Phreesia
The tablet patients check in on at the doctor's. It sells that one screen to three buyers: the practice, the patient paying the bill, and drug companies advertising on it.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth2/4 ↓
Five years of decelerating growth ending near zero like-for-like, with the largest line shrinking again. Not a 1 because clients still grow.
Business quality3/4 ↓
A distribution position no rival has assembled, clients still growing. Not a 4: it cut price to keep them while rivals grew.
Financial position3/4 →
Net debt near a sixth of one year's adjusted profit, nothing due until 2031. Not a 4: the lending business needs a lender's capacity.
Execution record3/4 ↓
Profitability milestones hit early, the shortfall flagged a quarter ahead. Not a 4: the revenue guide was cut 6.7% four months after being set.
Per share capture2/4 →
Share issuance takes about 40% of free cash flow at today's price, with no buyback. Not a 1: the acquisition was paid in cash.
Potential2/4 ↓
Under 1% of the payments pool, but three independent things must go right and one of them is a regulator's posture toward drug advertising.
Risk profile3/4 ↓
No customer above 10%, but 29% of revenue is drug marketing money a federal directive is already acting on. Not a 2: nothing resolves instantly.
Valuation3/4 →
About 19 times what is left for owners after staff share issuance, on flat revenue: the current business. Not a 4 while software declines.
Evidence quality3/4 →
Filed figures throughout, with four competitors' own filings and two government sources behind the outside claims. Not a 4: the latest call was unreadable.
The Verdict
We rate Phreesia neutral. It runs the check-in tablet at about one in six American doctor visits and earns from that screen three ways: software fees, fees on patient payments and drug advertising. The business is mixed: advertising stalled, and the software line is shrinking. The shares have fallen sharply, and the price is now cheap on cash but buys a business whose sales are flat once the company it bought is set aside, so it is fair. The view hinges on the software line growing again and on fewer new shares handed to staff. We think nobody can yet say whether the shrinking is by choice.
The long casePatients pay more of their own medical bills, turning the front desk into a till; Phreesia's software line must grow again for that to pay.
The evidence under this - 8 claims
C01facthigh confidence
Phreesia's platform handled about 180 million patient visits in fiscal 2026, roughly one in six US ambulatory patient visits.
C02facthigh confidence
Fiscal 2026 revenue was $480,591 thousand, up 14.5%: subscription $219,461 thousand, payment solutions $121,459 thousand, network solutions $139,671 thousand.
C39facthigh confidence
The shares are about 46% lower over 252 sessions and trade at about 1.92 times trailing revenue against a six-year median of 5.45 times.
sourceResearch pack, frozen at content/PHR/research-pack.jsonsecondaryPhreesia Form 10-K, fiscal year ended 31 January 2026primaryPhreesia Form 10-Q, quarter ended 30 April 2026primaryFMP end-of-day prices, close of 2026-10-22secondary
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C41inferencemedium confidence
At about $789.5M the price pays about 19.5 times the free cash flow left after a year of share issuance, on revenue guided flat like-for-like.
sourcePhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primaryResearch pack, refreshed 2026-09-24 (2026-09-23 close)secondaryFMP end-of-day prices, close of 2026-10-22secondary
against this
- Charging dilution against free cash flow double-counts if the awards are the reason cash costs are low, and the cash cost of pay would be higher without them - though the awards are on top of salaries, not instead of them.
- Free cash flow before dilution is about $67.5M against $789.5M of market value, a yield near 8.5%.
- The adjusted profit guide of $125-135M would put the whole enterprise at about six times its own middle, which is the number most buyers will use.
- Adjusted profit reached $32.9M in Q2 fiscal 2027 against $22.1M a year earlier, so the cost programme is working and cash generation is rising rather than flat.
- 2026-09-24editedRe-struck at the 2026-09-23 close on the Q2 cash flow; the price fell 16% while free cash flow rose.
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C49estimatemedium confidence
Fiscal 2026 revenue restated as if AccessOne had been owned all year was $515,665 thousand, so the maintained fiscal 2027 guide of $510-520M implies revenue between a 1.1% fall and a 0.8% rise on a like-for-like basis.
sourcePhreesia Form 10-Q, quarter ended 31 July 2026, with its…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
against this
- The pro forma statement is illustrative by its own words and aligns AccessOne's December year to Phreesia's January one with an adjustment, so it is a base, not a reported year.
- Guidance is a range management chooses; this company beat its own earnings estimate in seven of eight quarters before this one, so the outcome may clear the top.
C03facthigh confidence
Subscription and related services revenue fell 3.0% in Q1 2027, to $52,721 thousand from $54,355 thousand.
C13estimatemedium confidence
Trailing free cash flow is about $67.5M, and a year of share issuance is worth about $27.1M at $12.72.
sourcePhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primaryResearch pack, refreshed 2026-09-24 (2026-09-23 close)secondaryFMP end-of-day prices, close of 2026-10-22secondary
against this
- Free cash flow is struck before working capital normalises: the fiscal 2026 improvement was attributed partly to working-capital changes and to cash flows from the acquired business, and Q1 2027 released $7,731 thousand from receivables and took in $7,711 thousand from selling receivables.
- Valuing dilution at the current share price assumes the price is right, which is the question. At a higher price the same share count costs owners more, not less.
- Stock compensation fell 21% year over year in Q1 2027, to $13,554 thousand, so the issuance rate may be falling rather than steady.
- 2026-09-24editedRefreshed at the Q2 print and the 2026-09-23 close.
