Progyny Inc.

05/08/2026 | Press release | Distributed by Public on 05/08/2026 06:51

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" under Part II, Item 1A. of this Quarterly Report on Form 10-Q.
Overview
Progyny is a global leader in women's health and family building solutions. 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. 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 specialists and achieve optimal outcomes.
We launched our fertility benefits solution in 2016 with five employer clients and have since expanded our platform to include solutions in pregnancy and postpartum, menopause and midlife, benefit and leave navigation and parent and child wellbeing in order to address the continuum of women's health. Today, we have grown our current base of clients to more than 590 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 currently have contracts to provide coverage to approximately 7.2 million employees and their covered dependents (known in our industry as covered lives, and to 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 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 +81 for our fertility benefits solution and +79 for Progyny Rx, our integrated pharmacy benefits solution, as of December 31, 2025. 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.
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 %
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(1)Calculated based on the Society for Assisted Reproductive Technology, or SART, 2021 National Summary Report, finalized in 2024.
(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.
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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. Smart Cycles are proprietary treatment bundles designed by us to include those medical services available to our members through our selective network of high-quality fertility specialists. Medical services under our Smart Cycles include everything needed for a comprehensive fertility treatment cycle, including all necessary diagnostic testing and access to the latest technology (such as preimplantation genetic testing, in the case of in vitro fertilization, or IVF). We currently offer 20 different Smart Cycle treatment bundles, which may be used in various combinations depending on the member's need. Each Smart Cycle treatment bundle has a separate unit value (i.e., some have fractional values and some have whole values). Our clients contract to purchase a cumulative Smart Cycle unit value per eligible member. These can range from one to an unlimited unit value. Members, in consultation with their Progyny Care Advocates, or PCAs, can choose their preferred provider clinics within our network and utilize the specific Smart Cycle treatment bundles necessary for the treatment pathway they determine throughout their fertility journey.
In addition, we provide care management services as part of our fertility benefits solution, which include active management of our selective network of high-quality fertility specialists, real-time member eligibility and treatment authorization, member-facing digital solutions, detailed quarterly reporting for our clients supported by our dedicated client success teams and end-to-end comprehensive concierge member support provided by our in-house staff of PCAs. 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. 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.
Our Clients. We currently serve over 590 employers with at least 1,000 covered lives in the United States across more than 40 industries, including 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. Our current clients, who are industry leaders across both high-growth and mature industries and who range in size from approximately 1,000 to 300,000 employees, represent approximately 7.2 million covered lives.
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. With respect to the fertility benefits solution, we bill clients for Smart Cycles in accordance with our bundled case rates, which vary by the type of fertility service rendered and clinic location. Case rates include all third-party fertility specialists, anesthesiology and laboratory services, as well as all of our care management services. 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. Clients who purchase our fertility benefits solution also typically pay us a per employee per month fee, or PEPM fee, which is population-based. This allows us to provide members with access to our PCAs for fertility and family building education and guidance and other digital tools to all of our members, regardless of whether they ultimately pursue fertility treatment. PEPM fees represented 1% of our total revenue for the three months ended March 31, 2026 and 2025.
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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. Each year, we contract with new clients for our fertility benefits and Progyny Rx solutions. Given that the majority of our clients contract with us for a January 1st benefits plan start date, our sales cycle follows the conventional healthcare benefits cycle, which largely concludes by the end of October of the prior year to allow for benefits education and annual open enrollment to occur in November. For some clients that are considering a start date later in the year, the sales cycle can extend through the next year. Similarly, for existing clients, any changes in plan designs are typically elected by the end of October so that clients can inform their employees of the benefits during the open enrollment period ahead of a January 1st plan year start.
We continue to expand our women's health and family building solutions to include pregnancy and postpartum, menopause and midlife, benefit and leave navigation, and parent and child wellbeing solutions. While these offerings represent strategic areas of investment, they were not a significant portion of our revenue for the three months ended March 31, 2026 and 2025.
