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Good day, ladies and gentlemen, and welcome to the Progeny, Inc. second quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode, and the floor will be open for questions and comments after the presentation. If you wish to join the queue at any time to ask a question, you can press star 1 on your telephone keypad. Should you wish to remove yourself from queue, you can press star 2. It is now my pleasure to turn to call over to your host, James Hart.

James, the floor is yours. Thank you, Tom, and good afternoon, everyone. Welcome to our second quarter conference call. With me today are Peter Anevski, CEO of Progeny, and Mark Livingston, CFO. We will begin with some prepared remarks before we open the call for your questions. Before we begin, I'd 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 third quarter and full year 2026 and the assumptions and drivers underlying such guidance, the demand for our solutions, our expectations for our selling season for 2027 launches, anticipated employment levels of our clients and 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. More information about these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, are available in the press release, which is available at investors.progeny.com. I would now like to turn the call over to Pete.

Thanks, Jamie, and thanks, everyone, for joining us this afternoon. We're pleased to report a strong second quarter highlighted by solid growth over the prior year period, resulting in record quarterly revenue, gross profit, and adjusted EBITDA. as well as further gross margin expansion and the continued generation of significant cash flow. Fueled by the strength and consistency of this performance, not just in the most recent quarter, but really over the past several years, we've created flexibility both to invest in the business by laying a foundation for future growth through the expansion of our platform while also returning value to shareholders through significant share repurchases. Mark will take you through the details of both that and the quarter shortly. But before that, I'd like to give you some color on how our latest sales season is progressing because as you know, new sales in any year have the largest impact on our growth trajectory. I'm pleased to report our momentum from last quarter has continued and we enter our most critical time of year for closing new clients in a favorable position. Strong momentum is driven by an acceleration in both early commitments for new sales as well as retention across our existing book of business, led by our largest clients, which has largely de-risked client turnover for 2027 and positioned us for another year of strong retention. In short, we're seeing meaningful momentum in the market and I think it would be useful to help you understand why we believe our solutions continue to resonate so strongly with employers. starts with the reality that family building and women's health solutions continue to be a priority for employers of all sizes and across all industries. We're addressing a very real and highly prevalent medical need and one that can be costly to employers when it's not managed well or not managed at all. Employers are also experiencing high cost trends in their traditional medical and pharmacy coverage with increases of 10% or more and projecting further increases next year. In response, they're turning to solutions and benefit managers with a proven record of not only controlling trend, but helping to bend that curve. The buying criteria for employers evaluating options in the market continues to hone in on cost, quality, and member satisfaction with a heightened focus on accountability within each area. They want to see a track record in achieving total cost and quality management with a high-quality member experience consistently. and success is measured on the strength of hard ROI savings back to the employer and members, yielding short and long-term trend control. While the competitive environment remains active, as we look across the landscape, we see the other solutions falling short in one or many of these categories. By contrast, progeny on the strength of our detailed, transparent reporting remains the only solution in our opinion that has consistently demonstrated the ability to deliver across every one of them. and we've done this over a prolonged period, giving buyers confidence that we have the right solution that has been proven to work over the longest period of time. This is why we feel uniquely well positioned to compete and win, whether it's a buyer with an existing solution or one who's adding coverage for the first time. The result of this enhanced focus from employers has us well positioned across our three areas for growth, adding new logos, maintaining high client retention and expanding new partners to enhance our position and extend our reach. Looking a bit deeper within each area, on new client acquisition, early commitments are pacing meaningfully ahead of this time last year. While the sales season won't conclude until November, we have seen a meaningful number of early decisions, more than we'd expect at this point in the year. On that strength, we're confident we will meet our annual target of adding 1 million or more new lots. On client retention, based on current conversations and commitments, we believe we've removed the vast majority of retention risk, which is also earlier than usual at this point in the year. I think it isn't a coincidence that employers have been able to come to their decisions earlier this year and have chosen progeny at the point when managing their escalating medical cost trend is a top priority. The wins thus far represent the typical diverse cross-section of the economy, including employers in energy, construction, manufacturing, aerospace, healthcare, labor, financial services, and education. This includes one of the oldest and most prestigious universities in the country. The early commitments have also been diverse in terms of size, spanning from 1,000 cover lives to the jumbos we see every year. Turning to retention in any season, roughly one-third of the book is up for renewal. As discussed last quarter when we described the comprehensive review one of our longest-standing clients had recently done to measure and validate the efficacy of our program over many years, existing clients are often in the strongest position to directly see the cost control and sustained savings our solutions deliver. That not only yields positive renewal activity, but also an opportunity for expansions, which is when a client adds more services with us beyond core fertility and we take that business away from the competitors who've been previously providing some of those services. For those same reasons, our newest clients are selecting the typical level of coverage that we've historically seen and we aren't seeing existing clients look to reduce their benefit with us for the next year either. We're satisfied with our momentum at this point in the year amongst our traditional self-insured employers. We're also pleased with the progress we're making across a number of other strategic areas, including health plan partnerships, public sector clients, and continuing to advance our new fully insured market offering called Progeny Select. We're seeing good results with our existing partnerships, as well as a strong increase in productivity from our health plan partnerships, many of which are now in their second year with us. Additionally, we're pleased with our pipeline of potential new health plan partnerships. We also continue to advance Progeny Select with a focus on building relationships across key distribution areas, like leading general agents and brokers who are focused on the fully insured market. These partnerships are an important step, and no different from other relationships we've built and curated, we expect the first year will focus largely on forging those channel partners versus driving meaningful new volumes. As we've said previously, we're not expecting Select to be a meaningful contributor in 2027, and instead view this as an important addition to the portfolio and a significant contributor to our medium and longer-term growth. To conclude, we're pleased with our strong performance over the first half of the year, and given the momentum we're seeing in the market, we're comfortable that we've positioned ourselves exceptionally well to meet our traditional target of adding one million or more new lives. Let me turn the call now over to Mark.

