8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 8-K

___________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported)

June 2, 2022

___________________________________

Phreesia, Inc.

(Exact name of registrant as specified in its charter)

___________________________________

Delaware (State or other jurisdiction of incorporation or organization) 001-38977 (Commission File Number) 20-2275479 (I.R.S. Employer Identification Number)

434 Fayetteville Street, Suite 1400

Raleigh, North Carolina 27601

(Address of principal executive offices and zip code)

(888) 654-7473

(Registrant's telephone number, including area code)

___________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	PHR	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 - Results of Operations and Financial Condition

On June 2, 2022, Phreesia, Inc. (the “Company”) announced its financial results for the fiscal quarter ended April 30, 2022 by issuing a Letter to Stakeholders (the "Letter") and a press release. Copies of the press release and the Letter are furnished as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, respectively, and are incorporated by reference herein.

The information furnished under this Item 2.02 and in the accompanying Exhibit 99.1 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Description
99.1	Press release, dated June 2, 2022, by Phreesia, Inc.
99.2	Stakeholder letter, dated June 2, 2022, by Phreesia, Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 2, 2022	Phreesia, Inc.
	By:	/s/ Randy Rasmussen
	Name:	Randy Rasmussen
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

Phreesia Announces Fiscal First Quarter 2023 Results

RALEIGH, North Carolina, June 2, 2022 – Phreesia, Inc. (NYSE: PHR) (“Phreesia” or the "Company") announced financial results today for the fiscal first quarter ended April 30, 2022.

"We started the year strong with gains in new clients and expansion within existing clients across healthcare services and life sciences and began to generate operating leverage from our accelerated investments in fiscal years 2021 and 2022", said CEO and Co-Founder Chaim Indig.

Fiscal First Quarter 2023 Highlights

•Revenue was $63.4 million in the quarter as compared to $48.3 million in the same period in the prior year, an increase of 31%.

•Average number of healthcare services clients was 2,526 in the quarter as compared to 1,902 in the same period in the prior year, an increase of 33%.

•Average revenue per healthcare services client was $19,193 in the quarter as compared to $20,222 in the same period in the prior year, a decrease of 5%.

•Adjusted EBITDA was negative $30.6 million in the quarter compared to positive $0.1 million in the same period in the prior year.

•Cash and cash equivalents as of April 30, 2022 was $269.2 million, a decrease of $44.6 million compared to January 31, 2022, driven primarily by net cash used in operating activities and capital expenditures.

Outlook for Fiscal 2023

We are maintaining our revenue outlook for fiscal 2023 of $271 million to $275 million implying year-over-year growth of 27% to 29%.

We are raising our Adjusted EBITDA outlook for fiscal year 2023 to negative $126 million to negative $122 million from a previous range of negative $154 million to negative $149 million. This change reflects improvements in overall productivity and efficiency across our organization.

We maintain expectations that our Adjusted EBITDA outlook in fiscal year 2023 will be the low annual mark for fiscal years 2023 to 2025 and now expect to reach profitability1 in fiscal year 2025.

We have not reconciled the Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For further information regarding the non-GAAP financial measures included in this press release, please see “Non-GAAP financial measures” below.

1For the purposes of this statement, we define "profitability" in terms of Adjusted EBITDA.

Fiscal 2025 Target

We are maintaining our annualized revenue target of $500 million to be achieved during a quarter of fiscal year 2025.2

We believe our platform and diverse revenue streams offer us multiple paths for achieving our target.

A reconciliation of GAAP to non-GAAP financial measures is provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

2For our target revenue, annualized is defined as multiplying the highest-revenue quarter in fiscal year 2025 by four.

Recent Events

On March 28, 2022, we entered into the First Loan Modification Agreement to the Second Amended and Restated Loan and Security Agreement (the "Second SVB Facility") with Silicon Valley Bank ("SVB") (as amended, the "Third SVB Facility") to increase the borrowing capacity from $50.0 million to $100.0 million. The Third SVB Facility also reduced the interest rate to the greater of 3.25% or the Wall Street Journal Prime Rate minus 0.5%, amended the annual commitment fees to approximately $0.3 millionper year and amended the quarterly fee to 0.15% per annum of the average unused revolving line under the facility.

