Progyny, Inc. (PGNY) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to day 2 of the JPMorgan Healthcare Conference. My name is Annie Samuel, and I am the health care technology and distribution analyst here at JPMorgan. We're thrilled to have with us this morning, Progyny. With us is CEO, Pete Anevski. And we're going to have them do a presentation and then following that, we'll do an interactive Q&A session. [Operator Instructions] So with that, let me turn it over to Pete.

Thanks, Annie. Thanks, everybody, for joining us today. We appreciate the opportunity to present to you again this year during this very exciting time for Progyny. Michael Sturmer, our President; and Mark Livingston, our CFO, are going to join me right after the presentation for Q&A. With that, let's get started. I'll pause momentarily, so you can take note of the caution on Slide 2 regarding any forward-looking statements or non-GAAP financial measures that we may discuss today. And for anyone that's new to this story, I'll start with a quick recap of our investment thesis, that's on Slide 3, and then cover each of these areas in more detail later in the presentation. Fertility and family building benefits is a large and rapidly growing market, and the growth in the market is being fueled by continuing favorable macro trends. Importantly, fertility has also been one of the areas in health care that's been the most resilient during the COVID-19 pandemic. And despite the market's strong growth, employers and patients are still being underserved by the traditional managed care providers. They have plan designs that seek to control the cost of care by controlling the way that patients utilize the services. This approach prevents many patients from achieving a healthy pregnancy or live birth and it also results in employers spending more overall and getting less for their money. Progyny is specifically addressing those gaps with our differentiated approach. Our solution creates a significantly better member experience through superior outcomes, which are essential to creating that positive experience. This results in happier employees and a more efficient use of health care spend for our plan sponsors. For 6 years in a row, the success in our program has produced market-leading patient outcomes around live births and healthier pregnancies; strong top line growth; and we have a scalable model with operating leverage that's already profitable, cash flow positive and expanding margins 6 years in a row and counting. Over the same time period, we've strengthened our competitive advantages and we've become the brand of choice amongst the large self-insured employers who are in our addressable market. And the last point I'll make is that despite our demonstrated success as a high-growth company, we're still at a very early stage of penetrating our addressable market. The societal macro trends on Slide 4, fueling the growth in the overall fertility market in the U.S. are people increasingly deferring family building to later in life, alternative paths to pregnancy are becoming more common, access to care is growing as large self-insured employers are increasingly realizing the need to offer fertility benefits to their employees. The fertility market has grown at a 9.4% CAGR over the last 10 years. And this is based -- this data is based on ART cycle data reported to the CDC by every clinic in the U.S. on every patient. And as most people know, natural fertility rates in the U.S. and around the world are declining. What's misunderstood about this trend is that you have to break down the subset of the population by age to really understand what's happening. In fact, for women ages 35 and up over the last 10 years, childbirth has been growing at a 2.2% CAGR. When you consider that the average age of a woman using fertility services is 36, there's a growing need for fertility services amongst this group given the trend. The decline is actually happening with women ages 15 to 34 where childbirth is declining at a 1.7% rate. Additionally, this trend in deferring family building also drives a growing need for fertility preservation. The second trend that fuels the fertility market is people pursuing alternative paths to pregnancy -- I'm sorry, to parenthood, such as single parents by choice and same-sex couples, both of whom need treatment in order to achieve their family-building goals. And treatment for infertility is expensive and not affordable by most people without coverage. And thankfully, this issue around access to care is starting to be addressed with more and more companies adding some type of fertility coverage to their health plans. They recognize that offering fertility is one of the most important benefits to offer employees in order to attract and retain the best workers. Millennials routinely put family building benefits at the top of their list when they're making a decision of where they want to work. The pie charts on the right show the increasing trend of fertility benefits being offered amongst large employers. Today, half of large employers are providing some type of coverage and the market research suggests that figure will increase to more than 2/3 in just a couple of years. Although coverage is growing, carrier plan solutions are still limited because their dollar maximum plans, they're designed to restrain utilization and they include step therapies and require prior authorizations. As a result, they're still limited and inadequate to achieve good outcomes. And despite the strong growth that I mentioned in the overall fertility market over the last 10 years, the market is still significantly underserved due