Progyny, Inc. (Nasdaq: PGNY) (“Progyny” or the “Company”), a
leading benefits management company specializing in fertility and
family building benefits solutions, today announced its financial
results for the three-month period ended September 30, 2023
(“the third quarter of 2023”) as compared to the three-month period
ended September 30, 2022 (“the third quarter of 2022” or “the
prior year period”).
“We're pleased with our third quarter financial
performance, highlighted by record quarterly revenue that continues
to reflect healthy levels of utilization as well as solid growth in
both profitability and cash flow, in addition to another strong
sales and renewal season, which resulted in over 85 new client
commitments that are expected to add 1.3 million new covered lives,
and a near 100% retention rate for the eighth straight year. This
includes our first population of approximately 300,000 covered
lives under a federal government plan. While we modified our
services to align with the government plan design, which will yield
a lower contribution from this population for 2024, we are excited
about the future potential that this early win represents,” said
Pete Anevski, Chief Executive Officer of Progyny. “We believe these
results demonstrate that Progyny continues to be the provider of
choice for fertility and family building solutions among the
world's leading brands.”
“During the third quarter, revenue grew 37%,
while Adjusted EBITDA increased 43% as our margins continued to
expand, highlighting our ability to rapidly and effectively scale
our operations to serve both our members and the nation's largest
employers, even as we continue to enhance our solution and achieve
exceptional client satisfaction,” said Mark Livingston, Progyny’s
Chief Financial Officer.
Third Quarter 2023 Highlights:
(unaudited; in thousands, except per share amounts) |
3Q 2023 |
|
3Q 2022 |
Revenue |
$280,891 |
|
$205,371 |
|
|
|
|
Gross Profit |
$62,624 |
|
$45,995 |
Gross Margin |
22.3% |
|
22.4% |
Net Income |
$15,898 |
|
$13,211 |
|
|
|
|
Net Income per Diluted
Share1 |
$0.16 |
|
$0.13 |
|
|
|
|
Adjusted EBITDA2 |
$50,019 |
|
$34,957 |
Adjusted EBITDA Margin2 |
17.8% |
|
17.0% |
- Net income per diluted share
reflects weighted-average shares outstanding as adjusted for
potential dilutive securities, including options, restricted stock
units, warrants to purchase common stock, and shares issuable under
the employee stock purchase program.
- Adjusted EBITDA and Adjusted EBITDA
margin are financial measures that are not required by, or
presented in accordance with, U.S. generally accepted accounting
principles ("GAAP"). Please see Annex A of this press 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 HighlightsRevenue was
$280.9 million, a 37% increase as compared to the $205.4 million
reported in the third quarter of 2022, primarily as a result of the
increase in our number of clients and covered lives.
- Fertility benefit services revenue
was $175.1 million, a 35% increase from the $129.3 million reported
in the third quarter of 2022.
- Pharmacy benefit services revenue
was $105.8 million, a 39% increase from the $76.1 million reported
in the third quarter of 2022.
Gross profit was $62.6 million, an increase of
36% from the $46.0 million reported in the third quarter of 2022,
primarily due to the higher revenue. Gross margin was 22.3%,
comparable to the prior year period.
Net income was $15.9 million, or $0.16 income
per diluted share, an increase of 20% as compared to $13.2 million,
or $0.13 income per diluted share, reported in the third quarter of
2022. The higher net income was due primarily to the higher gross
profit and operating efficiencies realized on our higher revenues,
which more than offset higher non-cash stock-based compensation
expense and a higher provision for income taxes.
Adjusted EBITDA was $50.0 million, an increase
of 43%, from the $35.0 million reported in the third quarter of
2022, reflecting the higher gross profit and operating efficiencies
realized on our higher revenues. Adjusted EBITDA margin was 17.8%,
an increase of 80 basis points from the 17.0% Adjusted EBITDA
margin in the third quarter of 2022.
Cash FlowNet cash generated by
operating activities for the third quarter of 2023 was $54.2
million, compared to $20.9 million in the prior year period. The
improvement in cash flow reflects the higher profitability, as well
as the timing impact of certain working capital items in both
periods.
Balance Sheet and Financial
PositionAs of September 30, 2023, the Company had
total working capital of approximately $417.9 million and no debt.
This included cash and cash equivalents and marketable securities
of $335.6 million, an increase of $53.1 million from the balances
as of June 30, 2023.