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C04management claimmedium confidence
Management says the subscription decline is deliberate - it moderated pricing to keep clients and to earn more from payments and advertising - and repeated it on the 2 September 2026 call, citing providers under financial strain. The Q2 10-Q attributes that quarter's decline primarily to one-time fee adjustments and lower licence revenue.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q4 fiscal 2026 earnings callprimaryPhreesia Q2 fiscal 2027 earnings callprimaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primary
against this
- Two listed rivals selling overlapping front-desk software to healthcare practices grew 15.5% and 18.1% in the three months ended 30 June 2026 while this line shrank.
- The same outlook cut revenue per client from low-double-digit growth to low-single-digit growth, which is what lost pricing power also looks like.
- Weave's own annual report states it 'provides more functionality at a significantly lower cost than the combined cost of point solutions', which is a rival telling you the price of this bundle is under attack.
- Management has been saying subscription would grow slowest of the three lines for several quarters, so the framing predates the decline and cannot be tested against it.
- Asked on the Q2 call how retention and attach rates were moving, the chief financial officer gave no figure and said the company thinks about total revenue, so the claim that clients are being kept is still untested.
- 2026-09-24editedTested at the Q2 print: the call repeats the pricing explanation; the 10-Q gives a different one for the quarter.
The company
At the front desk the patient checks in on Phreesia's tablet or phone screen: insurance card captured, forms signed, the amount owed worked out and paid by card, a health questionnaire answered. Without it, the practice has a clipboard, a receptionist keying cards in by hand, and bills sent weeks later.
About 4,514 practices and health systems used it on average in fiscal 2026, handling about 180 million visits.
The evidence under this - 2 claims
C01facthigh confidence
Phreesia's platform handled about 180 million patient visits in fiscal 2026, roughly one in six US ambulatory patient visits.
C37facthigh confidence
Average healthcare services clients were 4,514 in fiscal 2026, up 7%, and total revenue per client was $106,467, also up 7%.
How it makes money
Three ways from one screen. Practices pay a yearly subscription, $219.5M in fiscal 2026. Card payments and patient payment plans earn fees, $121.5M. Drug companies pay to show patients health messages chosen from what they just answered, $139.7M. Every contract runs a year and has to be won again.
The evidence under this - 2 claims
C02facthigh confidence
Fiscal 2026 revenue was $480,591 thousand, up 14.5%: subscription $219,461 thousand, payment solutions $121,459 thousand, network solutions $139,671 thousand.
C42facthigh confidence
Healthcare services contracts are annual and auto-renewing; advertising campaigns run one year and must be resold each year.
Where the money comes from, stream by stream
| Stream | Share of sales (Q2 fiscal 2027) | How it earns it |
|---|---|---|
| Subscription and related services | 40.7% | Software fees from practices and health systems for intake, check-in, scheduling and patient communication, on annual auto-renewing contracts. |
| Payment solutions | 29.7% | Fees on patient card payments taken through the platform, plus financing fees on AccessOne's patient credit receivables since November 2025. |
| Network solutions | 29.6% | Drug makers and other organisations paying to reach consenting patients with messages on the check-in screens, sold as yearly campaigns. |
Who runs it
Chaim Indig co-founded Phreesia in 2005 and still runs it; Balaji Gandhi has run the money since 2023. Insiders own about 5%, and an outside fund, Pale Fire Capital, holds about 14%. The yearly bonus rides on sales and a profit figure that leaves out pay in shares; the long-term shares pay only if the stock beats most of the market. Nothing pays for shrinking the share count, and the company has bought none back.
The evidence under this - 4 claims
C50facthigh confidence
Chaim Indig co-founded Phreesia in 2005 and has been chief executive and a director since; Balaji Gandhi has been chief financial officer since March 2023, having joined in 2019 to run investor relations; co-founder Evan Roberts and David Linetsky have run Provider Solutions and Network Solutions since July 2025.
C51facthigh confidence
At 24 April 2026 the 14 directors and executive officers owned 5.2% of Phreesia; Chaim Indig, the largest insider, held 2.9% and Evan Roberts 1.2%. Pale Fire Capital held 14.4%, BlackRock 6.7% and Vanguard 5.6%. There is one class of common stock.
C52facthigh confidence
Phreesia's executive bonus pays on revenue and adjusted EBITDA, 30% on the first half and 70% on the full year; fiscal 2026 funded at 153.4% and 134.7%, with full-year revenue at 99.8% of its $472.0M goal and adjusted EBITDA at 113.3% of $88.0M, AccessOne excluded. Long-term awards are back-loaded RSUs and PSUs on three-year shareholder return against the Russell 3000, half the CEO's grant; the fiscal 2023 PSUs earned nothing.
against this
- Adjusted EBITDA excludes stock compensation of $67,452 thousand in fiscal 2026 (C11), so the profit measure the bonus pays on leaves out the dilution the per-share score is struck on.
- Nothing in the plan pays on subscription revenue, free cash flow or the share count, and an earned bonus can be taken in vested shares at a 15% premium, which adds to issuance.
C53facthigh confidence
Phreesia raised $174.8M net at $32 a share in October 2020 and $245.8M at $50 in April 2021, bought Insignia Health for $37.2M cash in December 2021 and AccessOne in November 2025 (C23), has never paid a dividend, and bought back no shares under a 2.5 million-share authorisation of March 2025 through 31 July 2026; diluted weighted shares rose from 49,888,436 in fiscal 2022 to 61,494,878 in fiscal 2026.
Why it wins, and who could beat it
Why customers come back
Phreesia owns minutes that cannot be bought: the time a patient spends checking in. No advertising network can reach that screen without first winning thousands of practices one by one.
Because drug companies pay so well for the screen, Phreesia can charge practices less than a software-only rival. It earns about $106,467 a year from each client, and under half of that is the subscription. Clients grew 7% last year.
