Progyny Inc (PGNY) Posts Record Revenue in Q3 2023, Raises Full-Year Guidance
Progyny Inc (NASDAQ:PGNY) reports a 37% increase in quarterly revenue, reaching $280.9 million.
Adjusted EBITDA climbs 43% to $50.0 million, with margins expanding to 17.8%.
Company raises full-year revenue and earnings guidance, reflecting strong sales and client retention.
Progyny anticipates over 460 clients and 6.7 million covered lives in 2024.
Progyny Inc (NASDAQ:PGNY), a leading benefits management company specializing in fertility and family building benefits solutions, announced its financial results for the third quarter of 2023 on November 7, 2023. The company delivered a record quarterly revenue of $280.9 million, marking a significant 37% growth over the same period last year. This performance was driven by an increase in the number of clients and covered lives.
Financial Performance Highlights
The company's fertility benefit services revenue surged 35% to $175.1 million, while pharmacy benefit services revenue grew 39% to $105.8 million. Gross profit followed suit, increasing by 36% to $62.6 million, with a stable gross margin of 22.3%. Net income rose to $15.9 million, or $0.16 per diluted share, a 20% increase from the third quarter of 2022. Adjusted EBITDA, a non-GAAP financial measure, reached $50.0 million, up 43% year-over-year, and Adjusted EBITDA margin improved by 80 basis points to 17.8%.
Operational and Client Growth
Progyny's operational success is also evident in its client and member growth. The company reported having 392 clients as of September 30, 2023, a significant increase from 282 clients the previous year. The number of Assisted Reproductive Technology (ART) cycles also grew to 15,005 in the third quarter, up from 11,086 in the same period last year. Utilization rates for all members increased to 0.56% from 0.49%, indicating higher engagement with Progyny's services.
Strong Balance Sheet and Cash Flow
Progyny's balance sheet remains robust with total working capital of approximately $417.9 million and no debt. Cash and cash equivalents, along with marketable securities, totaled $335.6 million, reflecting a $53.1 million increase from June 30, 2023. Net cash generated by operating activities for the quarter was $54.2 million, a substantial improvement from $20.9 million in the prior year period.
Forward-Looking Guidance
Based on the strong results and current expectations for member engagement, Progyny is raising its guidance for the full year 2023. The company now projects revenue to be between $1,087 million and $1,095 million, with net income expected to be between $58.3 million and $60.0 million, or $0.58 to $0.59 per diluted share. Adjusted EBITDA is anticipated to be between $186.0 million and $188.5 million.
Conclusion
Progyny's CEO, Pete Anevski, expressed excitement about the company's future potential, especially with the addition of approximately 300,000 covered lives under a federal government plan. CFO Mark Livingston highlighted the company's ability to scale operations effectively, which is reflected in the strong financial results. As Progyny prepares for 2024, it is well-positioned to deliver another year of robust growth, with more than 460 clients and an estimated 6.7 million covered lives.
For more detailed information on Progyny Inc (NASDAQ:PGNY)'s financial results, please visit the Investor Relations section of the company's website at investors.progyny.com.
Explore the complete 8-K earnings release (here) from Progyny Inc for further details.
This article first appeared on GuruFocus.
