Phreesia Inc
For the period ended Jul 31, 2024. Filed Sep 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2024 · Filed Sep 5, 2024
PHR$12.62-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-30; filed 2024-05-31.
0001412408-24-000121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-09-05.
0001412408-24-000139
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 180 current paragraphs.
87 unchanged; 54 reworded; 30 added; 12 removed; 2 previous and 9 current paragraphs rearranged.
Tables are not compared: 16 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
•Total revenue increased 20% to $203.3 million in the six months ended July 31, 2024, as compared with $169.7 million in the six months ended July 31, 2023.
Current report
•Net loss was $37.7 million in the six months ended July 31, 2024, as compared to a net loss of $74.3 million in the six months ended July 31, 2023.
Current report
•Adjusted EBITDA was $6.5 million in the three months ended July 31, 2024, as compared to negative $11.5 million in the three months ended July 31, 2023.
Current report
•Adjusted EBITDA was $10.6 million in the six months ended July 31, 2024, as compared to negative $25.3 million in the six months ended July 31, 2023.
Current report
•Net cash provided by operating activities was $10.3 million for the six months ended July 31, 2024, as compared to net cash used in operating activities of $23.0 million for the six months ended July 31, 2023.
Current report
•Free cash flow was $3.7 million for the three months ended July 31, 2024, as compared to negative $15.2 million for the three months ended July 31, 2023.
Current report
Since the incident, CHC and their parent company, UnitedHealth Group, have communicated to us that they have been working diligently to determine whether any data sent to CHC by Phreesia on behalf of our clients was impacted as a part of this security incident.
Current report
On July 9, 2024 and August 15, 2024, we restored certain portions of the ConnectOnCall service. The remainder of the ConnectOnCall service remains offline, and we are working diligently to restore the remainder of the service.
Current report
Other (expense) income, net
Current report
Cost of revenue (excluding depreciation and amortization) increased $1.7 million to $16.1 million for the three months ended July 31, 2024, as compared to $14.4 million for the three months ended July 31, 2023. The increase resulted primarily from a $1.7 million increase in third-party costs driven by growth in revenue, partially offset by a $0.1 million decrease in labor costs.
Current report
Stock compensation incurred related to cost of revenue was $2.5 million and $2.2 million for the six months ended July 31, 2024 and 2023, respectively.
Current report
Sales and marketing expense decreased $7.1 million to $30.2 million for the three months ended July 31, 2024, as compared to $37.2 million for the three months ended July 31, 2023. The decrease was primarily attributable to a $6.2 million decrease in labor costs including a $1.8 million decrease in employee stock compensation costs.
Current report
Sales and marketing expense decreased $12.5 million to $62.2 million for the six months ended July 31, 2024, as compared to $74.7 million for the six months ended July 31, 2023. The decrease was primarily attributable to a $10.5 million decrease in labor costs and a $2.0 million decrease in other third-party sales and marketing costs.
Current report
Stock compensation incurred related to sales and marketing expense was $11.1 million and $13.5 million for the six months ended July 31, 2024 and 2023, respectively.
Current report
Research and development expense increased $4.5 million to $58.4 million for the six months ended July 31, 2024, as compared to $53.9 million for the six months ended July 31, 2023. The increase resulted primarily from a $1.9 million increase in labor costs as well as a $1.9 million increase in software costs.
Current report
Stock compensation incurred related to research and development expense was $7.3 million and $8.4 million for the six months ended July 31, 2024 and 2023, respectively.
Current report
General and administrative expense decreased $2.3 million to $38.5 million for the six months ended July 31, 2024, as compared to $40.9 million for the six months ended July 31, 2023. The decrease was primarily related to a $3.2 million decrease in third-party costs associated with prior-year acquisitions, as well as a $0.5 million decrease in other third-party general and administrative expenses, partially offset by a $1.4 million increase in labor costs.
Current report
Stock compensation incurred related to general and administrative expense was $12.5 million and $11.6 million for the six months ended July 31, 2024 and 2023, respectively.
Current report
Depreciation expense decreased $1.3 million to $7.4 million for the six months ended July 31, 2024, as compared to $8.7 million for the six months ended July 31, 2023. The decrease was primarily attributable to lower computer equipment depreciation.
