Earnings call transcript: Phreesia Q2 2025 reports first positive net income

Phreesia Inc. (PHR) reported its financial results for the second quarter of fiscal year 2026, marking a significant milestone with its first positive net income. The company posted earnings per share (EPS) of $0.01, surpassing the forecasted EPS of -$0.06, resulting in a positive surprise of 116.67%. This strong performance was accompanied by a revenue increase of 15% year-over-year to $117.3 million, exceeding the forecast of $116.54 million. Following the announcement, Phreesia’s stock rose by 2.53% in aftermarket trading, reflecting investor optimism. According to InvestingPro data, the company maintains a "GREAT" overall financial health score of 3.09 out of 5, with particularly strong marks in growth and cash flow metrics.

Key Takeaways

• Phreesia achieved its first positive net income, marking a significant financial milestone.
• Revenue grew by 15% year-over-year, driven by an increase in healthcare services clients.
• The company’s new AI product launches are expected to enhance future productivity and revenue.
• The total addressable market expanded to $24 billion, bolstered by the AccessOne acquisition.
• Stock price increased by 2.53% in aftermarket trading, indicating positive investor sentiment.

Company Performance

Phreesia’s performance in Q2 2025 reflects a robust growth trajectory, with the company achieving a positive net income for the first time. This achievement underscores successful strategies in expanding its client base and leveraging innovative technology solutions. The company’s focus on operational leverage and disciplined spending has contributed to its improved financial standing.

Financial Highlights

• Revenue: $117.3 million, up 15% year-over-year.
• Earnings per share: $0.01, surpassing the forecast of -$0.06.
• Net income: $700,000, marking the first positive quarter.
• Adjusted EBITDA: $22 million, an increase of $16 million year-over-year.
• Operating cash flow: $14.8 million, up by $3.8 million year-over-year.

Earnings vs. Forecast

Phreesia’s EPS of $0.01 significantly outperformed the forecast of -$0.06, resulting in a 116.67% positive surprise. The company’s revenue also exceeded expectations, coming in at $117.3 million against a forecast of $116.54 million. This performance highlights Phreesia’s ability to exceed market expectations and reflects positively on its strategic initiatives.

Market Reaction

Following the earnings announcement, Phreesia’s stock rose by 2.53% to $31.11 in aftermarket trading. This positive movement suggests investor confidence in the company’s financial health and future growth prospects. The stock’s performance is in line with broader positive trends in the healthcare technology sector.

Outlook & Guidance

Phreesia has provided a revenue outlook for fiscal 2026 in the range of $472-$482 million, with an adjusted EBITDA forecast of $87-$92 million. The company anticipates reaching approximately 4,500 average healthcare services clients. The AccessOne acquisition is expected to close by Q3 or early Q4, further enhancing Phreesia’s market reach and financial performance.

Executive Commentary

CEO Chaim Indig remarked, "For the first time in our history, we were net income positive," highlighting the company’s financial milestone. He also expressed excitement about the new AI product, stating, "The feedback we’re getting from this product from the provider network is like nothing I’ve seen ever before." CFO Balaji Gandhi emphasized growth potential, saying, "We didn’t acquire it to not grow it," referring to the AccessOne acquisition.

Risks and Challenges

• Integration challenges related to the AccessOne acquisition could impact operations.
• Continued investment in product development and marketing may strain resources.
• Competitive pressures in the healthcare technology sector could affect market share.
• Economic uncertainties may influence client spending and growth.
• Regulatory changes in healthcare could pose compliance challenges.

Q&A

During the earnings call, analysts inquired about the integration timeline for AccessOne and its expected impact on revenue. Executives addressed concerns about maintaining growth momentum while managing costs effectively. Analysts also showed interest in the potential of new AI products to drive future revenue streams.

Full transcript - Phreesia Inc (PHR) Q2 2026:

Conference Call Operator: Good morning, ladies and gentlemen, and welcome to the Phreesia Second Quarter Fiscal 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will provide instructions for the question and answer session to follow. First, I would like to introduce Balaji Gandhi, Phreesia’s Chief Financial Officer. Mr. Gandhi, you may begin.