Thank you, Pete, and good afternoon, everyone. Before I begin, please note that the 8K we filed a short while ago includes our customary slide presentation, summarizing the results in the quarter while also highlighting some of the longer-term trends that we believe are important in understanding the health and direction of the business. That material has also been posted on our website. Rather than repeating what those slides address, my remarks today will focus on the four key themes that impacted both the quarter and how we think about the rest of 2026 and beyond. So let's begin with the first thing. Over the first half of the year, member engagement has remained consistent with our long-established ranges. As it relates to the second quarter specifically, engagement was closer to the higher end of expectations reflected in our May guidance. We believe both data points demonstrate how members are continuing to pursue the care and services they need when the time is right for them to do so. Likewise, second quarter revenue was also closer to the higher end of our guidance, reflecting a 5.3% increase on a reported basis and 11% when you exclude the contribution from a large former client who is under a transition of care agreement in the second quarter of 2025. I'll remind you that the transition agreement pertaining to this client ended on June 30th of last year. Accordingly, the second quarter is the last quarterly period where you have to take that client's contribution into account when looking at our comparative results. Moving on to our second theme, we continue to maintain healthy margins, even as we continue to invest to expand our product platform, enhance features for our members, and also lay the foundation to support our future growth. Gross margin expanded 180 basis points from the second quarter last year, comparable to the level of expansion we also saw in the first quarter. This is due to the efficiencies we've continued to realize in our care management and service delivery, as well as a reduction in stock compensation expense. Adjusted EBITDA margin also expanded from the year-ago period, though at a lesser rate than we've seen with gross margin, as the platform investments we're making are more concentrated within our operating expense lines. We're pleased with our ability to consistently maintain a level of overall profitability. As measured on a trailing 12-month basis, adjusted EBITDA margin was 17.2%, consistent with where it's trended throughout this period of increased investment, demonstrating our ability to invest to grow while simultaneously creating efficiencies throughout the business. As it relates to those investments, second quarter CapEx was $6.2 million. This was in line with our first quarter spend, as well as a million-dollar increase over the prior year period. Although it's premature to offer detailed commentary beyond this year, we continue to expect that this investment program will begin to taper down starting in 2027. Turning now to the third theme. Through the ongoing, disciplined, and prudent management of the business, we've continued to achieve a high conversion of adjusted EBITDA to operating cash flow. This allowed us to once again meet and somewhat exceed our 75% conversion target, both in the second quarter and over the first half of the year. For the fourth time in the last five quarters, we generated more than $50 million in operating cash flow. This yielded $201 million on a trailing 12-month basis, and we've now exceeded $200 million in last trailing months, 12 months operating cash flow for six consecutive quarters. Through our ongoing focus on managing the revenue to cash process, we drove further improvements in our DSOs, which ended the second quarter more than seven days lower from where it was in the year ago period. DSO also improved on a sequential basis from March 31st this year, reflecting the typical dynamic we see