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

"Our third quarter results reflect our entire team’s commitment to our clients and Phreesia's mission of creating a better, more engaging healthcare experience,” said Phreesia CEO Chaim Indig.

Fiscal Third Quarter 2021 Highlights

Revenue was $38.5 million in the quarter as compared to $32.8 million in the same period in the prior year, an increase of 17%.
Average number of provider clients was 1,737 in the quarter as compared to 1,573 in the same period in the prior year, an increase of 10%.
Average revenue per provider client was $17,490 in the quarter compared to $16,637 in the same period in the prior year, an increase of 5%.
Adjusted EBITDA was positive $1.2 million in the quarter compared to positive $3.0 million in the same period in the prior year.
Cash and cash equivalents as of October 31, 2020 was $254.1 million, an increase of $163.8 million compared to January 31, 2020, driven primarily by our follow-on offering of common stock, which generated net proceeds of $174.5 million.

Conference Call Information

The Company will host a conference call and webcast on Wednesday, December 9, 2020, at 8:30 a.m. Eastern Time to review the quarterly results. To participate in Phreesia's live conference call and webcast, please dial (866) 211-4557, or (647) 689-6750 for international participants, using conference code number 2375761, 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 “Events & Presentations” section of ir.phreesia.com, and will remain available for approximately 90 days.

Recent Events

COVID-19

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China and spread to a number of other countries, including the United States and Canada. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the United States declared a national emergency with respect to COVID-19. The impact of the outbreak has been rapidly evolving and has led to the implementation of various responses, including government-imposed quarantines, travel restrictions, business and school closures and other public health safety measures. It has also disrupted the normal operations of many businesses, including ours. COVID-19 has also disrupted, and we believe will continue to disrupt, 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, including travel restrictions and provider office closures, impact our subscription and related services revenue because of disruptions to sales processes and client implementations.
Payment processing: The 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.

Beginning in early September 2020, we saw patient visits return to pre-pandemic levels as some of the restrictions and other safety measures have been lifted. 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 30 million patient screenings between February 10, 2020 and November 30, 2020.

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. Further, due to recent surges of COVID-19 cases in many states, or a second wave, we may see quarantines and additional restrictions being put in place again, which could impact patient visits across our provider clients similar to the trends during the earlier periods of the pandemic.

Principal Executive Offices

In March 2020, in the wake of the pandemic, we prepared the Company for indefinite remote work. Consistent with our long-term plans for remote work, we made the decision to allow our New York City Office lease to expire at the end of January 2021. We will continue to have a significant employee presence in the New York City area, including our Chief Executive Officer and our Chief Operating Officer. However, effective December 9, 2020, our Raleigh, North Carolina office will become our principal executive offices.

Outlook for Fiscal 2021 and Fiscal 2022

For the full fiscal year 2021, ending January 31, 2021, the Company expects to report revenue of $146 to $147 million. For the full fiscal year 2022, ending January 31, 2022, the Company expects revenue to grow between 20 and 25 percent over fiscal year 2021.

Phreesia, Inc. Balance Sheets in thousands, except for shares and per share data

	October 31, 2020			January 31, 2020
	(unaudited)
Assets
Current:
Cash and cash equivalents	$	254,118		$	90,315
Settlement assets	12,267			12,368
Accounts receivable, net of allowances	27,594			21,978
Deferred contract acquisition costs	1,708			1,720
Prepaid expenses and other current assets	6,825			5,157
Total current assets	302,512			131,538
Property and equipment, net of accumulated depreciation and amortization of $42,665 and $35,551	19,160			14,487
Capitalized internal-use software, net of accumulated amortization of $23,907 and $19,554	9,986			8,735
Operating lease right-of-use assets (1)	3,192			—
Deferred contract acquisition costs	1,227			1,594
Intangible assets, net of accumulated amortization of $450 and $271	1,020			1,199
Deferred tax assets	496			775
Goodwill	250			250
Other assets	207			180
Total assets	$	338,050		$	158,758
Liabilities and Stockholders’ Equity
Current:
Settlement obligations	$	12,267		$	12,368
Current portion of debt and finance lease liabilities	4,722			2,324
Current portion of operating lease liabilities (1)	1,288			—
Accounts payable	4,215			6,017
Accrued expenses	12,662			9,243
Deferred revenue	6,623			5,401
Total current liabilities	41,777			35,353
Long-term debt and finance lease liabilities	24,439			21,540
Operating lease liabilities, noncurrent (1)	2,158			—
Total liabilities	68,374			56,893
Commitments and contingencies
Stockholders’ Equity:
Common stock, $0.01 par value—500,000,000 shares authorized as of October 31, 2020 and January 31, 2020, respectively; 44,039,563 and 36,610,763 shares issued and outstanding as of October 31, 2020 and January 31, 2020, respectively	440			366
Additional paid-in capital	573,786			386,383
Accumulated deficit	(303,681		)	(284,485		)
Treasury stock	(869		)	(399		)
Total Stockholders’ Equity	269,676			101,865
Total Liabilities and Stockholders’ Equity	$	338,050		$	158,758
(1) Figures as of October 31, 2020 reflect the Company's February 1, 2020 adoption of Accounting Standards Codification 842, Leases (ASC 842).

Phreesia, Inc. Unaudited Statements of Operations (in thousands, except for shares and per share data)

	Three months ended October 31,						Nine months ended October 31,
	2020			2019			2020			2019
Revenue:
Subscription and related services	$	17,468		$	14,606		$	50,196		$	41,292
Payment processing fees	12,917			11,559			36,452			34,781
Life sciences	8,079			6,678			20,221			15,895
Total revenues	38,464			32,843			106,869			91,968
Expenses:
Cost of revenue (excluding depreciation and amortization)	6,472			4,388			16,477			12,594
Payment processing expense	7,530			6,902			21,125			20,952
Sales and marketing	10,481			8,348			30,013			24,170
Research and development	5,732			4,774			16,267			13,762
General and administrative	10,370			7,184			28,721			20,849
Depreciation	2,447			2,153			7,125			6,444
Amortization	1,546			1,325			4,531			3,823
Total expenses	44,578			35,074			124,259			102,594
Operating loss	(6,114		)	(2,231		)	(17,390		)	(10,626		)
Other income (expense)	62			77			(229		)	(740		)
Change in fair value of warrant liability	—			—			—			(3,307		)
Interest income (expense)	(467

Phreesia Announces Fiscal Third Quarter 2021 Results