What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-02-29 · 170 added, 145 removed, 665 unchanged (32% of the section changed)

16 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 29, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 3, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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We have served as the Company’s auditor since 2012.

February 29, 2024

March 3, 2025

PROGYNY, INC.

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Common stock, $ 0.0001 par value;

1,000,000,000 shares authorized at December 31, 2023 and 2022, respectively;

96,348,522 and 93,301,156 shares issued and outstanding at December 31, 2023 and 2022, respectively

1,000,000,000 shares authorized;

at December 31, 2024 and 2023, respectively;

97,692,891 and 96,348,522 shares issued;

85,310,698 and 96,348,522 outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital 581,596 461,639

Treasury stock, at cost, $ 0.0001 par value;

615,980 shares outstanding at December 31, 2023 and 2022, respectively

12,998,173 and 615,980 shares at December 31, 2024 and 2023, respectively

( 303,889 ) ( 1,009 )

16 unchanged sentences

Income from operations 67,455 62,184 23,341

Other income, net:

Other income (expense), net 5,203 286 ( 366 )

Interest income, net 3,304 814 461

Total other income, net 8,507 1,100 95

Interest and other income, net 15,747 8,507 1,100

Income before income taxes 83,202 70,691 24,441

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Net income $ 54,336 $ 62,037 $ 30,358

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on marketable securities 2,333 594 ( 94 )

Foreign currency translation loss ( 15 ) — —

Total other comprehensive income (loss), net of tax 2,318 594 ( 94 )

Other comprehensive (loss) income, net of tax:

Unrealized gain on marketable securities before reclassifications 4,500 6,143 884

Reclassification of gains on the sale of marketable securities into net income ( 7,311 ) ( 3,810 ) ( 295 )

Net change on unrealized gains on marketable securities ( 2,811 ) 2,333 589

Foreign currency translation gain (loss) 31 ( 15 ) 5

Total other comprehensive (loss) income, net of tax ( 2,780 ) 2,318 594

Total comprehensive income $ 51,556 $ 64,355 $ 30,952

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Stock-based compensation — — — 101,521 — — 101,521

Warrant exercise 824,991 0 — 0 — — 0

Other comprehensive loss, net of tax — — — — — ( 94 ) ( 94 )

Other comprehensive income, net of tax — — — — — 594 594

Net income — — — — 30,358 — 30,358

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Stock-based compensation — — — 123,208 — — 123,208

Warrant exercise 247,672 0 — 0 — — 0

Other comprehensive income, net of tax — — — — — 2,318 2,318

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Stock-based compensation — — — 129,544 — — 129,544

Repurchase of common stock ( 12,382,193 ) — ( 302,880 ) — — — ( 302,880 )

Warrant exercise 279,867 0 — 0 — — 0

Other comprehensive income, net of tax — — — — — 2,318 2,318

Other comprehensive loss, net of tax — — — — — ( 2,780 ) ( 2,780 )

Net income — — — — 54,336 — 54,336

Balance at December 31, 2023

96,348,522 $ 9 $ ( 1,009 ) $ 461,639 $ 89,971 $ 2,819 $ 553,429

Balances at December 31, 2024 85,310,698 9 ( 303,889 ) 581,596 144,307 39 422,062

The accompanying notes are an integral part of these consolidated financial statements.

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Adjustments to reconcile net income to net cash provided by operating activities:

Deferred tax expense (benefit) 3,745 ( 6,615 ) ( 33,303 )

Deferred tax (benefit) expense ( 10,456 ) 3,745 ( 6,615 )

Non-cash interest income — ( 34 ) —

Depreciation and amortization 3,175 2,281 1,601

Loss on disposal of property and equipment 1,414 — —

Stock-based compensation expense 128,130 122,611 100,748

Bad debt expense 16,396 19,934 13,794

Realized gain on sale of marketable securities ( 4,328 ) — —

Net accretion of discounts on marketable securities ( 2,115 ) ( 4,328 ) —

Foreign currency exchange rate loss — ( 8 ) —

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Sale of marketable securities 376,840 232,813 122,709

Net cash (used in) provided by investing activities ( 200,525 ) ( 43,866 ) 8,766

Acquisition of business, net of cash acquired ( 5,304 ) — —

Net cash provided (used in) by investing activities 195,792 ( 200,525 ) ( 43,866 )

FINANCING ACTIVITIES

Repurchase of common stock ( 300,278 ) — —

Proceeds from exercise of stock options 1,099 4,850 3,073

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Effect of exchange rate changes on cash and cash equivalents 1 1 —

Net (decrease) increase in cash and cash equivalents ( 22,782 ) 28,665 21,108

Net increase (decrease) in cash and cash equivalents 65,018 ( 22,782 ) 28,665

Cash and cash equivalents, beginning of year 97,296 120,078 91,413

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(together with its subsidiaries referred to as “Progyny” or the “Company”) was incorporated in the state of Delaware on April 3, 2008, and maintains its corporate headquarters in New York, NY.

