Progyny, Inc. (NASDAQ:PGNY) Q1 2024 Earnings Call Transcript

Progyny, Inc. (NASDAQ:PGNY) Q1 2024 Earnings Call Transcript May 9, 2024

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Operator: Good day, everyone, and welcome to the Progyny, Inc. First Quarter 2024 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It’s now my pleasure to turn the floor over to your host, James Hart. James, the floor is yours.

James Hart: Thank you, Tom, and good afternoon, everyone. Welcome to our first quarter conference call. With me today are Pete Anevski, CEO of Progyny; Michael Sturmer, President; and Mark Livingston, CFO. We will begin with some prepared remarks before we open the call for your questions. Before we begin, I would 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 2024 and the assumptions and drivers underlying such guidance, the demand for our solutions our expectations for our selling season for 2025 launches, anticipated employment levels of our clients in the industries that we serve, the timing of client decisions, our expected utilization rates and mix, the potential benefits of our solution, 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 results 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, adjusted EBITDA margin on incremental revenue and adjusted earnings per share.

More information about these non-GAAP financial measures, including reconciliations with 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.

Pete Anevski: Thank you, Jamie. Thanks, everyone, for joining us. We had a strong first quarter overall, making meaningful progress in the areas that are most impactful to our long-term growth. This includes a strong start to our most recent selling season and the advancement of new strategic partnerships both of which I’ll address in a few moments. In the first quarter, our continued focus on operational excellence allowed us to expand our adjusted EBITDA margins as compared to the first quarter a year ago, and we also produced our best first quarter operating cash flow. Despite these results, you’ve likely seen from the press release that the quarter unfolded differently than we had expected on the top line as utilization for the first quarter came in modestly lower than we had expected.

This coincided with the national conversations about fertility treatment and access to maternal healthcare that were sparked by the Alabama Supreme Court decision in February. I’ll spend a few minutes walking you through this dynamic to help you appreciate why this doesn’t alter our view of the long-term trajectory of the business, particularly since we’re seeing Q2 utilization that is consistent with or better than prior years, although not quite as strong as it was in 2023. As a quick refresher on what informed our first quarter expectations a year ago, utilization started strong in January and then continued to climb to record levels that persisted for much of 2023. This year, at the time of our February call, utilization for Q1 was pacing on virtually identical track as it had been in the prior year period.

However, unlike last year, we began to see the ramp in member activity leveling off slightly in March, coinciding with the national conversations about women’s access to reproductive healthcare sparked by the Alabama Supreme Court ruling. And even so, utilization remained quite healthy at 0.46%, in fact higher than our utilization from the first quarter two years ago, but modestly lower than the 0.48, it was a year ago, which had formed the basis for our expectations. As our guidance has always been informed by what we’re seeing at that time, with the unexpected leveling off and the ramp of activity, revenue this quarter was less than what we had expected. While we can’t be certain why members don’t take action, as no one contacts us to say why they’re not doing something, we examined the Q1 activity by client, by industry, by region, and by clinical partner, and only one noticeable pattern emerged.

The modest dip in activity that we saw across the country was more pronounced in the states, where the most restrictive laws for women’s reproductive healthcare suggesting that a relatively small number of members were proceeding with a greater degree of caution before commencing their fertility journey. As the second quarter begins, utilization has remained healthy at levels that remain above 2022 and below 2023, which further reinforces the confidence we have about all the long-term trends remaining intact. The market data reveals how the macro trends remain highly supportive for our continued long-term growth. The incidence and prevalence of infertility continues to rise as people increasingly defer family building to later in life. And family building continues to be a high priority, particularly amongst people over 30 who are medically most likely to need fertility care as natural conception becomes more challenging as we age.

And while overall birth rates are declining in the U.S. that’s really being driven by women under 34 who in making the decision to defer family building are actually reinforcing the longer-term tailwind for the fertility industry as they will be the ones expanding the cohort patients needing care once they approach their mid-30s. With the macro trends remaining very favorable, the modest variations we can see in utilization from period to period, where it’s sometimes a bit higher, sometimes a lower are far less indicative to our long-term success than the overall trend line is. And like any company, there are many drivers to our business, of the areas that are within our control, which spans everything from member experience to clinical outcomes to client satisfaction and more.

We set rigorous goals that we continue to meet or exceed, and we’re extremely pleased with how 2024 has begun in each of these areas as well. And also in any year, the most impactful driver to growth is our go-to-market success, which includes new sales, renewals and upsells. So let’s turn to the progress we’re making in the current selling season. Though this season is just getting underway, we’re extremely pleased with our active pipeline, which is favorable to what it was this time last year. And in November, we told you about the robust pipeline of not now opportunities that we’re carrying over into 2024. As in every year, there are certain prospects who for a variety of reasons, weren’t in a position at the time to add a fertility benefit or change their existing provider.

We begin each season by reengaging with the not nows, as they may now be in a better position to make a decision. Additionally, the not nows represent the majority of the early commitments we receive, and 2024 is proving to be no different, with strong early commitments from leading brands in healthcare, auto manufacturing, travel and leisure, and media, as well as multiple state and local government populations. This is a further demonstration of the flywheel effect, where our presence in an industry deepens once we win an initial account and we see others in that industry look to maintain benefits parity by adding or improving their coverage. Season is also off to a strong start in terms of new pipeline built, including the average size of opportunities versus the prior year.

We’re generating additional pipeline through all the typical channels, including through our partnerships, conferences, targeted events, inbounds, introductions from the benefits [indiscernible] and direct outreach. Now turning to upsells, the activity thus far is also very positive. There’s a number of pathways to expand our relationship. We’ve seen historically seen to 20% to 25% of the base take additional services each year. This year, our upsell cadence includes our newest services in menopause, maternity and postpartum care, and we’re pleased with the response we’ve seen thus far. We expect these new services to represent a smaller contribution to our results than our fertility offering, as they are case rates, not medical claims, but will increase the diversity in our portfolio and broaden our reach to more members.

And as usual, clients may also look to expand by adding to their existing fertility coverage with more smart cycles or other services such as preservation. In November, we told you about our first federal government population, which represents about 300,000 covered lives. Although that benefit is narrower than our usual offering and its contribution to our financial results is nominal, we continue to look at this as a beachhead opportunity, as conversations of expanding coverage are encouraging at this point. We’re also advancing several new channel partner relationships, including some of the most prominent health plans in the U.S., which upon completion would add to our existing agreements with CVS Health, Evernorth, Vistia Health and further expand our go-to-market reach.

These partnerships will help lay the groundwork to both accelerate our current market focus and offer opportunities into new segments. To conclude, we believe the engagement we’re seeing in our current selling season demonstrates both the strong demand in the market as well as our position as the provider of choice for fertility and family building solutions. In every sales year, we look to grow the incremental covered lives as compared to the prior year. Although, it’s very early, given the strength we’re seeing in the sales season thus far, we believe we’re on track to meet that objective. We believe the momentum we’re seeing across many areas of our business demonstrates that our market opportunity remains vast and we are in our strongest ever competitive position relative to other solutions in the market.

Let me now turn the call over to Mark.

Mark Livingston: Thank you, Pete. Good afternoon, everyone. I’ll begin with our first quarter results and then provide our expectations for the second quarter and the full year. First quarter revenue was $278.1 million, reflecting growth of approximately 8%, primarily due to an increase in the number of clients and covered lives as compared to a year ago. I’ll remind you that first quarter revenue was negatively impacted by a $15 million treatment mix shift that we discussed with you on our February call. As expected, this shift was short lasting as mix returned to what we would typically expect to see for the balance of Q1 and is trending normally as the second quarter gets underway. However, as Pete discussed, first quarter growth was also impacted by a slightly lower level of utilization as compared to the year ago period.

Female utilization in the first quarter was 0.46%, which compared to 0.48% in the first quarter a year ago. I’ll remind you that the 0.48% was the highest quarterly utilization rate we had ever reported at that time. I’ll note that utilization does not include the 300,000 members in the federal population, given that their plan design as it is today, doesn’t include services that we measure in our utilization rate. In a comparative sense, utilization rate for the first quarter of 2024 is just 4% below that peak, while also comparing favorably to the 0.45% reported in the first quarter of 2022. In fact, we believe the relative consistency in utilization over these past few years, where utilization has persisted within a relatively narrow range in each period, reflects both the prevalence of infertility as a medical condition as well as the importance of family building medical care for our members.