as the payment flows with our newest clients get up and running. As of June 30th, we had approximately $273 million in total working capital, which includes $237 million in cash, cash equivalents, and marketable securities. There were no barrings against our $200 million revolving credit facility and no debt of any kind, and we have no plans used for the facility at this time. And finally, our fourth theme is how our strong and consistent financial performance has provided us with the flexibility to both invest in the business while simultaneously returning value to our shareholders through ongoing share repurchases. In late May, we announced our latest share repurchase program through a $200 million authorization, which permits us to acquire shares via open market purchases as well as under structured plans. Under this latest program, which was in effect for a little over a month during the second quarter, we purchased nearly 1.2 million shares by June 30th for $31.5 million. Including the activity that's happened subsequent to June 30th, we've now purchased a cumulative 2 million shares to date under the most recent program, and approximately 142.5 million remains available under the existing authorization. On an aggregate basis, combining this current program as well as our prior $200 million program, which concluded earlier this year, we have now purchased an aggregate 10.8 million shares overall since November. This has reduced our overall shares outstanding by approximately 12.5%. Turning now to our expectations for the third quarter and the remainder of 2026. As the third quarter begins, encompassing the peak of the summer, a seasonally less active time for members, we've seen a slightly more pronounced seasonal impact and have reflected that in our third quarter guidance. We view this to be the ordinary rhythm of activity and not an indication of a new macro trend or a change in the overall trajectory of engagement. Although our view into September is inherently limited at this point, we aren't seeing this seasonality extend beyond the summer. Accordingly, we continue to expect that our engagement metrics for the full year will remain consistent with our long-established historical ranges, with the low end of our range consistent with our five-year low for annual utilization. The table at the back of today's press release outlines our assumptions at both ends of the full year guidance ranges. On the basis of these assumptions, we're projecting revenue in 2026 of between $1.36 to $1.385 billion, reflecting growth of between 5.5 to 7.5%. If we exclude the $48.5 million in revenue from the client who was under a transition of care agreement over the first half of 2025, our full-year revenue growth is projected to be between 9.7% to 11.7%. With respect to profitability, we expect a range of $233 to $240 million in adjusted EBITDA with net income of $104.8 to $109.9 million. This equates to $1.26 and $1.32 in earnings per diluted share and $2.04 and $2.10 of adjusted EPS on the basis of approximately 83 million fully diluted shares. As it relates to the third quarter, we expect between $335 to $345 million in revenue, reflecting growth of 6.9% to 10.1%, with the sequential change in second quarter revenue reflecting the slightly more pronounced seasonality in activity this year. On profitability, we expect between $56 to $59 million in adjusted EBITDA in the quarter, along with net income of between $24.5 to $26.7 million. This equates to 30 cents and 33 cents of earnings per diluted share, or 50 cents and 52 cents of adjusted EPS on the basis of approximately 82 million fully diluted shares. At the midpoints of the ranges for both the quarter and the year, you can see we expect to maintain a consistent adjusted EBITDA margin, even with the investment to grow the business. And with that, we'd like to open the call for questions. Operator, can you please provide the instructions?

