Progyny (PGNY) 6 Aug 242024 Q2 Earnings call transcript

Good afternoon, everyone. Welcome the Progeny Inc.

Second Quarter 2024 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, James Hart. Sir, the floor is yours.

good and Matt, you, afternoon, everyone. Thank our to second quarter call. conference Welcome today With and CEO of Mark Pete Progeny; Anevski, CFO. me are Michael Livingston, Sturmer, President;

We we remarks your some will call questions. the for before begin with open prepared

clients guidance, both program operating conversion adjusted our we statements our and and partner agreements, that rates financial related flow, reflect the the cash views assumptions to ability expectations clients and securities information, for third such of mix, quarter responses remind strategy, of and including only today for EBITDA forward-looking opportunity existing XXXX to today expectations comments as questions of and pharmacy expected our expected our our begin, of the I'd full XXXX operating under the to and retain our utilization potential timing your our season which for and benefits upsell market and market drivers and benefits demand financial Before to for management's you like year to and will the client outlook include business the selling operations new solutions, decisions, our federal underlying the our solution, acquire our future concerning future statements of our our other and and law. are goals plans, position, launches,

those or factors. uncertainties by implied important from in these due contained as differ our with associated and materially business to statements Actual risks results as may other forward-looking well

update this to based of our be that filings or statements today's of uncertainties, on For please impact other Relations these future actual information we assumptions important statements SEC to events. a as and undertake factors we and make forward-looking as Investor assumptions refer no result a new call obligation could Any risks, of are both our found on today, and on website. which discussion release, the that results, press can material of our

also information I will as adjusted the to we release, call investors.progeny.com. in to measures available now More Pete. During refer measures, and the to these measures, comparable most margin including available turn with adjusted are about financial such call, at is EBITDA which revenue. financial would the press EBITDA like non-GAAP incremental the GAAP non-GAAP on reconciliations over

and Jamie, us Thanks, afternoon. for thanks, everyone, joining

enthusiasm During in significant quarter, are the that in clients, in building and newest includes of new most the we're for recent seeing and areas growth future the our investments making solutions in of address amongst second relationships This needs. clients we're to more even women's long-term foundation further and impactful season, the health services are members' leading we our most of our existing continued make women's progress our value for selling of and enhance channel health. early the to already the advancement success the laying our our business partner many

based on than relates expected. second to our assumptions unfold visibility utilization within and of the our while ticked remainder year, our quarter modestly the it the prior current the revenue adjusted will rate now guidance As half from quarter, and believe our results, first up consistent the with our second EBITDA differently second quarter we to of

the midpoint, Accordingly, X% well. we adjusted lower our approximately reductions adjusting guidance are by to as revenue at corresponding EBITDA with

is care capturing we set the what and provide that expected, be scheduling we to around of view given what limited in carries an past annuitized the is by care Unfortunately, best, share so appointment the at consumption driven guidance we level timing financial doesn't transparency how and provide unfold amount we those of vast given sentiments. have utilization from an to whose stream, our of consumption the revenue And business us. visibility importance informs the build and variability and any continued we're has the we to in to care where are predictive year have time. differently the leverage we a highest market disappointment variability pursuit given area of to of recognize more planning future we in and on we activity most so inherent deeply actual the that individual, models can trends. data the frustration there the we seeing is historical seeing than than as redone Given had any originally expected believe to that to The revenue can specific

relatively with we out, were well a we albeit continues year. seeing a that clear, To saw of our the as be than able levels dynamic multiple the historical engagement XXXX, pattern the a the case within engaging more And norms, we're historical take result, I'll where positive through in effect. seeing. XXXX, raise member portion last to walk been favorably to In you to are times what effect QX. opposite this guidance moment small healthy a In and in play indicated. was our at we're XXXX be that has base

an table historical art this cycles to However, female they illustrate where our is member, this we're of in cycles increase And fertility seeing for utilizing the press more negative our collectively we journeys. a a as We of move see how their average reflecting release added over pattern our to members utilizer deviation year, in of outlook. for the resulting progression previous you. per the in from number our quarter the the a the dynamic impact clearly through in historically table shows course

percentage And QX with would X.XX per as to like ordinarily while bit see we utilizer to increase thus and can QX higher a tick that something table is expect then for from well. in QX, you the as cycles average in up far level a utilization

the and per driving utilizing at half The X% first While it the of is or aren't half second then over lower we the is the expect anticipating we're be we obvious lower journey revenue all rate will seeing what a year, clinical per member. the has increase year, of approximately would this customary a increased question that over of fewer why on than based medical result as ordinarily none on the paths There different in factors based which the timing causing could different such the of of preference. need 'XX. rates treatment higher pattern utilizer, members' treatments in are success or treatment this number member's

and per to As viewing of in also expecting paywall lesser of the highlights, rate utilizer is a we consistent decrease or demand aren't we expected with remain this odd. an past a aren't patterns, as indicator seeing cycles utilization because