Available Information

We intend to use our Company website (including our Investor Relations website) as well as our Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Forward Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. These statements include, but are not limited to, statements regarding: our future financial and operating performance, including our revenue, Adjusted EBITDA and our ability to reach profitability in fiscal year 2025; our outlook for fiscal year 2023 and fiscal year 2025 targets, our anticipated growth and operating leverage and successful implementation of our solutions under development. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, risks associated with: our ability to effectively manage our growth and meet our growth objectives; our focus on the long-term and our investments in growth; the competitive environment in which we operate; our ability to develop and release new products and services, and develop and release successful enhancements, features and modifications to our existing products and services; our ability to maintain the security and availability of our platform; changes in laws and regulations applicable to our business model; our ability to make accurate predictions about our industry; and the impact of the COVID-19 pandemic and other global financial, economic and political events on our business and our ability to attract, retain and cross-sell to healthcare services clients; our ability to continue to operate effectively with a primarily remote workforce and attract and retain key talent; our ability to realize the intended benefits of our acquisitions; and other general, market, political, economic and business conditions (including as a result of the warfare and/or political and economic instability in Ukraine). The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended January 31, 2022 and in our Quarterly Report on Form 10-Q for the fiscal first quarter ended April 30, 2022 that will be filed with the SEC following this press release. The forward-looking statements in this press release 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, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

This press release includes certain non-GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures.

Conference Call Information

We will hold a conference call on June 2, 2022, at 5:00 p.m. Eastern Time to review our fiscal 2023 first quarter financial results. To participate in our live conference call and webcast, please dial (888) 350-3437 (or (646) 960-0153 for international participants) using conference code number 4000153 or visit the “Events & Presentations” section of our Investor Relations website at ir.phreesia.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

ABOUT PHREESIA

Phreesia gives healthcare organizations a suite of robust applications to manage the patient intake process. Our innovative SaaS platform engages patients in their healthcare and provides a modern, convenient experience, while enabling our clients to enhance clinical care and drive efficiency.

Investors:

Balaji Gandhi

Phreesia, Inc.

investors@phreesia.com

(929) 506-4950

Media:

Annie Harris

Phreesia, Inc.

aharris@phreesia.com
(929) 526-2611

Phreesia, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	April 30, 2022		January 31, 2022
	(Unaudited)
Assets
Current:
Cash and cash equivalents	$	269,190	$	313,812
Settlement assets	21,305		19,590
Accounts receivable, net of allowance for doubtful accounts of $914 and $863 as of April 30, 2022 and January 31, 2022, respectively	46,354		40,262
Deferred contract acquisition costs	1,520		1,642
Prepaid expenses and other current assets	10,853		11,043
Total current assets	349,222		386,349
Property and equipment, net of accumulated depreciation and amortization of $57,594 and $53,321 as of April 30, 2022 and January 31, 2022, respectively	31,807		34,645
Capitalized internal-use software, net of accumulated amortization of $32,400 and $31,139 as of April 30, 2022 and January 31, 2022, respectively	22,807		17,643
Operating lease right-of-use assets	2,048		2,337
Deferred contract acquisition costs	2,198		2,437
Intangible assets, net of accumulated amortization of $1,521 and $1,178 as of April 30, 2022 and January 31, 2022, respectively	12,429		12,772
Deferred tax asset	291		515
Goodwill	33,621		33,621
Other assets	4,669		4,157
Total Assets	$	459,092	$	494,476
Liabilities and Stockholders’ Equity
Current:
Settlement obligations	$	21,305	$	19,590
Current portion of finance lease liabilities and other debt	6,100		5,821
Current portion of operating lease liabilities	1,304		1,281
Accounts payable	5,872		5,119
Accrued expenses	18,416		20,128
Deferred revenue	17,782		16,493
Total current liabilities	70,779		68,432
Long-term finance lease liabilities and other debt	5,999		7,423
Operating lease liabilities, non-current	947		1,276
Long-term deferred revenue	148		65
Total Liabilities	77,873		77,196
Commitments and contingencies
Stockholders’ Equity:
Common stock, $0.01 par value - 500,000,000 shares authorized as of both April 30, 2022 and January 31, 2022; 52,655,723 and 52,095,964 shares issued as of April 30, 2022 and January 31, 2022, respectively	527		521
Additional paid-in capital	880,567		860,657
Accumulated deficit	(481,180)		(429,938)
Treasury stock, at cost, 474,656 and 301,003 shares as of April 30, 2022 and January 31, 2022, respectively	(18,695)		(13,960)
Total Stockholders’ Equity	381,219		417,280
Total Liabilities and Stockholders’ Equity	$	459,092	$	494,476

Phreesia, Inc.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

	Three months ended April 30,
	2022		2021
Revenue:
Subscription and related services	$	29,101	$	21,819
Payment processing fees	19,381		16,644
Life sciences	14,872		9,828
Total revenues	63,354		48,291
Expenses:
Cost of revenue (excluding depreciation and amortization)	14,386		8,534
Payment processing expense	12,158		9,725
Sales and marketing	40,031		15,012
Research and development	20,635		8,054
General and administrative	20,855		12,671
Depreciation	4,278		3,297
Amortization	1,604		1,651
Total expenses	113,947		58,944
Operating loss	(50,593)		(10,653)
Other (expense) income, net	(31)		66
Interest (expense) income, net	(383)		(238)
Total other expense, net	(414)		(172)
Loss before provision for income taxes	(51,007)		(10,825)
Provision for income taxes	(235)		(149)
Net loss	$	(51,242)	$	(10,974)
Net loss per share attributable to common stockholders, basic and diluted(1)	$	(0.99)	$	(0.24)
Weighted-average common shares outstanding, basic and diluted	51,938,887		45,416,431
(1) Our potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

Phreesia, Inc.

Consolidated Statements of Cash Flows
(Unaudited)

(in thousands)

	Three months Ended April 30,
	2022		2021
Operating activities:
Net loss	$	(51,242)	$	(10,974)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,882		4,948
Stock-based compensation expense	14,151		5,774
Amortization of deferred financing costs and debt discount	77		72
Cost of Phreesia hardware purchased by customers	277		135
Deferred contract acquisition costs amortization	467		575
Non-cash operating lease expense	289		256
Deferred tax asset	224		125
Changes in operating assets and liabilities:
Accounts receivable	(6,092)		(912)
Prepaid expenses and other assets	(450)		(809)
Deferred contract acquisition costs	(106)		(1,967)
Accounts payable	123		(1,068)
Accrued expenses and other liabilities	1,701		(3,678)
Lease liability	(306)		(335)
Deferred revenue	1,372		2,385
Net cash used in operating activities	(33,633)		(5,473)
Investing activities:
Capitalized internal-use software	(5,239)		(2,916)
Purchases of property and equipment	(1,785)		(3,983)
Net cash used in investing activities	(7,024)		(6,899)
Financing activities:
Proceeds from issuance of common stock in equity offerings, net of underwriters' discounts and commissions	—		245,813
Proceeds from issuance of common stock upon exercise of stock options	709		1,356
Treasury stock to satisfy tax withholdings on stock compensation awards	(4,307)		(1,145)
Payment of offering costs	—		(30)
Proceeds from employee stock purchase plan	1,214		—
Finance lease payments	(1,468)		(1,050)
Principal payments on financing agreements	—		(673)
Debt issuance costs and loan facility fee payments	(113)		—
Net cash (used in) provided by financing activities	(3,965)		244,271
Net (decrease) increase in cash and cash equivalents	(44,622)		231,899
Cash and cash equivalents – beginning of period	313,812		218,781
Cash and cash equivalents – end of period	$	269,190	$	450,680

Supplemental information of non-cash investing and financing information:
Right-of-use assets recorded in exchange for operating lease liabilities	$	—	$	81
Property and equipment acquisitions through finance leases	$	140	$	203
Deferred offering costs included in accounts payable and accrued expenses	$	—	$	362
Purchase of property and equipment and capitalized software included in accounts payable	$	1,755	$	351
Capitalized stock-based compensation	$	348	$	—
Issuance of stock to settle liability classified stock-based compensation awards	$	6,774	$	—
Cash paid for:
Interest	$	128	$	156

Non-GAAP financial measures

This press release and statements made during the above-referenced webcast may include certain non-GAAP financial measures as defined by SEC rules.

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss before interest expense (income), net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other expense (income), net.

We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. We have presented Adjusted EBITDA in this press release and our Quarterly Report on Form 10-Q because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss).

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

•Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) Interest expense (income), net; and

•Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:

Phreesia, Inc.

Adjusted EBITDA
(Unaudited)

	Three months ended April 30,
(in thousands)	2022		2021
Net loss	$	(51,242)	$	(10,974)
Interest expense (income), net	383		238
Provision for income taxes	235		149
Depreciation and amortization	5,882		4,948
Stock-based compensation expense	14,151		5,774
Other expense (income), net	31		(66)
Adjusted EBITDA	$	(30,560)	$	69

Phreesia, Inc.

