Phreesia(US:PHR)2025-12-08 23:02Financial Data and Key Metrics Changes - Total revenue for Q3 Fiscal 2026 was $120.3 million, representing a 13% year-over-year increase [12] - Adjusted EBITDA reached $29.1 million, an increase of $19 million year-over-year and $7 million quarter-over-quarter, with an all-time high adjusted EBITDA margin of 24% [12][13] - Net income was $4.3 million, marking the second consecutive quarter of positive net income [14] - Cash and cash equivalents at the end of the quarter were $106.4 million, up from $98.3 million in the prior quarter [15] Business Line Data and Key Metrics Changes - Average Healthcare Services Clients (AHSCs) increased to 4,520, up by 53 from the prior quarter, with expectations to reach 4,500 for the full fiscal year [13] - Total revenue per AHSC was $26,622, a 6% increase year-over-year [14] Market Data and Key Metrics Changes - The company expects to add approximately 80 AHSCs annually through the AccessOne acquisition, which manages a portfolio of approximately $450 million [17] - AccessOne's blended take rate averages 4%-12% on its managed portfolio, depending on the provider type and program mix [17] Company Strategy and Development Direction - The company is focusing on provider financing and healthcare provider marketing as new growth areas, aiming to enhance stakeholder value [7][8] - The acquisition of AccessOne is seen as a significant growth lever, addressing the financial risks faced by healthcare providers due to rising patient financial responsibility [8][10] - The company aims to leverage its existing relationships and infrastructure to participate in the multi-billion dollar healthcare provider marketing opportunity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of AccessOne and plans to invest in its go-to-market strategy [24][25] - The updated revenue outlook for fiscal 2026 is projected to be between $479 million and $481 million, reflecting contributions from AccessOne [18] - For fiscal 2027, the company anticipates revenue in the range of $545 million to $559 million, with AccessOne contributing approximately 6.5% [21] Other Important Information - The company has achieved positive operating cash flow and free cash flow for five consecutive quarters [15] - The AccessOne acquisition was funded with approximately $53 million in cash and a $110 million secured bridge loan [16] Q&A Session Summary Question: Growth potential for AccessOne - Management indicated that AccessOne's product needs investment before it can be offered to the majority of existing clients, with plans to invest in go-to-market strategies [24][25] Question: Financing and loan refinancing - Management is actively looking to replace the bridge loan and is confident in the demand for financing options [29] Question: AHSC growth strategy - Management highlighted that the provider side is seeing strong demand for intake and AI offerings, while Network Solutions and new offerings are expected to drive growth [30] Question: Core organic growth expectations - Management expects core organic growth to be in the mid-single-digit percentage range for fiscal 2027, with Network Solutions anticipated to grow the fastest [32][34] Question: HCP marketing initiative - Management confirmed that they have started selling the HCP marketing offering to select clients and expect it to generate incremental revenue [41] Question: Updated guidance concerns - Management clarified that the updated guidance reflects a more measured approach to Network Solutions due to market fluidity [43][46] Question: AccessOne's funded and unfunded models - Management emphasized AccessOne's flexibility in offering various funding models to meet client needs and expected to learn which offerings resonate best with clients [50] Question: DTC advertising impact - Management acknowledged that political issues around DTC advertising contribute to market fluidity but expressed confidence in their long-term positioning [54][56] Question: MediFind's competitive advantages - Management highlighted MediFind's focus on connecting patients with the right specialists without the need for paid leads, enhancing its competitive position [62]