Phreesia Announces Fourth Quarter Fiscal 2024 Results
- Total revenue increased by 27% year-over-year to $356.3 million for fiscal year 2024.
- AHSCs grew by 26% year-over-year to 3,601 in fiscal year 2024.
- Net loss decreased to $136.9 million in fiscal year 2024 from $176.1 million in fiscal year 2023.
- Adjusted EBITDA improved to negative $35.4 million in fiscal year 2024 from negative $92.5 million in fiscal year 2023.
- Revenue outlook for fiscal year 2025 is set at $424 million to $434 million, with a growth range of 19% to 22% year-over-year.
- Adjusted EBITDA outlook for fiscal year 2025 is revised to $12 million to $20 million, indicating a positive trend compared to the previous year.
- Cash and cash equivalents stood at $87.5 million as of January 31, 2024, supporting the company's growth plans for fiscal year 2025.
- Net loss for the fiscal fourth quarter was $30.6 million, compared to $38.0 million in the same period the previous year.
- Adjusted EBITDA for the fiscal fourth quarter was negative $3.5 million, an improvement from negative $17.6 million in the same period the prior year.
- Cash and cash equivalents decreased to $87.5 million as of January 31, 2024, down from $176.7 million as of January 31, 2023.
Insights
The reported fiscal year results for Phreesia, Inc. show a significant year-over-year revenue increase of 27%, indicating a robust expansion in their market presence. Despite this growth, there's a noted decrease in healthcare services revenue per AHSC, suggesting that the company's client acquisition rate is not fully translating into proportional revenue gains, potentially due to a saturation in payment processing volume. This decoupling could signal a need for Phreesia to diversify their revenue streams or enhance monetization strategies per client.
Their net loss reduction from $176.1 million in fiscal year 2023 to $136.9 million in fiscal year 2024, along with a significant improvement in adjusted EBITDA, indicates an effective cost management strategy and a path towards profitability. However, investors should be mindful of the decline in cash and cash equivalents by over 50% year-over-year, which could raise concerns about the company's liquidity and financial resilience in the absence of further capital infusion.
Phreesia's performance reflects a broader trend in the healthcare technology sector where companies are aggressively expanding their client base. The increase in AHSCs by 26% is notable and demonstrates Phreesia's ability to penetrate the market. However, the slight decrease in revenue per AHSC suggests competitive pressures or a lower monetization of newer clients, which is common in aggressive expansion phases. The market will be watching closely to see if Phreesia can leverage its increased market share to generate higher revenue per client.
With the company maintaining its revenue outlook for fiscal year 2025, it appears confident in its business model and growth strategies. The updated Adjusted EBITDA outlook also indicates operational optimizations and potential cost efficiencies. However, the lack of reconciliation of Adjusted EBITDA to GAAP Net income (loss) leaves some uncertainty regarding the impact of non-operational financial elements on the company's profitability.
Phreesia's disclosure regarding the non-reconciliation of Adjusted EBITDA to GAAP Net income (loss) is a critical piece of information for stakeholders. This indicates that there are unpredictable financial elements such as Other (income) expense, net and (Benefit from) provision for income taxes that could significantly affect the company's financials. Stakeholders should be aware that non-GAAP financial measures, while helpful for operational insight, may not fully represent the company's financial health as per standard accounting practices.
Additionally, Phreesia's use of multiple communication channels for disclosing material non-public information is in line with Regulation FD, ensuring fair and broad access to company information. Investors should monitor these channels to stay informed about the company's performance and strategy updates.
"Phreesia ended fiscal year 2024 with strong momentum going into fiscal 2025. We facilitated more than 150 million patient visits in fiscal 2024, or more than one in ten patient visits across the
Please visit the Phreesia investor relations website at ir.phreesia.com to view the Company's Q4 Fiscal Year 2024 Stakeholder Letter.
