide if you look at average utilization over over all the years right and you just average that out versus the variability and utilization in each year, there's literally only over the entire period of when we.

Jalan: I was wondering do any new learnings from additional observations you can share that would be really helpful.

Jalan: The short answer is not really.

Jalan: So again as I talked about it even as we analyze that data the discussion and engagement is usually about the journey to going on and you don't really get into detailed discussions around timing.

Speaker Change: Been around a $22 million revenue variance.

Jalan: When theyre going to make decisions around their journey and why we saw as a population for a short period of time that reduction, but then than at the beginning of returning.

Speaker Change: Cumulatively right. So if you think about it right.

Speaker Change: Going to be utilization variability in giving years, but on an overall basis in terms of of growth and delivering value to our shareholders that growth is happening over time based on the logos and lives are adding each year and any short term interim variability I think is although I understand for your models that you guys want to understand it.

Jalan: More historical patterns that we're seeing now, but again as I said before.

Jalan: The bottom line is that people choose to do their treatment and continue their journey and pursue care when it's right for them.

Jalan: And it makes sense for them and so it just happened to be that in one quarter, we saw that a little bit of slowdown or vis vis normal.

Speaker Change: The reality is that in terms of overall value, we continue to deliver that growth.

Speaker Change: Great.

Speaker Change: A follow up on the pharmacy benefit services business. It did outperform in Q2 to Q4 sorry.

Jalan: Seasonal patterns, but other than that not more insight.

Speaker Change: Okay. My quick follow up on that.

Speaker Change: Any particular driver behind that.

Speaker Change: One one point I want to make though and it is really important I think is and we've talked about this at J P. M and we had a slide if you look at average utilization over over all the years right and you just average that out versus the variability and utilization in each year, there's literally only over the entire period.

Speaker Change: In terms of.

Speaker Change: I'll just talk about that growth should be in line with fertility benefits business, but there was outperformance in Q4 and for 2025 should we just model similar growth as fertility benefit.

Speaker Change: It grew a little better than medical revenue in Q4. Some of that is a function of of the drugs that you order ahead of treatment for the next quarter. Some of that is a function of just timing. So Joe it's never never perfectly correlated to the timing of the medical treatment in terms of when in suspense.

Speaker Change: We've been around a $22 million revenue variance.

Speaker Change: Cumulatively right. So if you think about it right.

Speaker Change: Theres going to be utilization variability in giving years, but on an overall basis in terms of of growth and delivering value to our shareholders that growth is happening over time based on the logos and lives were adding each year and any short term interim variability I think is is although I understand for your models that you guys want to understand it.

Speaker Change: Great. Thanks, a lot.

Allen Lutz: The next question comes from Allen Lutz with Bank of America. Please proceed.

Speaker Change: Good afternoon, and thanks for taking the questions. One for Pete you mentioned something interesting about 20% of your existing clients are choosing new product, but 40% of new clients are adopting new products can you unpack that a little bit is it just because you are sort of in that selling phase where you're meeting the prospects.

Speaker Change: Important the reality is that in terms of overall value, we continue to deliver that growth.

Speaker Change: Great and a quick follow up on pharmacy benefit services business.

Speaker Change: <unk> outperformed in Q2 to Q4.

Allen Lutz: The face where you're able to talk about the new products.

Speaker Change: Any particular driver behind that.

Speaker Change: In terms of.

Allen Lutz: Is that what is effectively the difference here or.

Speaker Change: I'll just talk about that growth should be in line with fertility benefits business, but there was outperformance in Q4 and for 2025 should we just model it similar growth as fertility benefit.

Allen Lutz: Basically as you kind of rollover existing clients they come up for renewal that is kind of when the opportunity is just trying to get a sense of those 20% existing clients is most of that when they are adding new services around when there's a contract renewal.

Speaker Change: Yes.

Speaker Change: It grew a little better than medical revenue in Q4. Some of that is a function of of the drugs that you order ahead of treatment for the next quarter. Some of that is a function of just timing. So it's never never perfectly correlated to the timing of the medical treatment in terms of when suspense.

Allen Lutz: Anything you can unpack there would be helpful. Thanks.

Allen Lutz: So yes. So a couple of things you can add to service whenever you want you don't have to add the service on renewal.

Allen Lutz: 100% of the existing book of business is pretty significant considering the size of the book of business versus the $1 1 million lives that we added with the new clients.

Speaker Change: Great. Thanks, a lot.

Speaker Change: The next question comes from Allen Lutz with Bank of America. Please proceed.

