PHR - Earnings call transcript Q2 2020

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Operator

Good morning, ladies and gentlemen and welcome to the Phreesia Fiscal Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. I would now like to introduce Balaji Gandhi, Vice President, Investor Relations for Phreesia. Mr. begin. may you Gandhi,

Balaji Gandhi

Good our welcome XXXX, second XX, on operator. conference which Phreesia’s call July for quarter XXXX. morning you, to and earnings ended Thank of fiscal

Phreesia’s are Chief Officer XX. reminder, As Financial is and Chaim Executive year Officer, call Phreesia today’s Tom and January Altier. a from Participating fiscal Indig on Chief Co-Founder, end

will session. Q&A prepared from Following a remarks Chaim conduct and Tom, we

as yesterday available in of found disclosure related in can our evening of as of release press which Investor complete submission well A X-K ir.phreesia.com. section be issued our both Form website to on our earnings SEC at our Relations results the the are

reminder, be a a call the and call. recorded replay available As will is conclusion today’s being following of the

results, unknown on July September Form and our final XXXX we XX-Q Safe SEC of before statements be prospectus expected make for offering to XX, guidance and Act risk contained factors will implied included cause forward-looking from will to XX, statements launches performance and and those known growth those pursuant our statements filed in during the and year Securities the the our initial of risk Harbor including relating partnerships full particular, to described and the and to including Section of for projected products for this expected prospects. Exchange in subject with call, in services, our our our differ These are XXA the the in uncertainties future that that fiscal long-term forward-looking future Act, Section factors public the XXXX, XXXX. could During or risks strategy, of overall Securities provisions today’s included business, results our statements financial filed actual XXE materially call. In

make we no as statements assumptions update on obligation today forward-looking and them except are this statements All events. forward-looking by predictions rely undertake applicable that of not on and should You beliefs future as on required of we call as our based to law.

measures reconciliation financial investors. in from to Accepted may may non-GAAP of non-GAAP Investor market to GAAP found X-K substitute filed provide Principles release We with Relations with results Form which our supplemental also and Accounting will information addition ir.phreesia.com. GAAP were on to in isolation found materials measures in results. closed earnings should be with be our or A X in SEC Generally for not as a website accordance on an our and These not the the certain our refer after September also order be considered to to additional and furnished at

me let CEO, call that, our over Indig. With Chaim to the turn

Chaim Indig

course, success all public Good our take over our everyone. company. a formed and first to would moment the are partners, you, We and of appreciate our members, the board clients, who of XX past years, public contributions in investors I to morning, who July. and since Phreesia’s early our becoming made significant I since shareholders. Roberts those company also Thank the contributions employees to Evan is forum take Balaji. our This like a And of

important new our people, us in shareholders appreciative through all IPO. been has to we these that addition placed also In trust the by of our of are

the excited as opportunity company the mission. fulfill are to public about our and We future we have a

we results the with pleased very released night. are last We

two are Before we cover. jump into topics the to results, there

are our particularly background our you and our story. like our Phreesia’s those on past, First, present important to future. culture, are and for who culture mission We mission some and of part provide I to would believe of new

to to each us quarter. the you Second, you for I communicate will how progress lay foundation expect can our

long of have more Phreesia. having forward clients create way recognized to to experience, most are we materially have since believe healthcare look is mission engaging Phreesia’s culture, healthcare we improving of implement a to to the the We market yet the and is mission go years a but in come. We First, better that most experience. we to

Our the as We experience. team has that in we in shareholder invested initiatives. our Phreesia’s update mission mission on has healthcare of also our believe to want invested you improve deeply to these one

on we So, it. Put some about excited very are with opportunity our background that aligns the mission.

non-trivial excellent These the drives On foods, factors. including Carolina. increasing projects contributors setting, about an a North is of well services, patient’s the underwriting health determine remaining of Among commonly acceptance because and fiscal status. social to cover projects the to State environment indicators the the to York social Medical Times and income, XX% healthy clean access New home life delivery in health healthcare care to of health. to to XX% transportation, referred support as as August factors loneliness piece nutrition, determinants XX% clinical to social in of are about our as XX, there plan transportation environmental safe socioeconomic Factors to non-clinical like and was XX%. housing, the determinants include access transformative access with are and outside

patients excited person’s drive program needs coordinators impact Phreesia they in be state have to of use more can patient’s screening unmet individual needs, organizations states. real-time health. can beacon social in to We now standardized incredibly providers be health. that who so in partner will to the alert the Phreesia understand other is health a fully deliver care North determinants believe throughout Phreesia Healthcare a social this overall to about questions holistic can Carolina’s initiative. the and the this identify

do you believe that of Phreesia’s worth continued of validation provides with our While is initiatives. all it given this close value initiative alignment proposition and is revenue, a of contributor not sharing with it currently we significant

