Fertility benefits company Progyny (NASDAQ: PGNY) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 1.4% year on year to $328.5 million. Guidance for next quarter’s revenue was better than expected at $348.5 million at the midpoint, 0.9% above analysts’ estimates. Its non-GAAP profit of $0.50 per share was 14.7% above analysts’ consensus estimates.

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“We're pleased with the strong start to the year, as member engagement trended to the higher end of our expectations, reflecting that people are pursuing the services they need in order to address their family building and overall health and well-being goals,” said Pete Anevski, Chief Executive Officer of Progyny.

Company Overview

Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ: PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Progyny’s sales grew at an exceptional 27.4% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Progyny’s annualized revenue growth of 8% over the last two years is below its five-year trend, but we still think the results were respectable.

Progyny also reports its number of units sold, which reached 15,647 in the latest quarter. Over the last two years, Progyny’s units sold averaged 4.5% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, Progyny reported modest year-on-year revenue growth of 1.4% but beat Wall Street’s estimates by 0.7%. Company management is currently guiding for a 4.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.4% over the next 12 months, similar to its two-year rate. This projection is healthy and suggests its newer products and services will catalyze better top-line performance.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Progyny has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average adjusted operating margin of 16.4%.

Looking at the trend in its profitability, Progyny’s adjusted operating margin rose by 3.3 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Progyny generated an adjusted operating margin profit margin of 16.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Progyny’s EPS grew at 46.8% compounded annual growth rate over the last five years, higher than its 27.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Progyny’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Progyny’s adjusted operating margin was flat this quarter but expanded by 3.3 percentage points over the last five years. On top of that, its share count shrank by 15.3%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q1, Progyny reported adjusted EPS of $0.50, up from $0.48 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Progyny’s full-year EPS of $1.91 to grow 2.8%.

Key Takeaways from Progyny’s Q1 Results

It was great to see Progyny’s EBITDA guidance for next quarter top analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 9.6% to $21.00 immediately following the results.

Sure, Progyny had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).