Phreesia, Inc. (NYSE: PHR) ("Phreesia") announced financial results today for the fiscal second quarter ended July 31, 2021.
"Throughout our second quarter of Fiscal Year 2022, we again helped our clients drive patient self-service on our platform through the use of tools like mobile check-in, appointment self-scheduling and online payments," said CEO Chaim Indig. "We are proud to work with our provider clients to help them reach and schedule appointments with patients who are behind on well visits, vaccinations and other necessary preventive care".
Fiscal Second Quarter 2022 Highlights
Outlook for Fiscal 2022
We are increasing our revenue outlook for fiscal 2022 to a range of $195 million to $198 million from the previous range of $191 million to $194 million. We continue to expect our overall cash outflow to increase in fiscal 2022 compared to fiscal 2021 as we continue to ramp up hiring and infrastructure across the organization to support our anticipated growth.
Conference Call Information
The Company will hold a conference call on Thursday, September 2, 2021, at 8:30 a.m. Eastern Time to review the Company's second fiscal quarter 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 7489917 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
The impact of the COVID-19 (a novel strain of coronavirus) pandemic has been widespread and rapidly evolving. Over the last six months, several vaccines for COVID-19 received FDA approval and are currently being administered across the country. We believe COVID-19 may continue to impact the normal operations of our clients, which are primarily healthcare providers. As more individuals are vaccinated, we expect these impacts to be diminished. However, as the pandemic progresses, including through the emergence of new variants and rules regarding immunization, we may experience stricter protocols.
Phreesia, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) |
|||||||||
|
July 31, 2021 |
|
January 31, 2021 |
||||||
|
(Unaudited) |
|
|
||||||
Assets |
|
|
|
||||||
Current: |
|
|
|
||||||
Cash and cash equivalents |
$ |
439,854 |
|
|
|
$ |
218,781 |
|
|
Settlement assets |
15,503 |
|
|
|
15,488 |
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $632 and $699 as of July 31, 2021 and January 31, 2021, respectively |
30,356 |
|
|
|
29,052 |
|
|
||
Deferred contract acquisition costs |
1,817 |
|
|
|
1,693 |
|
|
||
Prepaid expenses and other current assets |
6,161 |
|
|
|
7,254 |
|
|
||
Total current assets |
493,691 |
|
|
|
272,268 |
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $47,124 and $40,148 as of July 31, 2021 and January 31, 2021, respectively |
26,868 |
|
|
|
26,660 |
|
|
||
Capitalized internal-use software, net of accumulated amortization of $28,451 and $25,476 as of July 31, 2021 and January 31, 2021, respectively |
12,299 |
|
|
|
10,476 |
|
|
||
Operating lease right-of-use assets |
2,252 |
|
|
|
2,654 |
|
|
||
Deferred contract acquisition costs |
2,513 |
|
|
|
1,248 |
|
|
||
Intangible assets, net of accumulated amortization of $780 and $525 as of July 31, 2021 and January 31, 2021, respectively |
2,470 |
|
|
|
2,725 |
|
|
||
Deferred tax asset |
379 |
|
|
|
658 |
|
|
||
Goodwill |
8,211 |
|
|
|
8,307 |
|
|
||
Other assets |
2,543 |
|
|
|
1,670 |
|
|
||
Total assets |
$ |
551,226 |
|
|
|
$ |
326,666 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
||||||
Current: |
|
|
|
||||||
Settlement obligations |
$ |
15,503 |
|
|
|
$ |
15,488 |
|
|
Current portion of finance lease liabilities and other debt |
4,494 |
|
|
|
4,864 |
|
|
||
Current portion of operating lease liabilities |
1,133 |
|
|
|
1,087 |
|
|
||
Accounts payable |
