Progyny (PGNY) Jefferies London Healthcare Conference 2024 summary

Utilization and financial trends

• Utilization rates remained high, but cycles per utilizer declined compared to historical patterns, with a drop in Q3 and early signs of reversal in Q4.

• Inflation and macroeconomic uncertainty may have influenced individual decisions, but overall utilization stayed strong.

• Membership is forecasted to reach 6.7 million in January, with no significant leakage; some new members started early.

• Client retention remains at 99%, with only five clients leaving out of over 460, and many clients expanding benefits.

• Analysts' revenue and EBITDA forecasts for 2025 appear conservative, likely due to assumptions of continued lower cycles per utilizer, despite improving trends in Q4.

Sales season and competitive landscape

• 1.1 million lives were added in the latest selling season, with strong wins among large clients and a robust active pipeline remaining.

• No significant pushback from employers on benefit coverage; competing priorities include medical cost inflation and health plan changes.

• Industry penetration is not yet saturated; about 50% of large employers offer some fertility coverage, but true comprehensive coverage is much lower.

• Competition from standalone providers and carriers remains, but win rates against competitors are strong, with more than double the wins versus losses.

• Partnerships with managed care organizations are increasing, shifting some former competitors into collaborators.

Product expansion and upsell activity

• New maternity and menopause solutions are being adopted, with 1.5 million covered lives expected for these products in 2025.

• These solutions are case-rate based and expected to become meaningful revenue contributors over time as awareness and utilization grow.

• 30% of clients bought additional services during the selling season, with no trend of clients reducing coverage.

• Upsell activity correlates with increased utilization and revenue over time, and the average client now has more cycles than at IPO.