Key Operational and Business Metrics
In addition to the measures presented in our consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.
Member and Client Base. Our addressable market is primarily large self-insured employers, as well as labor populations under the Labor Management Relations Act of 1947 (also known as the Taft-Hartley Act) and federal government populations. There are approximately 9,000 employers in the United States who have a minimum of 1,000 employees, who together with Taft-Hartley labor populations and federal government populations, represent approximately 106 million potential covered lives in total. Our current member base of approximately 7.2 million covered lives under contract represents a mid-single digit percent of our total market opportunity. We intend to continue to drive new client acquisition by investing significantly in sales and marketing to engage, educate and drive awareness of the unmet need around fertility solutions among benefits executives. We also increase brand awareness and adoption with employers by leveraging our strong relationships with benefits consultants. In particular, we are focused on expanding the number of clients with more than 2,500 covered lives. As of March 31, 2026 and December 31, 2025, we served 595 and 555 clients, representing 7,179,000 and 6,689,000 members, respectively.
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. 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. Additionally, we believe that our expanding presence has resulted in a heightened awareness of the need to offer fertility benefits and has informed the market of the value we provide to our clients and our members, which we believe also helps facilitate growth. In addition, we are continuously utilizing our established client relationships to evaluate other potential fertility solutions that could benefit our members and simultaneously drive growth. Our ability to attract new clients will depend on a number of factors, including the effectiveness and pricing of our solutions, offerings of our competitors, the effectiveness of our marketing efforts to drive awareness and the demand for fertility benefits solutions overall. We define a client as an organization for which we have an active contract in the period indicated. 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.
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As of March 31, As of December 31,
2026 2025
Client Tier (Members) Clients Members Clients Members
Up to 2,500 166 340,000 153 310,000
2,501 - 10,000 278 1,478,000 264 1,379,000
10,001 - 50,000 124 2,444,000 111 2,139,000
Greater than 50,000 27 2,917,000 27 2,861,000
Total 595 7,179,000 555 6,689,000
Benefits Utilization. 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 7.2 million members as of March 31, 2026.
The following table highlights the number of assisted reproductive treatment, or ART, cycles performed for Progyny members and the member utilization rates for each of the periods presented:
Three Months Ended
March 31,
2026 2025
Assisted Reproductive Treatment (ART) Cycles(1)
15,647 16,160
Utilization - All Members(2)
0.56% 0.54%
Utilization - Female Only(2)
0.48% 0.46%
Average Members (3)
7,185,000 6,695,000
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(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. Includes ART cycles performed in the first half of 2025 under the extended transition of care agreement with the large client who did not renew its service agreement.
(2)Represents the member utilization rate for all fertility and family building services, including, but not limited to, ART cycles, initial consultations, IUIs, and genetic testing. The utilization rate for all members includes all unique members (female and male) who utilize the benefit during that period, while the utilization rate for female only includes only unique females who utilize the benefit during that period. 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. Utilization for 2025 excludes activity under the extended transition of care agreement that ended June 30, 2025 with the large client who did not renew its service agreement, as only members meeting certain criteria were eligible to use the benefit.
(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. 2025 excludes the limited number of members who were eligible to use the benefit under the extended transition of care agreement that ended June 30, 2025 with the large client who did not renew its service agreement.
