Leases

3 Months Ended

Apr. 30, 2024

Leases [Abstract]

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S. under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically three years and are secured by the underlying equipment.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of April 30, 2024, for operating leases, the weighted-average remaining lease term is 2.0 years and the weighted-average discount rate is 7.2%. As of April 30, 2024, for finance leases, the weighted-average remaining lease term is 2.2 years, and the weighted-average discount rate is 7.4%.

The components of lease expense for the three months ended April 30, 2024 were as follows:

	April 30, 2024
Operating leases:
Operating lease cost	$	182
Variable lease cost	—
Total operating lease cost	$	182
Finance leases:
Amortization of right-of-use assets	$	1,484
Interest on lease liabilities	168
Total finance lease cost	$	1,652

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of April 30, 2024:

	April 30, 2024
	Operating		Finance
Maturity of lease liabilities
2025 (remaining nine months)	$	478	$	5,952
Fiscal year ending January 31,
2026	463		5,454
2027	203		2,989
2028	7		411
Thereafter	—		—
Total future minimum lease payments	$	1,151	$	14,806
Less: interest	(81)		(1,248)
Present value of lease liabilities	$	1,070	$	13,558

Other supplemental cash flow information for the three months ended April 30, 2024 was as follows:

	April 30, 2024
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	230
Operating cash used for finance leases	168
Financing cash used for finance leases	1,280
Right-of-use assets obtained in exchange for lease liabilities:
Operating	$	764
Finance	6,529
Total	$	7,293

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements are classified as operating leases.

During the three months ended April 30, 2024, the Company recognized $2,388 in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of April 30, 2024, except for those with terms of one year or less.

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S. under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically three years and are secured by the underlying equipment.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of April 30, 2024, for operating leases, the weighted-average remaining lease term is 2.0 years and the weighted-average discount rate is 7.2%. As of April 30, 2024, for finance leases, the weighted-average remaining lease term is 2.2 years, and the weighted-average discount rate is 7.4%.

The components of lease expense for the three months ended April 30, 2024 were as follows:

	April 30, 2024
Operating leases:
Operating lease cost	$	182
Variable lease cost	—
Total operating lease cost	$	182
Finance leases:
Amortization of right-of-use assets	$	1,484
Interest on lease liabilities	168
Total finance lease cost	$	1,652

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of April 30, 2024:

	April 30, 2024
	Operating		Finance
Maturity of lease liabilities
2025 (remaining nine months)	$	478	$	5,952
Fiscal year ending January 31,
2026	463		5,454
2027	203		2,989
2028	7		411
Thereafter	—		—
Total future minimum lease payments	$	1,151	$	14,806
Less: interest	(81)		(1,248)
Present value of lease liabilities	$	1,070	$	13,558

Other supplemental cash flow information for the three months ended April 30, 2024 was as follows:

	April 30, 2024
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	230
Operating cash used for finance leases	168
Financing cash used for finance leases	1,280
Right-of-use assets obtained in exchange for lease liabilities:
Operating	$	764
Finance	6,529
Total	$	7,293

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements are classified as operating leases.

During the three months ended April 30, 2024, the Company recognized $2,388 in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of April 30, 2024, except for those with terms of one year or less.

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S. under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically three years and are secured by the underlying equipment.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of April 30, 2024, for operating leases, the weighted-average remaining lease term is 2.0 years and the weighted-average discount rate is 7.2%. As of April 30, 2024, for finance leases, the weighted-average remaining lease term is 2.2 years, and the weighted-average discount rate is 7.4%.

The components of lease expense for the three months ended April 30, 2024 were as follows:

	April 30, 2024
Operating leases:
Operating lease cost	$	182
Variable lease cost	—
Total operating lease cost	$	182
Finance leases:
Amortization of right-of-use assets	$	1,484
Interest on lease liabilities	168
Total finance lease cost	$	1,652

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of April 30, 2024:

	April 30, 2024
	Operating		Finance
Maturity of lease liabilities
2025 (remaining nine months)	$	478	$	5,952
Fiscal year ending January 31,
2026	463		5,454
2027	203		2,989
2028	7		411
Thereafter	—		—
Total future minimum lease payments	$	1,151	$	14,806
Less: interest	(81)		(1,248)
Present value of lease liabilities	$	1,070	$	13,558

Other supplemental cash flow information for the three months ended April 30, 2024 was as follows:

	April 30, 2024
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	230
Operating cash used for finance leases	168
Financing cash used for finance leases	1,280
Right-of-use assets obtained in exchange for lease liabilities:
Operating	$	764
Finance	6,529
Total	$	7,293

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements are classified as operating leases.

During the three months ended April 30, 2024, the Company recognized $2,388 in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of April 30, 2024, except for those with terms of one year or less.