Good day, ladies and gentlemen, and welcome to the Progyny, Inc. Q4 2023 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, James Hart. The floor is yours. Thank you, John, and good afternoon, everyone. Welcome to our Q4 conference call. With me today are Pete Anevski, CEO of Progyny, Michael Sturmer, President, and Mark Livingston, CFO. We will begin with some prepared remarks before we open the call for your questions. Before we begin, I'll remind you that our comments and responses to your questions today reflect management's views as of today only, and will include statements related to our financial outlook for both the Q1 and full year 2024, and the assumptions and drivers underlying such guidance, including the impact of our sales season and client launches, and our expected utilization rates and mix, our anticipated number of clients and covered lives for 2024, the potential benefits of our solution, our ability to acquire new clients and retain and upsell existing clients, our market opportunity, and our business strategy, plans, goals, and expectations concerning our market position, future operations, and other financial and operating information, which are forward-looking statements under the federal securities laws. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business, as well as other important factors. For a discussion of the material risks, uncertainties, assumptions, and other important factors that could impact our actual results, please refer to our SEC filings in today's press release, both of which can be found on our investor relations website. Any forward-looking information, statements, excuse me, that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During the call, we will also refer to non-GAAP financial measures such as Adjusted EBITDA margin, Adjusted EBITDA margin on incremental revenue, and non-GAAP earnings per diluted share. More information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, are available in the press release, which is available at investors.progyny.com. I would now like to turn the call over to Pete. Thank you, James. Thanks, everyone, for joining us this afternoon. 2023 was another exceptional year for Progyny, a year in which we achieved record levels of revenue, which grew 38%, profitability with a Adjusted EBITDA margin, and operating cash flow, generating nearly $190 million or more than twice what we delivered in 2022. As important as those financial measures of success are, we're equally pleased with what we've achieved operationally. I'll touch on just a few of these highlights. Driven by our remarkable levels of member and client satisfaction, we once again maintained our near 100% retention across our client base, while also concluding a selling season that yielded the largest number of new covered lives in our history. We deepened our already highly collaborative relationships with clinical providers, while also extending the reach of our vast network through the addition of reproductive urologists, with the Progyny network now reaching more than 1,000 of the highest quality REIs and RUs in the country. We expanded our solution to address both menopause and the treatment of male infertility. Aided by the quality and reach of that network and the ways in which we collaborate with them, we continue to achieve, for the 8th straight year, the industry-leading clinical outcomes in fertility care. In 2023, we helped the largest number of members in our history realize their family-building dreams through healthier and faster journeys while controlling costs. In fact, since launching our solution in 2016, we've cumulatively helped hundreds of thousands of people successfully navigate what would otherwise have been a complex, stressful, and overwhelming course of treatment. We've done so while routinely achieving NPS scores in the 80s, an exceptional achievement for any industry, let alone healthcare. As a mission-driven company, where everything we do is about empowering people to successfully meet the milestones in their lives through evidence-based solutions, we're perhaps proudest of our sustained clinical success because we understand how those outcomes aren't just numbers on a page, but tangible, life-changing results for people every day. To put it simply, there are tens of thousands of babies in the world today who were born after their parents turned to Progyny for support, typically after having been unable to conceive on their own or unable to carry a child to term. It's helpful to remind ourselves of these successes, particularly when the news cycles over the past week have focused on a potential barrier in the state of Alabama with respect to access to care. We're fully committed to ensuring that access to IVF will continue for all of those in need, including our members, regardless of where they live. Just as we saw two years ago, following the Dobbs Decision, a number of state legislatures and governors, including Alabama's, have indicated their intent to take action to ensure the continued availability of these services. And while this is encouraging, it isn't surprising to us, given how life-affirming these services are to the millions of individuals who've already used it successfully, and the reality that an even greater number of people will need it to turn to it in the future. It's likely many of these legislators know someone personally who has needed access to fertility care in order for some people to realize their family-building dreams. As we've said previously, one of the macro trends driving the demand for care is the increasing prevalence of infertility, which has gone from 1 in 8, just a handful of years ago, to 1 in 5 today, according to the CDC. You've seen that reflected in the strong member engagement metrics that we've reported to you in 2023. Continuing the pattern that we've seen all year, utilization in the Q4 was up versus the comparable period in 2022. Although our Q4 guidance reflected the typical decline in member activity due to the holidays and clinic closures for routine cleaning and maintenance, the actual decline in December was slightly more than what we had anticipated, which is why revenue