Revenue

6 Months Ended

Jul. 31, 2020

Revenue from Contract with Customer [Abstract]

The Company generates revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry. The Company derives revenue from subscription fees and related services generated from the Company’s provider customers for access to the Phreesia Platform, payment processing fees based on patient payment volume processed through the Phreesia Platform, and from digital patient engagement revenue from life sciences companies to reach, educate and communicate with patients when they are most receptive and actively seeking care.

The amount of subscription and related services revenue recorded pursuant to ASC 842 for the leasing of the Company’s PhreesiaPads and Arrival Stations was $1,585 and $1,506 for the three months ended July 31, 2020 and 2019, respectively. The amount of subscription and related services revenue recorded pursuant to ASC 842 for

the leasing of the Company’s PhreesiaPads and Arrival Stations was $3,139 and $2,966 for the six months ended July 31, 2020 and 2019, respectively.

Contract balances

The following table represents a roll forward of contract assets:


	Contract assets (unbilled accounts receivable)
January 31, 2020	$	676
Amount transferred to receivables from contract assets	(222)
Contract asset additions	2,693
July 31, 2020	$	3,147

The following table represents a roll forward of contract liabilities:


	Contract liabilities (deferred revenue)
January 31, 2020	$	5,401
Revenue recognized that was included in deferred revenue at the beginning of the period	(4,002)
Revenue recognized that was not included in deferred revenue at the beginning of the period	(679)
Increases due to invoicing prior to satisfaction or performance obligations	5,537
July 31, 2020	$	6,257

Cost to obtain a contract

The Company capitalizes certain incremental costs to obtain customer contracts and amortizes these costs over a period of benefit that the Company has estimated to be three years. The Company determined the period of benefit by taking into consideration its customer contracts, its technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying statements of operations and totaled $1,250 and $489 for the three months ended July 31, 2020 and 2019, respectively. Amortization expense totaled $1,775 and $974 for the six months ended July 31, 2020 and 2019, respectively. The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented.

The following table represents a roll forward of deferred contract acquisition costs:


Beginning balance, January 31, 2020	$	3,314
Additions to deferred contract acquisition costs	1,401
Amortization of deferred contract acquisition costs	(1,775)
Ending balance, July 31, 2020	2,940
Deferred contract acquisition costs, current (to be amortized in next 12 months)	1,684
Deferred contract acquisition costs, non-current	1,256
Total deferred contract acquisition costs	$	2,940