Key MetricsThe Company had 392 clients as of
September 30, 2023, as compared to 282 clients as of September 30,
2022.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
ART Cycles* |
15,005 |
|
11,086 |
|
42,947 |
|
30,402 |
Utilization – All Members** |
0.56% |
|
0.49% |
|
1.11% |
|
1.00% |
Utilization – Female Only** |
0.49% |
|
0.44% |
|
0.93% |
|
0.85% |
Average Members |
5,428,000 |
|
4,482,000 |
|
5,366,000 |
|
4,301,000 |
* 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 OutlookThe majority
of the clients added in the most recent selling season are expected
to go live in the first quarter of 2024, though a number of clients
have already launched the benefit and are reflected in the clients
and covered lives reported as of September 30, 2023. Once all new
clients are live in 2024, the company anticipates having more than
460 clients, representing an estimated 6.7 million covered lives,
which compares to the 370 clients and 5.4 million covered lives
that were under commitment as of the start of 2023.
“With the strong results over the first nine
months of the year, as well as our current expectations for member
engagement, including the impact of the new clients who have
already launched, we are raising our guidance for the year,” said
Mr. Anevski. “Consistent with our past practice, we will provide
financial guidance for 2024 when we report our year end results in
February, by which time we'll have insight into the utilization
from the clients launching on January 1, 2024. Given the results of
the sales and renewal season we just completed, we are entering
2024 well positioned to deliver another strong year of growth.”
The Company is providing the following financial
guidance for both the full year and three-month period ending
December 31, 2023:
- Full Year 2023 Outlook:
- Revenue is now projected to be
$1,087 million to $1,095 million, reflecting growth of 38% to
39%
- Net income is projected to be $58.3
million to $60.0 million, or $0.58 to $0.59 per diluted share, on
the basis of approximately 101 million assumed weighted-average
fully diluted-shares outstanding
- Adjusted EBITDA1 is projected to be
$186.0 million to $188.5 million
- Fourth Quarter of 2023 Outlook:
- Revenue is projected to be $268.3
million to $276.3 million, reflecting growth of 25% to 29%
- Net income is projected to be $9.7
million to $11.4 million, or $0.10 to $0.11 per diluted share, on
the basis of approximately 102 million assumed weighted-average
fully diluted-shares outstanding
- Adjusted EBITDA1 is projected to be
$42.2 million to $44.7 million
- Adjusted EBITDA is a financial
measure that is not required by, or presented in accordance with,
GAAP. Please see Annex A of this press 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
InformationProgyny will host a conference call at 4:45
P.M. Eastern Time (1:45 P.M. Pacific Time) today, November 7,
2023, to discuss its financial results. Interested participants
from the United States may join by calling 1.866.825.7331 and using
conference ID 265484. Participants from international locations may
join by calling 1.973.413.6106 and using the same conference ID. A
replay of the call will be available until November 14, 2023 at
6:00 P.M. Eastern Time by dialing 1.800.332.6854 (U.S.
participants) or 1.973.528.0005 (international) and entering
passcode 265484. A live audio webcast of the call and subsequent
replay will also be available through the Events &
Presentations section of the Company’s Investor Relations website
at investors.progyny.com.
About ProgynyProgyny
(Nasdaq: PGNY) is a leading fertility benefits
management company. We are redefining fertility and
family building benefits, proving that a comprehensive and
inclusive solution can simultaneously benefit employers, patients,
and physicians.
Our benefits solution empowers
patients with education and guidance from a dedicated Patient Care
Advocate (PCA), provides access to a premier network
of fertility specialists using the latest science and
technologies, reduces healthcare costs for the nation’s leading
employers, and drives optimal clinical outcomes. We
envision a world where anyone who wants to have a child can do
so.
Headquartered in New York City, Progyny has been
recognized for its leadership and growth by CNBC Disruptor 50,
Modern Healthcare’s Best Places to Work in Healthcare, Financial
Times, INC. 5000, and Crain’s Fast 50 for NYC. For more
information, visit www.progyny.com.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. 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, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements
contained in this press release other than statements of historical
fact, including, without limitation, statements regarding our
financial outlook for the fourth quarter and full year 2023,
including the impact of our sales season and client launches; our
anticipated number of clients and covered lives for 2024; our
positioning to successfully manage economic uncertainty on our
business; the timing of client decisions; our expected utilization
rates and mix; our ability to retain existing clients and acquire
new clients; the expected benefits of our pharmacy program partner
agreements; and our business strategy, plans, goals and
expectations concerning our market position, future operations, and
other financial and operating information. The words “anticipates,”
“assumes,” “believe,” “contemplate,” “continues,” “could,”
“estimates,” “expects,” “future,” “intends,” “may,” “plans,”
“predict,” “potential,” “project,” “seeks,” “should,” “target,”
“will,” and the negative of these or similar expressions and
phrases are intended to identify forward-looking statements, though
not all forward-looking statements use these words or
expressions.
