10-K: Phreesia Swings to Profit in Fiscal 2026, Boosted by Growth

Phreesia reported a significant turnaround to net income of $2.3 million in fiscal year 2026, up from a $58.5 million net loss in the prior year, fueled by strong revenue growth across all segments and the strategic AccessOne acquisition.

Summary

• Total revenue increased 14% to $480.6 million in fiscal 2026, compared to $419.8 million in fiscal 2025.
• The company achieved a net income of $2.3 million in fiscal 2026, a substantial improvement from a net loss of $58.5 million in fiscal 2025.
• Adjusted EBITDA surged by 176% to $101.5 million in fiscal 2026, up from $36.8 million in fiscal 2025.
• Cash provided by operating activities increased 143% to $78.8 million in fiscal 2026, compared to $32.4 million in fiscal 2025.
• Free cash flow dramatically increased by 555% to $54.4 million in fiscal 2026, from $8.3 million in fiscal 2025.
• The AccessOne acquisition, completed on November 12, 2025, expanded the addressable market for healthcare payments and contributed $9.7 million in revenue and $0.3 million in net income for the partial period.
• Average number of healthcare services clients (AHSCs) grew 7% to 4,514 in fiscal 2026.
• Total revenue per AHSC increased 7% to $106,467 in fiscal 2026.
• Patient payment volume processed through the platform rose 10% to $4.873 billion.
• Sales and marketing expenses decreased by 17% to $100.2 million, primarily due to a $23.5 million reduction in labor costs.
• The company refinanced its Bridge Loan and Existing Capital One Credit Facility with a new $275 million senior secured revolving credit facility on March 13, 2026.
• A cybersecurity incident impacted the ConnectOnCall product in 2024, leading to 14 putative class action lawsuits, with a settlement motion pending as of March 2, 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive report, highlighted by the significant swing to net income, substantial growth in Adjusted EBITDA and free cash flow, and solid revenue expansion across all segments. The successful AccessOne acquisition and efficient cost management in sales and marketing are key strengths, despite ongoing competitive and regulatory challenges.

Positives

• Achieved net income of $2.3 million in fiscal 2026, a significant turnaround from a $58.5 million net loss in fiscal 2025.
• Adjusted EBITDA increased substantially by 176% to $101.5 million in fiscal 2026.
• Free cash flow saw a remarkable increase of 555% to $54.4 million in fiscal 2026.
• Total revenue grew 14% to $480.6 million, indicating strong business expansion.
• Growth across all three revenue streams: Subscription and related services (+12%), Payment solutions (+19%), and Network Solutions (+15%).
• Successful integration of the AccessOne acquisition, expanding healthcare payment solutions and contributing to revenue.
• Increased average number of healthcare services clients (AHSCs) by 7% to 4,514.
• Improved total revenue per AHSC by 7% to $106,467.
• Patient payment volume increased by 10% to $4.873 billion, reflecting underlying client business health and patient responsibility shift.
• Reduced sales and marketing expenses by 17% ($20.9 million decrease), primarily from lower labor costs, indicating improved efficiency.
• Refinanced debt post-fiscal year end, securing a new $275 million credit facility and repaying existing loans without penalty.
• Maintains a comprehensive cybersecurity risk management program informed by industry standards like NIST and HITRUST, and holds PCI-DSS Level 1 certification.
• Recognized on multiple "Top Places to Work" and "Best Software" lists, indicating strong talent and culture.

Negatives

• Cash, cash equivalents, and restricted cash decreased to $73.8 million in fiscal 2026 from $84.2 million in fiscal 2025.
• Incurred a $0.5 million loss on extinguishment of debt in fiscal 2026 related to the First Amendment to the Capital One Credit Facility.
• Interest expense increased significantly by $4.6 million to $7.0 million in fiscal 2026, primarily due to the Bridge Loan.
• Interest income decreased by $0.5 million to $2.2 million in fiscal 2026.
• The company has historically incurred significant operating losses and may incur net losses in the future, despite the current year's net income.
• A cybersecurity incident in 2024 impacted the ConnectOnCall product, leading to 14 putative class action lawsuits, with potential legal expenses and reputational harm.
• The company operates in a highly competitive industry with rapidly evolving technology (including AI) and regulatory requirements, posing ongoing competitive pressure.
• Significant upfront costs are typically incurred in client relationships, with no guarantee of recovery if relationships do not grow.
• Operating results can fluctuate significantly due to variable sales and implementation cycles, and seasonality.
• Reliance on a limited number of clients for a substantial portion of total revenue and accounts receivable poses a risk if these clients are lost or renegotiate terms.
• The company's market opportunity estimates may prove inaccurate, and growth may not meet forecasts.
• The company is fully remote, which subjects it to unique operational risks, including potentially less robust home technologies and increased cybersecurity risk.
• Operations in India subject the company to additional risks, including increasing wages, competition for talent, and potential political/economic instability.

Risks

• Operating in a highly competitive industry, including competition from EHR and PM systems, which could harm business and results of operations.
• Failure to manage future growth effectively could prevent revenue increase and business strategy implementation.
• Operating results have fluctuated and may continue to fluctuate significantly, potentially causing stock price decline if expectations are not met.
• Privacy concerns, cyber-attacks, data breaches, or cybersecurity incidents could lead to economic loss, reputational damage, deter users, and expose the company to legal penalties and liability.
• Operations in India subject the company to additional risks, including increased legal/regulatory compliance, rising wages, competition for talent, and potential political/economic instability.
• Significant upfront costs in client relationships may not be recovered if relationships do not develop or grow.
• Variable sales and implementation cycles can lead to revenue recognition delays and fluctuations in quarterly results.
• Estimates and assumptions for target market size may be inaccurate, and business may not grow at similar rates even if market estimates are met.
• Dependence on senior management and key employees; loss or inability to attract/retain highly skilled employees could adversely affect the business.
• Acquisitions and investments (like AccessOne) may be difficult to integrate, divert management resources, result in unanticipated costs, or dilute stockholders.
• Being a fully remote company subjects the company to unique operational risks, including less robust home technologies and increased cybersecurity risk.
• Subject to healthcare laws and data privacy/security laws (HIPAA, CCPA, CPRA, My Health My Data Act, GDPR, PIPEDA, etc.), which may impose restrictions, require business practice changes, and lead to fines, penalties, or lawsuits.
• Reliance on third-party contractors, vendors, and partners (including those outside the U.S. like in Ukraine and India); replacing them could be difficult and disruptive.
• Artificial intelligence presents risks and challenges, including increased competition, security risks to confidential/personal data, and increased regulatory/compliance burden.
• Business growth relies on client growth and success, and certain revenues from engagements are difficult to predict and subject to external factors (e.g., macroeconomic conditions, healthcare policy changes, life sciences marketing budgets).
• Existing clients may not renew contracts, renew at lower fee levels, or decline additional purchases, impacting revenue.
• Inability to implement solutions for clients or resolve technical issues in a timely manner could lead to costs, client loss, and reputational harm.
• Historical reliance on a limited number of large clients for a substantial portion of revenue and accounts receivable.
• Past net losses and potential for future net losses, requiring additional capital raises.
• If the payment processing platform is limited, restricted, curtailed, or degraded, or if it fails to grow, the business may be adversely affected.
• Failure to comply with card network requirements could result in fines, suspension, or termination of payment facilitator status.
• Changes in laws/regulations relating to interchange fees or increases in card network fees could lead to client loss and adverse impact on revenue.
• Inadequate protection of intellectual property could harm name recognition, technology, and products.
• Restrictions on use of, or ability to license/integrate, third-party technologies could have a material adverse effect.
• Third parties may initiate legal proceedings alleging intellectual property infringement.
• Interruption or failure of information technology and communications systems could impair service delivery, cause client loss, and harm operating results.
• Liability for use of incorrect or incomplete data provided, potentially leading to product liability claims.
• Use of open source software could adversely affect ability to offer services and lead to litigation.
• Existing laws regulate direct marketing (e.g., CAN-SPAM Act), and changes in privacy laws could adversely affect marketing efforts.
• Failure to comply with website accessibility standards could result in fines and penalties.
• Uncertain and evolving healthcare regulatory and political framework (e.g., Cures Act, HIPAA Security Rule modifications, OBBBA, drug pricing scrutiny).
• Subject to federal and state fraud and abuse laws (Anti-Kickback Statute, False Claims Act, HIPAA).
• Risks related to government contracts and procurement regulations (FAR).
• FDA may determine technology solutions are subject to Federal Food, Drug, and Cosmetic Act, leading to additional costs/risks.
• Calling/text messaging services may be subject to TCPA or similar state laws, leading to class action lawsuits and liability.
• Business dependent on phone, email, and text messaging channels; restrictions or decreased consumer willingness could adversely affect business.
• Adverse developments affecting the financial services industry (e.g., bank failures) could impact cash and capital access.
• Share price volatility and potential loss of investment.
• No current intention to pay dividends; return on investment depends on stock price appreciation.
• Stock repurchase program may not enhance long-term stockholder value and could increase volatility or diminish cash reserves.
• Anti-takeover provisions in incorporation documents and Delaware law could delay or prevent a change of control.
• Bylaws designate specific courts as sole forums for disputes, potentially limiting stockholders' ability to obtain a favorable judicial forum.

