EX-99.1 3 phrex-991earningsreleasefy.htm EX-99.1 Document

Exhibit 99.1
Phreesia Announces Fiscal Year Ended January 31, 2022 Results
RALEIGH, N.C., March 30, 2022 – Phreesia, Inc. (NYSE: PHR) (“Phreesia” or the "Company") announced financial results today for the fiscal fourth quarter and fiscal year ended January 31, 2022.

"Our organization has accomplished much to be proud of in fiscal year 2022, Phreesia’s 17th year and our third as a public company," said CEO and Co-Founder Chaim Indig. "We experienced tremendous growth in our platform, our capabilities and our team, and we greatly appreciate our employees' hard work and the support and partnership of our clients and investors."
Fiscal Fourth Quarter Ended January 31, 2022 Highlights
 
•Revenue was $58.0 million in the quarter, up 39% year-over-year.
•Average number of healthcare services clients was 2,311 in the quarter, up 28% year-over-year.
•Average revenue per healthcare services client was $18,430, up 3% year-over-year.
•Adjusted EBITDA was negative $30.5 million in the quarter, as compared to negative $0.1 million in the same period in the prior year.
•Cash and cash equivalents as of January 31, 2022 was $313.8 million, down $86.6 million from October 31, 2021.
Fiscal Year Ended January 31, 2022 Highlights
 
•Revenue was $213.2 million in fiscal year 2022, up 43% year-over-year.
•Average number of healthcare services clients was 2,074 in fiscal year 2022, up 21% year-over-year.
•Average revenue per healthcare services client was $77,478 in fiscal year 2022, up 11% year-over-year.
•Adjusted EBITDA was negative $59.0 million in fiscal year 2022, as compared to $3.8 million in fiscal year 2021.
•Cash and cash equivalents as of January 31, 2022 was $313.8 million, up from $218.8 million as of January 31, 2021.

Outlook for Fiscal 2023

For the full fiscal year 2023, ending January 31, 2023, we expect revenue to be between $271 million
and $275 million, implying year-over-year growth of 27% to 29%. For the full fiscal year 2023, ending January 31, 2023, we expect Adjusted EBITDA to be between negative $154 million and negative $149 million.

We expect our Adjusted EBITDA outlook in fiscal 2023 to be the low annual mark for fiscal years 2023 through 2025. We expect to see operating leverage in the early part of fiscal year 2024 and approach profitability1 in fiscal year 2025.

We have not provided a reconciliation of our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for Net income (loss) due to the uncertainty and potential variability of Other income, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For further information regarding the non-GAAP financial measures included in this press release, please see “Non-GAAP financial measures” below.

Fiscal 2025 Target

We also are introducing an annualized revenue target of $500 million to be achieved during a quarter of fiscal year 2025.2 We believe our platform and diverse revenue streams offer us multiple paths for achieving our target.

A reconciliation of GAAP to non-GAAP financial measures is provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

1 Profitability in terms of Adjusted EBITDA
2 For our target revenue, annualized is defined as multiplying the highest-revenue quarter in fiscal year 2025 by four.



Conference Call Information
We will hold a conference call on Wednesday, March 30, 2022, at 5:00 p.m. Eastern Time to review our fiscal fourth quarter and fiscal year 2022 financial results. To participate in our live conference call and webcast, please dial (888) 350-3437 (or (646) 960-0153 for international participants) using conference code number 4000153 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
On March 28, 2022, we entered into the First Loan Modification Agreement to the Second Amended and Restated Loan and Security Agreement (the "Second SVB Facility") with Silicon Valley Bank ("SVB") (as amended, the "Third SVB Facility") to increase the borrowing capacity from $50.0 million to $100.0 million. The Third SVB Facility also reduced the interest rate to the greater of 3.25% or the Wall Street Journal Prime Rate minus 0.5%, amended the annual commitment fees to approximately $0.3 million per year and amended the quarterly fee to 0.15% per annum of the average unused revolving line under the facility.
Available Information
We intend to use our Company website (including our Investor Relations website) as well as our Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Forward Looking Statements
This press release includes express or implied statements that 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. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. These statements include, but are not limited to, statements regarding: our future financial performance, including our revenue and Adjusted EBITDA; our outlook for fiscal year 2023 and fiscal year 2025 targets and our anticipated growth and operating leverage. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. 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, risks associated with: our ability to effectively manage our growth and meet our growth objectives; our focus on the long-term and our investments in growth; the competitive environment in which we operate; our ability to develop and release new products and services, and develop and release successful enhancements, features and modifications to our existing products and services; our ability to maintain the security and availability of our platform; changes in laws and regulations applicable to our business model; our ability to make accurate predictions about our industry; and the impact of the COVID-19 pandemic on our business and economic conditions; our ability to attract, retain and cross-sell to healthcare services clients; our ability to continue to operate effectively with a primarily remote workforce and attract and retain key talent; our ability to realize the intended benefits of our acquisitions; and other general, market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended January 31, 2022 that will be filed with the SEC following this press release. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, 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 healthcare and provides a modern, convenient experience, while enabling our clients to enhance clinical care and drive efficiency.

