Good evening, ladies and gentlemen, and welcome to the Phreesia fiscal first quarter 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 Balaji Gandhi, Phreesia's Chief Financial Officer. Mr. Gandhi, you may begin. Thank you, operator. Good evening, and welcome to Phreesia's earnings conference call for the fiscal first quarter of 2024, which ended on April 30th, 2023. Joining me on today's call is Chaim Indig, 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 markets closed 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. During today's call, we may make forward-looking statements, including statements regarding trends, our anticipated growth, our 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 tomorrow. 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. 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 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. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A 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 after the markets closed today with the SEC and may also be found on our investor relations website at ir.phreesia.com. I will now turn the call over to our CEO, Chaim Indig. Thank you, Balaji. 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 Phreesia team. Congratulations to all of you who are listening. In the quarter, our average number of healthcare services clients was 3,309, up 31% year-over-year. We added 169 average healthcare services clients from the fourth quarter to the first quarter. Total revenue for average healthcare services client was $25,338, up 1% year-over-year and 4% sequentially. Subscription and related services revenue grew 3% year-over-year. Payment processing revenue grew 25% year-over-year, and network solutions revenue was up 46% year-over-year. Let me hand it over to Balaji to talk about our fiscal 2024 outlook. Thanks, Chaim. Moving on to our outlook for fiscal 2024, which ends on January 31st, 2024. We are maintaining our revenue outlook for fiscal 2024, which is in the range of $353 million-$356 million, implying growth of 26%-27% over our fiscal 2023 revenue. We are raising our adjusted EBITDA outlook to a range of -$60 million to -$55 million, from a range of -$65 million to -$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. Gandhi. Ladies and gentlemen, at this time, if you do have any questions, simply press star one. If you do find your question has been addressed, you can remove yourself from the queue by pressing star one again. We do ask that you please limit yourself to one question and one follow-up question initially. We'll take our first question this afternoon from Anne Samuel of JP Morgan. Hi, guys. thanks for taking the question, and congrats on the great results. you know, in your letter, you spoke to higher patient volumes in the first quarter. I was just hoping maybe you could talk about, you know, what you attribute that to, and then just how to think about cadence for the remainder of the year. You know, was this a pull forward from 2Q, or do you think that that'll be spread more evenly throughout the year? Yeah. Hi, Anne, Balaji here. 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 and there's some seasonal strength, but it was just stronger than we would have thought. You know, I think, you know, and maybe Chaim can talk about this a little bit, if you think about our business and, you know, 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 weather, there's things around different mix on different specialties that can skew that. I don't know, Chaim, if you want to add anything on that, and I can come back to the cadence. You did a great job. Like, look, I think it's still early in the year, and I think we got a lot of months left to go. Anne, on the cadence, we did mention that the volume strength also helped with some of the pacing of our programs and our campaigns in the first quarter. You know, as you know, that revenue is non-recurring, and we're selling, you know, campaigns throughout the year as well. If you just did think about the cadence, things will have to happen in 2Q to sort of fill that out. We obviously don't provide quarterly guidance, but, you know, I think you should definitely think about a little bit of that being pulled up. Okay, that's really helpful. Thank you. 