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]

Financial Performance - Revenue for the first quarter of fiscal 2026 was $115.9 million, representing a 15% year-over-year increase [10] - Adjusted EBITDA was $20.8 million, an increase of 16.7% year-over-year, with an adjusted EBITDA margin of 18% [11] - Cash and cash equivalents at the end of the quarter were $90.9 million, up from $84.2 million in the prior quarter [11] - 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 [12] Business Lines Performance - Average healthcare services clients increased to 4,411, up 70 from the prior quarter and 346 from the prior year [10] - Total revenue per average healthcare services client was $26,283, up 6% year-over-year and 4% quarter-over-quarter [10] Market Data - The company is maintaining its revenue outlook for fiscal 2026 at a range of $472 million to $482 million [13] - The adjusted EBITDA outlook for fiscal 2026 has been updated to a range of $85 million to $90 million, an increase of $4.5 million from the previous guidance midpoint [13] Company Strategy and Industry Competition - The company focuses on delivering valuable and scalable products that drive meaningful outcomes for patients and providers, with an emphasis on AI integration across all aspects of the organization [8] - The company aims to grow its network through product-led growth and is well-positioned to allocate capital for long-term shareholder value [8] Management Commentary on Operating Environment and Future Outlook - Management noted that conversations with customers remain strong, with no significant hesitancy in decision-making despite macroeconomic conditions [19][25] - The company continues to see strong demand for its network solutions and is focused on building and delivering products that provide value [25] - Management expressed confidence in the company's ability to adapt to changing market conditions and maintain growth [8][25] Other Important Information - The company has approved a share repurchase plan for up to 2.5 million shares of common stock, aimed at being opportunistic in response to market conditions [81] - The company is optimistic about the potential of its Medifine platform, viewing it as a long-term contributor to revenue [93][95] Q&A Session Summary Question: Insights on network solutions growth and customer conversations - Management highlighted strong growth in network solutions and emphasized the importance of product development and delivery in driving results [19][20] Question: Provider market conversations and outlook - Management indicated that conversations with providers remain focused on delivering value through products, with no significant changes in the competitive landscape [25] Question: ROI visibility for network solutions customers - Management explained that clients can adjust campaigns based on performance, with a strong emphasis on delivering results [31] Question: Sales and marketing performance - Management noted that previous investments in sales and marketing are yielding returns, with expectations for continued growth [36] Question: Capital deployment opportunities - Management stated that while the cash position is improving, the approach to evaluating opportunities remains consistent, focusing on buy, build, or rent strategies [40][42] Question: Impact of proposed legislation on pharma advertising - Management acknowledged ongoing legislative discussions but emphasized the differentiated value of their platform [58] Question: Seasonality in network solutions revenue - Management clarified that fluctuations in revenue are more related to program pacing rather than strict seasonality [62] Question: Labor strategy and expense trajectory - Management explained that recent headcount changes were due to consolidation rather than new hiring strategies [54] Question: Cash conversion rates and payment processing revenue - Management indicated that cash conversion rates are expected to resemble first-quarter performance for the rest of the year [86] Question: Monetization of Medifine offering - Management described Medifine as still in early stages but showing positive revenue contributions [93][95]

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]

Q1 FY2026 Performance Highlights - Total revenue reached $115.9 million, a 15% year-over-year increase and a 6% sequential increase[11, 71] - Adjusted EBITDA was $20.8 million, showing a 409% year-over-year increase and a 27% sequential increase[11, 75] - Net loss improved significantly to $3.9 million, an 80% year-over-year decrease and a 39% sequential decrease[11, 71, 75] - The company had 4,411 Average Healthcare Services Clients (AHSCs)[11, 15, 27] Financial Outlook for Fiscal Year 2026 - Total revenue is projected to be between $472 million and $482 million[42, 44] - Adjusted EBITDA is expected to be between $85 million and $90 million[42, 45] - The company anticipates having approximately 4,500 AHSCs[42, 53] Revenue Streams and Growth - Subscription and related services accounted for 47% of Q1 FY26 revenue[39, 71] - Payment processing fees contributed 26% to Q1 FY26 revenue[39, 71] - Network solutions made up 27% of Q1 FY26 revenue[39, 71] - Patient payments processed in the latest twelve months exceeded $4 billion[15]

