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Healthcare technology company Phreesia (NYSE:PHR) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 14.5% year on year to $115.9 million. Its GAAP loss of $0.07 per share increased from -$0.35 in the same quarter last year.
Is now the time to buy PHR? Find out in our full research report (it’s free).
Phreesia’s first quarter saw continued sales growth, though revenue fell short of Wall Street expectations. Management highlighted the impact of products like appointment readiness, post-script engagement, and enhanced bill pay, while attributing year-on-year revenue growth primarily to an increase in average healthcare services clients and higher revenue per client. CEO Chaim Indig highlighted the measurable impact of these offerings on patient and provider outcomes. The company also attributed improved profitability to operating leverage from prior investments in its sales and marketing teams. CFO Balaji Gandhi emphasized that “getting a really good return” on these early investments has been key to Phreesia’s margin improvement, reflecting a more efficient expense structure even as product development remains a priority.
Looking ahead, Phreesia’s guidance is anchored by expectations for continued growth in its network and further margin expansion. Management expects new product modules and increased revenue per client to drive results for the remainder of the year, citing strong early traction from offerings like Medaphine and enhanced bill pay. Gandhi discussed the company's approach to capital allocation, noting a recently approved share repurchase program is an opportunistic tool meant to provide flexibility rather than signal a change in strategy. Indig noted that artificial intelligence is being incorporated across the organization, stating, “AI is enabling us to do things within the Phreesia platform...that we are very excited for.” The company also anticipates ongoing positive free cash flow, though Gandhi cautioned that quarter-to-quarter improvements may vary depending on invoicing and capital expenditures.
Management attributed the quarter’s performance to broad-based product adoption, operational discipline, and the early impact of recently launched solutions.
Management expects future performance to be driven by continued network growth, increased product adoption, and disciplined cost management.
In the coming quarters, key areas to watch will be (1) the uptake and monetization of new product modules like Medaphine and enhanced bill pay, (2) the pace of AI integration and its ability to drive tangible benefits for clients, and (3) sustained growth in client numbers and average revenue per customer. Execution on disciplined capital allocation, including opportunistic share repurchases, and further operating leverage will also be critical signposts for investors.
Phreesia currently trades at a forward P/E ratio of 25.6×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).
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