Good evening, ladies and gentlemen, and welcome to the Phreesia fiscal third 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 third quarter of 2024, which ended on October 31, 2023. 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 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 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. The 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, and good evening, everyone. Thank you for participating in our third quarter earnings call. Our stakeholder letter and earnings release were published about an hour ago. Let me start the call with a couple of highlights. For starters, I am pleased with our third quarter performance, both financially and operationally. Total revenue in the third quarter was $91.6 million, up 25% year-over-year. Adjusted EBITDA was -$6.6 million, an $11.7 million improvement year-over-year. During the quarter, we completed a small acquisition of ConnectOnCall, which complements our current product suite with an innovative medical answering solution that improves patient experience and makes it easier for on-call providers to respond to patient calls. Before Balaji discusses our fiscal 2024 and 2025 outlook, let me briefly address our decision to delay the achievement of $500 million in run rate revenue to fiscal 2026. Over the past couple of months, we determined that in order to achieve $500 million in run rate revenue in fiscal 2025, we would need to increase our spending to a level that we were simply not comfortable with in the current economic and capital markets environment. Therefore, we have made very intentional decisions to delay certain planned investments in the payer space, which will accelerate our Adjusted EBITDA growth. We continue to work with CMS and other payers to measure and improve performance and activation. We believe this work will drive revenue, Adjusted EBITDA, and health outcomes improvements over the long term. We believe our decision will enhance shareholder value. Let me now hand it over to Balaji. Thank you, Chaim. Let me start by addressing our outlook for fiscal 2024. We are maintaining our revenue outlook for fiscal 2024 at $353 million-$356 million, implying year-over-year growth of 26%-27%. We note that the maintenance of our $3 million revenue range is mostly related to our Network Solutions revenue line, where we have a wider range of revenue scenarios in the month of January, which represents a new spending year for our life sciences clients. We are raising our fiscal 2024 Adjusted EBITDA outlook to approximately -$39 million from a previous range of -$54 million--$49 million. This represents a $12.5 million increase from the midpoint of our prior outlook, highlighting the strong operating leverage we continue to generate across the business.... We also believe it is important to provide an early outlook for fiscal 2025, given our evolving capital allocation philosophy that Chaim discussed earlier. We expect fiscal 2025 revenue to be in the range of $424 million-$434 million. Our fiscal 2025 revenue outlook at the midpoint implies growth of over 20% above our fiscal 2024 outlook range. The revenue range provided for fiscal 2025 assumes no additional revenue from potential future acquisitions completed between now and January 31, 2025. We are updating our expectation of $500 million in revenue run rate to now be achieved in fiscal 2026, compared to our previous outlook of fiscal 2025. The later expected achievement is the result of a very intentional decision we have made to delay certain investments in the payer space. We prefer to target growth in the 20% range while accelerating our profitability growth. To that end, we now expect Adjusted EBITDA to be in the range of $10 million-$20 million, compared to our previous target of achieving profitability at some point during fiscal 2025. The increase in our fiscal 2025 Adjusted EBITDA outlook is mostly tied to the delay in planned investments in the payer space. As we think about revenue growth, it is critical to consider the multitude of factors that can drive our revenue growth, which we believe is a very unique and attractive aspect of Phreesia's business model. We continue to grow average healthcare services clients by leveraging our proven go-to-market team. It's also important to appreciate that the growth in our healthcare services client network drives network solutions revenue. We remain comfortable in our ability to finance our fiscal 2025 outlook, given the significant progress we have made in improving cash flow and with our current cash position. Separately, you will notice that we entered into a new five-year, $50 million senior secured revolving credit facility with Capital One. This new facility replaces our former facility with Silicon Valley Bank. We believe the new facility will give us additional financial flexibility through its 5-year term. Operator, I think we can now open it up for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. To remove yourself from the queue, it is star one again. We do ask that you please limit yourself to one question to allow everyone a chance to signal. We'll take our first question from Ryan Daniels with William Blair. Ryan, your line is open. Please go ahead. Yeah, sorry about that, guys. Thanks for the question. Congrats on the strong quarter. Balaji, maybe one for you, just on the focus on profits versus investments in some of the novel products. I think, you know, it's a positive here, given the current capital market environment, and I think investors will applaud that. But I'm curious if it's, you know, is it more the capital markets and just the desire to preserve capital, or were you seeing more hesitation among payers about using the platform or just kind of lower return on your marketing dollars there that really caused you to pull