It’s advantage. because our important it for to understand Let’s competitive talk culture. gives culture, company about believe our us the shareholders we

college new early with of aspect about program set best to culture companies, for X begin concepts, experience position recent recruited, those than we out retained after in graduates X and developed our our important is modeled ago. a then us people to and started years and program. career early companies. made inventive We decision great Another We our it strategic years less our career target long-term success, programs

us gives program speed advantage the agility. on Our and competitive

Balaji. for career the communicate forward. now a any is if our We early very career career foundation are are more we into early than about them you across years early value. of Compared progress we lay our for pave today bullish X everyone that to so the its going for And have call hires. able today’s ever the how well talented, both to please to you networked persons, and program, Phreesia program program, to career paths to send part listening referrals we

the EBITDA In viewed number adjusted clients; useful our addition revenue as statements, our quarter-to-quarter average and we indicators a of to the second, financial revenue provider basis: payment metrics provider first, following three on volume. client; per patient of average performance third, additional

XX. down in Adjusted metrics the will up on Patient highlights our up the year-over-year. up significant ended quarter, clients second XX% Tom quarter million the $X.X was provider $XX,XXX, these is number was $XXX of up revenue year-over-year. was revenue spend time few The July Total the million million, of year-over-year. was $X cover XXXX in payment quarter X% client $XX.X year-over-year. in a million, Average X,XXX, provider minutes. EBITDA which XX% per fiscal me Let for XX% quarter, year-over-year. average volume

our about guidance. talk Let’s

the EBITDA an on to of revenue year and annual annual total at those each provide adjusted to the and outlook an expect beginning here figures quarterly We basis for on basis. fiscal updates

fiscal for January outlook as Our follows. year XXXX XXXX XX, is ending

$XXX.X to We range the $XXX million. expect of total revenue million to be in

to EBITDA positive. XXXX remain adjusted fiscal We expect

Going forward, we expect to our margin increase adjusted annually. EBITDA

them incorporated We an and outlook. our increase EBITDA have seen company in have into expenses adjusted public

Our longer EBITDA term XX%. margin adjusted is

that, will I detailed review. CFO, turn With to a financial call Tom the now our over for

Tom Altier

everyone. and Thank good you, Chaim morning

more take balance through a of sheet quarter. also the run our cash provide to will me XXXX a and for outlook. statement, minutes the color on highlights I fiscal fiscal few our Let flows bit second income

combined $XX.X the as up was million in revenue, flat XX% total $XX.X subscription which track which $XX were provider adds quarter which year-over-year. differently, fees. business life $X.X three million and covers and up Chaim related was First, was in processing to revenue quarter, our year-over-year. XX% life services, We million, the up the processing $XX.X was year-over-year. in payment the fees, up quarter, entire It’s mentioned, million, payment revenue items, sciences, year-over-year, our Said which subscription revenue XX% reported providers, also line year-over-year, services our from quarter million related less and in sciences revenue XX% Provider in and useful to revenue. revenue

We past the to revenue. The consistent X% six over client. solid clients average per We quarters. provider modules grew we clients. into and drivers average each of we client past provide these expand believe year-over-year. land over trends and growth with experienced the formula. to have provider logos are mid deeper indicator a growth client trends to two growth providers the and patient little provider revenue client over a grew consistent Average provider the each up-sell revenue intake client single-digit time provider provider revenue with of new more also growth XX% per with quarters. is XX%, dig our more Average This six let’s Now,

but review to understand revenue sciences. the life strong driver Life our flat was the performance, sciences let revenue talk In let’s life up strong Now, me XX% year-over-year, sciences sequential about order sequentially. of model. a

targeted of expected our companies, over are contracted on messages delivered. our timeframe. a delivery per revenue price an patients to was the recognized are qualified number life science as patients. to Messaging largely messages delivered campaigns clients, of Our based for sold was Revenue specified messages message that the

in to XX% back go let’s quarter, the which Now, $X.X second million up revenue life in fiscal sciences the was sequentially.

