Progyny, Inc.

Previous wording

Progyny is a leading benefits management company specializing in fertility, family building and women's health benefits solutions in the United States. Our clients include many of the nation’s most prominent employers across a broad array of industries. We launched our fertility benefits solution in 2016 with our first five employer clients, and we have grown our current base of clients to over 540 with at least 1,000 covered lives. We currently have contracts to provide coverage to approximately 6.8 million employees and their covered dependents (known in our industry as covered lives, and to whom we refer to as our members). We have achieved this growth by demonstrating that our purpose-built, data-driven and disruptive platform consistently delivers superior clinical outcomes in a cost-efficient manner while driving exceptional client and member satisfaction. We have retained substantially all of our clients since we launched our fertility benefits solution, and our member satisfaction is evidenced by our most recent industry-leading Net Promoter Score, or NPS, of +79 for our fertility benefits solution and +84 for Progyny Rx, our integrated pharmacy benefits solution, as of December 31, 2024. Our members experience healthier pregnancies and superior rates of pregnancy and live births, as well as reduced rates of miscarriages and multiple births, saving valuable time and money and limiting personal and professional disruption.

Current wording

Progyny is a leading benefits management company specializing in fertility, family building and women's health benefits solutions in the United States. Our clients include many of the nation’s most prominent employers across a broad array of industries. We launched our fertility benefits solution in 2016 with our first five employer clients, and we have grown our current base of clients to over 550 with at least 1,000 covered lives. We currently have contracts to provide coverage to approximately 6.7 million employees and their covered dependents (known in our industry as covered lives, and to whom we refer to as our members). We have achieved this growth by demonstrating that our purpose-built, data-driven and disruptive platform consistently delivers superior clinical outcomes in a cost-efficient manner while driving exceptional client and member satisfaction. We have retained substantially all of our clients since we launched our fertility benefits solution, and our member satisfaction is evidenced by our most recent industry-leading Net Promoter Score, or NPS, of +79 for our fertility benefits solution and +84 for Progyny Rx, our integrated pharmacy benefits solution, as of December 31, 2024. Our members experience healthier pregnancies and superior rates of pregnancy and live births, as well as reduced rates of miscarriages and multiple births, saving valuable time and money and limiting personal and professional disruption.

Previous wording

Our Clients. We currently serve over 540 employers with at least 1,000 covered lives in the United States across more than 40 industries. Our current clients, who are industry leaders across both high-growth and mature industries and who range in size from approximately 1,000 to 600,000 employees, represent approximately 6.8 million covered lives.

Current wording

Our Clients. We currently serve over 550 employers with at least 1,000 covered lives in the United States across more than 40 industries. Our current clients, who are industry leaders across both high-growth and mature industries and who range in size from approximately 1,000 to 600,000 employees, represent approximately 6.7 million covered lives.

Previous wording

•Population-Based Component. Clients who purchase our fertility benefits solution also typically pay us a per employee per month fee, or PEPM fee, which is population-based. This allows us to provide access to our PCAs for fertility and family building education and guidance and other digital tools to all of our members, regardless of whether they ultimately pursue fertility treatment. PEPM fees represented 1% of our total revenue for the six months ended June 30, 2025 and 2024.

Current wording

•Population-Based Component. Clients who purchase our fertility benefits solution also typically pay us a per employee per month fee, or PEPM fee, which is population-based. This allows us to provide access to our PCAs for fertility and family building education and guidance and other digital tools to all of our members, regardless of whether they ultimately pursue fertility treatment. PEPM fees represented 1% of our total revenue for the nine months ended September 30, 2025 and 2024.

Previous wording

Member and Client Base. Our addressable market is primarily large self-insured employers, as well as labor populations under the Labor Management Relations Act of 1947 (also known as the Taft-Hartley Act) and federal government populations. There are approximately 8,000 employers in the United States who have a minimum of 1,000 employees, who together with Taft-Hartley labor populations and federal government populations, represent approximately 106 million potential covered lives in total. Our current member base of approximately 6.8 million covered lives under contract represents a mid-single digit percent of our total market opportunity. We intend to continue to drive new client acquisition by investing significantly in sales and marketing to engage, educate and drive awareness of the unmet need around fertility solutions among benefits executives. We also increase brand awareness and adoption with employers by leveraging our strong relationships with benefits consultants. In particular, we are focused on expanding the number of clients with more than 2,500 covered lives. As of June 30, 2025 and December 31, 2024, we served 542 and 473 clients, representing 6,754,000 and 6,472,000 members, respectively.

