Progyny Q2 Earnings Call Highlights

Record Q2 performance: Progyny reported record revenue, gross profit and adjusted EBITDA, with revenue up 5.3% year over year, or 11% excluding a former client’s transition-of-care revenue. Gross margin expanded 180 basis points, while trailing 12-month operating cash flow reached $201 million. Strong financial flexibility and capital returns: The company had $237 million in cash and marketable securities, no debt, and repurchased nearly 1.2 million shares for $31.5 million during the quarter. Including subsequent purchases, Progyny has repurchased 2 million shares under its latest authorization and reduced shares outstanding by about 12.5% since November. 2027 sales outlook remains favorable: Early new-client commitments are ahead of last year, retention risks have largely been addressed, and Progyny continues to target at least 1 million new covered lives for 2027. Management maintained full-year 2026 guidance of $1.36 billion-$1.385 billion in revenue and $233 million-$240 million in adjusted EBITDA, while citing a temporary summer slowdown in Q3 activity. Progyny NASDAQ: PGNY reported record quarterly revenue, gross profit and adjusted EBITDA for the second quarter of 2026, while management said early sales commitments and client-retention activity have positioned the company favorably for the 2027 selling season. Chief Executive Officer Pete Anevski said the quarter also featured gross-margin expansion and significant cash-flow generation. He said the company has used its financial performance to support investments in its platform while also repurchasing shares. Second-quarter revenue increased 5.3% from the prior-year period on a reported basis, Chief Financial Officer Mark Livingston said. Excluding revenue associated with a large former client that remained under a transition-of-care agreement during the second quarter of 2025, revenue rose 11%. That transition agreement ended June 30, 2025, meaning the second quarter was the last comparison period affected by the former client's contribution. Gross margin expanded 180 basis points from a year earlier, matching the level of expansion reported in the first quarter, Livingston said. He attributed the improvement to continuing efficiencies in care management and service delivery, as well as lower stock-compensation expense. Adjusted EBITDA margin also rose from the prior-year quarter, although at a slower pace than gross margin because platform investments were concentrated in operating expenses. On a trailing 12-month basis, adjusted EBITDA margin was 17.2%, Livingston said. Capital expenditures totaled $6.2 million during the second quarter, consistent with first-quarter spending and about $1 million above the year-earlier period. Management expects its investment program to begin tapering in 2027, though Livingston said it was too early to provide detailed commentary beyond this year. Operating cash flow exceeded $50 million for the fourth time in the past five quarters. Trailing 12-month operating cash flow was $201 million, and the company said it has generated more than $200 million in last-12-month operating cash flow for six consecutive quarters. Working capital totaled about $273 million as of June 30. Cash, cash equivalents and marketable securities totaled $237 million. The company had no debt and no borrowings under its $200 million revolving credit facility. Days sales outstanding were more than seven days lower than a year earlier. Progyny announced a new $200 million share-repurchase authorization in late May.