the additional the outperformance over This delivered forward revenue a specified number team timeframe. quarter. messages into Our shorter of brought

take I to Before minutes on payment highlights processing. into a we some want also to expenses, few talk about get

revenue dollar we on patients the that credit transactions volume on was the Phreesia on debit platform. processed and processing payment based came the number amount cards of at and Our of

sometimes are the processed per payment by one and percentage fees Our of value generally calculated dollar transaction two both. transaction. of messages methods Those are total and a fee the processing

as of The year-over-year. which total gateway payment our volume In payment payment patient processor in and Credit platform ended in our cash roughly acts our of another credit of well a debit transactions. represented up fiscal transactions, quarter, to July transactions was composed and debit second check of patient XX% and for payment patient the quarter dollar Phreesia XX, or months XXXX. was as remainder on XX% total volume volume volume million, as payment patient $XXX three the the the volume

year-over-year. fiscal in As were second prior expenses our processing XX% quarter fee earlier, was $XX.X the I the payment million, margin up processing The was Payment in million, year mentioned XX% second revenue up in revenue versus on XX% year-over-year. quarter. the $X.X quarter quarter payment processing XX%

year-over-year. points basis So XXX profitability our payment processing decreased by

quarter-to-quarter expect should would in lower pressure basis over and an interchange higher on You fluctuation profitability. due see expect annual rates We time costs. moderate to to take

XXX that including measures, XX.X% or Now, on basis and line basis, research of on Please is $X.X revenue, press compensation in line points down full will of total let an adjusted release point revenue, our or I and $X.X which quarter. million basis year-over-year. development non-GAAP me several second our on ongoing $X.X excludes of basis, sales a from points an item. reflects million focus up XX-Q points on items of the On basis our filed adjusted provide year-over-year. adjusted items On adjusted adjusted total to noteworthy year-over-year. a an basis few earnings review adjusted basis or XX% stock-based total the was of non-GAAP GAAP and EBITDA increase fiscal an expense product expense and basis, The each integrations expense down marketing XX.X% partner expense XX was note SEC. reconciliation cost included basis, development. an revenue On revenue, million XXX XXX with was expense

the become percentage The compensation an stock-based impact combined basis, the to the company. million, total from $X.X increase now a expense million earlier, decline general were million we and or public the driver public as adjusted XXX was was total reflects down positive basis incurring that costs with as associated revenue, company. administrative of $X.X year-over-year. points particularly cost The revenue, a Adjusted items up XX.X% I EBITDA, excludes which a are biggest to EBITDA, $X On preparing year-over-year. discussed this expense of of

as and outstanding million, The net XX, of XXXX. July cash and April million diluted million as $X.X in credit million balance from Cash was the increase of was relatively and $XX.X to $XX.X of outstanding $X.X were unchanged preferred $XXX.X million former million, reflecting the $XXX.X $X.X on sheet line stated. of in versus development trends capitalized July the prior dividend million the million Fully IPO from flow million of Capital the balance of our $X.X revolving from million $XX.X of operations from quarter, impact plus million at stockholders. quarter quarter proceeds the for $X.X inclusive higher shares our previously of the repayment $XX.X $XX was the on net million XX the of million up expense comparables year-over-year from expenditures $X.X software represents XX, our respectively.

an resetting with opening that the Q&A, XXXX cycle outlook note $XXX.X happening here. more is outlook. patient patient tend note please you some at our Before to considering for we When see million This that to payments fiscal I personally fiscal $XXX XXXX, all to call the provider wanted million the year on beginning model to provide When be annual deductibles. higher the our color revenue the following. of of revenue,

We G&A Due compliance with be And next expect million second our factors Sarbanes-Oxley. XX% continue annualized two to and directors price, largely strong we around to life may to in the with need relatively sciences flat much All-in-all, as to than compliant G&A the EBITDA to Sarbanes-Oxley will accelerated higher anticipated continue early year. expenses to a across share by range and $X very margin we said, these revenue officers’ our leverage long-term. we quarterly as of solid be million target business operating performance fiscal we quarter as insurance due pleased estimate liability an will on on year-over-year. be higher to We finally, and basis. adjusted see our are expense grow increase That results. we $X basis

Operator, can open we call for now up the questions.

Operator

with Your line Instructions] Samuel question the [Operator JPMorgan. first is of from Anne, open. comes your Anne you. Thank line

Anne Samuel

the taking thanks health Hi, guys. opportunity cross-sell of kind questions. detail and of bit announcement, what might for hoping Congrats was social on little forward? you more have the a the maybe going on a great could quarter I provide that implications determinants on

Chaim Indig

huge important well say I’d for it’s how affect we I to going any but our pretty program. on manage to going And with not it’s think think here the excited state at and cost the this are everyone mission. their Phreesia part it’s strategically really determinants be in to frankly and we long-term on I help how own revenue guidance revenue am to of really the is social partnered comprising unbelievably excited early we are groundbreaking frankly people become to outcomes. describe change a know healthcare and improve their alliance

fact that in SQH is right program largest now to are in us. partnered probably exciting just country we the with So, the

Anne Samuel

the through one And will half year? I Thanks. back some just just was maybe Great. think that then hoping quarter, upside then your than that this about expectations the what revenue to revenue and how our speak how drove on you line, slightly just was flow to to could better the of of

Chaim Indig

Tom I I the question. the and let answer first of second will answer will the part Well, then part

team phenomenal little job So, would and the a driving suggest bit I had say, expected. than did taking more of we look, practices just live I wouldn’t faster just that add-ons, past proud going happen just I to they kicked execute quarter. IPO process. really in we that’s through this and as went and team really the how into this gear of am Everyone faster

Tom Altier

also that at not seeing go bit through levels the revenue to of with first be we moderate that stay the I payment sciences year revenue year, for are was tends in we on keep the and in call, and respect quarter lumpy life to revenue the and going QX. may highest processing mentioned the as can mind Annie, as forward payment rest in the

Anne Samuel

guys. That’s very helpful color. Thanks,

Operator

next Daniels Your from of open. the comes question line Ryan your William is line with Blair. Ryan,

Ryan Daniels

retention if provide early it’s the be if on you and activities those Yes, doing work guys. expectations that’s for partner of and how or those maybe Congrats to am pipeline a develop? manifest quarter are good your Thanks morning existing too I Tom, out Epic the you Cerner on had integration maybe question. as follow-up, maybe would even in curious taking benefits or new that Want customer with what integration could the and the strong color box. see costs, you to sales any either the mentioned integrations

Tom Altier

integrations, correct, we this we XXXX. you this rest year those will Ryan, on give are at in what really think doing the but that’s too it’s of early time and much to color those result

Ryan Daniels

but I have mention work partnership the comments, the you fairly you to hospitals opportunity know care some like about with target, you rolling seems focus core it public their a past, TAM maybe you maybe large has update there? a on seeing a at what you novel acute RX inpatient something know and And so and you on bit are can a it I but they seems Thanks. the not been based talk are facilities, out market are interesting got Okay. of for didn’t kind on that in like little doing that

Chaim Indig

we with RX. at team So, partnership appreciated Joe our his and really

I with the think that that clients early success. we have really along serve, together, good we seen

Tom really I opportunity serve I excited to was saying fact in sure and we will want they the Epic. and coming think discuss, values that, metrics, be appropriately. is I really but lot really we those to having things be as one opportunity. will we long-term also about at want to talk out to started The about put be a able discuss just thing think to also it’s make of on hard am and street I acute still the early acute say able that pretty one about it’s complex real to view the to about a echo populations Ryan, we the to

been to Our organization been great with. partnership them wonderful. a work have They has with

Ryan Daniels

Alright. Congrats the color Thanks on for strong all start. the again guys.

