Phreesia Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Anne McCormick - JPMorgan Chase & Co - Analyst : Great. Congratulations on 20 years, what an accomplishment. So your gross margin once again saw some really nice expansion. And I know gross margin was kind of the first leg of the leverage story, but you're already seeing this really nice leverage on your other expense line. As we think about gross margin moving forward, how much more room is there for expansion? And then just how should we be thinking about the contribution it should have to overall leverage?

Question: Anne McCormick - JPMorgan Chase & Co - Analyst : Great. And then maybe just one more. You once again saw really strong growth in Network Solutions. Just wondering, should we be thinking about the underlying market conditions for 2026 is similar to 2025? Or are the market factors we should be thinking about in that line?

Question: Jessica Tassan - Piper Sandler & Co. - Analyst : I was hoping that maybe you could talk to us a little bit about postscript engagement. How does the product work, what data informs the product maybe what does the patience? And is payment kind of contingency based? Or is it based on whether the patient picks up the prescription or is it impression-based. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 9:00PM, PHR.N - Q4 2025 Phreesia Inc Earnings Call

Question: Jailendra Singh - Triust Securities - Analyst : This is Jailendra Singh from Triust Securities. So I want to ask about the total revenue per AHSC metric, nice growth of 5% year-over-year, 7% if you exclude the clearinghouse impact, but it was flat sequentially. How meaningful was the impact of Q4 from the way calendar paid out in terms of business days in terms of how holidays plays out in terms of year-over-year trends in Q4. And as we think about '26, clearly, we have one less day in fiscal Q1, but anything else we should keep in mind in terms of that quarterly progression of that metric?

Question: Jailendra Singh - Triust Securities - Analyst : Okay. And then my quick follow-up on kind of just update on progress on leveraging AI and automation. You guys have talked about one usage being replacing manual workflows and improving productivity internally. But you guys have also talked about leveraging AI and network solutions business in various ways. Just curious any interesting results to share? And are you seeing more operating internally? Or are you more about kind of driving more business in network solutions from AI side?

Question: Ryan Daniels - William Blair & Company L.L.C. - Analyst : I'm curious about solutions like appointment readiness. You mentioned that also creates a new opportunity to engage users and then leverage that for Network solution sales. So my question is, does the newer product like that need to reach some element of critical mass before you can sell it into the pharma customer base? Or is that something that you could just add to existing programs right away. Is it different than another touch point for Network Solutions.

Question: Ryan Daniels - William Blair & Company L.L.C. - Analyst : Okay. Perfect. And then if I call, we've seen a lot more announcements. It seems like lately of different NVs inside and even outside of health are names like Salesforce rolling out AI agents to do appointment scheduling and matching patients to admissions and insurance verification. Are you seeing any changes when you talk to your go-to-market team about the competitive dynamics? Or is your installed base and comprehensive offering still kind of winning more of the market relative to some of those solutions?

Question: Richard Close - Canaccord Genuity Corp. - Analyst : First, great results on that breast cancer screening, that's pretty neat. Just maybe digging in a little bit more on Ryan's question on appointment readiness. Is that something that you charge provider clients to turn on or maybe let them use it like you have done in the past? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 9:00PM, PHR.N - Q4 2025 Phreesia Inc Earnings Call And since you're talking about Life Science -- having another opportunity to engage. Can you talk a little bit about like what would be an example of how they are engaging with that offering if it's just their eligibility and deductible and stuff like that, just to better understand.

Question: Richard Close - Canaccord Genuity Corp. - Analyst : Okay. That's helpful. And then maybe on patient bill pay an update there. Obviously, the results from the ortho group really impressive. Can you talk a little bit more about the rollout of that, maybe interest from existing clients to add that on or what the attachment rate is with new clients?

Question: Ryan MacDonald - Needham & Company - Analyst : Congratz on a nice quarter. Maybe within Network Solutions, we're seeing a continued evolution, you see change in the advertising landscape for pharma marketing life sciences market in particularly in social media channels as we're seeing sort of more regulations come in, limiting the ability to target effectively on some of the major social media programs. Are you, from a go-to-market perspective on that networking solutions team doing anything to better position yourself to maybe capture more share of spend in the midst of these changes?

Question: Ryan MacDonald - Needham & Company - Analyst : Okay. And then maybe as you think about the reiterated sort of guidance on sort of magnitude of AHSC and the additions that you're expecting for this year. Can you just talk about sort of what you're seeing early days in the year, that gives you sort of confidence in the trajectory of that count? And then what to the extent that you can do to either meet or up or down investments to make sure you're sort of hitting to those targets as we progress through a year in what is likely again a volatile macro.

Question: Jeffrey Garro - Stephens Inc. - Analyst : A couple more for me on Network Solutions. First, just want to check in and see if you could help us understand how far along are you in penetrating all of the 170 million visits on the network with Network Solutions content? And then I also want to ask, how are you getting better at generating those monetization moments and maybe even further finding the best and most personalized match for your inventory of network solutions content to engage with those individual patient moments?

Question: Jeffrey Garro - Stephens Inc. - Analyst : Excellent. I appreciate that. And one more on Network Solutions. Back in mid-December, you spoke pretty positively on progress for Network Solutions on the kind of key selling season for pharma advertising. So I want to see if that remains the case here several months later. And maybe just generally how you feel about visibility there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 9:00PM, PHR.N - Q4 2025 Phreesia Inc Earnings Call

Question: Daniel Grosslight - Citigroup Inc. - Analyst : Congrats on another strong quarter here. There's been lots of macro noise out there right now, whether it's around consumer confidence or what's going to happen with Medicaid, enhanced subsidies on the exchanges or physician payment rates in Medicare. I'm curious if you're seeing any of these macro factors impact your business this year impact the sales cycle this year. And then I don't know if you have this data readily available, but if you could perhaps size what percent of your visit volume is coming from folks on Medicaid or the exchanges.

Question: Daniel Grosslight - Citigroup Inc. - Analyst : Yes. Makes sense. Okay. And then just on your capital deployment priorities for fiscal '26, you have really solid cash balance now, you're consistently free cash flow positive. So I'm just curious how you're thinking about the buy-versus-build dynamic in '26? And if there's any changes in capital deployment priorities?

Question: Scott Schoenhaus - KeyBanc Capital Markets Inc. - Analyst : So on the investment letter, you said your after-hours service was back online, that's good to hear. But it reminds me that you had 2 other acquisitions last year. Are you fully charging for those platforms now? And how should we think about those tailwinds of all 3 for fiscal '26.

Question: Jessica Tassan - Piper Sandler & Co. - Analyst : I just wanted to check in on the Network Solutions side, can you just remind us when are you able to upsell or maybe resell these contracts throughout the year? Are contracts usually time bound or impression bound? Just wondering about the per AHSC Network Solutions revenue over the course of the fiscal year.