The evidence under this - 3 claims
C01facthigh confidence
Phreesia's platform handled about 180 million patient visits in fiscal 2026, roughly one in six US ambulatory patient visits.
C46estimatehigh confidence
Phreesia earns about $106,467 a year per client and under half of it is the software subscription.
derivedFiscal 2026 subscription revenue of $219,461 thousand over 4,514 average clients is $48,618 per client, against total revenue per client of $106,467 - so the subscription is 45.7% of what the same relationship produces.
against this
- Advertising revenue is not earned per client in any direct sense - it is sold to pharmaceutical companies against the whole patient audience - so dividing it by the client count is an accounting convenience rather than a unit economic.
- The client count itself was flattered by 80 clients that arrived with the AccessOne acquisition in the fourth quarter.
C37facthigh confidence
Average healthcare services clients were 4,514 in fiscal 2026, up 7%, and total revenue per client was $106,467, also up 7%.
The threat
Each of the three buyers has somewhere else to go. Weave sells practices forms, scheduling and payments in one bundle and grew 15.5% in the June quarter; Waystar sells patient payments to hospitals and grew 18.1%. Phreesia's own software line shrank.
The evidence under this - 3 claims
C30facthigh confidence
Weave sells patient communications, scheduling, digital forms and payments to healthcare practices, and says it undercuts the combined cost of point solutions.
C31facthigh confidence
Waystar sells patient financial care - electronic statements, patient payments through its portal and flexible payment arrangements - to providers.
C05facthigh confidence
Weave revenue grew 15.5% and Waystar revenue grew 18.1% in the three months ended 30 June 2026.
The rivals: WEAV, WAY, OPRX, SYF.
Who else does this, rival by rival
| Ticker | Rival | How far along | Priced against it |
|---|---|---|---|
| WEAV | Weave CommunicationsPriced against it: One segment only | On sale | One segment only |
| WAY | WaystarPriced against it: One segment only | On sale | One segment only |
| OPRX | OptimizeRxPriced against it: One segment only | On sale | One segment only |
| SYF | CareCredit (Synchrony Financial)Priced against it: One segment only | On sale | One segment only |
How big it could get
How big this could get
Americans paid $556.6B of their own health bills in 2024, up 5.9%. Phreesia estimates about $95.0B of that passes through doctors' offices like the ones it serves.
It handled $4,873M of patient payments in fiscal 2026, about 5% of that pool.
The evidence under this - 3 claims
C33facthigh confidence
US out-of-pocket health spending grew 5.9% to $556.6 billion in 2024, 11% of national health expenditure.
C34management claimlow confidence
Phreesia estimates a $24 billion market: $6.3B of subscription, $9.1B of payment and financing fees on about $95.0B of ambulatory out-of-pocket spend, and $8.2B of advertising.
against this
- The $9.1B fee pool implies about 9.6% of the ambulatory out-of-pocket spend it sits on, against a payment solutions revenue rate of 2.3% of total managed payments that Phreesia itself reports - so the pool assumes roughly four times today's monetisation.
- The $8.2B advertising component is built on projections of marketing spend, which is the component a presidential memorandum and an FDA enforcement wave are currently acting on.
- The whole figure is the company's own and appears nowhere outside its filings, and the annual report gives no source for any of the three parts.
C35facthigh confidence
Fiscal 2026 patient payment volume was $4,873M, up 10%, and total managed payments were $1.786B in Q1 2027.
The results
The numbers
Is it growing?Steady
Sales grew 13% over the twelve months to Jul 2026, about the same pace as the 14% in the year to Jan 2026.
Is it profitable?Thin
Operating margin is 2.5%, up from −38% in the year to Jan 2024.
How steady is it?Uneven
Yearly sales growth has ranged from +14% to +43% over the last 5 years.
Does it earn good returns?Low
Shareholders' money earned 3.1% a year, up from −35% in the year to Jan 2022.
Is it making cash?Strong
It turned 16% of sales into free cash, $80.7M over the last twelve months.
Is profit turning into cash?Real cash
Free cash flow was 7.7 times net income.
Are shares being diluted?Diluting
The share count rose 25% in 4.5 years, and pay in shares costs 12% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in January.
| Jan 2022 | Jan 2023 | Jan 2024 | Jan 2025 | Jan 2026 | 12 mo to Jul 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $213M | $281M | $356M | $420M | $481M | $508M |
| Sales growth | +43% | +32% | +27% | +18% | +14% | +13% |
| Profit | ||||||
| Operating margin | −55% | −63% | −38% | −14% | −1.4% | 2.5% |
| Net margin | −55% | −63% | −38% | −14% | 0.5% | 2.1% |
| What growth costs, per sales dollar | ||||||
| Research and development | 25% | 32% | 32% | 28% | 25% | 23% |
| Sales and marketing | 50% | 54% | 41% | 29% | 21% | 19% |
| General and admin | 32% | 29% | 22% | 18% | 17% | 16% |
| Pay in shares | 17% | 21% | 20% | 16% | 14% | 12% |
| Capital spending | 8.6% | 1.7% | 1.6% | 2.1% | 2.3% | 2.1% |
| Cash | ||||||
| Cash from operations | −$74.7M | −$90.1M | −$32.4M | $32.4M | $78.8M | $91.4M |
| Free cash flow | −$93.1M | −$94.9M | −$38.2M | $23.7M | $67.7M | $80.7M |
| Balance sheet | ||||||
| Cash and short-term investments | $314M | $177M | $87.5M | $84.2M | $73.8M | - |
| Debt | $13.2M | $7.90M | $11.5M | $16.2M | $100M | $66.4M |
| Net cash | $301M | $169M | $76.1M | $68.0M | −$26.3M | - |
| Returns and shares | ||||||
| Return on capital | - | - | - | - | - | 3.4% |
| Shares (diluted) | 49.9M | 52.4M | 54.6M | 57.6M | 61.5M | 62.5M |
What growth costs
Each dollar of sales now costs Phreesia far less to win than it did four years ago, which has pulled it from heavy losses to a small profit. Most of that came from cutting the sales force and staff rather than from growing, so it shows discipline more than a business that gets cheaper to run as it grows.
The evidence under this - 3 claims
C54facthigh confidence
Per sales dollar, sales and marketing fell from 49.9 cents in fiscal 2022 to 20.9 in fiscal 2026 and 19.2 over the four quarters to July 2026, general and administrative from 32.2 to 16.6 and 15.6, and stock pay from 17.0 to 14.0 and 11.7; research and development peaked at 32.5 in fiscal 2023 and was 25.3 and 22.9. Operating margin went from -54.8% to -1.4% and 2.5%.
sourcePhreesia Form 10-K, fiscal year ended 31 January 2023primaryPhreesia Form 10-K, fiscal year ended 31 January 2026primaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primary
against this
- The fiscal 2026 gain came from cutting sales and marketing dollars by 17% (C15) and the May 2026 restructuring (C16) while revenue excluding AccessOne is guided roughly flat (C49), so it is cost reduction more than scale; research and development dollars still rose 4%.
- The numbers card's capital spending is purchases of property and equipment only ($11,101 thousand in fiscal 2026); Phreesia also capitalised $13,296 thousand of internal-use software, so all-in capital spending was about 5.1 cents per sales dollar, not 2.3.
C15facthigh confidence
Sales and marketing spending fell 17% in fiscal 2026, to $100,243 thousand, while revenue rose 14.5%.
C16facthigh confidence
On 7 May 2026 Phreesia adopted a restructuring plan eliminating about 220 positions, about half of them contractors, at about $10M of charges, $2.8M of which were recognised in Q2 fiscal 2027.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedThe Q2 release gives the plan's full size and cost.
The last report (2 Sep)
Quarter ended July 2026, filed figures.
10%
Sales growth
against the same quarter a year earlier
-1.1%
Growth from the quarter before
against 3.0% the quarter before that
6¢
Operating profit
per dollar of sales
In the quarter to 31 July 2026 sales rose 10.4% to $129.5M, but most of the growth came from AccessOne, the patient-lending business bought in November. Advertising grew 8.9%.
The software subscription fell 1.9%, its second quarterly decline. Management calls it deliberate price restraint; the quarterly report blames one-time fee adjustments. Asked for client-retention figures that would settle it, management gave none. The year's forecasts were held.
What it did to the thesisIt sharpened the central worry: the software line shrank again while the bought lending business supplied the growth. Management's explanation went unproven when it declined to give retention figures. The view stays Neutral, cheap on cash but with flat underlying sales.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.03 against $0.09 expected; $0.03 as filed, with no adjustments.
The evidence under this - 5 claims
C48facthigh confidence
In the quarter to 31 July 2026 subscription and related services revenue fell 1.9%, to $52,695 thousand from $53,702 thousand; payment solutions rose 35.6% to $38,489 thousand, largely on AccessOne; network solutions rose 8.9% to $38,274 thousand; total revenue rose 10.4% to $129,458 thousand. The 10-Q attributes the subscription decline 'primarily' to one-time adjustments for non-recurring fees and less one-time licence revenue.
C23facthigh confidence
AccessOne was bought on 12 November 2025 for about $163.7M, funded with cash and a $110M bridge loan refinanced in March 2026.
C04management claimmedium confidence
Management says the subscription decline is deliberate - it moderated pricing to keep clients and to earn more from payments and advertising - and repeated it on the 2 September 2026 call, citing providers under financial strain. The Q2 10-Q attributes that quarter's decline primarily to one-time fee adjustments and lower licence revenue.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q4 fiscal 2026 earnings callprimaryPhreesia Q2 fiscal 2027 earnings callprimaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primary
against this
- Two listed rivals selling overlapping front-desk software to healthcare practices grew 15.5% and 18.1% in the three months ended 30 June 2026 while this line shrank.
- The same outlook cut revenue per client from low-double-digit growth to low-single-digit growth, which is what lost pricing power also looks like.
- Weave's own annual report states it 'provides more functionality at a significantly lower cost than the combined cost of point solutions', which is a rival telling you the price of this bundle is under attack.
- Management has been saying subscription would grow slowest of the three lines for several quarters, so the framing predates the decline and cannot be tested against it.
- Asked on the Q2 call how retention and attach rates were moving, the chief financial officer gave no figure and said the company thinks about total revenue, so the claim that clients are being kept is still untested.
- 2026-09-24editedTested at the Q2 print: the call repeats the pricing explanation; the 10-Q gives a different one for the quarter.
C08facthigh confidence
Fiscal 2027 revenue guidance was cut on 30 March 2026 from $545-559M to $510-520M and maintained on 27 May and 2 September 2026.
sourcePhreesia Q4 and fiscal 2026 results release (Form 8-K,…primaryPhreesia Q1 fiscal 2027 results release (Form 8-K, Exhibit…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedMaintained again with Q2 results on 2026-09-02.
C14facthigh confidence
Fiscal 2027 adjusted EBITDA guidance of $125-135M was held through the revenue cut and maintained in May and September 2026.
sourcePhreesia Q4 and fiscal 2026 results release (Form 8-K,…primaryPhreesia Q1 fiscal 2027 results release (Form 8-K, Exhibit…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedMaintained again with Q2 results on 2026-09-02.
