Q1 2026 Phreesia Inc Earnings Call
Speaker Change: [music].
Operator: Good morning, ladies and gentlemen, and welcome to the Phreesia First Quarter Fiscal 2026 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.
Good morning, ladies and gentlemen, and welcome to the freeze your first quarter fiscal 2026 earnings conference call.
Speaker Change: 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 philosophy Gandhi Frejus Chief Financial Officer. Mr. Gandhi you may begin.
Balaji Gandhi: First, I would like to introduce Balaji Gandhi, Phreesia's Chief Financial Officer. Mr. Gandhi, you may begin. Thank you, operator.
Speaker Change: Thank you operator good morning.
Balaji Gandhi: Good morning and welcome to Phreesia's earnings conference call for the first quarter of fiscal 2026, which ended on April 30th of 2021. Joining me on today's call is Chaim Indig, our Chief Executive Officer. A more complete discussion of our results can be found in our earnings press release and in our related Form 8K submission to the SEC, including our quarterly stakeholder letter, both issued before the markets opened today. These documents are available on the Investor Relations section of our website at ir.phreesia.com. As a reminder, today's call is being recorded and a replay will be available on our investor relations website at ir.phreesia.com following the conclusion of the call.
Speaker Change: And welcome to <unk> earnings Conference call for the first quarter of fiscal 2026, which ended on April 30 of 2025.
Speaker Change: Joining me on today's call is our Chief Executive Officer.
Speaker Change: A more 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 before the market opened today.
Speaker Change: These documents are available on the Investor Relations section of our website at IR Dot Freesia Dot com.
Speaker Change: As a reminder, today's call is being recorded and a replay will be available on our investor Relations website at IR Dot freezer Dot com.
Speaker Change: Owing the conclusion of the call.
Balaji Gandhi: During today's call, we may make forward-looking statements, including statements regarding trends, our anticipated growth, strategies, predictions about our industry, and the anticipated performance of our business, including our outlook regarding future financial results. 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 stakeholder 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 later today.
Speaker Change: During today's call we may make forward looking statements, including statements regarding trends, our anticipated growth strategies predictions about our industry and the anticipated performance of our business, including our outlook regarding future financial results forward looking statements are subject to various risks uncertainties and other factors that may.
Speaker Change: 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 stakeholder 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.
Speaker Change: See later today.
Balaji Gandhi: The forward-looking statements made on this call will be based on our current views and expectations and speak only as of the date on which the statements are made.
Speaker Change: The forward looking statements made on this call will be based on our current views and expectations and speak only as of the date on which the statements are made.
Balaji Gandhi: We undertake no obligation to update and expressly disclaim the 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 We may also refer to certain financial measures not in accordance with generally accepted accounting principles, such as adjusted EBITDA and free cash. in order to provide additional information to. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from, our GAAP requirements. A reconciliation of GAAP to non-GAAP results may be found in our Earnings Release and Stakeholder Letter, which were furnished with our Form 8K, filed before the markets opened with the SEC, and may also be found on our Investor Relations website at ir.phreesia.com.
Speaker Change: 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.
Speaker Change: Also refer to certain financial measures not in accordance with generally accepted accounting principles, such as adjusted EBITDA and free cash flows in order to provide additional information to investors.
Speaker Change: non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results.
Speaker Change: Reconciliation 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 before the markets opened with the SEC and May also be found on our Investor Relations website at IR Dot Dot com.
Chaim Indig: I will now turn the call over to our CEO, Chaim Indig. Thank you, Balaji, and good morning, everyone. Thank you for joining our first quarter of fiscal 2026 earnings call. I'd like to thank and congratulate all my Phreesia colleagues for a strong start to the fiscal year.
Jaime: I will now turn the call over to our CEO Jaime <unk>.
Jaime: Thank you <unk> and good morning, everyone. Thank you for joining our first quarter of fiscal 2026 earnings call.
Jaime: Like to thank and congratulate all my <unk> colleagues for a strong start to the fiscal year largely will cover the results and updated outlook.
Chaim Indig: Balaji will cover the results and update out. First, I'd like to provide a few insights into where we are in our positioning for the future. Our focus remains to continuously deliver valuable and scalable products that drive meaningful outcomes for patients and providers. Products such as appointment readiness, post-script engagement, and enhanced bill pay were developed and introduced with long-term value in mind and are already showing measurable impact across the network. AI is being integrated across all aspects of our organization and our current and future products. We believe we are well positioned to continue to grow our network through product-led growth.
Jaime: First I'd like to provide a few insights into where we are and our positioning for the future.
Jaime: Our focus remains to continuously deliver valuable and scalable product may drive meaningful outcomes for patients and providers.
Jaime: Products, such as a break in readiness postscript engagement and enhance bill pay were developed and introduced with long term value in mind.
Speaker Change: Are you showing measurable impact across the network.
Speaker Change: AI is being integrated across all aspects of our organization and our current and future products.
Jaime: We believe we are well positioned to continue to grow our network through product led growth.
Chaim Indig: Through our strong balance sheet and growing free cash flow, we are also well-positioned to allocate capital in ways that drive long-term shareholder value.
Jaime: Our strong balance sheet and growing free cash flow. We are also well positioned to allocate capital in ways that drive long term shareholder value.
Balaji Gandhi: I'll now turn it over to Balaji to review our results and update it out. Thank you, Chaim. Let me begin with a review of our first quarter financial performance, and we'll then dive into our outlook for fiscal year 2020. Revenue was $115.9 million, an increase of 15% year over year. We ended the quarter with average healthcare services clients of 4,411, an increase of 70 from the prior quarter and 346 from the prior year. Total revenue per average healthcare services client. was $26,283, up 6% year over year, and up 4% quarter over quarter.
Jim <unk>: I'll turn it over Jim <unk>, who will review our results and updated outlook.
Jaime: Thank you hi.
Jaime: Let me begin with a review of our first quarter financial performance and will then dive into our outlook for fiscal year 2026.
Jaime: Revenue was $115 9 million, an increase of 15% year over year. We ended the quarter with average health care services clients of 4400 at 11, an increase of 70 from the prior quarter and 346 from the prior year.
Jaime: Total revenue per average healthcare services clients.
Jaime: It was $26283 up 6% year over year and up 4% quarter over quarter.
Balaji Gandhi: Moving on to profitability, adjusted EBITDA was $20.8 million, an increase of 16.7% year-over-year, with an adjusted EBITDA margin of $18.8 million.
Jaime: Moving on to profitability adjusted EBITDA.
Jaime: Was $28 million, an increase of 16, 7% year over year with an adjusted EBITDA margin of 18%.
