Exchange: NYSE | Sector: Healthcare | Industry: Medical Healthcare Information Services
Q4 2025
Published: Mar 13, 2025
Earnings Highlights
Revenue of $109.68M up 15.5% year-over-year
EPS of $-0.11 increased by 80.4% from previous year
Gross margin of 69.4%
Net income of -6.39M
""We are well positioned to continue generating positive free cash flow while investing in long-term profitable revenue growth."" - Balaji Gandhi
Phreesia Inc (PHR) QQ4 2025 Results: Revenue Growth, Margin Expansion, and 2026 Outlook
Executive Summary
Phreesia reported a solid Q4 2025, delivering 15% year-over-year revenue growth to $109.7 million and notable gross-margin expansion to 69.4%. The quarter showcased improving operating leverage, with adjusted EBITDA of $16.4 million (15% of revenue) and positive operating cash flow of $16.3 million, reinforcing a pattern of cash generation even as the company continues to invest in growth initiatives. However, GAAP net income remained negative at $6.39 million, resulting in an EPS of -$0.11, underscoring the ongoing investment phase typical of a high-growth SaaS-enabled platform in the healthcare information services space.
Gross Profit: $76.115 million; Gross Margin 69.4%; YoY gross profit up 38.95%; QoQ up 5.33%
Operating Income: -$7.612 million; Operating Margin -6.94%; YoY improvement in margin trend reflects leverage from higher volumes and ongoing cost discipline, though profitability remained negative on GAAP basis
EBITDA: $2.142 million; EBITDA Margin ~1.95%
Net Income: -$6.39 million; Net Margin -5.83%; EPS -$0.11 (diluted)
Financial Highlights
Highlights and drivers for QQ4 2025, with YoY and QoQ comparisons where available:
- Revenue: $109.681 million; YoY growth +15.5%; QoQ growth +2.7% (Q4 vs Q3)
- Gross Profit: $76.115 million; Gross Margin 69.4%; YoY gross profit up 38.95%; QoQ up 5.33%
- Operating Income: -$7.612 million; Operating Margin -6.94%; YoY improvement in margin trend reflects leverage from higher volumes and ongoing cost discipline, though profitability remained negative on GAAP basis
- EBITDA: $2.142 million; EBITDA Margin ~1.95%
- Net Income: -$6.39 million; Net Margin -5.83%; EPS -$0.11 (diluted)
- AHSC (Average Health Care Services Clients): 4,341, up 104 QoQ and 379 YoY
- Revenue per AHSC: $25,266; up 5% YoY (no material QoQ noted)
- Cash flow: Operating cash flow +$16.26 million; Free cash flow +$9.20 million; Third consecutive quarter of positive FCF
- Cash position: $84.22 million at 1/31/2025, up $2.5 million from 10/31/2024
- Net cash/debt: Net debt of -$66.417 million (net cash position) with total debt of $17.803 million
- 2026 guidance: Revenue guidance of $400–$482 million; EBITDA guidance $78–$88 million; AHSC revenue per AHSC expected to increase vs. fiscal 2025; no acquisitions assumed through 1/31/2026
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
109.68M
15.45%
2.70%
Gross Profit
76.12M
38.95%
5.33%
Operating Income
-7.61M
74.27%
45.01%
Net Income
-6.39M
79.15%
55.63%
EPS
-0.11
80.36%
-116.92%
Key Financial Ratios
currentRatio
1.78
grossProfitMargin
69.4%
operatingProfitMargin
-6.94%
netProfitMargin
-5.83%
returnOnAssets
-1.65%
returnOnEquity
-2.41%
debtEquityRatio
0.07
operatingCashFlowPerShare
$0.28
freeCashFlowPerShare
$0.16
priceToBookRatio
6.26
priceEarningsRatio
-64.89
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management insights from the Q4 2025 earnings call, grouped by theme:
- Strategy and growth trajectory
- Chaim Indig emphasized the platform’s mission and progress, noting the Phreesia platform was used in approximately 14% of U.S. patient visits (about 170 million visits) in fiscal 2025, highlighting the scale and value of the network effects.
- Balaji Gandhi highlighted continued operating leverage and a plan to sustain positive free cash flow while investing in long-term profitable revenue growth. Quote: “we are well positioned to continue generating positive free cash flow while investing in long-term profitable revenue growth.”
- Profitability and margins
- Management discussed gross-margin expansion as driven by mix, noting processing revenue is lower-margin and product mix will influence margin trajectory quarter to quarter.
- The Q4 call reiterated an EBITDA target and the expectation that AHSC revenue per AHSC would increase in fiscal 2026, supporting margin improvement over time.
- AI, automation, and product momentum
- The team highlighted real-time AI impact, particularly in forecasting within the Network Solutions group. Chaim Indig stated: “No, we’re seeing its impact in real time in our business, and we expect to continue to very thoughtfully implement AI throughout our organization where it not only drives real financial impact, but really improve the outcomes for all of our stakeholders.”
- Balaji noted internal AI demonstrations that improve forecasting and operational efficiency, signaling broader AI deployment across products and teams.
