Reports Record Revenue of
Raises Lower End of Full Year 2022 Guidance Ranges
Issues Revenue Guidance of
Early Season Sales Activity Affirms Progyny’s Continued Momentum as the Provider of Choice for Fertility and Family
“We had a strong start to the year, achieving our highest-ever quarterly revenue, gross profit and Adjusted EBITDA, in addition to successfully launching with the largest number of new clients and covered lives in our history. We are also pleased to report that we continue to achieve industry-leading clinical outcomes. Across all measures, for the sixth straight year, we significantly outperformed as compared to the national averages released by the CDC,” said
“Our gross profit and Adjusted EBITDA grew 14% and 44% in the first quarter, respectively, as compared to the prior year period, reflecting higher revenue and the operational efficiencies that we have continued to realize throughout our cost structure as we rapidly scale the business,” said
First Quarter Highlights:
(unaudited; in thousands, except per share amounts) | 1Q 2022 | 1Q 2021 | ||||
Revenue | $ | 172,217 | $ | 122,133 | ||
Gross Profit | $ | 32,949 | $ | 28,907 | ||
Gross Margin | 19.1 | % | 23.7 | % | ||
Gross Margin excl. stock-based compensation expense1 | 22.7 | % | 24.7 | % | ||
Net Income | $ | 4,971 | $ | 15,166 | ||
Net Income per Diluted Share2 | $ | 0.05 | $ | 0.15 | ||
Adjusted EBITDA3 | $ | 24,806 | $ | 17,263 | ||
Adjusted EBITDA Margin3 | 14.4 | % | 14.1 | % |
- Gross margin excluding stock-based compensation expense is a financial measure not required by, or presented in accordance with, GAAP. See Annex A of this release for a reconciliation of gross margin excluding stock-based compensation expense to gross margin, the most directly comparable financial measure stated in accordance with GAAP for each of the periods presented.
- Net income per diluted share reflects weighted-average shares outstanding as adjusted for potential dilutive securities, including options and warrants to purchase common stock, as well as restricted stock units.
- Adjusted EBITDA and Adjusted EBITDA margin are financial measures that are not required by, or presented in accordance with,
U.S. GAAP. Please see Annex A of this release for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with GAAP for each of the periods presented. We calculate Adjusted EBITDA margin as Adjusted EBITDA divided by revenue.
Financial Highlights
1st Quarter
Revenue was
- Fertility benefit services revenue was
$110.9 million , a 25% increase from the$88.9 million reported in the first quarter of 2021. - Pharmacy benefit services revenue was
$61.3 million , an 84% increase as compared to the$33.3 million reported in the first quarter of 2021.
Gross profit was
Net income was
Adjusted EBITDA was
Cash Flow
Net cash used by operating activities for the first quarter of 2022 was
Balance Sheet and Financial Position
As of
Key Metrics
The company had 264 clients as of
Three Months Ended | ||||
2022 | 2021 | |||
ART Cycles* | 8,924 | 6,558 | ||
Utilization – All Members** | 0.51 | % | 0.54 | % |
Utilization – Female Only** | 0.45 | % | 0.47 | % |
Average Members | 3,927,000 | 2,657,000 |
* Represents the number of ART cycles performed, including IVF with a fresh embryo transfer, IVF freeze all cycles/embryo banking, frozen embryo transfers, and egg freezing.
** Represents the member utilization rate for all services, including, but not limited to, ART cycles, initial consultations, IUIs, and genetic testing. The utilization rate for all members includes all unique members (female and male) who utilize the benefit during that period, while the utilization rate for female only includes only unique females who utilize the benefit during that period. For purposes of calculating utilization rates in any given period, the results reflect the number of unique members utilizing the benefit for that period. Individual periods cannot be combined as member treatments may span multiple periods.
Financial Outlook
“As the second quarter begins, the early indications of member activity have been consistent with our expectations, affirming – once again – the essential nature of fertility treatments and our members’ resilience in pursuing care, even against the backdrop of a global pandemic,” said
“In light of our strong results in the first quarter, as well as our visibility into member utilization at this point, we are narrowing our guidance ranges by raising the lower end of our full year expectations.”
