Progyny, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock has been listed on the Nasdaq Global Select Market under the symbol “PGNY” since October 25, 2019. Prior to that time, there was no public market for our stock. Holders of Record As of January 31, 2021, there were approximately 67 stockholders of record of our common stock. Because many of our shares of common stock are held in “street name” by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividend Policy We have never declared or paid cash dividends on our capital stock. We intend to retain any future earnings and do not expect to pay cash dividends in the foreseeable future. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Our restricted stock units are subject to vesting and the underlying shares of common stock are issued when the restricted stock units vest. In the fourth quarter of, 2020, we withheld shares through net settlements (where the award holder receives the net of the shares vested, after surrendering a portion of the shares back to the Company for tax withholding) for certain restricted stock units that vested. The following table provides a summary of shares surrendered back to the Company for tax withholding on restricted stock units that vested under our equity incentive plans in the three months ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Repurchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1, 2020 through October 31, 2020 ​ ​ 9,800 $ 32.63 ​ — $ — November 1, 2020 through November 30, 2020 ​ 331 30.00 ​ — — December 1, 2020 through December 31, 2020 ​ 3,676 40.45 ​ — — Total shares repurchased ​ ​ 13,807 $ 34.65 ​ — $ — (1) Represents shares withheld on net settlements of restricted stock units that vested under our equity incentive plans. 53 Table of Contents Stock Performance Graph This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Progyny, Inc. under the Securities Act or the Exchange Act. The graph set forth below compares cumulative total return on our common stock with the cumulative total return of the (i) S&P Health Care (Sector) and (ii) the Nasdaq Composite Index resulting from an initial investment of $100 in each and, assuming the reinvestment of any dividends, based on closing prices. Measurement points are from October 24, 2019 (the date our common stock began trading on Nasdaq) through December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cumulative Total Returns since Initial Public Offering Company/Index ​ ​ 10/24/2019 ​ ​ 12/31/2019 ​ ​ 3/31/2020 ​ ​ 6/30/2020 ​ ​ 9/30/2020 ​ ​ 12/31/2020 Progyny, Inc. ​ $ 100.00 ​ $ 211.15 ​ $ 163.00 ​ $ 198.54 ​ $ 226.38 ​ $ 326.08 S&P 500 Health Care ​ $ 100.00 ​ $ 111.78 ​ $ 97.17 ​ $ 109.86 ​ $ 115.81 ​ $ 124.56 NASDAQ Composite ​ $ 100.00 ​ $ 109.61 ​ $ 94.07 ​ $ 122.88 ​ $ 136.43 ​ $ 157.45 ​ ​ Use of Proceeds On October 29, 2019, in connection with our IPO, we issued and sold 6,700,000 shares of our common stock and certain of our selling stockholders offered and sold 4,800,000 shares of our common stock at a price to the public of $13.00 per share resulting in net proceeds to us of $77.6 million, after deducting the underwriting discount of $5.9 million and offering expenses of $3.6 million. All of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-233965), which was declared effective by the SEC on October 24, 2019. The net proceeds of $77.6 million from our IPO have been invested in investment grade, interest-bearing instruments. There has been no material change in the expected use of the net proceeds from our IPO as described in our final prospectus, filed with the SEC on October 25, 2019 pursuant to Rule 424(b) relating to our Registration Statement. ​ ​ ​ ​ 54 Table of Contents ITEM 6. SELECTED FINANCIAL DATA ​ The selected consolidated statement of operations data for the years ended December 31, 2020, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2020 and 2019 have been derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The consolidated statements of operations data for the year ended December 31, 2017 and the consolidated balance sheet data as of December 31, 2018 and December 31, 2017 have been derived from our audited consolidated financial statements that are not included in this Annual Report on Form 10-K. ​ You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results to be expected for any other period in the future. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 (1) 2019 2018 2017 ​ ​ (in thousands, except share and per share data) Consolidated Statements of Operations Data: ​ ​ ​ ​ Revenue ​ $ 344,858 ​ $ 229,683 ​ $ 105,400 ​ $ 48,584 Cost of services (2) ​ 274,799 ​ 184,178 ​ 85,966 ​ 41,184 Gross profit ​ 70,059 ​ 45,505 ​ 19,434 ​ 7,400 Operating expenses: ​ ​ ​ ​ Sales and marketing (2) ​ 15,006 ​ 11,901 ​ 7,285 ​ 4,258 General and administrative (2) ​ 46,705 ​ 23,927 ​ 15,601 ​ 14,147 Total operating expenses ​ 61,711 ​ 35,828 ​ 22,886 ​ 18,405 Income (loss) from operations ​ 8,348 ​ 9,677 ​ (3,452) ​ (11,005) Other income (expense): ​ ​ ​ ​ Other income ​ ​ 210 ​ ​ — ​ ​ — ​ ​ — Interest income (expense), net ​ 121 ​ (58) ​ (497) ​ (740) Convertible preferred stock warrant valuation adjustment ​ — ​ (18,176) ​ (2,944) ​ (714) Total other income (expense), net ​ 331 ​ (18,234) ​ (3,441) ​ (1,454) Income (loss), before income taxes ​ 8,679 ​ (8,557) ​ (6,893) ​ (12,459) Benefit (provision) for income taxes ​ 37,780 ​ (12) ​ 1,777 ​ 3 Net income (loss) from continuing operations ​ $ 46,459 ​ $ (8,569) ​ $ (5,116) ​ $ (12,456) Net income from discontinued operations, net of taxes (3) ​ $ — ​ $ — ​ $ 5,777 ​ $ 4 Net income (loss) ​ $ 46,459 ​ $ (8,569) ​ $ 661 ​ $ (12,452) Net income (loss) attributable to common stockholders ​ $ 46,459 ​ $ (8,569) ​ $ (5,541) ​ $ (13,468) Net income (loss) per share attributable to common stockholders: ​ ​ ​ ​ Basic: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations ​ $ 0.54 ​ $ (0.41) ​ $ (1.00) ​ $ (2.37) Discontinued operations (3) ​ — ​ — ​ 1.04 ​ — Total net income (loss) per share attributable to common stockholders basic ​ $ 0.54 ​ $ (0.41) ​ $ 0.04 ​ $ (2.37) Diluted: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Continuing operations ​ $ 0.47 ​ $ (0.41) ​ $ (1.00) ​ $ (2.37) Discontinued operations (3) ​ — ​ — ​ 1.04 ​ — Total net income (loss) per share attributable to common stockholders diluted ​ $ 0.47 ​ $ (0.41) ​ $ 0.04 ​ $ (2.37) Weighted‑average shares used in computing net income (loss) per share: ​ ​ ​ ​ Basic (4) ​ 85,722,670 ​ 20,735,202 ​ 5,539,739 ​ 5,677,860 Diluted (4) ​ 99,055,526 ​ 20,735,202 ​ 5,539,739 ​ 5,677,860 ​ ​ ​ 55 Table of Contents (1) Effective January 1, 2020, we adopted new accounting pronouncements as described in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 2, "Summary of Significant Accounting Policies." Prior year data remains unchanged. ​ (2) Includes stock-based compensation expense as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 2017 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of services ​ $ 3,056 ​ $ 537 ​ $ 96 ​ $ 26 Selling and marketing ​ 2,066 ​ 900 ​ 366 ​ 309 General and administrative ​ 7,699 ​ 3,624 ​ 2,535 ​ 1,224 Total stock‑based compensation expense ​ $ 12,821 ​ $ 5,061 ​ $ 2,997 ​ $ 1,559 ​ (3) See Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information about a certain divestiture. (4) See Note 12 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for an explanation of the calculations of our basic and diluted earnings per share attributable to common stockholders and the weighted average number of shares used in the computation of the per share amounts. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 2018 2017 Consolidated Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 70,305 ​ $ 80,382 ​ $ 127 ​ $ 4,691 Marketable securities ​ ​ 38,994 ​ ​ — ​ ​ — ​ ​ — Total assets ​ 253,927 ​ 150,434 ​ 41,324 ​ 34,961 Working capital (1) ​ 112,436 ​ 96,281 ​ (5,665) ​ (1,000) Convertible preferred stock warrant liability ​ — ​ — ​ 4,589 ​ 1,645 Total stockholders’ equity (deficit) ​ 166,947 ​ 114,271 ​ (95,115) ​ (97,622) (1) Working capital is defined as current assets less current liabilities. ​ ​