ended up closer to the midpoint of our Q4 range. As 2024 began, utilization returned to levels that are more consistent with what we would expect to see early in the year, demonstrating that the benefit is being used by both new and existing members. While overall utilization levels are in line with last year, as at this point in the quarter, there was a brief shift in treatment mix at the start of the year, which we estimate resulted in approximately $15 million headwind on revenue in the quarter from what we normally would expect, and which we've reflected in our guidance for the Q1. While this phenomenon doesn't happen often and has only occurred once since we've been a public company back in the summer of 2021, when it has happened, it's always been short-lasting and has reverted thereafter to the more typical distribution of treatments. To that end, we've already seen treatment mix return to more customary levels over the second half of the quarter, with February activity closer to normal than in January, and the visibility we have into March that indicates it's trending to typical expected distribution, giving us confidence that this aberration was, like all previous ones, short-lived and now behind us. While Mark will walk you through our guidance for the Q1, given what we are seeing now, we're expecting that the activity in Q2 and over the balance of the year will be much more consistent with the historical trajectory, which is reflected in our full-year guidance. That trajectory reflects a continuation of the macro trends that have been fueling our growth. Namely, the need for fertility benefits is higher than ever, with an increasing number of people affected by infertility as a medical condition. People are continuing to wait until later in life to start their families, and in doing so, are more likely to need fertility care, and family building is still a priority. In fact, these macro factors continue to create a number of tailwinds that we expect will contribute to our longer-term success. First, demand for fertility benefits is stronger than ever, particularly among the millennials who are in the prime of their family-building years. Second, family building and women's health benefits have never been more relevant or more timely with employers, particularly as they look to modernize the coverage they're providing in order to better support their employees' needs. Employers increasingly realize that in doing so, they're not only enhancing the efficiency of their recruitment and retention efforts, they're also meaningfully improving workforce productivity. Third, employers are continuing to demonstrate their commitment to family building and women's health services, and they're doing this by adding coverage when they don't already have it, or by expanding their coverage to provide even greater access to care, by broadening the scope to include other pathways, such as adoption and surrogacy, and by including other services into their programs, such as preconception, parenting, and menopause. Lastly, by leveraging our proven strengths in patient education and support, evidence-based care pathways, network management, and outcomes measurement, Progyny continues to successfully differentiate itself in the market by raising the bar for what employers should expect from their benefit providers. This experience ideally positions us for success as we enter 2024 with a more comprehensive set of services. 2024 selling season is in its very earliest stage, and while it's too soon to offer any quantitative commentary, the early activity that we're seeing thus far is very positive. Our active pipeline, which, at this early point in the season, consists primarily of the opportunities that were carried over from last year, is the largest it has ever been at this time of year. The pipeline will expand as additional opportunities are created through our channel partner relationships, our own demand generation activities, participation in key conferences, introductions facilitated by the benefit consultants, RFPs, and all other activity. We've also had a number of early wins, including well-known brands in apparel, healthcare, and media, just to highlight a few. In short, we've entered 2024 with considerable momentum, which comes on the heels of our last three selling seasons, which were the most productive in our history. And despite that rapid growth over such a short period of time, we continue to be at a very early stage of penetrating our market opportunities. Just a mid-single-digit% of either our targeted clients or covered lives. Though we've expanded our addressable market in recent years by first adding labor and then adding federal government populations, we have opportunities to expand our TAM even further with other types of employers. Because of our proven history of delivering real and sustained value in family building services, we enjoy a sizable advantage, as our clients will often proactively share with us the gaps they're looking to address across other areas of healthcare, particularly with respect to patient access, member experience, and cost efficiency.... In fact, because the Progyny member experience is so unique and what we deliver is so special, we've had clients tell us about the letdown once a member has concluded their Progyny journey and has to return to the health plan or some other solution for further support. That's why Progyny is so uniquely positioned to expand our already industry-leading platform into other areas that further support life's other key milestones. We've made investments in our product organization, and we'll continue to expand that team in 2024 to enable us to quickly add new features to existing services or expand into new areas in ways that make sense for us and our clients. These include areas like preconception support, where we can help address conditions that often negatively impact the ability to conceive, such as PCOS or endometriosis, or maternity, where we can help expectant mothers navigate the pregnancy journey, postpartum, as the new parents look for support as they adjust to the new addition to their family and think about their eventual return