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Transcript Summary

Progyny Inc. delivered a robust Q1 2026, with record revenue and profitability metrics that surpassed guidance. The company’s performance was bolstered by high member engagement and utilization rates reaching the top of historical norms. Management highlighted significant momentum in the 2027 selling season, noting a pipeline that is considerably stronger than last year and early commitments pacing ahead of historical schedules. Crucially, the renewal season has been derisked through early extensions from jumbo clients. A key theme of the call was the demographic shift in the U.S., where birth rates for women over 30—Progyny's primary demographic—are hitting record highs despite overall birth rate declines. This trend reinforces the necessity of employer-provided fertility benefits. Progyny raised its full-year guidance for adjusted EBITDA and net income, reflecting operational efficiencies and a positive outlook for its Cigna partnership and Progyny Select product. With $225 million in cash and the completion of a $200 million share buyback, the company maintains a strong financial position. Management remains confident that their superior clinical outcomes and cost-containment capabilities will continue to drive market share gains from legacy competitors.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

Progyny, Inc.: Aggressive Buybacks Masking Flat Growth and Mounting Receivables Risk

Full Earnings Call Transcript — Q1 • 2026-05-08

Operator: Good day, everyone, and welcome to the Progyny Inc. Earnings Conference Call. [Operator Instructions] It is now my pleasure to hand the floor over to your host, James Hart. Sir, the floor is yours.
James Hart: Thank you, Matt, and good afternoon, everyone. Welcome to our first quarter conference call. With me today are Pete Anevski, CEO of Progyny; and Mark Livingston, CFO. We will begin with some prepared remarks before we open the call for your questions. Before we begin, I'd like to remind you that our comments and responses to your questions today reflect management's views as of today only and will include statements related to our financial outlook for both the second quarter and full year 2026 and the assumptions and drivers underlying such guidance; the demand for our solutions, our expectations for our selling season for 2027 launches; anticipated employment levels of our clients in the industries that we serve, the timing of client decisions, our expected utilization rate and mix, the potential benefits of our solutions, our ability to acquire new clients and retain and upsell existing clients, our market opportunity and our business strategy, plans, goals and expectations concerning our market position, future operations and other financial and operating information, which are forward-looking statements under the federal securities law. Actual risks may differ materially from those contained in or implied by these forward-looking statements. due to risks and uncertainties associated with our business as well as other important factors. For a discussion of the material risks, uncertainties, assumptions and other important factors that could impact our actual results, please refer to our SEC filings and today's press release, both of which can be found on our Investor Relations website. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During the call, we will also refer to non-GAAP financial measures such as adjusted EBITDA. More information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures are available in the press release, which is available at investors.progyny.com. I would now like to turn the call over to Pete.
Peter Anevski: Thanks, Jamie. Thank you, everyone, for joining us today. We're pleased to report that we've had a good start to the year with record first quarter revenue coming in at the higher end of our expectations. And net income, earnings per share and adjusted EBITDA all above our guidance ranges. These results reflect that we continue to see healthy member engagement during the quarter with utilization trending to the higher end of our historical range and our continued discipline in managing the business, which yielded strong margins overall as well as healthy cash flow. In addition, we also made meaningful progress during the quarter in laying the foundation for future growth through our planned investments to expand the capabilities of the platform, enhance our already industry-leading member experience and extend our position as the solution of choice in women's health and family building. As the second quarter begins, engagement is pacing consistent with the typical seasonal patterns following the start of the year. Mark will take you through the guidance shortly, but we're pleased to issue ranges for Q2 that reflect sequential increases from Q1 across all the key results. We're also raising our full year expectations for adjusted EBITDA, net income and EPS as well. In short, we've begun 2026 on a strong positive note and are excited for the rest of the year ahead. Contributing to our excitement is the level of activity and energy we're seeing in the market. One example is at the recent Business Group on Health Conference, which is one of the most impactful events for the benefits industry, we had the honor of sharing the stage with one of our largest clients. During this joint session, our client discussed the results of a study they commissioned using a third party to analyze their claims data warehouse, which included all claims, not just family building from Progyny measuring the impact of our program over an 8-year period versus what they experienced prior to Progyny. The findings reaffirm what we've been reporting to this client regarding outcomes and value that we've been delivering since program inception. They showed that we increased the number of fertility-related pregnancies per year, doubled the pregnancy effectiveness of each treatment, decreased the multiples rate, lowered the miscarriage rate and more than half the preterm delivery rate. These results, in turn, lower the average cost across fertility and related pregnancies, cost per baby and their NICU costs. Clients put it best when they said, this is the kind of story they feel needs to be told as it achieves the trifecta of member experience, improved health outcomes and cost avoidance, all of which delivers hard ROI. As an aside, this type of analysis has also been performed by a handful of our other jumbo clients, independently analyzing their respective claims data warehouses, and they've all come to similar conclusions. Strong leadership in events like this, where HR leaders and decision-makers come together to share their experiences and help determine their priorities for the year ahead are just one aspect of our selling season calendar. This activity, amongst others, has the 2026 selling and renewal season off to a good start with the level of activity and overall engagement that we're seeing affirming how family building and women's health solutions remain a priority for every type of employer. Overall pipeline and the early build of new pipeline is substantially favorable versus a year ago, and early commitments are pacing ahead of this time last year. Additionally, on the renewal side, we've meaningfully derisked the season by securing early favorable notifications from some of our largest clients whose agreements were up for review this year. Consequently, the remaining renewal exposure measured in dollars on the book of business yet to be secured is at its lowest level at this point relative to prior years. Separately, regarding pipeline, we're encouraged by the activity with aggregators and other distribution partners for our Progyny Select offering. While the timing for its incremental contribution to pipeline will be later in the year due to normal buying patterns for these groups, we're pleased with the progress so far relative to our first year expectations around Select. Taking all of our pipeline activity together, we believe this once again demonstrates not only how important family building and women's health are to employers, but also highlights the market's recognition that our evidence-based solutions drive measurable value to employers through proven cost containment. Let me spend a few minutes walking you through the drivers of pipeline and overall activity. First, we're seeing good traction across our health plan partners overall and with Cigna in particular. You'll recall this is our first full season with Cigna as a partner. And as expected, we're seeing a good inflow of opportunities from that channel. Second, we're seeing a good contribution to our traditional demand generation activities where our opportunities remain distributed across greenfields and brownfields, companies looking to add the benefit for the first time or considering to switch from their existing provider, respectively. And lastly, we're seeing significant stronger activity from RFPs on business that's currently with stand-alone competitors. In fact, the activity there has thus far already outpaced what we saw across all of last year. Conversely, we're seeing fewer RFPs than we normally expect from our existing client base. And as previously mentioned, 2 of our largest clients who were up for review this year have already indicated their intention to continue with us. In short, we believe we are well positioned for the season ahead. We are excited about the activity we're seeing, and we look forward to reporting our progress in the coming quarters. We believe one of the reasons for this positive market activity is that employers are increasingly looking for cost-effective solutions that can address the large and growing portion of their workforce being impacted by infertility and who are in need of coverage and support in order to realize their family building and overall health and well-being goals. CDC recently reported that the number of births in the U.S. and the overall fertility rate have continued to decline, reaching record lows and extending the trends that began nearly 2 decades ago. Fortunately, if we peel back the layers of this data, we see something more insightful and certainly highly actionable. While the overall birth rate is declining, it's being driven entirely by women aged 29 and younger. On the other hand, birth rates amongst women aged 30 and over have continued to increase, such that women 30 and over now comprise nearly 53% of all births. This is the highest proportion