Speaker Change: At some some of that May be what you said, which is you are in a buying decision at that point and so may have a slightly higher likelihood of taking on the full suite of products, but the overall, 20%. We still think is hugely successful relative to first union market, Michael I don't give internet, yes, I think thats, all right and the only thing I would add is on.

Allen Lutz: Good afternoon, and thanks for taking the questions. One for Pete you mentioned something interesting about 20% of your existing clients are choosing new product, but 40% of new clients are adopting new products can you unpack that a little bit is it just because you are sort of in that selling.

Speaker Change: As where youre meeting.

Speaker Change: Prospects face to face, where you're able to talk about the new products.

Speaker Change: Certainly on our existing client base here, we meet with them frequently and discuss.

Speaker Change: Is that what is effectively the difference here or.

Speaker Change: Their strategy in the current year their strategy their benefit strategy in the upcoming year and that all factors into when they add services or where their priorities might be for that year, but to echo Pete's comments.

Speaker Change: Basically as you kind of rollover existing client they come up for renewal that is kind of when the opportunity is just trying to get a sense of those 20% existing clients is most of that when they are adding new services around when there's a contract renewal.

Speaker Change: We were pretty excited about the existing book adoption rate as well as those new clients.

Speaker Change: You can unpack there would be helpful. Thanks.

Speaker Change: Yes. So a couple of things you can add to service whenever you want you don't have to add the service on renewal.

Speaker Change: We'll look for continued progress this year on that as well.

Speaker Change: Thanks for that and then one for Mark on.

Speaker Change: 20% of the existing book of business is pretty significant considering the size of that book of business versus the $1 1 million lives that we added with the new clients.

Speaker Change: On the guidance framework here as we think about the guidance this year versus prior years.

Speaker Change: The loss of that large customer kind of makes it a little bit difficult to look at these the guidance on an apples to apples basis as we think about.

Speaker Change: Yes at some some of that May be what you said, which is you are in a buying decision at that point and so may have a slightly higher likelihood of taking on the full suite of products, but the overall, 20%. We still think is hugely successful relative to first union market.

Speaker Change: Female utilization rate and then art cycles per unique PMO utilize there as we just take a step back and think about.

Speaker Change: The framework for guidance can you just talk about maybe what's changed if anything.

Michael Cherny: Mike why don't you have internet yes.

Michael Cherny: That's all right and the only thing I would add is on certainly on our existing.

Speaker Change: We're thinking about guiding in 2025 versus 2024.

Michael Cherny: Client base here, we meet with them frequently and discuss their.

Speaker Change: Yes, I would say that our approach here for the year.

Our strategy in the current year their strategy their benefit strategy in the upcoming year and that all factors into when they add services or where their priorities might be for that year, but to echo Pete's comments.

Speaker Change: Is.

Speaker Change: More akin to our approach for how we guided Q4 as we.

We did on the November call.

Michael Cherny: Where we were pretty excited about the existing book adoption rate as well as those new clients.

Speaker Change: We have pretty good.

Speaker Change: Pretty decent amount of data and insight into Q1 not complete obviously.

Michael Cherny: We'll look for continued progress this year on that as well.

Speaker Change: But we can see where the variety of kpis.

Michael Cherny: Thanks for that and then one for Mark on.

Speaker Change: There is a natural step down from Q4 to Q1 as more people begin to start their journey.

Michael Cherny: On the guidance framework here as we think about the guidance this year versus prior years.

Speaker Change: First quarter, typically as well as with all the new clients. So we're sort of add a little bit of a new level.

Michael Cherny: The loss of that large customer kind of makes it a little bit difficult to look at these the guidance on an apples to apples basis as we think about.

Speaker Change: There, but yes, I mean, we have a lot of experience in projecting out new clients versus existing clients and tracking that so longer story short.

Michael Cherny: Female utilization rate and then art cycles per unique PMO utilize or as we just take a step back and think about.

The framework for guidance can you just talk about maybe what's changed if anything is as you're thinking about guiding in 2025 versus 2024.

Speaker Change: We're looking at the data that we see now.

Speaker Change: It happens to be trending slightly better.

Speaker Change: But we've been careful about our guidance ranges to be sure that we're incorporating some of the variability that we've seen in last year.

Michael Cherny: Yes, I would say that our approach here for the year.

Michael Cherny: Is.

Michael Cherny: More akin to our approach for how we guided Q4 as we as we did on the November call.

Speaker Change: Great. Thank you.