to a lack of broad and comprehensive coverage for all couples affected by infertility. You can see this on Slide 5. Infertility is a highly prevalent condition affecting 1 out of 8 couples trying to have a baby, a disease more common than asthma and diabetes. When you look at countries like Denmark that provide broad coverage through a single payer system, assisted reproductive technologies to account for approximately 10% of babies born in those countries. However, in the U.S., treatment for infertility is expensive for most patients, and without adequate and comprehensive coverage, many who need care haven't been able to pursue it because they simply can't afford it. So as a result, our technologies account for only 2% of babies born in the U.S. today, which highlights the impact of the lack of comprehensive coverages. This is why we believe that today's market understates our true market opportunity. The smaller pie chart reflects our penetration into today's $8 billion fertility market, where we have an approximately 7% market share. Given that the market in the U.S. could be 5x larger with broad comprehensive coverage, the larger pie chart reflects the potential fertility market opportunity, and our current penetration are really only about 1.5% of that potential. So while we believe we're still in the early first inning of penetrating the market even as it is today, we're at an even earlier stage when you consider the overall opportunity. Another way to measure our market penetration is on Slide 6. Our market penetration is expressed here against a number of large self-insured corporate employers with 1,000 employees or more, of which there are over 8,000 in the U.S. and the 75 million covered lives those employers represent. As we enter 2022, we have 265 clients and 4 million covered lives. We're only 3% and 5% penetrated, respectively, against those measures. We asked frequently how the current pandemic has impacted our business? When you flip to Slide 7, it shows only a short-term disruption due to COVID on our business during the initial months at the onset of the pandemic. The best way to understand this is to look at our quarterly utilization rates over the last 3.5 years. Our quarterly utilization has been relatively consistent, except for a brief period at the onset of the pandemic in early 2020, when the industry temporarily shut down before quickly reopening, given the time-sensitive nature of fertility treatments. Except for that slight dip, utilization rates have largely remained normal. We do believe that there are some members who continue to be hesitant to pursue treatment during the pandemic. And although we believe this number is small, it's difficult to measure exactly how many. I'd like to take you back now to the beginning when our offering was established. Why did the fertility benefit market need a new solution? Let's flip to Slide 8. Progyny was developed to solve very real problems with the fertility benefits offered through traditional carriers, the primary option for employers offering fertility benefits prior to our existence. The problem with traditional carrier plan designed, as I mentioned before, and what still holds true today is that plan designs that restrain utilization, such as dollar maximums, have step therapies and require prior authorizations, all result in inferior pregnancy success rates, higher cost, high-risk pregnancies in multiple births, higher patient stress, high rates of absenteeism in equity and lack of inclusion. And as a result, these programs end up not being as good of a recruitment or retention tool as it could be for the employers offering them. So how are we differentiated? I'll go to Slide 9. This highlights how Progyny redefined fertility benefit management by leading with the member experience, partnering with world-class providers and managing all aspects of our comprehensive solution which results in delivering superior outcomes at scale consistently. It starts with our plan design, which is unique and focused [indiscernible] outcomes. Members have unlimited access to their dedicated patient care advocate, and they support and educate the member on the complicated fertility treatment journey and the best practices to empower patients to make the decisions along with their providers that drive these superior outcomes. We also provide the doctors in our network with the latest tools and technologies available under our plan design, and we work with these doctors on a collaborative basis. We received comprehensive reporting from our network contractually with data in every patient, and this uniquely enables us to actively manage and monitor the network for Progyny members to ensure adherence to best practices by our clinicians so that our members receive the best care possible. As a result of the superior outcomes, we deliver under our program, our clients see reduced absenteeism as well as a higher percent and faster return to work for their employees. And because the Progyny benefit provides equal access to care for LGBTQ+ employees, companies have a tangible way of demonstrating to their employees, their commitment to the principles of diversity, equity and inclusion. The value of the unprecedented level of service that we provide to members and clients is reflected in our NPS score of 81-plus. Despite new market entrants from stand-alone solutions for fertility benefits, we remain the only offering in the market that has these core competencies, and the comprehensive solutions across every aspect of our program that's necessary to deliver this demonstrated value year after year. Flip to Slide 10, please. This outlines the