The visibility we have thus far into 2Q activity reveals that engagement has persisted at a similar level, namely lower than the record level that we saw in 2023, but higher than what we saw in 2022, which suggests that we aren’t seeing the emergence of a new underlying trend. Turning now to our other business metrics, in the quarter, approximately 14,800 ART cycles were performed in Q1, reflecting a 12% increase over the first quarter last year. As of March 31, we had 451 clients with at least 1,000 lives, representing an average of 6.4 million covered lives. This compared to 379 clients and an average of 5.3 million covered lives a year ago, reflecting approximately 20% growth in lives. As we told you last quarter, a number of our newest clients are scheduled to go live in Q2 and Q3.

Taking into account the clients who have already launched in the second quarter, we have over 460 clients today who represent approximately 6.5 million covered lives. With the launches scheduled between now until early Q3, as well as a limited amount of organic growth that we expect to see from the existing base, we anticipate an additional 200,000 covered lives this year. This will take us to 6.7 million lives overall, and we have reflected that in the progression of our guidance over the balance of 2024. Taking a deeper look at our financial results, medical revenue increased 8% in the quarter to $169.8 million, while pharmacy revenue over the same period increased 7% to $108.3 million. The lower rate of pharmacy growth versus medical primarily reflects the impact of the previously disclosed treatment mix shift, which disproportionately impacts pharmacy revenue given that the more extensive fertility treatments involve a higher level of medication.

Turning now to our margins and operating expenses. Gross profit increased 6% from the first quarter last year to $62.4 million, yielding a 22.4% gross margin comparable to the margin from the first quarter of 2023. Sales and marketing expense was 5.6% of revenue in the first quarter, consistent with the year ago period. Our model affords us the flexibility to continue to meaningfully expand our go-to-market resources given the inherent leverage we gain through the success in new client acquisition and from our high rate of client retention. G&A was 10.2% of revenue as compared to 11.4% in the first quarter a year ago. The 120 basis point improvement is primarily due to efficiencies that we continue to realize in our back office operations and reflecting our expanding margins on G&A even as we grow revenue.

Adjusted EBITDA grew in line with revenue this quarter to $50.3 million within our guidance despite the lower than expected revenue. Adjusted EBITDA margin was 18.1% in the quarter as compared to 17.9% in the year ago period. Because of our continued revenue growth and the operating efficiencies we continue to realize, adjusted EBITDA margin on incremental revenue, which most clearly highlights the rate of margin capture as we realize as we grow, was 20% in the first quarter. This demonstrates the leverage that we continue to realize in our business model. Net income was $16.9 million in the quarter or $0.17 per diluted share. This compared to net income of $17.7 million or $0.18 per share in the year ago period. The decline was primarily due to a provision for income taxes in the current period as compared to a small benefit for taxes in the prior period, which more than offset the 38% increase in income before taxes.

Adjusted earnings per diluted share or earnings, excluding the impact of stock-based compensation taking into account any associated tax impacts was $0.39 in the period. This compared to $0.34 in the first quarter a year ago and exceeded the high end of our guidance. Turning now to our cash flow and balance sheet. Operating cash flow in the first quarter was $25.7 million as compared to $21 million generated in the year ago period. The improvement was due primarily to our higher profitability as well as normal timing items that can impact any given quarter. The modest increase in DSO from year end is due primarily to the seasonality in cash flow that we typically see at the beginning of each year as we work to establish carrier integrations and payment flows with our newest clients.

With the expertise we’ve gained in managing this process across hundreds of clients, we generally see the flows for these new clients operating normally by the second quarter following their launch. DSO as of March 31 also reflects an increase in working capital due to the situation at change healthcare, although we haven’t been notified that any of our member data was exposed, for those providers who submit their claims through change, claims processing and therefore payment and collection cycles were elongated because of the manual processes that were implemented as a workaround solution. As those systems slowly return to normal, those cycles are improving. Looking across the remainder of the year, we continue to expect that we will convert approximately 75% of our full year adjusted EBITDA into operating cash flow in 2024.

As of March 31, we had total working capital of approximately $476 million, reflecting $372 million of cash, cash equivalents in marketable securities and no debt. In late February, our board authorized a $100 million share repurchase program. As of March 31, we’d repurchased more than 720,000 shares for approximately $26 million. With the activity thus far in Q2, nearly 2 million shares have been repurchased and approximately 32 million remains under the existing authorization. Turning now to our expectations for the second quarter and the rest of the year. Throughout our history as a public company, our approach has always been to set ranges that are informed by both historical trends and also what we’re currently seeing. This is the same approach we followed last year when we were in a position to raise guidance multiple times as utilization continued to trend upward for most of the year.

