Progyny, Inc. · NASDAQ:PGNY
Progyny — Investor Day (August 2024)
76 slides from Progyny's investor day presentation, August 2024
Slide 1: Progyny Investor Day
Progyny Investor Day August 2024 1 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements cont
Slide 3: Today's Agenda
Investor Day Pete Anevski, CEO 9:00am Michael Sturmer, President Katie Higgins, Chief Commercial Officer 9:45am Client Perspectives Panel 10:20am Joanna Balogh-Reynolds, VP Product Strategy 10:35am Break Today’s Provider Perspectives Panel altern Dr. Janet Choi, Chief Medical Officer Agenda 10:50am
Slide 4: Pete Anevski
Pete Anevski Chief Executive Officer 4 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 5: The foundation of our success
The foundation of our success The relationships we’ve built over years with our clients, members, providers, employees and shareholders 5 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 6: Today's Themes
• Advancing our go-to-market strategy to seize our opportunities • Investing to build a robust pipeline of new products Today’s • Our differentiation through our provider Themes network relationships • Delivering superior member experiences to drive value to all of our constituencies • Leveraging ou
Slide 7: Progyny is a mission-driven company
Progyny is a mission-driven company At Progyny, we believe in a world where everyone can realize dreams of family and ideal health 7 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 8: Significant growth over the past 5 years
Significant growth over the past 5 years Operational Metrics Financial Metrics Clients Covered Lives ART Cycles Revenue Adj. EBITDA Margin 500 7M 70,000 $1.4B 1400 20.0% 7000 +5.3x +4.3x +4.6x +5.1x +930 bps 0 00 0 0 0 0.0% 1 2 2019 Today 2019 2024E 1 2019 2024E 2 2019 2024E 2 2019 2024E 1. As per p
Slide 9: Measuring our impact
Measuring our impact Since launching our services in 2016, we’ve supported over 300,000 people on their family building journeys 300,000 people would stretch from NY to D.C. 9 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 10: Societal trends are continuing
Societal trends are continuing 8.3% decrease in US birth rates since 20101 compounded annual decline in births for (1.8%) women 34 and under since 20101 compounded annual growth in births for 2.2% women 35 and over since 20101 average age of patient using assisted 36.3 reproductive technology2 10% i
Slide 11: Medical need is increasing
Medical need is increasing couples struggle with infertility, up from 1 in 5 1 in 8 five years ago, yet many are left out of existing coverage1 20% of women of child-bearing age have 2 or more chronic conditions2 $24.8 excess direct medical expenditures related to menopause attributed to billion US
Slide 12: Workplace dynamics are very favorable
Workplace dynamics are very favorable of workers say fertility coverage is an ~50% important factor when considering where they want to work1 66%+ of workers would change jobs for better fertility benefits2 More of employers with at least 500 employees offer some sort of fertility support,3 than hal
Slide 13: What has changed since our IPO?
