Progyny NASDAQ: PGNY reported record quarterly revenue, gross profit and adjusted EBITDA for the second quarter of 2026, while management said early sales commitments and client-retention activity have positioned the company favorably for the 2027 selling season.
Chief Executive Officer Pete Anevski said the quarter also featured gross-margin expansion and significant cash-flow generation. He said the company has used its financial performance to support investments in its platform while also repurchasing shares.
Second-quarter revenue increased 5.3% from the prior-year period on a reported basis, Chief Financial Officer Mark Livingston said. Excluding revenue associated with a large former client that remained under a transition-of-care agreement during the second quarter of 2025, revenue rose 11%. That transition agreement ended June 30, 2025, meaning the second quarter was the last comparison period affected by the former client's contribution.
Margins expand as company continues investment program
Gross margin expanded 180 basis points from a year earlier, matching the level of expansion reported in the first quarter, Livingston said. He attributed the improvement to continuing efficiencies in care management and service delivery, as well as lower stock-compensation expense.
Adjusted EBITDA margin also rose from the prior-year quarter, although at a slower pace than gross margin because platform investments were concentrated in operating expenses. On a trailing 12-month basis, adjusted EBITDA margin was 17.2%, Livingston said.
Capital expenditures totaled $6.2 million during the second quarter, consistent with first-quarter spending and about $1 million above the year-earlier period. Management expects its investment program to begin tapering in 2027, though Livingston said it was too early to provide detailed commentary beyond this year.
Operating cash flow exceeded $50 million for the fourth time in the past five quarters. Trailing 12-month operating cash flow was $201 million, and the company said it has generated more than $200 million in last-12-month operating cash flow for six consecutive quarters.
- Working capital totaled about $273 million as of June 30.
- Cash, cash equivalents and marketable securities totaled $237 million.
- The company had no debt and no borrowings under its $200 million revolving credit facility.
- Days sales outstanding were more than seven days lower than a year earlier.
Share repurchases reduce outstanding shares
Progyny announced a new $200 million share-repurchase authorization in late May. During the portion of the second quarter in which the program was active, the company repurchased nearly 1.2 million shares for $31.5 million.
Including purchases after June 30, Progyny had bought 2 million shares under the latest authorization, with approximately $142.5 million remaining available. Across the current and prior $200 million programs, the company has repurchased 10.8 million shares since November, reducing shares outstanding by approximately 12.5%, Livingston said.
Anevski said the company expects its cash flow to provide flexibility for continued investment, potential acquisitions or tuck-in opportunities, further share repurchases and other uses of capital.
Early sales commitments support 2027 outlook
Management said new-client commitments are pacing meaningfully ahead of the same point last year, with a higher-than-expected number of decisions occurring early in the selling season. Progyny maintained its target of adding 1 million or more new lives for 2027 launches.
Anevski said retention activity has also accelerated, led by the company’s largest clients. Based on current discussions and commitments, he said Progyny believes it has removed most of its retention risk earlier than usual. Roughly one-third of the company’s client book is up for renewal in a typical season.
The company said early wins span industries including energy, construction, manufacturing, aerospace, healthcare, labor, financial services and education, as well as clients ranging from 1,000 covered lives to large employers.
Management said employer interest is being shaped by rising costs in traditional medical and pharmacy coverage. Anevski said employers are increasingly focused on cost management, quality and member satisfaction, and that prospects moving through the sales cycle this year have been more weighted toward employers replacing an existing solution rather than first-time buyers of fertility benefits.
Progyny also cited progress with health-plan partnerships, public-sector clients and its fully insured offering, Progyny Select. The company expects Select’s initial phase to focus on building distribution relationships with general agents and brokers. Management does not expect the offering to make a meaningful contribution in 2027, instead describing it as a medium- and long-term growth initiative.
Guidance reflects summer seasonality
For the third quarter, Progyny projected revenue of $335 million to $345 million, representing growth of 6.9% to 10.1%. The company expects adjusted EBITDA of $56 million to $59 million, net income of $24.5 million to $26.7 million, and adjusted earnings per share of $0.50 to $0.52 based on approximately 82 million fully diluted shares.
Livingston said the outlook incorporates a somewhat more pronounced seasonal slowdown during the middle of the summer. Management characterized the pattern as limited to the seasonally less-active summer period rather than evidence of a broader change in engagement trends. The company said appointment scheduling data provided some visibility into September and did not indicate the softer activity was extending beyond summer.
For full-year 2026, Progyny forecast revenue of $1.36 billion to $1.385 billion, representing reported growth of 5.5% to 7.5%. Excluding $48.5 million of transition-of-care revenue from the former client in the first half of 2025, the company projected growth of 9.7% to 11.7%.
The company expects full-year adjusted EBITDA of $233 million to $240 million, net income of $104.8 million to $109.9 million, and adjusted earnings per share of $2.04 to $2.10 based on approximately 83 million fully diluted shares.
About Progyny (NASDAQ:PGNY)
Progyny, Inc is a New York-based fertility benefits management company that partners with employers and health plans to design and administer comprehensive family-building programs. The company's digital health platform integrates clinical expertise, patient support tools and data analytics to help members navigate fertility treatments, from in vitro fertilization (IVF) and egg freezing to surrogacy and adoption. By focusing on outcomes-based care, Progyny aims to improve success rates while controlling costs for its clients.
The core of Progyny's offering is its proprietary Smart Cycle® benefit, which bundles clinical, emotional and logistical support into a single package.
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