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

Good morning. If I could ask everyone to please take your seats, we'd like to get started so that we could end on time. Welcome to Progyny's first-ever Investor Day. I'm James Hart, Head of IR. On behalf of the entire Progyny team, we'd like to thank you for joining us today. Before we begin, I'd like to remind everyone that today's presentation is being webcast and recorded. The slides we're using today have been posted to our website at investors.progyny.com where you can view or download them from the events menu. For those joining us in person, there are cards at each table with the Wi-Fi credentials, so that you can log on and access the file. I'll pause here momentarily so that you may take note of the safe harbor regarding any forward-looking statements that we may make today. We put together a great agenda with opening presentations from Pete and Michael before you'll hear from Katie Higgins, Progyny's Chief Commercial Officer. That then leads to a client panel where you'll hear the perspectives of decision makers who have selected Progyny for their workforces. We'll then end the first half of our agenda with a review of our product strategy and road map. Following the break, we then have panels looking at Progyny through the perspectives of both our providers and members. And Mark will then wrap things up with a financial overview. The formal agenda today concludes with a group Q&A. But for those who are attending in person, we encourage you to join the breakout sessions that we're holding over lunch, where you can interact in a smaller setting with even more members of the Progyny team, and we'll walk you through the logistics of that towards the end of the day. With that, we'd like to get things started by introducing Pete Anevski, Progyny's CEO.

Good morning, everybody. Thanks so much for coming. Welcome. And let's get started. For those of you who don't know me, I'm Pete Anevski. I started with Progyny in the beginning of 2017, where I started as CFO and COO, then became President and CEO since the beginning of 2022. I'm proud to lead the team of exceptional people who are achieving some pretty amazing results since both our inception and since our IPO. We've helped tens of thousands of people successfully address the challenges they face when it comes to the important milestones in their health and well-being. Before we begin, we recognize 2024 hasn't unfolded as we expected. I appreciate that each of you spend a great deal of time analyzing our business and our industry and that you're probably feeling frustration and disappointment in our recent results. And believe me, we are too. I can promise you that every executive here today understands that. However, we're also equally excited about the fundamentals of our business and the opportunities ahead and today is intended to give you a deeper dive, answer your questions and share our excitement. And since our IPO, we've accomplished a lot, and we built a great business. We positioned ourselves for the future and the remaining opportunity, which we think is significant. And like you, we're frustrated that the valuation doesn't reflect that opportunity yet. However, the good news is no matter how you look at us, across every fundamental measure, the business Is strong. whether it's client retention, whether it's member satisfaction, profitability, scalability, margin expansion, cash flow conversion, you name it. It's a solid debt foundation to build from. We're going to lay out a vision for you for the future as well as make some commitments. Every commitment we made to you, our Board, our employees or our shareholders, it's all important to us. And we don't meet them lightly. We use every bit of information that's available to us and put out what we believe is our best view of the future. It's not lost on me, believe me, that when you invest in us, you're placing your trust in us, and we place a really high value on that. As CEO, relationships couldn't be more important to me and the management team. It's the cornerstone to every aspect of our business, whether it's the relationships with clients, where we're caretakers of their employees and stewards of their money. Whether it's with members who turn to us to help navigate successfully a very complicated area of health care and realize one of their most important goals in life. Whether it's our providers who collaborate with us, we believe, in a way that you don't see in any other part of health care, or our employees who are ultimately tasked with the very important responsibility of taking care of every one of our members throughout their journeys. And last but not least, it's important to me and the team that you know, we view our investor relationships to be as essential to our success as any other relationship. Over the course of today's presentations, you're going to hear a number of themes, all of which are centered around providing you with greater transparency and insight into how our business operates. First, you get a deeper understanding of our go-to-market strategy and how we resource and align ourselves to capitalize on our opportunities. Next, you'll be hearing from a number of clients directly who will speak to the reasons they chose Progyny and the value they've seen created through our relationship. You'll hear about our approach in identifying new product opportunities that continue to take care of members and deepen our relationships with our clients, creating even more value for them than what we do today. And you also get a look into one of the most important legs in our stool, the provider network and how we revolutionized the way of benefits solution works with providers. As you know, the cornerstone of our business is a best-in-class member experience. And we're going to give you a sharper understanding of why that matters, both the impact that, that has to the individual as well as to the plan sponsors. And last, Mark Livingston, our CFO, will tie together everything you hear today to help you better appreciate the financial model and where we see opportunities for further expansion. We've been a mission-driven company since day 1, building solutions that empower people during life's most important milestones. And as most of you know, we started in fertility and family building. And most recently, we've expanded into maternity and menopause, and we're going to continue to expand in the future in other areas of reproductive and women's health. Generally, we focus on the areas that are either overlooked or underfunded by today's health care system. Not unlike where we started in fertility, where traditional plan designs were failing to meet the market need. These are the same problems that impact virtually every other area of health care, and they result in poor patient experience, clinical outcomes that aren't being measured, let alone improved and abrasions preventing providers from practicing best medicine. And then all of this results in an inefficient use of the employers' health care dollars, not to mention a bad member experience. Before we launched our fertility benefit in 2016, traditional health plans were the only option for employers. But by successfully addressing the problems with those traditional plan designs, we've been taking market share in fertility every single year. And with the infrastructure and platform we've built, we've been able to broaden our offering into other evidence-based services to address more and more aspects of women's health. Although Progyny is still relatively young, the 5-year anniversary of IPO is coming this October. When you consider that during the last 5 years, we weathered a multiyear global pandemic, sustained periods of high inflation and shifting labor dynamics. And despite that, we've achieved significant growth consistently throughout that period. And while these past 5 years have unfolded very differently than any of us could have expected, we're exceptionally proud of what we've accomplished with 4 to 5x increases across the board, whether it's clients, covered lives, treatment volumes or revenue, and we achieved this rapid growth profitably. But what makes us most excited is that this is still very much only the beginning of the opportunities for Progyny. Just to quickly translate those stats into something more tangible. Since launching our services in 2016, we have collectively helped approximately 300,000 people in their unique family building journeys. To put that into perspective, if 300,000 people stood side-by-side holding hands, they stretch from New York all the way to D.C. And that's really incredible when you think about it that we just started with 5 clients 8 years ago. Now why do I believe this is still just the beginning for Progyny? What starts with the fact that all the drivers that have been fueling our past successes remain just as meaningful today. As most people know, fertility rates around the world are declining and in countries like Japan, that presents a major challenge to their economies. Challenges that may not be solved for generations to come. In the U.S., births have dropped by 8.3% since just 2010. And that's an alarming drop if you think about it and pushes the U.S. closer to a fertility rate that is below what's needed to sustain overall population levels. But you have to break it down even further with the subset of the population by age to really understand what's happening. The decline is entirely driven by women 15 to 34 whose focus seems to be on higher education, career growth and other personal goals before they turn to family building. And as a result, total births for women 34 and under has been declining at a 1.8% compounded annual decline since 2010. And conversely, for women 35 and over, births have been steadily increasing at a 2.2% compounded annual growth rate over the same time period. And with 36 years old, representing the average age of a fertility patient, it makes sense that the number of women who need fertility treatments is increasing and why use of assisted reproductive technology has grown at a compounded annual growth rate of 10% over the same period. With age as a single largest factor affecting our ability to conceive, it's not surprising to see that the incidence and prevalence of couples struggling with infertility has increased to 1 in 5, higher than even diabetes and other chronic conditions. And the other needs we're now beginning to address go much broader touching on many other areas of women's health. 20% of women, for example, suffer today from 2 or more chronic conditions that are affecting their health and well-being, regardless of whether or not they're looking to conceive. And the need for specialized care in women's health doesn't diminish over time. For example, based on a recent Mayo Clinic study, the excess cost related just to menopause alone was nearly $25 billion a year, which really drives home just how consequential the full span of women's reproductive health care is to society. Demand for evidence-based care and cost-effective support, not surprisingly, is coming from both employees and employers. As an example, within fertility and family building, half of employees surveyed said that coverage is a deciding factor on where they're willing to work. And on top of that, 2/3 say they would change their jobs in order to get access to better coverage without knowing whether or not they'll even need it. So what's changed since our IPO? I mentioned it's been nearly 5 years since our IPO anniversary. And as I think about it, as the first women's health benefits company to go public, we have the responsibility to educate the market on what drives this industry. In the beginning, we heard skepticism about the durability of this market which also goes with the territory when you're new and unfamiliar. But with the 5 years of experience in data, it feels like a good time to reflect back on what we've learned. First, demand for care has not only proven to be sustainable, persisting through the pandemic and the macroeconomic environment that I mentioned before. In fact, it's continued to expand which validates the ongoing demand and how vital our services are. Second, reflecting the universal appeal and relevance of our services, our customer base, which started intact has become broad and diverse, and we now have customers in every area of the U.S. economy. Third, our approach and solution is so differentiated, it made it very challenging for others to try and recreate what we've built. And although many of our competitors have been around for as long, if not longer than we have, they continue to struggle to catch up. Instead, what we see them doing are simply variations on the themes that were begun by the health plans, those themes, which we've disrupted. And as we continue to improve our offering, the result is that our competitive moat has continued to widen in the last 5 years. Fourth, when we look at the broader health care ecosystem, we're continuing to see growth in partnership opportunities with the PBMs, the aggregators, the associations and increasingly even the health plans, who, even though they still remain our #1 competitor, have not made meaningful progress in replicating any of our key differentiators, and some of them are starting to look to us in order to better meet their customers' needs. And finally, the continually increasing focus on the gaps in women's health care, provides us with additional opportunities to serve our clients' members through expansion of our products beyond family building. Progyny's family building solution was created to address an important area of women's health that was both overlooked and underfunded. And now that we're in our ninth year in market, a discussion with you is about sharing our vision for the future. The pillars of Progyny's family building solution can be leveraged to address other gaps in women's health care. And the new products that we have launched, and we'll continue to launch that address some of these gaps in women's health care are designed in the same vein as how we approach our family building services. It means our solutions are personalized to the individual and designed to deliver the right care at the right time for every member. We'll also continue to focus on that which we already do well, including creating a better member experience, eliminating the abrasions that prevent people from getting the right care at the right time and doing this in conjunction with the sophisticated data-driven network management to ensure that providers are enabled to deliver care more effectively. As a result, we'll drive better clinical outcomes and savings and continue to ensure we're proper stewards of our client spend. All of this fuels our confidence that we're well positioned to continue on a path of strong growth and profitability. And we're pleased to provide you with our first-ever multiyear targets for financial performance. From 2024 as a baseline, we expect to be at least double our revenue over the next 5 years in 2028, reflecting an approximately 20% CAGR and 2.5x our adjusted EBITDA over the same period reflecting further margin expansion. And here's how we're going to achieve this. First, we'll continue to grab market share measured collectively against all other market players by further penetrating the large untapped TAM that remains ahead of us. And second, it's no secret that the health care system today overlooks a lot of details, particularly in women's health. So we're going to be highly opportunistic in continuing to develop other solutions that further address these gaps. As we continue to develop and roll out these new products and they're attached into our large installed base, they will become a more meaningful addition to our top line and even more so to our bottom line, both enhancing our overall growth and diversifying our revenue streams. You'll hear more about this in today's agenda. Now I'm excited to bring up Michael Sturmer, Progyny's President. I'll let Michael share his background with you. But I just want to say the unique asset that Michael brings to Progyny is his in-depth experience in managed care which, at every level informs a unique and differentiated perspective as we continue to identify opportunities and develop future products. Thank you. Michael?

Thanks, Pete. Good morning, everyone. Thank you for being here today. As Pete said, my name is Michael Sturmer. I'm present here at Progyny. I get to work with this great team and the other 600 employees in our New York City office around the country and the globe. I've been in health care now for over 25 years, and I've been lucky enough to have experiences across a number of different aspects of this health care system. From a regional rehab hospital to 16 years at Cigna Healthcare where I worked across almost every aspect of their health plan business. From Cigna, I joined Livongo, a chronic condition management company. There I have the opportunity to build the health plan side of the business, experiencing tremendous growth through bringing services to the health plan and then from there to the employer. All of these experiences have helped shape my understanding across health care, health plans, digital health, employer benefits and the opportunities to bring impact and value to members. It has also shaped a big part of why I came -- why I joined Progyny 3 years ago. To be part of a model that brought together the best parts of all my experiences and shed many of the constraints and challenges of building on top of an existing system. See this population was so underserved, a new approach was needed and the opportunity to make real impact on members and their families were clear. To be part of an end-to-end model, to work with amazingly passionate mission-driven people and be early in our growth opportunity. It really is special to wake up every day with a focus on this unique area of family building and women's health more broadly. As many of you know, Progyny started with family building, as it presented an opportunity to build a complete model end to end and from the ground up. Employers weren't and in most cases, still aren't required to cover fertility benefits. However, we knew with a better model for members and better outcomes, we would actually be more cost-effective for employers, allowing them to bring these benefits to their employees. And what we built was a platform asset, first for family building and now expanding into additional areas. Family building required us to build each component part with the member first. That meant reimagining benefit design, away from a flawed cash cap reimbursement model into what we call smart cycles. To building a single-tier center of excellence network that has shown you can have both access and the highest quality. We then took the additional steps to apply processes and controls to continuously improve and manage that network. Next, we added a high-touch concierge model that from the first moments of preconception and family building to trying to conceive through treatment for those who need it, wrapped with digital support and supported by actionable data across members, providers and their coaches. This platform is highly leverageable as we expand into new areas like pregnancy, postpartum support and menopause. And this gives us an advantage over other vendors who started in different areas and are now looking to move into family building. These vendors who services are more similar to digital health, lack some of the key components like health plan integration, like network development and management, and utilization disciplines. So they're starting from scratch. We had the ability to focus deeply on one area for many years to understand the complexities to establish each component and fit each service together with the members' needs. That's the model that has allowed us to go be both broad and deep. That's our competitive moat. That's our market advantage. And now that same asset, we'll leverage to expand into additional areas. The impact an employer has when they put Progyny members in place, is quite literally life changing. For members, this starts at a really basic level. Can I afford care? And when you look at the numbers here, that means can I afford $48,000 to $65,000 without coverage. And as we know, for the vast majority of people, that answer is simply unaffordable. However, when the Progyny benefit is put in place, first, we lower that total cost, then when you look at the portion that the member is responsible for or the member cost share, that number lowers to roughly $1,500 on average. But it really goes so much further than cost. Members simply get better care with less friction, which means less stress. And for employers, they see better downstream outcomes and better cost management, even when putting the benefit in for the first time. With 72% fewer high-risk pregnancies, 36% fewer treatments and higher productivity. But what's really important to remember is behind every number represents a person, family and hope. I recall a phone call I got when I first started Progyny from a former colleague. Said, "Wow, I love what Progyny does. And she went on to say that if I had Progyny during my path, it may have been a little less painful. So that word stuck in my head. Sadly, a couple of weeks ago, I got a text from a friend. The headline was simply, this is a painful process. There that word was again. His wife was going through IVF, and he went on to share of the following recap of that 48-hour period. They are waiting for critical medication that needs to be taken at a very specific time during the treatment. But unfortunately, that wasn't there. They called the clinic and the clinic had few to no answers and simply pointed them to the health plan. On with the health plan, once again, no answers and more pointing this time to the PBM. On with the PBM with a well-meaning member services rep, but unfortunately lacking the expertise and the experience in this area. And even more unfortunate still no answers. Back out at the next day, work a secondary thought as they scrambled to salvage the IVF cycle. Lost money, lost time, added stress, added pressure, lost productivity and unnecessary disappointment, all because of a bad member experience. You can understand painful. I couldn't help myself. I asked what clinic they were using, assuming the clinic could not have been in Progyny's network, but they were. And I thought, wait a second. Clinics in Progyny's network don't have this problem. But the fact is Progyny members in Progyny's network don't have this problem. For as good as our clinics are, they can and struggle to overcome poor benefit design, lack of expertise and poorly coordinated member and pharmacy benefits. And unfortunately, this is not an uncommon experience. For many health plans, just like the one in this story, this kind of poor member experience is acceptable. It's not acceptable because they want it to be. It's acceptable because they have no choice for it to be acceptable because the fact is they have not spent the time, the money or the resources to make it anything but. Now as you heard in my previously, I grew up in health plans. I spent 16 years there. And I think they actually do many things really well. This is not one of those things. Despite half measures to build competing programs or throw digital tools on top of fracture components. This story is still normal when it comes to fertility. And unfortunately, when you talk about a bad experience in family building, it doesn't just mean a frustrating phone call or billing issues. It means poor outcomes and more cost. That's why when I talk about our competitive advantage and our moat, it's all the parts together, and it's really important that the full model works. From the benefits to the network, to the concierge to the data. That's the asset we have and the advantage we bring in the market each and every day. Okay. That's a good segment to move from our product asset into our growth levers. We have prior framework where we've built now 4 ways to continue to grow the business in both the short and the long term. You'll hear a little more later about our future diversification. But first, I want to touch on the other 3 areas in a little more depth, share a mindset for how we think about growth and going to market across our various strengths and new opportunities. Whether that's expanding services within our great client base, adding new logos, both direct-to-employer and through partners or adding new products, markets or segments, we'll double-click into each. Our great client base is a strength, and it's not just because of the great logos. It's the staying power, it's the trust the credibility and the value delivered. That's what has kept us near 100% retention over the years and what has earned us the right for those service expansions within our base of clients. Building on the momentum of our client success team with roughly 90 -- within pharmacy with a roughly 93% attachment rate. We see more opportunity to continue that momentum with our suite of new products where we are already seeing a near 15% attachment rate. You'll hear from one of those clients on our panel, talk about why they added that product and that relationship that I referenced. Additionally, we'll continue to add coverages and services like adoption and surrogacy, additional cycles, donor tissue and fertility preservation. Lastly, when you serve the best companies in the world, they also expand. They expand the benefit into new populations. They expand the benefits globally, and they grow the business in many ways, including acquisitions. This continues to also be a net positive driver of our growth. I continue to be excited about expanding services with our existing clients and each time we win new logos, that creates more and more opportunity to expand down the road. And this is all made possible through the trust, credibility and value that we focus on each and every day with that client base. This has led to a consistent roughly 20% annual expansion, and we expect that to continue. Next is logo expansion. We've been doing this for years, and the market continues to look to add these clinical benefits. In fact, according to a recent Mercer study, 50% of companies surveyed prefer to specialty solution over their health plan. Mercer went on to say that solutions addressing specific health care needs, such as chronic condition management, fertility treatment and behavioral health have become increasingly common benefits for employers. And this is consistent with how we've won business over the years. First, by taking business from the health plans where a benefit was in place, but the employer wasn't seeing the value. We call this brownfield and it represents about half of our clients. Next, or more employers adding the benefit for the first time and selecting Progyny. And we have clients from both of these groups later today once again on our panel. And while it's always satisfying to win business from competitors, what is maybe more satisfying is not any of those employers, and these are employers of all sizes, not one that had a health plan benefit has ever gone back to a health plan benefit. I'm not sure if there's a better example of value and that market advantage that I referenced. That leads me into TAM expansion. We started at ASO employers over 1,000 lives and a roughly $80 million TAM. Over the last 2 years, we added labor and federal to that market and now representing roughly over 100 million lives opportunity. And we now see additional opportunity to expand once again across the 250 to 1,000 life groups across ASO fully insured level and minimum premium funded, adding an additional $50 million to TAM, including global across all categories. Now for global, we recently acquired a small company, and they will continue to focus on global expansion, working closely with our U.S. teams. For the other areas, we are taking the same approach that we've had success with labor and brought on a leader to focus in that area and help us make the necessary adjustments to win in that segment. We are testing that now in market and this will include a different go-to-market distribution, leveraging existing partners and continuing to forge new ones. We will also explore different funding models to fit best with this segment that is more cost sensitive to variability of cost. And we can leverage our strengths in right care, right time, for every member to help deliver this. To be clear, this is about adding, adding more options for employer -- for all employers, not just the largest, adding more optionality in the market and continuing to further penetrate the segments that we started in. And we've been successful in growing through diversifying our segments and areas of focus. We demonstrated this over the course of the last 5 years as we've expanded adoption from a heavy tech and tech services sale to now over 45 plus industries with tech joined by industries such as health care and consumer goods at the top of the list. And no one industry represents more than 20% of our membership. Lastly, as we've added these new segments, we did so while maintaining our mix of client size, and we expect to continue to do that again as we expand the pie with smaller companies, but as I said earlier, continue to pull on all levers. As we head into the rest of the day, this framework for growth is what you'll hear more about. As Katie Higgins, our Chief Commercial Officer, will go deeper on our go-to-market as we continue to go direct to employers as well as through partnerships. You will hear more about our new products and road map expansion from Joanna Balogh-Reynolds, our Vice President of Product Strategy, all built on a platform asset and the value, trust and credibility we built with our employer clients who you'll also hear from on a panel later. Lastly, and always first in how we approach things. You'll hear the impact we are having directly on our members and our clinical partners that serve them every day. Now I'm pleased to introduce Katie Higgins. Katie joined us in December of last year as our Chief Commercial Officer. I'm thrilled to have Katie on the team. She brings strong sales and client success execution. And please join me in welcoming Katie to the stage to go deeper on our market execution.

