Phreesia's Q3 2026: Contradictions Emerge on Network Solutions Growth and Visibility, Executive Confidence in AccessOne Acquisition, and Go-to-Market Strategy

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 (Adjusted EBITDA $29.1M, up $19M YOY)

Guidance:

• Fiscal 2026 revenue expected $479M to $481M (includes ~$7.5M AccessOne contribution)
• Fiscal 2026 adjusted EBITDA expected $99M to $101M
• Fiscal 2026 AHSCs ~4,515 and total revenue per AHSC expected to increase vs FY25
• Fiscal 2027 revenue outlook $545M to $559M; adjusted EBITDA $125M to $135M
• Fiscal 2027 assumptions: mid-single-digit AHSC growth (≈1 point from AccessOne) and double-digit revenue-per-AHSC growth; AccessOne ~6.5% of FY27 revenue

Business Commentary:

* Revenue and Earnings Performance: - Phreesia reported total revenue of $120.3 million for Q3 fiscal 2026, marking a 13% increase year-over-year. - The company's adjusted EBITDA reached $29.1 million, indicating a significant increase of $19 million year-over-year and reaching an all-time high margin of 24%. - The growth was driven by strong revenue per AHSC and disciplined execution, allowing for positive net income for the second consecutive quarter.

• AccessOne Acquisition Impact:
• Phreesia completed the acquisition of AccessOne, which is expected to contribute approximately $7.5 million in revenue for the fiscal year 2026.
• This acquisition is anticipated to add approximately 80 AHSC on an annualized basis and is expected to enhance cash flow for healthcare providers.
• The integration of AccessOne's solutions is aimed at helping providers manage patient receivables and improve their financial risk management.

• Outlook for Future Growth:
• Phreesia provided an updated revenue outlook for fiscal 2027, anticipating revenue to be in the range of $545 million to $559 million.
• The company expects AccessOne to contribute approximately 6.5% of the fiscal 2027 total revenue.

• This outlook reflects continued growth in both existing and new business segments, driven by emerging opportunities in provider financing and healthcare provider marketing.

• Investment and Strategic Focus:

• Phreesia is investing in expanding its provider financing and healthcare provider marketing solutions, with plans to leverage existing infrastructure and relationships.
• The company's strategic focus includes enhancing patient engagement and aligning patient and healthcare provider messaging, which is expected to differentiate Phreesia in the market.
• These investments are anticipated to contribute to long-term growth and stakeholder value, positioning Phreesia for continued market expansion.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted revenue of $120.3M (+13% YOY), adjusted EBITDA $29.1M and an all-time high adjusted EBITDA margin of 24% (up 15pp YOY, 5pp QoQ). They reported positive operating cash flow ($15.5M) and free cash flow ($8.8M), closed AccessOne acquisition (adds ~$7.5M in FY26), and provided constructive FY27 targets, signaling confidence in growth and profitability.

Q&A:

• Question from Sean Dodge (BMO Capital Markets): Congratulations on the quarter and on closing the acquisition. 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 requires product work and go-to-market investment before broad cross-sell; Phreesia will invest over the next quarters and expects multi-year contribution, with investments already baked into 2027 outlook.

• Question from Scott Schoenhaus (KeyBanc Capital Markets): I guess 1 for Balaji really quickly and then 1 for the team. But 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: They are actively working to replace the bridge loan and expect to announce a long-term facility in coming months; go-to-market will prioritize intake/voice AI demand and Network Solutions (Patient Connect and new HCP offerings) to drive AHSC growth.

• Question from Jailendra Singh (Truist Securities): Thanks for all the color on the fiscal '27 outlook. 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: Organic growth assumptions exclude AccessOne: Network Solutions expected to grow fastest, payments second, subscriptions third; monetization of HCP and other Network Solutions products underpins the FY27 organic assumptions.