Speaker Change: Next question comes from Sarah James with Cantor. Please proceed.

Michael Cherny: We have pretty good.

Sarah James: Thank you.

Speaker Change: Now that the Amazon employees are aware of their benefit change are you seeing any pull forward of demand.

Michael Cherny: Pretty decent amount of data and insight into Q1 not complete obviously.

Michael Cherny: But we can see where the variety of Kpis are trending there is there is a natural step down from Q4 to Q1 as more people begin to start their journey in the first quarter typically as well as with all of the new clients. So.

Speaker Change: You said, our music type of mentality and do you seen any of that happened in the first half of 'twenty five.

Speaker Change: For the for the client that we lost.

Michael Cherny: We're sort of add a little bit of a new level.

We did not see any pull forward in Q4.

Michael Cherny: There, but yes, I mean, we have a lot of experience in projecting out new clients versus existing clients and tracking that so.

Speaker Change: It's probably the easiest way I can answer it.

Our growth rate was slightly higher excluding.

Speaker Change: That client in Q4 versus versus the overall book of business. So there was no greater pull through if you will as you're thinking about it the way you're thinking about it.

Michael Cherny: Longer story short.

Michael Cherny: We're looking at the data that we see now it happens to be trending slightly better.

Michael Cherny: But we've been careful about our guidance ranges to be sure that we're incorporating some of the variability that we've seen in last year.

Speaker Change: Okay.

Speaker Change: And then in 2025, you've seen any of that.

Speaker Change: In the last couple of quarters that that remains in the queue.

Michael Cherny: Great. Thank you.

Speaker Change: First of all as we talked about in the prepared remarks for 2025.

Speaker Change: Next question comes from Sarah James with Cantor. Please proceed.

Speaker Change: Way more limited relative to the number of employees that that that client.

Michael Cherny: Thank you.

Speaker Change: Now that the Amazon employees are aware of their benefit change are you seeing any pull forward of demand.

Speaker Change: At that client that are able to avail themselves of our benefit there's a whole bunch of criteria relative to.

You said, our music type mentality and do you assume any of that happens in the first half of 'twenty.

Speaker Change: Those that are already on a journey with us that can then continue and that continuation and.

Speaker Change: And at the end of Q2 and so market.

Speaker Change: For the for the client that we lost.

Speaker Change: Called out the dollars relative to what we anticipated based on those criteria.

Speaker Change: We did not see any pull forward in Q4.

Speaker Change: Okay, and then as you saw.

Speaker Change: It's probably the easiest way I can answer it.

Speaker Change: Selling additional services to your clients, how should we think about that flowing through the model how much of a tailwind is that is it municipal.

Speaker Change: Our growth rate was slightly higher excluding.

Speaker Change: That client in Q4 versus versus the overall book of business. So there was no greater pull through if you will as you're thinking about it the way you're thinking about it.

Speaker Change: The revenue per cycle type of metric should we think about it impacting.

Speaker Change: Okay.

And in 2025, you've seen any of that.

Speaker Change: The cost of services ratio or margin or is it just too small to really be impacting the model.

Speaker Change: In the last couple of quarters that that means thank you.

Speaker Change: First of all as we talked about in the prepared remarks for 2025, it's way more limited relative to the number of employees that that that client.

Speaker Change: Right now it's too small.

Speaker Change: Sure.

Speaker Change: For it to have a meaningful impact and as I as I said before in one of the previous questions. As soon as we get more insight and are able to give more color on it we will book, but.

Speaker Change: That client that are able to avail themselves of our benefit.

Speaker Change: Whole bunch of criteria relative to those.

Speaker Change: There is a level of activity that has to occur relative to creating awareness of those clients and that's going to take a minute and so.

Speaker Change: Those that are already on a journey with us that can then continue and that continuation and.

Speaker Change: <unk>.

Speaker Change: And at the end of Q2 and so market.

Speaker Change: In future quarters, as we have more to share we will.

Speaker Change: And I'd just add to that we're cognizant that some of the metrics the consistency of metrics is helpful or.

Speaker Change: Called out the dollars relative to what we anticipated based on those criteria.

Speaker Change: Okay, and then as you said.

Speaker Change: Really all the investors as well as you guys in terms of modeling and we'll we'll take that into consideration when we're reporting them in guiding them in the future.

Speaker Change: Some of the additional services.

Speaker Change: Clients, how should we think about that flowing through to the model how much of a tailwind is that is it <unk>.

Speaker Change: Once they become significant enough.

