Phreesia (PHR) Fell in Q3 Despite Reporting Better Results

Core Insights - Conestoga Capital Advisors reported strong equity market performance in Q3 2025, with their Micro-Cap Composite returning 11.7% net-of-fees, while the Russell Microcap Growth Index returned 19.9% [1] Company Overview: Phreesia, Inc. (NYSE:PHR) - Phreesia, Inc. is a SaaS-based software and payment platform provider for the healthcare sector, headquartered in Wilmington, Delaware [2] - As of October 17, 2025, Phreesia's stock closed at $22.29 per share, with a market capitalization of $1.335 billion [2] Financial Performance - Phreesia reported a 15% year-over-year revenue growth in Q2 2026, totaling $117.3 million, with EBITDA margins expanding to 19% [3][4] - The company raised its full-year profitability outlook following better-than-expected Q2 results [3] Recent Developments - Phreesia announced the acquisition of AccessOne for $160 million, which is expected to add $35 million in revenue and $11 million in EBITDA [3] - The acquisition raised some investor concerns as it represents an expansion into a new area within their payments platform [3] Market Position - Phreesia was held by 28 hedge fund portfolios at the end of Q2 2025, indicating stable interest among institutional investors [4] - Despite its potential, the company is viewed as having less upside compared to certain AI stocks, which are considered to carry less downside risk [4]