Future Outlook

The company anticipates continued expansion of its operations, both organically and through acquisitions, and expects to make significant investments to support business growth, develop new solutions, and enhance its operating infrastructure. Future capital requirements will depend on various factors, including working capital needs, strategic relationships, and competitive pressures. The company believes its existing cash and cash equivalents, along with cash generated from operations, will be sufficient for at least the next 12 months, but may seek additional financing for long-term strategy implementation. The company also expects continued evolution in AI technologies and regulatory scrutiny in the healthcare and data privacy sectors.

Management Comments

• We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients.
• We believe that our ability to increase total revenue per AHSC provides useful information to investors as an indicator of the long-term value of our solutions.
• We believe there are significant seasonal factors that may cause us to record higher revenue in some quarters compared with others. We believe this variability is largely due to our focus on the healthcare industry.
• We believe our Indian operations are advantageous to our business, they also create risks that we must effectively manage.
• We believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements.
• We are committed to hiring, developing and supporting an inclusive workplace. We seek to recruit employees of all backgrounds and support their professional development.
• We have operated as a fully remote company since 2020, as we believe this arrangement allows us access to the best talent and creates optimal flexibility for our employees.
• Management believes that the Company’s cash and cash equivalents, along with cash generated in its normal operations will be sufficient to meet the Company’s needs for at least the next 12 months.

Industry Context

StockSavvy.ai notes that Phreesia's strong revenue growth and shift to profitability align with broader trends in the healthcare technology sector, which continues to see increased adoption of digital patient intake, payment solutions, and engagement platforms. The company's focus on AI-enabled workflows and patient affordability addresses critical industry challenges, positioning it well within a competitive landscape that is increasingly integrating AI. The acquisition of AccessOne further solidifies its position in the expanding healthcare payments market, a segment driven by increasing patient financial responsibility. However, the industry faces ongoing regulatory scrutiny, particularly concerning data privacy and AI governance, which Phreesia must navigate effectively.

Comparison to Industry Standards

• Phreesia's 14% total revenue growth to $480.6 million in fiscal 2026 demonstrates robust performance, potentially outpacing some competitors in the fragmented healthcare technology market, which often sees varied growth rates depending on specialization and market penetration.
• The significant improvement from a $58.5 million net loss to a $2.3 million net income in fiscal 2026 indicates a strong operational turnaround, which is a positive outlier compared to many growth-focused tech companies that may still be prioritizing market share over immediate profitability.
• The 176% increase in Adjusted EBITDA to $101.5 million suggests superior operational efficiency gains compared to industry averages, especially given the integration costs associated with the AccessOne acquisition.
• The 555% surge in Free Cash Flow to $54.4 million is an exceptional performance metric, indicating strong cash generation capabilities that could position Phreesia favorably against peers who may struggle with cash conversion despite revenue growth.
• The 7% growth in Average Number of Healthcare Services Clients (AHSCs) to 4,514, alongside a 10% increase in Patient Payment Volume to $4.873 billion, suggests effective client acquisition and engagement strategies, potentially outperforming some smaller niche players in patient engagement and payment processing.
• The 17% reduction in sales and marketing expenses, primarily from labor costs, while still achieving strong revenue growth, points to a more efficient go-to-market strategy compared to many SaaS companies that often see these costs rise with expansion.
• The company's recognition on "2025 Deloitte Technology Fast 500," "TIMEs 2025 Worlds Top HealthTech Companies," and "G2s 2025 Best Software Awards" indicates strong industry recognition and product leadership, comparable to top-tier healthtech innovators.

