10q10k10q10k.net

What changed in Progyny, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Progyny, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+514 added−617 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Progyny, Inc.'s 2024 10-K

514 paragraphs added · 617 removed · 434 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

104 edited+29 added−37 removed69 unchanged
Biggest changeWe believe we compete favorably based on the following competitive factors: • the value and comprehensiveness of the benefits solution and superior outcomes for employees; • benefits plan design; • access for all employees and their covered dependents, including LGBTQ+ and single mothers by choice; • equitable access to care across geographies; • treatment plans that maximize effectiveness and achieve desired outcomes; • member experience, including unlimited dedicated patient education, clinical guidance and emotional support; • access to a network of high-quality fertility specialists; • data reporting and sharing; and • access to an integrated pharmacy solution. 15 Table of Contents While we do not believe any single competitor offers a comparably robust, integrated fertility and family building benefits solution, as to what we provide, there are alternative solutions in the market such as the health insurance companies who are able to provide fertility benefits management services as part of their overall administration of a company's health plan and who are our primary competition.
Biggest changeWe believe we compete favorably based on the following competitive factors: • the value and comprehensiveness of the benefits solution and superior outcomes for members; • benefits plan design; • access for all employees and their covered dependents; 15 Table of Contents • equitable access to care across geographic areas; • treatment plans that maximize effectiveness and achieve desired outcomes; • member experience, including unlimited dedicated patient education, clinical guidance and emotional support; • access to a network of high-quality fertility specialists; • data reporting and sharing; and • access to an integrated pharmacy solution.
Because of the unique challenges of infertility, including the high costs and complexity of treatment and the variability of outcomes across fertility specialists, conventional benefits solutions have been unable to optimize outcomes and efficiently utilize employers’ dollars committed to fertility.
Because of the unique challenges of infertility, including high costs and complexity of treatment and the variability of outcomes across fertility specialists, conventional benefits solutions have been unable to optimize outcomes and efficiently utilize employers’ dollars committed to fertility.
Our Solutions We are redefining effective fertility and family building benefits through our purpose-built, data-driven and disruptive platform through which we offer our fertility benefits and Progyny Rx solutions. Our innovative and comprehensive fertility solution has proven to be simultaneously beneficial for our clients, our members and our network of fertility specialists.
Solutions We are redefining effective fertility and family building benefits through our purpose-built, data-driven and disruptive platform through which we offer our fertility benefits and Progyny Rx solutions. Our innovative and comprehensive fertility solution has proven to be simultaneously beneficial for our clients, our members and our network of fertility specialists.
Everything needed for a comprehensive fertility treatment is contained within a Smart Cycle treatment bundle, including all necessary diagnostic testing and access to the latest technology (e.g., in the case of IVF treatment, preimplantation genetic testing). We currently offer 20 different Smart Cycle treatment bundles, which may be used independently or in combination depending on the member’s need.
Everything needed for a comprehensive fertility treatment is contained within a Smart Cycle treatment bundle, including all necessary diagnostic testing and access to the latest technology (e.g., in the case of IVF treatment, preimplantation genetic testing). We currently offer 20 different Smart Cycle treatment bundles, which may be used independently or in combination depending on a member’s need.
As part of this solution, we provide care management services, which include our formulary plan design, simplified authorization, assistance with prescription fulfillment and timely delivery of the medications by our network of specialty pharmacies, as well as medication administration training, pharmacy support services and continuing PCA support.
As part of this solution, we provide care management services, which include our formulary plan design, simplified authorization, assistance with prescription fulfillment and timely delivery of the medications by our network of specialty pharmacies, as well as medication administration training, pharmacy support services and continuing PCA support.
Through our differentiated approach to benefits plan design, patient education and support and active network management, our clients’ employees are able to pursue the most effective treatment from the best fertility specialists and achieve optimal outcomes in a cost-efficient manner, while our clients and members achieve savings in upfront treatment costs as well as reduced maternity and NICU expenses. 9 Table of Contents Fertility Benefits Solution Differentiated Benefits Plan Design The innovative Smart Cycle is our easy-to-understand fertility benefits design.
Through our differentiated approach to benefits plan design, patient education and support and active network management, our clients’ employees are able to pursue the most effective treatment from the best fertility specialists and achieve optimal outcomes in a cost-efficient manner, while our clients and members achieve savings in upfront treatment costs as well as reduced maternity and NICU expenses. 9 Table of Contents Fertility Benefits Solution Differentiated Benefits Plan Design The innovative Smart Cycle is our proprietary, easy-to-understand fertility benefits design.
In addition, other competitors include specialty fertility-focused solutions owned or sponsored by the health insurance companies to provide more comprehensive support to fertility patients than their general medical coverage provides, such as case management or educational support, and the venture capital or private equity-backed companies who focus on maternity and reproductive health services more broadly, or who provide fertility-specific benefits solutions.
In addition, other competitors include specialty fertility-focused solutions owned or sponsored by health insurance companies to provide more comprehensive support to fertility patients than their general medical coverage provides, such as case management or educational support, and venture capital or private equity-backed companies who focus on maternity and reproductive health services more broadly, or who provide fertility-specific benefits solutions.
Our comprehensive member portal, accessible via any desktop or mobile device, further supports the member experience by providing key educational resources and easy-to-access benefits information to our members. Our members can use the portal to securely message their PCA or access a curated library of videos, articles, podcasts and webinars on fertility and family building.
Our comprehensive member portal, accessible via any desktop or mobile device or via the mobile application, further supports the member experience by providing key educational resources and easy-to-access benefits information to our members. Our members can use the portal to securely message their PCA or access a curated library of videos, articles, podcasts and webinars on fertility and family building.
Because employers in the same industry are competing for employee talent, once the availability of fertility benefits begins to penetrate a particular industry, a demonstrable network effect occurs in which employees within that industry begin to expect the benefit from their employers, which can cause an employer to adopt the benefit to remain competitive and bolster employee satisfaction.
Because employers in the same industry are competing for employee talent, once the availability of fertility benefits begins to penetrate a particular industry, a demonstrable network effect occurs in which employees within that industry begin to expect the benefit from their employers, which can cause an employer to adopt the benefit to remain competitive and bolster employee satisfaction and retention.
Our Smart Cycle design ensures that members always have coverage for a full treatment cycle as their access to treatment is not limited by a dollar maximum that could be exhausted mid-treatment. Additionally, members have access to the latest technologies and procedures, which are reviewed and approved by our Medical Advisory Board. • Access for All Members and Dependents.
Our Smart Cycle design ensures that members always have coverage for a full treatment cycle as their access to treatment is not limited by a dollar maximum that could be exhausted mid-treatment. Additionally, members have access to the latest technologies and procedures, which are reviewed and approved by our Medical Advisory Board. • Access for All Employees and Dependents.
The common use of multiple embryo transfer belies the fact that this procedure greatly increases the risk of multiple births and health complications among the mother and babies. One of the most common complications associated with multiples is preterm births, which significantly escalates healthcare costs, including maternity care, labor and delivery costs and NICU expenses.
The common use of multiple embryo transfer belies the fact that this procedure greatly increases the risk of multiple births and health complications among the mother and babies. One of the most common complications associated with multiples is preterm births, which significantly increases healthcare costs, including maternity care, labor and delivery costs and NICU expenses.
We believe we are uniquely positioned to do this for several reasons. First, we believe the combination of our Medical Advisory Board and our selective network of high-quality fertility specialists, as well as the data we collect and analyze, provides us with differentiated insights into fertility care delivery and support.
We believe we are uniquely positioned to do this for several reasons. We believe the combination of our Medical Advisory Board and our selective network of high-quality fertility specialists, as well as the data we collect and analyze, provides us with differentiated insights into fertility care delivery and support.
Sales and Marketing We sell our solutions through our sales organization and, in many cases, we leverage our relationships with top benefits consultants and channel partners to establish relationships with potential clients. Our sales team has broad experience in health benefits management and extensive long-term relationships with industry participants and benefits executives at large employers.
Sales and Marketing We sell our solutions through our sales organization and, in many cases, we leverage our relationships with top benefits consultants, channel partners and health plan partners to establish relationships with potential clients. Our sales team has broad experience in health benefits management and extensive long-term relationships with industry participants and benefits executives at large employers.
This review ensures that we are evaluating and covering the latest and most effective fertility treatments and identifying opportunities to improve our plan design, member experience and fertility specialists network standards. Full Service Client Success We provide a dedicated client success team to ensure that we are delivering superior service.
This review ensures that we are evaluating and covering the latest and most effective fertility treatments and identifying opportunities to improve our plan design, member experience and fertility specialists network standards. Full Service Client Success We provide a dedicated client success team to help ensure that we are delivering superior service.
In addition to our unique plan design, member support and fertility specialist network, one of the key structural differences between our pre-tax benefit and their post-tax reimbursement programs is that the individual receiving reimbursement for fertility treatments must pay income taxes on the amount of that reimbursement for the post-tax programs.
In addition to our unique plan design, member support and fertility specialist network, one of the key structural differences between our pre-tax benefit and post-tax reimbursement programs is that the individual receiving reimbursement for fertility treatments must pay income taxes on the amount of that reimbursement for the post-tax programs.
Additionally, fertility medications are often self-administered injectable drugs, and the effectiveness of a patient’s treatment may be compromised by improper storage and/or incorrect administration of their medications if the patient is not provided access to education and support.
Additionally, because fertility medications are often self-administered injectable drugs, the effectiveness of a patient’s treatment may be compromised by improper storage and/or incorrect administration of their medications if the patient is not provided access to education and support.
The insights from our data also enable us to actively manage our fertility specialist network and ensure that our fertility specialists are utilizing best practices and optimizing outcomes. The data collection process also includes extensive member surveys, which allow us to understand and improve our member satisfaction.
The insights from our data also enable us to actively manage our fertility specialist network and ensure that our fertility specialists are utilizing best practices and optimizing outcomes. The data collection process also includes extensive member surveys, which allow us to understand and improve our member experience and satisfaction.
Our solutions are structured as a pre-tax benefit program integrated into employers’ overall employee medical insurance, which is unique compared to the offerings of benefits managers new to the industry that do not have integrated health insurance carrier solutions.
Our solutions are structured as a pre-tax benefit program integrated into employers’ overall employee medical insurance plan, which is unique compared to the offerings of benefits managers new to the industry that do not have integrated health insurance carrier solutions.
Conventional benefits programs lack any meaningful care coordination, education or patient support. Patients and their dependents have no help in understanding the complex choices they are faced with and discerning between treatment alternatives.
Conventional benefits programs lack meaningful care coordination, education or patient support. Patients and their dependents have no help in understanding the complex choices they are faced with and discerning between treatment alternatives.
Fertility specialists who are invited to join our network must meet and maintain rigorous credentialing standards and quality thresholds that we set for inclusion in our network to ensure that our members receive the highest quality of care.
Fertility specialists who are invited to join our network must meet and maintain rigorous credentialing standards and quality thresholds that we set for inclusion in our network to ensure that our members receive the highest quality care.
Industry Challenges We believe employers are faced with three major challenges relating to providing fertility benefits to their employee bases: • the lack of a comprehensive fertility benefits solution that optimizes their fertility treatment expenditures; • the need to reduce the significant maternity and neonatal intensive care unit, or NICU, expenses, and the workplace impact, resulting from multiple births caused by fertility treatments; and • the desire to find innovative ways to attract and retain highly sought-after talent.
Industry Challenges We believe employers are faced with three major challenges related to providing fertility benefits to their employee bases: • the lack of a comprehensive fertility benefits solution that optimizes their fertility treatment expenditures; • the need to reduce the significant maternity and neonatal intensive care unit, or NICU, expenses resulting from multiple births caused by fertility treatments and the resulting workplace impact; and • the desire to find innovative ways to attract and retain highly sought-after talent.
Finally, our data allows us to provide our clients with unique and detailed quarterly reports in order to provide full transparency into the utilization of their benefit program, their expenditures and the outcomes delivered and value created.
Finally, our data allows us to provide our clients with unique and detailed reports in order to provide full transparency into the utilization of their benefit program, their expenditures and the outcomes delivered and value created.
Our Market Opportunity We believe we have a significant opportunity to provide employers with a superior comprehensive solution that addresses the unique challenges and complexities of fertility treatment and related fertility pharmacy services.
Market Opportunity We believe we have a significant opportunity to provide employers with a superior comprehensive solution that addresses the unique challenges and complexities of fertility treatment and related fertility pharmacy services.
Integrating our solution involves only a small commitment of our client's time (typically only six to ten hours over the course of six weeks). Facilitating the ease of integration is the fact that we have developed multiple integration solutions that allow us to integrate with any health plan or health insurance carrier, reducing significant time and expense for our clients.
Integrating our solution involves only a small commitment of our client's time (typically only six to ten hours over the course of six weeks). Underlying the ease of integration is the fact that we have developed multiple integration solutions that allow us to integrate with any health plan or health insurance carrier, reducing significant time and expense for our clients.
Progyny Rx delivers unit cost savings to our clients based on a reduction in unnecessary quantities of medication dispensed. • Employee Productivity and Retention. Our solution addresses employee absenteeism, poor productivity, and the lack of employee retention driven by the stress of suffering from infertility (and undergoing fertility treatment) as well as the back-to-work issues related to multiple births.
Progyny Rx delivers unit cost savings to our clients based on a reduction in unnecessary quantities of medication dispensed. • Employee Productivity and Retention. Our solution addresses employee absenteeism, poor productivity, and the lack of employee retention driven by the stress of suffering from infertility (and undergoing fertility treatment) as well as the return-to-work issues related to multiple births.
Additionally, the increased acceptance of non-traditional paths to parenthood has created an increased need for access to fertility treatments. As employees are demanding more robust fertility benefits coverage, employers are increasingly focused on providing a comprehensive fertility benefits plan that supports an inclusive and diverse workplace in order to attract and retain top employees.
Additionally, the increased acceptance of non-traditional paths to parenthood has created an increased need for access to fertility treatments. As employees are demanding more robust fertility benefits coverage, employers are increasingly focused on providing a comprehensive fertility benefits solution that supports an inclusive and diverse workplace in order to attract and retain top employees.
In the 2023 sales cycle, more clients, with benefits going live in 2024, have opted for comprehensive coverage, with substantially all of our new clients electing for Progyny Rx, multiple Smart Cycles and/or egg-freezing. Our Competitive Landscape We believe we are the leader in the market for employer-sponsored fertility benefits and family building solutions.
In the 2024 sales cycle, more clients, with benefits going live in 2025, have opted for comprehensive coverage, with substantially all of our new clients electing Progyny Rx, multiple Smart Cycles and/or egg-freezing. Competitive Landscape We believe we are the leader in the market for employer-sponsored fertility benefits and family building solutions.
