Phreesia (PHR -9.96%), a healthcare software company specializing in digital patient intake and payment solutions, reported its financial results for the quarter ended July 31, 2025, on September 4, 2025. The most notable news from the release was the company’s achievement of its first-ever GAAP net income-positive quarter in Q2 FY2026, with net income at $0.7 million. Revenue came in at $117.3 million in Q2 FY2026, representing a 15% rise over the prior-year period and matching the 15% year-over-year growth seen in the previous quarter. Earnings (GAAP) surpassed last year’s GAAP net loss of $18.0 million, while Adjusted EBITDA (non-GAAP) sharply increased to $22.1 million from $6.5 million. The results exceeded analyst expectations, though management did not raise its revenue guidance for FY2026. Overall, the quarter showed strong operating leverage and prudent balance sheet management as the company positions itself for further growth and an upcoming acquisition.
| Metric | Q2 FY26(Three months ended July 31, 2025) | Q2 FY25(Three months ended July 31, 2024) | Y/Y Change |
|---|---|---|---|
| Revenue | $117.3 million | $102.1 million | 15.0 % |
| Net Income | $0.7 million | $(18.0) million | $18.7 million |
| Adjusted EBITDA (Non-GAAP) | $22.1 million | $6.5 million | 240.0 % |
| Free Cash Flow (Non-GAAP) | $9.6 million | $3.7 million | 163.4 % |
| Average Healthcare Services Clients (AHSCs) | 4,467 | 4,169 | 7.1 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report.
What Phreesia Does and How It Competes
Phreesia helps healthcare providers digitize patient intake, registration, payments, and communication using cloud-based software services. Its platform automates front-office tasks, facilitates secure patient payments, and integrates with practice management and electronic health record systems. This allows practices and health systems to improve efficiency, collect payments, and engage patients from scheduling through post-visit outreach.
The company's business strategy focuses on two core areas: scaling its technology to more healthcare providers and deepening its relationships with existing clients by offering more value-added features. Integration with client workflows and regulatory compliance are central to its success, as these enable adoption by large health systems and small practices alike. Key success factors include product reliability, breadth of integrations, regulatory certifications, and continuous feature innovation.
Quarter in Detail: Key Highlights and Developments
The quarter saw Phreesia record double-digit top line growth. Revenue increased 15% year-over-year, with Network solutions revenue growing approximately 25% year-over-year. Subscription and related services revenue (GAAP) rose 10.5% year-over-year, while Payment processing fees increased 12% year-over-year.
Average Healthcare Services Clients (AHSCs)—a core customer metric—grew 7% year over year to 4,467. Sequential client growth slowed compared to previous periods, with 56 net new clients added versus 70 in the prior quarter. However, Total revenue per AHSC was $26,249, up 7% year-over-year. Patient payment volume processed through Phreesia was $1.25 billion, with the share run through its payment facilitator solution rose to 82%.
Sales and marketing expense (GAAP) declined 15.8%, and General and administrative cost (GAAP) fell 2.3% year-over-year. These cost controls, along with increased operating scale, drove Adjusted EBITDA up more than threefold year-over-year. Net cash from operating activities (GAAP) reached $14.8 million, while Free cash flow was $9.6 million.
The company announced plans to acquire AccessOne, a healthcare receivables financing platform. The acquisition aims to deepen Phreesia’s offerings in integrated patient payments and collections. While details on financials and expected synergies are deferred until after the deal closes, management stated that AccessOne revenue will not contribute to FY2026 guidance. There were no significant regulatory or compliance issues reported.
No dividend was declared for the period. Phreesia does not currently pay a dividend.
Looking Ahead: Guidance and What to Watch
Management maintained its previous guidance for FY2026 revenue in the range of $472 million to $482 million. Despite a quarter showing strong growth and margin expansion, leadership chose not to raise this target. Adjusted EBITDA guidance was increased to $87 million to $92 million for FY2026, up from $85 million to $90 million previously, citing continued cost discipline and operating leverage. The outlook for client additions stands at approximately 4,500 average healthcare services clients in FY2026, with Total revenue per AHSC is expected to increase in fiscal 2026 compared to fiscal 2025.
Investors should monitor how quickly the AccessOne acquisition closes and integrates with existing operations. The company will finance the transaction using a mix of cash and debt, leveraging its strong balance sheet position with $98.3 million in cash at quarter-end. One point to watch in future quarters is the sustained pace of client growth and whether network solutions can continue to grow faster than the rest of the business. With no dividend in place and a focus on investment and integration, Phreesia remains committed to driving long-term product and client expansion rather than near-term shareholder payouts.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
