Phreesia (PHR) 22 Mar 232023 Q4 Earnings call transcript

Company Profile

Participants

Balaji Gandhi	Senior Vice President, Investor Relations
Chaim Indig	Chief Executive Officer
Anne Samuel	JPMorgan
Jared Haase	William Blair
Jessica Tassan	Piper Sandler
Joe Vruwink	Baird
Glen Santangelo	Jefferies
Sean Dodge	RBC Capital Markets
Daniel Grosslight	Citi
Richard Close	Canaccord Genuity
John Ransom	Raymond James
Scott Schoenhaus	KeyBanc
Joe Goodwin	JMP Securities
Ryan MacDonald	Needham
Jack Wallace	Guggenheim
Robert Simmons	D.A. Davidson

Call transcript

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Operator

Good evening, ladies and gentlemen, and welcome to the Phreesia Fiscal Fourth Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode.

We will provide instructions for the question-and-answer session to follow.

First, I would like to introduce Balaji Gandhi, Senior Vice President, Investor Relations for Phreesia. Mr. begin. may you Gandhi,

Balaji Gandhi

Good the welcome XXXX, fiscal XX, on operator. conference which Phreesia's call January for fourth XXXX. evening, you, to and earnings ended Thank quarter of

today's Chief on Joining Indig, is our me Executive call Officer. Chaim

Investor closed complete available stakeholder in earnings website found after letter, Relations related X-K both press can SEC, on the markets our our submission in issued of to results today. and including ir.phreesia.com. A are discussion Form be our These our documents release our at the quarterly

As today's will the reminder, at Investor call a and is following a be Relations being replay conclusion ir.phreesia.com our call. recorded, of the available on website

the we outlook trends, make our about results. growth, future anticipated today's statements, including our and financial predictions may business, including performance our call, regarding of our anticipated statements regarding strategies, During industry, forward-looking our

our Forward-looking other and those performance achievements risks, to statements differ actual factors that in statements. various subject from results, are cause our or forward-looking uncertainties materially to may described

statements new no events. of after Such forward-looking on in or risks including stakeholder to filed SEC be and included undertake these call update to obligation forward-looking filings, the in SEC the will press are information the as statements the of XX-K on to in date or occurrence speak on expressly our update are expectations and that events views will made only this and risk made. reflect tomorrow. date on We reflect earnings or unanticipated fully and current Form of obligation the disclaim to the which our letter statements circumstances be described annual factors this report more our call with release, our based The our our

of earnings with addition reconciliation to results. today found our letter, or our ir.phreesia.com. be website provide a GAAP information in in our in refer after both financial A may Form should and also and to the with isolation furnished the investors. also accounting closed accepted with accordance from not results may our GAAP principles in filed may stakeholder be be substitute Relations to and Investor These considered additional for in were release to measures on as found at order not non-GAAP X-K generally to measures We SEC non-GAAP which markets certain

to I will call now Chaim turn the CEO, over Indig. our

Chaim Indig

Thank you, everyone. you our for in quarter Thank earnings fourth and good Balaji, participating call. evening,

we like we markets the jump closed. highlights in transition, after I'd about some filed which to X-K Before our the also into quarter of CFO Q&A, and announced talk an

excited about communicating Phreesia's over four of He's company. existence of over us and Board been care Friday, our take brings Balaji team health terms call part two XX. we as become peer of space of a and the past executive our trusted as with has our strategy, the analyst a role, background in this executive Gandhi decades are CFO the investment he and March invaluable previous executive, make the and including team our over to in He Many as in of industry his to a knowledge know entire an will as He's Phreesia. CFO. contributions will planning you Directors years and Balaji. on been public

$XXX to company a employees outgoing us our had thank also organization and we me finance XXXX, XXX Rasmussen. million small with Let CFO, revenue. about of joined Randy our Randy in When for to great be we and a able implemented a finance organization deliver public company are profitable that processes, believe build growth over helped and durable important Randy time. for systems and controls

to Now results. moving on our

year-over-year. was call let material by start of you few growth. That's we fantastic team, of Revenue entire quarter to over the the about consecutive revenue hour the an our and me year-over-year million, Thank but stakeholder eighth the in earnings and released. XX% congratulations up XX% key third a letter out Our a release Phreesia quarter job. sharing came ago highlights $XX

added In up the Health related health the was quarter, We X,XXX, from average third services of services processing care care subscription payment the our average year-over-year in clients to the number which of XXX services quarter clients XX% health quarter. and year-over-year. fourth combination is fourth up care XX% quarter. services, revenue, and was revenue the

X% year-over-year. beginning XX% per average client primarily growth by up XX% decline Subscription-related outpacing related was and key services year-over-year. client, quarter, metric grew health X% care year-over-year revenue Payment Total $XX,XXX, XX% services growth care solutions revenue this in new revenue average driven revenue services our processing. and a was network subscription year-over-year services grew down payment sequentially. processing and was health and The revenue

to 'XX, XX, for our January XXXX. fiscal on which Moving outlook ends

expect We range XX% XX% of to XXXX million, fiscal a in just be to for $XXX fiscal reported million revenue revenue. XXXX to growth implying of $XXX our over

showing range million $XX improvement our a million to adjusted expect in of to We $XX path to EBITDA negative continued profitability. on be negative

expect sequential in is fiscal average increase that quarter similar we fourth quarter the see of in quarter We increase XXXX care the the clients with services to first of saw in fiscal a sequential XXXX. health XXX

roughly subscription line fiscal fourth also expect results. revenue We care health per services services with related client remain quarter average in and to our

fiscal We our to year finance our expect profitability in million cash remain believe beyond. targets ability fiscal on our annualized We to up in us $XXX XXXX sets deliver our fiscal return continue our year operating while financial fiscal leverage targets to for allocation solid reaching with XXXX strategy we capital and to position. and during to adjusted XXXX comfortable revenue see XXXX. with EBITDA We

now it Operator, Q&A. can we up we to open think

Operator

today JPMorgan. We'll Instructions]. hear Anne first [Operator Samuel you. with from Thank