to the workforce. These services are being included in our 2024 selling season for both new clients as well as upsell activity amongst existing clients for contribution beginning in 2025. In conclusion, the early selling season activity gives us confidence that the macro trends driving the high demand for family-building benefits, combined with our position as the leader in the space, position us well to sustain our growth trajectory. Given the caliber of the companies that we're both partnering with and seeing in our active pipeline, it's become even more evident that Progyny is the provider of choice for fertility solutions amongst the best-known and most successful companies in the world. Let me now turn the call over to Mark, who will walk you through the results in more detail. Mark? Thanks, Pete, and good afternoon, everyone. I'll start with an overview of our results for the Q4 and the full year, and then provide our expectations for 2024. Revenue in the Q4 was $269.9 million, reflecting 26% growth. For the full year, revenue grew 38% to $1.09 billion. With this strong result, we've more than doubled our revenue over the past 2 years and achieved a tenfold increase over the past 5 years, which further attests to the substantial size of our market opportunity, as well as our success in executing against our go-to-market strategies. Our growth in both the quarter and the year was primarily due to an increase in the number of clients and covered lives as compared to the year-ago period. As of December 31, we had 392 clients with at least 1,000 lives, representing an average of 5.4 million covered lives in the Q4. This compared to 288 clients in an average of 4.6 million covered lives in the Q4 a year ago, reflecting approximately 19% growth in lives. For the full year, average lives increased to approximately 24%. I'll remind you that the Q4 of 2022 includes the impact of early launches, which had the effect of muting our growth rate this quarter as compared to what you will see in our full year growth rates. As we told you in November, our recent selling season was more typical, with substantially all of our newest clients launching in 2024, which is what we would ordinarily expect to see. Although the majority of our new clients have gone live in the Q1, we have new clients going live in Q2 and Q3, representing, in aggregate, approximately 200,000 additional lives, and we have reflected that in the progression of our quarterly expectations for 2024. Turning to the components of the top line, medical revenue increased 20% in the Q4 to $171 million, and grew 33% in the year to $676 million. Our growth in both the quarter and the year was driven by a higher number of clients in covered lives. Pharmacy revenue increased 39% in the Q4 to $98.6 million, and grew 49% over the full year to $412 million. The growth in both periods was primarily driven by an increase in the number of clients with Progyny Rx. We continue to see the progression in the adoption of our pharmacy solution. In 2022, 85% of our clients had pharmacy. That increased to approximately 90% in 2023. And with nearly every one of our newest clients choosing Rx in the most recent selling season, along with our upsell activity from the existing base, we anticipate that approximately 93% of our clients will have the integrated solution in 2024. While that still leaves approximately 7% of the base for future upsells, as the penetration continues to climb, we would expect to see the difference in growth rates between medical and pharmacy continue to narrow. Turning now to our member engagement metrics. More than 15,000 ART cycles were performed during the Q4. This was our highest quarterly total ever, and a 24% increase from the Q4 of 2022. For the full year, ART cycles grew more than 36%, reflecting the continued high rate of demand that we see for fertility care. The female utilization rate, which most closely corresponds to our financial results, as it captures the more extensive treatments in the fertility journey, was 0.48% in the quarter. This was an increase from the 0.46% that we reported in the Q4 a year ago. For the full year, the female utilization rate was 1.09%, which was higher than the 1.03% we reported a year ago, as utilization in every quarter of 2023 exceeded the comparable period in 2022. Although utilization can vary from quarter to quarter for many reasons, including the timing of new client launches and the time of the year, we believe the overall upward trajectory for the year reflects both the increasing prevalence of infertility as a medical condition, as well as our members' continued desire to pursue family building. Turning now to our margins and operating expenses. Gross profit increased 28% in the Q4 to $56.9 million. This yielded a 21.1% gross margin, which was a 30 basis point increase from the Q4 of 2022. For the full year, gross profit increased 43% to $239 million. The 21.9% gross margin in 2023 was a 60 basis point increase over the prior year, reflecting the ongoing efficiencies that we've realized in the delivery of our care management services, which were only partially offset by the impact of our previously disclosed cost containment efforts that were shared with our clients. Sales and marketing expense was 5.5% of revenue in both the quarter and the full year, reflecting a modest improvement from the corresponding periods in 2022. The investments we've made to meaningfully expand our channel partner relationships and go-to-market resources, including the build-out of newer areas like labor, continue to be offset by the leverage we gain through our client acquisition and retention success. G&A was 10.4% of revenue this quarter, as compared to 13.2% in the Q4 a year ago. For the full year, G&A was 10.8% of revenue, which compared to 12.5% in 2022. The improvement in both the quarter and the year is primarily due to efficiencies that we continue to realize in our back-office operations, even as we rapidly expand the business. With our strong top-line growth and the operating efficiencies that we've realized, Adjusted EBITDA, both in dollars as well as in margin, increased significantly in both the quarter