Phreesia Inc. (PHR) 2025 Q2 Earnings Call Summary

Optimistic Highlights

• Positive Cash Flow Milestone

Phreesia achieved positive cash flow for the first time as a public company in Q2 FY2025.

• Revenue Growth

Q2 revenue was $102.1 million, up 19% year-over-year.

• Adjusted EBITDA Increase

Adjusted EBITDA was $6.5 million, up $18 million year-over-year.

• Operating and Free Cash Flow

Operating cash flow was positive at $11.1 million, and free cash flow was positive at $3.7 million.

• Financial Outlook Update

Updated adjusted EBITDA outlook for FY2025 to a range of $26 million to $31 million, up from $21 million to $26 million.

Pessimistic Highlights

• Revenue per AHSC Decline

Total revenue per AHSC was $24,494, down 2% year-over-year.

• Clearinghouse Client Impact

Revenue per AHSC was flat year-over-year when excluding the revenue from the clearinghouse client relationship that was wound down earlier this year.

Company Outlook

• Revenue and EBITDA Guidance

Maintaining FY2025 revenue outlook at $416 million to $426 million. Updated adjusted EBITDA outlook to $26 million to $31 million.

• AHSC and Revenue per AHSC

Expecting AHSCs to reach approximately 4,200 for FY2025 and 4,500 for FY2026. Total revenue per AHSC is expected to increase in FY2025 and FY2026.

• Long-term Growth

Confident in continued revenue and profitable growth this year, next year, and beyond.

Q & A Highlights

• Q: Drivers of Revenue Growth per Provider Client (Anne Samuel, JPMorgan)

A: Pipeline win rates have been consistent, and the total value of transactions is about 20% bigger in the first half of this year versus last year. (Balaji Gandhi)

• Q: Patient Bill Pay Product (Anne Samuel, JPMorgan)

A: Leveraging current on file for it, providing a better experience for patients to pay their bills. (Chaim Indig)

• Q: Sales and Marketing Spend Sustainability (Ryan Daniels, William Blair)

A: Expect to continue getting leverage out of the current level of sales and marketing spend. (Balaji Gandhi)

• Q: MEDITECH Alliance (Ryan Daniels, William Blair)

A: MEDITECH is a reseller of one of Phreesia's products, and the integration will continue to roll out over the coming years. (Chaim Indig)

• Q: Fiscal '26 Target and Network Solutions Growth (Scott Schoenhaus, KeyBanc)

A: Network Solutions will continue to be a bigger part of revenue, growing at or faster than subscription. (Balaji Gandhi)

• Q: EBITDA Performance and Cost Efficiencies (Jailendra Singh, Truist Securities)

A: Focus on driving operating leverage and efficiency, with no change to the long-term margin profile. (Balaji Gandhi)

• Q: Visibility on Provider Adds for Fiscal '26 (Glen Santangelo, Jefferies)

A: High visibility on provider space and subscription revenue, with most variability in Network Solutions. (Balaji Gandhi)

• Q: Industry Penetration Rates and Competitive Landscape (Glen Santangelo, Jefferies)

A: Continued investment in product and diversification away from just being known for intake. (Chaim Indig)

• Q: Revenue per AHSC Growth Components (Stephanie Davis, Barclays)

A: Focus on driving more holistic solutions and leveraging investments in R&D and product. (Chaim Indig)

• Q: Retention and Client Switching (Richard Close, Canaccord Genuity)

A: Gross revenue retention has been in the 94% to 96% range since going public. (Balaji Gandhi)

• Q: Impact of Election Year on Network Solutions (Jeff Garro, Stephens)

A: No specific impact from the election year on Network Solutions. (Balaji Gandhi)

• Q: MediFind Update (Jeff Garro, Stephens)

A: MediFind has sparked good conversations and will be a driver of future growth. (Balaji Gandhi)

• Q: Provider Adds and Seasonality (Matthew Shea, Needham & Company)

A: No seasonality impact; focus on setting longer-term expectations. (Balaji Gandhi)

• Q: Oracle Health Care Marketplace Integration (Aaron Kimson, Citizens JMP)

A: Early stages, no specific updates yet. (Balaji Gandhi)