Q4 2025 Progyny Inc Earnings Call

February 26, 2026

James Hart. Sir. The floor is yours.

Thank you, Paul and good afternoon everyone. Welcome to our fourth quarter conference call with me today, our pet and epsky CEO of progeny and Mark, Livingston CFO. We will begin with some prepared remarks before we open the call for your questions.

Speaker #4: Thanks for holding. We appreciate your time and patience. Please stay on the line, and we'll be back.

Speaker #5: Good day and welcome to the Progyny, Inc. fourth quarter earnings conference call. At this time, all participants have been placed on a listen-only mode.

Speaker #5: Before we open for questions and comments following the presentation, it is now my pleasure to turn the floor over to your host, James Hart.

Speaker #5: Sir, the floor is yours.

Speaker #6: Thank you, Paul, and good afternoon, everyone. Welcome to our fourth quarter conference call. With me today are Peter Anevski, CEO of Progyny, and Mark Livingston, CFO.

Before we begin, I'd like to remind you that our comments and responses to your questions today, reflect Management's views as of today only and will include statements related to our financial outlook for both the first quarter and full year 2026 and the assumptions and drivers, underlying such guidance, our anticipated, number of clients and covered lives for 2026, the demand for our Solutions, anticipated employment levels of our clients in the industries that we serve are expected, utilization rates and mix the potential benefits of our solution. Our ability to acquire new clients and retain an 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.

Speaker #6: We will begin with some prepared remarks before we open the call for your

Speaker #6: questions. Before we begin, Your host, James Hart.

Speaker #6: I'd like to remind you that our comments and Sir, the floor is

Speaker #6: Responses to your questions today are yours.

Speaker #6: reflect management's views as of today

Speaker #6: only and will include statements related fourth-quarter conference call.

Speaker #6: to our financial outlook for both the first

Speaker #6: quarter and full year

Speaker #6: 2026 and the assumptions and drivers begin with some prepared remarks before we open the call

In the federal Securities Law, actual results May differ materially from those contained in or applied by these forward-looking statements due to risks and uncertainties associated with our business as well as other important factors for 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 cancer relations website, any forward-looking statements that we make on this call.

Speaker #6: underlying such guidance, our anticipated number for your questions.

Speaker #6: of clients and covered lives for

Speaker #6: 2026, the demand for our

Speaker #6: solutions, anticipated employment levels of our today reflect management's views as of

Based on assumptions as of today. And we undertake no obligation to update these statements as a result of new information or future events.

Speaker #6: clients, and the industries that we serve, are today only and will include statements related

Speaker #6: expected utilization rates and to our financial outlook for both

Speaker #6: mix, the potential benefits of our

Speaker #6: solution, our ability to acquire new clients 2026 and the assumptions and

During the call, we will also refer to non-gaap financial measures such as adjusted Ava and adjusted Eva margin on incremental Revenue.

Speaker #6: and retain and upsell existing clients, drivers underlying such guidance, our

Speaker #6: our market opportunity, and our anticipated number of clients and covered lives

Speaker #6: business strategy, plans, goals, and

Speaker #6: Expectations concerning our market for our solutions, anticipated employment.

Speaker #6: position, future operations, and other levels of our clients, and the industries that we

More information about these non-gaap Financial measures, including reconciliations, with the most comparable, gaap measures are included in the press release, which is available at investors.com. I would now like to turn the call over to Pete.

Speaker #6: Which are forward-looking statements under the Federal

Speaker #6: Securities Law. Actual

Thank you. Jamie, thanks everyone for joining us this afternoon.

Speaker #6: results may differ materially new clients and retain and upsell existing from those contained in or implied

Speaker #6: by these forward-looking statements, due to risks

Speaker #6: and uncertainties associated with our

Speaker #6: business as well as other important market position, future

Speaker #6: factors. For a discussion of the material operations, and other financial and operating risks, uncertainties, assumptions, and other important

to report that 2025 was an exceptionally strong year for Prodigy where we achieved record, highs in revenue and adjusted Eva with both metrics, increasing, double digits over 2024

Speaker #6: factors that could impact our actual

Speaker #6: results, please refer to our SEC Law.

Speaker #6: filings and today's press release both of which

We also generated a record 210 million in operating cash flow. An increase of 17% over 2024

Speaker #6: can be found on our Advisor Relations

Speaker #6: website. Any forward-looking statements that we statements, due to risks and uncertainties associated with

Speaker #6: make on this call are based on assumptions as of our business as well as other important

Speaker #6: today and we undertake no obligation to factors.

Speaker #6: update these statements as a result of new

We're pleased that the Strong finish to 2025 completing. The fourth consecutive quarter were both revenue and adjusted Eva, exceeded our expectations.

Speaker #6: information or future events.

Speaker #6: During the call, we will also refer to actual results, please refer to

Speaker #6: non-GAAP financial measures such as our SEC filings and today's press

Speaker #6: adjusted EBITDA and adjusted EBITDA margin release, both of which can be found on our

Speaker #6: on incremental revenue. More information Advisory Relations website.

Speaker #6: about these non-GAAP financial measures

Speaker #6: including reconciliations with the most

our 1.29 billion in revenue and 222 million in adjusted Ava in 2025, was nearly 90 million and 28 million respectively above the midpoint of our original guidance range for the year,

Speaker #6: comparable GAAP measures are included in the

Speaker #6: press release which is available at of new information or future

Speaker #6: investors.progyny.com. I would now like to events.

Speaker #6: turn the call over to Pete.

Speaker #7: Thank

Speaker #7: you, Jamie. Thanks, everyone, for

Additionally, the operational execution. We achieved this past year sets us up for continued momentum in 2026.

Speaker #7: joining us this afternoon. EBITDA margin on incremental

Speaker #7: We're pleased to report that 2025 was an exceptionally strong year for revenue.

Speaker #7: Progyny, where we achieved record highs in

Speaker #7: revenue and adjusted EBITDA, with

Speaker #7: both metrics increasing double investors.progyny.com.

Speaker #7: digits over I would now like to turn the call over to

Speaker #7: 2024, Pete. We also generated a record.

As always, this starts with our focus on member and client satisfaction. And this constant Focus along with the value, we deliver to our plan sponsors has once again, yielded a near 100% retention of our clients, including all of our largest employers

Speaker #7: $210 million in operating

Speaker #7: cash flow and increase of afternoon.

Speaker #7: 17% over

Speaker #7: 2024. We're year for Progyny, where we achieved

Speaker #7: pleased at the strong finish to

Speaker #7: 2025, completing the fourth consecutive EBITDA, with both metrics

Project is value. Proposition entails total program management. In all the areas that are critical to the health of our members as well as to the employers that provide their benefits.

Speaker #7: quarter where both revenue and adjusted increasing double digits over

Speaker #7: EBITDA exceeded our

This includes execution across member satisfaction.

Speaker #7: expectations. Our

Speaker #7: $1.29 billion in revenue and operating cash flow, an increase

Clinical quality and outcomes and overall cost management.

Speaker #7: $222 million in adjusted of 17% over EBITDA in 2025

Speaker #7: was nearly $90 million in $28 2024.

Speaker #7: million, respectively, above the midpoint of

Speaker #7: our original guidance range for the consecutive quarter where both revenue and

Speaker #7: year. Additionally, the operational execution we achieved this past year.

We've been able to hold costs and Trends far below what employers have experienced in healthcare over the last several years, even against the backdrop of record medical cost inflation in the US over that same period.

For quality and outcomes.

We once again led the industry in clinical results translating into successful, family, building healthier pregnancies and better support for menopause symptoms.

Peter Anevski: for continued momentum in 2026. As always, this starts with our focus on member and client satisfaction. This constant focus, along with the value we deliver to our plan sponsors, has once again yielded a near 100% retention of our clients, including all of our largest employers. Progyny's value proposition entails total program management in all the areas that are critical to the health of our members, as well as to the employers that provide their benefits. This includes execution across member satisfaction, clinical quality and outcomes, and overall cost management. We've been able to hold costs and trends far below what employers have experienced in healthcare over the last several years, even against the backdrop of record medical cost inflation in the US over that same period.

Those outcomes also translate into the elimination of unnecessary treatments. Reducing the rate of high risk. Pregnancies eliminating waste with fewer medication, dispensed, and fewer niku events.

These better outcomes, not only lead to Better Health for our members, but equally important lower costs for our employers.

This is enabled by our plan design and overall program management success.

And this constant Focus along with the value, we deliver to our plan sponsors has once again, yielded a near 100% retention of our clients, including all of our largest employers

Built off of our unparalleled partnership with our Network clinics and supported by our growth and industry-leading scale.

that when you put,

Project is value. Proposition entails total program management. In all the areas that are critical to the health of our members.

As well as to the employers that provide their benefits.

This includes execution across member satisfaction.

Clinical quality and outcomes and overall cost management.

Peter Anevski: For quality and outcomes, we once again led the industry in clinical results, translating into successful family building, healthier pregnancies, and better support for menopausal symptoms. Those outcomes also translate into the elimination of unnecessary treatments, reducing the rate of high-risk pregnancies, eliminating waste with fewer medication dispensed, and fewer NICU events. These better outcomes not only lead to better health for our members, but equally important, lower costs for our employers. This is enabled by our plan design and overall program management success, built off of our unparalleled partnership with our network clinics and supported by our growth and industry-leading scale. In fact, when you put all these aspects together across member satisfaction, critical outcomes, and cost and trend control, even in the face of challenging economic pressures, employers and members continue to turn to Progyny for solutions for their family building and women's health benefit needs.

It's also contributed to expanding relationships with many of our clients with 30% of our base expanding their benefits with progeny for 2026, through upsells and service enhancements.

We've been able to hold costs and trends far below what employers have experienced in healthcare over the last several years, even against the backdrop of record medical cost inflation in the U.S. over that same period.

For quality and outcomes.

With these expansions more than 2.7 million members will now have access to 1 or more of our newest services in pregnancy, postpartum and menopause in 2026.

We once again led the industry in clinical results translating into successful, family, building healthier pregnancies and better support for menopause symptoms.

Lastly, our growth has also enabled a further diversification of our base both in terms of client and Industry concentration.

Those outcomes also translate into the elimination of unnecessary treatments. Reducing the rate of high risk. Pregnancies eliminating waste with fewer medication dispense and fewer events.

These better outcomes not only lead to better health for our members, but equally important, lower costs for our employers.

This is enabled by our plan design and overall program management success.

And to that, I'd also add that our largest industry Healthcare has proven to be amongst the most highly resilient to the macro internships over the past 5 years.

Built off of our unparalleled partnership with our Network clinics and supported by our growth and industry-leading scale.

when you put,

all these, a

In short, we're answering 2026 with considerable momentum.

This momentum and general broad acknowledgement for the very real needs of family building and Women's Health Services remain stronger than ever.

Peter Anevski: It's also contributed to expanding relationships with many of our clients, with 30% of our base expanding their benefits with Progyny for 2026 through upsells and service enhancements. With these expansions, more than 2.7 million members will now have access to one or more of our newest services in pregnancy, postpartum, and menopause in 2026. Lastly, our growth has also enabled a further diversification of our base, both in terms of client and industry concentration. With the addition of our newest cohort of clients and lives, we are also entering 2026 with no single client accounting for more than a single-digit percent of revenue and no industry comprising more than 15% of lives. To that, I'd also add that our largest industry, healthcare, has proven to be amongst the most highly resilient to the macro uncertainties over the past five years.

Together, across member satisfaction, critical outcomes and cost, and trend control, even in the face of challenging economic pressures, employers and members continue to turn to Progyny for solutions for their family building and women's health benefit needs.

And while our selling season is only just getting underway, we're pleased with where we're starting off with both, closed deals and overall pipeline.

Including the size and quality of the opportunities from last season that are carrying over to this year.

It's also contributed to expanding relationships with many of our clients, with 30% of our base expanding their benefits with Progyny for 2026, through upsells and service enhancements.

With these expansions more than 2.7 million members will now have access to 1 or more of our newest services in pregnancy, postpartum and menopause in 2026.

And while we expect the self-insured market to continue to comprise the significant majority of new lives, to be added in this upcoming sales season. We are excited about our opportunities to broaden, our target market by making our industry-leading services available to smaller employers. Who previously have not had access to this type of benefit.

Lastly, our growth has also enabled a further diversification of our base both in terms of client and Industry concentration.

When we launched our solution, a decade ago, we focused exclusively on large, self-insured employers.

Over time, we expanded that to include universities and school systems, then labor, populations and government.

as those who are compelling additions to our tan,

in that same vein, we now see a highly compelling opportunity to profitably, bring our solution to the 50 million lives in the US under fully insured, plans,

Peter Anevski: In short, we're entering 2026 with considerable momentum. This momentum and general broad acknowledgment for the very real need of family building and women's health services remains stronger than ever. While our selling season is only just getting underway, we're pleased with where we're starting off with both closed deals and overall pipeline, including the size and quality of the opportunities from last season that are carrying over to this year. While we expect the self-insured market to continue to comprise the significant majority of new lives to be added in this upcoming sales season, we are excited about our opportunities to broaden our target market by making our industry-leading services available to smaller employers who previously have not had access to this type of benefit. When we launched our solution a decade ago, we focused exclusively on large self-insured employers.

With the addition of our newest cohort of clients and lives, we are also entering 2026 with no single client accounting for more than a single digit percent of Revenue and no industry comprising more than 15% of lives. And to that, I'd also add that our largest industry Healthcare has proven to be amongst the most highly resilient to the macro incentives over the past 5 years.

Proxy. Select is our solution to address the needs.

In short, we're answering 2026 with considerable momentum.

Of the smaller employer who is more sensitive to variability of costs and perverse. A model that minimizes their Financial Risk.

This momentum and general broad acknowledgement for the very real needs of family building and Women's Health Services remain stronger than ever.

Because progeny has access to the most comprehensive experience data. For employers, of all sizes. We believe we're exceptionally well, positioned to deliver what this Market needs.

And while our selling season is only just getting underway, we're pleased with where we're starting off with both, closed deals and overall pipeline.

But has never had access to.

Including the size and quality of the opportunities from last season that are carrying over to this year.

Fixed premium product that gives employers the cost predictability. They need by becoming part of a larger pool. While also allowing their employees access to the comprehensive coverage and support that the self-insured market has long enjoyed

And while we expect the self-insured market to continue to comprise to significant majority of new lives, to be added in this upcoming sales season. We are excited about our opportunities to broaden, our target market by making our industry-leading services available to smaller employers. Who previously have not had access to this type of benefit.

Peter Anevski: Over time, we expanded that to include universities and school systems, then labor populations and government, as those were compelling additions to our TAM. In that same vein, we now see a highly compelling opportunity to profitably bring our solution to the 50 million lives in the US under fully insured plans. Progyny Select is our solution to address the needs of the smaller employer, who is more sensitive to variability of costs and prefers a model that minimizes their financial risk. Because Progyny has access to the most comprehensive experience data for employers of all sizes, we believe we're exceptionally well positioned to deliver what this market needs, but has never had access to.

When we launched our solution, a decade ago, we focused exclusively on large, self-insured employers.

we already have the operational infrastructure in place to go to market for efficient distribution, through Brokers and other third-party distribution Partners, as well as by structuring the program in a way that provides real benefits while containing its risk through simple structures, like half benefits and removing options for opt out at the individual member level,

Over time, we expanded that to include universities and school systems, then labor, populations, and government.

As those were compelling additions to our tan.

An additional mitigator. Is that the premium applies to the full population covered under the employer's plan.

In that same vein, we now see a highly compelling opportunity to profitably bring our solution to the 50 million lives in the U.S. under fully insured plans.

As 2026 will be our first year in Market with select. We're anticipating any contribution to our financial results until 2027. We aren't anticipating any

hopefully my remarks today have helped you understand why we're pleased with our performance in 2025

With our reputation in Market.

Proxy.Select is our solution to address the needs of the smaller employer who is more sensitive to variability of costs and perverse. A model that minimizes their financial risk.

Because Progyny has access to the most comprehensive experience data—for employers, of all sizes. We believe we're exceptionally well positioned to deliver what this market needs.

Peter Anevski: A fixed premium product that gives employers the cost predictability they need by becoming part of a larger pool, while also allowing their employees access to the comprehensive coverage and support that the self-insured market has long enjoyed. We already have the operational infrastructure in place to go to market for efficient distribution through brokers and other third-party distribution partners, as well as by structuring the program in a way that provides real benefit while containing its risk through simple structures like cap benefits and removing options for opt-out at the individual member level. An additional mitigator is that the premium applies to the full population covered under the employer's plan. As 2026 will be our first year in market with Select, we're anticipating any contribution to our financial results until 2027. We aren't anticipating any.

But has never had access to.

Earned over a decade as the premier solution for family building and Women's Health driving. The best critical outcomes member experience and total program management and Cost Containment for our clients with the Investments. We've been making and will continue to make across our products, both in the US, and around the world, to enhance our product platform.

also allowing their employees access to the comprehensive coverage and support that the self-insured market has long enjoyed.

We already have the operational infrastructure in place to go to market for efficient distribution through Brokers and other third-party distribution partners.

And with our use of Technology, including AI to augment, our capabilities, to create a better member experience and provide even better service to our clients. While driving even more efficiencies, we believe we couldn't be in a better position as we begin 2026 to continue our growth into this year and Beyond.

With that, I'll turn the call over to mark.

Thank you, Pete and good afternoon, everyone.

as well as by structuring the program in a way that provides real benefits while containing its risk through simple structures, like half benefits and removing options for opt out at the individual member level,

And additional mitigator. Is that the premium applies to the full population covered under the employer's plan?

Peter Anevski: Hopefully, my remarks today have helped you understand why we're pleased with our performance in 2025. With our reputation in market, earned over a decade as the premier solution for family building and women's health, driving the best critical outcomes, member experience, and total program management and cost containment for our clients. With the investments we've been making, and will continue to make across our products, both in the US and around the world, to enhance our platform, and with our use of technology, including AI, to augment our capabilities to create a better member experience and provide even better service to our clients, while driving even more efficiencies, we believe we couldn't be in a better position as we begin 2026 to continue our growth into this year and beyond. With that, I'll turn the call over to Mark.

As 2026 will be our first year in market with Select, we’re not anticipating any contribution to our financial results until 2027. We are not anticipating any...

Hopefully, my remarks today have helped you understand why we're pleased with our performance in 2025 and our reputation in the market.

Understanding the health and direction of the business. So rather than repeating what's interesting that material? I use my time today to focus on the key takeaways coming out of the quarter, particularly with respect to the lasting trends that are impacting, how we think about 2026 and Beyond.

Earned over a decade as the premier solution for family building and women's health, driving the best clinical outcomes, member experience, and total program management and cost containment for our clients. With the investments we've been making, and will continue to make, across our products—both in the U.S. and around the world—to enhance our product platform.

So first we continue to see good Revenue growth overall 7% on an as reported basis in the quarter or 21%. When excluding the impact of a large former client in the fourth quarter of 2024. As a reminder, the transition of care agreement pertaining to this large client Ended as of June 30th 2025. So our results for the fourth quarter and the second half of 2025 don't include any contribution from this client.

For the full year, Revenue grew 10% on an as reported basis or 20% when excluding the impact of the former client in both periods.

Mark Livingston: Thank you, Pete. Good afternoon, everyone. Based on the positive feedback we received following the last quarter's call, we're continuing with the format we introduced in November. The 8-K we filed this evening includes a set of summary slides, providing highlights on the quarter and illustrating some of the longer-term trends that we believe are important in understanding the health and direction of the business. Rather than repeating what's addressed in that material, I'll use my time today to focus on the key takeaways coming out of the quarter, particularly with respect to the lasting trends that are impacting how we think about 2026 and beyond. First, we continue to see good revenue growth overall, 7% on an as-reported basis in the quarter, or 21% when excluding the impact of a large former client in Q4 2024.

With that, I'll turn the call over to Mark.

Thank you, Pete and good afternoon, everyone.

Second member engagement both in terms of utilization as well as consumption of art cycles per unique utilizar remained healthy and overall member activity. Pays favorably versus what was assumed in our guidance accordingly, fourth quarter Revenue, exceeded the top end of our range by nearly 11 million.

As Pete noted earlier, our results have exceeded our expectations throughout the past year. Reflecting how members have continued to PRI prioritize their pursuit of the care they need in order to realize their family building and overall health goals.

Based on the positive feedback we received following the last quarter's call. We're continuing with the format, we introduced in November the AK, we filed this evening includes a set of summary slides providing highlights on the quarter and illustrating some of the longer term trends that we believe are important in understanding the health and direction of the business. So rather than repeating, what's addressed in that material, I'll use my time today to focus on the key takeaways coming out of the quarter, particularly with respect to the lasting trends that are impacting, how we think about 2026 and Beyond.

Mark Livingston: As a reminder, the transition of care agreement pertaining to this large client ended as of 30 June 2025, so our results for Q4 and the second half of 2025 don't include any contribution from this client. For the full year, revenue grew 10% on an as-reported basis, or 20% when excluding the impact of the former client in both periods. Second, member engagement, both in terms of utilization as well as consumption of ART cycles per unique utilizer, remained healthy and overall member activity paced favorably versus what was assumed in our guidance. Accordingly, Q4 revenue exceeded the top end of our range by nearly $11 million.

Third, we continue to achieve healthy profitability, and overall margin expansion in both the quarter. And for the full year, the nearly 200 basis, point expansion in full year. Gross margin versus 2024 reflects both the efficiencies, we continue to realize and Care Management and Service delivery as well as the leverage we're creating with third-party Partners through the our our economies of scale. Both Dynamics have allowed us to continue delivering total Cost, Containment for our clients.

For the full year, Revenue grew 10% on an as reported basis or 20% when excluding the impact of the former client in both periods.

Going a bit deeper on what Pete described earlier at the recent, JP Morgan conference. We highlighted how us employers have seen a 27% compounded increase in their overall medical costs since 2022. Driven by inflation and high cost disease. Categories that 27% represents a greater than 5x. Differential versus the compounded change in progeny rates over that same time period.

Mark Livingston: As Pete noted earlier, our results have exceeded our expectations throughout the past year, reflecting how members have continued to prioritize their pursuit of the care they need in order to realize their family building and overall health goals. Third, we continued to achieve healthy profitability and overall margin expansion in both the quarter and for the full year. The nearly 200 basis point expansion in full year gross margin versus 2024, reflects both the efficiencies we continue to realize in care management and service delivery, as well as the leverage we're creating with third-party partners through our economies of scale. Both dynamics have allowed us to continue delivering total cost containment for our clients.

Second member engagement, both in terms of utilization as well as consumption of ART cycles for unique utilizers, remain healthy and overall member activity paces favorably versus what was assumed in our guidance. Accordingly, fourth quarter revenue exceeded the top end of our range by nearly $11 million.

we're extremely proud of this accomplishment, as it provides us with yet another way of differentiating our Solutions, particularly against the traditional health plans,

As Pete noted earlier, our results have exceeded our expectations throughout the past year, reflecting how members have continued to prioritize their pursuit of the care they need in order to realize their family building and overall health goals.

We also achieved a modest increase in our adjusted ebita margins in both the quarter and the year even as we've continued to invest to expand our product platform and lay the foundation for future growth. We're pleased that the model we've built provides us with this type of flexibility.

because of those Investments, our fourth quarter capex, was approximately 5.5 million reflecting a 3.5 million increase over the prior year period, for the year capex, was 18.4 Million as compared to 5.4 million in 2024

Third, we continue to achieve healthy profitability overall, with margin expansion in both the quarter and for the full year. The nearly 200 basis point expansion in full year gross margin versus 2024 reflects both the efficiencies we continue to realize in Care Management and Service Delivery, as well as the leverage we're creating with third-party partners through our economies of scale.

Mark Livingston: Going a bit deeper on what Pete described earlier, at the recent JP Morgan conference, we highlighted how US employers have seen a 27% compounded increase in their overall medical costs since 2022, driven by inflation and high-cost disease categories. That 27% represents a greater than 5x differential versus the compounded change in Progyny rates over that same time period. We're extremely proud of this accomplishment, as it provides us with yet another way of differentiating our solutions, particularly against the traditional health plans. We also achieved a modest increase in our Adjusted EBITDA margins in both the quarter and the year, even as we've continued to invest to expand our product platform and lay the foundation for future growth. We're pleased that the model we've built provides us with this type of flexibility.

Both Dynamics have allowed us to continue, delivering total Cost, Containment for our clients.

Forth through our disciplined prudent management of the business. We continue to achieve a high conversion rate of adjusted ebitda to cash, which gives us the flexibility to both invest in the business while also returning value to our shareholders,

And for the third consecutive quarter regenerated more than 50 million in operating cash flow, this contributed to a record 210 million in operating cash. Flow in 2025, a 31 million dollar, increase over fiscal 2024

We're extremely proud of this accomplishment, as it provides us with yet another way of differentiating our Solutions, particularly against the traditional health plans,

As of December 31st, we had total working capital of approximately 350 million, which includes 310 million in cash, cash equivalents in marketable securities.

There are no barring against our 200 million revolving credit facility and no debt of any kind and we have no plan to use for that facility. At this time,

Mark Livingston: Because of those investments, our Q4 CapEx was approximately $5.5 million, reflecting a $3.5 million increase over the prior year period. For the year, CapEx was $18.4 million, as compared to $5.4 million in 2024. Fourth, through our disciplined, prudent management of the business, we continue to achieve a high conversion rate of Adjusted EBITDA to cash, which gives us the flexibility to both invest in the business while also returning value to our shareholders. For the third consecutive quarter, we generated more than $50 million in operating cash flow. This contributed to a record $210 million in operating cash flow in 2025, a $31 million increase over fiscal 2024.

Growth, we’re pleased that the model we’ve built provides us with this type of flexibility.

During the quarter, we repurchase more than 3.3 million shares for nearly 84 million. Under our most recent, share repurchase program, which began in November and provides us with up to $200 million overall,

To date including the activity that has taken place since January 1st. We have now repurchased approximately 6.5 million shares in total with more than 40 million.

Remaining available under the authorization.

Before, discussing our outlook for the year ahead, I'd like to highlight a couple of items that will be helpful to you, in understanding our expectations for 2026.

Forth, through our disciplined, prudent management of the business, we continue to achieve a high conversion rate of adjusted EBITDA to cash, which gives us the flexibility to both invest in the business while also returning value to our shareholders.

7.2 million covered lives in 2026. This is lower than what we had originally estimated due to a net reduction in lives in the latest counts. We've received

Mark Livingston: As of 31 December, we had total working capital of approximately $350 million, which includes $310 million in cash equivalents, and marketable securities. There are no borrowings against our $200 million revolving credit facility and no debt of any kind, and we have no planned use for that facility at this time. During Q4, we repurchased more than 3.3 million shares for nearly $84 million under our most recent share repurchase program, which began in November, and provides us with up to $200 million overall. To date, including the activity that has taken place since 1 January, we have now repurchased approximately 6.5 million shares in total, with more than $40 million remaining available under the authorization.

And for the third consecutive quarter, regenerated more than 50 million in operating cash flow, this contributed to a record 2110 million in operating cash. Flow in 2025 a 31 million dollar, increase over fiscal 2024

We rely on our clients to provide member counts throughout the year and especially following open enrollment.

These updates are typically driven by hiring Acquisitions and dispositions but also include true-ups to the previously submitted figures.

As of December 31st, we had total working capital of approximately 350 million, which includes 310 million in cash, cash equivalents and marketable securities. There are no barring against our hundred million dollar revolving credit facility and no debt of any kind and we have no plan to use for that facility at this time.

When looking at the client level details of these updates, none of these coincided with the announcements of any Workforce reduction. Leading us to believe that these are more likely to be administrative type updates.

As we've said, previously, our guidance for the coming year is based off the actual utilization that we were seeing, as of the start of this year and doesn't rely on to total population counts.

During the quarter, we repurchase more than 3.3 million shares for nearly 84 million. Under our most recent, share repurchase program which began in November and provides us with up to million dollars overall

To date including the activity that has taken place since January 1st. We have now repurchased approximately 6.5 million shares in total with more than 40 million.

As a result we aren't seeing or expecting a negative impact to the total number of utilizers for this year. As these updates came principally from clients who are at lower than average utilization rates

Remaining available under the authorization.

Mark Livingston: Before discussing our outlook for the year ahead, I'd like to highlight a couple of items that will be helpful to you in understanding our expectations for 2026. First, as outlined in our guidance assumptions, we are expecting 7.2 million covered lives in 2026. This is lower than what we had originally estimated, due to a net reduction in lives in the latest counts we've received. We rely on our clients to provide member counts throughout the year, and especially following open enrollment. These updates are typically driven by hiring, acquisitions, and dispositions, but also include true-ups to the previously submitted figures. When looking at the client-level detail of these updates, none of these coincided with the announcements of any workforce reduction, leading us to believe that these are more likely to be administrative-type updates.

Second, as previously, disclosed Michael, sturmer departed, his role as president, he's president at the end of 2025.

Before, discussing our outlook for the year ahead, I'd like to highlight a couple of items that will be helpful to you, in understanding our expectations for 2026.

His departure accelerated, the vesting of certain previously issued Equity awards, that were otherwise due to vast throughout 2026.

This resulted in an incremental 7.7 million in stock-based, compensation expense to our fourth quarter and full year p&l.

First as outlined in our guidance assumptions, we are expecting 7.2 million covered lives in 2026. This is lower than what we had originally estimated due to a net reduction in lives in the latest counts. We've received

We rely on our clients to provide member counts throughout the year and especially following open enrollment.

And this accelerated expense was not contemplated. At the time, we issued our guidance for stock compensation or net income in November.

These updates are typically driven by hiring Acquisitions and dispositions but also include true-ups to the previously submitted figures.

As indicated in our January, press release ahead of the JP Morgan conference. But for the impacts of this stock compensation acceleration, our fourth quarter results for net income, and earnings per diluted share, would have also exceeded the high end of our guidance ranges.

When looking at the client level detail of these updates, none of these coincided with the announcements of any Workforce reduction. Leading us to believe that these are more likely to be administrative type updates.

Mark Livingston: As we've said previously, our guidance for the coming year is based off the actual utilization that we were seeing as of the start of this year and doesn't rely on total population counts. As a result, we aren't seeing or expecting a negative impact to the total number of utilizers for this year, as these updates came principally from clients who are at lower than average utilization rates. Second, as previously disclosed, Michael Sturmer departed his role as Progyny's president at the end of 2025. His departure accelerated the vesting of certain previously issued equity awards that were otherwise due to vest throughout 2026. This resulted in an incremental $7.7 million in stock-based compensation expense to our Q4 and full year P&L.

so turning now to our expectations for 2026,

With the first quarter, well underway. We've continued to see that member engagement has been healthy, including that from our newest cohort that launched in q1.

As we've said, previously, our guidance for the coming year is based off the actual utilization that we were seeing, as of the start of this year and doesn't rely on to total population counts.

Although the unexpected variability, we previously experienced hasn't recurred since 2024. The assumptions were making today, particularly at the low end of the ranges reflect the potential that further variability in activity and treatments could occur.

To be clear. This is the same approach we've been following from more than a year when setting our guidance ranges.

second, as previously, disclosed Michael sturmer departed his role as Project's president, at the end of 2025,

The the table at the back of today's press release, also outlines our assumptions at both ends of the ranges from Member engagement.

His departure accelerated, the vesting of certain previously issued Equity awards, that were otherwise due to vest throughout 2026.

Mark Livingston: This accelerated expense was not contemplated at the time we issued our guidance for stock compensation or net income in November. As indicated in our January press release, ahead of the JP Morgan conference, but for the impacts of this stock compensation acceleration, our Q4 results for net income and earnings per diluted share would have also exceeded the high end of our guidance ranges. Turning now to our expectations for 2026. With the Q1 well underway, we've continued to see that member engagement has been healthy, including that from our newest cohort that launched in Q1. Although the unexpected variability we previously experienced hasn't recurred since 2024, the assumptions we're making today, particularly at the low end of the ranges, reflect the potential that further variability in activity and treatments could occur.

This resulted in an incremental 7.7 million dollars in stock-based compensation, expense to our fourth quarter and full year p&l.

In terms of utilization, the low end of the range assumes 1.04%, which is at the lower end of our historical ranges, while the high is closer to the midpoint of that range.

And this accelerated expense was not contemplated that. The time we issued our guidance for stock compensation or net income in November.

In terms of consumption, we're assuming art cycles per unique utilizar for the first quarter to be at Point 48 at the low end of the range. And 0.49 at the high, which is a jumping off point. That's lower than what we've seen over the past 3 years.

For the year consumption at the midpoint is assumed to be consistent with that.

We've seen over the last 2 years, which itself is at the low end of the multi-year average.

so turning now to our expectations for 2026,

With the first quarter well underway, we've continued to see that member engagement has been healthy, including that from our newest cohort that launched in Q1.

On the basis of these assumptions, we're projecting revenue of between 1.355 billion, to 1.405 billion, reflecting growth of between 5.1 to 9%.

Mark Livingston: To be clear, this is the same approach we've been following for more than a year when setting our guidance ranges. The table at the back of today's press release also outlines our assumptions at both ends of the ranges for member engagement. In terms of utilization, the low end of the range assumes 1.04%, which is at the lower end of our historical ranges, while the high is closer to the midpoint of that range. In terms of consumption, we're assuming ART cycles per unique utilizer for Q1 to be at 0.48 at the low end of the range and 0.49 at the high, which is a jumping-off point that's lower than what we've seen over the past three years.

If we exclude, the 48.5 million of revenue from the client who was under a transition of care agreement for the first half of 2 2025 our full year, Revenue growth is projected to be between 9.3% to 13.3%.

To be clear. This is the same approach we've been following from more than a year when setting our guidance ranges.

The table at the back of today's press release. Also outlines our assumptions at both ends of the ranges from Member engagement.

With respect to profitability. I'll highlight that as previously committed. We expect to see a significant reduction in our stock-based compensation, expense. In 2026 down approximately 35% from 2025, as prior large, grants have now fully vested.

In terms of utilization, the low end of the range assumes 1.04%, which is at the lower end of our historical ranges, we'll have a high is closer to the midpoint of that range.

We now expect stock-based compensation to be approximately 6% of 2026 Revenue at the midpoint as compared to the 10 plus percent that it was in 2025.