The revenue per cycle type of metric should we think about it impacting.

Speaker Change: Once again, if you have a question or a comment please press star one on your Touchtone phone. The next question comes from Constantine <unk> with citizens JMP. Please proceed.

Speaker Change: The cost of services ratio or margin or is that just too small to really be impacting the model right.

Speaker Change: Thanks.

Speaker Change: Pete for benefit bump is this largely a.

Right now it's too small.

Speaker Change: Sure.

Speaker Change: A white space opportunity I'm, just wondering if you can kind of talk about what I guess, what kind of customers or is that is that service most suitable for.

Speaker Change: For it to have a meaningful impact and as I as I said before in one of the previous questions. As soon as we get more insight and are able to give more color on it we will but.

Speaker Change: And can you give us some sense for the financial scale and maybe <unk>.

Speaker Change: There is the level of activity that has to occur relative to creating awareness of those clients and that's going to take a minute and so.

Speaker Change: Growth of that.

Speaker Change: Asset today.

Speaker Change: There is.

Speaker Change: In future quarters, as we have more to share we will.

Speaker Change: Not any color I can give you around the financial scale around that asset its as.

Speaker Change: And I'd just add to that we're cognizant that some of the metrics the consistency of metrics is helpful.

Speaker Change: As I described it relative to the buyers the buyers.

Are the buyers that buy our benefit and anybody who is focused on on family building and to the extent as I described it to the extent that employers obviously offer benefits to their employees may benefit around that touch.

Speaker Change: Really all the investors as well as you guys in terms of modeling and we'll we'll take that into consideration when we're reporting them in guiding them in the future.

Speaker Change: Once they become significant enough.

Speaker Change: Family building in family in many ways, whether it's trying to get pregnant with us once you're pregnant, whether it's postpartum whether it's once you I believe.

Speaker Change: Once again, if you have a question or a comment please press star one on your Touchtone phone. The next question comes from Constantine <unk> with citizens JMP. Please proceed.

Speaker Change: Theres parenting solutions et cetera.

Speaker Change: It's all of those things and so so when you're doing that.

Speaker Change: Thanks.

Speaker Change: Pete for benefit bump is this largely a.

Speaker Change: It is a really really good service to amplify all of those types of services that you're that you're offering <unk> that it might even be available from state programs et cetera that the employee can fully appreciate and navigate their journey of as they're thinking about building their family as it's happening and then and then everything.

Speaker Change: A white space opportunity I'm, just wondering if you can kind of talk about what I guess, what kind of customers or is that is that service most suitable for.

Speaker Change: And can you give us some sense for the financial scale and maybe <unk>.

Speaker Change: Growth of that.

Speaker Change: Today.

Speaker Change: To make life easy as possible for returning to work and so it's and anybody all employers. If you think about it are offering services in all of those categories and so effectively all employers.

Speaker Change: There is.

Speaker Change: Not any color I can give you around the financial scale around that asset.

Speaker Change: As I described it relative to the buyers the buyers or the buyers that buy our benefit anybody who is focused on on family building and to the extent as I described it to the extent that employers obviously offer benefits to their employees many benefits around that touch.

Speaker Change: Great and then just one follow up here on.

Speaker Change: You guys have done a nice job assembling a network of channel partnerships over the last couple of years.

Speaker Change: Just wondering if you can give us a sense for how those partnerships are starting to impact sales activity and I guess also informing some of the newer initiatives you're rolling out this year, namely with <unk>.

Speaker Change: Family building in family in many ways, whether it's trying to get pregnant with us once you're pregnant, whether it's postpartum whether it's once you leave.

Speaker Change: Whether it's parenting solutions et cetera.

Speaker Change: Cigna.

Speaker Change: Sure.

Speaker Change: It's all of those things and so so when you're doing that.

Speaker Change: Our partnerships have been.

Speaker Change: Really good.

Speaker Change: It is a really really good service to amplify all of those types of services that you're that you're offering <unk> that it might even be available from from state programs et cetera that the employee can fully appreciate and navigate their journey of as they are thinking about building their family as it's happening and then and then everything.

Speaker Change: Have contributed well to helping support our sales season, we don't spike out sort of specifics around sell through partnerships or not but they are they are a.

Speaker Change: On the metal part of how we go to market.

Speaker Change: Provide.

Speaker Change: A number of different areas of benefit around credibility of our services as just going through the partnership process.

Requires.

Speaker Change: Deep dive into our services and our value.

Speaker Change: And all of those pieces and also provides easier contracting pass for employers.