Anne Samuel

very on news. a quarter congratulations, on my question exciting and on great Congrats Balaji, the Ho. solutions. is Maybe first network

once of a be saw perhaps, if, discuss this how bit space market strong some again. You could underlying relative in growth in that segment And thinking expect And about seen was some insulation really we I this have grow you to your really, you how versus seen growth little in wondering should about to you've pressure budget. from then, segment peers that. that pharma advertising and some relative

could just speak if maybe you're versus others. more So insulated you why wondering to

Chaim Indig

Annie, let I'll first, I you thank say guess. Balaji Hey,

Balaji Gandhi

Thanks, Annie.

Chaim Indig

So if why on correctly, heard are I solutions? doing is it your well I network question, we guess

Anne Samuel

versus then kind Why rate growth long-term, underlying of segment. do also what market just others, how for thinking about and that relative think we the maybe is

Chaim Indig

the think I shifted market. Look, tone in the has

from different and that care. on things could we to different understand clear, their so foremost, patients tried-and-tested like help focused our first clients therapies really scaled that and important and are think, deliver And understand their what that and are ROI, tactics platforms meaningfully ROI I see, understand treatment pathways like

so of foremost, And right? we've we the And do seen that's first what and things, probably in those sort market.

a and and with Frankly, them understand been the working they're and in got you. the I my well. the how making have clients want great thank reason everyone, our to The life out and payer sure great Everyone other is, reason of on of think teams sciences give they behalf doing we're on front doing just really they've value. job. a I just And because frankly, team team, really well we is done

I And so listening. know they're all to thank them. of you

Anne Samuel

spoke you're you seen could bit as you we was MemberConnect little in what and for space. That's your payer the helpful of talk hoping there, letter, since first about space, with new it color. much I payer kind And haven't looked completing maybe the enrollment about And in then that a your how to period and like helped you.

Chaim Indig

It days. about And I prepared it. much to looked it's talk still okay. early we're don't think

hard we're building around I of a did the everyone a think hard. But it. would. learning. lot it yet, think do about of I our we've we don't a was little pretty first pretty still doing had automated of little solutions It I on team. bit. I year working we're a was it thought lot better was And than I our excited We proud think to bit but think things it. products And

Balaji Gandhi

about we're period you'll the learning. And in And enrollment into Annie, still just we then I'd what is knew we One, quarter remember the things. two and still fourth early, back two, the raised knowing guidance add December. it

some of in is that the opportunity So already results.

Chaim Indig

at that Everyone of proud they're doing. is work Phreesia the pretty

So it's fine.

Anne Samuel

Great.

Operator

with We'll Blair. Ryan hear William Daniels next today from

Jared Haase

question. I Ryan. first transition point on the for is I'll around And echo to congrats Balaji ROI Thanks evening. the related did the actually for on This sciences then life the to a want good Hey, Jared here. on to follow-up the taking ask offering.

of so to one taking you so year? kind kind of expected. think So mentioned the that platform in for kind of clients time due looks can drivers more that the cycle, from I'm earlier was realizing it they the just order do than of on getting that's curious, ROI of the or letter, trend be a this you like channel, sort programs of for that's year and that upside their budgets in each live speak, one-off that was to

Chaim Indig

went we would so actually I of possible. able season there it And new sure live that people worked year seamlessly, -- the as No, thank for our soon make January. look, transition our year. end into a to the making way say, of was you runs programs and runs, as the lot fiscal to this ran holiday programs so that to sure And all that seamlessly programs were those

and just was the seamless So January a it transition team the strong about did.

in us to crushed really helped which we just in answers us January, I know and On pretty it behalf -- don't year Phreesia, if ran Jared. they question, well your everyone that that allowed significantly. into

Jared Haase

about certainly as helpful. a I nice guess follow-up hear And the that's -- to just execution. Yes, strong

Chaim Indig

pure was execution. It

whole the team. amazing Just for

Jared Haase

Got it. Yes.

guess So just I fiscal thinking 'XX follow-up us the here. one then. about from quick guidance

any growth to XXXX being that client strong versus greater to be land-and-expand on relative this fiscal that it visibility into the of there's outlook year, anything maybe trying the years. have thinking at is thoughts point mix to year the Given new guidance prior just a by fair saw in-year to driven you is in about you if we relative count growth should Really the last sales? triangulate assume this

Balaji Gandhi

of is, in gave for of which the adds We you take amount color if fourth a quarter. it's the it about that first we bit Jared. obviously Yes, same the quarter, had into that little what

would on per adds same versus look You client. about that for would the probably the revenue mix growth from growth conclude the client

the really In it. not we're quarters, latter three about terms talking of

we to going visibility, it's would I you the growth. still growth We with more think But skewed as have contribution, far to agree between where just but of probably versus kind were be inversion go. try you as client for as don't some going the some update to we now, we'll revenue

Jared Haase

Okay. for Great. the Thanks color.

Operator

to And move Tassan. Piper we'll next Jessica Sandler, from

Jessica Tassan

you, awesome. Thank And That's question. guys, taking so Hi. congratulations, Balaji. much the for

we little So facilitated saw XX% 'XX, up FY in focus visits year-over-year. you wanted plus a we bit million to about on, XXX

You grew health that. faster care services clients little than a

of those divergence there growth is us of rates? conclude to two on So anything for kind the

Balaji Gandhi

probably Yes. of million worth of math like the The actually It's eclipsing as of end do year-over-year, September a need actual we XXXX. is, had it's not talked and to actually you XXX an explanation. clean about visits

So get client that to read should size. I mean, you growth can't there's into think client to perfectly. in same difference visit line it they're But you growth up terms probably I growth, I the the between of don't would the or of anything say actually about the mix

Chaim Indig

It's Yes. isn't awesome, pretty it?

Jessica Tassan

is XXX a quite million few. Yes,

Chaim Indig

I It's a of know. I'm proud everyone. lot.

Jessica Tassan

Yes.

sponsoring tool network kind And a are the that or us maybe health getting are hoping was solutions? you're for not outreach in currently. I up payers the screening of follow-up. paid, whether a social if you. you show getting about little determinants revenue the you of Just and bit talk does could Thank guys paid that to quick and

Chaim Indig

thought people We So philosophically now, set believe to for of right charge the questions We that as just I do don't health to get extra tend the of package. part monetizing. that's not determinants we the something modules think that thing just have part around do. we everything we it's right those provide what just of that's social of it. and about

right about caregivers we, providers try an health. from And that do today, the and don't patients. we It's help no, to money as can make just social clients making help so any the issues their sure of on organization identify that we And to thing determinants payer them. help really clients

Jessica Tassan

Awesome. Thank you, guys.

Operator

hear with Vruwink We'll Baird. next Joe from

Joe Vruwink

Hi. Great. and Balaji. Thanks congrats,

on any kind over just that year. continuing basis. results, it's definitely puts And Just seen or out takes might to thoughts and kind the not wondering and reflecting I a over of actual today, being kind scenario productivity embed on EBITDA XX preliminary the forecast appreciate that the of of thing or than ended up that the of productivity think million being plan in last almost how But guidance. handicap performance provided of the trajectory context, employee $XX the ended the probably around I'm type I up the months, was pragmatic you gates better upward per last quarterly on

Balaji Gandhi

Yes. And thanks, Joe.

difference at today, inflation out up. wages One So off went outlook coming saw last and that ago that, a we was in other about was I in big were talked EBITDA the call, I of year there. versus and step-up the unknowns and a I in when talked between on the the we drop there of were And we out and terms mean of expenses, that EBITDA. maybe you we think biggest big think step-up this laid about time lot this that

the inning our that exec seventh ninth don't maybe I team, frank, we I of the whether in be of that. inning we knew to So think I'm were for think too, or Chaim speaking and

expectations. And so baked our into that was

we've think in of the it been have March situation would about so at 'XX. also Ukraine late talked time, I that

So those were different. are very factors two that

Beyond revenue pretty productivity that, I open think talking employee metrics per that. we've and like about been and

So those I differences are think is two this everything direction, headed of last and else in year year. between but the sort right

Chaim Indig

try have and of that which we people, the our company have what also we ownership it be a shareholders. our And to all took articulate them all really I think I think and at we of of about is spend the them to do, to Look, hard thoughtful money we seriously. and culture what

of on capital. them of be being the we a can't way are it lot went the really It through the stewards on lot the think and improvements I leadership; why just just a good thanks So all organization. the for And better, team material everyone too. to did that's

Joe Vruwink

then a kind And why. is any debuted, great. metric you time asked That's new Okay. of

I of will be Like, coming a of it's up tailwind like I'm And add from like a so for on maybe Phreesia the to going away. more the be do to a contributor you seems client in growth be goes less point this, I interpretation net SaaS while. related network here story think business maybe side you're story, guess to retention the certainly contribution growth a is time going of a of more saying it's a where that it's algorithm. not and to maybe think

Chaim Indig

think we're to say don't I ready that yet.

network lot of we left growth growing in term. the still think near a in the I have

Balaji Gandhi

know, was of this, we Joe, the from think, concluded, per and do following probably I called payment looked could weren't takeaway payment think But per a that that we break that was health really per which, And you putting you in investment the and back this that to at more things we client. what community sort provider the I subscription it's together it, revenue looked metric and processing was at like But you started think us don't services that I of and client, noticed care if services which puzzle of had client. one we the and revenue, the then. about fact, subscription-related down calculate. when happened, went public, Then jigsaw the key

sort And so added of to it. this third we just component like

at total Now can you you can at network solutions. look and look

sense? contribute So something more those you in like the picture at up quarter, isn't just break sort other. to any of intention any make it's back it can and new, But way that one the step to the of given entire Does introduce want. and look than

Joe Vruwink

I'll Yes, leave it does. you. Thank it there.

Operator

Jefferies, from And to Glen next Santangelo. move we'll

Glen Santangelo

more need grow you fiscal I revenue here. by another eight get question. guess, quarters? the to we check-in the quick to rate, goals are if it default, want like I this Yes. sort talk seems about to X gives fiscal broadly. business you of respect a use that mean, for year, giving I $XXX for of is your the Chaim, get on guidance first you're you're ones. of Thanks 'XX just just that effectively 'XX sense faster have sustainable currently within almost you to where comfort for rate the my years in And million we automated growth taking And I enjoying for your so here. of top-line you to to with I wanted two to that guidance what essentially, run penetration

Chaim Indig

All don't we've do ask our work early lot time, quarters we a got right. But I about during Look, pretty it's get be, of Like, for think a think of I'll in of to it's up. acceleration, we've need Balaji times business we how answer it. very, excited to we And I'm think like, easy. we're where and I back, that, you building reaccelerated to public the I still bunch in that we've have gone had and be to innings to going very if And now. down and this. think a Balaji? done many been bit look I

Balaji Gandhi

it's back, been streams. distortion sort even sequential vary is relates take total the revenue a three the you asked growth reason Glen, of times, the out I revenue it reason four on from where about look if Joe some that you payments, basis. think If we've like And the the quarter with to question or had earlier three biggest COVID of

seasonality of So seasonality a around solutions network little payments. again, there's around or bit

lose annual thinking CAGRs, when sort how growth So sight business you an operates. of on of about rates you're kind basis I think our or of can

were XX%, guidance there's for grown again, quarters this is growing where And So XX%. year. up we're things we've where annual we this there's quarters where setting for

Glen Santangelo

from quarter. leverage sort if mean, right, like because EBITDA reported Balaji, guidance I the side, the annual you the of assumes EBITDA you're it to on number maybe you're side, just right, in almost going end the this profitability no that theme year, on Well, 'XX, fiscal profitable by I could then Okay. follow in up providing assumes that little back the healthy a this to fiscal if mean, again, ramp I very assuming fiscal of be bit, 'XX. two-year a which, guidance, of fourth

it just is that I there stack it not to year anything the would or you 'XX straight year to being the to wanted played uncertainty get it's the but maybe second of as this so close more first load And environment, in expectation, the about the original expenses I like the differences a out we because way anywhere have in in positioned, understand sense, fiscal here think versus sort X-year that Thanks. lined. the seems

Balaji Gandhi

I isn't Chaim heard And linear. think say Yes. life I've

Chaim Indig

not. It's

Balaji Gandhi

think also guidance to like question, earlier around which last entered year I an is year. EBITDA and EBITDA relates entered how this this But the maybe and our year's we and

So I we early that last it's from And X year. weeks what, lot earlier a the of what's make. think look we in We're, different investments going to we're is, our What's talked the fiscal year. at about same year. different X, into

Some of we calibrate of them long-term. are short-term, are And as we some go. them

of a sort So view of things out. we how will we've got think play

July, And March so Glen. about to in is December, we be that talk where going October, different than

with some it point expect and we earlier mix, So revenue the through year. don't go we'll having expense a side there's of you the profitability. just sort said, linear the different we'll But should you to because of that be I as think then share that, on calibrate about

lower example. payments So for We're it's a seasonally going to EBITDA. strong quarter, have

Glen Santangelo

comments. the Appreciate Thanks. Okay.

Operator

And hear RBC Sean next Dodge Capital we'll Markets. from with

Sean Dodge

per a back moment, the metric Thanks. revenue the Good just new total AHSC. Yes. for Maybe to afternoon. going

would now on add us of basis before, give network QX. course. provider mind frame be a how said provider in per kind of you be on provider now the fully payments basis? per time, opportunity penetrated right something we over as XX,XXX we per at could with of for XX,XXX You're I our in services subscriptions, the of if think sense opportunity some and that you like a Can what

Balaji Gandhi

do simple. of want don't I math think puzzle. Sean, numbers all the I off top just pretty like mean it head, but these like, my a Yes. again, the to jigsaw about it's are

billion. TAM total $XX the So is

that's right, said, think, you XX,XXX, you the basis? I so that what mentioned, on quarterly a And

Sean Dodge

yes. That's right,

Balaji Gandhi

services. So that's subscription-related

total divided screw hand, it's one on $XX up about universe you say Again, solutions billion then by on think, $XX about then by we It's clients, there's XX,XXX network subscription, could I billion make XX,XXX but I you is a what And of the and math. $X my don't divided XXX,XXX sense? addressable to billion that and market. zeros, want of there's So talked can XX,XXX. clients. Does from do

Sean Dodge

how QX, with bigger sense. said sounded been some all? that know in you then, guess like clients? clients. last mix it processing in a larger makes you've like those increased the the from you And know payment I this, of you having Yes. I does what to call; I kind been related rate attachment That compare I What's of historically has added it for to success there. larger been guess,

Chaim Indig

long lower a I a still team's winning Yes. job the volume good we're the our we're we happy. enterprise been what average, in average, we've evident tracking, in But some but payment winning payment It's doing close of the away. no, And in And still fairly winning but it. to deals slog. than I think it's do but plugging think in it's We're accounts. They're numbers. volume. Obviously, nowhere the

Sean Dodge

Thanks All right. Okay. again. Great.

Operator

We'll to Citi. Grosslight move now with Daniel

Daniel Grosslight

congrats taking I'll Hi, guys. Thanks the my to Balaji here. add for question.

think as we to line provider we And still you look fees about you to comments? mentioned we network processing fees per if normalized look tends year-over-year. return shareholder degradation payment growth. growth to two going square with more that provider per there's XX% at expect You the be this that But patient or payment at do letter 'XX, help it grow fell metric? in volume some client those in a should in Can quarter, to

Balaji Gandhi

looking you're at payment So correct? revenue by divided client, fee

Daniel Grosslight

fees. processing numbers on per yes, But the I'm directly a were mean volume client basis. my volume it's with client. looking at But per I correlated

Balaji Gandhi

Yes.

so comparing Is that $XXX,XXX again, $XXX,XXX. about right? just clear, we're So to you're compared

Daniel Grosslight

right. that's Yes,

Balaji Gandhi

terms Chaim, be the thinking of I I I head? mean see off That on. top I up to know, of your quarter in with we your something point. don't follow you what might seasonality. Yes. have it's mean, obviously you're do same the

Chaim Indig

see a massive just might think is types. think client any it. what you of we don't mix in see I variability I No.

Balaji Gandhi

of this actually -- make so last we at that as unusual was and volumes down But couple have that. think were one the and and year-over-year COVID Daniel letters, thing would talked I down had one our XX and about, quarter from And is before in XX look last spiked year-over-year it then the quarters, we I sense, up.

And tougher some were anyway, of a follow we working But client because so on to those we comps off basis. you that nothing up comes maybe with per on can mind.

Daniel Grosslight

Yes. That sounds good. And it's across the for 'XX, more I normalized assume board.

So that's really dynamic. a 'XX 'XX and

Okay.

Balaji Gandhi

Yes.

Daniel Grosslight

this a bit of and for And about R&D talk little development a should just you bit about pickup. how capitalized Okay. 'XX? product a quarter, think and we software Can R&D

Chaim Indig

part, Balaji much and I'll first because capitalized don't I about Look, about about that it. talk the really software know can talk then

go our product-first, invest make of significant to Products to some that on look, impressive operating the of people of we our we lot we investments R&D term as products and Obviously, start new off to the getting for always new and doing. will the brought So expect growth efficiency and we of and time a gains and and team. we've clients. after, to things They markets see newer that gains all the we in its value that invest continue. start also, And just a organization, see some product. a And excited we're for near as so over shareholders. in onboard who the in huge lot of R&D that I build are the mitigate when And product. product-driven in leverage drive is our pretty we led mitigating about team

Balaji Gandhi

look to trend spend? Yes. the like Daniel, are trying you for on just

Daniel Grosslight

Exactly. Yes.

Balaji Gandhi

R&D sort P&L. it's expense you been can mean I proportionately the Yes. with of on see growing

bit sort but think will think on we've Chaim's on more similar that's we've all of could on in the So probably a it will at I to expense. this it based is. rate operating found at increase a been et context it you up to range that what increase, ratchet probably cetera. your this of little quarterly R&D point, I But R&D EBITDA, leverage basis. of getting still And a don't expense

Daniel Grosslight

Yes. Make Thanks sense. guys.

Operator

Stephanie We'll from now hear with SVB. Davis

Stephanie Davis

for congratulations questions. Thanks my Balaji, taking guys. new seat. Yes, the on

is you. a joined. first you is one different for Phreesia very First from organization when

look growth, would So and when role? you think leg this kind your you new new next this priorities how for of your top title at of of

Balaji Gandhi

X lot in a it we've done Well, obviously, different Had of opportunistic a years lot that's to I almost kind put at the think part is, I've years. work, here, money of lot in been a I we And last raised that things, that. trying make and X about get. think things. have involved capital I think of we'd of to to about how what returns decisions a and these lot We've of had be people Phreesia of we're been

on some behind we these capital. continuing we've talked lot rigor think this but reason So I a of is think focused And to we're what pretty had felt we because calls, comfortable just of make capital, on returns did we controversial, about it sure the on was cost I doing of it.

still got these continuing. team we've some that and a So I think, good again, helps decisions of us make really finance

actually, thing it's mess Don't more So of the with that on some ways, a good same. in front.

Stephanie Davis

buy to ironic you expansion? a with new are With it comes probably how looking the little accelerate mind, given Securities Understood. This organically that committed you cycle at platform maybe rev like rationalizing are in from the order private versus is pretty valuations to a developing these of solutions SVB analyst, market bit seeing in world some up, but blowing quickly.

Chaim Indig

also, but deals, past. where side. right? people great for capital believe in both be We've the in acquired obviously, And good the We valuations know sort believe of done on stewards really line that things, come we Look, to good sense some not capabilities build. that we we to private thought have we've want us I made the just of some things buy more want to than to acquire

I think that probably date, expectation resetting there, has there's to still happen than to more a happened lot Stephanie. of that needs

at we looked things. look, But

we're that phenomenal as at we look will and software at good things. our to And get things our We Frankly, network. getting to we and we're also deliver an at good use good organization, pretty continue feel clients, building value.

thoughtful. So to just doing to our the I shareholders, we care add that and keep we'll are know, we'll then things add look them. at drive clients, we'll don't great that. the phenomenal returns and our that things value clients But if about be there's value things to that And

Balaji Gandhi

And right of sort it see. allocation mean to some we'll quickly earlier the just I because gets let I you'll how lined way know But back have we've capital change. done and things to us point to around up just returns acquisitions for think my it's have us.

Chaim Indig

lot traffic of a There's there.

Stephanie Davis

Thanks, a there. see of we Hope guys. lot change

Operator

And Genuity, from next Close. we'll from hear Richard Canaccord

Richard Close

the for of Thanks both Congratulations Great. you. to question.

diving question. maybe in Annie's little bit into So a on more sciences, life

you new Just the wallet getting some provide the on maybe details could of terms maybe from platform. there to in customers greater coming pharma versus existing share growth if clients onboard

Chaim Indig

we recommend success been work previous with, or that with, Look, and with. new things. of we sciences we with expanding and greater haven't and that brands clients for in we've clients footprint. work us worked a couple has life winning it's clients agency then It's wallet It's great at with they worked before our with previously or companies other the they've had some and it's that been customers now brands company a we worked been the with clients. the share so pharmaceutical more And been at us

been by driven And lot of a just delivery. growth pretty I So our world. it's small think has a

It's And all good been over say doing going he's of big clients going well The really got to success treating do and team Balaji hard. a it and you're has really part it. great at over you what up is our has pull here. we and of the again been above. try well. to stat, been stat really a doing So a

Balaji Gandhi

Yes. Richard, in of we deck. from update time-to-time, some do this stuff our

XXs brands. was brands. number So look time of XXXX. investor at than that we I our would last we XX public looking went we in with I'm And And this if X deck. about at over the And it. it deck, Slide back, was the look XX updated when you more work

Chaim Indig

is So more. the answer

Balaji Gandhi

More.

Richard Close

us clients, like what's anything there would over you maybe existing I any the potential the are getting even Any you're can Has helpful. clients the the as in What just right perspectives year? feedback guess health care maybe pain and last terms your be Chaim, is with share mindset to talking same? changed now? points, from Okay. sales out of of providers update meaningfully it team,

Chaim Indig

Look, I working having They're hard. hard still to. turnover. what need They're people tired. think to they're It's they pay staff

think of have understaffed a I don't like fairly they are organizations ton often. feel their money. And they

and is look, don't for to they phenomenal a of So our that want just pretty of amount value looking take risk. drive solutions quickly lot view they're a

in and we've been could left can lot so that's this think it. give could their phenomenal Phreesia. And really, really a amount to to of having value for is ability a I great important with find we And right And the no get look They people it of to where them for used frankly, doctors. use lot market. their they and and they that's of success at they them that look have risk, a other their value get

last to years now. And for really feel our to work patients. four rough go. to ones. rough that health with so it get been a medical That's in right we providers It's been has really school. honored I you go. just many why great They're The go But a I'm treat care

a to You want difference. make

Richard Close

Thanks. right. All

Operator

John now from Raymond hear James. with We'll Ransom

John Ransom

I guys guess Balaji. you have there. dinner Hey, to Congratulations, congratulate Balaji I will was be or good. Hope mad.

the obviously, Last Thanks. year, your SCRs. we of hiring about gas. this of stepping in terms thinking experiment year upcoming additions? about are What Just the for big your thinking on cycle was

Chaim Indig

at We the it. like and want agree graduating That team. they're amazing get experience ever longer. I about that it. if but than we them team very And hire think now. are excited ISRs they're roles just with the future just successful. not we've And deeper talk into pretty the Balaji? also created an you to now it organization, graduate about really is more SCR their by me them. because was feel they've wouldn't Phreesia. Phreesia in we're of And job investing college. becoming I to seats they And like I Won't had, so design And in ISR the been out where that's around they're a rocking staying team it's well. they SCR right actually is And really an probably doing We're new

Balaji Gandhi

the the long without we got this for the asking but call in surprised I'm XXX And it's Yes. number, somebody quarter.

X of operating terms So range and John, trends of in for leverage. you know that what in sort tracking been I think it's quarters now. And expense doing talking we're about

Chaim Indig

note. lot have And all not We go-to-market provider just our SCRs I as market. a in our use I parts organization, side a would meetings, of also out of just point and

our So organization. organization, life we payer in SCRs in have our sciences

phenomenal have them doing of work. All been just

John Ransom

is, X I My only the other doctor patients. mean somebody a say been for I we they so offices, years. question X, with I the see let's can company, do mean plateau with X, has would to of with I hit many client, back go you if starting mean, roots you that assume. smaller

You so many them. can do for things only

your do with foundation mature the how about just more of? kind off So or customers that of some you you legacy is growth of clients think long-term of the build that kind new

Chaim Indig

Well, was which the us, of And exciting, of talk in too. about name. we pretty clients John? had have it clients just of their meeting which turns and heard in our the I I some products, one why using using and about they years. are beta look, ever I using they're our new products, out newest like, oldest a client, they're that where now hopefully we'll first and And it are some still was was coming changed our

new But seen happens out longest. the get with what our often with been us and they best Phreesia clients when the it. wins they've And are comes ones have products the that with

clients I out wouldn't know, don't say I our So there. old are

products been organization, those and they've newer use whole our CSM Our which getting to just try clients phenomenal is thesis. the

John Ransom

That was us were, of way, didn't bait. I what but slip the was and up some my you tell sneaky those take you'd hoping

-- So

Chaim Indig

I'm Balaji's me. allowed not say been to anything. No. training

Balaji Gandhi

there's angle there. another I think

just have that started that's Some Phreesia. market. And actually the specialists consolidators clients in become older of those private equity smaller roll-up with of

Chaim Indig

Phreesia been And think smaller out those a long some those those also was was turns now I it have because bought ago and smaller have. systems use of that that, that of that we But time They focus. clients. systems by clients health health our that like core have

