Progyny(US:PGNY)2021-11-05 01:27Financial Data and Key Metrics Changes - The company reported a solid third quarter with a 24% revenue growth, reaching $122.3 million, and a gross margin expansion of 220 basis points [8][34] - Adjusted EBITDA increased by 64% year-over-year to $16.5 million, with an adjusted EBITDA margin of 13.5%, reflecting a 330 basis point increase from the previous year [40] - Net income for the third quarter was $16.8 million, or $0.17 per share, compared to $4.8 million, or $0.05 per share, in the same period last year [41] Business Line Data and Key Metrics Changes - Medical revenue grew 17% to $85.3 million, while pharmacy revenue increased by 43% to $37 million [34] - The number of ART cycles performed during the third quarter was 6,892, approximately 27% higher than the previous year [36] - Female utilization rate was 0.46%, slightly up from 0.44% a year ago, indicating stable engagement with services [37] Market Data and Key Metrics Changes - The company expects to enter 2022 with 265 clients under contract, representing an estimated 4 million covered lives, nearly a 50% increase in members from the beginning of 2021 [11][50] - The client base continues to diversify, with new clients spanning over 20 different industries, including financial services, healthcare, and manufacturing [24][81] Company Strategy and Development Direction - The company aims to expand its addressable markets and explore new product development opportunities, indicating a focus on growth and market penetration [63] - The leadership transition is seen as a natural progression, with the new CEO and President expected to drive continued growth and strategic initiatives [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing market opportunities and the company's competitive position, highlighting a strong client retention rate of nearly 100% [10][28] - The company anticipates fourth quarter revenue between $133.9 million to $140.9 million, representing growth of 34% to 41% year-over-year, and expects approximately 50% revenue growth in 2022 [43][51] Other Important Information - The company has no debt and reported total working capital of approximately $150 million, with $114 million in cash and marketable securities [42] - The transition in leadership is expected to enhance focus on corporate strategy and development, allowing the outgoing CEO to dedicate more time to strategic initiatives [18][19] Q&A Session Summary Question: Can you provide color on the utilization embedded in the 50% revenue guidance for next year? - Management indicated that the guidance assumes current utilization levels continue, but clarity will come once the year starts [53] Question: How much of the 50% growth next year is from same store growth? - Most of the growth is expected from new lives added, with a smaller portion from upsells, but further clarity will be provided at year-end [55] Question: Can you clarify the fourth quarter net income guidance? - Management acknowledged a need to review the guidance for potential discrepancies and will provide updates if necessary [57] Question: What are the characteristics of the new clients being added? - The average size of new clients is consistent with historical averages, and they span across various industries, indicating a broad market appeal [81] Question: Is there a shift in the timing of new client adds? - Most new clients are still expected to go live on January 1, with a few smaller clients launching earlier, maintaining the traditional timeline [74]