Speaker Change: Great and then just one follow up here on.

Speaker Change: You guys have done a nice job assembling a network of channel partnerships over the last couple of years.

Speaker Change: All our partnerships do that and we would expect for the new partnerships, including Cigna.

Speaker Change: Our other health plan partners.

Speaker Change: To continue that trend, but also the health plans do sit in a core benefit.

Speaker Change: Cigna.

Speaker Change: Benefit buying.

Speaker Change: Sure.

Speaker Change: Position or benefit influence position and so we're particularly excited about our new health plan partnerships and <unk>.

Speaker Change: Our partnerships have been really good.

Speaker Change: Have contributed well to helping support our sales season, we don't spike out sort of specifics around sell through partnerships or not but they are they are a fundamental part of how we go to market.

Speaker Change: Continuing that that trend from a sales perspective, and again, the new partnerships take time they'll evolve over time, we do expect.

Speaker Change: Benefit some benefit from.

Speaker Change: This year, but again, that's more of a long term investment as we continue to integrate into these new health plan partnerships.

Speaker Change: They provide.

Speaker Change: <unk> have different <unk>.

Speaker Change: Areas of benefit around credibility of our services.

Speaker Change: Thank you.

Speaker Change: Just going through the partnership process.

Speaker Change: And our last question. This evening comes from David Larsen with <unk>. Please proceed.

Speaker Change: Requires a deep dive into our services and our value in.

Speaker Change: Hi, This is Jenny Chen on for Dave Congrats on a great quarter I was wondering if you could talk about the competitive environment and pricing.

Speaker Change: And all of those pieces and also provides easier contracting pass for employers.

Speaker Change: All of our partnerships do that and we would expect for the new partnerships, including Cigna.

Speaker Change: From our knowledge there are several late stage private space and we've heard that.

Speaker Change: And our other health plan partners.

Speaker Change: To continue that trend, but also the health plans do sit in a core benefit.

Speaker Change: Some are pricing very aggressively just any thoughts on that dynamic would be helpful. Thanks.

Speaker Change: Sure.

Speaker Change: Benefit buying position or benefit influence position and so we're particularly excited about our new health plan partnerships and <unk>.

Speaker Change: We can't we obviously can't control, what what the competitors do from a pricing perspective.

Speaker Change: And continuing that that trend from a sales perspective, and again, the new partnerships take time, though they will evolve over time, we do expect benefit some benefit from.

Speaker Change: We go into the market, whether that whether its new business opportunities or our existing our existing business.

Speaker Change: Our jobs are and we are focused on demonstrating our broader value.

Speaker Change: This year, but again, that's more of a long term investment is as we continue to integrate into these new health plan partnerships.

Speaker Change: Which includes both price as well as where the where the bigger portion of value in dollar set which is in the ability to.

Speaker Change: Thank you.

Speaker Change: As in our ability to predict and control cost and trend for employers and so we're fundamentally focused there and fundamentally focused on on the value that we deliver there as far as sort of undercutting price in the market and things like that those are things that we've seen and dealt with over time and continue to say and have said.

Speaker Change: And our last question. This evening comes from David Larsen with <unk>. Please proceed.

Speaker Change: Hi, This is Jenny Chen on for Dean Congrats on a great quarter I was wondering if you could talk about the competitive environment and pricing.

Speaker Change: From our knowledge there are several late stage private space and we've heard that some of them are pricing very aggressively just any thoughts on that dynamic would be helpful. Thanks.

Speaker Change: Before those are those are short term strategies that ultimately catch up with competitors and again.

Speaker Change: We're focused on broader value and multi year value that we deliver to our clients and as we reported when we reported our Q3 results.

Speaker Change: Sure.

Speaker Change: We can't we obviously can't control what what the competitors do from a pricing perspective, as we go into the market, whether that whether its new business opportunities or our existing our existing business.

Speaker Change: Against all those competitors and those dynamics to the extent that you're hearing about them. We want every jumbo accounts.

Speaker Change: And every one of the competitors were part of the RFP processes for those and so just factor that into your thinking.

Speaker Change: Our jobs are and we are focused on demonstrating our broader value.

Speaker Change: Okay, and if I could.

Speaker Change: Which includes both price as well as where the where the bigger portion of value in dollars set which is in the ability to which is in our ability to predict and control cost and trend for employers and so we're fundamentally focused there and fundamentally focused on on the value that we deliver there.

Speaker Change: Thank you and a quick follow up can you just talk about your international business and opportunity I know you mentioned it a bit.