Balaji Gandhi: Now turning to the balance sheet and cash. We ended the quarter with $90.9 million in cash and cash equivalents. This compares to $84.2 million in the prior quarter. We maintained positive operating cash flow and positive free cash flow for the fourth consecutive quarter. Operating cash flow remained positive at $14.9 million, up $15.6 million year-over-year. Pre-cash flow remains positive at $7.5 million in the quarter, up $13.7 million year-over-year.
Jaime: Now turning to the balance sheet and cash flow.
Jaime: We ended the quarter with $99 million in cash and cash equivalents. This compares to $84 2 million in the prior quarter we.
Jaime: We maintained positive operating cash flow and positive free cash flow for the fourth consecutive quarter.
Jaime: Operating cash flow remained positive at $14 $9 million up $15 $6 million year over year free cash flow remains positive at $7 $5 million in the quarter up $13 $7 million year over year.
Balaji Gandhi: We expect that the magnitude of improvement on a quarter-to-quarter basis to vary based on specific timing of invoicing and payments, which you can see in the working capital along with capital expenditures. Our first quarter results demonstrate our team's focus on growing our network, expanding our offerings, and driving operations. As our cash position continues to grow, we will remain opportunistic and flexible in our approach to deploying cash to profitable growth and value-enhancing opportunities as they arise.
Jaime: We expect that the magnitude of improvement on a quarter to quarter basis to vary based on specific timing of invoicing and payments, which you can see in the working capital along with capital expenditures.
Jaime: Our first quarter results demonstrate our team's focus on growing our network expanding our offerings and driving operating leverage.
Jaime: As our cash position continues to grow we will remain opportunistic and flexible in our approach to deploying cash to profitable growth and value enhancing opportunities as they arise.
Balaji Gandhi: I would like to thank all of my Phreesia teammates for their contributions.
Jaime: I would like to thank all of my <unk> teammates for their contributions.
Balaji Gandhi: Transitioning to our Financial Outlook for Fiscal 2020. We are maintaining our revenue outlook for the fiscal year 2026 at a range of $472 million to $482 million. We are updating our adjusted EBITDA outlook for fiscal year 2026 to a range of $85 million to $90 million, from a previous range of $78 million to $88 million. That's a $4.5 million increase from the prior guidance.
Jaime: Transitioning to our financial outlook for fiscal 2026, we are maintaining our revenue outlook for the fiscal year 2026 at a range of 472 million to $482 million.
Jaime: We're updating our adjusted EBITDA outlook for fiscal year, 2026 to a range of $85 million to $90 million.
Jaime: Previous range of <unk> $78 million to $88 million, that's a $4 $5 million increase from the prior guidance midpoint.
Balaji Gandhi: The revenue range provided for fiscal 2026 assumes no additional revenue from potential future acquisitions completed between now and January 31, 2021. We are reiterating our outlook on AHSCs to reach approximately 4,500 in fiscal 2026 and for total revenue per AHSC to increase in fiscal 2026 compared to fiscal 2020.
Jaime: The revenue range provided for fiscal 2026 assumes no additional revenue from potential future acquisitions completed between now and January 31 2026.
Jaime: We are reiterating our outlook on hfcs to reach approximately 4500 in fiscal 2026 and for total revenue per HFC to increase in fiscal 2026 compared to fiscal 2025.
Operator: Operator, I think we can now open up the lines for the Q&A. At this time, if you would like to ask a question, press star, then the number 1 on your telephone keypad. We ask that participants limit themselves to one question and return to the queue for one follow-up if necessary. We will pause for just a moment to compile the Q&A roster.
Speaker Change: Operator, I think we can now open up the lines for the Q&A session.
Speaker Change: At this time, if you'd like to ask a question Press Star then the number one on your telephone keypad, we ask that participants limit themselves to one question and return to the queue for one follow up if necessary, we will pause for just a moment to compile the Q&A roster.
Anne Samuel: Your first question comes from Anne Samuel with J.P. Morgan. Please go ahead. Hi guys, congrats on the terrific quarter. You know, maybe just starting with Network Solutions, you know, you continue to see really, really nice growth there. And I was hoping maybe you could just speak to what your conversations with customers have been like in the current environment. And is there just any hesitancy around decision making, like we've heard from others, you know, realizing that you've been more resilient, I would say, than others, you know, through some of the prior macro volatility that we've seen.
Speaker Change: Your first question comes from Anne Samuel with Jpmorgan. Please go ahead.
Anne Samuel: Hi, guys congrats on the terrific quarter.
Speaker Change: Yeah, maybe just starting with network solutions, you continue to see really really nice growth there and I was hoping maybe you could just speak to what your conversations with customers have been like in the current environment.
Jaime: Is there just any hesitancy around decision, making like we've heard from others.
Jaime: Realizing that you've been more resilient I would say than others.
Jaime: Some of the prior macro volatility that we've seen so just curious to hear any thoughts on how youre thinking about the find in the current environment.
Chaim Indig: So just curious to hear any thoughts on how you're thinking about this line in the current environment.
Chaim Indig: Yeah, Annie, thanks for the question. I think, you know, this is probably something we've talked about the entire time we've been public. I mean, it's really just a testament to the team we have. We have a great team from, you know, all aspects of the life sciences. And I think the other thing is, if you think about Haim's opening remarks, us being a product-led company, it really does also start with the product development end, and so having those products, and then having the network solutions team that can go out and deliver the product and sell it is really what's driving that result.
Speaker Change: Yes, Andy Thanks for the question I think this is probably something we've talked about the entire time ago public I mean, it's really just a testament to the team we have.
Speaker Change: We have a great team.
Speaker Change: Aspects of of.
Speaker Change: The life Sciences, and I think the other thing is if you think about <unk> opening remarks us being a product led company that really does also start with the product.
Speaker Change: Development and <unk>.
Speaker Change: So having those products and then having the network solutions team that can go out and deliver the product and sell it.
Speaker Change: It was really was driving that result, so nothing really new to report.
Chaim Indig: So nothing really new to report, but, yeah, nice to see those results in the quarter. That's really helpful.
Jaime: Nice to see those results in the quarter.
Jaime: That's really helpful. Thank you.
Jailendra Singh: Your next question comes from Halandra Singh with Truist Securities. Please go ahead.
Jaime: Your next question comes from how long dressing with true Securities. Please go ahead.
Jailendra Singh: Hi, this is Jailendra Singh from Truist. Thanks and good morning, everyone. So congrats on a strong quarter. I want to stay on the macro topic. I mean, you touched on pharma solutions and network solutions business, but also any thoughts on the provider's market? I mean, clearly those guys are also immune to all the recent developments. Keeping that in mind, how have your conversations evolved with these clients over the past couple of months? And are you capturing any incremental uncertainty in your outlook in any way?
Angela: Hi, This is Angela investing from choice, Thanks, and good morning, everyone. So congrats on a strong quarter I wanted to stay on the macro topic, you touched on pharma solutions and network solutions business, but also any portion that provided us market. I mean, clearly those guys are also immune to all of the Liza development keeping that in mind how have your conversations.
Jaime: Involved with these claims over the past couple of months and audio adoption any incremental uncertainty in your outlook in any ways.
Chaim Indig: So, yeah, and just so I make sure we understand the question, Jailendra, you're asking about the provider-end market and just, you know, how the conversations have been? Yeah.
Speaker Change: So yes, and then just so I make sure I understand the question Julien your estimate of provider end market and just how the car.
Jaime: Patients have been yes, yes.
Jaime: Yes.
Chaim Indig: I'll start, maybe, you know, if I want to say anything, Ken. Again, probably not a whole lot new there. I mean, really, you know, driving the product. And I think, you know, Phreesia, you know, over its history has always had, you know, a focus on trying to build and deliver products that are driving a lot of value. And that's usually where, you know, a lot of the conversations are anchored around. I don't think things are, you know, easier, harder. I mean, it's always been a competitive market. All the, you know, opportunities are competitive for us, and that continues.
Jaime: I'll start and maybe if I must say Ken.
Jaime: Again, probably not a whole lot new there I mean really.
Jaime: Driving the product and I think <unk> over its history has always had a.
Jaime: Our focus on trying to build and deliver products that are driving a lot of value and that's usually where a lot of the conversations are anchored around I don't think things are.
Jaime: Is your harder I mean, it's always been a competitive market.
Jaime: Opportunities are competitive for us.
Jaime: And that continues but I think the thing.
Chaim Indig: But I think, you know, the thing we'd want you to take away is just the products we have and the value that they bring. And I think you can see in our results that we're still, you know, adding a lot of new clients and generating a lot of revenue off of existing ones.
Jaime: We want you to take away is just the products, we have and the value they bring.
Jaime: I think you could see it in our results that we're still adding a lot of new clients and generating a lot of revenue off of existing ones.
Jaime: Thank you.
Jessica Tassan: Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead. Hi guys, thanks so much for taking the question. So can you maybe talk about just the visibility that your Network Solutions customers have into ROI, campaign success, how much flexibility they kind of have to titrate up or down campaigns, or maybe switch types of media, just interested in like what data they have on what timeframe, and then sort of, you know, to what degree are they able to amend or modify campaigns in real time? Thanks.
Jessica <unk>: Your next question comes from Jessica <unk> with Piper Sandler. Please go ahead.
Jessica <unk>: Hi, guys. Thanks, so much for and for taking the question.
Speaker Change: Can you maybe talk about just the visibility that your network solutions customers have into an ROI campaign success, how much flexibility they kind of have to titrate up or down campaigns.
Jessica <unk>: Such types of media just just interested in like what data they have on what timeframe and then sort of you know.
Jessica <unk>: What to what degree are they able to.
Speaker Change: And then modify campaigns and Ralph Thanks.
Chaim Indig: Hey, Jess, it's Chaim. We tech, almost all of our campaigns with life sciences clients have to go through an MLR process, or medical legal review. And it's like that for everyone in the industry.
Speaker Change: Hey, guys. Thanks, Scott.
Speaker Change: We get most almost all of our campaigns with life Sciences clients have to go through.
Jessica <unk>: Our processor of medical legal review so.
Jessica <unk>: And it's like that for everyone in the industry.
Chaim Indig: And then those get submitted with FDA. So all of our programs, yes, they can titrate up and down, depending on the different streams, and we run thousands of streams of different programs. throughout a year. And we pace them based on both the appropriate patient and the needs of the patient. The pharmaceutical or biotech company or life sciences company that we work with, and often throughout the year, you know, as dollars become available, they'll often titrate them higher, and we're more often than not a, the platform that is the receiver of dollars throughout the year, just because of our very strong ROI and our ability to deliver results.
Jessica <unk>: And then does get submitted with FDA, So all of our programs yes.
Jessica <unk>: Titrate operating down depending on the different streams and we run thousands of streams.
Jessica <unk>: Different programs.
Jessica <unk>: Throughout the year.
Jaime: We pay them based on.
Jaime: The appropriate patient and there were good it needs of the pain.
Speaker Change: The pharmaceutical or biotech company or life Sciences company that we work with and often throughout the year.
Speaker Change: Installers become available they will.
Speaker Change: Often titrate them higher.
Jaime: And were more often than not.
Jaime: Hey.
Jaime: And the platform that is the receiver of dollars throughout the year, just because of our very strong ROI in our ability to deliver results.
Jaime: And frankly, the fact that our scale keeps growing.
Chaim Indig: And frankly, the fact that our scale keeps Awesome.
Jaime: Awesome. Thank you.
Chaim Indig: Thank you.
Balaji Gandhi: Your next question. Balaji made me speak. He says I never speak anymore.
Jaime: Youre welcome.
Jaime: Me speak he says I never speak anymore asos.
Richard Close: Your next question comes from Richard Close with Canaccord Genuity. Please go ahead. Yeah, thanks.
Richard Close: Your next question comes from Richard close with Canaccord Genuity. Please go ahead.
Richard: Yes, thanks, congratulations on a great quarter.
Richard Close: Congratulations on a great quarter. Maybe talk a little bit about sales and marketing and the GNA lines. Obviously, great performance there in the first quarter. I was curious if there's anything specific to call out. And then as we think about the rest of the year, maybe anything to keep in mind as we progress through the remaining quarters.
Richard Close: Maybe talk a little bit about sales and marketing and the G&A lines, obviously, great performance there.
Richard Close: In the first quarter.
Richard Close: Was curious if there is anything specific to call out and then as we think about the rest of the year.
Richard Close: Maybe anything to keep in mind as we progressed through the remaining quarters.
Chaim Indig: Yeah. Thanks, Richard.
Richard Close: Yes.
Chaim Indig: You know, I think you were probably one of the people, maybe if you go back three or four years, when we made the big upfront investment, Richard, you remember a lot of the sort of math, sort of thinking around returns that we would get on all those investments and payback periods, and how, you know, our view was we could grow into them over time? I think what you're seeing is just that, and I think you're seeing it in the numbers. I think it's a testament, again, to the team, because we made a lot of those upfront investments.
Richard Close: Thanks Richard.
Richard Close: Thanks.