For the second quarter, we are assuming that the utilization rate will be steady, which is what we saw in April and continue to see as compared to the 0.46 rate in Q1, resulting in revenue of $300 million to $310 million. I’ll remind you that our utilization in the second quarter a year ago was the highest quarterly rate we’ve ever reported. Therefore, the 9% revenue growth we’re expecting at the midpoint of this range reflects this challenging comparison. For the full year, we now expect revenue of between $1.23 billion to $1.27 billion, reflecting growth of 15% at the midpoint. Our range assumes that utilization in the second half of the year will be nearer to what we saw in 2022 at the low end and closer to what we saw in 2023 at the high end.

Turning to our profitability, we expect adjusted EBITDA of $52 million to $55 million in the second quarter and net income of $15.7 million to $17.8 million. This equates to $0.16 and $0.18 earnings per diluted share, or $0.39 to $0.41 of adjusted EPS on the basis of approximately $99 million fully diluted shares. For the year, we now expect adjusted EBITDA of $216 million to $226 million along with net income of $68.4 million to $75.4 million, with the revisions incorporating the drop through impacts of the change in revenue, albeit reflecting the higher level of profitability we’re already seeing. This equates to $0.68 and $0.75 earnings per diluted share or $1.61 and $1.68 of adjusted EPS on the basis of approximately 100 million fully diluted shares.

I’ll remind you that our net income projections do not contemplate any discrete income tax items. At the midpoints of this guidance, we are expecting to see the continued expansion of our margins in 2024 with adjusted EBITDA margin on incremental revenue of over 20%. With that, I’ll turn the call back over to Pete for some closing remarks.

Pete Anevski: Thanks, Mark. As you look into the future, we believe we’re well positioned to continue expanding the top line at a strong rate driven by several factors. First, we remain in the earliest days of penetrating a very significant and growing core market opportunity with large self insured employers. Second, our expanding roster of channel partners, which enhance our market presence and broaden our reach. Third, our expansion into additional verticals, including federal and state governments where we’ve already had initial success and eventually the middle markets, adds meaningfully to our addressable market. And fourth, our new products and services to address life’s other milestones beyond fertility and family building, which are expected to contribute a higher gross margin as we leverage our existing infrastructure in the delivery of those services.

Taking all of those components into account, we believe we’ll continue to take market share for the foreseeable future. We look forward to discussing these drivers to our business in greater detail during our first ever Analyst Day, which we expect to hold shortly after the release of our second quarter earnings in August. Details will be released later this summer, and we hope you’ll be able to join us. With that, I’d like to open up the call for questions. Operator, can you please provide the instructions?

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Q&A Session

Operator: Certainly. [Operator Instructions] And the first question today is coming from Anne Samuel from JPMorgan. Anne, your line is live. Please go ahead.

Anne Samuel: Hi, guys. Thanks for taking the question and thanks for all of the color. Maybe just one on some of the issues that you’re seeing around utilization, given patients are proceeding with caution in some of these states that are affected by more restrictive reproductive regulations. Are you seeing employers in their states being more hesitant to add the benefit as well? Or is it really just kind of limited to utilization at this point?

Michael Sturmer: Yes. Hey, this is Michael. Limited to utilization at this point, we’re not – we haven’t heard or seen any sort of hesitation from an employer perspective.

Anne Samuel: That’s great to hear. And then maybe just as we look into the back half of the year, just curious if you could talk about what your expectations are around utilization and maybe just what’s giving you confidence in that recovery trajectory. Thanks.

Mark Livingston: Yes. Hi, Anne. Thanks for the question. So I’ll actually take the second part first. So we’ve seen as we’ve entered into the second quarter, utilization improve back from the activity that we were seeing in March. So that we’re back in a level that’s between what we were seeing in 2022 and 2023, again, based on my prepared comments, albeit not as high as what we saw certainly in Q2 for 2023. So we are seeing that improvement already. So the range contemplates, especially for the back half. So the Q2 contemplates what we’re seeing today and a continuation of that. For the back half of the year, the range basically reflects a modest increase in utilization versus what we saw in Q1 and we’re now seeing in Q2, a few percentage points, which brings us not quite to the same levels that we saw at the second half of 2023, but closer to that.

And then conversely, the low end of the range contemplates a slight reduction in the level of utilization that we’re seeing today, which actually brings us slightly below what we saw from our utilization rate for 2022. So we framed it around, again, what our history has been for these last couple of years.