Mark Livingston: For the year, consumption at the midpoint is assumed to be consistent with that we've seen over the last two years, which itself is at the low end of the multiyear average. On the basis of these assumptions, we're projecting revenue of between $1.355 to 1.405 billion, reflecting growth of between 5.1% to 9%. If we exclude the $48.5 million of revenue from the client who was under a transition of care agreement for the first half of 2025, our full year revenue growth is projected to be between 9.3% to 13.3%.

Art cycles per unique utilizare for the first quarter to be at 0.48 at the low end of the range and 0.49 at the high, which is a jumping-off point. That's lower than what we've seen over the past 3 years.

We expect 224 to 239 million. In full year, adjusted IBA with net income of between 9 9, 5. 4 6.

For the year consumption at the midpoint is assumed to be consistent with that.

We've seen over the last 2 years, which itself is at the low end of the multi-year average.

This equates to $1.19 and $1.22 in earnings per diluted share and 1 $1.83. And 1.95 cents of adjusted EPS on the basis of approximately 87 million fully diluted shares.

On the basis of these assumptions, we're projecting revenue of between $1.355 billion to $1.405 billion, reflecting growth of between 5.1% to 9%.

Program beyond what has already occurred. Given the unpredictability in the timing of any additional activity.

If we exclude, the 48.5 million of revenue from the client who was under a transition of care agreement for the first half of 2 202, our full year Revenue growth is projected to be between 9.3% to 13.3%.

Mark Livingston: With respect to profitability, I'll highlight that as previously committed, we expect to see a significant reduction in our stock-based compensation expense in 2026, down approximately 35% from 2025, as prior large grants have now fully vested. We now expect stock-based compensation to be approximately 6% of 2026 revenue at the midpoint, as compared to the 10+% that it was in 2025. We expect $224 to $239 million in full year Adjusted EBITDA, with net income of between $95.4 to $106.1 million. This equates to $1.19 and $1.22 in earnings per diluted share, and $1.83 and $1.95 of Adjusted EPS on the basis of approximately 87 million fully diluted shares.

As it relates to the first quarter, we expect between 319 to 332 million in the first quarter Revenue reflecting growth of negative 1.6% to positive 2.5%.

With respect to profitability. I'll highlight that as previously committed. We expect to see a significant reduction in our stock based compensation expense in 2026 down in approximately, 35%, from 2025, as prior large, grants have now fully vested.

if we exclude, the 31.3 million in revenue from the client under a transition agreement, in the year ago quarter, our first quarter guidance, reflects growth of 9% to 13.4%

We now expect stock-based compensation to be approximately 6% of 2026 Revenue at the midpoint as compared to the 10 plus percent that it was in 2025.

The supplemental materials we published today. Also include a charge showing the distribution of full year Revenue by quarter for the past 3 years. Revealing what we typically see 23 to 24% of our full year Revenue in the first quarter of the year

We expect 224 to 239 million. In full year, adjusted IBA with net income of between 9 9, 5. 4 0,

Our first quarter guidance for 2026 is likewise consistent with that. We felt it was worth highlighting this Dynamic given that 2025 on a reported basis, unfolded somewhat differently. Due to the additional contribution in the first half of the Year from the transition client.

This equates to $1.19 and $1.22 in earnings per diluted, share and 1.83 cents in 1.95 of adjusted EPS on the basis of approximately 87 million fully diluted shares.

As that contribution does not re-occur, we would expect to revert to the more customary Cadence at the start of the year.

Mark Livingston: Please note that our assumptions do not consider the impacts of any further activity under the repurchase program beyond what has already occurred, given the unpredictability and the timing of any additional activity. As it relates to Q1, we expect between $319 to 332 million in Q1 revenue, reflecting growth of negative 1.6% to positive 2.5%. If we exclude the $31.3 million in revenue from the client under a transition agreement in the year-ago quarter, our Q1 guidance reflects growth of 9% to 13.4%.

On profitability, we expect between 51 to 55 million in adjusted. EBA in the quarter along with net income of between 20.8 to 23.7 million.

Please note that our assumptions. Do not consider the impacts of any further activity under the repurchase program beyond, what has already occurred, given the unpredictability in the timing of any additional activity.

This equates to 24 cents and 27 cents.

As it relates to the first quarter, we expect between 319 to 332 million in the first quarter of Revenue, reflecting growth of negative 1.6% to positive 2.5%.

Of earnings per diluted share or 42 cents and 45 cents of adjusted EPS on the basis of 87 million fully diluted shares.

With that. We'd like to now open the call for questions. Operator, can you please provide the instructions?

Mark Livingston: The supplemental materials we published today also include a chart showing the distribution of full year revenue by quarter for the past three years, revealing what we typically see, 23% to 24% of our full year revenue in Q1 of the year. Our Q1 guidance for 2026 is likewise consistent with that. We felt it was worth highlighting this dynamic, given that 2025, on a reported basis, unfolded somewhat differently due to the additional contribution in the first half of the year from the transitioned client. As that contribution does not reoccur, we would expect to revert to the more customary cadence at the start of the year. On profitability, we expect between $51 to 55 million in Adjusted EBITDA in the quarter, along with net income of between $20.8 to 23.7 million.

if we exclude, the 31.3 million in revenue from the client under a transition agreement, in the year ago quarter, our first quarter guidance, reflects growth of 9% to 13.4%

Certainly at this time we will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone. At this time, we ask that while posing your question, you please pick up your handset at listening on speakerphone to provide Optimum sound quality.

Please hold while we pull for questions.

The supplemental materials we published today also include a chart showing the distribution of full year Revenue by quarter for the past 3 years. Revealing what we typically see 23 to 24% of our full year Revenue in the first quarter of the year

And the first question today is coming from tjaaland Singh from truist Securities, Chandra your line is live.

Our first quarter guidance for 2026 is likewise consistent with that.

We felt it was worth highlighting this Dynamic given that 2025 on a reported basis. Unfolded somewhat differently. Due to the additional contribution in the first half of the Year from the transitioned client.

As that contribution does not re-occur, we would expect to revert to the more customary Cadence at the start of the year.

Thank you, and thanks for taking my questions. I just want to go back to your explanation on this change in membership. How to look for 2026. It was those mismatches you called out. Just a new clients or at existing clients at 400,000. Delta seems like a pretty big number to be explained by just administrative issues. And does that mean that 2025 membership fee might have been overstated as well as help us clarify that

Mark Livingston: This equates to $0.24 and $0.27 of earnings per diluted share, or $0.42 and $0.45 of Adjusted EPS on the basis of 87 million fully diluted shares. With that, we'd like to now open the call for questions. Operator, can you please provide the instructions?

On profitability we expect between 51 to 55 million in adjusted ebit da in the quarter along with net income of between 20.8 to 23.7 million.

This equates to 24 cents and 27 cents.

Earnings per diluted share of $0.42 and $0.45 of adjusted EPS, on the basis of 87 million fully diluted shares.

Um, yeah, so, it, it does relate to, um, the previously existing clients, it's not related to the new cohort. Um, again, as I said in the prepared comments, we, we do receive updates throughout the year, That's the basis upon, which we, uh, provide numbers for, for lives throughout the year. Um, at the end of the year, it tends to be, uh, you know, more significant in changes. Um, given enrollment changes Etc. Um, but, uh, uh,

Operator: Certainly. At this time, we will be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone, to provide optimum sound quality. Please hold while we poll for questions. The first question today is coming from Jailendra Singh from Truist Securities. Jailendra, your line is live.

With that. We'd like to now open the call for questions. Operator, can you please provide the instructions?

Jailendra Singh: Thank you, and thanks for taking my questions. I just want to go back to your explanation on this change in membership outlook for 2026. Were those mismatches you called out just at new clients or at existing clients? The 400,000 delta seems like a pretty big number to be explained by just administrative issues. Does that mean that 2025 membership figure might have been overstated as well? Just help us clarify that.

And the first question today is coming from geland, Singh from truist Securities. Jandre your line is live,

You know, but but this, this happened to be, you know, a bit more significant in terms of these administrative changes than we've seen in Prior years. Although again, as we get bigger proportionally, um, you'd expect those numbers to be to be out there. The, the, the truth and the reality is is that we're reliant on clients uh, and their processes to give us these numbers. And, you know, they are not, uh, they're not perfect. And so, uh, again I I think what I tried to stress in the prepared comments, which is important is, our models are guidance and how we run, the business isn't driven by those population counts. It's on the actual utilization that we're seeing from those clients.

Thank you, and thanks for taking my questions. I just want to go back to your explanation on this change in membership outlook for 2026. Well, those mismatches—you called out just a new client or an existing client. The 400,000 delta seems like a pretty big number to be explained by just administrative issues. And does that mean that 2025 membership fee might have been overstated as well? Just help us clarify that.

Mark Livingston: Yeah, it does relate to the previously existing clients. It's not related to the new cohort. Again, as I said in the prepared comments, we do receive updates throughout the year. That's the basis upon which we provide numbers for lives throughout the year. At the end of the year, it tends to be more significant in changes, given enrollment changes, et cetera. You know, but this happened to be, you know, a bit more significant in terms of these administrative changes than we've seen in prior years. Although, again, as we get bigger, proportionally, you'd expect those numbers to be out there. The truth and the reality is that we're reliant on clients and their processes to give us these numbers.

Numbers for, for lives throughout the year. Um, at the end of the year, it tends to be, uh, you know, more significant in changes. Um, given enrollment changes Etc. Um, but, uh, uh,

Let me quick follow up around the progeny RX and there has been some confusion, uh, among uh, investor Community about the project model and economics, given all the developments around February bill, which requires 100% rebate pass through 2028 and also some fertility medications that are much lower cash. Pay price on Trump on it. Maybe talk about the just the value of projects. Have you seen any employers bringing this up in terms of what's happening in the marketplace? Do you see any push back from the employers? Do you see that model evolving in any way that economics don't change much for you but you still kind of check the box on what your employees looking for.

Mark Livingston: You know, they're not perfect. Again, I think what I tried to stress in the prepared comments, which is important, is our models, our guidance, and how we run the business isn't driven by those population counts. It's on the actual utilization that we're seeing from those clients.

Jailendra Singh: Got it. A quick follow-up around Progyny Rx. There has been some confusion among the industry community about the Progyny Rx model and economics, given all the developments around a February bill, which requires 100% rebate passed through in 2028, and also some fertility medications at a much lower cash pay price on compounded products. Maybe talk about the just the value of Progyny Rx? Have you seen any employers bringing this up in terms of what's happening in the marketplace? Do you see any pushback from the employers? Do you see that model evolving in any way, that economics don't change much for you, but you still kind of check the box on what your employer is looking for?

You know, but but this, this happened to be, you know, a bit more significant in terms of these administrative changes than we've seen uh, in Prior years, although again as we get bigger proportionally, um, you'd expect those numbers to be to be out there. The, the, the truth and the reality is is that we're reliant on clients, uh, and their processes to give us these numbers. And, you know, they are not, uh, they're not perfect. And so, uh, again I I think what I tried to stress in the prepared comments, which is important is, our models are guidance and how we run, the business isn't driven by those population counts. It's on the actual utilization that we're seeing from those clients.

Back in 19 2018. It was, um, and um, you know, whether or not, uh, uh, the model itself in terms of how we charge fees changes or not, uh, remains to be seen, but I think the net economics based on the value that we deliver for both the the on the medical side as well as the pharmacy side and the overall integrated program and how that's key to drive, you know, the member experience to the outcomes. Um, and that value, um, uh, is important. And so I don't expect the net economics to change, um, uh, but but the structure of it is certainly possible in the future.