Balaji Gandhi, Chief Financial Officer, Phreesia: Thank you, Operator. Good morning and welcome to Phreesia’s Earnings Conference Call for the second quarter of Fiscal 2026, which ended on July 31, 2025. Joining me on today’s call is Chaim Indig, our Chief Executive Officer. A more complete discussion of our results can be found in our earnings press release and in our related Form 8-K submission to the SEC, including our quarterly stakeholder letter, both issued after the markets close today. These documents are available on the Investor Relations section of our website at ir.phreesia.com. As a reminder, today’s call is being recorded, and a replay will be available on our Investor Relations website at ir.phreesia.com following the conclusion of the call.

During today’s call, we may make forward-looking statements, including statements regarding trends, our anticipated growth, our strategies, predictions about our industry, and the anticipated performance of our business, including our outlook regarding future financial results and acquisitions. Forward-looking statements are subject to various risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to differ materially from those described in our forward-looking statements. Such risks are described more fully in our earnings press release, our stakeholder letter, and our risk factors included in our SEC filings, including in our quarterly report on Form 10-Q that will be filed with the SEC tomorrow. The forward-looking statements made on this call will be based on our current views and expectations and 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 these forward-looking statements to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events. We may also refer to certain financial measures not in accordance with generally accepted accounting principles, such as adjusted EBITDA and free cash flow, in order to provide additional information to investors. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release and stakeholder letter, which were furnished with our Form 8-K filed after the markets close today with the SEC, and may also be found on our Investor Relations website at ir.phreesia.com. I will now turn the call over to our CEO, Chaim Indig.

Chaim Indig, Chief Executive Officer, Phreesia: Thank you, Balaji, and good evening, everyone. Thank you for joining our second quarter of fiscal year 2026 earnings call. I’d like to begin with some exciting news. Earlier today, Phreesia announced a definitive agreement to acquire AccessOne for $160 million. AccessOne is a market leader in healthcare provider financing, serving many of the nation’s largest health systems. We have followed AccessOne’s progress over many years and admired its approach to addressing a critical gap in care that is consistent with our mission of making care easier every day. AccessOne will expand our addressable market by roughly $6 billion and strengthen our ability to help providers improve collections while preserving patient trust. We believe this acquisition is a natural extension of our payment strategy and will complement Phreesia’s existing products. Balaji will provide some details on the transaction.

We look forward to welcoming the AccessOne team to Phreesia following the close of the transaction. I am also proud to share that Phreesia achieved an important milestone in the second quarter. For the first time in our history, we were net income positive. As with all of our milestones, achieving positive net income does not represent a finish line. However, this milestone does give us all a great sense of pride and accomplishment in that it captures the power of our unique business and financial model and our team’s ongoing commitment to being good stewards of capital. Before turning the call over to Balaji, I would like to congratulate my Co-Founder, Evan Roberts, and David Linetsky on being named President of Provider Solutions and Network Solutions, respectively.

These titles reflect our leadership of the Provider and Network Solutions teams, meeting the needs of our clients and executing on our mission, vision, and values. Evan and David are also invaluable thought partners to me, and I am pleased to share their titles with you. I’ll now turn it over to Balaji to provide some additional details on the AccessOne transaction and provide a review of our results and updated outlook.

Balaji Gandhi, Chief Financial Officer, Phreesia: Thank you, Chaim. First, I also want to congratulate Evan and David on their new titles. Now, for some details on the AccessOne transaction. As outlined in our press release and stakeholder letter, the purchase price for AccessOne is $160 million in cash. Phreesia intends to finance the acquisition through a combination of cash from our balance sheet and a new, fully committed bridge loan facility. The transaction is expected to close during the third quarter or early fourth quarter of Phreesia’s 2026 fiscal year, subject to customary closing conditions and regulatory approvals. We currently expect AccessOne to contribute approximately $35 million in annualized revenue and approximately $11 million in annualized adjusted EBITDA. Once the acquisition is closed, we plan to update our fiscal 2026 outlook to reflect the expected contribution to our results.

Overall, we believe this transaction will strengthen Phreesia’s financial profile, add profitable growth, and enhance our ability to support clients with innovative payment solutions. We look forward to closing the transaction and working with the AccessOne team. I would also like to touch on our updated total addressable market. The AccessOne acquisition is expected to expand our addressable market by about $6 billion by extending our reach in the payment solution space. We also increased our network solutions TAM by $6 billion, as we expect to be able to draw from a larger pool of life sciences marketing dollars as our products become more ubiquitous across our network. Combined, the expansion of our payments and network solutions addressable markets is expected to increase our TAM to approximately $24 billion from approximately $10 billion. Now, let me provide a few comments around our second quarter results.

