Progyny's Q1 Surge: Riding the Fertility Market or Stuck in Transition?

The fertility tech space just got a jolt of adrenaline. Progyny (PGNY) delivered a Q1 2025 earnings report that screamed "growth," but beneath the surface, a ticking clock looms over its biggest client. Let’s break down why this is both a buy-and-hold story and a potential pothole for investors.

The Numbers That Pop
Progyny’s first quarter was a masterclass in execution. Revenue hit $324 million, a 16.5% year-over-year jump, while Adjusted EBITDA surged to $57.8 million, up 15%. The company added 18% more clients compared to Q1 2024, reaching 532 total clients. These aren’t just stats—they’re proof that Progyny’s platform for fertility benefits is hooking big employers.

But here’s the catch: one giant client is walking out the door. The company confirmed a major client, which contributed $31.3 million in Q1 revenue, won’t renew after H2 2025. Exclude that client, and organic growth soars to 19%—a number that should make investors sit up. Progyny isn’t just surviving; it’s thriving in a niche where demand is exploding.

The Elephant in the Conference Call
The earnings call (replay available on Progyny’s investor site) revealed two critical themes: resilience and ambition. Management emphasized that member utilization rates—a key metric for how many patients are actually using services—held steady at 0.54%. That’s a vote of confidence in the long-term value of their programs.

But the elephant in the room? That departing client. Progyny’s CFO made it clear: losing this account will crimp growth in the second half of 2025. Full-year revenue guidance was raised to $1.185–$1.235 billion, but that’s a “best case” scenario. Strip out the client loss, and Progyny’s growth engine is firing on all cylinders.

Why This Isn’t Just a One-Quarter Story
Cramer’s rulebook says: follow the trends, not the headlines. Progyny’s Q1 wasn’t just about weathering a client loss—it was about proving its model works. Here’s why this matters:

1. The Fertility Boom Isn’t Slowing: More companies are offering fertility benefits, and Progyny’s network of clinics and data-driven tools gives it a monopoly-like edge.
2. Margin Discipline: Gross margins expanded to 23.4%, up from 22.4% last year. That’s real operational muscle.
3. 2026 Selling Season Buzz: Management hinted at early wins in renewals and new contracts, with “positive signals” from employers.

The Bottom Line
Progyny is a company that’s nailing execution in a $20 billion fertility market. The departing client is a speed bump, not a roadblock. With organic growth at 19% and margins rising, this stock could be a long-term winner for investors who can stomach near-term volatility.

Final Verdict: Hold for the long game, but brace for bumps. Progyny’s Q1 showed it can grow without the departing client’s revenue, and its 2026 pipeline looks strong. If the stock dips below $25—where it’s trading as of this writing—consider it a buying opportunity. This isn’t just a fertility play; it’s a bet on healthcare’s future. And in healthcare, Cramer always says: follow the patients. Progyny’s patients are growing, and that’s all that matters.

Final Stat to Remember: Excluding the departing client, Progyny’s Q1 growth was 19%—a rate that could sustain its valuation even as it navigates 2025’s headwinds. This is a company to watch, not just for earnings, but for the next wave of healthcare innovation.