Fiscal Fourth Quarter Ended January 31, 2024 Highlights
-
Total revenue was
$95.0 million 24% year-over-year. -
Average number of healthcare services clients ("AHSCs") was 3,962 in the quarter, up
26% year-over-year. -
Healthcare services revenue per AHSC was
$17,456 1% year-over-year. The decline was primarily driven by healthcare services client growth outpacing growth in payment processing volume and payment processing revenue. See "Key Metrics" below for additional information. -
Total revenue per AHSC was
$23,979 2% year-over-year. The decline was primarily driven by adding AHSCs from the acquisition of ConnectOnCall that have an immaterial amount of revenue associated with them. See "Key Metrics" below for additional information. -
Net loss was
$30.6 million $38.0 million -
Adjusted EBITDA was negative
$3.5 million $17.6 million -
Cash and cash equivalents as of January 31, 2024 was
$87.5 million $15.8 million
Fiscal Year Ended January 31, 2024 Highlights
-
Revenue was
$356.3 million 27% year-over-year. -
AHSCs were 3,601 in fiscal year 2024, up
26% year-over-year. -
Healthcare services revenue per AHSC was
$72,215 1% year-over-year. The decline was primarily driven by AHSC growth outpacing growth in payment processing volume and payment processing revenue. See "Key Metrics" below for additional information. -
Total revenue per AHSC was
$98,944 1% year-over-year. The increase was primarily driven by Network solutions revenue growth outpacing healthcare services client growth. See "Key Metrics" below for additional information. -
Net loss was
$136.9 million $176.1 million -
Adjusted EBITDA was negative
$35.4 million $92.5 million -
Cash and cash equivalents as of January 31, 2024 was
$87.5 million $176.7 million
Fiscal Year 2025 Outlook2
We are maintaining our revenue outlook for fiscal year 2025 at a range of
We are updating our Adjusted EBITDA outlook for fiscal year 2025 to a range of
We believe our
Non-GAAP Financial Measures
We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For further information regarding the non-GAAP financial measures included in this press release, including a reconciliation of GAAP to non-GAAP financial measures and an explanation of these measures, please see “Non-GAAP financial measures” below.
Available Information
We intend to use our Company website (including our Investor Relations website) as well as our Facebook, Twitter, LinkedIn and Instagram accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Forward Looking Statements
This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. These statements include, but are not limited to, statements regarding: our future financial and operating performance, including our revenue, Adjusted EBITDA and our ability to reach profitability1 in fiscal year 2025; our ability to finance our plans to achieve our fiscal year 2025 outlook with our current cash balance and cash generated in the normal course of business; our outlook for fiscal year 2025 and fiscal year 2026 targets (including with respect to Adjusted EBITDA); and our belief that our credit facility with Capital One gives us additional financial flexibility. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, risks associated with: our ability to effectively manage our growth and meet our growth objectives; our focus on the long-term and our investments in growth; the competitive environment in which we operate; our ability to comply with the covenants in our credit agreement with Capital One; our ability to develop and release new products and services; changes in market conditions and receptivity to our products and services; our ability to develop and release successful enhancements, features and modifications to our existing products and services; our ability to maintain the security and availability of our platform; changes in laws and regulations applicable to our business model; our ability to make accurate predictions about our industry and addressable market; our ability to attract, retain and cross-sell to healthcare services clients; our ability to continue to operate effectively with a primarily remote workforce and attract and retain key talent; our ability to realize the intended benefits of our acquisitions and partnerships and difficulties in integrating our acquisitions and investments; and the recent high inflationary environment and other general, market, political, economic and business conditions (including as a result of the warfare and/or political and economic instability in
This press release includes certain non-GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, with the exception of our Adjusted EBITDA outlook for the reasons described above.
Conference Call Information
We will hold a conference call on Thursday March 14, 2024, at 5:00 p.m. Eastern Time to review our fiscal fourth quarter and fiscal year 2024 financial results. To participate in our live conference call and webcast, please dial (888) 350-3437 (or (646) 960-0153 for international participants) using conference code number 4000153 or visit the “Events & Presentations” section of our Investor Relations website at ir.phreesia.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.
ABOUT PHREESIA
Phreesia is a trusted leader in patient activation, giving providers, life sciences companies, payers and other organizations tools to help patients take a more active role in their care. Founded in 2005, Phreesia enabled approximately 150 million patient visits in 2023—more than 1 in 10 visits across the U.S.—scale that we believe allows us to make meaningful impact. Offering patient-driven digital solutions for intake, outreach, education and more, Phreesia enhances the patient experience, drives efficiency and improves healthcare outcomes.