• Question from Brian Tanquilut (Jefferies): Maybe Balaji, just as I think about margins, obviously, strong margin performance in the quarter. You've done a good job there. So -- 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 operating leverage and disciplined capital stewardship (G&A leverage) while still planning targeted reinvestment 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: They've begun pilots for select clients with strong demand and expect to run programs in the new fiscal year; management believes HCP marketing is largely incremental because DTC and HCP budgets are distinct.

• 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 net guide increase despite $7.5M from AccessOne reflects a conservative posture on Network Solutions timing/visibility during the selling season, not a structural concern for FY27.

• Question from Richard Close (Canaccord Genuity): Congratulations on the acquisition in the quarter. 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 provides flexible funded/unfunded models and is differentiated by scale and technology; client needs will vary and revenue may be lumpy as they learn which offerings resonate, with go-to-market seasonality similar to provider sales.

• Question from Daniel Grosslight (Citigroup): Balaji, I wanted to go back to the commentary you made around the fluidity in the network solution selling season this year. Is any of that due to just unknowns around how DTC advertising large is going to develop given just some of the political issues around that? 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—DTC regulatory/market uncertainty contributes to current selling-season fluidity; management feels Phreesia is well-positioned given permission-based product and regulatory trends but needs weeks for clearer visibility.

• Question from Jeffrey Garro (Stephens): I want to go back to the HCP opportunity and maybe ask about MediFind a little bit more specifically. We saw a recent partnership announcement between 2 provider directories that, to some extent, compete with each other and to some extent, compete with MediFind. So I was hoping you could update us on MediFind's tractions and Phreesia MediFind's competitive advantages from offering an integrated platform connecting providers with scheduling and other patient engagement capabilities.
  Response: Management does not view Healthgrades+Zocdoc as a material competitive threat; MediFind's differentiation is integration into Phreesia workflows (scheduling/engagement), strong specialist adoption, rising usage and continued investment.

• Question from John Ransom (Raymond James): Just looking at the Q3 EBITDA outperformance and the guide for 2027, what would you say because the jump in -- I know there's seasonality in payroll taxes, but the jumping all point seems a bit stronger than the implied guide. So any comments there other than the $900,000 you mentioned? And marketing spend was the big variance in our model. So maybe in your guide, what are you contemplating for year-over-year marketing spend growth?
  Response: Q3 outperformance included a $900k one-time G&A tax benefit; Q4 faces payroll tax seasonality headwind; marketing spend is planned to increase year-over-year to support growth initiatives.

• Question from Jessica Tassan (Piper Sandler): And congrats on the close of AccessOne. Can you all elaborate a little bit on how PhreesiaOnCall allows you to enter the provider workflow and surface educational content to the HCP just kind of mechanically, how does that work? And then can you just 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 piloting non‑obtrusive ad formats embedded in natural workflow to surface HCP content; Network Solutions typically has ~60%–70% visibility/bookings entering the calendar year.

• Question from Joseph Vruwink (Robert W. Baird): Maybe a super quick answer. But going back to Jailendra's question earlier, he was asking about organic growth in FY '27. And Balaji, you mentioned network fastest payment second, subscription third I just wanted to clarify if that's the organic rank ordering because I guess it's not intuitive to me why payments would be growing faster than subs next year.
  Response: Yes—excluding AccessOne, organic ranking is Network Solutions fastest, payments roughly neck-and-neck or faster than subscriptions; specifics to be followed up.

• Question from Clark Wright (D.A. Davidson): A lot of might have been answered, but wanted to real quick touch on if you can help us really understand the assumptions behind the fiscal 2027 top line outlook and the mix that you're seeing right now between the growth in account of AHSCs versus the total revenue per AHSC? And if that -- the assumptions you've made includes AccessOne with those figures?
  Response: FY27 outlook includes AccessOne; AccessOne adds ~80 AHSC annualized (~15 in FY26, ~65 in FY27), contributing about 1 point of AHSC growth, with the balance of guidance assuming mid-single-digit AHSC growth and double-digit revenue-per-AHSC gains.