Operator

Gentlemen, open. Wells comes Stockton line Jamie, your is next question Jamie Fargo. line from with the your

Jamie Stockton

Good morning.

sure following maybe deals question talked a on NextGen environment the you right together, Epic, sense of MGE what little anything environment, a there is like and take subscription about that Cerner just Ryan’s and maybe businesses bit, broader if So us you gives putting up a about look I guess them we got at can around impacting kind towards just noise the now of some trend feels step back some a if I is am those changed. that’s and being

that anything will Just front be great? on

Chaim Indig

have anything think continuously and provide just their changing and we really haven’t and the can physicians the into propensity in is phenomenal partners with I we I those been they speak products them, don’t have, in value we seen lot great are can systems environment clients think a invest work and their I to our organization speak that we continuously and quick organizations I month-out things know say have tried healthcare down ROIs. I drive for just materially as a and do we our looking strong we that and can to instant Well, head or that ROI value doing can’t as they of good I seen our but think month-in for just really which solutions to kept to continuously have to do. going

Jamie Stockton

point, Can then and sooner maybe you about than that on got years? flat as or anything from business, solid to quarter just the whether what the And are you a the otherwise X approach has talk kind not business you for last as is years maybe next execution guys great. trying you let’s during down just your some or of really business the few trying elevate campaigns doing that what life might expected. this far are sciences here have that grow a little been say that’s’ to it to over you had Okay, X

Chaim Indig

still are guiding near-term in we be think for to it flat. the I relatively

– business we I about that we think really where today. good feel

– and our sure will because provider think are we our products will continue am the think it’s market around growth it. about I changes, the I in we and excited really has come of re-sourcing gone business. most anything If to core everyone,

they team and are that expectations guiding the thought near-term range. has bigger trying to appropriate what and just with the and we appreciate that in than are past it’s organization that do. was We quarter it that of it I doing proud this little pleased we bit we really but been and are we what would We in think a flat moving of set the think are forward, we sort be

Jamie Stockton

thank Okay, you.

Chaim Indig

Cheers mate.

Operator

Sean Wieland Sean, question open. next comes Jaffray. your with line your of Gentlemen, from is the Piper line

Sean Wieland

Thank you. morning. Good

bought products On client business increased that uptick break much is metric new you they natural penetration much the being have and the how up? of you how can of that products that and down their what into clients they revenue growth their us, driven that organic by given of the is is of growing, existing and of taking much that how products new are that on per

Chaim Indig

great a question. That’s

the is think I more So answer clients. we are selling

going new expanding we are we we up-sell uptick. products. think am which to and are and the of are it clients. they very are us I three with think aspect are with we I are cross-selling and we seeing down those applications our buying happy but seeing I build say am we very continuous is, across, that very the uptick breaking in the expense, We are wins it happy I’d those seeing I of applications in spread more And don’t are and additional with happy all seeing

Sean Wieland

apps What they are about that out calling specific out? taken some

Chaim Indig

through And one that think and way mobile we And just us frankly building and experience the flows out it’s a all adoption which every account thing it. board we one the years. phenomenal have are we say uptick I seeing and will just unbelievably I been being high, makes say So the would it happy seeing the for are adoption in we across that call that mobile. I’d broad is almost

Sean Wieland

you campaigns structure delivery, life earlier these the cadence whose is agreements, Alright, thank the is on these delta these it control then the cost And business, early deliver of you. the you and is so it there you messages, client? in sciences on or the when I is in hear a

Chaim Indig

that in the Sean, And can there deliver part second earlier. costs no we if question? of is uptick you repeat

Sean Wieland

wanted to just is sciences out, who provider? it Yes messages these it how cadence the is is is it controlling of really the the life know goes you, clients,

Chaim Indig

– as clients. so, the our sciences it’s that teams and And life with them range It’s with accelerating, will we acceleration. communicate budgeted general the sure a back usually are to making they comfortable set indicating

are So, really would throughout towards. quickly patients to our it’s and something we possible. don’t sometimes the they it the where question. year with excited making on are us as sure and/or board do That’s really are that driving clients that just it without they It’s to it and a they program like great rapidly many sometimes reach as on as the brand depended pace

Sean Wieland

you very much. Alright. Thank

Operator

to no questions. back will turn for the remarks. showing Indig further Phreesia’s CEO, closing are over We I Chaim call

Chaim Indig

Thank you really very much everyone for joining appreciate us. time. We your

meeting look We of the you couple and of I came and over forward Cheers. of next much. of to next forward we are couple to about just Thank months. you very the quarter happy out we quarters that lot look very the

Operator

today’s your Thank call. for This you you. Thank concludes conference participation.

may You now disconnect.

Phreesia (PHR) 10 Sep 192020 Q2 Earnings call transcript