Good morning. Thank you, Michael, and thank you for all of you who are joining us here in person and online. We are delighted to have you here and be able to tell our story today. As Michael mentioned, I'm Katie Higgins. I serve as the Chief Commercial Officer here at Progyny and I have the true pleasure of representing our incredible sales, business development and client success teams. I came to Progyny with over 25 years of of experience leading commercial teams first at the Advisory Board Company in Washington, D.C., later at Optum and most recently at Crossover Health. And I came to Progyny because what I saw was an organization that had really cracked the code on what I consider to be the holy grail of health care innovation, providing exceptional access to outcomes-driven care, leveraging an innovative benefit design, all the while keeping the patient and the provider experience at the center. Across my time in health care, I really have not seen an organization achieved this level of innovation as consistently and at scale, the way in which Progyny has done first in the family building space and most recently in women's health. As you heard in Michael's story a few minutes ago, it's not enough just to bring a patient to a specialist. You have to take on the entire innovation story if you're going to really achieve results. And that means access, benefit design, outcomes and experience. By taking a condition like infertility, which historically has lacked a true health care structure, you can reimagine how we design the health care experience with those key tenants of mine. So these are the themes you're going to hear continuously throughout today, not just from our Progyny team, but also from our clients and from our members, who are excited to introduce you to in a few minutes later this morning. I'm going to spend the next few minutes unpacking our go-to-market approach. So you understand how we deliver reliable growth results year-over-year. But the theme that is hard for me to capture in this forum is the passion and energy our team brings to the market. When you have a team that has a chance to go into the market and represent true innovation with documented results, that leads to creating families and helping women better manage their lives through better health. It creates an unstoppable force in the market. And that passion and energy is as important to our success as any growth strategy or organization that we can build. So with that as the backdrop, let me walk you through how we're organized and manage our approach to both growth and retention. Michael just took you through some of the big picture macro trends that are driving the groundswell for both family building and women's health solutions. As noted, we're still very early in our growth potential not just within the family building space. And that growth potential further compounds as we broaden our aperture to bring our model to other underserved areas of women's health care. My goal across the next few minutes is to provide perspective on how we cover that market. to achieve reliable and predictable year-over-year growth. Across the past 5 years, in particular, we have refined our go-to-market approach and organization to achieve reliable and predictable growth and retention of business as measured by lives, revenue and clients. We know to capture the buying market each year, it is critical that we bring a diversified go-to-market approach that canvasses how our clients evaluate and buy benefit solutions. There are 3 key areas of focus within our commercial organization. First, we maintain a robust team of sellers with experience selling to employers to cover key geographic markets and the industry verticals for direct sales. Secondly, we have built and deployed a strong team of client success executives who not only partner with our clients, but also lead our upsell efforts, both in terms of expanding benefit coverage and also adding new products and solutions to their portfolios. Because our client success team has been so successful in achieving their annual upsell targets, it frees up our sales team to focus exclusively adding net new logos, which has helped us tremendously in terms of delivering against our annual impressive targets. Knowing the importance of benefit consultants to our clients' buying process, we have also built a team of relationship executives, who are laser-focused on identifying key consultants, educating them on the Progyny solution and serving as a partner to them in key evaluations. And then finally, we have built a strong business development team that is consistently sourcing new partnerships and avenues for growth to resell Progyny, including health plans, TPAs, PBMs and other benefit aggregators. Through these 3 teams, we are able to extend our reach to potential buyers at the right time of their buying cycle, and help drive a thorough evaluation process that provides confidence not only in terms of total spend, but the achievement of clinical outcomes and member experience. With this in mind, I do want to go a little deeper into our consultant and partnership strategy as it's a critical component of our go-to-market approach. For those who are not as familiar with the buying patterns in the employer market, allow me to take just a moment to highlight the importance of Benefit Consultants as drivers of health care decisions in our industry. Across the past 5 to 6 years in particular with the explosion of critical decisions to be made related to workforce health and safety, particularly with COVID, including the vast proliferation of point solutions in the ever-increasing cost of employer-sponsored health care, consultants have played a key advisory role and an extension of employer benefit teams. Consultants are leveraged to analyze population-specific health care drivers, health care cost drivers, assess the market for solutions to those drivers and help navigate vendor selection. Employers and consultants alike field literally hundreds of solicitations a week from health care companies and the buying landscape can be very overwhelming. For companies like Progyny, investing in relationships with the top 10 to 12 consultancies is table stakes for making sure that those who are influencing buying decisions, understand our value proposition and our differentiators. In our case specifically, our scale, our breadth of industries and client profiles as well as our ability to drive outcomes and cost control consistently makes us a reliable recommendation for consultants to their clients. And to that point, WTW, the largest of the benefit consultancies has selected Progyny for their own employees, which is certainly a great testament to our value. While consultants maintain neutrality in the market as they serve their clients, we've also invested heavily into partnerships, where these health care aggregators in our industry have actively selected Progyny as their preferred family building solution to resell to their employer clients. Our partnership strategy gives us even greater reach across the industry by narrowing the field of potential solutions while also providing easier methods of contracting through an existing partner such as their PBM or health plan. Within these partnerships, it's important to note, we're not providing a lighter version of our standard offering as is the case with some alternative solutions in the market, but rather our full value proposition and service model, therefore, providing the same level of cost control and superior outcomes regardless if we're selling directly or through a partnership. So with a national team of sellers, client success leads, coverage of consultants is the primary buying influencers in our market and a growing roster of partners, we are able to achieve reliable pipeline build and achieve aggressive annual targets. With that as the context for our go-to-market organization, let me give you a little insight into our commercial discipline as well. With the benefit of 8 years of selling experience in this market and with the addition of new channels for growth, we see a reliable selling season year-over-year with a defined sales process that involves a collaborative analysis of potential spend and the resulting clinical outcomes based on our experience of managing this benefit for close to 500 clients. While our selling season generally kicks off in January, we entered the year with a robust pipeline of clients who have previously evaluated family building benefits in the past, but for whatever reason, had to push their decision to the next benefit year. These Not Now opportunities, as we call them, generally give us a fast start to the selling season with early decisions early in the sales year. In parallel to managing this carryover pipeline, our sales team is covering their respective markets and constituencies across direct outreach, marketing campaigns and a significant investment in events that are targeted to employers and to consultants. Our pipeline build stretches through the end of the summer with commitments starting to turn in the late spring and stretching through the end of the calendar year. We are rigorous in our definition and measurement of pipeline. Only those opportunities that have provided us with data on their populations to allow for a thorough investment analysis and discussion are included in what we refer to as active pipeline, which helps the commercial organization focus on true buyers versus casual window shoppers. This definition is also important as it allows us to have an objective measure of pipeline that is repeatable year-over-year and allows for good measurement and management of incoming opportunities and our growth projections. As we stand today in the middle of our selling year, we are pleased with our progress to date, both in terms of the quality of pipeline built and the commitments we've already received this year, which puts us ahead of 2023 performance with a healthy pipeline left to manage and close through the end of the year. While the past 2 to 3 years have witnessed the rise of other competitive solutions, we have not seen a significant shift in our win loss performance. And in fact, the vast majority of our non-wins remain deferred decisions versus competitive losses. 3 reasons drive our wins over other competitive offerings. First, our experience in managing family building journeys and the cost and clinical data that we have accumulated across the past decade, gives confidence to our cost and outcomes projections. And because of this depth of experience and confidence, we are willing in many cases to guarantee those related metrics. Secondly, our actively managed network that members -- our actively managed network ensures that members are receiving the highest quality of care, leveraging evidence-based standards of practice at the most competitive pricing. And lastly, our level of strategic partnership with clients through our client success team ensures that we are serving as an extension of that team, giving them precise data on cost, access and clinical outcomes. It is for these reasons that across the past several years, less than 6% of our annual pipeline has been lost to competitors. While the vast majority of our non-wins are represented by issues related to employer prioritization and mind share and/or defaulting to a carrier option. In these cases, we can see a crowded [ dock ] at the priorities, whether that be increasing medical rates, new issues such as GLP-1 management or other issues impacting larger shares of the employer population and at times, these competing priorities can crowd out a full evaluation. However, the deployment of our tenured national sales team expands a partnership strategy and health plan growth, alongside our growing product portfolio ensures that we have ample coverage of this long-term sales opportunities. And in fact, if you look at our annual wins, roughly 25% or a little bit more of our annual wins can be traced back to this deferred pipeline that we have carefully managed across our commercial organization. This commercial discipline, coupled with a growing product portfolio, that can increase our impact across a greater portion of the population allows us to optimize this Not Now pipeline. So once we receive confirmation in the great news that Progyny has been selected partner of choice, we are able to kick off a full service implementation process that requires minimal effort on the part of the client and can go live in as few as 4 weeks. Our implementation allows us to achieve speed to impact regardless of client size by being a light lift for benefit teams and gives fast access to members who are eagerly anticipating access to this benefit that is unlike other employer-sponsored benefits. We have earned our well-oiled approach to implementation by the volume and the breadth and the depth of the types of companies that we've had the pleasure of serving across the past many years. Let me bring this slide and give you one quick example. Earlier this year, we were approached by a well-known employer who was struggling with member experience and access with their incumbent solution. In this case, we were able to quickly provide an in-depth analysis of access to specialists for their populations, provide better visibility in their overall spend and provide a full implementation within 3 weeks to ensure we had a seamless member experience. This example is only possible because of the years of experience we've had in the hundreds of implementations that we have conducted. Lastly, as I've noted previously, our client success team is purpose-built to serve as strategic partners to our clients to understand overall benefit cost, patient-level clinical outcomes and cost avoidance through fewer required treatments and lower high-risk maturity and NICU spend through the achievement of a lower multiples rate. We meet with clients quarterly not only to just review level of engagement of their populations, which is important but also to provide deep insight into their investment and the very real and tangible results for that investment. Unfortunately, in health care, as everyone in this room knows, we do not always understand our costs, and we certainly don't understand the outcomes for those costs. But at Progyny, it is at the core of what we do. Beyond reviewing the business results of our quarterly -- in our quarterly business reviews, we always pause to reflect on the hundreds, and in some cases, thousands of families that have been forever impacted because of an employer's investment in Progyny. And it is truly an awesome conversation to be a part of, and it's not hard to understand why we've been called the most beloved benefit. In a few minutes, we'll introduce you to 4 of our clients who will give further insight into their reasons for partnering with Progyny and to tell you their stories of their experience. But at a macro level, we cannot be more proud of the stats you see across the page. Over 80% client NPS, close to 100% retention, 40% of our clients doing some level of advocacy on behalf of Progyny. And so far this year, 1 million of our covered lives now have access to some of our new products and solutions through client upsells. These stats represent the greatest validation of our value proposition that we could ask for. And I've been a part of some incredible companies in my career, I have never seen this level of retention and support from a client base. And this is how I know that what we're doing is the right answer. We deliver exceptional health care at a predictable cost that leaves our clients, our members and our providers with an unparalleled experience. So with that, it is my great pleasure to introduce you to our leader of Client Success, Tanu Rajendran, who will also introduce you to some of our clients. So we've had the privilege of serving and I'm so delighted for you to hear their stories.

Great. All right. Well, thank you, and good morning, everybody. My name is Tanu Rajendran. I head up our Client Success team. And it's my pleasure to represent my team this morning, a team that supports our 460-plus diverse clients and works very closely with the benefits leaders, 4 of whom you're about to meet today. And just making sure that we're bringing the Progyny benefit to their populations. So with that, let me introduce you to our panelists today. Let me start with Juliet Vestal, who is the Corporate Vice President of Total Rewards at B. Braun, 185 year-old privately held global medical device company that launched Progyny back in 2021. Juliet has over 30 years of experience in HR within a variety of different industries. And specifically at B. Braun, Juliet's focus has been really on offering a competitive benefits package that supports their talent attraction and retention strategy. Next to Juliet, we have Janet. Janet, who is the Director of Global Benefits at Delta Air Lines, where she served in a number of different HR roles for the last 12 years with a particular passion for enhancing the employee experience by increasing engagement and understanding of Delta's amazing benefits. And then we have Sam, next to Janet. Sam Elliot, the Head of U.S. Well-being and Digital Health at BASF, a leading global chemical company. Sam also comes with over 12 years of HR experience. And Sam, you have really kind of transformed the way BASF defines and measure as Well-being. And you were a key driver and just evaluator of fertility and Progyny last year, allowing BASF to join Progyny as a [ one on one ] this year. And then lastly, but very prominently displayed here up on the screen. We have Renee Albert, a leader here in just global Benefits Strategy. Renee has over 26 years of experience in benefit space, and she was an early partner of Progyny and has now since been with 2 of our Progyny clients, right? Renee, with that, let me actually start with you. I want to make sure we got audio. Good morning, Renee.

Good morning. How are you.

Perfect. Good. Great. You are at the forefront of fertility benefits back in 2016. And you actually had a fertility benefit in place at your company when it was still relatively new and early. But you kind of took a look at it and said something still isn't working, right? Something still isn't working, and we can do this better and that we can do this better effectively as what started your relationship with Progyny. I'd love for you to share a little bit more about those early days.

Absolutely, and thank you so much for allowing me to share and I'm sorry, I'm not there in person. We -- I would say we, as a benefits community, have always been facing challenges when it comes to infertility. And when I think back about why I selected Progyny and really wanted to change what was going on, came from twofold. A lot of people don't understand Facebook, when I was there really entered into rethinking fertility and hard benefit design decisions because we had a very young woman who had a rare medical condition and came to us in tears just overwhelmed with facing this medical condition, but also realizing she wasn't going to be able to have her own children. And that's actually how the conversation started, right? I think myself, my peers and my colleagues in the benefits industry, what people don't understand, we often get very personal stories. We get to know our employees and our associates and the journeys that they're going through. Sometimes so much where you establish a relationship where you're getting hugs, tears and fears coming to us on a regular basis. So this was an opportunity to really rethink how we wanted to approach the fertility journey. What we had was a carrier design, which was often based on a dollar value anywhere from about $ 15,000 to $ 25,000 that really was what market practice was at that time. But I don't think what most people understood was $ 15,000 to $ 20,000 might get you through 1, 1.5 aggressive cycles of fertility. And traditional insurance design also implemented a lot of roadblocks or red tape to get to IVF. You had to go through a significant number of IUI cycles before you could even advance to IVF. So we weren't allowing both the patient and the doctor to really choose what was the best journey for them through the fertility cycle at all. What that led to was if I went through an IVF cycle and I used up the -- let's say, I used my $15,000 benefit or maybe I used $12,000 I knew I didn't have much of a benefit left and it was a lifetime benefit. That was it. That's all I was going to get during that entire employment. What we, as employers often saw where individuals, women taking their embryos and transferring as many embryos as they could. So we were seeing the optimum. We were seeing people transferring 3, 5, 8 embryos back and then what that led to was if there was success, was there a success where there were so many embryos that actually took, women were often faced with whether or not they had to terminate some of those embryos. And you can imagine the emotional stress on a woman during that time. Here, I've been trying so, so hard to get pregnant and to have a family. Now let's say, 6 of the embryos took, I'm making a decision on whether to terminate some of those in order to hopefully achieve pregnancy and full birth. The other side of it was, I might be lucky enough to have 2 -- while that might sound great as an employee or as an individual to have twins, as an employer who self-insured, twins often lead to early term pregnancy, premature birth NICU and as a self-insured employer, NICU babies, just twins are costing us $1 million as a self-insured employer. So we're paying that cost. And I think that was really the pressure on both sides. How do we think about the employee journey from a humanistic standpoint, but also make sure that we are doing all the right things for our shareholders from a financial perspective. And I know that's a tough pool for especially teams who are nonrevenue-generating and we're trying to compete for talent, right? How do we do the right thing and care about our people. But that lack of care and experience in the family building was really important and insurers -- traditional insurers didn't understand the full journey. And so that's what led to the conversation with Progyny. We wanted to completely redesign how we focus on how we deliver this care in an effective, cost-efficient and really focused on outcomes of the delivery of achieving full birth. So we made our goal really, really simple. When I came to Progyny and said, "Hey, let's build this together. I said, it's going to be this simple. I want to know that I'm going to have a healthy mom, I'm going to have a healthy baby, single healthy baby, and it was a singleton birth. I wanted to figure out how do we get to that point. That's all I want to focus on, that simple. And so we were able to work with Progyny and really adopt what we call the cycles for what we were providing to our employees. The other thing that, that it did was it allowed us to eliminate the insurance carrier red tape and give the decision around how somebody wanted to approach their fertility treatment plan back to the individual or the couple and the doctor. We said, let's get out of the way. Let's stop building this around insurance red tape, give the doctor and the patient all the right information in order to determine what their fertility journey looks like and then focus on the quality outcomes, get to a single birth success of building a family. I think the other thing that really allowed us in that long-term partnership with Progyny was then also focusing on how do we build families regardless of where you are in your family building journey. Tanu, I know I shared with you earlier, my journey to building a family is marrying somebody who had children, I've got grandchildren now. But early, early on in my own life, I tried to go through fertility. It was before these new development and really good outcomes, and it was unsuccessful. But I am so excited because I have a family of my own, and I built it in a different way. And that's the other thing that I thought was really important because Progyny really understands that family building can come through so many different ways. And it really takes diversity and inclusion into effect. So it allows me to think about the IVF, the egg freezing. It allows me to think about whether or not I'm a diverse couple, am I same sex, Am I male-male, am I female-female. What does that entire cycle look like at a personalized level regardless of who you are, and I'm going to stop there. [indiscernible] back to you because I know we've got a lot to talk about.

No that was great.

Excited to hear from my peers.

No, that was great. I think it actually hits on a lot of the themes that we're about to cover here as well. And so I want to bring it back to the carrier benefit piece of it because Sam, that was 2016. We're at -- believe 2024 now.

Yes.

So 8 years later, you're kind of -- we're in a simpler bucket. And in fact, you in fact, increased your medical benefit fivefold to try to cover the fertility benefit for your population and realize that still wasn't solving the member challenges and needs that you were noticing amongst your population. So talk to me a little bit more about that observation and how that shaped the way you approached the fertility benefit this last year.

Yes. So as you mentioned, we had a $10,000 lifetime maximum with our carriers to deliver fertility benefits. And if you just talk to people in your circle? What are you going through? What that experience is like? It's not likely that somebody is having success on that first try, as Renee mentioned. People are going through multiple cycles to try to have success in starting their families. So we realized, hey, $10,000 is not even getting somebody through 1 cycle. We have to increase that. So we increased that to $50,000. And looking at the slides from this morning, I was right in that range. So I was happy that we got the right number there. We also removed the medical diagnosis from that because think about a female-female journey. Maybe it's not infertility, that's the reason you're going through that. So again, what is the best treatment and care for that journey to begin to start your family, right? So we did those 2 things, and we were still seeing 47% of pregnancies with complications. And we had 150 babies a year who were in the NICU. So we have to be doing better. What is missing from this benefit. And we thought, hey, maybe we need a partner that's going to help our families steward all this money that we've put out there, right? We don't want people just going cycle after cycle after cycle. Why is it taking 4 cycles? Can't we do better than that? How can we help people achieve success in the healthiest way and the best way for them sooner? Also, we found that our employees were becoming fertility experts, right? They didn't know where to go. They're going to the Internet. They're asking their friends, they're going to universities to find the latest research, so while this is already a stressful experience on the mind and body in the family, now you have to become an expert in this space, that's not your field, right? So who is helping somebody and holding their hand through this journey and deciding what the best treatment and care is for them. So those are some of the reasons that we were looking to seek a partner, and we knew that Progyny was the best fit for us. Also, you have traditional fertility journeys, but what about people who are going through cancer, right? Cancer is one of our top spends as I'm sure many other companies. What about somebody who's touched by cancer and wants to still have a family? What does that look like? What does male infertility look like and that journey? And Progyny was able to help with all those different aspects to help somebody start their family no matter what was happening in their lives.

Yes. I love the piece that you sit around because the cost is important. The cost avoidance ultimately is important, but what you grounded in and prioritized was really that individualized human experience and that journey and just the thought of like you do that the right way, and people are going to make better decisions that ultimately lead to the outcomes that you're looking for. And I want to kind of click on the human piece of it as well because I know, Juliet, one of the things that you're known for is just really having brought more women's like health benefits to B. Braun kind of leading that charge, especially through the lens of talent attraction and retention and as it impacts your evolving population as well. So I'd love to hear a little bit more about that.

Thank you. So it's interesting because I think it's important to start with a little bit of my history because I wasn't always at the forefront of women's benefits. And so I'm not proud to say that for about 15 years before I started at B. Braun, I followed the carriers advice. And so we limited the benefit. We would only cover a diagnosis, no treatment. So much more stringent, certainly not rich from any standpoint. And so when I got the opportunity to meet with Progyny, I'd also join B. Braun, and it was a completely different industry. So now I have the opportunity to really do the right thing. So in the med device life science industry, we're constantly benchmarking trying to attract and retain new talent. And so this was an opportunity to be able to bring in Progyny to look at what should this family building benefit look like. We really like the Smart Cycle approach, the individualized treatment plan, trying to have a singleton. That was, to us, the investment that we wanted to make. You've heard a couple of people talk about premies. And so when we have that limited benefit, I had a couple sets of multiples that were premature. They were all million-dollar-plus claims. And so anything that you were doing to try to save money was completely negated. The other thing is from a fiduciary standpoint, a lot of us are managing these benefits. We want to give the best benefits we possibly can. We want to be good stewards of our company medical spend, but it's really that focus. So adding this family building benefit was key with Progyny. We also did it from a DEI perspective. It just really is let's embrace what's going on in the world. Let's recognize people for who they are, whatever their path to parenthood is, that's what we wanted to focus on.

And I know when you and I talked, it was, your focus really was around kind of that full access to care, how do you ensure better outcomes and kind of that improved medical journey. And Janet, I think that aligns a lot with where Delta was focused when you evaluated this and your Chief Medical Officer was actually involved quite involved when you were evaluating for the fertility benefit. But before you even began that, this was like a multiyear journey for you. This was not an immediate like we need to do this. So I'd love for you to share 2 things, which is, first, what shifted in, I think, 2022, when Delta went from saying for years on and just not now, not now, it's not the right time to all of a sudden say, let's talk, now it's the right time. And then when you got to that point, specifically what was that clinical lens by which you and your CMO evaluated the fertility space.

So we did not cover benefits under our plan prior to 2023. And part of that was really we had a mature population. We had evaluated it previously in 2018, but it did not rise to the top of the clinical conditions we were trying to address. I don't think it was that it was not there. I think it was largely overlooked, unfortunately. And so then the pandemic occurred and we were suddenly finding 17,000 of our colleagues leaving -- taking packages with our company. But as we stood the airline back up, we had an influx of employees, and this greatly changed our demographic. So then we're looking at a much younger population. But what really drove this is we had 5 individuals from marketing, 5 women that approached our Chief Health Officer, Dr. Henry Ting, myself and another leader individual, and actually were sharing with us the difficulty they were encountering with the fertility journey and their lack of support under our plans. And so we knew we started looking at that. We had gone from 85,000 employees up to 110,000 employees. And we looked conservatively at the statistics of 1 in 8 struggling with fertility. And as Pete pointed out, that's even lower now. That's 1 in 5. We knew that represented a large portion of our population. And so we wanted to do something to assist our employees. So as we started looking at this, we looked at the multitude of options. We looked at those that had reimbursement in a flat dollar amount. What we did not like about that option was it's still asking an employee to front and fund a very expensive procedure for reimbursement. And we knew that, that was not something that all of our participants would be able to do. And so that was limiting the number of people who could take advantage of that benefit. So that was not for us. We also knew that there were cards that you could file, but then the problem with that is people running out of money, mid treatment. And so then you're making cost-based decisions. That was also something we were very leery of. We knew that this had to be a holistic solution that would cut across our entire population, but we also didn't know what that pent-up demand was. So we had to be clinically sound, very well managed and had to provide access to our entire population. So we did select Progyny. And some of the things that really intrigued us the network strength was really incredible. And also the access, we have 99% of our population within 60 miles of a network clinic or provider. And so that meant that it was an equitable benefit across our population. And we also knew that there was a lot of strength in the outcomes that we were seeing and reporting through Progyny. We also were very intrigued by the fact of the smart cycle because what that did, it was a holistic adding of medical and pharmacy together. People were not trying to go between different vendors to accomplish that one goal. And the smart cycle also meant that our employees were not going to run out of money mid-cycle. This was going to be something that would be a provider-led journey so that it can be the best care path for our employees and not based on cost decisions and people circumventing and trying to shortcut the system and transferring multiple embryos just to get the best outcome because this was their one shot. That was not the purpose of the benefit. This was to create and allow people to build their families in a safe and healthy way. And so part of this holistic design also included the support they had even with like the unpacking call for their medications, same and next-day delivery. So lack of waste and spend for medications that may not be used. So that was beneficial. And then also, their care advocates. That really probably is one of the key components is that they're helping curate a journey for our members based on their individual needs and it's end-to-end support. We really liked that there were care advocates focused on LBGTQ+ population, surrogacy, transgender. So it's really about curating the needs and answering and addressing the concerns of each individual. It wasn't just a one-size-fits-all solution. And that really developed and gave to our employees the type of care delivery that we were interested in and our Chief Medical Officer was keenly aware of.

Yes. I think I love the perspective is great because it's very reflective, I think, where a lot of our clients enter from that Not Now journey, which is it could be a single trigger as a single employee coming and crying to you about an experience or four of them bending together or you've just gone through an evolution in it's time. It's finally a priority. But I think what each of you kind of called out here is once you get to that point, the ability to actually look at it in a thoughtful clinical lens that gets to the end goal as opposed to kind of making that easy decision and where they're moving next. Juliet, I'm going to flip it back to you for a minute. So you've been here now for 4 years, right? So B. Braun has had Progyny for 4 years. What's been surprising or educational during this time.

So I would say the most surprising thing is how grateful our employees are. And I'm surprised by that because when you put in a benefit, you're not sure who's going to utilize it, who needs it. And so you just want people to have options. And so -- and I'd like to share the story. We had -- one of our employees work in our -- one of our distribution centers. And he and his wife for years, had tried to have a child and they were unsuccessful. And so they just sort of given up. We added this Progyny benefit. He had been a long-term B. Braun employee. We added this benefit. They were successful. They had a healthy baby boy. Every executive that he comes in contact with, he runs up to them, gives them a hug and says thank you. You are the reason. This is the reason that I have a family. And that gratefulness is what always makes me smile. It's what makes me love my job and what I do. But because of him, we actually increased our benefits. So we added to our Smart Cycle benefit because we realized it wasn't quite enough because he wanted -- they wanted to try to have another child. So -- and that's the partnership that we have with Progyny and just being able to build upon that. But when I look at -- so then we look at utilization. And so we are 1/10 of the size of Delta. But we weren't sure. So we put this benefit in. We weren't sure how many people were going to utilize it, how many people needed it. And over the course of 4 years, we've had 18 babies, which is fantastic, 18 healthy singleton babies. And so that, to me, is success. So putting in this benefit is not that you have the highest level of utilization, it's there for the people who need it and wanted to use it. And so that's really what is key to us.

Yes, love that. And Janet [ 1.5 years ] in opposite experience. You do have a larger population. And you've had, I think, we just tracked a 150 babies as of last time that we checked. So just a little bit about that. And how has just early reporting supported what you came into this with kind of what your expectations were from a utilization plus outcomes perspective.

So that was very important to us because as I stated, we did not have a fertility benefit. We didn't know what that pent-up demand was. We needed to be able to manage our cost, the expectations and also evaluate are we hitting the mark? Is there -- are there other things we need to do to really support our population. But through the reporting that we've received, we have been delighted with the outcomes because against national averages, our pregnancy has exceeded that by 16.4% higher pregnancy rate, 20% higher live birth rate and then also 72% of those have been fewer multiples. So that was very important to us that really, as I said, being clinically sound and managed. I think that's one of the things about Progyny is that it's a managed journey versus just a benefit that you're just -- people are self guiding. So we are very pleased with that, but not only do we have 157 babies, but Progyny has helped over 2,300 individuals because not everyone's goal at this moment is a birth of a child. It may be egg freezing, it may be other avenues and venues towards building a family. So it really supports that holistic journey. But also, I think the thing that we're most surprised about is I mentioned it was 5 women that came to us initially, but it is from the men in our company that we have heard the most, they've just been on the forefront of really expressing thanks. They have created their own support groups. We thought we had the employee resource groups that were there, the working families, the ones that supported loss and fertility struggles, but they have just created on their own support groups for one another. And so I think that's been most surprising. They check on one another, and it's just been a groundswell. And just last week, we received -- our CEO received a baby shower invitation from someone just thanking him saying this would never be possible without the forethought of our employee -- or on behalf of our employees buyer management. So just that incredible gratitude you spoke about. And I think what it really does is conveys to our employees the amount of care and concern we have for them, and they in turn are expressing that to one another. So we are just very pleased with the outcome.

That brings a smile to my face every time the whole like internal community that this has created for you. Sam as the newest Progyny client here to the table. Any early observations, early insights? And what's next for you?