Investors:
Balaji Gandhi
Phreesia, Inc.
investors@phreesia.com
(929) 506-4950

Media:

Annie Harris
Phreesia, Inc.
aharris@phreesia.com
(929) 526-2611


Phreesia, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)
January 31,
20222021
Assets
Current:
Cash and cash equivalents$313,812 $218,781 
Settlement assets19,590 15,488 
Accounts receivable, net of allowance for doubtful accounts of $863 and $699 as of January 31, 2022 and 2021, respectively40,262 29,052 
Deferred contract acquisition costs1,642 1,693 
Prepaid expenses and other current assets11,043 7,254 
Total current assets386,349 272,268 
Property and equipment, net of accumulated depreciation and amortization of $53,321 and $40,148 as of January 31, 2022 and 2021, respectively34,645 26,660 
Capitalized internal-use software, net of accumulated amortization of $31,139 and $25,476 as of January 31, 2022 and 2021, respectively17,643 10,476 
Operating lease right-of-use assets2,337 2,654 
Deferred contract acquisition costs2,437 1,248 
Intangible assets, net of accumulated amortization of $1,178 and $525 as of January 31, 2022 and 2021, respectively12,772 2,725 
Deferred tax asset515658 
Goodwill33,621 8,307 
Other assets4,157 1,670 
Total Assets$494,476 $326,666 
Liabilities and Stockholders’ Equity
Current:
Settlement obligations$19,590 $15,488 
Current portion of finance lease liabilities and other debt5,821 4,864 
Current portion of operating lease liabilities1,281 1,087 
Accounts payable5,119 4,389 
Accrued expenses20,128 18,324 
Deferred revenue16,493 10,838 
Total current liabilities68,432 54,990 
Long-term finance lease liabilities and other debt7,423 6,471 
Operating lease liabilities, non-current1,276 1,899 
Long-term deferred revenue65— 
Total liabilities77,196 63,360 
Commitments and contingencies
Stockholders’ Equity:
Common stock, $0.01 par value—500,000,000 shares authorized as of January 31, 2022 and 2021, respectively; 52,095,964 and 44,880,883 shares issued as of January 31, 2022 and 2021, respectively521 449 
Additional paid-in capital860,657 579,599 
Accumulated deficit(429,938)(311,777)
Treasury stock, at cost, 301,003 and 99,520 shares as of January 31, 2022 and 2021, respectively(13,960)(4,965)
Total Stockholders’ Equity417,280 263,306 
Total Liabilities and Stockholders’ Equity$494,476 $326,666 



Phreesia, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
 
 Three months ended
January 31,		Fiscal year ended
January 31,
 2022202120222021
Revenue:
Subscription and related services$26,445 $18,846 $95,514 $69,042 
Payment processing fees16,140 13,448 65,201 49,900 
Life sciences15,435 9,514 52,518 29,735 
Total revenue58,020 41,808 213,233 148,677 
Expenses:
Cost of revenue (excluding depreciation and amortization)12,459 6,984 42,669 23,461 
Payment processing expense9,897 7,800 38,719 28,925 
Sales and marketing37,206 12,959 106,421 42,972 
Research and development17,495 6,355 52,265 22,622 
General and administrative21,738 11,739 68,674 40,460 
Depreciation4,268 2,645 14,985 9,770 
Amortization1,573 1,607 6,317 6,138 
Total expenses104,636 50,089 330,050 174,348 
Operating loss(46,616)(8,281)(116,817)(25,671)
Other income (expense), net60 230 (78)1 
Interest (expense) income, net(328)(367)(1,084)(1,573)
Total other expense, net(268)(137)(1,162)(1,572)
Loss before benefit from (provision for) income taxes(46,884)(8,418)(117,979)(27,243)
Benefit from (provision for) income taxes433 322 (182)(49)
Net loss$(46,451)$(8,096)$(118,161)$(27,292)
Net loss per share attributable to common stockholders, basic and diluted$(0.90)$(0.18)$(2.37)$(0.69)
Weighted-average common shares outstanding, basic and diluted51,354,953 44,324,718 49,888,436 39,519,640 
(1)Our potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.