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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. Our client contracts are typically for a three-year term and pricing for this solution is established for each Smart Cycle treatment bundle, based in part on when the client first became a client and the number of members covered under the solution. Fertility benefits solution revenue includes amounts we receive directly from members, including deductibles, co-insurance and co-payments associated with the treatments under the fertility benefits solution. Revenue is recognized based on the negotiated price with our clients and includes the portion to be paid directly by the member. Revenue is recognized when Smart Cycle services are completed for a member. 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. For clients who contract for the fertility benefits solution, we offer an add-on, separate, fully integrated pharmacy benefits solution designed by us. Progyny Rx provides our members with access to our formulary plan design, simplified authorization, prescription fulfillment and timely delivery of the medications used during treatment through our network of specialty pharmacies, as well as provides our members with medication administration training and other pharmacy support services. Prescription drugs are dispensed by our contracted mail order specialty pharmacies. Revenue related to the dispensing of prescription drugs by the specialty pharmacies in our network includes the prescription fees negotiated with our clients, including the portion that we collect directly from members (deductibles, co-insurance and co-payments). The contractual fees agreed to with our clients are inclusive of the cost of the prescription drug from our specialty providers, less any applicable discounts (or rebates), as well as the related clinical and care management services. Revenue from these arrangements is recognized when the drugs are dispensed.
Per Employee Per Month (PEPM) Fee
Clients who purchase our fertility benefits solution also pay us a population based PEPM fee which provides access to our PCAs for fertility and family building education and guidance and other digital tools for all of our covered members, regardless of whether or not they ultimately pursue fertility treatment. We earn a PEPM fee for the majority of our clients. Revenue from the PEPM fee is billed and recognized monthly based upon the contractual fee and the number of employees at that specific client for that month.
Cost of Services
Our cost of services has three primary components: (1) fertility benefits services; (2) pharmacy benefits services; and (3) vendor rebates.
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. Our contracts with provider clinics are typically for a term of one to two years.
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Pharmacy Benefits Services
Pharmacy benefits services costs include: (1) the fees for prescription drugs dispensed and clinical services provided during the reporting period by our specialty pharmacy partners; (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: PCA, Provider Relations and Claims Processing teams; and (3) related information technology support costs. Contracts with the specialty pharmacies are typically for a term of one year.
Vendor Rebates
We receive a rebate on certain medications purchased by our specialty pharmacies. Our contractual arrangements with pharmacy program partners provide for us to receive a rebate from established list prices, which is paid subsequent to dispensing. These rebates are recorded as a reduction to cost of services when prescriptions are dispensed.
Gross Profit and Gross Margin
Gross profit is total revenue less total cost of services. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including the geographic location where treatments are performed, as well as pricing with each of our clients, provider clinics, labs, specialty pharmacies and pharmaceutical companies, all of which are negotiated separately, have different contracting start and end dates and durations, which are not coterminous with each other. 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.
Sales and Marketing Expense
Sales and marketing expense consists primarily of employee related costs, including salaries, bonuses, commissions, benefits, stock-based compensation expense, other related costs, and an allocation of our general overhead, depreciation and amortization for those employees associated with sales and marketing. These expenses also include third-party consulting services, advertising, marketing, promotional events, and brand awareness activities. We expect sales and marketing expense to continue to increase in absolute dollars as we continue to invest and grow our business.
General and Administrative Expense
General and administrative expense consists primarily of employee related costs, 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 general and administrative services such as executive, legal, human resources, information technology, accounting, and finance as well as research and development activities. These expenses also include third-party consulting services, facilities costs, and bad debt expense. 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 includes interest income and expense as well as investment income and losses.
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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. 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. 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.
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:
Three Months Ended
March 31,
2026 2025
(in thousands)
Consolidated Statements of Operations Data:
Revenue $ 328,504 $ 324,038
Cost of services(1)
245,433 248,243
Gross profit 83,071 75,795
Operating expenses:
Sales and marketing(1)
16,884 17,786
General and administrative(1)
30,808 33,839
Total operating expenses 47,692 51,625
Income from operations 35,379 24,170
Interest and other income, net 1,504 2,367
Income before income taxes 36,883 26,537
Provision for income taxes 12,651 11,478
Net income $ 24,232 $ 15,059
Adjusted EBITDA(2)
$ 56,583 $ 57,790
(1) Includes stock-based compensation expense as follows:
Three Months Ended
March 31,
2026 2025
Cost of services $ 6,270 $ 9,398
Sales and marketing 5,555 7,875
General and administrative 7,896 15,239
Total stock-based compensation expense $ 19,721 $ 32,512
(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. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measure - Adjusted EBITDA" below for a reconciliation of Adjusted EBITDA to net income, the most directly comparable measure calculated in accordance with U.S. GAAP.