Yes. So I've been with Progyny since January. We know it takes 9 months to make a baby, so I'm not quite there yet. So hoping we're going to see some really good results in the next couple of months, but initial thoughts were in my circle of colleagues and friends, I know 5 women right off the top of my head who are struggling with their journey. And when we open the benefit couple of weeks, we had 34 people, 34 families call in for support. Looking at the first half of the year, we're now up to a [ 170, ] right? So I knew that this was impacting our population, and it was good to see that through those numbers of who's calling in, yes, we really did need this. I'll also say our clients success team and our implementation team, incredible, right? So as a client from the client perspective, having a team you can trust and who's going to help you achieve success I feel that with Progyny, right? I trust my client success team, I have a great experience, and I know we're going to have a really great and long relationship. So that's very exciting for me from the client perspective. What's next for us? We talked about it this morning, women's health, right? What does that look like? We have a lot of great benefits in place at BASF. But I think when it comes to women's health, a lot of that really was focused around family and family building and maternity. And what does that whole journey look like from your child from when you have them to college. But that's not everybody's journey. So how are we supporting women's health holistically and that brings us to the menopause topic, right? And if you ask any woman in your life who is going through that right now, what do those symptoms feel like? Like what's going on? How are you managing that? And I only know of women who are struggling. So we want to change that. How do we manage those symptoms? How do we keep those women present in their lives and in the workforce. And that's what we're going to be looking into next.

Amazing. And Juliet I think you guys are already there. I want to recall. You've got an aging population that you're trying to address it now as well.

So half of our population is women, when we look at it, definitely aging, so that's why we're trying to add benefits that will cover the spectrum of your work life. And so it's in 2 weeks, we're adding it. I think I'm going to be the first person that calls, but it is -- so it's not like we're waiting for this. And we're obviously doing it off cycle. And I think it's important to do it off cycle and not have to wait until January just because people are -- people need this. It's finally a topic that is become mainstream. Thank you to Progyny for pushing the subject and getting it out there and making it not taboo because women are suffering. And we've seen it. The provider networks with the health plans are not -- the providers just are not prepared to be able to treat it. And so to have this custom network that you have available is something that we're looking forward to. I will end with -- we announced this to our HR leaders last week and they actually applaud it. Most of them are women, 15 over. But -- you don't realize how much people need it and how much people have been suffering in silence until you start to talk about it.

Love that. Renee, I want to bring it back to you. We've heard from Sam and Juliet, just around kind of where they're focusing next, what's next for their companies when it comes to women's health. Just given your leadership in this space and what you're observing, I'd love for you to round this out a little bit. What feels to you like a little bit of that unmet need or just prime for opportunity within women's health. But more importantly, how do you see companies making those investment decisions moving forward.

Thank you. As we go through and continue to focus on the gaps and the unmet needs, I think myself and my colleagues are often asked to try to solve the hardest problems that are out there and the fertility journey has definitely been one of them. When I think about it from an employee perspective, especially working at a global company, I'm constantly asked by my employees in international countries, why not us? Why aren't you advancing women's health, the ability to build families as aggressively here, say, in Singapore versus the U.S., right? And so I continue to always look for a global partner. It's easy for me to come in and understand and be able to talk to my employees with a partner that can help me understand the local culture. Progyny did that very early on when we rolled out egg freezing in the U.S., my folks in Singapore were constantly asking about it. But I began to understand that egg freezing isn't even legal in Singapore, right? So when we think globally, but act locally, I have the ability to throw a partnership to understand the local cultures and laws and think about how I can deliver on women's health through their entire journey. And what does that actually mean for them? I think when I am talking about that, I'm also really looking at diversity, equity and inclusion, which I also heard my peers talk about doula care is one that's top of mind for me. I have to think about DE&I and where my women are located or my families are located. Doula care is extremely important in many different cultures that's a gap in what I'm seeing in coverage. So it's important to me, it helps to improve care before, during and after childbirth. It helps to reduce the stress and provides emotional support. And in many locales, it also helps to reduce C-sections. I don't see the number of C-sections in the U.S. like I'm used to early on. But I still see that from an international perspective. And I think there are great opportunities when we think about women's health, and doulas actually help with that. Continuing to focus on LGBT, right? What does that look like not only here in the U.S. but from an international perspective. We continue to find that male-male couples baby are not receiving quite as much financial support as female-female or traditional heterosexual couple, so how do we continue to get creative about bridging the gap from that perspective. We talked about women's health. The women's health journey doesn't start when we're young, but it continues until we're older. So I agree thinking about menopause and what does that look like and how do we support people from a medical condition and substantiation is critically important from that. The other side that I have to constantly take is the financial pressures and the conversations with my CFO and why I'm making these investments. That is so important that I have to justify the ROI, especially if I'm doing point solutions. I think my top of my colleagues continue to get pressure on the reduction of point solutions, but it makes it really easy for me to have the conversation with my CEO or CFO when I'm seeing clinically based outcomes improved as many of us talked about, the ability to do a singleton birth and not end up in NICU with million dollar plus babies. That actually allows my controller and my CFO, to understand the cost upfront and plan for it more effectively. The old insurance designs actually created more flux and concern. When one of those million dollar baby twins hit my books, I constantly would get a call from my financial controller asking what the heck happened? What's going on? Is this going to be a long-term cost? How do I have to plan for it? Doing the cycles upfront helps to improve those costs and give a little more control over our financial stability and how we're reporting on that. The other thing is I really need data. Many of us, I think, work with data, medical data warehouses, telling what our population health looks like. The outcomes are important, and I want to be able to tell the story in a meaningful way with backed science and evidence and being able to show a lot of times when I first rolled out Progyny when I was at Facebook, we were actually able to show that the twins that were occurring were natural twins and not from a fertility cycle, which was a misconception in the beginning, right? So I was actually able to reframe the conversations with my financial team around why this benefit was so important, and it actually created more financial stability for us versus the opposite. And I had the data to prove that from an overall perspective. And the data helps me tell me a story from a marketing perspective. When I'm here, I'm here to support my talent and attraction and retention strategy data and having that to build that strategy and why it makes us a leading employer by offering this benefit is absolutely huge and significant. One of the things when I worked at Facebook, I actually got measured on how much I cared for my employees every single year in our birth benefits survey. That was the #1 question we measured from year-to-year. I will tell you the Progyny benefit was the #1 benefit that we continue to get feedback on that our employees felt like they were cared for. We also saw our employees who were very, very open, walk around those who were pregnant at work, rubbing their tummies saying they were Progyny babies. So it was just the regular table speak that we had employees talking about their Progyny babies. They were friends with their care advocates. But I think at the end of the day, what really brings us to head is Progyny has now set the table that this is a nonnegotiable. Our families are looking for this level of care, this level of support through their journey of building their families end-to-end regardless of how they get there. And that's what I want to continue to see Progyny do not only for me locally, but globally and to fill those gaps that are really hard. And thank you for being such a good partner in listening to the things that we continue to need and partner with us and trusting us that you're -- as your external partners using the benefit to help continue to redesign how we're inventing the marketplace.

Thank you, Renee. I truly don't think there's any other way for me to close this out. So thank you so much. Thank you, Juliet, Janet and Sam, for joining us on stage and just sharing your experience.

Okay. What a great panel. So thank you all for doing that and taking the time to do that. We're going to keep moving here. You heard me talk a lot earlier around our platform asset and our product approach. I said we're going to talk a little bit later about our future diversification. You also heard me talk a lot about our new products and reference our new products. So now sort of with this as a backdrop, I'm going to have Joanna come up on stage here, and Joanna is our Vice President of Product Strategy, She's going to walk you through some of the components of our newest products and also look a little bit into the future. Joanna?

Thank you, Michael, and I know I'm standing between break and coffee, so I will keep this very interesting, hopefully. So just to introduce myself a little bit. I'm the VP of Product Strategy. I've been in health care for over 20 years. I've been on the industry side actually for 15. I'm a registered nurse. I do have a research doctorate as well. I spent my industry career at a large health plan, doing everything from clinical operations as well as product management and running clinical programs. I then moved into health benefits consulting. So when I was in a consultant role, I was working with large state governments. I was evaluating programs such as Progyny against their competitors and actually placed Progyny with a few clients. And so what really drove me to come join the team was the intense focus on clinical outcomes. And in this new role, I get to [ meld ] my clinical experience with my market knowledge and help us advance into women's health care. So as Michael discussed, we continue to grow through this expansion. We'll evaluate our opportunities to build buy-in partner. And Progyny really started over here in the preconception fertility and family building space. This year, we expanded into pregnancy postpartum mid-life and menopause care, which I'll get into in a moment. As we continue to expand, we'll focus on the right care at the right time for every member. We also have core tenants to focus on, in-house clinical support with our patient care advocates, continuing to build an expanded network of specialists and manage them to clinical quality, all rounded by a digital experience. As we continue forward, we will build on this foundation. Now if you think about fertility, this was a space that was underserved and underfunded for some time. When we entered into the space, we were able to make a difference there. Similarly, there are broader macro issues leading to women's health in general being underfunded and underserved. Looking at a couple of examples. Endometriosis causes 40% of infertility cases. One in 10 women receive this diagnosis, yet it takes over 10 years to actually get diagnosed, leading to a lot of misdiagnosis, extra procedures and extra care. Why is this happening? Women were not included in clinical trials until 1993, leaving clinicians to adapt care in real time to the member. And additionally, 2011 is when urogynecology was recognized as a subspecialty yet 70% of women will experience a pelvic condition in their lifetime, and this subspecialty just was created in 2011. Contrary to popular belief, the '90s and the early 2000s were not that long ago, it was in our lifetime. And so as we move forward, these systemic issues present a really unique opportunity for Progyny to make a significant impact in women's health as we did in fertility. Additionally, there are tailwinds that point towards a future investment in women's health. Over the last few years, we've seen more VC funding going into women's health conditions with an acceleration in the last 6 months. The Biden-Harris administration announced funding into women's health research. There is bipartisan support at the Senate for Menopause Health Equity as well as $1 billion pledged by Melinda Gates globally in over the next 2 years. This highlights a shift in focus that aims to address the unique needs of women and families. Fundamentally, Progyny has always followed the data when we built our solutions. Let's walk through our clinical approach to our existing and our new programs. Now preconception has been a part of Progyny since day 1, addressing underlying medical and nonmedical concerns that someone might have. We focus on nutrition, mental health and lifestyle behaviors as well as timed intercourse, population tracking, sexual health and access to embedded network of specialists. 65% of those calling into Progyny do not need a medical intervention to reach their family-building goals. However, there are others that do need assistance with reproduction. And that's where our core program comes into play. We see a continued trend of individual starting families later in life. This is why Progyny supports all pathways to parenthood through a highly managed network with equitable treatment, unlimited support while reducing financial barriers to care. Now complex needs do not stop once you become pregnant. We see many individuals that have multiple chronic conditions that are going into pregnancy, causing high-risk pregnancy complications, neonatal ICU admissions and emergency C-sections. And that's where our pregnancy program really focuses with the registered nurses, identifying high-risk conditions early intervening and mitigating those complications and then providing support through the postpartum period. Our program also includes doulas support. We've seen doulas very regularly support emotional as well as birth planning, reducing unnecessary C-sections and increasing lactation postpartum. Additionally, our nurses are there to provide postpartum support for mental health. We have 24/7 lactation support, which is something that individuals really can't get a hold of lactation specialists often in the hospital when they need it at like 1 a.m. And so that's why our program is there to support them. And then we also support all the way through return to work as well as with parenting support through that first year. Shifting to menopause, many may not realize that perimenopause actually starts as early as 38 and lasts up to 8 years. If you heard earlier, Pete talking about the average age of our member is 36 having children. That means that you have 2- and 3-year olds at home while you're entering into perimenopause and having a lot of symptoms, as you heard the provider panel talk a little bit about. 100% of women will go through menopause. We cannot hide from that. It's going to happen. Yet 7% of physicians, only 7% are actually trained to treat menopause. Historical bias still exists within the medical community as well. And so even going to your primary care doctor, you may not get access to hormone replacement therapy when it's appropriate. So Progyny tackled this by creating a 50-state network of vetted menopause train specialists, opening up access to the hormone replacement therapy, and our in-house specialist provide symptom management support. Now that I've laid that foundation of what we have in place today, let's talk how we're going to move forward. As we consider where to go next, there are countless opportunities within women's health that we can tackle. If you look at the center circle in fertility and family building, this is where Progyny historically has lived. The white space around that is where there are ancillary services that many women either don't know that they can access or have very difficulty accessing, meaning that those providers may not exist in their geography or that it's only self-pay. And that's where we see how we build out our programs to provide additional support in those ancillary services. Next, we aim to prioritize conditions that are specialized and require specialized needs. As we look to expand into clinical adjacencies, we have to take into account our historical success in dealing with complex care needs. As we set priorities, we evaluate against these 3 key areas: conditions that when unaddressed, leads to costly outcomes, delayed care or misdiagnosis, closing gaps for traditional coverage may not exist and educating members to reduce stigma while advocating for access to high-quality care. Here, we have listed many areas that meet the above criteria. We have the right to pursue most of them because of our history in pursuing outcomes and reducing costs. So if we take a couple of examples, there are many conditions that only infect women and cause infertility upstream. PCOS and endometriosis are just to name a few. In midlife, there are conditions that impact women differently such as cardiovascular disease, yet that remains the #1 killer of women. And in those specialized areas, there are conditions that disproportionately impact women. Autoimmune disease is a great sample where women represent 80% of autoimmune diagnosis, yet historically, clinical trials really haven't studied women's tissue up until the last 2 years. And this further compounds the increase in high-risk pregnancies that we see with multiple chronic conditions and maternal death. No matter where we expand, our approach will remain tailored to our members' needs integrating these conditions into our core products. Now anecdotally, over 15 years in the industry, you tend to see trends as companies tackle one problem really, really well. As they expand too quickly, they tend to water down their value proposition and kind of lose where they started in the first place. With our framework and market knowledge, we are committed to maintaining that same rigor and clinical excellence that we brought to fertility. We also recognize the importance of partnering where we are not the experts, ensuring we build our credibility and constantly delivering those outstanding clinical results that you're used to. Now I'm thrilled with the progress of our team in getting these new products into market this year. We have already identified products in 2025, where we're going to have a key focus on expanded parenting as well as sexual and pelvic health across all life stages. With our proven framework, we're building a pipeline of innovative products that will drive women's health forward and contribute to a more equitable system for everyone. And now with that, it's time to take a 15-minute break. When we return, we'll have a provider panel that will talk about how we do build those networks. Thank you. [Break]

Thank you, everyone. We'd like to get started with the second part of our agenda with what we're calling our provider panel. I won't steal their thunder, they'll introduce themselves in a moment, but the panel is being chaired by Lissa Kline, who is responsible for what we call our Member and Provider Services Organization. She has a clinical background, an extensive experience at Progyny in working on both the clinical side and the member experience side. So Lissa, take it away.

Thank you so much. Welcome everyone [indiscernible] oh there I am. I'm thrilled to moderate a panel hearing from 2 physicians as well as our Head of Network. Our network, as you've heard a bit about today is really one of our differentiators and one we believe cannot be replicated. So we wanted you to hear from physicians who have treated Progyny and non-Progyny members alike. Before we get to them let me introduce myself. As James said, I'm Lissa Kline. I'm Head of Provider and Member Services at Progyny. I've been with Progyny almost 7 years, and prior to that was at Columbia University Medical Center here in New York City, where I am based. I managed a bunch of different programs there in their fertility center, including our Surrogacy [ Assistance ] Program, Donor program, Oncofertility program, which I helped profound. I'm an LCSW by training, and so I have some background in individuals, couples counseling as well as support groups. I ultimately was practice manager at Columbia before I left to join Progyny and continue the great work that had been started and while I was at Columbia, I worked with a great physician, a reproductive endocrinologist, named Dr. Janet Choi, with whom I'm honored to be working again, and I'll let you introduce yourself.

Thanks, Lissa. And again, thank you all for joining us today. As Lissa said, I'm Janet Choi. I'm Board-certified in both OB/GYN and Reproductive Endocrinology. I have over 25-plus years in clinical patient care. Both at the academic and private practice level and spend part of that time as well as a Progyny network provider, a Medical Advisory Board Member. I got to witness firsthand the life-changing experience that patients had when supported by Progyny. So very happy to be here today.

Thank you so much. We also have an in-network provider from one of our clinics, Spring Fertility also based here in New York, not too far from here, Dr. Catha Fischer, love for you to introduce yourself.

It feels really hard to that after Dr. Choi, [ a celebrity ] but I am Catha Fischer. I am one of the physicians that provide an [ effort for ] Progyny. I am the Medical Director of spring Fertility in New York. I also know Dr. Choi [indiscernible] a long, long time ago. And I'm thrilled to be here talking about Progyny a bit and how much it impacts my patients.

And last but certainly not least, Sam, who heads up our network provider accounts, go ahead and introduce yourself.

It's even harder to follow those. I'm Sam Correll, SVP, Network Management. I've got responsibility for our network of providers, which includes our pharmacy program. I came to Progyny 8 years ago right after Pete, or right before Pete actually. And I was recruited at Progyny in order to address some of the issues our network was having at that time. I saw in Progyny, we were addressing a problem in a new and innovative way and thought it was a great time to join, so glad I did. And it's been a lot of fun to be part of our success.

Thank you, Sam. So we're going to stick with you first question to you. We have, as we've talked about, a network which is truly clinically integrated, and that's been an effort that you said you've led over the past 8 years or so. Can you talk about a bit about how you built that network and maybe talk about what's different?

Yes. So when I joined Progyny 8 years ago, our network was really nothing more than a provider directory with some limited negotiated rates. The infrastructure wasn't very good. Doctors weren't happy. We weren't able to attract the best providers. We had a lot of work we needed to do and so our goal was to build the highest quality network.

And how did you go about achieving that goal?

Well, so first, we assembled a team of provider account managers and by provider account managers, there are people like me that had been in the fertility industry for quite some time. And we wanted them to recruit, if you will, the best providers for our network. And so we gave them inclusion standards such as live birth rates, low multiples rates. Practices had to have a certain amount of volume. We credentialed our providers to NCQA guidelines, which is the gold standard. We're actually going through an NCQA accreditation process today. From a contracting perspective, we require our providers to contract comprehensively. And we also paid them fairly, but we also contract on behalf of our clients. So we need to have favorable rates. So there's that balance there. And then finally, from an outcomes standpoint, and data, we collect a significant amount of outcomes and data from our providers directly, so we require that. We contractually obligate our providers to submit that data. So we've taken that same discipline that we created within our refractive endocrinology and infertility network and have applied it across our reproductive urology network, which we launched in January of 2023, and across our reference labs, genetics labs, our donor tissue banks and our pharmacy program, Progyny Rx, so that we can actively manage our networks. And I think we've met our goal of building the highest quality network. And I think that's because when we work with health plans, they want to use our network. They delegate credentialing to us. They delegate utilization management to us, and that's really unheard of. It's a testament to what we've been able to build. It's taken a lot of time and effort years in the making, but certainly effective and happy that we've been able to accomplish that.

Yes, agreed. You mentioned when you were talking about how you achieved that goal, you mentioned the data that your team collects. I'd love for you to double click on that a little bit. It's not just data for data's sake. If you don't mind talking to us about why the data is collected and who benefits from it.

Yes. So quality is so important. And the only way to actively manage our network is through our data that we directly get from the physicians. And so we always have an eye on our network. And so if there's any best practice that's not being followed, we can address that at any given time. But all of our stakeholders benefit from the data collection, the analysis and then the dissemination. So for -- as an example, our providers on a quarterly basis, our provider account managers host quarterly outcomes meetings with our providers. We take a scorecard to the practices. And on that scorecard, it's showing them how they perform versus their peers with a variety of metrics. So clinical metrics such as live birth rates, miscarriage rates, pregnancy rates, but it also shows them other metrics such as what we call progression metrics, how quickly do patients progress within their practice. So from the time that you have a new patient visit to treatment or from a new patient visit to pregnancy on average and doctors love that. They don't see that from, quite frankly, any other solution. So that's for providers. For clients, Katie showed you a screenshot earlier where we quarterly are providing our clients with data so that they know what the value is behind the benefit that they provide to our members, their employees. And then, of course, for our members, the data that we collect helps inform us of different opportunities for us to reach out to our members and support them on their pathway to parenthood. So only by that collection of data, the analysis and the dissemination and are we able to effectively manage and utilize that data.

Yes. And we'll hear a bit more from members in our next panel on what that means for them. Dr. Choi, I'm curious from your perspective, how you see this discipline that Sam talked about in the infrastructure that they've built. How are you leveraging that ability as we expand to new products?

So as we're considering where else we can better serve our members. One thing that made sense to us in the infertility arena was male infertility. As some of us know and a lot of us are learning along the way, infertility comprises male infertility sperm-related issues that impact 30% to 50% of couples struggling with infertility issues. And so we were able to build on that very strong foundation that Sam's team spent years cultivated and culturing as we expand into the reproductive urology network. And the reason why that is so important just to be very frank, most doctors are too busy to be bothered, answering calls from industry and carriers and they'd rather have their administrators deal with this. So it's a testament to our strong relationship with our REI network that Sam's team has actually, again, spent years developing, that those REIs, the same REIs are part of our network. They're actually volunteering to help us. They're seeking ways to actually assist Progyny's growth. And so we were able to use those REIs who are very satisfied with their relationship with Progyny to then reach out to the RU colleagues and help us. Again, there was a lot of work behind the scenes, but to actually more easily facilitate the necessary growth into the reproductive urology network space. Taking our credentialing experience as we looked at menopause, I still find it little bit of dismaying that 30% only of OB/Gyn residency programs in the country offer any sort of menopause education to their trainees over a 4-year training program course. These are the same graduating physicians that the majority of women will turn to for their menopause medical needs. And so it was very important to us as we thought I get very thoughtfully on how to better serve our members' needs as they entered midlife to look at the providers, make sure and we were vetting them properly, making sure that they have the right credentials, the experience, the training. There's no formal fellowship program for menopause. There's a lot of self education, some certification through the North American Menopause Society. So we use those standards to help figure out how to best partner with the most expert providers so that our members could get the most efficient and experienced care possible.

Yes. And as we look into some of the other products that Joanna talked about continuing with that full discipline.

Exactly.

So Dr. Fischer, I'd love to hear from you next. As you know, the patients that you see generally have coverage through maybe a carrier with a fixed dollar cap, one of the newer VC-backed entrants to the space or Progyny. And I'd love to hear what the experience is from the clinical side when your patients are covered by one versus the other and focusing on Progyny and sort of what is the difference from your perspective?

So commercial payers tend to treat the disease in general and not patients as individuals. And so what that leads me to do then is have to take a different approach to how I would care for them. And so first thing for commercial insurance is to meet the diagnosis of infertility. And so maybe for some to learn and some to be reminded, that's 12 months or basically a year's worth of trying before you get to my office to access those benefits. And then typically, it's about 1 to 3 months aggressive testing to decide from the commercial payer standpoint what feels like the best treatment option. And so it's really not me making those decisions for my patients, and that's really challenging to explain to them and then also frustrating for them if they feel like it's not meeting their needs. I think all providers feel pretty certain that, that needs to change for the -- given that the majority of patients are going to have some access to commercial insurance. The newer to market packages. It's the way they approach that is really like a lump sum. And so the challenge for me then is I have to be a little bit of like a financial counselor in a clinical setting, which is I know I might sound idealistic, but as a doctor, I don't really want to talk about money too much. But I find myself having to partner with these patients with the scarcity mentality of how do we use their benefit and what's going to serve their needs the best. This is where from a Progyny provider has really been revolutionary and is really innovative. It gives me lots of flexibility to just treat the patients and not really consider necessarily dollars and sense at every single stage. For us, it's really about what's going to serve their needs the best. And this is where the flexibility of that plan and the way that it's packaged for patients makes it really easier for them to understand and then use their benefits to serve their needs in particular. And I find this is really refreshing as a provider, and I'm really grateful to be in the network, and I know patients are always really grateful to have that coverage.

Yes. We talked about earlier the sort of the right treatment, right patient every time. which is great. Dr. Choi, we see when we look at our outcomes that Sam's team helps collect that Progyny members have superior outcomes even at the same clinic. So even within the same team, the same physician, maybe the Progyny member is going to have a better outcome as it were. I'm curious to what you would attribute that.

So again, just to kind of piggyback on what Dr. Fischer was just explaining. I know that as a physician and my colleagues do the same, we try to practice best evidence-based medicine all the time. However, the reality is, when you have a patient for a couple -- so 2 patients sitting before you trying to make some very hard life decisions, medical decisions. Unfortunately, if they don't have to -- if they're sitting there worrying about can they afford the next cycle of care to get them over the finish line to having a baby and getting out of the doctor's office and moving on with their life. They're not able to think clearly. And so oftentimes, as Dr. Fischer alluded to, our 30-minute medical discussion session broke down into an accounting session and then a haggling session. I'd have patients literally pull out -- check a grocery list of line items saying what treatment or what part of my treatment can I forgo in the hopes of cutting costs back because my insurer is not covering everything and I can't afford everything else because it's been about 3 years of trying now. And so this is where I was alluding to earlier, why I was so excited to join as Chief Medical Officer last year full time. It was really transformative, life-changing. I don't like throwing around these adjectives lightly, really meaningful impact on my patients time and time again when they walked in the door with Progyny, they were still stressed. Having the medical diagnosis of infertility is on par as having a diagnosis of cancer, and we've had this discussion time and time again with our oncology colleagues. But if they actually were supported with the right kind of benefit, what I found was that the Progyny supported patients were and are able to at least dump that suit case of financial concerns at the door so that when they walk into the doctor's office, they're more clear sighted. They're also very well educated and prepped by their PCA team. They're able to actually make a really truly shared decision-making process as we sort of tailor fit. It's not one size fits all, tailor fit the right treatment pathway to suit their family building needs, and the result is better clinical outcomes.

Yes. You just mentioned that you joined as our Chief Medical Officer last year. Before that, you were on our Medical Advisory Board. And while you're on our Medical Advisory Board and for the years prior, you were practicing physician in our network. And so I'd love to hear from you about specifically our Medical Advisory Board and how that sets Progyny apart from others.

So the Medical Advisory Board is an esteemed group of leaders from the largest networks in the world, networks and clinics, and they're comprised of embryologists, practicing reproductive endocrinologists and urologists, reproductive urologists. And so these are the experts that we actually collaborate with as we consider how do we make sure that our members are getting access to the right suite of comprehensive diagnostics and treatments. What sort of new fangled research items need to be further researched before they're considered mainstream and appropriate for medical care for our members and which ones should we be wrapping into and incorporating into our Smart Cycle offerings. Similarly, we collaborate very closely with our Medical Advisory Board as we come up with clinical guidelines. Again, we stay out of the way of our physicians. We respect the doctor-patient relationship. And at the same time, we're finding that we also have to put in some gentle guardrails, not restrict access to initial care for our patients that never is the case, but to develop some sort of very thoughtful, sensibly produced utilization management policies. And the reason why that's a distinguishing factor is I cannot tell you. I'm sure Dr. Fischer can also relate how many times I'd have to get on the phone for peer-to-peer with a carrier provider, who's just trying to do their job, but I'm having to go to that again for this patient, who was being denied access to their necessary family building treatments, whether it's certain IUI treatments or in vitro fertilization. The first 5 minutes of that conversation is typically spent because that provider on the other side, is a physician -- a nonfertility physician, so invariably I remember once an ER pediatrician. It was a little apologetic action like I'm really sorry. Can you tell me what IVF is? Or a cardiologist a little more cranky, right? And so after that 5- to 10-minute education, I would then be able to, if we had time, launch into that patient specific case and have to explain to them why this 34-year-old has been struggling for 3 years to build their family with her husband and has suffered 3 miscarriages due to a genetic issue that she has, might actually benefit from in vitro fertilization with genetic screening of embryos at age 34. And the difference with Progyny is that should a peer of ours need a peer to peer? They're going to get on the phone with either myself or one of my other reproductive endocrinology colleagues.

Yes. So really informed decision [indiscernible].

Right. And actually really thoughtful tailor-made care.

Yes, yes. Dr. Fischer, we haven't talked yet about Progyny Rx. And so I'd love to hear from you. Progyny Rx, of course, is our benefit that covers medication during treatments. I remember ordering medications back when we were running our Oncofertility program and remember how stressful that was, all patients are on a timeline, these patients are on a really specific timeline. And in 2018, Progyny rolled out Progyny Rx really in response to some of these escalations that we are seeing, hearing from our clients and our members. And so again, from your perspective, as a physician, what's the difference with Progyny Rx versus other coverage.

The Progyny Rx care is much more cohesive, right? When you have medications covered through a commercial carrier. It's almost like who's on first. They don't talk to each other. So the opportunity for the cycle is separate from the medications. And it can be very challenging for patients [ testing ] and that's because, frankly, a lot of clinicians don't get it or nurses don't get it. And so it leaves the patient in situations where they just like when they [ come ] in advocate. And two, they're always in this kind of circle of an anxiety of do I have enough? Will I have enough? When do I get it?" And the challenge is they're incredibly costly. Unfortunately, for fertility care, it's not super transparent. I don't know how much medication someone's got to need day to day. And for the first couple of days, it's somewhat routine. And after that, it's really after the body and how the system is responding. And so I'm unable to prescribe something for 14 days or 12 days at a time. So what I need is flexibility. I need to -- let's say a patient, you need this on this day and sometimes not feel like they're in the stress state because, as Dr. Choi said, fertility care no matter what is incredibly stressful, no ones that their best selves. And so they really don't want an extra burden on the sort of like bureaucracy of pharmacists. Anyone here is out with just like a Duane Reade, you know what I'm talking about. So now imagine fertility medication, it's really hard. So what Progyny Rx allowed us to do is really kind of remove that, right? And so there's never a situation where I am nervous for patients who are on Progyny Rx. They're getting medications within hours, right? Certainly, next day. There's real transparency in those prescriptions. That's easy to order for patients, easy for us to know what they've achieved or what they have prescribed to them. And it's just made it much more seamless. And medications are a costly part of fertility care that people don't recognize. And so if you have some month that's anticipating $5,000. All of a sudden, it's $13,000 for them. That is really, really impactful and something that I can't predict for them either. So I'm in a situation where I feel so apologetic, right, that this is way more than they thought, and this is where the Progyny Rx is incredibly helpful to them.

Yes. And when you don't have that predictability one way around it is to overorder and overprescribe and then invariably patients are left over with waste straight, and that's cost to the member to the plan sponsor, and so Progyny Rx helps mitigate that. You were doing retrievals this morning. So you didn't hear Michael's story, but he told a story about a friend who had an issue with a trigger shot and how it just sort of threw off their entire cycling caused unnecessary stress. So Progyny Rx solving for that is really important. So I'm going to wrap it up this panel and ask each of you, maybe start with you, Sam, if you'd like, if you don't mind, to talk about why providers want to be in and stay in the Progyny network. So what is it from your perspective?

Well, certainly, they talk about the volume by participating, they see a lot more patients, we call the members, but they also find prestige in participating as well.

Yes. It's a privilege. Anything you would add, Dr. Fischer?

No, I just -- like what Sam said it does it. It feels like someone has like stamped you with saying, like, you're good at your job, right? And then patients are excited to come to you because they feel like Progyny has vetted you. They don't have to do as much homework. And so I'm thrilled to be in the network. And I know my patients are really happy that I am as well.

Yes. So are we. And last word, Dr. Choi, anything you'd add?

I mean I could go on and on, but I think we only have a couple of minutes. So Progyny makes doctors lives and their teams lives easier by teeing up our patients and supporting them. And most importantly, it enables the physicians in our network to practice medicine at the top level of our game, the way we want to, evidence based, helping our patients achieve safe outcomes over and over again.

Yes. Perfect. Thank you so much. So that's it from this panel. Thank you all for sharing with us. I think it really helped outline the uniqueness of our network as well as how deep those relationships are. With a shared goal, I think, of healthy families healthy babies. So thank you. You guys are going. I am staying. Thank you. So we're doing quick mic changes, and then we'll bring up some members. So while Arielle gets miked up. I will start -- I'm going to sort of set the stage a little bit about member experience -- and so I'll get started while Arielle is getting her mic on. So you heard from Dr. Fischer, Dr. Choi and Sam about the provider network and what that means to providers and sort of what that value is there. We know that, that's beneficial really to all of our stakeholders, right? Including the clients and you heard about the providers, but I think most especially our members. And so our member experience has really always been our North Star. I think you've heard that theme a lot today, and we'll continue to hear that. And that's true as we continue to expand into new products, so the member experience starts with the patient care advocate and that's a team I've been really proud to lead for the last 7 years. That team is diverse and really always that you can use that word. And so we're really intentional in who we hire and how we train and the expertise we have on that team. And so they are nurses, NPs, PAs,doulas, embryologists, and more with expertise really around the whole spectrum of health care. So fertility, labor and delivery, menopause, pelvic floor, et cetera. Members interact with their patient care advocates, primarily via phone, secure message on our app or e-mail. And it is a dedicated one-on-one match. So members have a single point of contact throughout that journey with other experts being brought in when needed. It is a really human first support with a digital personalized experience that runs complementary to that. PCA is offering ongoing emotional support, benefit navigation, preconception coaching really a whole number of things. That support really goes deep. You heard of it from our clients how important they view that. And another testament to that is we've had babies named after PCAs, which is something we're so proud of. Because of that clinical integration, the PCAs are able to make outbound touch points. So that data that Sam's team collects, we use it to create really meaningful touch points to our members at critical points in their journey, which is so important. And while we know we have the best member experience, we continue to collect data to iterate, enhance and continue to improve it. And so we have a couple of unique members today. They are both Progyny employees. Of course, we, as Progyny employees have access to the Progyny benefit. So they're both Progyny employees who've used the Progyny benefit and one has a unique perspective of also being a buyer of Progyny in a former role. And so I'll let them introduce themselves Melissa, you want to get us started.

Yes, absolutely. Hi, everyone. I'm Melissa Maldonado, VP Client Operations here at Progyny. And so my team is responsible for onboarding all of Progyny's employer clients into Progyny's product suite. I've been here for about 7.5 years and health care for about 10, and I'm now a mom. Thanks to Progyny.

Thank you, Melissa. And Arielle, if you don't mind introducing yourself.

Hi, everyone. I'm Arielle Bogorad, SVP of Employer Market Strategy. I've been at Progyny a little over 2 years, and I have responsibility for Progyny's channel partnerships. I have been in health care for just over 20 years. And for the last 14 years, I've been really ensconced in the employee benefit space. I was actually -- well, prior to joining Progyny, I had executive responsibilities for worldwide benefits and all of the well-being programs at Cerner Corporation, which encompassed a $250 million health plan that covered approximately 38,000 lives. So I was actually responsible for adding Progyny when I was leading benefits at Cerner. And then unbeknownst to me at the time, I was later diagnosed with infertility, and so then it was a benefit that I actually needed. And so through this journey, I became really knowledgeable about being a planned sponsor in this -- within this vertical of health care as well as being a patient. And I'm proud to say that my Progyny miracle is 4.5 years old.

So we're first so honored that you're here to share your story. So thank you. Melissa, I'm going to kick it off with you, if you don't mind. Everyone's family building journey is really unique, right? No two like, do you mind sharing a bit about yours?

Yes, I don't mind at all. It was actually a long, arduous and unexpected journey. I think it was the time in my life where experienced the most grief for many different reasons. I was on my husband's insurance at the time and that was a horrible experience. And then it worked out in a way though that it was during open enrollment, and so I switched over to Progyny. I'll never forget, we knew that I had polycystic ovarian syndrome or PCOS and so we can get a little bit of help. But when we actually started trying to conceive things weren't happening and we didn't know what to do. And so went to meet with a fertility doctor. We went into the clinic, and we were told, all right, well, you're young, generally healthy, you should get pregnant really quickly and that wasn't the reality. And so we spent all of 2021 in and out of fertility treatments, having surgical procedures and going through miscarriages. And so grieving what I thought my journey to a family building would be grieving the diagnosis, I had blocked tubes and a bunch of other things, that testing uncovered and then graving from my miscarriages. And so at the end of 2021, my husband and I decided to take a break for our mental health. It was just really hard on us and try again in 2022. And then when 2022 came around, we decided to just jump right back in and just have faith. And sure enough, that led us to our little boy Lennox, who's going to be to 2 in October.

We love Lennox. You mentioned that when you were on your -- prior to having the Progyny benefit, you were on a carrier benefit through your husbands insurance before knowing really that fertility was going to be your journey or treatment. And you, I think, used the word horrible.

Yes.

Do you mind expanding a little bit on what is difficult about having that type of coverage.

Yes, absolutely. I think what made it horrible is I'll toot my horn for a bit, which is why I say horrible, I've been in health care for 10 years. So I know what a deductible is in an out-of-pocket max is. It's a little more educated. And so I felt really prepared when I picked up the phone to call the insurance and then what happened after that -- before I even got started with treatment, just went downhill. And so ultimately, if I had to sum it up, I felt like I was being pink ponged around. And so I'll never forget calling the insurance and speaking with their concierge team. And the lady was really nice, but she had to call someone else to get the coverage details. And her answer seemed a little off to me based on what I knew being at Progyny for the time that I was. And so I don't really trust what she said to me. And so I was like, let me call back and just validate what she's saying. And so I call back, I speak to someone else. So i have to tell my story all over again. She's doing the same dance like calling someone else at the insurance to get the information and now the answers are different. And so finally, I was like, okay, I know there are planned documents like this is required, and so I ask for planned documents and the rep said, call your HR. So then I had to go to my husband because he is the subscriber on the plan and add to his to-do list, which he loves getting those from me and say, Can you please call your HR and get your plan documents like this is what it is, this is what it means, and he did it, but they said, call your insurance or call the insurance. And so called the insurance back, didn't get the planned documents, and I finally got to a place where I was like, I'm just going to take a leap of faith. I'll go into the clinic. I'll figure out. I'll see what claims get processed and then whatever comes out of pocket, we'll figure it out from there. Lo and behold, I went into the fertility clinic and I met with the financial coordinator as my first person to meet with, and she gives me a laundry list of like different types of treatments that could -- I could possibly undergo, CPT codes, like descriptions costs, like it was like a menu of things. And she gave me homework and she goes, okay, now call your insurance to find out what's covered and ask about everything because you still haven't gone through testing. And at that point, I was like, "I'm just not calling them." and so I sat up -- I'll never forget sitting at my desk, I was showing Arielle the other day. I -- like sitting at my desk and doing the pros and cons of like staying on my insurance and moving on to Progyny's coverage. And so I made the switch which was a breath of fresh air.

So like having a full-time job and doing that and having to manage...

Myself back and forth. Yes, it's a lot

And feeling really stressed in so much is building on it. So you switched to Progyny, switched to the Progyny benefit and at that point, you had a patient care advocate. And I talked a bit about patient care advocates in the intro, and I'd love to hear from your perspective, what having a PCA, patient care advocate was like?

It was so helpful. So she's essentially an extension of our family now, like we still send her updates about Lennox. But from the moment I started talking to her, which was well before I was on Progyny's plan. It felt like we had someone in our corner and someone there for us and someone who is knowledgeable, accessible and really understood it. And so as I'm talking to her, I'm telling her okay, I've gotten started with the clinic, here's what I need to do here's my medical history. When I got the diagnosis that my tubes were blocked, I'll remember crying the entire ride home and like, "Oh shoot, I have to tell my PCA, which she knew would check in with me. And so when I told her that my tubes were blocked, she had suspected it all along, and I told about the other things, but she just supported me from that moment and consistently knew went to check in with me, so much so that after my second miscarriage, I started to go down the rabbit hole of embryo grading, which I'm not clinically trained. I'm not an embryologist by trade. There's no reason for me to start to go down that rabbit hole, but everyone else on Reddit was doing it. So I go that means I have to do it, too, because I'm not having success. And I mentioned it to my PCA and she's like, "Oh, we have an embryologist on the team like, let me pull them in. They'll help you." And so she knew when to pull in the right specialist. The other thing that I really appreciated about my patient care advocate is that when I called, she answered. When I sent her a message on the portal, she answered right away. So it was the same person every time. And in the moments where I was like, "I just need quick information, or I need to understand where I'm at with my Smart Cycle balance. I could do it on the app." And so just overall, the support from my patient care advocate, her knowledge, her consistency, not having to worry about, okay, what's covered because I have that clarity from the beginning and not having to worry about money really made a difference, and I attribute Lenny being here because of her.

Yes. We hear a lot from members that they just never felt so looked after. I mean, it sounds like that was your experience. So Arielle, going to switch to you. And before you talk about your personal journey, I'd love to hear, you mentioned you're a former benefits executive and an early adopter of fertility benefits at Cerner Corporation. Can you share why you chose Progyny?

Yes, sure. I'd be happy to. So Cerner didn't historically cover fertility treatments. We only covered the underlying diagnosis, which is essentially nothing. And our members have been asking for it for some time, but we honestly hadn't found the right partner until that is we met Progyny. And actually, I learned about Progyny from Renee Albert, we saw on the big screen before when we were in D.C. in 2016. So Progyny really aligned well to Cerner's overall benefits philosophy. So we thought a lot about putting the emphasis on highest quality and an exemplary member experience. And we found that if you pivot and put your focus there then you'll have improved outcomes and reduced costs over time. We also thought a lot about incentive alignment. And as you know, the U.S. health care system has a perverse incentive alignment amongst the key stakeholders, the patient, the provider and the payer. And so we were always trying to realign those otherwise perverse incentives to create those good consumers of health and care and good providers of health and care. And then finally, we always aim to put the patient and the provider at the center of decision-making. So when we met Progyny, I mean Progyny was doing all of these things within this vertical of health care. So it aligned really well for us. And so I was able to make the business case around cost mitigation as you've kind of heard today. And so when a health plan doesn't cover fertility treatments, it doesn't mean your members aren't going and seeking care. It just means, as we've heard that they're often taking out big loans in order to cover the cost and when someones seeking care and they have so much riding on this and they're maybe taking a second mortgage out on their house, I guarantee you they're not making evidence-based decisions. They're making cost-based decisions. And this is exactly how it played out on the Cerner health plan.

And this is exactly how it played out on the Cerner health plan. Prior to putting Progyny in place, we had quadruplets born on the plan, and each baby was over $1 million. So then I was able to make the business case that we could mitigate these NICU outliers and that we could help so many more people achieve their dreams of building a family. And that's exactly what we accomplished over the course of my time, leading benefits we had from 2017 on. We had hundreds of Cerner babies born to the plan. So this is really a win for the health plan. It was a win for our members. And ultimately, it was a win for big Cerner because of that increased satisfaction and loyalty amongst our members.

So when you added Progyny, what was the response from your members? What did you hear from them?

Yes, they were thrilled. I mean, they had been asking for it for some time, and we had an internal social networking platform that we used internally. And people were pretty vocal on it to begin with, but when we launched Progyny, they were ecstatic. And when we first launched in 2017, we actually only launched with medical coverage to begin with. And we soon heard from our members, they're vocal. We soon heard that pain for the pharmacy was still a pain point. And so that next year happens to be when Progyny launched in 2018, Progyny launched Progyny Rx and so we were first movers of adding that benefit. And then over the course of the next several years, we went from -- we continue to enhance it. So we went from 1 smart cycle to eventually 3 smart cycles and then ultimately to unlimited smart cycles, and Progyny was with us along the journey, helping us to model out the costs and what that impact would be to the health plan and ultimately, what those increase cycles would mean for our members. So yes, great support.

So sort of what your expectations were and delivered on the promise.

Yes. Yes. Yes.

So do you mind talking about the other side of your experience with Progyny, which is your personal fertility experience?

Yes. So when I put Progyny in place, I never expected that I would ultimately need it someday. As a planned sponsor, you spend a lot of time thinking about your -- the strategy of your -- of the benefits, our benefits book that you put out to your employers and you don't -- you wouldn't possibly think that you would use all the benefits. I mean, you'd be pretty sick, if you had to. And so I ended up having a really difficult journey. I ultimately was diagnosed with unexplained infertility, but through the course of my treatment, I was labeled as a poor responder to the fertility medications and then ultimately had a really hard time obtaining chromosomally normal embryos. And so after 6 stimulations, 2 of which were canceled mid-stimulation cycle. I ultimately -- well, 6 simulations, 4 ad vertebras, I only ultimately obtain 2 chromosomally normal embryos. So I had several cycles that just -- I had some embryos, but they were all abnormal. And so I walked away with 2 chromosomally normal and 1 of which is my daughter Stella today. So that's I know pretty special. And through this, I became really passionate about improving access to care for fertility and family building so much so, and I truly believe in Progyny's model. So I decided to make a career pivot and joined Progyny as a full-time employee so that I could personally play a part in advancing its mission to help others. So it's personal for me. And I firmly believe that if I didn't have coverage with Progyny that my daughter wouldn't be here today. So my daughter's embryo came out of that fourth egg retrieval, which was the sixth stimulation cycle and I, quite honestly, would have been priced out. And so I believe that my coverage with Progyny unequivocally changed my life, and that's why I'm here.

I love that story. You mentioned you also have experience with Progyny and that Cerner had added it around the time I think you were starting to use the benefit. Can you talk a little bit about what that experience is like?

Yes. Progyny, I'd love to talk about Progyny. Similar to what Melissa spoke about, like how the PCA experience was so pivotal to her journey. I kind of felt that same feeling from the Progyny Rx journey. So typically, when someone is going through like an egg retrieval, your doctor gives you the green light that like, all right, we're going to go, and it's all based on your cycle. So if you like miss that cycle that month, then you have to wait a whole another month. And so the doctor gave me the green light and then I talked to my PCA and she put in the med authorization, so that I could get the drugs going and we talked about the delivery date back to my house. And then it was in that meeting that she scheduled the unpacked call. And you've heard a couple of people talk about this sometime in the call, but I'll go into more depth. So then what my drug -- so fast forward, my drugs arrive and the pharmacist calls me to walk through to unpack the box with me. And the box is really well labeled every -- all the components are labeled and it has an insert that talks about them all. But literally, I had the pharmacists on the phone, and he and I walked through what goes in the fridge, what stays on the counter, which are the needles for mixing the liquids in the powders and then which are the needle for injecting. And I mean I had a lot of anxiety around this notion of having to self-inject medicine. And there's tons of emotions when you're going through a facility cycle, and you just know how much is riding on it and then as a plan sponsor, I knew how much like this box of drugs cost. And so I really felt supported by this personalized attention that I had. And it didn't end there. So then you start the stim cycle. And then it's like the next 10-plus days that you're injecting yourself and going in for labs and ultrasounds to see how things are growing. And the pharmacists kept calling me to see how things were progressing. And so I really felt supported throughout that stim cycle and ultimately, what was the biggest, I think, aha moment of, wow, this is differentiated, was now fast forward 2 years. This is my second embryo transfer. And the way I was -- well, they had a change in protocol for -- and I needed a trigger shot. And the way trigger shots work is at very time and like day and time-bound. And so you need to like administer it a certain -- on a certain day, at a certain time, and it's all around getting your body ready to like basically thinking that it's going to accept this embryo. And so you -- for the 2 weeks prior, you're doing progesterone and estrogen and you're seeing -- if you're at uterine lining is the thickness it needs to be. So everything is very -- you're in this itinerary and you're going through it. And so it's very stressful when all of a sudden, you need -- there's a change in protocol. And so I called my PCA and so Progyny arranged for this trigger shot to be hand courier to me to my house. And honestly, yes, wow, I was blown away. Like that doesn't happen in health care. And it's that level of an exemplary member experience that that's the member experience that Progyny delivers.

Yes, truly life-changing. And exactly when you need it, the support is there. Yes.

Yes.

Melissa, I'd love to hear a little bit from you now. The last session, you heard, Dr. Fischer, Dr. Choi and Sam talk about our provider network, and I know what it's like from their perspective, right, seeing patients, I'd love to hear what it's like from your perspective, being a patient navigating that fertility clinic with Progyny on your side?

Yes. And I think I have a unique experience in that I started without Progyny and then with Progyny and so even before I went into a fertility clinic, I looked at Progyny's directory because, one, I knew that Progyny did all of the work to vet the clinics in the network and that they have really high success rates. I don't want to just go to like any fertility clinic. I wanted to go to the best because things weren't happening. And so I did that homework of like in network with Progyny, in network with my insurance. And so overall, I was able to find a clinic close to home that I really liked and a provider that I really liked, so much so that mid-journey or track that, that provider switched to another fertility clinic. And so I ended up making the move to the new clinic that she's at, and that was really easy to do. I'll never forget, though, when I got started at the first clinic, I mentioned I met with the financial coordinator. That was the first person that I met with. And while she was really nice, I had to talk about money, and my husband have a really like conservative budget. And so now we have to start adding in like, okay, co-pays, deductibles and things like that. And so when I told the financial coordinator that I was moving over to Progyny and was going to have Progyny as of January 1. She's so excited for him. She was like, "Oh my God.' She's like, "It's great, you're covered. We don't have to talk anymore." And so that was really nice, because that was 1 last thing that I had to worry about during my fertility treatment. I didn't have to have an additional phone call with someone which, by the way, I'm very busy during the day. And so when they're calling you, it's hard to answer the phone and you want to make sure that you're answering the call from the clinic. And so I didn't have to talk to her anymore. I didn't have to worry about the money aspect. And it was very clear to me with Progyny, even at a Progyny Clinic, what was covered. And so overall, had a really great experience at Progyny practices.

That the smart cycle, which is how we cover treatment makes it so super clear to the member and to the provider exactly what it's covered and exactly what it's going to cost, which it's really a game changer.

Yes, I didn't have to worry about like, is ICSI-covered, which is like really best practice in fertility treatment, which I learned -- but now with the Smart Cycle, this is all included.

We knew what was there, yes. So thank you so much, both Melissa and Arielle. That's all we have time for. Again, like I said, in my intro, we are really honored that you're sharing your journey with us. I'm really excited to introduce you all to Lennox over here, that's Melissa's son Lennox and that's Stella, Arielle and her family.

Thank you for doing.

And so thank you so much. I think there's not a whole lot more of that. We can say that's better than this, 2 people who are very much loved and who maybe wouldn't exist for that Progyny. Thank you.