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 this cost of revenue level, or if there was maybe something unique this quarter that helped 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 continued, you know, a great effort by everyone. We obviously, you know, made a lot of investments across, you know, all those client services, client support teams, and everyone's done a great job as we've continued to add, you know, a ton of clients, 169 this quarter. We've, you know, 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. I think the big step up has happened, and now you're, you know, you're talking about more kind of moderate improvement from here. Yeah, we do feel pretty good about it. It was pretty nice, wasn't it? It was very nice. Thanks for the color, guys, congrats again. Thank you. Thanks. Thank you. We go next now to Ryan Daniels at William Blair. Hey, guys. Good evening. Thanks for taking the question. Balaji, maybe I'll start with one for you. The sales and marketing line, seeing 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 there as we roll through the year? I mean, once again, you know, it's worth calling out just the effort by the team. It's, I mean, you know, I think people use the term productivity a lot, but there's people behind all that. You know, we've also been pretty diligent about how we spend. I mean, there's non-people expenses, too, and there's vendors. You know, we've just tried to be, you know, have an ownership sort of mentality and try to get the most we can out of a lot of the expenses that we've had in the P&L. You know, I think, again, just like the previous question, that operating leverage on sales and marketing expense will be another source of how we get the EBITDA positive. If you think about the -13.8%, getting to zero, you know, we should see some improvement there as a percentage of revenue. Does that answer the question? Yeah. Yeah, that's perfect. Interesting case study on network solutions regarding the open enrollment period. I'm curious if that was done on behalf of a plan and thus kind of signs of a novel revenue stream there with that product 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. Ryan, that was a little of both. I think we did that with a plan, but I think it was really to show off some capabilities. It was not a huge revenue driver, but I think it got a lot of folks really excited about our capabilities, being able to reach their members specifically and understand what matters to the members. Because one of the things that we strongly believe that we've been able to see for years with our platform is that, as much as we might all be Americans and, like, use the healthcare system, we all have very individual and different needs, and those needs often are not seen through the plan coverage. this gives a lot more visibility to that client base of ours, and they've been pretty excited about that. The feedback we've been getting out. Perfect. Thank you for the color. Congrats again. Cheers. Thanks, mate. Thank you. We go next now to Jessica Tassan of Piper Sandler. Thank you, guys, for taking the question, and nice first quarter with the new CFO. I would just kind of, echo Ryan's sentiment. I thought the MemberConnect detail was really helpful. Should we think about this product as being kind of out of beta and priced and ready for full launch, for 2024 AP, so in your kind of fiscal 3Q, 4Q period? I don't think the team would tell you that it's in beta, but I don't think it's fully GA. How's that? 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 wouldn't say we're, let's just say it's doing very well, and I'm really proud of the team on what we're doing with it. How's that? I'm not commenting on where we'll be for open enrollment just yet. It's still early. Okay. But- Okay the response from the community, the client community, has been phenomenal. Okay, I think that's very helpful. Maybe can you talk about how you're monetizing PAM today? It seems like it might have been part of that MemberConnect survey, but just interested to know how that asset's being monetized today, and whether the impact's predominantly felt in subscriptions or in network solutions. That's it. Thanks again. Sure. There's sort of like two parts to that. MemberConnect as an offering, and I would refer you to go back to our letter from December on this. It's the Medicare Advantage lead gen, you know, piece that you were talking about earlier. There's also, like, you know, the offering of PAM in and of itself that's another sort of piece of MemberConnect. Nothing to really call out there for monetization. You know, the, it's MemberConnect when you think about MemberConnect, think about it as the revenue generating being, you know, 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 effectively, I mean, overwhelmingly, the contract we have with CMS. CMS has a multiyear contract that, you know, is public. You can look it up, but it's subscription revenue through that. Got it. Thanks again. Yeah. We'll take our next question now from Glen Santangelo at Jefferies. Oh, yeah, thanks for taking my question, and good evening. Hey, guys. Obviously, another nice EBITDA beat again this quarter, I think, you know, the obvious question is, you know, with revenue sort of humming along at, you know, in the low thirties here, you know, the EBITDA guidance for the year really doesn't assume any leverage throughout the balance of the year. 