Phreesia (PHR) 9 Dec 242025 Q3 Earnings call transcript

Good evening, ladies and gentlemen, and welcome to the Phreesia Third Quarter Fiscal 2025 Earnings Conference Call.

[Operator Instructions]

First, I would like to introduce Balaji Gandhi, Phreesia's Chief Financial Officer. Mr. Gandhi, you may begin.

operator. you, Thank welcome third and October earnings call conference XXXX. Good of to fiscal the quarter on XXXX, for evening, Phreesia's which XX, ended

These Joining our can our both of be our are in the our SEC, at Chaim documents more call including release quarterly discussion X-K found me issued and submission Investor press ir.phreesia.com. markets Officer. the in complete results letter, Executive closed Form on after A Indig, section our of earnings on today's related stakeholder today. Chief available the Relations is website to our

reminder, our recorded and Investor a call. the a on at call website the available following ir.phreesia.com be As is Relations conclusion today's replay being of will

statements During our today's including results. regarding predictions our and anticipated industry our financial call, of about strategies, growth, outlook we our may our including anticipated statements trends, performance the future business, regarding make forward-looking

uncertainties or to Forward-looking differ forward-looking that performance results, in described risks, statements statements. may subject actual our and are achievements from other those our factors various materially to cause

of or of new update obligation or of only or date which are be on to call morning. these our on will as XX-Q events described to speak the on and events. be the including Such release current earnings occurrence statements and information in reflect press the update circumstances our SEC risk views letter to no expectations quarterly expressly call in and in The reflect date the obligation our our We forward-looking report our statements forward-looking are more and factors will filings, undertake this unanticipated tomorrow the fully that included risks statements filed after this stakeholder by our disclaim Form made. to made based on

measures measures to be isolation to market and our A provide addition accordance stakeholder adjusted from our results considered These We non-GAAP to and also and GAAP to with Chaim Investor in the results. not may generally cash furnished principles, letter, a accounting X-K after closed as should non-GAAP the our of substitute free be investors. refer be release found turn to GAAP found additional SEC will in certain with with over today information or EBITDA such not as I accepted in flows website financial earnings to also CEO, order call our which filed may Relations reconciliation in the at Indig. on and may Form our were now in for ir.phreesia.com.

call. you third and joining Balaji, Thank evening, fiscal you, good quarter our for everyone. Thank earnings

Our team continues to perform and financial well as operating evidenced by our results.

track profitability and are foundation XXXX walk believe outlook. through year to We in up solid also we our us updated results, and quarter initial outlook for third our strong, our Balaji for on fiscal XXXX sets you fiscal that and continued XXXX. the finish our will growth fiscal

of it our proud few preparation Balaji, our the rallying months. States, and to I employees, clients make their clients, handing people Southeastern of hurricanes team's our destructive grateful to hurricanes I'm past the impacted colleagues for the First, the include in response friends respective behind and over and millions over I'd X like Before acknowledge comments: United Phreesia to many that want to families. and to team

are here we future Second, about excited Phreesia. at the

are of solutions adoption in. we Our beginning is new of investing see current grow, are our we to continues network offering promise to increasing, and

to and some our Balaji existing out team increasing highlights. clients to value financial existing continues it product creating new by investments compelling product Our to now our offering provide for of hand I more a into functionalities prospects. expanding will integrations, scale over

Chaim. you, Thank

our for couple our quarter, dive and initial along our third then fiscal I updated outlook letter a with outlook with for highlights XXXX. stakeholder into start will year the from me Let of regarding year XXXX, fiscal

by quarter. an increased our wind-down was with or third of we EBITDA $XX,XXX X%. per quarter EBITDA All That year-over-year relationship per clearinghouse million a $X.X the total First, million, the quarter Total quarter. from year-over-year X%. AHSC up margin reduced was the the line. quarter million, year by the the Year-over-year this XX comparisons growth was quarter. revenue X% processing associated discussed. client $XX.X the Adjusted payment third clients, previous affected third wind care that X% was $XXX.X are services in AHSCs, by down adjusted revenue prior revenue and year-over-year. XX% up revenue The clearinghouse client previously first this total in have AHSC up Revenue client over of growth X% average revenue in with by health and of up