Good morning, everybody. For those of you who don't know me, my name is Mark Livingston. I'm the CFO of Progyny. I joined the company prior to our IPO just a little over 5 years ago. Over my career, I have helped lead high-growth companies, both in the U.S. and internationally across a number of different industries, including oil and gas, health care tech and media and entertainment. And I'm pleased to be here today to shine a light on our business from a financial perspective and to share some of the details as to where we believe the business is headed. You've heard a great deal today about our business, our focus on taking great care of our members and clients, developing strong relationships with our providers and constantly monitoring all aspects of our business so that we can deliver true value-based care through superior outcomes. What that translates to from a business perspective is a strong base of clients as evidenced by our unparalleled retention rates. And within those clients are a motivated set of employees, who are discovering their need for fertility services and are taking advantage of the incredible benefits that they have access to. Now while there may be differences in how member demand presents itself from time to time, variable, I'd say, rather than volatile. Over the long term, that demand has remained within a tight range. Given that solid foundation, we believe our relationships with our clients represent a significant asset that we can -- that will appreciate over time as we continue to expand our services with them. To date, we've demonstrated consistent margin expansion through the efficient deployment of all of our teams while ensuring consistently high level of quality and satisfaction. I'll note that we've delivered this margin expansion even as we've added resources to develop and market the new offerings, which you've heard more about today. We have now built the capability to develop and launch new products efficiently, a capability will continue to strive to enhance. Looking forward, we believe that our existing infrastructure can continue to be leveraged to service our current offerings, the new ones we've launched and others in the future to continue expanding margins for years to come. And finally, with comparatively low capital needs to fund our growth, we convert a high rate of adjusted EBITDA and net income into operating cash flow each year. And as they say, cash is king. Before we dive in, I wanted to take everyone back almost 5 years to revisit the 5-year model that we shared as part of our pre-IPO process. These figures compare some of the key operating results from the final year of that projection, 2023, with our achieved results. While eyes were somewhat less than expected, given some of the macro factors such as COVID, sustained periods of high inflation, changing labor dynamics, revenues were comparatively closer. Part of this is because the take rate of our pharmacy product has been in the upper 90 percentile for the last few years. And our existing clients were expanding their benefits at a strong pace, notably with our pharmacy product, but also through upsells of smart cycles, for example. And importantly, we were able to meet our profitability and cash flow goals due to the consistency of the embedded base the multiple pathways of growth and the inherent operating leverage in the business. So how do we do that? Here are the key drivers to our financial model. Across the years, adding new client logos and lives has been the most important component of growth. It's been complemented by upsells across the base of clients. Again, adoption of pharmacy services for those that did not select it when they came on board, increasing the number of smart cycles they offer their employees and in some years, the growth in the population base of our clients. Now, we've added new services with more to come in the future. In many cases, those new products will be at a comparatively higher margins given that we may not incur claims-based provider costs to service those products. Our gross margins improved with our increasing volume and scale as we manage the equilibrium of creating savings in treatment and medication costs, sharing some of them with our clients and members and keeping some to ensure better returns for our shareholders. Our investments in sales and marketing are designed to ensure we are well positioned for all the opportunities in the marketplace. Nevertheless, given our 99% retention rate, our cost as a percentage of revenues are now quite consistent. Finally, our expanding adjusted EBITDA and low capital need profile provides us a cash flow engine for investment and growth. One important aspect of our working capital model is that the gap in time, on average, between when we pay our providers and when we collect from our clients and members, is fairly tight. So even while we grow our investment in net working capital is not in all. And while we are now a cash payer for income taxes, our cash flow conversion rate from adjusted EBITDA remains solid at 75-plus percent and with a conversion rate of nearly 2.5x net income. Next, I'd like to click down into revenues a bit to share some details on utilization and rates that you've not seen before. This chart presents a breakout of the utilization rate for the recent selling seasons in each of their first year with Progyny. For example, the clients we sold in 2022, who had launched in 2023 represented 1.2 million lives and yielded an annual utilization rate of 0.67%, that compares to the overall book of 1.09%. There are a few important takeaways from this breakdown. The rate of utilization of newer selling seasons has remained very consistent, 0.67% in each year over the last few years, even as we've added large varied groups of companies. Our overall annual utilization rates have been fairly consistent as well. In fact, have grown over time, even though they include the addition of new clients who started a comparatively lower rate as they ramp up in their first year. So mathematically, that must mean that the rates for the returning clients must be growing to offset the impact, and they do. This chart presents the annual utilization rates for each of the last several selling seasons that have had at least 2 full years of utilization. In this view, the rates have been indexed to show each season's launch year in order to show comparative growth. For example, when you look at the 2018 selling season cohort, you can see 5 years of comparative rates for 2019 through 2023. For 2019, there are 4 years and so on. What's very clear from this view is that each and every cohort has grown over time and in a similar fashion. And notably, despite the fact that these cohorts are made up of companies from different industries, the trend has remained the same over time. I'll add you that the earlier cohorts not depicted here has also grown each year since -- through 2023. Several factors can drive that long-term growth, including the increase in prevalence of infertility, but also the expansion of access to the benefit by our clients through incremental smart cycles or male infertility products and more. Ultimately, this all culminates in our quarterly reporting of female utilization rates. This chart simply represents our reported utilization rate by quarter. The trend line, which does grow slightly over time is based on all periods since the beginning of 2019, excluding Q1 and Q2 of 2020 when clinic closures due to the onset of COVID had a pronounced impact. As you can see, utilization rates have been within a tight range over the long term. Again, even as we've onboarded sizable cohorts of members from varying geographies and industries over time, underscoring the persistence that we see across the business. In fact, each quarterly result has been within plus or minus 3 basis points of that trend. Now, I know investors are interested in understanding more about what near-term visibility we have into scheduled treatments at any one point. Let's take a moment to talk about that. There are 3 main sources of information that help us estimate revenues for the upcoming quarter and the rest of the year. Obviously, received claims is our most reliable indicator of actual treatments rendered. But unfortunately, it takes weeks to receive them and ultimately months before they're all settled. Now, we do have an advantage over traditional health payers and that all of our treatments are preauthorized and for a defined period. Therefore, we know how much the revenue and provider cost will be for any authorization. We used historical analytics to estimate the actual day that a treatment is likely to occur in there for the quarter, along with estimates for changes, cancellations, postponements, which can occur fairly regularly. Finally, we estimate the expected authorizations that we would receive based on the current patterns of utilization, historical growth rates and seasonality factors. There are a variety of constraints inherent in our estimation, not the least of which is the fact that there are -- that appointment volumes more than 4 to 6 weeks out are minimal. Now, let's take a look at what we see as each quarter evolves. This chart is representative of the proportion of each of the components that I just highlighted as of a moment in time. So in this start-of-quarter view, you were looking at the component portion revenues for each of the next 3 months. Here, you can see that approximately 3/4 of revenues in the upcoming month 1 are made up of scheduled authorizations with the balance being made up of expected authorizations. Month 2, less than 20% of revenues are made up of schedule authorizations. And for month 3, there's virtually nothing scheduled. As time progresses to the end of the first month of the quarter, you now see that a little less than half of the revenues from month 1 are actual claims with the balance from authorizations, which are still open and are estimated to have occurred. Month 2 estimates are now similar in proportion into month 1, as of the start of the quarter and so on. This view most closely resembles our visibility into the current quarter as we provide quarterly guidance in May, August and November. Moving ahead in additional months to the end of month 2, we typically see around 90% of revenues from month 1 received by claims. Month 2 now looks similar to month 1 as of the end of the prior month and so on. This is the view that most closely represents our visibility when we provide annual guidance at the end of February. And to put it all into perspective, for the full year, when we provided guidance as of the end of February 2024, our full year view was limited to $127 million in claims, including drugs dispensed, $130 million in scheduled authorizations and the remainder of $1 billion-plus in expected authorizations. Finally, as we view the data as the end of the quarter, you can see that actual claims received continue to inch up for month 1 and month 2. And for month 3 claims received make up a little less than half. With that as background, let me turn to the guidance we issued the other day and some of the metrics we shared in our release. As you know, other than qualitative commentary, we've not previously shared the details regarding our forward-looking expectations for female utilization rate or hard cycles prior to this quarter. Given the overall reduction in our top line for the second half, we felt it was important to share more of these details in this quarter so that you could discern where we see the divergence from our historical norms. Our guidance assumes that our low end of the range will yield an annual female utilization rate of 1.05%, which would imply a back half of 2024 that is similar to Q2 in terms of rate of utilization although typically, you would normally see that tick up a bit. Our high-end assumes a continued rate of healthy utilization with that slight tick-up. Now the other key factor, which we've talked about, is the number of ART cycles per female unique utilizer, which we have estimated to be down near our 2021 levels in our low case, and down to our 22 levels in our high case. This chart is a graphical representation of what we shared in our table in our release regarding the quarterly trending of ART cycles per female unique utilizer. What's clear to see is that in prior periods, this metric steps up from Q1 to Q2. This is because the greater proportion of people start their fertility journey in the first quarter than any other quarter in the year. As a result, you have a higher proportion of overall female utilizers, the denominator who have not yet progressed to our treatments, the numerator within the quarter. This metric typically steps up throughout the year as more people progress. In the prior 2 years, the number of ART cycles per female unique grew by 14% to 16% from Q1 to Q4. You'll also note that the annual value steps up from year-to-year as our base of clients add to their benefit, which allows more people to continue their fertility treatment journey further than before. As we discussed on our call, the step-up in Q2 was not as significant as we'd expect. And unlike some of the other variability we've seen this year, at this time, we are not seeing that step-ups occur so far in the authorizations that have been scheduled for Q3. It takes time to receive the actual data and outcomes for any period, but we're looking into the various dimensions that could provide some insight into what might be driving that trend. As a result, we've established a range that contemplates sequentially flat to down ART cycles per female unique utilizer for our low end and sequentially flat to slightly up for the high end, yet still reduced versus historical levels. Let's turn now to overall margins and profitability. The growth in adjusted EBITDA margins demonstrates our ability to manage our costs as we rapidly scale the business. Given our high rate of retention, persistent utilization and the purchasing power we've gained as we've scaled, we've improved our gross margin steadily each year. We've achieved this even with continuous investments in the people and technology to support our current products and to prepare for the new ones. Now, one question we do get from time to time relates to the gross margins on smaller clients versus larger ones. The reality is, is that gross margins are within a very tight range across our client base. In fact, in 2023, excluding only our very largest clients, the difference in gross margins between clients greater than 10,000 lives and less than 10,000 lives was only 175 basis points, with the less than 10,000 life group having a slightly higher gross margin. Otherwise, sales and marketing costs have remained stable in the 5% to 6% range as a percent of revenues. And finally, we've continued to pursue ways to ensure we are efficient with our G&A, which is now 370 basis points lower as a percentage of revenues than we went public and you exclude the impact of stock compensation. Now I'd like to talk -- to touch on stock compensation for a few moments. A key driver in the increase in stock compensation over the last few years relates to a broad-based grant from late 2021. The options within that grant carry a strike price in the mid-$60 range which coincided with a brief period of time where we traded at our all-time highs. As a result, the Black-Scholes value for that grant, which is the basis for the expense we recognize was also quite high. That expense is recognized over the vesting period of that grant, in this case, over 4 years with the expense associated set to roll off in late 2025. The intent of this chart is to demonstrate the dynamics of stock-based compensation. Over time, as the grants we issued to new employees for promotions and for merit are more than offset by the impact of the current grants rolling off over time. So now that we're talking about the future, let's take a look at the bigger picture. As I'm sure all of you noted in Pete's introduction, we're targeting a CAGR of 20% from this year through 2028 for the top line. What that translates to is a business of over $2.4 billion. You've heard a lot today from our go-to-market execs, our product leaders and more about how we're canvassing our opportunities. We believe that we're well positioned with multiple levers of growth for the future. In order to achieve the 20%, we'll continue to grow our clients in covered lives to over $11.5 million through 2028 in all the ways that you heard about today. That also assumes an overall utilization rate of approximately 1.03% out in the future years. Again, increasing utilization rate of the base averaged down by the comparatively lower first year cohort each year. But really -- but what's really important is that we will leverage our most valuable asset, our client base to deliver the newly launched products such as menopause and maternity, with more to come over the years. We expect those revenues to contribute 8% to 10% of overall revenues in 2028, providing some additional wind to our year-over-year growth, especially a couple of years from now. Even the targeted revenue CAGR of 20%, we estimate adjusted EBITDA will grow at a rate of 25% over the same time frame. We do expect a small amount of continued leverage in gross margins across the core fertility offering. The new products, however, are expected to contribute gross margins at a higher rate, helping drive an overall 400 to 500 basis point improvement over 2024 by 2028. We anticipate incremental investments in sales and marketing to drive member utilization of the new products, and as a result, expect sales and marketing to grow by 100 to 200 basis points. All of -- and from a G&A standpoint, we anticipate continuing to be able to leverage that down. Our model estimates a reduction of approximately 100 basis points. And all of those changes are in addition to the improvement in stock compensation expense I mentioned a few minutes ago. Finally, given that outcome and long-term cash conversion rates from adjusted EBITDA of 75-plus percent, our annual operating cash flow in 2028 would be approaching $400 million. So let's talk now about what our priorities are for that capital. Today and for the near term, our capital priorities remain as follows: we will continue to evaluate and execute on share repurchases to the extent that we believe the stock is undervalued and that we have ample liquidity available to reduce overall share counts. We'll continue to look to strengthen our core fertility business while also investing in new products that could profitably address other key milestones in women's health. We continue to invest in our go-to-market strategies to ensure we are achieving our growth goals. Finally, we're open to acquiring assets that are -- that can accelerate us on our mission, but only through a disciplined and selective approach that demonstrates value creation. We hope you found today's presentation insightful and that you've come to appreciate the strength of the broader team here at Progyny a little more. Now, let me recap some of the key themes we hope that you'll take away from the day. We are covering all the bases in our go-to-market strategy in order to maximize our opportunity. We've developed the capability of being a multiproduct company and are poised to leverage our client asset base. We continue to stand out in terms of our mutually beneficial relationship with our providers. We're managing a great business here and leveraging our financial strengths. And finally, and perhaps most importantly, we are delivering on the promise of value-based care and ensuring that we deliver the right care at the right time for every member. Thank you for listening. I'm sure you're all eager to jump in with questions. So I'll now invite Pete and some more members of the management team up here and we'll jump right in.

Hi, everyone. I'm Julie Stadlbauer. I'm Chief Business Development Officer with Progyny. I've been here since 2017, about a month after Pete and David joined. I'm responsible for many of our large clients coming to Progyny, including Amazon, ExxonMobil, [ HEB ]. And today, I run three, and have overall responsibilities for three of our growth teams, including channel partnerships, which you heard from Arielle, our consultant relations team, very important to us for distribution and also our new health plan growth team as well. So I'm looking forward to the conversation today.

Hi. I'm Risa Fisher. I'm the Chief Marketing Officer of Progyny. I joined the company 7 years ago, so a few months after Julie did. Prior to that, I was at WebMD and spent 20-plus years in health care at some of the predecessor companies, WebMD as well.

Thanks for all the information today. It's been really helpful and it was great to hear some positive fertility journeys as well. I was hoping -- we know a lot about the competitive environment for the fertility benefit. But I was hoping maybe you could talk a little bit about what that looks like for some of the newer benefits that you're adding, like menopause, post-partum and things like that. What are the carriers doing today? And as you add these benefits, how is your conversation with employers changing with a more kind of fulsome benefit, some more incremental products. Is that more of a cross-sell opportunity? Or is that an actual -- you have a more comprehensive benefit that's why we're going to choose you versus a carrier conversation?

Michael?

Maybe I'll start and then others, please join in. So on the first part, for sort of the competition on the other groups, it's a little bit more spread out. So we actually think that's an opportunity for us to consolidate and leverage the strength of our existing client base. As for what the health plans are doing in those areas, again, I think there from sort of the maternity side of the equation, they've always been very focused on like the high acuity case management, really, really small portion of population, but still very focused there. On the other side, they -- it's interesting because they have really big networks, and you heard sort of Dr. Choi say this earlier, they have really big networks. And most of the -- from a menopause treatment perspective are covered under your 999 code your primary care codes, yet we haven't seen them really step into that space yet. So we do think we have an opportunity here, both from a sort of credibility trust perspective that we talked about as well as an early mover in the market and to sort of wrap it around those adjacencies that Joanna talked about.

I'd add the curation of our network and the way that we've built out the fertility solution, which we spent a lot of time talking about today really sets us up well to expand into these other markets, leveraging that expertise that we've developed over the last 8 years. For example, when you think about menopause and some of the other organizations really looking to focused on that, it's typically a health coach. We actually built out curated credentialed network of providers, which people have access to, for a visit within a week. And they can get medication where appropriate based on their clinical scenario. So that's -- it's the mindset that we have and the experience that we leverage as we build out in these other areas, which really sets us apart. And by the way, I spent a lot of time with Michael on the health plan side, so 3 decades of experience mostly on the health plan side as well.

And if I could just follow up. You have just -- it's your first selling season really with these benefits. So how is that impacting the conversation relative to maybe prior years where you've only had 1 benefit?

I think we've seen a huge spike in interest in not only what we do in fertility, but being able to work with one partner who's going to span across family building and women's health. And I think what Progyny offers is, we've spent all of our time and the hardest to crack segment of that, which is fertility, and then adding additional support and solutions on top of that. So I think when clients are looking at who they're going to partner with, finding their partner that is going to be very focused and the thing that's been the hardest for them to figure out and then having the opportunity to then attach other solutions to that that impact women's health.

Pete, this is Glen Santangelo from Jefferies. I hate to ask the obvious question after last week, but you're giving us today some pretty specific 5-year guidance with some specific 5-year goals in terms of membership adds and revenues. And we're kind of coming off the backside of 3 quarters in a row where you and Mark were maybe somewhat surprised at maybe how the quarter sort of played themselves out. And so I'm kind of curious what gives you the confidence as you look 2, 3 and 4 years down the road to sort of build this long-term guidance, particularly given that many economists think we're staring at an inevitable recession, DEI maybe seems to be losing some steam in the boardroom and the competitive landscape is obviously not sitting still. So I just would love to get your thoughts on all that long-term stuff. And then I'll ask my follow-up upfront and then I'll give up to Mike. I'm also curious about menopause. We've been -- I feel like we've been talking about this for a while. We talked about it today, but not really in specific detail about how the business model will work, how the company will charge for it, how quickly we think it can start to impact the P&L. Thanks, and I'll stop there.

Sure. So the first question relative to our confidence, it's really based on what I talked about in the beginning that the overall demand for fertility and family building continues, right? That's not just from us and what we're seeing in overall pipeline. It's also from what we're hearing from the benefit of so and so. So maybe either Katie or Julie can add to that, just to give them some perspective in terms of that continued demand and what's out there and what we're hearing from the benefit consultants. Then I'll take the next part of your question.

Yes. Thanks, Pete. It's a good question. So in terms of the fertility and family building, you've got employers that are working with consultants as advisers. We invested in building out our consultant relations team and many of these consulting firms have actually built Centers of Excellence around fertility and family building to really dive deeply into it. They understand the cost implications and the risks of not doing it. When you're looking at downstream NICU costs that lead to overall high cost that people are dealing with and surprises. And we have multiple clients that have joined us because they've dealt with $3 million, $4 million, $5 million, $6 million NICU expenses for one family. And so that's been part of what they're really trying to identify is how do we evaluate and really control spend overall from a fertility and family building perspective.

Regarding the -- Mark, do you want to talk about the model or you want to talk about the model relative to menopause?

Mark, why don't you take that. Go ahead, Mike.

So in my comments, I talked about that we don't expect the new products in large part to include claims. So it's going to have a different -- more of a case rate based model. And yes, we've been talking about some of the new products and adjacencies. I think the difference between what we've been seeing more recently and what we were seeing, let's say, a year or 2 ago around areas and examples of adjacencies we wanted to target that we were building out to, but we're there now. And I think as we said last week, we've had an incredible receipt from the market in terms of 1 million-plus lives now that have been signed up for some component of these new products between the existing customer base and new customers coming on board. So we see a heavy interest in the new products. And again, by the case rate. As far as the model goes, we're not anticipating a heavy contribution perhaps in '25, but it does build as each year goes on. And as I said in my prepared remarks, we expect these as a combination to be something in the range of 8% to 10% of overall revenue. So doing the math on $2.4 billion, you're talking about a couple of hundred million dollars.

Can you talk about expected membership growth? So I think you're projecting 20% top line growth. What does that mean in terms of membership? Is that like 10% to 15% for membership? And then when you talk about selling to smaller accounts, what is that sales process? How does that differ, if at all, to the larger accounts? And then as part of that, can you talk about international markets? It seems like there's a huge TAM internationally. You've got 300 million people in the U.S., 7 billion people on planet Earth. Any color there would be helpful.

So maybe I'll start with just like what the model has. So I mentioned that the model assumes that we get to 11.5 million members in the 2028 year. So if you do the math versus the 6.5 million that we have now, you're talking 5 million members are on average 1 million to 1.5 million each year. And you can have your own point of view, if you will, on how much of that is organic? How much of that is retention losses versus just new sales? But we felt that, that was an achievable target given where our selling seasons have been and the progress that we've seen in this selling season. And so that's how we thought about it in terms of membership. And then as far as the balance of the question.

Yes, sure. So as for the [ 250 to 1000 ] sort of group -- like I had referenced, it will be a different distribution model. But we're going to -- we will rely much more on existing partnerships, creating new partnerships, to help take those services out to market, very different than what we do for our large employers where we have our folks out doing a fair number of direct-to-employer or even through the larger consulting group. So that will certainly look different. And we're out testing that in the market now on how does that need to adjust and change and what do we need to adjust and change internally as that -- as we start to focus more on that segment, if you think about it that way. As for the global, we very much look at the global, while it's a big TAM from a lives perspective. The difference is country to country from a coverage perspective, cost perspective, just keep going down the line is really, really very variable. And so the way we're looking at global right now is, each year, we do get a few clients in that are looking at mostly larger, but that are looking at their U.S.-based employees, but also their global employees. And they really sort of want something that brings both to the equation. And we feel like we were competitive there. We feel like we're even more competitive now for those sort of select few large U.S. groups. And I think that will be the initial pull-through on global. And then from there, we'll really look country to country to see how that evolves and what the needs are from there.

This is Dave Larsen from BTIG, by the way. And then, Pete, can you talk about drug pricing -- any thoughts on that? Like with the Inflation Reduction Act, is there any impact on drug pricing there or not? I think it was mentioned this quarters having some impact on trend.

So there's no impact relative to the Inflation Reduction Act for the drugs that are on our formulary. The impact to the quarter-over-quarter, year-over-year revenue was simply timing of drug manufacturer rate increases in the prior year where there were 2 of the largest drugs on the formulary, the price that already gone up either in -- earlier in the year in January or middle of Q2 last year. This year, none of that occurred. Only one of the drugs on the formulary has a rate increase effective in July. So year-over-year, we just referred to it relative to the growth in pharmacy and the impact relative to rate increases.

Multipart question, I'll try to keep to one, give to [ Mark ]. You've seen the strong adoption, as you noted, of some of the new services already, which obviously are a key part of the building blocks for long-term growth. You also talked about the sales and marketing spend ticking up versus where recent leverage has been. Can you give us a sense on where exactly the sales and marketing spend is going? How much of that is needed to go out on the new services versus outreach into the smaller customer base and how to think about that balance to make sure that the sales and marketing I guess growth and spend that you have is actually turning into the revenue growth that you want to see.

Yes. So the model assumes overall, I think, a couple of hundred basis points increase, 100 to 200 or so in sales and marketing. And it's about reaching out and actually getting the attention of the members. Unlike fertility where folks are really driven to us with that need. Those that are going through menopause, for example, may or may not be aware of the details of their benefit plan and how they can use it. So unlike fertility where we don't market, if you will, to groups, here's where we see an opportunity to have awareness programs across the benefit groups of each of our employers. So our model assumes that we'll be making those investments as each one of those products grow.

Richard Close with Canaccord Genuity. Dr. Choi, I was curious your perspectives in terms of the changes in the utilization rate and the average or cycles that was just reported. You've been doing this for a while, and I think you could add some on that.

Thank you for that question. I think we're still trying to piece it out. I can tell you that it's true that the average age of the U.S. woman at her first live birth is slowly creeping upwards, and that's probably influencing some of this to some degree. I do think there's also potentially a societal subtle shift, as Pete highlighted in his opening remarks, in terms of deferral until a later age before starting to think about planning for building a family, if at all. And I think there's also more that we need to be looking at as well.

I am Jailendra Singh from Truist Securities. So with respect to the multiyear utilization ramp you guys highlighted for prior year cohorts, have you seen any significant differences across industries or between greenfield wins versus brownfield client wins? And related to that, you're expecting overall long-term utilization rate closer to 2022 levels, may be driven by mix. But however, as you scale, leverage data and technology, are there any initiatives you can put in place to drive that ramp faster than what you have seen in the past? Because it looks like to be a function of lack of awareness.

Yes. So we said in the long-term model that we've based the outer years on the 103. That includes, obviously, the level of new clients, higher level others. We've seen them grow over time. I mean, obviously, those selling seasons will be a smaller component of the overall as it gets bigger. So implied within that would be that you're not -- we're not anticipating as fast a growth in the base utilization rates. And so we're trying to put forward a model that we believe is achievable and is reasonable given the multi-years of information that we have, not just looking at short-term current trends or even much older trends. As far as driving utilization, and I sort of mentioned it in my last answer, we consider ourselves a company that's putting in access out there for people to use a benefit when they need it. But as far as trying to drive utilization or push it harder, it can go counter to what our clients are also trying to achieve, which is to provide that. But they're also not looking to have us push things on people that don't need it. And so that's an area that we've kind of stayed away from.

Let me just add some to that. So even though that's the case, what we do, do regularly and constantly invest in, is focused on the member journey, the member experience and everything around it. And are constantly investing to make that as seamless as possible. So one of the things that we're already in the process of building, relative to understanding the patient pathways that are out there and relative to understanding how to make that member experience better, but could also assist us in giving us insight in terms of this most recent trend of not the same rate of growth in cycles, articles per unique female member is where we have large language models that we're building. We're taking every conversation in the quarter, we have roughly 30,000 people using the benefit. We're taking every conversation we're dropping it down to transcription and starting to analyze that to give us more insight. So to the extent that we can make things easier and better for the member in every part of the journey. That could certainly assist and improve utilization patterns. To Mark's point, we're not out there sort of badgering people. Why don't you do another cycle or anything like that, obviously. But that doesn't mean that we can't do things to make sure that every region, if it's out there, [ adding ] clinic in any area, et cetera, any emerging sort of trends that we can't address them specifically. And that's what we're doing.

So this one probably makes sense for Mark to really keep the microphone on. Because it's a lot of questions for him. But given you guys are preconception already in some adjacencies beyond fertility, I was hoping we can get some color around how big that business is today? And how we should think about bridging that to up to 10% of your revenues? And given these adjacency growth will be about 5 points on the margin expansion. So the vast majority of the margin expansion in your 2028 targets, what levers do you have to pull if that sort of adjacencies traction doesn't really come through?

So the revenue from these products are nominal right now. It's really not material. We really just highlighted them last year. So we have a handful of clients that are in market today. And so the million lives, for example, we're talking about, this is all for beginning next year and on from there. So when it becomes significant enough, we'll be breaking it out. So you'll be able to see what that component is. As far as margin expansion goes, and we -- I think we've talked about it several times today, we believe that the infrastructure that we have in place all of these member services and provider services folks that we've established are in place and can handle additional capacity on a leveraged basis, to help support some of these models, these adjacency models because, in large part, they are about concierge-level service and support. And so it's something that we do every day, and we believe that we can continue to do that. And so we don't believe that we'll need to bring on the staff or the tools, et cetera, at the same pace in order to achieve those margins. And so that's where most of that leverage is coming from is up on the gross margin line. As I said, some investments in sales and marketing, we just talked about that. And then G&A, I think we're very well positioned. We've had a modest target of a further reduction of 100 basis points over these next 5 years. And so look, I think the model to date has been quite variable. So to the extent that revenue is up or down in any one period, we pay others or we don't pay others. So that suits us. But despite any of that variability, I think we've shown the capability of being able to pull levers, as you said, to ensure that we're always delivering at that very bottom line.

And just a follow-up on the visibility color that you gave us, which was really helpful. Is there any initiatives that you're debating or thinking of internally where you get maybe greater connectivity, you get your clinicians or greater connectivity with your member base and try to get better line of sight beyond month [ 2 ].

We're already connected with the providers, right? So even with that connectivity even with the real-time information as real time as we can get it, that's out there, the reality of what Mark showed us is that until the actual treatments happen, until the [ claim ] come in, many things can happen, right? So a lot of times, cancel cycles is an example, are not a function just of you decided not to do it and you scheduled it. They're a function of medically, you're going through the procedure and your body is not responding well, and your cycle is canceled early. You don't know that until the actual claim comes in and it got downgraded from a full cycle to a cancel cycle, for example. But overall, It's, again, 30,000 patients, a lot of clinics as much as we have data integration with them at some level, the reality is that we don't have integration with all of them. And so we're not getting that kind of bidirectional data flow regularly. We are constantly improving how we're communicating with them. And to the extent that we could create APIs and so you said that we can get bidirectional data flow with some of them, we will. And that is where sort of the investments are going to be, but that's going to happen over time.

This is Allen Lutz at BofA. One for Mark, you mentioned about 1 million lives will be live in 2025 on new products. Can you talk about what the uptake that would be embedded in the 2028 targets is or roughly? And then there was a little bit of talk about the menopause network. Is that network different than the legacy or traditional network? Is it more curated. Just curious if there's a difference there.

Yes. So we didn't talk about uptake per se. Obviously, driving couple hundred million dollars of revenue by 28%, there need to be some pretty significant uptake of the 11.5 million lives, but it's also around the utilization rate itself. As I said, we'll have sales and marketing efforts to try to drive the awareness around those benefits to make sure that they are they're being taken advantage of. So in our model, we do ramp lightly from these early years into the outer years. But you're talking in the tens of percentages in terms of client uptake, member uptake and then utilization rates, which would look higher than the 1.0 something that we have today, but only marginally higher than that. And then as far as the menopause network, I'm not sure. Michael, if you want to take that or...

Yes, the -- it's not more curated. I think that, that was -- if I heard that the right way. But it is different, though, certainly than our fertility network for a whole host of reasons. Like I said, just even the -- the difference in specialty is pretty significant. The other significant difference is it is largely a virtual network versus, obviously, the fertility network really requires that in person.

Okay. That concludes -- well, George, yes, one last question. on multipart, please.

On multipart, please. Mark, this question is for you. First of all, in terms of adjacent services, are they -- what kind of a business revenue model it is? Is it like a volume based, a current space or it is a subscription-based or it's a mix. And then I have another comment after this.

Yes. It's -- today, again, we're developing and piloting these products, so it could change over time. But today, it's a case rate-based model. So as somebody engages with us to use those services, there's a case rate that applies and they'll have a period of time generally a year that they'll be -- have those services available to them.

All right. Now the next is really kind of a comment and recommendations. So I think your company is doing the Godley work. I mean, you are creating -- help creating families and helping the babies coming to the world. So it's fantastic. And you are taking care of families, you are taking care of employees, you're taking care of employers, you are taking care of providers. There are only one missing link, you are not taking care of shareholders, meaning the stock has been in a dismal shape. And we've been a shareholder since IPO, and we'll continue to have faith in your company. And one of the key reasons -- or one of the reasons I would say is because of the messaging to -- the Street, maybe -- may not be -- maybe that can be optimized. Since your visibility into the future is only 1 to 2 months at most. And in the long term, it seems that quite a few of the metrics are fairly consistent within a tight range. But in the short term, like in the last 3 quarters, 3 different things happened, and it was kind of out of your expectation. So in other words, any near term, there is -- there could be quite a bit of volatility, so why not -- here's my recommendation -- why not try to give people the long-term confidence that you are doing the right thing, you are growing the top line, you're helping the clients, helping the patients. And in the short term, start your guidance using the low end of the historical range as the basis, and say, hey, in the near term, we don't have much visibility beyond 2 months. Let's have the upside take care of itself. And in that way, you don't have to waste a lot of your valuable time answering our questions, especially these days, the Street is getting even more and more short-term oriented. And you can focus on your more important jobs. And it makes our life easier because we don't get into earnings season fearing that you guys might miss for another reason. The reason is not even something that we have encountered. So in that case, hopefully, you can stream together a series of upside quarters that's going to help you rebuild your credibility among your shareholders. And you will see your multiples start to expand. You will get more respect and we -- actually, we personally in our portfolio to have few -- quite a few of companies, they start with very conservative guidance, and they surprised on the upside eventually, their stocks actually command a premium to their peers, sometimes significant premium. So you don't really have to tell them that I can do sky-high -- I can achieve sky-high results. All you need to do is saying, "Hey, we'll continue to do our Godley jobs, and we are going to up -- surprise on the upside. " So that would be my recommendation. And thank you very much. Your work is great. We continue to be your faithful shareholders. Thank you.

So that concludes the portion of this Q&A. We're doing over lunch, a series of breakout Q&A. So if we can pull up the map so that folks know where they're going. So this is this floor here. Station A is immediately located right outside the store. So we'll leave this map up so that you can see each pairing that we've sort of set up. It gives you the opportunity to go out and interact with members of the management team in a smaller setting over lunch. The lunch has already been stationed, we're going to be doing this until about 1.15. So please feel free to use that time as you best see fit. Thank you.