back? Thanks. Yeah. Thanks, Ryan. Thanks for the questions. You know, I think one thing to remember is we're always evaluating, you know, our, our investment decisions along the way. And so specifically to this, I mean, absolutely, the, the cost of capital, weighed into this, and it's changed dramatically in the past 18 months, so we, we have to calibrate. So think about it more as time that we would realize revenue, versus the investment dollars that we have, you know, more than anything else. All right. We'll take our next question from Vishal Patel with Piper Sandler. Hi, thanks for taking the question. This is Vishal Patel on for Jessica T assan, and congratulations on the strong quarter. Could you help us with some color on the ConnectOnCall acquisition? In particular, what capabilities does the product add? What is its pricing model and go-to-market strategy, and what investments are still needed to integrate the deal onto the Phreesia platform? Thanks. So that's a couple questions, and I'll try to answer some of them, and some of them are, you know, it's still too early for us to share. Look, at the greatest level, all of us have had to call a doctor after hours, and doctors, most doctors are required to provide after-hour service, and most of those services are people, right? And they're the same people that often answer the phones for funeral parlors or your plumber. And when we talk to providers, and we have so many of them, and we talk to them about their, how they interact with patients, this was an area that was just, they were never happy with. We never heard of a provider that was very excited about their after-hour service. And when we finally connected with the two doctors that had started ConnectOnCall, we just saw a beautiful product that's well integrated. And, you know, what's nice about it is they... Like as providers, they were also—their group actually uses Phreesia. And they told us, they're like: "Look, we just—we always assumed that, you know, we would never be able to do what you guys do." And we looked at what they did, and it just is a beautiful product. And we've been or we're in the early stages of letting our clients know about it. The reaction has been phenomenal. But look, at the end of the day, we're really viewing this as a replacement of the after-hours agents, and the response from our clients has been just phenomenal. I expect us to talk more about the go-to-market over the coming quarters, coming years, but we think this is a, a phenomenal capability, and we're gonna keep, obviously, we have the resources and the ability to just keep investing in it. It was a really, really, really small company that we bought. Awesome. That's helpful. If I could, if I could just sneak one in, really quickly. About a year ago, in your quarterly stakeholder letter, you mentioned that Phreesia was able to win more deals by being more competitive on pricing. How has your perspective on pricing in the payment processing business evolved since then? And how are you balancing pricing in that business versus retention and growth? Thank you so much. Yeah, Vishal, that comment, I mean, I would think of that, the topic in general to be something that's very, very fluid. We're constantly revisiting pricing, and I think the comment specifically there was we had lowered price, and it had helped us in terms of market share. But I think if you follow our take rate, which we disclose every quarter, it's sort of bounced around, but it's sort of found this home, sort of in the 2.8-2.9 range. But don't think of that as any sort of one specific milestone. We're constantly experimenting with it. Got it. Thank you. As a reminder, we do ask that you please limit yourself to one question. We'll take our next question from Glen Santangelo with Jefferies. Oh, yeah. Hey, thanks. Good evening, guys, and thanks for taking my question. Hey, hey, guys, I wanna talk to you about sort of the revenue growth guidance for fiscal 2025. I mean, Balaji, I heard your comments, just over 20%. It looks like 21%, midpoint over midpoint. And what I guess I'm kind of curious about is if we assume that the payment processing business doesn't really move much in either direction, I'm kind of curious about what you're sort of implicitly saying about the subscription business next year versus Network Solutions. I mean, clearly another good quarter in Network Solutions. It's still growing much faster than that 21% sort of growth rate, but recognizing that it is slowing and you are calling for some volatility in the fourth quarter. I'm just kind of curious about what you're saying about each of those two businesses as it relates to FY 25. Thanks. Yeah. Thanks, Glenn. So first of all, I mean, let's recognize that it's, you know, December fifth, the fiscal year is not even over yet. But that said, I think the way you should read that outlook we provided is no different than in the past, which is payments does grow slower than the other two revenue lines. To your point, you don't really create, you know, more payments. Most of that growth is coming from the fact that we're growing our network. And then, you know, and then there's some seasonality to it. So I wouldn't say there's no growth plus or minus, it's just that the growth itself largely comes from growth in our network, and it will be slower than the other two revenue lines. That's probably always we'd say now or probably ever. We'll take our next question from Richard Close with Canaccord Genuity. Yeah, thanks for the question, and congratulations on the acquisition in the quarter. Just maybe digging in a little bit more on Ryan's question. So on the payer update, I'm just curious, you know, has the opportunity changed there at all? Is it just not materializing as fast? Just any, you know, anything that maybe caught you off guard on that part of the business. No, I don't think... Look, we, we've been growing the payer opportunity, Richard, for many years, and I think our view was just the rate and pace of that investment and where we allocate dollars. Look, I, I don't think payers are going away anytime soon, and I don't think they move very fast. So I think our general view was they don't move fast. Let's not try to make a move too fast by throwing dollars at it. And, you know, and frankly, I think all companies make decisions around capital allocation, and our view is we wanna, we wanna get back to that profitability as pretty much as soon as we can, with- Mm-hmm ... while still driving significant growth in business. Okay, thank you. We'll take our next question from Daniel Grosslight with Citi. Hey, guys. Thanks for taking the question here. I just have a question on the pushout of that $500 million based on the run rate to fiscal 2026. And Balaji, squaring that with your comment about you guys remaining committed to achieving 20-ish%+ growth. I don't know if that comment was specific to kind of medium-term guidance or what, but you know, I'm curious because, you know, at a 20-ish%+ run rate, fiscal 2026 would be $515 million. So I'm curious, kind of, what's driving that step down in growth in fiscal 2026, and by that, pushed out about $500 million target? ... Hey, Daniel, you cut out there a little bit at the end. Do you mind repeating the, maybe the second half of your, really, just repeat your question, I guess. Oh, sorry. How's my volume now? Better? Yes, much better. Can you hear it better? Okay. So the question really is, if you look at fiscal 2026 and that $500 million based on an annual, you know, run rate target in fiscal 2026, it does imply revenue growth lower than 20% in fiscal 2026. And Balaji, you mentioned that, you know, you're committed to kind of growing revenue 20, 20%. So I'm curious, kinda, what's the delta there that's driving that step down in year-over-year growth from fiscal 2025 to fiscal 2026? Yeah. I mean, Daniel, I think we haven't made any comments about 26 other than the, you know, talking about pushing $500 million run rate out. I don't think it's appropriate to start, like, really digging in and unpacking 26. But I think both Chaim and I on this call, but also on prior calls, said we—you know, we've made a lot of investments to position ourselves for 20% growth, you know, beyond 25. But I think that's really all we can say at this point. Got it. Thank you. We'll take our next question from Scott Schoenhaus with KeyBanc. Hey, Chaim and Balaji. Thanks for taking my question. So it looks like from just the initial research on ConnectOnCall, it has a diverse client base. You said in your press release it was, or in your investor letter, about 67 new provider clients, and then you have the additional Access eForms clients. Is the goal here to really create kind of a new install base where you can cross-sell your legacy solutions? Obviously, you can add on these bolt-on solutions, but you inherently have this new customer base that you can cross-sell your legacy solutions to. I'm just trying to bridge and think about 25 guidance and what that means for average revenue per provider client growth. Thanks. Yeah. I'll try to answer the question as best I can. So... I guess, whenever we have done an acquisition, we've obviously always introduced them to Phreesia and to see if they'd be interested in buying our current, like, our existing product subset on top of whatever they have from, you know, the, the small product company that we bought. But when we think about acquisitions, we go through an analysis, our product organization does, around buy, build, or renting capabilities, right? And so if you think about healthcare, it's still in the early phases of digitizing, right? Like, if we think about Access eForms, we're talking about, like, it's technology that we acquired so that, you know, you can move away from having people sign, like, have physical paper that had to look a certain way for government forms or payer forms. Like, we're talking about replacing paper, right? And for ConnectOnCall, that's a capability. It's like we're replacing a call center operator. That costs just a phenomenal amount of money to a practice to have someone answer your phone and take down a message. Like, it still blows my mind that that even exists. Well, it's like... And when we talk to doctors, they're mostly just using very old-- Like, that is what they're using. They're using call centers that they pay per minute with minimums every single month, and we just think about that as a capability that just drives a phenomenal. Like, by adding this technology and these capabilities, we add just a phenomenal amount of, of value to our client base. It's been a strategy that's worked unbelievably well for us for almost 20 years. We'll take our next question from Ryan MacDonald with Needham & Company. Hi, thanks for taking my questions. Chaim, it was great to see that PAM was included in the MIPS calculation for 2024. As we think about the rollout of that and sort of how you monetize moving forward, is one, is this going to be included in all calculations just right off the bat in 2024, or are you sort of rolling out gradually in specific patient populations? And then two, you know, as you think about how the effect or impact of monetization, is this going to be a potential usage-based monetization, license fee, and what does this mean maybe potentially for adoption amongst you know, provider customers over time? Thanks. Yeah. So from a MIPS measure, it is up to the practice, and I'm... Absolutely, we have experts at Phreesia that could do a much better job of answering these questions. So, you know, take my really high-level answer as it be. But this is, first off, this is just massive and material in getting broad-scale awareness and adoption of the PAM as a measure. Or under- and, you know, as the measure gets adopted, we believe very strongly it will materially change outcomes, both health outcomes and clinical outcomes for these patients. And practices, we believe, will, over time, very much adopt this measure as what it is seen in policy and clinical worlds as the best of breed. And so, you know, from a MIPS standpoint, it's up to the practice as to what they submit as part of their MIPS measure, measure. So it's, I wanna say it's, like, 1,500 pages, and you, you know, depending on your specialty, there's different categories of what you could pick and how you pick it. And in year one, this measure, the PAM, PRO-PM, is included as a bonus measure. So it's between 7 and 10 bonus points to the practice, which can contribute up to 1% in additional revenue to them on their Medicare revenue. So it's significant in terms of its impact, but it's part of what you get when you get Phreesia. And we're pretty excited about making this part of Phreesia. And so we're running hundreds of thousands of PAMs right now. We'll take our next question from Jeff Garro with Stephens. Yeah, good afternoon, and thanks for taking the question. Wanted to ask for some more color on what you are seeing in the life sciences end market. Curious how you would describe customer behavior coming into year-end around remaining budgets and those customers and their planning cycles for next year? Thanks. Look, I think it's still early in the cycle, but what we have seen is that clients, life sciences clients are really very much focused on scale and ROI, and tried-and-true platforms that could deliver both of them. And I think it's been very nice to see that we're continuously at the top of their buy list. But it's still early, and I think the team is out there working their butts out for all of us, and we're pretty... You know, we have a lot of hope that next year will be another really strong year. We'll take our next question from Jack Wallace with Guggenheim Partners. Hi, this is Mitchell on for Jack. Thanks for taking the question. Just considering the trial promotion period and the recent acquisitions, how much of the near to medium-term growth algorithm in the software subscription segment is based on revenue per client expansion? Thanks. Can you repeat that again? I'm sorry. Yeah, just considering, you know, the recent trial promotion periods and the recent acquisitions, we're just wondering how much of the near- to medium-term growth algorithm within software subscriptions is kind of based on revenue per client expansion? Oh, got it. Got it. So I think, and we, and we mentioned this in the letter, I mean, I think just the, the fact that ConnectOnCall, in particular, brought a number of clients, I mean, you know, in the hundreds, with very little revenue. I mean, tiny. I mean, so in fact, on a quarterly basis, it's, like, in the hundreds of dollars, you know, revenue per client. So that has a, that has an impact of just dragging that number down. I think outside of that, I think it's more of what we've talked about, which is you have to think about the totality of our revenue and the fact that we have, you know, different, different ways of generating revenue across the client base, inclusive of Network Solutions. But I don't think outside of that one comment and how that impacts 3Q. It impacted 3Q a little bit. It'll impact 4Q a little bit more, and that's really, that's really it. Once again, to ask a question, it is star one on your telephone keypad, and to remove yourself from the queue, it is star one again. We'll take our next question from Sean Dodge with RBC Capital Markets. Hey, good afternoon. This is Thomas Keller in for Sean. Thanks for taking the question. Wanted to, you know, maybe following up on the earlier question on pricing, I think that one was mostly targeted toward payment processing. Wanted to refocus that on the subscription platform. So more specifically, when prospective customers are evaluating different intake solutions, what are the key factors that they're using to make the decision? Like, where does price fit into there? Are you able to rank those factors and, have those evolved at all over the last couple of years? Thanks. When we work with any of our provider clients, they wanna know, you know, capability. I think capabilities and value are the number one things that they talk about first and foremost. And then, frankly, we tend to win on both of those, like, hands down against lots of little point solutions and solutions that are often tied to specific EMR markets or specialties. And our ability to provide just the breadth of solutions, at the same time that we drive a phenomenal ROI and are willing to put our to show that we can, more frankly, really quickly, while also at the same time, just being able to intake the vast majority of their patients. But more and more, we're not just selling on intake. We're selling on the breadth of being able to drive more patient visits, drive more appointments, drive a lower cost of running the practice. But I'd say intake is becoming less and less of the reason why people are buying us, even though it's still our number one, our number one driver. All right. Perfect. Thank you. Just a reminder, that is star one to ask a question on the phone lines, and we'll pause for a moment. All right, at this time, there are no further questions. I'd like to turn the call back over to Chaim Indig for any additional or closing remarks. I'd just like to thank everyone for joining us on the call. I'd like to thank the team for another good quarter, and I wish everyone a happy holiday. And we look forward to continuously talking to all of you. Cheers. Happy holidays, and Happy New Year. That does conclude today's presentation. Thank you for your participation today. You may now disconnect.