Phreesia, Inc. (NYSE: PHR) (“Phreesia”) announced financial
results today for the fiscal fourth quarter and fiscal year ended
January 31, 2021.
"Our team’s strength and resilience throughout a challenging
fiscal 2021 supported our clients and helped drive our financial
results. We are proud to support the incredible ongoing efforts of
healthcare providers across the country while furthering Phreesia's
mission of creating a better, more engaging healthcare experience,"
said Phreesia CEO Chaim Indig.
Fiscal Fourth Quarter 2021 Highlights
- Revenue was $41.8 million in the quarter, up 27%
year-over-year.
- Average number of provider clients was 1,808 in the quarter, up
13% year-over-year.
- Average revenue per provider client was $17,858, up 7%
year-over-year.
- Adjusted EBITDA was negative $0.09 million in the quarter
compared to $1.3 million in the same period in the prior year.
- Cash as of January 31, 2021 was $218.8 million, down $35.3
million from October 31, 2020.
Fiscal Year End January 31, 2021 Highlights
- Revenue was $148.7 million in fiscal 2021, up 19%
year-over-year.
- Average number of provider clients was 1,711 in fiscal 2021, up
9% year-over-year.
- Average revenue per provider client was $69,499 in fiscal 2021,
up 6% year-over-year.
- Adjusted EBITDA was $3.8 million in fiscal 2021, as compared to
$4.8 million in fiscal 2020.
- Cash as of January 31, 2021 was $218.8 million, up $128.5
million from January 31, 2020.
Outlook for Fiscal 2022
For the full fiscal year 2022, ending January 31, 2022, the
Company expects revenue to be between $178 million and $186
million, consistent with its previous growth guidance of 20 to 25
percent over fiscal year 2021.
Conference Call Information
The Company will hold a conference call on Wednesday, March 31,
2021, at 8:30 a.m. Eastern Time to review the Company’s fiscal
fourth quarter and fiscal year 2021 financial results. To
participate in the Company’s live conference call and webcast,
please dial (866) 211-4557 (or (647) 689-6750 for international
participants) using conference code number 3387628 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
COVID-19
In March 2020, the World Health Organization declared the
ongoing outbreak of a novel strain of coronavirus (COVID-19) a
pandemic and the United States declared a national emergency with
respect to COVID-19. The impact of the COVID-19 pandemic has been
widespread and rapidly evolving, and has led to the implementation
of various responses over the last year, including
government-imposed quarantines, travel restrictions, business and
school closures, and other public health safety measures. During
the last few months, several vaccines for COVID-19 received FDA
approval and are currently being administered across the country.
Despite growing vaccination rates, we believe COVID-19 will
continue to impact the normal operations of our clients, which are
primarily healthcare providers. Because our business relies, in
part, on the growth and success of our clients, any disruption to
our clients' operations will impact our revenue as follows:
- Subscription and related services: Disruptions to provider
operations impact our subscription and related services revenue
because of disruptions to sales processes and client
implementations.
- Payment processing: Any decline in non-essential and elective
patient visits directly impacts the revenue we receive from payment
processing tools.
- Life sciences: Because our life sciences revenue is driven by
the number of patients receiving targeted messages, a decline in
patient visits may impact our revenue earned through patient
engagement.
During the third quarter of fiscal 2021, patient visits returned
to pre-pandemic levels as restrictions were lifted. During the
fourth quarter of fiscal 2021, patient visits remained stable
despite a surge in COVID-19 cases. We have seen positive trends as
a result of our ability to use our Platform and solutions to assist
our healthcare provider clients as they implement new safety
protocols in order to continue to see patients, including
minimizing contact during intake of patients, mobile check-in,
transitioning patients to telehealth visits and enabling providers
to screen patients for COVID-19 risk factors. Our COVID-19 module
was used in over 45 million patient screenings during fiscal 2021.
In addition to patient screenings, health care provider clients are
also using our COVID-19 Vaccination Management Solution to manage
vaccine delivery and identify vaccine-hesitant patients.
Given the unknown timeline and the near-term uncertainty of
COVID-19 on our business, there continues to be uncertainty as to
the extent to which the global COVID-19 pandemic may adversely
impact our business operations, financial performance, and results
of operations at this time.
ACQUISITION
On January 8, 2021, we acquired QueueDr Inc. (QueueDr), a SaaS
technology company, to enhance our appointments solution. The total
consideration for the acquisition consists of $5.8 million in cash
paid at the acquisition date, $2.1 million of liabilities incurred
and $2.2 million in performance-related contingent payments.
Phreesia, Inc. Consolidated
Balance Sheets (Unaudited) (in thousands, except share and per
share data)
January 31,
2021
2020
Assets
Current:
Cash and cash equivalents
$
218,781
$
90,315
Settlement assets
15,488
12,368
Accounts receivable, net of allowances
29,052
21,978
Deferred contract acquisition costs
1,693
1,720
Prepaid expenses and other current
assets
7,254
5,157
Total current assets
$
272,268
$
131,538
Property and equipment, net of accumulated
depreciation and amortization of $40,148 and $35,551
26,660
14,487
Capitalized internal-use software, net of
accumulated amortization of $25,476 and $19,554
10,476
8,735
Operating lease right-of-use assets
(1)
2,654
—
Deferred contract acquisition costs
1,248
1,594
Intangible assets, net of accumulated
amortization of $525 and $271
2,725
1,199
Long-term deferred tax assets
658
775
Goodwill
8,307
250
Other assets
1,670
180
Total Assets
$
326,666
$
158,758
Liabilities and Stockholders’
Equity
Current:
Settlement obligations
$
15,488
$
12,368
Short-term debt and finance lease
liabilities
4,864
2,324
Current portion of operating lease
liabilities (1)
1,087
—
Accounts payable
4,389
6,017
Accrued expenses
18,324
9,243
Deferred revenue
10,838
5,401
Total current liabilities
$
54,990
$
35,353
Long-term debt and finance lease
liabilities
6,471
21,540
Operating lease liabilities, non-current
(1)
1,899
—
Total liabilities
$
63,360
$
56,893
Commitments and contingencies
Stockholders’ Equity:
Common stock, $0.01 par value—500,000,000
shares authorized as of January 31, 2021 and January 31, 2020,
respectively; 44,880,883 and 36,610,763 shares issued and
outstanding at January 31, 2021 and 2020, respectively;
449
366
Additional paid-in capital
579,599
386,383
Accumulated deficit
(311,777
)
(284,485
)
Treasury stock, at cost, 99,520 and 13,078
shares at January 31, 2021 and 2020, respectively
(4,965
)
(399
)
Total Stockholders’ Equity
263,306
101,865
Total Liabilities and Stockholders’
Equity
$
326,666
$
158,758
(1) Figures as of January 31, 2021 reflect
the Company's February 1, 2020 adoption of Accounting Standards
Codification 842, Leases (ASC 842).
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,
2021
2020
2021
2020
Revenue:
Subscription and related services
$
18,846
$
15,064
$
69,042
$
56,357
Payment processing fees
13,448
11,719
49,900
46,500
Life sciences
9,514
6,032
29,735
21,927
Total revenue
41,808
32,815
148,677
124,784
Expenses:
Cost of revenue (excluding depreciation
and amortization)
6,984
4,237
23,461
16,831
Payment processing expense
7,800
6,936
28,925
27,889
Sales and marketing
12,959
8,187
42,972
32,357
Research and development
6,355
4,860
22,622
18,623
General and administrative
11,739
9,609
40,460
30,458
Depreciation
2,645
2,310
9,770
8,753
Amortization
1,607
1,348
6,138
5,171
Total expenses
50,089
37,487
174,348
140,082
Operating loss
(8,281
)
(4,672
)
(25,671
)
(15,298
)
Other income (expense), net
Other income (expense), net
230
(283
)
1
(1,023
)
Change in fair value of warrant
liability
—
—
—
(3,307
)
Interest (expense) income, net
(367
)
(676
)
(1,573
)
(2,445
)
Total other expense, net
(137
)
(959
)
(1,572
)
(6,775
)
Loss before benefit from (provision
for) income taxes
(8,418
)
(5,631
)
(27,243
)
(22,073
)
Benefit from (provision for) income
taxes
322
1,963
(49
)
1,780
Net loss
(8,096
)
(3,668
)
(27,292
)
(20,293
)
Preferred stock dividends paid
—
—
—
(14,955
)
Accretion of redeemable preferred
stock
—
—
—
(56,175
)
Net loss attributable to common
stockholders, basic and diluted
$
(8,096
)
$
(3,668
)
$
(27,292
)
$
(91,423
)
Net loss per share attributable to
common stockholders, basic and diluted (1)
$
(0.18
)
$
(0.10
)
$
(0.69
)
$
(4.50
)
Weighted-average common shares
outstanding, basic and diluted (1)
44,324,718
36,010,388
39,519,640
20,301,189
(1) The Company’s 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, except for
shares and per share data)
For the fiscal years ended
January 31,
2021
2020
2019
Cash flows from operating
activities:
Net loss
$
(27,292
)
$
(20,293
)
$
(15,062
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
15,908
13,924
11,594
Stock compensation expense
13,489
6,177
1,447
Change in fair value of warrants
liability
—
3,307
2,058
Amortization of debt discount
389
445
798
Loss on extinguishment of debt
—
1,073
—
Cost of Phreesia hardware purchased by
customers
762
741
585
Deferred contract acquisition cost
amortization
2,025
1,977
1,640
Non-cash operating lease expense
1,766
—
—
Deferred tax asset
(65
)
(775
)
—
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(6,619
)
(5,905
)
(3,765
)
Prepaid expenses and other assets
(1,600
)
(312
)
(576
)
Deferred contract acquisition costs
(1,652
)
(2,097
)
(2,500
)
Accounts payable
(3,821
)
(30
)
2,367
Accrued expenses and other liabilities
6,004
3,681
(2,317
)
Lease liability
(1,786
)
—
—
Deferred revenue
5,382
(1,087
)
1,601
Net cash provided by (used in)
operating activities
$
2,890
$
826
$
(2,130
)
Cash flows used in investing
activities:
Acquisitions, net of cash acquired
(6,510
)
—
(1,190
)
Capitalized internal-use software
(7,334
)
(5,305
)
(5,109
)
Purchases of property and equipment
(11,241
)
(7,015
)
(4,724
)
Net cash used in investing
activities
$
(25,085
)
$
(12,320
)
$
(11,023
)
Cash flows from financing activities:
Proceeds from issuance of common stock in
equity offerings, net of underwriters' discounts and
commissions
174,800
130,781
—
Payment of preferred stock dividends
—
(14,955
)
—
Proceeds from issuance of common stock
upon exercise of stock options
4,385
1,809
361
Tax withholdings on stock compensation
awards
(4,965
)
—
—
Payment of offering costs
(290
)
(6,217
)
(195
)
Proceeds from revolving line of credit
—
9,876
14,800
Payments of revolving line of credit
(20,663
)
(17,676
)
(7,000
)
Proceeds from term loan
—
20,000
—
Repayment of term loan and loan
payable
—
(21,042
)
(1,167
)
Insurance financing arrangement
2,009
—
—
Principal portion of finance lease
payments
(2,630
)
(1,898
)
(2,470
)
Principal payments on financing
arrangements
(1,691
)
—
—
Debt extinguishment costs
—
(300
)
—
Debt issuance costs
(69
)
(112
)
(136
)
Loan facility fee payment
(225
)
—
Net cash provided by financing
activities
$
150,661
$
100,266
$
4,193
Net increase (decrease) in cash and
cash equivalents
128,466
88,772
(8,960
)
Cash and cash equivalents—beginning of
year
90,315
1,543
10,503
Cash and cash equivalents—end of
year
$
218,781
$
90,315
$
1,543
Disclosures of additional investing and
financing activities:
Supplemental information:
Right-of-use assets recorded in exchange
for operating lease liabilities (1)
$
4,359
$
—
$
—
Property and equipment acquisitions
through finance leases
$
8,885
$
2,047
$
4,425
Capitalized software acquired through
financings
$
174
$
—
$
—
Purchase of property and equipment and
capitalized software included in accounts payable
$
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
$
—
$
—
Deferred issuance costs included in
accounts payable and accrued expenses
$
—
$
—
$
344
Issuance of warrants related to debt
$
—
$
833
$
—
Receivables for cash in-transit on stock
option exercises
$
915
$
—
$
—
Cashless exercise of common stock
warrants
$
3,060
$
3,530
$
—
Shares issued in connection with
acquisition
$
—
$
—
$
162
Cash paid for:
Interest
$
1,465
$
2,310
$
2,799
Income taxes
$
64
$
—
$
—
(1) Includes $2,741 initial right of use
asset recorded upon adoption of ASC 842.
Non-GAAP financial measures
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, and before stock-based compensation
expense, change in fair value of warrant liability, 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.
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)
2021
2020
2021
2020
Net loss
$
(8,096
)
$
(3,668
)
$
(27,292
)
$
(20,293
)
Interest expense (income), net
367
676
1,573
2,445
(Benefit from) provision for income
taxes
(322
)
(1,963
)
49
(1,780
)
Depreciation and amortization
4,252
3,657
15,908
13,924
Stock-based compensation expense
3,873
2,345
13,489
6,177
Change in fair value warrant liability
—
—
—
3,307
Change in fair value of contingent
consideration liabilities
71
—
71
—
Other (income) expense, net
(230
)
283
(1
)
1,023
Adjusted EBITDA
$
(85
)
$
1,330
$
3,797
$
4,803
Phreesia, Inc. Reconciliation
of GAAP and Adjusted Operating Expenses (Unaudited)
Three months ended January
31,
Fiscal year ended
January 31,
(in thousands)
2021
2020
2021
2020
GAAP operating expenses
General and administrative
11,739
9,609
$
40,460
$
30,458
Sales and marketing
12,959
8,187
42,972
32,357
Research and development
6,355
4,860
22,622
18,623
Cost of revenue
6,984
4,237
23,461
16,831
$
38,037
$
26,893
$
129,515
$
98,269
Stock compensation included in GAAP
operating expenses
General and administrative
2,192
1,548
7,361
3,901
Sales and marketing
967
507
3,497
1,370
Research and development
501
311
1,995
796
Cost of revenue
213
(21
)
636
110
$
3,873
$
2,345
$
13,489
$
6,177
Adjusted operating expenses
General and administrative
$
9,547
$
8,061
$
33,099
$
26,557
Sales and marketing
11,992
7,680
39,475
30,987
Research and development
5,854
4,549
20,627
17,827
Cost of revenue
6,771
4,258
22,825
16,721
$
34,164
$
24,548
$
116,026
$
92,092
Phreesia, Inc. Key Metrics
(Unaudited)
Three months ended January
31,
Fiscal year ended
January 31,
2021
2020
2021
2020
Key Metrics:
Provider clients (average over period)
1,808
1,603
1,711
1,571
Average revenue per provider client
$
17,858
$
16,708
$
69,499
$
65,486
- Provider clients. We define provider clients as the average
number of healthcare provider 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 provider
client. We believe growth in the number of provider 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 provider organizations that are not yet
clients. While growth in the number of provider 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 provider client growth. For
example, as the number of provider 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
provider clients and their patients.
- Average revenue per provider client. We define average revenue
per provider client as the total subscription and related services
and payment processing revenue generated from provider clients in a
given period divided by the average number of provider clients that
generate revenue each month during that same period. We are focused
on continually delivering value to our provider clients and believe
that our ability to increase average revenue per provider 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,
2021
2020
2021
2020
Patient payment volume (in millions)
$
552
$
477
$
1,997
$
1,865
Payment facilitator volume percentage
79
%
82
%
81
%
82
%
- Patient payment volume. We believe that patient payment volume
is an indicator of both the underlying health of our provider
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 provider 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 transactions where Phreesia acts 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.
Available Information
Phreesia intends to use its Company website (including its
Investor Relations website) as well as its Facebook, Twitter and
LinkedIn accounts as a means of disclosing material non-public
information and for complying with its 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 involve substantial risks and
uncertainties. 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. 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, statements about
our future financial performance, including our revenue, cash
flows, costs of revenue and operating expenses; our anticipated
growth; our predictions about our industry; the impact of the
COVID-19 pandemic on our business and our ability to attract,
retain and cross-sell to healthcare provider clients. The
forward-looking statements contained in this 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, 2021 that will be filed with the
SEC following this earnings 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, consistent experience, while enabling healthcare
organizations to enhance clinical care and drive efficiency.
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version on businesswire.com: https://www.businesswire.com/news/home/20210330006020/en/
Investors: Balaji Gandhi Phreesia, Inc. investors@phreesia.com
(929) 506-4950 Media: Maureen McKinney Phreesia, Inc.
mmckinney@phreesia.com (773) 330-8908
Prudential Financial JR Sub Nts 12/31/2068 (NYSE:PHR.CL)
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