Good afternoon, everyone. Welcome to our Q2 conference call. With me today are Pete Anevski, CEO of Progyny, Michael Sturmer, President, 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 today's call contains forward-looking statements, including, but not limited to, statements about our financial outlook for both the Q3 and full year 2022, including our expected utilization rates and mix, the impact of COVID-19, including variants on our business, clients, member activity, and industry operations, our ability to acquire new clients and retain and upsell existing clients, our market opportunity, size, and expectation of long-term growth, our plans for the expansion of our business, including expansion into other markets and of services offered.
Our business performance, industry outlook, strategy, future investments, plans and objectives, and other non-historical statements, as further described in our press release that was issued this afternoon. These forward-looking statements are subject to certain risks, uncertainties, assumptions, and other important factors, including those related to Progyny's growth, market opportunities, general economic and business conditions, and the impact of laws and regulations, including laws and regulations restricting reproductive rights. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call.
Descriptions of these risks and other important factors that could cause actual results to differ materially from these forward-looking statements are discussed in our periodic and current reports filed with the SEC, including in the section entitled Risk Factors in our most recent 10-K and 10-Q. During the call, we will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted EBITDA margin, gross margin excluding stock-based compensation, and operating expenses excluding stock-based compensation. Reconciliations with the most comparable GAAP measures are also available in the press release, which is available at investors.progyny.com. I'd now like to turn the call over to Pete.
Thanks, Jamie. Thanks everyone for joining us today. We're pleased to report that Progyny had a very solid Q2 with record quarterly revenue of $195 million, reflecting 52% growth over the Q2 of 2021. Over that same period, we also grew adjusted EBITDA by 78% to $32.9 million, while expanding our adjusted EBITDA margin to its highest ever level of 16.9%. The strength in this quarter's results reflect that member activity continues to be healthy and at the levels we would expect to see, further affirming both the essential need for fertility treatment, as well as the strong desire our members have in pursuing the care necessary to realize their family- building goals. I'll pause for a moment to underscore why we believe the essential nature of fertility is a critical point.
There is historical data demonstrating that the utilization of fertility services endures even during periods of economic uncertainty. The significant reason is that treatment is time sensitive for many patients, where even a short delay can become a factor in whether or not they have a successful outcome. Another reason is that people looking to add a child to their family have a very strong sense as to when it's the right time for them to do so, which often overcomes any financial concerns they may have over the short term. We've seen this durability take place over the past two years, when the vast majority of people who have needed fertility treatment continued to pursue care even against the backdrop of a global pandemic.
This trend was also consistent with what happened during the Great Recession a decade ago, when overall volumes remained healthy even though the significant majority of the market at that time was cash pay and presumably much more economically sensitive than a covered patient would be. Although we've all seen how inflation and a potential softening in the economy have become a major focus for companies and investors this year, we aren't seeing any related impacts on our business thus far. Member engagement with the benefit continues to be strong. We continue to have positive and productive renewal discussions with providers, and we aren't seeing employers change the way they think about the benefit, either in terms of adding it, if they don't already provide coverage today, or in keeping it if they do.
In fact, consistent with prior years, a healthy portion of our employer customers are planning to expand their coverage for next year. This enthusiasm among employers of all sizes for fertility and family-building solutions isn't surprising given two factors. First, despite the presence of inflationary headwinds and tighter monetary policy, unemployment remains at historic lows, and the labor market remains extremely tight, with more than two job listings for every one unemployed person. Second, recent survey data continues to reveal that fertility is one of the most sought-after benefits among the millennial population in their workforce. That generation now ranges in age from their late twenties to their early forties, which happens to be the most common age cohort for a fertility patient, so it isn't surprising for these employees to expect fertility as an essential component of their health benefits.
A recent survey from Mercer highlights that compensation alone doesn't build engagement as much as a well-designed benefits program does, and goes on to cite women's reproductive health and fertility in particular as the top areas employers are focused on to meet the needs and expectations of employees. In short, we believe the macro trends continue to be very supportive for fertility benefits, and we're seeing that reflected in the positive momentum of our current selling season. We begin each season with focused priorities for growth. One, to expand our market share through the acquisition of new clients. Two, to retain clients whose agreements are up for renewal. And three, to grow with our existing clients through expansion and upsells.