Current report
Other (expense) income, net
Current report
Other (expense) income, net was expense of $0.1 million for the six months ended July 31, 2024 as compared to income of less than $0.1 million for the six months ended July 31, 2023. Other (expense) income, net is comprised primarily of foreign exchange losses and gains.
Current report
During the three months ended July 31, 2024, net cash provided by operating activities was $11.1 million, as our cash received from customers in connection with our normal operations exceeded our cash paid to employees and suppliers.
Current report
During the six months ended July 31, 2024, net cash provided by operating activities was $10.3 million, as our cash received from customers in connection with our normal operations exceeded our cash paid to employees and suppliers.
Current report
During the three months ended July 31, 2024, net cash used in investing activities was $7.4 million, principally resulting from $4.4 million of purchases of property and equipment, primarily for software and $3.0 million of capitalized internal-use software costs.
Current report
During the three months ended July 31, 2023, net cash used in investing activities was $9.7 million, principally resulting from $5.1 million of capitalized internal-use software costs, $3.9 million of net cash paid for the MediFind Acquisition, as well as $0.8 million of purchases of property and equipment, principally for software.
Current report
During the six months ended July 31, 2023, net cash used in investing activities was $15.8 million, principally resulting from $9.8 million of capitalized internal-use software costs, $3.9 million of net cash paid for the MediFind Acquisition, as well as $2.1 million of purchases of property and equipment, principally for software.
Current report
During the three months ended July 31, 2024, net cash used in financing activities was $1.4 million, primarily consisting of $2.3 million used for principal payments on finance leases and financing arrangements, partially offset by $0.9 million in proceeds from our equity compensation plans.
Current report
During the six months ended July 31, 2023, net cash used in financing activities was $10.2 million, primarily consisting of $10.7 million used for treasury stock to satisfy tax withholdings on stock compensation awards and $3.4 million used for principal payments on finance leases, partially offset by $2.5 million in proceeds from our equity compensation plans and $1.7 million constructive financing related to our software financing arrangement.
Current report
As of July 31, 2024, the Company has signed a finance lease for computer equipment which does not commence until October 2024. Total undiscounted payments through the fiscal year ended January 31, 2028, related to the lease are $7,408 and are included in the Company's other contractual commitments.
Current report
Additionally, during the six months ended July 31, 2024, the Company entered into two significant new non-cancelable purchase commitments to support our technology infrastructure. Total undiscounted payments are $9,594 through fiscal year 2028.
Removed paragraphs (12)
Previous report
•Adjusted EBITDA was $4.1 million in the three months ended April 30, 2024, as compared to negative $13.8 million in the three months ended April 30, 2023.
Previous report
UnitedHealth Group, the parent company to CHC, has indicated a substantial portion of U.S. residents may have had their PHI/PII affected by the incident. However, we currently have no specific indication from CHC as to whether the data we sent to CHC has been breached. CHC has indicated they are working closely with law enforcement and regulatory authorities to identify appropriate next steps.
Previous report
Ascension Health Alliance Cybersecurity Incident
Previous report
On May 8, 2024, Ascension Health (“Ascension”), one of our customers, experienced a significant cybersecurity incident. In response to the incident, Ascension shut down certain systems including electronic health records systems and portals enabling patients to view their health records and communicate with their providers.
Previous report
Ascension has indicated that the outage has caused them to divert patients from certain of their hospitals to other providers. We are currently unable to estimate the potential impact that the Ascension outage will have on our healthcare services revenues for the fiscal year ended January 31, 2025. We will continue to monitor the Ascension outage and provide any relevant updates as the year progresses.
Previous report
Other income, net
Previous report
Sales and marketing expense decreased $5.4 million to $32.0 million for the three months ended April 30, 2024, as compared to $37.4 million for the three months ended April 30, 2023. The decrease was primarily attributable to a $3.2 million decrease in employee salary and benefits costs, a $1.0 million decrease in travel and internal costs, a $0.6 million decrease in employee stock compensation costs and a $0.7 million decrease in outside services costs.
Previous report
We note that the decline in expenses in the first quarter includes the impact of the full run-off of expenses from winding down our Medicare Advantage lead generation activities.
Previous report
Other expense, net
Previous report
Termination of Silicon Valley Bank Facility
Previous report
In December 2023, we terminated the Third SVB Facility with SVB. We incurred termination fees of $0.6 million in connection with the termination of the Third SVB Facility.
Previous report
During the three months ended April 30, 2023, net cash used in investing activities was $6.1 million, principally resulting from capital expenditures, the majority of which consisted of $4.7 million of capitalized internal-use software costs, as well as $1.3 million of purchases of property and equipment, principally for software.
Reworded paragraphs (54)
Previous wording
•Total revenue increased 21% to $101.2 million in the three months ended April 30, 2024, as compared with $83.8 million in the three months ended April 30, 2023.
Current wording
•Total revenue increased 19% to $102.1 million in the three months ended July 31, 2024, as compared with $85.8 million in the three months ended July 31, 2023.
Previous wording
•Net loss was $19.7 million in the three months ended April 30, 2024, as compared to a net loss of $37.5 million in the three months ended April 30, 2023.
Current wording
•Net loss was $18.0 million in the three months ended July 31, 2024, as compared to a net loss of $36.8 million in the three months ended July 31, 2023.
Previous wording
•Net cash used in operating activities was $0.7 million for the three months ended April 30, 2024, as compared to net cash used in operating activities of $13.7 million for the three months ended April 30, 2023.
Current wording
•Net cash provided by operating activities was $11.1 million for the three months ended July 31, 2024, as compared to net cash used in operating activities of $9.3 million for the three months ended July 31, 2023.
Previous wording
•Free cash flow was negative $6.2 million for the three months ended April 30, 2024 compared to negative $19.7 million for the three months ended April 30, 2023.
Current wording
•Free cash flow was negative $2.5 million for the six months ended July 31, 2024, as compared to negative $34.9 million for the six months ended July 31, 2023.
Previous wording
•Cash and cash equivalents as of April 30, 2024 was $79.5 million, a decrease of $8.0 million compared to January 31, 2024.
Current wording
•Cash and cash equivalents as of July 31, 2024 was $81.8 million, a decrease of $5.7 million compared to January 31, 2024.
Previous wording
For a reconciliation of Adjusted EBITDA to net loss and a reconciliation of free cash flow to net cash used in operating activities, and for more information as to how we define and calculate such measures, see the section below titled “Non-GAAP financial measures.”
Current wording
For a reconciliation of Adjusted EBITDA to net loss and a reconciliation of free cash flow to net cash provided by (used in) operating activities, and for more information as to how we define and calculate such measures, see the section below titled “Non-GAAP financial measures.”
Previous wording
Payment processing fees revenue generally grows in line with our network growth. However, patient payment volume in the first quarter was negatively impacted by the Change Healthcare outage that began in late February. As we noted last quarter, this attack impacted a major part of the U.S. healthcare infrastructure including many of our clients.
Current wording
Payment processing fees revenue generally grows in line with our network growth. However, patient payment volume in the first quarter was negatively impacted by the Change Healthcare outage that began in late February.
Previous wording
The cyberattack on Change Healthcare and subsequent outage accelerated the wind-down of our relationship because Change Healthcare did not bring the online portal used by our client back online. As a result, our patient payment volume declined, reducing our payment processing revenue by approximately $1.7 million in the fiscal first quarter of 2025.
Current wording
The cyberattack on Change Healthcare and subsequent outage accelerated the wind-down of our relationship because Change Healthcare did not bring the online portal used by our client back online. As a result, our patient payment volume declined, reducing our payment processing revenue by approximately $2.0 million in the fiscal second quarter of 2025.
Previous wording
While the accelerated wind-down of the clearinghouse relationship negatively impacted payment processing revenue, which increased by 12% over the first quarter of fiscal 2024, the accelerated wind-down did not materially impact our total revenues, which increased by 21% over the first quarter of fiscal 2024, our net cash used in operating activities, which improved by $13 million over the first quarter of fiscal 2024, or our overall results of operations.
Current wording
While the accelerated wind-down of the clearinghouse relationship negatively impacted payment processing revenue, which increased by 7% over the second quarter of fiscal 2024, the accelerated wind-down did not materially impact our total revenue, which increased by 19% over the second quarter of fiscal 2024, our net cash provided by (used in) operating activities, which improved by $20.4 million over the second quarter of fiscal 2024, or our overall results of operations.
Previous wording
On May 12, 2024, we learned of a service disruption to the ConnectOnCall service, an application created by a subsidiary we acquired in October 2023. While investigating this matter, we determined that a cybercriminal had gained access to the ConnectOnCall service.
Current wording
On May 12, 2024, we learned of a service disruption to the ConnectOnCall service, an application created by a subsidiary we acquired in October 2023. While investigating this matter, we determined that a cybercriminal had gained access to the ConnectOnCall service. We have engaged with law enforcement, and we are working with a third-party cybersecurity firm and other experts to support our investigation.
Previous wording
The ConnectOnCall service is separate from our other services, including our patient intake platform. Based on our investigation to date, we have seen no evidence that our other services have been affected. We understand the importance of this service to our clients’ business, and we are working to restore the ConnectOnCall service as quickly as is feasible.
Current wording
The ConnectOnCall service is separate from our other services, including our patient intake platform. Based on our investigation to date, we have seen no evidence that our other services have been affected.
Previous wording
Additionally, as of this time, the incident has not had a material impact on our overall business operations, nor do we believe the incident is likely to have a material impact, based on our investigation to date and our current understanding that this incident is limited to the ConnectOnCall service.
Current wording
Additionally, as of this time, this service disruption incident has not had a material impact on our overall business operations, nor do we believe the incident is likely to have a material impact, based on our investigation to date.
Previous wording
•Healthcare services revenue per AHSC. We define Healthcare services revenue as the sum of subscription and related services revenue and payment processing revenue. We define Healthcare services revenue per AHSC as healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase healthcare services revenue per AHSC is an indicator of the long-term value of the our solutions. Healthcare services revenue per AHSC was $18,155 in the three months ended April 30, 2024 compared to $18,779 in the same period in the prior year, a decrease of 3%. The decline was primarily driven by AHSC growth significantly outpacing growth in payment processing volume and payment processing revenue.
Current wording
•Healthcare services revenue per AHSC. We define Healthcare services revenue as the sum of subscription and related services revenue and payment processing revenue. We define Healthcare services revenue per AHSC as healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase healthcare services revenue per AHSC is an indicator of the long-term value of our solutions. Healthcare services revenue per AHSC was $17,729 in the three months ended July 31, 2024 compared to $18,268 in the same period in the prior year, a decrease of 3%. The decline was primarily driven by AHSC growth significantly outpacing growth in payment processing volume and payment processing revenue.
Previous wording
•Total revenue per AHSC. We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue. Additionally, our relationships with healthcare services clients who subscribe to our technology give us the opportunity to engage with life sciences companies, health plans and other payer organizations, patient advocacy, public interest and other not-for-profit organizations who deliver direct communication to patients through our solutions. As a result, we believe that our ability to increase Total revenue per AHSC is an indicator of the long-term value of our solutions. Total revenue per AHSC was $24,900 in the three months ended April 30, 2024 as compared to $25,338 in the same period in the prior year, a decrease of 2%. The decrease was driven primarily by healthcare services clients growth outpacing payment processing revenue growth.
Current wording
•Total revenue per AHSC. We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue. Additionally, our relationships with healthcare services clients who subscribe to our technology give us the opportunity to engage with life sciences companies, health plans and other payer organizations, patient advocacy, public interest and other not-for-profit organizations who deliver direct communication to patients through our solutions. As a result, we believe that our ability to increase Total revenue per AHSC is an indicator of the long-term value of our solutions. Total revenue per AHSC was $24,494 in the three months ended July 31, 2024 as compared to $24,914 in the same period in the prior year, a decrease of 2%. The decrease was driven primarily by healthcare services clients growth outpacing payment processing revenue growth.
Previous wording
•Payment processing fees. We generate revenue from payment processing fees based on the number of transactions and the levels of patient payment volume processed through our solutions. Payment processing fees are generally calculated as a percentage of the total transaction dollar value processed and/or a fee per transaction. Credit and debit patient payment volume processed through our payment facilitator model represented 81% and 82% of our patient payment volume in the three months ended April 30, 2024 and 2023, respectively. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions. Patient payment responsibility typically declines as a share of total spending as the calendar year progresses due to benefit design. Consistent with that trend, payment volume on a per client basis has historically been lower in the second half of our fiscal year as compared to the first half of our fiscal year.
Current wording
•Payment processing fees. We generate revenue from payment processing fees based on the number of transactions and the levels of patient payment volume processed through our solutions. Payment processing fees are generally calculated as a percentage of the total transaction dollar value processed and/or a fee per transaction. The remainder of our patient payment volume is composed of credit and debit transactions for which Phreesia acts as a gateway to another payment processor, and cash and check transactions. Patient payment responsibility typically declines as a share of total spending as the calendar year progresses due to benefit design. Consistent with that trend, payment volume on a per client basis has historically been lower in the second half of our fiscal year as compared to the first half of our fiscal year.
Previous wording
Our cost of revenue (excluding depreciation and amortization) primarily consists of personnel costs, including salaries, stock-based compensation, benefits and bonuses for implementation and technical support, and infrastructure costs to operate our solutions such as hosting fees and fees paid to various third-party providers for access to their technology, as well as costs to verify insurance eligibility and benefits.
Current wording
Our cost of revenue (excluding depreciation and amortization) primarily consists of labor costs, including salaries, stock-based compensation, benefits and bonuses for implementation and technical support, as well as outside services costs. Cost of revenue (excluding depreciation and amortization) also includes infrastructure costs to operate our solutions such as hosting fees and fees paid to various third-party providers for access to their technology, as well as costs to verify insurance eligibility and benefits.
Previous wording
Sales and marketing expense consists primarily of personnel costs, including salaries, stock-based compensation, benefits, bonuses and commission costs for our sales and marketing personnel. Sales and marketing expense also includes costs for advertising, promotional and other marketing activities, as well as certain fees paid to various third-party partners for sales and lead generation. Advertising is expensed as incurred.
Current wording
Sales and marketing expense consists primarily of labor costs, including salaries, stock-based compensation, benefits, bonuses and commission costs for our sales and marketing personnel, as well as outside services costs. Sales and marketing expense also includes costs for advertising, promotional and other marketing activities, as well as certain fees paid to various third-party partners for sales and lead generation. Advertising is expensed as incurred.
Previous wording
Research and development expense consists of costs to develop our products and services that do not meet the criteria for capitalization as internal-use software. These costs consist primarily of personnel costs, including salaries, stock-based compensation and benefits for our development personnel. Research and development expense also includes third-party partner fees and third-party consulting fees.
Current wording
Research and development expense consists of costs to develop our products and services that do not meet the criteria for capitalization as internal-use software. These costs consist primarily of labor costs, including salaries, stock-based compensation and benefits for our development personnel, as well as outside services costs. Research and development expense also includes third-party partner fees and third-party consulting fees.
Previous wording
General and administrative expense consists primarily of personnel costs, including salaries, stock-based compensation and benefits for our executive, finance, legal, security, human resources, information technology and other administrative personnel. General and administrative expense also includes software costs to support our finance, legal and human resources operations, insurance costs as well as fees to third-party providers for accounting, legal and consulting services, costs for various non-income-based taxes and software costs.
Current wording
General and administrative expense consists primarily of labor costs, including salaries, stock-based compensation and benefits for our executive, finance, legal, security, human resources, information technology and other administrative personnel, as well as outside services costs. General and administrative expense also includes software costs to support our finance, legal and human resources operations, insurance costs as well as fees to third-party providers for accounting, legal and consulting services, costs for various non-income-based taxes and software costs.
Previous wording
•Other expense, net. Other expense, net consists of foreign currency-related losses and gains and other miscellaneous (expense) income.
Current wording
•Other (expense) income, net. Other (expense) income, net consists of foreign currency-related losses and gains and other miscellaneous (expense) income.