_________________________________
1 We define "profitability", discussed within, in terms of Adjusted EBITDA.
2 We continue to believe we will achieve our Fiscal 2026 Annualized Revenue Target of
Phreesia, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) |
|||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||
Assets |
(Unaudited) |
|
|
||||
Current: |
|
|
|
||||
Cash and cash equivalents |
$ |
87,520 |
|
|
$ |
176,683 |
|
Settlement assets |
|
28,072 |
|
|
|
22,599 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
64,863 |
|
|
|
51,394 |
|
Deferred contract acquisition costs |
|
768 |
|
|
|
1,056 |
|
Prepaid expenses and other current assets |
|
14,461 |
|
|
|
10,709 |
|
Total current assets |
|
195,684 |
|
|
|
262,441 |
|
Property and equipment, net of accumulated depreciation and amortization of |
|
16,902 |
|
|
|
21,670 |
|
Capitalized internal-use software, net of accumulated amortization of |
|
46,139 |
|
|
|
35,150 |
|
Operating lease right-of-use assets |
|
266 |
|
|
|
569 |
|
Deferred contract acquisition costs |
|
986 |
|
|
|
1,754 |
|
Intangible assets, net of accumulated amortization of |
|
31,625 |
|
|
|
11,401 |
|
Deferred tax asset |
|
— |
|
|
|
81 |
|
Goodwill |
|
75,845 |
|
|
|
33,736 |
|
Other assets |
|
2,879 |
|
|
|
3,255 |
|
Total Assets |
$ |
370,326 |
|
|
$ |
370,057 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current: |
|
|
|
||||
Settlement obligations |
$ |
28,072 |
|
|
$ |
22,599 |
|
Current portion of finance lease liabilities and other debt |
|
6,056 |
|
|
|
5,172 |
|
Current portion of operating lease liabilities |
|
393 |
|
|
|
934 |
|
Accounts payable |
|
8,480 |
|
|
|
10,836 |
|
Accrued expenses |
|
37,130 |
|
|
|
21,810 |
|
Deferred revenue |
|
24,113 |
|
|
|
17,688 |
|
Other current liabilities |
|
5,875 |
|
|
|
— |
|
Total current liabilities |
|
110,119 |
|
|
|
79,039 |
|
Long-term finance lease liabilities and other debt |
|
5,400 |
|
|
|
2,725 |
|
Operating lease liabilities, non-current |
|
134 |
|
|
|
349 |
|
Long-term deferred revenue |
|
97 |
|
|
|
125 |
|
Long-term deferred tax liabilities |
|
270 |
|
|
|
— |
|
Other long-term liabilities |
|
2,857 |
|
|
|
— |
|
Total Liabilities |
|
118,877 |
|
|
|
82,238 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
Preferred stock, undesignated, |
|
— |
|
|
|
— |
|
Common stock, |
|
577 |
|
|
|
542 |
|
Additional paid-in capital |
|
1,039,361 |
|
|
|
926,957 |
|
Accumulated deficit |
|
(742,969 |
) |
|
|
(606,084 |
) |
Treasury stock, at cost, 1,355,169 and 971,236 shares as of January 31, 2024 and 2023, respectively |
|
(45,520 |
) |
|
|
(33,596 |
) |
Total Stockholders’ Equity |
|
251,449 |
|
|
|
287,819 |
|
Total Liabilities and Stockholders’ Equity |
$ |
370,326 |
|
|
$ |
370,057 |
|
Phreesia, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
|||||||||||||||
|
Three months ended January 31, |
|
Fiscal Year ended January 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Subscription and related services |
$ |
45,653 |
|
|
$ |
35,813 |
|
|
$ |
165,436 |
|
|
$ |
128,975 |
|
Payment processing fees |
|
23,508 |
|
|
|
19,780 |
|
|
|
94,610 |
|
|
|
78,368 |
|
Network solutions |
|
25,844 |
|
|
|
20,993 |
|
|
|
96,253 |
|
|
|
73,567 |
|
Total revenues |
|
95,005 |
|
|
|
76,586 |
|
|
|
356,299 |
|
|
|
280,910 |
|
Expenses: |
|
|
|
|
|
|
|
||||||||
