Chaim Indig: Well, I think we are making a lot of investments continuously. And I think that, we will continue to make investments not just in getting to 500, but I plan on being here after that, right? And so, a lot of the investments we’re making now are for beyond that, but and we think that continuously we’re not playing just the game for next quarter or next year, it’s let’s make sure that we build a sustainably large competitive moat and at the same time just provide phenomenal value to our clients and while also keeping an eye on the bottom line for our shareholders.
Balaji Gandhi: And, Glen, I’ll just add to that comment. I think we’re actually trying to run the business and grow the business in a way that we don’t lead to the concern you have, which is, are we under investing in the business and we’re trying to do both, at the same time. And I think again, credit to the entire Phreesia team for doing that. It’s not easy.
Operator: We’ll take our next question from Scott Schoenhaus with KeyBanc.
Scott Schoenhaus: Hi, Chaim and Balaji. I just wanted to dig further into your Access eForms acquisition. I guess this kind of ties into the long-term revenue cadence bridge but you mentioned in your stock holder letter that the Access eForms has a vast catalog of content in the acute-care space. Does this enhance your current number of modules that you’re able to cross-sell? And then should this also translate into higher revenue per AHSC as you’re able to sell more and more modules into the acute setting?
Chaim Indig: So I think early on it will, I think it will probably have very minimal impact to our revenue per client. I think that there’s a bunch of work we have to do to make in, to make it tied into Phreesia, which we are have already started the investment in, but over a long period of time, I think it’s going to add significant value to our clients. And when you add significant value, we have a pretty good track record of cap, sharing that value upside, look it’s not a sexy thing, but like if anyone’s ever been through a hospital, it’s just lots of paperwork that needs to be documented and signed continuously. And that, and to that point, like that content is just hard to replicate. And people often view content and sort of the watching a video or you’re having the, like a book or, but the reality is, content in healthcare is like the vast, these vast, whether it’s when we bought Insignia and it was patient activation measure, we do that as really as content or if it’s, this which is just this massive library of forms.
And that’s that example of 5,000 that was just one client that had, they built out 5,000 forms for us. So what we really have to do is do that list of making those types of forms available for the vast majority of our network over the next couple years.
Balaji Gandhi: And Scott, I don’t think that you need to get, like too deep into the, your question around revenue. I mean, think about the scope, right of things that we can do. And we have a big TAM number and subscription, and I think our philosophy has always been build, rent or buy, and this falls into that arena. And this just happened to be something that we, would buy, but it’s not going to be for every client. So when you spread the opportunity across a base of 3,500 clients and however many we’re at, two years, three years, five years from now, I would, I don’t think that’s going to be, material, but it’s part…
Scott Schoenhaus: Great. Thanks for all that color.
Chaim Indig: Great.
Scott Schoenhaus: I appreciate that. I just, my follow up is around the nascent payer referral. Obviously open enrollment season is occurring quickly coming up here quickly, can you just remind us these the profitability metrics on this business? I think you’ve mentioned before that, you know, it doesn’t require a huge sales uplift, and these are pretty high incremental margins, so I just wanted to get some more additional color on that. Thanks.
Balaji Gandhi: Yes, I mean, I don’t think, I think what we’ve said is it’s early and we’re every season, that we learn a little bit more about this. I don’t think there’s anything Scott, that we could sort of take away around like any kind of unit economics, but I will say that, we learn more from it every year and it’s still early and open enrollments around the corner.
Operator: We’ll take our next question from Daniel Grosslight with Citi.
Daniel Grosslight: Hi guys, thanks for taking the question. Chaim, you previously mentioned that the sales cycle has become a bit more challenged broadly, as everyone has taken a pretty hard look at tech spend and deciding what to cut. Can you just comment on how the selling season has changed this year or is changing if you’ve had to provide more discounts, et cetera and how we should really think about that average revenue per user for on the subscription side for the remainder of the year?
