Phreesia(PHR)2023-12-05 16:00Financial Performance - Total revenue increased 25% to $91.6 million for the three months ended October 31, 2023, compared to $73.1 million for the same period in 2022[155] - Net loss decreased to $31.9 million for the three months ended October 31, 2023, from a net loss of $40.2 million in the same period of 2022[155] - Adjusted EBITDA improved to negative $6.6 million for the three months ended October 31, 2023, compared to negative $18.3 million for the same period in 2022[155] - Total revenue for the three months ended October 31, 2023, was $91.6 million, an increase of 25% compared to $73.1 million in the same period in 2022[184] - Total revenue for the nine months ended October 31, 2023, was $261.3 million, an increase of 28% compared to $204.3 million in the same period in 2022[185] - Adjusted EBITDA for the nine months ended October 31, 2023, was $(31,918) thousand, an improvement from $(74,865) thousand in the same period of 2022[218] Client and Patient Metrics - Average number of healthcare services clients (AHSCs) increased to 3,688 for the three months ended October 31, 2023, from 2,982 in the same period of 2022[169] - Patient payment volume rose to $965 million for the three months ended October 31, 2023, compared to $815 million for the same period in 2022[171] - Total revenue per AHSC was $24,842 for the three months ended October 31, 2023, up 1% from $24,515 in the same period last year[184] - Healthcare services revenue per AHSC remained relatively flat at $17,845 for the three months ended October 31, 2023, compared to $17,645 in the prior year[184] Revenue Breakdown - Subscription and related services revenue increased by $9.6 million to $42.6 million for the three months ended October 31, 2023, representing a 29% growth year-over-year[186] - Payment processing fees revenue rose by $3.6 million to $23.2 million for the three months ended October 31, 2023, an 18% increase compared to the prior year[186] - Network solutions revenue increased by $5.3 million to $25.8 million for the three months ended October 31, 2023, a 26% growth year-over-year[186] - Subscription and related services revenue for the nine months ended October 31, 2023, increased by $26.6 million to $119.8 million, a 29% growth year-over-year[185] - Payment processing fees for the nine months ended October 31, 2023, increased by $12.5 million to $71.1 million, a 21% increase compared to the prior year[193] Expenses - Sales and marketing expense decreased by $0.2 million to $36.5 million for the three months ended October 31, 2023, compared to $36.6 million for the same period in 2022, primarily due to a $1.8 million decrease in total compensation and benefits costs[195] - Research and development expense increased by $5.9 million to $28.5 million for the three months ended October 31, 2023, representing a 26% increase compared to $22.7 million for the same period in 2022[199] - General and administrative expense increased by $0.6 million to $20.2 million for the three months ended October 31, 2023, reflecting a 3% increase from $19.6 million for the same period in 2022[203] - Sales and marketing expense decreased by $3.9 million to $111.1 million for the nine months ended October 31, 2023, a 3% decline from $115.0 million for the same period in 2022[197] - Research and development expense increased by $16.6 million to $82.5 million for the nine months ended October 31, 2023, representing a 25% increase compared to $65.8 million for the same period in 2022[201] - General and administrative expense increased by $0.6 million to $61.1 million for the nine months ended October 31, 2023, a 1% increase from $60.5 million for the same period in 2022[205] Cash Flow and Financial Position - Cash and cash equivalents decreased to $103.4 million as of October 31, 2023, down $73.3 million from January 31, 2023[155] - Free cash flow was negative $11.6 million for the three months ended October 31, 2023, compared to negative $27.5 million for the same period in 2022[155] - Free cash flow for the nine months ended October 31, 2023, was $(46,533) thousand, compared to $(93,828) thousand for the same period in 2022, indicating a 50.5% reduction in cash outflow[220] - During the nine months ended October 31, 2023, net cash used in operating activities was $29.3 million, a decrease from $74.2 million in the same period of 2022[239] - The company believes its cash and cash equivalents, along with cash generated from operations, are sufficient to fund operations for at least the next 12 months[232] Acquisitions - The company acquired MediFind for $8.9 million on June 30, 2023, to enhance patient-centered care offerings[161] - The acquisition of Access for $37.4 million on August 11, 2023, aims to improve workflows and patient experience in hospitals[162] - The company spent $14.3 million on acquisitions (MediFind, Access, and ConnectOnCall) during the nine months ended October 31, 2023[241] - The acquisition of ConnectOnCall included liabilities with an acquisition-date fair value of $10,000 thousand, payable in seven quarterly installments from December 2023 through June 2025[236] Debt and Financing - A new 5-year $50 million senior secured asset-based revolving credit facility was established on December 4, 2023, to enhance financial flexibility[166] - The company entered into a new 5-year $50 million Capital One Credit Facility on December 4, 2023, to replace the terminated Third SVB Facility[229] - As of October 31, 2023, the company had no debt outstanding under the Third SVB Facility and entered into the Capital One Credit Facility on December 4, 2023[255] - The company had no outstanding debt under the Capital One Credit Facility as of the filing date of the report[256] Market Risks and Accounting Policies - The company is exposed to market risks, primarily interest rate and foreign exchange risks, in its operations in the United States and Canada[253] - The company’s estimates and assumptions in financial reporting may differ from actual results, affecting future financial statements and cash flows[250] - There were no significant changes in the company's critical accounting policies and estimates during the three months ended October 31, 2023[251] - During the nine months ended October 31, 2023, there were no significant changes in the company's disclosures about market risk[257] - Changes in interest rates will impact interest expense if the company borrows against the Capital One Credit Facility in the future[256] - The company does not anticipate that a 100 basis point change in interest rates would materially affect its financial condition[254]