Q1 2024 Phreesia Inc. Earnings Call
Please standby we're about to begin.
Good evening, ladies and gentlemen, and welcome to the Freesia fiscal first quarter of 2024 earnings Conference call. At this time all participants are in a listen only mode. We will provide instructions for the question and answer session to follow first I would like to introduce <unk> Gandhi Freesia, Chief Financial Officer, Mr. John Thank you operator.
Good evening and welcome to Frejus earnings Conference call for the fiscal first quarter of 2024, which ended on April 30 of 2023.
Joining me on today's call is our Chief Executive Officer.
A complete discussion of our results can be found in our earnings press release and in our related form 8-K submission to the SEC, including our quarterly stakeholder letter both issued after the market's close today.
These documents are available on the Investor Relations section of our website at IR Dot Freesia Dot com.
As a reminder, today's call is being recorded and a replay will be available on our Investor Relations website at IR Dot appreciate dot com following the conclusion of the call.
During today's call we may make forward looking statements, including statements regarding trends our.
Anticipated growth our strategies predictions about our industry.
The anticipated performance of our business, including our outlook regarding future financial results and forward looking statements are subject to various risks uncertainties and other factors that may cause our actual results performance or achievements to differ materially from those described in our forward looking statements such risks are described more fully in our earnings press release our.
The letter and our risk factors included in our SEC filings, including in our quarterly report on Form 10-Q that will be filed with the SEC tomorrow.
The forward looking statements made on this call will be based on our current views and expectations.
Speak only as of the date on which the statements are made.
We undertake no obligation to update and expressly disclaim any obligation to update these forward looking statements to reflect events or circumstances. After the date of this call or to reflect new information or the occurrence of unanticipated events.
We may also refer to certain financial measures not in accordance with generally accepted accounting principles in order to provide additional information to investors.
non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results a reconciliation.
<unk> of GAAP to non-GAAP results may be found in our earnings release, and stakeholder letter, which were furnished with our form 8-K filed after the market closed today with the SEC and May also be found on our Investor Relations website at IR Dot Freesia Dot Com I will now.
Now I'll turn the call over to our CEO Jaime Dave.
Thank you <unk> and good evening everyone.
Thank you for participating in our first quarter earnings call.
Our stakeholder letter and earnings release came out about an hour ago, but let me start the call by sharing a few key highlights of the materials we released.
Revenue in the first quarter was $84 million up 32% year over year.
That's our ninth consecutive quarter of over 30% year over year revenue growth.
Another fantastic achievement by the preacher team congratulations to all of you are listening.
In the quarter, our average number of health care services clients was 3309.
39% year over year.
We added 169 average healthcare services clients in the fourth quarter to the first quarter.
Total revenue for average health care services client was $25338 up 1% year over year, 4% sequentially.
Subscription and related services revenue.
8% year over year.
Payment processing revenue grew 25% year over year.
And network solutions revenue was up 46% year over year.
Now, let me hand, it over to <unk> to talk about our fiscal 'twenty four.
Thanks, Hi.
Moving on to our outlook for fiscal 2024, which ends on January 31 2024.
We are maintaining our revenue outlook for fiscal 2024, which is in the range of 353 million to $356 million, implying growth of 26% to 27% over our fiscal 2023 revenue.
We are raising our adjusted EBITDA outlook to a range of negative 60 to negative $55 million from a range of negative 65 to negative $60 million showing continued improvement on our path to profitability.
We are also maintaining our revenue and profitability targets for fiscal 2025.
Those targets are $125 million of revenue in a quarter during fiscal 2025, which implies $500 million of annualized revenue.
And returning to adjusted EBITDA profitability during fiscal year 2025.
We remain comfortable with our ability to finance, our fiscal 2025 targets with our cash position.
We believe our capital allocation strategy sets us up to deliver on our financial targets for fiscal 2025 and beyond.
We continue to focus on driving shareholder value.
Operator, I think we can now open it up to Q&A.
Thank you Mr. Johnny Ladies and gentlemen at this time, if you have any questions simply press star one and could you find your question has been addressed you can remove yourself from the queue by pressing star one again and we do have to you. Please limit yourself to one question and one follow up question initially.
Our first question this afternoon from Anne Samuel of Jpmorgan.
Hey, guys. Thanks for taking the question and congrats on the great results.