Current wording

Member and Client Base. Our addressable market is primarily large self-insured employers, as well as labor populations under the Labor Management Relations Act of 1947 (also known as the Taft-Hartley Act) and federal government populations. There are approximately 8,000 employers in the United States who have a minimum of 1,000 employees, who together with Taft-Hartley labor populations and federal government populations, represent approximately 106 million potential covered lives in total. Our current member base of approximately 6.7 million covered lives under contract represents a mid-single digit percent of our total market opportunity. We intend to continue to drive new client acquisition by investing significantly in sales and marketing to engage, educate and drive awareness of the unmet need around fertility solutions among benefits executives. We also increase brand awareness and adoption with employers by leveraging our strong relationships with benefits consultants. In particular, we are focused on expanding the number of clients with more than 2,500 covered lives. As of September 30, 2025 and December 31, 2024, we served 553 and 473 clients, representing 6,724,000 and 6,472,000 members, respectively.

Previous wording

Benefits Utilization. A key driver of our revenue is the number of members we serve and the rate at which they utilize their fertility benefits. As our client base has grown, our membership has grown from approximately 0.1 million members in 2016 when we launched our fertility benefits solution to approximately 6.8 million members as of June 30, 2025.

Current wording

Benefits Utilization. A key driver of our revenue is the number of members we serve and the rate at which they utilize their fertility benefits. As our client base has grown, our membership has grown from approximately 0.1 million members in 2016 when we launched our fertility benefits solution to approximately 6.7 million members as of September 30, 2025.

Previous wording

(1)Represents the number of ART cycles performed, including IVF with a fresh embryo transfer, IVF freeze all cycles/embryo banking, frozen embryo transfers, and egg freezing. Includes ART cycles performed in 2025 under the extended transition of care agreement with the large client who did not renew its services agreement.

Current wording

(1)Represents the number of ART cycles performed, including IVF with a fresh embryo transfer, IVF freeze all cycles/embryo banking, frozen embryo transfers, and egg freezing. Includes ART cycles performed in the first half of 2025 under the extended transition of care agreement with the large client who did not renew its services agreement.

Previous wording

(2)Represents the member utilization rate for all fertility and family building services, including, but not limited to, ART cycles, initial consultations, IUIs, and genetic testing. The utilization rate for all members includes all unique members (female and male) who utilize the benefit during that period, while the utilization rate for female only includes only unique females who utilize the benefit during that period. For purposes of calculating utilization rates in any given period, the results reflect the number of unique members utilizing the benefit for that period. Individual periods cannot be combined as member treatments may span multiple periods. Utilization for 2025 excludes activity under the extended transition of care agreement with the large client who did not renew its services agreement, as only members meeting certain criteria were eligible to use the benefit.

Current wording

(2)Represents the member utilization rate for all fertility and family building services, including, but not limited to, ART cycles, initial consultations, IUIs, and genetic testing. The utilization rate for all members includes all unique members (female and male) who utilize the benefit during that period, while the utilization rate for female only includes only unique females who utilize the benefit during that period. For purposes of calculating utilization rates in any given period, the results reflect the number of unique members utilizing the benefit for that period. Individual periods cannot be combined as member treatments may span multiple periods. Utilization for 2025 excludes activity under the extended transition of care agreement ending June 30, 2025 with the large client who did not renew its services agreement, as only members meeting certain criteria were eligible to use the benefit.

Previous wording

(3)Includes approximately 300,000 members from a single client who are not reflected in utilization as a result of the client's chosen benefit design. 2025 excludes the limited number of members who were eligible to use the benefit under the extended transition of care agreement with the large client who did not renew its services agreement.

Current wording

(3)Includes approximately 300,000 members from a single client who are not reflected in utilization as a result of the client's chosen benefit design. 2025 excludes the limited number of members who were eligible to use the benefit under the extended transition of care agreement ending June 30, 2025 with the large client who did not renew its services agreement.

Previous wording

General and administrative expense consists primarily of employee related costs, including salaries, bonuses, benefits, stock-based compensation expense, other related costs, and an allocation of our general overhead, depreciation and amortization for those employees associated with general and administrative services such as executive, legal, human resources, information technology, accounting, and finance. These expenses also include third-party consulting services and facilities costs. We anticipate that we will incur additional general and administrative expenses on an ongoing basis to support the growth of our business.