With respect to the first priority, new client acquisitions, we are now in the heart of our selling season, and at this point, overall pipeline size and commitments received to date continue to be favorable relative to the record level of activity that we experienced a year ago at this time. We've built a strong pipeline of active opportunities that we're continuing to pursue over the remainder of this year's selling season. As with prior selling seasons, in the majority of opportunities we pursue this year, we are competing against the incumbent carrier, who is often participating solely on the basis of being the manager of a prospect's overall health plan. As you would expect to see in a growing market, buyers are becoming more sophisticated, with some choosing to use an RFP process.
Although the majority of opportunities do not use an RFP , we believe a more in-depth review of fertility benefits provides Progyny with an advantage as it reveals our leadership, scale, depth of expertise, and the superiority of our solution. While we typically receive a certain number of early commitments, which reflect not only the client's readiness to make a decision, but also their eagerness to begin preparation for the launch. This year, we've received a record number of commitments as of this point in the season. We believe this is a strong indication that the demand for fertility and family building benefits is robust and continuing to grow, reinforcing the macro trends I referred to earlier. As usual, we expect that the majority of client decisions will come in the late summer and early fall, which is when most companies finalize decisions in time for their open enrollment.
Some themes have emerged so far this season that are worth noting. First, we continue to break new ground by adding clients in new verticals. Some of our early wins are leading brands who are first-time logos for us in that industry, including our first automotive manufacturing client, our first hotel and hospitality client, and even our first major state university program. While the clients we already serve today represent a broad cross-section of more than 30 different industries, we are extremely pleased to be diversifying even further for 2023. Second, we're pleased to see continued momentum this year from industries that we brought on in previous years.
For example, we're seeing some early momentum this year in healthcare and hospital systems, which is particularly exciting for us as these are among the most sophisticated buyers of a medical benefit, given their awareness of what's important in assessing the quality of that benefit. We also continue to see companies benchmark themselves against a specific industry leader. These companies don't aspire to be the first adopter of a new benefit like fertility, but once the leader separates itself by adding it, these companies respond by adding the benefit in order to reestablish parity and maintain their competitiveness as an employer in that industry space.
While this dynamic provides opportunities within those industries we already serve, we believe it lends further importance with respect to the new verticals we are bringing on as well, in that it lays the groundwork for more opportunities to pursue in future seasons. A third theme is that our early wins are establishing benefit coverage levels that are comparable to what we've historically seen. This reveals that companies aren't pursuing some light version of the benefit in response to the economy. We're also pleased to see the take-rate on Progyny Rx continues to be high. In any selling season, our goal is to grow the absolute number of new clients and covered lives over what we achieved in the prior season. With the results we've seen thus far, we believe we're on pace to meet this objective once again.
Turning now to the second priority in our selling season. At this point in the year, we've seen that renewals have once again been consistent with our typical rate of near 100% retention. This is a testament to both the quality of our solution as well as the integrity in our sales and account management process. Clients know what to expect when they sign with Progyny, and once they've launched, our frequent communication and detailed reporting around our program ensures that they clearly understand how we're improving the efficiency of their healthcare spend while also helping their workforce realize their family-building goals.
The strong renewal rates are a positive sign, and it's noteworthy that we aren't seeing existing clients look to reduce their benefit for next year, which is yet another validating point to the resilience of fertility as a benefit, even when adverse economic conditions are present or on the horizon. Turning now to upsells and expansions. In any sales year, we pursue multiple pathways to grow our relationships with existing clients. These include adding services like Progyny Rx, expanding coverage with additional SmartCycles, or adding newer populations within the client. This year, again, we're seeing clients expanding their relationship with Progyny by adding new services. As usual, we'll provide you with a recap of the complete selling season on our next call in November. At this point in the season, we're pleased with where we are.
As the leader in value-based care in the fertility industry, we understand that measuring and comparing clinical outcomes is one of the best means of objectively demonstrating value to our clients and members. By now, most of you know that our clinical outcomes outperform national averages across every critical measure of fertility success. That means our members get pregnant meaningfully faster, experience significantly fewer miscarriages, have healthier pregnancies, and deliver healthier babies. While we've been publishing our outcomes since we began offering the benefit in 2016, we've not seen either the traditional carriers or newer point solutions demonstrate their value by improving their outcomes or, in some cases, having a meaningful enough level of activity to report on.
This quarter, we sought to set the standard for what a fertility program should provide to their clients regarding outcomes by engaging Milliman, a global leader in actuarial services, to conduct an evaluation of the methodology that we use to calculate our outcomes and compare them to the national averages. This means Progyny is the only fertility solution that is not only publicly publishing its outcomes, we're the only one to have taken the additional step of having an independent validation of those results. We believe this study raises the bar with respect to what companies should expect from their benefits provider and further advances Progyny's position as the industry leader in fertility solutions. Let me now turn the call over to Mark to talk about the results for the quarter. Mark.
Thank you, Pete, and good afternoon, everyone. I'll start by taking you through our Q2 results before providing you with our expectations for the Q3 and the full year. Revenue in the Q2 grew 52% over the prior year to $195 million. Our growth in the quarter was primarily due to an increase in the number of clients in covered lives as compared to a year ago, including the launch of a number of new clients in the quarter. Looking at the components of the top line, medical revenue increased 37% over the Q2 last year to $126.8 million, which again was due to the growth in our clients and covered lives. While pharmacy revenue increased 87% in the quarter to $68.2 million.
The growth in our pharmacy revenue was primarily driven by an increase in the number of clients with the integrated solution. Approximately 84% of our clients now have Progyny Rx, which is approximately 11 percentage points higher than it was at this time last year. As of June 30th, we had 273 clients, representing an average of 4.3 million covered lives during the quarter. This compared to 182 clients in an average of 2.8 million covered lives in the Q2 last year, reflecting growth of approximately 53% in lives over the past year. As we discussed with you last quarter, our client count for June 30th reflects the final group of companies that we won in the 2021 selling season who had scheduled the launch of the benefit in the Q2.
It also includes a handful of accounts that were won in the current selling season. While we always expect that the vast majority of our new clients will go live with their benefit on January first, as that's the start of the health plan year for most companies, there are employers whose plan year starts on other dates. We also encounter a handful of clients each year who have a January first plan year but want to launch their fertility benefit to their workforce sooner than that. While that's also the case this year, I'll remind you that these tend to be smaller clients who have the flexibility to manage an off-cycle change in their benefits. Accordingly, we wouldn't expect there to be significant incremental contribution to our 2022 results from these early launches. Turning now to our utilization metrics.
There were nearly 10,400 ART cycles performed in the Q2, reflecting a 42% increase in cycles as compared to the Q2 of last year. The strong 16% sequential growth in ART cycles versus the Q1 of 2022 is a function of the higher average lives and treatments from the clients that launched in Q2, along with the impact of those members who began their journey slightly later in the Q1, given the prevalence of the Omicron variant at the start of the year. In the Q2, both the level and pacing of utilization as it relates to treatment journeys was healthy and consistent with what we typically would expect to see. Our female utilization rate this quarter, which is what corresponds most closely to our financial results, was 0.44%.
This compared to 0.47% a year ago. I'll remind you that utilization rates will vary from quarter to quarter due to a number of factors, including the timing of our launches with new clients and the time of the year. Turning now to our margins. Gross profit increased 48% from the Q2 last year to $43.9 million, yielding a 22.5% gross margin. This reflects a 50 basis points decrease from our gross margin in the year ago period, due primarily to the impact of non-cash stock-based compensation, partially offset by efficiencies that we continue to realize in the delivery of our care management services. Sales and marketing expense was 5.9% of revenue in the Q2 as compared to 3.1% in the year ago period.
The increase of 280 basis points reflects a higher non-cash stock-based comp as well as investments we have made in our go-to-market resources. G&A costs were 12.1% of revenue this quarter as compared to 10.8% in the year ago period. That increase of 130 basis points is primarily due to an increase in non-cash stock-based comp, partially offset by operating leverage in G&A as we rapidly grow revenue. The press release that we issued today reconciles the impact of non-cash stock compensation on our gross margin and operating expenses. Because of our strong top-line performance as well as the operating efficiencies we've realized, adjusted EBITDA grew 78% this quarter from $18.5 million a year ago to $32.9 million.
Our adjusted EBITDA margin of 16.9% this quarter is the highest ever quarterly result, reflecting a 250 basis point expansion from the 14.4% margin in the Q2 of 2021. This quarter, our adjusted EBITDA margin on incremental revenue was 21.7%. We continue to believe that margin on incremental revenue is useful as a forward indicator for where the business is capable of moving as it highlights our high rate of margin capture as we expand the business. Net income was $8.8 million in the Q2, or $0.09 per share. This compared to net income of $18.7 million, or $0.19 per share in the year ago period.
