Core Insights - Phreesia Inc. reported stronger-than-expected second-quarter earnings, with earnings of 1 cent per share compared to a forecasted loss of 6 cents, and revenue increased by 15% year-over-year to $117.26 million, surpassing estimates [1] - The company announced a $160 million cash acquisition of AccessOne Parent Holdings, expected to close in the latter half of fiscal 2026, which is projected to add approximately $35 million in annual revenue and $11 million in adjusted EBITDA [2] - Phreesia reaffirmed its fiscal 2026 sales guidance of $472 million to $482 million, slightly above consensus estimates, and updated its adjusted EBITDA outlook to $87 million to $92 million [3] Financial Performance - The average number of healthcare service clients increased by 7% to 4,467, with revenue per client also rising by 7% to $26,249 [1] - Adjusted EBITDA surged to $22.1 million from $6.5 million a year earlier [1] Analyst Reactions - Analysts expressed concerns about integration risks associated with the acquisition, despite acknowledging the solid second-quarter results [3] - Needham maintained a Buy rating on Phreesia and raised the price forecast from $29 to $35, while Piper Sandler reiterated an Overweight rating and increased the price forecast from $33 to $34 [4] Stock Performance - Phreesia's stock price fell by 8.35% to $28.61 during the last check on Friday [5]

Core Insights - Phreesia reported revenue of $117.26 million for the quarter ended July 2025, reflecting a year-over-year increase of 14.8% and a surprise of +0.7% over the Zacks Consensus Estimate of $116.45 million [1] - The company's EPS was $0.01, a significant improvement from -$0.31 in the same quarter last year, resulting in an EPS surprise of +114.29% compared to the consensus estimate of -$0.07 [1] Financial Performance Metrics - Average healthcare services clients were reported at 4,467, slightly below the three-analyst average estimate of 4,475 [4] - Patient payment volume reached $1.25 billion, exceeding the average estimate of $1.18 billion from three analysts [4] - Payment facilitator volume percentage was 82%, closely aligning with the average estimate of 82.2% based on two analysts [4] - Revenue from subscription and related services was $53.7 million, below the average estimate of $55.27 million from six analysts, but still showing a year-over-year increase of +10.5% [4] - Revenue from network solutions was $35.16 million, surpassing the six-analyst average estimate of $33.25 million, with a year-over-year change of +24.7% [4] - Revenue from payment processing fees was $28.39 million, slightly above the six-analyst average estimate of $27.9 million, reflecting a year-over-year increase of +12.2% [4] Stock Performance - Phreesia's shares have returned +12.3% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Phreesia reported quarterly earnings of $0.01 per share, exceeding the Zacks Consensus Estimate of a loss of $0.07 per share, marking a significant improvement from a loss of $0.31 per share a year ago, resulting in an earnings surprise of +114.29% [1] Financial Performance - The company achieved revenues of $117.26 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 0.70% and showing an increase from $102.11 million in the same quarter last year [2] - Over the last four quarters, Phreesia has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - Phreesia shares have increased approximately 21% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $121.04 million, and for the current fiscal year, it is -$0.17 on revenues of $477.31 million [7] - The outlook for the Medical Info Systems industry, where Phreesia operates, is favorable, ranking in the top 34% of over 250 Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $117.3 million, representing a 15% year-over-year increase [10] - Achieved net income of $700,000, marking the first positive net income quarter in company history [10][11] - Adjusted EBITDA was $22 million, an increase of $16 million year-over-year, with an adjusted EBITDA margin of 19% [10] - Cash and cash equivalents at the end of the quarter were $98.3 million, up from $90.9 million in the prior quarter [11] - Operating cash flow was $14.8 million, up $3.8 million year-over-year, and free cash flow was $9.6 million, up $6 million year-over-year [11] Business Line Data and Key Metrics Changes - Average healthcare services clients increased to 4,467, up 298 from the prior year [10] - Total revenue per average healthcare services client was $26,249, up 7% year-over-year and flat quarter-over-quarter [10] Market Data and Key Metrics Changes - The acquisition of AccessOne is expected to expand the addressable market by approximately $6 billion, increasing the total addressable market to about $24 billion from approximately $10 billion [9][10] Company Strategy and Development Direction - The acquisition of AccessOne for $160 million is seen as a strategic move to enhance payment solutions and expand market reach [5][9] - The company aims to strengthen its financial profile and support clients with innovative payment solutions through this acquisition [9] - The introduction of new products like Voice AI is expected to drive engagement and revenue opportunities in the network solutions business [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the company, highlighting the importance of the AccessOne acquisition and the positive feedback on new products [5][21] - The company is maintaining its revenue outlook for fiscal year 2026 at a range of $472 million to $482 million and updating its adjusted EBITDA outlook to a range of $87 million to $92 million [12] Other Important Information - The company achieved positive operating cash flow and free cash flow for four consecutive quarters [11] - The AccessOne acquisition is expected to close in the third or early fourth quarter of fiscal 2026, subject to customary closing conditions and regulatory approvals [8] Q&A Session Summary Question: Development of AccessOne deal - Management has been monitoring AccessOne for years and believes it aligns well with their mission, making it a strategic acquisition [15] Question: Phreesia Voice AI product impact - The Voice AI product is expected to create more engagement opportunities and has received positive feedback from providers [20][21] Question: Revenue mix from AccessOne - The risk in the payment plans is shared between PNC Bank and the provider, with Phreesia not bearing the risk [35] Question: Growth rate of AccessOne - Management did not disclose historical growth rates but emphasized their intention to invest and grow AccessOne post-acquisition [53] Question: Customer overlap between Phreesia and AccessOne - There is some customer overlap, and more details will be shared post-acquisition [64] Question: AI product monetization - The company is currently monetizing AI products and sees significant market potential for these solutions [67]

Financial Performance Highlights - Total revenue for Q2 FY2026 reached $117 million, a 15% year-over-year increase[12] - Adjusted EBITDA for Q2 FY2026 was $22 million, a 239% year-over-year increase[12] - The company achieved net income of $0.7 million in Q2 FY2026 due to a deferred tax benefit[12] - The company has approximately 4,467 average healthcare services clients (AHSCs) [16] - The company processes over $4 billion in patient payments annually [10,16] - The company's total addressable market (TAM) is approximately $24 billion [36] Acquisition and Future Outlook - The company intends to acquire AccessOne for $160 million in cash, funded through a mix of cash and debt, expected to close in the second half of fiscal year 2026 [10] - The company anticipates AccessOne to contribute approximately $35 million in annualized revenue and $11 million in annualized Adjusted EBITDA [44] - The company projects total revenue for fiscal year 2026 to be between $472 million and $482 million [43] - The company projects Adjusted EBITDA for fiscal year 2026 to be between $87 million and $92 million [43]

Agreement and Plan of Merger Preamble [Preamble and Parties Involved](index=1&type=section&id=Preamble) This section introduces the merger agreement between AccessOne Parent Holdings, Inc. and Phreesia, Inc., outlining the merger and its core conditions - The merger involves AccessOne Parent Holdings, Inc. (Company) being acquired by Phreesia, Inc. (Acquiror) through its subsidiary Ace Merger Sub, Inc. (Merger Sub)[11](index=11&type=chunk) - The Company will survive the merger as a wholly-owned subsidiary of Acquiror[12](index=12&type=chunk) - Key conditions for the merger include **Support Agreements** from stockholders (at least 92%), **Requisite Stockholder Approval**, **Restrictive Covenant Agreements**, **Employment Arrangements**, and **Option/Warrant Cancellation Agreements**[12](index=12&type=chunk)[13](index=13&type=chunk) Table of Contents This section provides an organized listing of all chapters and their respective page numbers within the agreement Exhibits This section lists all supplementary documents and forms appended to the main agreement [Form of Support and Joinder Agreement](index=6&type=section&id=Exhibit%20A) This exhibit refers to the standard form for the Support and Joinder Agreement, critical for securing stockholder consent for the merger - Exhibit A is the Form of Support and Joinder Agreement[9](index=9&type=chunk) [Form of Option Cancellation Agreement](index=6&type=section&id=Exhibit%20B) This exhibit outlines the form for the Option Cancellation Agreement, addressing outstanding employee stock options in the merger - Exhibit B is the Form of Option Cancellation Agreement[9](index=9&type=chunk) [Warrant Surrender Agreement](index=6&type=section&id=Exhibit%20C) This exhibit specifies the Warrant Surrender Agreement, detailing terms for warrant surrender and cancellation