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Operator: Good morning, ladies and gentlemen. And welcome to the Phreesia First 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: Thank you, operator. Good morning. And welcome to Phreesia’s earnings conference call for the first quarter of fiscal 2026, which ended on April 30, 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 before the markets opened today. These documents are available on the Investor Relations section of our Web site at ir.phreesia.com. As a reminder, today’s call is being recorded and a replay will be available on our Investor Relations Web site 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, strategies, predictions about our industry and the anticipated performance of our business, including our outlook regarding future financial results. 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 later today. 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 flows, 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 before the markets opened with the SEC and may also be found on our Investor Relations Web site at ir.phreesia.com.

I will now turn the call over to our CEO, Chaim Indig.

Chaim Indig: Thank you, Balaji. And good morning, everyone. Thank you for joining our first quarter of fiscal 2026 earnings call. I’d like to thank and congratulate all my Phreesia colleagues for a strong start to the fiscal year. Balaji will cover the results and update outlook. First, I’d like to provide a few insights into where we are in our positioning for the future. Our focus remains to continuously deliver valuable and scalable products that drive meaningful outcomes for patients and providers. Products such as appointment readiness, post script engagement and enhanced bill pay were developed and introduced with long term value in mind and are already showing measurable impact across the network. AI is being integrated across all aspects of our organization and our current and future products.

We believe we are well positioned to continue to grow our network through product-led growth. Through our strong balance sheet and growing free cash flow, we are also well positioned to allocate capital in ways that drive long term shareholder value. I’ll now turn it over to Balaji to review our results and updated outlook.

Balaji Gandhi: Thank you, Chaim. Let me begin with a review of our first quarter financial performance and we’ll then dive into our outlook for fiscal year 2026. Revenue was $115.9 million, an increase of 15% year-over-year. We ended the quarter with average healthcare services clients of 4,411, an increase of 70 from the prior quarter and 346 from the prior year. Total revenue per average healthcare services clients was $26,283, up 6% year-over-year and up 4% quarter-over-quarter. Moving on to profitability, adjusted EBITDA was $20.8 million, an increase of 16.7% year-over-year with an adjusted EBITDA margin of 18%. Now turning to the balance sheet and cash flow. We ended the quarter with $90.9 million in cash and cash equivalents.

This compares to $84.2 million in the prior quarter. We maintained positive operating cash flow and positive free cash flow for the fourth consecutive quarter. Operating cash flow remained positive at $14.9 million, up $15.6 million year-over-year. Free cash flow remains positive at $7.5 million in the quarter, up $13.7 million year-over-year. We expect that the magnitude of improvement on a quarter-to-quarter basis to vary based on specific timing of invoicing and payments, which you can see in the working capital along with capital expenditures. Our first quarter results demonstrate our team’s focus on growing our network, expanding our offerings and driving operating leverage. As our cash position continues to grow, we will remain opportunistic and flexible in our approach to deploying cash to profitable growth and value enhancing opportunities as they arise.

I would like to thank all of my Phreesia teammates for their contributions. Transitioning to our financial outlook for fiscal 2026. We are maintaining our revenue outlook for the 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 $85 million to $90 million from a previous range of $78 million to $88 million, that’s a $4.5 million increase from the prior guidance midpoint. The revenue range provided for fiscal 2026 assumes no additional revenue from potential future acquisitions completed between now and January 31, 2026. We are reiterating our outlook on AHSCs to reach approximately 4,500 in fiscal 2026 and for total revenue per AHSC to increase in fiscal 2026 compared to fiscal 2025.

Operator, I think we can now open up the lines for the Q&A session.

Operator: [Operator Instructions] Your first question comes from Anne Samuel with JPMorgan.

Anne Samuel: Maybe just starting with network solutions, you continue to see really, really nice growth there. And I was hoping maybe you could just speak to what your conversations with customers have been like in the current environment. And is there just any hesitancy around decision making like we’ve heard from others, realizing that you’ve been more resilient, I would say, than others because through some of the prior macro volatility that we’ve seen? So just curious to hear any thoughts on how you’re thinking about this line in the current environment.

