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What changed in Phreesia, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Phreesia, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+563 added−545 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-15)

Top changes in Phreesia, Inc.'s 2025 10-K

563 paragraphs added · 545 removed · 410 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

110 edited+32 added−28 removed53 unchanged
Biggest changeThe federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; • HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public 16 Table of Contents or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors or agents of covered entities, that perform services for them that involve the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
Biggest changeThe federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; • HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; and • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
Throughout our history, we have effectively contracted with leading PM and EHR solution providers and will continue to evaluate strategic and innovative investments and partnerships to accelerate growth. Phreesia has also acquired products and functionalities that 9 Table of Contents expand our suite of solutions. We evaluate many investment, partnership and acquisition opportunities on an ongoing basis.
Throughout our history, we have effectively contracted with leading PM and EHR solution providers and will continue to evaluate strategic and innovative 9 Table of Contents investments and partnerships to accelerate growth. Phreesia has also acquired products and functionalities that expand our suite of solutions. We evaluate many investment, partnership and acquisition opportunities on an ongoing basis.
Moreover, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act or federal civil monetary penalty laws; • the federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent; knowingly making, using or causing to be made or used, a false statement of record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
Moreover, the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act or federal civil monetary penalty laws; • the federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent; knowingly making, using or causing to be made or used, a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
We also use the following social media channels as a means of disclosing information about the company, our solutions, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD: PHREESIA Twitter Account (https://twitter.com/phreesia) PHREESIA Facebook Page (https://www.facebook.com/phreesia/) PHREESIA LinkedIn Page (https://www.linkedin.com/company/phreesia) PHREESIA Instagram Account (https://www.instagram.com/phreesia.co) PHREESIA News Page (https://www.phreesia.com/news/) PHREESIA Life Sciences Twitter Account (https://twitter.com/PhreesiaLifeSci) PHREESIA Life Sciences Facebook Page (https://www.facebook.com/PhreesiaLifeSciences/) PHREESIA Life Sciences LinkedIn Page (https://www.linkedin.com/company/phreesia-life-sciences/) PHREESIA Life Sciences Page (https://lifesciences.phreesia.com) INSIGNIA Health website (https://www.insigniahealth.com/) MEDIFIND website (https://www.medifind.com/) We encourage our investors and others to review the information we make public in these locations as such information could be deemed to be material information.
We also use the following social media channels as a means of disclosing information about the company, our solutions, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD: PHREESIA X Account (https://x.com/phreesia) PHREESIA Facebook Page (https://www.facebook.com/phreesia/) PHREESIA LinkedIn Page (https://www.linkedin.com/company/phreesia) PHREESIA Instagram Account (https://www.instagram.com/phreesia.co) PHREESIA News Page (https://www.phreesia.com/news/) PHREESIA Life Sciences X Account (https://x.com/phreesialifesci) PHREESIA Life Sciences Facebook Page (https://www.facebook.com/phreesialifesciences/) PHREESIA Life Sciences LinkedIn Page (https://www.linkedin.com/company/phreesia-life-sciences/) PHREESIA Life Sciences Page (https://lifesciences.phreesia.com) INSIGNIA Health website (https://www.insigniahealth.com/) MEDIFIND website (https://www.medifind.com/) We encourage our investors and others to review the information we make public in these locations as such information could be deemed to be material information.
Our sales force executes on these qualified sales leads, partnering with sales enablement and client services to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time.
Our sales force executes on these qualified sales leads, partnering with our sales enablement and client services functions to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time.
Similar to delivery of educational materials, we conduct primary research among interested users after they check in for appointments via our intake software to understand sentiments and behaviors, uncover unmet needs, and learn about preferences and health beliefs. These insights aid clients in understanding their patients’ experiences and enhancing their existing products and services. • Referral management.
Similar to delivery of educational materials, we conduct primary research among interested users after they check in for appointments via our intake software to understand sentiments and behaviors, uncover unmet needs, and learn about preferences and health beliefs. These insights aid clients in understanding their patients’ experiences and enhancing their existing products and services.
Department of Health and Human Services Office of Inspector General, or OIG, has published safe-harbor regulations that outline categories of activities that are deemed protected from prosecution under the Anti-Kickback Statute provided all applicable criteria are met.
Department of Health and Human Services Office of Inspector General, or OIG, has enacted safe-harbor regulations that outline categories of activities that are deemed protected from prosecution under the Anti-Kickback Statute provided all applicable criteria are met.
Patients can also update their clinical and demographic information, take a photo to store in their patient record, capture images of their driver’s license and insurance card, sign forms and policies and pay copays and outstanding balances—all from the privacy and ease of their own device. 10 Table of Contents • Registration for virtual visits .
Patients can also 10 Table of Contents update their clinical and demographic information, take a photo to store in their patient record, capture images of their driver’s license and insurance card, sign forms and policies, pay copays and outstanding balances and select and update their preferred pharmacy—all from the privacy and ease of their own device. • Registration for virtual visits .
Educational material includes information about different therapy options to assist in advocating for their needs and preferences; disease education, which speeds up the time to diagnosis; screening tools and information to aid in early detection and disease prevention; and public service materials about vaccines, avoiding use of tobacco products, and more. • Patient insights.
Educational material includes information about different therapy options to assist in advocating for their needs and preferences; disease education, which speeds up the time to diagnosis; screening tools and information to aid in early detection and disease prevention; engagement regarding prescriptions, and public service materials about vaccines, avoiding use of tobacco products, and more. • Patient insights.
Patients are able to pay upfront or set up an automated payment plan that adheres to our healthcare services clients' financial policies. Patients can also choose to pay online on their healthcare services organization’s website or place a card on file, removing the need for difficult payment-related conversations with staff. • Activation in care.
Patients are able to pay upfront or set up an automated payment plan that adheres to our healthcare services clients' financial policies. Patients can also choose to pay online on their healthcare services organization’s website or place a card on file, removing the need for difficult payment-related conversations with staff.
Manufacturers can be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
Companies can be held liable under the federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups, and health systems as well as regional and national payers and other organizations that provide other types of healthcare-related services.
We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups and health systems as well as other organizations that provide other types of healthcare-related services.
The contents of any website referred to in this Annual Report on Form 10-K are not intended to be incorporated into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
The contents of any website or social media channel referred to in this Annual Report on Form 10-K are not intended to be incorporated into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
Maintaining the integrity of our solutions is critical to our business, our clients and the patients they treat. As our product offerings increase and become more robust, we continue to enhance and evolve our security program. Privacy and security Privacy and security are our top priorities.
Maintaining the integrity of our solutions is critical to our business, our clients and the patients they treat. As our product offerings increase and become more robust, we continue to enhance and evolve our security program. 12 Table of Contents Privacy and security Privacy and security are our top priorities.
We believe many direct competitors are focused on the basic aspects of electronic patient intake and are only starting to expand into the multiple adjacencies beyond patient registration such as access and clinical support.
We believe many direct competitors are focused on the basic aspects of electronic patient intake and are only starting to expand into the multiple adjacencies beyond patient registration such as 8 Table of Contents access and clinical support.
While HIPAA does not create a private right of action that would allow individuals to sue in civil court for a HIPAA violation, its standards have been used as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information.
While HIPAA does not create a private right of action that would allow individuals to sue in civil court, its standards have been used as the 14 Table of Contents basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information.
Many U.S. states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers.
Many U.S. states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, arrangements involving healthcare items or services reimbursed by non-governmental payors, including private insurers.
Some of our existing and potential service providers, particularly EHR providers, have 8 Table of Contents developed their own patient intake solutions and have become direct competitors. Our solutions integrate with a majority of the leading EHR systems.
Some of our existing and potential service providers, particularly EHR providers, have developed their own patient intake solutions and have become direct competitors. Our solutions integrate with a majority of the leading EHR systems.
Over time, we expect to increase profitability and margins by adding new clients and by expanding our existing clients with minimal incremental investment. Moreover, we continually aim to improve effectiveness and efficiency.
Over time, we expect to increase net income and margins by adding new clients and by expanding our existing clients with minimal incremental investment. Moreover, we continually aim to improve effectiveness and efficiency.
Our market opportunity We serve a range of healthcare services clients, including single-specialty practices, large multi-specialty groups and health systems. We provide services to large and small pharmaceutical, medical device and biotechnology companies as well as payer organizations.
Our market opportunity We serve a range of healthcare services clients, including single-specialty practices, large multi-specialty groups and health systems. We provide services to large and small pharmaceutical, medical device and biotechnology companies, as well as government entities and other organizations.
While we routinely evaluate our legal positions under applicable healthcare laws and regulations, these regulations can vary significantly from jurisdiction to jurisdiction, and interpretation and enforcement of existing laws and regulations can be uncertain or may change periodically.
While we routinely evaluate our legal positions under applicable healthcare, data privacy, security and other laws and regulations, these regulations can vary significantly from jurisdiction to jurisdiction, and interpretation and enforcement of existing laws and regulations can be uncertain or may change periodically.
The failure of a financial relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.
The failure of a financial relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute. Violations are subject to civil and criminal fines and penalties for each violation, imprisonment, and exclusion from government healthcare programs.
During our fiscal year ended January 31, 2024, Modern Healthcare magazine recognized Phreesia as one of the “Best Places to Work in Healthcare” for the seventh time, and Phreesia was named to the list of "The Top 100 Software Companies of 2023" by the Software Report, our second year in a row on the list.
During our fiscal year ended January 31, 2025, Modern Healthcare magazine recognized Phreesia as one of the “Best Places to Work in Healthcare” for the eighth time, and Phreesia was named to the list of "The Top 100 Software Companies of 2024" by the Software Report, our third year in a row on the list.
Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations related to drug pricing and payments and other transfers of value made to physicians and other healthcare providers.
Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations and other transfers of value made to physicians and other healthcare providers.
We deploy our solutions across a range of modalities, including through patients’ mobile devices (Phreesia Mobile), through a web-based dashboard for healthcare services clients (Phreesia Dashboard), and through our self-service intake tablets (PhreesiaPads) and on-site kiosks (Arrivals Kiosks), all of which provide an individualized experience for each patient based on age, gender, appointment type and other clinical and demographic factors.
We deploy our solutions to patients across a range of modalities, including through patients’ mobile devices (Phreesia Mobile), and through our self-service intake tablets (PhreesiaPads) and on-site kiosks (Arrivals Kiosks), all of which provide an individualized experience for each patient based on age, gender, appointment type and other clinical and demographic factors.
The California Consumer Privacy Act, or CCPA, as amended by the California Privacy Rights Act, or CPRA, creates individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
For example, the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”), creates individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
In fiscal 2024, we facilitated patient visits in over 3,900 healthcare services clients across all 50 states. We define a patient visit as an individual, in-person or telehealth visit to a healthcare services provider, which may include multiple encounters by the same patient.
In fiscal 2025, we facilitated patient visits in over 4,300 healthcare services clients across all 50 states. We define a patient visit as an individual, in-person or telehealth visit to a healthcare services provider, which may include multiple encounters by the same patient.
A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation. In addition to a few statutory exceptions and regulatory safe harbors, the U.S.
A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation. In addition to statutory exceptions, the U.S.
Our value proposition We are focused on providing healthcare services organizations, life sciences companies and payer organizations the tools to help patients take a more active role in their care. We believe our solutions provide a unique value proposition that is differentiated from what is offered by the traditional healthcare system. Value proposition for patients • Improved patient experience .
Our value proposition We are focused on providing healthcare services organizations, life sciences companies, government entities and other organizations the tools to help patients take a more active role in their care. We believe our solutions provide a unique value proposition that is differentiated from what is offered by the traditional healthcare system.
In addition, through Phreesia University (Phreesia’s in-house training program), events, client conferences and webinars, we help our healthcare services clients optimize their businesses and, as a result, support client retention. We also sell products and services to life sciences and payer organizations, healthcare advertising agencies and advocacy groups as well as advertising agencies through our direct sales and marketing teams.
In addition, through Phreesia University (Phreesia’s in-house training program), live and virtual events, we help our healthcare services clients optimize their businesses and, as a result, support client retention. We also sell products and services to life sciences and other organizations, healthcare advertising agencies, government entities and advocacy groups through our direct sales and marketing teams.
Patient intake is a complex and time-consuming process involving numerous tasks, including registration, insurance verification, patient questionnaires, patient-reported outcomes ("PROs"), payments and scheduling. Inefficiencies during the intake process often result in lower satisfaction for patients and healthcare services organizations, wasted time, missed revenue opportunities and diminished health outcomes. Phreesia’s mission is to make care easier every day.
Patient intake is a complex and time-consuming process involving numerous tasks, including registration, insurance verification, patient questionnaires, patient-reported outcomes ("PROs") and payments. Inefficiencies during the intake process often result in lower satisfaction for patients and healthcare services organizations, wasted time, missed revenue opportunities and diminished health outcomes.
Department of Health and Human Services, or HHS, and the local media in cases where a breach affects more than 500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis.
In addition, notification must be provided to the U.S. Department of Health and Human Services (“HHS”), and, in cases where a breach affects more than 500 individuals, the local media. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis.
Already in the U.S. we have witnessed significant developments at the state level. In addition to the CCPA, new privacy and data security laws have been enacted in numerous other states and have been proposed in even more states as well as in the U.S. Congress, reflecting a trend toward more stringent privacy legislation in the U.S., which may accelerate.
In addition to the CCPA, new privacy and data security laws have been enacted in numerous other states and have been proposed in even more states as well as in the U.S. Congress, reflecting a trend toward more stringent privacy legislation in the U.S., which may accelerate.
Our solutions streamline the patient intake process and provides consumer-centric options for check-in. We pre-populate information from prior visits, minimizing the frustration of repetitive questions during the intake process and streamlining the information for review by a clinician by the time the patient reaches the exam room.
Value proposition for patients • Improved patient experience . Our solutions streamline the patient access and patient intake processes and provide consumer-centric options for check-in. We pre-populate information from prior visits, minimizing the frustration of repetitive questions during the intake process and streamlining the information for review by a clinician by the time the patient reaches the exam room.
In the event of a breach, our covered entity customers may require we provide assistance in the breach notification process and may seek indemnification and other contractual remedies. State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states.
In the event of a breach, our covered entity customers may require that we provide assistance or request that we make these notifications on behalf of the covered entity in the breach notification process and may seek indemnification and other contractual remedies. State attorneys general also have the right to prosecute HIPAA violations in their states.
Remote Workforce: We have operated as a fully remote company since 2020, as we believe this arrangement allows us access to the best talent and creates optimal flexibility for our employees. Corporate Information We are a fully remote company and do not maintain principal executive offices.
