Progyny Inc (NASDAQ:PGNY) delivered a fourth quarter that surpassed analyst expectations on the top and bottom lines, but a cautious outlook for the coming year appears to have tempered investor enthusiasm, leading to a notable decline in the stock's after-hours trading.
The women's health and fertility benefits specialist reported financial results for the quarter and full year ended December 31, 2025, showcasing continued growth alongside a significant return of capital to shareholders. However, the market's immediate focus shifted to the company's projections for 2026.
Quarterly Performance Versus Estimates
Progyny's fourth-quarter results demonstrated solid execution, exceeding the consensus forecasts held by Wall Street analysts.
- Revenue: The company reported Q4 revenue of $318.4 million, a 6.7% increase year-over-year. This figure came in above the analyst estimate of approximately $313.6 million.
- Earnings Per Share (Non-GAAP): Adjusted earnings per diluted share were $0.48, significantly surpassing the analyst estimate of $0.40. This represents a 14.3% increase from the $0.42 reported in the prior-year period.
The beat was driven by growth in the company's core fertility benefit services, which saw revenue increase by 11% to $208.6 million. Management noted that excluding revenue from a large client that did not renew its agreement for 2025, fourth-quarter revenue growth would have been 21%.
Market Reaction and the Guidance Factor
Despite the earnings and revenue beat, shares of Progyny fell approximately 7% in after-market trading following the report. This negative price action is primarily attributed to the company's financial guidance for the first quarter and full year of 2026, which appears conservative relative to existing analyst expectations.
The company issued the following outlook:
- Full-Year 2026 Revenue Guidance: $1.355 billion to $1.405 billion.
- Analyst Estimate for 2026 Revenue: Approximately $1.427 billion.
Progyny's range implies a growth rate of 5.1% to 9.0%, or 9.3% to 13.3% when excluding transition revenue from the aforementioned lost client. The midpoint of the company's guidance range sits below the current consensus, indicating a more cautious stance on near-term growth.
Furthermore, the Q1 2026 revenue guidance of $319 million to $332 million also fell short of the analyst estimate of approximately $325.5 million for the quarter. CEO Pete Anevski stated the guidance "reflects the potential for variability in member engagement," a consistent approach the company has followed.
Key Highlights from the 2025 Report
Beyond the quarterly comparisons, the press release highlighted several strong full-year achievements and strategic actions:
- Record Annual Results: Full-year 2025 revenue grew 10% to a record $1.29 billion. Adjusted EBITDA reached a record $222.1 million, with operating cash flow also hitting a record high of $210.2 million.
- Margin Expansion: The company expanded its full-year gross margin to 23.6%, up from 21.7% in 2024, citing efficiencies in care management services.
- Client Growth: Fertility and family building clients increased to 555 as of year-end, up from 473 at the end of 2024. The company anticipates reaching approximately 600 clients in 2026, covering an estimated 7.2 million lives.
- Capital Return: Under a share repurchase program authorized in November 2025, Progyny returned approximately $160 million to shareholders by buying back about 6.5 million shares, including 3.3 million shares in the fourth quarter alone.
- Strong Balance Sheet: The company ended the year with no debt, $310.1 million in cash and marketable securities, and an undrawn $200 million revolving credit facility.
Conclusion
Progyny concluded 2025 with robust financial performance, beating quarterly estimates and demonstrating the profitability and cash-generating ability of its business model. The company's strategic investments and client growth position it for further expansion in the fertility benefits market. However, the market's reaction underscores the weight given to forward guidance. While the long-term growth narrative remains intact, the company's prudent outlook for 2026 has introduced near-term uncertainty, leading to a reassessment of the stock's price.
For a detailed look at Progyny's historical earnings, future estimates, and analyst projections, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