result of our program and how it translates into superior outcomes versus national averages, which are essentially akin to the traditional carrier results. In each of the 4 charts shown, you can clearly see Progyny members experience, higher pregnancy success, have fewer miscarriages and have healthier singleton pregnancies. To orient you to these charts, the leftmost bar represents the out of network clinics that were not invited to join Progyny's network. You can see their results are subpar, both to Progyny's network and to the national averages. The second bar represents the national averages for all clinicians and cycles in the U.S. The third dark gray bar represents the clinics that Progyny has chosen to be in our network. All outcomes for national averages on the slides as well as the subset of in and out of network data are derived from what these clinics report to the CDC for all ART cycles performed for all their patients in the U.S. Now let's look at the impact of our program. Although Progyny starts by curating a network of the best providers in the nation, and you can see that in the chart, our doctors do produce better outcomes than the national averages. When you give the right doctors the right tools, they can achieve even greater success, which is what you see in the dark blue bar that Progyny delivers for its members. The impact of these superior outcomes is significant to the member experience and the value that we create for our clients. We'll show you that on Slide 11. For the member experience, favorable outcomes mean members get pregnant faster and avoid unnecessary medical and Rx treatments. And when they get pregnant, it's primarily with singletons creating healthy pregnancies that reduce stress and anxiety associated with high-risk pregnancies such as NICU stays. These outcomes also increase productivity for the employer. And avoiding unnecessary treatments and reducing costly high-risk pregnancies means we're achieving substantial financial savings on behalf of our employer clients. Progyny's solution has been [Audio Gap] over the last 6 years. And as I mentioned before, [Audio Gap] consistent results demonstrated with our program, let's see how that has helped fuel the growth in our company. Let's flip to Slide 12. This shows where we started at launch in 2016, where we only had 5 clients and 2 industries and 110,000 covered lives. When we go to Slide 13, we move these images ahead to the time of our IPO in 2019. At that time, in just 3 short years, we increased to 80 clients and our covered lives increased 13-fold to 1.4 million. And perhaps most important, during that time period, we added clients in 18 new industries, emphasizing how the diversity in industries we serve began at the very early stages of our growth. This expansion happened across a broad area of the country, particularly in the Northeast, Midwest and Texas, while also deepening our presence in our existing geographies. Now let's go to Slide 14, which shows where we're at today. Our most recent selling season was our strongest ever. We added more than 85 new clients who represented approximately 1.2 million new covered lives for 2022. And as a result, we now have approximately 4 million covered lives, which is a 36-fold increase entering our seventh year in market. The map shows how we've continued to expand across the country even further with expansion in the South and the industrial Midwest, as well as strengthening our position even further in the geographies where we are already in. Today, our 265 clients are in over 30 different industries, which demonstrates the universal need for a fertility benefit across the board. Slide 15 highlights just a small sample of the companies we work with today. You can see the diversity we've achieved. Our clients are leaders in their industries with many of them recognized as the best place to work, best workplace for women or best workplace for LGBTQ+ company. Many of these companies are driving the economy and the caliber of this group emphasizes how Progyny has become the brand of choice when offering a leading fertility benefit. Our success in educating prospective clients around our disruptive approach and total management of the fertility benefit translates into strong performance with new client additions as illustrated by the chart when you flip to Slide 16. This approach, along with our sustained superior level of services around the management of our clients' fertility benefits, also contributed to our extraordinarily high client retention rate, which has been consistently near 100% each and every year. Because the utilization we see within a client tends to be persistent or even slightly increasing from year-to-year, our retained clients represent a strong base of recurring revenue. In addition, there's upsells and other opportunities to grow within the client base, which I'll cover on Slide 17. One pathway to expand with existing clients is through organic growth in covered lives. As our clients grow, the lives that we manage grow with them. Organic growth with these clients also includes a [ standing ] Progyny to any populations who weren't previously covered by the benefit including those employees gained through our clients' M&A activities. Another pathway with existing clients is upsells. Our clients generally either keep the benefit or increase their benefit year after year with us. For example, clients can add other services if they didn't take them initially, such as Progyny Rx or fertility preservation or they could add additional units of coverage to their program. For 2022, 1/3 of our existing clients elected to add some service to their