Progyny is a provider of a fertility benefits solution and pharmacy benefits solution and operates and manages in one operating segment.

Progyny is a benefits management company specializing in fertility, family building and women's health benefits solutions and operates and manages in one operating segment.

The fertility benefits solution consists of a significant service that integrates:

(1) the treatment services (“Smart Cycles”) that the Company has designed, (2) access to the Progyny network of high-quality fertility specialists that perform the Smart Cycle treatments and (3) active management of the selective network of high-quality provider clinics, real-time member eligibility and treatment authorization, member-facing digital tools and detailed quarterly reporting supported by the Company’s dedicated client success teams, and end-to-end comprehensive concierge member support provided by Progyny’s in-house staff of Patient Care Advocates (“PCAs”) (collectively, the “care management services”).

The Company enhanced its fertility benefits solution with the launch of Progyny Rx, its pharmacy benefits solution, effective January 1, 2018.

The Company enhanced its benefits solution offerings with the launch of its pharmacy benefits solution, Progyny Rx, effective January 1, 2018.

Progyny Rx provides the Company's members with access to the medications needed during their fertility treatment.

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As a pharmacy benefits solution provider, Progyny manages the dispensing of pharmaceuticals through the Company’s specialty pharmacy contracts.

The pharmacy benefits solution is only available as an add-on service to its fertility benefits solution.

Progyny Rx is only available as an add-on service to the fertility benefits solution.

Basis of Presentation

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The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in United Sates (“U.S.

Additionally, the coronavirus (“COVID-19”) pandemic continues to evolve and due to uncertainty of the pandemic, including variants, the Company's customers and members, provider network, specialty pharmacy partners, employees, suppliers, vendors, and other business partners may continue to be impacted in future periods.

A resurgence of COVID-19 could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

The Company will continue to assess these potential impacts to its business and will make adjustments to its operations as necessary.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in making decisions on how to allocate resources and assess performance.

The Company operates and manages in one operating segment, providing fertility and pharmacy benefits solutions.

The Company defines its CODM as its Chief Executive Officer.

All long-lived assets are located in the United States and substantially all revenue is attributed to the United States.

Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements.

Use of Estimates

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Such estimates include, but are not limited to, the determination of accrued receivables related to revenue recognition, accrued claims payable, allowance for doubtful accounts, stock-based compensation expense, lease liabilities, and accounting for income taxes.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the

circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

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The PEPM administration fee is allocated between the fertility benefits solution and the pharmacy benefits solution based on standalone selling price, estimated using an expected cost-plus margin method.

The Company allocates the variable consideration related to the fixed rate per Smart Cycle to the distinct period during which the related services were performed as those fees relate specifically to the Company’s efforts to provide its fertility benefits solution to its clients

in the period and represents the consideration the Company is entitled to for the fertility benefits services provided.

As a result, the fixed rate per Smart Cycle is included in the transaction price and recognized in the period in which the Smart Cycle is provided to the member.

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Progyny controls the specified service (the pharmacy benefits solution) before it is transferred to the client.

Progyny integrates the prescription fulfillment and clinical services provided by the pharmacies and PCAs into the overall pharmacy

benefits solution that the client contracted to receive.

Progyny integrates the prescription fulfillment and clinical services provided by the pharmacies and PCAs into the overall pharmacy benefits solution that the client contracted to receive.

In addition, Progyny defines the scope of the potential services to be performed by the specialty pharmacies and monitors the performance of the specialty pharmacies.

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These rebates are recognized as a reduction of cost of services when prescriptions are dispensed and are generally estimated and billed to manufacturers within 20 days after the end of each month.

Vendor rebates are included within accounts receivable in the consolidated balance sheet.

The effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Company’s results of operations.

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Substantially all of the Company’s cash is maintained with two financial institutions with high credit standings.

From time to time, such deposits may exceed federally insured limits.

Such deposits may exceed federally insured limits.

The Company regularly reviews the outstanding accounts receivable balances and makes estimates of the lifetime expected credit losses based upon consideration of factors such as the age of the receivable balance, historical experience, current economic conditions, and reasonable and supportable forecasts of future economic conditions.

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Goodwill is reviewed for impairment annually as of October 1st of each year or when an interim triggering event has occurred indicating potential impairment.

Events or changes in circumstances which could trigger an impairment review, which are assessed at the reporting unit level, include significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel.

