Revenue was $32.8 million in the quarter compared to $24.8 million in the same period in the prior year, an increase of 33%.

Average provider revenue per provider client was $16,637 in the quarter compared to $13,308 in the same period in the prior year, an increase of 25%.

Average number of provider clients was 1,573 in the quarter compared to 1,503 in the same period in the prior year, an increase of 5%.

Adjusted EBITDA was $3.0 million in the quarter compared to $0.4 million in the same period in the prior year.

Cash on the balance sheet as of October 31st was $91.4 million, down $8.7 million from July 31, 2019.

We expect fiscal 2020 revenue to be in the range of $122.0 to $122.5 million compared to our previous range of $118.5 to $119.0 million.

We expect to be Adjusted EBITDA positive in fiscal 2020.

Assets

Current:

Cash and cash equivalents

Settlement assets

Accounts receivable, net of allowance for doubtful accounts of $729 and $517

Deferred contract acquisition costs

Prepaid expenses

Total current assets

Property and equipment, net of accumulated depreciation and amortization of $34,304 and $27,862

Capitalized internal-use software, net of accumulated amortization of $18,266 and $14,621

Deferred contract acquisition costs

Intangible assets, net of accumulated amortization of $212 and $33

Goodwill

Other assets

Total assets

Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)

Current:

Settlement obligations

Current portion of long-term debt

Current portion of capital leases

Accounts payable

Accrued expenses

Deferred revenue

Total current liabilities

Long-term debt, net of current portion

Capital leases, net of current portion

Warrant liability

Total liabilities

Commitments and contingencies (Note 12)

Redeemable preferred stock:

Senior A redeemable preferred stock, $0.01 par value—0 and 14,500,000 shares authorized as of October 31, 2019 and January 31, 2019, respectively; 0 and 13,674,365 issued and outstanding as of October 31, 2019 and January 31, 2019, respectively

Series B redeemable convertible preferred stock, $0.01 par value—0 and 10,820,169 shares authorized as of October 31, 2019 and January 31, 2019, respectively; 0 and 9,197,142 shares issued and outstanding as of October 31, 2019 and January 31, 2019 , respectively

Junior convertible preferred stock, $0.01 par value—0 and 34,000,000 shares authorized as of October 31, 2019 and January 31, 2019, respectively; 0 and 32,746,041 shares issued and outstanding as of October 31, 2019 and January 31, 2019, respectively

Redeemable preferred stock, $0.01 par value—0 and 44,000,000 shares authorized as of October 31, 2019 and January 31, 2019, respectively; 0 and 42,560,530 shares issued and outstanding as of October 31, 2019 and January 31, 2019, respectively

Total redeemable preferred stock

Stockholders’ Equity (Deficit):

Common stock, $0.01 par value—500,000,000 and 80,000,000 shares authorized as of October 31, 2019 and January 31, 2019, respectively; 35,872,057 and 1,994,721 shares issued and outstanding as of October 31, 2019 and January 31, 2019, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity (deficit)

Total Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)

Revenue:

Subscription and related services

Payment processing fees

Life sciences

Total revenues

Expenses:

Cost of revenue (excluding depreciation and amortization)

Payment processing expense

Sales and marketing

Research and development

General and administrative

Depreciation

Amortization

Total expenses

Operating loss

Other income (expense)

Change in fair value of warrant liability

Interest income (expense)

Total other income (expense)

Loss before provision for income taxes

Provision for income taxes

Net loss

Preferred stock dividend paid

Accretion of redeemable preferred stock

Net loss attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

Weighted-average common shares outstanding, basic and diluted

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Stock-based compensation expense

Change in fair value of warrants liability

Amortization of debt discount

Loss on extinguishment of debt

Cost of Phreesia hardware purchased by customers

Deferred contract acquisition costs amortization

Changes in operating assets and liabilities

Accounts receivable

Prepaid expenses and other assets

Deferred contract acquisition costs

Accounts payable

Accrued expenses

Deferred revenue

Net cash provided by (used in) operating activities

Cash flows used in investing activities:

Capitalized internal-use software

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from IPO

Proceeds from revolving line of credit

Payments of revolving line of credit

Proceeds from term loan

Repayment of term loan

Repayment of loan payable

Payment of preferred stock dividends

Payment on capital leases

Debt extinguishment costs

Debt issuance costs

Proceeds from issuance of common stock upon exercise of stock options

Payment of offering costs

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents – beginning of period

Cash and cash equivalents – end of period

Disclosures of additional investing and financing activities:

Supplemental information:

Property and equipment acquisitions through capital leases

Deferred issuance costs included in accounts payable and accrued expenses

Purchase of property and equipment included in accounts payable

Issuance of warrants related to debt

Cashless exercise of common stock warrants

Cash payments for:

Interest

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) net interest expense/(income); 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.

(in thousands, unaudited)

Net loss

Interest (income) expense, net

Depreciation and amortization

Stock-based compensation expense

Change in fair value warrant liability

Income tax provision

Other (income) expense, net

Adjusted EBITDA

(in thousands)

GAAP operating expenses

General and administrative

Sales and marketing

Research and development

Cost of revenue

Stock compensation included in GAAP operating expenses

General and administrative

Sales and marketing

Research and development

Cost of revenue

Adjusted operating expenses

General and administrative

Sales and marketing

Research and development

Cost of revenue

Key Metrics:

Provider clients (average over period)

Average revenue per provider client

Patient payment volume (in millions)

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.