Forward-looking statements are neither promises
nor guarantees, but 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, 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; unfavorable conditions in our industry or
the United States economy; 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 or
developments 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 level or the mix of 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 revenue;
the accuracy of the estimates and assumptions we use to determine
the size of target markets; our ability to successfully manage our
growth; reductions in employee benefits spending; seasonal
fluctuations in our sales; the adoption of new solutions and
services by our clients or members; our ability to innovate and
develop new offerings; our ability to adapt and respond to the
medical landscape, regulations, client needs, requirements or
preferences; our ability to maintain and enhance our brand; our
ability to attract and retain members of our management team, key
employees, or other qualified personnel; our ability to maintain
our Company culture; risks related to any litigation against us;
our ability to maintain our Center of Excellence network of
healthcare providers; our strategic relationships with and
monitoring of third parties; our ability to maintain or any
disruption of our pharmacy distribution network or their supply
chain; our relationship with key pharmacy program partners or any
decline in rebates provided by them; our ability to maintain our
relationships with benefits consultants; exposure to credit risk
from our members; risks related to government regulation; risks
related to potential sales to government entities; our ability to
protect our intellectual property rights; risks related to
acquisitions, strategic investments, partnerships, or alliances;
federal tax reform and changes to our effective tax rate; the
imposition of state and local taxes; our ability to utilize a
significant portion of our net operating loss or research tax
credit carryforwards; our ability to maintain effective internal
control over financial reporting; our ability to adapt and respond
to the changing SEC expectations regarding environmental, social
and governance practices. For a detailed discussion of these and
other risk factors, please refer to our filings with the Securities
and Exchange Commission (the “SEC”), including in the section
entitled “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, and subsequent reports that we
file with the SEC which are available at
http://investors.progyny.com and on the SEC’s website at
https://www.sec.gov.
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 MeasuresIn
addition to disclosing financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”), this
press release and the accompanying tables include the non-GAAP
financial measures Adjusted EBITDA, Adjusted EBITDA margin, and
Adjusted EBITDA margin on incremental revenue.
Adjusted EBITDA, Adjusted EBITDA margin and
Adjusted EBITDA margin on incremental revenue 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 Adjusted EBITDA margin
on incremental revenue 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
Adjusted EBITDA margin on incremental revenue 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, Adjusted EBITDA
margin and Adjusted EBITDA margin on incremental revenue 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 income and 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. 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 Adjusted EBITDA margin on incremental revenue 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, net; interest income, net; and
provision (benefit) for income taxes. We calculate Adjusted EBITDA
margin as Adjusted EBITDA divided by revenue. We calculate Adjusted
EBITDA margin on incremental revenue as incremental Adjusted EBITDA
in 2023 divided by incremental revenue in 2023. Please see Annex A:
“Reconciliation of GAAP to Non-GAAP Financial Measures” elsewhere
in this press release.
