EX-99.1 2 phrex-991earningsrelea.htm EX-99.1 Document

Exhibit 99.1
Phreesia Announces Fiscal Year End 2020 Results
NEW YORK, April 22, 2020 – Phreesia, Inc. (NYSE: PHR) (“Phreesia”) announced financial results today for the fiscal fourth quarter and year ended January 31, 2020.
Fiscal Fourth Quarter 2020 Highlights
 
•Revenue was $32.8 million in the quarter as compared to $26.5 million in the same period in the prior year, an increase of 24%.
•Average number of provider clients was 1,603 in the quarter as compared to 1,543 in the same period in the prior year, an increase of 4%.
•Average revenue per provider client was $16,708 in the quarter compared to $14,219 in the same period in the prior year, an increase of 18%.
•Adjusted EBITDA was $1.3 million in the quarter compared to $0.4 million in the same period in the prior year.
•Cash on the balance sheet as of January 31, 2020 was $90.3 million, down $1.1 million from October 31, 2019.
Fiscal Year End January 31, 2020 Highlights
 
•Revenue was $124.8 million in fiscal 2020 as compared to $99.9 million in fiscal 2019, an increase of 25%.
•Average number of provider clients was 1,571 in fiscal 2020 as compared to 1,490 in fiscal 2019, an increase of 5%.
•Average revenue per provider client was $65,486 in fiscal 2020 as compared to $54,231 in fiscal 2019, an increase of 21%.
•Adjusted EBITDA was $4.8 million in fiscal 2020 as compared to $3.5 million in fiscal 2019.
•Cash on the balance sheet as of January 31, 2020 was $90.3 million, up $88.8 million from January 31, 2019.
Conference Call Information
The Company will hold a conference call on Thursday, April 23, 2020, at 8:30 a.m. Eastern Time to review the Company’s fiscal fourth quarter and fiscal year 2020 financial results. To participate in the Company’s live conference call and webcast, please dial (866) 211-4557 (or (647) 689-6750 for international participants) using conference code number 2346258 or visit the “Events & Presentations” section of ir.phreesia.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

Recent Events

The Company filed a Current Report on Form 8-K on April 6, 2020 (the “8-K”) to provide an update related to the outbreak of a novel strain of Coronavirus (“COVID-19”) and its impact on the Company’s business. As set forth in the 8-K, COVID-19 has and could continue to materially and adversely impact Phreesia’s business and results of operations. However, the rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. During the interim period since the filing of the 8-K, there has been no change to the information disclosed therein.


Phreesia, Inc.
Balance sheets
(Unaudited)
in thousands, except for shares and per share data
January 31, 2020January 31, 2019
Assets
Current:
Cash and cash equivalents$90,315  $1,543  
Settlement assets12,368  10,217  
Accounts receivable, net of allowance for doubtful accounts of $943 and $517
21,978  16,073  
Deferred contract acquisition costs1,720  1,673  
Prepaid expenses5,157  3,811  
Total current assets$131,538  $33,317  
Property and equipment, net of accumulated depreciation and amortization of $35,551 and $27,862
14,487  14,211  
Capitalized internal-use software, net of accumulated amortization of $19,554 and $14,621
8,735  7,816  
Deferred contract acquisition costs1,594  1,521  
Intangible assets, net of accumulated amortization of $271 and $33
1,199  1,437  
Long-term deferred tax assets775  —  
Goodwill250  250  
Other assets180  710  
Total assets$158,758  $59,262  
Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)
Current:
Settlement obligations$12,368  $10,217  
Current portion of long-term debt—  97  
Current portion of capital leases2,324  1,869  
Accounts payable6,017  3,750  
Accrued expenses9,243  5,507  
Deferred revenue5,401  6,488  
Total current liabilities$35,353  $27,929  
Long-term debt, net of current portion19,444  27,918  
Capital leases, net of current portion2,096  2,401  
Warrant liability—  5,498  
Total liabilities$56,893  $63,746  
Redeemable preferred stock:
Senior A redeemable preferred stock, $0.01 par value—14,500,000 shares authorized as of January 31, 2019; 13,674,365 issued and outstanding as of January 31, 2019;
—  79,311  
Series B redeemable convertible preferred stock, $0.01 par value—10,820,169 shares authorized as of January 31, 2019; 9,197,142 shares issued and outstanding as of January 31, 2019;
—  51,872  
Junior convertible preferred stock, $0.01 par value—34,000,000 shares authorized as of January 31, 2019; 32,746,041 shares issued and outstanding as of January 31, 2019;
—  32,746  
Redeemable preferred stock, $0.01 par value— 44,000,000 shares authorized as of January 31, 2019; 42,560,530 shares issued and outstanding as of January 31, 2019;
—  42,561  
Total redeemable preferred stock—  206,490  
Stockholders’ Equity (Deficit):
Common stock, $0.01 par value—500,000,000 and 80,000,000 shares authorized as of January 31, 2020 and January 31, 2019, respectively; 36,610,763 and 1,994,721 shares issued and outstanding as of January 31, 2020 and January 31, 2019, respectively
366  20  
Additional paid-in capital386,383  —  
Accumulated deficit(284,485) (210,994) 
Treasury stock$(399) —  
Total stockholders’ equity (deficit)$101,865  $(210,974) 
Total Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)$158,758  $59,262  