Samuel Anne: I think you were probably one of the people maybe if you go back three or four years. When we made the big upfront investment Richard you remember a lot of the sort of mass sort of thinking around returns.
Richard Close: We would get on all of those investments in payback periods and how our view was we could grow into them over time.
Richard Close: I think what Youre seeing is just that and I think you're seeing it in the numbers I think it's a testament again to the team because we made a lot of those upfront investments.
Chaim Indig: We've obviously, you know, continuously made changes to how the team is composed and how the go-to-market is, and introduced some new products along the way, but I think it really does just go back to getting a really good return on that. I think our revenue and adjusted EBITDA outlook for the year, you can, you know, back into what the expense trend is going to be. I don't think it's going to be particularly different within any of these line items, you know, sort of flat-ish. Okay.
Richard Close: Obviously continuously made changes to how the team is composed and how the go to market is and I'm going to introduce some new products along the way, but I think it really does just go back to getting a really good return on that I think our revenue and EBITDA adjusted EBITDA outlook for the year.
Richard Close: Back into what the expense trend is going to be I don't think its going to be particularly.
Richard Close: Different within any of these line items.
Richard Close: Flattish.
Richard Close: Okay. Thank you.
John Ransom: Your next question comes from John Ransom with RJF. Please go ahead. Hey, good morning, everybody. Just wondering, as your financial position is getting a little better day by day, Are there any kind of potential capital deployments that might make the bar today that maybe wouldn't have been there a year ago or so?
Speaker Change: Your next question comes from John Ransom with R. J F. Please go ahead.
John Ransom: Hey, good morning, everybody.
John Ransom: Just wondering as your financial position is getting a little better day by day.
John Ransom: Are there any kind of potential capital deployment.
John Ransom: Might make the bar today that maybe wouldn't have been there.
John Ransom: A year ago or so and then also just like are there any end markets that you think are kind of if we wanted to get into this end market is more of a buy versus build.
John Ransom: And also, just like, are there any end markets that you think are kind of, if we want to get into this end market, it's more of a buy versus build? Thanks.
Chaim Indig: Yeah, that's a good question, John, and yeah, you see the cash balance continuing to grow now.
John Ransom: Yes, that's a good question John and yes.
John Ransom: You did.
John Ransom: The cash balance.
John Ransom: You're going to grow now.
Chaim Indig: I think philosophically, if you're talking about inorganic opportunities, nothing's really changed. We evaluate lots of opportunities. We do it as a team. There's lots of different people at Phreesia who bring up different ideas that we evaluate. We've done a few of them, as you've seen, over the years. I think it's all sort of through the lens of buy, build, or rent, and so there's things that we do in our business that we rent. Obviously, we've built a lot, but the acquisitions we've made, it's just sort of there's an equation you've got to run through. How long would it take to build it?
John Ransom: I think philosophically.
John Ransom: Because if you're talking about inorganic opportunities nothing's really changed we evaluate lots of opportunities we do it as a team.
Speaker Change: These different people at Frito, who bring up different ideas that we evaluate.
John Ransom: We've done a few of them as you've seen over the years.
John Ransom: I think it's all in the sort of through the lens of.
John Ransom: <unk> build or rent.
John Ransom: And so there's things that we do in our business that we rent obviously, we've built a lot but the acquisitions. We've made it's just sort of there is an equation you got to run through how long would it take to build it how much would it cost.
Chaim Indig: How much would it cost? And those are the kind of things that we've pursued and will continue to. I think we obviously have more capital to deploy, but that doesn't mean the way we look at opportunities is going to be any different. We'll continue to look at them, but don't feel the need to do anything differently just because we have more capital.
John Ransom: And those are the kind of things that we've pursued and will continue to.
John Ransom: I think.
John Ransom: We obviously have more capital to deploy but that doesn't mean that.
John Ransom: Way, we look at opportunities going to be any different.
John Ransom: Because when you look at them, but don't feel the need to do anything.
John Ransom: <unk>, just because we have more foreign capital.
Chaim Indig: And if you had to go back and look at your acquisitions to date, which one would kind of stand out as a star and which one would say maybe that those did not meet our expectations? You know, it's like a portfolio, John, and we like them all, but they definitely all have different time horizons and, you know, when we thought they would contribute. So, every, you know, you just think about it as a portfolio. Everything is contributing in the way we wanted it to. You know, obviously, we talked about publicly, you know, the last setback we had with the acquisition we did on Connect On Call, but it's really, you know, the team did a great job getting that restored and back out in the market.
John Ransom: And if you had to go back and look at share acquisitions to date with one what kind of stand out as a star and which one would say maybe that does did not meet our expectations.
Speaker Change: It's kind of it's like a portfolio, John and we like them all but they definitely all have different time horizons.
John Ransom: When we thought they would contribute so every every if you just think about the portfolio every thing is contributing in the way we wanted wanted it to.
John Ransom: Obviously, we've talked about publicly.
John Ransom: Let the setback we had.
John Ransom: With the acquisition, we did on connect on call, but it's really a team did a great job.
John Ransom: Getting that restored and back out in the market, so that probably cost us some time and that's probably the only one I'd call out.
Chaim Indig: So, that probably cost us, you know, some time, and that's probably the only one I could think of.
Chaim Indig: Thank you, sir. I'm sorry.
Speaker Change: Thank you Sir.
Chaim Indig: I'm sad that Chaim didn't say anything, but I'll get over it. It's fine.
Speaker Change: Im sorry, Im sad that high didn't say anything but I'll go over it.
Chaim Indig: Balaji was excited to answer that question. He did a great job. I agree.
John Ransom: <unk> is excited to answer that question Jeff.
John Ransom: Hi, great. Thank you.
Daniel Grosslight: Your next question comes from Daniel Grosslight with Citi.
Speaker Change: Your next question comes from Daniel <unk> with Citi. Please go ahead.
Daniel Grosslight: Please go ahead. Hi, guys. Thanks for taking the question. Grass on the strong quarter here.
Speaker Change: Hi, guys. Thanks for taking my question congrats on the strong quarter here.
Daniel Grosslight: I wanted to focus on the pavement segment. You know, volume was particularly strong this quarter. I was curious if the later flu season had any kind of outsized impact this quarter, or if there were any other tailwinds this quarter to call out.
John Ransom: Focus on the payments segment.
John Ransom: Volume was particularly strong this quarter I was curious if the later flu season had any kind of outsized impact this quarter or if there are if there were any other.
John Ransom: Tailwind this quarter to call out.
Chaim Indig: Probably just, first thing, Daniel, on that, just repeat what we probably said, you know, the last, you know, multiple calls, which is there's not a lot of, you know, fluctuation from things that are other than weather or just sort of the way the days fall on a calendar based on utilization in an office, you know, the days in the calendar. Those are really it.
John Ransom: Probably just well first thing Daniel on that just for Pete where we've probably said.
John Ransom: Multiple calls, which is theres not a lot of fluctuation from things that are other than weather or just sort of the way the days fell on a calendar based on utilization and an office.
John Ransom: The days in the calendar those are really it.
Chaim Indig: The one thing that you should be aware of is we did introduce our bill pay product, our patient bill pay product last year. And so that continues to get traction in the market. And the way that works is, you know, providers, you know, utilizing that product, we believe the way, you know, drives through our business is more volume. So that, we expect that to contribute.
John Ransom: The one thing that you should be aware of is we did introduce.
John Ransom: Our.
John Ransom: Bill pay product or patient bill pay product last year, and so that continues to get traction in the market and the way that works is providers utilizing that product.
John Ransom: We believe the way drives through our businesses more volume so that we would expect that to contribute.
Chaim Indig: I don't think in the first quarter that was anything material.
John Ransom: In the first quarter that was anything material to call out.
William Jellison: Your next question comes from William Jellison with D.A. Davidson. Please go ahead. Good morning, and thanks for taking my question.
John Ransom: Your next question comes from William Jellison with D. A Davidson. Please go ahead.
William Jellison: Good morning, and thanks for taking my question.
William Jellison: You know, pressing rewind real quick, if we look at the fiscal 2510k, it actually showed Phreesia adding, you know, quite a bit of net new talent to the organization last year, most of which was international. You know, as we sit here today, I was wondering if you could help us understand a bit better Phreesia's labor strategy moving forward and how we connect those dots to the kind of expense trajectory we've seen over the last several quarters.
John Ransom: Pressing rewind real quick if you look at the fiscal 'twenty five 10-K actually showed freesia, adding quite a bit of net new talent to the organization last year, most of which was international.
John Ransom: As we sit here today I was wondering if you could help us understand a bit better fragrance labor strategy moving forward and how we connect those dots to the kind of expense trajectory we've seen over the last.
John Ransom: Several quarters.
Chaim Indig: Yeah, William, you may have been newer to the story at that time, but the language in the 10-K you're referencing was a consolidation, really, that we did at the very beginning of the fiscal year. We had always had folks we worked with in India, and we consolidated that as Phreesia India, so you saw them drop into the headcount number as a consolidation.
John Ransom: Yes.
John Ransom: You may have been newer to the story at that time.
Speaker Change: Language in the 10-K Youre referencing.
Speaker Change: It was a consolidation really that we did at the very beginning of the.
Speaker Change: Fiscal year, we had always had.
Speaker Change: Folks we work with.
Speaker Change: In India.
Speaker Change: And we consolidated that is fresher, India. So you saw then drop into the head count number is a consolidation.
Speaker Change: Understood. Thank you.
Ryan Macdonald: Your next question comes from Ryan MacDonald with Needham and Company. Please go ahead. Hi, thanks for taking my questions, and congrats on a great quarter.
Ryan Macdonald: Your next question comes from Ryan Macdonald with Needham <unk> Company. Please go ahead.
Ryan Macdonald: Alright, Thanks for taking my questions and congrats on a great quarter I wanted to.
Ryan Macdonald: I wanted to get your thoughts on the proposed No Handouts for Drug Advertisements Act. It aims to eliminate the tax deduction that pharma companies can claim on direct-to-consumer advertising. I'm just curious if, one, if the proposed legislation's coming up in conversations with your pharma customers at all, is it resulting in any sort of incremental review on the ROI that Phreesia would generate if sort of the tax deduction for them is eliminated? And do you think that this is troublesome for the business, or does it create incremental opportunity that maybe pharma companies move from lower ROI direct-to-consumer channels into Phreesia as you think about later this year and into next year?
Ryan Macdonald: To get your thoughts on the proposed no handouts for drug advertisements Act.
Ryan Macdonald: It aims to eliminate the tax deduction that pharma companies can can claim on direct to consumer advertising I'm. Just curious is if one if the proposed legislation is coming up in conversations with your pharma customers at all is it resulting in any sort of incremental review on the ROI that frees you would generate if sorted.
Ryan Macdonald: The tax deduction for them.
Ryan Macdonald: Eliminated and do you think that this is troublesome for the business or does it create incremental opportunity that maybe pharma companies move from lower ROI direct to consumer channels into freesia as you think about later this year and into next year. Thanks.
Ryan Macdonald: Thanks.
Chaim Indig: Yeah, thanks Ryan. As you know, there's always, you know, legislation floating around topics like this. You know, there's bills that have been introduced this year, including the one you referred to.
Brian: Yes, Thanks, Brian.
Brian: As you know there's always legislation.
Brian: Floating around around topics like this.
Brian: There's bills that have been introduced this year include the one you referred to there is really nothing new.
Chaim Indig: There's really nothing new to update there, and we would, you know, always take the practice of waiting until something happened. But I think what's probably more important to your question is just thinking about our platform and the value we bring to clients, which is very differentiated. Our platform delivers personalized health content on principles of privacy and consent. And so we feel really good about that value proposition, and there's, you know, really nothing new to report on that for the legislation.
Brian: To update there.
Brian: Always take the practice of waiting until something happens, but I think what's probably more important to your question is just thinking about our platform and the value we bring to clients, which is very differentiated our platform delivers personalized health content.
Brian: Principles of privacy and consent.
Brian: And so we feel really good about that value proposition.
Brian: And there is really nothing new to report on that legislation.
Brian: Okay.
Jeff Garro: Your next question comes from Jeff Garro with Stevens. Please go ahead. Yeah, good morning, guys. And thanks for taking the question. I want to return to the network solutions business and, and talk about the seasonality of that business. Maybe you could remind us what you typically see from Q4 to Q1 in a year and, and how that played out this year. And then is there Any expectation that the rest of the year network solutions revenue plays out at a different seasonality cadence than what you've seen historically. Thanks.
Speaker Change: Your next question comes from Jeff Garrow with Stephens. Please go ahead.
Jeff Garrow: Yes, good morning, guys and thanks for taking the question wanted to return to the network solutions business and talk about the seasonality of that business, maybe you could remind us what you typically see from Q4 to Q1 in our year end and how that played out this year.
Speaker Change: And then.
Speaker Change: Is there.
Speaker Change: Any expectation that the rest of the year network solutions revenue plays out at a different seasonality or cadence than what you've seen historically thanks.
Chaim Indig: Yeah, thanks, Jeff.
Jeff Garrow: Yes, Thanks, Jeff.
