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.
Phreesia, Inc.
Consolidated Balance
Sheets
(Unaudited)
(in thousands, except share and
per share data)
January 31,
2022
2021
Assets
Current:
Cash and cash equivalents
$
313,812
$
218,781
Settlement assets
19,590
15,488
Accounts receivable, net of allowance for
doubtful accounts of $863 and $699 as of January 31, 2022 and 2021,
respectively
40,262
29,052
Deferred contract acquisition costs
1,642
1,693
Prepaid expenses and other current
assets
11,043
7,254
Total current assets
386,349
272,268
Property and equipment, net of accumulated
depreciation and amortization of $53,321 and $40,148 as of January
31, 2022 and 2021, respectively
34,645
26,660
Capitalized internal-use software, net of
accumulated amortization of $31,139 and $25,476 as of January 31,
2022 and 2021, respectively
17,643
10,476
Operating lease right-of-use assets
2,337
2,654
Deferred contract acquisition costs
2,437
1,248
Intangible assets, net of accumulated
amortization of $1,178 and $525 as of January 31, 2022 and 2021,
respectively
12,772
2,725
Deferred tax asset
515
658
Goodwill
33,621
8,307
Other assets
4,157
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 debt
5,821
4,864
Current portion of operating lease
liabilities
1,281
1,087
Accounts payable
5,119
4,389
Accrued expenses
20,128
18,324
Deferred revenue
16,493
10,838
Total current liabilities
68,432
54,990
Long-term finance lease liabilities and
other debt
7,423
6,471
Operating lease liabilities,
non-current
1,276
1,899
Long-term deferred revenue
65
—
Total liabilities
77,196
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, respectively
521
449
Additional paid-in capital
860,657
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’ Equity
417,280
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,
2022
2021
2022
2021
Revenue:
Subscription and related services
$
26,445
$
18,846
$
95,514
$
69,042
Payment processing fees
16,140
13,448
65,201
49,900
Life sciences
15,435
9,514
52,518
29,735
Total revenue
58,020
41,808
213,233
148,677
Expenses:
Cost of revenue (excluding depreciation
and amortization)
12,459
6,984
42,669
23,461
Payment processing expense
9,897
7,800
38,719
28,925
Sales and marketing
37,206
12,959
106,421
42,972
Research and development
17,495
6,355
52,265
22,622
General and administrative
21,738
11,739
68,674
40,460
Depreciation
4,268
2,645
14,985
9,770
Amortization
1,573
1,607
6,317
6,138
Total expenses
104,636
50,089
330,050
174,348
Operating loss
(46,616
)
(8,281
)
(116,817
)
(25,671
)
Other income (expense), net
60
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
taxes
433
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 diluted
51,354,953
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,
2022
2021
2020
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 amortization
21,302
15,908
13,924
Non-cash stock-based compensation
expense
36,144
13,489
6,177
Change in fair value of warrants
liability
—
—
3,307
Amortization of deferred financing costs
and debt discount
288
389
445
Loss on extinguishment of debt
—
—
1,073
Cost of Phreesia hardware purchased by
customers
672
762
741
Deferred contract acquisition costs
amortization
2,211
2,025
1,977
Non-cash operating lease expense
1,004
1,766
—
Change in fair value of contingent
consideration liabilities
258
—
—
Deferred tax asset
143
(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 payable
2,881
(3,821
)
(30
)
Accrued expenses and other liabilities
(2,983
)
6,004
3,681
Lease liability
(1,060
)
(1,786
)
—
Deferred revenue
3,348
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
commissions
245,813
174,800
130,781
Payment of preferred stock dividends
—
—
(14,955
)
Proceeds from issuance of common stock
upon exercise of stock options
4,889
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
plan
1,979
—
—
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
activities
234,969
150,661
100,266
Net increase in cash and cash
equivalents
95,031
128,466
88,772
Cash and cash equivalents—beginning of
year
218,781
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)
2022
2021
2022
2021
Net loss
$
(46,451
)
$
(8,096
)
$
(118,161
)
$
(27,292
)
Interest expense (income), net
328
367
1,084
1,573
(Benefit from) provision for income
taxes
(433
)
(322
)
182
49
Depreciation and amortization
5,841
4,252
21,302
15,908
Stock-based compensation expense
10,258
3,873
36,234
13,489
Change in fair value of contingent
consideration liabilities
49
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)
2022
2021
2022
2021
GAAP operating expenses
General and administrative
$
21,738
$
11,739
$68,674
$40,460
Sales and marketing
37,206
12,959
106,421
42,972
Research and development
17,495
6,355
52,265
22,622
Cost of revenue
12,459
6,984
42,669
23,461
$
88,898
$
38,037
$270,029
$129,515
Stock compensation included in GAAP
operating expenses
General and administrative
4,418
2,192
15,655
7,361
Sales and marketing
3,490
967
12,536
3,497
Research and development
1,745
501
5,957
1,995
Cost of revenue
605
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 marketing
33,716
11,992
93,885
39,475
Research and development
15,750
5,854
46,308
20,627
Cost of revenue
11,854
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,
2022
2021
2022
2021
Key Metrics:
Healthcare services clients (average over
period)
2,311
1,808
2,074
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,
2022
2021
2022
2021
Patient payment volume (in millions)
$
689
$
552
$
2,769
$
1,997
Payment facilitator volume percentage
79
%
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220330005768/en/
Investors:
Balaji Gandhi Phreesia, Inc. investors@phreesia.com (929)
506-4950
Media:
Annie Harris Phreesia, Inc. aharris@phreesia.com (929)
526-2611
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