"expense discipline… there is a pretty special culture about exercising expense discipline and thinking like owners and really being good stewards of capital."
— Balaji Gandhi
03Detailed Report
PHR
Company PHR
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 25, 2026
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Executive Summary
Phreesia reported a solid third quarter of fiscal 2025, underpinned by a 17% year-over-year revenue increase to $106.8 million and a positive turn in cash flow metrics, including positive operating cash flow ($5.8 million) and free cash flow ($1.6 million). While GAAP net income remained negative (-$14.4 million) and EBITDA was negative (-$6.3 million), the company demonstrated meaningful operating leverage and a disciplined cost structure, driving an adjusted EBITDA of $9.8 million and an adjusted EBITDA margin of 9% for the quarter. Management reiterated a constructive path to profitability and free cash flow expansion, guided by a narrowed FY2025 revenue range ($418–$420 million) and an elevated adjusted EBITDA range ($34–$36 million), with long-term targets of multimillion-dollar EBITDA growth and AHSC expansion into 4,200 for FY2025 and 4,500 for FY2026. The updated guidance implies a scalable platform with meaningful leverage as revenue per AHSC trends higher and onboarding of strategic add-on solutions accelerates. The quarter also demonstrates ongoing progress in cross-sell opportunities through network solutions and life sciences initiatives, while maintaining a strong balance sheet (net cash ≈$70.6 million) and robust liquidity (cash ≈$82 million). The management commentary stresses expense discipline and reinvestment discipline as the dual engines of growth, a theme reinforced in the Q&A transcript. Investors should weigh the improving profitability trajectory against ongoing investments in product and go-to-market initiatives, as well as integration risks from recent acquisitions.
Key Performance Indicators
Revenue
Increasing
106.80M
QoQ: 4.59% | YoY: 16.57%
Gross Profit
Increasing
72.26M
67.66% margin
QoQ: 16.91% | YoY: 19.09%
Operating Income
Increasing
-13.84M
QoQ: 19.62% | YoY: 56.80%
Net Income
Increasing
-14.40M
QoQ: 20.04% | YoY: 54.91%
EPS
Increasing
0.65
QoQ: 309.68% | YoY: 212.07%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $106.8 million, up 17% YoY; QoQ growth around 4.6% (Q2 2025 was $102.1 million).
- Gross profit: $72.263 million; gross margin ~67.66%, up from prior-year levels (~66.2%).
- Operating loss: $(13.84) million; operating margin ≈ −12.96%.
- EBITDA: $(6.27) million; EBITDA margin ≈ −5.87% for the quarter; adjusted EBITDA: $9.8 million; adjusted EBITDA margin: 9%.
- Net income: $(14.40) million; net margin ≈ −13.49%.
- Earnings per share (GAAP): Not explicitly reconciled in the GAAP table; reported EPS (non-GAAP) shown as 0.65 in the data, which appears inconsistent with a GAAP loss; weighted average diluted shares ≈ 57.9 million.
- AHSCs (Average Healthcare Services Clients): 4,200 for FY2025; growth of 68 AHSCs quarter-over-quarter; total revenue per AHSC: $25,207, up 1% YoY and 3% QoQ.
- Revenue per AHSC trend: +1% YoY, +3% QoQ; indicates selective pricing/upsell in a higher-value mix.
- Cash flow: Operating cash flow +$5.8 million; Free cash flow +$1.6 million (positive for second consecutive quarter).
- Balance sheet:
- Cash and equivalents: ~$81.7 million; Net cash position: ~$70.6 million (net debt negative).
- Total assets: ~$375.7 million; Total liabilities: ~$121.1 million; Total stockholders’ equity: ~$254.6 million.
- Debt: Total debt ≈ $11.1 million; no borrowings on the $50 million facility.
- Guidance (FY2025): Revenue $418–$420 million; Adjusted EBITDA $34–$36 million; AHSC ~4,200; Revenue per AHSC growth expected vs FY2024.
- Guidance (FY2026): Revenue $472–$482 million; Adjusted EBITDA $78–$88 million; AHSC ~4,500; assumption of no additional acquisitions through Jan 31, 2026; continued rise in revenue per AHSC expected.
- Management tone: Emphasized expense discipline, reinvestment where it drives growth, and a pipeline of new solutions and integrations.
- Transcript cues: Management highlighted ongoing network expansion, higher adoption, and the potential of new offerings, while also noting the wind-down of a clearinghouse client in FY2024 that affected growth rates.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
106.80M
16.57%
4.59%
Gross Profit
72.26M
19.09%
16.91%
Operating Income
-13.84M
56.80%
19.62%
Net Income
-14.40M
54.91%
20.04%
EPS
0.65
212.07%
309.68%
Key Financial Ratios
Gross Profit Margin
Excellent
67.70%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
-0.13%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.14%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.04%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.06%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.74
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Conservative
0.04
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-18.38x
Negative earnings make P/E ratio not meaningful
Price to Book
Premium
4.16x
Trading at premium to book value, reflects strong intangibles or growth
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