Moving at flow positive million cash year-over-year. flow operating and highlights. cash up to $XX.X fiscal completed quarter, $XX.X Free the million, year-over-year. flow positive million flow flow Operating free was cash quarter. third In $X.X balance our and consecutive $X.X was positive we on at up sheet million, cash second cash

We the in quarter-to-quarter in year-over-year cash of reflected capital CapEx. along working based specific payments, on fluctuate on basis can will invoicing a free see expect timing that and improvement flow which you

Our cash XX. million was $XX on October

borrowings We have million no credit $XX our facility. on

moving financial to Now on our outlook.

revenue a our million million XXXX ] $XXX range on million $XXX from outlook. with fiscal $XXX a XXXX previous fiscal start of for [ of We're to our Let's outlook an range to $XXX to update narrowing million.

narrowing to to $XX and million of adjusted $XX outlook XXXX a fiscal raising $XX range of a to previous our $XX million. year are We million range EBITDA from million, for

to XXXX. we fiscal year We continue compared fiscal reach approximately to to expect year the AHSCs X,XXX reported in for X,XXX the full XXXX

fiscal we achieved compared to total in fiscal in XXXX. AHSC to revenue per to increase also XXXX the continue expect $XX,XXX We

initial for financial outlook XXXX. Moving on our to fiscal

range to XX% to XXXX. expect We our be outlook of revenue XX% million, updated for revenue in the implies to which a increase $XXX million from $XXX fiscal

revenue outlook XXX% provided adjusted fiscal for increase no from additional expect which to acquisitions of our $XX XXX% revenue from XXXX. between XX, in million, completed The million $XX a to now and EBITDA EBITDA We assumes updated XXXX be range potential future XXXX. fiscal adjusted January range the to implies or

reach previously to our outlook XXXX. on in shared in reiterating total also XXXX are and approximately per fiscal fiscal increase to AHSCs to compared We fiscal AHSC XXXX revenue X,XXX

I contributions for I quarter can we to open the to another of thank like the up to Phreesia for would think Operator, at their their mission successful colleagues values. all session. commitment and Q&A my our and now lines

[Operator Instructions]

Securities. question the comes of with And from your Jailendra first Singh Truist line

important, and I'm between impressive a than in 'XX. margin fiscal the just of curious, top reinvesting on and more color that. our love guide growth doubling balancing quarter for about go free profitability extremely profitability of Congratulations back and business goal EBITDA a higher? the margin Obviously, 'XX are strong cash we you push the But flow did how fiscal very line to some into

just Jailendra, could you that. thanks The for how arrive your of the at you repeat, question. did question, last part

EBITDA your outlook that trying to year? profitability revenue and for top trying mean, you almost profitability of double Just I of is between doubling margin the this basically, go impressive. the your doing how So about higher? business But next margin to like balancing did just line margin you're some which back understand the reflects push understand balancing and pretty thought year, process goal your into the EBITDA to reinvesting of

Sure.

So I that topic around don't is think anything new.

I'd for the one years I now. And out X.X I we've point think exercising think thing expense it's something is discipline. been

Phreesia, culture I've that. an have career we amazing think followed I company and companies at have my especially in worked

capital. I pretty good think and owners a company, stewards and being of the expense across is discipline about exercising there really culture special like thinking

it's you went if of you of find think drops back And to fuel then, of bottom Jailendra, back but the then I future can So at and that. a it years, the a opportunities efficiency, line, have when discipline more you really that areas of looked in expense be other for expense reinvested some it lines couple bunch and growth.

you as both, out. doing pointed absolutely are we So

line And Dodge with your Sean from comes the Markets. RBC Capital next question of

Balaji, Maybe is and around change much to spent? on give Are quantification done per And year you or and you've last shifting give any expense, If allocate toward the away think going being about network continuing changed? are new are drive update those the mix of you continuing reallocating just you to of sales revenue those marketing any us how we the there to comments cross-selling continuing solutions AHSC. higher in each so how to and much can over around from back dollars then how there you clients? more can buckets

question, Yes, Sean, continuous. I think relates sort to of it Jailendra's it's

it it frankly, paybacks part don't of changes going be getting we're the the care but health And we're think time on time, use in to percentage both side. a services appropriate continuous. -- And would how always on I looking to we're from Sciences the Life think and market returns so to the because and the I it at is market also

I range be years literally it's if amount in the and and the running to it's dollar actually of a sort the quarter, the look in sales the happened you third for been in spent fourth same think quarter marketing of on And money -- to compared second at now. quarter, amount, it this couple that of

reflecting So I get of think that's communicates. outlook the trying as returns I away types go-to-market take to that is our the think should always how we

And Capital Scott with comes line of KeyBanc question your next Markets. from the Schoenhaus

coming monetizing this your subscription access the provider this acquisitions these ConnectOnCall. not for maybe then in year think question is you revenue strategy per you recently, you. client how you And fully The forums, the -- an us now? on them Can give update I guess recent Are Balaji, I did guess, you past there? quarters? of

enough Yes. them. year. fully I have we could had ever And obviously, those of we last we're X did mean, time where none acquisitions say monetizing

go-to-market. activity organization different management in So the there's lot product of in of on and parts going the a

still say specifically, On work pleased going acquisitions. we're that far that's those we'd we're think So had not all the something do, of that Scott. to to so talk progress where a but with subscription, we've lot on I

total I anchor per revenue think we've tried really to everyone client. is around what

letter, we have around expect year that versus number last that and next in We year the be I -- revenue these see you year. number, commentary this and versus our think up this to different streams

total most the to now with think go I into even our up. you our might And the business. point, think can client I you about the outlook, we even back outlook think per revenue revenue probably and AHSC at way constructive much that's think this can how

of And line your from the next comes Jessica Piper Tassan with question Sandler.

quarter and guide. specific hoping about marketing heard of bit season drove selling Any And some you a on HHS, related of tailwinds lead to strength because customers you you and our to could strong the Maybe describe what 'XX. fiscal I'm just kind solutions about RFK hoping the in an then of and appointment distinction. network delineating in I was the pharma D? from little some between kind of XQ? talk how the Part the important feedback fiscal you've the Congrats your regarding education your can are customers and in it's view, thinking of

Jess. got a lot there, You in

point are where I we fiscal a is about, there this start in year X we of the At I we or of 'XX. tell this? slightly season. terms year, we're can for questions. don't think with you time we've outlook And of much shared probably as have I into in talked what of versus visibility this probably the we we we Why think selling last how think just just ahead the don't X year. Why do activity is lot

that So better. slightly front, on

rest think the as repeat expected. then I for think question? I -- much maybe sort terms year, pretty your this And of our so we of outlook it's And second in of our

Yes.

pharma Just And kind pharma appointment customers thinking education. and pharma of Thanks, marketing and you the about of RFK you are lead HHS? how addressing. your you thinking between are about delineating appreciate to

Sure.

of it's the think that of for a reasonable coverage first issues. all, that a is we some their presumptive of has, relevant, content personalized on privacy health Phreesia, and we built to patients substantiate certainly moments may is what of that secretary influence dependence nominee Phreesia's with clear think and they're information a of improves aware certain they which channels that. and outcomes probably So health that a and nominee everybody reminder, we're -- state might television consent and in HHS a when how television need be for the platform viewers data health accurate of advertising And presumptive I just have health should in whether question we perspective key care on as have have mind, principles personalized

we So really, would that's how at just I this look that at think, point. topic

comes your with from And next of the Ryan question line MacDonald Needham.

about to clients color Wanted with quarter Shea about to going Curious some Matt on for the of the MediFind. is Congrats of manufacturing hear This Good here. long how campaigns around traction a ROI mechanics then with on double-click here? the just number campaign. versus live far Ryan. expectations? on nice the And for that from typically? these are trended the campaigns. And any of or the building of so incremental is How partners kind campaigns that's pipeline these on how

Yes. the topic, not follow ] I available Matt, [ on MediFind something on but that specifically that's happy we think readily to now. on not have you I'm with campaigns, -- the it's have something now. we up

your question Garro the comes And Garro from next Stephens. of Jeff line with

the your strong ask on 'XX seems margins incremental EBITDA margin gross the a to better, It wanted if bit to and I a profitability FY percentage. outlook more very on little not to equivalent, imply there.

if about roughly 'XX operating Or expenses think the flat So identized to some if efficiencies. the I framework strong wanted FY on gross margins outlook? right as you've incremental EBITDA expense operating ask incremental

Yes.

asking Jeff, line, think, of the that. below EBITDA is you're is I gross the from how margin maybe much gross what So versus improvement margin

Yes.

Okay.

in I of Okay. several ago. margin We significant and quarters And we now. at investments revenue made cost front-loaded talked Yes. years running about several we've think for been the that gross

very line, that leverage for We margin we've also but of continue gross out quarters. to the been running nice get several operating we've at had

bit driver driver be a the the really, So the EBITDA. expense of it's biggest growth there, leverage And of I is may more revenue is opportunity really that little lines should certainly for below takeaway benches growth that. operating these think the biggest be probably of out getting but

And question Grosslight from your with line next the Daniel of Citi. comes

here. the pipeline broadly customers. I more on to quarter I strong again. terms in wanted ask Congrats total the just about guess speaking, LTVF of

that was you half, that first on the an quarter, little of last value I the mentioned the provide can about in update first hoping bit trending fiscal are transaction year. how last think the you a than second half total things the we're of now in half XX% was season for later year. I selling larger

last The it's Yes. say just time consistent. total revenue care client contract, same an X XX% are from value, Daniel. dollar that can and now, are we year. value average around services than Good And repeating the time associated with question, been of we health it's and this clip that means total said and we're clear last that Those about lines. trending what bigger so all is at

the from of comes with question Blair. Jared next your Haase And line William

Network mentioned on Ryan just that Balaji, Jared pharma think I side. follow Daniels. an business. with point for network a a And earlier wanted you bit to visibility customers is this from This maybe little up question Solutions having at little -- on I solutions on the better

Phreesia of there I'm do something I getting other macro that? curious, Or the unique would that's guess, the in that's, there's guess, driving pharma? to I wanted across clarify, Just is to platform I'm think is, priority I to you earlier that, sort tactics. you're moving little you mean in wondering, think maybe a in finalized relative where anything up that assume are bit board a budgets do trend for cycle. particular the

was one year. have Yes. revenue -- the we What And this time let next the clarify at for visibility that we at provided this we me -- thing. year this -- we outlook year outlook into meant

were So we a we're ago. that comparing where year to

Jared, think our call And our comment. and it's generally very that specific out a I team just it's team, I Life team. it's outcome. driven mean So has Sciences I Phreesia think product I'd our

we in of got area. And letter. the bit a grown about so that think And out, it's we've more product in I and quite some talked obviously that

Davidson. D.A. question next comes William of your line the from Jellison And with

volume specifically important like from on subscription ask AHSC I an the retention, per you respect with update we're business just of line, to get and and what wanted a price seeing gross about to drivers that on basis? cross-sell

Yes.

And so a stream. just clarify, let me it's first, revenue

revenue it commentary everything it we the make So it's clients clients, it. so And we type us. of relate about that to framework sort lines, is and really is the William, of not think does a think all we right to business do think about when we and go-to-market lot X about of a for and I

metrics trying not not we're really obviously, So subscription really how business, products to how are around our and there optimize designed. are but that's that's the this,

of I So lines But that one revenue have to think helpful. don't it's contributes that the would be we that.

[Operator Instructions]

your And question from of with comes the next Close Richard line Genuity. Canaccord

looks the on a I work to last the little midpoint down based a Maybe out Congratulations. Yes. And be year guidance. on bit. It close fiscal on the range 'XX network the you quarter, had done think just to follow-up wider mentioned was solutions. came

a little moving bit. is since midpoint down it's guess margins. a So maybe networks much moved on EBITDA and the up higher just surprising the why I little color so bit little a

would great. there help any So be

in Yes. have philosophy tried that we visibility have we And it is we've one Richard, more throughout with think thing year, general, I to do you. the a share when fiscal guidance

the of with we coming And revised visibility we in read And environment of better with into think have have had there's aligned guidance. bit really people on expectations to the And pretty the quarter think what talked little shared that. selling second are year. for But lots anything about that feeling in light. I else the think of conversations a expectations out Richard. slightly think this don't I terms next are I I we fairly I think folks September. we the

turn remarks. Chaim our the conference And back closing will Indig that now over question-and-answer concludes to session. I for

Bye. [indiscernible]. thank earnings us holidays, our I and New XXnd happy a everyone for joining Just Christmas, everyone Merry for call. happy wish want And Year, to Happy

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