Current wording

General and administrative expense consists primarily of employee related costs, including salaries, bonuses, benefits, stock-based compensation expense, other related costs, and an allocation of our general overhead, depreciation and amortization for those employees associated with general and administrative services such as executive, legal, human resources, information technology, accounting, and finance as well as research and development activities. These expenses also include third-party consulting services, facilities costs, and bad debt expense. We anticipate that we will incur additional general and administrative expenses on an ongoing basis to support the growth of our business.

Previous wording

(2) Adjusted EBITDA is a non-GAAP financial measure that we define as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, interest and other income, net, and provision for income taxes. See “Management’s Discussion and Analysis of Financial Condition and Result of Operations – Non-GAAP Financial Measure – Adjusted EBITDA" below for a reconciliation of Adjusted EBITDA to net income, the most directly comparable measure calculated in accordance with U.S. GAAP.

Current wording

(2) Adjusted EBITDA is a non-GAAP financial measure that we define as net income, adjusted to exclude depreciation and amortization, stock-based compensation expense, interest and other income, net, and provision for income taxes. See "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measure – Adjusted EBITDA" below for a reconciliation of Adjusted EBITDA to net income, the most directly comparable measure calculated in accordance with U.S. GAAP.

Previous wording

Revenue increased by $28.8 million, or 9%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase is primarily due to a $20.4 million, or 11%, increase in revenue from our fertility benefits solution and a $8.4 million, or 8%, increase in revenue from our Progyny Rx solution. The increase in revenue from our fertility benefits solution and our Progyny Rx solution were primarily due to the increase in the number of clients and covered lives.

Current wording

Revenue increased by $26.7 million, or 9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase is primarily due to a $23.2 million, or 13%, increase in revenue from our fertility benefits solution and a $3.5 million, or 3%, increase in revenue from our Progyny Rx solution. The increase in revenue from our fertility benefits solution and our Progyny Rx solution were primarily due to the increase in the number of clients and covered lives.

Previous wording

Cost of services increased by $50.7 million, or 11%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatment delivered. This increase in cost of services was also attributable to an increase in personnel-related costs primarily due to incremental head count which included an increase in stock-based compensation expense of $0.5 million.

Current wording

Cost of services increased by $13.1 million, or 6%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatment delivered. This increase in cost of services was also attributable to an increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a decrease in stock-based compensation expense of $0.3 million.

Previous wording

Gross profit increased by $10.7 million, or 16%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Gross profit increased by $13.6 million, or 23%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Gross margin increased 120 basis points for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to ongoing efficiencies realized in the delivery of our care management services.

Current wording

Gross margin increased 250 basis points for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to ongoing efficiencies realized in the delivery of our care management services.

Previous wording

Sales and marketing expense increased by $4.3 million, or 14%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to a $3.3 million increase in personnel-related costs attributable to incremental head count which included an increase in stock-based compensation expense of $0.6 million, and a $1.0 million increase in other related sales and marketing expenses.

Current wording

Sales and marketing expense increased by $1.5 million, or 9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily due to a $1.3 million increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a decrease in stock-based compensation expense of $0.1 million, and a $0.2 million increase in other related sales and marketing expenses.

Previous wording

General and administrative expense increased by $5.0 million, or 16%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily due to a $1.6 million increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a $1.0 million decrease in stock-based compensation expense, an increase of $0.6 million in bad debt expense driven by our revenue growth, and a $2.8 million increase in other related general and administrative expenses.

Current wording

General and administrative expense increased by $3.0 million, or 10%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily due to a $2.8 million increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a $0.5 million decrease in stock-based compensation expense, an increase of $1.2 million in bad debt expense driven by our revenue growth, and a $1.0 million net increase in other related general and administrative expenses. General and administrative expense also included a benefit of $2.0 million in the three months ended September 30, 2025 related to employee retention credit refunds.

Previous wording

Interest and other income, net decreased by $1.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a decrease in investment income, partially offset by an increase in interest income.

Current wording

Interest and other income, net decreased by $3.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a decrease in investment income and an increase in interest expense, partially offset by an increase in interest income.

Previous wording

For the three months ended June 30, 2025, we recorded a provision for income taxes of $10.0 million, as compared to a provision for income taxes of $8.6 million for the three months ended June 30, 2024, primarily due to higher operating profit as well as a decrease in tax benefits for equity compensation, including discrete tax benefits, in the current year period.

Current wording

For the three months ended September 30, 2025, we recorded a provision for income taxes of $10.1 million, as compared to a provision for income taxes of $7.5 million for the three months ended September 30, 2024, primarily due to higher operating profit as well as a decrease in tax benefits for equity compensation, including discrete tax benefits, in the current year period.

