Phreesia, Inc. Q4 FY2026 earnings call

• Fiscal year 2026 was pivotal with key financial milestones like surpassing $100 million in adjusted EBITDA, $50 million in free cash flow, and positive net income. - Provider financing: Acquisition of Access One has been central, and it's performing in line with expectations with plans to expand access to capital. - HCP marketing: Launched Provider Connect in early March, a first - of - its - kind offering for healthcare provider marketers. - AI is playing an increasingly important role, used to automate manual processes, reduce reliance on outsourced resources, and drive efficiency. - Entered fiscal 2027 with a financial profile that gives flexibility to pursue opportunities and resilience to absorb challenges. - Healthcare industry is facing adversity with challenges in FDA guidelines, insurance coverage, etc., but Freesia's products are positioned to address access, affordability, and outcomes.

For the fourth quarter of fiscal year 2026, revenue was $127.1 million, up 16% year-over-year, with growth led by payment solutions following the acquisition of AccessOne. Excluding the AccessOne acquisition, revenue was up 7%. Adjusted EBITDA was $29.4 million, with an adjusted EBITDA margin of 23%. Fourth quarter average healthcare services clients (AHSCs) reached 4,658, an increase of 138 from the prior quarter. Fourth quarter total revenue per AHSC is $27,279, up 8% year over year. 2026 was an important year as Freesia achieved positive net income and earnings per share. Cash flow continued to improve with net cash provided by operating activities in the fourth quarter being $33.7 million, up $17.4 million year-over-year, and free cash flow was $28.5 million, up $19.3 million year-over-year.

• Lowered revenue outlook for fiscal 2027 to a range of $510 million to $520 million from prior range of $545 million to $559 million due to shorter visibility into spending commitments from certain pharmaceutical manufacturers in network solutions. - Maintaining adjusted EBITDA outlook of $125 million to $135 million for fiscal 2027, reflecting operating leverage and ability to drive efficiency gains. - Maintaining expectation for AHSC growth in the mid - single - digit percentage range in fiscal 2027. - Updating total revenue per AHSC outlook to a low single - digit percentage range from low double - digit range previously.

• Healthcare industry facing adversity such as challenges in FDA guidelines, insurance coverage, patient utilization, and provider reimbursement. - Shorter visibility into spending commitments from certain pharmaceutical manufacturers in network solutions creating variability in financial forecast. - Forward - looking statements subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from those described.

Q: About dynamics in network solutions and change in guidance, specifically if it's across all clients or subset and firmness of budgets.

A: Balaji said it's very fluid, not broad - based, in specific brand and therapeutic areas like vaccines and public health with agencies.

Q: About Provider Connect in network solutions.

A: Ryan was told it's very early days, very small base, launch went well but change in revenue outlook has nothing to do with it.

Q: About price negotiations in network solutions.

A: Jeff was told it's not tied to the earlier mentioned topics.

Q: About EBITDA guidance and cost actions.

A: Jalindra was told about continuing to look for margin expansion and efficiencies with AI and past history of driving margin in the business.

Q: About AccessOne priorities for growth.

A: Ryan was told it's an established business, they'll put more resources within Freesia, expanding capital base is super important.

Q: About subscription pricing and client retention.

A: Richard was told it's more proactive and offensive on their part to improve existing product and provide more value.

Q: About revenue concentration in network solutions.

A: Stan was told nothing particularly noteworthy in terms of concentration.

Q: About AI changing competitive landscape in software business.

A: Client was told AI allows increasing breadth of offerings and they're well - suited given contextual info and history.

Q: About GLP - 1 drugs in network solutions.

A: Steve was told GLP - 1 drugs are in the 'bad guy' category among other issues.

Q: About visibility and erosion in commitments in ProviderConnect and pharma budgets.

A: Scott was told ProviderConnect is very early, inconsequential in magnitude, and news has been more positive fiscal year to date.

Q: About allocation of revenue reduction to network solutions and cadence.

A: Daniel was told about year - over - year comparisons and cadence being about the second half of the year not the first.

Q: About next phases of scaling AccessOne.

A: Brian was told it's both expanding to existing clients and greenfield opportunities.

Q: About opportunities in payments business with AccessOne.

A: Clark was told about net new opportunities, expansion within legacy client base, and expanded capital base to bring to other Freesia.

Q: About strategy rethinking in network solutions due to pharma situation.

A: John was told it's a speed bump, they still have conviction in their differentiated value proposition.

Q: About why EBITDA guidance is held steady despite revenue reduction.

A: Balaji was told they provide information as they know it with convictions.

Q: About clarification on oral GLP - 1 and network solutions.

A: Balaji said there's nothing specific about oral in the comment.

Q: About flow of network solutions and cadence.

A: Ryan was told generally about the second half of the year being the focus. }