Phreesia, Inc. 10-Q Summary: Quarter Ended April 30, 2026
Business Context and Reporting Period
This report covers the quarterly period ended April 30, 2026 (Fiscal Q2 2027). Phreesia, Inc. operates an integrated software, payments, and engagement platform for the healthcare industry, focusing on access, affordability, and patient outcomes. The company is fully remote. A significant development during the period was the completion of the AccessOne Acquisition (closed November 12, 2025), which expanded the company's payment solutions and financing capabilities. On March 13, 2026, the company refinanced its debt, replacing a bridge loan and previous credit facility with a new $275 million senior secured revolving credit facility.
Key Financial Metrics
| Metric | Q1 2026 (Three Months Ended April 30) | Q1 2025 (Three Months Ended April 30) |
|---|---|---|
| Total Revenue | $130.9 million | $115.9 million |
| Net Income (Loss) | $3.0 million | ($3.9 million) |
| Operating Income (Loss) | $6.7 million | ($3.3 million) |
| Adjusted EBITDA | $30.5 million | $20.8 million |
| Free Cash Flow | $16.4 million | $7.5 million |
| Cash, Cash Equivalents, and Restricted Cash | $76.4 million | $90.9 million (End of Period) |
| Total Debt and Finance Lease Liabilities | $90.6 million | $100.1 million |
| Unused Borrowing Capacity | $190.8 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 13% year-over-year. Payment solutions revenue surged 40% to $41.9 million, driven by the inclusion of AccessOne operations and increased patient payment volume. Network solutions revenue grew 15% to $36.3 million. Conversely, subscription and related services revenue declined 3% to $52.7 million due to one-time adjustments and a decline in license delivery revenue.
- Profitability: The company returned to profitability, reporting net income of $3.0 million compared to a net loss of $3.9 million in the prior year. Operating income improved from a loss of $3.3 million to income of $6.7 million.
- Expense Management: Sales and marketing expenses decreased 7% and research and development expenses decreased 11%, primarily due to reductions in labor costs. However, general and administrative expenses increased 12% due to higher third-party costs. Amortization expense increased 69% due to intangible assets acquired in the AccessOne deal.
- Debt Refinancing: The company terminated its bridge loan and previous credit facility, replacing them with a new $275 million revolving credit facility. As of April 30, 2026, the outstanding balance was $84.2 million.
Guidance, Outlook, and Risks
- Restructuring Plan: On May 7, 2026 (subsequent to the period end), the company implemented a restructuring plan eliminating approximately 220 positions (half contractor roles) to reduce operating expenses and align cost structure with business priorities. Costs are expected to be incurred primarily in fiscal 2027.
- Outlook: Management expects the restructuring to result in meaningful annualized run-rate expense savings. The company believes its cash and cash equivalents, along with operating cash flow and available credit facility capacity, are sufficient to meet needs for at least the next 12 months.
- Legal Proceedings: The company is involved in consolidated class action litigation regarding a 2024 cybersecurity incident affecting its ConnectOnCall service. A settlement motion is pending preliminary approval. Additionally, a putative securities class action was filed in May 2026 regarding public statements about the company's outlook.
- Risks: Key risks include the successful integration of AccessOne, competition from EHR/PM systems, cybersecurity threats, regulatory changes in healthcare and data privacy, and the impact of macroeconomic conditions on client spending.
Investor Verification Checklist
- AccessOne Integration: Verify the realization of anticipated synergies and revenue growth from the AccessOne acquisition, specifically regarding payment solutions volume.
- Restructuring Impact: Monitor the execution of the May 2026 restructuring plan and the actual realization of projected run-rate expense savings in upcoming quarters.
- Legal Exposure: Track the status of the ConnectOnCall data breach litigation settlement and the newly filed securities class action to assess potential financial liabilities.
- Debt Covenants: Confirm continued compliance with the financial covenants of the new Capital One Credit Facility (Total Net Leverage Ratio and Fixed Charge Coverage Ratio).
- Subscription Trends: Investigate the reasons behind the 3% decline in subscription and related services revenue to determine if it signals a broader trend in client retention or pricing pressure.