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, or would be helpful to sort of point out? Then I just had a, you know, a follow-up question on the balance sheet. Sure. First of all, just to be clear, when you say low 30s, you mean as a percentage growth? Yeah, I'm sorry. Okay. As a percentage growth. Okay, good. Good. I almost skipped a beat there 'cause I thought you meant dollars. Okay. I mean, Glen, first of all, like, 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, like, I know, you know. We can't sort of say that, say enough about that. It's afforded us, you know, the ability to keep investing in the business. The outperformance on EBITDA that you've seen in the past few quarters has set us up to do what we've said, which is continue to invest. The area that you should think about is R&D. It's the one area that we, you know, don't talk about, like, as, oh, we're gonna, you know, sort of squeeze and get operating leverage, you know, around, 'cause we're thinking about fiscal 2026, 2027 and 2028, et cetera. So when you think about the range, the EBITDA guidance range, sure, there's a situation where we'll be investing more in R&D. That said, we'll update you in 90 days, if, you know, if the team continues to execute well, you know, maybe there's room for improvement. Does that help? Okay, perfect. Balaj, that's helpful. I just wanted to follow up on the balance sheet. I mean, the company has been. Yeah You know, burning, call it mid-teens, you know, $15 million of cash. I think again, this quarter, maybe a little bit higher last year. As we think about the path to profitability in fiscal 2024 and 2025, I know you have a $150 million in cash on the balance sheet, and you said that you're more than comfortable that you have enough. I was just wanted to reconcile that with some of the comments related to SVB in the press release. If you could just sort of quickly rehash for us where you have a lending facility now, where your cash is sitting, and would the plan to be to open up another lending facility outside of SVB? Yeah. Thanks for bringing up. Well, Glen, those were, like, seven deep questions. Sorry, I'm done after that, I promise. I'm done. Thanks for, like, making me wanna have to look at our lengthy disclosure, so all of our attorneys feel comfortable with how we talk about this. I mean, Glen, there's a lot of language in the filings from last time, and you'll see some in the Q this time, at the end of the day, that facility still is in place, and we've received a waiver that allows us to keep more cash outside of SVB. Longer term, you know, for people on the phone who are listening, who are in the lending community, you know, feel free to reach out to us. Longer term, we'll look at, you know, other avenues to finance, you know, any kind of growth we want beyond, you know, beyond what we've said we can finance through cash through 2025. 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. We have no, you know, no debt drawn on the existing facility. Yeah, we'll look at other things, and we'll continue to look at other opportunities, but that revolver is in place, today. Then as far as the, you know, in terms of the losses, just note that on cash flow, there is timing. The first part of the year, you know, we have, some additional treasury stock, if you look at the financing section, to cover tax withholdings for employees. You don't see those in the remaining quarters. You'll actually see that in Q4 and Q1. Okay, perfect. Thanks for all the detail. Much appreciated. Yep. Thank you. We go next now to Scott Schoenhaus at KeyBanc. Hey, Chaim and Balaji. congrats on the quarter. I wanted to dig deeper into this update you provided in your letter about your partnership with Unlimited Systems. Was any of that launched this quarter, was any of that shown up in results on the subscription side? No. No. Not even- Okay. slightly. Okay. Is this something that you guys are actively- I would put that in the R&D line. It's still real early. Is this something that you guys are actively pursuing? Basically, trying to partner with all these specialty, other Healthcare IT service offerings to really sell your solution, and what do you view that opportunity as? Is this a way to drive really much more incremental, you know, subscription growth for this year and next year? Thanks. Well, to be clear, we sell our solution. Look, we got a lot of requests from their customer base wanting to have an integrated solution with Phreesia. We're just really following where the market is and what the market wants. You know, frankly, we've had. Like, that's we have a whole team of people, and they do market assessments on where we should spend dollars, and they're just 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 product that we have is just great. And we are very excited about it. Unlimited is a, they seem like a, early days, it seemed like a great partner. Thanks for that color, Chaim. I guess, lastly, my second question is on the, you know, pharma digital advertising space. Just generally, what are you seeing there? Anything different from last quarter? It seems like you continue to outperform peers in the space. Thanks. I think I definitely think it's challenging, compared to the way it was when, you know, this was one of the only ways that people