What management did with the money
It bought AccessOne for about $163.7M and has already repaid over $23M of debt in one quarter, leaving cash slightly above debt. In May it cut about 220 positions. The share count rose 3.43% in a year, as staff were paid in stock.
Insiders in 2026Q2: 23 purchases and 19 sales, from their Form 4 filings.
The evidence under this - 4 claims
C23facthigh confidence
AccessOne was bought on 12 November 2025 for about $163.7M, funded with cash and a $110M bridge loan refinanced in March 2026.
C27facthigh confidence
At 31 July 2026 Phreesia held $72,945 thousand of cash against $66,446 thousand of debt and finance leases, having repaid over $23M of debt principal in the quarter.
sourcePhreesia Form 10-Q, quarter ended 31 July 2026, with its…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedRefreshed at the Q2 balance sheet.
C16facthigh confidence
On 7 May 2026 Phreesia adopted a restructuring plan eliminating about 220 positions, about half of them contractors, at about $10M of charges, $2.8M of which were recognised in Q2 fiscal 2027.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedThe Q2 release gives the plan's full size and cost.
C12facthigh confidence
Basic weighted average shares rose 3.43% year over year in Q1 2027, to 60,944,962 from 58,920,782.
The price, and where we disagree
In short. Fair. Cheap on cash, but for a business whose sales are flat once the company it bought is set aside, and whose staff take a slice of the cash every year in new shares.
Share price
$9.68
close,
Spare cash as a share of the price
12.7%
its 6-year normal -2.4%
The shares trade at 1.92 times a year's sales, against a six-year norm of 5.45 times. The price is no longer the obstacle.
What stands in the way is the revenue. Washington has pressed drug companies on their advertising since September 2025, and budgets have been cut. The next results, due 14 December, show whether the software line stops shrinking and advertising keeps growing into the second half.
The evidence under this - 4 claims
C39facthigh confidence
The shares are about 46% lower over 252 sessions and trade at about 1.92 times trailing revenue against a six-year median of 5.45 times.
sourceResearch pack, frozen at content/PHR/research-pack.jsonsecondaryPhreesia Form 10-K, fiscal year ended 31 January 2026primaryPhreesia Form 10-Q, quarter ended 30 April 2026primaryFMP end-of-day prices, close of 2026-10-22secondary
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C18facthigh confidence
A presidential memorandum of 9 September 2025 directed HHS to put more risk information into drug adverts and the FDA to enforce the advertising rules.
C19facthigh confidence
Phreesia's annual report says federal action on drug marketing has affected its life sciences clients, who have cut marketing budgets and redirected spend.
C08facthigh confidence
Fiscal 2027 revenue guidance was cut on 30 March 2026 from $545-559M to $510-520M and maintained on 27 May and 2 September 2026.
sourcePhreesia Q4 and fiscal 2026 results release (Form 8-K,…primaryPhreesia Q1 fiscal 2027 results release (Form 8-K, Exhibit…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
- 2026-09-24editedMaintained again with Q2 results on 2026-09-02.
How we read the multiple
Phreesia produced about $67.5M of spare cash over the last year, but the new shares it hands staff cost owners about $27.1M of it. The $789.5M price is about 19.5 times what is left.
That is a fair price for a flat business and a cheap one for a growing one. Leave out the company it bought and sales are forecast between a 1.1% fall and a 0.8% rise this year.
Against its own history. Far cheaper than its own normal, because the market no longer believes the growth story, not because the business earns less.
The evidence under this - 3 claims
C13estimatemedium confidence
Trailing free cash flow is about $67.5M, and a year of share issuance is worth about $27.1M at $12.72.
sourcePhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primaryResearch pack, refreshed 2026-09-24 (2026-09-23 close)secondaryFMP end-of-day prices, close of 2026-10-22secondary
against this
- Free cash flow is struck before working capital normalises: the fiscal 2026 improvement was attributed partly to working-capital changes and to cash flows from the acquired business, and Q1 2027 released $7,731 thousand from receivables and took in $7,711 thousand from selling receivables.
- Valuing dilution at the current share price assumes the price is right, which is the question. At a higher price the same share count costs owners more, not less.
- Stock compensation fell 21% year over year in Q1 2027, to $13,554 thousand, so the issuance rate may be falling rather than steady.
- 2026-09-24editedRefreshed at the Q2 print and the 2026-09-23 close.
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C41inferencemedium confidence
At about $789.5M the price pays about 19.5 times the free cash flow left after a year of share issuance, on revenue guided flat like-for-like.
sourcePhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primaryResearch pack, refreshed 2026-09-24 (2026-09-23 close)secondaryFMP end-of-day prices, close of 2026-10-22secondary
against this
- Charging dilution against free cash flow double-counts if the awards are the reason cash costs are low, and the cash cost of pay would be higher without them - though the awards are on top of salaries, not instead of them.
- Free cash flow before dilution is about $67.5M against $789.5M of market value, a yield near 8.5%.
- The adjusted profit guide of $125-135M would put the whole enterprise at about six times its own middle, which is the number most buyers will use.
- Adjusted profit reached $32.9M in Q2 fiscal 2027 against $22.1M a year earlier, so the cost programme is working and cash generation is rising rather than flat.
- 2026-09-24editedRe-struck at the 2026-09-23 close on the Q2 cash flow; the price fell 16% while free cash flow rose.