All right. Thank you.

Thank you.

The next question is coming from Brian, Tukwila from Jeffrey's Brian. Your line is live.

You call it. And then you click follow up around the project in the RX. And there has been some confusion, uh, among the investor Community about the project model and economics, given all the developments around February bill, which requires 100% rebate pass between 2028 and also some fertility medications that are much lower Cash Flow by some a trump on it. Maybe talk about the the value of fresh projecting out of it. Have you seen any employers bringing this up in terms of what's happening in the marketplace? Do you see any push back from the employers? Do you see that model evolving in any way that economic

Peter Anevski: Sure. We haven't seen any pushback, as you're describing it, or employers raising concerns about what's out there. You know, whether or not the our model, I'll remind everybody, includes rebates at point of sale. We've been doing that since we introduced our pharmacy product back in, I think, 2018, it was. You know, whether or not the model itself in terms of how we charge fees changes or not, remains to be seen. I think the net economics, based on the value that we deliver, both the on the medical side as well as the pharmacy side and the overall integrated program, and how that's key to drive, you know, the member experience and the outcomes, and that value is important.

Don't change much for you but you still kind of check the box on what your employees are looking for.

Sure. Um,

Hey, good afternoon guys. Um maybe I'll I'll hit on progeny select first. Uh how do we think about, you know, the strategy and pricing progeny select and how you're thinking through the risk or whether or not there is risk associated with that strategy in terms of uh undertaking a pmpm model. Um, and and any other kpis that you can share with us, in terms of how you're thinking about, like utilization for member base or anything along those lines. Thanks sure sure. Um, so I'll start with the fact that that, although, in our client Council, when we talk about them, we talk about employers, the Thousand Lives or more, we have a number of clients, um, and in and and the

Peter Anevski: I don't expect the net economics to change, but the structure of it is certainly possible in the future.

Jailendra Singh: Got it. Thank you.

so, uh, we haven't seen any, uh, push back as you're describing it or employers, uh, raising concerns about what's out there. Um, uh, you know, whether or not the the, um, our model. Uh, I'll remind everybody includes, uh, rebates at point of sale. We've been doing that since we introduced our our, um, Pharmacy product, um, back in, I think 2018 it was, um, and um, you know, whether or not, uh, uh, the model itself in terms of how we charge fees changes or not, uh, remains to be seen, but I think the net economics based on the value that we deliver for both the the on the medical side as well as the pharmacy side and the overall integrated program and how that's key to drive, you know, the member experience of the outcomes. Um, and that value um is important and so I don't expect that that economics to change um uh but but the structure of it is certainly possible in the future.

All right. Thank you.

Operator: Thank you. The next question is coming from Brian Tanquilut from Jefferies. Brian, your line is live.

Thank you.

Brian Tanquilut: Hey, good afternoon, guys. Maybe I'll hit on Progyny Select first. How do we think about the strategy on pricing Progyny Select and how you're thinking through the risk or whether or not there is risk associated with that strategy in terms of undertaking a PMPM model? Any other KPIs that you can share with us in terms of how you're thinking about, like, utilization per member base or anything along those lines? Thanks.

The next question is coming from Brian, Tukwila from Jeffrey's Brian. Your line is live.

Over our lives are included, these smaller clients. We have, we have many, many smaller clients, um, that we use to underwrite the product and that experience is what we used as a starting point relative to, um, uh, pricing the product. Uh, as you might imagine, we manage our book of business on behalf of our clients that are ASO clients, um, and self-insured clients, and we can do the same thing for ourselves and that's how we we priced it. We put in guard rails around some of that risk to ensure that there isn't, um, uh, significant, um, uh, variability, in terms of utilization versus our current book of business, um, and that's part of the structure of the product. Um, some of those guard rails include, uh, the, the offering and not being able to be selected at the individual level. And so, no opt-outs being allowed. But that when when even the small, uh, employer clients take the benefit, they take it for all of their lives. Um, and then, oh, overall, their

Peter Anevski: Sure, sure. I'll start with the fact that although in our client counts, when we talk about them, we talk about employers, 1,000 lives or more, we have a number of clients, and the overall lives are included, these smaller clients. We have many smaller clients that we use to underwrite the product, and that experience is what we used as a starting point relative to pricing the product. As you might imagine, we manage our book of business on behalf of our clients that are ASO clients, and self-insured clients, and we can do the same thing for ourselves, and that's how we priced it.

There are other types of caps, um, and VAR rails, including caps for high cost, claimants Etc, that are are within the, um, within the product. Um, but overall, you know, the way we see it is as the, the pool Grows, Right? Um,

It, it's going to perform no different than what we see with, with a long tail of smaller clients that we have. Today that are not inconsistent with our overall utilization. Once the pool is big enough, our expectation is that there shouldn't be a lot of variability and therefore, we priced it. That way we did, we did obviously put in a risk premium but we priced it that way off of that experience.

Hey, good afternoon guys. Um, maybe I'll I'll hit on progeny select first. Uh how do we think about, you know, the strategy and pricing project you select and how you're thinking through the risk or whether or not there is risk associated with that strategy in terms of uh undertaking a pmpm model. Um, and and any other kpis that you can share with us in terms of how you're thinking about like utilization per member base or anything along those lines. Thanks sure sure. Um, so I'll start with the fact that that, although, in our client Council, when we talk about them, we talk about employers, A Thousand Lives or more, we have a number of clients, um, and in. And, and the overall lives are included, these smaller clients. We have, we have many, many smaller clients, um, that we use to underwrite the product and that experience is what we use. As a starting point relative to, um, uh, pricing the product. Uh, as you might imagine, we manage our book of business on behalf of our clients that are ASO.

Peter Anevski: We put in guardrails around some of that risk to ensure that there isn't significant variability in terms of utilization versus our current book of business, and that's part of the structure of the product. Some of those guardrails include the offering and not being able to be selected at the individual level, so no opt-outs being allowed, but that when even the smaller employer clients take the benefit, they take it for all of their lives. Overall, there are other types of caps and guardrails, including caps for high-cost claimants, et cetera, that are within the product. Overall, you know, the way we see it is as the pool grows, right.

Okay, that makes sense. Does it make my follow-up? Just as I think about the guidance and the comments here you made in q1 just to clarify. I mean first truly think of this as there's ample conservatism just because we're early in the year or with you pointing to kind of like the low end to midpoint of historical ranges. Is that just basically

Clients um and self-insured clients and we can do the same thing for ourselves and that's how we we priced it. We put in guard rails around some of that risk to ensure that there isn't um, uh, significant, um, uh, variability, in terms of utilization versus our current book of business, um, and that's part of the structure of the product. Um, some of those

Factoring in what you're seeing quarter to date. Um and then maybe last part here in the in this question is when I think of the margin compression. That's implying the guide. I mean what are the factors there? Other than you know kind of like the revenue Outlook.

Being what it is.

Peter Anevski: It's gonna perform no different than what we see with the long tail of smaller clients that we have today, that are not inconsistent with our overall utilization. Once the pool is big enough, our expectation is that there shouldn't be a lot of variability, and therefore, we price it that way. We did obviously put in a risk premium, we priced it that way off of that experience.

Inconsistent with our overall utilization. Once the pool was big enough, our expectations that there shouldn't be a lot of variability and therefore, we priced it. That way we did, we did obviously put in a risk premium but we priced it that way off of that experience.

Brian Tanquilut: Okay, that makes sense. My follow-up, just as I think about the guidance and the commentary you made in Q1, just to clarify, I mean, first, should we think of this as there's ample conservatism just because we're early in the year? With you pointing to kind of like the low-end, midpoint of historical ranges, is that just basically factoring in what you're seeing quarter to date? Maybe last part here in this question, when I think of the margin compression that's implied in the guide, I mean, what are the factors there other than, you know, kind of like the revenue, outlook being what it is?

Part of last year and so it wasn't uh as much a contributor to to expense uh in q1 of 25.

Factoring in what you're seeing quarter to date. Um and then maybe last part here. The in this question is when I think of the margin compression. That's implying, the guy, I mean what are the factors there? Other than you know kind of like the revenue Outlook.

Mark Livingston: Yeah. Our guide is always based on the activity that we're seeing, in any period. You know, and for the benefit of Q1, because our call is a little bit later, we do get the benefit of being able to see a little bit more data as we set our guidance. Although I'll also add to that, you know, new clients who are just coming on board, they're ramping up. You know, there's a, you know, good news there and maybe, you know, a little bit less data as you're looking at the newer clients. It is all based on what we're seeing. I'll start with that.

Being what it is.

Thank you.

Thank you. And the next question will be from Michael churny from near Inc. Michael, your line is live.

Mark Livingston: As far as margin compression goes, you know, we typically see, you know, in Q1, as we've ramped up the entire business, there is a step-up typically. Our revenue for this quarter is only just a little bit north of 23% for the full year, we are prepared to handle the business throughout the year. There's a little bit of compression there. I think there's also some timing around the platform investments and the product expansions that we talked about. That ramped up through the course of the first part of last year, it wasn't as much a contributor to expense in Q1 of 2025.

Yeah, so um our guide is always based on the activity that we're seeing uh in any in any period. So uh, so you know, and and for the benefit of the first quarter, um, because our call is a little bit later. Uh, we do get the benefit of being able to see a little bit more data as we set our guidance. Um, although I'll also add to that that, you know, new clients who are just coming on board. Um, they are ramping up and so, you know, there's a, you know, a good news there and and maybe, uh, you know, a little bit less data as you're looking at the newer clients, but but it is all based on what we're seeing. Um, so I'll start with that and then as far as margin,

Uh afternoon, thanks for taking the question. Maybe to build on, on Brian's a little bit. Uh, if my math is correct versus the starting point of the midpoints for your initial 25 guidelines, you end up coming in a little over 7% better than the initial midpoint on Revenue, a little more than 14% on the initial midpoint on ebata. I fully respect the the formulation you have on guidance and what you're seeing now. But as you think through um what's embedded in the guidance, in the view, how do you think about the swing factors that get you to the bottom end of the range? Versus the top end of the range? Um and then as anything changed relative to the visibility that you think you have um into those different metrics

Brian Tanquilut: Awesome. Thank you.

Compression goes, um, you know, we typically see, uh, you know, in the first quarter, uh, as we've ramped up, uh, the entire business, uh, there is a step up typically, again, our revenue for this quarter is only, you know, just a little bit north of 23% for the full year. So we are prepared to to handle the business throughout the year. So there's a little bit of compression there and I think there's also some timing around the platform Investments and the product expansion that we talked about that ramped up through the course of the first part of last year. And so it wasn't uh, as much a contributor to to expense uh in q1 of 25.

So you know when you think about uh and again this is been the the similar philosophy. We've been using now for a good, you know, several quarters. So what we're seeing and the data that we have to, to make our our predictions for the quarter in the year? Um I would say are and as you have, you seen our closer to the higher end of the range, uh then the lower the low factors in

Awesome. Thank you.

Operator: Thank you. The next question will be from Michael Cherny from Leerink Partners. Michael, your line is live.

Thank you. And the next question will be from Michael churny from an Inc. Michael, your line is live.

Michael Cherny: Afternoon. Thanks for taking the question. Maybe to build on Brian's a little bit, if my math is correct, versus the starting point, the midpoints for your initial 25 guidance, you ended up coming in a little over 7% better than the initial midpoint on revenue, a little more than 14% on the initial midpoint on EBITDA. I fully respect the formulation you have on guidance and what you're seeing now, but as you think through, what's embedded in the guidance, in the view, how do you think about the swing factors that get you to the bottom end of the range versus the top end of the range? Then has anything changed relative to the visibility that you think you have into those different metrics?