For
Further Information, Please Contact: |
|
Investors: |
Media: |
James Hart |
Selena Yang |
investors@progyny.com |
media@progyny.com |
PROGYNY, INC. |
Consolidated Balance Sheets |
(Unaudited) |
(in thousands, except share and per share
amounts) |
|
|
September 30, 2023 |
|
December 31, 2022 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
158,075 |
|
|
$ |
120,078 |
|
Marketable securities |
|
177,477 |
|
|
|
69,222 |
|
Accounts receivable, net of $42,896 and $28,328 of allowances at
September 30, 2023 and December 31, 2022,
respectively |
|
268,766 |
|
|
|
240,067 |
|
Prepaid expenses and other current assets |
|
6,954 |
|
|
|
4,489 |
|
Total current assets |
|
611,272 |
|
|
|
433,856 |
|
Property and equipment,
net |
|
9,716 |
|
|
|
8,371 |
|
Operating lease right-of-use
assets |
|
18,028 |
|
|
|
6,903 |
|
Goodwill |
|
11,880 |
|
|
|
11,880 |
|
Intangible assets, net |
|
— |
|
|
|
99 |
|
Deferred tax assets |
|
72,027 |
|
|
|
77,889 |
|
Other noncurrent assets |
|
3,589 |
|
|
|
3,988 |
|
Total
assets |
$ |
726,512 |
|
|
$ |
542,986 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
132,040 |
|
|
$ |
109,287 |
|
Accrued expenses and other current liabilities |
|
61,379 |
|
|
|
50,249 |
|
Total current liabilities |
|
193,419 |
|
|
|
159,536 |
|
Operating lease noncurrent
liabilities |
|
17,700 |
|
|
|
6,482 |
|
Total
liabilities |
|
211,119 |
|
|
|
166,018 |
|
Commitments and
Contingencies |
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at
September 30, 2023 and December 31, 2022; 95,764,690 and
93,301,156 shares issued and outstanding at September 30, 2023
and December 31, 2022, respectively |
|
9 |
|
|
|
9 |
|
Additional paid-in capital |
|
438,044 |
|
|
|
349,533 |
|
Treasury stock, at cost, $0.0001 par value; 615,980 shares at
September 30, 2023 and December 31, 2022 |
|
(1,009 |
) |
|
|
(1,009 |
) |
Accumulated earnings |
|
76,501 |
|
|
|
27,934 |
|
Accumulated other comprehensive income |
|
1,848 |
|
|
|
501 |
|
Total stockholders’
equity |
|
515,393 |
|
|
|
376,968 |
|
Total liabilities and
stockholders’ equity |
$ |
726,512 |
|
|
$ |
542,986 |
|
PROGYNY, INC. |
Consolidated Statements of Operations |
(Unaudited) |
(in thousands, except share and per share
amounts) |
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ |
280,891 |
|
|
$ |
205,371 |
|
$ |
818,658 |
|
|
$ |
572,592 |
Cost of services |
|
218,267 |
|
|
|
159,376 |
|
|
636,753 |
|
|
|
449,761 |
Gross profit |
|
62,624 |
|
|
|
45,995 |
|
|
181,905 |
|
|
|
122,831 |
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
14,911 |
|
|
|
11,166 |
|
|
44,577 |
|
|
|
32,677 |
General and administrative |
|
29,524 |
|
|
|
23,574 |
|
|
88,944 |
|
|
|
70,119 |
Total operating expenses |
|
44,435 |
|
|
|
34,740 |
|
|
133,521 |
|
|
|
102,796 |
Income from operations |
|
18,189 |
|
|
|
11,255 |
|
|
48,384 |
|
|
|
20,035 |
Other income, net: |
|
|
|
|
|
|
|
Other income, net |
|
1,708 |
|
|
|
82 |
|
|
3,483 |
|
|
|
11 |
Interest income, net |
|
1,034 |
|
|
|
202 |
|
|
2,562 |
|
|
|
254 |
Total other income, net |
|
2,742 |
|
|
|
284 |
|
|
6,045 |
|
|
|
265 |
Income before income
taxes |
|
20,931 |
|
|
|
11,539 |
|
|
54,429 |
|
|
|
20,300 |
(Provision) benefit for income taxes |
|
(5,033 |
) |
|
|
1,672 |
|
|
(5,862 |
) |
|
|
6,650 |
Net income |
$ |
15,898 |
|
|
$ |
13,211 |
|
$ |
48,567 |
|
|
$ |
26,950 |
Net income per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.17 |
|
|
$ |
0.14 |
|
$ |
0.51 |
|
|
$ |
0.29 |
Diluted |
$ |
0.16 |
|
|
$ |
0.13 |
|
$ |
0.48 |
|
|
$ |
0.27 |
Weighted-average shares used
in computing net income per share: |
|
|
|
|
|
|
|
Basic |
|
