Progyny, Inc. (NASDAQ:PGNY), a provider of fertility and family building benefits solutions, disclosed today that a significant client, representing about 12% to 13% of its revenue, has decided to terminate their services agreement effective January 1, 2025.
The client, which accounts for approximately 670,000 members, exercised a 90-day termination option but affirmed there were no issues with the service quality or outcomes throughout their multi-year relationship.
The company stated that the termination is not expected to negatively affect its financial results for the fiscal year ending December 31, 2024. Progyny emphasized that the client's contribution to the company's Adjusted EBITDA is relatively smaller and that no other client represents more than a single-digit percentage of revenue or Adjusted EBITDA.
Despite this development, Progyny anticipates an increase in its overall member count in 2025 compared to 2024. The company expressed confidence in its ability to continue achieving growth, profitability, and cash flow. Progyny highlighted its commitment to managing its business with discipline and ensuring that members receive the right care at the right time for family building and health goals.
This news comes as the company prepares for the upcoming sales season and client launches, with expectations to retain and acquire new clients. Progyny's forward-looking statements in the report also included its financial outlook, demand for its solutions, and its strategic positioning to manage economic uncertainties.
The information in this article is based on a press release statement from Progyny, Inc. filed with the Securities and Exchange Commission. The company's forward-looking statements involve risks and uncertainties, and actual results may differ materially from those projected. The full details of these risks are outlined in Progyny's SEC filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
In other recent news, Progyny Inc . reported a record second-quarter 2024 revenue of $304.1 million, a 9% increase from the previous year. Despite this growth, the company adjusted its revenue guidance for the second half of the year due to a change in the number of Assisted Reproductive Technology (ART) cycles per utilizing member and minor client workforce reductions. KeyBanc Capital Markets maintained a Sector Weight rating on Progyny, expressing concerns over the ambitious midterm financial targets set by the company.
The analyst firm suggested that while Progyny has potential for long-term growth, the company's projections might be overly optimistic. Progyny recently acquired Berlin-based facility benefits platform, April, and partnered with Meritene Health, expanding its global offerings.
The company also announced a $100 million share repurchase program. As part of its long-term growth strategy, Progyny plans to launch new products in 2025.
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