ever for that age group. And I'll remind you that the population we serve in our family building solution is generally 30 to 42 years old with the average age of a woman going through IVF at 36. While all this data tells us is that society has increasingly chosen to defer family building to later in life. And while that may be the preferred path to parenthood for the clear majority of people today, there is a biological reality in that conception without the use of assisted reproductive technologies often becomes more difficult as we age and for many unaffordable. We believe this is a macro trend that employers simply can't afford to ignore. This is no less true even given the heightened focus on the state of the labor market, particularly as it relates to the potential for disruption from AI. As just one data point on that topic, the Wall Street Journal recently reported on a survey of 750 CFOs who concluded that the impact of AI is only expected to reduce their company's headcount by just 0.4% as compared to what it otherwise would have been for 2026. And that impact is largely expected at entry-level roles or clerical and administrative functions where the tax are more easily automated. This is all the more reason why having family building benefits in the company's overall benefit offering is critical. We recognize that investors are pricing into our valuation for potential for a negative impact on member engagement or on employer demand for our services. To be clear, we aren't seeing any signs of either. As we see it, these concerns are more rooted in what we've called headline risk as opposed to accurately reflecting a shift in market dynamics, which we don't believe will adversely impact our business. Before I turn things over to Mark, let me conclude by saying that we believe our results and outlook reflect that we are as well positioned as we've ever been for this opportunity. This is highlighted by 5 key areas: early sales commitments, our overall pipeline, the progress we're making with our channel partners, our derisking of the renewal season through the favorable notifications we've already received and the traction we're seeing with Progyny Select. We view all of this as evidence of the continuing macro tailwinds, and we believe we're in the best position ever to take advantage of those. Although some headwinds always exist, the outsized emphasis of what is seemingly anticipated in our current valuation runs contrary to what we see. We've seen this play out before throughout our history. When in past years, there were concerns at varying times regarding high inflation or tariffs or potential looming recession, general macro uncertainty and the loss of our largest client 2 years ago. Yet we continue to grow through all of the above, and we expect to continue to do so in the future. We recently completed our $200 million share repurchase program, and Mark will take you through those details shortly. Our Board is currently evaluating potential options for a new share repurchase program. We anticipate a decision around the end of May, and we expect to make an announcement at that time. Let me now turn the call over to Mark to walk you through the quarter. Mark?
Mark Livingston: Thank you, Pete, and good afternoon, everyone. Before I begin, I'll note that the 8-K we filed a short while ago includes our usual slide presentation, which summarizes both the results in the quarter and highlights some of the longer-term trends that we believe are important in understanding the health and direction of the business. We've also posted that on our website. Rather than repeating what's covered by that material, I'll focus on the key themes that impacted both the quarter and how we think about the rest of 2026 and beyond. So let's begin. The first theme is that this quarter's results reflect once again that member engagement has remained healthy and at levels that were consistent with what we were seeing when we issued the guidance in February. The consistency we're seeing in overall engagement continues to demonstrate that members are pursuing the care and services they need in order to achieve their family building and overall well-being goals. As a result, first quarter revenue came in closer to the high end of our guidance range, reflecting an increase of 1.4% on a reported basis and more than 12% when excluding the contribution from a large former client who is under a transition of care agreement in the first quarter of 2025. As a reminder, the transition agreement pertaining to this client ended as of June 30, 2025. Accordingly, the second quarter that is now underway will be the last quarterly period where you have to take that into account when looking at our comparative results. The second theme is that we continue to maintain healthy margin performance even as we continue to invest to expand our product platform, enhance features for our members and lay the foundation for future growth. Gross margin expanded efficiencies we continue to realize in care management and service delivery as well as the anticipated reduction in stock compensation expense. And while adjusted EBITDA [Audio Gap] investments, our longer-term adjusted EBITDA margin measured on a [Audio Gap] even at a higher level of investment. Our first quarter CapEx was $6.3 million, reflecting a $3.5 million increase over the prior year period. I'll remind you that we were still ramping this investment program over the early part of 2025. And our third theme through our [Audio Gap] the flexibility to both invest in the business while also returning value to our shareholders. We generated approximately $46 million in operating cash flow, yielding over $200 million on a trailing 12-month basis, a level we've maintained for 5 consecutive quarters now. Through our ongoing focus on process improvement in revenue to cash management, we also continue to drive further improvements in DSO, which was 11 lower than the first quarter a year ago. This improvement occurred even with the customary build in DSO on a sequential basis from Q4 as we work to establish the payment flows with our newest clients who launched on January 1. As of March 31, we had total working capital of approximately $266 million, which includes $225 million in cash, cash equivalents and marketable securities. There are no borrowings against our $200 million revolving credit facility and no debt of any kind, and we have no planned use for the facility at this time. And the fourth and final theme is that during the quarter, we repurchased more than 5.5 million shares for approximately $160 million under our most recent share repurchase program, which began in November and provides us with up to $200 million overall. We've now completed that program through the repurchase of approximately 8.8 million shares in aggregate. Turning now to our expectations for the second quarter and the remainder of 2026. As the second quarter begins, member engagement is pacing consistently with the typical seasonal patterns following the start of the year. Although the unexpected variability in engagement that we previously experienced hasn't recurred since 2024, the assumptions we're making today, particularly at the low end of the ranges reflect the potential that further variability in activity and treatments could occur. To be clear, this is the same approach we've been for more than a year when setting our guidance ranges. The table at the back of today's press release also outlines our assumptions at both ends of the ranges. In terms of utilization, we're maintaining our full year assumption of 1.04% to 1.05%, which is consistent with our long-term historical ranges. We're also maintaining our assumption for ART cycle consumption per female unique at 0.93 at the low end of the range and 0.95 at the high end. For the second quarter, we're assuming the customary sequential increase, reflecting the ramping of member journeys. On the basis of these assumptions, we're projecting revenue of between $1.365 billion to $1.405 billion, reflecting growth of between 5.9% to 9%. If we exclude the $48.5 million in revenue from the client who is under a transition of care agreement over the first half of 2025, our full year revenue growth is projected to be between 10.1% to 13.3%. At these levels, we expect 2026 to be our eighth straight year of double-digit top line growth since we became a public company. With respect to profitability, we're increasing our full year adjusted EBITDA, net income and EPS expectations. For adjusted EBITDA, we expect a range of $232 million to $244 million with net income of $103.7 million to $112.3 million. This equates to $1.23 and $1.34 in earnings per diluted share and $1.98 and $2.09 of adjusted EPS on the basis of approximately 84 million fully diluted shares. As it relates to the second quarter, we expect between $342 million to $355 million in revenue, reflecting growth of 2.7% to 6.6%. Again, if we exclude the $17.2 million in revenue from the client under the transition agreement in the year ago quarter, our second quarter guidance reflects growth of 8.3% to 12.4%. On profitability, we expect between $58 million to $62 million in adjusted EBITDA in the quarter, along with net income of between $25.8 million to $28.7 million. This equates to $0.31 and $0.35 of earnings per diluted share or $0.50 and $0.53 of adjusted EPS on the basis of approximately 83 million fully diluted shares. At the midpoints of the ranges for both the quarter and the year, you can see that we are expecting a consistent adjusted EBITDA margin throughout the year at a level that is also consistent with our full year result from 2025, even with the investments we're making to grow the business. With that, we'd like to now open the call for questions. Operator, can you please provide the instructions?
Operator: [Operator Instructions] Your first question is coming from Jailendra Singh from Truist Securities.
Jailendra Singh: On a strong quarter. My first question is on the early sales activity commentary, very encouraging comments there. A few follow-ups. First, how are these early commitments split between not nows from last year who might have delayed versus employers looking at this benefit for the first time? And then you also called out, Pete, that you're seeing more RFPs from employers who are currently with their competitors. Are there 1 or 2 consistent themes that you're hearing from these employers that they are actually evaluating options and it is driving more pickup in this RFP activity from competitor clients?