95,502,250 |
|
|
|
92,316,022 |
|
|
94,698,616 |
|
|
|
91,901,778 |
Diluted |
|
100,879,576 |
|
|
|
99,819,801 |
|
|
100,552,705 |
|
|
|
99,865,366 |
PROGYNY, INC. |
Consolidated Statements of Cash Flows |
(Unaudited) |
(in thousands) |
|
|
Nine Months Ended September
30, |
|
2023 |
|
2022 |
OPERATING
ACTIVITIES |
|
|
|
Net income |
$ |
48,567 |
|
|
$ |
26,950 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Deferred tax expense (benefit) |
|
5,862 |
|
|
|
(6,742 |
) |
Non-cash interest income |
|
58 |
|
|
|
— |
|
Depreciation and amortization |
|
1,647 |
|
|
|
1,155 |
|
Stock-based compensation expense |
|
93,812 |
|
|
|
71,451 |
|
Bad debt expense |
|
15,062 |
|
|
|
9,685 |
|
Realized gain on sale of marketable securities |
|
(2,701 |
) |
|
|
— |
|
Foreign currency exchange rate loss |
|
12 |
|
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
Accounts receivable |
|
(43,761 |
) |
|
|
(133,163 |
) |
Prepaid expenses and other current assets |
|
(2,523 |
) |
|
|
1,715 |
|
Accounts payable |
|
22,884 |
|
|
|
42,707 |
|
Accrued expenses and other current liabilities |
|
11,744 |
|
|
|
16,330 |
|
Other noncurrent assets and liabilities |
|
492 |
|
|
|
(1,210 |
) |
Net cash provided by operating activities |
|
151,155 |
|
|
|
28,878 |
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
Purchase of property and
equipment, net |
|
(2,963 |
) |
|
|
(2,520 |
) |
Purchase of marketable
securities |
|
(262,961 |
) |
|
|
(125,156 |
) |
Sale of marketable
securities |
|
158,813 |
|
|
|
84,983 |
|
Net cash used in investing activities |
|
(107,111 |
) |
|
|
(42,693 |
) |
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
Proceeds from exercise of
stock options |
|
3,573 |
|
|
|
2,130 |
|
Payment of employee taxes
related to equity awards |
|
(10,504 |
) |
|
|
(7,957 |
) |
Proceeds from contributions to
employee stock purchase plan |
|
884 |
|
|
|
749 |
|
Net cash used in financing activities |
|
(6,047 |
) |
|
|
(5,078 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
0 |
|
|
|
— |
|
Net increase (decrease) in
cash and cash equivalents |
|
37,997 |
|
|
|
(18,893 |
) |
Cash and cash equivalents,
beginning of period |
|
120,078 |
|
|
|
91,413 |
|
Cash and cash equivalents, end
of period |
$ |
158,075 |
|
|
$ |
72,520 |
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
Cash paid for income taxes,
net of refunds received |
$ |
2,318 |
|
|
$ |
146 |
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES |
|
|
|
Additions of property and
equipment, net included in accounts payable and accrued
expenses |
$ |
128 |
|
|
$ |
76 |
|
ANNEX A |
|
PROGYNY, INC. |
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 September 30,
2023 |
|
Three Months Ended September 30,
2022 |
|
GAAP |
|
Stock-Based Compensation Expense |
|
Non-GAAP |
|
GAAP |
|
Stock-Based Compensation Expense |
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
$ |
218,267 |
|
|
$ |
(8,941 |
) |
|
$ |
209,326 |
|
|
$ |
159,376 |
|
|
$ |
(6,268 |
) |
|
$ |
153,108 |
|
Gross profit |
$ |
62,624 |
|
|
$ |
8,941 |
|
|
$ |
71,565 |
|
|
$ |
45,995 |
|
|
$ |
6,268 |
|
|
$ |
52,263 |
|
Sales and marketing |
$ |
14,911 |
|
|
$ |
(6,938 |
) |
|
$ |
7,973 |
|
|
$ |
11,166 |
|
|
$ |
(5,184 |
) |
|
$ |
5,982 |
|
General and
administrative |
$ |
29,524 |
|
|
$ |
(15,372 |
) |
|
$ |
14,152 |
|
|
$ |
23,574 |
|
|
$ |
(11,845 |
) |
|
$ |
11,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
Gross margin |
|
22.3 |
% |
|
|
3.2 |
% |
|
|
25.5 |
% |
|
|
22.4 |
% |
|
|
3.1 |
% |
|
|
25.4 |
% |
Sales and marketing |
|
5.3 |
% |
|
|
(2.5 |
)% |
|
|
2.8 |
% |
|
|
5.4 |
% |
|
|
(2.5 |
)% |
|
|
2.9 |
% |