Better fertility benefits programs can be a key component of enhancing a company’s overall benefits and an important tool in its recruiting efforts and in helping retain key talent. An appealing feature of the Progyny benefit from an employee retention perspective is that the benefit is both comprehensive and is accessible by all groups across an employee population.
Better fertility benefits programs can be a key component to enhancing a company’s overall benefits program and an important tool in its recruiting efforts and in helping retain key talent. An appealing feature of the Progyny benefit from an employee retention perspective is that the benefit is both comprehensive and is accessible by all groups across an employee population.
Given that the majority of our clients contract with us for a January 1 st benefits plan start date and that the average cost of treatments earlier in the overall treatment process is somewhat lower than the average cost as treatment progresses, our revenue from treatment services tend to grow as the year continues, particularly for new clients.
Given that the majority of our clients contract with us for a January 1 st benefits plan start date and that the average cost of treatments earlier in the overall treatment process is somewhat lower than the average cost as treatment progresses, our revenue from treatment services tends to grow as the year continues, particularly for new clients.
As such, we estimate that our current member base of 6.4 million covered lives under contract represents a mid-single digit percent of our total market opportunity. Regardless of whether or not these employers currently provide a fertility benefit, we believe they are prospective clients of Progyny.
As such, we estimate that our current member base of 6.7 million covered lives under contract represents a mid-single digit percent of our total market opportunity. Regardless of whether or not these employers currently provide a fertility benefit, we believe they are prospective clients of Progyny.
Our PCAs have deep fertility expertise and provide extensive clinical education, guidance and emotional support to our members. Additionally, we have an in-house clinical staff, comprised of professionals with substantial expertise in reproductive endocrinology, fertility nursing, clinical psychology and social work that design our PCA training curriculum and direct our comprehensive member experience.
Our PCAs have deep fertility expertise and provide extensive clinical education, guidance and emotional support to our members. Additionally, we have an in-house clinical staff, comprised of professionals with substantial expertise in reproductive endocrinology, fertility nursing, clinical psychology and social work who design our PCA training curriculum and direct our comprehensive member experience.
By comparison, medical conditions with a similar prevalence, such as diabetes and asthma, are comprehensively covered by conventional health insurance carriers and employers.
By comparison, medical conditions with similar prevalence, such as diabetes and asthma, are comprehensively covered by conventional health insurance carriers and employers.
Our marketing programs target human resource, benefits and finance executives in addition to health professionals and senior business leaders. Our principal marketing programs include learning opportunities for potential members, demand generation, field marketing events, integrated marketing campaigns (including direct email and online advertising) and participation in industry events, trade shows and conferences.
Our marketing programs target human resource, benefits and finance executives in addition to healthcare professionals and senior business leaders. Our principal marketing programs include learning opportunities for potential members, demand generation, field marketing events, integrated marketing campaigns (including direct email and online advertising) and participation in industry events, trade shows and conferences.
We believe that with conventional benefits programs, authorization and delivery times of one to two weeks are typical. If medications are not received on time, patients may have to wait a month or longer to commence another round of fertility treatment, wasting valuable time and money.
We believe that authorization and delivery times of one to two weeks are typical for conventional benefits programs. If medications are not received on time, patients may have to wait a month or longer to commence another round of fertility treatment, wasting valuable time and money.
We provide access to phone-based, clinical education and support seven days a week to ensure that our members understand any necessary medication storage requirements and administration techniques, including injection training. To further support those members that require additional education, we also offer a library of on-demand videos.
We provide access to phone-based, clinical education and support seven days a week to ensure that our members understand any necessary medication storage requirements and administration techniques, including injection training. To further support members who require additional education, we also offer a library of on-demand videos.
Our members receive access to our selective Center of Excellence network of high-quality providers that includes over 950 fertility specialists who practice at over 650 provider clinic locations throughout the United States and over 1,050 specialists in total when including reproductive urologists.
Our members receive access to our selective Center of Excellence network of high-quality providers that includes over 1,050 fertility specialists who practice at over 650 provider clinic locations throughout the United States and over 1,140 specialists in total when including reproductive urologists.
Our Value Proposition We believe that our competitive success is a function of our ability to concurrently: (1) provide tangible financial value to our clients; (2) deliver a better and more supported fertility journey to our members; and (3) provide value to, and work collaboratively with, the nation’s finest fertility specialists.
Value Proposition We believe that our competitive success is a function of our ability to concurrently: (1) provide tangible financial value to our clients; (2) deliver a better and more supported fertility journey to our members; and (3) provide value to, and work collaboratively with, the nation’s leading fertility specialists.
In conjunction with the Smart Cycle plan design, each of our members who utilizes our benefit has a dedicated Patient Care Advocate, or PCA, who has fertility expertise and provides end-to-end concierge support, including logistical support (i.e., fertility specialist selection, appointment scheduling, treatment authorization and treatment payment), clinical guidance (i.e., treatment options, outcomes statistics and what to expect) and emotional support during the often challenging and unpredictable fertility journey.
In conjunction with the Smart Cycle plan design, each member who utilizes our benefit has a dedicated Patient Care Advocate, or PCA, who has fertility expertise and provides end-to-end concierge support, including logistical support (i.e., fertility specialist selection, appointment scheduling, treatment authorization and treatment payment), clinical guidance (i.e., treatment options, outcomes statistics and what to expect) and emotional support during the often challenging and unpredictable fertility journey.
Provider clinics within our network produce outcomes that surpass their own reported practice averages when treating Progyny members because of our differentiated solution. Additionally, across our membership, our outcomes compared to national averages have been consistently superior to date.
Provider clinics in our network produce outcomes that surpass their own reported practice averages when treating Progyny members because of our differentiated solution. Additionally, across our membership, our outcomes compared to national averages have been consistently superior to date.
(2) Calculated based on CDC, 2021 National Summary and Clinic Data Sets, published in 2023. (3) Calculated based on the 12-month period ended December 31, 2022. • Comprehensive Coverage. We provide all individuals with access to comprehensive coverage.
(2) Calculated based on CDC, 2022 National Summary and Clinic Data Sets, published in 2024. (3) Calculated based on the 12-month period ended December 31, 2023. • Comprehensive Coverage. We provide all individuals with access to comprehensive coverage.
We have clients in the technology, consumer retail, e-commerce, industrial, healthcare, media, insurance, legal, food and beverage, financial services, life sciences, professional services, government services, union, energy, manufacturing, logistics, transportation, aerospace, real estate, nonprofit and hospitality sectors. Substantially all of our clients have renewed their benefits management contracts since our initial benefits offerings launched in 2016.
We have clients in the technology, consumer retail, e-commerce, industrial, healthcare, media, insurance, legal, food and beverage, financial services, life sciences, professional services, government services, union, energy, manufacturing, logistics, transportation, aerospace, real estate, nonprofit and hospitality sectors. Substantially all of our clients have renewed their benefits management contracts since our initial benefit offering launched in 2016.
This results in the typical Progyny member undergoing 2.2 retrievals for a live birth as compared to the national average of 3.5 retrievals. This difference of more than one retrieval represents substantial cost avoidance for our clients, as well as significantly less physical and emotional stress on the member. • Eliminating Financial Risk Associated With Collections.
This results in the typical Progyny member undergoing 2.1 retrievals for a live birth as compared to the national average of 3.6 retrievals. This difference of more than one retrieval represents substantial cost avoidance for our clients, as well as significantly less physical and emotional stress on the member. • Eliminating Financial Risk Associated With Collections.
In addition, the storage, preparation and administration of fertility medication is complex and requires extensive self-administered injections, yet most fertility benefits programs offer limited guidance and clinical support to patients around these issues.
In addition, the storage, preparation and administration of fertility medication is complex and requires extensive self-administered injections, yet most fertility benefits solutions offer limited guidance and clinical support to patients around these issues.
We believe we have a total addressable market of approximately 8,000 potential employer clients in the United States, who have a minimum of 1,000 employees, as well as Taft-Hartley labor populations, and federal government populations and, with our base of over 450 clients under contract, are still in the early stages of our growth trajectory.
We believe that we have a total addressable market of approximately 8,000 potential employer clients in the United States, who have a minimum of 1,000 employees, as well as Taft-Hartley labor populations, and federal government populations, and, with our base of over 530 clients under contract, we are still in the early stages of our growth trajectory.
Our client success team also reviews all quarterly and annual program reports with our clients to reinforce the transparency we provide to clients into their expenditures and outcomes and to review and quantify the value created by our solutions.
Our client success team also reviews all program reports with our clients to reinforce the transparency we provide to clients into their expenditures and outcomes and to review and quantify the value created by our solutions.
We offer paid parental leave for new parents with an extension of leave for those with an infant in the NICU and offer a pregnancy loss leave benefit as an enhancement to our bereavement leave policy, explicitly recognizing the physical, emotional, and mental health impact of a pregnancy loss, or failed fertility procedure, adoption or surrogacy, for any employee.
We offer paid parental leave for new parents, with an extension of leave for those with an infant in the NICU, as well as a pregnancy loss leave benefit as an enhancement to our bereavement leave policy, explicitly recognizing the physical, emotional, and mental health impact of a pregnancy loss or failed fertility procedure, adoption or surrogacy.
Our ability to integrate our solution with our clients' health insurance coverage allows our benefit to be offered to employees on a pre-tax basis, providing our members with significant savings in comparison to a post-tax reimbursement.
Our ability to integrate our solution with our clients' health insurance plan allows our benefit to be offered to employees on a pre-tax basis, providing our members with significant savings in comparison to a post-tax reimbursement.
We believe the combination of these factors results in meaningful and sustainable embedded growth potential well into the future. Expansion of Progyny Benefits Solutions within Our Existing Client Base We expect to see further growth from existing clients that add incremental services to their fertility benefits program.
We believe the combination of these factors results in meaningful and sustainable embedded growth potential well into the future. 14 Table of Contents Expansion of Progyny Benefits Solutions within Our Existing Client Base We expect to see further growth from existing clients that add incremental services to their fertility benefits program.
Due to the high prevalence of infertility, its high costs of treatment and the limited insurance coverage provided for the disease, there is a significant unmet need for fertility services in the United States and several macro trends are driving that need for fertility treatments and propelling the overall size of the fertility market higher.
Due to the high prevalence of infertility, its high costs of treatment and the limited insurance coverage provided for this disease, there is a significant unmet need for fertility services in the United States, and several macro trends are driving the need for fertility treatments and propelling the overall size of the fertility market.
As transparency and dialogue around infertility have increased, there has been a de-stigmatization of the disease. Despite this change in perception of infertility and its high prevalence, it is one of the only high-prevalence medical conditions with limited or non-existent 6 Table of Contents medical insurance.
As transparency and dialogue around infertility have increased, there has been a de-stigmatization of the disease. Despite this change in perception of infertility and its high prevalence, it is one of the only high-prevalence medical conditions with limited or non-existent medical insurance.
In addition to multiple birth rates, the relatively higher miscarriage rate associated with IVF treatment also results in significant additional medical costs for employers and their employees, as well as emotional and physical strain on patients.
In addition to multiple birth rates, the relatively higher miscarriage rate associated with IVF treatment leads to significant additional medical costs for employers and their employees, as well as emotional and physical strain on patients.
Our clients include many of the nation’s most prominent employers across a broad array of industries. We launched our fertility benefits solution in 2016 with our first five employer clients, and we have grown our current base of clients to over 450 employers, each with at least 1,000 covered lives.
Our clients include many of the nation’s most prominent employers across a broad array of industries. We launched our fertility benefits solution in 2016 with our first five employer clients, and we have grown our current base of clients to more than 530 employers, each with at least 1,000 covered lives.
ITEM 1. BUSINESS Overview We believe in a world where everyone can realize dreams of family and ideal health. Our mission is to empower healthier, supported journeys through transformative fertility, family building and women's health benefits.
ITEM 1. BUSINESS Overview We envision a world where everyone can realize their dreams of family and ideal health. Our mission is to empower healthier, supported journeys through transformative fertility, family building and women's health benefits.
In order to simplify the process for our members, we position the benefit to them using our proprietary Smart Cycle approach. Smart Cycles are designed by us to include the medical services required for a member’s full course of treatment, including all necessary diagnostic testing and access to the latest technology.
In order to simplify the process for our members, we offer our proprietary Smart Cycle approach. Smart Cycles are designed by us to include the medical services required for a member’s full course of treatment, including all necessary diagnostic testing and access to the latest technology.
For example, it was not until 2017 that infertility was first recognized as a disease by the American Medical Association and, as of February 2024, only 21 states and the District of Columbia have mandated insurance coverage for infertility.
For example, it was not until 2017 that infertility was first recognized as a disease by the American Medical Association, and, as of February 2025, only 22 states and the District of Columbia have mandated insurance coverage for infertility.
Through our differentiated approach to benefits plan design, patient education and support and active network management, our clients’ employees are able to pursue the most effective treatment across life's milestones from the best physicians and achieve optimal outcomes. Progyny is a leading benefits management company specializing in fertility and family building benefits solutions in the United States.
Through our differentiated approach to benefits plan design, member education and support and active network management, our clients’ employees are able to pursue the most effective treatment across life's milestones from the best providers and achieve optimal outcomes. Progyny is a leading benefits management company specializing in fertility, family building and women's health benefits solutions in the United States.
We have retained substantially all of our clients since we launched our fertility benefits solution, and our member satisfaction is evidenced by our most recent industry-leading Net Promoter Score, or NPS, of +80 for our fertility benefits solution and +80 for our integrated pharmacy benefits solution, Progyny Rx as of December 31, 2023.
We have retained substantially all of our clients since we launched our fertility benefits solution, and our member satisfaction is evidenced by our most recent industry-leading Net Promoter Score, or NPS, of +79 for our fertility benefits solution and +84 for Progyny Rx, our integrated pharmacy benefits solution, as of December 31, 2024.
These members are also educated on the use of best practices and are supported by PCAs along their fertility journey. • Eliminate Step Therapy Protocols.
Members are also educated on the use of best practices and are supported by PCAs throughout their fertility journey. • Eliminate Step Therapy Protocols.
Our Growth Strategy Expand Our Client Base We intend to continue increasing our client base of self-insured employers throughout the United States by leveraging our experienced sales force and strong relationships with benefits consultants.
Growth Strategy Expand Our Client Base We intend to continue increasing our client base of self-insured employers in the United States by leveraging our experienced sales team and strong relationships with benefits consultants.
We are redefining fertility and family building benefits, proving that a comprehensive fertility solution can simultaneously benefit employers, patients and physicians. We believe the differentiated value proposition we deliver to all of these constituents is key to our success and growth.