Total revenue was $117.3 million, an increase of 15% year over year. We are very pleased with our performance on the top line. We ended with average healthcare services clients of 4,467, an increase of 56 AHSCs from the prior quarter and 298 from the prior year. This result was in line with our expectation. Total revenue per average healthcare services clients was $26,249, up 7% year over year and flat quarter over quarter, also in line with our expectation. Moving on to profitability, as Chaim mentioned, we achieved another major milestone this quarter with net income of $700,000, our first ever positive net income quarter. Adjusted EBITDA was $22 million, an increase of $16 million year over year, with an adjusted EBITDA margin of 19%. Now turning to the balance sheet and cash flow. We ended the quarter with $98.3 million in cash and cash equivalents.

This compares to $90.9 million in the prior quarter. Operating cash flow was $14.8 million, up $3.8 million year over year. Free cash flow was $9.6 million, up $6 million year over year. We have now achieved positive operating cash flow and free cash flow for four consecutive quarters. We expect that the magnitude of cash flow improvement on a quarter-to-quarter basis to vary based on specific timing of invoicing and payments, which you can see in working capital along with CapEx. Our second quarter results reflect the continued strength of our operating leverage and revenue growth. I would like to thank the entire Phreesia team for being able to balance the priorities associated with our mission and values and being good stewards of capital, which helped us to achieve positive net income for the first time in our history. Transitioning now to our financial outlook for fiscal 2026.

We are maintaining our revenue outlook for fiscal year 2026 at a range of $472 million to $482 million. We are updating our adjusted EBITDA outlook for fiscal year 2026 to a range of $87 million to $92 million, from a previous range of $85 million to $90 million. That’s a $2 million increase at the top and bottom ends of the previous range. We are reiterating our outlook on AHSCs to reach approximately 4,500 in fiscal year 2026 and for total revenue per AHSC to increase in fiscal 2026 compared to fiscal 2025. As I mentioned earlier, we expect to update our fiscal 2026 financial outlook following the close of the AccessOne transaction. Operator, we can now begin the Q&A session.

Conference Call Operator: We will now begin the question and answer session. If you’d like to ask a question at this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We will be limiting participants to one question to ensure we give everyone a chance to ask one and come back for follow-ups. Your first question comes from the line of Jared Haas with William Blair. Please go ahead.

Jared Haas, Analyst, William Blair: Hey, guys. Thanks for taking the questions and congrats on the deal. Maybe I’ll just ask the first one on AccessOne. Would love to hear a little bit more just how that deal developed over time and I guess what gives you the comfort that this is the right asset and the right market for what seems like a fairly large-scale deal relative to what you’ve done in the past.

Chaim Indig, Chief Executive Officer, Phreesia: Yeah, so look, we’ve been looking at the space for years. We’ve known this company for many, many years and a lot of the executives there. We felt a lot of comfort just having watched it. It’s a part of the market we haven’t been able to play because of both product and regulatory requirements. It’s something our customers have said would really be beneficial to them. We felt pretty good about that. Also, frankly, we think it aligns really well with our mission of making care easier every day. All the pieces sort of came together, and when it became available, we moved pretty aggressively. It’s something we’ve been watching and paying attention to for years. It wasn’t a last-minute decision. It was actually something we’ve talked about as a team for years.

We thought it was something in our arsenal that frankly would just make a lot of sense to the patients that we serve and the providers we serve.

Jared Haas, Analyst, William Blair: Next.

Conference Call Operator: Your next question comes from the line of Jailendra Singh with Truist Securities. Please go ahead.