In your letter you spoke to higher patient volumes in the first quarter I was just hoping maybe you could talk about what you attribute that to and then just how to think about cadence for the remainder of the year, which is a pull forward from Q2 or do you think that that will be spread more evenly throughout the year.
Yeah, Hi, Annie philosophy here.
So the comment around the volumes in the first quarter I think what's important to take away is that it was just stronger than we anticipated when we entered the year.
It's obviously, there's some seasonality in there is some seasonal strength, but it was stronger than we would've thought you know I think.
Maybe I can talk about this a little bit.
If you think about our business and having having been at this a long time, we can be off a little bit on any quarter, we have a lot of visibility, but there's things around whether there's things around different mix on different specialties that can skew that so I don't know if you want add anything on that and then come back to the case no.
Great job you did a great job on it like look I think it's still early in the year.
And I think we I think we got a lot of months left to go.
And in any on the cadence.
We did mention that the volume strength also helped with some of the pacing of our of our programs and our campaigns in the first quarter. So as.
As you know that that revenue is nonrecurring and where we're selling campaigns throughout the year as well. So if you just did think about the cadence.
Some of that will have to have things will have to happen in <unk> to sort of fill that out.
We obviously don't provide quarterly guidance, but I think you should you should definitely think about a little bit of that's been pulled out.
Okay. That's really helpful. Thank you and then maybe just one more you saw really nice gross margins on the software side and just curious if we should be assuming that you can kind of hold the cost of revenue level, where if there was maybe something unique this quarter that helps keep it kind of flat.
Well I mean first of all I think it's just important to call out the team I mean, just.
Just to continue.
Great effort by everyone. We obviously made a lot of investments across.
All of those clients client services client support teams and everyone's done a great job as we've continued to add a ton of clients 169.
This quarter.
So we.
And as we've said continue to say that when we think about getting back to adjusted EBITDA profitability, it's going to be based on more gross margin improvement, but I think the big step up has happened and now you're talking about more.
On a moderate improvement from here, but yeah, we do feel pretty good about it it was pretty nice wasn't it.
Is there anything it was very nice.
And thanks for the color and congrats again.
Thank you thanks.
Thank you we'll go next now to Ryan Daniels at William Blair.
Hey, guys. Good evening. Thanks for taking the question maybe I'll start with one for you the sales and marketing line seen really great leverage there was off about 10% year over year. Despite the 30% plus growth how should we think about that line item going forward and maybe the cadence here as we roll through the year.
Yes, I mean once again.
Worth calling out just the effort by the team so it's I mean.
People use the term productivity a lot, but there's people behind all that.
And so we're also been pretty diligent about how we spend I mean, theres non people expenses do and Theres vendors.
And so we've just tried to be you know have an ownership mentality in and try to get the most we can out of a lot of the expenses that we've had in the P&L and so I think again just like the previous question.
That operating leverage on sales and marketing expense will be another source of how we get to EBITDA positive. If you think about the negative 13, eight I'm getting to zero.
Should see some improvement there as a percentage of revenue that answer the question. Yeah. That's perfect and then interesting case study on network solutions regarding the open enrollment period I'm curious if that was done on behalf of a plant and thus kind of signs of novel revenue stream there with that.
Offering or is that something you did as kind of an internal project for MA eligible members in order to market the capability to payers going forward. Thanks.
Yes.
That is right and that was a little of both so I think we.
We did that we had a plan, but I don't think it's I think it was really to show off some capabilities. It was not a revenue dropped a huge revenue driver.
But I think you've got a lot of folks really excited about our capabilities being able to reach their members specifically.
And understand what matters to the members.
What are the things that we strongly believe that we've been able to see for years with our platform is that it.
As much as we might all the Americans like use the health care system, we all have very individual and different needs and those needs often.
Are not seen through the plan coverage and this gives this gives a lot more visibility to that client base of ours and they've been pretty excited about that.
Feedback we think every night.
Perfect. Thank you for the color congrats again.
Cheers, Thanks man.
Thank you well go next out use Jessica Tan Piper Sandler.
Thank you guys for taking my question and nice first quarter with that new CFO .
So I would just kind of echo Ryan Benjamin I thought the number connect detail is really helpful should.
Should we think about this product that is being kind of out of beta and priced and ready for full launch.
For 2020 for AEP. So in your kind of fiscal <unk> Q4 keep here yet.
Okay.
I don't think.
Team would tell you that.
In data, but I don't think its fully gea has that it's I think we have a bunch of customers on our different product sets I think we still have a lot of investment in it and I think.