Peter Anevski: Regarding your first question, as always, early commitments, a higher proportion of them do come from not nows. But either way, it's positive overall activity and commitments to date versus last year, as we mentioned. And it relates to your second question, nothing really constructive that I can share relative to what we're hearing, normal sort of general reviews and general comments, but none that are constructive to share here. But I think the bigger, more important data point is the level of activity that we're seeing versus last year and really any other year relative to potential opportunities around solutions that are with current competitors.
Jailendra Singh: Okay. And then my quick follow-up. Last quarter, you called out membership changes because of administrative changes. I know the number of eligible lives is less important metric for you guys to focus on. But given your experience last quarter, have you guys made any changes in the process over the last 2 to 3 months to make sure you get more regular updates from your clients and we don't get any more surprises like what we saw last quarter?
Peter Anevski: Yes. We're getting regular updates. But what we're also doing is we're in the process of getting full eligibility files as opposed to just updates relative to numeric headcounts from our clients. We've already increased the level of eligibility files that we're getting from our clients over -- since year-end and expect to continue to do so throughout the year. And by year-end, we expect to have eligibility files from the significant majority of our clients. And so throughout the year, a combination of the periodic updates and having full eligibility files will help mitigate events like that again.
Operator: Your next question is coming from Brian Tanquilut from Jefferies.
Cameron Harbilas: On the quarter. This is Cameron on for Brian. I was just wondering if you could give me some more color on the increase you saw in revenues per ART Cycle. Can you walk us through kind of the moving pieces of this? Was this ancillary uptake rate? And do you expect this to persist throughout the year?
Mark Livingston: Sure, Cameron. This is Mark. So typically, in the beginning of the year, you'll see a slightly higher rate of revenue -- overall revenue per ART Cycle because you have a higher proportion of clients, particularly for the new ones that are starting their journey. So they're in initial consultation phase. So there's revenue associated, but not ART Cycles. That was a little less evident last year because the revenue that was contributed from that large client that was under a transition of care program was more skewed towards ART Cycle activity just by the definition of how that transition of care program worked. And so what I would say is more instructive is looking back maybe a couple of few years to seeing how that sort of progresses through the year.
Operator: Your next question is coming from Michael Cherny from Leerink.
Ahmed Muhammad Rahat: This is Ahmed Muhammad on for Mike Cherny. Congrats on the great results. As we think about the investments that you're making in future growth, can you give us an update on what's sort of in the pipeline in terms of new products and maybe even some timing on that as well? And could you also give some color on what you're seeing and expecting in terms of upsells of new products, both this quarter and this year?
Peter Anevski: Regarding your second question, it's a little early to comment on upsells, but simply to say that upsell activity is also positive. Other than that, it's early relative to any more color than that. As it relates to expectations around new products, the investments and capabilities are not necessarily new products, but additional capabilities for the existing products and/or expanded products that address the same areas for our global population.
Ahmed Muhammad Rahat: Great. And just as a follow-up, what are you -- what's embedded in the guide in terms of expectations for upselling of new products for the rest of the year?
Peter Anevski: The guidance -- everything in guidance is what's already committed. There are not -- we don't generally put in expectations of any material kind relative to upselling or new activity is how you should think about it. The upsell activity impact materially the following year.
Operator: Your next question is coming from Scott Schoenhaus from KeyBanc.
Scott Schoenhaus: Congrats on the quarter, the guidance. It seems like you're managing as best as you can the renewal process and seeing a great start to the selling season. So congrats on all fronts. My question is on utilization and your previous comments when you said this last selling season this year produced higher utilizing clients. I guess you're still seeing that, but what drove that utilization towards the higher end? Was it this new cohort? How are they progressing in April? I mean -- and so far in May, your comments were in line with seasonal activity. Is the new cohort seeing elevated utilization through the first 1.5 months -- month and 7 days of the quarter? And then I have a follow-up for Mark. I guess that's more of a question for Pete.