Jailendra Singh, Analyst, Truist Securities: Thank you. Thanks for taking my questions. Congrats on the AccessOne deal, but I want to ask about the Phreesia Voice AI product you guys launched during the quarter. Seems like a pretty exciting product for both patients and providers, but can you help us better understand how this product will drive opportunities in the network solutions business? That’s where you are increasing the TAM pretty substantially, just given all the incumbent players in STP pharma marketing. Just explain to us what gives you confidence in terms of getting some traction in that market.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, thanks, Jailendra. We did want to take the opportunity to talk about this product because we’re very excited about it. It’s off to a great start. I think, as we’ve talked about really over several years now, we think about the business holistically. These products that we introduce in the market, when they benefit providers and benefit patients, there are opportunities that create more engagement opportunities for our network solutions revenue. This is just one example. We also want to take the opportunity to explain that sizing and that TAM that’s been increased. I wouldn’t read too much into the timing of the two being linked. It’s probably something we would have introduced earlier and we’re choosing to do it now.

Chaim Indig, Chief Executive Officer, Phreesia: We are very excited about this product, though, Jailendra. It’s growing rapidly. Our providers are getting phenomenal feedback. The feedback we’re getting from this product from the provider network is like nothing I’ve seen ever before. We are really excited and the investments we’re making in it, a lot of these are investments we’ve been making for quite some time, and now we feel more comfortable talking about them as it’s really, this product’s been proliferating across the network. We expect to hear more and more applications around Voice AI in the coming quarters.

Conference Call Operator: Your next question comes from the line of Jeff Garro with Stephens. Please go ahead.

Jared Haas, Analyst, William Blair: Yeah, thanks for taking the question. Maybe we’ll stick with Voice AI. I want to ask kind of where this product sits between a call center type answering service and a nurse triage line. Relatedly, it sounds like it can handle some clinical questions, but do you think it can handle more clinical questions in time? Thanks.

Chaim Indig, Chief Executive Officer, Phreesia: Yes, we think it will. We think it’s really, it’s not I think. I know today it is also already providing massive value to doctors. They’re using it. The feedback is phenomenal from the providers that are using it. Yes, it’s also helping, you know, call center folks. It’s helping prescription refills. It’s helping with appointment booking. It is rapidly helping all of our clients in all different types of scenarios. I’m just, I’m so freaking excited about this product. It’s something that’s been rolling out in the network for quite some time. We’re now just excited that we get to talk about it.

Conference Call Operator: Your next question comes from the line of Richard Close with Canaccord Genuity. Please go ahead.

Richard Close, Analyst, Canaccord Genuity: Yeah, thanks for the questions. Congratulations on the quarter and the acquisition. Just on the new products, Voice AI, the AI referrals, and the auto-network tags, I’m just curious, are all three on this no-risk, no-cost model right now here initially? How long do you think that’ll be until, you know, some of these new products, new functionality can begin to be a positive driver to the revenue per AHSC? Just curious.

Balaji Gandhi, Chief Financial Officer, Phreesia: We believe very strongly as a company that when you have good products, the products should lead with themselves. We let all of our products at any time, any one of our clients could use them at no cost. We expect over time, all of these products will have material impact on our revenue, right? Frankly, they’ll also just have material impact on the revenue and the productivity of our clients, which also flows through to our core value proposition. I am not worried about them in the near future having an impact on our financials as they’re already having an impact on the financials of our clients.

Richard, in terms of the actual flow-through, I don’t think any of this is different than some of the products we introduced in 2021, 2022, 2023, where it’s contributing today and the total revenue per AHSC growth that you’re seeing is sort of that waterfall effect, and this will be no different. That’s a big strength of Phreesia’s business model.

Conference Call Operator: Your next question comes from the line of Scott Schoenhaus with KeyBanc Capital Markets. Please go ahead.

Scott Schoenhaus, Analyst, KeyBanc Capital Markets: Hey guys, congrats on the quarter in acquisition. You reported a healthy 25% growth rate in network solutions. AccessOne expands your TAM in life sciences. It seems like just from a quick glance, AccessOne is already embedded in health systems with specialty network groups. Maybe you could just walk through the opportunities on the network solution side. It seems like you have now more touch points with patients in the payment process, multiple points of engagement, and maybe you can drive more incremental revenue opportunities in network solutions via this acquisition. Just help us walk through those opportunities, please.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, Scott, let me correct you on one thing, and hopefully this is all clear. We see the AccessOne acquisition aligned with the increase in the TAM in our payment solutions category, which is about $6 billion. I’d read the whole footnote and back up to the TAM for you, but I think you can go look it up yourself. Really, that’s how you should think about AccessOne, in terms of the near-term opportunity for us. They work, as I think we talked about in the press release and in the letter, they do have a great footprint and work closely with lots of great partners in the health system space, but also with other types of medical groups.