Previous wording

Revenue increased by $74.7 million, or 13%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase is primarily due to a $57.0 million, or 16%, increase in revenue from our fertility benefits solution and a $17.7 million, or 8%, increase in revenue from our Progyny Rx solution. The increases in revenue from our fertility benefits solution and our Progyny Rx solution were primarily due to the increase in the number of clients and covered lives.

Current wording

Revenue increased by $101.5 million, or 12%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase is primarily due to a $80.2 million, or 15%, increase in revenue from our fertility benefits solution and a $21.3 million, or 7%, increase in revenue from our Progyny Rx solution. The increases in revenue from our fertility benefits solution and our Progyny Rx solution were primarily due to the increase in the number of clients and covered lives.

Previous wording

Cost of services increased by $18.1 million, or 8%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatment delivered. This increase in cost of services was also attributable to an increase in personnel-related costs primarily due to incremental head count which included an increase in stock-based compensation expense of $0.1 million.

Current wording

Cost of services increased by $63.8 million, or 9%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in medical treatment and pharmacy prescription costs associated with fertility treatment delivered. This increase in cost of services was also attributable to an increase in personnel-related costs primarily due to incremental head count which included an increase in stock-based compensation expense of $0.1 million.

Previous wording

Gross profit increased by $24.1 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Gross profit increased by $37.7 million, or 20%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Gross margin increased 120 basis points for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to ongoing efficiencies realized in the delivery of our care management services.

Current wording

Gross margin increased 160 basis points for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to ongoing efficiencies realized in the delivery of our care management services.

Previous wording

Sales and marketing expense increased by $2.0 million, or 12%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily due to a $1.5 million increase in personnel-related costs attributable to incremental head count which included an increase in stock-based compensation expense of $0.2 million, and a $0.5 million increase in other related sales and marketing expenses.

Current wording

Sales and marketing expense increased by $5.8 million, or 12%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily due to a $4.9 million increase in personnel-related costs attributable to incremental head count which included an increase in stock-based compensation expense of $0.5 million, and a $0.9 million increase in other related sales and marketing expenses.

Previous wording

General and administrative expense increased by $10.4 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to a $4.2 million increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a $0.3 million decrease in stock-based compensation expense, an increase of $1.4 million in bad debt expense driven by our revenue growth, and a $4.8 million increase in other related general and administrative expenses.

Current wording

General and administrative expense increased by $13.5 million, or 15%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily due to a $7.0 million increase in personnel-related costs as higher costs attributable to incremental head count were partially offset by a $0.8 million decrease in stock-based compensation expense, an increase of $2.6 million in bad debt expense driven by our revenue growth, and a $6.0 million increase in other related general and administrative expenses. General and administrative expense also included a benefit of $2.1 million in the nine months ended September 30, 2025 related to employee retention credit refunds.

Previous wording

Interest and other income, net decreased by $3.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a decrease in investment income, partially offset by an increase in interest income.

Current wording

Interest and other income, net decreased by $6.4 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a decrease in investment income and an increase in interest expense, partially offset by an increase in interest income.

Previous wording

For the six months ended June 30, 2025, we recorded a provision for income taxes of $21.4 million, as compared to a provision for income taxes of $14.2 million for the six months ended June 30, 2024, primarily due to higher operating profit as well as a decrease in tax benefits for equity compensation, including discrete tax benefits, in the current year period.

Current wording

For the nine months ended September 30, 2025, we recorded a provision for income taxes of $31.5 million, as compared to a provision for income taxes of $21.7 million for the nine months ended September 30, 2024, primarily due to higher operating profit as well as a decrease in tax benefits for equity compensation, including discrete tax benefits, in the current year period.

Previous wording

As of June 30, 2025, we had $132.5 million of cash and cash equivalents and $172.6 million of marketable securities. We have financed our operations primarily through sales of our solutions and the net proceeds we have received from sales of equity securities. Our cash and cash equivalents and working capital are affected by the timing of payments to third party providers and collections from clients and have increased as our revenue has increased. In particular, during the ramp up and onboarding of new clients who typically begin their benefits plan year as of January 1 st, our accounts receivable has historically increased more than our accounts payable, accrued expenses and other current liabilities in the early part of each calendar year. Historically, these timing impacts have reversed throughout the remainder of the fiscal year. Accordingly, our working capital, and its impact on cash flow from operations, can fluctuate materially from period to period.

