Progyny, Inc. (NASDAQ:PGNY) Q3 2023 Earnings Call Transcript

Michael Sturmer: Yes, this is Michael. So, each year there’s always, there’s always competing priorities and other priorities that employers are dealing with that get factored into the selling season and certainly factor into the not nows. We sort of, you know, Pete referenced a few of those in the script. You referenced one on the GLP-1s. Obviously, there was upward pressure on medical cost inflation in general. And then some of the macro uncertainties in the broader economic environment. Certainly, those all played a role in, what is on the minds of employers and prioritized with employers. But as I said in the prior question, fertility also remained. One of those priorities and so specifically in the sale season, we didn’t hear specifically that, any one of those individual things drove a not now.

Certainly, we didn’t hear specifically that, you focus around GLP-1s drove a not now. But some combination of all of those priorities lead towards sort of the decision to wait on adding a family building benefit until the next year. That said, as Pete referenced in the prepared remarks, much like prior years, those not nows become a strong tailwind going into the next year. And certainly, we expect to see that trend continue as we go into 2024.

Richard Close: Okay. And as a follow up, I was curious on the partnerships. Can you just remind us in terms of is the go-to-market with those partners, the same across, the various partnerships that you discussed today? Or is there some nuance to different partnerships in terms of how you go to market?

Pete Anevski: Yes, I mean, they all they all have some general similarities to each other. And sort of where and how we’re positioned, certainly from that last mile contracting perspective. But each one also has a slightly different approach on where and how we fit into maybe other services that they’re providing, or where and how we fit into the medical coverage, or the pharmacy side of the equation, or from a more pure navigation perspective. So there’s certainly similarities. But each one has nuances and differences in how we go-to-market. And we adjust to, we adjust to work with those partners as we launch and roll out to account for each of those different scenarios.

Richard Close: Okay, thank you.

Operator: Thank you. Your next question is coming from Allen Lutz from Bank of America. Your line is live.

Allen Lutz: Good afternoon, and thanks for taking the questions. Pete, you mentioned that more than 20% of current customers are increasing their programs by some amount, adding things like more smart cycles and covering more solutions. But is there any way to frame how much that’s contributing to revenue? And then my follow up, you talked about with the not now, is there a way to frame kind of the top of funnel or how much larger the overall pipeline has gotten year-over-year? Thanks.

Pete Anevski: Sure. As it relates to the first question, the best way to frame it is this. The last year, for example, we talked about 25% of clients added something to their benefit coming into 2023. That was probably the last big year of sort of Progyny Rx as a contributor in revenue, which is the largest sort of revenue opportunity from an upsell perspective. Given now that our penetration overall is 93%, or next year will be 93% of clients having Progyny Rx is probably a factor that will contribute to less contribution, not more coming from upsell opportunity. We don’t generally quantify the dollar value of it. We always talk about that the revenue contribution, incremental revenue comes mostly from new client ads, second from upsell activity, and third from any organic sort of growth.