The company is providing the following financial guidance for the year ending
- Full Year 2022 Outlook:
- Revenue is now projected to be
$735.0 million to$775.0 million , reflecting growth of 47% to 55% - Net income is projected to be
$7.3 million to$14.2 million , or$0.07 to$0.14 per diluted share, on the basis of approximately 105 million assumed weighted-average fully diluted-shares outstanding - Adjusted EBITDA1 is projected to be
$111.0 million to$122.0 million
- Revenue is now projected to be
- Second Quarter of 2022 Outlook:
- Revenue is projected to be
$188.0 million to$193.0 million , reflecting growth of 46% to 50% - Net income is projected to be
$1.0 million to$2.3 million , or$0.01 to$0.02 per diluted share, on the basis of approximately 102 million assumed weighted-average fully diluted-shares outstanding - Adjusted EBITDA1 is projected to be
$28.0 million to$30.0 million
- Revenue is projected to be
- Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with,
U.S. GAAP. Please see Annex A of this release for a reconciliation of forward-looking Adjusted EBITDA to forward-looking net income, the most directly comparable financial measure stated in accordance with GAAP for the period presented.
Conference Call Information
About
Our benefits solution empowers patients with education and guidance from a dedicated
Headquartered in
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release includes forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to management. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the
Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, without limitation, risks related to the ongoing impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, the spread of new variants, government actions and restrictive measures implemented in response, material delays and cancellations of fertility procedures and other impacts to the business; failure to meet our publicly announced guidance or other expectations about our business; competition in the market in which we operate; our history of operating losses and ability to sustain profitability in the future; our limited operating history and the difficulty in predicting our future results of operations; our ability to attract and retain clients and increase the adoption of services within our client base; the loss of any of our largest client accounts; changes in the technology industry; changes in the health insurance market; negative publicity in the health benefits industry; lags, failures or security breaches in our computer systems or those of our vendors; a significant change in the utilization of our solutions; our ability to offer high-quality support; positive references from our existing clients; our ability to develop and expand our marketing and sales capabilities; the rate of growth of our future revenues; the accuracy of the estimates and assumptions we use to determine the size of target markets; our ability to successfully manage our growth; unfavorable conditions in our industry or
Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this press release. Our actual future results could differ materially from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
Adjusted EBITDA, Adjusted EBITDA margin and gross margin excluding the impact of stock-based compensation expense are supplemental financial measures that are not required by, or presented in accordance with, GAAP. We believe that these non-GAAP measures, when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA, Adjusted EBITDA margin and gross margin excluding the impact of stock-based compensation expense are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation, evaluating our operating performance, and for internal planning and forecasting purposes.
Adjusted EBITDA, Adjusted EBITDA margin and gross margin excluding the impact of stock-based compensation expense are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of Adjusted EBITDA and Adjusted EBITDA margin include: (1) it does not properly reflect capital commitments to be paid in the future; (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (3) it does not consider the impact of stock-based compensation expense; (4) it does not reflect other non-operating expenses, including other (income) expense, net and interest (income) expense, net; (5) it does not reflect tax payments that may represent a reduction in cash available to us. Gross margin excluding the impact of stock-based compensation expense does not reflect the impact of stock-based compensation, which is an important component of our compensation strategy. In addition, our non-GAAP measures may not be comparable to similarly titled measures of other companies because they may not calculate such measures in the same manner as we calculate these measures, limiting their usefulness as comparative measures. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA, Adjusted EBITDA margin and gross margin excluding the impact of stock-based compensation expense alongside other financial performance measures, including our net income, gross margin, and our other GAAP results.
We calculate Adjusted EBITDA as net income, adjusted to exclude depreciation and amortization; stock-based compensation expense; other (income) expense, net; interest (income) expense, net; and benefit for income taxes. We calculate Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Please see Annex A: “Reconciliation of GAAP to Non-GAAP Financial Measures” elsewhere in this press release.