What has changed since our IPO? • Growing demand has persisted through the pandemic, sustained periods of high inflation, and softening/shifting labor market • Our customer base has become even more diverse, reflecting the universal appeal of our services • Our competitive moat has widened, as the i
Slide 14: Progyny's core pillars
Progyny’s core pillars Value-based care … delivers the right care, at the personalized to the individual… right time, for every member A data-driven approach to … produces sustained, plan design and benefit management… leading clinical outcomes Unparalleled level of collaboration across our … yields
Slide 15: Multi-year targets
In 2028: Multi-year targets (By 2028) • Achieve a revenue CAGR of ~20% $2.4B+ revenue • Achieve an Adj. EBITDA CAGR of ~25% (~2X 20241) $500M+ Adj. EBITDA (2.5x+ 20241) 1. Midpoint of ranges used in calculation as provided in press release issued on August 6, 2024 15 PLEASE REFER TO SLIDE 2 FOR THE
Slide 16: Strategic Priorities
• Continue market share growth from large, untapped TAM • Continue expanding our products Strategic that address overlooked areas in Priorities women’s health • Increase diversification of revenue streams beyond core family building product 16 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REG
Slide 17: Michael Sturmer
Michael Sturmer President 17 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 18: Delivering the right solution at the right time for each member
Delivering the right solution at the right time for each member Delivering superior outcomes is in our DNA Equitable benefit design that enables coverage and access to evidence-based care and Rx, personal to each member Specialized and managed network of the nation’s top fertility and women's health
Slide 19: Measuring our impact on individuals and employers
Measuring our impact on individuals and employers Unsupported Progyny’s Impact Fertility Journey Out-of-pocket Average annual Progyny Average uninsured treatment costs patient cost: member out-of-pocket to patient ~$48,000 to $65,0001 cost: ~$1,500 • More treatments needed to • Fewer treatments need
Slide 20: Expanding our levers for growth
Expanding our levers for growth TAM Future New expansions diversification Markets Upsells of Existing Our existing our newest base services Existing New Products 20 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 21: Pathways to expand client relationships
New Markets Existing Our Upsells of our existing Pathways to expand client relationships newest base services Existing New Products Share of Wallet Expanded Fertility Coverage New Populations • Pregnancy and Postpartum • Progyny Rx • New client segments • Menopause • Adoption and surrogacy • Additio
Slide 22: Expanding market share
New TAM Markets expansions Expanding market share Existing Our existing base Existing New Products 2016 – 2019 2020 2021 - 2023 Selling Seasons Selling Season Selling Seasons +140 clients won +45 clients won +275 clients won Gr Brownfield win (clients won who had Greenfield win, expanding the market
Slide 23: Growing our addressable market
New TAM Markets Growing our addressable market expansions Existing Existing New Products Covered lives 50 plus million + Global 250 - 1000 Employees (ASO, Minimum Premium, Fully +6 million =106 million Insured) +20 million Federal Taft-Hartley 80 million (labor) Self-insureds Our penetration today P
Slide 24: Diversification of client base
New Markets Diversification of client base Existing Our existing base Existing New Products Continuous Expansion Distribution of Clients Composition of 2024 into New Industries By Size Member Base By Industry Reflects number of industries in our client base Percent of clients within each tier of cov
Slide 25: Relationships are the foundation of our growth
Relationships are the foundation of our growth Our Demonstrated 460+ 45+ 6.5M 99+% +80 8 Success Clients Industries Lives retention NPS strategic partnerships Health Plans and PBMS Channel Partners Clients Clinical Partners 25 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESE
Slide 26: Katie Higgins
Katie Higgins Chief Commercial Officer 26 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 27: At an early stage of penetrating our market opportunity
At an early stage of penetrating our market opportunity Large, self-insured Lives covered by large, Future TAM expansion employers self-insured employers opportunities Addressable market: 8,000 employers Addressable market: 106 million lives • State and local Just 6% of large, self-insured Just 7% o
Slide 28: Commercial team covers geographic markets and key buying channels
Commercial team covers geographic markets and key buying channels Direct employer Consultant Relations Partnerships selling and expansion Teams of Sales and Education and Partnership team focused Client Success Reps relationship mapping of on increasing reseller covering East, Midwest top consulting
Slide 29: Understanding benefit consultant ecosystem
Understanding benefit consultant ecosystem Employer benefit Consultants leveraged to leaders manage the intersection provide expertise of health care spend and access: Benefit recommendations and run Negotiating with carriers, PBMs, vendor selections through RFPs or analyzing workforce health needs,
Slide 30: Partnerships offer an opportunity to scale growth
Partnerships offer an opportunity to scale growth Channel Partners (Potential Lives) Partnerships Other accelerating access to Partnerships millions of additional lives to serve through: 35M 30M 6M 3.1M 2M 3M+ 1. Collaboration through shared growth teams 2. Ease of contracting for Health Plan Partne
Slide 31: Components of selling season
Building pipeline and converting into wins Building Pipeline Components of selling season Early Commits (Prior Not Nows) Progressing Opportunities Peak Commitments Not Nows Carrying Forward January March May July September November 31 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING TH
Slide 32: Majority of non-wins comprised of deferred decisions vs competitive losses
Majority of non-wins comprised of deferred decisions vs competitive losses Reliably win 1M+ new lives annually • Deep experience and data drives accurate projections and guarantees on investment savings and clinical outcomes Wins • Access to curated, actively managed network & dedicated patient care
Slide 33: Streamlined implementation and member experience
Streamlined implementation and member experience Kick-off and Benefit Coordination Integration Complete & Go Integration Launch and Communication Member Support Launches Live 0-30 Days 30-60 Days 60-90 Days Monitor Member Engagement “ There is absolutely nothing I can recommend that would enhance th
Slide 34: Robust reporting for a unique level of transparency
Robust reporting for a unique level of transparency Quarterly and annual reporting: • Pregnancy and treatment outcomes • Reporting also includes: • Demographics* • Member Activity & Engagement • Clinical Best Practices • IVF & IUI Outcomes • Total Utilization by Therapeutic Class • Quality • Inferre
Slide 35: Client Success: The key to driving GTM success and client loyalty
Client Success: The key to driving GTM success and client loyalty Client Satisfaction Revenue Retention & Growth Client Advocacy 80+ 99% 20% 40+% Client NPS retention of clients of clients engaged in by lives grow spend annually external advocacy annually “ The path to parenthood is full of twists a
Slide 36: Voice of the client
Voice of the client: Providing life changing support to employees nationally Samantha Elliot Janet Brunk Juliet Vestal Renee Albert Head of US Well-being and Director Global Benefits Corporate VP of Total Rewards Global Benefits Strategy & Digital Health Experience Leader • Partner since 2024 • Part
Slide 37: Perspectives from our Clients
Perspectives from our Clients 37 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 38: Driving Health Care Innovation
Driving Health Care Innovation Delivering superior outcomes is in our DNA Equitable benefit design that enables coverage and access to evidence-based care and Rx, personal to each member Specialized and managed network of the nation’s top fertility and women's health specialists Concierge support 1:
Slide 39: Joanna Balogh-Reynolds
Joanna Balogh-Reynolds VP, Product Strategy 39 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 40: Designed for the right care, at the right time, for every member
Designed for the right care, at the right time, for every member Leveraging what we do best: personalized guidance, sophisticated network management, streamlined care coordination and data sharing, and driving cost effective client solution. Preconception and Fertility & Family Pregnancy & Menopause
Slide 41: Redefining care for women
Redefining care for women 1 in 10 Effective care for conditions that specifically impact women or impact them differently are still emerging. 1977 1993 FDA bans women NIH inclusion from research policy passes 2011 Urogynecology recognized as a Experience issues such as endometriosis that subspecialt
Slide 42: Investing in the future of women's health
Investing in the future of women’s health • Investment in women’s health care reached an all-time high of $3.3 billion in 2022 1 • In 2022, startups focused on women’s health earned 13.26% of health tech funding 2 • For every $1 spent on improving access to family planning services, society yields $