Financial Performance - Total revenue for the first quarter was $115.9 million, representing a 15% year-over-year increase[8] - Adjusted EBITDA for the quarter was $20.8 million, compared to $4.1 million in the same period last year[8] - Net loss for the quarter was $3.9 million, significantly improved from a net loss of $19.7 million in the prior year[8] - Total revenues for the three months ended April 30, 2025, were $115,936,000, a 14.5% increase from $101,217,000 in the same period of 2024[20] - Adjusted EBITDA for the three months ended April 30, 2025, was $20,816,000, compared to $4,093,000 in the same period of 2024, indicating a substantial increase[32] - Net loss for the three months ended April 30, 2025, was $3,914,000, significantly improved from a net loss of $19,722,000 in the same period of 2024[22] - The company reported a comprehensive loss of $3,479,000 for the three months ended April 30, 2025, compared to a comprehensive loss of $19,721,000 in the same period of 2024[22] Client Metrics - Average number of healthcare services clients (AHSCs) was 4,411, up 9% year-over-year[8] - Average number of healthcare services clients (AHSCs) rose to 4,411 in Q1 2025 from 4,065 in Q1 2024, reflecting a growth of 8.5%[39] - The company expects to reach approximately 4,500 AHSCs in fiscal 2026, with total revenue per AHSC projected to increase from fiscal 2025[5] Revenue per Client - Total revenue per AHSC was $26,283, an increase of 6% year-over-year[8] - Total revenue per AHSC increased to $26,283 in Q1 2025 from $24,900 in Q1 2024, marking a growth of 5.5%[39] Cash Position - Cash and cash equivalents as of April 30, 2025, were $90.9 million, up $6.7 million from January 31, 2025[8] - Cash and cash equivalents at the end of the period were $90,871,000, up from $79,527,000 at the end of the same period in 2024[24] - Net cash provided by operating activities was $14,850,000 for the three months ended April 30, 2025, compared to a cash outflow of $721,000 in the same period of 2024[24] - The company had no borrowings outstanding under its credit facility as of April 30, 2025, providing additional capital flexibility for growth opportunities[6] Revenue Outlook - The company maintains its revenue outlook for fiscal 2026, expecting revenue between $472 million and $482 million[4] - Adjusted EBITDA outlook for fiscal 2026 has been updated to a range of $85 million to $90 million, up from a previous range of $78 million to $88 million[5] Payment Metrics - Patient payment volume for Q1 2025 reached $1,314 million, up from $1,166 million in Q1 2024, representing an increase of approximately 12.7%[42] - Payment facilitator volume percentage increased to 82% in Q1 2025 from 81% in Q1 2024, indicating a slight growth in the proportion of transactions processed as a payment facilitator[42] - The company views patient payment volume as a key indicator of the health of its healthcare services clients' businesses and the shift of healthcare costs to patients[42] - Payment facilitator volume is a major driver of the company's payment processing revenue, with potential for slight decline in percentage as enterprise customer penetration increases[42] Expense Management - Total expenses decreased to $119,223,000 in Q1 2025 from $120,637,000 in Q1 2024, a reduction of 1.2%[20]

Core Insights - Phreesia (PHR) is expected to report a quarterly loss of $0.13 per share, marking a 62.9% increase in losses compared to the same period last year [1] - Revenue forecasts for Phreesia stand at $114.69 million, reflecting a year-over-year increase of 13.3% [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating stability in analysts' projections [1] Revenue Estimates - Analysts predict 'Revenue - Subscription and related services' will reach $52.43 million, a 12.2% increase from the previous year [4] - 'Revenue - Network solutions' is estimated at $33.40 million, showing a year-over-year change of 21.8% [4] - 'Revenue - Payment processing fees' is forecasted to be $28.87 million, indicating a 6.7% increase from the year-ago quarter [4] Client Metrics - The estimated 'Average healthcare services Clients' is projected at 4,373, up from 4,065 in the same quarter last year [5] - 'Average revenue per healthcare services client' is expected to reach $18.65 million, compared to $18.24 million a year ago [5] Payment Volume - 'Patient payment volume' is anticipated to be $1.25 billion, an increase from $1.17 billion in the previous year [6] Stock Performance - Phreesia shares have decreased by 2.8% over the past month, contrasting with the Zacks S&P 500 composite's increase of 8.2% [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [6]

Group 1 - The stock of Phreesia (PHR) closed at $24.84, showing a 2.6% increase over the past four weeks, with a mean price target of $31.80 indicating a potential upside of 28% [1] - Analysts have set 15 short-term price targets for PHR, ranging from a low of $29 to a high of $36, with a standard deviation of $2.34, suggesting a consensus among analysts [2] - The Zacks Consensus Estimate for the current year has increased by 14.4% over the last 30 days, with three estimates moving higher and no negative revisions [11] Group 2 - There is strong agreement among analysts regarding PHR's ability to report better earnings than previously predicted, which supports the expectation of an upside [4][10] - PHR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential for near-term upside [12] - While price targets can be misleading, the direction implied by the consensus price target for PHR appears to be a useful guide for potential price movement [9][12]