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C49estimatemedium confidence
Fiscal 2026 revenue restated as if AccessOne had been owned all year was $515,665 thousand, so the maintained fiscal 2027 guide of $510-520M implies revenue between a 1.1% fall and a 0.8% rise on a like-for-like basis.
sourcePhreesia Form 10-Q, quarter ended 31 July 2026, with its…primaryPhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primary
against this
- The pro forma statement is illustrative by its own words and aligns AccessOne's December year to Phreesia's January one with an adjustment, so it is a base, not a reported year.
- Guidance is a range management chooses; this company beat its own earnings estimate in seven of eight quarters before this one, so the outcome may clear the top.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Also checked and set aside: Doximity (a substitute, not the same product).
Private or foreign rivals that cannot be priced: Epic Systems, athenahealth, eClinicalWorks, CareCredit (Synchrony Financial).
Where we disagree with the market
The market believes
Analysts still rate it a buy, while the price says drug advertising is permanently smaller and the growth story is over.
We believe
The market has the advertising roughly right, and has not yet reacted to the software line shrinking while listed rivals grow.
The guidance cut everyone watched was the sector's: OptimizeRx, a listed rival selling drug messages through doctors' record systems, saw sales fall 29.8% in the June quarter. The fact underneath is Phreesia's own, and it sits in the revenue table rather than the headline.
The case against us: management may be right that it cut software prices to win more from payments and advertising. Subscription growth returning would prove it.
What analysts say, and the evidence
Analysts positive
55%
of 20, 1 Sep
Four months earlier
65%
of 23, 1 May
The evidence under this - 6 claims
C20facthigh confidence
OptimizeRx revenue fell 29.8% in the three months ended 30 June 2026, to $20,504 thousand, and 21.1% over six months.
C22inferencemedium confidence
The point-of-care advertising pullback is a market event rather than Phreesia losing share.
derivedPhreesia's advertising line grew 14.6% in the quarter to 30 April 2026 while the closest listed point-of-care advertising business shrank 29.8% in the quarter to 30 June 2026, and Doximity, the largest listed seller of pharmaceutical marketing, decelerated to about 7% growth in the same quarter from 13% for its prior year.
against this
- The two quarters do not overlap: Phreesia's is to 30 April and OptimizeRx's to 30 June, so Phreesia's growth is measured two months earlier in the same downturn.
- OptimizeRx's revenue is concentrated in a handful of brands, so its fall may be idiosyncratic.
- Winning share of a shrinking pool is not the same as being unaffected by it, and Phreesia's own guidance cut is the evidence that it is affected.
C03facthigh confidence
Subscription and related services revenue fell 3.0% in Q1 2027, to $52,721 thousand from $54,355 thousand.
C48facthigh confidence
In the quarter to 31 July 2026 subscription and related services revenue fell 1.9%, to $52,695 thousand from $53,702 thousand; payment solutions rose 35.6% to $38,489 thousand, largely on AccessOne; network solutions rose 8.9% to $38,274 thousand; total revenue rose 10.4% to $129,458 thousand. The 10-Q attributes the subscription decline 'primarily' to one-time adjustments for non-recurring fees and less one-time licence revenue.
C05facthigh confidence
Weave revenue grew 15.5% and Waystar revenue grew 18.1% in the three months ended 30 June 2026.
C04management claimmedium confidence
Management says the subscription decline is deliberate - it moderated pricing to keep clients and to earn more from payments and advertising - and repeated it on the 2 September 2026 call, citing providers under financial strain. The Q2 10-Q attributes that quarter's decline primarily to one-time fee adjustments and lower licence revenue.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q4 fiscal 2026 earnings callprimaryPhreesia Q2 fiscal 2027 earnings callprimaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primary
against this
- Two listed rivals selling overlapping front-desk software to healthcare practices grew 15.5% and 18.1% in the three months ended 30 June 2026 while this line shrank.
- The same outlook cut revenue per client from low-double-digit growth to low-single-digit growth, which is what lost pricing power also looks like.
- Weave's own annual report states it 'provides more functionality at a significantly lower cost than the combined cost of point solutions', which is a rival telling you the price of this bundle is under attack.
- Management has been saying subscription would grow slowest of the three lines for several quarters, so the framing predates the decline and cannot be tested against it.
- Asked on the Q2 call how retention and attach rates were moving, the chief financial officer gave no figure and said the company thinks about total revenue, so the claim that clients are being kept is still untested.
- 2026-09-24editedTested at the Q2 print: the call repeats the pricing explanation; the 10-Q gives a different one for the quarter.
What could go wrong, and how we would know
The risks
- Drug advertising under pressure. Federal action has already cut drug companies' marketing budgets, and advertising is 29% of sales, sold one year at a time.
- Software losing to rivals. The subscription line has declined two quarters running while two listed rivals grew over 15%.
- Staff paid in shares. Share issuance takes close to a third of the cash the business produces each year.
- Lending risk. AccessOne carries about $419M of patient payment plans; Phreesia can recover losses from the practices, which puts client goodwill at stake.
The evidence under this - 8 claims
C19facthigh confidence
Phreesia's annual report says federal action on drug marketing has affected its life sciences clients, who have cut marketing budgets and redirected spend.
C42facthigh confidence
Healthcare services contracts are annual and auto-renewing; advertising campaigns run one year and must be resold each year.
C03facthigh confidence
Subscription and related services revenue fell 3.0% in Q1 2027, to $52,721 thousand from $54,355 thousand.
C48facthigh confidence
In the quarter to 31 July 2026 subscription and related services revenue fell 1.9%, to $52,695 thousand from $53,702 thousand; payment solutions rose 35.6% to $38,489 thousand, largely on AccessOne; network solutions rose 8.9% to $38,274 thousand; total revenue rose 10.4% to $129,458 thousand. The 10-Q attributes the subscription decline 'primarily' to one-time adjustments for non-recurring fees and less one-time licence revenue.