Chaim Indig: So I think the first thing, just to make sure we bring up, is the visibility we have into the year is the same as it was, you know, last year at this time. I think we wouldn't think about it as seasonality so much as if you think about Haim's answer to an earlier question around, you know, value and how we work with our life sciences clients. It's really, you know, there's pacing of certain programs that can cause fluctuations month to month or quarter to quarter. And I think that's, you know, some of what you see, especially as the numbers get bigger for us, the revenue gets a lot larger.
Speaker Change: So I think the first thing just to make sure we bring up is.
Speaker Change: The visibility.
Speaker Change: We have into the year is the same as it was last year at this time.
Speaker Change: I think we wouldn't think about it is seasonality. So much is if you think about <unk>.
Speaker Change: Answer to an earlier question around value and how we work with our life Sciences clients.
Speaker Change: It's really pacing of certain programs that can cause fluctuations amongst a month or quarter to quarter and I think thats. Some of what you see especially as the numbers get bigger for us.
Speaker Change: The revenue gets a lot larger, but no nothing nothing really to call out beyond that.
Chaim Indig: But no, nothing really to call out beyond that.
Chaim Indig: Understood.
Speaker Change: Understood. Thanks for taking the question.
Speaker Change: Yes.
Scott Schoenhaus: Your next question comes from Scott Schoenhaus with KeyBank. Please go ahead. Close enough.
Speaker Change: Your next question comes from Scott <unk> Haas with Keybanc. Please go ahead.
Speaker Change: Close enough.
Scott Schoenhaus: Hi, I'm Balaji. Great quarter.
Speaker Change: <unk> great quarter.
Scott Schoenhaus: I guess my question, I want to steer away from network solutions and focus in on subscription. You know, even if we back out that one time one million benefit from the extra services for one client, we get to a pretty healthy three point five percent growth rate on the revenue per provider client stat. And that's the best growth rate we've seen since, you know, 2021.
Speaker Change: I guess my question I want to steer away from network solutions and focus in on subscription even if we back out that one time $1 million benefit from the extra services for one client we get to a pretty healthy three 5% growth rate on the revenue per provider client stat.
Speaker Change: And that's the best growth rate, we've seen since 2021.
Scott Schoenhaus: Maybe talk about, this is either for Haim or Balaji, maybe talk about how you're seeing the ramp on your modules. You know, you announced last quarter some modules. You're finally monetizing the Phreesia on call this year, which you weren't able to do last year. Maybe can you talk about the ramp in the modules and what you're seeing in terms of client traction?
Speaker Change: Maybe talk about this is either for <unk>.
Speaker Change: Maybe talk about how youre seeing the ramp on your modules you announced last quarter some modules, you're fine with monetizing the freedom on the call.
Speaker Change: This year, which you weren't able to do last year, maybe can you talk about the ramp and the modules on what youre seeing in terms of client traction. Thanks.
Chaim Indig: Thanks. Yeah, I mean, you know, Scott, you see it in the numbers, and I think that's how we've always tried to articulate it, and, you know, when you look at the total revenue per client, as you pointed out, it's now started to tick up. It's a reflection of exactly that, all those products that have been introduced, causing, you know, some lift. There's still expansion happening within base clients as well. And then, you know, our focus on Net New being clients with – where there's more dollars associated with those clients when we land with a shorter payback period.
Speaker Change: Yes.
Speaker Change: Scott.
Speaker Change: See it in the numbers and I think that's how we've always tried to articulate it in.
Speaker Change: When you look at the total revenue per client as you pointed out. It has now started to tick up it's a reflection of of exactly that all of those products that have been introduced causing some lift there is still expansion happening within based clients as well and then our focus on net new being.
Speaker Change: Clients, where theres more dollars associated with those clients when we land.
Speaker Change: With a shorter payback period, so it's really all of the all the above and I think if you just look at the flow of products. It would be unfair to really call out one I think and the lenders in the last couple of quarters, we've highlighted three products.
Chaim Indig: So it's really all the above, and I think if you just look at the flow of products, it would be unfair to really call out one. I think, you know, in the letters in the last couple of quarters, we've highlighted, you know, three products, and it's really, you know, all those three, if you wanted to ask about any of them.
Speaker Change: It's really all of those three if you wanted to ask about new products.
Speaker Change: Great. Thanks.
Speaker Change: Yes.
Jared Haase: Your next question comes from Jared Haase with William Blair. Please go ahead. Hey, hey guys, thanks for taking the questions.
Speaker Change: Your next question comes from Jared Haas with William Blair. Please go ahead.
Jared Haas: Hey, Hey, guys. Thanks for taking the questions and maybe I'll circle back to AI and I think this has come up on some of the recent calls as well, but number one just curious if theres any I guess incremental so you're thinking about the competitive landscape.
Jared Haase: Maybe we'll circle back to AI. And I think this has come up on some of the recent calls as well.
Chaim Indig: But number one, just curious if there's any, I guess, incremental to your thinking about the competitive landscape, especially thinking about the potential for new entrants raising venture capital or things like that. And then I'm also curious, are you seeing any changes in customer behavior around AI? So thinking, you know, is AI maybe becoming a bigger part of our fee processing or are you even seeing, you know, incremental dollars or budget capacity available for AI use cases? Just would love to unpack that a little bit more. Yeah. So what I would say is that AI is allowing people to do things that weren't, we weren't able to do before.
Speaker Change: Thinking about the potential for new entrants raising venture capital or things like that.
Speaker Change: And I'm also curious are you seeing any changes in customer behavior around AI so thinking.
Speaker Change: AI, maybe becoming a bigger part of RFP processes or you've been seeing incremental dollars or budget capacity available for AI use cases, just would love to unpack that a little bit more thanks.
Speaker Change: Yes.
Speaker Change: So what I would say is that AI is allowing people to do things that werent, we werent able to do before and we're seeing the same thing in our products. So we're seeing AI.
Chaim Indig: And we're seeing the same thing in our products. So we're seeing AI The input, like, to both change how we run our business, but also in the products we roll out, allowing us to do things that, you know, 20 years ago, Emin and I could barely even dream about being able to deploy. And so I think it's giving us a new tool in the toolbox, but clients don't buy AI. Right, what they buy is solutions to really complex problems. And what we're seeing, frankly, I think what we're seeing a lot of is really a derivation to more trusted partner, right?
Speaker Change: So it <unk> change, how we run our business, but also in the products, we rollout, allowing us to do things.
Speaker Change: 20 years ago, and I can barely even dream about being able to deploy.
Speaker Change: I think it's giving us a new tool in the toolbox, but clients don't by AI.