Certainly, the floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star 1 on your telephone keypad. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. Once again, please press star 1 on your keypad at this time if you wish to join queue. Please hold a moment while we poll for questions. And our first question today is coming from Brian Tankila from Jefferies. Brian, your line is live. Please go ahead.

Thank you, and good afternoon, guys. Maybe just on the comments on ART cycle seasonality, just curious if you can expand further on that slowdown that you're seeing this summer, and if you have any thoughts on what drove this increased seasonality, and when do you think this peaks, and when do we get back to more normal trends?

So I think what's important, Brian, is to also look at what we've done here for the first half of the year. Although we've had a good strong Q1 and Q2, we haven't hit the high end of our ranges. And so part of what we're doing here is recalibrating and narrowing the year just in recognition of where we're at here six months in. As far as the third quarter, the comments around the slightly more pronounced seasonality, It's really limited to just this middle part of the summer here. And we do have some visibility as we get into September as the appointment scheduling builds there. So look, we don't see it as anything that is prolonged or any kind of change in trend. And so our guidance reflects really more of a stable utilization and consumption pattern consistent with what we've seen in other years.

Got it. When I think about the sequential improvement in fertility revs per cycle, what is driving that? Is that ancillary? So then maybe another part of that question would just be any comment you can share on pricing, both on the PBM side and on the services side.

Yeah, so on fertility pricing, we do have the ability to modestly increase pricing based on CPI. So on the fertility side, that's something that we've done over the last couple of years, so that contributes, but we're talking low single-digit percentages. And then on the pharmacy side, we've looked to absorb some of the cost increases that we see in order to keep our clients whole.

I think if you're focused on sequential, sequential is impacted by a lower proportion of cycles in the art cycles in the first quarter and a higher proportion of initial consults. But the average is calculated in terms of revenue per cycle. Second quarter seasonally has a bump up in in cycles in art cycles versus the first quarter. And so and a lower proportion of initial consults. That's normal every year. So as you talk about sequential revenue per cycle, that's what impact that.

Thank you.

Thank you. Your next question is coming from Jalendra Singh from Truist Securities. Jalendra, your line is live. Please go ahead.

Thank you, and thanks for taking my question. I want to go back to this seasonality point you raised. I know it's only one month of data, but given the experience the company has had in the past couple of years back, What additional data points or observations you have which makes you believe this is really more of seasonal softness you're seeing? Outside of being prudent in your guidance approach, anything else you're doing correctly to make sure you don't get caught off guard once you get out of this seasonal week period?

Just to answer your first question, in terms of data points, every year we see seasonality in the summer, in the middle of the summer. This year is a little bit more pronounced. If you recall, you know, I think three or four years ago, we saw the same thing and then exiting the quarter, we saw the same thing in terms of engagement returning to normal levels. Of the visibility we have so far for September, that appears to be the case for this year as well. And so that's why we added the color and commentary relative to what we're seeing not only this year, but in periods past, we do see that and seasonality as, you know, more pronounced in this quarter and then coming back to normal engagement levels in the balance of the year. It's just a little bit more pronounced this year than normal.

Okay, and then my follow-up, and thanks for the color on the selling season, Pete. It's good to see you feel good about meeting or exceeding annual target of 1 million lives. A quick follow-up there, as you look at these type of lives, industries, these lives are coming from expected utilization or number of offerings they might have access to, how do you think about the revenue attached to these lives? Do you think it's similar to this year, better or worse? Any color will be helpful.

I... You know, obviously we're not going to quantify it, but I think my commentary spoke to not only the commitments, but the contribution from them, which is sort of what you're alluding to being meaningfully ahead of last year at this point.

Got it. Thank you.

Thank you. Your next question is coming from Michael Cherney from Lyric. Michael, your line is live. Please go ahead.

Good afternoon, and thanks for taking the question. I started to harp on this same topic, but this is not the first time, obviously, we've seen summer seasonality, as you've alluded to, maybe a bit more than before. When you think about the visibility you had at this point last quarter, you talked about utilization improving, but I guess how much was this on the foresight, given that, again, you're seeing already an uptick in September, like As the work you've done over the years to improve your visibility has been significant, how did that play out specifically tied to ending the quarter and into the print?

The visibility, Mike, hasn't changed. The algorithms that we use have improved, which is what you're referring to in terms of the work we've done. But the visibility is still the same, right? We have visibility, good visibility, into the month ahead and a little less visibility into the month after that. That's not new. That's generally how far ahead people are scheduling appointments. And then we look at a lot of things underlying that data. And so, you know, and that's what we use when we guide always. And that's what we used last quarter when we reported in May. And that's what we're using now as we report Q2 and and what we're seeing so far exiting the quarter and then also looking at past history relative to that being normal in terms of normalizing back to normal levels of engagement for the remainder of the year.