Peter Anevski: Thanks, by the way, for the comment. So if you recall, when we talked about it, it's not -- it is the new cohort having higher than normal utilization as a cohort, but it's because of the fact that the sales in the cohort this year were weighted more towards higher contribution of certain industries, right? But overall, it's generally performing as expected. I wouldn't say it's higher or better or anything else like that, but as expected and as we've talked about.
Scott Schoenhaus: Okay. Great. And my follow-up for Mark is, clearly, you beat on the bottom line here despite the investments. Maybe you can walk us through what further investments are needed throughout the rest of the year? And where you could potentially see upside to the margin guidance throughout the rest of the year because you did such a solid job on the first quarter.
Mark Livingston: Yes. Look, I would say that we've contemplated -- even since February, we've contemplated the investments and phased them throughout the year. So I think they're already well factored in. Look, we had a good quarter, and we've had some puts and takes. Nothing that I'd sort of call out specifically. But obviously, the things that we felt were recurring, we've already now baked into the full year guide. We -- as you know, we've left -- we brought up the low end of the range a little bit. We've kept the high end of the range the same on the top line, but we've increased the EBITDA. And that's really just reflective of some of the efficiencies that we were able to gain in Q1 that we see recurring through the rest of the year.
Operator: Your next question is coming from Sarah James from Cantor Fitzgerald.
Sarah James: I'm wondering if a larger portion of this year's early pipeline sales are coming from clients that were not nows in past years, so people that you've been talking to for a while? And if so, why the uptick this year in the decision process to start benefits?
Peter Anevski: So in general, always early commitments, a higher proportion of them come from not nows. This is no different. If you recall, some of the things we talked about last year was the pipeline build was later than normal. And as a result, that could be part of the contribution to early commitments. But either way, the early commitments are just one indication of the selling season. The overall positive activity and all the things I already mentioned that are driving it are, I think, how I look at the overall activity for the selling season, including the early commitments.
Sarah James: Got it. And one more just on the general market. How do you see the mix of client demand between case rate versus back-end savings? Is the market trending in one direction? And would you ever consider a product model that has back-end savings?
Peter Anevski: You talking about some sort of value-based care model and risk. Here's the way I think about it. We haven't needed to do that to win business. And the back-end savings are part of what drives our success in client retention. And so the current model, I think, has served us well, and we're not getting real pushback on it in terms of the current model versus a back-end savings sort of with risk and upside, et cetera, in it. So I don't have any plans to modify it.
Mark Livingston: Yes. I'd just point out that in Pete's prepared comments, he highlighted the third-party study that was done by one of our largest long-standing clients. I think that was sort of the major takeaway of it is the savings are demonstrated by our current model.
Operator: Your next question is coming from David Larsen from BTIG.
David Larsen: Congratulations on the good quarter. Can you just remind me what the revenue growth would have been in 1Q, excluding that one major client from the year ago period, please?
Mark Livingston: Yes, 12%. It's a little bit more than 12%.
David Larsen: Okay. And then with regards to like growth in your existing clients, it's my sense that the cost of oil kind of affects everything. The stock market, broadly speaking, had pulled back significantly a couple of months ago at the end of last year, first quarter, it's now rallied back up. Are you seeing sort of positive signs from your existing client base in terms of adding employees, which would obviously potentially add to your life count in maybe the back half of '26 or into '27. Basically, did this Iran war cause the 400,000 lower count at the start of the year? And could it come back up now that things seem to be getting resolved?
Peter Anevski: The Iran war, I don't believe has anything to do with the true-ups we reported before. And in general, we're seeing our existing client base from a lives perspective, stay relatively flat. And the good news is, as it relates to sort of everything costing more, as you said, we're not seeing any impact, including what we've seen so far in Q2. And as we all know, the war has been going on now for a couple of months, give or take. We're not seeing any impact on engagement or anything else like that as well.
David Larsen: Okay. And then just any comments on Select? What's the market reception to Select?
Peter Anevski: Sure. The market reception is positive. We are signing up aggregators and distributors. Reaction is positive. And we don't expect pull-through -- to be able to see pull-through on that until really end of the year when normally smaller employers make their buying decisions and their renewal period is. But nonetheless, so far, we're pleased with the activity and the reception.