last. predict can't how this long also average We lower will

also programs clear, We're either an be on To At high adjustment the we've showing throughout reported seen previous a be the client. of utilization our revenue large-scale or reflect guidance. recent the productions as end, forecast well employees from that any end reductions headwind for coming of cover. of decline showing aren't making lives rounds number ART the to by we this we previous both the to their a reduction and consistently from quarter, and midpoint, of year small estimate we reported to female accordingly, from outlook rate the be member. million impact any workforce seeing So this core an our recovered clients off may to approximately utilizing cycles low believe $XX in

of XXX,XXX lives covered our to collective impact line. or base across million the approximately quarter this was the headwind $XX full approximately However, top

have today I transparency to influence our can beyond While the their meaningful aren't fully following our our model. always reductions is never drivers will in year, our that increased provide reemphasize mitigate to into number Though we've as of utilization are perfect clients consumption the other you market guidance shortly, factors it seen Mark new, within control. and but given historically the ability reductions. business. control What headcount the been to of walk act regarding our clients some of clients is through affecting within our have details a the any to headcount want we from visibility there offset. growth year, the hasn't while this an the cap are enough outlook we

will investors why in execute we strength the of affected. any to business long-term trajectory that to in their that is Our towards control. believe our doing so continue strategic the those and back way is hope where turn and areas against allow are our we within priorities focus successfully

as Those solutions of areas include an building industry raising business Progyny and the health both delivery leader the a care. the catalyst in positioning long-term and value the of in for bar women's

the areas, So latest turning greatest impact selling since now with industry our also long-term has leading that our demonstrating to growth, to those position. season beginning our

each are clear season. Our goals

expand we through First, client new share market acquisition. want to our

areas. a last look with continuing our efficiencies of with selling expansions the benefit to to pleased existing our companies At these also maintain new consistent to to our progress high rate compared the and pipeline sales market throughout sales selling in seek remained And retention, now new new lastly, strong as of first efforts. respect upsells. are evaluating and of We're year's we pipeline all not season, in our clients, heart adding create to to our we grow year. their we're partnerships Employer but priority, our season, With to demand opportunities the to through across with the presence clients relationships enhance Second, only develop also this point we're of the season. offering add

fall, client decisions last health most at although the believe in will that in robust. later As I'm this commitments look ahead received as demonstrate their women's summer time one to this early are ahead point for to solutions the building of the family usual, early appetite companies QX. demand, at were commitments benefits pacing open report anticipate of of And date that of be we is year. to finalize and pleased remain these and majority activities where season, enrollment their that this just we we indicator this

exceed are of season, with of complete a we'll although still are. the call us, of we this in or the ahead recap season pleased at point we're you prior season. But pace this usual, from next in selling objective. are meet And we As of commitments sales we for on to where provide our majority covered In number lives the believe seasons the season, meet November. our on to any is with goal selling the

hospitality, media, recent broad most a name as range both few, XXXX earliest including our are we speaks state government and unions to coming financial and our to industries, wins services, the with well Consistent market. to a in just continue from wide appeal for local differentiation which our as the believe labor solutions of for seasons, our

that this our are also choosing At newest with ranging dynamic is date, a and to product. continuing take wins further the of season or postpartum a from in to in million more are Rx, XXXX. from of terms the maternity the of that so this we're commitments lives Progyny on high X,XXX our these is representing broadly have cost to as terms existing to more $XXX,XXX. take from or X clients. seeing menopause, diverse to rate of our a year in lives employees number solution in wins in my existing same in point member one products of also covered with perspective, X Our And excess Equally of encouraging of such support. far accounts products season, We're offer approximately this chosen size, significance their to differentiation development that our validating experience promising of and very meaningful the see

our expect exciting contribution expansion meaningful and clients, we've existing while an to in and had from seen represent rate by while XXXX, to that upsell employers we've pathways date. products adoption the we products And to always these we're And revenue encouraged don't newest interest with for addition activities. multiple our grow

for their reflecting renewals of looking their efficiency also broadly, to retention. has their consistent workforce terms the they're building we of benefit of health care near helping reduce with typical family our seeing year, roles. thus more to any continuing value In also realize activity XXX% overall see been as not their while rate the far We're improve clients next spend

of subsidiary the and development for ongoing relationships, And that continue our respect second agreements lastly, adding with new Health, opportunities and TPA we through Health, priorities, the with see business largest partner became in of Last advancing recently told existing the Vision. our several relationships. expansion quarter, million to partner additional to the and Evernorth to members CVS a we preferred were channel partner we development with to we significant Meritene country X.X Aetna you

since important they prospects. we opportunities other market-leading as part addition, with contract future the detail strategy of alternative hope are and new for reach as provide an In to and calls. believe our way add these channel act go-to-market an able to continuing be progressing provide channel on are We validation to to partner both partnerships additional as well solutions