- Market conditions and competition
- Management acknowledged calendar effects and weather as meaningful quarterly headwinds but indicated these are anticipated and modeled into internal plans.
- Respondents noted competitive dynamics, including AI-enabled incumbent rollouts, with management suggesting Phreesia’ cross-network capability and privacy-first approach help sustain win rates (e.g., “our close rates… have gotten a little bit better as of late,” and larger entrants have, in some cases, raised awareness of Phreesia’s value proposition).
"We are well positioned to continue generating positive free cash flow while investing in long-term profitable revenue growth."
— Balaji Gandhi
"No, we're seeing its impact in real time in our business, and we expect to continue to very thoughtfully implement AI throughout our organization where it not only drives real financial impact, but really improve the outcomes for all of our stakeholders."
— Chaim Indig
Forward Guidance
Management’s fiscal 2026 outlook centers on durable, profitable growth with a conservative revenue range of $400–$482 million and EBITDA of $78–$88 million. The outlook assumes no additional revenue or acquisitions beyond what is in place as of 1/31/2026. Management also reiterated expectations for AHSC-level metrics to improve, including an increase in revenue per AHSC compared with fiscal 2025. In assessing achievability, the Q4 results illustrate healthy top-line momentum (YoY revenue +15.5%) and improving cash generation, contributing to confidence in a path to mid-to-high single-digit revenue growth within the range plus continued leverage on operating expenses. Key factors investors should monitor include: (1) execution on Network Solutions and appointment-readiness offerings, (2) the trajectory of AHSC clients and per-AHSC revenue, (3) the pace of AI-enabled productivity gains and their translation into unit economics, and (4) macro factors influencing healthcare spending, payer mix, and patient visit volumes.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PHR Focus
69.40%
-6.94%
-2.41%
-64.89%
HCAT
43.60%
-22.00%
-5.66%
-5.33%
DH
76.40%
-1.60%
-13.30%
-2.00%
PRVA
10.40%
1.14%
0.69%
133.48%
NRC
61.10%
26.00%
21.00%
15.70%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Phreesia’s QQ4 2025 results demonstrate reinforcing trends: solid revenue growth, improving gross margins, and meaningful free cash flow generation, underpinned by a scalable platform with large installed base and expanding product suite. The 2026 guidance implies continued growth with a focus on profitability through operating leverage and higher AHSC monetization. The company’s emphasis on AI-enabled process improvements and cross-sell opportunities (appointment readiness, post-script engagement, patient bill pay) supports a durable growth trajectory. Investors should weigh the strong cash generation and scalable model against the ongoing investment cycle and near-term profitability headwinds. Key catalysts include accelerating adoption of newer Network Solutions offerings, successful integration of AI-driven tools, and the ability to sustain positive FCF as revenue scales toward the midpoint of the guidance range.
Key Investment Factors
Growth Potential
Robust revenue growth led by the Phreesia platform and Network Solutions; rising revenue per AHSC and expanding use cases (appointment readiness, post-visit engagement, and payer-agnostic monetization opportunities) position Phreesia to scale with hospital systems and multi-site networks. The company’s AI initiatives and internal forecasting tools promise productivity gains and improved forecasting accuracy, which can translate to higher operating leverage as volumes climb.
Profitability Risk
Near-term profitability remains pressured by ongoing investments in R&D, go-to-market, and platform expansion. Macro volatility (weather, holiday calendars, Medicaid/exchange policy changes) can cause quarterly variability in patient visits and revenue. Competitive pressure from large platform players adding AI capabilities may impact near-term win rates. The forecast assumes no M&A activity; any acquisitions could alter risk/return dynamics.
Financial Position
Phreesia maintains a strong liquidity position with $84.22 million cash at year-end and net debt of -$66.42 million, reflecting a net cash position. Total debt is modest at $17.80 million. The company reports positive operating cash flow ($16.26 million) and free cash flow ($9.20 million) in Q4, supporting continued investment while funding profitability improvement.
SWOT Analysis
Strengths
Strong top-line growth with Q4 revenue of $109.7M and 15% YoY increase
High gross margin of 69.4%, indicating favorable product mix and pricing power
Consistent positive operating cash flow and free cash flow for three consecutive quarters
Scale-driven impact, with Phreesia platform used in ~14% of U.S. patient visits in FY2025 (~170M visits)
Healthy liquidity and modest indebtedness; net cash position
Weaknesses
GAAP net loss and negative earnings per share in Q4 2025 (EPS -$0.11) indicate ongoing investment phase
Operating margin still negative (-6.94%), though improving due to leverage
Sensitivity to calendar effects (holidays, weather) causing quarterly volatility
Reliance on client adoption of new products and continued client retention in a competitive environment
Opportunities
AI-enabled productivity gains and forecasting improvements across Network Solutions
Expansion of appointment readiness and post-visit engagement leading to higher cross-sell within AHSC base
Further monetization of Network Solutions content through targeted campaigns and broader client adoption
Potential inorganic growth opportunities (M&A) given strong balance sheet and cash generation
Threats
Macro headwinds and payer mix dynamics could impact visit volumes
Regulatory and competitive developments in pharma marketing and patient engagement
Execution risk in scaling AI-driven features and achieving sustained cost leverage