could, you know, reach the consumer. Obviously, we're doing, we just put on another really good quarter, and I'd say the number one reason is the return we have 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? That's just worked out very well for us and our clients. The reason that we've also had the success is the team. Like, they're working really hard. Like, every so often, there's this, like, dashboard that I can see just the amount of interactions that 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. They had a team off-site, and I went to it, and it was just. I was just like, I think I had a smile on my face the entire time just being there and being near that team. It was really uplifting. They're just doing a great job. I'm really proud of them. Thank you. We go next now to Ryan MacDonald at Needham. Thanks for taking my questions, congrats on a nice quarter. Chaim, maybe the first one for you. In the, in the quarterly stakehold er letter, I thought it was interesting, 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 there for, you know, extending sort of network solutions into clinical trial enrollment and, you know, how you think about potentially monetizing that over time? Look, I think, I think that clinical trials and making sure that there's, that patients that want to be in different trials and get access to cutting-edge therapies, you know, giving them access and making it available, I just think it's just a wonderful thing to do. It's an area we've been making investments in. It's a natural continuation for what we can do. I think, you know, you should expect to hear more from us in the coming years on how we're how excited we are and the potent- and some of the things we're gonna do in that space. I think it's still too early, but, you know, we are investing in it. What we want to let everyone know is, like, we think that it's not just a monetary win, we think it's just a big win for patients and for science. Thanks. Maybe as a follow-up to that, I mean, as in being a win for patients over time, as you continue to evolve the offerings there, when you have MemberConnect, and you have the core life sciences marketing, and potentially now on the clinical trial enrollment, how do you sort of balance out or prioritize what you're showing, you know, to the patient and, you know, within that intake experience to prevent, you know, the experience from becoming too spammy, if you will, over time? Thanks. Look, we've made huge investments over the years in data science and in just machine learning to be able to make the right type of decisions, right? I think that there's tons of very smart people and a lot of data that gets tied into how and what we do with what patient. I'd say that first and foremost is making sure that it's consent-driven, and we have permission to do. When you have permission, as which is core to what everything we do, it allows us to really lean into how we engage that patient in different content, which, frankly, should improve outcomes. Appreciate the call. Thanks again. Cheers, mate. Thank you. We go next now to John Ransom at Raymond James. Hey, good evening. I'd like to hear your reflection, Chaim, the experiments you ran to crank up investment, sales, and marketing, and R&D. Just as you reflect on that, you know, after the decision, what would you point out as this was a particular highlight? What would you kind of point out as this was something that we would not have learned if we hadn't done this? Well, I don't think we have enough time on this call, Mr. Ransom, for me to go through all those things. I think the one thing that, 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. You know, the fact that a lot of us have just worked together for a really long time and understand the business and the clients and understand how to read the information and data that decisions have to be made at all times, and those decisions need to be made quickly. If not, the dollars are misspent very quickly. I, you know, so I think first and foremost, the comfort I have in the decision is the team all over, spread all over at all different levels, made me really comfortable. Frankly, I'm reaffirmed based on, you know, quarter after quarter result, that that's why we've been as successful as we have is the team, right? Their ability to continuously iterate on everything that's happening in the market. That's first and foremost. I'd say this every single time, that you when you get a client, you gotta do the things you say you're gonna do, you gotta do it really, really well, and you gotta treat them really well. As long as we keep doing that and giving them great product that is a fair value, I think we're gonna keep building a business that will not just stand the test of time, we'll just make a big impact in healthcare. Healthcare just needs to get better, right? Just for all of our sake. I'm getting old, right? I'm gonna be using the system even more than I already am. Yeah, I was gonna mention that. That's a bad joke. Did I answer your question? Yeah. We'll talk later. I- I'm sure- kind of follow up. Yeah, it's okay. Yeah. The second question I have is, your sales productivity, and as you go into the SDR hiring season, just what's driving the productivity that you're seeing in your sales force? How are you, if anything, what are you doing differently there, as you bring these new people on board? How much of it is technology, how much of it is just talent selection, and how much of this is door number three that I can't think of right now? I think our ability to attract and retain folks on the team, like our SDR team, is probably one of the best I know of, right? The ability to attract and retain on that team and the leadership of that team is absolutely part of that. The sales organization, I think average tenure of our sales leadership is within Phreesia over a decade, right? It shouldn't be lost on how amazing that team has done. Then, frankly, our upsell, cross-sell, like, the way the team has been performing on it's just been lovely. They're just doing a lovely job, and I'm in awe of how well they've been performing. You know, frankly, that's a testament to building great product and treating our customers well, and doing the things we say we're gonna do, and which I think is just pretty basic. All right, sir. Thank you. Thank you. Go next now to Sean Dodge at RBC Capital Markets. Hey, good afternoon. This is Thomas Kelliher in for Sean. Thanks for taking the question. Just one for me. How big is the hospital business now, and has that been a meaningful contributor to growth? I guess, maybe do you expect it to be in the fiscal 2024 and 2025? I mean, you know, we don't think about it as as a hospital business, and so, you know, you think about healthcare providers, and you think about health systems, and all hospitals in this, you know, country are, tend to be affiliated with some type of, system or, and tend to have physician practices associated with them. You know, that's typically been our entry point historically. We've worked with the physician practice out of that organization and then entered the hospital piece. We have, you know, lots of hospitals we work with. I think we announced, you know, publicly, we entered that market at about three and a half years ago. We've been working on the product for several years before that. You know, we think we're pretty happy about where we are, which, I mean, would you agree, Chaim? Yeah. Yeah. I, frankly, I, it's even beat my own expectations. When you think about just the universe of clients and, you know, patients, where patients receive care, it's in the hospital, but it's also in plenty of other delivery settings. All right. Makes sense. I'll leave it there. Thanks, guys. Thanks. Cheers, man. Thank you. We go next now to Stephanie Davis at SVB. Hey, guys. Congrats on the quarter. I cannot tell you how much I can't wait for SVB to stop being in press releases. It's been a long few months. Yeah, we're required to disclose some of that stuff, so. I hear that. I hear that. I mean, it's been brutal. I was hoping you could help us understand the revenue guidance a little bit, 'cause it implies eight points of deceleration for the rest of the year. Is there any seasonality in the payer business or anything like that, just given we've never seen that level of step down before in your revenue growth? I mean, I think one of the things, and we brought this up, I think, earlier, and was in the letter, volume strength was better than even we had expected in the first quarter. When you said 8%, I think I heard you say 8 percentage points, I think that's. Mm-hmm You know, 'cause if you took the low end of 26% and the 32% that we just reported, that's 6, right? Am I missing something? It's that you had 32% growth, and then it would imply that it goes down to 24% growth in midpoint. I see what you're saying. Got it. Got it. Look, we, I mean, I think there's definitely, you know, things that move around. I think even this, we brought up in the letter, there's, you know, some related services, you know, that we talked about in the letter. We just try to, you know, we don't sort of operate the business, you know, in a way that, you know, it's gonna be exactly the same growth every quarter, but we try to sort of put the outlook out in the beginning of the year. I think the biggest thing to take away in that delta is the strong, stronger than expected volume trends in the first quarter. As we pointed out, that not only impacted payment processing, it also impacted network solutions because of the pacing of our campaigns. You know, Stephanie, also as somebody who I know you've, you know, you follow payments closely, I think it's noteworthy that we had a billion-dollar volume quarter in payment volume in the first quarter. Yeah W e actually skipped over the 900, you know, decile and whatever you'd call, I guess, the hundred of millions. We went from $800 million to $1 billion in this quarter. I think that just sort of speaks to even