Conference Call Operator: Your next question comes from the line of Jessica Tassan with KeyBanc Capital Markets. Please go ahead.

Jessica Tassan, Analyst, KeyBanc Capital Markets: Hi guys, thanks so much for taking the question and congrats on the deal. On the AccessOne, just the payment extensions to patients, can you help us understand who bears risk for those dollars as you wait to collect? Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Sure, thanks Jess. This is really important to understand. We are not the risk bearer in this relationship. We’re able to offer the provider clients of AccessOne, or I should say AccessOne is able to offer their clients a more robust payment offering and payment plan offering. The capital, there’s an important partner in this relationship, and there are press releases that you could look up from 2023. That partner is PNC Bank, obviously one of the largest banks in the country. The risk is actually shared between PNC Bank and the provider itself. You should think about us as really helping drive a lot more, just better solutions to patients in a pretty technology-first way.

Conference Call Operator: Your next question comes from the line of Ryan MacDonald with Needham & Company. Please go ahead.

Ryan MacDonald, Analyst, Needham & Company: Thanks for taking my questions. Maybe on AccessOne, how should we think about the mix of revenue between sort of just pure interest being collected from payment plans relative to, say, fees charged for the 0% interest rate plan they’re offering? As we think about the cross-sell opportunity once the acquisition is integrated here, do you think there is a near-term opportunity to sort of cross-sell AccessOne into your core base or move more of your core subscription offerings, core product offerings up into the health system base that AccessOne’s already serving? Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, first of all, we’ll reiterate we’re very excited about this and excited to talk about it today, but the transaction hasn’t closed. I think we’re more than happy to talk a lot more about some of our plans, but we have to get to close this transaction first. Hopefully, everyone appreciates that.

Conference Call Operator: Your next question comes from the line of Daniel Grosslight with Citi Group. Please go ahead.

Scott Schoenhaus, Analyst, KeyBanc Capital Markets: Hi, hi guys, thanks for taking the question. I want to go back to some of your new product developments, specifically your AI initiatives. If I look back a few quarters ago, most of your AI initiatives were internal in nature, you know, improving operating leverage, et cetera. Now you’re actually shipping monetizable external-facing AI products. As you make that shift from internal-facing to external product shipping, how are you thinking about the balance between investing in AI for internal improvement versus, you know, external product development? What does a product roadmap look like in the future? It sounds like you’re most excited about Voice AI, but I’m sure there’s many more products you guys are having in the pipeline. Finally, how do you intend to price these new products? Is it similar to the non-AI products, or will they be priced at a premium? Thanks.

Chaim Indig, Chief Executive Officer, Phreesia: Sorry, there’s a lot of questions. We had to limit it to one question. If you have more, we can come back to it. Why don’t I start with, we’ve been investing in both internal and external-facing AI tools. I don’t think the answer is one or the other. I think now we just feel more comfortable talking about them publicly. These are things that we’ve been rolling out to our clients for some time. I think our general view is lean in first and make sure that the product’s really valuable. When you provide a ton of value to clients, you know, and they’re appreciative of it and they see it, it’s like monetizing. It becomes an afterthought. We’ve generally focused first on building amazing products and making them very valuable to our clients. After that, the dollars generally have flown.

We expect to continue to invest both in internal use and external. I think we’re now comfortable saying we have multiple sets of AI products that are actively being used by our clients across the board, and we are monetizing them today.

Conference Call Operator: As a reminder, we will be limiting participants to one question in order for everyone to have a chance to ask a question and come back for follow-ups. Your next question comes from the line of Steven Valiquette with Mizuho Securities. Please go ahead.

Steven Valiquette, Analyst, Mizuho Securities: Great, thanks. Yeah, thanks, good afternoon. Thanks for taking the question here. Another question here on the pending AccessOne acquisition. Within the class industry rankings, which I know are not always critical, it looks like they ranked number three or number four in the patient financing services category over the past couple of years. My question is really just about their market share, kind of similar to other players. The $35 million in revenue seems kind of low within a $6 billion TAM. I’m not sure that’s the right way to think about market share or not, but just curious to get thoughts on just market share and positioning relative to the size of other players in that space. Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, Steven, thanks for the question. We’re trying to be as helpful as we can because, you know, one, we’re excited about this, but two, it’s also the largest acquisition we’ve done to date. We also have to be kind of respectful of the process and get to the other side of things before we could talk more about it. You’ve got the sort of backup on the TAM in the TAM slide, and you’ve got the revenue, so I think you can do some math there yourself.