Chaim Indig: Look, I think, I wish there was a selling season. I feel like, selling season for us is Monday to Friday and it starts at 9:00 A.M. and goes till 5:00 P.M. east coast, west coast, and everything in between, right? Like I, every week we’re out there calling our practices and health systems and big groups and small groups and single hospitals and multi-hospital groups, and the teams doing really just good work getting in front of the right clients. And then as we win the clients, we have a pretty good track record of keeping them and selling them more stuff. And the way we sell them more stuff is we want, is we introduce product that adds a lot of value to them, and sometimes we give it to them, sometimes we sell it to them, and sometimes, it’s part of the transaction so it really, we get it from transactions.
So I’ve been really happy. I still think it’s hard, but I think the team’s doing a great job in a tough environment. And I think a lot of that is not just the sales marketing organization, but it’s also the product organization. We have good product and it really starts with good product and we do a good job of selling to our clients and we do the things we say we’re going to do, implement them really well, and we try our best to treat them as awesome as we can.
Balaji Gandhi: And, I’d also add that if, when you think about just the client, we do have these three different revenue lines and obviously it’s, I’m sure it’s helpful for people to look at subscription, look at payments, look at network solutions independently and that’s fine. But at the end of the day, when we think about our go-to market, we think about, how a cost of acquiring customer and all that type of stuff. It’s really the totality of it. And that, as Chaim said, I think earlier in the remarks, that inched up a couple of points year-over-year to just around 25,000.
Daniel Grosslight: Yep, okay. And then Balaji on the funding need. I know you mentioned that you can get to your fiscal 2025 targets, profitability within fiscal 2025 without raising additional capital. But I’m wondering if you could put perhaps maybe a finer point on that, you do spend, call it $20 million or so on capitalized software, et cetera. So I’m just curious if you think you can get to free cash flow profitability with your current cash position or, beyond that 2025, do you think you have to perhaps raise additional capital to get you there?
Balaji Gandhi: Well, I think the, I think the earlier comment, to Ryan’s question, we talked about growing profitably beyond that. So I think let’s start Daniel with, like it’s, get to adjusted EBITDA profitability. I think there’s milestones along the way. You look at the operating cash flow this quarter, I think we’re all very proud that that’s a single digit number and that’s that sort of return to a single digit loss number for the first time really since this big investment cycle happened. So that’s a data point. And then, adjusted EBITDA operating cash flow and then free cash flow. So I think we should, let’s be clear, that comment earlier around growing profitably beyond fiscal 2025 was intended to say, we can grow the business at that rate and we can, invest in it as we continue to grow. But it’s not like, that’s, that we need, we envision ourselves needing to come to the market to raise money to grow the business at that. We just want to be clear about that.
Operator: We’ll take our next question from Ryan MacDonald with Needham.
Matthew Shea: Hey, this is Matt Shea on for Ryan. Thanks for taking the question and congrats on the strong quarter. Wanted to start with network solutions. There was a comment in the stakeholder letter that discussed you guys delivering more messages in the first half of 2024 than anticipated with some of those messages originally being expected for the second half. So curious, if we should interpret this as an as a pull forward of spending. Or could the strong first half performance lead to incremental programs or upsells for additional messages in the second half would just like to kind of unpack that and help understand what your expectations are for the back half of the year?
Balaji Gandhi: Sure. Thanks Matt. Look it’s the former of your two scenarios. It is pulling it forward. And I think, the team has done an outstanding job of performing in the first half of the year, and we’re able to deliver those messages for our clients, which is great. But at the same time, look the lack of us rolling that into the guidance for the remainder of the year is because there is some in year activity that we want to wait and see. And, Matt, that’s not really any different than every other year for Phreesia. And so that’s just sort of where we are at this point in the year, and so I would absolutely think of it as portfolio.
Matthew Shea: Okay, got it. That’s helpful. And then maybe sticking with Network Solutions turning to MemberConnect, obviously annual enrollment periods different every year, but curious kind of how the Medicare Advantage lead generation business has gone this year to date, kind of relative to your expectations, and then again, not knowing what AEP is going to look like yet, just curious if there’s anything that gets you guys excited about this year’s AEP in particular, whether it be, any conversations you guys have had with payers or any plans to maybe weaponize some of those communication preferences, insights you generated from your recent survey of Medicare Advantage beneficiaries?