and the year. In the Q4, Adjusted EBITDA increased 31% to $43.2 million, yielding a margin of 16%. For the full year, Adjusted EBITDA increased 49% to $187 million, yielding a margin of 17.2%, which is a 120 basis point expansion from 2022. Adjusted EBITDA margin on incremental revenue, which most clearly highlights our rate of margin capture as we grow, and has proven to be useful as a forward indicator of where the overall business is moving, was 20.3% in 2023, further demonstrating the leverage that we've continued to achieve on the most recent cohort of revenue. Net income in the Q4 was $13.5 million or $0.13 per diluted share. This compares to net income of $3.4 million or $0.03 per share in the Q4 of 2022. On a full year basis, net income was $62 million or $0.62 per diluted share, which compared to $30.4 million or $0.30 per share in 2022. The increase in both the quarter and the year was due primarily to higher profitability and higher investment income, which more than offset a higher provision for income taxes in the current periods. In response to feedback we've received from investors, we're also now reporting adjusted earnings per diluted share, which is earnings excluding the impact of stock-based compensation, taking into account any associated tax impacts. We believe this measure enhances the comparability of our results to other companies who report non-GAAP earnings. We'll continue to report and issue guidance just as we did previously, and we'll add this measure going forward. Adjusted earnings per diluted share was $0.32 in the quarter, which compares to $0.22 in the year-ago period. For the year, Adjusted EPS was $1.40 for the full year, as compared to $0.89 in 2022. The press release we issued today includes a reconciliation for Adjusted EPS over the last 8 quarters. Turning now to our cash flow and balance sheet. Operating cash flow in the Q4 was $37.7 million, which compared to $51.5 million generated in the year-ago period. The decrease was primarily due to timing on certain working capital items. Our full year operating cash flow was our highest ever at $189 million, more than double the $80 million that was generated in 2022, and reflects our higher profitability, as well as the previously disclosed impact from an amended agreement with a pharmacy partner, which took effect midway through the year. As a result, our days of sales outstanding improved at year-end by approximately 20 days from where we concluded 2022. Looking forward, we expect a mid-70% conversion of full-year Adjusted EBITDA to operating cash flow, excluding the impact of any cash taxes. As of December 31, we had total working capital of approximately $454 million, reflecting $371 million of cash, cash equivalents and marketable securities, and no debt. Finally, turning now to our expectations for the Q1 and the full year 2024. For revenue, we are projecting between $285 million-$292 million in the Q1, which contemplates the $15 million headwind in treatment mix shift that Pete described to you a little bit earlier. With the visibility that we have into more recent activity, we can see that mix is trending more consistent to what we'd expect, and we've reflected that in our guidance over the balance of the year. For 2024, we project revenue of between $1.285 billion-$1.315 billion, reflecting growth of between 18% and 21%.... Turning to profitability, we expect between $49 million-$51 million in Adjusted EBITDA in the Q1, along with net income of between $12.4 million-$13.7 million. This equates to $0.12-$0.13 earnings per diluted share, or $0.33-$0.35 of Adjusted EPS, based on the basis of approximately 102 million fully diluted shares. I'll remind you, our guidance does not contemplate any discrete income tax items, including the income tax benefit related to equity compensation activity. To the extent that related activity occurs, we will continue to benefit from those discrete items throughout 2024. For the full year, we expect Adjusted EBITDA between $224 million-$232 million, and for net income of between $68.1 million-$73.6 million. This equates to $0.66-$0.71 earnings per diluted share, and $1.54-$1.59 of adjusted earnings per diluted share on the basis of approximately 103 million fully diluted shares for the full year 2024. At the midpoints of this guidance, we are expecting to see the continued expansion of our margins in 2024, with Adjusted EBITDA margin on incremental revenue of 19.4%. These ranges reflect how 2024 will be another year of both strong top line growth and continued margin expansion. With the momentum we continue to see for family building services generally, and the energy behind our more comprehensive end-to-end solution, we are excited for the year ahead. With that, we'd now like to open the call for questions. Operator, can you please provide the instructions? Absolutely. Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your questions, you please pick up your handset if listening on speaker phone to provide optimum sound quality. Please hold while we poll for questions. Once again, please press star one if you have a question or a comment. The first question comes from Anne Samuel with JP Morgan. Please proceed. Hey, guys. Thanks for taking the question. I was hoping you could just provide a little bit more color about what's happening in the Q1, around the treatment mix, you know, why the headwinds? And then, you know, you touched a little bit on it, you know, that you've seen the rebound in February, but, you know, why do you expect to be able to, you know, recover that through the remainder of the year? And how should we think about that recovery looking... You know, is it gonna be kind of even throughout the year, or do you expect it to, you know, kind of step up in 2Q? Thanks. Yeah. Hi, Anne. Thanks for the question. So let me give you some history, and that history is what our expectations are based on. Throughout all our years, if you look at a full year, utilization mix is pretty constant year-over-year. The reason for that is that incidence and prevalence of treatment types, especially when the population is as large as it is under management that we have, is gonna be relatively consistent over a period of time. That said, there have been periods, and again, the most pronounced one was summer of 2021, right? Where we had blips or anomalies or aberrations or whatever you wanna call them, where treatment mix was a little off for a short period of time, but then reverted back to normal. This is acting similarly to that, where we had, you know, from treatments, both done and scheduled for Q1, where we haven't received all the claims yet, but materially are receiving a lot of them, where that aberration started, continued into the middle of February in terms of, you know, again, scheduled and, you know, where we received adjudicated claims on. But scheduled for the balance of February and through March, it's already returned to normal. And our expectations, because past history says that the years, and again, when I say, you know, the years are sort of pretty consistent, I'm literally referring to almost every year since we've been in the market, right? That the longer periods of time revert back to normal, because again, the, you know, what people are gonna need for treatment based on the different treatment pathways and journeys that they're gonna do, are gonna be relatively consistent when the population gets large enough, and that's our expectation, and that's why we expect what we are now seeing as normal distribution of mix to continue that we have for March. That's really helpful. Thanks. And then maybe just one other. You added some new benefits for the 2024 selling season. Was just hoping you could discuss, you know, what conversations with employers have been like? How receptive are they to, you know, adding more than just fertility? Thanks. Yeah. Hey, hey, Annie, this is Michael. Yeah, the conversations, you know, obviously we're early in the season, but conversations have been very good. There's a good amount of interest. And again, these are products and services that are logical extensions for us. You know, especially given our success on the fertility side, as that naturally goes into maternity and postpartum. And so, again, conversations are early, but interest is good and the, you know, pipeline is good from a client perspective so far. Thank you. The next question comes from Michael Cherny with Leerink Partners. Please proceed. Good afternoon, and thanks for taking the question. Maybe if I can just follow up on Annie's first question. I know, Pete, you've talked about this not being the first time you've had this mixed dynamic. ... Can you just maybe give a little more color beyond what you already said about how you landed on $15 million as the right number that is, transitioning over the course of the year, given that the implied guidance you have for the rest of the year, no matter how you spread it out, is still pretty solid relative to what your long-term trajectory has been? Sure. The-- You know, I'll remind you that Q1 has seasonality in it versus Q2, three, and four. We compared Q1 mix to last year and previous Q1 years and calculated the impact of the mix change that caused the, you know, impact to revenue, or the-- you know, short-term headwind that we, we described, right? So it's literally, effectively a pro forma calculation, is the easiest way to think about it, right? And it takes into account what I'm describing, which is the short-term nature of the, mixed impact in the first half of the quarter in terms of, of, of what we see, versus what we have and see scheduled for the second half of the quarter. And that's how it's calculated. Does that help? No, it certainly does. And then when you think about the dynamics of the pharmacy business, in particular, you're getting at kind of high levels of penetration. How should we think about the growth dynamics, growth opportunity around that business on an, call it, intermediate-term basis, given that there's so much cross-penetration that's already been done, are there other areas, other ways that you can help grow that business beyond just natural volume growth on the member adds? Or where should that business be going within your P&L? So as you point out, Mike, and by the way, welcome back. But as you point out, the penetration is getting close to 100%. It's 93% this year, in terms of the client base that we have. There is a little bit more to go relative to upsell opportunities, but for the most part, it's getting close. So it will reflect normal growth rate, more consistent with the medical revenue. That said, the only other dynamic that does come into play for a pharmacy is, you know, what's been going on historically, which is annual increases on some of the drugs that are in the formulary, and that will, you know, continue to contribute to growth from a top-line perspective for pharmacy. Awesome. Thanks. The next question comes from Glenn Santangelo with Jefferies. Please proceed. Yeah, Pete, I just wanna go back and touch on the regulatory climate that you talked about in your prepared remarks. I mean, after the Alabama court ruling came out, did you see any inflection or change in your business? And I know the Alabama AG office has come out and said they have no intent to prosecute any families, and the Texas governor came out and... Is this all gonna wind up just being like, you know, Roe v. Wade a couple of years ago, where it didn't really amount to anything as far as your business is concerned? Or is there anything that you're watching or sort of paying attention to? So, the short answer is, I do believe, like you're asking, and similar to when Roe v. Wade got overturned, where there was concern that fertility or IVF can inadvertently get caught up in the anti-abortion laws that were coming out, and then that didn't happen. This is the same thing. Alabama, just for clarity, wasn't a legislative change, it was a Supreme Court ruling on a case that then had an impact and concern around clinics in the state practicing when they do create in normal practice, more than one embryo when they're doing IVF, right? But I think the thing we're seeing and watching, but seeing, is bipartisan comments, you know, from everybody, including even the former president, but certainly the legislature in the states