Progyny Growth Reaccelerates as Large-Client Drag Fades
Progyny's revenue rose 5.3% to $350.5 million in the second quarter, or 11.0% excluding a client that did not renew a year earlier, as net income more than doubled.
Progyny (PGNY) reported second-quarter revenue of $350.5 million, up 5.3% from $332.9 million a year earlier. Excluding $17.2 million of revenue tied to a large client that did not renew in the prior-year period, growth was 11.0%.
The headline growth rate has climbed each of the past two quarters as comparisons lap the full effect of that lost client. Year-over-year growth was 1.4% in the first quarter of 2026, or 12.2% on the adjusted basis, before rising to 5.3%, or 11.0% adjusted, in the second quarter. The pattern points to a company whose underlying business has been expanding at a fairly steady double-digit pace even as reported figures were distorted by the single account loss.
Fertility benefit services revenue, the larger of Progyny's two segments, grew 7.6% to $230.2 million from $213.9 million a year earlier. Pharmacy benefit services revenue grew 1.2% to $120.3 million from $118.9 million, lagging the fertility business by a wide margin. Client count reached 604 fertility and family-building clients as of June 30, up 11.4% from 542 a year earlier, underpinning the broader base of the business even as ART cycles per unique female utilizer continued a multi-year decline, guided to 0.93-0.94 for full-year 2026 from 0.99 in 2023.
Gross margin expanded to 25.5% in the second quarter from 23.7% a year earlier, the third straight quarter of year-over-year margin gains after 24.1% in the fourth quarter of 2025 and 25.3% in the first quarter of 2026. Adjusted EBITDA margin was 17.7%, up from 17.4% a year ago, though it remained below the 17.8% margin posted in the year-ago first quarter comparison, a reminder that the margin recovery has not been uniform quarter to quarter.
Net income more than doubled to $28.1 million, or $0.34 a diluted share, from $17.1 million, or $0.19 a diluted share, a year earlier, due to higher operating profit and lower stock-based compensation expense.
Progyny raised its full-year 2026 revenue guidance to a range of $1.360 billion to $1.385 billion, implying growth of 5.5% to 7.5%, or 9.7% to 11.7% excluding the non-renewing client, compared with $1.2887 billion in full-year 2025 revenue. Full-year Adjusted EBITDA guidance of $233.0 million to $240.0 million implies growth of 4.9% to 8.1% from $222.1 million in 2025. For the third quarter, the company guided to revenue of $335.0 million to $345.0 million and Adjusted EBITDA of $56.0 million to $59.0 million, citing a more pronounced-than-usual seasonal summer slowdown in member engagement.
The company kept up an aggressive pace of share buybacks, repurchasing nearly 1.2 million shares for $31.5 million in the second quarter alone. Cumulative repurchases under the May 2026 authorization reached 2 million shares, leaving about $142.5 million remaining of the $200 million program, and total repurchases combined with the concluded November 2025 program reached 10.8 million shares, up from 8.8 million as of the first-quarter release. Cash and marketable securities rose to $236.9 million as of June 30, up $11.8 million from March 31 despite the quarter's buyback spending, even as operating cash flow of $50.4 million came in below the $55.5 million generated a year earlier on working-capital timing.