Good? Okay. Perfect. Morning, everyone. Welcome to this session of the Leerink Global Healthcare Conference. Mike Cherney, the healthcare technology distribution analyst. It's my pleasure to have with us the Progyny team, CFO Mark Livingston, James Hart, who adeptly runs IR, in the audience. I'm very happy that James didn't bother putting any slides together 'cause I got enough questions to keep us going for a while. Yeah. Yeah. Great to see you, Mark. Thanks for having us. Yeah, good to see you. I wanna start on the positive side. I know there was some confusion, which we'll get to, on last quarter, but 2025, if I had to characterize it in two words, improving utilization. It's something I think you saw slow and steady build over the course of the year. Relative to what you would wanna plan for as an organization, where does utilization sit today? Yes, I know always you want higher, but, like, for your thought process about strategic opportunity for the business, where do you think you are right now versus where you'd wanna be? I think maybe the right way to start level setting that is we are a consumption model, utilization ultimately is a measure of how much we will see on the top line, but we don't gear ourselves towards driving utilization. We create an environment, we create the benefit plans to make that available for our clients. You know, for us, execution is about member satisfaction and about better clinical outcomes. Yeah, 2025 was a good year from a variability standpoint. Things were more consistent than they were in the previous year in terms of consumption mainly because ultimately utilization, and I always like to say utilization is people who walk in the front door. Yeah ... consumption is what do they do when they get here. I think utilization is within that sort of common range that we've seen, and consumption is an area where we saw a lot more consistency throughout the year. I appreciate the delineation 'cause when we think of utilization, it's a mathematical equation. It's what goes into driving your revenue 'cause that's how you recognize revenue. So much of it is you enabling the environment so that utilization is something that your members actually want to do, that you make it easier for them to utilize, to consume. As you think about the experience over the course of 2025, what were some of those proactive solutions, the targeted service expansion to make sure that as people came back into the market, like you said, slow but steady, but that you were there to support them and position them to be successful, to have healthy babies, to help employers be able to better manage the cost that comes with a healthier birth? Right. Yeah, look, we're always looking for new ways of helping provide a better member experience for our for those that are going through it and better cost control for our clients. That's the demonstration of value that we give every day. You know, in terms of big steps that drove consistency or utilization, again, it isn't something that we execute towards. You know, we've been developing new systems. We've been developing other approaches. I'm sure we'll talk about that a bit on how we can best serve them. There's nothing I would point to that makes that like a significant driver of, again, sort of growth and consistency. For us, growth is about new members and new lives, and that's ultimately what makes the business get bigger. Once they're here, we always manage them in the same way. Maybe we'll jump ahead there and then come back to some other dynamics. One of the themes or one of the data points that came out of last quarter was this administrative adjustment in the membership number. Can you maybe just dive a little bit more into the why behind it, like what it structurally looked like in terms of for your management team sitting in the office and getting these numbers and how it actually factors into your ability to both, I'm not gonna say support members, but the consumption patterns that you see? Right. I think maybe the background here is really important. For us, we don't look at or use utilization. It's an output of our process and not an input. Everything about what we do is we're looking at the actual activity from members as they're engaging with the benefit throughout the year and certainly as the year begins. When we look at the activity for previously existing clients and that level of activity and staying consistent year-over-year, when we hear about, and again, this is sort of a late in the game thing where we're getting accounts and whatnot, and we're sort of recalculating, if you will, what the output is we see that and we say, "Okay, there's something perhaps odd in their numbers," but we don't go and press our clients for that. Our relationship with them, there's nothing that drives revenue. There's no relationship issue in and around those member counts. You know, we're not going after them to say, "Well, why is this wrong?" sort of if you will, chasing them on it, unless it's very extreme, which we try to do at times. Generally, we keep a bit of a hands-off approach to it. That's why again, when we, like we guided this year, I think the revenue expectation that we had from the new lives as well as the returning lives was where we expected it to be, and that's where our utilization is sitting today. Maybe just, I think that's an important delineation that the revenue you saw in 2025, no matter what membership that carried forward to on same-store sales, it's still the revenue. It's still the consumption. Mm-hmm. This isn't like you're not a per member per month revenue model where there was members that don't exist anymore. Yeah. You still have that same pocket of consumption, same pocket of services. Exactly. Yeah. It just looks more variable because if the member counts are changing, then your utilization