Progyny(US:PGNY)2023-02-28 04:32Financial Data and Key Metrics Changes - In Q4 2022, revenue reached $214.3 million, reflecting a growth of 68% compared to the previous year, while full-year revenue grew 57% to $786.9 million [22][23] - Adjusted EBITDA for Q4 more than doubled to $33 million, yielding a margin of 15.4%, and for the full year, adjusted EBITDA increased 87% to $125.7 million, with a margin of 16% [33][34] - Operating cash flow in Q4 was $51.5 million, the highest quarterly figure ever, leading to a record $80.4 million for the full year [35][36] Business Line Data and Key Metrics Changes - Medical revenue increased 60% in Q4 to $143 million and grew 43% for the full year to $510 million, driven by a higher number of clients and covered lives [28] - Pharmacy revenue surged 86% in Q4 to $71.2 million and grew 91% for the full year to $277 million, with an increase in clients utilizing Progyny Rx [28] - A record 12,200 ART cycles were performed in Q4, a 60% increase from the same period in 2021, while full-year ART cycles grew nearly 50% [29] Market Data and Key Metrics Changes - The company ended Q4 with 288 clients, representing an average of 4.7 million covered lives, compared to 191 clients and 2.9 million covered lives a year ago, reflecting a 60% growth in lives [23] - The client base is diversified across more than 40 industries, with no single industry comprising more than 20% of the member base [27] - The company maintained a near 100% retention rate among existing clients for the seventh consecutive year, with over 25% of clients increasing their Progyny program for 2023 [9][10] Company Strategy and Development Direction - The company aims to capitalize on the increasing demand for family-building benefits, with a focus on expanding its services and market penetration [12][20] - Progyny was selected by the Children's Hospital Association as the exclusive preferred partner for fertility and family-building services, indicating strong market positioning [16][18] - The company plans to enhance services related to preconception, maternity, and male infertility, reflecting a commitment to comprehensive family-building solutions [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum from the previous year into 2023, citing strong early activity in the selling season [20][40] - The macroeconomic environment, including inflation and potential recession, has not significantly impacted client decisions regarding fertility benefits [10][12] - The company anticipates revenue growth of 27% to 31% for 2023, projecting between $1 billion to $1.03 billion in revenue [37] Other Important Information - The company achieved a gross profit of $44.5 million in Q4, yielding a gross margin of 20.8%, and for the full year, gross profit increased 49% to $167 million [30][31] - The company has no debt and ended the year with approximately $274 million in working capital, including $189 million in cash and marketable securities [36] Q&A Session Summary Question: What are the expectations for early starts in the selling season? - Management indicated that guidance includes early wins but does not expect outsized impacts from these early starts compared to the previous year [62] Question: How is the company addressing provider retention and reimbursement rates? - Management reported no issues with provider retention and indicated that they expect to maintain flat to slightly down costs for clients, differentiating from industry trends [69][70] Question: What growth should be expected in the pharmacy benefit segment? - While specific growth rates for pharmacy and medical segments are not broken out, pharmacy growth is expected to be higher but will start to converge with medical growth rates [80]