5,483 |
|
|
|
4,389 |
|
|
||
Accrued expenses |
18,101 |
|
|
|
18,324 |
|
|
||
Deferred revenue |
12,938 |
|
|
|
10,838 |
|
|
||
Total current liabilities |
57,652 |
|
|
|
54,990 |
|
|
||
Long-term finance lease liabilities and other debt |
5,598 |
|
|
|
6,471 |
|
|
||
Operating lease liabilities, non-current |
1,412 |
|
|
|
1,899 |
|
|
||
Total liabilities |
64,662 |
|
|
|
63,360 |
|
|
||
Commitments and contingencies |
|
|
|
||||||
Stockholders' Equity: |
|
|
|
||||||
Common stock, $0.01 par value - 500,000,000 shares authorized as of both July 31, 2021 and January 31, 2021; 50,892,126 and 44,880,883 shares issued as of July 31, 2021 and January 31, 2021, respectively |
509 |
|
|
|
449 |
|
|
||
Additional paid-in capital |
840,287 |
|
|
|
579,599 |
|
|
||
Accumulated deficit |
(347,144 |
) |
|
|
(311,777 |
) |
|
||
Treasury stock, at cost, 135,918 and 99,520 shares at July 31, 2021 and January 31, 2021, respectively |
(7,088 |
) |
|
|
(4,965 |
) |
|
||
Total Stockholders' Equity |
486,564 |
|
|
|
263,306 |
|
|
||
Total Liabilities and Stockholders' Equity |
$ |
551,226 |
|
|
|
$ |
326,666 |
|
|
Phreesia, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
|||||||||||||||||||
|
Three months ended July 31, |
|
Six months ended July 31, |
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||||||
Subscription and related services |
$ |
22,885 |
|
|
|
$ |
17,129 |
|
|
|
$ |
44,704 |
|
|
|
$ |
32,728 |
|
|
Payment processing fees |
16,306 |
|
|
|
11,828 |
|
|
|
32,950 |
|
|
|
23,535 |
|
|
||||
Life sciences |
11,816 |
|
|
|
6,052 |
|
|
|
21,644 |
|
|
|
12,142 |
|
|
||||
Total revenues |
51,007 |
|
|
|
35,009 |
|
|
|
99,298 |
|
|
|
68,405 |
|
|
||||
Expenses: |
|
|
|
|
|
|
|
||||||||||||
Cost of revenue (excluding depreciation and amortization) |
10,032 |
|
|
|
5,271 |
|
|
|
18,566 |
|
|
|
10,005 |
|
|
||||
Payment processing expense |
9,648 |
|
|
|
6,747 |
|
|
|
19,373 |
|
|
|
13,595 |
|
|
||||
Sales and marketing |
22,167 |
|
|
|
10,098 |
|
|
|
37,179 |
|
|
|
19,532 |
|
|
||||
Research and development |
11,443 |
|
|
|
5,530 |
|
|
|
19,497 |
|
|
|
10,535 |
|
|
||||
General and administrative |
16,244 |
|
|
|
9,631 |
|
|
|
28,915 |
|
|
|
18,351 |
|
|
||||
Depreciation |
3,701 |
|
|
|
2,410 |
|
|
|
6,998 |
|
|
|
4,678 |
|
|
||||
Amortization |
1,580 |
|
|
|
1,632 |
|
|
|
3,231 |
|
|
|
2,985 |
|
|
||||
Total expenses |
74,815 |
|
|
|
41,319 |
|
|
|
133,759 |
|
|
|
79,681 |
|
|
||||
Operating loss |
(23,808 |
) |
|
|
(6,310 |
) |
|
|
(34,461 |
) |
|
|
(11,276 |
) |
|
||||
Other (expense) income, net |
(90 |
) |
|
|
424 |
|
|
|
(24 |
) |
|
|
(291 |
) |
|
||||
Interest (expense) income, net |
(207 |
) |
|
|
(419 |
) |
|
|
(445 |
) |
|
|
(739 |
) |
|
||||
Total other (expense) income, net |
(297 |
) |
|
|
5 |
|
|
|
(469 |
) |
|
|
(1,030 |
) |
|
||||
Loss before provision for income taxes |
(24,105 |
) |
|
|
(6,305 |
) |
|
|
(34,930 |
) |
|
|
(12,306 |
) |
|
||||
Provision for income taxes |
(288 |
) |
|
|
(66 |
) |
|
|
(437 |
) |
|
|
(177 |
) |
|
||||
Net loss |
$ |
(24,393 |
) |
|
|
$ |
(6,371 |
) |
|
|
$ |
(35,367 |
) |
|
|
$ |
(12,483 |
) |
|
Net loss per share attributable to common stockholders, basic and diluted |
$ |
(0.48 |
) |
|
|
$ |
(0.17 |
) |
|
|
$ |
(0.73 |
) |
|
|
$ |
(0.33 |
) |
|
Weighted-average common shares outstanding, basic and diluted |
50,577,614 |
|
|
|
37,735,155 |
|
|
|
48,287,305 |
|
|
|
37,523,966 |
|
|
Phreesia, Inc. Unaudited Consolidated Statements of Cash Flows (in thousands) |
||||||||||
|
|
Six months Ended July 31, |
||||||||
|
|
2021 |
|
2020 |
||||||
Operating activities: |
|
|
|
|
||||||
Net loss |
|
$ |
(35,367 |
) |
|
|
$ |