Speaker Change: When you talked about M&A in the prepared remarks, hows that progressing and what other opportunities do you think.

Speaker Change: Sure we're excited about.

Speaker Change: The acquisition in that area and the expansion of services within our global and international business.

Speaker Change: As far as sort of undercutting price in the market and things like that those are things that we've.

Speaker Change: <unk> seen and dealt with over time and continue to say and have said before those are.

Speaker Change: And again it helps it helps continue to round out our services and as we work with.

Speaker Change: Those are our short term strategies that ultimately catch up with competitors and again.

Speaker Change: Large employers to make sure that we're able to offer them a full complete view.

Speaker Change: We're focused on broader value and multi year value that we deliver to our clients and as we reported when we reported our Q3 results.

Speaker Change: <unk> services for their entire population.

Speaker Change: And again, that's where we're excited about that our global solutions and are projecting global solutions.

Speaker Change: Against all those competitors and those dynamics to the extent that you're hearing about them. We want every jumbo accounts.

Speaker Change: And again, that's sort of all factors into how we go to market and the broad solutions that we're able to bring new employers now.

Speaker Change: And every one of our competitors were part of the RFP processes for those and so just factor that into your thinking.

Speaker Change: There are no further questions in queue I would now like to turn the floor back to James Hart for closing remarks.

Okay, and if I could.

Speaker Change: Thank you and a quick follow up can you just talk about your international business and opportunity I know you mentioned it a bit.

James Hart: Thank you John and thank you everyone for joining us. This afternoon. If you have any questions of course, please feel free to reach out otherwise we look forward to.

Speaker Change: When you talked about M&A in the prepared remarks, how is that progressing and what other opportunities do you think.

Speaker Change: Seeing you at the conferences, we are attending next month.

Speaker Change: Sure.

James Hart: Or and earnings.

Speaker Change: Excited about.

James Hart: In April.

Speaker Change: The acquisition in that area and the expansion of services within our global and our international business.

Speaker Change: Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day.

Speaker Change: And again it helps it helps continue to round out our services and as we work with.

James Hart: You for your participation.

Speaker Change: Very large employers to make sure that we're able to offer them a full complete view.

Speaker Change: AV services for their entire population.

Speaker Change: And again, that's where we're excited about that our global solutions and are projecting global solutions.

Speaker Change: And again, that's sort of all factors into how we go to market and the broad solutions that we're able to bring new employers.

Speaker Change: Okay.

Speaker Change: There are no further questions in queue I would now like to turn the floor back to James Hart for closing remarks.

James Hart: Thank you John and thank you everyone for joining us. This afternoon. If you have any questions of course, please feel free to reach out otherwise we look forward to seeing you at the conferences. We are attending next month.

Speaker Change: Or and earnings.

James Hart: In April.

Speaker Change: Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day.

James Hart: You for your participation.

James Hart: [music].

Speaker Change: Good day, ladies and gentlemen, and welcome to the progeny, Inc. Fourth quarter earnings Conference call. At this time, all participants are in a listen only mode and the floor will be opened for questions and comments. After the presentation. It is now.

Speaker Change: My pleasure to turn the floor over to your host James Hart the floor is yours.

James Hart: Thank you John and good afternoon, everyone welcome to our fourth quarter Conference call with me today are Peter <unk> CEO of progeny, Michael Turner, President and Mark Livingston CFO.

James Hart: I'll begin with some prepared remarks before we open the call for your questions before we begin I'll remind you that our comments and responses to your questions today reflect management's views as of today only and will include <unk>.

James Hart: Statements related to our financial outlook for both the first quarter and full year 2025, and the assumptions and drivers underlying such guidance, including the impact of our sales team and client launches and our expected utilization rates and mix are anticipated number of clients and covered lives for 2025, the potential benefits of our solutions our ability to acquire.

James Hart: New clients and recruiting upsell existing clients, our market opportunity and our business strategy plans goals and expectations concerning our market position future operations and other financial and operating information, which are forward looking statements under the federal Securities law actual results may differ materially from those contained in or.

James Hart: Slide by these forward looking statements due to risks and uncertainties associated with our business as well as other important factors for a discussion of the material risks uncertainties assumptions and other important factors that could impact our actual results. Please refer to our SEC filings and today's press release, both of which can be found on our Investor Relations website.

James Hart: Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or.

James Hart: During the call. We will also refer to non-GAAP financial measures such as adjusted EBITDA adjusted EBITDA margin.