The lower net income and EPS as compared to a year ago primarily reflect the higher stock comp expense in the current period, as well as the $0.07 per share tax benefit that we recorded in the prior year period, as compared to the de minimis tax provision booked for the current quarter. Turning now to our cash flow and balance sheet. Operating cash flow during the quarter was $19.2 million. This compares to a cash use of $7.5 million in the year ago period. Each period was impacted by timing items, including the short-term use of working capital at the outset of each year. In the current period, those impacts are beginning to reverse following the completion of those integrations for the newest clients who have launched the benefit.
Also, as a reminder, last year, we signed new pharmacy partner agreements, including new rebate agreements, which represented a significant improvement in the economics on the Rx business and extended payment terms an additional 90 days. As a result, as our Progyny Rx business grows, we'll expect that we'll experience negative timing on cash flows, which is the effect of the combination of our actual growth, plus the extended payment terms, particularly for the first two quarters of the year. The payments owed to us under our rebate agreements are reflected on the balance sheet as accounts receivable. As of June 30, we had total working capital of $211 million, including $122 million in cash equivalents in marketable securities, and no debt. Turning now to our expectations for the Q3 and full year 2022.
With the strong first half results, we are pleased to be in a position to revise our guidance upward for 2022 for the Q2 in a row. For the full year, we are raising the low end of the range and now expect revenue to be between $750 million to $775 million, reflecting growth of between 50% to 55% or approximately 52% at the midpoint. We are also raising our guidance on profitability. We now expect adjusted EBITDA of between $114 million-$122 million. For net income, we now expect between $13.8 million-$19.5 million, or between $0.14-$0.19 earnings per share on the basis of approximately 102 million fully diluted shares.
I'll remind you that our net income projections do not contemplate any discrete income tax items, including any income tax benefit related to equity compensation activity. To the extent that that activity occurs, we will continue to benefit from those discrete tax items throughout 2022. For the Q3, we are projecting revenue between $190 million and $197 million, reflecting growth of between 55% and 61%. For Q3 adjusted EBITDA, we expect between $29.6 million and $31.6 million, along with net income of between $1.9 million-$3.3 million, or between $0.02 and $0.03 earnings per share on the basis of approximately 102 million fully diluted shares. Let me now turn the call back over to Pete for some closing remarks.
Thanks, Mark. Before I close, I wanted to touch on a concern we heard in the past around whether or not fertility treatment would become an unintended consequence of the overturning of Roe v. Wade. We've not seen or heard of any clinics across the U.S. changing their practices, or I've seen any legal analysis which suggests access to IVF will be negatively impacted. Now to conclude, we're pleased with our results in the quarter and first half of the year, as well as the progress that we've made in our selling season for 2023 book of business. While there are economic headwinds on the top of investors' minds, and certainly this is impacting some industries, we are not experiencing the same level of impact, given that the overall macro trends that have been fueling our growth continue to be strong.
Those trends include the growing need for fertility as people increasingly defer family building to later in life and access to care is growing as employers are increasingly realizing the need to offer fertility benefits to their employees. With that, we'd like to open up the call for your questions. Operator?
Thanks. Congrats on some great results today. You said in your prepared remarks that you're starting to see some clients, expanding with new services, and was wondering if you could just talk about what those expansions look like and what's catalyzing those conversations.
Sure. They're. Thank you, by the way. They're upsell services that we generally have sold in the past. They're whether or not they're reviewing their benefit and understanding, do they have enough SmartCycles purchased, or do they want to expand the number of SmartCycles that they're offering each employee or each eligible member? They're whether or not they're goning to add Rx and they didn't have it already. They're whether or not they're going to add certain populations that may not be today covered, or maybe they acquired a company that they now want to put under the benefit. Those types of things in terms of expanding their benefit.
That's helpful. Thanks. Just your adjusted gross margins expanded quite a bit in the quarter. I was just wondering what drove that, and are you seeing maybe some better pricing, that might flow through going forward? Thanks.
Yeah. Certainly sequentially, we were expecting gross margins to go up. I think we highlighted this last quarter. The company was really built this year for the level of revenues that we have, and we launched, all of those new clients that we referenced last quarter here in the Q2. That incremental revenue was expected. We naturally expected gross margins to go up in Q2. It's really sort of at our expectations. Far as pricing goes, yeah, there's nothing that I would, you know, call out in terms of, pricing impacts going forward.