Speaker Change: Alright, well then they buy solutions to really complex problems and what we're seeing frankly, I think what we're seeing a lot of it is really a derivation too.
Speaker Change: Our trusted partner right. So I think after the Covid room, a lot of a lot of provider groups got really burned by smaller VC backed businesses.
Chaim Indig: So I don't, I think after sort of the COVID boom, a lot of, a lot of provider groups got really burned by smaller VC-backed businesses that really pivoted strategies a couple dozen times, and often just didn't have the capital to invest appropriately. And we're seeing a lot of those customers really come back to us and say, we don't really want to, want to bet on, you know, a 10-person company that promises us the world. But AI is enabling us to do things within the Phreesia platform and across our network that we are very excited for and is driving massive value for our clients.
Speaker Change: Really pivoted strategy is a couple of dozen times.
Speaker Change: Often just didn't have the capital to invest appropriately and we're seeing a lot of those customers really come back to us.
Speaker Change: I'd say, we don't really want to want to bet on a 10 person company that promises us the world.
Speaker Change: But AI is enabling us to do things within the free to platform and across our network that we are very excited for and is driving massive value for our clients and we think over a very near term.
Chaim Indig: And we think over a very near term, a return for our investors.
Speaker Change: For our investors.
Chaim Indig: That's really helpful. Thank you.
Speaker Change: That's really helpful. Thank you.
Aaron Kimson: Your next question comes from Aaron Kimson with Citizens JMP. Please go ahead. Thanks for the question. You disclosed in the subsequent events section of the 10-K that on March 13th the Board approved a share repurchase plan for up to 2.5 million shares of common stock.
Speaker Change: Your next question comes from Erin Kimpton with citizens JMP. Please go ahead.
Erin Kimpton: Thanks for the question you disclosed on the subsequent events section of the 10-K on March 13th the Board approved a share repurchase plan for up to $2 5 million shares of common stocks can you talk about the motivation for the repurchase authorization the dynamics, whether it's <unk>. One do you have a higher degree of discretion and how you are thinking about utilizing repurchases.
Aaron Kimson: Can you talk about the motivation for the repurchase authorization, the dynamics, whether it's 10B51 or you have a higher degree of discretion, and how you're thinking about utilizing repurchases now that you're consistently generating cash? Yeah, thanks, Aaron. And that was right after we reported last, so that is a new event. And really, you should just think about it as being opportunistic. Our share price has been very volatile over the time we've been public. And I think as a cash-generating company with a lot of capital, we just thought it was sort of good housekeeping to have that in place, to be opportunistic around the ability to do that if there was some real market dislocation, the share price got to a level where we wanted to step in.
Speaker Change: Now that you are consistently generating cash.
Speaker Change: Yes, Thanks Erin.
Speaker Change: And that was right. After we reported last so that as that is a new event.
Speaker Change: And it really should just think about it as being opportunistic.
Speaker Change: Our share price has been very volatile.
Speaker Change: Over time, we've been public.
Speaker Change: And I think as a cash generating company with a lot of capital.
Speaker Change: Thought it was sort of good housekeeping to have that in place to be opportunistic around <unk>.
Speaker Change: The ability to do that if there were some real market dislocations in the share price.
Speaker Change: Got to a level, where we wanted to step in but I don't think theres anything to read into it in terms of some.
Chaim Indig: But I don't think there's anything to read into it in terms of some regular sort of change to how we think about capital allocation.
Speaker Change: Regular sort of change to how we think about capital allocation.
Speaker Change: That's helpful. Thank you.
Jean Mannheimer: Your next question comes from Jean Mannheimer with Freedom Capital Markets. Please go ahead. Thanks. Good morning. Nice quarter. Great EBITDA. I wanted to just comment on your improvement in free cash flow last few quarters. Really positive.
Speaker Change: Your next question comes from Jim Manheimer with Freedom capital markets. Please go ahead.
Jim Manheimer: Thanks, Good morning, nice quarter, Great EBITDA.
Jim Manheimer: I wanted to just comment on your improvement in free cash flow last few quarters.
Jim Manheimer: It really positive how do how should we think about cash conversion rates going forward.
Jean Mannheimer: How should we think about cash conversion rates going forward? And follow-up is with respect to payment processing revenue, we saw that typical seasonality in Q1 due to more out-of-pockets. How should we think about the cadence of that revenue for the rest of the year? Would it be similar to prior? Thank you.
Jim Manheimer: And follow up is.
Jim Manheimer: With respect to payment processing revenue.
Jim Manheimer: Saw that typical seasonality in Q1 due to.
Jim Manheimer: More out of pockets, how should we think about the cadence of that revenue for the rest of the year would it be similar to prior thank you.
Chaim Indig: Yeah, Gene, can you repeat the second question again? Yes, payment processing revenue. We saw a nice seasonal bump up, I guess, due to deductible resets and more out-of-pockets. Is that kind of the right cadence to think about the rest of the year? Would it track similar to prior years? Yeah, okay, great.
Jim: Yes, Jim.
Jim: The second question again.
Jim: Yes payment processing revenue, we saw a nice seasonal bump up I guess due to deductible resets and more out of pocket is that kind of the right cadence to think about.
Jim: The rest of the year would it be would it tracks similar to prior years.
Jim: Yeah, Okay, great. So on your first.
Chaim Indig: So, on your first question, I think it's a bit of a transitional year with the ramp in cash flow, with CapEx not ramping as much. So, there's a little bit of distortion there. What I, you know, what we can tell you is, if you think about conversion of operating cash flow to free cash flow in fiscal 26, it should resemble what you saw in the first quarter for the rest of the year. I think that conversion starts to, as the operating cash flow gets higher, there's more flow through in fiscal 27. So, hopefully, that's helpful.
Jim: Question, I think it's a bit of a transitional year.
Jim: With the ramp in cash flow with.
Jim: With capex not ramping as much.
Speaker Change: So there's a little bit of distortion there what we can tell you is if you think about conversion of operating cash flow to free cash flow in fiscal 'twenty six it should resemble what you saw in the first quarter for the rest of the year.
Speaker Change: I think that conversion starts to as the operating cash flow gets.
Speaker Change: It gets higher.
Speaker Change: There's more flow through in fiscal 'twenty seven so hopefully that's helpful.
Chaim Indig: And then, on your second question, it's, yeah, I mean, there's, look, there's some noise around the pandemic years, and then, you know, outside of that, it's, there's a step up in the beginning of the calendar year, which, for us, includes one month of our previous fiscal year in January. There's a bump there, and then it sort of flattens out if you look at the trend in payments over previous years, and that should continue again.
Speaker Change: And then on your second question, Yes, I mean, there's look there's some noise around the pandemic years years and then.
