Phreesia reported QQ3 2025 revenue of $106.8 million, up 16.57% year over year and 4.59% quarter over quarter, driven by continued demand for its integrated SaaS and payments platform in the U.S. and Canada healthcare market. The quarter delivered a robust gross margin of 67.66% (gross profit of $72.263 million), underscoring the high-margin nature of Phreesia’s software-enabled revenue model. However, operating profitability remained negative, with operating income of -$13.843 million and EBITDA of -$6.274 million, reflecting ongoing investments in R&D and go-to-market initiatives. Net income declined to -$14.403 million, yielding a net margin of -13.49%, while earnings per share (EPS) stood at 0.65 with 57.892 million weighted-average shares, indicating a disconnect between the reported EPS figure and net loss likely influenced by non-cash or one-time adjustments embedded in the period.
Cash flow remained healthy on an operating basis, with net cash provided by operating activities of $5.785 million and free cash flow of $5.169 million, supported by a cash balance of $81.74 million at period end. The company maintains a net cash position (net debt of -$70.608 million) and a solid equity base of $254.592 million, highlighting balance-sheet resilience even as profitability normalizes post-investment phase. Liquidity metrics remain favorable (current ratio 1.73; cash ratio 0.75), though working capital and receivables dynamics (DSO ~60 days) suggest continued exposure to collection cycles typical of the healthcare services ecosystem.
Looking ahead, Phreesia’s growth trajectory hinges on expanding its penetration within existing healthcare provider networks, monetizing new modules (e.g., enhanced revenue cycle features, life sciences solutions), and achieving operating leverage as scale increases. Given the current mix of revenue growth and profitability headwinds, the investment thesis centers on durable revenue visibility from the SaaS/Payments platform, potential for higher contribution margins with scale, and disciplined capital deployment to drive profitability over the medium term.