Phreesia Inc (PHR) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and Positive Cash Flow

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Thu, Mar 13, 2025, 12:09 AM 4 min read

Revenue: $109.7 million in Q4, up 15% year-over-year.
Adjusted EBITDA: $16.4 million in Q4, up $19.9 million year-over-year.
Adjusted EBITDA Margin: 15% in Q4.
Average Healthcare Services Clients (AHSC): 4,341 in Q4, an increase of 104 from the prior quarter and 379 from the prior year.
Total Revenue per AHSC: $25,266 in Q4, up 5% year-over-year.
Operating Cash Flow: Positive $16.3 million in Q4, up $19.3 million year-over-year.
Free Cash Flow: Positive $9.2 million in Q4, up $20.1 million year-over-year.
Cash Position: $84.2 million as of January 31, up $2.5 million from October 31, 2024.
Fiscal 2026 Revenue Outlook: $400 million to $482 million.
Fiscal 2026 EBITDA Outlook: $78 million to $88 million.

Warning! GuruFocus has detected 3 Warning Signs with PHR.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Phreesia Inc (NYSE:PHR) reported Q4 revenue of $109.7 million, marking a 15% year-over-year increase.
The company achieved a positive operating cash flow of $16.3 million in Q4, up $19.3 million year-over-year.
Phreesia Inc (NYSE:PHR) maintained positive free cash flow for the third consecutive quarter, with Q4 free cash flow at $9.2 million.
The Phreesia platform was used in approximately 14% of patient visits across the United States, reaching around 170 million people.
The company is well-positioned to continue generating positive free cash flow while investing in long-term profitable revenue growth.

Negative Points

The total revenue per AHSC was flat sequentially, despite a 5% year-over-year growth.
The impact of calendar and weather-related factors posed challenges in Q4, affecting business operations.
There is uncertainty regarding the macroeconomic environment, including consumer confidence and healthcare policy changes, which could impact future performance.
Phreesia Inc (NYSE:PHR) faces competition from larger entrants in the market, which could affect its market share.
The company did not provide specific attachment rates for new products like patient bill pay, indicating potential challenges in adoption.

Q & A Highlights

Q: Congratulations on 20 years. Your gross margin saw expansion. How much more room is there for expansion, and how should we think about its contribution to overall leverage? A: Chaim Indig, CEO: The mix is a significant driver of gross margin. Processing is associated with lower margins, so growth expectations in other revenue lines will contribute to gross margin. Operating leverage might vary by quarter.

Q: You saw strong growth in Network Solutions. Should we expect similar market conditions in 2026 as in 2025? A: Balaji Gandhi, CFO: We expect market conditions to be very similar as we head into the year.

Q: Can you explain how the postscript engagement product works and its payment model? A: Balaji Gandhi, CFO: It's impression-based, similar to other campaigns. We leverage data to remind patients about prescriptions, adding value to clients, providers, and patients.

Q: How did the calendar and weather impact Q4 revenue per AHSC, and what should we expect for fiscal 2026? A: Balaji Gandhi, CFO: Calendar and weather were significant factors. Christmas timing and regional weather affected comps. These factors are considered in our internal modeling and expectations.

Q: Can you update us on leveraging AI and automation within Phreesia? A: Chaim Indig, CEO: AI is being used internally, notably by our Network Solutions team for forecasting. It's having a real-time impact, and we plan to implement AI thoughtfully across the organization.

Q: How does the appointment readiness product integrate with Network Solutions, and does it require critical mass before engaging pharma customers? A: Chaim Indig, CEO: Our product organization ensures scale from early stages. When we discuss a product, it's usually already at scale, allowing us to leverage it across Network Solutions.

Q: Are macro factors like consumer confidence and Medicaid changes impacting your business? A: Balaji Gandhi, CFO: We monitor these trends closely, but there's nothing significant to report currently. Our network's payer mix aligns with the broader population.

Q: What are your capital deployment priorities for fiscal 2026? A: Chaim Indig, CEO: No change in priorities. We focus on allocating capital for profitable, durable growth, both organically and inorganically, leveraging our strong balance sheet.

Q: How are you progressing with Network Solutions penetration and monetization? A: Balaji Gandhi, CFO: We provide value in various ways across visits. Network Solutions revenue per visit continues to increase, and new products will drive further growth.

Q: How do you handle upselling or reselling Network Solutions contracts throughout the year? A: Balaji Gandhi, CFO: We sell campaigns for a fixed number of messages and resell upon completion. AI aids in forecasting and campaign management.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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