Cost of revenue (excluding depreciation and amortization) |
|
16,140 |
|
|
|
15,123 |
|
|
|
61,025 |
|
|
|
58,944 |
|
Payment processing expense |
|
15,634 |
|
|
|
12,841 |
|
|
|
62,986 |
|
|
|
50,323 |
|
Sales and marketing |
|
35,873 |
|
|
|
36,260 |
|
|
|
147,008 |
|
|
|
151,263 |
|
Research and development |
|
29,862 |
|
|
|
25,398 |
|
|
|
112,346 |
|
|
|
91,244 |
|
General and administrative |
|
18,821 |
|
|
|
19,856 |
|
|
|
79,926 |
|
|
|
80,384 |
|
Depreciation |
|
4,353 |
|
|
|
4,625 |
|
|
|
17,584 |
|
|
|
17,988 |
|
Amortization |
|
3,900 |
|
|
|
2,296 |
|
|
|
11,903 |
|
|
|
7,316 |
|
Total expenses |
|
124,583 |
|
|
|
116,399 |
|
|
|
492,778 |
|
|
|
457,462 |
|
Operating loss |
|
(29,578 |
) |
|
|
(39,813 |
) |
|
|
(136,479 |
) |
|
|
(176,552 |
) |
Other income (expense), net |
|
83 |
|
|
|
29 |
|
|
|
44 |
|
|
|
(175 |
) |
Loss on extinguishment of debt |
|
(1,118 |
) |
|
|
— |
|
|
|
(1,118 |
) |
|
|
— |
|
Interest income, net |
|
184 |
|
|
|
1,592 |
|
|
|
2,211 |
|
|
|
1,064 |
|
Total other (expense) income, net |
|
(851 |
) |
|
|
1,621 |
|
|
|
1,137 |
|
|
|
889 |
|
Loss before provision for income taxes |
|
(30,429 |
) |
|
|
(38,192 |
) |
|
|
(135,342 |
) |
|
|
(175,663 |
) |
(Provision for) benefit from income taxes |
|
(217 |
) |
|
|
171 |
|
|
|
(1,543 |
) |
|
|
(483 |
) |
Net loss |
$ |
(30,646 |
) |
|
$ |
(38,021 |
) |
|
$ |
(136,885 |
) |
|
$ |
(176,146 |
) |
Net loss per share attributable to common stockholders, basic and diluted(1) |
$ |
(0.56 |
) |
|
$ |
(0.72 |
) |
|
$ |
(2.51 |
) |
|
$ |
(3.36 |
) |
Weighted-average common shares outstanding, basic and diluted |
|
54,555,555 |
|
|
|
52,873,139 |
|
|
|
54,561,449 |
|
|
|
52,440,067 |
|
(1) Our potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. |
|||||||||||||||
Phreesia, Inc. Consolidated Statements of Cash Flows (Unaudited) (in thousands) |
||||||||||||
|
|
Fiscal Year ended January 31, |
||||||||||
|
|
2024 |
|
2023 |
|
2022 |
||||||
Operating activities: |
|
|
|
|
|
|
||||||
Net loss |
|
$ |
(136,885 |
) |
|
$ |
(176,146 |
) |
|
$ |
(118,161 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
29,487 |
|
|
|
25,304 |
|
|
|
21,302 |
|
Stock-based compensation expense |
|
|
71,613 |
|
|
|
58,775 |
|
|
|
36,144 |
|
Amortization of deferred financing costs and debt discount |
|
|
321 |
|
|
|
310 |
|
|
|
288 |
|
Loss on extinguishment of debt |
|
|
1,118 |
|
|
|
— |
|
|
|
— |
|
Cost of Phreesia hardware purchased by customers |
|
|
1,619 |
|
|
|
1,598 |
|
|
|
672 |
|
Deferred contract acquisition costs amortization |
|
|
1,056 |
|
|
|
1,696 |
|
|
|
2,211 |
|
Non-cash operating lease expense |
|
|
702 |
|
|
|
1,768 |
|
|
|
1,004 |
|
Change in fair value of contingent consideration liabilities |
|
|
— |
|
|
|
— |
|
|
|
258 |
|
Deferred taxes |
|
|
228 |
|
|
|
434 |
|
|
|
143 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||||||
Accounts receivable |
|
|
(11,205 |
) |
|
|
(11,132 |
) |
|
|
(10,216 |
) |
Prepaid expenses and other assets |
|
|
(2,209 |
) |
|
|
250 |
|
|
|
(7,192 |
) |
Deferred contract acquisition costs |
|
|
— |
|
|
|
(427 |
) |
|
|
(3,349 |
) |
Accounts payable |
|
|
(1,993 |
) |
|
|
4,774 |
|
|
|
2,881 |
|
Accrued expenses and other liabilities |
|
|
14,195 |
|
|
|
2,720 |
|
|
|
(2,983 |
) |
Lease liabilities |
|
|
(1,156 |
) |
|
|
(1,302 |
) |
|
|
(1,060 |
) |
Deferred revenue |
|
|
731 |
|
|
|
1,255 |