Got it. And just one more additional question. I mean, cash flow build has been very strong. You obviously have Select going on. You have some of the other ancillary programs. How do you think about the future usage of capital deployment for both internal and external investments as you continue to broaden your lead in the market?

Well, like I mentioned in my remarks, the good news is we have strong enough cash flow to continue to invest. If we need to, the level of investment will come down, as we had mentioned a couple times on the last couple of calls. Next year and in the future, based on what we have planned, our large investments happened over the last two years. or finish out in terms of incremental investments through the end of this year. But as you mentioned, we have the capital to make decisions whether there are any opportunities around M&A, whether they're tuck-ins or otherwise, whether there's additional repurchases that we're going to do or any other additional investments. We have the cash flow to do all three.

Thank you. Your next question is coming from Sarah James from Cantor Fitzgerald.

Thank you. On the improved algorithm that you were talking about, can you give us an idea of what the slope of level of confidence looks like? So how is your confidence in your two-week out forecast versus four versus six? What does that look like for you now?

Well, given the actual visibility we have, and given that it's a consumption model, right, you know, obviously any periods further out inherently are going to have, you know, less. But again, the algorithms have improved significantly. They've proven to be pretty predictable. But things like, you know, a more pronounced seasonality than you otherwise didn't have visibility into can happen. And that's what we're experiencing. And by the way, I mean, overall, if you look at sort of the midpoint, it's a 1% adjustment. So we're not talking about a large adjustment and change in consumption. But either way, it's a fair question.

And then you mentioned also the growing pipeline of your broker relationships. Can you talk about how material that channel is now to your business and where you think it could go over time?

Sure. It's not material today, and as I mentioned in my prepared remarks, not expected to be material at all relative to what it's going to contribute in terms of new lives next year. That's consistent with the comments we've been making. Those channel partners will take time both in terms of signing up, which we've been successful in doing so far, but more importantly in getting throughput from them relative to The reality of when their renewals happen, the majority of which are for 1-1, the reality of getting through those organizations because many of them are inherently roll-ups of a lot of small companies. It's a little bit more of a grassroots effort in terms of getting the message through to all their brokers, etc. The relationships we've built so far are positive. and they are inclined to work with us and work with their people to do that. But that's why it's more of a medium to long-term strategy. So I would say it's more important to the medium and long-term in terms of being additive as opposed to looking for something for 2027. Thank you.

Thank you. Your next question is coming from Scott Schoenhaus from KeyBank. Scott, your line is live. Please go ahead.

Thanks, guys, for taking my question. Just to drill in a little bit more on the summertime softness here, if I think about it, is there anything that's glaringly different than you expected in terms of a certain cohort? Is it this new cohort that you onboarded from New Winds this year that you saw a less Thank you for joining us. from a certain employer that delayed an egg retrieval with medication in the summer, and now you're seeing that pick up in the fall.

Yeah, the short answer is there isn't anything pronounced in any one of those categories that you described. We certainly take a look at that to see if there's anything that would be different than a seasonality event. It's more across the board, really in all those categories that you described it.

Okay, and then on the selling season, the one comment that I thought was really interesting was that you're seeing the most sort of competitive customer conversations from people that had previously had a competitor's benefit. Maybe can you dive into more color, Pete, on what exactly they're telling you and why they're coming to you to explore options? Is it ROI? Is it the fact that their employees want a more robust benefit? This is I think the first time you've ever commented on something like this, and I kind of want to hear what the customers are saying when they're coming to you. Thanks.

Sure. It's important to note that the only reason why I'm calling it out is because it's more than what we've seen in the past. But we're getting all sorts of opportunities from Brownfield and some Greenfield as well. When you do get these opportunities... You don't always get the opportunity to understand everything they're unhappy about. They just simply are out there and they're just out there in more volume this year. And so you compete for them. So you spend more time talking about your solution and you just infer that something isn't right when they're going out to RFP. Or a lot of them are doing, you know, many times do market checks. But either way, there isn't a lot of discussion around sort of what's not working. There's some anecdotal stuff, but I don't want to comment on anecdotal stuff as opposed to we're hearing something constant and systemic. But I think the more insightful commentary is that it's happening and that we're winning a lot of it.