C05facthigh confidence
Weave revenue grew 15.5% and Waystar revenue grew 18.1% in the three months ended 30 June 2026.
C13estimatemedium confidence
Trailing free cash flow is about $67.5M, and a year of share issuance is worth about $27.1M at $12.72.
sourcePhreesia Q2 fiscal 2027 results release (Form 8-K, Exhibit…primaryResearch pack, refreshed 2026-09-24 (2026-09-23 close)secondaryFMP end-of-day prices, close of 2026-10-22secondary
against this
- Free cash flow is struck before working capital normalises: the fiscal 2026 improvement was attributed partly to working-capital changes and to cash flows from the acquired business, and Q1 2027 released $7,731 thousand from receivables and took in $7,711 thousand from selling receivables.
- Valuing dilution at the current share price assumes the price is right, which is the question. At a higher price the same share count costs owners more, not less.
- Stock compensation fell 21% year over year in Q1 2027, to $13,554 thousand, so the issuance rate may be falling rather than steady.
- 2026-09-24editedRefreshed at the Q2 print and the 2026-09-23 close.
- 2026-10-23editedRe-struck at the 2026-10-22 close of $12.72 (the shares rose 31% since the 2026-09-23 close); no new filing, so the free cash flow and share count are unchanged.
C24facthigh confidence
AccessOne held a managed portfolio of about $419M of cardholder receivables at 31 January 2026 and earned about 2.3% of it in the quarter.
C25facthigh confidence
Phreesia bears no credit risk from the patient cardholder; it has full recourse to the healthcare provider for unpaid principal.
What we still do not know
- Whether the software decline is chosen or forced. Management has given no retention or renewal figures that would tell them apart.
- How profitable each of the three lines is. Phreesia reports one segment, so no separate margin is published.
The evidence under this - 2 claims
C04management claimmedium confidence
Management says the subscription decline is deliberate - it moderated pricing to keep clients and to earn more from payments and advertising - and repeated it on the 2 September 2026 call, citing providers under financial strain. The Q2 10-Q attributes that quarter's decline primarily to one-time fee adjustments and lower licence revenue.
sourcePhreesia Q1 fiscal 2027 stakeholder letter (Form 8-K,…primaryPhreesia Q4 fiscal 2026 earnings callprimaryPhreesia Q2 fiscal 2027 earnings callprimaryPhreesia Form 10-Q, quarter ended 31 July 2026, with its…primary
against this
- Two listed rivals selling overlapping front-desk software to healthcare practices grew 15.5% and 18.1% in the three months ended 30 June 2026 while this line shrank.
- The same outlook cut revenue per client from low-double-digit growth to low-single-digit growth, which is what lost pricing power also looks like.
- Weave's own annual report states it 'provides more functionality at a significantly lower cost than the combined cost of point solutions', which is a rival telling you the price of this bundle is under attack.
- Management has been saying subscription would grow slowest of the three lines for several quarters, so the framing predates the decline and cannot be tested against it.
- Asked on the Q2 call how retention and attach rates were moving, the chief financial officer gave no figure and said the company thinks about total revenue, so the claim that clients are being kept is still untested.
- 2026-09-24editedTested at the Q2 print: the call repeats the pricing explanation; the 10-Q gives a different one for the quarter.
C45facthigh confidence
Phreesia reports one segment, so no margin is published for the software, payments or advertising lines separately.
What would change our view
- Neutral→AttractiveThe dilution stops eating the cash
It needs all of:
- ○Shares issued to staff fall clearly below about 3.4% of the company a year, counted in shares, not dollars.checked at the next results, due by 14 Dec
- ○Subscription revenue grows across fiscal 2028 instead of shrinking again, with advertising revenue growing from a year earlier.checked at the next results, due by 14 Dec
- Neutral→UnattractiveThe revenue lines keep declining
It needs any of:
- ○The number of practices using it stops growing once those gained by acquisition are left out.checked at the next results, due by 14 Dec
- ○AccessOne's outstanding patient payment plans shrink or losses appear against them, or the adjusted profit forecast is cut.watched as it happens
We would also be wrong if
- Advertising revenue falls from a year earlier for two quarters running.
What is coming
- 14 December 2026 Q3 fiscal 2027 results: Whether subscription revenue stops falling once one-time items are excluded, network solutions keeps growing, and the $510-520M revenue and $125-135M adjusted EBITDA guides hold.
Every dated event ahead
- 14 December 2026 Q3 fiscal 2027 results: Whether subscription revenue stops falling once one-time items are excluded, network solutions keeps growing, and the $510-520M revenue and $125-135M adjusted EBITDA guides hold.
- March 2027 Q4 fiscal 2027 results and the fiscal 2028 outlook: The first full-year guide since the cut: whether it assumes like-for-like growth again or another flat year, and whether AccessOne is finally guided to grow.
Since we wrote this
Written
25 Aug
Price the thesis read
$9.68
23 Sep
- 23 OctPrice moveShares rose 31%; price now pays about 19.5 times cashRe-struck at the 2026-10-22 close with no new filing. Still Fair on price, so Neutral holds; revenue lines remain the test.
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 24 SepEarningsSoftware shrank a second quarter; forecasts held. View heldThe fall was small and the yearly forecasts were kept. The thesis judges software across fiscal 2028 as a whole, not one quarter.
- 25 AugThesis writtenNeutral, medium convictionFive months after a guidance cut blamed on drug-advertising budgets, with the shares already down by more than half.
Also checked 1 time with nothing new to act on.