Incremental variability of, you know, various sorts whether it's, you know, lower number of cycles per utilizar lower utilization rate Etc. Um, although at this stage, that's not what we're seeing. Um, and I think as far as factors and drivers that can uh, influence the, uh, you know, the year as we go forward. So, you know, uh,

Uh afternoon, thanks for taking the question. Maybe to build on, on Brian's a little bit. Uh, if my math is correct versus the starting point of the midpoints for your initial 25 guests, you ended up coming in a little over 7% better than the initial midpoint on Revenue, a little more than 14% on the initial midpoint on ebata. I fully respect the the formulation you have on guidance and what you're seeing now. But as you think through um, what's embedded in the guidance, in the view, how do you think about the swing factors that get you to the bottom end of the range? Versus the top end of the range? Um, and then as anything changed,

Relative to the visibility that you think you have um into those different metrics.

Mark Livingston: You know, when you think about, and again, this has been the similar philosophy we've been using now for a good, you know, several quarters. What we're seeing and the data that we have to make our predictions for the quarter and the year, I would say are, as you've seen, closer to the higher end of the range than the lower. The low factors in incremental variability of, you know, various sorts, whether it's, you know, lower number of cycles per utilizer, lower utilization rate, et cetera. Although at this stage, that's not what we're seeing.

so, you know,

Faster pace of of treatments, you know, improved mix of treatments in terms of Revenue per, uh, overall cycle, uh, in improved utilization as we go through the year. Um, like those are all, you know, many of the key factors. Um, we don't include revenue from any sales that we make that we have not already had full commitments to and largely all of the clients that we've sold have already launched. So, um, and and so, to the extent that we have, you know, uh mid-year starts or uh, third quarter starts or fourth quarter starts like those are all potential contributors um, as they have been in any year

helpful Market, if I could just touch on 1 other, um,

how should we think about the contribution in the year, from some of the other maternal Health Services, the menopause Etc? Is it material at this point in time? Or is this still something that's more of a value? Add um, relationship Builder. Just curious on the financial impact.

Mark Livingston: I think as far as factors and drivers that can influence the year as we go forward, so, faster pace of treatments, improved mix of treatments in terms of revenue per overall cycle, improved utilization as we go through the year, like, those are all many of the key factors. We don't include revenue from any sales that we make that we have not already had full commitments to, and largely all of the clients that we've sold have already launched. To the extent that we have, mid-year starts or Q3 starts or Q4 starts, like, those are all potential contributors, as they have been in any year.

Yeah, it's growing, but it's not yet material. Um, and it's definitely a value ad, as you described it, relative to the overall services, that we performed with our clients, um, uh, when, when, when it becomes material enough to break it out, we will. Um, uh, but uh, but, uh, it's growing

Awesome. Thanks Pete.

Thank you. The next question will be from Scott Shon house from KeyBank Scott. Your line is live.

Hi team. Thanks for taking my questions.

Using now for a good, you know, several quarters. So what we're seeing and the data that we have to, to make our our predictions for the quarter in the year, um I would say are and as you have, you seen our closer to the higher end of the range, uh, than the lower the low factors in incremental, variability of, you know, various sorts whether it's, you know, lower number of cycles per utilizar lower utilization rate Etc. Um, although at this stage, that's not what we're seeing. Um, and I think as far as factors and drivers that can uh, influence the, uh, you know, the year as we go forward. So, you know, uh, faster pace of of treatments, you know, improved mix of treatments in terms of Revenue per, uh, overall cycle, uh, in improved utilization as we go through the year. Um, like those are all, you know, many of the key factors. Um, we don't include Revenue.

Golden my um counterparts here. So we know that you've reduced your expectations, your clients have reduced their expectations on lives. But you said that those were all from

Lower yielding lives. So they've implied utilization is actually better for this year based on their revenue ranges. I guess the utilization and the sorry, the revenue ranges in first quarter

From any sales that we make that we have not already had full commitments to and largely all of the clients that we've sold have already launched. So, um, and and so, to the extent that we have, you know, uh mid-year starts or uh, third quarter starts or fourth quarter starts like those are all potential contributors um, as they have been in any year

Michael Cherny: Helpful, Mark. If I could just touch on one other. How should we think about the contribution in the year from some of the other maternal health services, the menopause, et cetera? Is it material at this point in time, or is this still something that's more a value add, relationship builder? Just curious on the financial impact.

Helpful, Mark, if I could just touch on one other, um,

Peter Anevski: Yeah. It's growing, but it's not yet material. It's definitely a value add, as you described it, relative to the overall services that we perform with our clients. When it becomes material enough to break it out, we will. It's growing.

And the uh, implied utilization. There would suggest to me that from this new Co cohort which you've we've backed into is high utilizing cohorts so far. Um, maybe you know, as you do IVF, you have your initial consult the earliest you could ever do. That would be January, we take a month to do, you know, to get on your, depending on your cycle, to get on these fertility medications and then another month earliest to do the retrieval. So, my question here is that we you obviously seen this New Hope cohort, um, do the initial consults

Michael Cherny: Awesome. Thanks, Pete.

Yeah, it it it's growing but it's not yet material. Um, and it's definitely a value ad, as you described it, relative to the overall services, that we performed with our clients, um, uh, when, when it becomes material enough to break it out, we will. Um, uh, but uh, but, uh, you know,

Awesome. Thanks Pete.

Operator: Thank you. The next question will be from Scott Schoenhaus from KeyBank. Scott, your line is live.

Um pretty nicely here. Should we assume that there's a nice Tailwind here coming through the next several months of potential retrievals based on what you're seeing today and this new cohort of high utilizing clients. Thanks.

Scott Schoenhaus: Hi, team. Thanks for taking my questions, and my counterparts here. We know that you've reduced your expectations, or your clients have reduced their expectations on lives, but you said that those were all from lower-yielding lives. The implied utilization is actually better for this year based on the revenue ranges. I guess the utilization and the sorry, the revenue ranges in Q1 and the implied utilization there, would suggest to me that from this new cohort, which we've backed into, is a high-utilizing cohort so far. Maybe, you know, as you do IVF, you have your initial consult. The earliest you could ever do that would be January. It would take a month to do, you know, to get on your depending on your cycle, to get on these fertility medications, and then another month earliest to do the retrieval.

Thank you. The next question will be from Scott Shon house from KeyBank Scott. Your line is live.

Hi team. Thanks for taking my questions.

Gold and my um, counterparts here. So we know that you've reduced your expectations, or your clients have reduced their expectations on lives. But you said that those were all from

lower yielding lives. So the implied utilization is actually better for this year based on their revenue ranges, I guess the utilization and the sorry, the revenue ranges in first quarter

Um, you know, we gave you the a range around art cycles per female utilizar, and if you sort of try to do the math, of what's the balance of the year to get to the annual numbers that we've also provided, it does imply that there's, you know, a step up that we would normally see, uh, throughout the year. So, again, it's, it's been a good start to the year, uh, and it would seem that the, you know, the phasing and profiling of it is, um, you know, as we would normally expect

Scott Schoenhaus: My question here is that you've obviously seen this new hope cohort do the initial consults pretty nicely here. Should we assume that there's a nice tailwind here coming through the next several months of potential retrievals based on what you're seeing today and this new cohort of high utilizing clients? Thanks.

Great. And then Pete. This is a follow up for you. You had some nice. I don't think you've ever given us early selling season commentary this early. But could we contemplate some of these wins coming in? Um, throughout the end of this year? Like we experience, I don't know. Is it 2 or 3 years ago and are these large?

And the uh, implied utilization there would suggest to me that from this new cohort which you've we've backed into is a high utilizing cohort so far. Um, maybe you know, as you do IVF, you have your initial consult the earliest you could ever do. That would be January, we take a month to do, you know, to get on your, depending on your cycle, to get on these fertility medications and then another month earliest to do the retrieval. So, my question here is that we, you obviously seen this New Hope cohort. Um, do the initial call consults, um,

Um employers, can you give us more color on that commentary? I thought it was interesting.

Pretty nicely here. Should we assume that there’s a nice tailwind here coming through the next several months of potential retrievals based on what you’re seeing today and this new cohort of high-utilizing clients? Thanks.

Mark Livingston: I think, look, the way that our guidance is laid out, especially again, you can just see it in the revenue mix, you know, Q1 being, you know, less than a quarter of the year. Implied there is a step up as we go through the year. You know, we gave you the a range around ART cycles per female utilizer, and if you sorta try to do the math of what's the balance of the year to get to the annual numbers that we've also provided, it does imply that there's, you know, a step-up that we would normally see throughout the year. Again, it's been a good start to the year, and it would seem that the, you know, the phasing and profiling of it is, you know, as we would normally expect.

Sure, um, so so they're not large Employers in terms of an individual employer. Um, but we've had a, a good number of wins that were were pleased about especially this early in the sailing season. Um, a lot of, uh, times throughout the year. Uh, there are clients that that we sell and then go live during the year. Um, uh, that's normal every year. Uh, as you, uh, uh, recalled a couple of years back. I forgot if it was 23 or 24. Um, I think it was 23. They were really large clients that we sold them went live during the year. This is in the case yet. Um, who knows what? We'll, we'll see. We don't ever plan.

And for that. Um, but nonetheless, you know, small amount of activity does happen, uh, where we sell and, and they go live during the year last year, that was the case. Um, and every year, that's the case, uh, you know, but it's usually a longer tale of smaller clients that do that.

It's done.

Scott Schoenhaus: Great. Pete, this is a follow-up for you. You've had some nice... I don't think you've ever given us early selling season commentary this early. Could we contemplate some of these wins coming in throughout the end of this year like we experienced, I don't know, was it two or three years ago? Are these large employers? Can you give us more color on that commentary? I thought it was interesting.

Yeah, I I think, um, look the way that our guidance is laid out, uh, especially again, you can just see it in the revenue, mix, uh, you know, q1 being, you know, less than a quarter of the year. So implied, there is a step up as we go through the year. Um, you know, we gave you the a range around art cycles per female utilizar, and if you sort of try to do the math of what's the balance of the year to get to the annual numbers that we've also provided, it does imply that there's, you know, a step up that we would normally see, uh, throughout the year. So, again, it's, it's been a good start to the year, uh, and it would seem that the, you know, the phasing and profiling of it is, um, you know, as we would normally expect

Thank you. The next question will be from Peter wendorf, from Barclays, Peter. Your line is live.

Peter Anevski: Sure. They're not large employers in terms of an individual employer, but we've had a good number of wins that we're pleased about, especially this early in the selling season. A lot of times throughout the year, there are clients that we sell and then go live during the year. That's normal every year. As you recalled a couple of years back, I forgot if it was 2023 or 2024, I think it was 2023, there were really large clients that we sold and went live during the year. This isn't the case yet. Who knows what we'll see. We don't ever plan for that. Nonetheless, you know, a small amount of activity does happen where we sell and they go live during the year.

Um, employers, can you give us more color on that commenter? I thought it was interesting.

Hey, yeah, thanks for the question. Uh, if I'm doing my math, right? It sounds like membership is probably up, kind of in the mid to high single digits range, this year and revenue. Growth is maybe closer to low double digits low teens. Um, can you just help us think about how to bridge that Gap and and maybe what's coming from utilization versus upsell versus any kind of contribution from the new products?