Remote Workforce: We have operated as a fully remote company since 2020, as we believe this arrangement allows us access to the best talent and creates optimal flexibility for our employees.
Subscriber services and support Our operations and support organizations differentiate and enhance our clients’ and patients’ experience. Our teams have significant experience integrating with various EHR and PM systems, which can help take our healthcare services clients from sale to go-live much quicker than other solutions. Our client-focused operations are structured to provide a seamless process. • Client services.
Subscriber services and support Our operations and support organizations differentiate and enhance our clients’ and patients’ experience. Our teams have significant experience integrating with various EHR and PM systems, which can help take our healthcare 13 Table of Contents services clients from sale to go-live much quicker than other solutions.
Phreesia investors and others should note that we announce material information to the public about our company, products and services and other issues through a variety of means, including our website at https://www.phreesia.com, our investor relations website at https://ir.phreesia.com, press releases, SEC filings and public conference calls, in order to achieve broad, non-exclusionary distribution of information to the public.
The SEC maintains an Internet website at https://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 18 Table of Contents Phreesia investors and others should note that we announce material information to the public about our company, products and services and other issues through a variety of means, including our website at https://www.phreesia.com, our investor relations website at https://ir.phreesia.com, press releases, SEC filings and public conference calls, in order to achieve broad, non-exclusionary distribution of information to the public.
Under the breach notification rule, business associates must notify covered entities of a breach, and those covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security or integrity of the PHI. In addition, notification must be provided to the U.S.
We must also comply with HIPAA’s breach notification rule. Under the breach notification rule, business associates must notify covered entities of a breach, and those covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security or integrity of the PHI.
Our employee resource groups ("ERGs") support our commitment to promoting and maintaining an inclusive culture for all employees by bringing together individuals from a wide range of backgrounds, experiences and perspectives. These groups seek to foster a sense of shared community and empowerment for employees who share a common social identity, such as gender, race, ethnicity, disability and sexual orientation.
Our employee resource groups ("ERGs") support our commitment to promoting and maintaining an inclusive culture for all employees by bringing together individuals from a wide range of backgrounds, experiences and perspectives. These groups seek to foster a sense of shared community and empowerment for employees.
Based on client feedback received and our internal analysis, we believe that our flexible patient payment options, including card on file, have led to an increase in time-of-service collections for the majority of our healthcare services clients. Our automated eligibility and benefits verification solution also reduces the number of denied claims.
We enable our healthcare services clients to increase collections and reduce costs. Based on client feedback received and our internal analysis, we believe that our flexible patient payment options, including card on file, have led to an increase in time-of-service collections for the majority of our healthcare services clients.
We have tools to communicate with patients about their health and have demonstrated increased rates of preventive care and vaccinations. Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers to better understand their patients and connect them to needed services, resulting in improved health outcomes.
Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers better understand their patients and connect them to needed services, resulting in improved health outcomes.
These providers of PM and EHR solutions and our healthcare services clients can leverage our expanding APIs to embed the functionality of our solutions for their patients, while controlling the look and feel. • Embedded payments.
We currently contract with leading PM and EHR providers that collectively represent the majority of the total PM and EHR market. These providers of PM and EHR solutions and our healthcare services clients can leverage our expanding APIs to embed the functionality of our solutions for their patients, while controlling the look and feel. • Embedded payments.
We allow healthcare services clients to send and receive text messages from individual patients about their in-person or virtual visits. This capability helps to reduce face-to-face interactions, decrease phone-call volume and improve patient communication. • After-hours care. PhreesiaOnCall helps healthcare services clients manage patients seeking care after-hours.
Patient responses to confirm, cancel or reschedule appointments flow directly into the Phreesia Appointments Hub. • Patient text messaging. We allow healthcare services clients to send and receive text messages from individual patients about their in-person or virtual visits. This capability helps to reduce face-to-face interactions, decrease phone-call volume and improve patient communication. • After-hours care.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.
The FTC expects a company’s data privacy and security policies and practices to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business and the cost of available tools to improve security and reduce vulnerabilities.
Registration Our Registration applications facilitate mobile and on-site check-in, create a more complete patient record and increase patient convenience and satisfaction. These solutions include: • Mobile and in-office intake modalities . We allow patients to check in securely and conveniently on their computer or mobile device, either prior to their visit or when they arrive at the office.
These solutions include: • Mobile and in-office intake modalities . We allow patients to check in securely and conveniently on their computer or mobile device, either prior to their visit or when they arrive at the office.
We also provide life sciences companies, health plans and other payer organizations (payers), patient advocacy, public interest and other not-for-profit organizations with a channel for direct communication with patients. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise.
We also provide life sciences companies, government entities, patient advocacy, public interest and not-for-profit and other organizations with a channel for direct education and communication with patients in a privacy-protected environment. Additional products and services include the MediFind provider directory, which helps patients find care based on providers' specialty and condition expertise.
We cannot be assured that a review of our business by courts or regulatory authorities will not result in determinations that could adversely affect our operations or that the healthcare regulatory environment will not change in a way that restricts our operations.
We cannot be assured that a review of our business by courts or regulatory authorities will not result in determinations that could adversely affect our operations or that the regulatory environment will not change in a way that restricts our operations. Federal and state legislatures also may enact various legislative proposals that could materially impact certain aspects of our business.
Educational and promotional 11 Table of Contents content about health is delivered to raise patient awareness and help patients start the right conversations with their providers, improving outcomes for these individuals.
Clients of this tool include life sciences organizations, government entities and patient advocacy groups. ◦ Educational and promotional content about health is delivered to raise patient awareness and help patients start the right conversations with their providers, improving outcomes for these individuals.
Many of our customers are regulated as covered entities under HIPAA. As a service provider who creates, receives, maintains or transmits PHI on behalf of our covered entity customers, Phreesia is a “business associate” as defined under HIPAA, and certain HIPAA requirements are directly applicable to business associates.
As a service provider that creates, receives, maintains or transmits PHI on behalf of our covered entity customers, Phreesia is a “business associate” as defined under HIPAA, and certain HIPAA requirements are directly applicable to business associates. Violations of HIPAA may result in civil and criminal penalties and a single data breach can result in violations of multiple standards.
To the extent we work as a third-party for our healthcare provider partners, we are a "Business Associate" as defined under the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information and Technology for Economic ad Clinical Health Act ("HITECH Act") and their implementing regulations, collectively referred to as HIPAA.
To the extent we work as a third-party for our healthcare provider partners, we are a "Business Associate" as defined under the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information and Technology for Economic and Clinical Health Act ("HITECH Act") and their implementing regulations, collectively referred to as “HIPAA.” As a Business Associate, we sign Business Associate Agreements that govern our uses and disclosures of protected health information ("PHI") on behalf of our covered entity clients that engage us to provide our software solutions.
On behalf of our life sciences and payer clients, we deliver clinically relevant content to patients and health plan members who voluntarily opt in to receive this type of engagement. Additionally, our DoctorFinder product allows Life Sciences companies to embed a doctor directory in their own websites, thereby helping patients find appropriate care for their unique needs.
On behalf of our clients, we deliver clinically relevant content to patients who consent to receive information and engagement. Viewing content is optional, and patients can revoke their authorization at any time. Additionally, our DoctorFinder product allows Life Sciences companies to embed our MediFind doctor directory in their own websites, thereby helping patients find appropriate care for their unique needs.
Item 1. Business Overview We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care. Our solutions include SaaS-based integrated tools that manage patient access, registration and payments.
Item 1. Business Overview We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care. Phreesia’s mission is to make care easier every day.
In particular, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, establishes privacy and security standards that limit the use and disclosure of protected health information, referred to as PHI, and require the implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form.
In particular, HIPAA establishes privacy and security standards that limit the use and disclosure of PHI, and requires the implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form. Many of our customers are regulated as covered entities under HIPAA.
We have industry 12 Table of Contents certifications, including HITRUST, PCI-DSS Level 1 Service Provider, Systems and Organization Controls 2 ("SOC 2") and PCI Point-to-Point Encryption. As a PCI-DSS Level 1 Service Provider, we are committed to upholding industry security standards to cardholder data. We are committed to protecting the information and privacy of our clients and their patients.
As a PCI-DSS Level 1 Service Provider, we are committed to upholding industry security standards to cardholder data. We are committed to protecting the information of and safeguarding privacy for our clients and their patients.
The existence of comprehensive privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. Where state laws are more protective than HIPAA, we must comply with these additional state laws.
The existence of privacy laws in different states in the country have increasingly made compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.
Our logic-driven delivery of PROs and other questionnaires help healthcare services clients identify at-risk patients in need of specific care and reduce errors by avoiding the need to manually gather the information. These PROs enable our healthcare services clients to close gaps in care, identify successful treatments and engage patients in their care.
We enable our healthcare services clients to more efficiently and effectively capture the right clinical information to meet their clinical goals and align with quality reporting initiatives. Our logic-driven delivery of PROs and other questionnaires help healthcare services clients identify at-risk patients in need of specific care and reduce errors by avoiding the need to manually gather the information.
Our Network solutions revenue (as described below) is generated from clients in the pharmaceutical, biotechnology and medical device industries, as well as payers, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health.
Our network solutions clients include life sciences companies in the pharmaceutical, biotechnology and medical device industries, as well as government entities, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health. Our goal is to help patients have more informed conversations to help them make decisions about their care.
Through our subsidiary, Insignia Health, LLC ("Insignia"), we license the exclusive worldwide rights to the Patient Activation Measure ("PAM"®), which we believe is widely viewed as the gold standard of patient activation measures.
These PROs enable our healthcare services clients to close gaps in care, identify successful treatments and engage patients in their care. Through our subsidiary, Insignia Health, LLC ("Insignia"), we license the exclusive worldwide rights to the Patient Activation Measure ("PAM"®), which we believe is widely viewed as the gold standard of patient activation measures.
Our dedicated Client Services team is responsible for pre-sales engagement, new client onboarding and implementation, existing client implementation and on-site optimization. Client Services is organized by market specialization, ensuring that our team provides deep expertise in the markets they support. In addition, our implementation teams have extensive knowledge of the PM and EHR systems that our healthcare services clients use.
Our client-focused operations are structured to provide a seamless process. • Client services. Our dedicated Client Services team is responsible for pre-sales engagement, new client onboarding and implementation, existing client implementation and on-site optimization. Client Services is organized by market specialization, ensuring that our team provides deep expertise in the markets they support.
Our solutions are highly customizable and scalable to any size healthcare service organization and can seamlessly integrate within a client’s workflows and leading Practice Management, or PM, and Electronic Health Record, or EHR, systems. Our solutions additionally allow for secure time-of-service and post-explanation of benefits integrated payments.
We deploy our solutions to healthcare services clients through a web-based dashboard (Phreesia Dashboard). Our solutions are highly customizable and scalable to any size healthcare service organization and can seamlessly integrate within a client’s workflows and leading Practice Management, or PM, and Electronic Health Record, or EHR, systems.
By leveraging the power of self-service and providing individualized and flexible software solutions, we activate patients early in their healthcare journey and provide them with relevant information to further educate them so they can take an active role in their healthcare decisions. Value proposition for healthcare services clients • Simplify operations and enhance staff efficiency.
By leveraging the power of self-service, flexible software solutions and consent-based content delivery, we support and activate patients along their healthcare journey so they can take an active role in their healthcare decisions, resulting in improved health outcomes. Value proposition for healthcare services clients 7 Table of Contents • Simplify operations and enhance staff efficiency.
Our direct marketing solutions are unique and compete at the point of care as well as pre- and post-visit across an array of digital devices backed by our commitment to transparency and third-party auditing. We compete on the basis of several factors, including price, quality, transparency and the ability to demonstrate meaningful return on investment.
Our direct marketing solutions are unique and compete across the healthcare journey including during the search for care, at the point of care, and at pre- and post-visit moments across an array of digital devices backed by our commitment to transparency and third-party auditing.
Our products and services Our solutions are specifically designed to cater to the needs of patients, healthcare services clients and life sciences and payer companies while improving healthcare engagement. Access to Care We offer healthcare services clients convenient online appointment requests for patients, appointment tracking and appointment management in one place, and provide insight into past and upcoming appointments.
Access to Care We offer healthcare services clients convenient online appointment requests for patients, appointment tracking and appointment management in one place, and provide insight into past and upcoming appointments. Our Access to Care solutions include: • Provider directory for patients seeking care.
U.S. federal and state fraud and abuse laws We are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business that may constrain the financial arrangements and relationships through which we research, as well as sell, market and distribute any products for which we obtain marketing authorization.
U.S. federal and state fraud and abuse laws 16 Table of Contents We are subject to additional healthcare regulation by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business that may constrain our financial arrangements with third parties.
Human Capital Resources 17 Table of Contents As of January 31, 2024, we had 1,438 full-time employees, including 512 in sales and marketing, 473 in research and development, 294 in services and support and 159 in general and administrative. As of January 31, 2024, we had 946 full-time employees in the United States and 492 full-time employees internationally.
Human Capital Resources As of January 31, 2025, we had 2,082 full-time employees, including 623 in sales and marketing, 614 in research and development, 610 in services and support and 235 in general and administrative. As of January 31, 2025, we had 817 full-time employees in the United States and 1,265 full-time employees internationally.
There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties.
There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties. Intellectual property 17 Table of Contents Our continued growth and success depend, in part, on our ability to protect our intellectual property and proprietary technology.
A provider-facing app transcribes patient messages, routes to the on-call provider, and displays key information from the patient’s chart for a more productive call. • Smart answering solution. We help healthcare services clients manage inbound patient calls digitally with the option to follow-up via text message, reducing burden on call center and front desk staff members.
We help healthcare services clients manage inbound patient calls digitally with the option to follow-up via text message, reducing burden on call center and front desk staff members. • Referral management .
In recent years, the FTC has paid increased attention to privacy and data security matters, and we expect them to continue to do so in the future. 14 Table of Contents Many states in which we operate and in which our patients reside also have laws that protect the privacy and security of sensitive and personal information, including health information, and are, in many cases, not preempted by HIPAA and may be subject to varying interpretations by courts and government agencies.
Many states also have laws that protect the privacy and security of sensitive and personal information, including health information, and are, in many cases, not preempted by HIPAA and may be subject to varying interpretations by courts and government agencies.
By expanding and continuously enhancing our solutions, we believe we can drive incremental revenue from existing clients as well as broaden our appeal to potential new clients.
