Please visit the Phreesia investor relations website at ir.phreesia.com to view the Company's Q2 Fiscal 2027 Stakeholder Letter.
Fiscal Second Quarter Ended July 31, 2026 Highlights
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• Total revenue was $129.5 million in the quarter, up 10% year-over-year.
• Average number of healthcare services clients ("AHSCs") was 4,744 in the quarter, up 6% year-over-year.
• Total revenue per AHSC was $27,289 in the quarter, up 4% year-over-year. See "Key Metrics" below for additional information.
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• Net income was $1.9 million in the quarter, as compared to net income of $0.7 million in the same period in the prior year.
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• Adjusted EBITDA 1 was $32.9 million in the quarter, as compared to $22.1 million in the same period in the prior year.
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• Net cash provided by operating activities was $18.3 million in the quarter, as compared to $14.8 million in the same period in the prior year.
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• Free cash flow 2 was $13.8 million in the quarter, as compared to $9.6 million in the same period in the prior year.
• Cash, cash equivalents and restricted cash as of July 31, 2026 was $74.6 million, an increase of $0.8 million from January 31, 2026. As of July 31, 2026, cash, cash equivalents and restricted cash included $1.7 million of long-term restricted cash classified within other long-term assets.
Recent Developments
2 Free cash flow is a non-GAAP measure. We calculate free cash flow as net cash provided by operating activities less capitalized internal-use software development costs and purchases of property and equipment. See “Non-GAAP Financial Measures” for a reconciliation of free cash flow to the closest GAAP measure.
approximately $2.8 million were recognized for the Plan during the second quarter of fiscal 2027. We expect the Plan to be substantially completed during fiscal year 2027.
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Fiscal 2027 Outlook We are maintaining our revenue outlook for fiscal 2027. We expect revenue to be in the range of $510 million to $520 million. As we noted over the past several quarters, there is now more variability in our network solutions revenue forecasting, particularly in the second half of each fiscal year. Our visibility into revenue across the other parts of our business is generally consistent with our views in our March 2026 earnings disclosure. The revenue range provided for fiscal 2027 assumes approximately $37 million of contribution from AccessOne (as defined below) and no additional revenue from potential future acquisitions completed between now and January 31, 2027.
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We are maintaining our Adjusted EBITDA outlook for fiscal 2027. We expect Adjusted EBITDA to be in the range of $125 million to $135 million. As a reminder, in May 2026, we implemented a restructuring plan intended to reduce operating expenses and better align our cost structure with our current business priorities. The plan is expected to result in meaningful annualized run-rate expense savings, which were reflected in our Adjusted EBITDA outlook provided on March 30, 2026 and reaffirmed on May 27, 2026.
We are maintaining our expectation for AHSC growth in the mid-single-digit percentage range, and we are maintaining our outlook for total revenue per AHSC to grow in the low-single-digit percentage range in fiscal 2027.
We believe our cash, cash equivalents, restricted cash and cash generated in our normal operations will be sufficient to reach our fiscal 2027 outlook and meet our obligations for at least the next twelve months. As of July 31, 2026 we had $61 million in borrowings outstanding under our credit facility with Capital One.
QUARTERLY STAKEHOLDER LETTER | SECOND QUARTER 2027 | 6 Payment Solutions Statistics Total managed payments⁶ and payment solutions revenue rate7 were introduced in the first quarter of fiscal 2027. Total managed payments reflects both the transactional activity we facilitate and the financing solutions we provide to healthcare organizations and patients. Payment solutions revenue rate reflects the combined monetization of both our payment processing and patient financing activities into a single, unified rate. We believe these metrics provide a clear and consistent framework for understanding how payment activity translates into revenue, enabling investors to more effectively assess the growth, performance and overall value of our payment solutions business. In the second quarter of fiscal 2027, our total managed payments were $1.626 billion and our payment solutions revenue rate was 2.4%. The following chart shows total managed payments and payment solutions revenue rate for the fiscal fourth quarter of 20268, the fiscal first quarter of 2027 and the fiscal second quarter of 2027. We define total managed payments as the sum of: i) our legacy patient payment volume, measured as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator, as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors; and ii) the average month-end outstanding balance of our managed portfolio of cardholder receivables, calculated as the average of all month-end balances during the applicable period. We define our payment solutions revenue rate as total payment solutions revenue divided by total managed payments for a given period. Because total managed payments include both transaction volume and average receivables balances, the payment solutions revenue rate should not be interpreted as a processing take rate, interest yield or margin. The AccessOne Acquisition was completed on November 12, 2025. The quarter ended January 31, 2026 reflects inclusion of the business operations of AccessOne from November 12, 2025 to January 31, 2026, and therefore, the payment solutions revenue rate for the three months ended January 31, 2026 is not indicative of AccessOne’s full-quarter performance.