Reconciliation of GAAP and Adjusted Operating Expenses
(Unaudited)

	Three months ended April 30,
(in thousands)	2022		2021
GAAP operating expenses
General and administrative	$	20,855	$	12,671
Sales and marketing	40,031		15,012
Research and development	20,635		8,054
Cost of revenue (excluding depreciation and amortization)	14,386		8,534
	$	95,907	$	44,271
Stock compensation included in GAAP operating expenses
General and administrative	$	5,128	$	2,918
Sales and marketing	5,654		1,646
Research and development	2,561		844
Cost of revenue (excluding depreciation and amortization)	808		366
	$	14,151	$	5,774
Adjusted operating expenses
General and administrative	$	15,727	$	9,753
Sales and marketing	34,377		13,366
Research and development	18,074		7,210
Cost of revenue (excluding depreciation and amortization)	13,578		8,168
	$	81,756	$	38,497

Phreesia, Inc.
Key Metrics
(Unaudited)

	Three months ended April 30,
	2022		2021
Key Metrics:
Healthcare services clients (average over period)	2,526		1,902
Average revenue per healthcare services client	$	19,193	$	20,222

We remain focused on building secure and reliable products that derive a strong return on investment for our clients and implementing them with speed and ease. This strategy continues to enable us to grow our network of healthcare services clients. As disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2022, during the fourth quarter of fiscal year 2022, we renamed our key metric "provider clients (average over period)" to "healthcare services clients (average over period)". We also renamed our key metric "average revenue per provider client" to "average revenue per healthcare services client."

•Healthcare services clients. We define healthcare services clients as the average number of healthcare services client organizations that generate revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. We believe growth in the number of healthcare services clients is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our Platform to healthcare services organizations that are not yet clients. While growth in the number of healthcare services clients is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future healthcare services client growth. For example, as the number of healthcare services clients increases, we may need to add to our customer support team and invest to maintain effectiveness and performance of our Platform and software for our healthcare services clients and their patients.

•Average revenue per healthcare services client. We define average revenue per healthcare services client as the total subscription and related services and payment processing revenue generated from healthcare services clients in a given period divided by the average number of healthcare services clients that generate revenue each month during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase average revenue per healthcare services client is an indicator of the long-term value of the Phreesia platform.

Additional Information

(Unaudited)

	Three months ended April 30,
	2022			2021
Patient payment volume (in millions)	$	837		$	701
Payment facilitator volume percentage	80		%	78		%

•Patient payment volume. We believe that patient payment volume is an indicator of both the underlying health of our healthcare services clients’ businesses and the continuing shift of healthcare costs to patients. We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors.

•Payment facilitator volume percentage. We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue. Our payment facilitator volume percentage could decline slightly over time should we increase our penetration of enterprise customers that are less likely to use Phreesia as a payment facilitator.

EX-99.2

Quarterly Stakeholder Letter FIRST QUARTER | FISCAL YEAR 2023

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 2 Dear Phreesia stakeholders, Our team’s performance in the first quarter of fiscal year 2023 was commendable. We started the year strong with gains in new clients and expansion with existing clients across healthcare services and life sciences, and we began to generate operating leverage from the accelerated investments we made in fiscal years 2021 and 2022. Our network of healthcare services clients has more than doubled since fiscal year 2019, having facilitated over 100 million patient visits in fiscal year 2022—more than 10% of the overall U.S. patient-visit market.1 As we have grown, the power of our network has increased. Perhaps the best illustration of this is a recently published report sharing patient perspectives on patient-engagement technology, measured across our national network of healthcare services clients in partnership with KLAS Research.2 This collaboration reflects Phreesia’s and KLAS’ common interest in ensuring that patients’ voices are heard and that technology reflects their needs and preferences. The report’s findings showed some misalignment between which features patients want and which ones vendors and healthcare organizations provide. For example, while patients see great potential in appointment self-scheduling, providers’ investment in and vendors’ delivery of this capability falls short of patients’ expectations. With this and other insights gathered from our growing network, our team of 1,6863 Phreesians can carefully work to align our healthcare services clients’ goals and desired outcomes with those of their patients, in service of our mission to create a better, more engaging healthcare experience. We look forward to bringing these patient insights to the broader healthcare community in order to improve health outcomes. We are proud of our team’s ongoing commitment to our clients and the patients they serve, and we also would like to express our admiration and support for our partners impacted by the situation in Ukraine. On behalf of the Phreesia leadership team, thank you for your interest in Phreesia. Chaim Indig Chief Executive Officer and Co-Founder JUNE 2, 2022 1 William Blair & Company, LLC, Healthcare Mosaic Report: Analyzing the Clinical Workforce Issue: A Clear and Present Danger for U.S. Healthcare Systems, January 24, 2022. 2 As part of a non-financial agreement, KLAS performed its own analysis of the shared data, created this report and maintains editorial rights. Phreesia was given the opportunity to review and provide feedback on KLAS’ final analysis, and we are grateful for the collaboration. KLAS’ partnership with Phreesia is in no way an endorsement of Phreesia’s performance and has had no impact on Phreesia’s standing in KLAS ratings. 3 As of April 30, 2022.

