Phreesia Inc. reported mixed financial results for its fiscal second quarter ended July 31, 2026, with revenue growth outpacing expectations while adjusted earnings fell short of forecasts, prompting a 7.6% decline in after-hours trading.
The healthcare technology company posted revenue of $129.5 million, a 10% increase from the same period last year and marginally above Wall Street's consensus estimate of $129.05 million. Sequentially, revenue edged down about 1% from the first quarter. Adjusted earnings per share totaled $0.03, missing the $0.09 consensus forecast by $0.06 per share, representing a 66.7% miss. Adjusted EBITDA rose to $32.9 million, up $10.8 million year-over-year, with a margin of 25%.
Net income for the quarter was $1.9 million, an improvement from $700,000 in the prior-year period, marking the fifth consecutive quarter of positive net income. Operating cash flow increased to $18.3 million, up $3.5 million year-over-year, while free cash flow totaled $13.8 million, a $4.2 million rise from the previous year. The company has now recorded nine consecutive quarters of positive operating and free cash flow.
Cash and equivalents stood at $74.6 million at quarter-end, down from $76.4 million in the prior quarter, while debt principal was reduced by more than $23 million during the period.
Client metrics showed growth, with average healthcare services clients rising to 4,744, up 36 sequentially and 277 year-over-year. Revenue per client increased 4% year-over-year to $27,289 but declined about 2% sequentially. The platform facilitated approximately 180 million patient visits, with total managed payments reaching $1.626 billion at a payment solutions revenue rate of 2.4%.
Shares of Phreesia closed the regular session at $11.85, up 0.08% from the prior close, before falling $0.90, or 7.59%, to $10.95 in after-hours trading. The stock has traded in a 52-week range of $7.77 to $31.83.
Management maintained its fiscal 2027 guidance, projecting revenue of $510 million to $520 million, which includes approximately $37 million from the AccessOne acquisition. Adjusted EBITDA is expected in a range of $125 million to $135 million. Client growth is anticipated to be in the mid-single digits, with total revenue per client growing in the low-single digits.
Phreesia highlighted its AccessOne patient financing business as a key growth driver, citing early market traction and positive client feedback. The company also noted improving momentum for its ProviderConnect network solutions and reported a 4% incremental lift in new-to-brand prescriptions from a four-month GLP-1 campaign study involving over 1,000 new patient starts. Ongoing investments in AI tools, including VoiceAI and PlanMatch, were also emphasized.