Great. Maybe if I could just sneak in one more. Your commentary around the selling season has been really positive so far. I was just wondering if you might be willing to share, how you're thinking about next year and how we should be modeling.
I think it's early and want to go back to a normal cadence of talking about from a dollar expectation perspective for the November call overall sales activity. I think the commentary and I'll remind you, as I remind everybody, the majority of commitments do still happen you know middle of August through early October. The activity so far is really strong relative to you know commitments to date relative to overall remaining active pipeline et cetera. That's really the commentary I think that we can provide at this point before we start quantifying you know 2023.
That's great. Thanks, everyone.
Hi, this is Cheryl Sergio for Mike. Thanks for taking my question. Just looking at the results from the quarter, you reported pretty strong revenue growth. But it also looks like you're seeing some pretty significant growth in your accounts receivable and day sales outstanding. Could you just break down what's driving that growth?
Yeah. Well, part of what's in there, and I tried to highlight it in my prepared remarks, in the first two quarters of the year, we'll see an increase in our receivables associated with our rebates, based on the payment terms that we agree. Again, it was, a strong deal from an economic perspective. Given that we have, plenty of cash on the books, we were okay with allowing that. But essentially, we were earning rebates, and getting paid in this quarter for the rebates that were a couple of quarters back. It's really referencing what we had earned. We're getting paid now for what we earned last year.
And really, it's all centered around the growth in pharmacy. When you see from last year to this year, you'll see that growth, and that's what's really driving it.
You should start to see it correcting itself in the Q3.
Got it. That's helpful. Just a second question. Can you talk a little bit about utilization trends that you're seeing on newer cohorts? Thanks.
Yeah. The utilization is as we expect. There is a difference, each cohort will be different because the demographic makeup of each client group is different. For example, we launched, some customers here in the Q2, including a larger one that was a retail customer. Now, we would expect, again, given the demographics of that company, that their utilization rate would be lower than what our overall average book of business is. Again, they begin, in their Q1, and then we'll typically see them rise a little bit as people begin to get into their treatment journeys.
Otherwise, these cohorts and the past cohorts are effectively normal, acting normally.
Great. Thank you.
Thank you. I just want to follow up on the utilization front. If you look at your more mature book, not the everyone that started in 2Q, but earlier, are they back to pre-COVID levels at this point?
Yeah, if you look at it by client and those clients within the industries that they're in, they're back to normal pre-COVID levels. What Mark was referring to was the impact of newer clients and the demographics of the industries that they're in, and it would impact the averages. Overall, our pre-COVID or sorry, our clients that were around pre-COVID are back to normal.
Great. You mentioned earlier that your pharmacy sell-through is now kind of low-to-mid 80s%. Where do you think that caps out for your client base?
I would, look, we try to sell every one of them. I'm not sure, I would say it caps out. I would say it's a matter of time, in terms of whether or not they'll all buy upfront or whether or not there'll be upsell opportunities in the future. Our success around upsell activity, whether it's Rx or anything else in terms of their original plan design when they first come on board, and then what they ultimately do is an indication of that. That continues. So, I wouldn't sort a begin to guess at where it caps out. We're in the low 80s% already. And I think that'll continue to improve, just the question is to where.
I think it's a matter of time that they come on, versus whether or not they'll ever come on.
Just to be clear, the 84% is the cumulative take rate since, effectively beginning of time. It has the take rate in our 2021 selling season out of that group was in the low 90. We continue to improve on that.
Great. One more clarification on your AR comment. When you said it's going to start to normalize in 3Q, does that mean normalize going forward or we're always going to see this seasonality, where it's elevated in first half and then goes down in second half? 'Cause I don't think looking at past years, everyone have had that seasonality.
We had it. It was just one quarter, not two, so the payment terms got extended. Every year, as you have a step-up in growth, you're going to have that same cash flow impact that'll correct itself in the back half of the year. It's a function of the growth, and a result of those payment terms that are on a, 180-day payment term that's going to impact two quarters versus one in terms of, as you have step-up in growth.
Just to be clear on what normal means. In those first two quarters that we saw this year and in the Q2 of last year, it's an investment in working capital associated with the growth. Again, to the extent that Rx continues to grow, there'll be a smaller increase in working capital, but you won't see that outsize pace. To be clear, it doesn't mean that it comes back down or somehow reverses itself in the back half of the year. It's just we'll no longer be making a sizable investment in working capital. We wouldn't expect to be making a sizable investment in working capital.