in the merger - Exhibit C is the Warrant Surrender Agreement[9](index=9&type=chunk) [Form of Certificate of Merger](index=6&type=section&id=Exhibit%20D) This exhibit provides the form for the Certificate of Merger, to be filed with the Delaware Secretary of State to effectuate the merger - Exhibit D is the Form of Certificate of Merger[9](index=9&type=chunk) [Form of Letter of Transmittal](index=6&type=section&id=Exhibit%20E) This exhibit details the form for the Letter of Transmittal, used by stockholders to exchange shares for merger consideration - Exhibit E is the Form of Letter of Transmittal[9](index=9&type=chunk) [Escrow Agreement](index=6&type=section&id=Exhibit%20F) This exhibit refers to the Escrow Agreement, governing escrow funds for merger adjustments and indemnification - Exhibit F is the Escrow Agreement[9](index=9&type=chunk) [Paying Agent Agreement](index=6&type=section&id=Exhibit%20G) This exhibit specifies the Paying Agent Agreement, outlining the paying agent's role in distributing merger consideration to stockholders and warrantholders - Exhibit G is the Paying Agent Agreement[9](index=9&type=chunk) [Form of FIRPTA](index=6&type=section&id=Exhibit%20H) This exhibit provides the form for FIRPTA certification, relevant for tax compliance in the transaction - Exhibit H is the Form of FIRPTA[9](index=9&type=chunk) [Example Calculation of Working Capital](index=6&type=section&id=Exhibit%20I) This exhibit provides an illustrative example for calculating working capital, a component in determining the final merger consideration - Exhibit I provides an example calculation of Working Capital[9](index=9&type=chunk) The Merger This article details merger provisions of the merger agreement [The Merger Mechanics](index=8&type=section&id=1.01.%20The%20Merger) This section details the legal mechanics of the merger, where Merger Sub merges into the Company, which survives as a wholly-owned subsidiary of Acquiror, succeeding to all assets and liabilities upon filing the Certificate of Merger - Merger Sub will merge into the Company, with the Company surviving as a wholly-owned subsidiary of Acquiror[15](index=15&type=chunk) - The merger becomes effective upon filing the Certificate of Merger with the Delaware Secretary of State[16](index=16&type=chunk)[17](index=17&type=chunk) - The Surviving Corporation will succeed to all assets, rights, privileges, powers, franchises, liabilities, restrictions, and duties of both the Company and Merger Sub[17](index=17&type=chunk) [Share Conversion and Consideration](index=9&type=section&id=1.02.%20Conversion%20of%20Preferred%20Shares%20and%20Common%20Shares) At the Effective Time, all outstanding Preferred and Common Shares (excluding treasury and dissenting shares) convert into the right to receive cash consideration, conditional upon the holder executing a Support Agreement and Letter of Transmittal - Each Preferred Share and Common Share (excluding treasury and dissenting shares) will be converted into the right to receive cash from the Acquiror[18](index=18&type=chunk)[19](index=19&type=chunk) - Payment is contingent on the holder executing a Support Agreement and a Letter of Transmittal[18](index=18&type=chunk)[19](index=19&type=chunk) - Shares held by the Company, its Subsidiaries, Acquiror, Merger Sub, or their Affiliates will be canceled without payment[20](index=20&type=chunk) [Payment Procedures and Certificate Exchange](index=9&type=section&id=1.03.%20Payment%3B%20Exchange%20of%20Certificates%3B%20Lost%20Certificates) This section outlines the payment process for merger consideration, including the Paying Agent's role, stockholder requirements for payment, provisions for lost certificates, and the reversion of unclaimed consideration to Acquiror after two years - The Company will deliver Letters of Transmittal and Support Agreements to stockholders, and Option Cancellation Agreements to optionholders, for escrow prior to closing[22](index=22&type=chunk)[23](index=23&type=chunk) - The Paying Agent will facilitate the exchange of cash for Company Shares and warrants, contingent on certificate surrender (if applicable), executed Letter of Transmittal, and Support Agreement[25](index=25&type=chunk) - Unclaimed merger consideration will be returned to Acquiror after **two years** from the Closing Date[27](index=27&type=chunk) [Treatment of Options and Warrants](index=11&type=section&id=1.04.%20Options%20and%20Warrants) All outstanding Options (vested or unvested) will be canceled for a cash payment, conditional on the Optionholder executing an Option Cancellation Agreement within 15 days post-closing, with the Warrant also being surrendered for cash - All outstanding Options (vested or unvested) will be canceled and converted into a cash payment from Acquiror, subject to taxes and execution of an Option Cancellation Agreement within **15 days** post-closing[28](index=28&type=chunk) - Failure to deliver an Option Cancellation Agreement within **15 days** post-closing results in forfeiture of consideration for Options[28](index=28&type=chunk) - The Warrant will be surrendered and canceled for a cash payment as per the Merger Payout Schedule[30](index=30&type=chunk) [Surviving Corporation's Certificate of Incorporation](index=12&type=section&id=1.05.