We are redefining fertility and family building benefits, proving that a comprehensive fertility solution can simultaneously benefit employers, members and providers. We believe the value proposition we deliver to all of these constituents is key to our success and growth.
We allow flexible work hours to accommodate employee volunteer opportunities, provide corporate sponsored charitable events and continue to develop partnerships with community organizations that align with our priorities in fertility, family building and equity in healthcare. 19 Table of Contents Our Corporate Information We were incorporated in Delaware in 2008 under the name Auxogen Bioscience, Inc.
We allow flexible work hours to accommodate employee volunteer opportunities and attend company-sponsored charitable events and continue to develop partnerships with community organizations that align with our priorities in fertility, family building and equity in healthcare. Our Corporate Information We were incorporated in Delaware in 2008 under the name Auxogen Bioscience, Inc.
Overall, we believe our market opportunity is substantial and is continuing to grow as a result of the rising demand for fertility benefits solutions, the lack of adequate offerings in the market today and the increasing awareness of the challenges of infertility we are driving.
Overall, we believe our market opportunity is substantial and is continuing to grow as a result of the rising demand for fertility benefits solutions, the lack of adequate offerings in the market today and the increased awareness of the challenges of infertility that we are helping to drive.
In 2010, we changed our name to Auxogen, Inc. and in 2015 we changed our name to Progyny, Inc. Our principal executive offices are located at 1359 Broadway, New York, New York 10018, and our telephone number is (212) 888-3124. Our website address is www.progyny.com and we also maintain a mobile application for our members.
In 2010, we changed our name to Auxogen, Inc. and in 2015 we changed our name to Progyny, Inc. Our principal executive offices are located at 1359 Broadway, New York, New York 10018, and our telephone number is (212) 888-3124. Our website address is www.progyny.com .
Our network includes 44 of the top 50 fertility practice groups by volume in the United States according to 2021 CDC data, which was published in 2023 and is the most recent data available.
Our network includes 45 of the top 50 fertility practice groups by volume in the United States according to 2022 CDC data, which was published in 2024 and is the most recent data available.
“Risk Factors—Risks Related to Our Business and Industry—Our business experiences seasonality, which may cause fluctuations in our sales and results of operations” of this Annual Report on Form 10-K. 18 Table of Contents Employees and Human Capital As of December 31, 2023, we had 566 employees, of which 563 were full-time.
“Risk Factors—Risks Related to Our Business and Industry—Our business experiences seasonality, which may cause fluctuations in our sales and results of operations” of this Annual Report on Form 10-K. Employees and Human Capital As of December 31, 2024, we had 680 employees, of which 675 were full-time.
The success and effectiveness of our sales team is evidenced by the over 85 new clients that we added in 2023, and the fact that a majority of our current clients terminated their existing fertility coverage to switch to Progyny. We generate client leads, accelerate sales opportunities and build brand awareness through our marketing programs.
The success and effectiveness of our sales team is evidenced by the addition of over 80 new clients in 2024, and the fact that a majority of our current clients terminated their prior fertility benefit to switch to Progyny. We generate client leads, accelerate sales opportunities and build brand awareness through our marketing programs.
We are expanding our client base within each industry that we serve, and have an industry-specific strategy, which enables us to most effectively target our addressable market.
We are expanding our client base within each industry that we serve, and have developed industry-specific strategies, which enable us to most effectively target our addressable market.
Industry Background The prevalence of infertility is high, affecting one in five heterosexual women aged 15 to 49 years with no prior births in the United States, according to the Centers for Disease Control and Prevention, or the CDC, and infertility is gaining attention as individuals are more openly discussing their struggles with fertility.
Industry Background The prevalence of infertility is high, affecting one in five married women aged 15 to 49 years with no prior births in the United States, according to the Centers for Disease Control and Prevention, or CDC, and there is increasing 6 Table of Contents awareness around infertility as a disease as more individuals are openly discussing their struggles with fertility.
Our solution provides members with access to the nation’s most desired fertility providers, including over 950 fertility specialists who practice at over 650 provider clinic locations throughout the United States. Our network includes 44 of the top 50 fertility practice groups by volume in the United States according to 2021 CDC data. • Integrated Pharmacy Benefits Solution.
Our solution provides members with access to the nation’s leading fertility specialists, including over 1,050 fertility specialists who practice at over 650 provider clinic locations throughout the United States. Our network includes 45 of the top 50 fertility practice groups by volume in the United States according to 2022 CDC data. • Integrated Pharmacy Benefits Solution.
Specifically, as shown in the table above, the in-network average live birth rate per attempted retrieval for Progyny members is 44.4%, as compared to the 37.4% average live birth rate per attempted retrieval for all of the patients at those same clinics.
Specifically, as shown in the table above, the in-network average live birth rate per attempted retrieval for Progyny members is 46.7%, as compared to the 36.8% average live birth rate per attempted retrieval for all patients at those same clinics.
Further, 37% of our current clients had no prior fertility coverage before adopting Progyny and 90% of our current clients enhanced their coverage when they switched to Progyny.
Further, 40% of our current clients had no prior fertility coverage before adopting the Progyny benefit, and 92% of our current clients enhanced their coverage when they switched to Progyny.
Our members experience healthier pregnancies (with significantly increased utilization of single embryo transfer) and superior rates of pregnancy and live births, as well as reduced rates of miscarriages and multiple births, saving valuable time and money and limiting personal and professional disruption. 12 Table of Contents Outcome National Averages for All Provider Clinics Progyny In-Network Provider Clinic Averages for All Patients Progyny In-Network Provider Clinic Averages for Progyny Members Only (3) Live birth rate per attempted retrieval (2) 35.5 % 37.4 % 44.4 % Single embryo transfer rate (1) 75.5 % 77.8 % 93.9 % Pregnancy rate per IVF transfer (1) 53.8 % 55.2 % 62.8 % Miscarriage rate (1) 18.4 % 18.2 % 15.8 % Live birth rate per transfer (2) 41.6 % 42.6 % 52.9 % IVF multiples rate (2) 6.9 % 6.2 % 1.9 % (1) Calculated based on the Society for Assisted Reproductive Technology, or SART, 2020 National Summary Report, finalized in 2023.
Our members experience healthier pregnancies (with significantly increased utilization of single embryo transfer) and superior rates of pregnancy and live births, as well as reduced rates of miscarriages and multiple births, saving valuable time and money and limiting personal and professional disruption. 12 Table of Contents Outcome National Averages for All Provider Clinics Progyny In-Network Provider Clinic Averages for All Patients Progyny In-Network Provider Clinic Averages for Progyny Members Only (3) Live birth rate per attempted retrieval (2) 34.9 % 36.8 % 46.7 % Single embryo transfer rate (1) 78.9 % 80.8 % 96.6 % Pregnancy rate per IVF transfer (1) 54.3 % 55.6 % 60.8 % Miscarriage rate (1) 18.2 % 17.9 % 14.4 % Live birth rate per transfer (2) 42.2 % 43.2 % 52.1 % IVF multiples rate (2) 5.8 % 5.4 % 2.1 % (1) Calculated based on the Society for Assisted Reproductive Technology, or SART, 2021 National Summary Report, finalized in 2024.
Our Smart Cycle design ensures members receive fair and balanced access to care that is not dependent on where members live, how expensive a fertility specialist is or which specific treatments are required. • High-Touch Concierge Member Experience.
Smart Cycles are available to be utilized across all employee groups, including populations not typically covered. • Equitable Access to Care. Our Smart Cycle design ensures members receive fair and balanced access to care that is not dependent on where members live, how expensive a fertility specialist is or which specific treatments are required. • High-Touch Concierge Member Experience.
To date, we have identified several ways we believe we can potentially expand our comprehensive family building offering, our addressable market, and our client base in the future, including the new preconception, maternity and postpartum, and menopause offerings. We will continue to evaluate opportunities as our platform continues to expand.
To date, we have identified several ways we believe we can potentially expand our comprehensive family building offering, our addressable market, and our client base in the future, including the addition of our new preconception, maternity and postpartum offering and menopause and midlife care offering.
The Employee Retirement Income Security Act of 1974, or ERISA, regulates certain aspects of employee health benefits plans, which includes both insured and self-funded health plans sponsored by our clients, with which we have agreements to provide TPA services.
ERISA Regulation The Employee Retirement Income Security Act of 1974, or ERISA, regulates certain aspects of employee health plans, including both insured and self-funded health plans sponsored by our clients, with whom we have agreements to provide TPA services and, in most cases, PBM services through Progyny Rx.
Although many regulatory and governmental requirements do not directly apply to our business, our clients are required to comply with a variety of U.S. laws, and we may be affected by these laws as a result of our contractual obligations.
Although many regulatory and governmental requirements do not directly apply to us or our business, our clients may be directly subject to such regulations and requirements, and, in turn, we may be required to comply as a result of our contractual obligations with our clients.
Our Clients We currently have contracts to serve over 450 employers in the United States across more than 40 industries. Our current clients, who are industry leaders across both high-growth and mature industries and range in size from at least 1,000 to 600,000 employees, represent approximately 6.4 million covered lives under contract.
Our current clients, who are leaders across both high-growth and mature industries and range in size from at least 1,000 to 600,000 employees, represent approximately 6.7 million lives under contract.
Further, our references to website URLs are intended to be inactive textual references only. We announce material information to the public through filings with the SEC, our investor relations website at investors.progyny.com , press releases, public conference calls, and webcasts to achieve broad, non-exclusionary distribution of information.
We announce material information to the public through filings with the SEC, our investor relations website at investors.progyny.com , press releases, public conference calls, and webcasts to achieve broad, non-exclusionary distribution of information. We therefore encourage investors and others interested in Progyny to review the information disclosed through such channels.
Selective Network of High-Quality Fertility Specialists We have utilized our deep industry knowledge and the insights derived from our data analytics platform to establish and actively manage a national network of the leading fertility specialists in the country.
We believe our platform provides our members with best-in-class support services to help them navigate their fertility and family building journeys. Selective Network of High-Quality Fertility Specialists We have utilized our deep industry knowledge and the insights derived from our data analytics platform to establish and actively manage a national network of leading fertility specialists in the United States.
We currently have contracts to provide coverage to approximately 6.4 million employees and their partners (known in our industry as covered lives), whom we refer to as our members. We have achieved this growth by demonstrating that our purpose-built, data-driven and disruptive platform consistently delivers superior clinical outcomes in a cost-efficient manner while driving exceptional client and member satisfaction.
We have achieved this growth by demonstrating that our purpose-built, data-driven and disruptive platform consistently delivers superior clinical outcomes in a cost-efficient manner, while driving exceptional client and member satisfaction.

… 90 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

251 edited+35 added−120 removed105 unchanged
Biggest changeAs a provider of services to entities subject to HIPAA, we are directly subject to certain provisions of the regulations as a “Business Associate.” When acting as a Business Associate under HIPAA, to the extent permitted by applicable privacy regulations and contracts and associated Business Associate Agreements with our clients, we are permitted to use and disclose protected health information to perform our services and for other limited purposes, but other uses and disclosures, such as marketing communications, require written authorization from the patient or must meet an exception specified under the privacy regulations.
Biggest changeIf a professional board in any state determines that the services provided by our PCAs require a license, we may need to conduct additional training and credentialing, replace personnel, obtain additional insurance, pay increased salaries, and suspend PCA services while our personnel obtain the necessary licensure, which may adversely affect our results of operations, our relationships with our clients and members, and cause us to be in breach of our contractual arrangements. 34 Table of Contents HIPAA Privacy and Security Requirements When acting as a “Business Associate” under HIPAA, to the extent permitted by applicable privacy regulations and our contractual arrangements with our clients, we are permitted to use and disclose protected health information to perform our services and for other limited purposes, but other uses and disclosures, such as marketing communications, require written authorization from the member or must meet an exception specified under HIPAA.
Any of the following risks could materially and adversely affect our business, financial condition and results of operations, the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K and could cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment.
Any of the following risks could materially and adversely affect our business, financial condition and results of operations and the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K and could cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment.
Finally, consolidation may also result in the acquisition of our partners by competitors or development by our partners of products and services that compete with our products and services. Any of these potential results of consolidation could have a material adverse effect on our business, financial condition and results of operations.
Finally, consolidation may also result in the acquisition of our partners by competitors or development by our partners of products and services that compete with our products and services. Any of these potential results of consolidation could also have a material adverse effect on our business, financial condition and results of operations.
Our success therefore is dependent in part on our ability to secure, integrate, develop, redesign and enhance our (or contract with vendors to provide) information technology systems that support our business strategy initiatives and processes in a compliant, secure, and cost and resource efficient manner.
Therefore, our success is dependent in part on our ability to secure, integrate, develop, redesign and enhance our (or contract with vendors to provide) information technology systems that support our business strategy initiatives and processes in a compliant, secure, and cost and resource efficient manner.
Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods. If our revenue growth does not meet our expectations in future periods, we may not maintain profitability in the future, our business, financial position and results of operations may be harmed.
Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods. If our revenue growth does not meet our expectations in future periods, we may not maintain profitability in the future, and our business, financial position and results of operations may be harmed.
Our results of operations would also suffer if our innovations are not responsive to the needs of the members, appropriately timed with market opportunity or effectively brought to market.
Our results of operations would also suffer if our innovations are not responsive to the needs of our members, appropriately timed with market opportunity or effectively brought to market.
If we fail to adapt and respond effectively to the changing medical landscape, changing laws, regulations and government enforcement priorities, changing client needs, requirements or preferences, our offerings may become less competitive.
If we fail to adapt and respond effectively to the changing medical landscape, changing laws, regulations and government enforcement priorities, and changing client needs, requirements or preferences, our offerings may become less competitive.
Any of these events could have a material adverse effect on the provision of services to our members and our operations. There may be additional shifts in the fertility specialty provider space as the fertility market matures, and high-quality fertility specialists may become more demanding in re-negotiating to remain in our network.
Any of these events could have a material adverse effect on our operations and the provision of services to our members. There may be additional shifts in the fertility specialty provider space as the fertility market matures, and high-quality fertility specialists may become more demanding in re-negotiating to remain in our network.
Our growth depends in part on the success of our strategic relationships with, and monitoring of, third parties, including channel partners, vendors, as well as insurance carriers. In order to grow our business, we anticipate that we will continue to depend on our relationships with third parties, including channel partners, vendors and insurance carriers among others.
Our growth depends in part on the success of our strategic relationships with, and monitoring of, third parties, including channel partners and vendors, as well as insurance carriers. In order to grow our business, we anticipate that we will continue to depend on our relationships with third parties, including channel partners, vendors and insurance carriers, among others.