already existing program. And conversely, no client reduced their benefit from what they provided in 2021. I think this really speaks volumes not only to the strength of our offering, but also to our clients' level of satisfaction with the value they're receiving from our program. Now let's take a moment to zero-in on an important component of our program, which is Progyny Rx. Flip to Slide 18. Medications are an extremely important part of fertility treatment. There are multiple drugs necessary, all with different dosing, administration and storage requirements. And in a traditional carrier program, the carriers manage the medical side of the benefit and the PBMs manage access to medications. This lack of coordinated care creates significant patient abrasions. We identified this gap early on and stepped in to solve this exceptionally well. And because of our integrated approach and managing treatments and medications at a minimum, our patients avoid missed or delayed treatment cycle amongst other raises. As a result, we're seeing higher success around the take rate for Rx amongst our new clients each selling season. This culminated in the most recent selling season with over 90% of our newest clients taking the Rx benefit for 2022. This is impactful to our growth because revenue -- our revenue opportunity is 50% greater when a client takes Progyny Rx along with the medical benefit. Now let's flip to our financial profile on Slide 19. This slide demonstrates the scale we've achieved as well as the leverage that's inherent in our business model. The financial data included in this slide for 2021 and 2022 is from the midpoint of the guidance we issued in November. Because of the very strong success of our most recent selling season, we said at that time that we expect to grow 2022 revenue by approximately 50%. We expect to be in a position to report our results and issue full guidance for 2022 at the end of February, once we've closed our books and see the early utilization trends for our newest clients. We think that these results would be notable really in any environment but are even more noteworthy since we're achieving them against the backdrop of an ongoing global pandemic. We've also achieved profitability at a very early stage and have expanded our margins significantly over time. And this expansion reflects the scalable infrastructure we've built, which results in our ability to continue to achieve higher margins on incremental revenue year after year. And finally, we're also highly efficient from a capital perspective, and we've demonstrated a high rate of conversion of EBITDA to cash flow, which is enhancing our already strong balance sheet. Now flipping to Slide 20, we believe our cash flow and strong balance sheet provide us with considerable flexibility as we think about our pathways for continued ongoing growth. First, we can continue to penetrate more of the 8,000 large self-insured corporate employers that are in our initial target market. As I described earlier, we only have about 3% of those companies under contract today so we can continue to grow significantly for the foreseeable future by continuing to add new clients within our core market. We also see ways of expanding our revenue opportunity by pursuing other types of clients and markets. For example, there are other types of employers which are currently not included in the 8,000 large corporate employers that I mentioned, such as state and local governments, universities and school systems and union groups. These represent a significant number of other covered lives, and our benefits is relevant and compelling to them as it is for our existing clients. We also see opportunities to enter into other geographies, both by leveraging our existing relationships with our multinational clients to extend the Progyny benefit to their employees outside the U.S. as well as providing our solutions to companies based in those local markets. And finally, there are new services and adjacencies that could further strengthen our current benefit offering, which could result in additional stickiness as well as incremental revenues and profitability. Considering the substantial runway for growth we have ahead of us for a rather existing addressable market, we're going to be methodical and selective with respect to adding any additional services that we consider. In conclusion, today's presentation highlighted the key aspects of our investment thesis. The desire for family building, coupled with the growing trend in deferred family building to later in life, drives more and more of a need for fertility services. This is demonstrated by our members' ongoing pursuit of treatment, even against the backdrop of a global pandemic. The record success of our selling season shows the increasing awareness and relevance to fertility to employers. And our continued achievement of the superior outcomes emphasizes the differentiation of our plan design as well as the unique nature of the collaborative relationships we share with providers in our network. Our continued high rate of client retention and our industry-leading NPS score of 81-plus emphasizes the continuing quality of our service, even with our high rate of growth. And the quality of our financial results underscores the strength of our business model and our ability to execute against it. Progyny has definitely become the brand of choice in fertility and family-building benefits, and we're in the strongest competitive position that we've ever been. We're incredibly excited for the future and look forward to keeping you updated on our progress. And with that, Annie, I'll turn it back to you.

