Executive Summary
Phreesia reported Q2 2025 revenue of $102.1 million, up 19% year over year, with operating cash flow of $11.1 million and free cash flow of $3.7 million, marking the first positive cash flow milestones as a public company. GAAP results show a net loss of $18.0 million and negative EBITDA of $9.2 million, but management highlighted upside from non-GAAP adjustments, including Adjusted EBITDA of $6.5 million. Importantly, the company achieved a positive operating cash flow and demonstrated the ability to convert revenue growth into free cash flow while investing for long‑term expansion.
Strategically, Phreesia continues to expand the value delivered per AHSC (Average Health Care Services Client) through a broader product suite (Network Solutions and Life Sciences), with AHSCs increasing by 104 sequentially to about 4,200 in fiscal 2025 and total revenue per AHSC expected to rise versus fiscal 2024. Management reaffirmed fiscal 2025 guidance of $416–$426 million in revenue and $26–$31 million in Adjusted EBITDA, while providing visibility for 2026: AHSCs around 4,500 and higher total revenue per AHSC, underscoring an expected trajectory of higher value per provider. The company also signaled ongoing investment in product development and go-to-market expansion and highlighted strategic partnerships (MEDITECH alliance, Oracle marketplace) and Life Sciences initiatives (MediFind, PAM renewal) as levers for long-term growth.
Overall, the near-term cadence reflects continued revenue growth and improving profitability on an adjusted basis, supported by a strong balance sheet and cash generation, with a multi-year growth framework centered on expanding AHSC value, higher-network transaction value, and cross-sell across the Phreesia platform.
Key Performance Indicators
Key Insights
Revenue: $102.1 million in Q2 2025, up 19% YoY and 0.9% QoQ. Gross profit: $61.81 million; gross margin 60.53%. Operating income: -$17.22 million; operating margin -16.87%. Net income: -$18.01 million; net margin -17.64%. EBITDA: -$9.16 million (GAAP); Adjusted EBITDA: $6.5 million (management-reported, non-GAAP). Cash flow: Operating cash flow $11.06 million; Free cash flow $3.66 million. Balance sheet: cash and cash equivalents $81.80 million; total debt $16.52 million; net debt at -$65.28 mil...
Financial Highlights
Revenue: $102.1 million in Q2 2025, up 19% YoY and 0.9% QoQ. Gross profit: $61.81 million; gross margin 60.53%. Operating income: -$17.22 million; operating margin -16.87%. Net income: -$18.01 million; net margin -17.64%. EBITDA: -$9.16 million (GAAP); Adjusted EBITDA: $6.5 million (management-reported, non-GAAP). Cash flow: Operating cash flow $11.06 million; Free cash flow $3.66 million. Balance sheet: cash and cash equivalents $81.80 million; total debt $16.52 million; net debt at -$65.28 million (net cash position). AHSCs: ~4,200 expected in FY2025 (vs 3,601 in FY2024); Total revenue per AHSC: $98,944 in FY2024, expected to rise in FY2025. Revenue per AHSC is driven by a larger value of transactions and expanded network solutions and Life Sciences offerings. Earnings per share (diluted): -$0.31; Weighted average shares outstanding: ~57.50 million. YoY revenue growth: 18.97%; QoQ revenue growth: 0.89%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
102.12M |
18.97% |
0.89% |
| Gross Profit |
61.81M |
11.31% |
2.45% |
| Operating Income |
-17.22M |
53.40% |
11.32% |
| Net Income |
-18.01M |
51.01% |
8.67% |
| EPS |
-0.31 |
54.41% |
11.43% |
Key Financial Ratios
operatingProfitMargin
-16.9%
operatingCashFlowPerShare
$0.19
freeCashFlowPerShare
$0.06
priceEarningsRatio
-19.91
Management Commentary
Theme: Cash flow and profitability milestones. Quote: "We achieved another important milestone in the fiscal second quarter by reaching positive cash flow for the first time as a public-company." (Chaim Indig)
Theme: Revenue growth and AHSC metrics. Quote: "Q2 revenue was $102.1 million, up 19% and $16 million year-over-year. Adjusted EBITDA was $6.5 million, up $18 million year-over-year. Our average health care services clients or AHSCs increased by 104 from the prior quarter." (Balaji Gandhi)
Theme: Guidance and outlook. Quote: "We are maintaining our revenue outlook for fiscal year 2025 at a range of $416 million to $426 million." (Balaji Gandhi)
Theme: Strategic initiatives and partnerships. Quote: "Yes. They are a reseller of one of our small piece of the technology for some of their clients, but a lot of clients that I'd say the alliance allows us—it's really opening the door and making it easier for MEDITECH clients to buy directly from Phreesia..." (Chaim Indig)
Theme: Product breadth and PAM renewal. Quote: "One of the reasons we are very excited about that measure is it is very unique... in nephrology space, PAM is required to be measured..." (Balaji Gandhi)
Theme: Pipeline and visibility. Quote: "We have 90% visibility" on AHSC adds; pipeline size is the same as a year ago but deal value is ~20% larger in the first half of fiscal 2025 versus last year." (Balaji Gandhi)
"We achieved another important milestone in the fiscal second quarter by reaching positive cash flow for the first time as a public-company."
— Chaim Indig
"We are maintaining our revenue outlook for fiscal year 2025 at a range of $416 million to $426 million."
— Balaji Gandhi
Forward Guidance
Management reaffirmed fiscal 2025 guidance: revenue of $416–$426 million and Adjusted EBITDA of $26–$31 million, along with ~4,200 AHSCs in 2025 and higher total revenue per AHSC versus 2024. For 2026, management projects AHSCs around 4,500 and continued improvement in total revenue per AHSC, signaling an acceleration in value delivered per client through a broader product suite (Network Solutions and Life Sciences). The outlook reflects a deliberate shift toward larger, higher-value deals and cross-sell across the Phreesia platform, supported by a robust pipeline (first-half 2025 pipeline values ~20% larger than 2024) and higher platform adoption (e.g., PAM integration, MediFind and expanding network solutions). assessability: Achievable if pipeline converts at expected win rates, continued product expansion remains accretive, and the company sustains/accelerates sales and marketing efficiency. Key factors to monitor include: (1) execution cadence on AHSC additions versus 2025 targets, (2) progression and integration of MEDITECH and Oracle marketplace efforts, (3) continued growth in Network Solutions’ share of revenue and per-AHSC value, (4) regulatory/payer-model developments affecting Life Sciences and CK models, and (5) the pace of free cash flow generation and capital allocation (including potential M&A opportunities).