|
|
|
3,348 |
|
Net cash used in operating activities |
|
|
(32,378 |
) |
|
|
(90,123 |
) |
|
|
(74,710 |
) |
Investing activities: |
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired |
|
|
(14,573 |
) |
|
|
— |
|
|
|
(34,423 |
) |
Capitalized internal-use software |
|
|
(19,291 |
) |
|
|
(21,471 |
) |
|
|
(12,385 |
) |
Purchases of property and equipment |
|
|
(5,806 |
) |
|
|
(4,732 |
) |
|
|
(18,420 |
) |
Net cash used in investing activities |
|
|
(39,670 |
) |
|
|
(26,203 |
) |
|
|
(65,228 |
) |
Financing activities: |
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock in equity offerings, net of underwriters' discounts and commissions |
|
|
— |
|
|
|
— |
|
|
|
245,813 |
|
Proceeds from issuance of common stock upon exercise of stock options |
|
|
955 |
|
|
|
1,603 |
|
|
|
4,889 |
|
Treasury stock to satisfy tax withholdings on stock compensation awards |
|
|
(12,176 |
) |
|
|
(19,383 |
) |
|
|
(8,995 |
) |
Proceeds from employee stock purchase plan |
|
|
3,209 |
|
|
|
3,321 |
|
|
|
1,979 |
|
Constructive financing |
|
|
(6,779 |
) |
|
|
(5,731 |
) |
|
|
(4,267 |
) |
Finance lease payments |
|
|
1,688 |
|
|
|
— |
|
|
|
— |
|
Principal payments on financing agreements |
|
|
(600 |
) |
|
|
(216 |
) |
|
|
(1,039 |
) |
Debt issuance costs and loan facility fee payments |
|
|
(1,321 |
) |
|
|
(397 |
) |
|
|
(125 |
) |
Financing payments of acquisition-related liabilities |
|
|
(1,333 |
) |
|
|
— |
|
|
|
(3,286 |
) |
Debt extinguishment costs |
|
|
(758 |
) |
|
|
— |
|
|
|
— |
|
Net cash (used in) provided by financing activities |
|
|
(17,115 |
) |
|
|
(20,803 |
) |
|
|
234,969 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
(89,163 |
) |
|
|
(137,129 |
) |
|
|
95,031 |
|
Cash and cash equivalents—beginning of year |
|
|
176,683 |
|
|
|
313,812 |
|
|
|
218,781 |
|
Cash and cash equivalents—end of year |
|
$ |
87,520 |
|
|
$ |
176,683 |
|
|
$ |
313,812 |
|
|
|
|
|
|
|
|
||||||
Supplemental information of non-cash investing and financing information: |
|
|
|
|
|
|
||||||
Right of use assets acquired in exchange for operating lease liabilities |
|
$ |
398 |
|
|
$ |
— |
|
|
$ |
81 |
|
Property and equipment acquisitions through finance leases |
|
$ |
7,438 |
|
|
$ |
526 |
|
|
$ |
7,394 |
|
Purchase of property and equipment and capitalized software included in accounts payable and accrued liabilities |
|
$ |
1,299 |
|
|
$ |
2,345 |
|
|
$ |
1,124 |
|
Receivables for cash in-transit on stock option exercises |
|
$ |
— |
|
|
$ |
97 |
|
|
$ |
169 |
|
Capitalized stock based compensation |
|
$ |
1,415 |
|
|
$ |
1,372 |
|
|
$ |
489 |
|
Issuance of stock to settle liabilities for stock-based compensation |
|
$ |
12,276 |
|
|
$ |
12,284 |
|
|
$ |
— |
|
Deferred consideration liabilities payable in business combinations |
|
$ |
8,732 |
|
|
$ |
— |
|
|
$ |
— |
|
Issuance of stock as consideration in business combination |
|
$ |
35,321 |
|
|
$ |
— |
|
|
$ |
— |
|
Capitalized software acquired through vendor financing |
|
$ |
2,047 |
|
|
$ |
— |
|
|
$ |
— |
|
Cash paid for: |
|
|
|
|
|
|
||||||
Interest |
|
$ |
1,306 |
|
|
$ |
763 |
|
|
$ |
802 |
|
Income taxes |
|
$ |
37 |
|
|
$ |
39 |
|
|
$ |
49 |
|
Non-GAAP Financial Measures
This press release and statements made during the above-referenced webcast may include certain non-GAAP financial measures as defined by SEC rules.
Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss before interest income, net, provision for (benefit from) income taxes, depreciation and amortization, and before stock-based compensation expense, loss on extinguishment of debt and other (income) expense, net.
We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. We have presented Adjusted EBITDA in this press release and our Annual Report on Form 10-K to be filed after this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss).
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:
- Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) Interest (income) expense, net; and
- Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.
Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:
Phreesia, Inc. Adjusted EBITDA (Unaudited) |
||||||||||||||||
|
|
Three months ended January 31, |
|
Fiscal Year ended January 31, |
||||||||||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net loss |
|
$ |
(30,646 |
) |
|
$ |
(38,021 |
) |
|
$ |
(136,885 |
) |
|
$ |
(176,146 |
) |
Interest income, net |
|
|
(184 |
) |
|
|
(1,592 |
) |
|
|
(2,211 |
) |
|
|
(1,064 |
) |
Provision for (benefit from) income taxes |
|
|
217 |
|
|
|
(171 |
) |
|
|
1,543 |
|
|
|
483 |
|
Depreciation and amortization |
|
|
8,253 |
|
|
|
6,921 |
|
|
|
29,487 |
|
|
|
25,304 |
|
Stock-based compensation expense |
|
|
17,864 |
|
|
|
15,284 |
|
|
|
71,613 |
|
|
|
58,775 |
|
Loss on extinguishment of debt |
|
|
1,118 |
|
|
|
— |
|
|
|
1,118 |
|
|
|
— |
|
Other (income) expense, net |
|
|
(83 |
) |
|
|
(29 |
) |
|
|
(44 |
) |
|
|
175 |
|
Adjusted EBITDA |
|
$ |
(3,461 |
) |
|
$ |
(17,608 |
) |
|
$ |
(35,379 |
) |
|
$ |
(92,473 |
) |
Phreesia, Inc. Reconciliation of GAAP and Adjusted Operating Expenses (Unaudited) |
||||||||||||
|
|
Three months ended January 31, |
|
Fiscal Year ended January 31, |
||||||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
GAAP operating expenses |
|
|
|
|
|
|
|
|
||||
General and administrative |
|
$ |
18,821 |
|
$ |
19,856 |
|
$ |
79,926 |
|
$ |
80,384 |
Sales and marketing |
|
|
35,873 |
|
|
36,260 |
|
|
147,008 |
|
|
151,263 |
Research and development |
|
|
29,862 |
|
|
25,398 |
|
|
112,346 |
|
|
91,244 |
Cost of revenue (excluding depreciation and amortization) |
|
|
16,140 |
|
|
15,123 |
|
|
61,025 |
|
|
58,944 |
|
|
$ |
100,696 |
|
$ |
96,637 |
|
$ |
400,305 |
|
$ |
381,835 |
Stock compensation included in GAAP operating expenses |
|
|
|
|
|
|
|
|
||||
General and administrative |
|
$ |
6,238 |
|
$ |
5,508 |
|
$ |
23,661 |
|
$ |
21,160 |
Sales and marketing |
|
|
6,100 |
|
|
5,563 |
|
|
25,950 |
|
|
22,183 |
Research and development |
|
|
4,444 |
|
|
3,270 |
|
|
17,446 |
|
|
11,777 |
Cost of revenue (excluding depreciation and amortization) |
|
|
1,082 |
|
|
943 |
|
|
4,556 |
|
|
3,655 |
|
|
$ |
17,864 |
|
$ |
15,284 |
|
$ |
71,613 |
|
$ |
58,775 |
Adjusted operating expenses |
|
|
|
|
|
|
|
|
||||
General and administrative |
|
$ |
12,583 |
|
$ |
14,348 |
|
$ |
56,265 |
|
$ |
59,224 |
Sales and marketing |
|
|
29,773 |
|
|
30,697 |
|
|
121,058 |
|
|
129,080 |
Research and development |
|
|
25,418 |
|
|
22,128 |
|
|
94,900 |
|
|
79,467 |
Cost of revenue (excluding depreciation and amortization) |
|
|
15,058 |
|
|
14,180 |
|
|
56,469 |
|
|
55,289 |
|
|
$ |
82,832 |
|
$ |
81,353 |
|
$ |
328,692 |
|
$ |
323,060 |
Phreesia, Inc. Key Metrics (Unaudited) |
|||||||||||
|
Three months ended January 31, |
|
Fiscal Year ended January 31, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Key Metrics: |
|
|
|
|
|
|
|
||||
Average number of healthcare services clients ("AHSCs") |
|
3,962 |
|
|
3,140 |
|
|
3,601 |
|
|
2,856 |
Healthcare services revenue per AHSC |