Balaji Gandhi: I think this is probably something we’ve talked about the entire time we go public. I mean it’s really just a testament to the team we have. We have a great team from all aspects of the life sciences. And I think the other thing is, if you think about Chaim’s opening remarks, us being a product-led company, it really does also start with product development. And so having those products and then having the network solutions team that can go out and deliver the product and sell it is really what’s driving that result. So nothing really new to report but yes, nice to see those results in the quarter.

Operator: Your next question comes from Jailendra Singh with Truist Securities.

Jailendra Singh: I want to stay on the macro topic, you touched on pharma solutions and network solutions business, but Also, any thoughts on the providers’ market? I mean, clearly, those that are also immune to all the recent developments, keeping that in mind, how have your conversations evolved with these clients over the past couple of months? And are you capturing any incremental uncertainty in your outlook in any way?

Balaji Gandhi: So yes — just to make sure I understand the question, Jailendra, you’re asking about the provider end market and just how the conversations have been. I’ll start [Multiple Speakers] again, probably not a whole lot new there, I mean, really driving the product. And I think Phreesia over its history has always had a focus on trying to build and deliver products that are driving a lot of value. And that’s usually where a lot of the conversations are anchored around. I don’t think things are easier or harder. I mean, it’s always been a competitive market, all the opportunities are competitive for us and that continues. But I think the thing we want you to take away is just the products we have and the value they bring. And I think you can see in our results that we’re still adding a lot of new clients and generating a lot of revenue off of existing ones.

Operator: Your next question comes from Jessica Tassan with Piper Sandler.

Jessica Tassan: So can you maybe talk about just the visibility that your network solutions customers have into ROI campaign success, how much flexibility they kind of have to titrate up or down campaigns or maybe switch types of media? Just interested in like what data they have on what time frame and then sort of to what degree are they able to amend or modify campaigns in real time?

Chaim Indig: We — almost all of our campaigns with life sciences clients have to go through an MLR process or medical legal review, so — and it’s like that for everyone in the industry, and then those get submitted with FDA. So all of our programs, yes, they can titrate up and down depending on the different streams and we run thousands of streams of different programs throughout a year. And we pace them based on both the appropriate patient and the needs of the pharmaceutical or biotech company or life sciences company that we work with. And often throughout the year, as dollars become available, they’ll often titrate them higher and we’re more often than not the platform that is the receiver of dollars throughout the year just because of our very strong ROI and our ability to deliver results. And frankly, the fact that our scale keeps growing.

Operator: Your next question comes from Richard Close with Canaccord Genuity.

Richard Close: Maybe talk a little bit about sales and marketing and the G&A lines. Obviously, great performance there in the first quarter. I was curious if there’s anything specific to call out? And then as we think about the rest of the year, maybe anything to keep in mind as we progress through the remaining quarters?

Balaji Gandhi: I think you were probably one of the people maybe if you go back three or four years when we made the big upfront investment, Richard, you remember a lot of the sort of math sort of thinking around returns that we would get on all those investments and payback periods and how our view was we could grow into them over time. I think what you’re seeing is just that and I think you’re seeing it in the numbers, I think it’s a testament again to the team, because we made a lot of those upfront investments. We’ve obviously continuously made changes to how the team is composed and how the go-to-market is and introduce some new products along the way. But I think it really does just go back to getting a really good return on that. I think our revenue and EBITDA — adjusted EBITDA outlook for the year, you can back into what the expense trend is going to be. I don’t think it’s going to be particularly different within any of these line items sort of flattish.

Operator: Your next question comes from John Ransom with [RJA].

John Ransom: Just wondering as your financial position is getting a little better day by day, are there any kind of potential capital deployments that might make the bar today that maybe wouldn’t have been there a year ago or so? And then also, just like are there any end markets that you think are kind of — if we want to get into this end market as more of a buy versus build?

Balaji Gandhi: Yes, you see the cash balance continuing to grow now. I think philosophically, if you’re talking about inorganic opportunities, nothing’s really changed. We evaluate lots of opportunities. We do it as a team. There’s lots of different people at Phreesia who bring up different ideas that we evaluate. We’ve done a few of them as you’ve seen over the years. I think it’s all in the — through sort of through the lens of buy, build or rent. And so there’s things that we do in our business that we rent. Obviously, we’ve built a lot, but the acquisitions we’ve made, it’s just sort of there’s an equation you got to run through how long would it take to build it, how much would it cost. And those are the kind of things that we’ve pursued and will continue to.