Great. Thanks so much for that great overview of the fertility market. That was terrific. [Operator Instructions] But I'm going to kick it off with the first one, which is when we look at the backdrop for fertility and the opportunity for you to penetrate the market, a lot has happened since you went public 2 years ago, has anything changed with that opportunity with the underlying market backdrop?

Not really. So as I mentioned in my presentation, even though the pandemic is going on, we're still performing really well against that opportunity. And as I also mentioned, as people choose to defer family building later in life and continue to do so even over that time period, but really over the last 10 years and probably even longer, it provides an even greater opportunity for us to help that many more people and help companies offer an exceptional benefit.

That's great. Maybe you could spend a little bit of time just explaining or helping us understand what's been driving the volatility around utilization this past year? You were really optimistic on your most recent call around some improvement in the fourth quarter, but now we're having this Omicron surge. So how do we think about all those different moving pieces?

Yes. I think -- and for anybody who just joined the call for Q&A, we presented a chart. Over the last 3.5 years, we presented our utilization rates, and the chart pretty much showed what does happen, except for the downturn really because the industry shut down on the onset of the pandemic in 2020, the variance has only impacted us on the margins within quarters, within periods, but in a material way, haven't really impacted us, right? So although they're creating a little bit of bumpiness as it relates to near-term utilization, overall for the long term, in the long term or even quarters and full years, there's not really a material impact that we see. So although it feels volatile sometimes, I don't look at that as volatile. I look at that as significant resiliency of people who choose to continue to try and build their dreams and build their families. And that's how I view it. So there are marginal impacts in any given period, but they're marginal at best.

Maybe just one question, one theme we've been hearing from day 1 of the conference was that utilization has been a little bit disruptive because doctors are getting sick. Are you seeing any of that within your provider network?

If that's happening, it's anecdotal, we're not feeling it or seeing it. When I say that, I mean we're not having a problem getting appointment scheduled and getting a treatment scheduled. And so if it's happening, it's not pervasive, it's not happening across the board and it's not happening in a systematic way. If you remember, when the clinics reopened, they were very careful in their protocols of how they set up. They were very careful in staging their staff and making sure that they have the least amount of interaction even amongst the staff in order to avoid what you just described. So I'm sure it happens, but it's anecdotal at best.

That's great to hear. I'm going to take a question from the audience now. Can you speak to what you view as the key differentiators between Progyny and many of the upstart DTC fertility companies?

Yes. It's what I mentioned again in the presentation. There really is nobody. And when I say nobody, nobody, not a carrier, not a VC-backed start-up, nobody that takes every component of what it means to manage a fertility benefit and addresses it. And so at the end of the day, a lot of people have marketing materials and have a lot of claims, but there is a reality. Nobody is reporting outcomes, nobody is delivering outcomes at scale, nobody has NPS scores like we do, and most importantly, nobody has now going into the seventh year in market, client retention at the rate that we have, right? And when I say client retention, I'd like to remind people, it's not just the VC-backed start-ups, but if you think about it, right, we've carved out the medical benefit from dozens of national carriers, dozens, since 2016, and not one client has carved it back. And that, I think, speaks volumes in terms of what we're doing and what we're doing consistently. And then the other thing I'd like to remind people is that we continue to improve our solution in every aspect of it, every single year. That's 7 years of real experience, real improvement, real infrastructure build, real patterns of behavior amongst our employees and how they interest, the members and how we interact with providers. You don't do that in a day, you don't do that in a week, you don't do that in a year, right? So at the end of the day, anybody else that's out there trying to do what we do doesn't have the breadth of experience and performance demonstrated over such a sustained period of time.