Phreesia, Inc.
Statements of Operation
(Unaudited)
in thousands, except for shares and per share data
 
 Three months ended January 31,Fiscal year ended January 31,
 2020201920202019
Revenue:
Subscription and related services$15,064  $12,537  $56,357  $43,928  
Payment processing fees11,719  9,403  46,500  36,881  
Life sciences6,032  4,543  21,927  19,080  
Total revenues32,815  26,483  124,784  99,889  
Expenses:
Cost of revenue (excluding depreciation and amortization)4,237  4,473  16,831  15,105  
Payment processing expense6,936  5,582  27,889  21,892  
Sales and marketing8,187  6,396  32,357  26,367  
Research and development4,860  4,205  18,623  14,349  
General and administrative9,609  5,958  30,458  20,076  
Depreciation2,310  2,037  8,753  7,552  
Amortization1,348  1,130  5,171  4,042  
Total expenses37,487  29,782  140,082  109,382  
Operating loss(4,672) (3,299) (15,298) (9,494) 
Other income (expense)(283) (173) (1,023) (7) 
Change in fair value of warrant liability—  (562) (3,307) (2,058) 
Interest income (expense)(676) (1,045) (2,445) (3,504) 
Total other income (expense)(959) (1,780) (6,775) (5,568) 
Loss before benefit from (provision for) income taxes(5,631) (5,080) (22,073) (15,062) 
Benefit from (provision for) income taxes1,963  —  1,780  —  
Net loss(3,668) (5,080) (20,293) (15,062) 
Preferred stock dividend paid—  —  (14,955) —  
Accretion of redeemable preferred stock—  —  (56,175) (30,199) 
Net loss attributable to common stockholders, basic and diluted$(3,668) $(5,080) $(91,423) $(45,261) 
Net loss per share attributable to common stockholders, basic and diluted$(0.10) $(2.58) $(4.50) $(24.53) 
Weighted-average common shares outstanding, basic and diluted36,010,388  1,971,031  20,301,189  1,844,929  



