Investors might want to bet on Phreesia (PHR) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing earnings pict ...

Company Overview - Phreesia is a leading provider of comprehensive solutions that transform the healthcare experience by engaging patients in their care[8] - The company operates a SaaS platform to manage patient intake and offers an integrated patient payments solution[8] - Phreesia processed $1.4 billion in patient payments in FY19[8] - The company serves approximately 1,600 healthcare provider organizations[8, 22] Financial Performance and Market Opportunity - Phreesia's revenue in FY19 was $100 million, demonstrating over 25% growth[8, 9] - The company estimates a total addressable market (TAM) of approximately $7 billion[9] - Subscription and related services accounted for 44% of FY19 revenue, while payment processing contributed 37%, and life sciences 19%[34] - In Q2 2020, total revenue reached $30.8 million, a 24.4% increase compared to Q2 2019[42] Growth Strategy - Phreesia aims to land new clients, grow its footprint within existing clients, and cross-sell new applications[27] - The company focuses on margin expansion through scale and strategic partnerships and M&A[27] - Phreesia achieved a 107% dollar-based net retention rate in FY19[27]

Company Overview - Phreesia is a leading provider of comprehensive solutions that transform the healthcare experience by engaging patients in their care[12] - The company processes approximately $1.9 billion in patient payments in FY20[12] - Phreesia's revenue in FY20 was $125 million, representing a 25% growth[12] - The company estimates a total addressable market of approximately $9 billion[13] Financial Performance - Total revenue increased from $99.9 million in FY2019 to $124.8 million in FY2020, a 25% year-over-year growth[51] - Subscription and related services revenue was $56.4 million in FY2020[51], which accounts for 45% of FY20 revenue[44] - Payment processing revenue was $46.5 million in FY2020, representing 37% of FY20 revenue[44] - Life Sciences revenue contributed $21.9 million in FY2020, accounting for 18% of FY20 revenue[44] - Adjusted EBITDA increased from $3.5 million in FY2019 to $4.8 million in FY2020[53] Key Metrics - The average number of provider clients increased by 5% from 1,490 in FY19 to 1,571 in FY20[47]

Core Viewpoint - Phreesia (PHR) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, particularly due to the actions of institutional investors who adjust their valuations based on these estimates [4][6]. Recent Performance and Projections - For the fiscal year ending January 2026, Phreesia is expected to earn -$0.04 per share, representing a 96.1% change from the previous year's reported number [8]. - Over the past three months, the Zacks Consensus Estimate for Phreesia has increased by 42%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Phreesia's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - The article discusses the positive growth outlook for Phreesia (PHR), highlighting the potential for new logo additions to drive business expansion [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets [1] - There is a critique of the misconception that low multiple stocks are inherently cheap, advocating for a focus on long-term growth rather than immediate price concerns [1] Group 2 - The article does not contain any disclosures related to stock positions or business relationships with the companies mentioned [2] - It clarifies that past performance is not indicative of future results and that no specific investment recommendations are provided [3]

