BusinessWire

Phreesia Announces Fiscal Year End 2020 Results

NEW YORK--(BUSINESS WIRE)--Phreesia, Inc. (NYSE: PHR) (“Phreesia”) announced financial results today for the fiscal fourth quarter and year ended January 31, 2020.


Fiscal Fourth Quarter 2020 Highlights

  • Revenue was $32.8 million in the quarter as compared to $26.5 million in the same period in the prior year, an increase of 24%.
  • Average number of provider clients was 1,603 in the quarter as compared to 1,543 in the same period in the prior year, an increase of 4%.
  • Average revenue per provider client was $16,708 in the quarter compared to $14,219 in the same period in the prior year, an increase of 18%.
  • Adjusted EBITDA was $1.3 million in the quarter compared to $0.4 million in the same period in the prior year.
  • Cash on the balance sheet as of January 31, 2020 was $90.3 million, down $1.1 million from October 31, 2019.

Fiscal Year End January 31, 2020 Highlights

  • Revenue was $124.8 million in fiscal 2020 as compared to $99.9 million in fiscal 2019, an increase of 25%.
  • Average number of provider clients was 1,571 in fiscal 2020 as compared to 1,490 in fiscal 2019, an increase of 5%.
  • Average revenue per provider client was $65,486 in fiscal 2020 as compared to $54,231 in fiscal 2019, an increase of 21%.
  • Adjusted EBITDA was $4.8 million in fiscal 2020 as compared to $3.5 million in fiscal 2019.
  • Cash on the balance sheet as of January 31, 2020 was $90.3 million, up $88.8 million from January 31, 2019.

Conference Call Information

The Company will hold a conference call on Thursday, April 23, 2020, at 8:30 a.m. Eastern Time to review the Company’s fiscal fourth quarter and fiscal year 2020 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 2346258 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

The Company filed a Current Report on Form 8-K on April 6, 2020 (the “8-K”) to provide an update related to the outbreak of a novel strain of Coronavirus (“COVID-19”) and its impact on the Company’s business. As set forth in the 8-K, COVID-19 has and could continue to materially and adversely impact Phreesia’s business and results of operations. However, the rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. During the interim period since the filing of the 8-K, there has been no change to the information disclosed therein.

Phreesia, Inc.

Balance sheets

(Unaudited)

in thousands, except for shares and per share data

 

 

January 31,
2020

 

January 31,
2019

Assets

 

 

 

Current:

 

 

 

Cash and cash equivalents

$

90,315

 

 

$

1,543

 

Settlement assets

12,368

 

 

10,217

 

Accounts receivable, net of allowance for doubtful accounts of $943 and $517

21,978

 

 

16,073

 

Deferred contract acquisition costs

1,720

 

 

1,673

 

Prepaid expenses

5,157

 

 

3,811

 

Total current assets

$

131,538

 

 

$

33,317

 

Property and equipment, net of accumulated depreciation and amortization of $35,551 and $27,862

14,487

 

 

14,211

 

Capitalized internal-use software, net of accumulated amortization of $19,554 and $14,621

8,735

 

 

7,816

 

Deferred contract acquisition costs

1,594

 

 

1,521

 

Intangible assets, net of accumulated amortization of $271 and $33

1,199

 

 

1,437

 

Long-term deferred tax assets

775

 

 

 

Goodwill

250

 

 

250

 

Other assets

180

 

 

710

 

Total assets

$

158,758

 

 

$

59,262

 

Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)

 

 

 

Current:

 

 

 

Settlement obligations

$

12,368

 

 

$

10,217

 

Current portion of long-term debt

 

 

97

 

Current portion of capital leases

2,324

 

 

1,869

 

Accounts payable

6,017

 

 

3,750

 

Accrued expenses

9,243

 

 

5,507

 

Deferred revenue

5,401

 

 

6,488

 

Total current liabilities

$

35,353

 

 

$

27,929

 

Long-term debt, net of current portion

19,444

 

 

27,918

 

Capital leases, net of current portion

2,096

 

 

2,401

 

Warrant liability

 

 

5,498

 

Total liabilities

$

56,893

 

 

$

63,746

 

Redeemable preferred stock:

 

 

 

Senior A redeemable preferred stock, $0.01 par value—14,500,000 shares authorized as of January 31, 2019; 13,674,365 issued and outstanding as of January 31, 2019;

 

 

79,311

 

Series B redeemable convertible preferred stock, $0.01 par value—10,820,169 shares authorized as of January 31, 2019; 9,197,142 shares issued and outstanding as of January 31, 2019;

 

 

51,872

 

Junior convertible preferred stock, $0.01 par value—34,000,000 shares authorized as of January 31, 2019; 32,746,041 shares issued and outstanding as of January 31, 2019;

 

 

32,746

 

Redeemable preferred stock, $0.01 par value— 44,000,000 shares authorized as of January 31, 2019; 42,560,530 shares issued and outstanding as of January 31, 2019;

 

 

42,561

 

Total redeemable preferred stock

 

 

206,490

 

Stockholders’ Equity (Deficit):

 

 

 

Common stock, $0.01 par value—500,000,000 and 80,000,000 shares authorized as of January 31, 2020 and January 31, 2019, respectively; 36,610,763 and 1,994,721 shares issued and outstanding as of January 31, 2020 and January 31, 2019, respectively

366

 

 

20

 

Additional paid-in capital

386,383

 

 

 

Accumulated deficit

(284,485

)

 

(210,994

)

Treasury stock

$

(399

)

 

 

Total stockholders’ equity (deficit)

$

101,865

 

 

$

(210,974

)

Total Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)

$

158,758

 

 

$

59,262

 

Phreesia, Inc.

Statements of Operation

(Unaudited)

in thousands, except for shares and per share data

 

 

 

 

 

Three months ended January 31,

 

Fiscal year ended January 31,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

Subscription and related services

$

15,064

 

 

$

12,537

 

 

$

56,357

 

 

$

43,928

 

Payment processing fees

11,719

 

 

9,403

 

 

46,500

 

 

36,881

 

Life sciences

6,032

 

 

4,543

 

 

21,927

 

 

19,080

 

Total revenues

32,815

 

 

26,483

 

 

124,784

 

 

99,889

 

Expenses:

 

 

 

 

 

 

 

Cost of revenue (excluding depreciation and amortization)

4,237

 

 

4,473

 

 

16,831

 

 

15,105

 

Payment processing expense

6,936

 

 

5,582

 

 

27,889

 

 

21,892

 

Sales and marketing

8,187

 

 

6,396

 

 

32,357

 

 

26,367

 

Research and development

4,860

 

 

4,205

 

 

18,623

 

 

14,349

 

General and administrative

9,609

 

 

5,958

 

 

30,458

 

 

20,076

 

Depreciation

2,310

 

 

2,037

 

 

8,753

 

 

7,552

 

Amortization

1,348

 

 

1,130

 

 

5,171

 

 

4,042

 

Total expenses

37,487

 

 

29,782

 

 

140,082

 

 

109,382

 

Operating loss

(4,672

)

 

(3,299

)

 

(15,298

)

 

(9,494

)

Other income (expense)

(283)

 

 

(173

)

 

(1,023

)

 

(7

)

Change in fair value of warrant liability

 

 

(562

)

 

(3,307

)

 

(2,058

)

Interest income (expense)

(676

)

 

(1,045

)

 

(2,445

)

 

(3,504

)

Total other income (expense)

(959

)

 

(1,780

)

 

(6,775

)

 

(5,568

)

Loss before benefit from (provision for) income taxes

(5,631

)

 

(5,080

)

 

(22,073

)

 

(15,062

)

Benefit from (provision for) income taxes

1,963

 

 

 

 

1,780

 

 

 

Net loss

(3,668

)

 

(5,080

)

 

(20,293

)

 

(15,062

)

Preferred stock dividend paid

 

 

 

 

(14,955

)

 

 

Accretion of redeemable preferred stock

 

 

 

 

(56,175

)

 

(30,199

)

Net loss attributable to common stockholders, basic and diluted

$

(3,668

)

 

$

(5,080

)

 

$

(91,423

)

 

$

(45,261

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.10

)

 

$

(2.58

)

 

$

(4.50

)

 

$

(24.53

)

Weighted-average common shares outstanding, basic and diluted

36,010,388

 

 

1,971,031

 

 

20,301,189

 

 

1,844,929

 

Phreesia, Inc.