Sources 26
Where this came from
Sources - 26
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-31Item 1 business and the competition paragraph, the risk factors including the EHR and the pharmaceutical-advertising ones, the three revenue lines and the whole expense bridge, the tax note and the valuation-allowance release, the AccessOne purchase and the bridge loan, the key metrics, customer concentration and the cardholder credit-risk notebacksC01C02C10C11C15C19C23C24C25C28C29C34C35C37C39C42C53C54
- S02primarycompany release2026-03-30the fiscal 2027 revenue guidance cut and the held adjusted profit guide, the revenue-per-client outlook reduction, the fourth-quarter figures and the refinancingbacksC01C08C11C14C23C44
- S03primarytranscript2026-03-30management's account of which advertising categories pulled back, the fourth-quarter growth rate excluding the acquisition, the AccessOne growth assumption, and nineteen analyst questions - the questions are a separate origin from the answersbacksC04C17C43
- S04primarycompany release2026-05-27the three revenue lines for the quarter, the balance sheet and cash flow statement, the reaffirmed fiscal 2027 outlook, and the PNC securitisation amendment and guarantybacksC03C08C12C14C26
- S05primarycompany release2026-05-27the decomposition of payment-solutions growth into acquired and legacy, management's explanation of the subscription decline, the restructuring headcount, and the new managed-payments metricsbacksC04C06C16C21C35
- S06primarycompany filing2026-05-28the quarterly statements under signature, the debt and securitisation notes, the legal-proceedings item and the risk factors as they stand nowbacksC03C12C21C26C39C45
- S07secondaryvendor data2026-08-25Research pack, frozen at content/PHR/research-pack.jsoncontent/PHR/research-pack.jsonprice, market value, the 252-day return and range, the vendor ratio history against its own six-year medians, the analyst split, the Form 4 transcription and the single-segment reading of the filer's own taggingbacksC38C39C40C44C45
- S08primarycompany filing2026-08-13the closest listed point-of-care advertising business's own revenue for the same period, from outside PhreesiabacksC20
- S09primarycompany filing2026-03-12a rival's own description of the digital point-of-care network and its competition section, which names point-of-care platforms as the competing classread, but no claim rests on it
- S10primarycompany filing2026-08-06a listed front-desk software rival's own revenue for the same periodbacksC05
- S11primarycompany filing2026-03-05a rival's own description of the intake, scheduling, digital forms and payments bundle, its practice-management integrations and the verticals it sells intobacksC30
- S12primarycompany filing2026-07-29a listed healthcare-payments rival's own revenue for the same periodbacksC05
- S13primarycompany filing2026-02-17a rival's own description of patient financial care - electronic statements, patient payments and flexible payment arrangementsbacksC31
- S14primarycompany filing2026-02-06the size of the largest listed patient-financing book and the terms on which its provider agreements can be cancelledbacksC32
- S15primaryregulator2025-09-09Presidential memorandum, Addressing Misleading Direct-To-Consumer Prescription Drug Advertisements The White Housethe mechanism under the advertising business, from the party that changed it rather than from the company it changed it for
The Secretary of Health and Human Services shall therefore take appropriate action to ensure transparency and accuracy in direct-to-consumer prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug required to be provided in prescription drug advertisements, to the extent permitted by applicable law.
backsC18 - S16primarygovernment data2026-08-25CMS National Health Expenditure Fact Sheet, 2024 historical Centers for Medicare & Medicaid Servicesthe size and growth rate of the pool Phreesia's payment business sells into, measured by the agency that measures it
Out of pocket spending grew 5.9% to $556.6 billion in 2024, or 11 percent of total NHE.
backsC33C47 - S17primarycompany filing2026-03-05a rival's own claim to undercut the combined cost of point solutions, and the statement that its buyer base is dental, optometry, veterinary and specialty medicalbacksC30
- S18primarycompany filing2026-05-04the actual wording of what Phreesia now guarantees, which is wider than the results release's summary of itbacksC26
- S19primarycompany filing2026-09-02Q2 fiscal 2027 revenue, adjusted EBITDA, free cash flow, AHSCs, debt repayment, the restructuring plan and the maintained fiscal 2027 outlook.backsC08C13C14C16C27C41C49
- S20primarycompany filing2026-09-03Revenue by line and the MD&A's reasons for each, the balance sheet and debt schedule, total managed payments, the cover-page share count, and fiscal 2026 revenue restated as if AccessOne had been owned all year.backsC04C27C41C48C49C53C54
- S21primarytranscript2026-09-02Phreesia Q2 fiscal 2027 earnings callManagement's explanation of subscription pricing and its answer on retention and attach rates.backsC04
- S22secondaryvendor data2026-09-24Research pack, refreshed 2026-09-24 (2026-09-23 close)Last completed-session close of $9.68 on 2026-09-23.backsC13C41
- S23primarycompany filing2026-05-14executive officers and their tenure, beneficial ownership at 24 April 2026 including the 5% holders, the bonus plan's metrics, goals and fiscal 2026 payouts, the PSU and RSU design and the unearned fiscal 2023 PSUsbacksC50C51C52
- S24primarycompany filing2023-03-23fiscal 2022 and 2023 revenue and the expense lines (sales and marketing, research and development, general and administrative), and fiscal 2023 operating cash flowbacksC54
- S25primarycompany filing2022-03-31the October 2020 and April 2021 follow-on offerings and the Insignia Health acquisitionbacksC53
- S26secondaryvendor data2026-10-23FMP end-of-day prices, close of 2026-10-22Last completed-session close of $12.72 on 2026-10-22; 251-session change -45.8%.backsC13C39C41