This in countries. scale. services sensitive we're benefits of multinational our acquisition the provide the and and enhanced totally on quarter, has a country, broaden customizable expanding by we the care global a through our XXX we facility platform opportunities over platform, can to populations navigation April global their employee also created April, Berlin-based education, a support offering to excited employers scope support about of

Let me over I some come call review quarterly to now turn with the Mark before the to Mark? closing back remarks. results

and Pete, the the for and third quarter our expectations with results full second begin afternoon, I'll and you, then good everyone. Thank year. the quarter provide

into million revenue, the the we operations while XXX the $XXX prior market million, the the in Second quarter as year quarter to X plateaus. This profitability well compared X% grew we it's margins since rapidly lives and ago. each of years years solution reach growth we $XXX the this million our the launched momentum making same at in and next perspective, ability our first that our our as to to first to year increasing meet the illustrates to see $XXX scale us XXXX, clients increase a X million time. covered exceed both as than milestone. number an X due us of to less Put Revenue million quarter, was while less quarter primarily crossed in in $XXX.X to after years took revenue in over our this than it taken

least million XX, lives lives of in year X.X clients XXX a X.X As year. clients of of lives, over compared representing an growth This an X,XXX prior million we XX% June at had an reflecting the ago, with XXX average covered average lives. covered to and approximately

lives. launched clients approximately of the handful a quarter, expected, covered second XXX,XXX adding As during new

at is mentioned, reductions. of recent to March from to compared the we saw turnover benefits or existing XX, following a likely also as workforce a increasing number with not dynamic. reporting all However, number clients large -- quarter, coverage report number lives. which is Pete as base a as lives any new in prior seen of our This lower of given also lapsing of ours, due we've clients as a lives always their With a certain clients

nearly U.S. of having speaks diverse a that every the corner to really of advantage base touches This the economy.

both usual, a our members slight this to as was the during the the continue within net While see in we base, impact pluses and that existing reduction minuses quarter, and in moderated sequential quarter. growth

quarter, approximately have last July launches the of several contributing we Following and clients their launched benefit, Progyny first in the close of lives. additional from these took Taking the account the lives. additional XX,XXX days million that clients clients covered place today August, season handful an the into nearly few selling XXX of representing over representing XXXX X.X

end with covered million the to million X.X We expect year and lives. between X.X

in a occur the growth first drug XX% lower period lives, last our year $XXX the to of art described per increased line. revenue the well not in the half the revenue in pharmacy while benefit in which Medical second over X% of did cycles this in year. components as the which is utilizing increased due clients again to to lower quarter million, manufacturer-driven over Pete million. member, the top growth $XXX as The increases, price earlier, covered the Looking from the at year-ago pharmacy of reflection quarter

increase modest decrease new in quarter engagement this utilization cycles female from first X.XX% ago. as to year a from the record versus we quarter, earlier rate a the and year. now expected last a was the increase the performed X.XX%, the were of trend. Turning reinforcing X.XX% reflecting quarter Approximately XX,XXX the a sequentially member our year metrics. second was in indicative second the not that ART we X% year, slight reported variability that a saw macro in of The

expect that somewhat levels, we continue consistent XXXX. we year, the albeit will rate of what utilization half saw lower historical than of with back the to Over be the in

yielding compared to margins. points $XX.X ago our last an the year XX.X% the our to period ago this the expense go-to-market containment even revenue XX to G&A Gross XX% retention. for XX.X% increase our to is of more were in quarter grow gross as in clients. offset in client as gain due continue primarily stock-based inherent we than care the second back million, and the from to revenue the office Sales our to were improvement as lower in of acquisition second made by was G&A we've now to we as and cost year we compared compensation. a quarter and Turning management of expand costs basis realize efficiencies we quarter, our XX increased nature of improvement expanding period from as point profit ongoing a as investments The deliver to resources revenue the resources through ago basis X.X% leverage on marketing our reflecting the period. noncash slight margin, efficiencies year margins year continue XX.X% operations,

earnings stock-based associated $X.XX $XX share year compensation, million year. diluted the $X.XX ago earnings, second last to of of was or impacts, into the in the per current quarter tax taking per compared compared operating basis $XX.X the EBITDA this quarter margin million year XX.X% was was efficiencies realized, from to income grew ago period. diluted Adjusted adjusted or in second EBITDA the $X.XX we've Net $XX.X XX% of the per With for account this of excluding in net quarter million. XX any as period points up quarter period. income $X.XX the diluted Adjusted impact share. to share This in

period. cash quarter million certain our previously the the $XX.X capital disclosed the in Turning year was to now generated ago to taxes in items during which of well million, higher decrease compares is favorable working impact current sheet. $XX the quarter. cash as the period balance due year to as prior in The flow Operating cash flow and

first period. $XX.X a the we've million conversion adjusted Over the same X year, the EBITDA flow, our of generated months representing XX% in operating of cash over

decrease XX, XX we debt. cash, stock had and total and activity cash in repurchasing of position quarter. June to of $XXX $XXX marketable capital compared our As million March approximately cash The our equivalents no securities working reflects including as million, the during in