rate will change correspondingly. You know, I know it's unfortunate because it's what we do to try to communicate with the street, as to sort of how the business is operating, but ultimately it isn't how we operate. Even along those lines. This isn't the first time you've seen variability in membership counts, and it can move both up and down, right? Right. It's one thing if we have like a well. You've gone through periods where you have well-known, well-telegraphed clients that have job reductions. Like, this is different. Yeah. Yeah. What's different this time is that they all sort of trended negatively as opposed to sort of offsetting each other. You're right. What we're not hearing from our clients and what we're not seeing in either their press releases, their earnings calls. I mean, many of them are publicly traded companies. Mm-hmm ... so in their SEC reports or even some of the required things like WARN documentation that you have to send out in advance, we're not seeing layoffs across those bases. Again, that's why we believe and see that there are more of these adjustments. Again, that combined with the stable level of activity that we're seeing with people who are actually showing up to do treatment. on that treatment side, looking back at 2025 and how you think about 2026, what's been the dynamics of treatment mix? I mean, one of the things I've always found appealing about Progyny as a service, full disclosure, Leerink is a Progyny client- Mm-hmm is the ease of use you make it for the member. The fact that it's not just going in some nebulous number for an IVF or a egg harvesting and freezing, that it's a token. Mm-hmm. It's, "This is gonna cost you half a token. This will cost you a quarter token relative to your Smart Cycle's dynamic." What did you see in the patterns on Smart Cycle utilization and the mix of it relative to the levels of consumption that underpinned what was a very strong 2025? Yeah. Look, ultimately the same thing that you're seeing at, on the output of it is good consistency. Really over many years, the mix of what people do is pretty tight. It takes maybe a percentage point or so change between mix to even see something across the whole set of the book and maybe a little bit more what we saw in 2024, which was more, less about mix and more about pacing. Sure of what they were doing and the timing of when they were doing it. Yeah, I think again, something that you know, we used to talk years ago about Progyny as more like a recurring revenue model even though we're not technically that. We're fully basically full consumption. The treatment mix breakdowns that we see you give those levels of patterns. Now that we have the scale that we have and the amount of people that are going through treatment at any one point in time, it is really pretty consistent. Along those lines, you've talked at length, including back to the Investor Day, about some of the investments you're making in your IT systems and the platform and understanding how those treatment patterns progress. Mm-hmm. Can you talk maybe about some of the tangible evidence that you've seen in where those investments in the IT systems and the platform internally has allowed you to position the business better for that high touch consumer supporting? Mm-hmm model? We talked a lot about investments last year, and it's part of our story here in 2026. You know, as we begin to roll out some of the tools associated with those that are more member-facing perhaps we'll be able to get a better sense and get more data around engagement and intent, et cetera. You know, we don't have that right now because we're still in the midst of rolling those out. Even the things that we did prior to our more significant platform investments we've invested in a lot of data analytics tools, et cetera, to try to understand more what they were doing. Again, what we see more so than anything is consistency. What hasn't changed for us and will likely never change for us, at least on the fertility side, is that we only have several weeks of forward-looking data to try to understand what had happened, and even that is only authorizations, not actually claims. It's something I had spent some time at that Investor Day. While we've, I would say, continued to perfect our understanding of the information that we have, it isn't going to be. We're not able to make huge leaps until perhaps we get more member-facing intent type data. Maybe let's also tick back to the selling season as you think about the setup for 2026. Another year of a lot of new logos, and you just made an interesting comment on the earnings call, I hope I have this correctly in my head, that healthcare now represents the biggest% of the industry exposure you have relative to your clients. That's right. I think I've told you in the past, I was surprised years ago that it wasn't higher. Yeah given the educational knowledge that the average healthcare organization would have about the importance of fertility support. Mm-hmm. What has been so successful about driving, I know you don't go out and say, "We wanna make healthcare our biggest industry," but as you think about the continued shift of industry representation, what are some of the characteristics you can use to describe the why behind why it's happened? Yeah. Yeah, look, I think we've highlighted, obviously, I know a lot of people still sort of hold on to the it's mainly a tech benefit, which has really not been the case for a number of years. We've been trying to highlight, as we did, more recently again on the breadth. I think ranking it that way, I think, has definitely caught people's eye. You know, healthcare is an interesting one because, I would say wind the clock back maybe three years, I don't think we had any healthcare clients of any sort of scale or meaning. They are large, right? They're you know, you're talking about large hospital systems across the U.S. or even regional sort of hospital groups. You know, you've got the right demographic. Typically, you have a large female workforce that's part of it, typically are in their thirties as well. It's been interesting because many of these clients are also part of our provider network. You'd sort of think, "Well, why can't they manage this on their own?" I think it speaks a lot to Progyny and all the other aspects of care that we give other than just the actual physical treatment part, which the providers do. I think our success there has then spun into this flywheel effect that we talk about a lot, where you've got competition across different healthcare providers for nurses specifically. Even in the last few years, I think it's pretty widely understood that the nursing shortage has been a thing. Having this benefit's obviously a big driver for the healthcare folks. As you think about the new customers in particular, what were they doing before on fertility support? Are these net new customers? Are these replacements from other carve-out benefits, replacements from more traditional carrier benefits? Look, this year, it feels like it's been this way for a few years now. It was about 50/50 roughly in terms of clients who are now adopting a fertility benefit for the first time versus some level of coverage, largely with a traditional carrier. I do think we did displace some of the VC-backed folks as well, during the course. Like nothing I'd call out in terms of mix of that. Really a similar story. Are you seeing similar trends relative to the, if new customers or even your upsells and what they're doing on the Smart Cycle side? I know the upsell is a bit of a somewhat misnomer in the fact that it's a opportunity- Mm-hmm to generate more revenue, not more revenue directly specifically. What are you seeing in terms of the generosity of the benefits? I do think it's remarkable. Most of the clients, for years now, and even in this last selling season, will pick either two or three Smart Cycles. That's sort of the typical entry level. There are some that pick one, it's a smaller proportion, some that pick more. What we see over time, and again through our upsell season this year, is that you see people increase the number of Smart Cycles that they'll choose to provide that that adequate benefit. I think part of it's just understanding, one, how Smart Cycles work, what's the actual cost of ownership. You know, despite all the work that we do to educate them upfront, like, there's nothing like the actual experience of your own company to understand that. I think we do a good job of educating them, like, what that incremental cost of a Smart Cycle would be. Then they can see, because now they've been living with their actual employees, those that reach it's rare, but those, there are people that do reach their limit, and their desire to give that extra benefit advantage to those who have not yet been able to achieve their be able to build their family, giving them that extra Smart Cycle is a comparatively low cost versus the benefit of actually providing the coverage and them finally succeeding on their journey. We've had quite a number of clients go to unlimited Smart Cycles. I would say, and I won't put a number on it, but there was a small percentage several years ago that's grown over these last several years as well. Maybe thinking about AI as a theme, how do you think about, for your business as a whole, the potential outward-facing dynamics of AI deployment versus potential inward opportunities, either in terms of improving the capacity of the patient care advocates or just especially sitting here as a CFO running the business better? Yeah. No question that AI will help, I think, many businesses, if not all businesses, run their business better. We're certainly already engaged in attacking that for ourselves. You know, the way that we're approaching it, we believe that it'll be more about hiring avoidance where you're gaining efficiencies rather than reductions. I know some companies have been out there sort of talking about AI and their future, and I know that there's also skeptics around sort of the motivations behind those announcements, but I'll leave that aside. For us, it is about creating efficiencies across all of our different functions. Coming into focusing in on the PCAs, for example part of the platform that we've been building over the last year and look to complete this year enables a lot of these AI functions to help them provide better care to PCAs. Think of next best. We talk a lot about next best action. Like, what is the next best thing for us to be doing to help this particular member in that exact moment? That's obviously real-time sort of effort. For us, it is focused on maintaining that human-to-human experience. We are not looking for AI technology to take over a PCA and try to replace them with a technological solution. You know, that's just our mindset around it. How do you game plan? Again, this goes back maybe to the membership base, and it might be a simple answer, but you do have a lot of your employer-facing business. Mm-hmm. There's headlines about potential job reductions, job losses. Like, how are you thinking or what's embedded in your guidance, if anything, on the potential for any type of workforce reduction-oriented changes? Yeah Relative to your client base. Look, I think it's interesting. Forrester came out and said that they believe about 6% of the U.S. workforce will be displaced by 2030. It isn't like a clear and present immediate change that you're going to see, like, this quarter or this year. It is displacement, not necessarily just an increase to unemployment. I think so straight out of the gate, we're not, like, of the mind that this is going to be a change