Current wording

As of September 30, 2025, we had $134.0 million of cash and cash equivalents and $211.2 million of marketable securities. We have financed our operations primarily through sales of our solutions and the net proceeds we have received from sales of equity securities. Our cash and cash equivalents and working capital are affected by the timing of payments to third party providers and collections from clients and have increased as our revenue has increased. In particular, during the ramp up and onboarding of new clients who typically begin their benefits plan year as of January 1 st, our accounts receivable has historically increased more than our accounts payable, accrued expenses and other current liabilities in the early part of each calendar year. Historically, these timing impacts have reversed throughout the remainder of the fiscal year. Accordingly, our working capital, and its impact on cash flow from operations, can fluctuate materially from period to period.

Previous wording

On July 1, 2025, we entered into a revolving credit facility (the “Facility”) pursuant to a Credit Agreement (the “Credit Agreement”) with the lenders and issuing banks, party thereto and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, and swingline lender. The Credit Agreement makes available a maximum aggregate amount of $200 million, subject to customary borrowing conditions, until its maturity on July 1, 2030. As of the date of this filing, no amounts were drawn under the Facility. Refer to Note 12, to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

On July 1, 2025, we entered into a revolving credit facility (the “Facility”) pursuant to a Credit Agreement (the “Credit Agreement”) with the lenders and issuing banks, party thereto and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, and swingline lender. The Credit Agreement makes available a maximum aggregate amount of $200 million, subject to customary borrowing conditions, until its maturity on July 1, 2030. We are in compliance with all financial covenants under the Credit Agreement as of September 30, 2025. As of the date of this filing, no amounts were drawn under the Facility. Refer to Note 6 to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

We believe that our existing cash and cash equivalents, including the proceeds from our marketable securities, cash flow from operations, and the availability of funds under our revolving credit facility will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We also expect these sources of existing cash and cash equivalents will be sufficient to fund our long-term contractual obligations and capital needs. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory, and other factors that are beyond our control. Moreover, our future capital requirements will depend on many factors, including sales of our solutions and client renewals, the timing and the amount of cash received from clients, the amount of capital investment necessary to support our benefits offerings and growth strategy, the expansion of our sales and marketing activities and the continuing market adoption of our solutions. In addition, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies.

Current wording

We believe that our existing cash and cash equivalents, including the proceeds from our marketable securities, cash flow from operations, and the availability of funds under the Facility will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. We also expect these sources of existing cash and cash equivalents will be sufficient to fund our long-term contractual obligations and capital needs. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory, and other factors that are beyond our control. Moreover, our future capital requirements will depend on many factors, including sales of our solutions and client renewals, the timing and the amount of cash received from clients, the amount of capital investment necessary to support our benefits offerings and growth strategy, the expansion of our sales and marketing activities and the continuing market adoption of our solutions. In addition, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies.

Previous wording

Net cash provided by operating activities was $105.3 million for the six months ended June 30, 2025, primarily consisting of net income of $32.2 million adjusted for certain items, which includes $64.9 million of stock-based compensation expense, $11.0 million of bad debt expense, $2.3 million of depreciation and amortization, and $0.1 million of loss on disposal of property and equipment. Changes in operating assets and liabilities resulted in cash used in operating activities from increases in accounts receivable of $47.2 million, prepaid expenses and other current assets of $7.9 million, other noncurrent assets and liabilities of $1.2 million, partially offset by cash provided by operating activities from increases in accounts payable of $45.2 million and accrued expenses and other current liabilities of $5.9 million. These changes were a result of the impact of revenue growth and our operating results as well as the timing of cash collections and payments to third parties, including $24.3 million of cash paid for income taxes, net of refunds received for the period ended June 30, 2025.

Current wording

Net cash provided by operating activities was $156.0 million for the nine months ended September 30, 2025, primarily consisting of net income of $46.0 million adjusted for certain items, which includes $97.1 million of stock-based compensation expense, $15.3 million of bad debt expense, $3.6 million of depreciation and amortization, $0.4 million of net accretion of discounts on marketable securities, $0.3 million of non-cash interest expense, and $0.1 million of loss on disposal of property and equipment. Changes in operating assets and liabilities resulted in cash used in operating activities from increases in accounts receivable of $32.2 million, prepaid expenses and other current assets of $14.9 million, partially offset by cash provided by operating activities from increases in accounts payable of $27.7 million, and accrued expenses and other current liabilities of $13.3 million. These changes were a result of the impact of revenue growth and our operating results as well as the timing of cash collections and payments to third parties, including $39.9 million of cash paid for income taxes, net of refunds received for the period ended September 30, 2025.

