Progyny brings in $15M in profits in Q1 as more employers add workplace fertility benefits

Progyny saw its revenue grow 51% to $122 million in the first quarter of 2021 as employees increasingly turn to fertility medical services despite the ongoing COVID-19 pandemic.

First-quarter revenue increased $41 million from $81 million in the same period a year ago.

New York-based Progyny, a company that manages fertility benefits for employees at large firms, brought in profits of $15.2 million during the quarter, reflecting an improvement of $11.5 million from profits of $3.6 million during the same quarter a year ago. The higher net income was due primarily to the higher gross profit and operating efficiencies during the quarter, executives said.

The company reported earnings per diluted share of 15 cents compared to earnings of 4 cents per basic and diluted share in the first quarter of 2020.

The company's quarterly results beat Wall Street estimates. Analysts had expected fourth-quarter earnings per share of 9 cents and a revenue consensus estimate of $121 million, according to Seeking Alpha.

Fertility benefit services revenue was $90 million, up 50% increase from $60 million reported in the first quarter of 2020. Pharmacy benefit services revenue was $33 million, a 54% increase as compared to the $22 million reported a year ago.

RELATED: Progyny brings in $4M in profits in Q1, beats Wall Street expectations

Progyny onboarded 44 new clients in the first quarter. 

The first fertility benefits management company to ever go public, Progyny has grown its client base to more than 179 large self-insured employers including Amazon, Google, Facebook and Microsoft. 

At the end of the quarter, Progyny had 2.7 million covered lives compared to 2.1 million covered lives in the first quarter of 2020, reflecting growth of about 30% in covered lives over the past year.

Despite federal data showing that the U.S. birthrate saw a steeper decline in 2020, indicating early evidence that the coronavirus pandemic accelerated a trend among American women of delaying pregnancy, utilization of Progyny's fertility services continues to tick up, Progyny chief executive officer David Schlanger told Fierce Healthcare.

Fertility medical services continue to be an under-penetrated market, he said, as about 2% of all births in the United States result from the use of assisted reproductive technology.

One in eight couples face infertility issues and benefits offered by companies like Progyny are essential to help employees build their families, Schlanger said.

"Corporate benefits teams are looking past the pandemic and evaluating what life is like on the other side of this. Employers are making benefits decisions for a post-COVID world. As they look to attract and retain employees, they are focused on those benefits important to employees" he said.

RELATED: Progyny brings in $5M in profits in Q3 with growing demand for workplace fertility benefits

Adjusted EBITDA was $17.3 million in the first quarter of 2021, an increase of $10.6 million, or 158%, from the prior-year period. Adjusted EBITDA in the first quarter of 2020 was $6.7 million.

Looking ahead to the second quarter, Progyny expects quarterly revenue between $126 million and $131 million, which reflects growth of 95% to 103%. The company projects net income to be $6.5 million to $8.8 million, or 6 cents to 9 cents per diluted share in Q2.

Progyny is projecting full-year 2021 revenue to reach between $520 million to $540 million, reflecting growth of 51% to 57%. The company is projecting profits between $34 million to $42 million or 33 cents to 44 cents per diluted share for 2021.

Accolade's Q4, full-year 2021 results

Following on major acquisitions early in 2021, Accolade's fiscal fourth-quarter 2021 revenue jumped 33% to $59 million, compared to fiscal fourth-quarter 2020 revenue of $44 million. The company's fiscal fourth-quarter and full-year 2021 ended Feb. 28.

The company's fiscal year 2021 revenue came in at $170 million, up 29% increase compared to fiscal year 2020 revenue of $133 million. 

Revenue for the quarter beat Wall Street estimates, as analysts expected revenue of $55 million for the quarter, according to MarketBeat.

Founded in 2007, Accolade provides a health benefits platform for employers aimed at improving health outcomes and controlling costs by helping consumers make better, data-driven decisions.

During the year, Accolade doubled its customer base to more than 100 companies covering more than 2.1 million members. And the company's annual contract value increased 31% year-over-year to $211 million, Accolade chief executive officer Rajeev Singh said during the earnings call.

The company reported a net loss in the quarter of $4.7 million compared to a loss of $2.1 million during the same quarter a year ago.

RELATED: Accolade plans to acquire virtual primary care provider PlushCare in a $450M stock and cash deal

Adjusted EBITDA in fiscal 2021 was a loss of $27 million compared to a loss of $33 million in fiscal 2020. Adjusted EBITDA in the quarter was a loss of $2.7 million compared to a loss of $2 million in the same quarter a year ago, according to chief financial officer Steve Barnes.

Adjusted earnings per share came to a loss of 22 cents, missing analysts' consensus estimates of a loss of 10 cents, according to MarketBeat.

Singh said employers are shifting their focus from post-COVID "return to work" issues to addressing employees' longer-term health needs, particularly around chronic conditions and mental health.

"I think we're definitely seeing a turn in the conversations where our customers are increasingly getting ready to get back to normal, which means they're concerned about postponed elective care," said Accolade's chief medical officer Shantanu Nundy during the earnings call.

"I think what we're seeing, you know, early evidence of in the customers is a real change in mindset and sort of a larger aperture for getting even more involved in care delivery and for connecting all the different pieces of the healthcare equation for their members," Nundy said.

In March, Accolade closed its acquisition of 2nd.MD, a company that helps patients get expert medical opinions via video or phone. The deal was valued at $460 million. In April, the company announced plans to expand into virtual primary care by acquiring PlushCare in a deal valued at $450 million.

For fiscal year 2022, Accolade expects revenue in the range of $260 million to $265 million, with adjusted EBITDA in the range of a loss of $38 million to $42 million.

For the first fiscal quarter ending in May, the company expects revenue in the range of $54 million to $56 million, representing 53% growth over the prior year at the midpoint.