Phreesia (NYSE:PHR) reported second-quarter fiscal 2027 revenue growth and continued profitability expansion, while maintaining its full-year revenue and adjusted EBITDA outlook. The company said it generated positive operating and free cash flow for the ninth consecutive quarter and used its cash generation and available cash to reduce debt principal by more than $23 million.
The fiscal second quarter ended July 31, 2026. Revenue rose 10% year over year to $129.5 million, although it declined about 1% sequentially from the first quarter. Chief Financial Officer Balaji Gandhi said the sequential decline was driven primarily by the company’s legacy payment-processing business, which typically experiences stronger first-quarter activity as health plan deductibles reset.
Profitability and Cash Flow
Adjusted EBITDA totaled $32.9 million, up $10.8 million from a year earlier, for an adjusted EBITDA margin of 25%. Net income was $1.9 million, compared with net income of $700,000 in the prior-year period. Gandhi said the quarter marked Phreesia’s fifth consecutive quarter of positive net income.
Operating cash flow increased $3.5 million year over year to $18.3 million, while free cash flow rose $4.2 million to $13.8 million. The company ended the quarter with $74.6 million in cash equivalents and restricted cash, compared with $76.4 million in the previous quarter.
Gandhi noted that quarterly cash-flow trends may vary based on invoicing, payments, working capital and capital-expenditure timing.
- Second-quarter revenue: $129.5 million, up 10% year over year.
- Adjusted EBITDA: $32.9 million, with a 25% margin.
- Net income: $1.9 million.
- Operating cash flow: $18.3 million.
- Free cash flow: $13.8 million.
- Debt principal reduction: More than $23 million.
Client Growth and Payment Activity
Phreesia ended the quarter with 4,744 average healthcare services clients, an increase of 36 from the prior quarter and 277 from a year earlier. Gandhi said client additions were in line with expectations and consistent with the company’s forecast for mid-single-digit percentage growth in average healthcare services clients for the full fiscal year.
Total revenue per average healthcare services client was $27,289, up 4% year over year but down approximately 2% sequentially. The sequential decline reflected both payment-processing seasonality and the continued expansion of the client base, according to Gandhi.
Total managed payments were $1.626 billion during the quarter, and Phreesia’s payment solutions revenue rate was 2.4%. Asked about patient-volume and deductible trends, Gandhi said the company had previously observed some weakness beyond typical seasonality earlier in the year but had “nothing really notable to call out” in the second quarter regarding volume or deductible-reset trends.
AccessOne and Network Solutions
Management highlighted AccessOne, which Phreesia described as an extension of its effort to address consumers’ growing share of healthcare costs. Indig said healthcare providers have communicated a need for more predictable financing options for patients.
Gandhi said the company feels better about the AccessOne acquisition than it did at closing, citing discussions around its value proposition and progress in product fit and go-to-market efforts. Indig said Phreesia has begun to see early market wins and positive feedback from existing clients.
“We think this is going to be a growth lever over the next couple of years,” Indig said.
The company also said momentum is building for ProviderConnect, its newer network-solutions offering. Gandhi said business activity in network solutions improved heading into the second half of the fiscal year and that newer offerings such as ProviderConnect were resonating with the market.
In the GLP-1 category, Indig said a four-month study showed a 4% incremental lift in new-to-brand prescriptions compared with a matched control group, along with more than 1,000 new patient starts. He added that the pilot helped convert new business activity.
Outlook and Product Investment
Phreesia maintained its fiscal 2027 revenue guidance of $510 million to $520 million and adjusted EBITDA guidance of $125 million to $135 million. The revenue outlook assumes approximately $37 million of contribution from AccessOne and excludes potential revenue from any acquisitions completed before Jan. 31, 2027.
The company also reaffirmed expectations for mid-single-digit percentage growth in average healthcare services clients and low-single-digit percentage growth in total revenue per client. Gandhi said the restructuring plan implemented in May is expected to produce meaningful annualized run-rate expense savings, which were already reflected in previously issued guidance.
Management said it is balancing investments in growth with provider clients’ financial pressures. Indig said providers are facing strain from changes in payer dynamics, and Phreesia is focused on delivering value through tools supporting front-end revenue-cycle workflows, payment capabilities and operational efficiency.
On artificial intelligence, Indig said the company is incorporating AI across operations, product development, sales and client support. He cited VoiceAI and PlanMatch as examples of offerings that can change patient engagement and automate functions that previously required more manual work. Indig said AI has enabled the company to test and scale ideas more quickly and cost-effectively.
About Phreesia (NYSE:PHR)
Phreesia, Inc (NYSE: PHR) is a provider of patient intake management solutions designed to streamline front-office workflows for healthcare organizations. The company’s cloud-based platform digitizes patient registration, appointment scheduling, insurance verification, consent documentation and payment collection through touchscreen kiosks, tablets and mobile devices. By replacing paper forms and manual processes, Phreesia enhances data accuracy, reduces administrative burden and improves the patient experience.
Founded in 2000 by Chaim Indig and headquartered in Burlington, Massachusetts, Phreesia offers a modular software suite that integrates with electronic medical record (EMR) and practice management systems.