%20Certificate%20of%20Incorporation) At the Effective Time, Merger Sub's Certificate of Incorporation will be amended to "AccessOne Parent Holdings, Inc." and will serve as the Surviving Corporation's Certificate of Incorporation - Merger Sub's certificate of incorporation will be amended to 'AccessOne Parent Holdings, Inc.' and become the Surviving Corporation's certificate[31](index=31&type=chunk) [Surviving Corporation's Bylaws](index=12&type=section&id=1.06.%20Bylaws) At the Effective Time, Merger Sub's Bylaws will be amended to "AccessOne Parent Holdings, Inc." and will then serve as the Surviving Corporation's Bylaws - Merger Sub's bylaws will be amended to 'AccessOne Parent Holdings, Inc.' and become the Surviving Corporation's bylaws[32](index=32&type=chunk) [Leadership of Surviving Corporation](index=12&type=section&id=1.07.%20Directors%20and%20Officers) Upon the Effective Time, the directors and officers of Merger Sub will become the directors and officers of the Surviving Corporation until their successors are duly elected or appointed - Directors and officers of Merger Sub at the Effective Time will become the directors and officers of the Surviving Corporation[33](index=33&type=chunk) [Estimated Closing Merger Consideration](index=12&type=section&id=1.08.%20Calculation%20of%20Closing%20Merger%20Consideration) Five business days before closing, the Company must provide an Estimated Statement detailing the estimated consolidated balance sheet, Closing Merger Consideration, and Merger Payout Schedule, with Acquiror retaining the right to challenge the final calculation - The Company must deliver an Estimated Statement **five business days** prior to closing, detailing the estimated consolidated balance sheet, Closing Merger Consideration, and Merger Payout Schedule[34](index=34&type=chunk) Components of Estimated Closing Merger Consideration | Component | Description | | :---------- | :---------- | | Base Purchase Price | Starting point for calculation | | Estimated Indebtedness | Subtracted from Base Purchase Price | | Estimated Transaction Expenses | Subtracted from Base Purchase Price | | Estimated Working Capital Adjustment | Added/subtracted from Base Purchase Price | | Estimated Closing Cash | Added/subtracted from Base Purchase Price | | Estimated Taxes Payable | Subtracted from Base Purchase Price | - Acquiror's non-comment on the Estimated Statement does not waive its right to challenge the final calculation[35](index=35&type=chunk) [Determination and Adjustment of Final Merger Consideration](index=13&type=section&id=1.09.%20Final%20Closing%20Merger%20Consideration) Within 90 days post-closing, Acquiror delivers a Closing Statement for final merger consideration, subject to Representative's objection and independent accounting firm resolution, with adjustments made from the Adjustment Escrow Fund and treated as tax adjustments - Acquiror will deliver a Closing Statement within **90 days** post-closing, detailing the Final Closing Merger Consideration[36](index=36&type=chunk) - The Representative has **30 days** to object to Disputed Items in the Closing Statement; unresolved disputes are submitted to an independent Accounting Firm[37](index=37&type=chunk)[38](index=38&type=chunk) - Adjustments to the merger consideration (upward or downward) are made from the Adjustment Escrow Fund, with any remaining funds distributed to Equityholders or paid to Acquiror[40

Group 1 - Phreesia Inc. is transforming the way healthcare providers interact with their clients, indicating a significant shift in the healthcare industry [1] - The company is publicly traded on the NYSE under the ticker symbol PHR, highlighting its status as a publicly listed entity [1] Group 2 - Nabeel Bukhari, a law graduate with expertise in corporate law and financial analysis, provides valuable insights into business dynamics, enhancing the understanding of companies like Phreesia [2] - His work has been published in reputable platforms, indicating a strong credibility in financial analysis and industry insights [2]

Core Viewpoint - Phreesia (PHR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Company Performance and Outlook - The recent upgrade for Phreesia reflects an improvement in its underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. - For the fiscal year ending January 2026, Phreesia is expected to earn -$0.17 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 41.5% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - 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].

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]