Phreesia Q2 Earnings Call Highlights

Phreesia delivered solid fiscal Q2 results: Revenue increased 10% year over year to $129.5 million, while adjusted EBITDA rose to $32.9 million with a 25% margin. Net income reached $1.9 million, marking the fifth consecutive profitable quarter. Cash generation strengthened the balance sheet: Operating cash flow was $18.3 million and free cash flow was $13.8 million, enabling the company to reduce debt principal by more than $23 million. Full-year guidance was reaffirmed: Phreesia maintained fiscal 2027 revenue guidance of $510 million to $520 million and adjusted EBITDA guidance of $125 million to $135 million, with AccessOne and ProviderConnect expected to support future growth.

Phreesia NYSE: PHR reported second-quarter fiscal 2027 revenue growth and continued profitability expansion, while maintaining its full-year revenue and adjusted EBITDA outlook. The company said it generated positive operating and free cash flow for the ninth consecutive quarter and used its cash generation and available cash to reduce debt principal by more than $23 million. The fiscal second quarter ended July 31, 2026. Revenue rose 10% year over year to $129.5 million, although it declined about 1% sequentially from the first quarter. Chief Financial Officer Balaji Gandhi said the sequential decline was driven primarily by the company’s legacy payment-processing business, which typically experiences stronger first-quarter activity as health plan deductibles reset.

Adjusted EBITDA totaled $32.9 million, up $10.8 million from a year earlier, for an adjusted EBITDA margin of 25%. Net income was $1.9 million, compared with net income of $700,000 in the prior-year period. Gandhi said the quarter marked Phreesia’s fifth consecutive quarter of positive net income.

Operating cash flow increased $3.5 million year over year to $18.3 million, while free cash flow rose $4.2 million to $13.8 million. The company ended the quarter with $74.6 million in cash equivalents and restricted cash, compared with $76.4 million in the previous quarter. Gandhi noted that quarterly cash-flow trends may vary based on invoicing, payments, working capital and capital-expenditure timing.

Second-quarter revenue: $129.5 million, up 10% year over year. Adjusted EBITDA: $32.9 million, with a 25% margin. Net income: $1.9 million. Operating cash flow: $18.3 million. Free cash flow: $13.8 million. Debt principal reduction: More than $23 million.

Phreesia ended the quarter with 4,744 average healthcare services clients, an increase of 36 from the prior quarter and 277 from a year earlier. Gandhi said client additions were in line with expectations and consistent with the company’s forecast for mid-single-digit percentage growth in average healthcare services clients for the full fiscal year. Total revenue per average healthcare services client was $27,289, up 4% year over year but down approximately 2% sequentially. The sequential decline reflected both payment-processing seasonality and the continued expansion of the client base, according to Gandhi. Total managed payments were $1.626 billion during the quarter, and Phreesia’s payment solutions revenue rate was 2.4%. Asked about patient-volume and deductible trends, Gandhi said the company had previously observed some weakness beyond typical seasonality earlier in the y...