Anne Samuel: That’s very helpful. Thank you.

Operator: Thank you. Your next question is coming from Michael Cherny from Leerink. Michael, your line is live. Please go ahead.

Michael Cherny: Good afternoon. Thank you for taking the questions. I guess, I have one question, but covering two different areas. And this basically diving in a bit more into some of the utilization dynamics you’re seeing, obviously, I know a hot topic. But if you can give us a little more cohort information, first on some of the new member base and what you’re seeing on the utilization in terms of the lives you’ve added this year versus previous years. And then second, if you can give us any trending dynamics on what you’re seeing on the utilization side in the less restrictive states post the Alabama decision, how that factors in to the underlying utilization views for the business as a whole.

Pete Anevski: Yes. Thanks, Mike. As it relates to the first question, first year utilization for the cohort that launched this year is similar to other cohorts in prior years. The second part of your question, part of the improvement that Mark’s referring to off of what we saw in March that we’re now seeing in April, is some of those red states, if you will, that are improving off of the trough in March that we saw with them. And so that is part of the improvement already.

Michael Cherny: I’ll hop back in the queue. Thanks.

Operator: Thank you. Your next question is coming from Glen Santangelo from Jefferies. Glen, your line is live. Please go ahead.

Glen Santangelo: Yes, thanks for taking my questions. Just two quick ones for me. I also want to follow-up on this utilization question in the back half, because, Mark, if you look at the guidance, I mean, you’re calling for 8.5% revenue growth in the first half. And then to get to the midpoint of your guidance, you’re going to need 21% growth in the second half. And you said you’re sort of modeling utilization off of somewhere between 2022 and 2023, what we saw in those two years. But isn’t the consumer in a different place today versus a year or two years ago? And I guess what gives you confidence that we’re going to see those historical utilization trends? And then I just had a quick follow-up on the selling season.

Mark Livingston: Yes. So if you try to look at first half, second half, you have to remember there’s a couple of key pieces that are contributing to the second half. So first, we’ve already called out the mix issue in Q1, which is clearly behind us. That was $15 million right there. So obviously that’s not going to be – you have to normalize for that. We also mentioned that we’ve got a couple of hundred thousand new lives that are starting through the end – through the back half of second quarter into Q3, which will contribute as we go forward. And as I said, we’re already seeing that utilization move back to that level. And again, as we said in our prepared remarks, the first couple of months of activity for this year, we’re tracking identically to last year, which was our record year.

So intuitively, that cohort of members and patients does have the capability of driving that utilization at some stage. And I think part of the question is. So I don’t know if member sentiment, if you will, has completely shifted since February. We saw some decline in activity in March. Of course, we don’t know for sure, but certainly coincides pretty clearly with the Alabama decision and people’s reflection on when they would want to move forward. To the extent that it’s already improving here in April, I mean, that gives us some confidence that we will likely. And that’s why our guidance reflected land between 2022, which was measurably lower, and 2023, which was our record year.

Glen Santangelo: Okay, perfect. I appreciate the details. Hey, Pete, if I could just follow-up on the selling season. It feels like, every year, you tell us roughly about this time that you’re trending ahead of where you were in the year prior. And that’s always been the case, which is great, except for – last year, it probably came in maybe a little bit lighter than what we were expecting. And I think you go into these years with the goal of adding at least as many lives as last year. So is the goal this year 1.3 million lives? And I guess, how are you measuring your progress thus far? Is it conversations you’re having? Is it commitments to date? Do you measure it by lives clients? Any sort of color on how you measure the selling season at this point would be helpful. Thanks.

Pete Anevski: Sure. To go to the first part of your question, yes, it’s the 1.3 million lives that we’re looking to meet or exceed as a goal. The second part of your question is the active pipeline for us, when we talk about it, has very strict definitions in terms of sales activities, not just conversations. It’s different types of milestones relative to progress with those prospective clients. And so when we talk about active pipeline being ahead of last year, that’s what we’re referring to. We talk about the average deal size being larger than last year. That’s what we’re referring to versus this point last year. Pipeline builds – sales pipeline builds throughout the sales season. And all we could do is look at and always do look at where we’re at relative to prior year.

Now last year, if you recall, was a slightly more difficult year where you had macroeconomic conditions and for the majority of the year, a looming recession. And it wasn’t just our benefit was – overall benefit decisions were not as robust as they were in prior years. And so that’s what we believe impacted last year a little bit. And despite that, we were really pleased with the season. But when you talk about early commitments, yes, definitely early commitments are also what we look at again, period to date versus a year ago when we make these comments.