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 3 Fiscal Year 2023 First-Quarter Highlights We began the fiscal year with solid momentum, as evidenced by Total Healthcare Services Revenue, Life Sciences Revenue, Average Number of Healthcare Services Clients4 and Average Revenue per Healthcare Services Client over the quarter. QUARTERLY REVENUE $5M $15M $10M Q2’22Q1’22 $12M $9M $25M Q2’19Q1’19 Q4’19 $9M $10M $5M $12M $11M $5M $9M $5M $16M $22M Q2’20Q3’19 $13M $9M $17M $4M $13M $12M $19M Q1’20 $24M $14M $6M $17M $12M $16M $5M Q2’21 $15M Q4’21 $7M Q3’20 $13M $12M $6M Q4’20 $12M Q1’21 $17M $12M $6M $8M Q3’21 $13M $25M $10M $10M $23M $16M Q3’22 $24M $26M $28M $31M $33M $33M $33M $35M $15M $42M $48M $51M $56M Q4’22 Q1’23 $58M $16M $26M $15M $63M $19M $29M $15M $38M Subscription and Related Services Life Sciences Payment Processing Fees FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 2.7x *Revenue may not add up due to rounding FY ended January 31 Healthcare Services Clients In the first quarter, we grew to support an average of 2,526 healthcare services clients, an increase of 215 clients over the fourth quarter of fiscal year 2022 and an increase of 624 average clients (or 33%) year-over-year. While this level of growth is not likely sustainable in every quarter, we are encouraged by this trend, and would like to acknowledge the performance of all of the teams involved in taking these new clients live during the quarter. 4 Healthcare services clients are defined as clients who are healthcare providers, payers and other organizations that provide other types of healthcare-related services.

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 4 AVERAGE NUMBER OF HEALTHCARE SERVICES CLIENTS 1,450 1,463 1,503 1,543 1,549 1,558 1,573 1,603 1,632 1,668 1,737 1,808 1,902 1,987 2,097 2,311 Q3’19 Q4’19 Q3’20Q1’19 Q4’22Q2’19 Q1’20 Q3’21Q2’20 Q4’20 Q1’21 Q2’21 Q4’21 Q1’22 Q3’22 $7.1K $6.9K $9.6K $7.3K $8.1K $10.4K $8.2K $9.0K $9.3K $9.4K $11.5K $10.3K $10.1K $11.5K $11.6K $11.4K 2,526 Q1’23 $11.5K Q2’22 Avg. Subscription and Related Services Revenue per Healthcare Services Client1 Avg. Number of Healthcare Services Clients2 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 1 We define average subscription and related services revenue per healthcare services client as the total subscription and related services revenue (excluding payment processing revenue) generated from healthcare services clients in a given period divided by the average number of healthcare services clients that generate revenue each month during that same period. 2 We define average number of healthcare services clients as the average number of healthcare services client organizations that generate revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. FY ended January 31 Subscription and Related Services Subscription and related services revenue grew 33% in the first quarter of fiscal year 2023 compared to the first quarter of the prior year. Average subscription and related services revenue per healthcare services client was roughly flat at $11,521 compared to the prior quarter, reflecting our significant increase in new-client lands. We continue to estimate the annual total addressable market for our subscription and related services solutions to be approximately $6.3 billion, which implies roughly 50,000 healthcare services clients each spending approximately $126,000 for subscription and related services. We would expect contributions resulting from both an increase in our overall number of clients, as well as subscription and related services revenue per client to vary from quarter to quarter, but we expect both areas to be meaningful contributors to our overall growth when measured over a longer period.

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 5 Culture Phreesia recently was named to two prestigious lists recognizing our workplace culture, our commitment to diversity and our dedication to our employees’ professional development. We were selected for a sixth year as one of Modern Healthcare’s “Best Places to Work in Healthcare”— featuring healthcare organizations across the industry that empower employees to provide patients and customers with the best possible care, products and services—and we were named to the 2022 Becker’s Healthcare’s list “150 Top Places to Work in Healthcare.” We are honored to be recognized for our efforts to maintain a diverse, inclusive and equitable work environment that supports employee growth and success. To enhance those efforts, we introduced Life@Phreesia this quarter, an internal employee engagement platform that provides opportunities for Phreesians to connect, give back, and recognize and develop talent. The platform’s pillars—which include community, wellness, employee development and giving—reflect our organization’s core values. We also published a report this quarter based on the Sustainability Accounting Standards Board (SASB) framework and standards that includes information about our environmental footprint, data privacy and security, diversity and employee engagement. Payment Processing Update Our patient-payment volume grew 19% over the prior year’s first quarter, most significantly reflecting our continued addition of new clients. We note that utilization trends have been dynamic through the pandemic, and patient utilization was slightly below our expectations in the first quarter of fiscal year 2023 based on our prior experience—a trend that could persist in the second quarter. Our payment-facilitator volume percentage was 80% this quarter, up 100 basis points and 200 basis points on a sequential and year-over-year basis, respectively. In spite of the slight uptick over these two periods, this percentage could decline over time should our footprint include more enterprise customers who are less likely to utilize our payment-facilitator model. PLAY VIDEO IN BROWSER