Statements of Cash Flows

(Unaudited)

in thousands, except for shares and per share data

 

 

 

For the fiscal years ended January 31,

 

2020

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(20,293

)

 

$

(15,062

)

 

(18,192

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

13,924

 

 

11,594

 

 

9,640

 

Stock-based compensation expense

6,177

 

 

1,447

 

 

805

 

Change in fair value of warrants liability

3,307

 

 

2,058

 

 

598

 

Amortization of debt discount

445

 

 

798

 

 

904

 

Loss on extinguishment of debt

1,073

 

 

 

 

 

Cost of Phreesia hardware purchased by customers

741

 

 

585

 

 

 

Deferred contract acquisition costs amortization

1,977

 

 

1,640

 

 

1,389

 

Deferred tax asset

(775

)

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

Accounts receivable

(5,905

)

 

(3,765

)

 

(3,382

)

Prepaid expenses and other assets

(312

)

 

(576

)

 

(319

)

Deferred contract acquisition costs

(2,097

)

 

(2,500

)

 

(1,773

)

Accounts payable

(30

)

 

2,367

 

 

(2,057

)

Accrued expenses and other

3,681

 

 

(2,317

)

 

1,968

 

Deferred revenue

(1,087

)

 

1,601

 

 

(723

)

Net cash provided by (used in) operating activities

$

826

 

 

$

(2,130

)

 

$

(11,142

)

Cash flows used in investing activities:

 

 

 

 

 

Acquisition

 

 

(1,190

)

 

 

Capitalized internal-use software

(5,305

)

 

(5,109

)

 

(5,375

)

Purchase of property and equipment

(7,015

)

 

(4,724

)

 

(6,590

)

Net cash used in investing activities

$

(12,320

)

 

$

(11,023

)

 

$

(11,965

)

Cash flows from financing activities:

 

 

 

 

 

Proceeds from IPO

$

130,781

 

 

$

 

 

 

Proceeds from revolving line of credit

9,876

 

 

14,800

 

 

12,400

 

Payments of revolving line of credit

(17,676

)

 

(7,000

)

 

(20,400

)

Proceeds from term loan

20,000

 

 

 

 

 

Proceeds from loan payable

 

 

 

 

10,000

 

Repayment of term loan

(1,042

)

 

(1,167

)

 

(1,167

)

Repayment of loan payable

(20,000

)

 

 

 

 

Payment of preferred stock dividends

(14,955

)

 

 

 

 

Payment on capital leases

(1,898

)

 

(2,470

)

 

(1,929

)

Debt extinguishment costs

(300

)

 

 

 

 

Debt issuance costs

(112

)

 

(136

)

 

(224

)

Proceeds from issuance of preferred stock, net

 

 

 

 

32,459

 

Proceeds from issuance of common stock upon exercise of stock options

1,809

 

 

361

 

 

147

 

Payment of offering costs

(6,217

)

 

(195

)

 

 

Net cash provided by financing activities

$

100,266

 

 

$

4,193

 

 

$

31,286

 

Net increase in cash and cash equivalents

88,772

 

 

(8,960

)

 

8,179

 

Cash and cash equivalents – beginning of period

1,543

 

 

10,503

 

 

2,323

 

Cash and cash equivalents – end of period

$

90,315

 

 

$

1,543

 

 

$

10,503

 

Disclosures of additional investing and financing activities:

 

 

 

 

 

Supplemental information:

 

 

 

 

 

Property and equipment acquisitions through capital leases

$

2,047

 

 

$

4,425

 

 

$

781

 

Deferred debt issuance costs included in accrued expenses

$

 

 

$

 

 

$

100

 

Deferred issuance costs included in accounts payable and accrued expenses

$

 

 

$

344

 

 

$

 

Purchase of property and equipment and capitalized software included in accounts payable

$

1,253

 

 

$

 

 

$

 

Shares issued in connection with acquisition

$

 

 

$

162

 

 

$

 

Issuance of warrants related to debt

$

833

 

 

$

 

 

$

 

Net exercise of preferred stock warrant

$

 

 

$

 

 

$

28

 

Cash payments for:

 

 

 

 

 

Interest

$

2,310

 

 

$

2,799

 

 

$

2,799

 

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 net interest expense (income), provision for income taxes, depreciation and amortization, and before non-cash based compensation expense, non-cash change in fair value of warrant liability and net other income (expense).