For Further Information, Please Contact:
Investors:
investors@progyny.com
Media:
media@progyny.com
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
2022 | 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 38,821 | $ | 91,413 | ||||
66,855 | 28,005 | |||||||
Accounts receivable, net of | 198,120 | 134,557 | ||||||
Prepaid expenses and other current assets | 5,230 | 4,564 | ||||||
Total current assets | 309,026 | 258,539 | ||||||
Property and equipment, net | 5,827 | 5,027 | ||||||
Operating lease right-of-use assets | 7,583 | 7,805 | ||||||
11,880 | 11,880 | |||||||
Intangible assets, net | 473 | 599 | ||||||
Deferred tax assets | 76,429 | 71,274 | ||||||
Other noncurrent assets | 4,307 | 2,941 | ||||||
Total assets | $ | 415,525 | $ | 358,065 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 84,677 | $ | 61,399 | ||||
Accrued expenses and other current liabilities | 44,040 | 37,425 | ||||||
Total current liabilities | 128,717 | 98,824 | ||||||
Operating lease noncurrent liabilities | 7,189 | 7,419 | ||||||
Total liabilities | 135,906 | 106,243 | ||||||
Commitments and Contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, | 9 | 9 | ||||||
Additional paid-in capital | 278,083 | 255,339 | ||||||
(1,009 | ) | (1,009 | ) | |||||
Accumulated earnings (deficit) | 2,547 | (2,424 | ) | |||||
Accumulated other comprehensive loss | (11 | ) | (93 | ) | ||||
Total stockholders’ equity | 279,619 | 251,822 | ||||||
Total liabilities and stockholders’ equity | $ | 415,525 | $ | 358,065 |
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended | |||||||
2022 | 2021 | ||||||
Revenue | $ | 172,217 | $ | 122,133 | |||
Cost of services | 139,268 | 93,226 | |||||
Gross profit | 32,949 | 28,907 | |||||
Operating expenses: | |||||||
Sales and marketing | 10,015 | 4,014 | |||||
General and administrative | 22,992 | 13,086 | |||||
Total operating expenses | 33,007 | 17,100 | |||||
Income (loss) from operations | (58 | ) | 11,807 | ||||
Other income (expense): | |||||||
Other income (expense), net | (96 | ) | 7 | ||||
Interest income (expense), net | 12 | (18 | ) | ||||
Total other expense, net | (84 | ) | (11 | ) | |||
Income (loss) before income taxes | (142 | ) | 11,796 | ||||
Benefit for income taxes | 5,113 | 3,370 | |||||
Net income | $ | 4,971 | $ | 15,166 | |||
Net income per share: | |||||||
Basic | $ | 0.05 | $ | 0.17 | |||
Diluted | $ | 0.05 | $ | 0.15 | |||
Weighted-average shares used in computing net income per share: | |||||||
Basic | 91,410,368 | 87,404,287 | |||||
Diluted | 99,935,735 | 100,106,497 |
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended | ||||||||
2022 | 2021 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 4,971 | $ | 15,166 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Deferred tax benefit | (5,155 | ) | (3,370 | ) | ||||
Non-cash interest expense | — | 19 | ||||||
Depreciation and amortization | 364 | 422 | ||||||
Stock-based compensation expense | 24,500 | 5,034 | ||||||
Bad debt expense | 2,281 | 2,518 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (65,845 | ) | (43,520 | ) | ||||
Prepaid expenses and other current assets | (664 | ) | 1,046 | |||||
Accounts payable | 23,171 | 13,797 | ||||||
Accrued expenses and other current liabilities | 6,489 | 9,413 | ||||||
Other noncurrent assets and liabilities | (1,374 | ) | 7 | |||||
Net cash (used in) provided by operating activities | (11,262 | ) | 532 | |||||
INVESTING ACTIVITIES | ||||||||
Purchase of property and equipment, net | (790 | ) | (369 | ) | ||||
Purchase of marketable securities | (59,867 | ) | (62,146 | ) | ||||
Sale of marketable securities | 21,099 | 23,995 | ||||||
Net cash used in investing activities | (39,558 | ) | (38,520 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Proceeds from exercise of stock options | 830 | 539 | ||||||
Payment of employee taxes related to equity awards | (2,988 | ) | (3,523 | ) | ||||
Proceeds from contributions to employee stock purchase plan | 386 | 487 | ||||||
Net cash used in financing activities | (1,772 | ) | (2,497 | ) | ||||
