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  "documentTitle": "Progyny, Inc. (PGNY)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-02-07 00:00:00",
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  "notes": "Uses a 'Spruce Point Adjusted EBITDA' metric to highlight the impact of SBC on profitability.",
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      "kind": "callout",
      "text": "Optically, PGNY would like investors to believe that it is achieving significant operating leverage. In reality, the largest contributor to its operating leverage story has been its aggressive use of stock-based compensation (SBC). Netting out the benefit of SBC uncovers that PGNY's EBITDA margins are in decline.",
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      "text": "Optically, PGNY would like investors to believe that it is achieving significant operating leverage. In reality, the largest contributor to its operating leverage story has been its aggressive use of stock-based compensation (SBC). Netting out the benefit of SBC uncovers that PGNY’s EBITDA margins are in decline.",
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      "kind": "disclaimer",
      "text": "Sources: PGNY DRS, 3Q19 10-Q, FY19 10-K, 1Q20 10-Q, 2Q20 10-Q, 3Q20 10-Q, FY20 10-K, 1Q21 10-Q, 2Q21 10-Q, 3Q21 10-Q, FY21 10-K, 1Q22 10-Q, 2Q22 10-Q, 3Q22 10-Q (1) Spruce Point's Adjusted EBITDA calculation removes the benefit of Stock Based Compensation to its calculation",
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      "text": "Stock based compensation is now ~50% of all operating expenses up from 13%, 16%, and 31% of operating costs for FY19, FY20 and FY21, respectively.",
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      "kind": "list",
      "text": "Spruce Point always contends that SBC has real economic costs in the form of shareholder dilution. Our Adjusted EBITDA performance metric treats all compensation equally and includes the costs of SBC.",
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      "text": "Stock Based Compensation has accelerated from 2% of FY19 revenues to >12% over the most recent twelve months.",
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      "text": "EBITDA margin: 15.4%",
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      "kind": "table",
      "text": "GAAP Operating Cost Breakout table",
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      "text": "PGNY's Adjusted EBITDA table",
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      "kind": "title",
      "text": "PGNY's Margin Expansion Is Illusory, Largely The Result of Aggressive Use of Stock Compensation",
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