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Three Months Ended
March 31,
2026 2025
Consolidated Statements of Operations Data, as a percentage of revenue:
Revenue 100.0 % 100.0 %
Cost of services 74.7 % 76.6 %
Gross profit 25.3 % 23.4 %
Operating expenses:
Sales and marketing 5.1 % 5.5 %
General and administrative 9.4 % 10.4 %
Total operating expenses 14.5 % 15.9 %
Income from operations 10.8 % 7.5 %
Interest and other income, net 0.5 % 0.7 %
Income before income taxes 11.2 % 8.2 %
Provision for income taxes 3.9 % 3.5 %
Net income 7.4 % 4.6 %
Adjusted EBITDA
17.2 % 17.8 %
Note: percentages shown in the table may not foot due to rounding.
Non-GAAP Financial Measure - Adjusted EBITDA
Adjusted EBITDA is a supplemental financial measure that is not required by, or presented in accordance with U.S. GAAP. We believe that Adjusted EBITDA, when taken together with our U.S. GAAP financial results, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation, evaluating our operating performance, and for internal planning and forecasting purposes.
Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. 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. In addition, our Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. 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. The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with U.S. GAAP, for each of the periods indicated:
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Three Months Ended
March 31,
2026 2025
(in thousands)
Net income $ 24,232 $ 15,059
Add:
Depreciation and amortization 1,483 1,108
Stock-based compensation expense 19,721 32,512
Interest and other income, net (1,504) (2,367)
Provision for income taxes 12,651 11,478
Adjusted EBITDA $ 56,583 $ 57,790
Comparison of Three Months Ended March 31, 2026 and 2025
Revenue
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Revenue $328,504 $324,038 1 %
Revenue increased by $4.5 million, or 1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase is primarily due to a $3.0 million, or 1%, increase in revenue from our fertility benefits solution and a $1.5 million, or 1%, increase in revenue from our Progyny Rx solution. The increase in revenue from our fertility benefits solution and Progyny Rx solution was primarily due to the increase in the number of clients and covered lives, largely offset by the impact of the previously disclosed large client who did not renew its services for 2025 but provided an extended transition period over the first half of 2025 for members meeting certain criteria.
Cost of Services
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Cost of services $245,433 $248,243 (1 %)
Cost of services decreased by $2.8 million, or 1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily due to a reduction in medical treatment and pharmacy prescription costs associated with fertility treatments delivered driven by the previously disclosed large client who did not renew its services for 2025 but provided an extended transition period over the first half of 2025 for members meeting certain criteria. This decrease in cost of services was also attributable to a decrease in personnel-related costs, which was partially offset by an increase in other related costs of services. The decrease in personnel-related costs was due to a $3.1 million decrease in stock-based compensation expense, partially offset by higher costs attributable to incremental head count.
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Gross Profit and Gross Margin
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Gross profit $83,071 $75,795 10 %
Gross margin 25.3 % 23.4 %
Gross profit increased by $7.3 million, or 10%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Gross margin increased 190 basis points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to ongoing efficiencies realized in the delivery of our care management services as well as a decrease in stock-based compensation expense.
Operating Expenses
Sales and Marketing Expense
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Sales and marketing $16,884 $17,786 (5 %)
Sales and marketing expense decreased by $0.9 million, or 5%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily due to a $1.2 million decrease in personnel-related costs, partially offset by a $0.3 million increase in other related sales and marketing expenses. The decrease in personnel-related costs was due to a $2.3 million decrease in stock-based compensation expense, partially offset by higher costs attributable to incremental head count.