Helpful. Thank you.
Hey, guys. Thanks for the question. Congrats on a solid beat. I was looking at your stock-based comp figure, and I was hoping to hear a little bit more about your hiring and labor philosophy. I was wondering if that's shifted at all given the push-pull of the macro backdrop with the growing number of sizable RFPs in the market, and if this is reflective of anything to call out.
The stock comp activity is more a function of a grant that we did late last year that's impacting the year on a full year basis, including this quarter. There is no change in philosophy. We haven't sort of adopted a change in the level of stock comp that we award to new employees. We've been operating under a matrix and continue to do so relative to you know the portion of compensation that ties to stock comp versus the portion of compensation that's cash comp. No change in our approach nor the proportions of compensation. The increase in stock comp ties back to the grant we did late last year.
Okay. Understood. On the, just the subject of some of those large RFPs and some of that pipeline activity, could you just tell us where you've been competing in these head-to-head and maybe where are you seeing either greater traction or the Progyny story really stick with some of these pitches?
I'm not sure. I mean, I don't know. I'll let Michael answer that.
Yeah. I think in general, we continue to see. First off, we continue to see the health plan as sort of a constant, from a competitive, perspective. They own, they own the benefits already. And again, in every case, we'll certainly come up against the health plan from that decision point. While there has been, an increase in RFP activity, we've not seen that impact any of our key metrics to date, whether that be, pipeline, as referenced in the, opening comments, ahead on closes, this year, and we're seeing, consistency, and comparability in our close rates.
Again, although there's, slightly more noise in the marketplace, we're not seeing negative impacts from our new logo sales.
Right. In terms of where we're seeing it, there's no specific segment or industry or benefit consultant or anything like that that's outweighed relative to RFPs. It's sprinkled across, industries and consultants, relatively equally.
Good color. Thank you, guys.
Hi there. Thanks for taking my question, and, pardon me if I'm repeating something that's been asked. I'm kind of hopping through calls here. I wanted to just talk around a couple of things. One is just capacity for providers. The number of ART cycles have, just grown at about a 10% clip, over the last 5 years or so. From what we understand, the capacity of the provider base hasn't dramatically increased. Given where the fertility market is, expecting that to continue to grow, I guess, what are you guys' thoughts on how that capacity and volume, will reconcile, with kind of the supply of the provider base? What bridges that gap?
The easiest way I could describe it is the conversations we have with our provider network. There's significant variability in what I'll call productivity per doc across the industry, and they all manage their businesses differently, but they manage them in a way that they aren't hitting limitations as I understand it, relative to being able to service all their patients, including their Progyny members. We're not hearing. When I say we're not hearing, we're not having a challenge in getting our members scheduled with docs and getting them treatment. We're not feeling an impact relative to a capacity limitation of any kind to speak of.
Docs are adding docs every year relative to the fellowships that they have across the country, and they're opening up de novo clinics as part of their group network. Although the numbers that you're suggesting might indicate some limitation, it's not what we're experiencing or hearing in any way.
Okay, great. That's probably something I'll want to double-click on later. Let me just move on, maybe just revenue. It's typically been back-half weighted, aside from last year. This year's guidance kind of points to that trend coming back a little bit, with the H2, weighting reemerging, although to a lesser extent. Could you provide some color around what lends to that, historically and why that may be reemerging now?
Sure.
Thanks.
The biggest thing that's going to impact back half versus first half revenue is the number of larger, usually not this many and not this size, clients that have started in Q2, and some of which started within the, during the quarter, not literally on April first, but that started in Q2, and their impact in Q3 and Q4 is going to impact the full year, where they didn't exist in Q1, right? The step-up in revenue from Q1 to Q2 is driven primarily by those new clients that have launched, right? The other things that do impact it, though, naturally for the entire base is every year front-loaded relative to eligible members utilizing the benefit from a consultation standpoint, more so as a mix, more so than the back half as a mix that they're going on to treatments.
The combination of those two factors is going to drive the back half of the year versus the first half of the year.
All right. Thank you so much.
No problem.
Thank you. Thank you everyone for joining us this afternoon. We know that there are certainly lots of companies that are announcing, so we'll wrap this up quick and let you get back to that. Thank you so much. If you have any questions, please reach out. Otherwise, we'll look forward to speaking with you in the fall.