that will happen overnight. The other part I think that's important to consider is when you think about the types of activities and positions that AI can, if you will, replace, if you wanna go down that path, it'll tend to be more manual effort, lower level type roles. Think people in their twenties as opposed to more middle managers, senior managers, those where you have to still apply human judgment to what these tools are doing and how they're running their business. That's the demographic that's a Progyny member per se. Even if there were more significant job losses, I think, and not just us, I think others believe that it would tend to be more at those earlier, career type roles as opposed to those that are straight in our demographic. Even that I think is somewhat controversial because ultimately how do you bridge somebody from entry-level person to a middle senior-level manager with that seasoned judgment to help run a business if they haven't gone through something? I think, look, there's a lot of angles to AI, but so for us, we're not seeing it as necessarily that much of a a long-term or a short-term issue, but something that we'll have to adapt with as time goes on. Last time I checked, healthcare was an industry that was less at risk. Mm-hmm You know, positioning well on that front with the mix shift. You've been on a multi-year journey on expanding the offering. You're building on the strength in fertility into other women's health, maternal health services. Mm-hmm. Menopause was the first one. Like, maybe just give us a status update on how Menopause is progressing, what the adoption rate has been, and especially given last year was the first year where you had any level of Menopause scale, what did utilization look like there? Yeah, no, look, we've been really pleased with the level of adoption, the uptake by clients, for both our Pregnancy and Postpartum and menopause product. It's been you know, it's clearly an area of need and that's sort of the reaction to it. We've certainly earned a position as a you know, trusted provider through our fertility reputation. You know, but for us, like the utilization, the use of that, we didn't have high expectations of that in 2025. We always talk about it not being meaningful, et cetera. I think 2025 was more of a learning year of how do we get to and engage with members so that they're aware. It's different than fertility. Fertility, if you have the benefit and you're looking for the help, you'll find us even if you're not aware of us, because ultimately through insurance or you'll get pointed towards us. Something like menopause, for example, you don't have to do anything. You can just suffer with the consequences of the symptoms that you're suffering from. We've been working with our clients to try to create programs to for awareness and to build that utilization over time. I think that'll continue on into 2026, but we're happy with that progress. I think again, it's new product and we're learning how to best deliver it. Along those lines and the strategic value of being able to do more for clients seems fairly, very straightforward to me. What does the pipeline look like for what more you'd like to do around still building on the trajectory of the core fertility service? Yeah, leave and benefit navigation is also one of the newer tools that came, and we've been modifying it and integrating it. It came through our BenefitBump acquisition a little bit more than a year ago. That's also a really interesting product that will begin. It's already had some good uptake in the marketplace around that. I think the right way of thinking of it is we don't wanna be all things to all people, and so although it may look good to have lots and lots of different offerings, to the extent that they're only modestly or even less than modestly used and don't necessarily drive any kind of measurable care we're focusing on the areas that we think make the most difference. This is why we've started in Pregnancy and Postpartum and menopause and then the Benefit Navigation to sort of help navigate through it all. speaking of the transition, not to all things to all people, but some things to most people. Mm-hmm. Progyny Select. Yeah. New introduction, kind of formally launched, I guess, start of this year. Mm-hmm For the Select season into next year. How should we think about the success rates of process for adding new members, given that this is a slightly different financial model versus what the traditional consumption looks like within your broader book? Yeah. Look, we're all very excited about Progyny Select. We've put a lot of effort into preparing the product for market, doing the work to make sure that we design the product appropriately. You know, expectations around milestones for this year, so we've already been out in market working with those that there's a very well-established marketplace around how you buy these benefits as a small company through your local broker, through the networks that aggregate them, like general agents, PEOs, et cetera. We've been working down through that over the course of the last year, and this year will be the same. I think creating that very, very broad reach of the product, not on a broker by broker basis, 'cause there's literally thousands and thousands and thousands of them, and even more companies, but through those sort of broader networks. We've made good progress with that now, and that's what we would expect to talk about as the year goes on. We are going to be selling, and we have our own internal expectation about adding lives and then being live in 2027. Look, I don't wanna overcook the expectations of it because, again, first year in, we're gonna see how it goes. The feedback that we've gotten through those partners that we've been beginning to work with and negotiate with has been