I Wouldnt say were.
Yeah.
Let's just say, it's showing very well I'm really proud of the team.
On what we're doing with it at that.
I'm not commenting on where we'll be for open enrollment just yet.
It's still early okay.
But.
Response from the community the client community has been phenomenal.
In our exploration.
Thanks again.
Sure. So there is sort of like two parts to that.
Remember connect as an offering.
We refer you to go back to our.
Through our letter from December on this.
Sure.
The Medicare advantage lead Gen piece that you were talking about earlier, but there is also like.
<unk> <unk>.
The offering of Pam in and of itself.
Thats another sort of piece of member connect.
Nothing really to call out there for monetization.
Remember when you think about member connect think about it is the revenue generating.
Almost exclusively the Medicare advantage lead Gen. However.
There is revenue from Pam that came through the acquisition of insignia, which is in subscription.
That's tied to that.
Effectively the EMEA <unk>.
<unk> is a contract we have with CMS.
So CMS has a multi year contract.
That is public you can see you can look it up but it's it's subscription revenue through that.
Got it thanks again.
Yes.
We'll take our next question now from Glen San Angelo at Jefferies.
Hi, yes, thanks for taking my question and good evening.
Hey, guys I wanted obviously, another nice EBITDA beat again this quarter and I think you know the obvious question is.
With revenues sort of humming along in the low thirty's here the.
The EBITDA guidance for the year really doesn't assume any leverage throughout the balance of the year and I'm kind of curious is that some level of conservatism or are there other sort of planned investments that we should be talking about or there would be helpful to sort of point out and then I just had a.
A follow up question on the on the balance sheet.
Sure. So first of all just to be clear when.
When you say low Thirty's, you mean as a percentage growth.
Yes, I'm sorry, yes.
Okay got it I almost skipped a beat there because I thought you meant.
No.
Okay.
So I mean, Glenn first of all I think this is sort of like the same sort of theme from the question on gross margins and on sales and marketing that goes right to EBITDA, which is.
The team has done a great job and I know we.
Can't go to say, let's say enough about that and so it's afforded us the ability to keep investing in the business.
And so the outperformance on EBITDA that you've seen in the past few quarters has set us up too.
We've said, which is continue to invest in the area that you should think about is R&D. It's the one area that we don't talk about like Oh, we're going to sort of squeeze in.
Operating leverage around because we're thinking about fiscal 'twenty, six 'twenty, seven and 28 et cetera.
So when you think about the range the EBITDA guidance range sure. There is there is a situation where.
We'll be investing more in R&D that said, we'll update you in 90 days and the team continues to execute well.
Maybe maybe there's room for improvement.
Okay perfect.
That's helpful. I just wanted to follow up on the balance sheet I mean, the company has been.
Burn in call it mid teens.
15 ish million dollars of cash I think again this quarter, maybe a little bit higher last year as we think about the path to profitability in fiscal 'twenty four 'twenty five I know you have a $150 million in cash on the balance sheet. You said that you are more than comfortable that that you have enough, but I was just wanted to reconcile that with some of the commentary related to SBB.
In the press release, if you could just sort of quickly rehash course, where you have a lending facility now where your cash is sitting in with the plan to be to open up another lending facility outside of that same day.
Yeah, Thanks for bringing up the well go ahead and those were like 17 last year.
I promise I'm done.
And thanks for making me want to have to look at our lengthy disclosure so Oliver attorneys.
We feel comfortable with how we talk about this but.
I mean glad there's a lot of language in the filings from last time and Youll see some in the queue at this time, but.
At the end of the day that that facility is still is in place and we've received a waiver.
That allows us to keep more cash outside of SCB.
Longer term and for people on the phone or listening who are and the lending community.
Feel free to reach out to us longer term, we'll we'll look at other other avenues to finance any kind of growth we want beyond beyond what we've said, we can finance through cash through 'twenty five we continue to feel very good about that the cash is there to support that growth and as you said, it's about $150 million.
And we have no debt drawn on the existing facility.
Yes, we will look at other things and we will continue to look at other opportunities, but that revolver is in place today and then as far as the.
In terms of the losses, just note that on cash flow. There is timing. So the first part of the year we have some.
Some additional treasury stock if you look at the financing section to cover tax withholdings for employees. So you don't see those in the.
And the remaining quarters Youll actually see that Q4 and Q1.