Previous wording

Net cash provided by operating activities was $82.4 million for the six months ended June 30, 2024, primarily consisting of net income of $33.4 million adjusted for certain items, which include $64.1 million of stock-based compensation expense, $9.6 million of bad debt expense, $7.0 million of net accretion of discounts on marketable securities, $5.5 million of deferred tax expense, and $1.5 million of depreciation and amortization. Changes in operating assets and liabilities resulted in cash used in operating activities from increases in accounts receivable of $61.5 million, partially offset by cash provided by operating activities from increases in accounts payable of $26.4 million, accrued expenses and other current liabilities of $8.9 million, and other noncurrent assets and liabilities of $0.4 million as well as a decrease in prepaid expenses and other current assets of $1.3 million. These changes were a result of the impact of revenue growth and our operating results as well as the timing of cash collections and payments to third parties, including $17.3 million of cash paid for income taxes, net of refunds received in the six months ended June 30, 2024.

Current wording

Net cash provided by operating activities was $126.9 million for the nine months ended September 30, 2024, primarily consisting of net income of $43.8 million adjusted for certain items, which include $97.3 million of stock-based compensation expense, $12.7 million of bad debt expense, $3.8 million of net accretion of discounts on marketable securities, $10.4 million of deferred tax expense, and $2.3 million of depreciation and amortization. Changes in operating assets and liabilities resulted in cash used in operating activities from increases in accounts receivable of $51.6 million and prepaid expenses and other current assets of $2.4 million, partially offset by cash provided by operating activities from increases in accrued expenses and other current liabilities of $13.1 million and accounts payable of $5.1 million. These changes were a result of the impact of revenue growth and our operating results as well as the timing of cash collections and payments to third parties, including $34.9 million of cash paid for income taxes, net of refunds in the nine months ended September 30, 2024.

Previous wording

Net cash used in investing activities was $124.5 million for the six months ended June 30, 2025 which primarily consisted of net investments in marketable securities of $107.1 million and $9.3 million of cash used in a business acquisition, net of cash acquired. The remainder of the activity consisted of purchases of computers, software, including capitalized software development costs, leasehold improvements, and furniture and fixtures. For the six months ended June 30, 2024, net cash provided by investing activities was $105.4 million which primarily consisted of net investments from marketable securities of $112.5 million, partially offset by $5.3 million used for a business acquisition, net of cash acquired. The remainder of the activity consisted of purchases of computers, software, including capitalized software development costs, and leasehold improvements. Our capital investments, including investments in technology and the development of software, are expected to increase over the next 12 months as we continue to invest in our benefits offerings and growth strategy.

Current wording

Net cash used in investing activities was $167.3 million for the nine months ended September 30, 2025 which primarily consisted of net investments in marketable securities of $145.1 million and $9.3 million of cash used in a business acquisition, net of cash acquired. The remainder of the activity consisted of purchases of computers, software, including capitalized software development costs, leasehold improvements, and furniture and fixtures.

Previous wording

Net cash used in financing activities was $5.6 million for the six months ended June 30, 2025, consisting of payments of $6.2 million for employee taxes related to equity awards, partially offset by $0.6 million in proceeds from contributions to our employee stock purchase plan.

Current wording

Net cash used in financing activities was $11.1 million for the nine months ended September 30, 2025, consisting of payments of $8.8 million for employee taxes related to equity awards, $3.1 million of issuance costs related to the Facility, partially offset by $0.8 million in proceeds from contributions to our employee stock purchase plan.

Previous wording

Net cash used in financing activities was $190.2 million for the six months ended June 30, 2024, consisting of repurchases of $183.7 million of common stock under the February 2024 and May 2024 share repurchase programs and payments of $8.2 million for employee taxes related to equity awards, partially offset by $1.0 million in proceeds from stock option exercises and $0.7 million in proceeds from contributions to our employee stock purchase plan.

Current wording

Net cash used in financing activities was $253.6 million for the nine months ended September 30, 2024, consisting of $245.2 million of repurchases of common stock under the February 2024, May 2024, and August 2024 share repurchase programs and payments of $10.4 million for employee taxes related to equity awards, partially offset by $1.1 million in proceeds from stock option exercises and $0.9 million in proceeds from contributions to our employee stock purchase plan.