Maybe to that point, is there anything different around the conversations that you're having with prospective clients now that you're bigger, you're broader, you have more referrals and people know you a lot better?

Yes, I'm going to flip that to our President, Michael Sturmer.

Sure. Thanks, Pete. So we have seen a bit of a shift in the discussions from prior years and even within early 2021. And that shift has moved from a sort of fundamental fertility education conversation and exploration into a much more focused discussion from employers and consultants at a much deeper dive related to where the differentiators are, where the value really is driven from and more of those detailed components of the fertility benefit. Annie, to your question, certainly, in this case, that plays into our strength and our size and scale, as Pete highlighted in his presentation, definitely helps us in those kinds of questions, and we've really become that provider of choice across some of the world's largest and most established companies and organizations.

Great. It seems like women's health is becoming a lot more of a focus issue. There was a really terrific panel last night about digital women's health, which I would recommend. But I was wondering are you seeing any improvement in the adoption of your employers of fertility benefits of ones that may be potentially before we're saying we don't want to cover fertility?

The short answer is yes. So we're also excited about seeing the amount of investment coming into women's health focused on women's health. Our benefit, as you rightly point out, addresses a women's health issue. And the nice thing that we saw this year was every industry is sort of different relative to what they adopt. Some adopt benefits and they're on the front edge of adopting early, I mean some industries adopt later. What we saw this year is a lot of adoption in industries that we hadn't penetrated before, but we also continue to expand in the industries that we're already in. And that really is a sign of what you're describing, which is more and more companies recognizing that this is something that they really should be offering to their employees, in particular, serving their female population.

That's great. We just got a bunch in from the audience. So when you think about ancillary service offerings, it might make sense for Progyny to offer, what is top of mind?

Women's health categories are top of mind. Adjacencies -- those are adjacencies that are naturally makes sense for us relative to what we already do for our employer clients and the credibility we've established with them. Beyond that, we're really not in a position because we're not far enough along really in any specific area to really talk about it. But to say that we are organized around it, we are doing research around it and we want to make investments in other areas and as soon as we have something to talk about, we will.

Great. And then can you talk about working capital utilization? There seems to be a jump in [ AP ] and AR patterns this year compared to last year resulting in a decline in cash flow from operating activities compared to previous year even though EBITDA grew.

Yes, Annie, I'll let Mark take that.

Yes. Look, we had sort of a onetime change in the load of working capital that we brought on as a company. We've talked about it, I think, a couple of times throughout the year. We had a really successful negotiation or renegotiation of the terms across our pharmacy supply chain, in particular, which yielded much more favorable rebates and pricing. One of the things that we agreed to in doing that was to allow for a longer receipt time on some of those rebates. So effectively, we've invested some working capital to get the returns that we're getting from that. So -- and you can see that in the gross margins and as they've improved this year, and in fact, our adjusted EBITDA and our adjusted EBITDA incremental on incremental revenues. So a onetime shift there that we knowingly did in Q1 and into Q2. But again, I think as we've said, I think our cash flow is now sort of normalized versus our earnings from here forward, other than the normal ebbs and flows of working capital.

Just a follow-up to that. You kind of ratcheted your gross margins a little bit higher when you were able to renegotiate that, that pharmacy benefit. And when you went public, you just talked about high-teens margins as a longer-term target. In light of what you've been able to do with the margins, how should we be thinking about your longer-term margin profile?

Mark?