Financial Performance - Total revenue increased 15% to $115.9 million for the three months ended April 30, 2025, compared to $101.2 million for the same period in 2024[145] - Net loss was $3.9 million for the three months ended April 30, 2025, compared to a net loss of $19.7 million for the same period in 2024[145] - Adjusted EBITDA was $20.8 million for the three months ended April 30, 2025, compared to $4.1 million for the same period in 2024[145] - Free cash flow was $7.5 million for the three months ended April 30, 2025, compared to negative $6.2 million for the same period in 2024[145] - Total revenue for the three months ended April 30, 2025, was $115.9 million, an increase of $14.7 million or 15% compared to $101.2 million in the same period of 2024[167] - Adjusted EBITDA for the three months ended April 30, 2025, was $20.8 million, compared to $4.1 million in the same period of 2024[186] Client and Revenue Metrics - Average number of healthcare services clients (AHSCs) increased to 4,411 for the three months ended April 30, 2025, from 4,065 in the same period in 2024[154] - Total revenue per AHSC increased by 6% to $26,283 for the three months ended April 30, 2025, compared to $24,900 for the same period in 2024[154] - Subscription and related services revenue increased by $7.6 million to $54.4 million, primarily due to new healthcare services clients and expansion of existing clients[167] - Payment processing fees revenue rose by $2.9 million to $29.9 million, driven by an increase in patient visits and payments processed[175] - Patient payment volume increased to $1,314 million for the three months ended April 30, 2025, compared to $1,166 million for the same period in 2024[155] - Payment facilitator volume percentage increased to 82% for the three months ended April 30, 2025, compared to 81% for the same period in 2024[155] Cash and Liquidity - Cash and cash equivalents as of April 30, 2025, were $90.9 million, an increase of $6.7 million compared to January 31, 2025[145] - As of April 30, 2025, cash and cash equivalents totaled $90.9 million, up from $84.2 million as of January 31, 2025[189] - The company believes its existing cash and cash equivalents, along with cash generated from operations, will be sufficient to meet its needs for at least the next 12 months[189] Expenses and Cost Management - Research and development expenses increased by $2.9 million to $31.8 million, attributed to higher labor and software costs[174][176] - Sales and marketing expenses decreased by $6.0 million to $26.0 million, primarily due to a reduction in labor costs[172] - General and administrative expenses decreased by $2.6 million to $16.4 million, mainly from lower third-party costs and labor costs[177] Other Financial Information - Other income (expense), net improved to income of $0.3 million from an expense of less than $0.1 million year-over-year[181] - Provision for income taxes increased by $0.2 million to $0.7 million, primarily due to higher Canadian and Indian income tax expenses[183] - Interest expense income, net was a loss of $0.2 million for the three months ended April 30, 2025, compared to income of $0.2 million in the prior year[182] Cash Flow Activities - For the three months ended April 30, 2025, net cash provided by operating activities was $14.85 million, compared to a net cash used of $0.72 million for the same period in 2024[199] - Free cash flow for the three months ended April 30, 2025, was $7.46 million, a significant improvement from a free cash flow of $(6.17) million in the prior year[197] - Net cash used in investing activities for the three months ended April 30, 2025, was $7.39 million, primarily due to $3.89 million in capitalized internal-use software costs and $3.50 million in property and equipment purchases[201] - Net cash used in financing activities for the three months ended April 30, 2025, was $0.84 million, mainly for principal payments on finance leases[204] - The company has a financing agreement with an outstanding principal of $1.6 million as of April 30, 2025, requiring monthly payments of $0.1 million for 36 months at an effective interest rate of 10.5%[195] Foreign Currency Exposure - Approximately 86% of the company's expenses for the three months ended April 30, 2025, were denominated in US Dollars, exposing it to foreign currency exchange risks[213] - Foreign currency gains for the three months ended April 30, 2025, were $0.3 million, while losses for the same period in 2024 were less than $0.1 million[214] Financial Flexibility - The company entered into a 5-year $50 million senior secured asset-based revolving credit facility in December 2023, enhancing financial flexibility through fiscal 2028[191]

Core Insights - Phreesia (PHR) reported revenue of $115.94 million for the quarter ended April 2025, marking a year-over-year increase of 14.5% and exceeding the Zacks Consensus Estimate by 1.09% [1] - The company posted an EPS of -$0.07, a significant improvement from -$0.35 a year ago, resulting in an EPS surprise of 46.15% compared to the consensus estimate of -$0.13 [1] Financial Performance Metrics - Average healthcare services clients reached 4,411, surpassing the average estimate of 4,373 [4] - Patient payment volume was reported at $1.31 billion, exceeding the average estimate of $1.25 billion [4] - Payment facilitator volume percentage was 82%, slightly above the estimated 81.3% [4] - Revenue from subscription and related services was $54.36 million, exceeding the estimate of $52.43 million, reflecting a year-over-year increase of 16.3% [4] - Revenue from network solutions was $31.66 million, below the average estimate of $33.40 million, but still showing a year-over-year increase of 15.5% [4] - Revenue from payment processing fees was $29.93 million, surpassing the estimate of $28.87 million, with a year-over-year change of 10.6% [4] Stock Performance - Phreesia's shares have returned +0.4% over the past month, while the Zacks S&P 500 composite has increased by +7.4% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Phreesia (PHR) Q1 2026 Earnings Call May 28, 2025 08:30 AM ET Company Participants Balaji Gandhi - CFOChaim Indig - Co-Founder, CEO & DirectorAnne Samuel - Executive DirectorJailendra Singh - Managing DirectorRichard Close - Managing DirectorJohn Ransom - Managing Director, Director of Healthcare ResearchWilliam Jellison - Associate VPJeff Garro - Managing DirectorScott Schoenhaus - Managing DirectorJared Haase - Equity Research AssociateAaron Kimson - Vice President Conference Call Participants Jessica Tas ...