Phreesia, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
 For the fiscal years ended
January 31,
 202220212020
Operating activities:
Net loss$(118,161)$(27,292)$(20,293)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization21,302 15,908 13,924 
Non-cash stock-based compensation expense36,144 13,489 6,177 
Change in fair value of warrants liability— — 3,307 
Amortization of deferred financing costs and debt discount288 389 445 
Loss on extinguishment of debt— — 1,073 
Cost of Phreesia hardware purchased by customers672 762 741 
Deferred contract acquisition costs amortization2,211 2,025 1,977 
Non-cash operating lease expense1,004 1,766 — 
Change in fair value of contingent consideration liabilities258 — — 
Deferred tax asset143 (65)(775)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable(10,216)(6,619)(5,905)
Prepaid expenses and other assets(7,192)(1,600)(312)
Deferred contract acquisition costs(3,349)(1,652)(2,097)
Accounts payable2,881 (3,821)(30)
Accrued expenses and other liabilities(2,983)6,004 3,681 
Lease liability(1,060)(1,786)— 
Deferred revenue3,348 5,382 (1,087)
Net cash (used in) provided by operating activities(74,710)2,890 826 
Investing activities:
Acquisitions, net of cash acquired(34,423)(6,510)— 
Capitalized internal-use software(12,385)(7,334)(5,305)
Purchases of property and equipment(18,420)(11,241)(7,015)
Net cash used in investing activities(65,228)(25,085)(12,320)
Financing activities:
Proceeds from issuance of common stock in equity offerings, net of underwriters' discounts and commissions245,813 174,800 130,781 
Payment of preferred stock dividends— — (14,955)
Proceeds from issuance of common stock upon exercise of stock options4,889 4,385 1,809 
Treasury stock to satisfy tax withholdings on stock compensation awards(8,995)(4,965)— 
Payment of offering costs— (290)(6,217)
Proceeds from employee stock purchase plan1,979 — — 
Insurance financing agreement— 2,009 — 
Finance lease payments(4,267)(2,630)(1,898)
Principal payments on financing agreements(1,039)(1,691)— 
Debt issuance costs— (69)(112)
Loan facility fee payment(125)(225)— 
Financing payments of acquisition-related liabilities(3,286)— — 
Proceeds from revolving line of credit— — 9,876 
Payments of revolving line of credit— (20,663)(17,676)
Proceeds from term loan— — 20,000 
Repayment of term loan and loan payable— — (21,042)
Debt extinguishment costs— — (300)
Net cash provided by financing activities234,969 150,661 100,266 
Net increase in cash and cash equivalents95,031 128,466 88,772 
Cash and cash equivalents—beginning of year218,781 90,315 1,543 


Cash and cash equivalents—end of year$313,812 $218,781 $90,315 
Supplemental information of non-cash investing and financing information:
Right-of-use assets recorded in exchange for operating lease liabilities$81 $4,359 $— 
Property and equipment acquisitions through finance leases$7,394 $8,885 $2,047 
Capitalized software acquired through vendor financing$— $174 $— 
Purchase of property and equipment and capitalized software included in accounts payable$1,124 $3,359 $1,253 
Cashless transfer of term loan and related accrued fees into increase in debt balance$— $20,257 $— 
Cashless transfer of lender fees through increase in debt balance$— $406 $— 
Issuance of warrants related to debt$— $— $833 
Receivables for cash in-transit on stock option exercises$169 $915 $— 
Cashless exercise of common stock warrants$— $3,060 $3,530 
Capitalized stock based compensation$489 $— $— 
Cash paid for:
Interest$802 $1,465 $2,310 
Income taxes$49 $64 $— 
.
Non-GAAP financial measures
This press release and statements made during the above-referenced webcast may include certain non-GAAP financial measures as defined by SEC rules.

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 interest expense (income), net, (benefit from) provision for income taxes, depreciation and amortization, stock-based compensation expense, change in fair value of contingent consideration liabilities and other (income) expense, net.
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 press 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. We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss).
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; (3) tax payments that may represent a reduction in cash available to us; or (4) Interest expense (income), net; 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
(Unaudited)
 
 Three months ended
January 31,		Fiscal year ended
January 31,
(in thousands)2022202120222021
Net loss$(46,451)$(8,096)$(118,161)$(27,292)
Interest expense (income), net328 367 1,084 1,573 
(Benefit from) provision for income taxes(433)(322)182 49 
Depreciation and amortization5,841 4,252 21,302 15,908 
Stock-based compensation expense10,258 3,873 36,234 13,489 
Change in fair value of contingent consideration liabilities49 71 258 71 
Other (income) expense, net(60)(230)78 (1)
Adjusted EBITDA$(30,468)$(85)$(59,023)$3,797 



Phreesia, Inc.
Reconciliation of GAAP and Adjusted Operating Expenses
(Unaudited)
 
 Three months ended
January 31,		Fiscal year ended
January 31,
(in thousands)2022202120222021
GAAP operating expenses
General and administrative$21,738 $11,739 $68,674 $40,460 
Sales and marketing37,206 12,959 106,421 42,972 
Research and development17,495 6,355 52,265 22,622 
Cost of revenue12,459 6,984 42,669 23,461 
$88,898 $38,037 $270,029 $129,515 
Stock compensation included in GAAP operating expenses
General and administrative4,418 2,192 15,655 7,361 
Sales and marketing3,490 967 12,536 3,497 
Research and development1,745 501 5,957 1,995 
Cost of revenue605 213 2,086 636 
10,258 3,873 36,234 13,489 
Adjusted operating expenses
General and administrative$17,320 $9,547 $53,019 $33,099 
Sales and marketing33,716 11,992 93,885 39,475 
Research and development15,750 5,854 46,308 20,627 
Cost of revenue11,854 6,771 40,583 22,825 
$78,640 $34,164 $233,795 $116,026 

Phreesia, Inc.
Key Metrics
(Unaudited)
 
 Three months ended
January 31,		 Fiscal year ended
January 31,
 2022202120222021
Key Metrics:
Healthcare services clients (average over period)2,311 1,8082,074 1,711 
Average revenue per healthcare services client$18,430 $17,858 $77,478 $69,499 

We remain focused on building secure and reliable products that derive a strong return on investment for our clients and implementing them with speed and ease. This strategy continues to enable us to grow our network of healthcare services clients. With the expansion of our operations in the payer market in the fiscal fourth quarter, we have renamed our key metric "provider clients (average over period)" to "healthcare services clients (average over period)". We have also renamed our key metric "average revenue per provider client" to "average revenue per healthcare services client." While we believe the contribution of payers (including payer clients added in connection with the acquisition of Insignia Health, LLC) is not yet material to our business, we intend to grow our footprint with payers and organizations who provide other types of healthcare-related services, and we believe it is an appropriate time to broaden the definition of these key metrics.

•Healthcare services clients. We define healthcare services clients as the average number of healthcare services client organizations that generate revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. We believe growth in the number of healthcare services 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 services organizations that are not yet clients.


While growth in the number of healthcare services 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 healthcare services client growth. For example, as the number of healthcare services 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 healthcare services clients and for patients.
•Average revenue per healthcare services client. We define average revenue per healthcare services client as the total subscription and related services and payment processing revenue generated from healthcare services clients in a given period divided by the average number of healthcare services clients that generate revenue each month during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase average revenue per healthcare services client is an indicator of the long-term value of the Phreesia platform.

Additional Information
(Unaudited)
 Three months ended
January 31,		 Fiscal year ended
January 31,
 2022202120222021
Patient payment volume (in millions)$689 $552 $2,769 $1,997 
Payment facilitator volume percentage79 %79 %79 %81 %


•Patient payment volume. We believe that patient payment volume is an indicator of both the underlying health of our healthcare services clients' businesses and the continuing shift of healthcare costs to patients. We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors.

•Payment facilitator volume percentage. We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue.