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PI

Phreesia, Inc. (PHR)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered 15% revenue growth to $109.7M with strong non-GAAP profitability: Adjusted EBITDA of $16.4M (~15% margin), positive operating cash flow ($16.3M) and free cash flow ($9.2M), marking continued operating leverage and cash generation .
  • Network Solutions led growth (+29% YoY) alongside Subscription (+13%) and Payments (+5%); AHSCs rose to 4,341 (+10% YoY), while total revenue per AHSC increased 5% YoY to $25,266 .
  • FY2026 guidance was maintained: revenue $472–$482M, Adjusted EBITDA $78–$88M, AHSCs ≈4,500, with revenue per AHSC expected to increase; balance sheet flexibility supported by $84.2M cash and an undrawn credit facility .
  • Management emphasized new product momentum (Appointment Readiness, Patient Bill Pay) and real-time internal AI tools boosting forecasting; calendar/weather headwinds (Christmas mid-week, regional fires/storms) were acknowledged as Q4 mix/timing impacts .
  • Wall Street consensus comparisons from S&P Global were unavailable due to API limit; estimate-relative framing deferred (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Network Solutions revenue grew 29% YoY, underpinned by privacy/consent-based point‑of‑care engagement; selling season visibility remained solid compared with prior year .
  • Sustained operating leverage: Adjusted EBITDA up $19.9M YoY to $16.4M in Q4; three consecutive quarters of positive operating and free cash flow (Q4 OCF $16.3M; FCF $9.2M) .
  • Product momentum: Appointment Readiness (insurance benefits clarity, increased touchpoint value) and Patient Bill Pay (material uplift in collections and efficiency for clients) are scaling with positive client feedback .

Management quote: “We are well positioned to continue generating positive free cash flow while investing in long-term profitable revenue growth.”

What Went Wrong

  • Payment processing take rate moderated (2.79% in Q4 vs 2.93% prior-year Q4) and payment processing expense ratio rose vs prior-year Q4 (69% vs 67%), pressuring gross economics for the payments line .
  • Sequential total revenue per AHSC was flat in Q4; management cited calendar placement (Christmas mid-week), adverse weather (Northeast/Southeast), and L.A. fires affecting some clients .
  • S&P Global consensus data was not retrievable for estimate comparisons this cycle; limits detailed beat/miss quantification (see Estimates Context).

Financial Results

MetricQ2 FY2025 (Jul 31, 2024)Q3 FY2025 (Oct 31, 2024)Q4 FY2025 (Jan 31, 2025)
Total Revenue ($USD Millions)$102.115 $106.800 $109.681
Net Loss ($USD Millions)$(18.012) $(14.403) $(6.390)
Net Loss per Share ($)$(0.31) $(0.25) $(0.11)
Adjusted EBITDA ($USD Millions, non-GAAP)$6.529 $9.769 $16.373
Adjusted EBITDA Margin (%)6.4% (Adj. EBITDA/Rev) 9.2% (Adj. EBITDA/Rev) ~15.0% (Adj. EBITDA/Rev; company also cited ~15%)
Operating Cash Flow ($USD Millions)$11.061 $5.785 $16.256
Free Cash Flow ($USD Millions, non-GAAP)$3.658 $1.603 $9.198

Segment revenue breakdown

Segment Revenue ($USD Millions)Q2 FY2025Q3 FY2025Q4 FY2025
Subscription & Related Services$48.612 $49.363 $51.793
Payment Processing Fees$25.300 $24.704 $24.676
Network Solutions$28.203 $32.733 $33.212

KPIs and operating metrics

KPIQ2 FY2025Q3 FY2025Q4 FY2025
AHSCs (avg healthcare services clients)4,169 4,237 4,341
Total Revenue per AHSC ($)$24,494 $25,207 $25,266
Healthcare Services Revenue per AHSC ($)$17,729 $17,481 $17,616
Patient Payment Volume ($USD Millions)$1,093 $1,081 $1,080
Payment Facilitator Volume (%)81% 81% 82%
Cash & Cash Equivalents ($USD Millions)$81.798 $81.740 $84.220