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 6 PATIENT PAYMENT VOLUME Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 $360 $358 $358 $370 $461 $464 $463 $477 $454 $466 $524 $552 $701 $696 $682 $689 $837 3.06% 3.09% 3.09% 3.08% 3.02% 3.04% 3.04% 3.01% 3.08% 3.11% 3.09% 3.08% 3.04% 3.00% 2.99% 2.96% Payment Facilitator Volume Percentage3 Take Rate Percentage1 Patient Payment Volume (in millions)2 84% 83% 82% 83% 83% 83% 82% 82% 84% 82% 80% 79% 78% 78% 79% 79% 2.89% 80% FY 2019 FY 2020 FY 2021 FY 2022 Q1’23 FY 2023 1 Take rate percentage is defined as: payment processing fees / (patient payment volume x payment facilitator volume percentage). 2 Patient payment volume: We believe that patient payment volume is an indicator of both the underlying health of our healthcare services clients’ businesses and the continuing shift of healthcare costs to patients. We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients who utilize our payment platform, including via credit and debit cards that we process as a payment facilitator, as well as through cash and check payments, and credit and debit transactions for which Phreesia acts as a gateway to other payment processors. 3 Payment facilitator volume percentage is defined as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue. FY ended January 31 Phreesia Platform Update We continue to have success cross-selling offerings across the Phreesia platform’s four solution areas. We believe our Access solutions have been especially popular with clients because of their ability to address pain points in the patient referrals process and close gaps in care, two areas patients identified as needing improvement in a patient insights report we collaborated on with KLAS Research. Our Clinical Content team continues to work with clients to collect important self-reported data from patients, with 3.9 million social determinants of health (SDOH) patient screenings completed on Phreesia's platform to date. 3.9 MILLION social determinants of health (SDOH) patient screenings completed on Phreesia's platform to date

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 7 Our clinical leaders recently shared their expertise and guidance on effective ways to use technology to document SDOH in order to provide more comprehensive care in a Phreesia webinar on SDOH coding, and in a Becker’s Healthcare podcast on patient reported outcomes. THE PHREESIA PLATFORM Mobile and in-office intake modalitiesAppointment reminders Point-of-service payments Insurance verification Card on file and payment assurance Payment plans Online payments Specialty-specific workflows Registration for virtual visits Consent management Self-service patient-reported outcomes Behavioral health screenings Social determinants of health screenings COVID-19 support modules Referral management Integrated patient scheduling Automated appointment rescheduling ACCESS REGISTRATION REVENUE CYCLE CLINICAL SUPPORT Patient text messaging Patient education and engagement Technology Integrations In April 2022, we announced a collaboration to offer a robust integration with Azalea Health, a leading provider of cloud-based patient management and health IT solutions. This integration will allow provider organizations to offer patients a seamless, convenient digital experience more efficiently, with the staff they have. Announcing Phreesia as our preferred integration partner demonstrates our latest commitment to enhance the intake experience for our growing network of rural healthcare organizations. Baha Zeidan, CEO of Azalea Health

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 8 Phreesia and Azalea Health are developing a bidirectional API integration that will allow healthcare organizations to digitally capture patients’ self-reported demographic, clinical, financial and social information during the intake process and save it directly into Azalea Health’s EHR. By leveraging Phreesia’s automated workflows for intake, consent management, appointment reminders and scheduling, we believe organizations struggling with staffing challenges can reduce the manual workloads of their existing staff and improve their operational and financial health. Azalea Health customers can also benefit from Phreesia’s Connect offering, a referral-management solution that allows senders and receivers to track referrals, share documents and chat with other providers on a central hub, helping patients to get the care they need faster. Life Sciences Phreesia’s Life Sciences solutions represent an important aspect of our company’s value to the healthcare industry, as well as our financial performance. The Life Sciences team continues to refine and improve campaign offerings. As just one example, during the first quarter of fiscal year 2023, the team’s COVID-19 vaccine hesitancy campaign— which featured brand-new functionality—received an honorable mention for “Best Point-of-Care Campaign” at the 2022 DTC Advertising Awards. We believe our PatientInsights solution continues to give the healthcare-marketing industry meaningful insights into patient behaviors. The team published several reports this quarter, including on topics such as asthma treatment and perceptions and trends pharma marketers should watch for in 2022. The asthma report highlighted that, despite TV ads introducing new biologic brands to treat asthma, most targeted patients don’t recognize them—but they’re willing to give them a try. In an interview with Fierce Pharma about the asthma report, Joyce Wang, Phreesia’s Associate Research Director, said, “While 60% of patients who have used a biologic said they started treatment because their doctor recommended it, more awareness is needed to encourage patients to initiate the conversations.” 60% of patients who have used a biologic said they started treatment because their doctor recommended it