really positive. We're excited. I think I like to add this every time. I mean, we it is very much in line and core with our mission. I like to say you shouldn't have to work for a large company in order to be able to have a fertility benefit and we're excited to be making that happen. Along those lines, I mean, this is selling into primarily fully insured- Mm-hmm employers. Fully insured comes with some level of risk. Mm-hmm. What does risk mean in terms of the risk that Progyny is taking on in underwriting, and does that change anything about the capital constraints or capital requirements for the business based on this looking more like a insured product even though it's more a product alongside insured? Yeah. Look, I mean, the scale of our self-insured business is obviously quite substantial at this point. I would like to say, 'cause I think we have heard some confusion about this. It's not our intention to offer this select product across the entire base. There's no replacement. It wouldn't make sense either because a self-insured employer, for all the same reasons they're self-insured on across their healthcare, are not gonna wanna be fully insured for this. You know, first, we don't believe that there's any real measurable risk here in the early years just given the scale that we've expected to be able to sell into in the first couple of years or so. Obviously, when you have that smaller pool of members your risk of variability could be much higher, but we've done a lot of things in designing the product to try to control for that. There is a fixed number of Smart Cycles. There is a dollar maximum cap that rests above, comfortably above that, but to the extent that you have outlier cases, we can control that. To be able to select this product, it isn't on an individual basis, so it isn't like a voluntary opt-in. When the company elects to have Progyny, we're being paid for the entire population of that company, and then obviously handling their members. So that also sort of reduces the risk of like biased selection by companies or individuals for Progyny. These are a lot of the big things that can factor into it. Look, we've been doing this for 10 years. I don't think there's any company out there that has the level of data to really understand how to underwrite a product like this. I'd even say that we have quite a number of clients. We don't count them in our client count, but we do have quite a number of clients that are below 1,000 lives that act a lot more like a fully insured employer. Sorry, I think we've been able to assess what patterns of utilization could look like between larger and smaller companies, and that's all factored into our pricing. We've we've certainly included a risk premium in the PEPMs that we'll be charging and expect that with all of the work and modeling that we've done, that we'll have a solid outcome from it. We're gonna run out of time, but I do wanna ask a pharmacy question. Yeah. A lot of moving pieces relative to the market thanks to Gonal-f being selected for MFN negotiations. Mm-hmm. Can you just level set for us how you think about pricing relative to this new reference price that's publicly available on the market and the value add that Progyny Rx puts in place as part of the entirety of the fertility service? Right. Look, I think the second part is the most important part. Negotiated price discounting is obviously something that is part of the offering that we provide employers. We have really good scale in the industry, particularly for fertility-focused drugs. But to the extent that there are these public prices that are out there that are lower, fine, but I think it's the value that you bring in controlling also the volume of drugs that are being dispensed, right? It's a two-part equation around cost. All of the things that we do to help manage those benefits, we talk about them all the time, waste management and things like that that are 30% savings for a client. When you're off in an unmanaged world, you're looking at again, unmanaged and the outcomes that come with that. I'll give you one, I think, really good example. You have a member who's going through IUI, and they and their doctor choose to sort of, forgive my word, supercharge that with drugs. What that does is significantly increase the rate of multiples through that to the extent that they have success with their IUI. As we've said many times, multiples leads to higher low birth weight babies, higher NICU stays, et cetera, which is where your costs come back to bite you. We think a holistic program both with lower pricing as well as appropriate management is the right solution. Before we run out of time, quick question. Yep. You have no debt, generate healthy cash flow. You, your team has alluded to the fact you think your stock is trading below intrinsic value, like price target would say. I agree with you. How should we think about the buyback right now? Yeah, we're still, as we talked about on our call, we're still in the midst of the current program that we have. We'll be ultimately up to $500 million- Yep ... over the last couple of years ago, or so. Brought back a significant number of shares with that. It will remain one of our capital priorities as it has been. I wanna come back 'cause you asked about capital on Progyny Select. We don't see that as being a significant component- Okay Going forward. Frankly, I'll throw a number out, not that this is a calculated number. If we had $50 million of capital constrained because of Progyny Select, that would mean that Progyny Select has been wildly successful, and candidly, I don't think investors will be concerned about that. Awesome. Mark, thank you so much for being here. Yeah. Appreciate it. Thank you. Thanks for having us. Good talk. Appreciate it. You look really tan, by the way. Hmm? You look really tan.