that are the most extreme relative to anti-abortion, including Alabama, which just had this Supreme Court ruling, you know, in the state of Alabama, where they're talking about, you know, effectively fixing it, if you will, or protecting IVF, realizing the importance of IVF in family building for many, many millions of couples. And so, so, I agree that I don't believe this will have an impact to the overall industry. I don't believe any other legislation, any other state will have anything relative to moving this direction. I also, you know, hope that for the state of Alabama, the legislature there will correct, if you will, what, in my opinion, is a bad ruling. This is Mark. Just putting a fine point on the first part of your question, is there anything that we're seeing? We don't really get into sort of the breakdowns of our business by state, but, if you look at the publicly available data from SART around Alabama, it makes up less than 0.5% of the volume in the U.S., and they're not outsized for us. So they're very, very small part of our overall business, so, so we're not seeing any impact of that. Okay, that's helpful. Mark, if I could just ask you a quick follow-up question on the guidance? I think you said when all your client wins in 2023 are rolled on, you'll have 6.7 million covered lives. Could you give us what that number was at end of period 12/31/2023? I'm just kind of curious as to how many members still have to roll on here post January 1st. And embedded within that guidance assumption, are you assuming any sort of organic growth within the existing base or any sort of deterioration within that existing base? And thanks, and I'll stop there. Yeah. So we so there's a couple of pieces here to, to keep in mind, and, and some were part of my prepared comments. So we expect, you know, in Q1, that will be approximately 6.1 million live. ...In addition, and then on top of that, the 300,000 or so lives that we have for GEHA, so call it, you know, 640-ish. That together with the 200,000 or so that we'll be launching in Q2 and Q3, you get closer. I think the rest is frankly in the rounding, to be honest. As far as organic growth through the year, we're not anticipating. I know in earlier years of our existence, we had more significant organic growth that we saw, but we're not planning that, and it's not baked into our guidance, you know, very, very small. So, you know, that's where our position is for this year, our outlook as of right now. Okay, thank you. Up next is Allen Lutz with Bank of America. Please proceed. Good afternoon, thanks for taking the questions. Pete, I wanna ask another one on the treatment mix shift here. Is it, digging a little bit deeper here, is it, was there more IUI and less IVF in the quarter? You know, I'm trying to understand exactly where is the mix shift occurring within the business, just to give you the confidence that it's gonna revert over the next few quarters. Thanks. Sure. No, it wasn't more IUI and versus IVF, it was more types of IVF that have different revenue contributions. And again, so without sort of getting into a lot of, you know, detail, if you will, there is variations of treatments, right? We literally have 20 different treatment bundles, right? That are all different forms of IVF. A couple of them are IUI, but they're mostly IVF. And there's nuances on all of those, and they have different revenue contribution on all of those. And so it's within the IVF bucket, it's not some shift to IUI. That's helpful. And then, just a quick follow-up on the female utilization was up about 6% in 2023, and that's a pretty big step up in one year. So just trying to think about how we should think about what's embedded in terms of utilization in the 2024 guide. Thanks. Sure. For both Q1 and the full year, we have essentially flat utilization versus 2023. Thank you. Okay, the next question comes from Scott Schoenhaus with KeyBanc. Please proceed. Hi, team. Thanks for taking the question. So I just want to keep drilling into this treatment shift. So is it a shift in the, you know, initial consult services that were probably more pronounced in December into early January affecting, you know, sort of the push out in egg retrieval medication and the retrieval process, which can be, you know, medications alone could be 10 times more than the initial consult. I just want to kind of put a fine point on the minutiae of this treatment shift on the IVF process. Yeah, it's although initial consults contributes to it, it was more, again, a shift within IVF treatments themselves, which do, by the way, as you're pointing out, different treatments have different levels of pharmacy contribution to them. Different parts of the cycle require different volumes and, you know, in terms of dosing as well as, you know, price points relative to the specialty drugs that are involved in IVF. So the combination of it is what's driving the bigger mixed impact, not an outsized impact relative to higher initial consults than normal versus moving on the treatment. And I'd just add to that, making the fine point Pete made it in his comments a little bit earlier. We do normally expect, at this time of the year, to see a slightly higher proportion of initial comments, so consults, because it's the beginning of the year. That's part of actually why you see the step up from Q1 to Q2. It's a contributor there. All of our comments here around mix are versus what we would expect to see and what we've seen historically. Again, Q1 is a little bit different than other quarters of the year, normally. That's super helpful. So is it fair to say that we should see a re-ramp up in acceleration in the medications, you know, the blip that we saw in the first half of the quarter? Should that roll really- should that give you visibility and confidence to see that roll right into the Q2? Thanks. Yeah. So I'm not sure that we comment this specifically on medications or not, but in general, the blip that we saw in the first half of the quarter, we're seeing in the first half of the quarter, that seems to be correcting itself in the second half, is gonna, you know, however much it contributes to higher medical revenue and