Yeah, look I think um, when you look at at the midpoint for the year, uh again excluding the impact of that uh that other client, you know, we're projecting like 11% growth at the midpoint and so with your lives growth, which is uh and ultimately the utilizers if you do the math and even the art Cycles, you know all of those are contributing, you know a significant part to that 11%. Um but we also do again. We we we're proud of the cost control.

Peter Anevski: Last year, that was the case. Every year that's the case, you know, it's usually a longer tail of smaller clients that do that.

Uh you know, our level of cost control uh on behalf of our clients. Um but we do have an element of rate that's also included which helps bridge that Gap. Um,

Scott Schoenhaus: Thanks, guys.

Sure, um, so so they're not large Employers in terms of an individual employer. Um, but we've had a, a good number of wins that we're we're pleased about especially this early in the sailing season. Um, a lot of, uh, times throughout the year. Uh, there are clients that that we sell and then go live during the year. Um, uh, that's normal every year. Uh, as you, uh, uh, recalled a couple of years back. I forgot if it was 23 or 24. Um, I think it was 23. They were really large clients that we sold them went live during the year. This is in the case yet. Um, who knows what? We'll, we'll see. We don't ever plan for that. Um, but nonetheless, you know, a small amount of activity does happen, uh, where we sell and, and they go live during the year last year, that was the case. Um, and every year that's the case. Uh, you know, that's usually a longer tale of smaller clients that do that.

Thanks d.

Operator: Thank you. The next question will be from Peter Warendorf from Barclays. Peter, your line is live.

So, you know, those are, those are kind of the key pieces. Yeah. If you think about Mark's comments,

Peter Warendorf: Hey. Yeah, thanks for the question. If I'm doing my math right, it sounds like membership is probably up kind of in the mid to high single digits range this year, and revenue growth is maybe closer to low double digits, low teens. Can you just help us think about how to bridge that gap and maybe what's coming from utilization versus upsell versus any kind of contribution from the new products?

Thank you. The next question will be from Peter wendorf, from Barclays, Peter. Your line is live.

Um, before, think about it, as, as a lower utilizing lives being replaced by higher utilizing lives, which are part of that. So there's straight math. Have just the increase in lives. Uh, misses that little piece, thank you. Yeah, good point.

Great, that's helpful. Uh and then maybe with a little bit of macro uncertainty out there. Is there anything on the treatment mix side that you might think is worth calling out here? Thanks.

No, not nothing. Nothing nothing unusual.

Hey, yeah, thanks for the question. Uh, if I'm doing my math right, it sounds like membership is probably up, kind of in the mid- to high-single digits range this year, and revenue growth is maybe closer to low double-digits, low teens. Um, can you just help us think about how to bridge that gap, and maybe what's coming from utilization versus upsell versus any kind of contribution from the new products?

Mark Livingston: Yeah. Look, I think, when you look at the midpoint for the year, again, excluding the impact of that other client, you know, we're projecting like 11% growth at the midpoint. With your lives growth, which is, and ultimately the utilizers, if you do the math and even the ART cycles, you know, all of those are contributing, you know, a significant part to that 11%. We also do. Again, we're proud of the cost control, you know, our level of cost control, on behalf of our clients. We do have an element of rate that's also included, which helps bridge that gap. The you know, those are kind of the key pieces.

Thank you.

The next question will be from Sarah James from Cantor Fitzgerald. Sarah. Your line is live.

Predictable.

How do you think about what a critical mass is for predictability? Are you already there now given um your exposure to small group on the ASO product or how long could it take to hit that critical mass level?

You know, our level of cost control, uh, on behalf of our clients—um, but we do have an element of rate that's also included, which helps bridge that gap. Um,

Peter Anevski: Yeah. If you think about Mark's comments, before, think about it as lower utilizing lives being replaced by higher utilizing lives, which are part of that. The straight math of just the increase in lives, misses that little piece.

So, you know, those are, those are kind of the key pieces. Yeah. If you think about Mark's comments,

Mark Livingston: Thank you. Yeah, good point.

Um, before, think about it, as, as a lower utilizing lives being replaced by higher utilizing lives, which are part of that. So, the straight mass of just the increase in lives. Uh, misses that little piece, thank you. Yeah, good point.

Peter Warendorf: Great. That's helpful. Maybe with a little bit of macro uncertainty out there, is there anything on the treatment mix side that you might think is worth calling out here? Thanks.

Peter Anevski: No. Nothing unusual.

Great, that's helpful. Uh, and then maybe with a little bit of macro uncertainty out there, is there anything on the treatment mix side that you might think is worth calling out here? Thanks.

No, not nothing. Nothing nothing unusual.

Operator: Thank you. The next question will be from Sarah James from Cantor Fitzgerald. Sarah, your line is live.

Thank you.

The next question will be from Sarah James from Cantor Fitzgerald. Sarah. Your line is live.

Sarah James: Thank you. You talked about Select group becoming more predictable as it scales. How do you think about what a critical mass is for predictability? Are you already there now, given your exposure to small group on the ASO product, or how long could it take to hit that critical mass level?

Peter Anevski: Yeah. Well, we're not there now, as I mentioned in my comments. Right now, all we're doing is going to market with the distributors, and broker partners, et cetera, that will through their sales force be selling Select, right? For those, they won't go live until 2027. There's nothing to refer to now in terms of what we're seeing today for that pool. The pool doesn't have to get that big to start to become predictable.

Starts to become predictable and and act more closer to the, to the book of business. Um, assuming no weird anomaly, in terms of sort of, you know, 1 industry versus another being heavily weighted in that population, which we don't expect. Um, and so and so that, that sort of, you know, and and, and until that happens, there may be a little bit of variability. But relative to the overall number of lives that we have, it won't actually have any, you know, noticeable impact, if you will on margins overall, or our our, um, our Eva margin and or our gross margins, you know, to speak of. Um, but but once you get to, uh, enough of a, a pool across, you know, a long tail of smaller clients, um, it should become predictable and I don't like the book of business and, and just to put a fine point on it. So Pete, mentioned a couple of minutes ago, how we do have clients that are of that size now. Um, so we obviously have that data, but we've also looked at our smaller sized clients, you know, with a similar structure of benefit and whatnot. So,

Peter Anevski: You know, you're talking in the, you know, couple hundred thousand lives range or thereabout, is my prediction based on the data that we have, until it starts to become predictable and act more closer to the book of the business, assuming no weird anomaly in terms of sort of, you know, one industry versus another being heavily weighted in that population, which we don't expect. That sort of, you know, and until that happens, there may be a little bit of variability, but relative to the overall number of lives that we have, it won't actually have any, you know, noticeable impact, if you will, on margins overall or our EBITDA margin and/or our gross margins, you know, to speak of.

You know, that we do have a tremendous amount, 10 years plus of data that we can use to, uh, to help refine. You know what, we expect those pools to to deliver when they get to some level of scale. Yeah. Yeah. And and we, we did. We do have actuaries just to be clear. We did, you know, and all this was under written, uh, uh, you know, with those experts

That makes sense and just 1 1 follow-up. If I can um when you talked about the high cost guard rails,

Yeah. Uh, well, we're not there now. Uh, as I mentioned in my comments, uh, the right now all we're doing is going to market with the Distributors, um, and and broker Partners Etc that will will through their um, Salesforce be selling select, right? Um for those they won't go live until 2027. So there is no, there's nothing referred to now in terms of what we're seeing today for that pool, um the the pool uh, doesn't have to get that big to start to become predictable, you know, you're talking in the, you know, a couple hundred thousand lives range, or thereabouts is my prediction based on the data that we have until it starts to become predictable and and act more closer to the, to the book of the business. Um, assuming no weird anomaly in terms of sort of, you know, 1 industry versus another being heavily weighted in that population, which we don't expect. Um, and so and so that, that sort of, you know, and and and until that happens, there may be a little bit of variability.

Peter Anevski: Once it gets to enough of a pool across, you know, a long tail of smaller clients, it should become predictable, not unlike the book of business.

Mark Livingston: Just to put a fine point on it, Pete mentioned a couple of minutes ago, how we do have clients that are of that size now. We obviously have that data, but we've also looked at our smaller sized clients, you know, with a similar structure of benefit and whatnot. You know, we do have a tremendous amount, 10 years plus of data, that we can use to help refine, you know, what we expect those pools to deliver when they get to some level of scale.

But relative to the overall number of lives that we have, it won't actually have any, you know, noticeable impact, if you will on margins overall, or our our, um, our Eva margin and or our gross margins, you know, to speak of. Um, but but once you get to enough of a, a pool across, you know, a long tail of smaller clients, um, it should become predictable and I don't like to book a business and, and just to put a fine point on it. So Pete mentioned a couple of minutes ago, how we do have clients

How are they structured? Are you talking about reinsurance, or are you talking about claims reverting to the employer at a certain attachment point? Um, and what is the average attachment point? Thanks. Uh, well, the simplest. Uh, there's there's a couple of guard rails again. We're not getting into all the details of the product, but the simplest guard will is a maximum dollar amount for high cost claims, right? Um, you know, a lifetime maximum, right? Um, uh, and then at that point, uh, it's not going to revert back to the employer. It was just the employee. Then becomes effectively self-insured again. Um, you know, or or, or cash pay. Um, uh, is the simplest example, of of, of, of 1 of the guard rails, um, that are out there.

Thank you. The next question, will be from Constantine, David from citizens, Constantine. Your line is live.

Peter Anevski: Yeah. We do have actuaries, just to be clear. We did, you know. All this was underwritten, you know, with those experts.

[Analyst] (Bank of America): That makes sense. Just one follow-up, if I can. When you talked about the high-cost guardrails, how are they structured? Are you talking about reinsurance, or are you talking about claims reverting to the employer at a certain attachment point? What is the average attachment point? Thanks.

That are of that size now. Um, so we obviously have that data, but we've also looked at our smaller sized clients, you know, with a similar structure of benefit and whatnot. So, you know that we do have a tremendous amount 10 years plus of data that we can use to, uh, to help refine. You know what, we expect those pools to to deliver when they get to some level of scale. Yeah. Yeah. And and we, we did. We do have actuaries just to be clear. We did, you know, and all this is under written, uh, uh, you know, with those experts

Thanks, uh, maybe first question for Mark. Uh, you obviously had a big step up in capex in 25 and just wondering, you can give us um, a little flavor for your expectations for 2026. If we see another step up or maybe a drop off and then um, I guess whatever color you can provide around operating cash flow. Uh, conversion for 26 as well.

Peter Anevski: Well, the simplest, there's a couple of guardrails. Again, we're not getting into all the details of the product, but the simplest guardrail is a maximum dollar amount for high-cost claimants, right? You know, lifetime maximum, right? At that point, it's not gonna revert back to the employer, it's just the employee then becomes effectively self-insured again, you know, or cash pay, is the simplest example of one of the guardrails that are out there.

[Analyst] (Bank of America): Got it. Thank you.

That makes sense and just 1 1 follow up if I can. Um, when you talked about the high cost guard rails, how are they structured? Are you talking about reinsurance, or are you talking about claims reverting to the employer at a certain attachment point? Um, and what is the average attachment point? I think. Well, well, the the simplest, uh, there's, there's a couple of guard rails again. We're not getting into all the details of the product, but the simplest guard will is a maximum dollar amount for high-cost claimants, right? Um, you know, a lifetime maximum, right? Um, uh, and then at that point, uh, it's not going to revert back to the employer. It was just the employee. Then becomes effectively self-insured again. Um, you know, or or, or cash pay. Um, uh, is the simplest example, of of, of, of 1 of the guard rails, um, that are out there.

Thank you.

Operator: Thank you. The next question will be from Constantine Davides from Citizens. Constantine, your line is live.