General and
administrative |
|
10.5 |
% |
|
|
(5.5 |
)% |
|
|
5.0 |
% |
|
|
11.5 |
% |
|
|
(5.8 |
)% |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2023 |
|
Nine Months Ended September 30,
2022 |
|
GAAP |
|
Stock-Based Compensation Expense |
|
Non-GAAP |
|
GAAP |
|
Stock-Based Compensation Expense |
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
$ |
636,753 |
|
|
$ |
(25,967 |
) |
|
$ |
610,786 |
|
|
$ |
449,761 |
|
|
$ |
(18,603 |
) |
|
$ |
431,158 |
|
Gross profit |
$ |
181,905 |
|
|
$ |
25,967 |
|
|
$ |
207,872 |
|
|
$ |
122,831 |
|
|
$ |
18,603 |
|
|
$ |
141,434 |
|
Sales and marketing |
$ |
44,577 |
|
|
$ |
(20,389 |
) |
|
$ |
24,188 |
|
|
$ |
32,677 |
|
|
$ |
(15,026 |
) |
|
$ |
17,651 |
|
General and
administrative |
$ |
88,944 |
|
|
$ |
(47,456 |
) |
|
$ |
41,488 |
|
|
$ |
70,119 |
|
|
$ |
(37,822 |
) |
|
$ |
32,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expressed as a
Percentage of Revenue |
|
|
|
|
|
|
|
|
Gross margin |
|
22.2 |
% |
|
|
3.2 |
% |
|
|
25.4 |
% |
|
|
21.5 |
% |
|
|
3.2 |
% |
|
|
24.7 |
% |
Sales and marketing |
|
5.4 |
% |
|
|
(2.5 |
)% |
|
|
3.0 |
% |
|
|
5.7 |
% |
|
|
(2.6 |
)% |
|
|
3.1 |
% |
General and
administrative |
|
10.9 |
% |
|
|
(5.8 |
)% |
|
|
5.1 |
% |
|
|
12.2 |
% |
|
|
(6.6 |
)% |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Note: percentages shown in the table may not cross foot due to
rounding.
Adjusted EBITDA and Adjusted EBITDA Margin on
Incremental Revenue CalculationThe following table
provides a reconciliation of Net income to Adjusted EBITDA for each
of the periods presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Net income |
$ |
15,898 |
|
|
$ |
13,211 |
|
|
$ |
48,567 |
|
|
$ |
26,950 |
|
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
579 |
|
|
|
405 |
|
|
|
1,647 |
|
|
|
1,155 |
|
Stock‑based compensation expense |
|
31,251 |
|
|
|
23,297 |
|
|
|
93,812 |
|
|
|
71,451 |
|
Other income, net |
|
(1,708 |
) |
|
|
(82 |
) |
|
|
(3,483 |
) |
|
|
(11 |
) |
Interest income, net |
|
(1,034 |
) |
|
|
(202 |
) |
|
|
(2,562 |
) |
|
|
(254 |
) |
Provision (benefit) for income taxes |
|
5,033 |
|
|
|
(1,672 |
) |
|
|
5,862 |
|
|
|
(6,650 |
) |
Adjusted EBITDA |
$ |
50,019 |
|
|
$ |
34,957 |
|
|
$ |
143,843 |
|
|
$ |
92,641 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
280,891 |
|
|
$ |
205,371 |
|
|
$ |
818,658 |
|
|
$ |
572,592 |
|
|
|
|
|
|
|
|
|
Incremental revenue vs.
2022 |
|
75,520 |
|
|
|
|
|
246,066 |
|
|
|
|
|
|
|
|
|
|
|
Incremental Adjusted EBITDA
vs. 2022 |
|
15,062 |
|
|
|
|
|
51,202 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin on
incremental revenue |
|
19.9 |
% |
|
|
|
|
20.8 |
% |
|
|
Reconciliation of Non-GAAP Financial Guidance for the
Three Months and Year Ending December 31, 2023
|
Three Months EndingDecember 31,
2023 |
|
Year EndingDecember 31, 2023 |
(in thousands) |
Low |
|
High |
|
Low |
|
High |
|
|
|
|
|
|
|
|
Revenue |
$ |
268,342 |
|
|
$ |
276,342 |
|
|
$ |
1,087,000 |
|
|
$ |
1,095,000 |
|
Net
Income |
$ |
9,733 |
|
|
$ |
11,433 |
|
|
$ |
58,300 |
|
|
$ |
60,000 |
|
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
653 |
|
|
|
653 |
|
|
|
2,300 |
|
|
|
2,300 |
|
Stock-based compensation expense |
|
30,688 |
|
|
|
30,688 |
|
|
|
124,500 |
|
|
|
124,500 |
|
Other income, net |
|
(2,955 |
) |
|
|
(2,955 |
) |
|
|
(9,000 |
) |
|
|
(9,000 |
) |
Provision for income taxes |
|
4,038 |
|
|
|
4,838 |
|
|
|
9,900 |
|
|
|
10,700 |
|
Adjusted
EBITDA* |
$ |
42,157 |
|
|
$ |
44,657 |
|
|
$ |
186,000 |
|
|
$ |
188,500 |
|
* 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.
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