If we lose our relationship with one or more key pharmacy program partners, or if the rebates provided by pharmacy program partners decline, our business and results of operations could be adversely affected. We maintain contractual relationships with select pharmacy program partners, which provide us with access to limited distribution specialty pharmaceutical rebates for drugs we purchase.
If we lose our relationship with one or more key pharmacy program partners, or if the rebates provided by pharmacy program partners decline, our business and results of operations could be adversely affected. We maintain contractual relationships with select pharmacy program partners, which provide us access to limited distribution specialty pharmaceutical rebates for drugs we purchase.
In the event OCR finds that we have failed to comply with applicable HIPAA privacy and security standards, we could face civil and criminal penalties. In addition, OCR performs compliance audits of Covered Entities and Business Associates in order to proactively enforce the HIPAA privacy and security standards.
In the event the OCR finds that we have failed to comply with applicable HIPAA privacy and security standards, we could face civil and criminal penalties. In addition, OCR performs compliance audits of Covered Entities and Business Associates in order to proactively enforce the HIPAA privacy and security standards.
OCR has become an increasingly active regulator and has signaled its intention to continue this trend. OCR has the discretion to impose penalties and may require companies to enter into resolution agreements and corrective action plans which impose ongoing compliance requirements.
The OCR has become an increasingly active regulator and has signaled its intention to continue this trend. The OCR has the discretion to impose penalties and may require companies to enter into resolution agreements and corrective action plans, which impose ongoing compliance requirements.
A non-permitted use or disclosure of protected health information is presumed to be a breach under HIPAA unless the Covered Entity or Business Associate establishes that there is a low probability the information has been compromised consistent with requirements enumerated in HIPAA.
A non-permitted use or disclosure of protected health information is presumed to be a breach under HIPAA unless the Covered Entity or Business Associate establishes that there is a low probability that the information has been compromised consistent with requirements enumerated in HIPAA.
We are required, pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting and our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting.
Pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”), we are required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting.
Our effective tax rate could be impacted due to several factors, including, but not limited to: • changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • changes in tax laws, tax treaties, and regulations or the interpretation of them (such as the recent Inflation Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations); • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • the outcome of future tax audits, examinations, or administrative appeals; • limitations or adverse findings regarding our ability to do business in some jurisdictions; and • discrete impact tax items, including such items resulting from the amount and timing of equity exercises and our stock price.
Our effective tax rate could be impacted due to several factors, including, but not limited to: • changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • changes in tax laws, tax treaties, or regulations or the interpretation of them (such as the Inflation Reduction Act, which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations); • changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • the outcome of future tax audits, examinations, or administrative appeals; • limitations or adverse findings regarding our ability to do business in some jurisdictions; and • discrete impact tax items, including items resulting from the amount and timing of equity exercises and our stock price.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, any state court located within the State of Delaware, or if all such state courts lack jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a breach of a fiduciary duty owed by any current or former director, officer or other employee, to us or our stockholders; (3) any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provisions of the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; (4) or any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; (5) any action or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (6) any action asserting a claim against us, or any of our directors, officers or other employees, that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, any state court located within the State of Delaware, or if all such state courts lack jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a breach of a fiduciary duty owed by any current or former director, officer or other employee to us or our stockholders; (3) any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees arising out of or pursuant to any provisions of the DGCL, our amended and restated certificate of incorporation, or our second amended and restated bylaws; (4) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our second amended and restated bylaws; (5) any action or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (6) any action asserting a claim against us, or any of our directors, officers or other employees, that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as defendants.
We also may face audits or investigations by one or more government agencies relating to our compliance with these laws and regulations. An adverse outcome under any such investigation or audit could result in fines, penalties, other liability, or could result in adverse publicity or a loss of reputation, and adversely affect our business.
We also may face audits or investigations by one or more government agencies relating to our compliance with these laws, rules and regulations. An adverse outcome under any such investigation or audit could result in fines, penalties, other liability, adverse publicity or a loss of reputation, and adversely affect our business.
Additionally, under HIPAA, Covered Entities must report breaches of unsecured protected health information to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach by a Covered Entity or its agents. Notification also must be made to OCR and, in certain circumstances involving large breaches, to the media.
Under HIPAA, Covered Entities must report breaches of unsecured protected health information to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach by a Covered Entity or its agents. Notification also must be made to the OCR and, in certain circumstances involving large breaches, to the media.
Economic conditions including inflation, interest rate fluctuations, changes in capital market conditions, disruptions in the banking industry and other parts of the financial services sector, and regulatory changes, such as the taxability of medical benefits like ours, may affect our ability to obtain necessary financing on acceptable terms.
In addition, economic conditions, including inflation, interest rate fluctuations, changes in capital market conditions, disruptions in the banking industry and other parts of the financial services sector, and regulatory changes, such as the taxability of medical benefits like ours, may affect our ability to obtain necessary financing on acceptable terms.
Identifying high-quality fertility specialists and other healthcare providers, credentialing and negotiating contracts with them and evaluating, monitoring and maintaining our network, requires significant time and resources. Our network provider arrangements generally may be terminated or not renewed by either party without cause upon prior written notice.
Identifying high-quality fertility specialists and other healthcare providers; credentialing and negotiating contracts with them; and evaluating, monitoring and maintaining our network requires significant time and resources. Our network provider contractual arrangements generally may be terminated or not renewed by either party without cause upon prior written notice.
Several states have proposed separate PBM bills, and at least 18 states have adopted PBM oversight laws. A number of these proposed laws would require PBMs to submit annual transparency reports or otherwise disclose contractual arrangements with health benefit plans or health insurance issuers, or allow regulators to conduct audits of PBM operations.
Several states have proposed separate PBM bills, and at least 18 states have adopted PBM oversight laws. A number of these proposed laws would require PBMs to submit annual transparency reports or otherwise disclose contractual arrangements with health plans or health insurance issuers or allow regulators to conduct audits of PBM operations.
There is no assurance that we will be able to obtain, maintain, defend and enforce our intellectual property rights, or that such intellectual property rights will not be challenged, narrowed, held unenforceable or circumvented. Therefore, these legal protections and precautions may not prevent infringement, misappropriation or other violations of our intellectual property.
There is no assurance that we will be able to obtain, maintain, defend and enforce our intellectual property rights or that such intellectual property rights will not be challenged, narrowed, held unenforceable or circumvented. Therefore, these legal protections and precautions may not prevent infringement, misappropriation, dilution or other violations of our intellectual property.
If a significant data breach occurred, our reputation could be materially and adversely affected, confidence among our clients and members may be diminished, or we may be subject to legal claims, any of which may contribute to the loss of customers and have a material adverse effect on us.
If a significant data breach occurred, our reputation could be materially and adversely affected, confidence among our clients and members may be diminished, or we may be subject to legal claims, any of which may contribute to the loss of clients and have a material adverse effect on us.
Some states’ anti-kickback and false claims laws may be broader in scope than analogous federal laws and may apply to items and services reimbursed by any third-party payor, including private insurers, self-insured employers and on a cash basis by patients, and may be applicable to us.
Some states’ anti-kickback and false claims laws may be broader in scope than analogous federal laws and may apply to items and services reimbursed by a third-party payor, including private insurers, self-insured employers and patients on a cash basis, and may be applicable to us.
As a result of our limited operating history with the current platform of solutions, as well as a limited amount of time serving a majority of our client base, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.
As a result of our limited operating history with our current platform of solutions, as well as a limited amount of time serving a majority of our client base, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.
We also cannot provide any assurance that we will be able to continue to renew our existing contracts, maintain our current negotiated pricing or discounts, or enter into new contracts on a timely basis or under favorable terms enabling us to service our members profitably.
We cannot provide any assurance that we will be able to continue to renew our existing contracts, maintain our current negotiated pricing or discounts, or enter into new contracts on a timely basis or under favorable terms enabling us to service our members profitably.
Moreover, if these laws and regulations change, or are interpreted and applied in a manner that is inconsistent with our policies and processes or the operation of our solutions, we may need to expend resources in order to change our business operations, policies and processes or the manner in which we provide our solutions.
Moreover, if these laws, rules and regulations change, or are interpreted and applied in a manner that is inconsistent with our policies and processes or the operation of our solutions, we may need to expend resources in order to change our business operations, policies and processes or the manner in which we provide our solutions.
As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal control may adversely affect investor confidence in our company and, as a result, the value of our common stock.
As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.
Although we have implemented and maintain policies, processes and compliance program infrastructure to assist us in complying with these laws and regulations and our contractual obligations, we cannot provide assurance regarding how these laws and regulations will be interpreted, enforced or applied to our operations.
Although we have implemented and maintain policies, processes and compliance program infrastructure to assist us in complying with HIPAA and our contractual obligations, we cannot provide assurance regarding how these laws and regulations will be interpreted, enforced or applied to our operations.
There can be no assurance that such requirements will not change or that we will not otherwise be subject to legal or regulatory actions. These laws and regulations are rapidly evolving and changing, and could have an adverse impact on our operations.
There can be no assurance that such requirements will not change or that we will not otherwise be subject to legal or regulatory actions. These laws, rules and regulations are rapidly evolving and changing and could have an adverse impact on our operations.
Fertility specialists and our other network providers could refuse to contract with us, demand higher payments or take other actions that could result in higher medical costs, less attractive service for our members or difficulty meeting regulatory or accreditation requirements.
Fertility specialists and our other network providers could refuse to continue to contract with us, demand higher payments or take other actions that could result in higher medical costs, less attractive service for our members or difficulty meeting regulatory or accreditation requirements.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our employees and management personnel from their normal responsibilities .
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our employees and management from their normal responsibilities.
Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition and results of operations.
Acquisitions, strategic investments, or partnerships could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition and results of operations.
Our future revenue may not grow at the rates they historically have, or at all. We have experienced significant growth since the launch of our fertility benefits solution in 2016. Revenue and our client base may not grow at the same rates they historically have, or they may decline in the future.
We have experienced significant growth since the launch of our fertility benefits solution in 2016. Revenue and our client base may not grow at the same rates they historically have, or they may decline in the future.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing members of our management.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board of Directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our Board of Directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board of Directors, the chairperson of our Board of Directors, or our chief executive officer; 46 Table of Contents • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board of Directors; • establish that our Board of Directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 and 2/3% of our outstanding shares of voting stock; • provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our Board of Directors or the holders of at least 66 and 2/3% of our outstanding shares of voting stock to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation.
Our amended and restated certificate of incorporation and second amended and restated bylaws include provisions that: • authorize our Board of Directors to issue, without further action by stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our Board of Directors and which may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board of Directors, the chairperson of our Board of Directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board of Directors; • establish that our Board of Directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 and 2/3% of our outstanding shares of voting stock; • provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; and 42 Table of Contents • require the approval of our Board of Directors or the holders of at least 66 and 2/3% of our outstanding shares of voting stock to amend our second amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation.
Unfavorable changes in our industry, including reductions in general healthcare spending, or in the United States and global economy could have a negative effect on our and our clients’ and potential clients’ results of operations.
Unfavorable changes in our industry, including reductions in general healthcare spending, or in the United States and global economy could have a negative effect on our and our existing clients’ and potential clients’ results of operations.
If securities or industry analysts do not publish research or reports about our business, downgrade our common stock, or publish negative reports about our business, our stock price would likely decline and the trading volume of our common stock could decrease.
If securities or industry analysts do not publish research or reports about our business, downgrade our common stock, or publish negative reports about our business, then our stock price would likely decline, and the trading volume of our common stock could decrease.
Any litigation and any infringement, misappropriation or other violations of our intellectual property could hinder our ability to market and sell our solutions, and our business, financial condition and results of operations could be adversely affected .
Any litigation and any infringement, misappropriation, dilution or other violations of our intellectual property could hinder our ability to market and sell our solutions, and our business, financial condition and results of operations could be adversely affected.
Certain of our solutions and services involve the transmission and storage of client and member data in various jurisdictions, which subjects the operation of those solutions and services to privacy or data protection laws and regulations in those jurisdictions.
Certain of our solutions and services involve the transmission and storage of client and member data in various jurisdictions, which subjects the operation of those solutions and services to data privacy or data protection laws, rules and regulations in those jurisdictions.
If a partner experiences sizable growth following consolidation, it may determine that it no longer needs to rely on us and may reduce its demand for our services.
If a partner experiences sizable growth following consolidation, it may determine that it no longer needs to rely on us and may reduce demand for our services.
Our ability to increase our client base and achieve broader market acceptance of solutions we provide will depend to a significant extent on our ability to expand our marketing and sales capabilities.
Our ability to increase our client base and achieve broader market acceptance of the solutions we provide will depend to a significant extent on our ability to expand our marketing and sales capabilities.
A security breach or failure could result from a variety of circumstances and events, including third-party action, human negligence or error, malfeasance, employee theft or misuse, phishing and other social engineering schemes, computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, and catastrophic events.
A cybersecurity breach or failure could result from a variety of circumstances and events, including third-party action, human negligence or error, malfeasance, employee theft or misuse, phishing and other social engineering schemes, computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, and catastrophic events.
Moreover, these rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time consuming and costly.
Moreover, these rules and regulations have increased, and will continue to increase, our legal and financial reporting compliance costs and will make some activities more time consuming and costly.
Our amended and restated certificate of incorporation designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us or our directors, officers, or employees.
Our amended and restated certificate of incorporation designates the state courts in the State of Delaware or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us or our directors, officers, or other employees.
You should carefully consider all of the information contained in this Annual Report on Form 10-K, including the sections titled “Cautionary Note Regarding Forward-Looking Statements,” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
You should carefully consider all of the information contained in this Annual Report on Form 10-K, including the sections titled “Cautionary Note Regarding Forward-Looking Statements,” Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience cybersecurity breaches that may remain undetected for an extended period.
Laws in all 50 states require businesses to provide notice to clients whose personally identifiable information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach is costly. States are also constantly amending existing laws, requiring attention to frequently changing regulatory requirements.
Laws in all 50 states require businesses to provide notice to individuals whose personally identifiable information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach is costly. States are also constantly amending existing laws, requiring attention to frequently changing regulatory requirements.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management.
Provisions in our amended and restated certificate of incorporation and second amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management.
As we market our solutions to potential clients that currently utilize other vendors to manage their employees’ fertility benefits, we may fail to convince their internal stakeholders that our offerings and our model are superior to their current solutions. Some of our competitors are more established, benefit from greater brand recognition and have substantially greater financial, technical and marketing resources.
As we market our solutions to potential clients that currently utilize other fertility benefits vendors, we may fail to convince their internal stakeholders that our offerings and our model are superior to their current solutions. Some of our competitors are more established, benefit from greater brand recognition and have substantially greater financial, technical and marketing resources.