Corporate Governance

Legal Proceedings

• On May 12, 2024, the company learned of a cybersecurity incident impacting the ConnectOnCall service, an application created by a subsidiary acquired in October 2023.
• Between December 24, 2024, and March 31, 2026, 14 related putative class action complaints were filed against ConnectOnCall.com, LLC and Phreesia, Inc. in the U.S. District Court for the Eastern District of New York (the ConnectOnCall Case).
• The cases have been consolidated as "In re ConnectOnCall.com Data Breach Litigation."
• Plaintiffs purport to represent a nationwide class and state-specific subclasses of individuals whose personally identifiable information and personal health information were allegedly stolen due to the incident.
• Plaintiffs assert common law claims seeking monetary damages, disgorgement restitution, attorneys' fees, interest, declaratory relief, and injunctive relief.
• The company expects to incur legal and professional services expenses associated with this litigation, net of probable insurance recoveries.
• A mediation occurred, and on March 2, 2026, plaintiffs filed an amended motion for preliminary approval of a settlement, which remains pending.
• The company has not recorded a loss contingency liability as of January 31, 2026, because a range of possible losses cannot be reasonably estimated at this time.

Related Party Transactions

• For the years ended January 31, 2026 and 2025, the company recognized revenue totaling $1,124 thousand and $1,343 thousand, respectively, for advertisements placed by a pharmaceutical company where one of the company's independent Board of Directors members serves on its board.
• As of January 31, 2026 and 2025, accounts receivable from this pharmaceutical company totaled $450 thousand and $116 thousand, respectively.
• For the year ended January 31, 2024, the company recognized general and administrative expenses totaling $118 thousand for software agreements with a software company where one of the company's independent Board of Directors members served as CEO and a director until May 2023.

Stakeholder Impact

• Shareholders: Positive impact from the swing to net income, strong Adjusted EBITDA and free cash flow growth, and revenue expansion. Potential dilution from future equity financings is a risk. Stock repurchase program aims to enhance long-term value. Share price volatility is a risk.
• Employees: Positive impact from strong company culture, investment in career growth, and recognition as a top place to work. Fully remote model offers flexibility. Potential impact from management changes and stock-based compensation plans.
• Customers (Healthcare Services Clients): Benefit from expanded payment solutions (AccessOne acquisition), improved patient access, affordability, and outcomes through the integrated platform. Risks include dissatisfaction with services, implementation delays, and potential renegotiation of contracts.
• Patients: Benefit from streamlined administrative processes, improved access to care, flexible payment options, and engagement tools for better health outcomes. Risks include privacy concerns, data breaches, and potential issues with AI accuracy or bias.
• Life Sciences Companies and Other Organizations: Benefit from Network Solutions for direct patient engagement and education. Impacted by the company's ability to grow its client network and patient population, and by life sciences marketing budget cycles and drug approval trends.
• Creditors: Impacted by the company's debt structure, including the new $275 million credit facility and its associated covenants. The company's improved financial performance (net income, EBITDA, cash flow) generally strengthens its creditworthiness.

Next Steps

• Continue to invest to grow the business, including through acquisitions.
• Build relationships with clients and partners.
• Develop new solutions and enhance existing ones.
• Enhance operating infrastructure.
• Effectively integrate, develop, and manage an increasingly distributed employee base in a fully remote working environment.
• Maintain and enhance IT infrastructure, financial and accounting systems and controls.
• Continue to build a qualified workforce in key areas.
• Monitor and comply with evolving healthcare laws, data privacy, and security regulations.
• Address the ConnectOnCall class action lawsuits, with a settlement motion pending.
• Evaluate the impact of new accounting pronouncements (ASU 2024-03, ASU 2025-01, ASU 2025-05, ASU 2025-06) on financial statements and disclosures.
• Potentially seek additional financing to fund long-term strategy.
• Continue to execute the stock repurchase program as authorized by the Board of Directors.

Key Dates

Recommendation

The company's impressive turnaround to net income, coupled with substantial growth in Adjusted EBITDA and free cash flow, signals a strong operational and financial recovery. The strategic AccessOne acquisition expands its market reach in healthcare payments, and consistent revenue growth across all segments demonstrates robust business momentum. While competitive and regulatory risks exist, the company's improved efficiency, strong industry recognition, and proactive debt refinancing position it favorably for continued growth and value creation, making it an attractive investment.

Keywords

Healthcare Technology, Patient Engagement, Payment Solutions, SaaS, HealthTech, SEC Filing, Annual Report, Financial Results, AccessOne Acquisition, AI in Healthcare, Cybersecurity, HIPAA Compliance, Revenue Growth, Profitability, Adjusted EBITDA, Free Cash Flow, Medical Financing, Electronic Health Records, Practice Management, Digital Intake