Yes, Scott. The other thing maybe I'd add to that is Pete's prepared remarks around cost containment and the pressures on employers now, which I think we believe is part of that root cause of why they're coming to us. We obviously have a proven model that helps control costs, and so we believe that's part of what's driving it. That's helpful, Culler. Thanks.

Thank you. Your next question is coming from Alan Lutz from Bank of America. Alan, your line is live. Please go ahead.

Good afternoon and thanks for taking the questions. One for Peter Mark here. Around, I guess to follow up on the selling season piece here, is there any way to bifurcate between the engagement you're getting from prospects that are looking at fertility benefits for the first time versus those that are potential competitive conversions? Would love to get a sense if anything's changed there with those that currently don't offer a fertility benefit. and then second, we've talked about this a little bit in the past, but the conversation around GLP-1s continues to evolve. Some of the big PBMs are talking about employers just offering that type of benefit less. If employers are not offering GLP-1 coverage, are you seeing any increased interest in fertility benefits? Just trying to get a sense to triangulate if any of those things are hitting your prospects or if it's just too early. Thanks.

Yeah, I'll try and capture the spirit of all the ask-downs. First thing is building on Mark's comment. What we are seeing more of this year is more brownfield than greenfield. We'll start with that. It is from all competitors, not just the VC-backed competitors, but also those that have a carrier solution today. So we still view them and always view them as a competitor. Probably the largest competitor still relative to where others are getting a fertility benefit beyond our VC-backed competitors. And that's not surprising given the fact that, as we sort of talked about, ending last year and coming into this year, medical cost inflation is real. A lot of what's driving that is some of what you're alluding to, which is GLP-1s and other sort of new drugs in the market that are driving Higher utilization and overall increase in medical costs. So it's not surprising that it's those that are looking to contain costs or save money, i.e. in a brownfield situation, are the ones that are doing more looking and more committing this year versus the greenfield. We're still getting greenfield, but it's more pronounced in the brownfield. And so that's probably the easiest way I can answer, I think, most of what you asked. and really specifically the GLP-1s. I don't know that I have enough good information to say as a result of companies cutting back on GLP-1s, now they feel that they're in a better position to sort of buy fertility or not. I think it's just there's an overall reality that they're trying to manage costs overall and that higher utilization from things like GLP-1s and therefore are adjusting just to keep doing what they can to bend that cost curve a little bit for themselves.

Thank you. Your next question is coming from Peter Warrendorf from Barclays. Peter, your line is live. Please go ahead.

Hey, yeah, thanks for the question. It looks like clients maybe kicked up slightly in the second quarter, but membership was closer to flat. I mean, it's not a huge difference, but I'm just curious if you're seeing any impact from the broader employment trends and maybe a weaker employment environment. And then what you're assuming in guidance over the second half of the year in terms of membership at current clients. Thanks.

Yeah. So just as a reminder, we typically count only those clients that have a thousand lives or more. We have a number of them that are smaller, but we've always excluded. And we include the lives but not the counts. So there were a handful of clients that graduated beyond the 1,000 life level. Obviously, in and of themselves, not going to drive your overall averages. And then as far as lives are, they've been pretty consistent that we've seen some clients go up a little, some go down a little, but it's been relatively stable. And then from a projection standpoint, we're projecting the same. We have the same level of and a full year estimate as we've been maintaining for a couple of quarters now. And so, yeah, we do have a couple of very small clients that are starting here in the second half, not anything meaningful from a revenue contribution or whatnot. So you see a little bit in the coming quarters, but frankly it's just more rounding than anything.

Great. And then just quickly on the selling season, It's encouraging that you guys reiterated the million target for this year. Just curious how much visibility you guys have into that target for next year at this point, and then maybe what the expectation might be for how many of those lives come from select versus traditional membership.