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 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; or (3) tax payments that may represent a reduction in cash available to us; (4) other interest (expense); 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

 

 

 

Three months ended
January 31,

 

Fiscal year ended
January 31,

(in thousands, unaudited)

 

2020

 

2019

 

2020

 

2019

Net loss

 

$

(3,668

)

 

$

(5,080

)

 

$

(20,293

)

 

$

(15,062

)

Interest (income) expense

 

676

 

 

1,045

 

 

2,445

 

 

3,504

 

Depreciation and amortization

 

3,657

 

 

3,167

 

 

13,924

 

 

11,594

 

Stock-based compensation expense

 

2,345

 

 

497

 

 

6,177

 

 

1,447

 

Change in fair value warrant liability

 

 

 

562

 

 

3,307

 

 

2,058

 

(Benefit from) provision for income taxes

 

(1,963

)

 

 

 

(1,780

)

 

 

Other (income) expense

 

283

 

 

173

 

 

1,023

 

 

7

 

Adjusted EBITDA

 

$

1,330

 

 

$

364

 

 

$

4,803

 

 

$

3,548

 

Phreesia, Inc.

Reconciliation of GAAP and Adjusted Operating Expenses (Unaudited)

 

 

 

Three months ended
January 31,

 

Fiscal year ended
January 31,

(in thousands)

 

2020

 

2019

 

2020

 

2019

GAAP operating expenses

 

 

 

 

 

 

 

 

General and administrative

 

9,609

 

 

5,958

 

 

$

30,458

 

 

$

20,076

 

Sales and marketing

 

8,187

 

 

6,396

 

 

32,357

 

 

26,367

 

Research and development

 

4,860

 

 

4,205

 

 

18,623

 

 

14,349

 

Cost of revenue

 

4,237

 

 

4,473

 

 

16,831

 

 

15,105

 

 

 

$

26,893

 

 

$

21,032

 

 

$

98,269

 

 

$

75,897

 

Stock compensation included in GAAP operating expenses

 

 

 

 

 

 

 

 

General and administrative

 

1,548

 

 

361

 

 

3,901

 

 

902

 

Sales and marketing

 

507

 

 

75

 

 

1,370

 

 

298

 

Research and development

 

311

 

 

61

 

 

796

 

 

247

 

Cost of revenue

 

(21

)

 

 

 

110

 

 

 

 

 

$

2,345

 

 

$

497

 

 

$

6,177

 

 

$

1,447

 

Adjusted operating expenses

 

 

 

 

 

 

 

 

General and administrative

 

$

8,061

 

 

$

5,597

 

 

$

26,557

 

 

$

19,174

 

Sales and marketing

 

7,680

 

 

6,321

 

 

30,987

 

 

26,069

 

Research and development

 

4,549

 

 

4,144

 

 

17,827

 

 

14,102

 

Cost of revenue

 

4,258

 

 

4,473

 

 

16,721

 

 

15,105

 

 

 

$

24,548

 

 

$

20,535

 

 

$

92,092

 

 

$

74,450

 

Phreesia, Inc.

Key Metrics

 

 

 

Three months ended
January 31,

 

Fiscal year ended
January 31,

 

 

2020

 

2019

 

2020

 

2019

Key Metrics:

 

 

 

 

 

 

 

 

Provider clients (average over period)

 

1,603

 

 

1,543

 

 

1,571

 

 

1,490

 

Average revenue per provider client

 

$

16,708

 

 

$

14,219

 

 

$

65,486

 

 

$

54,231

 

Patient payment volume (in millions)

 

$

477

 

 

$

369

 

 

$

1,865

 

 

$

1,446

 

  • Provider clients. We define provider clients as the average number of healthcare provider organizations that generate revenue each month during the applicable period. In one specific case wherein we act as a subcontractor providing white-label services to our partner’s clients, we treat this 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 our existing provider client relationships.
  • Patient payment volume. 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, cash and check. Patient payment volume is a major driver of our payment processing revenue, and 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. Credit and debit patient payment volume processed through our payment facilitator model represented 82% and 83% of our patient payment volume in fiscal 2020 and 2019, respectively. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions. Credit and debit patient payment volume processed through our payment facilitator model represented 82% and 83% in the three months ended January 31, 2020 and 2019, respectively.

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

Statements we make in this press release may include statements which 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. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Phreesia’s plans, intentions, expectations, strategies and prospects. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. 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, costs of revenue and operating expenses and our business outlook for fiscal 2020; 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 Phreesia’s filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K that will be filed with the SEC following this earnings release. The forward-looking statements in this release are based on information available to Phreesia as of the date hereof, and Phreesia disclaims any obligation to update any forward-looking statements, 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 care and provides a modern, consistent experience, while enabling healthcare organizations to optimize their staffing, boost profitability and enhance clinical care.


Contacts

Investors:
Balaji Gandhi
Phreesia, Inc.
investors@phreesia.com
(929) 506-4950

Media:
Maureen McKinney
Phreesia Inc.
mmckinney@phreesia.com
773-330-8908