with some of the seasonality, just the strong volumes in the first quarter. That's a perfect lead into my next question. You saw that huge volume quarter. How much of that was a function of just utilization improvements versus some of the discounting you called out in the prepared remarks? Is there a way to discount but still healthfully beat in that segment in a more sustainable way, given what we saw this quarter? I mean, I think we've been clear on the last couple of quarters that that's something we've, you know, we have experimented with different pricing over time and with the intention that, you know, we'll continue to do it if we can get, you know, good profit and economics out of it. Yes, there is some correlation. I don't know if we say a specific amount, but anything you wanna add, Chaim? No, you did great. All right. All right. Thanks, guys. Thanks, Stephanie. Thanks. We'll take our next question now from John Park at Guggenheim. Hi, team. Thanks for taking my question. I'm on for Jack. I was wondering if we could quickly touch on the SDR count? You mean in the quarter? Yes. Yeah. Give me one second. These are laminated pages. If you have another question, go ahead, and I'll get the number for you. How have changes in the labor market impacted, and market demand? You know, I think what I, by having done this for a pretty long time, I'd say, you know, labor is still pretty. Compared to the way it was pre-COVID, it's still pretty tight. Wages are still, they're still at an accelerated level. I would say that it's very dependent on the organization, regional. Look, a lot of these practices and health systems, everyone's having to watch all their costs, and you know, labor is the most expensive, the biggest part of healthcare. I don't see wages coming down anytime soon, as a percentage. John, that number's 169. That's inclusive of our ISRs, our inside sales representatives, too. Pretty much about the same number as last quarter. Got it. Okay. If I can just squeeze one in, Apple announced Apple Pay Later in March, and I understand there's an 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. I don't. Great. I don't know if they've enabled it in healthcare, I guess, but, we do, you know, Phreesia accepts Apple Pay on our platform. Great. Thank you so much. Cheers. Thanks, man. Thank you. We go next now to Richard Close at Canaccord Genuity. Thanks. Congratulations. Sorry, I dropped off a couple times, so, if I repeat, just let me know. Did you talk at all about the Unlimited Systems relationship and, you know, maybe the market presence there? Yeah, we did. We spent, like, 20 minutes of the call on it. Like, it was a good question. You should read the transcript. Okay. Uh- Yeah, we'll move to the next one then. All right. Just maybe following up on Ryan's, you know, comments on sales and marketing, or question on sales and marketing. I know you called out for cost of services and sales and marketing, some lower headcount there, and some growth in R&D, and, you know, maybe just fine-tuning a little bit, you know, on those in those areas. Maybe if you could just go into a little bit more detail on the headcount changes. I mean, I think you sort of hit it, Richard. It's, you know, we continue to invest in R&D, and then in the other areas, I mean, you know, you have the numbers. It was, you know, -30 sequentially. You could sort of on a net basis, just, you know, allocate those to those other areas, but, you know, R&D continues to be up. Any thoughts with respect to the referral management offering, that you rolled out a couple of years ago, how that's trending? It's still growing pretty nicely. I'd say that that offering is, it's continuously getting more and more traction, and that's really. It's been really beneficial to a lot of our practices as we've been rolling it out. I have been very pleased with its success, our, and I know that they keep lighting up more and more practices with it. Maybe in the next couple of quarters, we'll give a little update on how that volume is looking. Okay, great. Thanks. Thanks. We'll take our next question now from Daniel Grosslight at Citi. Hi, guys. Thanks for taking the question. I wanna go back to the MemberConnect product here and just get your views on, in general, the Medicare Advantage market. You know, there are some headwinds for the next calendar year, given the advance rate notice, given some of the Star Scores changes. How are you thinking about growth in the Medicare market in general, and how does that translate to how you're thinking about the MemberConnect product for calendar year 2024? Well, you know, 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, you know, at the end of the day, they wanna make sure that they are engaging with their members, making sure that their members are unbelievably satisfied with the plans, and when possible, align the available plans with providers in their network. That is one of the most important decisions people make when picking a plan, is: Is my doctor