• Question from Jailendra Singh (Truist Securities): I'm curious with shares trading at these valuation levels. What are your thoughts on returning shareholders some value via share buyback program and if that would even be a consideration in light of all the investment opportunities you are focused on?
  Response: Share buybacks are a consideration and previously approved, but current priority is using free cash flow to pay down acquisition-related debt; buybacks remain on the roadmap thereafter.

Contradiction Point 1

Network Solutions Growth and Timing

It involves differing expectations about the growth and timing of revenue recognition within the Network Solutions segment, which is a key growth driver for the company.

Can you clarify core growth in each of your three business areas for fiscal 2027 and provide visibility on network solutions sales? - Jailendra Singh (Truist Securities, Inc., Research Division)

2026Q3: Network Solutions is expected to grow the fastest, followed by Payment Processing and Subscription. We are in a similar situation to last year at this time, but with larger dollar amounts. - Balaji Gandhi(CFO)

What are the factors driving Network Solutions' growth reacceleration? - Steven Valiquette (Mizuho Securities USA LLC)

2026Q2: We are essentially in the same spot we were at this time last year for Q3. So we'll get some of the pharma and pharma advertising sales in Q3, but again, it will be slightly weighted more towards Q4. - Balaji Gandhi(CFO)

Contradiction Point 2

Executive Confidence in AccessOne Acquisition

It highlights a change in executive confidence regarding the potential of the AccessOne acquisition, which could impact strategic decisions and investor perceptions.

What is the growth potential for AccessOne and the potential to expand within its existing base? How can AccessOne be cross-sold into the legacy Phreesia base? - Sean Dodge (BMO Capital Markets Equity Research)

2026Q3: This is the largest acquisition we've done, and we have high expectations for it. Investment in growth opportunities is baked into our outlook for 2027. - Balaji Gandhi(CFO)

Can you provide more details on the AccessOne acquisition? How was the decision made, and why is this acquisition considered the right market and asset for your scale? - Jared Haase (William Blair & Company L.L.C.)

2026Q2: The acquisition is expected to be slightly accretive to operating income in fiscal '26 and significantly accretive in fiscal '27. - Balaji Gandhi(CFO)

Contradiction Point 3

Network Solutions Growth and Visibility

It highlights inconsistencies in the expected growth rates and visibility of the Network Solutions segment, which impacts revenue projections and investor expectations.

Can you provide color on core growth in your three business areas for fiscal 2027 and the visibility on sales in network solutions? - Jailendra Singh (Truist Securities, Inc., Research Division)

2026Q3: Network Solutions is expected to grow the fastest, followed by Payment Processing and Subscription. We are in a similar situation to last year at this time, but with larger dollar amounts. - Balaji Gandhi(CFO)

What are your insights on network solutions amid macroeconomic volatility, and how do customer conversations differ? - Anne Samuel (JPMorgan)

2026Q1: Our growth in network solutions is due to our strong product development and sales team. Customer conversations focus on product value rather than macroeconomic impacts. - Balaji Gandhi(CFO)

Contradiction Point 4

Go-to-Market Strategy for AccessOne

It highlights differing approaches and investments in the go-to-market strategy for AccessOne, which impacts the expected growth and integration of this acquisition.

Can you discuss AccessOne's growth potential and expansion opportunities within its existing customer base, as well as cross-selling strategies into the legacy Phreesia customer base? - Sean Dodge(BMO Capital Markets Equity Research)

2026Q3: Currently, the product is not suited for the vast majority of our clients and requires some work and investment before cross-selling. We plan to invest in the go-to-market strategy for both new and existing clients, as we believe it has been underinvested in go-to-market efforts. - Chaim Indig(CEO)

Will 2026 market conditions and factors be similar to 2025? - Anne McCormick(JPMorgan)

2025Q4: We've been measuring the network solutions sales season. We're being conservative in the guidance, and it doesn't reflect concerns about next year. We believe we should be able to replicate last year's momentum in fiscal '27. - Balaji Gandhi(CFO)