$ |
17,456 |
|
$ |
17,705 |
|
$ |
72,215 |
|
$ |
72,599 |
Total revenue per AHSC |
$ |
23,979 |
|
$ |
24,390 |
|
$ |
98,944 |
|
$ |
98,358 |
We remain focused on building secure and reliable products that derive a strong return on investment for our clients and implementing them with speed and ease. This strategy continues to enable us to grow our network of healthcare services clients. The investments we make to grow, strengthen and sustain our network of healthcare services clients lead to growth in all of our revenue categories.
The definitions of our key metrics are presented below.
- AHSCs. We define AHSCs as the average number of clients that generate subscription and related services or payment processing revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients. While growth in AHSCs is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future AHSC growth. For example, as AHSCs increase, we may need to add to our customer support team and invest to maintain effectiveness and performance of our solutions for our healthcare services clients and their patients.
- Healthcare services revenue per AHSC. We define Healthcare services revenue as the sum of subscription and related services revenue and payment processing revenue. We define Healthcare services revenue per AHSC as Healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase Healthcare services revenue per AHSC is an indicator of the long-term value of our solutions.
- Total revenue per AHSC. We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue. Additionally, our relationships with healthcare services clients who subscribe to our solutions give us the opportunity to engage with life sciences companies, health plans and other payer organizations, patient advocacy, public interest and other not-for-profit organizations who deliver direct communication to patients through our solutions. As a result, we believe that our ability to increase Total revenue per AHSC is an indicator of the long-term value of our solutions.
Additional Information (Unaudited) |
|||||||||||||||
|
|
Three months ended January 31, |
Fiscal Year ended January 31, |
||||||||||||
|
|
2024 |
|
2023 |
2024 |
|
2023 |
||||||||
Patient payment volume (in millions) |
|
$ |
977 |
|
|
$ |
821 |
|
$ |
3,947 |
|
|
$ |
3,284 |
|
Payment facilitator volume percentage |
|
|
82 |
% |
|
|
81 |
% |
|
82 |
% |
|
|
80 |
% |
- Patient payment volume. We believe that patient payment volume is an indicator of both the underlying health of our healthcare services clients’ businesses and the continuing shift of healthcare costs to patients. We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors.
- Payment facilitator volume percentage. We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue. Our payment facilitator volume percentage could decline slightly over time should we increase our penetration of enterprise customers that are less likely to use Phreesia as a payment facilitator.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314476249/en/
Investor Relations Contact:
Balaji Gandhi
Phreesia, Inc.
investors@phreesia.com
(929) 506-4950
Media Contact:
Nicole Gist
Phreesia, Inc.
nicole.gist@phreesia.com
(407) 760-6274
Source: Phreesia, Inc.
FAQ
What was Phreesia's total revenue for fiscal year 2024?
How many AHSCs did Phreesia have in fiscal year 2024?
What was the net loss for Phreesia in fiscal year 2024?
What was Phreesia's Adjusted EBITDA for fiscal year 2024?
What is the revenue outlook for Phreesia for fiscal year 2025?
What is Phreesia's Adjusted EBITDA outlook for fiscal year 2025?
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