I think we obviously have more capital to deploy but that doesn’t mean the way we look at opportunities is going to be any different. We’ll continue to look at them but don’t feel the need to do anything differently just because we have more capital.

John Ransom: And if you had to go back and look at your acquisitions to date, which one would kind of stand out as the star and which ones would say maybe that — those did not meet our expectations?

Balaji Gandhi: It’s like a portfolio, John, and we like them all, but they definitely all have different time horizons and when we thought they would contribute. So every — if you just think about the portfolio, everything is contributing in the way we wanted it to. Obviously, we talked about publicly that the last setback we had with the acquisition we did on ConnectOnCall, but it’s really our team did a great job getting that restored and back out in the market. So that probably cost us some time and that’s probably the only one I’d call out.

John Ransom: I’m sad that Chaim didn’t say anything but I’ll go over it…

Chaim Indig: Balaji was excited to answer that question, he did a great job…

Operator: Your next question comes from Daniel Grosslight with Citi.

Daniel Grosslight: I guess focus on the phase in segment, volume was particularly strong this quarter. I was curious if the later flu season had any kind of outsized impact this quarter or if there were any other tailwinds this quarter to call out?

Chaim Indig: Probably just — first thing, Daniel, on that just repeat what we’ve probably said the last multiple calls, which is there’s not a lot of fluctuation from things that are other than weather or just sort of the way the days fall on a calendar based on utilization in an office days in the calendar. Those are really it. The one thing that you should be aware of is we did introduce our bill pay product, our patient bill pay product last year. And so that continues to get traction in the market. And the way that works is providers utilizing that product we believe the way it drives to our business is more volume. So that — we expect that to contribute. I don’t think in the first quarter that was anything material to call out.

Operator: Your next question comes from William Jellison with D.A. Davidson.

William Jellison: Pressing realigned real quick, if we look at the fiscal ’25 10-K, and you’ve actually showed Phreesia adding quite a bit of net new talent to the organization last year, most of which was international. As we sit here today, I was wondering if you could help us understand a bit better Phreesia’s labor strategy moving forward and how we connect those dots to the kind of expense trajectory we’ve seen over the last several quarters?

Balaji Gandhi: William, you may have been newer to the story at that time, but the language in the 10-K you’re referencing was a consolidation really that we did at the very beginning of the fiscal year. We had always had folks we work with in India and we consolidated that as Phreesia India, so you saw them drop into the headcount number as a consolidation.

Operator: Your next question comes from Ryan MacDonald with Needham & Company.

Ryan MacDonald: I wanted to get your thoughts on the proposed no handouts for Drug Advertisements Act. It aims to eliminate the tax deduction that pharma companies can claim on direct-to-consumer advertising. I’m just curious if, one, if the proposed legislation is coming up in conversations with your pharma customers at all, is it resulting in any sort of incremental review on the ROI that Phreesia would generate if sort of the tax deduction for them is eliminated? And do you think that this is troublesome for the business or does it create incremental opportunity that maybe pharma companies move from lower ROI direct-to-consumer channels into Phreesia as you think about later this year and into next year?

Balaji Gandhi: Look, as you know, there’s always legislation floating around topics like this. There’s bills that have been introduced this year and including one you referred to. There’s really nothing new to update there and we would always take the practice of waiting until something happened. But I think what’s probably more important to your question is just thinking about our platform and the value we bring to clients, which is very differentiated. Our platform delivers personalized health content on principles of privacy and consent. And so we feel really good about that value proposition and there’s really nothing new to report on that for the legislation.

Operator: Your next question comes from Jeff Garro with Stephens.

Jeff Garro: I wanted to return to the network solutions business and and talk about the seasonality of that business. Maybe you could remind us what you typically see from Q4 to Q1 in a year and how that played out this year? And then is there any expectation that the rest of the year network solutions revenue plays out at a different seasonality cadence than what you’ve seen historically?

