Progyny (PGNY) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We may fail to meet our publicly announced guidance or other expectations about our business and future results of operations, which would cause our stock price to decline
2. 02The market in which we operate is highly competitive, and, if we do not continue to compete effectively, our business, financial condition and results of operations could be harmed
3. 03Unfavorable conditions in the global economy or our industry could limit our ability to grow our business and negatively affect our results of operations
4. 04Our business depends on our ability to retain our existing clients and increase the adoption of our services within our client base. Any failure to do so would harm our business, financial condition and results of operations
5. 05We went live with Progyny Rx in 2018, and 91% of our current clients have now launched this solution, including approximately 95% of the clients we signed in 2024
6. 06Any of the above factors, alone or together, could negatively affect our ability to retain existing clients and sell additional solutions to them, which would have an adverse effect on our business, revenue growth and results of operations
7. 07If we are unable to attract new clients, our business, financial condition and results of operations would be adversely affected
8. 08A significant change in the utilization of our fertility solutions, including the consumption rate or the mix of utilization, could have an adverse effect on our business, financial condition and results of operations
9. 09Acquisitions, strategic investments, or partnerships could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition and results of operations
10. 10We have a limited operating history with our current platform of solutions, which makes it difficult to predict our future results of operations
11. 11We have a history of operating losses and may not sustain profitability in the future
12. 12The health benefits industry may be subject to negative publicity, which could adversely affect our business, financial condition and results of operations
13. 13If we fail to offer high-quality support, our reputation could suffer
14. 14Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our client base and achieve broader market acceptance of the solutions we provide
15. 15Our future revenue may not grow at the rates they historically have, or at all
16. 16If the estimates and assumptions we use to determine the size of the target markets for our services are inaccurate, our future growth rate may be impacted, and our business would be harmed
17. 17We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed
18. 18Our business experiences seasonality, which may cause fluctuations in our revenue and results of operations
19. 19If our new solutions and services are not adopted by our clients or members, or if we fail to innovate and develop new offerings that are adopted by our clients, our revenue and results of operations may be adversely affected
20. 20If we fail to adapt and respond effectively to the changing medical landscape, changing laws, regulations and government enforcement priorities, and changing client needs, requirements or preferences, our offerings may become less competitive
21. 21If we fail to maintain and enhance our brand, our ability to expand our client base will be impaired, and our business, financial condition and results of operations may suffer
22. 22If we fail to retain members of our management team or other key employees or fail to attract additional qualified personnel, our business and future growth may be negatively impacted
23. 23Any litigation against us could be costly and time-consuming to defend and could harm our business, financial condition and results of operations
24. 24We are exposed to credit risk from our members
25. 25Our business with government entities is subject to a number of challenges and risks
26. 26Failure to enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand
27. 27If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, and our competitive position would be harmed
28. 28We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which could adversely affect our profitability
29. 29Changes in our effective tax rate or tax liabilities may have an adverse effect on our results of operations
30. 30Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local taxes, which could adversely affect our results of operations
31. 31Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
32. 32If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected

Risks Related to Our Relationships with Third Parties

1. 33Our business depends on our ability to maintain our Center of Excellence network of high-quality fertility specialists and other healthcare providers. If we are unable to do so, our future growth would be limited and our business, financial condition and results of operations would be harmed
2. 34Our growth depends in part on the success of our strategic relationships with, and monitoring of, third parties, including channel partners and vendors, as well as insurance carriers
3. 35If we fail to maintain an efficient pharmacy distribution network or if there is a disruption to our network of specialty pharmacies or their supply chains, our business, financial condition and results of operations could suffer
4. 36If we lose our relationship with one or more key pharmacy program partners, or if the rebates provided by pharmacy program partners decline, our business and results of operations could be adversely affected
5. 37Our marketing efforts depend on our ability to maintain our relationships with benefits consultants and receive positive references from our existing clients, channel partners and benefit consultants

Risks Related to Legal and Regulatory Requirements

1. 38We operate in a highly regulated industry and must comply with a significant number of new and evolving legal and regulatory requirements, as well as complex judicial mandates, which could have an adverse impact on our business
2. 39or clients that do business with government entities, or to refund some or all of our service fees or otherwise compensate our clients
3. 40Changes in State and Federal Laws Related to Reproductive Rights and Fertility Benefits
4. 41HIPAA Privacy and Security Requirements
5. 42Other Data Privacy and Cybersecurity Requirements
6. 43Data Protection and Breaches
7. 44State Corporate Practice and Fee-Splitting Prohibitions
8. 45Restrictions on Communication
9. 46We are part of the broader healthcare industry and subject to increasing scrutiny and regulation within our business, including with respect to Progyny Rx’s PBM operations, which may adversely affect our business, financial condition and results of operations
10. 47As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock
11. 48We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations
12. 49Changing rules and regulations regarding environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, or otherwise adversely impact our business

Risks Related to Ownership of Our Common Stock

1. 50Our stock price may experience volatility, and the value of our common stock may decline
2. 51An active trading market for our common stock may not be sustained
3. 52capital to fund continuing operations through the sale of additional equity securities and may impair our ability to make strategic investments, including acquiring other companies or investing in technologies, using our equity as consideration
4. 53Future sales of our common stock in the public market, including in connection with financings, acquisitions, our equity incentive plan or otherwise, could cause the market price of our common stock to decline
5. 54If securities or industry analysts do not publish research, or publish unfavorable or inaccurate research, about our business, the market price and trading volume of our common stock could decline
6. 55We do not intend to pay dividends for the foreseeable future, and, as a result, your ability to receive a return on your investment will depend on appreciation in the price of our common stock
7. 56Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock