WILMINGTON, DE — Phreesia Inc. (NYSE: PHR) generated stronger profit and cash flow in its fiscal second quarter, allowing the healthcare technology company to reduce debt principal by more than $23 million while maintaining its full-year revenue and adjusted EBITDA outlook.
Revenue for the quarter ended July 31 rose 10% from a year earlier to $129.5 million, while net income increased to $1.9 million from $0.7 million.
Adjusted EBITDA climbed to $32.9 million from $22.1 million a year earlier. Net cash provided by operating activities increased to $18.3 million from $14.8 million, while free cash flow rose to $13.8 million from $9.6 million.
Phreesia ended the quarter with $74.6 million in cash, cash equivalents and restricted cash, up $0.8 million from Jan. 31. The balance included $1.7 million of long-term restricted cash.
The company had $61 million outstanding under its Capital One credit facility as of July 31.
“Phreesia delivered a solid fiscal second quarter, with revenue growth and profitability expansion in line with our expectations,” Chief Executive Officer and co-founder Chaim Indig said. He said positive operating and free cash flow, combined with available cash, enabled the company to reduce debt principal by more than $23 million.
Phreesia’s average number of healthcare services clients rose 6% year over year to 4,744. Revenue per client increased 4% to $27,289.
The quarter also reflected costs from a restructuring plan implemented May 7 that calls for eliminating about 220 positions, roughly half of them contractor roles.
Phreesia expects total restructuring charges of about $10 million, primarily for employee transition costs, severance, benefits and taxes. It recognized approximately $2.8 million of those charges during the fiscal second quarter and expects the restructuring to be substantially completed during fiscal 2027.
The company maintained its fiscal 2027 revenue forecast of $510 million to $520 million. The outlook assumes about $37 million in revenue from AccessOne and excludes revenue from any acquisitions completed through Jan. 31, 2027.
Phreesia cautioned that forecasting its network solutions revenue has become more variable, particularly during the second half of each fiscal year.
The company also kept its adjusted EBITDA outlook at $125 million to $135 million. Phreesia said the restructuring is expected to produce annualized expense savings already reflected in that forecast.
Phreesia continues to expect mid-single-digit percentage growth in healthcare services clients and low-single-digit percentage growth in revenue per client during fiscal 2027.
Indig said the company sees AccessOne and ProviderConnect as potential future growth drivers and is beginning to see effects from its investments in artificial intelligence across its products and operations.
Phreesia said its existing cash and expected operating cash generation should be sufficient to meet its obligations and fiscal 2027 outlook for at least the next 12 months.
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