Glen Santangelo: Okay. Thanks for all the details.

Operator: Thank you. Your next question is coming from Jailendra Singh from Truist. Jailendra, your line is live. Please go ahead.

Jailendra Singh: Thank you and thanks for taking my question. My first question is around the business visibility. So utilization shortfall this quarter, combined with the issue of utilization mix shift, that does raise the question of visibility in that business. And I understand there could be always some variability in the business, but can you spend some time on how much forward visibility generally you have in your business considering that the company gets involved in very early in a patient’s journey? The gist of my question actually is that, you called out multiple times, 2023 was a record year, but you still assume that those utilization levels stay at those levels when you should guidance a few months back, only to lower the guidance a quarter later. So help us better understand how we should get comfortable around the visibility of your business.

Mark Livingston: So the way that our business works is that members call and engage with us to use their benefit, and they will do that and schedule appointments with providers, and there’ll be a window of time where those appointments will be authorized for. And that period generally gives us four to perhaps six weeks – four to some degree, six weeks to a lesser degree, visibility to the volume of appointments that are being scheduled. So, for example, when I’m sitting at the end of February, I’m looking at a series of appointments that were scheduled for February for which we’ve not received claims or have a formal confirmation that an appointment has actually happened. And I’m looking forward into the month of March for appointments that have been scheduled which may move, they may cancel, they may change, they may be renewed from another period of time.

So with that being said, to get to your point or get to the point, we’re looking at four to six weeks forward and also looking backwards for four weeks or so to confirm the appointments that we believe have been scheduled and have happened.

Jailendra Singh: So when you issued your reported Q4, you did not have much visibility on March that this was happening. Just make sure I understand that.

Pete Anevski: Did not. And although we have visibility into the next month and up to six weeks, I think the important point to understand is appointments are being scheduled throughout the month of March, not just at the end of February and all scheduled already in March. So I think that’s the nuance, I think, in that data point, right? So what we do and what we always do, sort of no different than the conversation we had about sales activity, is we look at that, what’s scheduled at that point versus what was scheduled again a year ago, what’s been happening already in January, February versus a year ago. And those are the comments we made and those are – and that’s what the basis for the guidance was we’re literally to the 100 basis point, we were on point to a year ago through the end of February at the time that we reported in terms of what was scheduled.

And then although, there’s decent visibility into March, it’s not complete visibility by far, more activity has to be booked. And that’s the leveling off we’re referring to that in the prior year we didn’t see in March, and we saw a little bit more leveling off this year. That although impacting the guidance was a 4% delta, right. And if you think about the last couple of years, including last year, where we reported, where we guided the year, it ended up being favorable, but was still roughly 4% or 5% better, not worse, better. So better is always better. But it could go either way, which is sort of our point. And so it’s plus or minus 3%, 4%, 5% for a given period, month or quarter or a year. It’s not material. And that was sort of in our written remarks, the comments we were making.

And that’s been the level of visibility and accuracy that the system that we’ve been utilizing to forecast on has been.

Mark Livingston: And just to make a simple example of this. So somebody that called up in the middle of February to book an appointment in the first half of March and had that settled, that doesn’t mean they’re locked into going into March. So as the latter part of February occurred, people began to think more reflectively about what the Alabama decision meant and what have you would call up and move that appointment out into April or cancel it altogether. And so that’s part of that activity in March, where people are either changing their mind or they’re just not coming as quickly as we would have anticipated. And that’s the activity that we’re talking about. That happened again as we got into March and even towards the middle of March, honestly.

Jailendra Singh: Okay, that’s helpful color. And my quick follow-up on Progyny Rx revenue was up 7%, which was actually slower than your fertility benefits. That was up 8%. I can’t recall a quarter where that actually happened. Anything to highlight there?

Mark Livingston: Well, you’ve got, again, right now we’re getting to a point where our – the installed base of both medical and Rx are very close together. But I think in our prepared comments, we mentioned that the mix issue that was apparent in the early part of the quarter, which, again, has fully resolved itself, is this – hits Rx disproportionately, because the more extensive treatments that we did not have in the first quarter tend to carry a much heavier proportion of medication than the overall. So that also served to mute the growth of Rx as it compares to medical in the quarter.