Revenue and contract costs

3 Months Ended

Apr. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue and contract costs

Revenue and contract costs

The Company generates revenue primarily from providing integrated SaaS-based software and payment solutions for the healthcare industry. The Company derives revenue from subscription fees and related services generated from the Company’s healthcare services clients for access to the Company’s solutions, payment processing fees based on patient payment volume, and fees from life sciences and payer clients for delivering qualified direct communications to patients who voluntarily opt in to receive this type of engagement using the Company’s solutions.

The amount of subscription and related services revenue recorded pursuant to ASC 842 for the leasing of the Company’s PhreesiaPads and Arrivals Kiosks was $2,388 and $2,662 for the three months ended April 30, 2024 and 2023, respectively.

Contract balances

The following table represents a roll-forward of contract assets:

Balance, January 31, 2024	$	3,375
Amount transferred to receivables from beginning balance of contract assets	(3,375)
Contract asset additions, net of reclassification to receivables	6,622
Balance, April 30, 2024	$	6,622

The following table represents a roll-forward of deferred revenue:

Balance, January 31, 2024	$	24,210
Revenue recognized that was included in deferred revenue at the beginning of the period	(15,480)
Other current period activity in deferred revenue	15,424
Balance, April 30, 2024	$	24,154

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 to five 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 consolidated statements of operations and totaled $192 and $340 for the three months ended April 30, 2024 and 2023, 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:

Balance, January 31, 2024	$	1,754
Amortization of deferred contract acquisition costs	(192)
Balance, April 30, 2024	$	1,562
Deferred contract acquisition costs, current (to be amortized in next 12 months)	$	768
Deferred contract acquisition costs, non-current	794
Total deferred contract acquisition costs	$	1,562