High-profile security breaches at other companies and in government agencies have increased in recent years. There is the possibility of targeted cyberattacks by foreign countries or entities that could impact United States government and private companies’ technological infrastructures, some of which we utilize to provide our services.
High-profile cybersecurity breaches at other companies and government agencies have increased in recent years. There is the possibility of targeted cyberattacks by foreign countries or entities that could impact United States government and private companies’ technological infrastructures, some of which we utilize to provide our services.
As laws and regulations, including FTC enforcement, rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties .
As laws and regulations, including FTC enforcement, rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in connection with the use of these platforms and devices could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties .
In addition, any potential security breach could result in increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused by such breaches, incentives offered to clients or other business partners in an effort to maintain the business relationships after a breach and implementing measures to prevent future occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
In addition, any potential cybersecurity breach could result in increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused by such breach, incentives offered to clients or other business partners in an effort to maintain the business relationships after a breach and implementing measures to prevent future occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
To date, we have derived a substantial majority of our revenue from sales of our fertility benefits and Progyny Rx solutions. As we operate in an evolving industry and new markets, our long-term results of operations and continued growth will depend on our ability to successfully develop and market new successful solutions and services to our clients.
To date, we have derived a substantial majority of our revenue from sales of our fertility benefits and Progyny Rx solutions. As we operate in an evolving industry and new market, our long-term results of operations and continued growth will depend on our ability to successfully develop and market new solutions and services to our clients.
In addition, our arrangements with these third parties may expose us to public scrutiny, adversely affect our brand and reputation, expose us to litigation and/or regulatory action, or otherwise make our operations vulnerable if we fail to adequately monitor their performance or if they fail to meet their contractual obligations to us or to comply with applicable laws or regulations.
In addition, our arrangements with such third parties may expose us to public scrutiny, adversely affect our brand and reputation, expose us to litigation and/or regulatory action, or otherwise make our operations vulnerable if we fail to adequately monitor their performance or if they fail to meet their contractual obligations to us or to comply with applicable laws or regulations.
We rely on our agreements with our clients, and non-disclosure and confidentiality agreements with employees and third parties, and our trademarks, trade secrets, and copyrights to protect our intellectual property rights. However, any of these parties may breach such agreements and disclose our proprietary information, and we may not be able to obtain adequate remedies for such breaches.
We rely on our agreements with our clients, non-disclosure and confidentiality agreements with employees and third parties, and our trademarks, trade secrets, and copyrights to protect our intellectual property rights. However, any of these parties may breach such agreements and disclose our confidential or proprietary information, and we may not be able to obtain adequate remedies for such breaches.
In addition, regardless of whether any such lawsuits brought against us are successful or have merit, they will be time-consuming and costly, and could have an adverse impact on our reputation. As a result, under such circumstances, we may be unable to operate our business effectively.
Regardless of whether any such lawsuits brought against us are successful or have merit, they will be time-consuming and costly and could have an adverse impact on our reputation. As a result, under such circumstances, we may be unable to operate our business effectively.
There is a risk that certain state tax authorities, where we do not currently file a state tax return, could assert that we are liable for state and local taxes based upon income or gross receipts allocable to such states. States are becoming increasingly aggressive in asserting a nexus for state tax purposes.
There is a risk that certain state tax authorities, where we do not currently file a tax return, could assert that we are liable for state and local taxes based on income or gross receipts allocable to such states. States are becoming increasingly aggressive in asserting a nexus for state tax purposes.
If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. We have a history of operating losses and may not sustain profitability in the future.
If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect or change, or if we do not address these risks effectively, our operating and financial results could differ materially from our expectations, and our business could suffer. We have a history of operating losses and may not sustain profitability in the future.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations. While we operate only in the United States, we remain subject to the U.S.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations. While we operate primarily in the United States, we remain subject to the U.S.
These laws and regulations are subject to uncertainty in how they may be interpreted and enforced by government authorities and regulators.
These laws, rules and regulations are subject to uncertainty in how they may be interpreted and enforced by government authorities and regulators.
Any of these developments could have an adverse effect on our results of operations. Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local taxes which could adversely affect our results of operations. We currently file state tax returns in certain states.
Any of these factors could have an adverse effect on our results of operations. Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local taxes, which could adversely affect our results of operations. We currently file tax returns in certain states.
A stockholder may, nevertheless, seek to bring a claim in a venue other than that designated in our amended and restated certificate of incorporation. In such instance we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions, which may require significant additional costs.
A stockholder may, nevertheless, seek to bring a claim in a venue other than that designated in our amended and restated certificate of incorporation. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions, which may result in significant additional costs.
If we fail to maintain an efficient pharmacy distribution network or if there is a disruption to our network of specialty pharmacies or their supply chains, our business, financial condition and results of operations could suffer. The timely delivery of fertility prescriptions is essential for fertility treatments.
If we fail to maintain an efficient pharmacy distribution network or if there is a disruption to our network of specialty pharmacies or their supply chains, our business, financial condition and results of operations could suffer. The timely delivery of fertility medication is essential for fertility treatments.
In addition, if the resulting business from such a transaction fails to meet our expectations, or we fail to successfully integrate such businesses into our own, our business, financial condition and results of operations may be adversely affected or we may be exposed to unknown risks or liabilities .
If the resulting business from a transaction fails to meet our expectations, or we fail to successfully integrate such businesses into our own, our business, financial condition and results of operations may be adversely affected, or we may be exposed to unknown risks or liabilities .
Our existing management team has and will continue to devote a substantial amount of time to these compliance initiatives, and we may need to hire additional accounting and financial staff with appropriate public company experience to assist us in ongoing compliance with these requirements.
Our existing management team has and will continue to devote a substantial amount of time to these compliance initiatives, and we may need to hire additional accounting and financial personnel with appropriate public company experience to assist us in ongoing compliance with these requirements.
Even an unsuccessful challenge by regulatory, judicial and other authorities or parties could be expensive and time-consuming, could result in loss of business, exposure to adverse publicity, and injury to our reputation and could adversely affect our ability to retain and attract clients.
Even an unsuccessful challenge by regulatory, judicial and other authorities or parties could be expensive and time-consuming; could result in loss of business, exposure to negative publicity, and injury to our reputation; and could adversely affect our ability to retain and attract clients.
We have experienced and may in the future experience analyst coverage reduction due to analysts leaving firms, changing firms or going on temporary leaves of absences. Such reduction in analyst coverage, even if temporary, could lead to volatility in our stock price.
We have experienced and may in the future experience analyst coverage reduction due to analysts leaving firms, changing firms or going on temporary leaves of absences. A reduction in analyst coverage, even if temporary, could lead to volatility in our stock price.
On February 27, 2024, we issued guidance for the first quarter of 2024 and full year 2024. This guidance, which consists of forward-looking statements, is qualified by, and subject to, such assumptions, estimates and expectations as of the date such guidance is given and may be revised at a later time, solely in our discretion, as we learn more information.
On February 27, 2025, we issued guidance for the first quarter of 2025 and full year 2025. Our guidance, which consists of forward-looking statements, is qualified by, and subject to, such assumptions, estimates and expectations as of the date such guidance is given and may be revised at a later time, solely in our discretion, as we learn more information.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of such third-party intermediaries as well as our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.
If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, financial condition and results of operations could be harmed.
If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any potential civil or criminal proceeding, our business, financial condition and results of operations could be harmed.
During the evaluation and testing process of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective.
During the evaluation and testing process of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting, we would be unable to certify that our internal control over financial reporting is effective.
As part of our business strategy, we may acquire or make investments in businesses, joint ventures, products and services, or technologies and issue equity securities to pay for any such acquisition or investment.
As part of our growth strategy, we may acquire or make investments in businesses, joint ventures, products and services, or technologies and issue equity securities to pay for any such acquisition or investment.
We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We do not intend to pay dividends for the foreseeable future, and, as a result, your ability to receive a return on your investment will depend on appreciation in the price of our common stock.
Our business experiences seasonality, which may cause fluctuations in our sales and results of operations. Our business experiences moderate seasonality in revenue with a slightly higher proportion of revenue during the second half of the year as compared with the first half.
Our business experiences seasonality, which may cause fluctuations in our revenue and results of operations. Our business experiences moderate seasonality in revenue with a slightly higher proportion of revenue during the second half of the year as compared to the first half.
Our business strategy may not effectively respond to these changes, and we may fail to recognize and position ourselves to capitalize upon market opportunities. We may not have sufficient advance notice and resources to develop and effectively implement an alternative strategy.
Our business strategy may not effectively respond to these changes, and we may fail to recognize and position ourselves to capitalize on market opportunities. We may not have sufficient advance notice and resources to develop and effectively implement an alternative strategy.
As the fertility management market and our client base grow, if we do not successfully maintain our relationships with insurance carriers, they may make integration more difficult or expensive, such as implementing an onerous fee structure in exchange for our ability to continue to integrate our solutions with their platforms.
As the fertility industry and our client base grow, if we do not successfully maintain our relationships with insurance carriers, they may make integration more difficult or expensive, such as implementing an onerous fee structure in exchange for our ability to continue to integrate our solutions with their platforms.
In addition, any of our trademarks or trade names, whether registered or unregistered, may be challenged, opposed, infringed, cancelled, circumvented or declared generic, or determined to be infringing on other marks, as applicable.
Any of our trademarks or trade names, whether registered or unregistered, may be challenged, opposed, infringed, cancelled, circumvented or declared generic or determined to be infringing on other marks, as applicable.
Further, our failure to comply with these laws or regulations could result in material fines and/or sanctions and could have a material adverse effect on our results of operations and/or cash flows.
In addition, failure to comply with these laws or regulations could result in material fines and sanctions and could have a material adverse effect on our results of operations and cash flows.
Any losses, costs or liabilities may not be covered by, or may exceed the coverage limits of, any or all applicable insurance policies. 28 Table of Contents We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed .
Any losses, costs or liabilities may not be covered by, or may exceed the coverage limits of, any or all applicable insurance policies. We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed .

… 326 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+0 added−0 removed4 unchanged
Biggest changeFor more information about these risks, please see “Risk Factors – If our information technology systems, or those of our provider clinics, specialty pharmacies or other vendors lag, fail or suffer security breaches, we may incur a material disruption of our services or suffer a loss or inappropriate disclosure of confidential information, which could materially impact our business and the results of operations” in this annual report on Form 10-K.
Biggest changeFor more information about these risks, please see “Risk Factors—If our information technology systems, or those of the third parties with whom we do business, including our provider clinics, specialty pharmacies or other vendors, lag, fail or suffer cybersecurity breaches, we may experience a material disruption of our services or suffer a loss or inappropriate disclosure of confidential information, which could materially impact our business and results of operations” in this Annual Report on Form 10-K.
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced an undetected cybersecurity incident.
Management, including our Chief Information Security Officer and cybersecurity team, regularly update the Audit Committee on our cybersecurity programs, material cybersecurity risks and mitigation strategies and provide cybersecurity reports annually that cover, among other topics, third-party assessments of our cybersecurity programs, developments in cybersecurity and updates to our cybersecurity programs and mitigation strategies.
Management, including our Chief Information Security Officer and cybersecurity team, regularly update the Audit Committee on our cybersecurity program, material cybersecurity risks and mitigation strategies and provide cybersecurity reports annually that cover, among other topics, third-party assessments of our cybersecurity program, developments in cybersecurity and updates to our cybersecurity program and mitigation strategies.
The Audit Committee is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which we are exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. The Audit Committee also reports material cybersecurity risks to our full Board of Directors.
The Audit Committee is responsible for ensuring that management has processes in place that are designed to identify and evaluate cybersecurity risks to which we are exposed and has implemented processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. The Audit Committee reports material cybersecurity risks to our full Board of Directors.
Our cybersecurity team engages third-party security experts for risk assessment and system enhancements, including a third-party security consultant that conducts regular network security reviews, scans and audits.
Our cybersecurity team engages third-party security experts for risk assessments and system enhancements, including a third-party security consultant that conducts regular network security reviews, scans and audits.
In addition, we maintain various preventive measures, such as protections designed to safeguard against cyberattacks, including employee training, multifactor authentication, firewalls and virus detection software, periodic scans of our environment for any vulnerabilities and penetration testing. Our Board of Directors has overall oversight responsibility for our risk management, and delegates cybersecurity risk management oversight to the Audit Committee.
In addition, we have implemented various preventive measures, such as protections designed to safeguard against cyberattacks, including employee training, multifactor authentication, firewalls and virus detection software, periodic scans of our environment for any vulnerabilities and penetration testing. Our Board of Directors has overall oversight responsibility for our risk management and has delegated cybersecurity risk management oversight to the Audit Committee.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, implementing appropriate mitigation measures and maintaining our cybersecurity program.
Our cybersecurity programs are under the direction of our Chief Information Security Officer who receives reports from our cybersecurity team and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our Chief Information Security Officer and dedicated personnel are experienced information systems security professionals and information security managers with many years of experience.
Our cybersecurity program is overseen by our Chief Information Security Officer, who receives reports from our cybersecurity team and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our Chief Information Security Officer and cybersecurity team are experienced information systems security professionals and information security managers with many years of experience.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed1 unchanged
Biggest changeFor additional information, please refer to Part II, Item 8 “Financial Statements and Supplementary Data — Note 7 — Leases” in this Annual Report on Form 10-K. 49 Table of Contents ITEM 3. LEGAL PROCEEDINGS See Part II, Item 8 “Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies — Arbitration/Litigation.”
Biggest changeFor additional information, please refer to Part II, Item 8 “Financial Statements and Supplementary Data — Note 7 — Leases” in this Annual Report on Form 10-K. 44 Table of Contents ITEM 3. LEGAL PROCEEDINGS See Part II, Item 8 “Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies — Arbitration/Litigation.” ITEM 4.
In February 2022, we entered into a lease, which is expected to expire in the fourth quarter of 2035, for additional space in the same location and also for continued occupancy of our current space after the current sublease expires. We use our headquarters for administration, sales and marketing and client support.
In February 2023, we entered into a lease, which is expected to expire in the second quarter of 2036, for additional space in the same location and also for continued occupancy of our current space after the current sublease expires. We use our headquarters for administration, sales and marketing and client support.
Added
MINE SAFETY DISCLOSURES Not applicable. 45 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+6 added−4 removed1 unchanged
Biggest changeThe following table provides a summary of shares surrendered back to the Company for tax withholding on restricted stock units that vested under our equity incentive plans in the three months ended December 31, 2023: Period Total Number of Shares Repurchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program October 1, 2023 through October 31, 2023 36,223 33.18 — $ — November 1, 2023 through November 30, 2023 121,827 32.49 — — December 1, 2023 through December 31, 2023 13,725 35.62 — — Total shares repurchased 171,775 32.89 — — (1) Represents shares withheld on net settlements of restricted stock units that vested under our equity incentive plans.
Biggest changeThe following table provides a summary of shares surrendered back to the Company for tax withholding on restricted stock units that vested under our equity incentive plans and shares purchased as part of publicly announced programs in the three months ended December 31, 2024: Period Total Number of Shares Repurchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program October 1, 2024 through October 31, 2024 3,277,815 $ 16.17 3,248,298 $ — November 1, 2024 through November 30, 2024 31,761 $ 15.98 — — December 1, 2024 through December 31, 2024 34,205 $ 15.27 — — Total shares repurchased 3,343,781 $ 15.86 3,248,298 — (1) Includes share repurchases and shares withheld on net settlements of restricted stock units that vested under our equity incentive plans. 46 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Progyny, Inc. under the Securities Act or the Exchange Act.
In the fourth quarter of 2023, we withheld shares through net settlements (where the award holder receives the net of the shares vested, after surrendering a portion of the shares back to the Company for tax withholding) for certain restricted stock units that vested.
In the fourth quarter of 2024, we withheld shares through net settlements (where the award holder receives the net of the shares vested, after surrendering a portion of the shares back to the Company for tax withholding) for certain restricted stock units that vested.
We intend to retain any future earnings and do not expect to pay cash dividends in the foreseeable future. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Our restricted stock units are subject to vesting and the underlying shares of common stock are issued when the restricted stock units vest.
We intend to retain any future earnings and do not expect to pay cash dividends in the foreseeable future. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Net Settlement of Equity Awards Our restricted stock units are subject to vesting and the underlying shares of common stock are issued when the restricted stock units vest.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “PGNY”. Holders of Record As of January 31, 2024, there were approximately 51 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “PGNY”. Holders of Record As of January 31, 2025, there were approximately 42 stockholders of record of our common stock.
The graph set forth below compares cumulative total return on our common stock with the cumulative total return of the (i) S&P Health Care (Sector) and (ii) the Nasdaq Composite Index resulting from an initial investment of $100 in each and, assuming the reinvestment of any dividends, based on closing prices.
The graph set forth below compares cumulative total return on our common stock for the last five fiscal years through the fiscal year ended December 31, 2024, with that of the (i) S&P Health Care (Sector) and (ii) the Nasdaq Composite Index.
Removed
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Progyny, Inc. under the Securities Act or the Exchange Act.
Added
Share Repurchase Programs On February 29, 2024, the Company announced the February 2024 share repurchase program of up to $100 million in shares of common stock (the "February Share Repurchase Program").
Removed
Measurement points are from October 24, 2019 (the date our common stock began trading on Nasdaq) through December 31, 2023. 54 Table of Contents Cumulative Total Returns since Initial Public Offering Company/Index 10/24/2019 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Progyny, Inc. $100.00 $211.15 $ 326.08 $ 394.54 $ 239.62 $ 286.00 S&P 500 Health Care $100.00 $111.78 $ 124.56 $ 155.27 $ 149.16 $ 149.62 NASDAQ Composite $100.00 $109.61 $ 157.45 $ 192.30 $ 127.86 $ 183.38 Use of Proceeds On October 29, 2019, in connection with our initial public offering (IPO), we issued and sold 6,700,000 shares of our common stock and certain of our selling stockholders offered and sold 4,800,000 shares of our common stock at a price to the public of $13.00 per share resulting in net proceeds to us of $77.6 million, after deducting the underwriting discount of $5.9 million and offering expenses of $3.6 million.
Added
On May 22, 2024, the Company announced the May 2024 share repurchase program of up to an additional $100 million in shares of common stock (the "May Share Repurchase Program").
Removed
All of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-233965), which was declared effective by the SEC on October 24, 2019. The net proceeds of $77.6 million from our IPO have been invested in investment grade, interest-bearing instruments.
Added
On August 6, 2024, the Company announced the August 2024 share repurchase program of up to an additional $100 million in shares of common stock (the "August Share Repurchase Program," and together with the February Share Repurchase Program and the May Share Repurchase Program, the "2024 Share Repurchase Programs").
Removed
There has been no material change in the expected use of the net proceeds from our IPO as described in our final prospectus, filed with the SEC on October 25, 2019 pursuant to Rule 424(b) relating to our Registration Statement. 55 Table of Contents ITEM 6. [RESERVED]
Added
As of the year-ended December 31, 2024, the 2024 Share Repurchase Programs were completed, and no amounts remained available under the 2024 Share Repurchase Programs.
Added
Each index assumes an initial investment of $100 in each and, assumes the reinvestment of any dividends, based on closing prices.
Added
Cumulative Total Returns Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Progyny, Inc. $100.00 $154.43 $186.85 $ 113.48 $ 135.45 $ 62.84 S&P 500 Health Care $100.00 $111.43 $138.90 $ 133.44 $ 133.85 $ 135.06 NASDAQ Composite $100.00 $143.64 $175.44 $ 116.65 $ 167.30 $ 215.22 47 Table of Contents ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+9 added−22 removed67 unchanged
Biggest changeOther Income, Net Year Ended December 31, 2023 2022 % Change (dollars in thousands) Other income, net $ 8,507 $ 1,100 673 % Other income, net increased by $7.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to increases in investment and interest income. 64 Table of Contents Provision (Benefit) for Income Taxes Year Ended December 31, 2023 2022 % Change (dollars in thousands) Provision (benefit) for income taxes $ 8,654 $ (5,917) (246) % For the year ended December 31, 2023, we recorded a provision for income taxes of $8.7 million, as compared to a benefit for income taxes of $5.9 million for the year ended December 31, 2022, primarily due to higher operating profit as well as a decrease in tax benefits for equity compensation, including discrete tax benefits, in the current year period.
Biggest changeProvision for Income Taxes Year Ended December 31, 2024 2023 % Change (dollars in thousands) Provision for income taxes $ 28,866 $ 8,654 234 % For the year ended December 31, 2024, we recorded a provision for income taxes of $28.9 million, as compared to a provision for income taxes of $8.7 million for the year ended December 31, 2023, primarily due to a higher operating profit as well as a decrease in tax benefits for equity compensation. 56 Table of Contents Liquidity and Capital Resources As of December 31, 2024, we had $162.3 million of cash and cash equivalents and $65.6 million of marketable securities.
These expenses also include third-party consulting services and facilities costs. We anticipate that we will incur additional general and administrative expenses on an ongoing basis to support the growth of our business. Other Income, net Other income, net primarily includes interest income and expense, as well as investment income and losses.
These expenses also include third-party consulting services and facilities costs. We anticipate that we will incur additional general and administrative expenses on an ongoing basis to support the growth of our business. Interest and other income, net Interest and other income, net primarily includes interest income and expense, as well as investment income and losses.
Some of the limitations of Adjusted EBITDA include: (1) it does not properly reflect capital commitments to be paid in the future; (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (3) it does not consider the impact of stock-based compensation expense; (4) it does not reflect other non-operating income and expenses, including other income (expense), net and interest income (expense), net; and (5) it does not reflect tax payments that may represent a reduction in cash available to us.
Some of the limitations of Adjusted EBITDA include: (1) it does not properly reflect capital commitments to be paid in the future; (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (3) it does not consider the impact of stock-based compensation expense; (4) it does not reflect other non-operating income and expenses, including interest and other income, net; and (5) it does not reflect tax payments that may represent a reduction in cash available to us.
Financing Activities Net cash used in financing activities was $11.1 million for the year ended December 31, 2023, consisting of payments of $17.2 million for employee taxes related to equity awards, partially offset by $4.9 million in proceeds from stock option exercises and $1.3 million in proceeds from contributions to our employee stock purchase plan.
Net cash used in financing activities was $11.1 million for the year ended December 31, 2023, consisting of payments of $17.2 million for employee taxes related to the net settlement of equity awards, partially offset by $4.9 million in proceeds from stock option exercises and $1.3 million in proceeds from contributions to our employee stock purchase plan.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis.
GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis.
Revenue Model Our clients primarily contract with us to provide our fertility benefits solution and, where added on by our clients, our Progyny Rx solution. Our revenue has both a utilization-based component and a population-based component, as follows: • Utilization Component. Clients pay us for the fertility benefits and Progyny Rx solutions utilized by their employees.
Our clients primarily contract with us to provide our fertility benefits solution and, where added on by our clients, our Progyny Rx solution. Our revenue has both a utilization-based component and a population-based component, as follows: • Utilization Component. Clients pay us for the fertility benefits and Progyny Rx solutions utilized by their employees.
There are approximately 8,000 employers in the United States who have a minimum of 1,000 employees, who together with Taft-Hartley labor populations and federal government populations, represents approximately 106 million potential covered lives in total. Our current member base of approximately 6.4 million covered lives under contract represents a mid-single digit percent of our total market opportunity.
There are approximately 8,000 employers in the United States who have a minimum of 1,000 employees, who together with Taft-Hartley labor populations and federal government populations, represents approximately 106 million potential covered lives in total. Our current member base of approximately 6.7 million covered lives under contract represents a mid-single digit percent of our total market opportunity.
In February 2022, we entered into a lease agreement for additional space in our corporate offices in New York, New York, consisting of a 24,099 square foot office and a 21,262 square foot office, and also for continued occupancy of the 25,212 square foot office after the expiration of the current sublease.
In February 2022, we entered into a lease agreement commencing in February 2023 for additional space in our corporate offices in New York, New York, consisting of a 24,099 square foot office and a 21,262 square foot office, and also for continued occupancy of the 25,212 square foot office after the expiration of the current sublease.
Fertility Benefits Services Fertility benefits services costs include: (1) fees paid to provider clinics within our network, labs and anesthesiologists; (2) costs incurred (including salaries, bonuses, benefits, stock-based compensation expense, other related costs, and an allocation of our general overhead, depreciation and amortization) for those employees associated with 59 Table of Contents our care management service functions: Provider Account Management, PCA, Provider Relations and Claims Processing teams; and (3) related information technology support costs.
Fertility Benefits Services Fertility benefits services costs include: (1) fees paid to provider clinics within our network, labs and anesthesiologists; (2) costs incurred (including salaries, bonuses, benefits, stock-based compensation expense, other related costs, and an allocation of our general overhead, depreciation and amortization) for those employees associated with our care management service functions: Provider Account Management, PCA, Provider Relations and Claims Processing teams; and (3) related information technology support costs.
We include accrued receivables within accounts receivable on our consolidated balance sheet. As of December 31, 2023 and 2022, accrued receivables were $45.8 million and $54.6 million, respectively. At the same time, we estimate cost of services and accrued claims payables based on the amount to be paid to the provider clinic and expected gross margin on fertility benefit services.
We include accrued receivables within accounts receivable on our consolidated balance sheet. As of December 31, 2024 and 2023, accrued receivables were $45.6 million and $45.8 million, respectively. At the same time, we estimate cost of services and accrued claims payables based on the amount to be paid to the provider clinic and expected gross margin on fertility benefit services.
Revenue is also accrued for authorized Smart Cycle services rendered based on member appointments scheduled with a fertility specialist in our network but for which no claim has yet been reported, net of expected changes and cancellations of services. Pharmacy Benefits Solution Revenue Pharmacy benefits solution revenue primarily represents utilization of Progyny Rx.
Revenue is also accrued for authorized Smart Cycle services rendered based on member appointments scheduled with a fertility specialist in our network but for which no claim has yet been reported, net of expected changes and cancellations of services. 50 Table of Contents Pharmacy Benefits Solution Revenue Pharmacy benefits solution revenue primarily represents utilization of Progyny Rx.
We estimate the fair value of each stock-based award on the measurement 67 Table of Contents date using either the Black-Scholes option-pricing model for stock options and stock purchased under the employee stock purchase plan or the closing market price of our common stock for restricted stock units, including those with performance-based vesting criteria.
We estimate the fair value of each stock-based award on the measurement date using either the Black-Scholes option-pricing model for stock options and stock purchased under the employee stock purchase plan or the closing market price of our common stock for restricted stock units, including those with performance-based vesting criteria.
Accrued claims payable of $30.3 million and $31.1 million as of December 31, 2023 and 2022, respectively, are included within accrued expenses and other current liabilities in the consolidated balance sheet. Our estimates are adjusted to actual at the time of billing and these adjustments have historically not been material.
Accrued claims payable of $32.1 million and $30.3 million as of December 31, 2024 and 2023, respectively, are included within accrued expenses and other current liabilities in the consolidated balance sheet. Our estimates are adjusted to actual at the time of billing and these adjustments have historically not been material.
Additionally, staffing levels and the related personnel costs, including stock-based compensation expense, and other costs necessary to deliver our care management services will continue to grow as we continue to add clients and their associated members. Operating Expenses Our operating expenses consist of sales and marketing and general and administrative expenses.
Additionally, staffing levels and the related 51 Table of Contents personnel costs, including stock-based compensation expense, and other costs necessary to deliver our care management services will continue to grow as we continue to add clients and their associated members. Operating Expenses Our operating expenses consist of sales and marketing and general and administrative expenses.
Changes in operating assets and liabilities resulted in cash used in operating activities from an increase in prepaid expenses and other current assets of $22.9 million and accounts receivable of $21.7 million, partially offset by cash provided by operating activities from increases in accounts payable of $16.2 million, accrued expenses and other current liabilities of $10.4 million and other noncurrent assets and liabilities of $0.6 million.
Changes in operating assets and liabilities resulted in cash used in operating activities from an increase in prepaid expenses and other current assets of $22.9 million and accounts receivable of $21.7 million, partially 57 Table of Contents offset by cash provided by operating activities from increases in accounts payable of $16.2 million, accrued expenses and other current liabilities of $10.4 million and other noncurrent assets and liabilities of $0.6 million.
A key driver of our revenue is the number of members we serve and the rate at which they utilize their fertility benefits. As our client base has grown, our membership has grown from approximately 110,000 members in 2016 when we launched our fertility benefits solution to 5.4 million members as of December 31, 2023.
A key driver of our revenue is the number of members we serve and the rate at which they utilize their fertility benefits. As our client base has grown, our membership has grown from approximately 110,000 members in 2016 when we launched our fertility benefits solution to 6.5 million members as of December 31, 2024.
As part of this solution, we provide care 56 Table of Contents management services, which include our formulary plan design, simplified authorization, assistance with prescription fulfillment and timely delivery of the medications by our network of specialty pharmacies, as well as medication administration training, pharmacy support services and continuing PCA support. Our Clients.
As part of this solution, we provide care management services, which include our formulary plan design, simplified authorization, assistance with prescription fulfillment and timely delivery of the medications by our network of specialty pharmacies, as well as medication administration training, pharmacy support services and continuing PCA support.
With respect to Progyny Rx, we bill the client for the fertility medication dispensed to their employees in connection with the authorized fertility treatments. Medication fees also include our formulary management, drug utilization review and cost containment services and other care management services. • Population-Based Component.
With respect to Progyny Rx, we bill the client for the fertility medication dispensed to their employees in connection with the authorized fertility treatments. Medication fees also include our 48 Table of Contents formulary management, drug utilization review and cost containment services and other care management services. • Population-Based Component.
We believe there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets were realizable as of December 31, 2023. The amount of deferred tax provided is calculated using tax rates enacted at the balance sheet date.
We believe there is sufficient positive evidence to conclude that it is more likely than not that substantially all the net deferred tax assets were realizable as of December 31, 2024. The amount of deferred tax provided is calculated using tax rates enacted at the balance sheet date.
Treasury securities for the period that is consistent with the expected term of the stock option. The dividend yield is assumed to be none as we have not paid dividends, nor do we anticipate paying dividends. The weighted-average estimated fair value of stock option awards granted in the year ended December 31, 2023 was $19.10.
Treasury securities for the period that is consistent with the expected term of the stock option. The dividend yield is assumed to be none as we have not paid dividends, nor do we anticipate paying dividends. The weighted-average estimated fair value of stock option awards granted in the year ended December 31, 2024 was $16.60.
Provision (Benefit) for Income Taxes We are subject to income taxes in the United States. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules.
Provision for Income Taxes We are subject to income taxes in the United States and in certain foreign jurisdictions. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules.
GAAP. 61 Table of Contents Year Ended December 31, 2023 2022 Consolidated Statements of Operations Data, as a percentage of revenue: Revenue 100.0 % 100.0 % Cost of services 78.1 % 78.7 % Gross profit 21.9 % 21.3 % Operating expenses: Sales and marketing 5.5 % 5.8 % General and administrative 10.8 % 12.5 % Total operating expenses 16.2 % 18.3 % Income from operations 5.7 % 3.0 % Other income, net 0.8 % 0.1 % Income before income taxes 6.5 % 3.1 % Provision (benefit) for income taxes 0.8 % (0.8) % Net income 5.7 % 3.9 % Adjusted EBITDA 17.2 % 16.0 % Note: percentages shown in the table may not foot due to rounding.
GAAP. 53 Table of Contents Year Ended December 31, 2024 2023 Consolidated Statements of Operations Data, as a percentage of revenue: Revenue 100.0 % 100.0 % Cost of services 78.3 % 78.1 % Gross profit 21.7 % 21.9 % Operating expenses: Sales and marketing 5.5 % 5.5 % General and administrative 10.4 % 10.8 % Total operating expenses 15.9 % 16.2 % Income from operations 5.8 % 5.7 % Interest and other income, net 1.3 % 0.8 % Income before income taxes 7.1 % 6.5 % Provision for income taxes 2.5 % 0.8 % Net income 4.6 % 5.7 % Adjusted EBITDA 17.0 % 17.2 % Note: percentages shown in the table may not foot due to rounding.
PEPM fees represented 1% of our total revenue for the years ended December 31, 2023 and 2022, respectively. Our revenue in a given year is determined by the level and mix of the utilization of our fertility benefits and Progyny Rx solutions by our members as well as the number of members enrolled in our clients’ benefits plans.
PEPM fees represented 1% of our total revenue for the years ended December 31, 2024 and 2023, respectively. Our revenue in a given year is determined by the utilization, including rate of consumption and mix, of our fertility benefits and Progyny Rx solutions by our members as well as the number of members enrolled in our clients’ benefits plans.
Clients can also add adoption and surrogacy reimbursement programs as part of this solution. Pharmacy Benefits Solution. We went live with our integrated pharmacy benefits solution in 2018. Progyny Rx can only be purchased by clients that purchase our fertility benefits solution. Progyny Rx provides our members with access to the medications needed during their fertility treatment.
Clients can also add adoption and surrogacy reimbursement programs as part of this solution. Pharmacy Benefits Solution. Progyny Rx can only be purchased by clients that purchase our fertility benefits solution. Progyny Rx provides our members with access to the medications needed during their fertility treatment.
For the 21,262 square foot office, we will pay the base rent of approximately $1.3 million starting in the fourth quarter of 2025 for five years and approximately $1.4 million per year thereafter through the fourth quarter of 2035, the expected expiration date.
For the 21,262 square foot office, we will pay the base rent of approximately $1.3 million starting in the second quarter of 2026 for five years and approximately $1.4 million per year thereafter through the second quarter of 2036, the expected expiration date.
Share Repurchase Program In February 2024, our Board of Directors authorized a share repurchase program of up to $100 million in shares of common stock.
Share Repurchase Programs In February 2024, our Board of Directors authorized a share repurchase program of up to $100 million in shares of common stock. In May 2024, our Board of Directors authorized an additional share repurchase program of up to $100 million in shares of common stock.
As of December 31, 2023, we had $165.1 million and $91.0 million of unrecognized compensation costs related to unvested options and restricted stock units, respectively, which are expected to be expensed and vest over a weighted-average remaining period of approximately 2.5 years and 2.6 years, respectively.
As of December 31, 2024, we had $118.3 million and $99.5 million of unrecognized compensation costs related to unvested options and restricted stock units, respectively, which are expected to be expensed and vest over a weighted-average remaining period of approximately 2.0 years and 2.6 years, respectively.
The impact of tax law changes is recognized in periods when the change is enacted. 68 Table of Contents As of December 31, 2023 and 2022, we had $73.1 million and $77.9 million of net deferred tax assets, respectively. There was a valuation allowance of $0.5 million and $0.3 million as of December 31, 2023 and 2022, respectively.
The impact of tax law changes is recognized in periods when the change is enacted. As of December 31, 2024 and 2023, we had $84.9 million and $73.1 million of net deferred tax assets, respectively. There was a valuation allowance of $1.8 million and $0.5 million as of December 31, 2024 and 2023, respectively. 60 Table of Contents
For our current 25,212 square foot office, we will pay the base rent of approximately $1.6 million per year beginning in June 2029 through the fourth quarter of 2035, the expected expiration date. Critical Accounting Estimates Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP.
For our current 25,212 square foot office, we will pay the base rent of approximately $1.6 million per year beginning in June 2029, which is the lease commencement date, through the second quarter of 2036, the expected expiration date. 58 Table of Contents Critical Accounting Estimates Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S.
Moreover, our future capital requirements will depend on many factors, including sales of our solutions and client renewals, the timing and the amount of cash received from clients, the expansion of our sales and marketing activities and the continuing market adoption of our solutions.
Moreover, our future capital requirements will depend on many factors, including sales of our solutions and client renewals, the timing and the amount of cash received from clients, the amount of capital investment necessary to support our benefits offerings and growth strategy, the expansion of our sales and marketing activities and the continuing market adoption of our solutions.
Cost of Services Year Ended December 31, 2023 2022 % Change (dollars in thousands) Cost of services $ 849,799 $ 619,588 37 % Cost of services increased by $230.2 million, or 37%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatments delivered.
Cost of Services Year Ended December 31, 2024 2023 % Change (dollars in thousands) Cost of services $ 913,858 $ 849,799 8 % Cost of services increased by $64.1 million, or 8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatments delivered.
This increase was primarily due to an $11.3 million increase in personnel-related costs attributable to an increase in stock-based compensation expense of $5.9 million, incremental headcount and an increase in sales commissions, as well as a $2.5 million increase in other related sales and marketing expenses.
This increase was primarily due to a $3.5 million increase in personnel-related costs attributable to an increase in stock-based compensation expense, as well as a $1.0 million increase in other related sales and marketing expenses.
For the years ended December 31, 2023 and 2022, stock-based compensation expense was $122.6 million and $100.7 million, respectively.
For the years ended December 31, 2024 and 2023, stock-based compensation expense was $128.1 million and $122.6 million, respectively.
The following assumptions were used to calculate the fair value of stock options granted to employees: Year Ended December 31, 2023 2022 Expected volatility 52.0% - 54.0% 49.3% - 53.3% Expected term (years) 5.50 - 6.11 4.61 - 6.11 Risk‑free interest rate 3.5% - 4.8% 1.4% - 4.4% Expected dividend yield — — Our outstanding stock-based awards as of December 31, 2023 are subject to service-based or performance-based vesting.
Changes in these inputs could result in a significant change in the fair value of stock options. 59 Table of Contents The following assumptions were used to calculate the fair value of stock options granted to employees: Year Ended December 31, 2024 2023 Expected volatility 53.0% - 55.0% 52.0% - 54.0% Expected term (years) 5.25 - 6.11 5.50 - 6.11 Risk‑free interest rate 3.5% - 4.6% 3.5% - 4.8% Expected dividend yield — — Our outstanding stock-based awards as of December 31, 2024 are subject to service-based or performance-based vesting.
General and Administrative Expense Year Ended December 31, 2023 2022 % Change (dollars in thousands) General and administrative $ 117,127 $ 98,327 19 % General and administrative expense increased by $18.8 million, or 19%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and Administrative Expense Year Ended December 31, 2024 2023 % Change (dollars in thousands) General and administrative $ 121,960 $ 117,127 4 % General and administrative expense increased by $4.8 million, or 4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Changes in operating assets and liabilities resulted in cash used in operating activities from an increase in accounts receivable of $119.3 million and other noncurrent assets and liabilities of $1.1 million, partially offset by cash provided by operating activities from increases in accounts payable of $47.7 million and accrued expenses and other current liabilities of $13.1 million and decreases in prepaid expenses and other current assets of $0.1 million.
Changes in operating assets and liabilities resulted in cash used in operating activities from a decrease in accounts payable of $30.3 million, and an increase in accounts receivable of $9.9 million, partially offset by cash provided by operating activities from increases in accrued expenses and other current liabilities of $9.9 million and other noncurrent assets and liabilities of $0.4 million, and a decrease in prepaid expenses and other current assets of $18.0 million.
Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Assisted Reproductive Treatment (ART) Cycles (1) 15,066 12,196 58,013 42,598 Utilization - All Members (2) 0.54% 0.51% 1.33% 1.23% Utilization - Female Only (2) 0.48% 0.46% 1.09% 1.03% Average Members 5,442,000 4,559,000 5,383,000 4,349,000 (1) Represents the number of ART cycles performed, including IVF with a fresh embryo transfer, IVF freeze all cycles/embryo banking, frozen embryo transfers and egg freezing.
Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Assisted Reproductive Treatment (ART) Cycles (1) 15,839 15,066 61,114 58,013 Utilization - All Members (2) 0.55% 0.54% 1.31% 1.33% Utilization - Female Only (2) 0.48% 0.48% 1.07% 1.09% Average Members (3) 6,471,000 5,442,000 6,404,000 5,383,000 (1) Represents the number of ART cycles performed, including IVF with a fresh embryo transfer, IVF freeze all cycles/embryo banking, frozen embryo transfers and egg freezing.
Net cash provided by operating activities was $80.4 million for the year ended December 31, 2022, primarily consisting of net income of $30.4 million adjusted for certain non-cash items, which included $100.7 million of stock-based compensation expense, $13.8 million of bad debt expense, $6.6 million of deferred tax benefits, and $1.6 million of depreciation and amortization.
Net cash provided by operating activities was $188.8 million for the year ended December 31, 2023, primarily consisting of net income of $62.0 million adjusted for certain non-cash items, which included $122.6 million of stock-based compensation expense, $19.9 million of bad debt expense, $3.7 million of deferred tax expense, and $2.3 million of depreciation and amortization.
Net cash used in financing activities was $7.9 million for the year ended December 31, 2022, consisting of payments of $12.1 million for employee taxes related to equity awards, partially offset by $3.1 million in proceeds from stock option exercises and $1.2 million in proceeds from contributions to our employee stock purchase plan.
Financing Activities Net cash used in financing activities was $309.9 million for the year ended December 31, 2024, consisting of $300.3 million of repurchases of common stock under the 2024 Share Repurchase Programs, inclusive of $0.4 million in trading fees and payments of $12.0 million for employee taxes related to the net settlement of equity awards, partially offset by $1.1 million in proceeds from stock option exercises and $1.3 million in proceeds from contributions to our employee stock purchase plan.
This increase is primarily due to a $166.2 million, or 33% increase, in revenue from our fertility benefits solution and a $135.5 million or 49% increase in revenue from our Progyny Rx solution. The increase in revenue from our fertility benefits solution was primarily due to the increase in the number of clients and covered lives.
This increase is primarily due to a $53.2 million, or 8% increase, in revenue from our fertility benefits solution and a $25.4 million or 6% increase in revenue from our Progyny Rx solution. The increase in revenue from our fertility benefits solution and Progyny Rx solution were primarily due to the increase in the number of clients and covered lives.
Operating Expenses Sales and Marketing Expense Year Ended December 31, 2023 2022 % Change (dollars in thousands) Sales and marketing $ 59,488 $ 45,657 30 % Sales and marketing expense increased by $13.8 million, or 30%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Operating Expenses Sales and Marketing Expense Year Ended December 31, 2024 2023 % Change (dollars in thousands) Sales and marketing $ 63,948 $ 59,488 7 % Sales and marketing expense increased by $4.5 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Our cash and cash equivalents and working capital are affected by the timing of payments to third party providers and collections from clients and have increased as our revenue has increased.
We have financed our operations primarily through sales of our solutions and the net proceeds we have received from sales of equity securities. Our cash and cash equivalents and working capital are affected by the timing of payments to third party providers and collections from clients and have increased as our revenue has increased.
We are expanding our client base within each industry and have an industry-specific strategy that enables us to most effectively target our addressable market. Because our clients within an industry compete with each other for employees, we believe our solutions are increasingly viewed as an important way for them to differentiate from, or remain competitive with, one another.
Because our clients within an industry compete with each other for employees, we believe our solutions are increasingly viewed as an important way for them to differentiate from, or remain competitive with, one another.
For the 24,099 square foot office, we will pay the base rent of approximately $1.4 million per year starting in April 2024 for five years and approximately $1.5 million per year thereafter through the fourth quarter of 2035, the expected expiration date.
For the 24,099 square foot office, we pay base rent of approximately $1.4 million per year through the end of the fifth year and approximately $1.5 million per year thereafter through the second quarter of 2036, the expected expiration date.
A discussion of the fiscal year ended December 31, 2022 compared to the year ended December 31, 2021 has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023 (File No. 001-39100) under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Comparison of Years Ended December 31, 2022 and 2021 .” Overview We believe in a world where everyone can realize dreams of family and ideal health.
A discussion of the fiscal year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024 (File No. 001-39100) under the heading “ Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2023 and 2022. ” Executive Overview We are a benefits management company specializing in fertility, family building, and women's health benefits solutions in the United States.
For the purposes of calculating utilization rates in any given period, the results reflect the number of unique members utilizing the benefit for that period. Individual periods cannot be combined as member treatments may span multiple periods . Impact of COVID-19 on our Business The COVID-19 pandemic significantly impacted various markets around the world, including the United States.
For the purposes of calculating utilization rates in any given period, the results reflect the number of unique members utilizing the benefit for that period. Individual periods cannot be combined as member treatments may span multiple periods .
Results of Operations The following tables set forth our results of operations for the periods presented and as a percentage of revenue for those periods: Year Ended December 31, 2023 2022 (in thousands) Consolidated Statements of Operations Data: Revenue $ 1,088,598 $ 786,913 Cost of services (1) 849,799 619,588 Gross profit 238,799 167,325 Operating expenses: Sales and marketing (1) 59,488 45,657 General and administrative (1) 117,127 98,327 Total operating expenses 176,615 143,984 Income from operations 62,184 23,341 Other income, net 8,507 1,100 Income before income taxes 70,691 24,441 Provision (benefit) for income taxes 8,654 (5,917) Net income $ 62,037 $ 30,358 Adjusted EBITDA (2) $ 187,076 $ 125,690 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 Cost of services $ 34,490 $ 25,918 Sales and marketing 27,015 21,135 General and administrative 61,106 53,695 Total stock‑based compensation expense $ 122,611 $ 100,748 (2) Adjusted EBITDA is a non-GAAP financial measure that we define as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, other income, net, interest income, net, and provision (benefit) for income taxes.
Results of Operations The following tables set forth our results of operations for the periods presented and as a percentage of revenue for those periods: 52 Table of Contents Year Ended December 31, 2024 2023 (in thousands) Consolidated Statements of Operations Data: Revenue $ 1,167,221 $ 1,088,598 Cost of services (1) 913,858 849,799 Gross profit 253,363 238,799 Operating expenses: Sales and marketing (1) 63,948 59,488 General and administrative (1) 121,960 117,127 Total operating expenses 185,908 176,615 Income from operations 67,455 62,184 Interest and other income, net 15,747 8,507 Income before income taxes 83,202 70,691 Provision for income taxes 28,866 8,654 Net income $ 54,336 $ 62,037 Adjusted EBITDA (2) $ 198,760 $ 187,076 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 Cost of services $ 36,799 $ 34,490 Sales and marketing 30,490 27,015 General and administrative 60,841 61,106 Total stock‑based compensation expense $ 128,130 $ 122,611 (2) Adjusted EBITDA is a non-GAAP financial measure that we define as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, interest and other income, net, and provision for income taxes.
In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.
In addition, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may, in the future, be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.
Investing Activities Net cash used in investing activities was $200.5 million and $43.9 million for the years ended December 31, 2023 and 2022, respectively, which primarily consisted of net investments in marketable securities of $196.9 million and $40.6 million, respectively.
For the year ended December 31, 2023, net cash used in investing activities was $200.5 million, which primarily consisted of net investments in marketable securities of $196.9 million. The remainder of the activity for the year ended December 31, 2024 consisted of purchases of computers, software, including capitalized software development costs, and furniture and fixtures.
Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax basis of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes.
Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax basis of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.
The following table presents a reconciliation of Adjusted EBITDA to net income for each of the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net income $ 62,037 $ 30,358 Add: Depreciation and amortization 2,281 1,601 Stock‑based compensation expense 122,611 100,748 Other income, net (5,203) (286) Interest income, net (3,304) (814) Provision (benefit) for income taxes 8,654 (5,917) Adjusted EBITDA $ 187,076 $ 125,690 Comparison of Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, 2023 2022 % Change (dollars in thousands) Revenue $ 1,088,598 $ 786,913 38 % Revenue increased by $301.7 million, or 38%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
GAAP, for each of the periods indicated: 54 Table of Contents Year Ended December 31, 2024 2023 (in thousands) Net income $ 54,336 $ 62,037 Add: Depreciation and amortization 3,175 2,281 Stock‑based compensation expense 128,130 122,611 Interest and other income, net (15,747) (8,507) Provision for income taxes 28,866 8,654 Adjusted EBITDA $ 198,760 $ 187,076 Comparison of Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 2023 % Change (dollars in thousands) Revenue $ 1,167,221 $ 1,088,598 7 % Revenue increased by $78.6 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
These changes are a result of the impact of revenue growth and our operating results as well as the timing of cash collection and payments to third parties.
These changes are a result of the impact of revenue growth and our operating results as well as the timing of cash collections and payments to third parties, including $40.4 million of cash paid for income taxes, net of refunds for the year ended December 31, 2024.
There can be no assurance as to the number of shares to be repurchased by us, if any. Operating Lease Commitments In September 2019, we commenced a sublease agreement for our corporate offices in New York, New York. The sublease is for a 25,212 square foot office and will expire in May 2029.
As of the year ended December 31, 2024, the share repurchase programs were completed, and no amounts remained available for repurchase under the programs. Operating Lease Commitments In September 2019, we commenced a sublease agreement for our corporate offices in New York, New York. The sublease is for a 25,212 square foot office and will expire in May 2029.
GAAP results. 62 Table of Contents We calculate Adjusted EBITDA as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, other income, net, interest income, net, and provision (benefit) for income taxes.
Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net income, gross margin, and other U.S. GAAP results. We calculate Adjusted EBITDA as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, interest and other income, net, and provision for income taxes.
If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition. 65 Table of Contents The following table summarizes our cash flows from operations for the periods presented: Year Ended December 31, 2023 2022 (in thousands) Cash provided by operating activities $ 188,814 $ 80,395 Cash used in investing activities (200,525) (43,866) Cash used in financing activities (11,072) (7,864) Effect of exchange rate changes on cash and cash equivalents 1 — Net (decrease) increase in cash and cash equivalents $ (22,782) $ 28,665 Operating Activities Net cash provided by operating activities was $188.8 million for the year ended December 31, 2023, primarily consisting of net income of $62.0 million adjusted for certain non-cash items, which included $122.6 million of stock-based compensation expense, $19.9 million of bad debt expense, $3.7 million of deferred tax expense, and $2.3 million of depreciation and amortization.
The following table summarizes our cash flows from operations for the periods presented: Year Ended December 31, 2024 2023 (in thousands) Cash provided by operating activities $ 179,105 $ 188,814 Cash provided by (used in) investing activities 195,792 (200,525) Cash used in financing activities (309,880) (11,072) Effect of exchange rate changes on cash and cash equivalents $ 1 $ 1 Net increase (decrease) in cash and cash equivalents $ 65,018 $ (22,782) Operating Activities Net cash provided by operating activities was $179.1 million for the year ended December 31, 2024, primarily consisting of net income of $54.3 million adjusted for certain non-cash items, which included $128.1 million of stock-based compensation expense, $16.4 million of bad debt expense, $10.5 million of deferred tax benefit, $3.2 million of depreciation and amortization, $2.1 million of net accretion of discounts on marketable securities, and $1.4 million loss on disposal of property and equipment.
In particular, we are focused on expanding the number of clients with more than 2,500 covered lives.
In particular, we are focused on expanding the number of clients with more than 2,500 covered lives. As of December 31, 2024 and 2023, we served 473 and 392 clients, representing 6,472,000 and 5,418,000 members, respectively.
This increase in cost of services was also attributable to an increase in personnel-related costs primarily due to incremental headcount as well as an $8.6 million increase in stock-based compensation expense. 63 Table of Contents Gross Profit and Gross Margin Year Ended December 31, 2023 2022 % Change (dollars in thousands) Gross profit $ 238,799 $ 167,325 43 % Gross margin 21.9 % 21.3 % Gross profit increased by $71.5 million, or 43%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Gross Profit and Gross Margin Year Ended December 31, 2024 2023 % Change (dollars in thousands) Gross profit $ 253,363 $ 238,799 6 % Gross margin 21.7 % 21.9 % Gross profit increased by $14.6 million, or 6%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. 55 Table of Contents Gross margin decreased 20 basis points for the year ended December 31, 2024 compared to year ended December 31, 2023, primarily due to an increase in personnel-related costs in the delivery of our care management services.
As of each reporting date, management considers new 60 Table of Contents evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. We believe there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets are realizable.
We believe there is sufficient positive evidence to conclude that it is more likely than not that substantially all the net deferred tax assets are realizable.
This increase was primarily due to a $9.7 million increase in personnel-related costs including an increase in stock-based compensation expense of $7.4 million, a $6.1 million increase in bad debt expense driven by our revenue growth, as well as a $3.0 million increase in other related general and administrative expenses.
This increase was primarily due to a $6.0 million increase in personnel-related costs attributable to incremental head count, and a $2.3 million increase in other related general and administrative expenses, partially offset by a $3.5 million decrease in bad debt expense.
As of December 31, 2023 and 2022, we served 392 and 288 clients, respectively, representing 5,418,000 and 4,585,000 members, respectively. 57 Table of Contents Importantly, as we have continued to grow, we have meaningfully diversified our client base across more than 40 different industries currently from just two industries when we launched our fertility benefits solution in 2016.
Importantly, as we have continued to grow, we have meaningfully diversified our client base across more than 40 different industries currently from just two industries when we launched our fertility benefits solution in 2016. We are expanding our client base within each industry and have an industry-specific strategy that enables us to most effectively target our addressable market.
Components of Results of Operations Revenue Revenue includes fertility benefits solution revenue, pharmacy benefits solution revenue and PEPM fees. Fertility Benefits Solution Revenue Fertility benefits solution revenue primarily represents utilization of our fertility benefits solution.
(3) Includes approximately 300,000 members from a single client who are not reflected in utilization as a result of the client's chosen benefit design. Components of Results of Operations Revenue Revenue includes fertility benefits solution revenue, pharmacy benefits solution revenue and PEPM fees. Fertility Benefits Solution Revenue Fertility benefits solution revenue primarily represents utilization of our fertility benefits solution.
As of December 31, 2023 2022 Client Tier (Members) Clients Members Clients Members Up to 2,500 112 217,000 76 145,000 2,501 - 10,000 180 934,000 130 678,000 10,001 - 50,000 79 1,588,000 64 1,275,000 Greater than 50,000 21 2,679,000 18 2,487,000 Total 392 5,418,000 288 4,585,000 Benefits Utilization.
We count each organization we contract with as a single client including divisions, segments or subsidiaries of larger organizations to the extent we contract separately with them. 49 Table of Contents As of December 31, 2024 2023 Client Tier (Members) Clients Members Clients Members Up to 2,500 130 261,000 112 217,000 2,501 - 10,000 222 1,151,000 180 934,000 10,001 - 50,000 98 1,935,000 79 1,588,000 Greater than 50,000 23 3,125,000 21 2,679,000 Total 473 6,472,000 392 5,418,000 Benefits Utilization.
Removed
Our mission is to empower healthier, supported journeys through transformative fertility, family building and women's health benefits. Through our differentiated approach to benefits plan design, patient education and support and active network management, our clients’ employees are able to pursue the most effective treatment across life's milestones from the best physicians and achieve optimal outcomes.
Added
For further information on our business and strategy, see Part I, Item 1. "Business" of this Annual Report on Form 10-K. Revenue Model Fertility Benefits Solution. Our fertility benefits solution includes providing members with access to effective and cost-efficient fertility treatments through our Smart Cycle plan design.
Removed
Progyny is a leading benefits management company specializing in fertility and family building benefits solutions in the United States. Our clients include many of the nation’s most prominent employers across a broad array of industries.
Added
The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with U.S.
Removed
We launched our fertility benefits solution in 2016 with our first five employer clients, and we have grown our current base of clients to over 450 with at least 1,000 covered lives.
Added
This increase in cost of services was also attributable to an increase in personnel-related costs primarily due to incremental headcount as well as an $2.3 million increase in stock-based compensation expense.
Removed
We currently have contracts to provide coverage to approximately 6.4 million employees and their partners (known in our industry as covered lives), whom we refer to as our members. We have achieved this growth by demonstrating that our purpose-built, data-driven and disruptive platform consistently delivers superior clinical outcomes in a cost-efficient manner while driving exceptional client and member satisfaction.
Added
Interest and Other Income, Net Year Ended December 31, 2024 2023 % Change (dollars in thousands) Interest and other income, net $ 15,747 $ 8,507 85 % Interest and other income, net increased by $7.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to increases in investment and interest income.
Removed
We have retained substantially all of our clients since inception, and our member satisfaction over that same time period is evidenced by our industry-leading Net Promoter Score, or NPS, of +80 for our fertility benefits solution and +80 for our integrated pharmacy benefits solution, Progyny Rx as of December 31, 2023.
Added
If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.
Removed
Our members experience healthier pregnancies and superior rates of pregnancy and live births, as well as reduced rates of miscarriages and multiple births, saving valuable time and money and limiting personal and professional disruption. Fertility Benefits Solution . Our fertility benefits solution includes providing members with access to effective and cost-efficient fertility treatments through our Smart Cycle plan design.
Added
Investing Activities Net cash provided by investing activities was $195.8 million for the year ended December 31, 2024, which primarily consisted of net sales in marketable securities of $206.5 million, partially offset by $5.3 million used in a business acquisition, net of cash acquired.
Removed
We currently serve over 450 employers with at least 1,000 covered lives in the United States across more than 40 industries. Our current clients, who are industry leaders across both high-growth and mature industries and who range in size from approximately 1,000 to 600,000 employees, represent approximately 6.4 million covered lives under contract.
Added
Our capital investments, including investments in technology and the development of software, are expected to increase over the next 12 months as we continue to invest in our benefits offerings and growth strategy.
Removed
We count each organization we contract with as a single client including divisions, segments or subsidiaries of larger organizations to the extent we contract separately with them.
Added
In August 2024, our Board of Directors authorized an additional share repurchase program of up to $100 million in shares of common stock.
Removed
Restrictions related to COVID-19, including variants, and our responses to them significantly impacted and may continue to impact how our members use our services, access our providers, and how our employees work and provide services to our clients and members, resulting in an impact on our revenue.
Added
During the year ended December 31, 2024, we repurchased a total of 12,382,193 shares of common stock under the 2024 Share Repurchase Programs at an average price per share of $24.22 and a total cost of $300.3 million, inclusive of $0.4 million in trading fees. In addition, the Company recognized $2.6 million of excise taxes related to the share repurchases.

… 13 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeAt December 31, 2023, we had cash and cash equivalents of $97.3 million and marketable securities of $273.8 million. Interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
Biggest changeAt December 31, 2024, we had cash and cash equivalents of $162.3 million and marketable securities of $65.6 million. Interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 69 Table of Contents
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. 61 Table of Contents

Other PGNY 10-K year-over-year comparisons