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY2026$472–$482 $472–$482 Maintained
Adjusted EBITDA ($USD Millions, non-GAAP)FY2026$78–$88 $78–$88 Maintained
AHSCs (avg)FY2026≈4,500 ≈4,500 Maintained
Total Revenue per AHSCFY2026Expected to increase vs FY2025 Expected to increase vs FY2025 Maintained
Dividends/Tax/OpEx/Segment guidanceFY2026Not provided Not provided N/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025)Previous Mentions (Q3 FY2025)Current Period (Q4 FY2025)Trend
AI/technology initiativesFocus on R&D; broader suite; improving paybacks; PAM renewal Scaling product functionalities and integrations Internal AI forecasting tool impressed mgmt; expanding thoughtful AI use with financial impact Increasing adoption and impact
Network Solutions demandSelling season variability normal; privacy/consent differentiation; pipeline values ~20% larger YoY Slightly better visibility vs prior year; continuing as larger revenue mix driver Continued strength; impression-based products (postscript engagement) Strengthening
Macro/timing factorsElection-year typically absorbable; hurricanes impacted operations Selling season visibility improved; guidance narrowed Calendar (Christmas mid-week), L.A. fires, winter storms affected Q4 mix/timing Neutral with episodic headwinds
Regulatory/privacyPAM renewal supports CMS models; Oracle marketplace/Meditech alliances discussed HHS Secretary nomination commentary; emphasis on privacy/consent NAI privacy blog spotlight; ongoing privacy/consent positioning Reinforced
Product performancePatient Bill Pay and PAM use-cases; improving collections and stickiness Scaling suite for higher total value per client Appointment Readiness and Patient Bill Pay show measurable client benefits Expanding
Operating leverageExpense discipline; S&M stable ~$30–31M with leverage EBITDA margin expansion largely from below gross margin line and growth Three consecutive positive OCF/FCF; ~15% Adj. EBITDA margin Improving

Management Commentary

  • “We are pleased with our solid finish to fiscal 2025 and…new products…that improve medication adherence and the overall patient and provider experience.” – CEO Chaim Indig .
  • “We are well positioned to continue generating positive free cash flow while investing in long‑term profitable revenue growth.” – CFO Balaji Gandhi .
  • On AI: “It would be an understatement…impact has been great. We are very excited.” – CEO, on internal AI forecasting tool .
  • On Appointment Readiness: Adds value by reducing call volume and educating patients on benefits; life sciences clients gain a new engagement moment .
  • On Patient Bill Pay: Large orthopedic client saw +35% in out‑of‑time‑of‑service payments, +331% transactions, 12+ days/mo staff time saved; high patient satisfaction .

Q&A Highlights

  • Gross margin outlook: Mix is the main driver; processing carries lower margins; leverage expected to vary by quarter .
  • Network Solutions selling season/visibility: Similar to prior year; slightly better visibility into FY2026 vs last year; campaigns sold on fixed messages and resold upon completion .
  • AI usage: Internal AI tool materially aiding forecasting; broader thoughtful implementation planned for measurable financial impact .
  • Product adoption: Appointment Readiness currently not separately charged; boosts provider value and Network Solutions monetization; Patient Bill Pay rollout driving tangible financial/operational gains .
  • Capital deployment: No change; focus on durable, profitable organic growth; inorganic optionality remains, supported by strong cash/FCF .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q4 FY2025 (EPS and revenue) were unavailable at time of analysis due to daily request limits; as a result, beat/miss versus Street cannot be quantified this cycle. We default to company‑reported actuals and maintained FY2026 guidance for context . Values normally retrieved from S&P Global.

Key Takeaways for Investors

  • Operating momentum evident: three straight quarters of positive OCF/FCF and ~15% Adj. EBITDA margin in Q4; continued cost discipline supports FY2026 profitability targets .
  • Revenue mix shift: Network Solutions leading growth with privacy/consent‑anchored point‑of‑care engagement; selling season visibility appears at least as good as last year .
  • Product catalysts: Appointment Readiness and Patient Bill Pay are driving measurable client value and monetization opportunities; watch for broader deployments in FY2026 .
  • Payments economics: Take rate and payment processing expense ratios moderated; total mix and calendar/weather factors can affect quarterly per‑AHSC metrics .
  • Guidance intact: FY2026 revenue $472–$482M and Adj. EBITDA $78–$88M maintained; AHSC ~4,500 with revenue per AHSC expected to rise—monitor execution on mix and cross‑sell .
  • AI adoption: Internal tools already impacting forecasting; broader AI deployment could further enhance efficiency and margin trajectory .
  • Trading lens: Near‑term narrative centers on sustained operating leverage/FCF, Network Solutions demand, and product scaling; lack of consensus retrieval this quarter tempers beat/miss headlines but guidance stability provides anchor .