the Since in million approximately completing X.X of program In million XQ, since previous by to shares buyback announce our program, We're Board we've we launching believe very to to authorizations our repurchased the deploying pleased return. giving reduce start shares, cash the million. that of shareholders to a million year. returned our flexibility X.X through repurchase approved and us today an the we $XXX further and outstanding for additional provides shares the shares outstanding has value attractive what reducing February, our X% $XXX

and Turning full the into million now female cycles expectations earlier, for million Taking of revenue number Pete XXXX. with the lower a expect for to quarter. year quarter $XXX described to third we per our average third account the art $XXX dynamics utilizer of

full between at year, reflecting now billion $X.XXX of of expect revenue we the For X% to growth $X.X midpoint. the billion

levels. range the utilization at rate press low X.XX% can and that table consistent the release, the with As at at our today's the the year full of in for assumes you X.XX% be end, historical high see end will of back the

as to the compared of also female in We utilizer end the high per X.XX end cycles prior low X.XX year. the unique are X.XX and ART at at assuming

Turning to profitability. our

million of million the We diluted $X.XX diluted $X.XX shares. to of $X.XX of million basis $XX.X EPS $X.XX and per million net $XX.X income the and share expect earnings on million. adjusted equates approximately in fully XX quarter to $XX.X adjusted EBITDA $XX This and of or to third

net the approximately along we with are net over midpoint expecting million our nor announced EPS XX%. expect shares. million, diluted margin million of adjusted income revenue XXXX Pete. income to million. of discrete of year, per any this with diluted repurchase the fully share continued any associated we EBITDA $X.XX to and EBITDA that income on margins our For At I'll the to in turn expansion adjusted contemplate it $XXX the consider of program XX an not on tax million $XX.X guidance, you equates remind the earnings $X.XX to call back The the incremental of projections impacts share I'll we with to or over now items basis $XX.X do of now of $XXX does This today. adjusted see

strong Thanks, utilizer, Mark. state the a our is overall, Today's business and our business. cycles not clear lesser-than-expected change health in the forecast, the which to the Q&A give upcoming per driven ART material you even the with by remarks perspective female about of the of

Monday, Progyny don't an City. agenda, If of Day you August next week aren't Investor an that here events. in lot to New on XX York normally put aware, investor at exciting team we're together get meet featuring hosting We a you

capitalizing market is we've goal and opportunities and our clients providers excited Our to point we view on and Several how looking both about you are from about participating, created give to panels think of members. the future. the from gets us what

If interested please Spaces we'll James is joining note for send a can in registration instructions. as you With and open Operator, call please to questions. Limited. your us, provide the required that, you're

from Your from Samuel Instructions] coming first question is JPMorgan. [Operator Anne

utilization. was perhaps what us understand volatility hoping disclosure of Thanks release. and could helpful. some I in this in Really might help for mix you the the incremental driving be

changed the be the Just wondering GLP-X. to this like leading be shift perhaps practices structure that or outcomes any less might to might adoption prevalent, that fertility have benefit within coverage given clinics has the changed or better leading anything best of

curious you that? be thoughts on what any if might have Just driving

got I spirit the Sure, of last And question. question, the part and the out, Thanks your came question. catch you it, the I for in so didn't of Anney. but

So.

was success prevalence higher less GLP-Xs. by maybe there of rates it is perhaps driven from -- Sorry, PCS

Yes.

growth only and in it's prepared it's issue. know mentioned decline, that been not what's that normally of mix a some a don't sort year would out the traditionally, quarterly now, give female utilizer is remarks, you this. driving to historically has broke trends as the It's full it's as right that. my the not it but what progresses not rate exactly is why into we of So the expectations, which It's insight per a not year seasonally we I but cycles see you

as now, exactly know here driving And sit don't what so may we we be that.

or we're of just our We right of best it know we seeing that project lower why, now what will continue sit the growth. is, we in that to not as to exactly It's we're it can. and persist. But as for don't extent that rate now, as therefore, also seeing and here to what whether terms exactly to forecast we in certainly, know our QX But saw we'll well don't do where continuing why out know we don't what we find

And some more little just unemployment for could calls what bit the you just I thinking given of just kind a you if seeing forward, about recent you recession. provide and around color lives? then was of elevated wondering How backdrop perhaps the are of just some more are Great. going more the

go also just we be to Yes. normally I be so as comments, term better a and we no just from to quarter lines. as and it Mark fewer quarter from this. that lack to or same book than think reporting But lives out plus The I business. down, that up driving usually to It or that down netted happens talked slightly they about, -- about out of net the true-up quarter. adjustment in or net of a this get either would anybody minus kind any lives, more every us actions our X and the net we've of heard think lives of for his clients the up in They're happens talked they

just government, -- think, in have. we I just by most anybody in overall it's recent don't there's support growth. base it's any the think reported as degradation report, have we'll continued, And should concerns activity. that I job normal further believe normal sort may growth the slower think I of albeit