Phreesia, Inc.
Statements of Cash Flows
(Unaudited)
in thousands, except for shares and per share data
 For the fiscal years ended January 31,
 202020192018
Cash flows from operating activities:
Net loss$(20,293) $(15,062) (18,192) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization13,924  11,594  9,640  
Stock-based compensation expense6,177  1,447  805  
Change in fair value of warrants liability3,307  2,058  598  
Amortization of debt discount445  798  904  
Loss on extinguishment of debt1,073  —  —  
Cost of Phreesia hardware purchased by customers741  585  —  
Deferred contract acquisition costs amortization1,977  1,640  1,389  
Deferred tax asset(775) —  —  
Changes in operating assets and liabilities
Accounts receivable(5,905) (3,765) (3,382) 
Prepaid expenses and other assets(312) (576) (319) 
Deferred contract acquisition costs(2,097) (2,500) (1,773) 
Accounts payable(30) 2,367  (2,057) 
Accrued expenses and other3,681  (2,317) 1,968  
Deferred revenue(1,087) 1,601  (723) 
Net cash provided by (used in) operating activities$826  $(2,130) $(11,142) 
Cash flows used in investing activities:
Acquisition—  (1,190) —  
Capitalized internal-use software(5,305) (5,109) (5,375) 
Purchase of property and equipment(7,015) (4,724) (6,590) 
Net cash used in investing activities$(12,320) $(11,023) $(11,965) 
Cash flows from financing activities:
Proceeds from IPO$130,781  $—  —  
Proceeds from revolving line of credit9,876  14,800  12,400  
Payments of revolving line of credit(17,676) (7,000) (20,400) 
Proceeds from term loan20,000  —  —  
Proceeds from loan payable—  —  10,000  
Repayment of term loan(1,042) (1,167) (1,167) 
Repayment of loan payable(20,000) —  —  
Payment of preferred stock dividends(14,955) —  —  
Payment on capital leases(1,898) (2,470) (1,929) 
Debt extinguishment costs(300) —  —  
Debt issuance costs(112) (136) (224) 
Proceeds from issuance of preferred stock, net—  —  32,459  
Proceeds from issuance of common stock upon exercise of stock options1,809  361  147  
Payment of offering costs(6,217) (195) —  
Net cash provided by financing activities$100,266  $4,193  $31,286  
Net increase in cash and cash equivalents88,772  (8,960) 8,179  
Cash and cash equivalents – beginning of period1,543  10,503  2,323  


Cash and cash equivalents – end of period$90,315  $1,543  $10,503  
Disclosures of additional investing and financing activities:
Supplemental information:
Property and equipment acquisitions through capital leases$2,047  $4,425  $781  
Deferred debt issuance costs included in accrued expenses$—  $—  $100  
Deferred issuance costs included in accounts payable and accrued expenses$—  $344  $—  
Purchase of property and equipment and capitalized software included in accounts payable$1,253  $—  $—  
Shares issued in connection with acquisition$—  $162  $—  
Issuance of warrants related to debt$833  $—  $—  
Net exercise of preferred stock warrant$—  $—  $28  
Cash payments for:
Interest$2,310  $2,799  $2,799  

Non-GAAP financial measures
Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss, before net interest expense (income), provision for income taxes, depreciation and amortization, and before non-cash based compensation expense, non-cash change in fair value of warrant liability and net other income (expense).
We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. We have presented Adjusted EBITDA in this release and our Annual Report on Form 10-K because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:
 
•Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; or (3) tax payments that may represent a reduction in cash available to us; (4) other interest (expense); and
•Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.
Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:



Phreesia, Inc.
Adjusted EBITDA
 
 Three months ended January 31,Fiscal year ended
January 31,
(in thousands, unaudited)2020201920202019
Net loss$(3,668) $(5,080) $(20,293) $(15,062) 
Interest (income) expense676  1,045  2,445  3,504  
Depreciation and amortization3,657  3,167  13,924  11,594  
Stock-based compensation expense2,345  497  6,177  1,447  
Change in fair value warrant liability—  562  3,307  2,058  
(Benefit from) provision for income taxes(1,963) —  (1,780) —  
Other (income) expense283  173  1,023  7  
Adjusted EBITDA$1,330  $364  $4,803  $3,548  



Phreesia, Inc.
Reconciliation of GAAP and Adjusted Operating Expenses (Unaudited)
 