covered? Look, it's a huge market. I think it's. As long as it's been around, it's had changes, I think we're pretty excited about, you know, being able to serve more Americans, more different ways. Yeah, that makes sense. I guess, as I think about the product too, you know, it has applicability beyond just the carriers, right? You could, you know, potentially sell this to the broker channel, the e-brokers in particular. How are you thinking about them, the e-brokers, the brokers in general, as clients here? I- I assume right now, carriers. Yeah, go ahead. I think it's mostly plans, but I know that the team is engaged with some brokers too. Okay. Going forward, we should expect this mostly to be a carrier product? I think that's the plan, yeah. Okay, great. Thank you. Thanks. We'll go next now to Jeff Garro at Stephens. Yeah, good afternoon. Thanks for taking the questions. Looked like another good quarter of healthcare service clients adds. I wanna see if there's anything you could tell us about what worked in the quarter to drive those adds, and anything you'd call out in terms of the mix of the adds by practice size or specialty or geography? No, they were all over the board. You know, unbelievably large, all across the country, unbelievably small, all across the country, a whole bunch in the middle, all across the country. Specialty, single specialty, multi-specialty, health system, you know, you name it was the whole megillah. We did well because the team did well selling, did a phenomenal job implementing and treating customers really, and our clients really, really well. You know, and having just a great product. That works. That's a good way to do it. Follow up a little bit on the subject of client adds. The stakeholder letter set the expectation for the fiscal second quarter to have similar adds as last fourth quarter or this most recent quarter. Call it, you know, a range of 160-170. Curious to get your comments on the company's ability to, you know, potentially match the roughly 800 incremental adds you achieved in FY 2023, in the current fiscal year, as we think about the next nine months. I mean, you know, Jeff, what we're trying to do is, you know, we're not gonna speak to the whole year, but we understand, like, having some inputs in your models are helpful. Even, even the comment about the next quarter, it was 158, you know, in the fourth quarter, it was 169 in this quarter. And, you know, we're just saying it's gonna sort of be in that, yeah, general range. And then there's obviously, like, you know, some sort of counterbalance to that with, revenue per client. We'll come back to you next quarter and give you, give you an update, but we're not gonna speak to the year. We can give that visibility 'cause we see it. Yeah. It's not like hide the ball. We generally know where it's gonna be at this point. Yeah. You know, if you wanna follow up, you know, please do. I think that's what we're trying to do, is just at least put some kind of anchor in there. No, that helps. Thanks again. We'll go next now to Robert Simmons at D.A. Davidson. Hey, thanks for taking the question. You touched on this earlier, but hearing from the. Wait, is that us or? We couldn't hear you. Hello? Mr. Simmons, we're having a hard time hearing you, sir. All right, just checking. Everyone always complains. Hey- crappy phone service, I just assumed it was us. Hey, can you hear me now? Yeah. Oh, yeah, we can hear you. Yeah, that was me. My headset switched off and then back on for some reason. Sorry, I was saying, you touched on this earlier, what are you hearing from the pharmas in terms of their spend intentions? Has the tone of the conversation improved, gotten worse, stayed about the same over the last, call it, three to six months? I think life sciences organizations everywhere are just very cognizant of, you know, scale and return on investment and being aligned with the right types of products, and I think they've been pretty happy. You know, I could speak about working with us. I can't necessarily speak about, you know, the whole market. It's obviously been a still a softer market than in previous years, and I know the teams, you know, we still have a lot of selling left to do in the year, and the team's doing, you know, pretty good work, making sure that we continue to execute. We still think the market's still pretty, still early in the year. Got it. Great. Thank you very much. Thanks. Thank you. Gentlemen, it appears we have no further questions this afternoon. Mr. Indig, I'd like to turn the conference back to you for any closing remarks. Yeah. I just wanna thank everyone for joining the call, and I wanna thank everyone at Phreesia, for another great quarter. we'll talk to everyone in about 90-ish days, and hopefully, everyone has a nice summer. Thank you, Mr. Indig. Thank you. Ladies and gentlemen, that will conclude the Phreesia fiscal first quarter 2024 earnings conference. I'd like to thank you all so much for joining us and wish you all a great remainder of your day.