Okay perfect. Thanks for all the detail much appreciated.
Yes.
Okay.
Thank you we'll go next to Scott <unk> House at Keybanc.
Hey, I'm in velocity.
Congrats on the quarter.
Wanted to.
Dig deeper into the update you provided in your letter about your partnership with unlimited systems.
Any of that launched this quarter was any of that showing up in results on the subscription side.
No.
Okay.
Okay and so is this something that you guys are accurately.
I would put that in the R&D line it still real early.
Okay. So is this something that you guys are actively pursuing.
Basically trying to partner with all the specialty.
Other healthcare service offerings.
Do you really sell your solution and what do you view that opportunity is.
As a way to drive really much more incremental.
Subscription growth for this year and next year.
Well so to be clear, we sell our solution.
But look we got a lot of requests from their customer base wanting to have an integrated solution with Frazier and so we're just really following where the market is and what the market wants and frankly, we've had.
We have a whole team of people and they do market assessments on where we should spend dollars in there.
Which is really smart and they work with our different partners and we decide where we make R&D investments for that type of integration and making sure that the.
The product that.
We have as great. So I don't know.
And we are very excited about it.
Unlimited is.
Seemed like early days is it seemed like a great partner.
Thanks for that color I guess lastly, my second question is on the.
Pharma digital advertising space, just generally what are you seeing there anything different from last quarter. You can it seems like you continue to outperform peers in this space.
Yeah.
So I think it's by gasoline think it's challenging.
<unk> to where it was when.
This was one of the only ways that people could reach the consumer obviously, we are doing.
We just put out another really good quarter and I'd say the number one reason is the.
The return we have for our for our clients like they've just been really really happy with.
What we can do and how we do it in a very in a methodology that is really pro patient right and.
That's just worked out very well for us and our clients, but the reason that we've also had the success is the team.
Just like they're working really hard.
And we still have in there is just like dashboard that I can see just the amount of interactions are our team is having with clients and it blows my mind.
Just how engaged how excited.
And how amazing that team is that works with our life Sciences clients.
The team off site and I went through and it was just.
Just like I think I had a smile on my face the entire times being there and being near that team. It was it was.
It was really uplifting theyre just doing a great job.
Im really proud of them.
Okay.
Thank you and the next to Ryan Macdonald Needham.
Thanks for taking my questions and congrats on the nice quarter, maybe the first one for you in the in the quarterly stakeholder letter I thought it was interesting on the discussion of patient insights and being utilized to sort of gather information around.
Clinical trials from patients can you talk about the potential application, therefore, extending sort of network solutions into clinical trial enrollment and how you think about potentially monetizing that overtime.
Well look I think I think that clinical trials and making sure that there is that.
And that patients that want to be in.
Different trials and get access to cutting edge therapies.
Giving them access and making available I just think it's just a wonderful wonderful thing to do.
Larry we've been making investments in its a natural continuation.
For what we can do and I think.
You should expect to hear more from us in the coming years on how we're.
How excited we are and the potential and some of the things we're going to do in that space I think it's still too early.
But we are investing in it and.
And what we want to let everyone know we.
We think that it's not just a monetary.
Monetary when we think it's just a big win for patients and for science.
Thanks, and maybe as a follow up to that I mean.
And being a win for patients over time as you continue to evolve the offerings there and when you have remember connect and you have the core life Sciences marketing and potentially now on the.
The clinical trial enrollment, how do you sort of balance out our prioritize what you're showing.
To the patient.
Within that intake experience to prevent the.
The experience from becoming too Jimmy if you will over time. Thanks.
Look we've made huge investments several years in data science and.
Just machine learning to be able to make the right type of decisions and I think that there's tons of very smart people and a lot of data.
Data that gets tied into how and what we do with what patient, but I'd say that first and foremost is making sure that its consent driven and we have permission to do and when you have permission.
Which is core to what everything we do it allows us to really lean into how we engage that that patient in different contexts, which which frankly should improve outcomes.
Okay.
I appreciate the color. Thanks again.
Sure.
Thank you we'll go next to John Ransom at Raymond James.
Hey, good evening.
Just.
I'd like to hear your reflection that high in the experiments you ran.
Are you crank up.
Investments.
And marketing and R&D just as you reflect on that after the decision what what would you point out is this was a particular highlight and then what would you kind of point out is this is something that we would not have learned if we hadn't done that.
I don't think we have enough time on this call Mr. Ransom.