Net decrease in cash and cash equivalents | (52,592 | ) | (40,486 | ) | ||||
Cash and cash equivalents, beginning of period | 91,413 | 70,305 | ||||||
Cash and cash equivalents, end of period | $ | 38,821 | $ | 29,819 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash paid for interest | $ | 5 | $ | — | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
Additions of property and equipment, net included in accounts payable and accrued expenses | $ | 251 | $ | 20 |
ANNEX A
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
(in thousands)
Costs of Services, Gross Margin and Operating Expenses Excluding Stock-Based Compensation Calculation
The following table provides a reconciliation of cost of services, gross profit, sales and marketing and general and administrative expenses to each of these measures excluding the impact of stock-based compensation expense for each of the periods presented:
Three Months Ended | ||||||||||||
GAAP | Stock-Based Compensation Expense | Non-GAAP | ||||||||||
Cost of services | $ | 139,268 | $ | (6,165 | ) | $ | 133,103 | |||||
Gross profit | $ | 32,949 | $ | 6,165 | $ | 39,114 | ||||||
Sales and marketing | $ | 10,015 | $ | (4,763 | ) | $ | 5,252 | |||||
General and administrative | $ | 22,992 | $ | (13,572 | ) | $ | 9,420 | |||||
Expressed as a Percentage of Revenue | ||||||||||||
Gross margin | 19.1 | % | 3.6 | % | 22.7 | % | ||||||
Sales and marketing | 5.8 | % | (2.8 | )% | 3.0 | % | ||||||
General and administrative | 13.4 | % | (7.9 | )% | 5.5 | % | ||||||
Three Months Ended | ||||||||||||
GAAP | Stock-Based Compensation Expense | Non-GAAP | ||||||||||
Cost of services | $ | 93,226 | $ | (1,287 | ) | $ | 91,939 | |||||
Gross profit | $ | 28,907 | $ | 1,287 | $ | 30,194 | ||||||
Sales and marketing | $ | 4,014 | $ | (681 | ) | $ | 3,333 | |||||
General and administrative | $ | 13,086 | $ | (3,066 | ) | $ | 10,020 | |||||
Expressed as a Percentage of Revenue | ||||||||||||
Gross margin | 23.7 | % | 1.1 | % | 24.7 | % | ||||||
Sales and marketing | 3.3 | % | (0.6 | )% | 2.7 | % | ||||||
General and administrative | 10.7 | % | (2.5 | )% | 8.2 | % | ||||||
Adjusted EBITDA and Adjusted EBITDA Margin on Incremental Revenue Calculation
The following table provides a reconciliation of Net income to Adjusted EBITDA for each of the periods presented:
Three Months Ended | ||||||||
2022 | 2021 | |||||||
Net income | $ | 4,971 | $ | 15,166 | ||||
Add: | ||||||||
Depreciation and amortization | 364 | 422 | ||||||
Stock‑based compensation expense | 24,500 | 5,034 | ||||||
Other (income) expense, net | 96 | (7 | ) | |||||
Interest (income) expense, net | (12 | ) | 18 | |||||
Benefit for income taxes | (5,113 | ) | (3,370 | ) | ||||
Adjusted EBITDA | $ | 24,806 | $ | 17,263 | ||||
Revenue | $ | 172,217 | $ | 122,133 | ||||
Incremental revenue vs. 2021 | 50,084 | |||||||
Incremental Adjusted EBITDA vs. 2021 | 7,543 | |||||||
Incremental Adj EBITDA margin on incremental revenue | 15.1 | % |
Reconciliation of Non-GAAP Financial Guidance for the Three Months Ending
Three Months Ending | Year Ending | ||||||||||||
(in thousands) | Low | High | Low | High | |||||||||
Revenue | $ | 188,000 | $ | 193,000 | $ | 735,000 | $ | 775,000 | |||||
Net Income | $ | 1,000 | $ | 2,300 | $ | 7,316 | $ | 14,216 | |||||
Add: | |||||||||||||
Depreciation and amortization | 400 | 400 | 1,700 | 1,700 | |||||||||
Stock-based compensation expense | 26,000 | 26,000 | 106,000 | 106,000 | |||||||||
Other income, net | — | — | 84 | 84 | |||||||||
Provision (benefit) for income taxes | 600 | 1,300 | (4,100 | ) | — | ||||||||
Adjusted EBITDA* | $ | 28,000 | $ | 30,000 | $ | 111,000 | $ | 122,000 |
* All of the numbers in the table above reflect our future outlook as of the date hereof. Net income and Adjusted EBITDA ranges do not reflect any estimate for other potential activities and transactions, nor do they contemplate any discrete income tax items, including the income tax impact related to equity compensation activity.
Source:
2022 GlobeNewswire, Inc., source