Chaim Indig, Chief Executive Officer, Phreesia: We expect to continue to invest in the platform, in the product.

Balaji Gandhi, Chief Financial Officer, Phreesia: Absolutely.

Conference Call Operator: Your next question comes from the line of Brian Tanquelet with Jefferies. Please go ahead.

Scott Schoenhaus, Analyst, KeyBanc Capital Markets: Hey, good afternoon guys, and congrats. Just maybe a question on sales and marketing. Obviously, that continues to go down. Just curious, you know, how much more runway do you think we can bring that down both at a dollar basis versus % of revenue? Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, I mean, I think what we’ve seen there, and we’ve talked a lot about this, is just the productivity we’ve gotten, but also the type of, you know, the profile of clients that we’re trying to add on the provider side, and also just, you know, continue to get a lot of deepening relationships and new ones on the network solution side. We’re getting good productivity, and I think I, you know, we both like to remind people that we are investing pretty significantly in sales and marketing as a dollar amount, and you should expect it to kind of be in these levels, but, you know, we’re getting some good productivity there.

Conference Call Operator: Your next question comes from the line of Gene Manheimer with Freedom Capital Markets. Please go ahead.

Gene Manheimer, Analyst, Freedom Capital Markets: Thank you, and congrats guys on the good numbers this quarter. Just revisiting AccessOne, I know you say you’re somewhat limited in what you can talk about, but historically, can you talk about the growth rate of the company the last couple of years and whether you think that you can accelerate it as part of the Phreesia portfolio?

Balaji Gandhi, Chief Financial Officer, Phreesia: I think what we can say, Gene, is we didn’t acquire it to not grow it. Obviously, I mentioned we’re also going to invest in it. We’re not going to be able to provide historical numbers on that. The company has a good reputation, and as I’m saying, we followed it for a long time. We absolutely intend to invest in and grow that.

Conference Call Operator: As a reminder, if you’d like to ask a question, please press star, followed by the number one on your telephone keypad. Your next question comes from the line of Richard Close with Canaccord Genuity. Please go ahead.

Richard Close, Analyst, Canaccord Genuity: Yeah, thanks for the follow-up. Actually, I wanted to go back to Jailendra’s question on network solutions TAM, because, you know, I guess I just don’t understand why Voice AI specifically drives, you know, such a large increase in TAM of like $6 billion. Is there any way you can provide some examples or maybe more thoughts on that TAM growth?

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, so Richard, first of all, I think you know how we operate. We want to be really thoughtful about what we share. There are competitive reasons, et cetera. I think to the specific question on the TAM, the point I think that we’re trying to make with Jailendra was that this opportunity in the new TAM is big in and of itself. It’s not exclusive to the Voice AI product. We think that could be one area that could help us penetrate it, but there will be others that you will hear about. You’re getting the opportunity set first, and I think, in our fashion, you’ll hear more about other ones in the future. That’s about all we could say.

Conference Call Operator: Your next question comes from the line of Jeff Garro with Stephens. Please go ahead.

Jared Haas, Analyst, William Blair: Yeah, thanks for taking the follow-up question. We’ll make sure we hit network solutions and an updated discussion on visibility the rest of the year and progress to date on the upsell season for pharma advertising. Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, I can start and Chaim can fill anything in. It’s still early, Jeff, in that, you know, sort of in the calendar, but I think things are off to, you know, a good start. Long way to go. I think we can say that as we sit here today, we’re in a similar place we were last year at this time, the data that, you know, we look at. We’ll sort of, you know, give you updates along the way, and the next one will be in December.

Conference Call Operator: Your next question comes from the line of Steven Valachet with Mizuho Securities. Please go ahead. Mr. Valachet, your line is open. Please go ahead.