General and Administrative Expense
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
General and administrative $30,808 $33,839 (9 %)
General and administrative expense decreased by $3.0 million, or 9%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily due to a $4.7 million decrease in personnel-related costs and a $1.2 million decrease in bad debt expense, partially offset by a $2.9 million increase in other related general and administrative expenses. The decrease in personnel-related costs was due to a $7.3 million decrease in stock-based compensation expense, partially offset by higher costs attributable to incremental head count. The decrease in stock-based compensation expense was driven by the November 2021 retention equity grant which became fully vested in late 2025 and therefore is no longer contributing to the expense in 2026.
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Interest and Other Income, Net
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Interest and other income, net $1,504 $2,367 (36 %)
Interest and other income, net decreased by $0.9 million, or 36% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily due to a decrease in interest income and an increase in interest expense.
Provision for Income Taxes
Three Months Ended
March 31,
2026 2025 % Change
(dollars in thousands)
Provision for income taxes $12,651 $11,478 10 %
Provision for income taxes increased by $1.2 million, or 10%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to higher operating profit, partially offset by a decrease in tax deficiencies related to stock-based compensation.
Liquidity and Capital Resources
As of March 31, 2026, we had $131.6 million of cash and cash equivalents and $93.5 million of marketable securities. We have financed our operations primarily through cash generated from the sales of our solutions. 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. In particular, during the ramp up and onboarding of new clients who typically begin their benefits plan year as of January 1st, our accounts receivable has historically increased more than our accounts payable, accrued expenses and other current liabilities in the early part of each calendar year. Historically, these timing impacts have reversed throughout the remainder of the fiscal year. Accordingly, our working capital, and its impact on cash flow from operations, can fluctuate materially from period to period.
On July 1, 2025, we entered into a revolving credit facility (the "Facility") pursuant to a Credit Agreement (the "Credit Agreement") with the lenders and issuing banks, party thereto and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, and swingline lender. The Credit Agreement makes available a maximum aggregate amount of $200 million, subject to customary borrowing conditions, until its maturity on July 1, 2030. We are in compliance with all financial covenants under the Credit Agreement as of March 31, 2026. As of the date of this filing, no amounts were drawn under the Facility. Refer to Note 6 to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.
We believe that our existing cash and cash equivalents, including the proceeds from our marketable securities, cash flow from operations, and the availability of funds under the Facility will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We also expect these sources of existing cash and cash equivalents will be sufficient to fund our long-term contractual obligations and capital needs. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory, and other factors that are beyond our control. 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. 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. 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.
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The following table summarizes our cash flows from operations for the periods presented:
Three Months Ended
March 31,
2026 2025
(in thousands)
Cash provided by operating activities $ 45,949 $ 49,808
Cash provided by (used in) investing activities
96,594 (94,610)
Cash used in financing activities (123,114) (3,288)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (51) 15
Net increase (decrease) in cash, cash equivalents, and restricted cash
$ 19,378 $ (48,075)
Operating Activities
Net cash provided by operating activities was $45.9 million for the three months ended March 31, 2026, primarily consisting of net income of $24.2 million adjusted for certain items, which includes $19.7 million of stock-based compensation expense, $4.4 million of bad debt expense, $1.5 million of depreciation and amortization, $1.2 million of net accretion of discounts on marketable securities, $0.3 million of non-cash interest expense, and $0.1 million of loss on disposal of property and equipment. Changes in operating assets and liabilities resulted in cash used in operating activities from an increase in accounts receivable of $47.8 million and other noncurrent assets and liabilities of $2.4 million, partially offset by cash provided by operating activities from an increase in accounts payable of $33.6 million and accrued expenses and other current liabilities of $1.5 million, and a decrease in prepaid expenses and other current assets of $9.6 million. These changes were 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 $0.6 million of cash paid for income taxes, net of refunds received for the period ended March 31, 2026.