You go through all of those things I think the one thing.
Net.
There's a lot of things, which is one I don't think I would have felt comfortable doing this without the leadership team that I have.
And the fact that we have a lot of us.
Have just worked together for a really long time and understand the business and the clients and.
And Pat and.
And understand how to read the information and data that gets that.
The decisions have been made at all times and those decisions can be made quickly if not the dollars are mis spent very quickly.
And I'm.
So I think first and foremost the comfort of having the decision as the team all over all spread all over at all different levels made me really comfortable and frankly.
Our reaffirmed based on quarter after quarter result, but that's why we have been as successful as you have as the team right and their ability to continuously iterate on everything that's happening in the market.
On the SaaS for his form in second half.
And I would say this every single time.
Okay.
When you've got a quiet you got to do the things you say youre going to do you're going to do it really really well and you've got to treat them really well and as long as we keep doing that and giving them great product that has a fair value I think we're going to keep building our business and will not just stand. The test time will just make a big impact in health care and health care.
Just need to get better.
Alright, just for all of our stake I'm getting old.
I'm going to be using the system, even more than I already have.
Yes, I was kind of mentioned that.
Yes.
Yes.
The beds did I answer your question.
Hi.
We'll talk later.
Yeah.
I'm just kind of follow up.
Okay.
Second question I have is.
So your sales productivity and if you go into the SDR selling or hiring season.
Just what's driving that productivity.
That youre seeing in your sales force and then how are you.
Anything what are you doing differently there.
You bring these new people onboard and how much of its technology, how much dividends just talent selection and how much of this is.
Door number three.
I can't think of right now.
I think I think we our ability to attract and retain folks on the team like our SDR teams.
Probably one of the best.
Right.
To attract and retain on that team and the leadership that team has is absolutely part of that.
The sales organization I think average tenure of our sales leadership.
With infusions over a decade and it shouldnt be lost on how amazing that team has done and then frankly, our up sell cross sell like the way that the way the team has been performing on it.
It's just been lovely Theyre, just doing a lovely job in and I mean, all of how well, it's Nathan performing and frankly, that's a testament to building great product and treating our customers well and doing the things, we say, we're going to do and which I think is just pretty basic.
Alright, Sir thank you.
Thank you.
Go next now to Sean Dodge at RBC capital markets.
Hey, good afternoon, Tom pillar on for Sean Thanks for taking the question.
Just one from me I guess, how big is the hospital business now and has that been a meaningful contributor to growth.
Maybe do you expect it to be in fiscal 2025.
I mean, we don't think about it.
Hospital is a hospital business and so you think about health care providers and you think about.
<unk> systems.
All hospitals.
Country are tend to be affiliated with some type of <unk>.
System or tend to have physician practices associated with them.
So that's typically been our entry point historically, we worked with the physician practice side of that organization and then enter the hospital piece and so we have lots of hospitals, we work with.
We announced publicly we enter that market.
About three and a half years ago, we've been working on the product for several years before that.
And so.
Think we're pretty happy about where we are with Jimmy would you agree.
Yeah.
I think everyone's been.
Thanks, Craig.
But when you think about just the universe of clients in.
Patients were patients receive care in the hospital, but it's also plenty of other delivery settings.
Alright makes sense I'll leave it there thanks guys.
Thanks.
It's been a long few months.
Oh, Yes, we will.
Required to disclose some of that stuff. So I hear that I hear that I mean.
Thank you Greg.
Hi, I was hoping you could help us understand the revenue guidance a little bit.
Slide eight points of deceleration for the rest of the year is there.
Any seasonality.
Our business or anything like that just given we've never seen that level of step down before and your revenue growth.
I mean, I think one of the things and we brought this up I think earlier.
<unk> was in the letter.
Volume strength was better than even we had expected in the first quarter. So when you said eight percentage, but I think I heard you say eight percentage points I think.
If you took the low end of 26 to 32 that we just reported that six right.
Am I missing something.
Is that you had 32% growth and then it would imply that it goes down to 20 corporate congrats on that point.
Oh, I see Youre, saying got it got it yeah, and so look I mean, I think there is definitely things that move around I think even this we brought up in the letter. There is there is some some related services that wherever we talked about in the letter.
And we just try to you know we don't sort of.
The business in a way that it's going to be exactly the same growth every quarter, but we try to sort of put the outlook out in the beginning of the year and but I think the biggest thing to take away and that Delta is the strong stronger than expected volume trends in the first quarter and as we pointed out that not only impacted payment processing. It also.