John Ransom

understand. I

we question last the probably And I years, know thesis it's of time you a hospital entry. how about And reach was your I'm losing you learnings you think hospital can been my market? been track save at time announced you were opportunity you've that data when started? versus Now of as do since couple now is, expanded into But going what the have the the market. your on Thanks. into

Chaim Indig

We the just think about it same.

of had rolling is there's pretty It's the been lot market John. We've different We've years. hospital out acute hospitals of lot in regional hospitals, community Obviously, hospitals, in hospital. hospitals, children's big. I think the over a a of segmentation. hospitals, sort funny, success tertiary

teams, to you product our asked to building, just very hospitals I you existed. implementation coming workflows hospital, one they're another new from do. see you one, didn't laborious organizations, also and our systems. value It's all CSM me in both we're been You ago even ton to of organization have that, a add And specific And to we've these that workflows years be our of one if those know they organization, and tandem. some hospital hard but the them. But for go see working out we'd different able X building just

work better care to talk have and just more outcomes continuously years to a ever still lot But we experience than the just think with we to create health we're starting work about outcomes. a and have. I of patient automate better move

John Ransom

much. so Thanks Great.

Operator

We'll hear now from Scott with KeyBanc. Schoenhaus

Scott Schoenhaus

Balaji, the well role, Congrats, new Balaji. and Chaim Hey, deserved. on

touch this strong, upon clients XXX to another wanted upcoming I adds quarter. the new So of in

And clients. to you your promotional conversion client using timeframe as including wondering the average a service, on for us you're are promotional volumes software that was from I are speaks it for a of think services. I client paying still providers but just if to give the But the count could processing correct? a provider quick your offered reminder, subscription payment client pretrial ROI

Balaji Gandhi

correct. is That Correct.

X on Yes, rate on be few really client retention an hasn't You XXXX 'XX. years the basis changed not tell you, there. go-to-market we're much client from that Scott, we've pay have that the health years chunk us care rates to over in counted for And through it promo. client big been the sharing of XX%-ish But our to can rate, conversion has aggregate retention a services shared count. retention from we last

Scott Schoenhaus

last and wanted sales investments call Yes. And the I on with that just SCR commentary. to follow up

Should marketing continue keep in going and to we think will 'XX? to leverage I this drive last mentioned to flattish, you expect expenses fiscal you're which of actually saw relatively most we quarter. continue this operating sales quarter, that the

Balaji Gandhi

margin sales on changed. at G&A revenue. I sort up don't has third, sort you of about second, how still stack If and and getting That's flat improvement, holding the percentage Well, marketing think think. being list a investment and of top going maybe some R&D area we this of of an rank, is the gross but as

Scott Schoenhaus

Perfect. Thank you.

Operator

we'll next JMP Goodwin. Securities, Joe from From hear

Joe Goodwin

to for you number guess vectors and the the much of like I so payer growth on Great. have into taking methodology, talk coming how guidance of guidance role. Thank questions you methodology continued a CFO mature. how my new and congrats, the you referral these are in or newer influencing items Balaji, I maybe, has CFO model, about Balaji, change which the you're that your seat? now management, can may guess

Balaji Gandhi

think anything change. don't I will

of different are going the being I dollars that. of what and we're you of you some some access cycle registration things opportunity that revenue trying and terms stuff, different see is, about can we think think, newer to in quarters of the But new to total focus intentional areas sort be in have see you also I on, monetization the where patient subscription mentioned.

that We of have lot about. we've a talked promos the

has mask simple ways for I driving like it different to And think So growth our intent a see isn't anything. really over keep everyone. to don't you're trying to time that anything going of different. business and It's

Joe Goodwin

it. Got

know qualitatively, Okay. Any we there? Thank it commentary don't think metrics? was But I we 'XX, you in into guess FY if had retention maybe I the is And improving rate. net about from disclose when still visibility those what that you.

Balaji Gandhi

can look point then where of those where in look if things you new give got got year-over-year move have of those where speak they a matters. going we and one a to And this And quarter and I two net time are, a examples metrics going is quarter-to-quarter. as to If to it's client, clients, we've lot that. added it's favorably we got we've think in again, a Well, that not around of we at smaller had I good. expansion we quarter

of gross in I So are revenue want not to terms a something we go place just again, we've question retention your client think probably and disclosed. But that's retention specifically.

Joe Goodwin

Got it.

again. Okay. Congrats you. Thank

Operator

now Needham. move with MacDonald to We'll Ryan

Ryan MacDonald

early upcoming XXXX enrollment questions ROI of and it's period, first MemberConnect. period for enrollment able of measuring, starting expand and understand you're the it's get whether and through to about leads offering? that process the sort got how conversion into sort the that or to as generating can But be referrals taking on congrats, for the you might first the my Balaji. on you're grow you rates, and Thanks. of use Maybe here we monetization how you and in Thanks the talk I maturation Hi. and offering. as that

Chaim Indig

to us it's start opposed lead anything And I putting give probably I'm sure the color when for we'll do, too to on as let out team will they with material. but early else. promotional that, still it think them

Balaji Gandhi

And website payer there. and you a could probably, information there's there's

that, get how market you'll a So at just going to there. you if we're of look sense

Ryan MacDonald

you at I be will fiscal as the press sheet? on a XX sort wording feel your of in generated release, sort the just on I still some confident you next target believe And to at press support of cash cash of for the ability follow-up months. in breakeven state the then that, then on maybe of you want the hitting think enough right for a to the it sure on release. Balaji. your the the 'XX to Thanks. balance. be Do I In you And in least will recent of events balance that got say end said with sufficient it, cash path down, XXXX wanted the your sure and to I your have the Just clarification make you, target, targets. clarification Okay. to make along the reach you the this

Balaji Gandhi

that you balance accounting think regulatory I'm our way, take of in just worded, we And worded perspective. very we with say and feel still that made. and cash but sort comfortable the comfortable to And us I'll 'XX. to SEC Yes, was It I targets we've feel from glad asked. an audit yes, our was comments with

Ryan MacDonald

Thanks again.