Events or changes in circumstances which could trigger an impairment

review, which are assessed at the reporting unit level, include significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel.

The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

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The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis.

There were no impairments recorded for the years ended December 31, 2023, 2022 and 2021.

The Company recorded a $ 1.4 million loss on disposal of property and equipment for the year ended December 31, 2024.

There were no other significant impairments recorded for the years ended December 31, 2024, 2023 and 2022.

The Company determines if an arrangement is a lease at inception.

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Compensation expense related to awards with performance-based vesting conditions is recognized over the requisite service period when achievement of the performance condition is considered probable.

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”), including updates in ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which the Company adopted as of January 1, 2021.

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”).

Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax basis of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes.

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The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement.

The Company’s policy is to recognize interest and penalty expenses associated with uncertain tax positions as a component of income tax expense in the consolidated statements of operations and comprehensive income.

As of December 31, 2023, 2022 and 2021, the Company had no significant accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s consolidated statements of operations.

The Company’s policy is to recognize interest and penalty expenses associated with uncertain tax positions, if any, as a component of income tax expense in the consolidated statements of operations and comprehensive income.

Global Intangible Low-Taxed Income (“GILTI”) is described as the excess of a U.S.

Shareholder's total net foreign income over a deemed return on tangible assets.

The Company's policy is to recognize GILTI taxes as a current period expense, as a component of income tax expense, in the consolidated statements of operations and comprehensive income.

Fair Value of Financial Instruments and Fair Value Measurements

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Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The standard is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as improve consistent application of and simplify U.S.

GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The Company adopted this standard as of January 1, 2021.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In May 2021, the FASB issued ASU No.

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The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Accounting Pronouncements Issued but Not Yet Adopted

In November 2023, the FASB issued ASU No.

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The standard is intended to provide a better understanding of an entity's overall performance and business activities through improved disclosure about an entity's reportable segments, including more detailed information about reportable segment expenses.

The new standard will be effective for the Company for the fiscal year beginning January 1, 2024.

While the new standard does require additional footnote disclosure, the Company currently does not expect the adoption of the new standard to have a material effect on its consolidated financial statements.

The Company adopted this standard in the annual period beginning January 1, 2024 and applied the disclosure requirements retrospectively to all prior periods presented in the financial statements.

The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Accounting Pronouncements Issued but Not Yet Adopted

In December 2023, the FASB issued ASU No.

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While the new standard does require further disaggregation of the income tax footnote, the Company currently does not expect the adoption of the new standard to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The standard is intended to provide enhanced transparency into the nature of expenses and requires more detailed information on specific

expense categories (purchases of inventory, employee compensation, depreciation, and intangible asset amortization) included in certain expense captions presented on the face of the income statement.

The new standard will be effective for the Company for the fiscal year beginning January 1, 2027, and for interim periods within the fiscal year beginning January 1, 2028.

Early adoption is permitted.

The amendments may be applied either 1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or 2) retrospectively to all periods presented in the financial statements.

The Company is currently evaluating the impact of the new standard including the impact on its disclosures.

Disaggregated revenue

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For the year ended December 31, 2024, one client accounted for 12 % of total revenue.

Two clients accounted for 16 % and 10 %, or a combined 26 %, of total revenue for the year ended December 31, 2022.

For the year ended December 31, 2023, that same client accounted for 13 % of total revenue.

For the year ended December 31, 2022, two clients accounted for 16 %, and 10 %, or a combined 26 % of total revenue.

No other clients accounted for more than 10% for the years ended December 31, 2023, 2022, and 2021.

No other clients accounted for more than 10% of total revenue for the years ended December 31, 2024, 2023, and 2022.

Fair Value of Financial Instruments

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The Company classified these assets as Level 1 because the values of these assets are determined using unadjusted quoted prices in active markets for identical assets.

During the year ended December 31, 2023, the Company had $ 5.2 million of gross realized gains related to marketable securities and money market accounts included within earnings.

There were no related gross realized losses included within earnings for this period.

The gross realized gains and losses included within earnings for marketable securities and money market accounts for the year ended December 31, 2022 were $ 0.4 million and $ 0.1 million, respectively.

The gross realized losses included within earnings for the year ended December 31, 2021 were $ 0.4 million.

The gross realized gains for the year ended December 31, 2021 were not significant.

The Company reclassified $ 3.9 million and $ 0.3 million of net unrealized holding gains out of other comprehensive income and into earnings for the years ended December 31, 2023 and 2022, respectively.

The amount of net unrealized holding losses reclassified out of other comprehensive loss into earnings for the year ended December 31, 2021 was $ 0.4 million.

These amounts were reclassified into other income (expense), net line per the consolidated statement of operations.