So impacted network solutions because of the pacing of our campaigns, but Stephanie also as somebody who I know you follow up payments closely.
I think it's noteworthy that we had a 1 billion dollar volume quarter in payment volume in the first quarter and we actually skipped over the 900 deaths.
<unk> or whatever you call I guess, the $100 million to $101 million, we went from $800 million to $1 billion in this quarter.
And so I think that just sort of speaks to even even with some of the seasonality just the strong volumes in the first quarter.
Okay. So that's a perfect lead into my next question you saw that huge volume quarter.
Much of that was a function of.
Utilization improvements versus some of the debt discount and we've called out peg remarks is thereof.
Is there a way to discount, but still healthy beat in that segment and more sustainable way.
Without this quarter.
I mean.
I think we've been clear on the last couple of quarters that Thats something we have.
We have experimented with different pricing over time and with the intention that it will continue to do it if we can get.
Good profit and economics out of it. So yes. There is some correlation I don't know if we say.
The specific amount but.
No you did great.
Right.
Alright, thanks, guys.
Thanks, Stephanie.
We'll take our next question now from John Park at Guggenheim.
Hi.
Thanks for taking my question I'm on for Jack.
I was wondering if we could quickly touch on the SDR account.
You mean in the in the quarter yes.
Yes give me one second.
These are laminated pages you have any if you have another question go ahead and I'll get the number for you yet.
However changes in the labor market impacted.
Market demand.
I think what.
Bye bye.
<unk> done this for a pretty long time, I'd say labor is still pretty compared to the way. It was pre COVID-19, it's still pretty tight.
And then wages are still they're still at an accelerated level.
I would say.
It's very <unk>.
Depending on the organization regional but look a lot of these practices and health systems.
Everyone's having everyones, having to watch all of their costs and labor is the most expensive and the biggest part of health care and I don't see wages coming down anytime soon.
Percentage.
And and John .
John that numbers 169, that's inclusive of our ISR as our inside sales representatives to.
So pretty much about the same number as last quarter got it okay, and if I can just squeeze one in.
Apple announced Apple pay later in March and I understand as the application process to actually use the functionality do you envision that having any sort of impact.
On the payment side of business.
No I don't.
Okay.
I don't know if they've enabled it in health care.
But.
We do.
As you accept Apple pay.
On our platform.
Great. Thanks, so much sure.
Curious thanks man.
Thank you we'll go next to Richard close of Canaccord Genuity.
Yes.
Yes, thanks, Congratulations sorry, I dropped off for a couple of times. So if I repeat just let me know.
Did you talk at all about the <unk>.
Unlimited systems relationship.
Maybe the market presence there.
Yeah. We did we spent like 20 minutes of the call.
It would be great.
You should read the transcript.
We'll move to the next one then.
Alright.
Just maybe following up on Ryan's.
Comments.
On sales and marketing or question on sales and marketing I know you called out for cost of services and sales and marketing from lower head count there.
Some growth in R&D in.
Maybe just fine tuning a little bit.
Yes.
<unk>.
And those areas, maybe if you can just go into a little bit more detail on that.
Head count changes.
I mean, I think you sort of hit it Richard I mean, it's.
We continue to invest in R&D.
And then in the other areas I mean, you have the numbers it was.
Minus 30% sequentially.
So.
You could.
Sort of on a net basis.
Allocate those to those other areas but.
R&D continues to be up.
Okay.
Any thoughts with respect to the referral management offerings that you rolled out a couple of years ago, how that's trending.
It's still growing pretty nicely.
Debt offerings.
Continuously getting more and more traction and that's really it's been really beneficial through a lot of our practices as we've been rolling it out.
Have been very pleased with its success.
And I know that they keep lighting up more and more practices with it than maybe in the next couple of quarters, we'll give a little update on that.
How that volumes okay.
Okay, great. Thanks.
Thanks.
We will take our next question now from Daniel gross like at Citi.
Yes.
Hi, guys. Thanks for taking the question.
I want to go back to the member connect.
Product here and just get your views on in general Medicare advantage market. There's some headwinds for the next calendar year, given the advanced rate notice getting somewhat.
Star scores changes.
So how are you thinking about growth in the Medicare market market in general and how does that translate to how youre thinking about that number connect product for calendar year 'twenty four.
Well.
