Phreesia's Q3 2025-2026: Contradictions Emerge on AccessOne Growth, Cross-Sell, and VoiceAI Integration

Date of Call: December 8, 2025

Financials Results

• Revenue: $120.3M, up 13% YOY
• Operating Margin: Adjusted EBITDA margin 24%, up 5 percentage points sequentially and up 15 percentage points year-over-year

Guidance:

• Fiscal 2026 revenue updated to $479M–$481M, including ~$7.5M contribution from AccessOne
• Fiscal 2026 adjusted EBITDA updated to $99M–$101M (vs prior $87M–$92M)
• FY26 AHSCs expected ~4,515 and total revenue per AHSC expected to increase vs FY25
• Fiscal 2027 preliminary outlook: revenue $545M–$559M and adjusted EBITDA $125M–$135M
• FY27 assumptions: AHSCs to grow mid-single-digits and revenue per AHSC to grow double-digits; AccessOne ~6.5% of FY27 revenue
• Plan to refinance/replace $110M bridge loan with a long-term facility

Business Commentary:

* Revenue Growth and EBITDA Margin Improvement: - Phreesia reported total revenue of $120.3 million for Q3, which was a 13% increase year-over-year, and an adjusted EBITDA margin of 24%, representing an improvement of 5 percentage points quarter-over-quarter and 15 percentage points year-over-year. - This growth and margin improvement were driven by strong performance across the company's revenue streams and disciplined execution, with a focus on reducing operating leverage and enhancing returns on investment.

• AccessOne Acquisition and Strategic Expansion:
• Phreesia completed the acquisition of AccessOne, which is expected to contribute approximately 80 AHSCs on an annualized basis, managing a portfolio of $450 million.

• This acquisition aligns with Phreesia's strategy to provide financing solutions to health care providers, enabling more predictable cash flow and supporting long-term growth.

• HCP Marketing and Network Solutions:

• Phreesia is expanding into Health Care Provider (HCP) marketing, with select clients already piloting the new offering, and anticipates incremental revenue from network solutions in Q4.
• This expansion is supported by MediFind and ConnectOnCall assets, which align with providers' needs and create a premium, endemic offering, leveraging Phreesia's trusted relationships with providers and life sciences companies.

• Free Cash Flow and Financial Stability:
• Operating cash flow was $15.5 million in Q3, up $9.7 million year-over-year, with free cash flow improving to $8.8 million from $1.6 million a year ago, marking five consecutive quarters of positive cash flow.
• These improvements reflect Phreesia's focus on cash flow management and its ability to sustain growth while managing debt obligations, ensuring financial stability for future investments and strategic acquisitions.

Sentiment Analysis:

Overall Tone: Positive

• Management reported Q3 revenue of $120.3M, up 13% YOY, adjusted EBITDA of $29.1M and an all-time high adjusted EBITDA margin of 24%; they raised FY26 revenue and EBITDA outlook and provided a constructive FY27 outlook ($545M–$559M revenue, $125M–$135M adjusted EBITDA) while highlighting continued product expansion (AccessOne, HCP marketing).

Q&A:

• Question from Sean Dodge (BMO Capital Markets): Chaim, you mentioned the new emerging solution areas that will help to continue driving higher revenue per AHSC. On AccessOne, maybe just anything more you can share on the growth potential for that business, specifically over the next couple of years and how you can accelerate it? And how much room is left to continue expanding within their existing base? And then maybe anything that you need to kind of change about that before you can start cross-selling it into the legacy Phreesia base? When does that become an opportunity?
  Response: AccessOne needs product work and go-to-market investment before broad cross-sell; company will invest in GTM over the next quarters and has already baked resources into the 2027 outlook.

• Question from Scott Schoenhaus (KeyBanc Capital Markets): First on the financing Balaji, you mentioned you're going to refinance or take on a new loan. Can you maybe provide more color there on what you're seeing in the marketplace and what you expect? And then maybe for Haym and Balaji, this mid-single-digit AHSC growth for next year. Maybe talk about your go-to-market strategy in terms of what is -- what products -- what your core products are you going to market to drive that growth? And then how do you think about that growth holistically with this new marketing opportunity.
  Response: Replacing the bridge loan is actively underway with an announcement expected in months, and GTM priorities to drive AHSC growth center on intake/voice-AI and Network Solutions (Patient Connect, post-script engagement and HCP offerings).

• Question from Jailendra Singh (Truist Securities): If I got my math right, your fiscal '27 revenue guidance implies around 8% to 10% core organic growth number I know you guys have talked about double-digit core growth, so that would be at the high end of that guide. Can you share some color around how you're thinking of core growth in 3 business at, at least directionally compared to your expectation of fiscal '26 I was more focused on network solution because are you still in the middle selling season, how much visibility do you have, what level of question you're building in? Just give us some flavor around that and what is built in that 8% to 10% number.
  Response: Excluding AccessOne, management expects Network Solutions to be the fastest-growing segment, Payments second and Subscription third, with monetization of HCP/post‑script/appointment-readiness driving Network Solutions growth.

• Question from Brian Tanquilut (Jefferies): As I look at the guidance for next year, showing about 450 bps of margin expansion. How should I think about the drivers of that and just the sustainability of kind of like squeezing margins here and there over the next few years?
  Response: Margin expansion is driven by disciplined capital allocation and G&A leverage while balancing continued investment in sales, marketing and R&D to support growth.

• Question from Ryan Daniels (William Blair): I wanted to dig a little bit more into the new HCP marketing initiative. And I'm curious, I guess, twofold. 1, have you actively started to sell that for the 2026 season? And kind of what's been the reception from pharma clients and then second, when you think about that, are you seeing or do you anticipate that it will be all incremental dollars? Or do you think any of your kind of D2C dollars from the pharma companies could shift into HCP such that's not 100% incremental?
  Response: Selective pilots are underway with strong demand; management believes HCP spend is largely incremental because HCP and DTC budgets are typically separate.

• Question from Ryan MacDonald (Needham & Company): Balaji, maybe for you, just wanted to ask about the updated '26 guidance. I know you called out $7.5 million of -- in fourth quarter from AccessOne, yes, we've only increased the guidance range at the midpoint by about $3 million -- is there sort of a $4.5 million hole that we're refilling here? Or anything we should be concerned about, I guess, within the core subscription or network solutions business. And how is that sort of impacting your outlook of either of those segments kind of heading into '27?
  Response: The modest guide increase reflects a deliberately more measured view on Network Solutions timing during the selling season; AccessOne contribution is included but conservative network assumptions offset part of it.

• Question from Richard Close (Canaccord Genuity): Just curious if you guys could talk a little bit more about AccessOne, the funded and unfunded, how we think about like the demand in various products or those offerings? And then just like how you expect any type of seasonality in that business in terms of selling new customers and et cetera?
  Response: AccessOne offers flexible funded/unfunded models with advanced technology and scale; demand varies by client type, revenue may be lumpy and seasonality/GTN will resemble provider go-to-market patterns as they learn which offerings resonate.

• Question from Daniel Grosslight (Citi): Is any of that fluidity in the network solution selling season due to unknowns around how DTC advertising will develop given political issues? And what gives you confidence that this fluidity is just really going to happen in fiscal '26 and what really impact fiscal '27?
  Response: Yes—near-term selling-season fluidity is driven in part by DTC/regulatory uncertainty, but management believes Phreesia's permission-based positioning leaves it well-positioned long-term; more visibility will emerge in the coming weeks.

• Question from Jeffrey Garro (Stephens): We saw a recent partnership announcement between Healthgrades and Zocdoc's scheduling capabilities that to some extent compete with MediFind. Can you update us on MediFind's traction and competitive advantages from offering an integrated platform connecting providers with scheduling and other patient engagement capabilities?
  Response: MediFind differentiates by focusing on connecting the right patients to specialists without pay-to-play leads, and integration into Phreesia is driving strong volume and usage—management will continue heavy investment.

• Question from John Ransom (Raymond James): Looking at the Q3 EBITDA outperformance and the guide for 2027, any comments beyond the $900,000 benefit you mentioned? And on marketing spend, what are you contemplating for year-over-year marketing spend growth?
  Response: Q3 included a $900k one‑time G&A tax benefit and Q4 will carry higher payroll-tax seasonality; marketing spend is expected to increase year-over-year to fund growth initiatives.

• Question from Jessica Tassan (Piper Sandler): Can you elaborate how PhreesiaOnCall allows you to enter the provider workflow and surface educational content to the HCP mechanically, and remind us how much of Network Solutions revenue typically books ahead of the start of the calendar year versus upsold or cross-sold intra-year and whether FY '26 is tracking consistent with historical experience?
  Response: PhreesiaOnCall is testing non‑obtrusive in‑workflow ad formats in pilots to surface educational content; roughly 60%–70% of Network Solutions revenue has visibility at calendar-year start.

• Question from Joseph Vruwink (Baird): Going back to Jailendra's question on organic growth in FY27: you mentioned network fastest, payment second, subscription third—was that the organic rank ordering excluding AccessOne?
  Response: Yes—excluding AccessOne, the organic rank is Network Solutions fastest, Payments second and Subscriptions third.

• Question from Clark Wright (D.A. Davidson): Can you help us understand the assumptions behind the fiscal 2027 top-line outlook and the mix between AHSC growth versus total revenue per AHSC? Do those figures include AccessOne?
  Response: FY27 outlook includes AccessOne (annualized ~80 AHSC; ~15 counted in FY26 and ~65 in FY27), so AccessOne contributes about one percentage point to AHSC growth; guidance assumes mid-single-digit AHSC growth plus double-digit revenue-per-AHSC increases.

