Progyny Q3 Earnings Call Highlights

Key Points

• Progyny raised the midpoint of its 2026 guidance after third-quarter revenue rose nearly 9% year over year and exceeded expectations. It now forecasts $1.365 billion to $1.385 billion in full-year revenue and adjusted EPS of $2.09 to $2.13.
• The company secured a record 1.3 million new covered lives in its latest selling season, adding more than 85 clients and retaining nearly all existing clients. Most new members are expected to begin coverage in early 2027; once fully launched, Progyny expects to serve 8.3 million covered lives.
• Progyny generated more than $56 million in third-quarter operating cash flow and ended September with $196 million in cash and no debt. It repurchased nearly 3 million shares for about $83 million during the quarter.

Progyny NASDAQ: PGNY raised the midpoint of its full-year 2026 guidance after reporting record third-quarter revenue and profitability and securing a record 1.3 million new covered lives during its latest selling season.

The fertility and family-building benefits company expects the majority of those new members to launch in the first quarter of 2027, with several hundred thousand expected to begin coverage around midyear. Once all new clients are live, Progyny anticipates serving more than 660 clients and 8.3 million covered lives.

CEO Pete Anevski said the company added more than 85 new clients, retained nearly all of its existing base and secured commitments from approximately 20% of existing clients to expand their benefits for 2027. He said those expansion commitments were generally in line with the past couple of years.

Revenue growth and 2026 outlook

Third-quarter revenue rose nearly 9% from a year earlier and exceeded the midpoint of the company’s guidance, CFO Mark Livingston said. For the first nine months of 2026, revenue increased 11% excluding a large former client that contributed revenue under a transition-of-care agreement through the first half of 2025.

Livingston said utilization trended toward the higher end of the company’s established ranges during the third quarter. The more pronounced seasonality discussed on the prior call was short-lived, he said, with activity returning to expected patterns as fall began.

For full-year 2026, Progyny now expects:

• Revenue: $1.365 billion to $1.385 billion, representing growth of 5.9% to 7.5%.
• Adjusted EBITDA: $235 million to $240 million.
• Net income: $107 million to $110.6 million.
• Diluted earnings per share: $1.30 to $1.35, with adjusted EPS of $2.09 to $2.13.

Excluding $48.5 million in 2025 revenue from the former client’s transition-of-care agreement, the company projected full-year revenue growth of 10.1% to 11.7%.

For the fourth quarter, Progyny forecast revenue of $344.7 million to $364.7 million and adjusted EBITDA of $57.9 million to $62.9 million. Livingston said the outlook reflects healthy engagement and visibility into activity through October and into November.

Client wins and competitive landscape

Anevski said the new client group spans industries and employer sizes, including universities, a major technology company, a large U.S. bank and a public-employee health benefit fund. The latest total of 1.3 million new covered lives was 100,000 higher than the company’s update a month earlier.

New clients had a nearly 100% attach rate for Progyny Rx, the company’s pharmacy program, Anevski said. He added that approximately 95% to 96% of all clients are expected to have Rx next year, while more than 3 million lives will have access to expanded products during 2027.

Some wins came from competitors, but Anevski said those conversions were not the largest driver of the selling season. He also cited channel partners, including Cigna and regional health plans, alongside the company’s sales execution. Progyny Select, its offering for the fully insured market, made an immaterial contribution in its first year, he said.

Asked about a large public-sector client, Anevski said Progyny expects utilization for that population to be slightly below its normal book of business, but that the company underwrote the account accordingly and expects a margin profile consistent with its business.

The CEO said the active sales pipeline for the next season was larger than at the same point in prior years and included several large opportunities. Management plans to provide 2027 guidance when it reports year-end results.

Margins, cash flow and buybacks

Third-quarter gross margin expanded 130 basis points from a year earlier, helped by lower stock compensation expense and efficiencies in care management, Livingston said. Adjusted EBITDA margin was modestly lower year over year, though the trailing 12-month margin was 17.1%.

Progyny generated more than $56 million in operating cash flow during the quarter and $207 million over the trailing 12 months. It ended September with $196 million in cash, equivalents and marketable securities and no debt, Livingston said.

The company repurchased nearly 3 million shares for approximately $83 million during the third quarter under its latest $200 million authorization. Including purchases after September 30, it had bought nearly 5.5 million shares under that program, with about $51 million remaining available.

Anevski reiterated that Progyny expects to taper its elevated investments throughout 2027. Livingston said the company expects incremental margins as it grows, but has not issued a formal long-term adjusted EBITDA margin target.

About Progyny (NASDAQ:PGNY)

Progyny, Inc is a benefits-management company focused on fertility and family-building care. The company works with employers to provide comprehensive benefits that help members access fertility treatments and related services through a network of specialized providers.

Its offerings include coverage and support for services such as in vitro fertilization, fertility testing, egg and sperm freezing, donor services, gestational surrogacy, and adoption. Progyny also provides pharmacy benefits through Progyny Rx, as well as personalized guidance intended to help members navigate treatment options, providers, and the broader family-building process.

Progyny primarily serves self-insured employers and their employees in the United States.

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