Steven Valiquette, Analyst, Mizuho Securities: Oh, sorry. My follow-up question was just sort of touched on a little bit, but I was just curious again with the network solutions, as far as the re-acceleration and growth there. Is there any color on whether you were maybe able to add more pharma brands or maybe just better revenue per pharma brand? Just curious if you could provide any more color just from that direction as far as that re-acceleration. Maybe it was something else altogether, just curious to hear about more of the drivers of the re-acceleration and growth. Thanks.

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, let me, there’s sort of two pieces to that, Steven. One is, yes, obviously, our relationships have grown, but there’s also just the campaigns that we’ve sold into the year that we’re just pacing throughout the year. I think that’s something that came up in a lot of the follow-ups from last quarter that we expected to see the growth that we saw in the first quarter, and we expected to see the growth we saw in the second quarter. We sort of look at these things over the course of the year and why we don’t guide on a quarterly basis on that. I don’t think you should, I don’t know if re-acceleration is really the way to think about it. The team’s performing really well and feel good about where we are.

Conference Call Operator: Your next question comes from the line of Gene Manheimer with Freedom Capital Markets. Please go ahead.

Gene Manheimer, Analyst, Freedom Capital Markets: Thanks for the follow-up. I just wanted to ask if you can share what is the customer overlap, say, between Phreesia’s intake solutions and AccessOne’s customers?

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah, Gene, again, you know, got to be careful and wait until we close on more detail. We thought about this topic and that it would be helpful to you. Obviously, we shared one in the press release, and that was intentional. There’s a client mentioned there, but there are others. That was another reason we have some familiarity and history with the company from following it for many years, is that we do have overlapping customers. I think when we close the transaction, we will incorporate that into our AHSC account.

Conference Call Operator: Your next question comes from the line of Ryan MacDonald with Needham & Company. Please go ahead.

Jared Haas, Analyst, William Blair: Hi, I figured I’d take a second crack at one here too as well. Maybe just to talk about the AI competitive landscape. Chaim, did you say in one of your earlier responses that you are monetizing AI solutions at the moment? If so, I’d just be curious, now that we’re seeing larger platform vendors like Epic starting to release some of their AI functionality, Doximity taking various AI functionality and sort of building it in and offering it for free, could you just talk about what the evolution here is within your customer base on willingness to pay for AI functionality and what the runway is here for monetization of those features? Thanks.

Chaim Indig, Chief Executive Officer, Phreesia: I think the market is massive, right? When we talk to customers, it’s not a solution. They’re looking, this is game-changing and we see it ourselves, right? We’re able to do things that people always frankly dreamed about or could never even imagine dreaming about. The idea of like being able to answer a phone call and help someone schedule a visit is pretty game-changing, right? We think the market is massive. Frankly, we have, yes, to very clearly state, we have and are monetizing this product today. We expect to continue to monetize it, and it is growing rapidly.

Conference Call Operator: Your next question comes from the line of Richard Close with Canaccord Genuity. Please go ahead.

Chaim Indig, Chief Executive Officer, Phreesia: Yeah, thanks for the follow-up. All right, on the R&D leverage.

Balaji Gandhi, Chief Financial Officer, Phreesia: Number three! I was saying we don’t give you chances, Richard.

Chaim Indig, Chief Executive Officer, Phreesia: Oh, we’re excited!

Balaji Gandhi, Chief Financial Officer, Phreesia: Yeah.

Chaim Indig, Chief Executive Officer, Phreesia: All right. You cited repurposing tools to revenue-generating activities. Can you go into any more detail what exactly that was, and can that continue going forward?

Balaji Gandhi, Chief Financial Officer, Phreesia: No, Richard, that was very much a one-off sort of thing that we wanted to call out. Similar to the earlier question about sales and marketing, we’re getting lots of productivity. Sometimes you’re getting productivity in different areas, but we’re investing a lot in R&D and that’s going to continue. We just wanted to call out that nuance in the quarter.

Chaim Indig, Chief Executive Officer, Phreesia: Richard, here I thought you were going to ask about Sesame Street.

Conference Call Operator: There are no further questions at this time. I will now turn the call back over to Chaim Indig for closing remarks. Please go ahead.

Chaim Indig, Chief Executive Officer, Phreesia: Thank you, everyone, for joining our earnings call. We look forward to talking to everyone again in 90 days. I hope everyone has a great fall. Have a great day.

Conference Call Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now discontinue.

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