Financial Performance and Key Metrics - Revenue for Q1 2026 was $115.9 million, representing a 15% year-over-year increase [9] - Adjusted EBITDA was $20.8 million, an increase of 16.7% year-over-year, with an adjusted EBITDA margin of 18% [10] - Average healthcare services clients increased to 4,411, up 70 from the prior quarter and 346 from the prior year [9] - Total revenue per average healthcare services client was $26,283, up 6% year-over-year and 4% quarter-over-quarter [9] - Cash and cash equivalents at the end of the quarter were $90.9 million, compared to $84.2 million in the prior quarter [10] - Positive operating cash flow of $14.9 million, up $15.6 million year-over-year, and positive free cash flow of $7.5 million, up $13.7 million year-over-year [11] Business Line Performance - The company is focused on delivering scalable products that drive meaningful outcomes for patients and providers, with AI integration across all aspects of the organization [6] - The company is maintaining its revenue outlook for fiscal year 2026 at a range of $472 million to $482 million, with an updated adjusted EBITDA outlook of $85 million to $90 million [12] Market Data and Key Metrics - The company is reiterating its outlook on average healthcare services clients (AHSCs) to reach approximately 4,500 in fiscal year 2026 [12] Company Strategy and Industry Competition - The company emphasizes product-led growth and aims to allocate capital to drive long-term shareholder value [6] - Management highlighted the importance of delivering products that provide value, which is crucial in a competitive market [23] Management Commentary on Operating Environment and Future Outlook - Management noted that conversations with customers remain strong, and the company has been resilient amid macroeconomic volatility [15] - The company is optimistic about its ability to grow its network and expand offerings, driven by a strong balance sheet and growing free cash flow [6][11] Other Important Information - The company has a share repurchase plan for up to 2.5 million shares, aimed at being opportunistic in response to market conditions [80][82] - The Medifine acquisition is still in its early stages, but it is expected to contribute to revenue growth in the future [94][96] Q&A Session Summary Question: Insights on network solutions growth and customer conversations - Management indicated that strong product development and a capable network solutions team are driving growth, with no significant hesitancy reported from customers [15][18] Question: Provider market conversations and outlook - Management noted that conversations with providers remain focused on delivering value through products, with no significant changes in the competitive landscape [22][23] Question: ROI visibility for network solutions customers - Management explained that campaigns can be adjusted based on client needs, and the company has a strong ROI, which drives continued investment from clients [27][29] Question: Sales and marketing performance - Management highlighted that previous investments in sales and marketing are yielding returns, with expectations for consistent expense trends moving forward [34][35] Question: Capital deployment opportunities - Management stated that while the cash position is improving, the evaluation of inorganic opportunities remains consistent, focusing on the best approach to growth [39][41] Question: Impact of flu season on performance - Management clarified that while there are seasonal factors, the introduction of new products like the patient bill pay product is contributing to volume growth [50][51] Question: Labor strategy and expense trajectory - Management explained that recent headcount changes were due to consolidation rather than new hiring, and the expense trajectory is expected to remain stable [53][54] Question: Proposed legislation on drug advertisements - Management indicated that while legislation is always a topic, the focus remains on the value proposition of their platform, which is differentiated [56][58] Question: Network solutions seasonality - Management noted that fluctuations in revenue are more related to program pacing rather than strict seasonality [60][61] Question: Subscription revenue growth - Management confirmed that the growth in revenue per provider client reflects successful product introductions and expansion within existing clients [65][67] Question: AI's impact on competitive landscape - Management observed that AI is enhancing their product offerings and driving value for clients, with a shift towards being a trusted partner in the market [74][76] Question: Share repurchase plan motivation - Management described the share repurchase plan as a means to be opportunistic in response to market volatility, without indicating a change in capital allocation strategy [80][82] Question: Cash conversion rates and payment processing revenue - Management indicated that cash conversion rates are expected to resemble Q1 performance for the rest of the year, with payment processing revenue following historical trends [86][88] Question: Monetization of Medifine offering - Management stated that Medifine is in the early stages of monetization but is expected to grow as the network expands [94][96]

Investor Presentation FIRST QUARTER | FISCAL YEAR 2026 Forward Looking Statements This presentation 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 operational performance and may contain projections of our future results o ...