Slide 43: A growing need: Preconception
A growing need: Preconception Societal Trends What Do We Do? Outbound and inbound 20% dedicated coaching at the start of members' conception journey of women of child- • Nutrition, mental health bearing age have 2 or and lifestyle behaviors more chronic conditions1 • Ovulation and intercourse tracki
Slide 44: A growing need: Conception and Fertility
A growing need: Conception and Fertility Societal Trends What Do We Do? While overall birth rates are A comprehensive and declining sharply, that is being equitable benefit that supports driven by women under 30 all paths to parenthood who are significantly less likely • Highly managed network of to
Slide 45: A growing need: Pregnancy and Postpartum
A growing need: Pregnancy and Postpartum Societal Trends What Do We Do? What Do We Do? 5.5 million Overcome engagement barriers with a connected experience pregnancies that members trust annually in the US1 • Timely, programmatic coaching check-ins 70% • Early engagement on health risks of pregnant
Slide 46: A growing need: Menopause
A growing need: Menopause Societal Trends What Do We Do? Whataddresses Progyny Do We the Do? care +20% vacuum – not just hot flashes percent of women in the • Trained, NAMS-certified workforce aged 45 to 541 providers • Education and destigmatization to address 1.3 million the menopause factor • Spe
Slide 47: Women and Health
Ancillary Services Women and Health Mental Health A specialized benefits platform Pelvic floor created to expedite interventions Lactation & milk shipping addressing interconnected health issues that are diagnosed or treated Parenting & disparately in women. Fertility & Family Caregiver Support Buil
Slide 48: Expanding adjacent areas of care
Expanding adjacent areas of care Addressing often overlooked and underserved conditions that impact women and reproductive health disproportionately and differently Addressing unmet needs that: Lead to costly Are under-covered Members don't outcomes when by traditional understand and delaying care o
Slide 49: Women have a range of care needs
Women have a range of care needs Obstetric & Gynecologic conditions Gynecologic PCOS Endometriosis cancers Conditions that affect women differently than men Cardiovascular Obesity Osteoporosis diseases Conditions that affect women disproportionally Autoimmune Hormonal Anxiety & diseases disruption d
Slide 50: Break
Break 50 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 51: Perspectives from our Providers
Perspectives from our Providers 51 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 52: Perspectives from our Members
Perspectives from our Members 52 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 53: Mark Livingston
Mark Livingston Chief Financial Officer 53 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 54: Platform built for growth, profitability, cash flow
Platform built for growth, profitability, cash flow Consistency of Significant Scalability for embedded base cash flow further margin provides a solid conversion expansion foundation to creates build upon optionality 54 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 55: Achievements vs previous five-year model
Achievements vs previous five-year model Lives Revenue Adj. EBITDA Operating Cash Flow (cumulative 2019 - 2023) 6.5M $1.2B $1.1B $187.6M $187.1M 5.4M $327M $330M IPO Model (view of 2023 from 2019) 2023 Actuals 55 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 56: Key drivers to our financial model
Key drivers to our financial model Revenue Profitability Cash Flow Growth drivers: Gross margin: High conversion rate to • New client lives • Increasing volumes/ scale operating cash flow: • Upsells: expanded across clinical footprint • Expanding Adjusted coverage levels of family • Continuous effic
Slide 57: Utilization rates - New cohorts vs full book
Utilization rates - New cohorts vs full book Newest cohort Overall utilization rate Newest Cohort (first year utilization rate) (first year lives) First year of new cohorts vs full book 0.6M • Across our largest cohorts, we’ve seen a consistent initial 0.5M 1.2M 1.2M utilization rate in the first ye
Slide 58: Utilization growth spanning every cohort
Utilization growth spanning every cohort Utilization by selling season cohort (indexed utilization from launch year through to 2023) Cohort 0.6M lives 0.8M lives 0.5M lives 1.2M lives size • Since launching in 2016, every annual cohort has experienced Year one increasing baseline (index value utiliz
Slide 59: Quarterly Female Utilization