I think it's still pretty early but what I can tell you is that the feedback we're hearing from carriers and the plans is that at the end of the day they want to make sure that they are engaging with their members, making sure that their members are unbelievably satisfied with the plans and when possible.
Alignment.
The available plans with providers in their network and that is one of the most important decisions people make bin picking our plan is is my doctor recovered and so what I can say, it's a huge market I think it's.
As long as it's been around its head changes and I think we're pretty excited about.
Being able to serve more Americans more different ways.
Yeah that makes sense and I guess as I think about the product to.
It has applicability beyond just just the carriers right you could potentially sell this to the broker channel. The E brokers in particular, how are you thinking about then the brokers the brokers in general as clients here.
And right now carriers, Yes go ahead.
Yes, I think it's mostly plans, but I know that the team is engaged with some of the broker some brokers too.
Okay, but going forward, we should expect this mostly to be a carrier product.
I think that's the plan yes.
Okay, great. Thank you.
Thanks.
Well go next to Jeff Garrow at Stephens.
Yes. Good afternoon, thanks for taking the questions. It looks like another good quarter of healthcare service clients adds wanted to see if theres anything you could tell us about what worked in the quarter to drive those ads and anything you'd call out in terms of the mix of the ads by.
Practice size or specialty or geography.
No they were all over the board.
We really large.
All across the country unbelievably small all across the country whole bunch in the middle or across the country.
<unk> single, especially multi especially health system.
You name it was the whole megillah and so.
And we did well because the team did well selling did a phenomenal job implementing.
And.
Screening customers really and our clients really really well.
And <unk>.
Having just.
Just a great product.
That works, that's a good way to do it.
Follow up a little bit on the subject of client ads. The stakeholder letter said the expectation for the fiscal second quarter to similar ads as last fourth quarter or this most recent quarter. So call. It a range of $1 60 to 170 curious to get your comments on the company's ability to.
Essentially matched the roughly 800 incremental adds you achieved in FY2023 in the current fiscal year as we think about the next nine months.
Yeah, I mean, Jeff we're trying to do is.
We're not going to speak to the whole year, but we understand like having some inputs in your models are our outflow. So EBIT, even the comment about the next quarter. It was $1 58.
In the fourth quarter was 169 in this quarter.
And we're just saying, it's going to sort of be in that general range.
And then there's obviously like some sort of counterbalance to that with.
Revenue per client, but.
We'll just we'll come back to you next quarter and give you give you an update but we're not going to speak to the year.
We can you give that visibility because we fear.
No.
Not like hide the ball, we generally know where it's going to be at this point, yes. So.
If you have if you want to follow up please do but I think that's that's what we're trying to do is just at least put some kind of anchor.
Anchor in there.
No that helps thanks again.
And we'll go next to Robert Simmons at D. A Davidson.
Hey, Thanks for taking the question.
Hearing from the farmer.
Where is that us or the.
Couldn't hear you.
Hello.
Mr. Simmons, we're having a hard time hearing you Sir.
Alright trajectory.
Hi, everyone I was completely scrappy phone service. So I just assumed it was us.
Hey can you hear me now.
Oh, yes, we can hear you.
Doesn't mean might headset switch off and then back on for some reason.
So sorry, I was wondering you touched on this earlier, but what are you hearing from the farmers in terms of their spend attention has the tone of the conversation improves gotten worse stayed about the same over the last call. It three to six months.
I think life Sciences organizations everywhere is very cognizant of.
Gail and a return on investment and being aligned with the right types of products and I think <unk> been pretty happy.
I could speak about working with us I can't necessarily speak about.
The whole market, it's obviously been a still a softer market than in previous years and I know the teams.
We still have a lot of selling left to do in the ear and the team's doing.
Pretty good work, making sure that we are.
Sure.
We continue to execute.
But we still think the market's still pretty still early in the year.
Got it great. Thank you very much.
Thanks.
Thanks.
Thank you and gentlemen, it appears we have no further questions. This afternoon, Mr. Andy I'd like to turn the conference back to you for any closing remarks.
Yes, I just wanted to thank everyone for joining the call and I want to thank everyone at freesia for another great quarter and.
We will talk to everyone in about 90 ish days and hopefully everyone has a nice summer.
Thank you Mr. Idzik, ladies and gentlemen, thank you for the <unk> fiscal first quarter 2020 or earnings conference.
Thank you all so much for joining us and wish you all a great remainder of your day Goodbye.
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