Thanks. I'll start by saying our target is always that pretty much every year. We do have a pretty nice pipeline build for The next year's selling season so far, and also we expect more pipeline to come in from now going forward, most of which will be carryover pipeline into next year. But there is some pretty good activity, particularly from some jumbo opportunities for next year. It's early to comment on whether or not they will or won't get us to a million lives, and so I can't reiterate sort of the same kind of clarity around And then as it relates to Select, as I said in my previous comments, as soon as we have more clarity into how much and when Select will start to contribute more meaningfully. We'll add that color in our commentary. But as I said before, most of what's going to happen now and over the next, I'll call it 12 to 18 months, is going to be us signing up those relationships and then working with those companies and entities to get to as many of their brokers through tactics that we both will do, the companies and us, in order to get adoption going.

Great, thank you. Thank you. Your next question is coming from John Piney from Canaccord Genuity. John, your line is live. Please go ahead.

Hi, yeah, John Piney. I'm from Richard Close. Thanks for the questions. Good to hear about the selling season. I guess I just wanted We have a lot of tracking and tools and obviously then conversations with our sales force and our sales leaders.

in particular around the larger opportunities that are in pipeline. But we track a lot of activities, a lot of our criteria as to what we call pipeline is objective in terms of sales progression. And it's a combination of the commentary from our sales teams, the objective data that we have around the sales activity, what they're looking at, the buying questions, that kind of thing, and then our past history around around that to estimate where we're going to get to.

Okay, and just as a follow-up, is there any way you can quantify how much the investments for this year are factoring into EBITDA guidance for the year?

Yeah, we've never really quantified it, but what we've said historically, and it's still the case, is that the increase in CapEx that you've seen over... from 24 to 25 and now sort of equivalent here in 26. There's about an equivalent amount of OpEx running through the P&L as well.

Related to the investments?

Related to the investments, yeah. All right, thank you.

Thank you. And our final question this afternoon is coming from David Larson from BTIG. David, your line is live. Please go ahead.

Hi. We spoke recently with a benefits consultant, and he said that of his 12 or 13 clients that he supports, Progeny was in about seven of them, which I was positively surprised to hear. It makes me think that you have somewhat of a dominant fertility support position in the market. What are your thoughts in terms of growing your revenue and what opportunities there are to in-sell additional services into your existing base? What products or services may you develop that could drive incremental revenue growth? And then can you also comment on international expansion efforts? Since you're doing so well in the U.S., it seems like Europe and the international markets are the next frontier.

As it relates to our existing base, we don't own as much market share in the market as what that consultant said, so that's not representative. Nonetheless, we are one of the larger providers of facility and family benefits in the country, for sure. As it relates to opportunities with existing clients, it's the stuff we already do, which is whether... Whether it's any of the expanded products that we have and or whether it's them expanding the fertility benefit with us, most clients start with the two to three cycle benefit. Not everybody starts with egg freezing. And over time, and we've shown in the past charts around this, but over time, each sales year cohort generally buys up a little bit more, whether they add more cycles, whether they add egg freezing, small portion that doesn't buy pharmacy every year, whether they add that. whether they add any of the expanded products or the opportunities around the existing base. The opportunities for us still, as I mentioned in my prepared remarks, is still around adding new logos all the time. Although what we're winning this year is more pronounced in brownfields, that doesn't mean there's a significant opportunity out there for brownfield and greenfield as indicated by our expectations for for the sales year so far. As it relates to opportunities, OUS, the OUS opportunity isn't the same in terms of financial contribution as it is in the US. It's more of an opportunity around winning multinational companies, in particular, whose parent is in the US, and having a solution that will address the needs of their global population that's at least similar in terms of what it's addressing even if it's not the same type of solution due to many limitations like regulatory limitations, et cetera, OUS. So it continues to be an opportunity that we invest in and have invested in but continue to invest in in order to win as many multinational companies as we continue forward fueling the overall fertility and family building business that we have today.

Okay, thanks very much. Congrats on a good quarter.

Thank you. Thank you. This does conclude today's question and answer session. I would now like to hand the floor back to James Hart for closing remarks.

Thank you, Tom, and thank you, everyone, for joining us this afternoon. Please feel free to reach out, of course. If you have any follow-up questions, we'll also be attending a conference next week, so perhaps we'll see some of you there in Boston. Otherwise, enjoy the rest of the summer.

Thank you. This does conclude today's conference call. You may disconnect at this time and have a wonderful day. Thank you once again for your participation.