Constantine Davides ): Thanks. Maybe first question for Mark. You obviously had a big step-up in CapEx in 2025. Just wondering if you can give us a little flavor for your expectations for 2026, if we see another step-up or maybe a drop-off. I guess, whatever color you can provide around operating cash flow conversion for 2026 as well.

Constantine Davides: Thanks. Maybe first question for Mark. You obviously had a big step-up in CapEx in 2025. Just wondering if you can give us a little flavor for your expectations for 2026, if we see another step-up or maybe a drop-off. I guess, whatever color you can provide around operating cash flow conversion for 2026 as well.

Thank you. The next question will be from Constantine Davies from Citizens. Constantine, your line is live.

Yeah, sure. So um as I I said a couple of minutes ago so a lot of the effort that we've put into, uh, you know, improving and and expanding our platform as well as Investments as we've been uh expanding the number of products and really getting them launched that really um, ramped up. You know, let's call it over the first half of 2025 and so as we come into 2026 and sort of lap that we do, we do anticipate for the full year, that they'll be a step up but not a doubling. Um, I think if you, if you think about it in terms of, you know, a full year impact of those levels of increase is probably the right way to think about it and then from a cash flow conversion standpoint. Um, and it's in our our materials, you'll you'll note that we've made a significant reduction in our outstanding dsos, um, you know, credit to our teams and and the work that they've done to uh, to make that happen. But there is a limit on how much we can continue to

Mark Livingston: Yeah, sure. As I said a couple of minutes ago, a lot of the effort that we've put into improving and expanding our platform, as well as investments as we've been expanding the number of products and really getting them launched, that really ramped up, you know, let's call it over the first half of 2025. As we come into 2026 and sort of lap that, we do anticipate for the full year that there'll be a step-up, but not a doubling. I think if you think about it in terms of, you know, a full year impact of those levels of increase, is probably the right way to think about it.

To sort of reduce that there. There is a structure of of how the uh, you know, the cache will work. Um, so I think, you know, going forward although we've been beating it for a couple of years now. Uh, the 75% conversion rate from adjusted EB but not a cash flow is probably a better metric than uh what we've been able to achieve and and beat that, uh, that metric over the last couple years.

Got it. Excuse me. And um, I guess just want to follow up on the newer Solutions. I, I know you said those won't really impact 26, but I guess, you know, you talked about having 2.7 million eligible members now, with access to those programs. What are you kind of learning about, uh, targeting and marketing, those programs to the members and I guess, um, you know, again, I know it's early, but where are you seeing the most success in terms of those? Those newer Solutions today. Thanks.

Mark Livingston: From a cash flow conversion standpoint, and it's in our materials, you'll note that we've made a significant reduction in our outstanding DSOs, you know, credit to our teams and the work that they've done to make that happen. There is a limit on how much we can continue to sort of reduce that. There is a structure of how the, you know, the cash will work. I think, you know, going forward, although we've been beating it for a couple of years now, the 75% conversion rate from Adjusted EBITDA to cash flow is probably a better metric than what we've been able to achieve and beat that metric over the last couple of years.

Distribution partners and their uh sales force, IE Brokers um that generally today.

Sell to, um, sell overall. Uh, he was asking about menopause and

Oh, I'm sorry. I apologize.

To, uh, improving and and expanding our platform as well, as Investments as we've been uh, expanding the number of products and really getting them launched that really um, ramped up. You know, let's call it over the first half of 2025 and so as we come into 2026 and sort of lap that we do, we do anticipate for the full year, that they'll be a step up but not a doubling. Um, I think if you, if you think about it in terms of, you know, a full year impact of those levels of increase is probably the right way to think about it and then from a cash flow conversion standpoint. Um, and it's in our our materials, you'll you'll note that we've made a significant reduction in our outstanding dsos, um, you know, credit to our teams and and the work that they've done to uh, to make that happen. There is a limit on how much we can continue to sort of reduce that. There's, there's a structure of of how the, uh, you know, the cache will work.

Um, so I think, you know, going forward, although we've been beating it for a couple of years now, uh, the 75% conversion rate from adjusted EBITDA to cash flow is probably a better metric than, uh, what we've been able to achieve, and we've beat that, uh, that metric over the last couple years.

Constantine Davides ): Got it. Excuse me. I guess just one follow-up on the newer solutions. I know you said those won't really impact 2026, but I guess, you know, you talked about having 2.7 million eligible members now with access to those programs. What are you kind of learning about targeting and marketing those programs to the members? I guess, again, I know it's early, but where are you seeing the most success in terms of those newer solutions to date? Thanks.

Constantine Davides: Got it. Excuse me. I guess just one follow-up on the newer solutions. I know you said those won't really impact 2026, but I guess, you know, you talked about having 2.7 million eligible members now with access to those programs. What are you kind of learning about targeting and marketing those programs to the members? I guess, again, I know it's early, but where are you seeing the most success in terms of those newer solutions to date? Thanks.

Um, the difference is in the selling motion for the, the the, when we, when we sell the expanded products, um, with the fertility benefit, um, the sales force is generally trained to sell those products. Um, we mark it to our clients relative, to those overall Solutions. Uh and then we have subject matter experts, as you might imagine that are brought in some of those areas.

And we also on top of it. Um, then once they're live market to, uh, the individual members in conjunction with our, uh, with our, uh, client partners.

Thank you. And the next question will be from Alan Lutz from Bank of America, Alan your line is live.

Peter Anevski: Yeah, it's not, it's not the traditional way we do it today, where we're doing the individual marketing to the end clients. It's leveraging distribution partners and their sales force, i.e., brokers, that generally today sell overall...

Got it. Excuse me. And um, I guess just want to follow up on the newer Solutions. I, I know you said those won't really impact 26, but I guess, you know, you talked about having 2.7%. Now, with access to those programs, what are you kind of learning about, uh, targeting and marketing, those programs to the members and I guess, um, you know, again, I know it's early, but where are you seeing the most success in terms of those? Those newer Solutions today. Thanks.

Hey, this is Devon for Allen. Uh, thanks for taking the question.

Yeah, it's not—um, it's not the traditional way we do it today, where we're, uh, doing the individual marketing to the end clients. Um, it's leveraging, um, uh, distribution partners and their, uh, sales force, i.e., brokers, um, that generally today.

Mark Livingston: He was asking about menopause and.

I appreciate you. You know, the color on the member base and some of the drivers there, just curious, you know, if there's any particular Industries where you saw the elevated administrative changes. Um, you know, and then it sounds like you're pretty constructive on the pipeline. Despite some of these hard Mis administrative churn. Um, how are, you know, however, your conversations

Peter Anevski: Oh, I'm sorry. Menopause.

Sell to, um, sell overall. Uh, he was asking about menopause and

Mark Livingston: Yeah.

Peter Anevski: Um-

Oh, I'm sorry. I apologize.

Mark Livingston: The differences in the selling motion.

Peter Anevski: The When we sell the expanded products, with the fertility benefit, the sales force is generally trained to sell those products. We market to our clients relative to those overall solutions, then we have subject matter experts, as you might imagine, that are broader in some of those areas. We also, on top of it, then once they're live, market to the individual members in conjunction with our client partners.

With clients over the last month or 2 change. If at all around the labor market. Um, just any color there, additional color would be helpful. Thank you.

Um, to the second part of your question. Uh, conversations have not really changed. Um, the the the

Um, the difference is that the selling motion for the, the, the, when we, when we sell the expanded products, um, with the fertility benefit, um, the sales force is generally trained to sell those products. Um, we Market it to our clients relative to those overall Solutions, and then we have subject matter experts, as you might imagine that are brought in some of those areas.

And we also on top of it. Um, then once they're live market to, uh, the individual members in conjunction with our, uh, with our, uh, client partners.

Current Pipeline and, and the, uh, the early season wins that I referred to are generally coming from the carryover, uh, pipeline from, uh, 2025. Um, and uh, the, you know, selling season for 2026 and and continuing to add to that pipeline. Is is you barely underway. But I would say uh, generally know, different conversations relative to the labor force than what we've been having.

Operator: Thank you. The next question will be from Allen Lutz, from Bank of America. Alan, your line is live.

Got it. And then any

Movies that, you know, you saw that elevated administrative changes.

Thank you. And the next question will be from Alan Lutz from Bank of America, Alan your line is live.

[Analyst] (Bank of America): Hey, this is Devon for Allen. Thanks for taking the question. I appreciate, you know, the color on the member base and some of the drivers there. Just curious, you know, if there's any particular industries where you saw the elevated administrative changes?

Hey, this is Devon for Allen. Uh, thanks for taking the question.

[Analyst] (Bank of America): Yeah, it sounds like you're pretty constructive on the pipeline, despite some of these higher administrative churn. How have your conversations with clients over the last month or two changed, if at all, around the labor market? Just any color there, additional color would be helpful. Thank you.

No, I did. It's a, it's a cross. It's across a bunch of Industries. Um, I think the only common theme in it is again, you know, the apparent utilization rate that we, you know, we're seeing from them were, you know, lower than than the book.

I appreciate, you know, the color on the member base and some of the drivers there, just curious, you know, if there's any particular Industries where you saw the elevated administrative changes. Um you know, and then it sounds like you're pretty constructive on the pipeline despite some of these hard Mis administrative churn.

Thank you. Uh there were no other questions from the lines at this time.

Peter Anevski: To the second part of your question, conversations have not really changed. The current pipeline and the early season wins that I referred to are generally coming from the carryover pipeline from 2025. The, you know, selling season for 2026 and continuing to add to that pipeline is very underway. I would say, generally, no different conversations relative to the labor force than what we've been having.

Um, how are, you know, however, your conversations with clients over the last month or 2 change if at all around the labor market, um, just any color there, additional color would be helpful. Thank you.

Um, to the second part of your question. Uh, conversations have not really changed. Um, the the the

Well, thank you, Paul. Thank you everyone for joining us. This afternoon. Uh, please of course, as always, feel free to reach out to me on follow-up with any additional questions. Otherwise, we look forward to seeing you at some of the upcoming conferences, or uh, in uh, the first quarter with our call in. I guess that would be May. Thank you all again.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Current Pipeline and, and the, uh, the early season wins that I referred to are generally coming from the carryover, uh, pipeline from, uh, 2025. Um, and uh, the, you know, selling season for 2026 and and continuing to add to that pipeline. Is is you barely underway. But I would say uh generally know, different conversations, relative to the labor force and what we've been having

[Analyst] (Bank of America): Got it. Any particular industries that, you know, you saw the elevated administrative changes?

Mark Livingston: No, I think it's across a bunch of industries. I think the only common theme in it is, again, you know, the apparent utilization rate that we, you know, we're seeing from them were, you know, lower than the book.

Got it. And then any particular industry is uh you know, you saw the elevated administrative changes.

[Analyst] (Bank of America): Got it. Thank you.

Got it. Thank you.

Operator: Thank you. There were no other questions from the lines at this time.

Thank you. There were no other questions from the lines at this time.

Peter Anevski: Well, thank you, Paul. Thank you everyone for joining us this afternoon. Please, of course, as always, feel free to reach out to me on follow-up with any additional questions. Otherwise, we look forward to seeing you at some of the upcoming conferences or in Q1 with our call in. I guess that would be May. Thank you all again.

This afternoon. Uh, please of course, as always, feel free to reach out to me on follow-up with any additional questions. Otherwise, we look forward to seeing you at some of the upcoming conferences, or, uh, in, uh, the first quarter with our call in

I guess that would be May. Thank you all again.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Q4 2025 Progyny Inc Earnings Call

Request a DemoDemo

PGNY

Progyny

Earnings