Net cash provided by operating activities was $49.8 million for the three months ended March 31, 2025, primarily consisting of net income of $15.1 million adjusted for certain items, which includes $32.5 million of stock-based compensation expense, $5.7 million of bad debt expense, $1.1 million of depreciation and amortization, $1.1 million of net accretion of discounts on marketable securities, and $0.1 million of loss on disposal of property and equipment. Changes in operating assets and liabilities resulted in cash used in operating activities from increases in accounts receivable of $69.7 million, prepaid expenses and other current assets of $2.4 million, and other noncurrent assets and liabilities of $0.7 million, partially offset by cash provided by operating activities from increases in accounts payable of $49.6 million and accrued expenses and other current liabilities of $17.5 million. These changes were 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 $0.4 million of cash paid for income taxes, net of refunds received for the period ended March 31, 2025.
Investing Activities
Net cash provided by investing activities was $96.6 million for the three months ended March 31, 2026 which primarily consisted of net proceeds from marketable securities of $102.9 million. The remainder of the activity consisted of purchases of computers, software, including capitalized software development costs, leasehold improvements, and furniture and fixtures.
For the three months ended March 31, 2025, net cash used in investing activities was $94.6 million for the three months ended March 31, 2025 which primarily consisted of net investments in marketable securities of $82.4 million and $9.3 million of cash used in a business acquisition, net of cash acquired. The remainder of the activity consisted of purchases of computers, software, including capitalized software development costs, and furniture and fixtures.
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.
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Financing Activities
Net cash used in financing activities was $123.1 million for the three months ended March 31, 2026, consisting of $118.6 million of cash paid for repurchases of common stock under the November 2025 share repurchase program, inclusive of $0.2 million in trading fees, payments of $4.8 million for employee taxes related to equity awards, partially offset by $0.3 million in proceeds from contributions to our employee stock purchase plan.
Net cash used in financing activities was $3.3 million for the three months ended March 31, 2025, consisting of payments of $3.6 million for employee taxes related to equity awards, partially offset by $0.3 million in proceeds from contributions to our employee stock purchase plan.
Share Repurchase Program
In November 2025, our Board of Directors authorized a share repurchase program of up to $200 million in shares of common stock (the "November 2025 share repurchase program").
For the three months ended March 31, 2026, we repurchased a total of 5,511,824 shares of common stock under the November 2025 share repurchase program at an average price per share of $21.13 and a total cost of $116.6 million, inclusive of $0.2 million in trading fees. In addition, we recognized $1.1 million of excise taxes related to the share repurchases. As of March 31, 2026, the November 2025 share repurchase program was completed, and no amounts remained available for repurchase under the program.
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. Pursuant to the sublease, we will pay the base rent of approximately $1.3 million per year through the end of the fifth lease year and approximately $1.4 million per year thereafter through the expiration date.
In February 2022, we entered into a lease agreement for leases commencing in February 2023 and March 2025 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, respectively. The lease agreement also provides for continued occupancy of the 25,212 square foot office after the expiration of the current sublease. For the 24,099 square foot office, we pay the 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 April 2036, the expiration date. For the 21,262 square foot office, we will pay the base rent of approximately $1.3 million per year starting in April 2026 through the end of the fifth year and approximately $1.4 million per year thereafter through April 2036, the expiration date. 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 April 2036, the expiration date.
Critical Accounting Estimates
Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. 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. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.
We believe that the assumptions and estimates associated with our accrued receivables related to revenue recognition, accrued claims payable, stock-based compensation expense, and accounting for income taxes have the greatest potential impact on our financial statements. Therefore, we consider these to be our critical accounting estimates.
For additional information about our significant accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K as well as "Financial Statements (Unaudited) - Note 1 - Business and Basis of Presentation" and "Financial Statements (Unaudited) - Note 2 - Significant Accounting Policies" in the notes to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes to the Company's critical accounting policies and estimates since our Annual Report on Form 10-K.
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Recently Adopted Accounting Pronouncements
For a full discussion of recently adopted accounting pronouncements, see "Financial Statements (Unaudited) - Note 2 - Significant Accounting Policies", to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Progyny Inc. published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 08, 2026 at 12:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]