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 9 Investments and Operating Leverage Nearly all of our year-over-year expense trends in the fiscal first quarter reflect our proactive ramp-up in both hiring and compensation as part of our multi-year planning. We encourage investors to examine the sequential-quarter trends in expenses throughout fiscal year 2023 as an indicator of the operating leverage we believe we are generating as we grow into the now-larger Phreesia platform. Cost of Revenue – Cost of revenue (excluding depreciation and amortization) increased $5.9 million to $14.4 million in the fiscal first quarter, as compared to $8.5 million in the prior year’s first quarter, representing a 500 basis-point increase as a percentage of revenue. This resulted primarily from a $3.3 million increase in employee compensation costs driven by higher compensation for existing employees and increased headcount, as well as higher outside-services costs. On a sequential-quarter basis, cost of revenue increased by $2.0 million, or 120 basis points as a percentage of revenue. Stock compensation incurred related to cost of revenue was $0.8 million and $0.4 million for the three months ended April 30, 2022 and April 30, 2021, respectively. Sales & Marketing – Sales and marketing expense increased $25.0 million to $40.0 million in the fiscal first quarter, as compared to $15.0 million in the prior year’s first quarter. The increase was primarily attributable to a $21.4 million increase in total compensation costs driven by higher compensation for existing employees and increased headcount, as well as higher third-party marketing and advertising costs. On a sequential-quarter basis, sales and marketing expense increased by $2.8 million and declined by approximately 90 basis points as a percentage of revenue. Stock compensation incurred related to sales and marketing expense was $5.7 million and $1.6 million for the three months ended April 30, 2022 and April 30, 2021, respectively. Research & Development – Research and development expense increased $12.6 million to $20.6 million in the fiscal first quarter, as compared to $8.1 million in the prior year’s first quarter. The increase resulted primarily from a $9.3 million increase in total compensation and benefits costs driven by higher compensation for existing employees and increased headcount and a $1.3 million increase in outside- services costs, as well as higher software expenses. On a sequential-quarter basis, research and development expense increased by $3.1 million or by approximately 240 basis points as a percentage of revenue. Stock compensation incurred related to research and development expense was $2.6 million and $0.8 million for the three months ended April 30, 2022 and April 30, 2021, respectively. General & Administrative – General and administrative expense increased $8.2 million to $20.9 million in the fiscal first quarter, as compared to $12.7 million for the three months ended April 30, 2021. The increase resulted primarily from: a $5.3 million increase in total compensation and benefits costs driven by higher compensation for existing employees and increased headcount to support our growth as a public company; a $1.0 million increase in outside-services costs; higher software costs; and higher costs for non-income-based taxes, partially offset by lower recruiting costs. On a sequential-quarter basis, general and administrative expense decreased by $900,000 and by approximately 460 basis points as a percentage of revenue. Stock compensation incurred related to general and administrative expense was $5.1 million and $2.9 million for the three months ended April 30, 2022 and April 30, 2021, respectively.

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 10 OPERATING EXPENSE TRENDS $40 63% Q4 FY22 Cost of Revenue % Rev $21 33% Q1 FY23 $6 $8 $11 $15 $17 15% 17% 22% 27% 30% Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 +156% $13 $15 $22 $32 $37 31% 31% 43% 57% 64%% Rev Q4 FY21 Q1 FY22 Sales & Marketing Q2 FY22 Q3 FY22 Q1 FY23 +167% % Rev General & AdminResearch & Development Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 $12 $13 $16 $18 $22 28% 26% 32% 32% 37% Q4 FY22 +65% (Rounded numbers. $ in millions) % Rev $7 $9 $10 $12 $12 17% 18% 20% 21% 21% $14 23% Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 +69% $21 33% Q1 FY23 Cash Flow Statement, Balance Sheet and Liquidity As of April 30, 2022 and January 31, 2022, we had cash and cash equivalents of $269.2 million and $313.8 million, respectively. Cash and cash equivalents consist of money market accounts and cash on deposit. We feel comfortable that our current cash balance and revolving line of credit is sufficient to finance our plans to achieve our 2025 targets. For the fiscal quarters ended April 30, 2022 2021 Net cash (used in) operating activities $(33,633) $(5,473) Investing activities: Capitalized internal-use software (5,239) (2,916) Purchases of property and equipment (1,785) (3,983) Net cash used in investing activities $(7,024) $(6,899) ($ in thousands)