Pete: Adjusted EBITDA margin on incremental revenue and non-GAAP earnings per diluted share more information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures are available in the press release, which is available at investors <unk> Dot Com I would now like to turn the call over to Pete.

Pete: Thanks, Jamie and thanks, everyone for joining us for.

Pete: We're pleased to report that 2024 ended on a positive note with revenue and adjusted EBITDA for the quarter above the high end of our guidance ranges.

Pete: From when we last spoke to you in November as Q4 progressed, we continued to see an improvement in the pacing of member engagement relative to what we had seen in Q3.

Pete: In addition, we concluded the year with yet another strong sales and product development season, yielding sales of an incremental $1 1 million new covered lives and adding more than 80, new logos with 40% of those new logos, representing $1 5 million covered lives overall, adopting one or more of our newest serve.

Pete: <unk> and the charity postpartum and met a pause.

Pete: The retention of 99% of our clients through the execution of our partner expansion strategy, adding multiple health plan partners, including Cigna as our first ever National Health plan partner further strengthening our go to market presence for the sale season ahead.

Pete: And lastly, the advancement of our product strategy with the launch of our newest services in pregnancy postpartum in matter of months.

Pete: As we look to the year ahead, we continue to invest in our digital assets in support of our existing products as well as positioning us for future expansion.

Pete: All of the tailwind that had been fueling our past growth remain fully intact setting us up for a strong year ahead.

Pete: We continue to see how people all around the world for continuing to defer family building to later in life, which increases the need important impact of our solutions.

Pete: Employers are increasingly recognizing the value to both your bottom lines and to their employees' health and wellbeing by addressing underserved areas in women's health.

Pete: We continue to raise the bar for what a solution can achieve for all the key constituents in the ecosystem the patients to providers and plan sponsors to that last point, we're now entering our 10th year as the premier solution and family building.

Pete: And though many solutions have claimed to be delivering on the promises of value based care.

Actually achieving it through our unique approach to plan design and benefit management.

Pete: And how are we doing that well it starts by creating solutions that are flexible and customizable.

Pete: We recognize that every member every journey is unique.

Pete: We engineered our plan designed to be flexible to the individual patient, allowing us to ensure that the right care is being delivered at the right time for each person.

Pete: We also pioneered an unparalleled level of collaboration across our network empowering providers to deliver care more effectively while also enabling us to perform active benefit management throughout the journey and that's how we're reporting for the ninth straight year clinical outcomes that are significantly better than the national averages.

Pete: And we're the only ones reporting those outcomes at scale reporting results that include every member for every treatment as opposed to others, who only report on a small sample.

Pete: Because the project has experienced is so unique once they're projecting journey concluded we routinely heard from members who are disappointed when they had to return to their health plan or a point solution.

Pete: Same time, our clients are telling us of other gaps in women's and family health that they felt we can address and to capitalize on these opportunities a couple of years ago, we laid out a multiyear product roadmap that would allow us to thoughtfully and profitably expand our platform to solve for these gaps while simultaneously enhancing our existing shrink as well.

Pete: The first step was to invest in our product organization, both people and systems to be able to quickly add new features to existing services or to expand into new areas in ways that makes sense for us and our clients.

Pete: Step was to launch our solutions and maternity postpartum in medical.

Pete: And with approximately $6 7 million total covered lives in 2025, there remains a healthy runway ahead of us in further penetration of these services across the rest of our book of business.

Pete: And to further dive into our newer acquisition benefit bump for anyone expect them to have a child the parental lean process is often extraordinarily complex.

Pete: <unk> and administrative burden that screens, both the employee and their employer and add stress and anxiety to the new path.

Pete: And often the employers providing education and support services to ease the parenting journey and better position the employees for an eventual return to work. Unfortunately due to the complexity and fragmentation within the benefits ecosystem. These services. Many times go unused because the employee isn't aware of what's available.

Pete: How to access.

Pete: This is yet another opportunity, where we can leverage our existing strengths to both improve the member experience, while delivering measurable results and ROI for the client.

Pete: We're proud of this model is deeply clinical benefit pumps began by focusing on tying together all of an employee's family friendly benefits, making it easier for the members to navigate the employers entire offering including the services, we provide and family done.

Pete: In 2025, we will make additional investments to integrate these acquisitions to fully realize their value and create a wind platform across our high touch care management services with personalized digital engagement for patients providers and clients all surrounded by what we believe will be a better front end user experience.

Pete: Than anyone else in the market.

Pete: With the addition of these new components to our solution <unk> is extending its lead in the three areas that matter most to employers its member experience outcomes and cost control.

Pete: At this point.

Pete: Selling season is only in its very early stages, but we're pleased with the activity. We've seen so far which includes our active pipeline. The engagement, we're seeing with <unk> that were carried over from last year and the early commitments, we've already received including in verticals, where we have had past success.

Pete: This demonstrates once again, how our solution is the preferred choice amongst the most sophisticated data driven organizations in the world.

Mark: Revenue in the quarter grew 11% to $298 4 million for the full year revenue grew 7% to one $1 7 billion, representing our ninth straight year of growth.

Mark: The growth in both the quarter and the year was primarily due to an increase in the number of clients in covered lives as compared to the year ago period, the lower growth rate for the year as compared to Q4 was due to the periods of variability in consumption earlier in the year that we previously discussed with you.

Mark: As of December 31, we had 473 clients with at least 1000 lives representing an average of $6 5 million covered lives in the quarter.

Mark: This compares to 392 clients and an average of $5 4 million covered lives in the fourth quarter a year ago.

As compared to the third quarter average lives increased by nearly 30000, reflecting early launches from a small number of clients that we won in the most recent selling season.

Mark: As expected the lives within our existing base were flat versus <unk>.

Mark: Recapping the progression of these metrics at this time last year, we had 460 clients and $6 4 million covered lives under contract. Our most recent selling season produced 80, new clients and an incremental $1 1 million new lives and now we've entered 2020, but with over 530.

Mark: Clients and $6 7 million lives under contract.

Mark: This affirms what we've previously stated that our member base has grown for 2025, despite the loss of a large client.

Mark: The substantial majority of our newest clients and lives have already gone live and will be included in our accounts as of March 31.

Mark: Turning to the components of the top line for this quarter medical revenue increased nine 4% in the fourth quarter to $188 million and grew seven 9% in the year to $730 million.

Mark: Pharmacy revenue increased 13% in the fourth quarter to $111 million and grew 6% in the full year to $438 million.

Mark: The growth in both components was due to the same factors that impacted our overall revenue growth.

Mark: Turning now to our member engagement metrics female utilization was four 8% in the quarter consistent with the fourth quarter, a year ago and a slight increase from the four 7% we recorded in Q3.

Mark: For the year female utilization was one 7% slightly lower than the one 9% we reported a year ago, although at the higher end of our multi year range over the last several years.

Mark: More than 15800 art cycles were performed during the fourth quarter, our highest quarterly total ever yielding more than 61000 for the full year, reflecting 5% growth in art cycles in both the quarter and the year.

Mark: Our press release today includes the usual table to report art cycles per unique female utilizing which reflects an average of five four in the fourth quarter up from five 2% and <unk>.

Mark: For the full year art cycles per unique utilize or were still lower than 2023, which was due mostly to the periods of lower consumption earlier in the year.

Mark: We know that member activity can vary from period to period, reflecting the deeply personal nature of when it's the right time for members to pursue care in the areas. We address however, as we presented at the JP Morgan Conference last month. This short term variability doesn't have any bearing on the long term value we are creating for our investors.

Mark: <unk>.

Mark: We believe that the overall consistency with the rate of utilization demonstrates that we arent witnessing a macro shift with respect to the underlying medical need for our services or a lessening in people's desire to pursue our services.

Mark: Turning now to our margins and operating expenses gross profit increased 11% from the fourth quarter last year to $63 4 million. This yielded a 21, 3% gross margin a slight improvement from <unk> a year ago.

Mark: For the full year gross profit increased 6% to $253 million. The 21, 7% gross margin in 2024 was a slight decrease from the prior year, reflecting the impact of the unanticipated decline in cycles per utilized or at earlier points in this year.

Sales and marketing expense of five 2% of revenue in Q4 reflected a modest improvement from the year ago period.

Mark: For the full year sales and marketing was equal to the prior period at five 5% of revenue as investments we've made to expand our go to market resources and channel partner relationships, such as our first ever National Health plan partnership with Cigna continue to be offset by the leverage we gain through our client acquisition and retention success.

Mark: G&A was 10, 7% of revenue this quarter slightly higher than the fourth quarter a year ago for the full year G&A improved slightly to 10, 4% of revenue the improvement in the year is due to the efficiencies that we continue to realize in our back office operations.

Mark: Yeah.

Mark: With the top line growth and higher.

Q4 2024 Progyny Inc Earnings Call

Request a DemoDemo

PGNY

Progyny

Earnings