Leerink from coming is question next from Cherny Partners. Your Michael

what's Pete, with what year is the had started the below was guidance out hoped we've some we that guys second I that for. as So that of you comfort at need control, now you $X.XXX time, low is end of called understand level seen. but tie-down revenue stuff the last This in that is of you your point your cost sit that to billion this the the here make?

end. year And comfort share There's we them surprises sort year. unknown of size to the of short-lived even hopefully therefore, this no the Mike, surprises are or a inherent had we've low negative this and in I This why, Unfortunately, of the That it's have to the that is X number. predict that more were unknown. assumptions a now continue. some are third right very where that that is lot It's persisting. of difficult in didn't said, one

I So I it's the best comfortable. predict, can't I without answer can give you feel really other unknown surprises that

normal" we the adds. your model heading about obviously and think exiting between into year, the your new very But I are just away ART difference growth of trying growth to rate the at moving membership taking week, run acceleration, but to should big much which from I'm business end apologize. -- the is call back, bottom And built for a mean, get you for are member we seeing rates -- of get whatever the normal for additional this It's I I on this, business? of a that "new is early you know want it Where different you be? next seeing the to should obviously, pieces are but beyond know don't or the the nice uptick, to various growth a if this new the down normalized growth I as and you're revenue so normalization think How growth cycle be services, about where should year opportunities. growth. the

No, question. fair it's a

have be logos driver biggest to happy is lives. at. adding the Michael growth expand on and will where we're So of continue to and I'm

more far, year, color. in nonetheless, time my we lives I talked at adding that we're give So prepared happy where relative where versus were are logos but remarks we to to pleased this and last with

if single remain Beyond again has changes to still it member, largest will, volume per the barring in utilization, growth relative that that, as surprises will unique any driver of the and or past. you us for

question next Drew Singh is Securities. from from coming Your Jailendra

think to still on and year are employees. these Actually, from months I your guidance contracting, long-term want how also happened. do in in experience in about I thus follow about to And growth know in you this I up any why know the that, among contracting seeing issues last of in less variability your thought can different changes model, terms related far, of strong those to does in employees based on this approach X the results? result in provider But your that demand we your business issues, you Michael or future understand can change first you the question terms X in per the and we business. either which X have of don't about guys

wider, to couple we're that capture going enhance the ranges will get that year, of inform we a this that and models of also the of definitely Regarding certainly considering current things. and our and the versus in we One our get be to more work that and to couple our do to models. we're can to to first guidance real-time that surprises extent right, continue providers will that. sort we part, get the some as to going as through And will our algorithms information data future, us, prove something additional continue the of can to is had much we get inform information

in consumption. is or Regarding that, consumption without the mitigate a sort changing it's like sort putting to how do anything of variability by some it of client care minimums in model actual else hard we business, and

isn't that That here sit doesn't not But we evolve. as may now, thinking mean there So not here sit now. we things that's plan. the around as

my behavior on year, season either in coming Have are any And seeing with guys you Okay. to XXXX coverage approach, or of follow-up respect you selling and the terms in benefit their benefits this out commentary. scope or not now called employers. several additionally, the them seen Last year change you of back the

freezing, facility in terms of what whether at in the not commitments number with form the change new the So for the has take where as whether comment seeing so Rx the employers in he's rate of in made is adopting clients there's early of remarks cycles, past. it it's relative really consistent it's Rx, is we're prepared to -- prior preservation any I year, been egg are my coverage, high

All the of newer also have There's products positive some the that that is out positive. of there. rate we relative results take to of

So that's positive. also

not relates to the majority not-nows, As nows. early commitments the of it are the

head they at and a year. earlier they back term in start the so come they've yes, making the better because the are [indiscernible] they're year back prior every benefit the and And season for do come looked sales years the decision they back, come in and

Barclays. from Davis coming is from Stephanie question next Your

I that in as you Can was hoping prior some confidence this data, lower the to cycles in just what gives to X of follow back issue? per data And you questions. the dig have a that the up level maturation level cohort you do on you half that cohort thought deeper of what you of maybe anticipate user this isn't year? level given

time question, utilizing saw the quarter. the time expect this previous at QX, reduction the of And where what in rate consistent we we slower at quarter we're cycles than and a versus the we're of QX. normally So at growth first rate of with look the what or growth quarter in the in first member this where is per of slower part was in e-mail would off we the in which

to think early, It's relates overall expect not utilizer still just growth. trend seasonality the I considering rate cycles And do think there's it now the of the it's the that. really math we a sort conclude new with per at I right business. is that in in would normal of terms we As see to we that impact maturation, this this

And this and selling shaping the versus when the that there. selling of then upcoming contribute how have think Understood coming on you season hunting the kind in commercial is government mix season to that opportunities of how now Or have how it's thoughts pipeline? do license? government on lives bullishness about you ahead, date a could up you any in

Yes.