Operator: Your next question is coming from Allen Lutz from Bank of America.
Unknown Analyst: This is [ Dev ] on for Allen. I just wanted to touch on kind of the market growth for ART Cycles. I think the latest data CDC put out, I'm not even sure if it's available since that team was maybe cannibalized, but it was about 10% CAGR for ART Cycles. Progyny is now moving kind of closer to that range, but obviously still appears to be taking share. I just would love to kind of get your view on what you think kind of the ART Cycle growth is for the market and how we should think about that over the medium term? And I have one follow-up.
Peter Anevski: Yes. There's no data I've gotten that suggests that the growth rate has changed relative to what we saw over the last 10 years based on the most recent data that's available. So that's really all I can share is I'm not -- I don't have any other data besides what you're describing relative to growth. Some of the pharma manufacturers are reporting growth. They're not giving me exact percentages, but they're reporting growth. And so it continues to grow, but I can't comment by how much.
Unknown Analyst: Okay. Great. No problem. And then start to harp on this, true-ups on the administrative side. But just curious what that came in like this quarter from what I understand is a quarterly process. Was that a positive this quarter? Just commentary and from what you're hearing from your employer clients around their -- the health of the employees and retention there?
Mark Livingston: Yes. Look, we're basically at the same level like we've seen in most typical quarters, there's some that are up a little. There's some that are down a little, they've largely offset. And as I think Pete highlighted on an earlier question, we're doing a lot of work to gain actual eligibility files on a recurring basis from these clients, which should help us refine and avoid adjustments like that in the future. We've already have some coming in, so we have available to us. And as you said, we expect to have a majority of our clients providing eligibility funds on a regular basis by the end of this year. So all of that should go to helping. Just the last thing I'd point out is like the revenue growth is exactly what we expected. So I think as we've tried to highlight, I think, on our last call and since is that it's really not a driver per se of activity, but an indicator around it. And those adjustments haven't seemed to had any effect on our expectations around revenue.
Operator: And our final question comes from Richard Close from Canaccord Genuity.
John Granville Pinney: John Pinney on for Richard Close. Congrats on the quarter. So first, good to hear on the business group on health study. I guess I know it's early in the selling season, but just like qualitatively, is there anything about like the value proposition of your services that's like resonating more like this selling season or anything different than past selling seasons that you would comment on?
Peter Anevski: I would say no. I would say I spoke more to the demand, even though the pacing of commitments is ahead also. It's more about demand than the pipeline. We're now in the normal process of articulating our capabilities, differentiating ourselves and also articulating the value that we deliver. So I would say nothing substantially different, but just emphasizing, as we always do, we not only manage for each individual member on a sponsor's behalf that goes through the program, good outcomes and favorable outcomes, but we also manage overall program cost containment, which is really important for sponsors as they review their alternatives.
John Granville Pinney: All right. Just as one follow-up. non-GAAP gross profit or gross profit margin, very strong in the quarter. Anything particularly that's driving that? Is this level sustainable? Or is there going to be some coming back here the rest of the year?
Mark Livingston: So a couple of key things. We've been highlighting that stock compensation expense will be coming down as some of the recognition period for older grants begins to expire. It really started last year in the middle of the fourth quarter. So that's a significant piece of that savings. But there is just recurring regular efficiency that we've been able to gain, which will recur. So both are recurring throughout the balance of the year. It's part of what's contributing to the improvement in adjusted EBITDA that we have now included in the guidance versus what we did a couple of months ago.
Operator: Thank you. That concludes our Q&A session. I'll now hand the conference back to James Hart for closing remarks. Please go ahead.
James Hart: Thank you, Matt, and thank you, everyone, for joining us this afternoon. We know it's a busy day for those we won't see next week at the conference. Please feel free to reach out to me at any time for any follow-ups. Thank you again.
Operator: Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.