QUARTERLY STAKEHOLDER LETTER | SECOND QUARTER 2027 | 7 Payment Solutions Statistics ($B, Q4 FY2026 - Q2 FY20271) Fiscal year ended January 31. We define total managed payments as the sum of: 1) our legacy patient payment volume, measured 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; and 2) the average month-end outstanding balance of our managed portfolio of cardholder receivables, calculated as the average of all month-end balances during the applicable period. We believe total managed payments are a useful indicator of the scale and health of our payments ecosystem, reflecting both the volume of transactions we facilitate and the size of the receivables portfolio we service. Total managed payments are one of the primary drivers of our total payments revenue. We define our payment solutions revenue rate as total payment solutions revenue divided by total managed payments for a given period. This rate reflects the combined monetization of both our payment processing and patient financing activities into a single, unified rate. We believe this metric provides a useful lens into the efficiency and stability of our revenue model over time, enabling investors to better understand how changes in volume and portfolio size translate into revenue and to more easily evaluate the underlying performance and scalability of our payment solutions business. Because total managed payments includes both transaction volume and average receivables balances, the payment solutions revenue rate should not be interpreted as a processing take rate, interest yield or margin. The AccessOne Acquisition was completed on November 12, 2025. The quarter ended January 31, 2026 reflects inclusion of the business operations of AccessOne from November 12, 2025 to January 31, 2026, and therefore, the payment solutions revenue rate for the three months ended January 31, 2026 is not indicative of AccessOne’s full-quarter performance.
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QUARTERLY STAKEHOLDER LETTER | SECOND QUARTER 2027 | 8 9 References to net cash provided by operating activities and free cash flow throughout this letter relate to the cash flow categories in our consolidated statements of cash flows and free cash flow reconciliation within Part I - Item 1 and 2 of our Quarterly Report on Form 10-Q. Free cash flow is a non-GAAP measure. We calculate free cash flow as net cash provided by operating activities less capitalized internal-use software development costs and purchases of property and equipment. See the “Non-GAAP Financial Measures” section of this letter for a reconciliation of free cash flow to the closest GAAP measure. In the second quarter of fiscal 2027, net cash provided by operating activities⁹ was $18.3 million, an increase of $3.5 million year-over-year, as compared to $14.8 million in the second quarter of fiscal 2026. In the second quarter of fiscal 2027, we generated free cash flow10 of $13.8 million, an increase of $4.2 million year-over-year, as compared to $9.6 million in the second quarter of fiscal 2026. We utilized free cash flow and available cash to reduce our long-term debt by $23.5 million during the second quarter of fiscal 2027, with $60.7 million of long term debt as of July 31, 2026. As of July 31, 2026 and January 31, 2026, we had cash, cash equivalents and restricted cash of $74.6 million and $73.8 million, respectively.
QUARTERLY STAKEHOLDER LETTER | SECOND QUARTER 2027 | 9 Phreesia Solutions Our broad capabilities bring value to patients, providers and life sciences companies in unique ways.
QUARTERLY STAKEHOLDER LETTER | SECOND QUARTER 2027 | 10 Access Expanding Eligibility and Benefits Beyond Verification Eligibility and benefits (E&B) verification is an important part of patient registration, but confirming eligibility status is only the beginning. Front desk staff still need to make sure the right insurance is on file, understand what the eligibility response means, consider any conditions and select the correct billing plan in the practice management (PM) system. Those manual steps are time- consuming and create opportunities for error that can lead to claim denials and delayed reimbursement. One of our clients recently reported that nearly 80% of its registration-related denials stemmed from incorrect insurance or plan selection. Over the past year, we have continued expanding our E&B capabilities to simplify this process for both patients and providers. Patients can now upload insurance cards during intake, where optical character recognition (OCR) can extract key insurance details, reducing manual entry while making check-in easier. We have also expanded eligibility verification to support up to three insurance plans per patient, automatically identify vision, medical and dental coverage to support accurate insurance assignment, and begin verification 30 days before an appointment, helping identify and resolve coverage issues before the day of care. Building on these capabilities, we recently introduced PlanMatch, our new AI-powered E&B solution built to put artificial intelligence to work at one of the most error-prone steps in patient registration: selecting the right billing plan. Because the Phreesia platform already connects the patient, the payer and the PM system before the visit, PlanMatch is able to compare and reconcile information across all three in real time to identify the billing plan that best matches a patient's coverage. On average, staff must choose from eight possible billing plans during scheduling, making the process both time-consuming and complex. PlanMatch automatically compares the patient's live eligibility response with each organization's unique billing plan structure and learns how that organization maps payer responses to its billing plans, allowing it to recommend the correct plan before check-in, when there is still time to resolve issues. Those recommendations are automatically surfaced in the Phreesia
