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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200422005964/en/
Investors: Balaji Gandhi Phreesia, Inc. investors@phreesia.com
(929) 506-4950
Media: Maureen McKinney Phreesia Inc. mmckinney@phreesia.com
773-330-8908
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