is this So Michael.

remains decisions -- both to Pete is to really have what But come. partnerships as for it's us the another partners pipeline, partners. things. then the we of leading to stays that us And mean, X really relates as same question, as it the what reference the the do as relates I and in as to same is -- we solutions. our commitments allow it provide the said it in lots well in yes, good areas partnerships remarks, One date still where really about. still value differentiate prop our and feel But to to certainly, differentiation the First, the active certainly point partners we consistently those remains the

And the sort way. is to around The provides employers that last paths of it if and really bringing think mile, that additional you about the second our want part ease contracting on. change, decision partnerships in towards helped it particular, to process

we to and going sort levers. our So us that we into partnerships that's And at and to and how same on continue impact partnerships look great of effect add prior valuable as for be new look future business. the

Your next from America. is of Bank from Allen coming question Lutz

anything last Pete, Alabama on an XQ? driver a the provide utilization. Is to Supreme you a Court there there you call ruling on saw in update quarter, you mentioned just potential state-by-state out of Can what basis? as

Yes.

last the short-term was utilization quarter caused that. So we surmised by in that dip

for talked consistent full seeing QX. we reported recall, normal you we're also If now that's also right back what it levels, for returned we the with and fact about that QX to quarter for what the and

news of anything state-by-state is that call today was good basis persisted. not any it a meaning We're something and a dip on that out. is to seeing the short-term So not that

around the want Okay. you And you a Do And think talk is year. quickly I growing up about stronger some comments XXXX. follow Great. think little of the at Progyny Can on it's taking relative bit you than changed season market fertility is how selling share? do then XXXX? to all you last to the in think

whether have, anecdotal And continue with 'XX, growth in carriers thing very the first the it's growth take the industry to have say companies or we market. coverage, plans, versus do as -- the different growing that are how based take share of maximums. carriers in think other hard to I benefit is have it's because So The the through on any that, the lives different through competitors coverage much to every us when the we it's relative I or dollar that is year right? the say we of is that generally plans rate

of math cost comprehensive coverage just dollar or depending the companies number based board not many a success of live and get the rates on of And what the they offer on or and the coverage. for So of limited cycles coverage maximums sort IVF. offer therefore, don't across coverage successfully ultimately

forms. live in been the CDC is what's reported always sort cycles annual year juxtaposed as look to in thing with births, that overall the what's look growth are if over on is X is in 'XX 'XX rate -- point -- the year, against is and access years every of which growth around of happening I last roughly XX comes at decline. or last happening growth reported year I coverage. coverage that terms rate, you at last We of compounded year to are that So a Overall, have 'XX the a [indiscernible]? the think data XX% art point has has data the

from Your is next question coming from Santangelo Jefferies. Glenn

pointed dead the beat XQ now it call, be you answers had as we've of Pete, XQ the in horse But out, call to other the and issues, the some I different tonight. of here. hate whether sort

so it is thread that common indicators down. guess, like to the throughout answers, like we all bit get but each of about quarter, I questions the issue the little economic of trending sort one that different, it listening was year a your thing And kind are sounds seems is this

seeing is, seem so guess what to I say not that weakening any just a you weakness in you mean the be why kind gives demand. to that you're in curious it part as consumer. to a think unreasonable of least could logical when it is answer. to that the not it's seems confidence confident of And like question at I it And I'm sort pretty

saying not So Look, right? answer, Yes. that be one I'm impossible. certainly, that's could

when saying. the And top I'm demand what if you utilization the we're still make I right that, first about of of -- of terms me, -- the there, When it why Here's end utilizers as positive, what especially that's sort that's a over closer opposed you in than we historical of the rate, year, we unique right? will, to utilization last when I look record we're high to utilization the had year, was now, Other and talk say rates at lower of issues. rates. end comment. rate to a seeing So i.e., historical is that funnel, if utilization other

that to QX, came that mix, first that's lower, that rate it for were about why half that was utilization revenue called QX in talk itself. of reason why out. The other it called with issues one which was we resolved and We out versus the the why

DIP in around issue utilization And previous the the was was already question, rate second The resolved. temporary. answered as I on

to per utilizer, as small short-term a persistent but as is and percent, one it in be continue we to It a drop the it. be future itself, cycles -- be is utilizers happens just because so we're a the a impacting does If a QX, are doesn't correct This guiding issue. issue. And we're yet. are appear and It far, And into appeared still to new we it, explaining utilizing. seeing to why it not that that's outlook. itself correct

the bit of pipeline, consumer demand. people look So at changing a how and that and of that perspective starting that tells all are sales demand I many could from demand it as the utilizing as could there's is collectively employees point an that top funnel benefit be little a continues. comments me cetera, it, softening benefit made, offices, active then be of looked around that a I those understand et that, all and the top the and that's from season at and could on indication the of demand. But -- their the to it why the overall demand I clients, And

we're was we year our fallen somewhere? we now X.X the up to model. at of seem million. we year have maybe to XXX,XXX what it the off is members us going like am that? misremembering walk to just I the sort tighten now? could quick X.X. the to a sounds ask there we it difference I supposed I versus at thought, added X.X follow-up I'm I to kind lose finish through Did a you year can expectation members Or X.X Mark, finish X.X. And were just of started -- thought what if million if that Maybe is of Okay. around wondering when

Yes.