higher RX revenue, yes, that's our expectation. Again, based on past history, and when I said that before, it wasn't like a one-time past history, it's literally years and years of history around full year utilization mix, from a mix perspective, is what we are expecting for the reasons that I said in the answer on my first question. Thank you so much. Next question comes from Sarah James with Cantor Fitzgerald. Your line is live. Thank you. So if we, you know, kind of ignore the anomaly that's going on in January, and we think about just the underlying revenue per cycle trend, how do you think about that progressing in 2024 versus 2023? Or maybe how you think about it going forward, given, you know, the geographic and product mix that you guys have going on, is that something that would be flat? Is it possible for it to still trend up? Well, we don't normally sort of comment from a guidance perspective on revenue per Smart Cycle. I would point to our history, though. Our history is that, in general, it's been coming down a little bit each year for a couple reasons. One is, I think you, you had referenced one of them, and the bigger contributor, which is, as we continue to grow the company and more and more of our growth comes from across the country, and therefore contributes as a mix, you know, a higher mix versus sort of previous years, where there was a higher concentration of East Coast, West Coast, which normally has higher reimbursement rates, that's gonna contribute to an average lower medical and overall revenue per cycle. So if history is a guide, I would continue to expect at some level that, I couldn't tell you sort of how much and what that might look like, but that is, that would be a normal expectation based on what's been happening, over the last 7, 8 years. Now, now remember, though, that we'll have a greater proportion of clients in 2024 that have the Rx benefit than the prior year, so that when if you look at it on a full revenue basis, there's a little bit of a step up because of the higher attach rate, but all the comments are, you know, certainly stand for medical, which is probably the best comparison point for you. Great. And one more, if I could. You guys have been fantastic at generating cash flow. You have a large balance now. How do you think about deploying that capital? You know, as we sit here now, we continue to look at that capital as optionality relative to opportunities, as we continue to explore opportunities out there. To that end, at some point, we will take a harder look at, you know, whether or not there's some sort of other use for that capital. And we'll share sort of those thoughts, you know, on upcoming calls. Thank you. Okay. The next question comes from Jailendra Singh with Truist Securities. Please proceed. Thank you, and thanks for taking my questions. And apologies, I keep going back to this shift in treatment mix in Q1. Couple of cleanup questions there. First, what is the related EBITDA headwind for this $15 million revenue impact? And how is this $15 million revenue impact split between medical and Progyny Rx? And the second question... was this treatment mix shift across the board, or was there particular geography or industry you saw this concentrated? The reason I'm asking this because I know, Pete, you're trying to compare this with summer of 2021, but back then, you attributed that to, you know, possibility of seasonality as people taking summer vacation. But having something like this happening at the beginning of the year, a little surprising, but, Well, thanks for the question, Jailendra. So let me give you again some history. When it's happened before, when we weren't public, it wasn't in summer or sort of it was different, it happened in different parts of the year. It's more happenstance than it is cause and effect. When we talked about it in 2021, we surmised what it might be. The reality is, we have no idea. The reality is nobody tells us sort of, you know, why they're doing what they're doing. They're on a medical journey, and they're gonna do what they do, and there's points in time that are anomalous, where a concentration of types of treatment that contribute lower revenue are gonna happen in a higher concentration. But they're anomalous because they're usually short in duration, right? Relative to, I forgot what your other questions were. So, uh- Okay. the EBITDA sort of- Well, the EBITDA sorta contribution would be, you know, relatively normal drop through, is the best way I could describe it. And you just could do sort of your own, you know, calc, if you will, on that. As it relates to breaking apart sort of the impact between medical and pharmacy, our guidance, we don't guide to sort of with medical and pharmacy broken out already, so I'm not sure how instructive that would be. And so we're not gonna break that out. Okay, and then my follow-up on gross margin. Anything you can share in terms of your expectations for 2024? You guys reported a 50 basis point expansion in 2023. Should we think similar year-over-year trends next in 2024? Well, I wouldn't sorta exactly, you know, peg that number. The reality is, you know, a lot of the dollars relative to margin expansion do come from there, right? So you can certainly take a look at that, but there's leverage across the business. You know, sales and marketing, and G&A, as Mark, you know, talked about for 2023 in his comments. But since we don't guide margin either, I think it's premature to sort of start commenting on margin expectations. That's why we give sort of the, you know, Adjusted EBITDA guidance for the full year to give you some frame reference. Great. Thanks, guys. Up next is Stephanie Davis with Barclays. Please proceed. Hey, guys. Thank you for taking my question. Apologies for this background noise. I am in the airport again. The story of my beginning year. I wanted to ask a little bit about the pharmacy benefit, because we are hearing a lot of concerns because of the election year around what this means for PBM. Are there any protections or carve-outs that you would call out that you think would shield your pharmacy benefit from being impacted by any regulation by this? Or how does that factor into your outlook for the year? Oh, I'm not sure exactly what you're referring to. Of the regulation, the regulatory stuff that's being discussed, as far as I'm aware, it's mostly around transparency and not around sort of any change relative to the economics of sort of the PBM world, right? That said, I will point out that our model, you know, relative to our clients and the members is different. As it relates to rebates, we don't cut a rebate check, if you will, and give it to the client. All of it is point of sale relative to the formulary pricing, so that the members themselves individually can also benefit from it. But there's nothing out there that I'm seeing or hearing about as I talk to the attorneys, you know, that causes me concern relative to an impact, economically to our model. I think the stuff that's being discussed sounds like it's just furtherance of some of the transparency laws, potentially. That rebate info was all I need to know. Then I wanna touch on your margins a bit, because it looks like you're, you're still expanding margins, but it's not the same pace that we've seen for the past few years. How much of that is just the penetration rate that you have reached for this pharmacy benefit versus maybe some conservatism in the outlook? Well, I would say again, it's early in the year to see where we settle in. I think it's pretty comparable to prior years relative to our guidance versus what we've achieved. And it's. I wouldn't necessarily peg it all to pharmacy or not. It's the overall business, and the overall revenue growth contributes to the overall margin expansion. The larger dollars are on the medical side already. So but overall, I would say that, you know, given all of the continued investment that we planned for the year, you know, as I referred to in some of my prepared remarks, if you think about it, right, you know, before 2023, we were effectively a one-product company. We've been investing in 2023 and a lot more again in 2024, in becoming a multi-product company. That's all in the P&L. With that, we're still achieving the margins that we have. I think, you know, that's a pretty good financial picture given the amount of investment that we are doing to expand our product portfolio. Awesome. Thanks for the help. Up next is David Larsen with BTIG. Please proceed. Hi, this is Jenny Shen on for David Larsen. Thanks for taking my questions. Just one on competition. So you mentioned that your market share right now is pretty low, in the mid-single digits. So, I was just wondering your views on the competitive environment, whether you run into other competitors when you're having discussions with prospective clients, and whether most of your wins right now are from clients who've never offered fertility benefits before, or whether they're competitive wins where you're taking business away from competition. Thanks. Thanks for the question. I'll do the second part first. And all my comments relate to prior selling seasons, so it's too early in the year to comment on current activity. But if you sort of take the 2023 selling season, the 2022 selling season, the 2021 selling season, our wins come from, you know, almost 50/50 as a percent from brownfield, i.e., clients that had some form of fertility benefit or greenfield, i.e., clients that have never had a benefit, and that's sort of been the recent history in the past 3 selling seasons. Before that, it was more sort of 2/3, 1/3 brownfield versus greenfield. That was the first part of your question. What was the other part of the question? I think the second part was related to, you know, competition during sales. Yes. So, you know, we, we, you know, first off, you know, each really each sale and each win, you know, we are competing first and foremost with the health plans benefit. So that's always something that's there, that's always something that's available and obviously something that, you know, we've had a lot of success in selling against for a variety of reasons. And then certainly as the market and the industry has picked up and the interest from the employer side has picked up, we do see and compete against some of the other point solutions. Again, that's not nothing new this year from that front. We've, we've been competing on that front for a while now, and as Pete said, you know, it varies on whether we're competing with with a health plan only, or whether we're competing with the health plan and point solutions on a case-by-case basis. But again, early in the year so far, but, you know, again, we're seeing consistent nothing new, I should say, from the competitive position versus last year. Got it. That makes sense. And I think you mentioned last quarter and throughout the year, some of the Not Now decisions. Do you think some of those headwinds can become tailwinds in 2024? Thanks. Yeah, I mean, so, you know, our not nows are, you know, we, we see not nows every year, first off, and, and again, these are, you know, these are, these are strategic decisions that employers are making. And so, you know, sometimes they go through a process and it's, you know, it's next year's priority or something along those lines. So we do see them every year. As Pete mentioned in, in his comments, not nows make up usually the majority of our, of our pipeline early in the year like this. And, you know, currently we're at a, a, you know, a strong position from a, a not now and a, and an active pipeline perspective. Again, it's too early in the year to, you know, make too many predictions around, you know, how that will materialize. But they certainly become Not Nows from last year, certainly become opportunities going into the new year, and this year is no different. Great. Thank you. There are no further questions in queue. I would now like to turn the floor back to James Hart for closing remarks. Thank you, John, and thank you everyone for joining us this afternoon. As always, please feel free to reach out to me if you have any questions. Otherwise, we look forward to giving you our next update in just a couple of months, actually. Thanks much. Have a good afternoon. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.