Operator

to Guggenheim, move we'll Jack from And Wallace.

Jack Wallace

congratulations Balaji, thanks my for thanks the Hey, on last questions. public in call. words the for taking role. kind new to both, And the you

I ask want off, the First just to about commercial team.

bodies. year able Looking you ago. clients. more you. stack a Obviously, about just now of were where a added of the of a full last versus, lot Thank back few to a we added over say, levels to or the cross-training plus, and you've quarters bit their year sell comfort and team how I'm even be quite settling thinking the is in

Chaim Indig

I was What the it. don't understand I if know question?

Balaji Gandhi

Yes.

Jack. Sorry,

Chaim Indig

It's like really of question. Like I'm lost with good statement. a the sort

Jack Wallace

just level year expansion their asking given you quarters the a cross-selling now versus, the more team of state of upselling Just on even land average focused today tenure versus comfort of terms about or ago. the commercial being and team in of ago the the a in say couple

Chaim Indig

Yes.

different team. doing a those the that obviously new just on they're years. and they lot We've and there's based been that goes longer, lot expand ton team a are last to more But side. in good team And a because are seats out number, obviously, And obviously, different and seats of crushing and And ramped phenomenal. keep getting on their that's the frankly, upsell frankly the my folks our now then, also, people and clarify, they're heart in the off, better. people obviously, a net -- us. a to it just over provider the amazing, is doing very they're lot people of of First couple for for longer up

high keep And team X have those of well. all just doing separate teams think and frankly So well. to really us are doing I they're expectations that with

Jack Wallace

or there in out expense to that I'm either I Got And nature in within of hitting be if R&D. a side, hiring to it. then technology helpful. call certain moving related lumpy are any investments the That's wondering then of And or on opportunistic market. projects specifically was you. parts thinking given state there's year. the the on if Thank note, going the any could

Chaim Indig

or remain always these Look, we we I about up headcount about hire, down XX%. around I levels, that communicated expect we think we're thoughtful think how have but to

being we're on hiring. there's it But So the done economic matter talent. a We're I But it. this surely doesn't of on having think about been cycle, crazy think for years. not thoughtful lot look, I always don't XX this,

with good like it's to in than Like, you it or are every just right? tough, know that bad. So Like, times now times find to to when are bit on any can hold good hard be. your even I easier hiring people great don't talent you used people

used much the good I think promises about with I are place what that? they to grandeur. we see at is, we're getting not How's poached people pretty as of Phreesia. as think we feel

Jack Wallace

Thanks Yes, that's on I a it. great and really helpful, about outlook. a again. comment. quarter the appreciate And great retention congrats

Operator

will next Simmons Our from Robert D.A. Davidson. question with be

Robert Simmons

Balaji. for to our And well. Good let [ph] to doing [FFO] see congratulations Thanks me my Hey. add taking questions.

current about What levels, around level the you or going margin to expectations year, previous plus. it's think been expect getting to So you you gross gross your are has there? on to business, Do a stabilize the see? for payments the used margin it pressured back year to there start do

Balaji Gandhi

there. mean I it's headed Yes. back

about I of on think sort journey. talking this we've been this

looking subscription was et back. a our payments, different a I you sort basis of to calculate that But of cetera, number. at in back, bit I ways working XXX-plus investing. through it And we've and be we're want period no that think it of versus just you point calculating way interchange, just at terms how steadily step careful headwind little I matter because network looking solutions if been there's think

So think adjusted an a basis when few are gross points basis. EBITDA I breakeven the margins be on hundred will we higher at

have it talked that But the between improves -- cycle, mix and hundred before basis like a just we of the when there about through how so terms is today don't but in margin just we we to for then. I X,XXX-plus of within that one expect this I should gross think the really company sort fiscal company remember levels 'XX, think went investment because now you that. weren't as scaled thing think few points matters of clients earlier,

Robert Simmons

helpful. give would rewarding about Got in And Can context? rewarding example then providers. you us a that kind example the that bring in What it. of kind That's you be an letter, the about also and talked just very PAM of to light? provider of to

Balaji Gandhi

Sure. one Care one think KCC is program, straightforward the program. the I in I Kidney most Yes, letter, the sure. Choices the the mean

And a performance measure. it so is

are perform you you a measure one. measures on If you program value-based quality twice want of are your with care and in CMS, to based that and to which payments participate have how is PAM bunch measured against that, of PAM on you

how rule making work the around the of some between read can CMS you program. KCC from the payments to, care you If and

Robert Simmons

Got it. Thank you much. very

Operator

to I'd And at Indig this back closing Chaim like for remarks. things turn to time, Mr. any

Chaim Indig

another And right. to to of want I just all thank great excited year. and in a to our really I year, you for joining look months, thank call team and the just want about to for new forward the ahead, everyone one we All right? couple talk

Balaji Gandhi

Bye-bye.

Operator

conference. today's thank joining all us. conclude for And does you Again, that

You now disconnect. may

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