Progyny lost a big client that made up around 670,000 members, the fertility benefits company said in a securities filing Wednesday, though analysts remain optimistic about the space.
The unnamed client, which comprised 13% of Progyny’s 2023 revenue, will stop using Progyny by Jan. 1, 2025, and said they didn’t have any issues with member satisfaction, outcomes or quality over its years of using Progyny’s services, according to the filing. Progyny doesn’t expect the contract termination to negatively affect its financial results for the rest of this year and expects an increase in its overall number of members next year compared to this year, it said in the filing.
Pete Anevski“They were clear that they had no issues during the course of the engagement with respect to member satisfaction, quality of service or outcomes,” Progyny CEO Pete Anevski said in a statement to Endpoints News, declining to name the client.
Progyny lowered its full-year financial outlook during its second-quarter earnings in August, citing lower-than-expected revenue per member using its services. The company’s stock $PGNY dropped about 30% on Thursday morning.
Wall Street analysts remain bullish on the fertility market more broadly.
“Based on our catch-up with the company and industry benefit consultants, we believe this is a one-off situation and doesn’t necessarily indicate a broader market trend,” Truist wrote in an analyst note. “We believe PGNY (along with its competitors) are still early in their growth potential in the family building space, which is still large and underpenetrated.”
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