Utilization rate ±3 basis points vs. average in any given quarter 0.70% 0.60% Quarterly Female Utilization 0.50% 0.40% 0.30% Covid-related clinic closures 0.20% 0.10% 2019 2020 2021 2022 2023 2024 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4 59 PLEASE REFER TO SLIDE 2 F
Slide 60: Key components of revenue estimates
Key components of revenue estimates Authorizations Expected Claims Authorizations Actual transactions Specific treatments which New Authorizations received which confirm span a defined period. which are estimated to treatment rendered and be received in the date of service. Adjusted lower to allow f
Slide 61: Visibility into fertility revenue
Visibility into fertility revenue Claims Authorizations Expected Authorizations Start of Quarter Month 1 Month 2 Month 3 61 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 62: Visibility into fertility revenue
Visibility into fertility revenue Claims Authorizations Expected Authorizations End of Month 1 Month 1 Month 2 Month 3 62 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 63: Visibility into fertility revenue
Visibility into fertility revenue Claims Authorizations Expected Authorizations End of Month 2 Month 1 Month 2 Month 3 63 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 64: Visibility into fertility revenue
Visibility into fertility revenue Claims Authorizations Expected Authorizations End of Month 3 Month 1 Month 2 Month 3 64 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 65: Historical trend and guidance assumptions
Historical trend and guidance assumptions 2024 2024 2024 2021 2022 2023 High End Guidance Low End Guidance High End Guidance May 9th August 6th August 6th Average Members* 2,812 4,349 5,383 6,198 6,118 6,118 (in 000s) Female Utilization Rate 1.07% 1.03% 1.09% 1.08% 1.05% 1.08% Female Unique Utilizer
Slide 66: ART cycles per female unique utilizers quarterly trends and guidance
ART cycles per female unique utilizers 0.65 quarterly trends and guidance 0.60 0.58 0.58 Historical trend: 0.56 0.56 0.55 0.55 0.55 0.55 0.54 0.54 0.54 0.54 0.53 0.53 0.53 • ART Cycles per Female Unique 0.51 Utilizer historically steps up from 0.50 0.50 Q1 to Q2 given that a greater proportion of ut
Slide 67: Demonstrated operating leverage
Demonstrated operating leverage Revenue Key drivers of Adjusted EBITDA $1,089 Adjusted EBITDA Margin operating leverage: • High rate of client retention $787 • Persistent utilization 17.2% • Purchasing power given $501 16.0% increasing scale 13.5% $345 9.4% • Continuous improvement $230 8.0% initiat
Slide 68: Stock-based compensation
Stock-based compensation As a % of revenue 13% Key drivers of stock- based compensation: 11% 11% 10% • Step up in 2022 reflects a significant grant across a broad base of employees in 7% 7% late 2021 6% 6% • Staff grants are now RSU based 4% 2% • Step down in 2026 reflects the roll off of expense fr
Slide 69: Sustained growth through multiple levers
Sustained growth through multiple levers Through 2028 $2.4B+ • 20% CAGR (’24-’28) yields $2.4B+ in revenue $1.18B • Covered lives grow to ~11.5M $1.09B • New products contribute 8-10% of annual revenue in 2028 • Maintain high retention rate FY23 FY24 Mid FY25-27 FY28 Target 69 PLEASE REFER TO SLIDE
Slide 70: Continued expansion in profitability
Continued expansion in profitability $700 40.0% Through 2028 $600 35.0% $500M+ • Revenue CAGR of 20% yields Adjusted EBITDA 30.0% CAGR of 25% $500 25.0% • Gross Margins to grow by 400-500 bps* $400 21+% driven by higher new product gross margins 20.0% while core fertility margins increase slightly 1
Slide 71: Strong cash flow enables our strategic capital priorities
Strong cash flow enables our strategic capital priorities Capital Priorities • Continued evaluation of share repurchases • Expand core business through investments in new products addressing other key life milestones • Investments in go-to-market resources • Create value through disciplined, selecti
Slide 72: Today's Themes
• Advancing our go-to-market strategy to seize our opportunities • Investing to build a robust pipeline of new products Today’s • Our differentiation through our provider Themes network relationships • Leveraging our financial strength to deepen our competitive advantages • Delivering superior membe
Slide 73: Q&A
Q&A 73 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 74: Thank you for joining us!
Thank you for joining us! 74 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 75: Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures 75 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION
Slide 76: Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures 76 PLEASE REFER TO SLIDE 2 FOR THE SAFE HARBOR LANGUAGE REGARDING THIS PRESENTATION