The total gains for marketable securities and money market accounts with net gains in other comprehensive income as of December 31, 2023 and December 31, 2022 was $ 3.9 million and $ 0.5 million, respectively.

The total losses for the period as well as the total gains and losses for marketable securities and money market accounts in other comprehensive loss as of December 31, 2021 was not significant.

For the years ended December 31, 2024, 2023, and 2022, interest income on cash and cash equivalents and marketable securities, including the accretion of discounts on investments, was $ 12.4 million, $ 3.3 million, and $ 0.8 million, respectively.

During the year ended December 31, 2024 and 2023, the Company had $ 10.0 million and $ 5.2 million, respectively of gross realized gains related to marketable securities included within earnings.

There were no related gross realized losses included within earnings for these periods.

The gross realized gains and losses included within earnings for the year ended December 31, 2022 were $ 0.4 million and $ 0.1 million, respectively.

The Company reclassified $ 7.3 million, $ 3.8 million, and $ 0.3 million of net unrealized holding gains out of other comprehensive income and into earnings for the years ended December 31, 2024, 2023, and 2022, respectively.

These amounts were reclassified into interest and other income, net in the consolidated statement of operations.

The total net gains for marketable securities recorded into other comprehensive income, before reclassifications into earnings, for the years ended December 31, 2024, 2023, and 2022, was $ 4.5 million, $ 6.1 million, $ 0.9 million, respectively.

During the years ended December 31, 2024, 2023, and 2022, the Company did not maintain any assets or liabilities classified as Level 2 or Level 3 in the fair value hierarchy.

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Depreciation expense was approximately $ 3.1 million, $ 2.2 million and $ 1.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

During the years ended December 31, 2023, 2022, and 2021, the Company capitalized $ 0.6 million, $ 0.8 million, and $ 0.1 million respectively, in stock-based compensation expense related to the development of internal-use software.

During the years ended December 31, 2024, 2023, and 2022, the Company capitalized $ 1.4 million, $ 0.6 million, and $ 0.8 million, respectively, in stock-based compensation related to the development of internal-use software.

Intangible Assets, Net

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Website 5 2,000 2,000

Databases 8 864 —

Technology 6 448 —

Customers 10 94 —

Intangible assets, gross 10,906 9,500

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Amortization expense was $ 0.1 million, $ 0.1 million, and $ 0.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2023, there was no future amortization expense of other intangible assets remaining.

In September 2019, the Company’s sublease agreement for its corporate headquarters in New York, NY commenced and is scheduled to expire in May 2029.

Pursuant to the sublease, the Company will pay the base rent of approximately $ 1.3 million per annum through the end of the fifth lease year and approximately $ 1.4 million per annum thereafter through the expiration date.

In February 2023, the Company's lease agreement for the additional 24,099 square foot office in its corporate offices commenced in New York, NY and is expected to expire in the fourth quarter of 2035.

As of December 31, 2024, the future amortization expense of other intangible assets is as follows (in thousands):

Year ending December 31:

Thereafter 343

Total $ 1,303

In September 2019, the Company’s sublease agreement for a 25,212 square foot office in its corporate headquarters in New York, NY commenced and is scheduled to expire in May 2029.

Pursuant to the sublease, the Company is obligated to pay the base rent of approximately $ 1.3 million per annum through the end of the fifth lease year and approximately $ 1.4 million per annum thereafter through the expiration date.

In February 2023, the Company's lease agreement for the additional 24,099 square foot office in its corporate offices (entered into in February 2022) commenced in New York, NY and is expected to expire in the second quarter of 2036.

In accordance with ASC 842, the Company recorded right-of-use assets and lease liabilities of $ 12.2 million and $ 12.1 million, respectively.

Pursuant to the lease, the Company is obligated to pay the base rent of approximately $ 1.4 million per annum beginning in April 2024 through the end of the fifth lease year and approximately $ 1.5 million per annum thereafter through the expiration date.

Pursuant to the lease, the Company is obligated to pay the base rent of approximately $ 1.4 million per annum through the end of the fifth lease year and approximately $ 1.5 million per annum thereafter through the expiration date.

The Company recognizes lease expense on a straight-line basis over the lease term.

Lease expense for the Company’s operating leases was $ 2.7 million for the year ended December 31, 2024.

For the years ended December 31, 2022 and 2021 lease expense for the Company's operating leases was $ 1.3 million.

Cash outflows from operating activities attributable to the operating leases for the years ended December 31, 2023, 2022, and 2021 was $ 1.3 million.

For the years ended December 31, 2023 and 2022 lease expense for the Company's operating leases was $ 2.4 million and $ 1.3 million, respectively .