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 11 Fiscal Year 2023 Outlook We are maintaining our revenue outlook for fiscal year 2023 at $271 million to $275 million, implying year-over-year growth of 27% to 29%. We are raising our Adjusted EBITDA outlook for fiscal year 2023 to a range of negative $126 million to negative $122 million from a previous range of negative $154 million to negative $149 million. This change reflects improvements in overall productivity and efficiency across our organization. We maintain expectations that our Adjusted EBITDA outlook in fiscal year 2023 will be the low annual mark for fiscal years 2023 to 2025 and now expect to reach profitability5 in fiscal year 2025. Fiscal Year 2025 Target We are maintaining our annualized revenue target of $500 million to be achieved during a quarter of fiscal year 2025.6 We believe our platform and diverse revenue streams offer us multiple paths for achieving our target. About Phreesia Phreesia gives healthcare organizations a suite of robust applications to manage the patient intake process. Our innovative SaaS platform engages patients in their healthcare and provides a modern, convenient experience, while enabling our clients to enhance clinical care and drive efficiency. INVESTOR RELATIONS CONTACT: Balaji Gandhi investors@phreesia.com MEDIA CONTACT: Annie Harris aharris@phreesia.com 5 For the purposes of this statement, we define “profitability” in terms of Adjusted EBITDA. 6 For our target revenue, “annualized” is defined as multiplying the highest-revenue quarter in fiscal year 2025 by four.

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 12 Non-GAAP Financial Measures We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). Forward-Looking Statements This stakeholder letter includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. These statements include, but are not limited to, statements regarding: our future financial and operational performance, including our revenue, Adjusted EBITDA and our ability to reach profitability in fiscal year 2025; our outlook for fiscal year 2023 and fiscal year 2025 targets; our ability to finance our plans to achieve our 2025 targets with our current cash balance and revolving line of credit; our business strategy and operating plans; industry trends and predictions; and anticipated growth and operating leverage; and successful implementation of our solutions under development. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, risks associated with: our ability to effectively manage our growth and meet our growth objectives; our focus on the long-term and our investments in growth; the competitive environment in which we operate; our ability to develop and release new products and services, and develop and release successful enhancements, features and modifications to our existing products and services; our

QUARTERLY STAKEHOLDER LETTER | FIRST QUARTER 2023 | 13 ability to maintain the security and availability of our platform; changes in laws and regulations applicable to our business model; our ability to make accurate predictions about our industry; the impact of the COVID-19 pandemic on our business and economic conditions; our ability to attract, retain and cross-sell to healthcare services clients; our ability to continue to operate effectively with a primarily remote workforce and attract and retain key talent; our ability to realize the intended benefits of our acquisitions; and other general market, political, economic and business conditions (including as a result of the warfare and/or political and economic instability in Ukraine). The forward-looking statements contained in this letter are also subject to other risks and uncertainties, including those listed or described in our filings with the Securities and Exchange Commission (the "SEC"), including in our Annual Report on Form 10-K for the fiscal year ended January 31, 2022 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2022 that will be filed with the SEC after this letter. The forward-looking statements in this letter 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, any forward-looking statements made in this letter to reflect events or circumstances after the date of this letter or to reflect new information or the occurrence of unanticipated events, except as required by law. This letter also includes statistical data, estimates and forecasts that are based on industry publications or other publicly available information, as well as other information based on our internal sources. This information may be based on many assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified the accuracy or completeness of the information contained in these industry publications and other publicly available information. Conference Call Information We will hold a conference call on June 2, 2022 at 5:00 PM ET to review our fiscal 2023 first quarter financial results. To participate in our live conference call and webcast, please dial (888) 350-3437 (or (646) 960-0153 for international participants) using conference code number 4000153 or visit the “Events & Presentations” section of our Investor Relations website ir.phreesia.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

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Document and Entity Information Document	Jun. 02, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jun. 02, 2022
Entity Registrant Name	Phreesia, Inc.
Amendment Flag	false
Entity Central Index Key	0001412408
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38977
Entity Tax Identification Number	20-2275479
Entity Address, Address Line One	434 Fayetteville Street, Suite 1400
Entity Address, City or Town	Raleigh
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27601
City Area Code	888
Local Phone Number	654-7473
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	PHR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false