• Question from Jailendra Singh (Truist Securities): With shares trading at these valuation levels, what are your thoughts on returning value via a share buyback program and would that be a consideration given investment priorities?
  Response: Share buybacks are under consideration but near-term priority is retiring acquisition-related debt; repurchases remain a priority when capital allows.

Contradiction Point 1

AccessOne Growth Potential and Cross-Sell to Legacy Phreesia Base

It highlights differing expectations regarding the growth potential and cross-selling opportunities of the AccessOne acquisition, which could impact investment decisions and strategic planning.

What is the growth potential for AccessOne, how can growth be accelerated, how much expansion remains within the existing customer base, and when does it become an opportunity for the legacy Phreesia customer base? - Sean Dodge (BMO Capital Markets Equity Research)

20251209-2026 Q3: The product is not suited for the majority of clients, requiring work and investment before it can be sold to the base. We plan to invest in go-to-market strategies for new and existing clients. - Chaim Indig(CEO)

What is the growth potential for AccessOne over the next few years? How can growth be accelerated, and is there expansion potential within the existing customer base? Can it be cross-sold into the legacy Phreesia customer base? - Sean Dodge (BMO Capital Markets Equity Research)

2026Q3: The current product is not suited for most of their clients and will need investment to adapt. They plan to invest in go-to-market strategies to expand both new and existing clients. Balaji Gandhi added that the acquisition aligns with their strategy, and they have high expectations for it, with the current guidance reflecting their view of its potential. - Chaim Indig(CEO), Balaji Gandhi(CFO)

Contradiction Point 2

Margin Improvement Expectations

It involves differing expectations for margin improvement, which is a critical metric for investors and stakeholders to assess the company's financial performance and fiscal discipline.

How should we think about margin expansion next year? - Brian Tanquilut (Jefferies)

20251209-2026 Q3: We've been good at being capital stewards. Growth and margin balance are key. G&A is an area we can get leverage on, but we'll continue to invest in sales, marketing, and R&D. - Balaji Gandhi(CFO)

How can the company sustain margin expansion over the next few years? - Brian Tanquilut (Jefferies LLC, Research Division)

2026Q3: We've been good at capital stewardship and aims to balance growth and margin improvement. He expects continued investment in sales and marketing, but also aims to improve margins. - Balaji Gandhi(CFO)

Contradiction Point 3

AccessOne Market Opportunities and Integration Strategy

It involves the company's strategic approach and expectations for the AccessOne acquisition, impacting potential synergies, market penetration, and revenue growth.

What is the growth potential for AccessOne? How can growth be accelerated? What expansion potential remains in the existing customer base? When will AccessOne become an opportunity for legacy Phreesia clients? - Sean Dodge (BMO Capital Markets)

20251209-2026 Q3: The product is not suited for the majority of clients, requiring work and investment before it can be sold to the base. We plan to invest in go-to-market strategies for new and existing clients. - Chaim Indig(CEO)

How does the AccessOne acquisition drive incremental revenue in Network Solutions? - Scott Schoenhaus (KeyBanc Capital Markets Inc.)

2026Q2: AccessOne aligns with Payment Solutions TAM. They work closely with health systems and have a great footprint. The opportunity lies in complementing our existing solutions and cross-selling to health system clients. - Balaji Gandhi(CFO)

Contradiction Point 4

VoiceAI Product Integration and Market Impact

It involves the company's expectations and integration strategies for the VoiceAI product, which could influence product adoption, revenue growth, and market positioning.

What is AccessOne's revenue mix and cross-sell opportunities? - Ryan MacDonald (Needham & Company, LLC)

20251209-2026 Q3: VoiceAI is not a call center type answering service. It's helping with call center folks, prescription refills, and appointmentbooking. It's rapidly helping clients in various scenarios, and we expect it to handle more clinical questions as it continues to develop. - Chaim Indig(CEO)

How does VoiceAI position itself between call center answering services and nurse triage lines? Can it handle more clinical questions over time? - Jeffrey Garro (Stephens Inc.)

2026Q2: VoiceAI is already providing massive value to doctors. It's helping with call center folks, prescription refills, and appointment booking. - Chaim Indig(CEO)

Contradiction Point 5

Potential and Growth Strategy for AccessOne

It involves differing perspectives on the growth potential and strategic approach for AccessOne, which could impact investor expectations and company priorities.

What is the growth potential for AccessOne and how can it be accelerated? How much expansion remains in the existing customer base, and when will it present an opportunity for the legacy Phreesia customer base? - Sean Dodge (BMO Capital Markets)

20251209-2026 Q3: The product is not suited for the majority of clients, requiring work and investment before it can be sold to the base. We plan to invest in go-to-market strategies for new and existing clients. - Chaim Indig(CEO)

How are revenue trends per provider client and new module impacts shaping up? - Scott Schoenhaus (KeyBank)

2026Q1: We have three identified addressable market areas where we have already begun laying the groundwork. These include appointment readiness, patient bill pay and Reputation Management. - Balaji Gandhi(CFO)