(12,483 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
||||||
Depreciation and amortization |
|
10,229 |
|
|
|
7,663 |
|
|
||
Stock-based compensation expense |
|
13,047 |
|
|
|
6,300 |
|
|
||
Amortization of deferred financing costs and debt discount |
|
144 |
|
|
|
245 |
|
|
||
Cost of Phreesia hardware purchased by customers |
|
273 |
|
|
|
439 |
|
|
||
Deferred contract acquisition costs amortization |
|
1,152 |
|
|
|
1,775 |
|
|
||
Non-cash operating lease expense |
|
483 |
|
|
|
777 |
|
|
||
Change in fair value of contingent consideration liabilities |
|
209 |
|
|
|
? |
|
|
||
Deferred tax asset |
|
279 |
|
|
|
109 |
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
||||||
Accounts receivable |
|
(1,304 |
) |
|
|
(994 |
) |
|
||
Prepaid expenses and other assets |
|
(1,037 |
) |
|
|
(2,892 |
) |
|
||
Deferred contract acquisition costs |
|
(2,541 |
) |
|
|
(1,401 |
) |
|
||
Accounts payable |
|
950 |
|
|
|
(1,275 |
) |
|
||
Accrued expenses and other liabilities |
|
(275 |
) |
|
|
1,116 |
|
|
||
Lease liability |
|
(544 |
) |
|
|
(755 |
) |
|
||
Deferred revenue |
|
2,100 |
|
|
|
856 |
|
|
||
Net cash used in operating activities |
|
(12,202 |
) |
|
|
(520 |
) |
|
||
Investing activities: |
|
|
|
|
||||||
Capitalized internal-use software |
|
(5,023 |
) |
|
|
(2,737 |
) |
|
||
Purchase of property and equipment |
|
(5,030 |
) |
|
|
(4,659 |
) |
|
||
Net cash used in investing activities |
|
(10,053 |
) |
|
|
(7,396 |
) |
|
||
Financing activities: |
|
|
|
|
||||||
Proceeds from issuance of common stock in equity offerings, net of underwriters' discounts and commissions |
|
245,813 |
|
|
|
? |
|
|
||
Proceeds from issuance of common stock upon exercise of stock options |
|
2,678 |
|
|
|
2,475 |
|
|
||
Treasury stock to satisfy tax withholdings on stock compensation awards |
|
(1,960 |
) |
|
|
(869 |
) |
|
||
Proceeds from employee stock purchase plan |
|
295 |
|
|
|
? |
|
|
||
Insurance financing agreement |
|
? |
|
|
|
2,009 |
|
|
||
Finance lease payments |
|
(2,100 |
) |
|
|
(1,301 |
) |
|
||
Principal payments on financing agreements |
|
(873 |
) |
|
|
(220 |
) |
|
||
Debt issuance costs |
|
? |
|
|
|
(69 |
) |
|
||
Loan facility fee payment |
|
(125 |
) |
|
|
(225 |
) |
|
||
Payment of contingent consideration for acquisitions |
|
(400 |
) |
|
|
? |
|
|
||
Net cash provided by financing activities |
|
243,328 |
|
|
|
1,800 |
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
221,073 |
|
|
|
(6,116 |
) |
|
||
Cash and cash equivalents ? beginning of period |
|
218,781 |
|
|
|
90,315 |
|
|
||
Cash and cash equivalents ? end of period |
|
$ |
439,854 |
|
|
|
$ |
84,199 |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
||||||
Supplemental information of non-cash investing and financing information: |
|
|
|
|
||||||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
81 |
|
|
|
$ |
3,183 |
|
|
Property and equipment acquisitions through finance leases |
|
$ |
1,980 |
|
|
|
$ |
3,657 |
|
|
Capitalized software acquired through vendor financing |
|
$ |
? |
|
|
|
$ |
174 |
|
|
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 |
|
|
Purchase of property and equipment and capitalized software included in accounts payable |
|
$ |
3,503 |
|
|
|
$ |
1,358 |
|
|
Capitalized stock-based compensation |
|
$ |
82 |
|
|
|
$ |
? |
|
|
Cash payments for: |
|
|
|
|
||||||
Interest |
|
$ |
365 |
|
|
|
$ |
833 |
|
|
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, provision for income taxes, depreciation and amortization, and before stock-based compensation expense, change in fair value of contingent consideration liabilities and other expense (income), 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:
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 July 31, |
|
Six months ended July 31, |
||||||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Net loss |
|
$ |
(24,393 |
) |
|
|
$ |
(6,371 |
) |
|
|
$ |
(35,367 |
) |
|
|
$ |
(12,483 |
) |
|
Interest expense (income), net |
|
207 |
|
|
|
419 |
|
|
|
445 |
|
|
|
739 |
|
|
||||
Provision for income taxes |
|
288 |
|
|
|
66 |
|
|
|
437 |
|
|
|
177 |
|
|
||||
Depreciation and amortization |
|
5,281 |
|
|
|
4,042 |
|
|
|
10,229 |
|
|
|
7,663 |
|
|
||||
Stock-based compensation expense |
|
7,273 |
|
|
|
3,428 |
|
|
|
13,047 |
|
|
|
6,300 |
|
|
||||
Change in fair value of contingent consideration liabilities |
|
209 |
|
|
|
? |
|
|
|
209 |
|
|
|
? |
|
|
||||
Other expense (income), net |
|
90 |
|
|
|
(424 |
) |
|
|
24 |
|
|
|
291 |
|
|
||||
Adjusted EBITDA |
|
$ |
(11,045 |
) |
|
|
$ |
1,160 |
|
|
|
$ |
(10,976 |
) |
|
|
$ |
2,687 |
|
|
Phreesia, Inc. Reconciliation of GAAP and Adjusted Operating Expenses (Unaudited) |
||||||||||||||||
|
|
Three months ended July 31, |
|
Six months ended July 31, |
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
GAAP operating expenses |
|
|
|
|
|
|
|
|
||||||||
General and administrative |
|
$ |
16,244 |
|
|
$ |
9,631 |
|
|
$ |
28,915 |
|
|
$ |
18,351 |
|
Sales and marketing |
|
22,167 |
|
|
10,098 |
|
|
37,179 |
|
|
19,532 |
|
||||
Research and development |
|
11,443 |
|
|
5,530 |
|
|
19,497 |
|
|
10,535 |
|
||||
Cost of revenue |
|
10,032 |
|
|
5,271 |
|
|
18,566 |
|
|
10,005 |
|
||||
|
|
$ |
59,886 |
|
|
$ |
30,530 |
|
|
$ |
104,157 |
|
|
$ |
58,423 |
|
Stock compensation included in GAAP operating expenses |
|
|
|
|
|
|
|
|
||||||||
General and administrative |
|
$ |
3,376 |
|
|
$ |
1,928 |
|
|
$ |
6,294 |
|
|
$ |
3,534 |
|
Sales and marketing |
|
2,231 |
|
|
794 |
|
|
3,877 |
|
|
1,522 |
|
||||
Research and development |
|
1,144 |
|
|
573 |
|
|
1,988 |
|
|
1,024 |
|
||||
Cost of revenue |
|
522 |
|
|
133 |
|
|
888 |
|
|
220 |
|
||||
|
|
$ |
7,273 |
|
|
$ |
3,428 |
|
|
$ |
13,047 |
|
|
$ |
6,300 |
|
Adjusted operating expenses |
|
|
|
|
|
|
|
|
||||||||
General and administrative |
|
$ |
12,868 |
|
|
$ |
7,703 |
|
|
$ |
22,621 |
|
|
$ |
14,817 |
|
Sales and marketing |
|
19,936 |
|
|
9,304 |
|
|
33,302 |
|
|
18,010 |
|
||||
Research and development |
|
10,299 |
|
|
4,957 |
|
|
17,509 |
|
|
9,511 |
|
||||
Cost of revenue |
|
9,510 |
|
|
5,138 |
|
|
17,678 |
|
|
9,785 |
|
||||
|
|
$ |
52,613 |
|
|
$ |
27,102 |
|
|
$ |
91,110 |
|
|
$ |
52,123 |
|
Phreesia, Inc. Key Metrics (Unaudited) |
||||||||||||||||
|
|
Three months ended July 31, |
|
Six months ended July 31, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Key Metrics: |
|
|
|
|
|
|
|
|
||||||||
Provider clients (average over period) |
|
1,987 |
|
|
1,668 |
|
|
1,945 |
|
|
1,650 |
|
||||
Average revenue per provider client |
|
$ |
19,720 |
|
|
$ |
17,360 |
|
|
$ |
39,932 |
|
|
$ |
34,099 |
|
Additional Information (Unaudited) |
||||||||||||||||
|
|
Three months ended
|
Six months ended
|
|||||||||||||
|
|
2021 |
|
2020 |
2021 |
|
2020 |
|||||||||
Patient payment volume (in millions) |
|
$ |
696 |
|
|
$ |
466 |
|
$ |
1,397 |
|
|
$ |
921 |
|
|
Payment facilitator volume percentage |
|
78 |
% |
|
82 |
% |
78 |
% |
|
83 |
% |
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 Quarterly Report on Form 10-Q for the fiscal quarter ended July 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 care and provides a modern, consistent experience, while enabling healthcare organizations to optimize their staffing, boost profitability and enhance clinical care.
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