X.X saying reduction have to be even So today about comments prepared that we XXX,XXX. talked did our at unexpected members it were going were an we in approaching this that put you're in We about We million. we in right that net quarter.

the think we part what early there. actually we're now that expected we right of announced to launch, you're I that's launch launched part clients going the Again, into all that that and we're have August. of seeing to

to the But X.X last or really neighborhood. organic we've what that's it's it's at. any X.X to across seen the this of And that between balance So that looking is isn't there the difference or rounding year in factor. impacted X.X number you're quarter growth just is maybe of type that extent sort of the the up

Your Fitzgerald. from Sarah next Cantor question is coming James from

progression. release. quarterly afterwards about if come something back look unique at But a ask And guidance chart of our to for I on female in could, wanted your when utilize clarification I then here. I the

So if pieces quarter account weekdays, is but that some there's material with comes not or then from I'm some have a headwind sure of a utilization number which and flat you model. was great, got XQ, of in is but XQ. accounts business new shrinkage which bunch not the starting your I a moving you've full could in understand now, the got us assumption because XQ you've in of you wondering to help also of usually for different

come scale you help pieces think could So through guidance? as you us your those the moving to of

Sure. Do Mark?. you want to

Yes, then, do And if you it. I'll color. have Pete,

the I charts progressions the the which unique is referencing utilizers. to per showing important just maybe chart, cycles is of lower thing is the are. the female think one I what think quarterly understand There's So you're art

many one through will So X.XX cycles seeking in -- this a 'XX is that second continue X.XX what them progress component you quarter. art and dynamic at utilizers And how 'XX, complete aren't any the our the balance they year. actually if from you [indiscernible] quarter, see progress look begin who of and level there X.XX, then that utilizers at people the are of is the to the And higher into with doing,

I apologize.

off. have alarm We going a fire

a higher cycles than highlighting on. years. an per is mix third is the a at this what of we've we're What increase lower year X.XX, year what as seeing can seeing consults still goes saw we is then but And prior further, perceive increase it's in a obviously the X.XX -- similar much reason bit that is the increase estimating see can female here we're because progresses you're a much seen What it's see also to for -- So after of a X.XX we're the year. and the effectively from of rates. and which you quarter QX initial does in this quarter year, first year, utilizer the ART and you sort actually in

the we down as of perhaps the as would a high low the estimates fact we've to can a end as so goes that So as our you the down it been And you allow see to the year there always guidance that most on can and we bit stepping prudent that little it's bring factors continue typically see to increase and thought reflect in you -- may of the on. range bit range, where philosophy was versus that end there not unforeseen QX it course, what may much for again, 'XX, base we're to our guidance do 'XX to be and have other expect. show from seeing. And of

that's helping. hopefully, So

chart per One wanted XQ versus different. And down. good up. to sized report clarify, understand that I want seems sure clarify, member Sure. And ART There's make then other guess how female a utilizer you to and to unique in other pretty higher the in quite just cycles recast no XXX,XXX I I I come because historically that. is the only so up difference that's account. goes to just

design So different is really, now. that's of this, QX, rate the think they for average it's does has talked that's the the lower a excluded to numbers average earlier associated we've utilization the we've than including The it which only rate chose X.X full bit to plan only year that launches. remember, to the and because yes, on -- the based benefit. didn't is chosen XXXX, they've with the a their which about that little is -- how members chart, -- QX I with federal factor upper in those and associated X.X average full and members, from And year a members have averages, how in

'XX? Got is it. something for different? Is Or that what the recast drove that

I don't think we're recasting XX. No.

X.XX chart I on if far think the lower chart, unique right you XXXX year if is in arc you per look, 'XX the on the chart, utilizer, X.XX. for below the full look cycles same the same the then $X.XX upper is is female X.XX, at that's and

the right. the year versus the the quarterly chart bottom year to on way Full all is full and

we later. can can differences, we little up offline Maybe bit follow more quarterly because still but handle I'm a getting some that

coming is Richard Canaccord from Close from question next Your Genuity.

on Sarah's Maybe expand here. to questioning of just line

'XX. know decreases question. and if you the you like if and or back But this only chart, showing ever years, first go experienced in the guys to go I so far and time, quarters any you're that's back at bottom I anything us you've looking where -- you have earlier Just 'XX in guess 'XX seen in

Yes. COVID, year years, of years X if look out coming at it sort depending sequential and still improvement. of full X during were of of those of had sort of the more seasonality variability the terms versus COVID year. first but you activity last pre-IPO first in it indicative of a that sort in There's the XXXX The COVID the the of at, was back, year. was it a -- lot on year you the was look year you look if because XXXX,

process the terms in of have seems Okay. here like to there terms explain you the And that. -- But find upon really in the out, decline. just then is. It out what to variance want know reasons figure or if change earlier you know the what's mean, said trying of can to you trying is don't I I to expand what you'd

a start aggregate you outcomes different tell see journeys the not will anything whether that also see in the see today combination in you these any have in anything clinics QX, in will or tell a It's you anything. if we anything. in, as any of and quarter or come conversations don't area cycles which country that and utilizing It's understand It's tools volume whether our and XX,XXX and what do was of could people or the with to of the creating combination haunting of significant the a different or you benefit analyzing in will that not that combination that not anything. combination whether of tell you for

So of the real in it's above, what's sort because will of time, all but happening. time know you don't take

is Scott next coming from Your KeyBanc. Schoenhaus from question

spiked question at revenue us years. look first that? Can color if My to really is a levels seen we few haven't and in it what's you cycle, per we some accelerated ART on, services on benefit average driving fertility give

for a There seeing it's associated with greater per I think there Sorry, again, utilizing of that. the number cycles, the that ART, are -- is -- is what a ART there are people proportion. completing the the service, number versus yes, revenue are you have average you're if that

this utilizer. to seeing It and push non-Art you're cycles revenue average for to that's So a higher cycle themselves, proportion your a of factor revenue per up. of is going hard the

Got we by did if look mix between even the more of simply the business declines, that it are revenue discrepancies regions -- it. question a state-by-state we is is state you a it benefit or in this year what drill revenue down ago services year My signal any pharmacy declines you part mix. are -- like can state see glaring there states on ago? or at discrepancies the If versus big the or follow-up can revenue, is that a clear

it, revenue pharmacy tied the in had As the see There revenue. I isn't in had that going revenue difference rate what medical And QX as I had increases and as prior a call QX in therefore, much talked Mark -- manufacturer versus remarks, right variance can did to growth last in weren't QX this somebody the state-by-state think were out. question. by as asked QX drove to year per now top QX, off year. in prepared by And that sequentially a And same more year's to mentioned year cycle, that before, really were his done of you're we end -- of grow in I past. rate so significant of by on the it's in of growth the last about didn't comp year

no, would right state it. now. there So state combination out call isn't a to anything impact by But

from is David question next Your Larsen from coming BTIG.

It's blue years that the had back not? conversations diversity Can leading plans not and benefits consultants? when the was election benefits would I all growth. heading handful perhaps of of into DEI has X you and cycle. us will take your with inclusion was at these entered companies power. up of mean an the possible, conversations they a bit to discussions and with gets more we're into for red sort a discussion? conservative sign them that equity or that It some to maybe about administration over a obviously, a this important an driver we've past talk consideration little Like highlighted that

statements Trump, though Regarding there, takes supports IVF. the in there's he President has out even said, aisle, former nominee sides there's -- facility the piece, the Republican even more support on -- power, last for if already been the IVF. both enough of party the the And conservative

So will I the issue industry. for create that don't an think

better benefit the the trend the with consoles, to positive think relative consultants. what's conversations happening is Regarding I at

be the indication existing or know these they've them clients Over rebuilding wasn't of as an with Michael, and adviser if overall of demand anything. see place excellence clients, to often That's positive. to and are prospective to that for a add clients a don't of years, center in last the created the all conversations I that around happening an be want couple we theirs. And of to effectively before equipped benefits how

are and I'd year. sort And those to go, plays date, again, see from lots seeing we're we're -- Yes. then a Obviously, just prepared last seeing pipelines active how also To that not of remarks, not comments play and would we're happening itself good. to comparable back No. the but just the -- more the those things. And what's to out. we're you to again, not point in closes things start out. Pete's

what per follow-up. back expected. membership that's thought you Okay. to in then a service cycle revenue where would The the Is for high increased is than again, simply each the be, And it mix sort of meaning and cycle and just coming per now good sequentially. quick amount overall it's in was art X revenue lower utilization the

other X mix times year the had been We we because significant X of mix isn't Mix change. breaking that the other who if anomaly are the the ART in is than cycle fact ART a year. that. that QX term. for that, drives normal, different in cycles, are other a at driving separately, that That's the really would utilize increase expect will, and what relatively utilizes that revenue The of right, function the using stuff services it's is that right, ART not consistent first math if cycles, So will the weeks we're not overall drive of it is but in of that but out utilization and lack better cycles, there's right? fewer and makes other services There right? done, seem a higher, math with they're you what's for the

goes normal. is I'm is comment take sure want they of our utilization which don't around lower are away the revenue of that cycles -- they're map that by cycle. down, other therefore, But that. female make of utilizer of it utilizers to services a is into that volume other item, this only because sorry, from utilizing also So same jump the utilizing you cycle is I just benefit unique up It's around our per the number per the

So that if sense. makes

questions There further are no in the queue.

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