We intend to leverage our network and patient activation capabilities to eliminate gaps in care and increase care coordination among all key healthcare constituents. By expanding and continuously enhancing our solutions, we believe we can drive incremental revenue from existing clients as well as broaden our appeal to potential new clients.
We are committed to providing quality services and support, with a focus on integration, implementation support and overall client satisfaction. Regulatory Matters Our business is subject to extensive, complex and rapidly changing federal and state laws and regulations. Various federal and state agencies have discretion to issue regulations and interpret and enforce healthcare laws.
This model has proven to help large companies continue to scale, while leveraging the benefits of smaller operations. We are committed to providing quality services and support, with a focus on integration, implementation support and overall client satisfaction. Regulatory Matters Our business is subject to extensive, complex and rapidly changing federal and state laws and regulations.
Our growth strategies The success of our business depends on acquiring new clients and increasing utilization among our existing clients, which in turn drives growth across our solutions. We believe we are well-positioned to benefit from a number of prevailing industry tailwinds across our patient access, registration, revenue cycle and Network solution areas.
We believe we are well-positioned to benefit from a number of prevailing industry tailwinds across our patient access, registration, revenue cycle and Network solution areas.
Through our designed implementation approach and expertise, we are able to take healthcare services clients live efficiently and quickly. Our Client Services team is also able to demonstrate early return on investment in land-and-expand deals, enabling us to roll out to additional locations. • Client success.
Our Client Services team is also able to demonstrate early return on investment in land-and-expand deals, enabling us to roll out to additional locations. • Client success. Our success is driven by our ability to retain and expand relationships with existing and new clients.
For example, according to the Federal Trade Commission (FTC), failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a).
For example, the Federal Trade Commission (“FTC”) has advised that failing to take appropriate steps to keep consumers’ personal information private and secure may constitute an unfair act or practice in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act (the “FTCA”).
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA covered entities and their business associates. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator.
In addition, HIPAA tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator. We expect a continued or increased level of federal and state HIPAA privacy and security enforcement efforts.
Additionally, Phreesia was named as one of 2023 Achievers 50 "Most Engaged Workplaces". Phreesia has also had representation on the Software Report's Top 50 Women Leaders in SaaS for the past six years. All of these achievements optimally position us to continue to attract top healthcare and technology talent.
Phreesia has also had representation on the Software Report's Top 50 Women Leaders in Software for the past seven years. All of these achievements optimally position us to continue to attract top healthcare and technology talent. Access and Equal Opportunity: We are committed to hiring, developing and supporting an inclusive workplace.
Each plan is configured according to the healthcare services client’s financial policies and managed automatically. • Online payments. We allow practices to add a custom payment button to their website or send email reminders that direct patients to an online payment page. • Card on file and payment assurance.
We allow practices to add a custom payment button to their website, send email reminders that direct patients to an online payment page and send bills directly to patients via text or email, based on patient preferences. • Card on file and payment assurance.
We maintain a comprehensive security program designed to safeguard the confidentiality, integrity and availability of our clients’ data. In particular, we deploy physical, administrative and technical controls to appropriately safeguard patient information. We offer reliability, performance, security and privacy for our clients.
We maintain a comprehensive security program designed to safeguard the confidentiality, integrity and availability of our clients’ data. In particular, we deploy physical, administrative and technical controls to appropriately safeguard patient information. Our infrastructure is deployed to three co-located data centers, and within multiple Microsoft Azure and Amazon Web Service environments, to securely manage and maintain our clients’ information.
In certain cases, it may be necessary to modify our planned operations and procedures to comply with these more stringent state laws. Not only may some of these state laws impose fines and penalties upon violators, but also some state laws, unlike HIPAA, may afford private rights of action to individuals who believe their personal information has been misused.
Not only may some of these state laws impose fines and penalties upon violators, but also some state laws, unlike HIPAA, may afford private rights of action to individuals who believe their personal information has been misused. In addition, state laws are changing rapidly, and there is discussion of a new federal privacy law to which we may be subject.
While any information we maintain in our role as a business associate may be exempt from the CCPA, other records and information we maintain may be subject to the CCPA. We expect that there will continue to be new proposed and amended laws, regulations and industry standards concerning privacy, data protection and information security in the U.S.
While any information we maintain in our role as a business associate may be exempt from the CCPA, other records and information we maintain may be subject to the CCPA.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo the extent that HSA-linked payment cards and other exempt payment cards (or their issuing banks, such as those having assets of less than $10 billion) lose their exempt status under the current rules, or if any interchange rate caps applicable to the debit card, credit card or other payment cards are changed, any such amendment, rule-making, or legislation could impact interchange rates applicable to payment card transactions processed through our payments platform.
Biggest changeIf the maximum permissible interchange fee 30 for debit cards, credit cards, or other payment cards is changed or the exempt status of HSA-linked payment cards from such maximum interchange rate caps is lost as a result of amendment to Regulation II by the FRS or any other new rulemaking, legislation, or private litigation challenge, our revenue and profit from payment card transactions processed through our payments platform could decrease, and there could be a material adverse effect on our financial condition and results of operations.
You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and notes thereto and the “Management’s discussion and analysis of financial condition and results of operations” section of Annual Report on Form 10-K, before deciding whether to purchase shares of our common stock.
You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and notes thereto and the “Management’s discussion and analysis of financial condition and results of operations” section of this Annual Report on Form 10-K, before deciding whether to purchase shares of our common stock.
We cannot be certain that we will be able to retain our current clients or expand our client base in this competitive environment. If we do not retain current clients or expand our client base, or if we have to renegotiate existing contracts, our business, financial condition and results of operations will be harmed.
We cannot be certain that we will be able to retain our current client base in this competitive environment. If we do not retain current clients or expand our client base, or if we have to renegotiate existing contracts, our business, financial condition and results of operations will be harmed.
Our success depends, in part, on the skills, working relationships and continued services of our founders, Chaim Indig (Chief Executive Officer) and Evan Roberts (Chief Operating Officer), and senior management team and other key personnel.
Our success depends, in part, on the skills, working relationships and continued services of our founders, Chaim Indig (Chief Executive Officer) and Evan Roberts (Chief Operating Officer), and our senior management team and other key personnel.
If any of these risks occur, they could materially adversely affect our business, financial condition or results of operations. We may be liable for use of incorrect or incomplete data we provide which could harm our business, financial condition and results of operations.
If any of these risks occur, they could materially and adversely affect our business, financial condition or results of operations. We may be liable for use of incorrect or incomplete data we provide, which could harm our business, financial condition and results of operations.
Other federal and state laws restrict the use and protect the privacy and security of personally identifiable information are, in many cases, are not preempted by HIPAA and may be subject to varying interpretations by the courts and government agencies.
Other federal and state laws restrict the use and protect the privacy and security of personally identifiable information, in many cases are not preempted by HIPAA and may be subject to varying interpretations by courts and government agencies.
Any failure or perceived failure by us to comply with domestic or foreign laws or regulations, industry standards or other legal obligations, or any actual or suspected privacy or security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause our clients to lose trust in us, which could have an adverse effect on our reputation and business.
Any failure or perceived failure by us to comply with domestic or foreign laws or regulations, industry standards or other legal obligations, or any actual or suspected privacy or security incident, whether or not 36 resulting in unauthorized access to, or acquisition, release or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause our clients to lose trust in us, which could have an adverse effect on our reputation and business.
Factors that may affect our client satisfaction and our ability to sell additional applications and services include, but are not limited to, the following: • the price, performance and functionality of our solutions; • patient acceptance and adoption of services and utilization of our payment processing tools; • the availability, price, performance and functionality of competing solutions; • our ability to develop and sell complimentary applications and services; • the stability, performance and security of our hosting infrastructure and hosting services; • changes in healthcare laws, regulations or trends; • the business environment of our clients including healthcare staffing shortages and headcount reductions by our clients; and • our ability to maintain and enhance our reputation and brand recognition.
Factors that may affect our client satisfaction and our ability to sell additional applications and services include, but are not limited to, the following: • the price, performance and functionality of our solutions; • patient acceptance and adoption of services and utilization of our payment processing tools; • the availability, price, performance and functionality of competing solutions; • our ability to develop and sell complimentary applications and services; 24 • the stability, performance and security of our hosting infrastructure and hosting services; • changes in healthcare laws, regulations or trends; • the business environment of our clients including healthcare staffing shortages and headcount reductions by our clients; and • our ability to maintain and enhance our reputation and brand recognition.
Numerous class-action suits under federal and state laws have been filed in recent years against companies who conduct call and SMS texting programs, with many resulting in multi-million-dollar settlements to the plaintiffs. Even an unsuccessful challenge by consumers or regulatory authorities of our activities could result in adverse publicity and could require a costly response from us.
Numerous class-action suits under federal and state laws have been filed in recent years against companies who conduct call and SMS texting programs, with many resulting in multi-million- 39 dollar settlements to the plaintiffs. Even an unsuccessful challenge by consumers or regulatory authorities of our activities could result in adverse publicity and could require a costly response from us.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; 49 • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than 75% of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than 75% of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; 48 • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than 75% of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than 75% of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, 22 reliability, security and availability of our products, or failure to prevent software bugs, to the satisfaction of our clients or the health and safety of their patients, such events may harm our reputation and our ability to retain existing clients, and negatively affect our clients and their patients.
Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security and availability of our products, or failure to prevent software bugs, to the satisfaction of our clients or the health and safety of their patients, such events may harm our reputation and our ability to retain existing clients, and negatively affect our clients and their patients.
If implementation periods are extended, our revenue cycle will be delayed and our financial condition may be adversely affected. In addition, cancellation of any implementation after it has begun may involve loss to us of time, effort and expenses invested in the cancelled implementation process and lost opportunity for implementing paying clients in that same period of time.
If implementation periods are 23 extended, our revenue cycle will be delayed and our financial condition may be adversely affected. In addition, cancellation of any implementation after it has begun may involve loss to us of time, effort and expenses invested in the cancelled implementation process and lost opportunity for implementing paying clients in that same period of time.
We continue to invest in more robust technology and resources to manage those reporting requirements. Implementing the appropriate changes to our internal controls may distract our officers and employees, result in substantial costs and require significant time to complete. Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results.
We continue to invest in more robust technology and resources to manage our reporting requirements. Implementing the appropriate changes to our internal controls may distract our officers and employees, result in substantial costs and require significant time to complete. Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results.
We may, over time, increase our investment in protecting our intellectual property through additional trademark, patent and other intellectual 31 property filings that could be expensive and time-consuming. Effective trademark, trade-secret and copyright protection is expensive to develop and maintain, both in terms of initial and ongoing registration requirements and the costs of defending our rights.
We may, over time, increase our investment in protecting our intellectual property through additional trademark, patent and other intellectual property filings that could be expensive and time-consuming. Effective trademark, trade-secret and copyright protection is expensive to develop and maintain, both in terms of initial and ongoing registration requirements and the costs of defending our rights.
If we cannot implement our solutions for clients or resolve any technical issues in a timely manner, we may incur costs in the form of service credits or other remedial steps and/or lose clients, and our reputation may be harmed. 26 Our clients utilize a variety of data formats, applications and infrastructure and we must support our clients’ data formats.
If we cannot implement our solutions for clients or resolve any technical issues in a timely manner, we may incur costs in the form of service credits or other remedial steps and/or lose clients, and our reputation may be harmed. Our clients utilize a variety of data formats, applications and infrastructure and we must support our clients’ data formats.
Further, any changes in the taxation of our activities, including certain proposed changes in U.S. tax laws, may increase our effective tax rate and adversely affect our financial position and results of operations. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period.
Further, any changes in the taxation of our operations, including certain proposed changes in U.S. tax laws, may increase our effective tax rate and adversely affect our financial position and results of operations. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period.
Our healthcare services clients often require specific features or functions unique to their organizational structure, which, at a time of significant growth or during periods of high demand, may strain our implementation capacity and hinder our ability to successfully implement our solutions for our clients in a timely manner.
Our healthcare services clients often 20 require specific features or functions unique to their organizational structure, which, at a time of significant growth or during periods of high demand, may strain our implementation capacity and hinder our ability to successfully implement our solutions for our clients in a timely manner.
If we fail to comply with the applicable requirements of card networks, they could seek to fine us, suspend 30 us or terminate our payment facilitator status. If our clients or sales partners incur fines or penalties that we cannot collect from them, we may have to bear the cost of such fines or penalties.
If we fail to comply with the applicable requirements of card networks, they could seek to fine us, suspend us or terminate our payment facilitator status. If our clients or sales partners incur fines or penalties that we cannot collect from them, we may have to bear the cost of such fines or penalties.
While HIPAA does not create a private right of action that would allow individuals to sue in civil court for HIPAA violations, its standards have been used as the basis for the duty of care in state civil suits, such as those for recklessness in misusing individuals’ health information.
While HIPAA does not create a private right of action that would allow individuals to sue in civil court, its standards have been used as the basis for the duty of care in state civil suits, such as those for recklessness in misusing individuals’ health information.
If we are subject to 35 investigation or litigation related to an alleged violation of HIPAA, then we may elect to resolve the matter through a settlement. Such settlement could require payment of a civil penalty or damages, corrective action and/or monitoring of our business by a third party.
If we are subject to investigation or litigation related to an alleged violation of HIPAA, then we may elect to resolve the matter through a settlement. Such settlement could require payment of a civil penalty or damages, corrective action and/or monitoring of our business by a third party.
We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors. It is difficult to predict client and patient demand for technical support services, and if client or patient demand increases significantly, we may be unable to provide satisfactory support services to our clients.
We also may be 25 unable to modify the format of our support services to compete with changes in support services provided by competitors. It is difficult to predict client and patient demand for technical support services, and if client or patient demand increases significantly, we may be unable to provide satisfactory support services to our clients.
Further, our clients may expect us to comply with more stringent privacy, data storage and data security requirements than those imposed by laws, 38 regulations or self-regulatory requirements, and we may be obligated contractually to comply with additional or different standards relating to our handling or protection of data.
Further, our clients may expect us to comply with more stringent privacy, data storage and data security requirements than those imposed by laws, regulations or self-regulatory requirements, and we may be obligated contractually to comply with additional or different standards relating to our handling or protection of data.
In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.
In addition, in the past, when the market price of a stock has been volatile, 47 holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.
If we require a third-party license, it may not be 33 available on reasonable terms or at all, and we may have to pay substantial royalties, upfront fees or grant cross-licenses to intellectual property rights for our products and services.
If we require a third-party license, it may not be available on reasonable terms or at all, and we may have to pay substantial royalties, upfront fees or grant cross-licenses to intellectual property rights for our products and services.
While we maintain insurance coverage, we cannot be certain that this coverage will prove to be adequate or will continue to be available on acceptable terms, if at all. Even unsuccessful claims could result in substantial costs and diversion of management resources.
While we maintain insurance coverage, we cannot be certain that this coverage will prove to be adequate or will continue to be available on acceptable terms, if at all. Even unsuccessful claims could result in substantial costs and diversion of management 33 resources.
Determination by a court or regulatory agency that our services did not comply also invalidate all or portions of some of our client contracts, could require us to change or terminate some portions of our business, could require us to refund portions of our services fees, and could have an adverse effect on our business.
Determination by a court or regulatory agency that our services did not comply may also invalidate all or portions of some of our client contracts, could require us to change or terminate some portions of our business, could require us to refund portions of our services fees, and could have an adverse effect on our business.
Despite our policies, procedures and compliance programs, our internal controls and compliance systems may not 42 be able to protect us from prohibited acts willfully committed by our employees, agents or business partners that would violate such applicable laws and regulations.
Despite our policies, procedures and compliance programs, our internal controls and compliance systems may not be able to protect us from prohibited acts willfully committed by our employees, agents or business partners that would violate such applicable laws and regulations.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, 46 could adversely affect our current and projected business operations and our financial condition and results of operations.
There is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter risks associated with employees and service providers accessing company data and systems remotely.
There is no guarantee that the data security and privacy 22 safeguards we have put in place will be completely effective or that we will not encounter risks associated with employees and service providers accessing company data and systems remotely.
We typically enter into annual contracts with our clients, which have a stated initial term of one year and automatically renew for one-year subsequent terms. Most of our clients have no obligation to renew their subscriptions for our solutions after the initial term expires.
We typically enter into annual contracts with our clients, which have a stated initial term of one year and automatically renew for one-year subsequent terms. Our clients have no obligation to renew their subscriptions for our solutions after the initial term expires.
We expect to derive a significant portion of our revenue from renewal of existing clients’ contracts and sales of additional applications and services to existing clients. As part of our growth strategy, we have recently focused on expanding our services amongst current clients.
We expect to derive a significant portion of our revenue from renewal of existing clients’ contracts and sales of additional applications and services to existing clients. As part of our growth strategy, we have focused on expanding our services amongst current clients.
Export Administration Regulations require authorization for the export of certain encryption items, including by a license, a license exception or other appropriate government authorizations. Such solutions may also be subject to certain regulatory reporting requirements.
Export Administration Regulations require authorization for the export of certain encryption items, including by a license, a license exception or other appropriate government authorizations. Such solutions may also be subject to certain regulatory 41 reporting requirements.
If our existing clients are not satisfied with our services, it could have a material adverse effect on our business, financial condition, results of operations and reputation. 25 We depend on our existing clients’ satisfaction with our products and services.
If our existing clients are not satisfied with our services, it could have a material adverse effect on our business, financial condition, results of operations and reputation. We depend on our existing clients’ satisfaction with our products and services.
Market estimates and growth forecasts that we disclose are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates and forecasts relating to the size and expected growth of the market for our services may prove to be inaccurate.
Market estimates and growth forecasts that we disclose are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates and forecasts relating to the size and expected growth of the markets for our services may prove to be inaccurate.
The departure and replacement of one or more of our executive officers or other key employees would likely involve significant time and costs, may significantly delay or prevent the achievement of our business objectives and could materially harm our business.
The departure and replacement of one or more of our executive officers or 26 other key employees would likely involve significant time and costs, may significantly delay or prevent the achievement of our business objectives and could materially harm our business.
We also integrate into our proprietary applications and use third-party software to maintain and enhance, among other things, content generation and delivery, and to support our technology infrastructure. Some of this software is proprietary and some is open source software.
We integrate into our proprietary applications and use third-party software to maintain and enhance, among other things, content generation and delivery, and to support our technology infrastructure. Some of this software is proprietary and some is open source software.
Most of these licenses can be renewed only by mutual consent and may be terminated if we breach the terms of the license and fail to cure the breach within a specified period of time.
Most of these licenses can be 31 renewed only by mutual consent and may be terminated if we breach the terms of the license and fail to cure the breach within a specified period of time.
Even though we may have contractual protections with such vendors, contractors, or other organizations, notifications and follow-up actions related to a cybersecurity breach could impact our reputation, cause us to incur significant costs, including legal expenses, harm customer confidence, expose us to government enforcement action, hurt our expansion into new markets, cause us to incur remediation costs, or cause us to lose existing customers.
Even though we may have contractual protections with such vendors, contractors, or other organizations, notifications and follow-up actions related to a cybersecurity incident or data breach could impact our reputation, cause us to incur significant costs, including legal expenses, harm customer confidence, expose us to government enforcement action, hurt our expansion into new markets, cause us to incur remediation costs, or cause us to lose existing customers.
We attempt to limit by contract our liability for damages and to require that our clients assume responsibility for medical care and 34 approve key system rules, protocols and data.
We attempt to limit by contract our liability for damages and to require that our clients assume responsibility for medical care and approve key system rules, protocols and data.
In addition, a partner or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on the Company, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution.
In addition, a partner or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on us, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution.
In addition, contractual obligations and in the future, legislation may limit, forbid or regulate the use or transmission of health information outside of the United States or across other national borders. These developments, if adopted, could render our use of Canadian employees and other non-U.S. resources for work related to such data impracticable or substantially more expensive.
In addition, contractual obligations and in the future, legislation may limit, forbid or regulate the use or transmission of health information outside of the United States or across other national borders. These developments, if adopted, could render our use of Indian employees and other non-U.S. resources for work related to such data impracticable or substantially more expensive.
Non-compliance with applicable FDA requirements can result in, among other things, public warning 40 letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the FDA to grant marketing approvals, withdrawal of marketing approvals, a recommendation by the FDA to disallow us from entering into government contracts and criminal prosecutions.
Non-compliance with applicable FDA requirements can result in, among other things, public warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the FDA to grant marketing approvals, withdrawal of marketing approvals, criminal prosecutions or a recommendation by the FDA to disallow us from entering into government contracts.
The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws are not guarantees that we and our subcontractors will not be the victims of cybersecurity attacks, acts of vandalism or theft, computer viruses, misplaced or lost data, malfeasance, programming and human errors or other similar events.
The security measures that we and our third-party vendors and subcontractors have in place to ensure compliance with privacy and data protection laws are not guarantees that we and our subcontractors will not be the victims of cyber-attacks, acts of vandalism or theft, computer viruses, misplaced or lost data, malfeasance, programming and human errors or other similar events.
Any disruption in the network access, telecommunications or co-location services provided by third-party providers or any failure of or by third-party providers’ systems or our own systems to handle current or higher volume of use could significantly harm our business. We exercise limited control over our third-party suppliers, which increases our vulnerability to problems with services they provide.
Any disruption in the network access, telecommunications or co-location services provided by third-party providers or any failure of or by third-party providers’ systems or our own systems to handle current or higher volume of use could significantly harm our business. We exercise limited control over third-parties, which increases our vulnerability to problems with services they provide.
A key element of how we manage our growth is our ability to scale our 19 capabilities and satisfactorily implement solutions for our clients’ needs.
A key element of how we manage our growth is our ability to scale our capabilities and satisfactorily implement solutions for our clients’ needs.
In the event such methods become popular among consumers, any failure to timely integrate emerging payment methods (such as ApplePay) into our software, anticipate client behavior changes, or contract with payment processing partners that support such emerging payment technologies could reduce the attractiveness of our payment processing services, potentially resulting in a corresponding loss of revenue.
In the event such methods become popular among consumers, any failure to timely integrate emerging payment methods into our software, anticipate client behavior changes, or contract with payment processing partners that support such emerging payment technologies could reduce the attractiveness of our payment processing services, potentially resulting in a corresponding loss of revenue.
Treasury Department’s Office of Foreign Assets Control (OFAC) prohibit or restrict transactions to or from, and dealings with specified countries and territories, their governments, and in certain circumstances, with individuals and entities that are located in or nationals of those countries, and other sanctioned persons, including specially designated nationals, narcotics traffickers and terrorists or terrorist organizations.
Treasury Department’s Office of Foreign Assets Control (“OFAC”) prohibit or restrict transactions to or from, and dealings with specified countries and territories, their governments, and in certain circumstances, with individuals and entities that are located in or nationals of those countries, and other sanctioned persons, including specially designated nationals, narcotics traffickers and terrorists or terrorist organizations.
In addition, volatility or lack of performance in our stock price may affect our ability to attract replacement should key personnel depart. We have made, and may in the future make, acquisitions and investments which may be difficult to integrate, divert management resources, result in unanticipated costs or dilute our stockholders.
In addition, volatility or lack of performance in our stock price may affect our ability to attract replacements should key personnel depart. We have made, and may in the future make, acquisitions and investments which may be difficult to integrate, divert management resources, result in unanticipated costs or dilute our stockholders.
Further, the security systems in place at our employees’ and service providers’ offices and homes may be less secure than those used in our offices, and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from their offices, homes and other remote locations, we may be subject to increased cybersecurity risk, which could expose us to risks of data or financial loss, and could disrupt our business operations.
Further, the security systems in place at our employees’ and service providers’ offices and homes may be less secure than those used in a corporate office, and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from their offices, homes and other remote locations, we may be subject to increased cybersecurity risk, which could expose us to risks of data or financial loss, and could disrupt our business operations.
The principal assumptions relating to our market opportunity include the number of healthcare services organizations currently taking appointments, the amount of annual out of pocket consumer spend for healthcare-related services, and the amount of annual spend by life sciences and payer companies on direct communications with patients at the point of care.
The principal assumptions relating to our market opportunity include the number of healthcare services organizations currently taking appointments, the amount of annual out of pocket consumer spend for healthcare-related services, and the amount of annual spend by life sciences companies and other organizations on direct communications with patients at the point of care.
Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured and adversely impact our ability to attract directors and officers.
In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and adversely impact our ability to attract directors and officers.
We have in place systems and processes that are designed to protect our data, prevent data loss, disable undesirable accounts and activities on our platform and prevent or detect security breaches, however, we cannot assure you that such measures will provide absolute security.
We have in place systems and processes that are designed to protect our data, prevent data loss, disable undesirable accounts and activities on our platform and prevent or detect cybersecurity incidents or data breaches, however, we cannot assure you that such measures will provide absolute security.
We also expect that there will continue to be new or amended laws, regulations, standards and obligations proposed and enacted in various jurisdictions. Many countries around the world have enacted comprehensive privacy and data protection laws that can impact our business.
We expect that there will continue to be new or amended laws, regulations, standards and obligations proposed and enacted in various foreign jurisdictions. Many countries around the world have enacted comprehensive privacy and data protection laws that can impact our business.
Although we believe our tax practices and provisions are reasonable, the final determination of tax audits and any related litigation, changes in the taxation of our activities and proposed changes in tax laws could cause the ultimate settlement of our tax liabilities to be materially different from our historical tax practices, provisions and accruals.
Although we believe our tax practices and provisions are reasonable, the final determination of tax audits and any related litigation, changes in the taxation of our operations and proposed changes in tax laws could cause the ultimate settlement of our tax liabilities to be materially different from our historical tax practices, provisions and accruals.
Some of the important factors that could cause our revenues and operating results to fluctuate from quarter to quarter include: • the extent to which our products and services achieve or maintain market acceptance; • our ability to introduce new products and services and enhancements to our existing products and services on a timely basis; • new competitors and the introduction of enhanced products and services from new or existing competitors; • the length of our contracting and implementation cycles; • the financial condition of our current and potential clients; • our ability to integrate our solutions with the systems utilized by our healthcare services clients, including but not limited to, EHR and PM systems; • changes in client budgets and procurement policies; • patients' desires to receive communications from Phreesia and/or our partners, the extent to which they opt-in to such communications, and our ability to deliver a consistent volume of such communications; • amount and timing of our investment in research and development activities and other areas of our business; • technical difficulties or interruptions in our services; • our ability to hire and retain qualified personnel, including the rate of expansion of our sales force; • changes in the regulatory environment related to healthcare; • regulatory compliance costs; 21 • the timing, size and integration success of recent and potential future acquisitions; • unforeseen legal expenses, including litigation and settlement costs; and • buying patterns of our clients and the related seasonality impacts on our business.
Some of the important factors that could cause our revenues and operating results to fluctuate from quarter to quarter include: • the extent to which our products and services achieve or maintain market acceptance; • our ability to introduce new products and services and enhancements to our existing products and services on a timely basis; • new competitors and the introduction of enhanced products and services from new or existing competitors; • the length of our contracting and implementation cycles; • the financial condition of our current and potential clients; • our ability to integrate our solutions with the systems utilized by our healthcare services clients, including but not limited to, EHR and PM systems; • changes in client budgets and procurement policies; • patients' desires to receive communications from Phreesia and/or our partners, the extent to which they opt-in to such communications, and our ability to deliver a consistent volume of such communications; • amount and timing of our investment in research and development activities and other areas of our business; • technical difficulties or interruptions in our services, like the one we experienced with ConnectOnCall in 2024; • our ability to hire and retain qualified personnel, including the rate of expansion of our sales force; • changes in the regulatory environment related to healthcare; • regulatory compliance costs; • the timing, size and integration success of recent and potential future acquisitions; • unforeseen legal expenses, including litigation and settlement costs; and • buying patterns of our clients and the related seasonality impacts on our business.
These activities are regulated by legislation such as the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003. Any failure by us to comply fully with the CAN-SPAM Act may leave us subject to substantial fines and penalties.
These activities are regulated by legislation such as the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”). Any failure by us to comply fully with the CAN-SPAM Act may leave us subject to substantial fines and penalties.
Further, we could be subject to putative class action lawsuits alleging violations of the TCPA, state mini-TCPA laws and other similar state laws. Our call and SMS texting services are potential sources of risk for class action lawsuits and liability for our Company.
Further, we could be subject to putative class action lawsuits alleging violations of the TCPA, state mini-TCPA laws and other similar state laws. Our call and SMS texting services are potential sources of risk for class action lawsuits and liability for us.
Broad-based business or economic disruptions or global health concerns could materially and adversely impact our business and results of operations due to, among other factors: • a general decline in business activity; • a potentially disproportionate impact on the healthcare services clients with whom we contract; • disruptions to our supply chains and our third-party vendors, partners, and suppliers; • difficulty accessing the capital and credit markets on favorable terms, or at all, and a severe disruption and instability in the global financial markets, or deteriorations in credit and financing conditions that could affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and • social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.
Business or economic disruptions or global health concerns could harm our business and increase our costs and expenses. 27 Broad-based business or economic disruptions or global health concerns could materially and adversely impact our business and results of operations due to, among other factors: • a general decline in business activity; • a potentially disproportionate impact on the healthcare services clients with whom we contract; • disruptions to our supply chains and our third-party vendors, partners, and suppliers; • difficulty accessing the capital and credit markets on favorable terms, or at all, and a severe disruption and instability in the global financial markets, or deteriorations in credit and financing conditions that could affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and • social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.
Our software, content and services are used to assist medical groups, health systems and payers with managing the patient intake process and to empower patients and healthcare organizations as they navigate the challenges of an evolving healthcare system.
Our software, content and services are used to assist medical groups, health systems and other organizations with managing the patient intake process and to empower patients and healthcare organizations as they navigate the challenges of an evolving healthcare system.
Notably, Québec’s Act respecting the protection of personal information in the private sector, or the Private Sector Act, was amended by Bill 64, an Act to modernize legislative provisions as regards the protection of personal information, which introduced major amendments to the Private Sector Act, notably, to impose significant and stringent new obligations on Québec businesses while increasing the powers of Quebec’s supervisory authority.
Notably, Québec’s Act respecting the protection of personal information in the private sector (the “Private Sector Act”), was amended by Bill 64, an Act to modernize legislative provisions as regards the protection of personal information, which introduced major amendments to the Private Sector Act, notably, to impose significant and stringent new obligations on Québec businesses while increasing the powers of Quebec’s supervisory authority.
Numerous complex federal and state laws and regulations govern the collection, use, disclosure, storage and transmission of personally identifiable information, including protected health information. State laws may be even more restrictive and not preempted by HIPAA,(as defined below), and may be subject to varying interpretations by the courts and government agencies.
Numerous complex federal and state laws and regulations govern the collection, use, disclosure, storage and transmission of personally identifiable information, including protected health information. State laws may be even more restrictive and not preempted by HIPAA, and may be subject to varying interpretations by the courts and government agencies.
Further, the security systems in place at our employees’ homes may be less secure than those used in our offices, 23 and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from home, we may be subject to increased cybersecurity risk, which could expose us to risks of data or financial loss and could disrupt our business operations.
Further, the security systems in place at our employees’ homes may be less secure than those used in a corporate office, and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from home, we may be subject to increased cybersecurity risk, which could expose us to risks of data or financial loss and could disrupt our business operations.
For clients that decide to enter into a contract with us, most of these contracts may provide for a preliminary trial period where a subset of healthcare services locations from the client is granted access to our solutions. Following any such trial period, we aim to increase the number of healthcare services locations within the client that utilize our solutions.
For clients that decide to enter into a contract with us, most of these contracts may provide for a preliminary trial period where a subset of the client’s healthcare services locations is granted access to our solutions. Following any such trial period, we aim to increase the number of the client’s healthcare services locations that utilize our solutions.
Our operating results have in the past and may continue to fluctuate significantly and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
Our operating results have fluctuated and may continue to fluctuate significantly, and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
Our systems and operations are vulnerable to damage or interruption from natural disasters or man-made problems, such as earthquakes, floods, fires, political unrest, acts of terrorism, armed conflict or war (such as the current Russian invasion of Ukraine and the conflict in the Middle East), power loss, break-ins, hardware or software failures, telecommunications failures, computer viruses or other attempts to harm our systems and similar events.
Our systems and operations, and those of our third-party providers, are vulnerable to damage or interruption from natural disasters or man-made problems, such as earthquakes, floods, fires, political unrest, acts of terrorism, armed conflict or war (such as the current Russian invasion of Ukraine and the conflict in the Middle East), power loss, break-ins, hardware or software failures, telecommunications failures, computer viruses, cyber-attacks or other attempts to harm our systems and similar events.
In addition, we must attract, train and retain a significant number of highly skilled employees, including sales and marketing personnel, client support personnel, professional services personnel, software engineers, technical personnel and management personnel, and the availability of such personnel, in particular software engineers, may be constrained.
In addition, we must attract, train and retain a significant number of highly skilled employees in the U.S., India and Canada, including sales and marketing personnel, client support personnel, professional services personnel, software engineers, technical personnel and management personnel, and the availability of such personnel, in particular software engineers, may be constrained.
Penalties can vary significantly depending on a number of factors, such as whether the Business Associate’s failure to comply was due to willful neglect. State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states.
Penalties can vary significantly depending on a number of factors, such as whether the Business Associate’s failure to comply was due to willful neglect. State attorneys general also have the right to prosecute HIPAA violations in their states.
As a result, achieving a high client retention rate, expanding within clients and selling additional applications and services are critical to our future business, revenue growth and results of operations.
As a result, achieving a high client retention rate and selling additional applications and services to existing clients are critical to our future business, revenue growth and results of operations.
For example, technologies in our employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees and service providers to be more limited or less reliable than in our offices.
For example, technologies in our employees’ homes may not be as robust as in a corporate office and could cause the networks, information systems, applications, and other tools available to employees and service providers to be more limited or less reliable than in a corporate office.
As of January 31, 2023, we had U.S. federal and state net operating loss carryforwards ("NOLs") of $599.0 million due to prior period losses, which, subject to the following discussion, are generally available to be carried forward to offset a portion of our future taxable income, if any, until such NOLs are used or expire.
As of January 31, 2025, we had U.S. federal and state net operating loss carryforwards ("NOLs") of $596.5 million due to prior period losses, which, subject to the following discussion, are generally available to be carried forward to offset a portion of our future taxable income, if any, until such NOLs are used or expire.
Likewise, if any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment as well.
Likewise, if any of the healthcare providers or entities with whom we do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
A reduction in the available population of patients to engage or a decline in patient opt-in rates or a lack of relevant content could lead to a decrease in our Network solutions revenue, which could harm our business, financial condition and results of operations.
A reduction in the available population of patients to engage or a lack of relevant content could lead to a decrease in our Network solutions revenue, which could harm our business, financial condition and results of operations.
Like all internet services, our service is vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks or similar disruptions from unauthorized use of our and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access of data.
Like all internet services, our service is vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, wrongful or inadvertent conduct by insider employees or vendors, or other attacks or similar disruptions from unauthorized use of our and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access of data.
If an actual or perceived breach of security occurs to our systems or a third-party’s systems, we also could be required to expend significant resources to mitigate the breach of security, pay any applicable fines and address matters related to any such breach, including notifying users or regulators, and address reputational harm.
If an actual or perceived cybersecurity incident or data breach occurs to our systems or a third-party’s systems, we also could be required to expend significant resources to mitigate the breach of security, pay any applicable fines and address matters related to any such breach, including notifying users or regulators, defend against claims related to the breach and address reputational harm.
Federal and state consumer protection laws are increasingly being applied by the United States Federal Trade Commission and states’ attorneys general to regulate the collection, use, storage and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
Federal and state consumer protection laws are increasingly being applied by the FTC and states’ attorneys general to regulate the collection, use, storage and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
These laws will impact, among other things, our clinical research, proposed sales, marketing and educational programs, and other interactions with healthcare professionals. For more information regarding the risks related to these laws and regulations please see “ Business – Regulatory Matters – U.S.
These laws will impact, among other things, proposed sales, marketing and educational programs, and other interactions with healthcare providers. For more information regarding the risks related to these laws and regulations please see “ Business – Regulatory Matters – U.S.
In addition, recent macroeconomic challenges (including high levels of inflation and high interest rates) and the tight labor market continue to adversely affect workforces, organizations, governments, clients, economies, and financial markets globally and have disrupted the normal operations of many businesses, including our business, making it potentially very difficult for our clients and us to accurately forecast and plan future business activities.
In addition, macroeconomic challenges (including changes in inflation and interest rates) and a tight labor market have adversely affected, and may continue to adversely affect, workforces, organizations, governments, clients, economies, and financial markets globally and have disrupted the normal operations of many businesses, including our business, making it potentially very difficult for our clients and us to accurately forecast and plan future business activities.
There is no guarantee that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
There is no guarantee that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, stabilize financial institutions through access to loans or other liquidity or support programs, or that they would do so in a timely fashion.
Some of our new-client set-up projects are complex and require a lengthy delay and significant implementation work, including to educate prospective clients about the uses and benefits of our solutions. Each customer’s situation is different, and unanticipated difficulties and delays may arise as a result of failure by us or by the client to meet our respective implementation responsibilities.
Some of our new client set-up projects are complex and require a considerable time commitment and significant implementation work, including educating prospective clients about the uses and benefits of our solutions. Each customer’s situation is different, and unanticipated difficulties and delays may arise as a result of failure by us or by the client to meet our respective implementation responsibilities.
Widespread investor concerns regarding the U.S. or international financial systems could also result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
Further, investor concerns regarding domestic or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s Chief Technology Officer is principally responsible for day-to-day management of the Company’s cybersecurity risk management program. The Chief Technology Officer reports directly to the Chief Executive Officer and works in coordination with the other members of the leadership team, which includes our General Counsel, Chief Operating Officer, and Chief Financial Officer.
Biggest changeThe Chief Technology Officer reports directly to the Chief Executive Officer and works in coordination with the other members of the leadership team, which includes our General Counsel, Chief Operating Officer, and Chief Financial Officer. The Chief Technology Officer oversees a team of security professionals, which is led by the Chief Information 50 Security Officer.
The Board and the Audit Committee each receive regular presentations and reports from the Company’s Chief Technology Officer and/or General Counsel on cybersecurity risks, which address a wide range of topics including, among others, recent developments, evolving standards, vulnerability assessments, third-party and independent 51 reviews, the threat environment, technological trends and information security considerations arising with respect to the Company’s peers and third party service providers.
The Board and the Audit Committee each receive quarterly presentations and reports from the Company’s Chief Technology Officer and/or General Counsel on cybersecurity risks, which address a wide range of topics including, among others, recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to the Company’s peers and third party service providers.
The Company’s cybersecurity program utilizes a cross functional, multilayered approach designed to: (i) identify, prevent and mitigate cybersecurity threats to the Company; (ii) preserve the confidentiality, security and availability of the information that we collect and store; (iii) protect the Company’s intellectual property; (iv) maintain the confidence of our customers, clients and business partners; and (v) provide appropriate public disclosure and required notices of cybersecurity risks and incidents when required.
The Company’s cybersecurity program utilizes a cross functional, multilayered defense-in-depth approach designed to: (i) identify, prevent and mitigate cybersecurity threats to the Company; (ii) preserve the confidentiality, security and availability of the information that we collect and store; (iii) protect the Company’s intellectual property; (iv) maintain the confidence of our customers, clients and business partners; and (v) provide appropriate public disclosure and required notices of cybersecurity risks and incidents when required.
Item 1C. Cybersecurity 50 As a healthcare-focused company, we understand the importance of managing cybersecurity risks that we face and have established a cybersecurity risk management program as part of our enterprise risk management program.
Item 1C. Cybersecurity 49 As a healthcare-focused company, we understand the importance of managing cybersecurity risks that we face and have established a cybersecurity risk management program as part of our enterprise risk management program.
The Company’s Board of Directors (the “Board”) holds oversight responsibility over the Company’s enterprise risk management (“ERM”) program, which incorporates the Company’s cybersecurity risk management program.
The Company’s Board of Directors (the “Board”) maintains oversight responsibility over the Company’s enterprise risk management (“ERM”) program, which incorporates the Company’s cybersecurity risk management program.
However, like other companies in our industry, we and our third-party vendors may from time to time experience threats and security incidents that could affect our information or systems. See Item 1A “Risk Factors” in this Annual Report on Form 10-K for more information. Governance Phreesia takes a cross-functional approach to address the risks from cybersecurity threats.
However, like other companies in our industry, we and our third-party vendors have experienced and will likely experience threats and security incidents that could affect our information or systems. See Item 1A “Risk Factors” in this Annual Report on Form 10-K for more information. Governance Phreesia takes a cross-functional approach to address the risks from cybersecurity threats.
The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which regularly interacts with the Company’s ERM function, the Company’s Chief Technology Officer, who serves as the Company’s Security Officer, along with other members of management including the Senior Director of Security Engineering, the Chief Privacy Officer, and the compliance, audit, and risk teams.
The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which regularly interacts with the Company’s ERM function, the Company’s Chief Technology Officer, along with other members of management including the Chief Information Security Officer, the Chief Privacy Officer, and the compliance, audit, and risk teams.
The Chief Technology Officer oversees a team of security professionals, which is led by the Senior Director of Security Engineering. The security team includes approximately 40 security professionals, 25 of whom are security engineers. Other members of the team oversee and manage identity, risk, compliance and audit functions.
The security team includes approximately 36 security professionals, 25 of whom are security engineers. Other members of the team oversee and manage identity, risk, compliance and audit functions.
Added
The Company’s Chief Information Security Officer is principally responsible for day-to-day management of the Company’s cybersecurity risk management program and reports to the Chief Technology Officer. The Chief Information Security Officer has more than 15 years of cybersecurity experience, including leadership roles at four publicly traded companies.
Added
He is a Certified Information Systems Security Professional, holds a M.S. in Security Technologies from the University of Minnesota and is an alumnus of the FBI Citizen’s Academy.
Added
The Chief Technology Officer has served in various leadership roles in information technology and information security at the Company for over 14 years and holds a B.S. in computer science from Worcester Polytechnic Institute.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Biggest changeItem 3. Legal Proceedings From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. For further information regarding legal proceedings, refer to Note 11 - Commitments and contingencies in Part II - Item 8 in this Annual Report on Form 10-K. Item 4.
Removed
We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 52 PART II
Added
Mine Safety Disclosures Not applicable. 51 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph shows a comparison from July 18, 2019, the date on which our common stock first began trading the NYSE, through January 31, 2024 of the cumulative total stockholder return on our common stock, the NYSE Composite Index, S&P 500, and the S&P 1500 Composite Software and Services Index, each of which assumes an initial investment of $100 and reinvestment of all dividends.
Biggest changeThe following graph shows a comparison the period beginning on January 31, 2020 and ending on January 31, 2025 of the cumulative total stockholder return on our common stock, the NYSE Composite Index, S&P 500, and the S&P 1500 Composite Software and Services Index, each of which assumes an initial investment of $100 and reinvestment of all dividends.
Additionally, our ability to pay dividends on our common stock is limited by restrictions under the terms of the Capital One Credit Facility. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference.
Additionally, our ability to pay dividends on our common stock is limited by restrictions under the terms of the Capital One Credit Facility. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans in Part III - Item 12 of this Annual Report on Form 10-K is incorporated herein by reference.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 53 Dividend Policy We have never declared or paid any cash dividends on our common stock.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 52 Dividend Policy We have never declared or paid any cash dividends on our common stock.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended January 31, 2024 that were not previously reported on a Current Report on Form 8-K. Issuer Purchases of Equity Securities Not applicable. Use of Proceeds from Sales of Registered Securities Not applicable. Item 6. Reserved Not applicable. 54
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended January 31, 2025 that were not previously reported on a Current Report on Form 8-K. Issuer Purchases of Equity Securities Not applicable. Use of Proceeds from Sales of Registered Securities Not applicable. Item 6. Reserved Not applicable. 53
Stockholders We had approximately 42 stockholders of record as of March 15, 2024; however, because many of our outstanding shares are held in accounts with brokers and other institutions, we believe we have more beneficial owners.
Stockholders We had approximately 37 stockholders of record as of March 13, 2025; however, because many of our outstanding shares are held in accounts with brokers and other institutions, we believe we have more beneficial owners.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePayment facilitator volume is a major driver of our payment processing revenue. 58 Results of operations The following tables set forth our results of operations for the periods presented and as a percentage of revenue for those periods: For the fiscal years ended January 31, For the fiscal years ended January 31, (in thousands) 2024 2023 2024 2023 Revenue Subscription and related services $ 165,436 $ 128,975 46 % 46 % Payment processing fees 94,610 78,368 27 % 28 % Network solutions 96,253 73,567 27 % 26 % Total revenues 356,299 280,910 100 % 100 % Expenses Cost of revenue (excluding depreciation and amortization) 61,025 58,944 17 % 21 % Payment processing expense 62,986 50,323 18 % 18 % Sales and marketing 147,008 151,263 41 % 54 % Research and development 112,346 91,244 32 % 32 % General and administrative 79,926 80,384 22 % 29 % Depreciation 17,584 17,988 5 % 6 % Amortization 11,903 7,316 3 % 3 % Total expenses 492,778 457,462 138 % 163 % Operating loss (136,479) (176,552) (38) % (63) % Other income (expense), net 44 (175) — % — % Loss on extinguishment of debt (1,118) — — % — % Interest income, net 2,211 1,064 1 % — % Total other income, net 1,137 889 — % — % Loss before provision for income taxes (135,342) (175,663) (38) % (63) % Provision for income taxes (1,543) (483) — % — % Net loss $ (136,885) $ (176,146) (38) % (63) % Components of statements of operations Revenue We generate revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry.
Biggest changeResults of operations The following tables set forth our results of operations for the periods presented and as a percentage of revenue for those periods: For the fiscal years ended January 31, For the fiscal years ended January 31, (in thousands) 2025 2024 2025 2024 Revenue Subscription and related services $ 196,510 $ 165,436 47 % 46 % Payment processing fees 101,740 94,610 24 % 27 % Network solutions 121,563 96,253 29 % 27 % Total revenues 419,813 356,299 100 % 100 % Expenses Cost of revenue (excluding depreciation and amortization) 66,227 61,025 16 % 17 % Payment processing expense 68,707 62,986 16 % 18 % Sales and marketing 121,129 147,008 29 % 41 % Research and development 117,364 112,346 28 % 32 % General and administrative 76,597 79,926 18 % 22 % Depreciation 14,183 17,584 3 % 5 % Amortization 13,703 11,903 3 % 3 % Total expenses 477,910 492,778 114 % 138 % Operating loss (58,097) (136,479) (14) % (38) % Other income, net 1,956 44 — % — % Loss on extinguishment of debt — (1,118) — % — % Interest income, net 330 2,211 — % 1 % Total other income, net 2,286 1,137 1 % — % Loss before provision for income taxes (55,811) (135,342) (13) % (38) % Provision for income taxes (2,716) (1,543) (1) % — % Net loss $ (58,527) $ (136,885) (14) % (38) % Components of consolidated statements of operations Revenue We generate revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry.
We define Adjusted EBITDA as net income or loss before interest income (expense), net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense, loss on extinguishment of debt and other income (expense) net. We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.
We define Adjusted EBITDA as net income or loss before interest income, net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense, loss on extinguishment of debt and other income, net. We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.
Investing activities During the fiscal year ended January 31, 2024, net cash used in investing activities was $39.7 million, including $19.3 million of cash paid for capitalized internal-use software, $14.6 million of cash paid for acquisitions, net of cash acquired, as well as well as $5.8 million of purchases of property and equipment.
During the fiscal year ended January 31, 2024, net cash used in investing activities was $39.7 million, including $19.3 million of cash paid for capitalized internal-use software, $14.6 million of cash paid for acquisitions, net of cash acquired, as well as $5.8 million of purchases of property and equipment.
Financing activities During the fiscal year ended January 31, 2024, net cash used in financing activities was $17.1 million, primarily consisting of $12.2 million used for treasury stock to satisfy tax withholdings on stock compensation awards, $7.4 million used for principal payments on finance leases and financing arrangements, $2.1 million used for debt issuance costs, facility fees and debt extinguishment costs, and $1.3 million used for principal payments of acquisition-related liabilities, partially offset by $4.2 million in proceeds from our equity compensation plans and $1.7 million constructive financing related to our software financing arrangement.
During the fiscal year ended January 31, 2024, net cash used in financing activities was $17.1 million, primarily consisting of $12.2 million used for treasury stock to satisfy tax withholdings on stock compensation awards, $7.4 million used for principal payments on finance leases and financing arrangements, $2.1 million used for debt issuance costs, facility fees and debt extinguishment costs, and $1.3 million used for principal payments of acquisition-related liabilities, partially offset by $4.2 million in proceeds from our equity compensation plans and $1.7 million constructive financing related to our software financing arrangement.
For a reconciliation of Adjusted EBITDA to net loss and a reconciliation of free cash flow to net cash used in operating activities, and for more information as to how we define and calculate such measures, see the section below titled “Non-GAAP financial measures.” Overview We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care.
For a reconciliation of Adjusted EBITDA to net loss and a reconciliation of free cash flow to net cash provided by (used in) operating activities, and for more information as to how we define and calculate such measures, see the section below titled “Non-GAAP financial measures.” Overview We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care.
Some of these limitations are as follows: • Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) interest (income) expense, net; and • Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure. 64 Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results.
Some of these limitations are as follows: • Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) interest income, net; and • Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure. 62 Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results.
We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors. • Payment facilitator volume percentage .
We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment 56 facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors. • Payment facilitator volume percentage .
Our sales force executes on these qualified sales leads, partnering with sales enablement and client services to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time.
Our sales force executes on these qualified sales leads, partnering with our sales enablement and client services functions to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time.
To the extent we charge in an alternative manner with larger enterprise healthcare services clients, we expect that such a pricing model will recur and, combined with our per healthcare services client subscription fees, will increase as a percentage of our total revenue.
To the extent we charge in an alternative manner with larger enterprise healthcare services 57 clients, we expect that such a pricing model will recur and, combined with our per healthcare services client subscription fees, will increase as a percentage of our total revenue.
Cash and cash equivalents consist of money market funds and cash on deposit. We believe that our existing cash and cash equivalents, along with cash generated in the normal course of business, will be sufficient to meet our needs for at least the next 12 months.
Cash and cash equivalents consist of money market mutual funds and cash on deposit. We believe that our existing cash and cash equivalents, along with cash generated in the normal course of business, will be sufficient to meet our needs for at least the next 12 months.
Depreciation Depreciation represents depreciation expense for PhreesiaPads and Arrivals Kiosks, data center and other computer hardware, purchased computer software, furniture and fixtures and leasehold improvements. Amortization Amortization primarily represents amortization of our capitalized internal-use software related to our solutions as well as amortization of acquired intangible assets.
Depreciation Depreciation represents depreciation expense for PhreesiaPads and Arrivals Kiosks, data center and other computer hardware, purchased computer software, furniture and fixtures and leasehold improvements. 58 Amortization Amortization primarily represents amortization of our capitalized internal-use software related to our solutions as well as amortization of acquired intangible assets.
Refer to Note 6 - Finance leases and other debt, Note 10 - Leases and Note 11 - Commitments and contingencies in Part II - Item 8 of this Annual Report on Form 10-K for additional information on cash requirements for leases, financing arrangements and contractual purchase commitments. 67 Critical accounting policies and estimates The preparation of the consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions.
Refer to Note 6 - Finance leases and other debt, Note 10 - Leases and Note 11 - Commitments and contingencies in Part II - Item 8 of this Annual Report on Form 10-K for additional information on cash requirements for leases, financing arrangements and contractual purchase commitments. 65 Critical accounting policies and estimates The preparation of the consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions.
However, as we do not typically transfer our performance obligations on a standalone basis, but rather we transfer bundles of performance 68 obligations, we use an adjusted market assessment approach to estimate the price a customer would be willing to pay for our performance obligations using historical price information as priced in previous bundled contracts.
However, as we do not typically transfer our performance obligations on a standalone basis, but rather we transfer bundles of performance 66 obligations, we use an adjusted market assessment approach to estimate the price a customer would be willing to pay for our performance obligations using historical price information as priced in previous bundled contracts.
Stock-based compensation for market-based performance stock units ("PSUs") We granted market-based PSUs during fiscal 2022, 2023 and 2024. PSUs vest in between 0% and 220% of the number of PSUs originally granted based on our total stockholder return ("TSR"), relative to a peer group of companies on the Russell 3000 stock index.
Stock-based compensation for market-based performance stock units ("PSUs") We granted market-based PSUs during fiscal 2023, 2024 and 2025. PSUs vest in between 0% and 220% of the number of PSUs originally granted based on our total stockholder return ("TSR"), relative to a peer group of companies on the Russell 3000 stock index.
We believe that there will not be significant changes to our estimates of variable consideration as of January 31, 2024. Principal vs Agent Considerations As part of our revenue recognition process, we evaluate whether we are the principal or agent for the performance obligations in our contracts with customers.
We believe that there will not be significant changes to our estimates of variable consideration as of January 31, 2025. Principal vs Agent Considerations As part of our revenue recognition process, we evaluate whether we are the principal or agent for the performance obligations in our contracts with customers.
In addition, we receive certain fees from healthcare services clients for professional services associated with our implementation services as well as travel and expense reimbursements, shipping and handling fees, sales of hardware (PhreesiaPads and Arrivals Kiosks), on-site support and training. 59 • Payment processing fees.
In addition, we receive certain fees from healthcare services clients for professional services associated with our implementation services as well as travel and expense reimbursements, shipping and handling fees, leasing and sales of hardware (PhreesiaPads and Arrivals Kiosks), on-site support and training. • Payment processing fees.
The increase in provision for income taxes relates primarily to an increase in Canadian income tax expense. Non-GAAP financial measures Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP.
The increase in provision for income taxes relates primarily to an increase in Canadian and Indian income tax expense. Non-GAAP financial measures Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP.
Please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended January 31, 2023 for a comparison of the year ended January 31, 2023 to the year ended January 31, 2022.
Please refer to Part II - Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended January 31, 2024 for a comparison of the year ended January 31, 2024 to the year ended January 31, 2023.
Recent geopolitical uncertainty resulting, in part, from military conflict between Russia and Ukraine and the conflict in the Middle East, as well as other macro-economic conditions, such as the impact of pandemics, increased interest rates, inflation in the cost of goods, services and labor, or a recession or an economic slowdown in the U.S. or internationally have contributed to significant volatility and declines in global financial markets.
Geopolitical uncertainty resulting, in part, from the military conflict between Russia and Ukraine and the conflict in the Middle East, as well as other macro-economic conditions, such as the impact of pandemics, changes in interest rates, inflation in the cost of goods, services and labor, or a recession or an economic slowdown in the U.S. or internationally, have contributed to significant volatility and declines in global financial markets.
Material Cash Requirements Our material cash requirements relate to human capital, contractual purchase commitments, payments on deferred consideration liabilities, leases and financing arrangements. Refer to Note 4 - Composition of certain financial statement accounts in Part II - Item 8 of this Annual Report on Form 10-K for additional information on accrued payroll related liabilities and deferred consideration liabilities.
Material Cash Requirements Our material cash requirements relate to human capital, contractual purchase commitments, leases and financing arrangements. Refer to Note 4 - Composition of certain financial statement accounts in Part II - Item 8 of this Annual Report on Form 10-K for additional information on accrued payroll related liabilities.
We derive revenue from subscription fees and related services generated from our healthcare services clients for access to our solutions, payment processing fees based on the levels of patient payment volume we process, and from fees from life sciences and payer clients for delivering direct communications to help activate, engage and educate patients about topics critical to their health.
We derive revenue from subscription fees and related services generated from our healthcare services clients for access to our solutions, payment processing fees based on the levels of patient payment volume we process, and from fees from life sciences clients and other organizations for delivering direct communications to help activate, engage and educate patients about topics critical to their health.
The new Capital One Credit Facility was entered into with Capital One, N.A., acting as administrative agent and replaces our previous senior secured revolving credit facility with Silicon Valley Bank, which we terminated the same date. We believe the new Capital One Credit Facility will give us additional financial flexibility through fiscal 2028.
The new Capital One Credit Facility was entered into with Capital One, N.A. (“Capital One”) acting as administrative agent and replaces our previous senior secured revolving credit facility with Silicon Valley Bank, which we terminated on the same date. We believe the Capital One Credit Facility will give us additional financial flexibility through fiscal 2028.
This coefficient is used to project the performance of our stock against our peers to estimate projected performance under the plan. • Expected volatility: For PSUs granted during the year ended January 31, 2024 and January 31, 2023, the expected volatility is based on the historical volatility of our stock price over a term commensurate with the simulation term assumption.
This coefficient is used to project the performance of our stock against our peers to estimate projected performance under the plan. • Expected volatility: For PSUs granted during the years ended January 31, 2025, 2024 and 2023, the expected volatility is based on the historical volatility of our stock price over a term commensurate with the simulation term assumption.
References to fiscal 2024 and 2023 refer to the fiscal years ended January 31, 2024 and 2023, respectively. Basis of Presentation This management's discussion and analysis discusses our financial condition and results of operations for the years ended January 31, 2024 and 2023.
References to fiscal 2025 and 2024 refer to the fiscal years ended January 31, 2025 and 2024, respectively. Basis of Presentation This management's discussion and analysis discusses our financial condition and results of operations for the years ended January 31, 2025 and 2024.
On August 11, 2023, we entered into an agreement to acquire 100% of the outstanding equity of Access for total consideration of $37.4 million, which included the issuance of 1,096,436 shares of our common stock to certain members of Access.
On August 11, 2023, we entered into an agreement to acquire 100% of the outstanding equity of Access eForms, LLC (“Access”) for total consideration of $37.4 million, which included the issuance of 1,096,436 shares of our common stock to certain members of Access.
Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. 69 In connection with the ConnectOnCall acquisition, we recorded deferred consideration liabilities within other current liabilities and other long-term liabilities for amounts payable to the selling shareholders in seven quarterly installments from December 2023 through June 2025.
Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. 67 In connection with the ConnectOnCall acquisition, we recorded deferred consideration liabilities within other current liabilities and other long-term liabilities for amounts payable to the selling shareholders in seven quarterly installments through June 2025.
We also generate revenue through our additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise. We have strong visibility into our business as the majority of our revenue is derived from recurring subscription fees and re-occurring payment processing fees.
We also generate revenue through our additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specialty and condition expertise. We have strong visibility into our business as the majority of our revenue is derived from recurring subscription fees and re-occurring payment processing fees.
We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups, and health systems as well as regional and national payers and other organizations that provide other types 55 of healthcare-related services.
We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups, and health systems as well as other organizations that provide other types of healthcare-related services.
Provision for income taxes Based upon our cumulative pre-tax losses in recent years and available evidence, we have determined that it is more likely than not that substantially all of our deferred tax assets as of January 31, 2024 will not be realized in the near term.
Provision for income taxes Based upon our cumulative pre-tax losses in recent years and available evidence, we have determined that it is more likely than not that substantially all of our U.S. deferred tax assets as of January 31, 2025 will not be realized in the near term.
PSUs granted during fiscal 2024, 2023 and 2022 vest in a maximum of 220%, 200% and 200% of the number of PSUs originally granted, respectively. We estimate the fair value of the PSUs using a Monte Carlo Simulation model which projects TSR for Phreesia and each member of the peer group over a performance period of approximately three years.
PSUs granted during fiscal 2025, 2024 and 2023 vest in a maximum of 220% of the number of PSUs originally granted. We estimate the fair value of the PSUs using a Monte Carlo Simulation model which projects TSR for Phreesia and each member of the peer group over a performance period of approximately three years.
We were in compliance with all covenants related to the Capital One Credit Facility as of January 31, 2024. We believe that our cash and cash equivalents along with cash generated in the normal course of business, are sufficient to fund our operations for at least the next 12 months.
We were in compliance with all covenants related to the Capital One Credit Facility as of January 31, 2025. We believe that our cash and cash equivalents along with cash generated in the normal course of business are sufficient to fund our operations for at least the next twelve months.
Credit and debit patient payment volume processed through our payment facilitator model represented 82% and 80% of our patient payment volume in fiscal 2024 and 2023, respectively. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions.
Credit and debit patient payment volume processed through our payment facilitator model represented 81% and 82% of our patient payment volume in fiscal 2025 and 2024, respectively. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions.
Capital One Facility On December 4, 2023, we entered into a new 5-year $50.0 million senior secured asset-based revolving credit facility ("Capital One Credit Facility") maturing in December 2028, which includes a swingline sub-limit of at least $5.0 million and a letter of credit sub-limit of at least $5.0 million.
Capital One facility In December 2023, we entered into a 5-year $50 million senior secured asset-based revolving credit facility ("Capital One Credit Facility") maturing in December 2028, which includes a swingline sub-limit of at least $5.0 million and a 63 letter of credit sub-limit of at least $5.0 million.
Financing agreements On June 8, 2023, we entered into a financing agreement to obtain financing for internal-use software and related software support. As of January 31, 2024, there was $3.1 million in outstanding principal and interest due under the agreement. The financing agreement requires us to pay $0.1 million per month for 36 months beginning August 2023.
Financing agreements In June 2023, we entered into a financing agreement to obtain financing for internal-use software and related software support. As of January 31, 2025, there was $1.9 million in outstanding principal and interest due under the agreement. The financing agreement requires us to pay $0.1 million per month for 36 months beginning August 2023.
Our total revenues consist of the following: • Subscription and related services. We primarily generate subscription fees from our healthcare services clients based on the number of healthcare services clients that subscribe to and utilize our solutions.
Our total revenue consists of the following: • Subscription and related services. We primarily generate subscription fees from our healthcare services clients based on the number of healthcare services clients that subscribe to and utilize our solutions.
Additionally, our relationships with healthcare services clients who subscribe to our technology give us the opportunity to engage with life sciences companies, health plans and other payer organizations, patient advocacy, public interest and other not-for-profit organizations who deliver direct communication to patients through our solutions.
Additionally, our relationships with healthcare services clients who subscribe to our technology give us the opportunity to engage with life sciences companies, government entities, patient advocacy, public interest and not-for-profit organizations who deliver direct communication to patients through our solutions.
The effective interest rate on the agreement is 10.5% per annum. Shares issued as consideration for acquisition On June 30, 2023, we entered into an agreement to acquire 100% of the outstanding equity of MediFind for total consideration of $8.9 million, which included the issuance of 150,786 shares of our common stock to certain MediFind stockholders.
The effective interest rate on the agreement is 10.5% per annum. Shares issued as consideration for acquisitions On June 30, 2023, we entered into an agreement to acquire 100% of the outstanding equity of Comsort, Inc. d/b/a MediFind (“MediFind”) for total consideration of $8.9 million, which included the issuance of 150,786 shares of our common stock to certain MediFind stockholders.
The increase was primarily driven by higher amortization of capitalized internal-use software development costs as well as amortization of intangible assets acquired during the current year.
The increase was primarily driven by higher amortization of capitalized internal-use software development costs as well as amortization of intangible assets acquired during fiscal 2024.
The primary uses of cash for operating activities are for payroll, payments to suppliers, payments for operating leases, as well as cash paid for interest on our finance leases and other financings and cash paid for various taxes.
The primary uses of cash for operating activities are for payroll, payments to suppliers, payments for operating leases, as well as cash paid for interest on our finance leases and other borrowings and cash paid for various sales, property and income taxes.
Our marketing team identifies customer profiles, develops content and deploys one-to-many communications to soften the market. This helps prepare our sales development team to outbound to prospects. The sales development team creates opportunities and works with the direct sales team to qualify those opportunities.
Our marketing team identifies customer profiles, develops content and deploys one-to-many communications to soften the market. This helps prepare our sales development team to engage with new prospective customers. The sales development team creates opportunities and works with the direct sales team to qualify those opportunities.
In addition, through Phreesia University (Phreesia’s in-house training program), events, client conferences and webinars, we help our healthcare services clients optimize their businesses and, as a result, support client retention. We also sell products and services to life sciences and payer organizations, healthcare advertising agencies and advocacy groups as well as advertising agencies through our direct sales and marketing teams.
In addition, through Phreesia University (Phreesia’s in-house training program), live and virtual events, we help our healthcare services clients optimize their businesses and, as a result, support client retention. We also sell products and services to life sciences and other organizations, healthcare advertising agencies, government entities and advocacy groups through our direct sales and marketing teams.
Our subscription and related services revenue from healthcare services organizations increased $36.5 million to $165.4 million for fiscal 2024, as compared to $129.0 million for fiscal 2023, primarily due to new healthcare services clients added in fiscal 2024 as well as expansion of and cross-selling to existing healthcare services clients. • Payment processing fees.
Our subscription and related services revenue from healthcare services organizations increased $31.1 million to $196.5 million for fiscal 2025, as compared to $165.4 million for fiscal 2024, primarily due to new healthcare services clients added in fiscal 2025 as well as expansion of and cross-selling to existing healthcare services clients. • Payment processing fees.
We generate revenue from life sciences and payer clients for delivering direct communications to patients. As we expand our healthcare services client base, we increase the number of new patients we can reach to deliver our direct communications that help activate, engage and educate patients about topics critical to their health on behalf of life sciences and payer clients.
As we expand our healthcare services client base, we increase the number of new patients we can reach to deliver our direct communications to help activate, engage and educate patients about topics critical to their health on behalf of life sciences clients and other organizations.
We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients.
We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients. We believe growth in AHSCs provides useful information to investors as an important indicator of expected revenue growth.
Research and development Research and development expense consists of costs to develop our products and services that do not meet the criteria for capitalization as internal-use software. These costs consist primarily of personnel costs, including salaries, stock-based compensation and benefits for our development personnel. Research and development expense also includes third-party partner fees and third-party consulting fees.
Research and development Research and development expense consists of costs to develop our products and services that do not meet the criteria for capitalization as internal-use software. These costs consist primarily of labor costs, including salaries, stock-based compensation and benefits for our development personnel, as well as outside services costs.
Our revenue from patient payments processed through our solutions increased $16.2 million to $94.6 million for fiscal 2024, as compared to $78.4 million for fiscal 2023, due to the addition of new healthcare services clients, which drove increases in patient visits and patient payments processed through our platform. • Network solutions.
Our revenue from patient payments processed through our solutions increased $7.1 million to $101.7 million for fiscal 2025, as compared to $94.6 million for fiscal 2024, due to the addition of new healthcare services clients, which drove increases in patient visits and patient payments processed through our platform.
We derive revenue from (i) subscription fees from healthcare services clients for access to our solutions and related professional services fees, (ii) payment processing fees based on levels of patient payment volume processed through our solutions and (iii) fees from life sciences and payer clients for delivering direct communications to help activate, engage and educate patients about topics critical to their health using our solutions.
Our goal is to help patients have more informed conversations to help them make decisions about their care. 54 We derive revenue from (i) subscription fees from healthcare services clients for access to our solutions and related professional services fees, (ii) payment processing fees based on levels of patient payment volume processed through our solutions and (iii) fees from life sciences clients and other organizations for delivering direct communications to help activate, engage and educate patients about topics critical to their health using our solutions.
During the fiscal year ended January 31, 2023, net cash used in operating activities was $90.1 million, as our cash paid to employees and suppliers exceeded our cash received from customers in connection with our normal operations.
During the fiscal year ended January 31, 2025, net cash provided by operating activities was $32.4 million, as our cash received from customers in connection with our normal operations exceeded our cash paid to employees and suppliers.
We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue.
The decrease was primarily driven by AHSC growth significantly outpacing growth in payment processing volume and payment processing revenue. • Total revenue per AHSC. We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue.
The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated: For the fiscal years ended January 31, (in thousands) 2024 2023 Net loss $ (136,885) $ (176,146) Interest income, net (2,211) (1,064) Provision for income taxes 1,543 483 Depreciation and amortization 29,487 25,304 Stock-based compensation expense 71,613 58,775 Loss on extinguishment of debt 1,118 — Other (income) expense, net (44) 175 Adjusted EBITDA $ (35,379) $ (92,473) We calculate free cash flow as net cash used in operating activities less capitalized internal-use software development costs and purchases of property and equipment.
The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated: For the fiscal years ended January 31, (in thousands) 2025 2024 Net loss $ (58,527) $ (136,885) Interest income, net (330) (2,211) Provision for income taxes 2,716 1,543 Depreciation and amortization 27,886 29,487 Stock-based compensation expense 66,975 71,613 Loss on extinguishment of debt — 1,118 Other income, net (1,956) (44) Adjusted EBITDA $ 36,764 $ (35,379) We calculate free cash flow as net cash provided by (used in) operating activities less capitalized internal-use software development costs and purchases of property and equipment.
We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume.
We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue.
We also provide life sciences companies, health plans and other payer organizations (payers), patient advocacy, public interest and other not-for-profit organizations with a channel for direct communication with patients. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise.
We also provide life sciences companies, government entities, patient advocacy, public interest and not-for-profit and other organizations with a channel for direct education and communication with patients in a privacy-protected environment. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specialty and condition expertise.
The following table presents a reconciliation of free cash flow from net cash used in operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated: For the fiscal years ended January 31, (in thousands) 2024 2023 Net cash used in operating activities $ (32,378) $ (90,123) Less: Capitalized internal-use software (19,291) (21,471) Purchases of property and equipment (5,806) (4,732) Free cash flow $ (57,475) $ (116,326) Liquidity and capital resources As of January 31, 2024 and 2023, we had cash and cash equivalents of $87.5 million and $176.7 million, respectively.
The following table presents a reconciliation of free cash flow from net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated: For the fiscal years ended January 31, (in thousands) 2025 2024 Net cash provided by (used in) operating activities $ 32,381 $ (32,378) Less: Capitalized internal-use software (15,380) (19,291) Purchases of property and equipment (8,709) (5,806) Free cash flow $ 8,292 $ (57,475) Liquidity and capital resources As of January 31, 2025 and 2024, we had cash and cash equivalents of $84.2 million and $87.5 million, respectively.
As a result, we believe that our ability to increase Total revenue per AHSC is an indicator of the long-term value of our solutions. Total revenue per AHSC was $98,944 for the year ended January 31, 2024 compared to $98,358 for the year ended January 31, 2023, an increase of $586.
As a result, we believe that our ability to increase Total revenue per AHSC provides useful information to investors as an indicator of the long-term value of our solutions. Total revenue per AHSC was $99,884 for the year ended January 31, 2025 compared to $98,944 for the year ended January 31, 2024, an increase of 1%.
Our Network solutions revenue (as described below) is generated from clients in the pharmaceutical, biotechnology and medical device industries, as well as payers, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health.
Our network solutions clients include life sciences companies in the pharmaceutical, biotechnology and medical device industries, as well as government entities, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health.
Other income (expense), net Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change Other income (expense), net $ 44 $ (175) $ 219 (125 %) Other income (expense), net was income of less than $0.1 million for fiscal 2024 as compared to expense of $0.2 million for fiscal 2023.
Other income, net Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Other income, net $ 1,956 $ 44 $ 1,912 4,345 % Other income, net was income of $2.0 million for fiscal 2025 as compared to income of less than $0.1 million for fiscal 2024.
Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers to better understand their patients and connect them to needed services, resulting in improved health outcomes.
We offer tools to communicate with patients about their health that have demonstrated increased rates of preventive care and vaccinations. Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers better understand their patients and connect them to needed services, resulting in improved health outcomes.
The increase resulted primarily from a $6.1 million increase in outside services and other third-party costs driven by growth in revenue and a $0.9 million increase in employee stock compensation costs, partially offset by a $4.7 million decrease in employee salary and benefits costs driven by lower headcount. 61 Stock compensation incurred related to cost of revenue was $4.6 million and $3.7 million for fiscal 2024 and fiscal 2023, respectively.
The increase resulted primarily from a $7.7 million increase in other third-party costs driven by growth in revenue, partially offset by a $2.5 million decrease in labor costs. Stock compensation incurred related to cost of revenue was $4.9 million and $4.6 million for fiscal 2025 and fiscal 2024, respectively.
While growth in AHSCs is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future AHSC growth.
In addition, growth in AHSCs informs our management of the areas of our business that will require further investment to support expected future AHSC growth.
Cost of revenue (excluding depreciation and amortization) Our cost of revenue (excluding depreciation and amortization) primarily consists of personnel costs, including salaries, stock-based compensation, benefits and bonuses for implementation and technical support, and infrastructure costs to operate our solutions such as hosting fees and fees paid to various third-party providers for access to their technology, as well as costs to verify insurance eligibility and benefits.
Cost of revenue (excluding depreciation and amortization) also includes infrastructure costs to operate our solutions such as hosting fees and fees paid to various third-party providers for access to their technology, as well as costs to verify insurance eligibility and benefits.
Financial Highlights Fiscal 2024 • Total revenue increased 27% to $356.3 million in fiscal 2024 compared with $280.9 million in fiscal 2023. • Net loss was $136.9 million in fiscal 2024 compared with $176.1 million in fiscal 2023. • Adjusted EBITDA was negative $35.4 million in fiscal 2024 compared with negative $92.5 million in fiscal 2023. • Cash used in operating activities was $32.4 million in fiscal 2024 compared with cash used in operating activities of $90.1 million in fiscal 2023. • Free cash flow was negative $57.5 million in fiscal 2024 compared with negative $116.3 million in fiscal 2023. • Cash and cash equivalents was $87.5 million as of January 31, 2024 compared with $176.7 million as of January 31, 2023.
Financial Highlights Fiscal 2025 • Total revenue increased 18% to $419.8 million in fiscal 2025 compared with $356.3 million in fiscal 2024. • Net loss was $58.5 million in fiscal 2025 compared with $136.9 million in fiscal 2024. • Adjusted EBITDA was $36.8 million in fiscal 2025 compared with negative $35.4 million in fiscal 2024. • Cash provided by operating activities was $32.4 million in fiscal 2025 compared with cash used in operating activities of $32.4 million in fiscal 2024. • Free cash flow was $8.3 million in fiscal 2025 compared with negative $57.5 million in fiscal 2024. • Cash and cash equivalents was $84.2 million as of January 31, 2025 compared with $87.5 million as of January 31, 2024.
We define Healthcare services revenue per AHSC as healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on 57 continually delivering value to our healthcare services clients and believe that our ability to increase healthcare services revenue per AHSC is an indicator of the long-term value of our solutions.
We define Healthcare services revenue per AHSC as healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on continually delivering value to our healthcare services clients.
Payment processing expense may increase as a percentage of payment processing revenue if card networks raise pricing for interchange and assessment fees or if we reduce pricing to our clients. Sales and marketing Sales and marketing expense consists primarily of personnel costs, including salaries, stock-based compensation, benefits, bonuses and commission costs for our sales and marketing personnel.
Payment processing expense may increase as a percentage of payment processing revenue if card networks raise pricing for interchange and assessment fees or if we reduce pricing to our clients.
General and administrative General and administrative expense consists primarily of personnel costs, including salaries, stock-based compensation and benefits for our executive, finance, legal, security, human resources, information technology and other administrative personnel.
Research and development expense also includes third-party partner fees and third-party consulting fees. General and administrative General and administrative expense consists primarily of labor costs, including salaries, stock-based compensation and benefits for our executive, finance, legal, security, human resources, information technology and other administrative personnel, as well as outside services costs.
Payment processing expense Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change Payment processing expense $ 62,986 $ 50,323 $ 12,663 25 % Payment processing expense increased $12.7 million to $63.0 million for fiscal 2024, as compared to $50.3 million for fiscal 2023.
Payment processing expense Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Payment processing expense $ 68,707 $ 62,986 $ 5,721 9 % Payment processing expense increased $5.7 million to $68.7 million for fiscal 2025, as compared to $63.0 million for fiscal 2024.
While none of these factors individually has had a material impact on our business to date, it is difficult to predict the potential impact these factors may have on our future business results, and each could adversely impact our business operations, financial performance and results of operations.
While none of these factors individually has had a material impact on our business to date, it is difficult to predict the potential impact these factors may have on our future business results, and each could adversely impact our business operations, financial performance and results of operations. 55 Key Metrics We regularly review the following key metrics to measure our performance, identify trends affecting our business, formulate financial projections, make strategic business decisions and assess working capital needs.
General and administrative Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change General and administrative $ 79,926 $ 80,384 $ (458) (1 %) General and administrative expense decreased $0.5 million to $79.9 million for fiscal 2024, as compared to $80.4 million for fiscal 2023.
General and administrative Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change General and administrative $ 76,597 $ 79,926 $ (3,329) (4 %) 60 General and administrative expense decreased $3.3 million to $76.6 million for fiscal 2025, as compared to $79.9 million for fiscal 2024.
For the fiscal years ended January 31, Change 2024 2023 Amount % Key Metrics: Average number of healthcare services clients ("AHSCs") 3,601 2,856 745 26 % Healthcare services revenue per AHSC $ 72,215 $ 72,599 $ (384) (1) % Total revenue per AHSC $ 98,944 $ 98,358 $ 586 1 % • AHSCs .
For the fiscal years ended January 31, Change 2025 2024 Amount % Key Metrics: Average number of healthcare services clients ("AHSCs") 4,203 3,601 602 17 % Healthcare services revenue per AHSC $ 70,961 $ 72,215 $ (1,254) (2) % Total revenue per AHSC $ 99,884 $ 98,944 $ 940 1 % • AHSCs .
Sales and marketing Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change Sales and marketing $ 147,008 $ 151,263 $ (4,255) (3 %) Sales and marketing expense decreased $4.3 million to $147.0 million for fiscal 2024, as compared to $151.3 million for fiscal 2023.
Sales and marketing Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Sales and marketing $ 121,129 $ 147,008 $ (25,879) (18 %) Sales and marketing expense decreased $25.9 million to $121.1 million for fiscal 2025, as compared to $147.0 million for fiscal 2024.
The increase was primarily driven by Network solutions revenue growth outpacing healthcare services client growth. Additional Information For the fiscal years ended January 31, Change 2024 2023 Amount % Patient payment volume (in millions) $ 3,947 $ 3,284 $ 663 20 % Payment facilitator volume percentage 82 % 80 % 2 % 3 % • Patient payment volume .
The increase was primarily driven by Network solutions revenue growth that outpaced AHSC growth. Additional Information For the fiscal years ended January 31, Change 2025 2024 Amount % Patient payment volume (in millions) $ 4,420 $ 3,947 $ 473 12 % Payment facilitator volume percentage 81 % 82 % (1) % (1) % • Patient payment volume .
Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three to five years. We evaluate the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
We evaluate the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
The new standard will require us to provide all disclosures required by ASC 280 - Segment Reporting all segment reporting, including a measure of segment profit or loss. The new standard will also require us to disclose the title and position of our Chief Operating Decision Maker.
The new standard also permits companies to disclose more than one measure of segment profit or loss, requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”), and requires companies with a single reportable segment to provide all disclosures required by Topic 280 – Segment Reporting.
The increase resulted primarily from the increase in payment processing fees revenue and patient payments processed through our solutions, each driven by an increase in patient visits over the prior year.
The increase resulted primarily from the increase in payment processing fees revenue and patient payments processed through our solutions, each driven by an increase in patient visits over the prior year. Payment processing expense for the year ended January 31, 2025 was reduced by the accelerated wind-down of a relationship with a clearinghouse client.
Research and development Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change Research and development $ 112,346 $ 91,244 $ 21,102 23 % Research and development expense increased $21.1 million to $112.3 million for fiscal 2024, as compared to $91.2 million for fiscal 2023.
Research and development Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Research and development $ 117,364 $ 112,346 $ 5,018 4 % Research and development expense increased $5.0 million to $117.4 million for fiscal 2025, as compared to $112.3 million for fiscal 2024.
Loss on extinguishment of debt Fiscal years ended January 31, (in thousands) 2024 2023 $ Change % Change Loss on extinguishment of debt $ (1,118) $ — $ (1,118) (100 %) During fiscal 2024, we recorded a $1.1 million loss on extinguishment of debt in connection with the termination of the Third SVB Facility.
Loss on extinguishment of debt Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Loss on extinguishment of debt $ — $ (1,118) $ 1,118 (100 %) During fiscal 2024, we recorded a $1.1 million loss on extinguishment of debt in connection with the termination of the Third SVB Facility. 61 Interest income, net Fiscal years ended January 31, (in thousands) 2025 2024 $ Change % Change Interest income, net $ 330 $ 2,211 $ (1,881) (85 %) Interest income, net decreased by $1.9 million to $0.3 million for fiscal 2025, as compared to $2.2 million for fiscal 2024.
During the fiscal year ended January 31, 2023, net cash used in investing activities was $26.2 million, principally resulting from capital expenditures, the majority of which consisted of $21.5 million of cash paid for capitalized internal-use software, as well as $4.7 million of purchases of property and equipment, including hardware used by clients and data center equipment.
Investing activities During the fiscal year ended January 31, 2025, net cash used in investing activities was $24.1 million, principally resulting from $15.4 million of cash paid for capitalized internal-use software, as well as $8.7 million of purchases of property and equipment, primarily computer equipment.
The uncertainty over the extent and duration of the ongoing conflict and these macroeconomic conditions continues to cause disruptions to businesses and markets worldwide.
The uncertainty over the extent and duration of the ongoing conflicts and these macroeconomic conditions continues to cause disruptions to businesses and markets worldwide. Additionally, the change in U.S. presidential administration may result in additional geopolitical and macroeconomic uncertainty.
We capitalize the costs during the development of the project, when it is determined that it is probable that the project will be completed, and the software will be used as intended. Costs related to preliminary project activities, post-implementation activities, training and maintenance are expensed as incurred.
Capitalized internal-use software We capitalize certain costs incurred for the development of computer software for internal use . These costs relate to the development of our solutions. We capitalize the costs during the development of the project, when it is determined that it is probable that the project will be completed, and the software will be used as intended.
See Note 16 - Acquisitions of this Annual Report on Form 10-K for additional information regarding the acquisition of ConnectOnCall. 66 The following table summarizes our sources and uses of cash for each of the periods presented: Fiscal years ended January 31, (in thousands) 2024 2023 Net cash used in operating activities $ (32,378) $ (90,123) Net cash used in investing activities (39,670) (26,203) Net cash used in financing activities (17,115) (20,803) Net decrease in cash and cash equivalents $ (89,163) $ (137,129) Operating activities The primary sources of cash from operating activities are cash received from our customers and interest earned on our money market mutual funds.
The following table summarizes our sources and uses of cash for each of the periods presented: For the fiscal years ended January 31, (in thousands) 2025 2024 Net cash provided by (used in) operating activities $ 32,381 $ (32,378) Net cash used in investing activities (24,089) (39,670) Net cash used in financing activities (11,486) (17,115) Effect of exchange rate changes on cash and cash equivalents (106) — Net decrease in cash and cash equivalents $ (3,300) $ (89,163) Operating activities The primary sources of cash from operating activities are cash received from our customers and interest earned on our money market mutual funds.
During the fiscal year ended January 31, 2023, cash provided by financing activities was $20.8 million, primarily consisting of $19.4 million used for treasury stock to satisfy tax withholdings on stock compensation awards and $5.9 million used for principal payments on finance leases and financing arrangements, partially offset by $4.9 million in proceeds from our equity compensation plans.
Financing activities During the fiscal year ended January 31, 2025, net cash used in financing activities was $11.5 million, primarily consisting of $9.0 million used for principal payments on finance leases and financing arrangements, $6.3 million used for principal payments of acquisition-related liabilities and $0.2 million used for debt issuance costs, facility fees and debt extinguishment costs, partially offset by $3.9 million in proceeds from our equity compensation plans.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk We have operations both within the United States and in Canada, and we are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate and foreign exchange risks.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk We have operations in the United States, Canada and India, and we are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate and foreign exchange risks.
Interest rate risk As of January 31, 2024, our cash and cash equivalents consisted primarily of money market funds and cash on deposit. The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Because our cash equivalents have a short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes.
Interest rate risk As of January 31, 2025, our cash and cash equivalents consisted primarily of money market funds and cash on deposit. The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Because our cash equivalents have a short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes.
In future periods, we will continue to evaluate our investment policy in order to ensure that we continue to meet our overall objectives. Although we had no debt outstanding under the Capital One Credit Facility as of January 31, 2024, changes in interest rates would affect interest expense if we borrow against the Capital One Credit Facility in the future.
In future periods, we will continue to evaluate our investment policy in order to ensure that we continue to meet our overall objectives. Although we had no debt outstanding under the Capital One Credit Facility as of January 31, 2025, changes in interest rates would affect interest expense if we borrow against the Capital One Credit Facility in the future.
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Additionally, changes in interest rates will impact the discount rate and resulting interest expense for any new finance leases or financing arrangements. Foreign currency exchange risk We have foreign currency risks related to our expenses denominated in Canadian dollars, which are subject to fluctuations due to changes in foreign currency exchange rates.
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Foreign currency exchange risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian Dollar and Indian Rupee, and may be adversely affected in the future due to changes in foreign currency exchange rates.
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Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our statements of operations. To date, foreign currency transaction gains and losses have not been material to our consolidated financial statements. 71
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For example, changes in exchange rates negatively affected our expenses as expressed in U.S. dollars for the fiscal year ended January 31, 2025. Additionally, changes in exchange rates largely offset operating income for the fiscal year ended January 31, 2025. For the year ended January 31, 2025, approximately 85% of our expenses were denominated in U.S. Dollars.
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We have also experienced and will continue to experience foreign currency fluctuations due to the periodic re-measurement of monetary account balances that are denominated in currencies other than the functional currency of the entities in which they are recorded, and such fluctuations can impact our net income.
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Foreign currency losses, primarily resulting from the re-measurement of monetary account balances, were $0.4 million for the year ended January 31, 2025. In February 2025, we entered into foreign currency forward contracts in respect of the Canadian Dollar and designated them as hedges of the foreign currency exchange risk associated with forecasted Canadian Dollar denominated payroll payments.
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We do not believe that a 1% increase or decrease in foreign exchange rates between the Canadian Dollar, Indian Rupee and U.S. Dollar would have a material effect on our results of operations or financial condition.
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In addition, 69 we believe that the foreign currency forward contracts will limit our exposure to the foreign currency exchange risk associated with forecasted Canadian Dollar denominated payroll payments. 70

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