Balaji Gandhi: So I think the first thing, just to make sure we bring up is the visibility we have into the year is the same as it was last year at this time. I think we wouldn’t think about it as seasonality so much as if you think about Chaim’s answer to an earlier question around value and how we work with our life sciences clients. It’s really — there’s pacing certain programs that can cause fluctuations month-to-month or quarter-to-quarter. And I think that’s some of what you see, especially as the numbers get bigger for us, the revenue gets a lot larger. But no, nothing really to call out beyond that.

Operator: Your next question comes from Scott Schoenhaus with Keybank.

Scott Schoenhaus: I guess my question, I want to steer away from network solutions and focus in on subscription. Even if we back out that onetime 1 million benefit from the extra services for one client, we get to a pretty healthy 3.5% growth rate on the revenue per provider clients that — and that’s the best growth rate we’ve seen since 2021. Maybe talk about — this is either for Chaim or Balaji, maybe talk about how you’re seeing the ramp on your modules. You announced last quarter some modules, you’re finally monetizing the freeze on the call this year, which you weren’t able to do last year. Maybe can you talk about the ramp in the modules and what you’re seeing in terms of client traction?

Balaji Gandhi: I mean Scott, you see it in the numbers and I think that’s how we’ve always tried to articulate it. And when you look at the total revenue per client, as you pointed out, it’s now started to tick up. It’s a reflection of of exactly that, all those products that have been introduced causing some lift. There’s still expansion happening within base clients as well. And then our focus on net new being clients where there’s more dollars associated with those clients when we land with a shorter payback period. So it’s really all the above. And I think if you look at the flow of products, it would be unfair to really call out one, I think in the letters in the last couple of quarters, we’ve highlighted three products and it’s really all those three, if you want to ask about new products.

Operator: Your next question comes from Jared Hass with William Blair.

Jared Hass: Maybe we’ll circle back to AI. And I think this has come up on some of the recent calls as well. But number one, just curious if there’s any, I guess, incremental to your thinking about the competitive landscape, especially thinking about the potential for new entrants, raising venture capital or things like that? And then I’m also curious, are you seeing any changes in customer behavior around AI. So thinking is AI maybe becoming a bigger part of RFP processes or are you been seeing incremental dollars or budget capacity available for AI use cases? Just would love to unpack that a little bit more.

Chaim Indig: So what I would say is that AI is allowing people to do things that we weren’t able to do before. And we’re seeing the same thing in our products. So we’re seeing AI like both change how we run our business but also in the products we roll out, allowing us to do things that 20 years ago, Evan and I could barely even dream about being able to deploy. And so I think it’s giving us a new tool in the toolbox. But clients don’t buy AI, right? What they buy is solutions to really complex problems. And what we’re seeing frankly, I think what we’re seeing a lot of is really a derivation to more trusted partner, right? So I don’t — I think after sort of the COVID boom, a lot of provider groups got really burned by smaller VC backed businesses that really pivoted strategies a couple of dozen times and often just didn’t have the capital to invest appropriately.

And we’re seeing a lot of those customers really come back to us and say, we don’t really want to bet on a 10 person company that promises us the world. But AI is enabling us to do things within the Phreesia platform and across our network that we are very excited for and it’s driving massive value for our clients and we think over a very near term return for our investors.

Operator: Your next question comes from Aaron Kempson with Citizens JMP.

Aaron Kempson: You disclosed on the subsequent events section of the 10-K that on March 13th, the Board approved a share repurchase plan for up than 2.5 million shares of common stock. Can you talk about the motivation for the repurchase authorization, the dynamics, whether it’s 10b5-1, you have a higher degree of discretion and how you’re thinking about utilizing repurchases now that you’re consistently generating cash?

Balaji Gandhi: And that was right after we reported last, so that is a new event. And it really — you should just think about it as being opportunistic. Our share price has been very volatile over the time we’ve been public. And I think as a cash generating company with a lot of capital, we just thought it was sort of good housekeeping to have that in place to be opportunistic around the ability to do that if there were some real market dislocation in the share price got to a level where we wanted to step in. But I don’t think there’s anything to read into it in terms of some regular sort of change to how we think about capital allocation.