Speaker Change: Outside of that.
Speaker Change: There is a step up in the beginning of the calendar year, which for US includes one month of our previous fiscal year in January.
Speaker Change: There is a bump there and is that it sort of flattens out if you look at the trend in payments over previous years and that should continue again this year.
Chaim Indig: Perfect. Thanks a lot.
Speaker Change: Perfect. Thanks, a lot.
Speaker Change: Yes.
Richard Close: Your next question comes from Richard Close with Kennecord Genuity. Please go ahead. Yes, thanks for the follow-up. Just on MediFine, it was good to see that get called out here. I'm curious your thoughts in terms of where you think you are in terms of monetizing the offering, and then the visits that you talk about in terms of, you know, the people that click on the ads are, you know, actually going and visiting, scheduling a visit. I'm curious, are those visits scheduled with, like, Phreesia customers, or how should we think about that?
Richard Close: Your next question comes from Richard close with Canaccord Genuity. Please go ahead.
Richard Close: Yes, thanks for the follow up just on meta fine. It was good to see that get called out here I'm curious your thoughts in terms of where you think you are in terms of monetizing the offering and then the visits that you talk about in terms of.
Speaker Change: People that click on the ads are.
Speaker Change: Actually going and visiting scheduling a visit.
Speaker Change: Curious are there was a schedule those visits scheduled with like free share customers or how should we think about that.
Chaim Indig: Yeah, so on the first question, think about it as the first inning, Richard, and so I think we have been clear that MediFind is contributing revenue and additional revenue from when we acquired it, which is nice to see, so it's headed in the right direction and we've invested some capital into it, but it's still very early. And yeah, I mean, one of the reasons we were excited about the opportunity to acquire it was that with the size of our network growing, it does enable patients to schedule visits with providers when they find one on the MediFind platform.
Speaker Change: Yes. So on the first question. It's think about it is the first thing Richard and so I think we have been.
Speaker Change: Clear that day.
Speaker Change: <unk> is contributing revenue and additional revenue from when we acquired it.
Speaker Change: Nice to see so its headed in the right direction and we've invested some capital into it.
Speaker Change: But it's still very early.
Speaker Change: Yes, I mean, one of the reasons, we were excited about the opportunity to acquire it was that with our the size of our network growing it does enable.
Speaker Change: <unk> to schedule visits with providers when they find one unmet by platform.
Chaim Indig: People, look, it's a problem throughout the country. People need help finding the right type of providers to deliver the right type of care, and we think MediFind is a key solution to that problem across the continuum of care. And the feedback we get from patients and providers has been overwhelmingly strong, and we think this is a very, very big problem, one where we think we're, frankly, we're halfway through the first inning. So we expect to continue to invest in this over the next, over the coming years, but also to become a contributor over the coming years to our business, and I'm sure we'll talk more about it in the coming years.
Speaker Change: People.
Speaker Change: It's a problem throughout the country people.
Speaker Change: Need help finding the right type of <unk>.
Speaker Change: Providers to deliver the right type of care.
Speaker Change: We think <unk> is a key solution to that problem across the continuum of care.
Speaker Change: Feedback from patients and providers has been.
Speaker Change: Overwhelmingly overwhelmingly strong and we expect to we think this is a very very big problem, one where we think we are.
Speaker Change: We're halfway through the FERC Sydney, So we expect to continue to invest in this over the next over the coming years, but it also to become a contributor over the coming years to our business and I'm sure we'll talk more about it in the coming years.
Speaker Change: Great. Thanks.
Joseph Vruwink: Your final question comes from Joe Vruwink with Baird, please go ahead. Great, thanks. Not to make too much out of a non-recurring revenue bump to 1Q, but to the extent you took on some extra work, maybe in support of a unique client opportunity, I wanted to ask if the nature of engagements are maybe changing for Phreesia, or you start to rethink about supporting customer success.
Speaker Change: Your final question comes from Joe <unk> with Baird. Please go ahead.
Speaker Change: Great. Thanks, not to make too much out of that nonrecurring revenue bump kind of wanting to you but to the extent you took on some extra work maybe in support of unique client opportunity.
Speaker Change: Wanted to ask if the nature of engage and are maybe changing portrays what are your sector right think about it support and customer success and really I guess the heart of the question is with the type of opportunity that is higher ROI and quicker payback that is bad at CAD demand something differently from Fraser.
Chaim Indig: And really, I guess the heart of the question is, with the type of opportunity that is higher ROI and quicker payback, does that account demand something differently from Phreesia, or just generally speaking, as part of the planning and go-live event? Yeah, no, thanks, Joe. And look, I think the way we should read into this is that's actually, and it's disclosed in all of our 10-Ks over the years, that is the related services, you know, component of that revenue line, and it's always been there. We just think it's good practice when, you know, you have a boarder to just call something like that out to be helpful to people to really unpack what's going on in the business.
Speaker Change: Or just generally speaking as part of the planning and go live event.
Speaker Change: Yes, no. Thanks, Joe look I think the way we should read into this is that's actually and it's disclosed in all of our 10-Ks over the years that is still related services.
Speaker Change: Component of that revenue line and it's always been there. We just think it's good practice win.
Speaker Change: You have a quarter to just call something like that out to be helpful to people to really unpack, what's going on in the business, but there's no there's not like a shift happening underneath and it's really I mean again consistent with just trying to add a lot of value to clients that was an existing client.
Chaim Indig: But there's not like a shift happening underneath, and it's really, I mean, again, consistent with just trying to add a lot of value to clients. That was an existing client, and we were able to, you know, get that done quickly in a quarter, so kudos to the team for moving quickly around that. But nothing to call out. We just, again, just trying to be helpful.
Speaker Change: And we were able to get that done quickly in the quarter. So kudos to the team for moving quickly around that but nothing nothing to call out just again, just trying to trying to be helpful.
Speaker Change: Okay. Thank you.
Speaker Change: Yes.
Chaim Indig: That will conclude our question and answer session, and I will now turn the call back over to Chaim Indig for closing remarks. Thank you, everyone, for joining our Q1 earnings call.
Speaker Change: That will conclude our question and answer session and I will now turn the call back over to Hi, Mindy for closing remarks.
Speaker Change: Thank you.
Mindy: Everyone for joining.
Speaker Change: Q1 earnings call I hope, everyone is doing well and we'll see hopefully most of you in the coming months and we'll talk to you again in about 90 days.
Chaim Indig: I hope everyone is doing well, and we'll see, hopefully, most of you in the coming months, and we'll talk to you again in about 90 days. Cheers.
Speaker Change: <unk>.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Operator: You may now disconnect.
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