Phreesia(US:PHR)2025-12-09 21:02Financial Performance - Total revenue increased 13% to $120.3 million for the three months ended October 31, 2025, compared to $106.8 million for the same period in 2024[163]. - Net income was $4.3 million for the three months ended October 31, 2025, compared to a net loss of $14.4 million for the same period in 2024[163]. - Adjusted EBITDA was $29.1 million for the three months ended October 31, 2025, compared to $9.8 million for the same period in 2024[163]. - Free cash flow was $8.8 million for the three months ended October 31, 2025, compared to $1.6 million for the same period in 2024[163]. - Total revenue for the nine months ended October 31, 2025, was $353.5 million, a 14% increase from $310.1 million for the same period in 2024[195]. - Adjusted EBITDA for the three months ended October 31, 2025, was $29.1 million, up 198% from $9.8 million in the same period of 2024[231]. - Net cash provided by operating activities for the nine months ended October 31, 2025, was $45.2 million, significantly higher than $16.1 million for the same period in 2024[246]. Revenue Breakdown - Subscription and related services revenue increased by $6.1 million to $55.5 million for the three months ended October 31, 2025, representing a 12% growth year-over-year[194]. - Payment processing fees revenue rose by $2.7 million to $27.4 million for the three months ended October 31, 2025, an 11% increase compared to the prior year[196]. - Network solutions revenue increased by $4.7 million to $37.4 million for the three months ended October 31, 2025, reflecting a 14% growth year-over-year[196]. - Subscription and related services revenue for the nine months ended October 31, 2025, increased by $18.8 million to $163.5 million, a 13% growth year-over-year[197]. - Payment processing fees revenue for the nine months ended October 31, 2025, rose by $8.7 million to $85.7 million, an 11% increase compared to the prior year[197]. - Network solutions revenue for the nine months ended October 31, 2025, increased by $15.9 million to $104.2 million, reflecting an 18% growth year-over-year[197]. Expenses - Cost of revenue (excluding depreciation and amortization) for the three months ended October 31, 2025, was $18.3 million, a 3% increase from $17.9 million in the same period of 2024[198]. - Payment processing expense for the three months ended October 31, 2025, increased by $3.0 million to $19.7 million, an 18% rise compared to $16.7 million in the prior year[202]. - Sales and marketing expense decreased by $5.9 million to $24.1 million for the three months ended October 31, 2025, a 20% decline compared to $30.1 million for the same period in 2024[204]. - Research and development expense increased by $0.1 million to $29.5 million for the three months ended October 31, 2025, remaining relatively stable with a 0% change from $29.3 million in 2024[208]. - General and administrative expense decreased by $2.1 million to $17.5 million for the three months ended October 31, 2025, an 11% decline compared to $19.6 million for the same period in 2024[212]. - Sales and marketing expense decreased by $16.7 million to $75.6 million for the nine months ended October 31, 2025, an 18% decline compared to $92.3 million in 2024[206]. - Research and development expense increased by $2.8 million to $90.6 million for the nine months ended October 31, 2025, a 3% increase from $87.7 million in 2024[210]. - General and administrative expense decreased by $5.2 million to $52.9 million for the nine months ended October 31, 2025, a 9% decline compared to $58.2 million in 2024[214]. - Amortization expense increased by $2.2 million to $12.3 million for the nine months ended October 31, 2025, a 22% increase from $10.1 million in 2024[219]. Cash and Financing - Cash and cash equivalents as of October 31, 2025, were $106.4 million, an increase of $22.2 million compared to January 31, 2025[163]. - The AccessOne Acquisition was completed on November 12, 2025, for a total cash consideration of $160 million, funded by cash and a $110 million secured term loan[236]. - The Bridge Loan associated with the AccessOne Acquisition has an outstanding principal of $110 million and matures on November 11, 2026, with an interest rate that increases by 0.5% every three months[237]. - The company entered into a 364-day secured term loan of $110 million on November 12, 2025, with an interest rate of three-month SOFR plus a margin of 4.00% per annum, increasing by 0.5% every three months[266]. - The Capital One Credit Facility, entered in December 2023, provides a $50 million revolving credit line, enhancing financial flexibility through fiscal 2028[238]. - The company expects that its cash and cash equivalents, along with cash generated from operations, will be sufficient to meet its needs for at least the next 12 months[242]. - As of October 31, 2025, the company had cash and cash equivalents primarily in money market funds and cash deposits, with a portfolio relatively insensitive to interest rate changes[264]. Foreign Currency and Market Risk - For the fiscal year ended January 31, 2025, changes in foreign currency exchange rates negatively affected expenses and largely offset operating income[267]. - Approximately 86% of the company's expenses for the three months ended October 31, 2025, were denominated in US Dollars[267]. - Foreign currency gains and losses for the nine months ended October 31, 2025, were gains of $0.2 million and losses of $0.3 million for the same period in 2024[268]. - The company entered into foreign currency forward contracts to hedge a portion of Canadian Dollar payroll payments, with 90% designated as cash flow hedges[269]. - A 1% increase or decrease in foreign exchange rates between the Canadian Dollar, Indian Rupee, and US Dollar is not expected to have a material effect on the company's results of operations or financial condition[270]. - There were no significant changes in the company's market risk disclosures during the nine months ended October 31, 2025[271].