Operator: Your next question comes from Gene Mannheimer with Freedom Capital Markets.

Gene Mannheimer: I wanted to just comment on your improvement in free cash flow last few quarters, really positive. How should we think about cash conversion rates going forward? And follow-up is with respect to payment processing revenue, we saw that typical seasonality in Q1 due to more out of pockets. How should we think about the cadence of that revenue for the rest of the year, would it be similar to prior?

Balaji Gandhi: Gene, can you repeat the second question again?

Gene Mannheimer: Payment processing revenue, we saw a nice seasonal bump up, I guess, due to deductible resets and more out of pockets. Is that kind of the right cadence to think about the rest of the year? Would it be — would it track similar to prior years?

Balaji Gandhi: So on your first question, I think it’s a bit of a transitional year with the ramp in cash flow with CapEx not ramping as much. So there’s a little bit of distortion there. What we can tell you is if you think about conversion of operating cash flow to free cash flow in fiscal ’26, it should resemble what you saw in the first quarter for the rest of the year. I think that conversion starts to — as the operating cash flow gets higher, there’s more flow through in fiscal ’27. So hopefully, that’s helpful. And then on your second question, it’s — yes, I mean, there’s — look, there’s some noise around the pandemic years and then outside of that, there’s a step up in the beginning of the calendar year, which for us includes one month of our previous fiscal year in January. There’s a bump there and it sort of flattens out if you look at the trend in payments over previous years and that should continue again this year.

Operator: Your next question comes from Richard Close with Canaccord Genuity.

Richard Close: Just on Medaphine, it was good to see that get called out here. I’m curious your thoughts in terms of where you think you are in terms of monetizing the offering? And then the visits that you talk about in terms of the people that click on the ads or actually going and visiting scheduling a visit. I’m curious, are those scheduled — those visits scheduled with like Phreesia customers or how should we think about that?

Balaji Gandhi: So on the first question, it’s — think about the first inning, Richard. And so I think we have been clear that the Medaphine is contributing revenue and additional revenue from when we acquired it, which is nice to see. So it’s headed in the right direction and we’ve invested some capital into it, but it’s still very early. And yes, I mean, one of the reasons we were excited about the opportunity to acquire it was that with our — the size of our network growing, it does enable patients to schedule visits with providers when they find one on Medaphine platform.

Chaim Indig: People — look, it’s a problem throughout the country. People need help finding the right type of providers to deliver the right type of care. And we think Medaphine is a key solution to that problem across the continuum of care. And the feedback we get from patients and providers has been overwhelmingly strong. And we expect — we think this is a very, very big problem, one where we think we’re frankly we’re halfway through the first inning. So we expect to continue to invest in this over the next — over the coming years, but it also to become a contributor over the coming years to our business. And I’m sure we’ll talk more about it in the coming years.

Operator: Your final question comes from Joe Vruwink with Baird.

Joe Vruwink: Not to make too much out of a nonrecurring revenue bump to 1Q, but to the extent you took on some extra work maybe in support of a unique client opportunity. I wanted to ask if the nature of engagements are maybe changing for Phreesia where you start to rethink about supporting customer success. And really I guess the heart of the question is with the type of opportunity that is higher ROI and quicker payback does that account demand something differently from Phreesia or just generally speaking as part of the planning and go live events?

Balaji Gandhi: And look, I think the way you should read into this is that’s actually — and it’s disclosed in all of our 10-Ks over the years, that is the related services component of that revenue line and it’s always been there. We just think it’s good practice when you have a quarter to just call something like that out to be helpful to people to really unpack what’s going on in the business. But there’s no — there’s not like a shift happening underneath. And it’s really — I mean, again, consistent with just trying to add a lot of value to clients, that was an existing client and we were able to get that done quickly in the quarter. So kudos to the team for moving quickly around that, but nothing to call out. We just think — I’m just trying to be helpful.

Operator: That will conclude our question-and-answer session. And I will now turn the call back over to Chaim Indig for closing remarks.

Chaim Indig: Thank you, everyone, for joining our Q1 earnings call. I hope everyone is doing well, and we’ll see, hopefully, most of you in the coming months, and we’ll talk to you again in about 90 days. Cheers.

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