Cash outflows from operating activities attributable to the operating leases for the years ended December 31, 2024 was $ 2.3 million, For the years ended December 31, 2023, and 2022, cash outflows toward operating leases were $ 1.3 million, respectively.

Information related to the Company’s leases is as follows (in thousands):

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As noted above, the Company commenced its lease for the 24,099 square foot office in its corporate offices in New York, NY in February 2023, pursuant to a lease agreement entered into by the Company in February 2022.

The lease agreement also provides for additional space in the Company's corporate offices, including an additional 21,262 square foot office and continued occupancy of the 25,212 square foot office after the expiration of the current sublease.

For the 21,262 square foot office, the lease commencement date, which is when the premises will become available to the Company for use, is expected to be in the fourth quarter of 2024.

The Company is obligated to pay the base rent of approximately $ 1.3 million starting in the fourth quarter of 2025 for five years and approximately $ 1.4 million per year thereafter through the fourth quarter of 2035, the expected expiration date.

For the current 25,212 square foot office, the Company is obligated to pay the base rent of approximately $ 1.6 million per year beginning in June 2029 through the fourth quarter of 2035, the expected expiration date.

agreement also provides for additional space in the Company's corporate offices, including an additional 21,262 square foot office and continued occupancy of the 25,212 square foot office after the expiration of the current sublease.

For the 21,262 square foot office, the lease commencement date, which is when the premise will become available to the Company for use, is currently expected to be in the first quarter of 2025.

The Company is obligated to pay the base rent of approximately $ 1.3 million starting in the second quarter of 2026 for five years and approximately $ 1.4 million per year thereafter through second quarter of 2036, the expected expiration date.

For the current 25,212 square foot office, the Company is obligated to pay the base rent of approximately $ 1.6 million per year beginning in June 2029, which is the lease commencement, through second quarter of 2036, the expected expiration date.

Accrued Expenses and Other Current Liabilities

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Total accrued expenses and other current liabilities $ 73,530 $ 60,524

In June 2018, the Company entered into a loan agreement with Silicon Valley Bank for a revolving line of credit up to $ 15.0 million based upon an advance rate of 80 % on “eligible” accounts receivable to fund its working capital and other general corporate needs, which was amended in April 2019, January 2020, June 2020, and February 2021 (“SVB Line of Credit”).

Eligible accounts receivable was defined in the loan agreement as accounts billed with aging 90 days or less and excluded accounts receivable due for member copayments, coinsurance, and deductibles.

The SVB Line of Credit matured in June 2021.

The Company was required to pay a revolving line commitment fee of $ 225,000 in three equal annual installments of $ 75,000 starting on the one-year anniversary of the revolving line.

The Company made the first installment payment of $ 75,000 in June 2019 and accrued this cost monthly.

When the Company held unrestricted cash balances greater than $ 5.0 million, interest accrued at a floating rate per annum equal to the greater of prime rate or 4.75 %.

If the unrestricted cash balance was less than $ 5.0 million, interest accrued at a floating rate per annum equal to the greater of prime rate plus 0.50 % or 4.75 %, with interest payable monthly.

Interest was paid based upon the borrowed funds.

The SVB Line of Credit contained customary affirmative covenants, financial covenants, as well as negative covenants that, among other things, restricted the Company’s ability to incur additional indebtedness (including guarantees of certain obligations);

create liens;

engage in mergers, consolidations, liquidations and dissolutions;

maintain collateral;

pay dividends or make other payments in respect of capital stock;

make acquisitions;

make investments, loans and advances;

enter into transactions with affiliates;

make payments with respect to or modify subordinated debt instruments;

and enter into agreements with negative pledge clauses or clauses restricting subsidiary distributions.

The financial covenant required the Company to achieve a specified minimum quarterly revenue as defined by the SVB Line of Credit.

The Company recorded interest expense on the SVB Line of Credit of $ 38,000 during the year ended December 31, 2021.

On June 17, 2024, the Company completed its acquisition of Apryl GmbH, a Berlin-based fertility benefits platform, to expand its global offering.

The transaction was for a purchase price of € 5.1 million, or $ 5.3 million, net of cash acquired, based on the exchange rate on the acquisition closing date, and was accounted for using the acquisition method.

As a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date.

Any excess consideration over the fair value of the assets and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is completed during the measurement period (up to one year from acquisition date).

This acquisition did not have a material impact on the Company’s consolidated financial statements.

On January 8, 2025 the Company completed its acquisition of Benefit Bump LLC, a comprehensive parental leave benefits navigation program for new and growing families.

The acquisition enhances the Company's existing offerings, extending its ability to further serve the needs of families on their journey from pregnancy to early childhood and beyond.

The transaction was for a purchase price of $ 10.5 million including $ 2.5 million held in escrow for standard indemnifications and the satisfaction of certain conditions.

The financial results of Benefit Bump will be included in the Company's consolidated financial statements beginning in the first quarter of fiscal year 2025.

Stockholders’ Equity

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The common stock confers upon its holders the right to receive dividends out of any assets legally available, when and as declared by the Board of Directors.

The Company had 615,980 shares of treasury stock as of December 31, 2023, 2022 and 2021.

The Company had 12,998,173 shares of treasury stock as of December 31, 2024.

There were 615,980 shares of treasury stock shares for the years ended December 31, 2023 and 2022, respectively.

Share Repurchase Program

In February 2024, the Company’s Board of Directors authorized a share repurchase program of up to $ 100 million in shares of common stock.

Repurchases may be made in the form of open market repurchases, including through plans

complying with Rule 10b5-1 under the Securities Exchange Act of 1934 as amended, depending on stock price, market conditions and other factors, as determined by the Company.

There can be no assurance as to the number of shares to be repurchased by us, if any.

In February 2024, the Company's Board of Directors authorized a share repurchase program of up to $ 100 million in shares of common stock (the “February Share Repurchase Program”).

In May 2024, the Company's Board of Directors

authorized an additional share repurchase program of up to $ 100 million in shares of common stock (the “May Share Repurchase Program”).

In August 2024, the Company's Board of Directors authorized an additional share repurchase program of up to $ 100 million in shares of common stock (the “August Share Repurchase Program,” and together with the February Share Repurchase Program and the May Share Repurchase Program, the "2024 Share Repurchase Programs").

For the year ended December 31, 2024, the Company repurchased a total of 12,382,193 shares of common stock under the 2024 Share Repurchase Programs at an average price per share of $ 24.22 and a total cost of $ 300.3 million, inclusive of $ 0.4 million in trading fees.

In addition, the Company recognized $ 2.6 million of excise taxes related to the share repurchases.

As of the year ended December 31, 2024, the 2024 Share Repurchase Programs were completed, and no amounts remained available for repurchase under the programs.

Common Stock Warrants

In connection with the IPO on October 25, 2019, all outstanding convertible preferred warrants were converted to common stock warrants.

As of December 31, 2023 and 2022, the Company had 305,595 and 565,351 common stock warrants outstanding, respectively.

As of December 31, 2024, the Company had no outstanding common stock warrants.

The Company had 305,595 common stock warrants outstanding as of December 31, 2023.

For the year ended December 31, 2024, 305,595 common stock warrants were exercised for 279,867 shares of common stock at a weighted-average exercise price of $ 1.73 .

No common stock warrants were exercised during the year ended December 31, 2022.

For the year ended December 31, 2023, 259,756 common stock warrants were exercised for 247,672 shares of common stock at a weighted-average exercise price of $ 1.73 .

No common stock warrants were exercised during the year ended December 31, 2022.

The Company did not recognize compensation expense relating to the common stock warrants for the years ended December 31, 2024, 2023 and 2022 as they were all fully vested.

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The exercise price of options granted to stockholders who hold 10 % or more of the Company’s common stock on the option grant date shall not be less than 110 % of the fair value of the Company’s common stock on the date of grant for both incentive and non-qualified stock option grants.

These options generally vest over four years and expire ten years from the date of grant.

These options generally vest over 4 years and expire 10 years from the date of grant.

Stock option grants may be exercisable upon grant, and any unvested shares purchased are subject to repurchase.

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Total stock-based compensation expense $ 128,130 $ 122,611 $ 100,748

Accumulated Other Comprehensive Income

Accumulated other comprehensive income consisted of the following (in thousands):

Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022

Unrealized gains on marketable securities Foreign currency translation adjustments Total Unrealized gains on marketable securities Foreign currency translation adjustments Total Unrealized gains on marketable securities Foreign currency translation adjustments Total

Balance at beginning of period $ 2,829 $ ( 10 ) $ 2,819 $ 496 $ 5 $ 501 $ ( 93 ) $ — $ ( 93 )

Other comprehensive income before reclassifications, net of tax (1)

4,500 31 4,531 6,143 ( 15 ) 6,128 884 5 889

Amounts reclassified from accumulated other comprehensive income, net of tax (2)

( 7,311 ) — ( 7,311 ) ( 3,810 ) — ( 3,810 ) ( 295 ) — ( 295 )

Net current period other comprehensive (loss) income ( 2,811 ) 31 ( 2,780 ) 2,333 ( 15 ) 2,318 589 5 594

Balance at end of period $ 18 $ 21 $ 39 $ 2,829 $ ( 10 ) $ 2,819 $ 496 $ 5 $ 501

(1) Represents unrealized gains of $ 6.2 million, net of tax expense of $ 1.7 million for the year ended December 31, 2024, unrealized gains of $ 8.6 million, net of tax of $ 2.5 million for the year ended December 31, 2023, and unrealized gains of $ 0.9 million, net of tax of $ 0 for the year ended December 31, 2022.

(2) The effects on net income of amounts reclassified from accumulated other comprehensive income were as follows (in thousands):

Details about Accumulated Other Comprehensive Income Component Year Ended December 31, Affected Line Item in Statement of Operations

2024 2023 2022

Gains on marketable securities 9,982 5,196 295 Interest and other income, net

9,982 5,196 295 Income before income taxes

2,671 1,386 0 Provision for income taxes

7,311 3,810 295 Net income

Net Income Per Share

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The Company incurred expenses related to employer contributions of $ 1.8 million, $ 1.4 million, and $ 1.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

For the year ended December 31, 2023, a tax provision of $ 8.7 million was recorded.

A tax benefit of $ 5.9 million and $ 33.3 million was recorded for the years ended December 31, 2022, and 2021, respectively.

The provision (benefit) from income taxes is composed of the following (in thousands):

The provision (benefit) for income taxes is composed of the following (in thousands):

2024 2023 2022

Federal $ 27,342 $ 2,311 $ —

State 2,598 695 ( 31 )

Total current provision (benefit) from income taxes 4,909 695 ( 31 )

State and local 11,980 2,598 695

Total current provision for income taxes 39,322 4,909 695

Federal ( 6,836 ) 4,433 ( 6,880 )

State ( 688 ) 268 ( 8,149 )

Total deferred provision (benefit) from income taxes 3,745 ( 6,612 ) ( 33,303 )

Total provision (benefit) from income taxes $ 8,654 $ ( 5,917 ) $ ( 33,334 )

State and local ( 3,620 ) ( 688 ) 268

Total deferred provision (benefit) for income taxes ( 10,456 ) 3,745 ( 6,612 )

Total provision (benefit) for income taxes $ 28,866 $ 8,654 $ ( 5,917 )

A reconciliation of the U.S.

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Effective tax rate 35 % 12 % ( 24 ) %

The Company's effective tax rate for the years ended December 31, 2023, 2022, and 2021 was 12 %, ( 24 )%, and ( 103 )%, respectively.

For the year ended December 31, 2024, the effective tax rate differs from the U.S.

federal statutory rate primarily due to permanent tax adjustments, including windfalls upon the exercise of stock options and vesting of RSUs as well as the disallowance of certain compensation deductions based on Section 162(m) of the Internal Revenue Code, which limits the compensation deduction of certain highly compensated employees.

federal statutory rate primarily due to permanent tax adjustments, including shortfalls upon the exercise of stock options and vesting of RSUs as well as the disallowance of certain compensation deductions based on Section 162(m) of the Internal Revenue Code, which limits the compensation deduction of certain highly compensated employees.

For the years ended December 31, 2023, and 2022, the effective tax rate differs from the U.S.

federal statutory rate primarily due to permanent tax adjustments, including windfalls upon the exercise of stock options and vesting of RSUs.

Deferred Tax Balances

The components of the Company’s net deferred tax assets and liabilities are as follows (in thousands):

The components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

Deferred tax assets:

Net operating loss carryforwards $ 5,577 $ 16,818

Capitalized start‑up costs 3 6

Research and development credits 310 1,039

Research and development capitalization and credits 1,989 282

Stock-based compensation 60,738 42,257

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Operating lease liabilities 4,918 5,171

Intangibles 568 547

Depreciation and amortization 185 467

Total deferred tax assets 91,761 80,185

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Deferred tax liabilities:

Property and equipment ( 104 ) ( 461 )

Goodwill ( 683 ) ( 832 )

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Unrealized gain on marketable securities ( 14 ) ( 1,025 )

Capitalized research and development costs ( 28 ) —

Total deferred tax liabilities ( 5,049 ) ( 6,552 )

Net deferred tax assets $ 84,933 $ 73,120

* Presentation updates between the breakout of categories for 2023 have been made from the 2023 Form 10-K for comparability purposes.

Assessing the realizability of deferred tax assets requires the determination of whether it is more-likely-than-not that some portion or all the deferred tax assets will not be realized.

In assessing the need for a valuation allowance, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies.

The valuation allowance increased by $ 1.3 million during the year ended December 31, 2024.

As of December 31, 2023, management believes there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets were realizable.

During the year ended December 31, 2022, the net change in the valuation allowance was not significant.

As of December 31, 2023, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately$ 1.2 million and $ 67.6 million, respectively, which expire beginning in the year 2027.

In addition to the above federal net operating losses, the Company has net operating losses of $ 55.5 million with an indefinite carryforward period.

There are certain state net operating losses that follow the federal carryforward period and are indefinite in nature.

In addition, the Company has research and development tax credits in California of approximately $ 0.8 million that have no expiration date.

Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership changes that may occur, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions.

Such annual limitation could result in the expiration of net operating losses and credits before their utilization.

Unrecognized Tax Benefits

As of December 31, 2024, management believes there is sufficient positive evidence to conclude that it is more likely than not that substantially all the net deferred tax assets were realizable.

As of December 31, 2024, the Company has U.S.

federal net operating loss carryforwards of $ 1.1 million which expire in the year 2030 and U.S.

state net operating loss carryforwards of $ 51.8 million, which will begin to expire in the year 2030.

In addition, the Company has foreign net operating loss carryforwards of $ 5.9 million, which will begin to expire in the year 2042.

Utilization of the U.S.

federal net operating loss carryforwards may be subject to an annual limitation due to ownership changes, as provided by Section 382 of the Internal Revenue Code.

Such annual limitation could result in the expiration of net operating losses before their utilization.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

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Balance at the beginning of the year $ 390 $ 390 $ 390

Reductions based upon tax positions related to the current year — — —

Additions based upon tax positions related to the current year 213 — —

Balance at the end of the year $ 603 $ 390 $ 390

In order for these unrecognized tax benefits to be realized, the net operating loss carryforwards must be utilized first.

For the years ended December 31, 2024, 2023, and 2022, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $ 0.6 million, $ 0.4 million, and $ 0.4 million, in the aggregate, respectively.

The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes.

As of December 31, 2024, 2023, and 2022, the Company had no significant accrued interest or penalties related to unrecognized tax benefits and no amounts have been recognized in the Company’s consolidated statements of

The Company does not anticipate any material change in its unrecognized tax benefits over the next twelve months.

The Company files U.S.

federal and state income tax returns with varying statutes of limitations.

All tax years since inception remain open to examination due to the carryover of unused net operating losses and tax credits.

The Company files income tax returns in the U.S.

for federal and state and local jurisdictions, as well as in certain foreign jurisdictions, with varying statutes of limitations.

All tax years since inception remain open to examination due to the carryover of unused net operating losses.

Commitments and Contingencies

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Accordingly, it has not recognized any liabilities relating to these obligations for any period presented.

Segment Reporting

Progyny is a benefits management company specializing in fertility, family building and women's health benefits solutions.

Substantially, all of the Company's revenues and assets are attributable to the United States.

The chief operating decision maker (“CODM”) is the Chief Executive Officer.

The Company determined it has one operating segment and one reportable segment, as the CODM manages the business and evaluates performance at the consolidated level.

The CODM uses net income to allocate resources (including personnel, technology, and capital resources) for the single segment to make decisions regarding the annual budget, ongoing operations, and strategic investments to drive the Company's strategy and mission.

Year Ended December 31,

2024 2023 2022

$ 1,167,221 $ 1,088,598 $ 786,913

Cost of services 913,858 849,799 619,588

Sales and marketing 63,948 59,488 45,657

General and administrative 121,960 117,127 98,327

Interest and other (income), net ( 15,747 ) ( 8,507 ) ( 1,100 )

Provision (benefit) for income taxes 28,866 8,654 ( 5,917 )

Net income $ 54,336 $ 62,037 $ 30,358

(1) Refer to footnote 3, for disaggregated revenue by service.

Year Ended December 31,

Total Assets $ 607,102 $ 756,620

Unaudited Quarterly Results of Operations Data

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Total operating expenses 43,629 45,457 44,435 43,094 43,883 47,594 46,786 47,645

Income (loss) from operations ( 58 ) 8,838 11,255 3,306 15,011 15,184 18,189 13,800

Other income (expense), net ( 96 ) 25 82 275 498 1,277 1,708 1,720

Interest income, net 12 40 202 560 822 706 1,034 742

Total other income (expense), net ( 84 ) 65 284 835 1,320 1,983 2,742 2,462

Income (loss) before income taxes ( 142 ) 8,903 11,539 4,141 16,331 17,167 20,931 16,262

Income from operations 15,011 15,184 18,189 13,800 18,523 20,687 12,458 15,787

Interest and other income, net 1,320 1,983 2,742 2,462 3,992 4,380 5,504 1,871

Income before income taxes 16,331 17,167 20,931 16,262 22,515 25,067 17,962 17,658

Provision (benefit) for income taxes ( 1,347 ) 2,176 5,033 2,792 5,617 8,582 7,541 7,126

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data