 Three months ended January 31,Fiscal year ended
January 31,
(in thousands)2020201920202019
GAAP operating expenses
General and administrative9,609  5,958  $30,458  $20,076  
Sales and marketing8,187  6,396  32,357  26,367  
Research and development4,860  4,205  18,623  14,349  
Cost of revenue4,237  4,473  16,831  15,105  
$26,893  $21,032  $98,269  $75,897  
Stock compensation included in GAAP operating expenses
General and administrative1,548  3613,901  902
Sales and marketing507  751,370  298
Research and development311  61796  247
Cost of revenue(21) —  110  —  
$2,345  $497  $6,177  $1,447  
Adjusted operating expenses
General and administrative$8,061  $5,597  $26,557  $19,174  
Sales and marketing7,680  6,321  30,987  26,069  
Research and development4,549  4,144  17,827  14,102  
Cost of revenue4,258  4,473  16,721  15,105  
$24,548  $20,535  $92,092  $74,450  

Phreesia, Inc.
Key Metrics
 
 Three months ended January 31, Fiscal year ended
January 31,
 2020201920202019
Key Metrics:
Provider clients (average over period)1,603  1,543  1,571  1,490  
Average revenue per provider client$16,708  $14,219  $65,486  $54,231  
Patient payment volume (in millions)$477  $369  $1,865  $1,446  

•Provider clients. We define provider clients as the average number of healthcare provider organizations that generate revenue each month during the applicable period. In one specific case wherein we act as a subcontractor providing white-label services to our partner’s clients, we treat this contractual relationship as a single provider client. We believe growth in the number of provider clients is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our Platform to healthcare provider organizations that are not yet clients. While growth in the number of provider clients is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future provider client growth. For example, as the number of provider clients increases, we may need to add to our customer support team and invest to maintain effectiveness and performance of our Platform and software for our provider clients and their patients.

•Average revenue per provider client. We define average revenue per provider client as the total subscription and related services and payment processing revenue generated from provider clients in a given period divided by the average number of provider clients that generate revenue each month during that same period. We are focused on continually delivering value to our provider clients and believe that our ability to


increase average revenue per provider client is an indicator of the long-term value of our existing provider client relationships.

•Patient payment volume. We measure patient payment volume as the total dollar volume of transactions between our provider clients and their patients utilizing our payment platform, including via credit and debit cards, cash and check. Patient payment volume is a major driver of our payment processing revenue, and we believe that patient payment volume is an indicator of both the underlying health of our provider clients’ businesses and the continuing shift of healthcare costs to patients. Credit and debit patient payment volume processed through our payment facilitator model represented 82% and 83% of our patient payment volume in fiscal 2020 and 2019, respectively. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions. Credit and debit patient payment volume processed through our payment facilitator model represented 82% and 83% in the three months ended January 31, 2020 and 2019, respectively.

Available Information
Phreesia intends to use its Company website (including its Investor Relations website) as well as its Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Forward Looking Statements
Statements we make in this press release may include statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Phreesia’s plans, intentions, expectations, strategies and prospects. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, statements about our future financial performance, including our revenue, costs of revenue and operating expenses and our business outlook for fiscal 2020; our anticipated growth; our predictions about our industry; the impact of the COVID-19 pandemic on our business and our ability to attract, retain and cross-sell to healthcare provider clients. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Phreesia’s filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K that will be filed with the SEC following this earnings release. The forward-looking statements in this release are based on information available to Phreesia as of the date hereof, and Phreesia disclaims any obligation to update any forward-looking statements, except as required by law.
This press release includes certain non-GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures.
ABOUT PHREESIA
Phreesia gives healthcare organizations a suite of robust applications to manage the patient intake process. Our innovative SaaS platform engages patients in their care and provides a modern, consistent experience, while enabling healthcare organizations to optimize their staffing, boost profitability and enhance clinical care.
Investors:                
Balaji Gandhi
Phreesia, Inc.
investors@phreesia.com
(929) 506-4950
Media:


Maureen McKinney
Phreesia Inc.
mmckinney@phreesia.com
773-330-8908