Yes, sure. Yes, I think the one thing I want to be clear though, we haven't -- since the IPO, we haven't communicated any sort of long-term targets for margins. So we always sort of reference back to margins on incremental revenue as being sort of the indicator of where we think we can take the business and where it's trending. And for us, it's all about continuing to stay focused on execution and to see how far we can take the business. That renegotiation was a great example of how we can continue to try to negotiate better deals as we grow in scale. So -- and not just on the pharmacy side, we also have been really successful at negotiating reduced treatment costs across our provider network. And yes, those conversations are very partner oriented. We have a -- we sit down with the clinics, we go through the -- how Progyny and how it's come to their business has helped them grow and we come to sort of a mutual agreement. So that's been successful. And that's a recurring process. We -- each time we're renegotiating those deals are generally 2-year deals. I would note that over time, we've shared some of those savings with our clients as well, and we may continue to do that from time to time. But we've also kept some of those savings for ourselves, which is what you can see in our margins. And look, we think that as we continue to grow and expand the business, there'll continue to be opportunities to do that as we go forward.

That's great. Maybe just a follow-up to the question on some of the ancillary service offerings. Can you walk us through your rationale on build versus buy? I think you had -- you've spoken over your history about being open to doing acquisitions, but we haven't really seen anything yet. So what's your philosophy on capital allocation, and how you're thinking about maybe building or buying those new services?

I think the first thing I'll say to that, Annie, is the reason why I haven't seen anything yet is because we are being thoughtful about what we're doing. We don't want to just buy for the sake of buying, if you will. We obviously want to buy something that makes sense, that's going to drive profitability, that's going to drive revenue growth that makes sense relative to even what we're currently offering and making sure that it makes our overall solutions across the board even stickier with our clients, right? But with that, to the extent that we identify anything, it's not unlike really this benefit, right? If we can do it organically, if we can establish it ourselves or if it makes more sense for us to pilot and partner with somebody first before we make a decision to buy something, we'll do that. Otherwise, if it makes more sense for us to get to market faster around the current solution, we'll buy. Over our history, just to remind everybody, I was the former CFO of WebMD. We acquired many companies over those years, and we have experience doing that, and we're not afraid to do that. It's just really a matter of we haven't yet identified anything to do that. That said, as I mentioned in prior calls, and as we've mentioned in prior calls, most of our focus really in the last, let's call it, 1.5 years, 2 years, has been really dealing with the pandemic and dealing with the impact of the pandemic and managing through that. And we're now really much more, what I'll call, resourced and organized around looking at those other market opportunities that are in the marketplace that may make sense for Progyny.

That makes sense. I will take one more from the audience. You mentioned some bumpiness in near-term utilization due to the latest Omicron variant. To what extent does your 2022 expected revenue growth of 50% discount any volatility associated with utilization due to COVID?

Just to clarify, I didn't mention it relative to Omicron. What I simply mentioned was over the pandemic, there's been bumpiness in utilization as variants have shown up or really just even in overall as behavior sort of changes over the different phases, if you will, of the pandemic. We are in the process of closing our books. Part of that process is making sure that we confirm scheduled appointments and did they actually occur was -- or what were cancel rates, if you will. And so we're really not in a position to talk about how Omicron may have impacted us and it won't be really until the end of February. That process, as you might imagine, takes a while. And so that's why -- and more importantly, I think the early utilization and what that's going to tell us for existing clients, but mostly for our new clients because they're obviously new to us, what that will tell us relative to what '22 is going to look like. So beyond that, I'm really not in a position because I don't have the data to give you any more clarity on sort of what Omicron might have impacted us relative to the latest variant.

Great. Well, we'll stay tuned for February. Maybe in our last minute here, can you tell us what you're most excited about for 2022?

Yes. I really am excited about where we are as a company. I'm really excited about how many industries we're in and how many clients we have and are able to serve really. But that positions us really well competitively in order to be able to continue to penetrate the market and help that many more companies and help that many more people achieve their family-building dreams. When David and I joined the company back in 2017, we knew there was a large unmet need. And I couldn't, in my wildest dreams, believe that we would have been this successful this early. But what that really does and what really gets exciting about that is it really gives us the ability to take that success and leverage it and propel ourselves forward even more and help that many more people. So it's a pretty exciting time.

Terrific. Well, thank you so much for sharing your time with us today, Pete, Mark and Mike. I hope you have a great rest of your conference, and thank you, everyone, for joining us.

Thanks so much, Annie. Nice seeing you.