Previous wording
Comparison of results of operations for the three months ended April 30, 2024 and 2023
Current wording
Comparison of results of operations for the three and six months ended July 31, 2024 and 2023
Previous wording
•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $8.9 million to $46.7 million for the three months ended April 30, 2024, as compared to $37.9 million for the three months ended April 30, 2023, primarily due to the new healthcare services clients as well as expansion of and cross-selling to existing healthcare services clients.
Current wording
•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $9.3 million to $48.6 million for the three months ended July 31, 2024, as compared to $39.3 million for the three months ended July 31, 2023, primarily due to the new healthcare services clients as well as expansion of and cross-selling to existing healthcare services clients.
Previous wording
•Payment processing fees. Our revenue from patient payments processed through our solutions increased $2.8 million to $27.1 million for the three months ended April 30, 2024, as compared to $24.3 million for the three months ended April 30, 2023, due to the addition of more healthcare services clients, which drove increases in patient visits and patient payments processed through our platform. Payment processing fees for the first quarter of fiscal 2025 were reduced by approximately $1.7 million related to the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Current wording
•Payment processing fees. Our revenue from patient payments processed through our solutions increased $1.7 million to $25.3 million for the three months ended July 31, 2024, as compared to $23.6 million for the three months ended July 31, 2023, due to the addition of more healthcare services clients, which drove increases in patient visits and patient payments processed through our platform. Payment processing fees for the three months ended July 31, 2024 were reduced by approximately $2.0 million related to the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Previous wording
•Network solutions. Our revenue from life science and payer clients increased $5.7 million to $27.4 million for the three months ended April 30, 2024, as compared to $21.7 million for the three months ended April 30, 2023, due to an increase engagement, education programs and deeper patient outreach among the existing programs.
Current wording
•Network solutions. Our revenue from life science and payer clients increased $5.3 million to $28.2 million for the three months ended July 31, 2024, as compared to $22.9 million for the three months ended July 31, 2023, due to an increase engagement, education programs and deeper patient outreach among the existing programs.
Previous wording
Stock compensation incurred related to cost of revenue was $1.2 million and $1.0 million for the three months ended April 30, 2024 and 2023, respectively.
Current wording
Stock compensation incurred related to cost of revenue was $1.2 million for both the three months ended July 31, 2024 and 2023.
Previous wording
Cost of revenue (excluding depreciation and amortization) increased $0.8 million to $15.7 million for the three months ended April 30, 2024, as compared to $14.9 million for the three months ended April 30, 2023. The increase resulted primarily from a $0.4 million increase in employee salary and benefits costs and a $0.2 million increase in employee stock compensation costs, as well as a $0.2 million increase in third-party costs driven by growth in revenue.
Current wording
Cost of revenue (excluding depreciation and amortization) increased $2.5 million to $31.9 million for the six months ended July 31, 2024, as compared to $29.4 million for the six months ended July 31, 2023. The increase resulted primarily from a $2.3 million increase in third-party costs driven by growth in revenue, as well as a $0.3 million increase labor costs primarily driven by higher employee stock compensation costs.
Previous wording
Payment processing expense increased $2.2 million to $18.3 million for the three months ended April 30, 2024, as compared to $16.1 million for the three months ended April 30, 2023. The increase resulted primarily from the increase in payment processing fees revenue and patient payments processed through our solutions, each driven by an increase in patient visits over the prior year.
Current wording
Payment processing expense increased $0.8 million to $16.7 million for the three months ended July 31, 2024, as compared to $15.9 million for the three months ended July 31, 2023. The increase resulted primarily from the increase in payment processing fees revenue and patient payments processed through our solutions, each driven by an increase in patient visits over the prior year.
Previous wording
Payment processing expense for the first quarter of fiscal 2025 was reduced by the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Current wording
Payment processing expense for the three months ended July 31, 2024 was reduced by the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Previous wording
Stock compensation incurred related to sales and marketing expense was $5.8 million and $6.4 million for the three months ended April 30, 2024 and 2023, respectively.
Current wording
Stock compensation incurred related to sales and marketing expense was $5.3 million and $7.1 million for the three months ended July 31, 2024 and 2023, respectively.
Previous wording
Research and development expense increased $2.4 million to $28.9 million for the three months ended April 30, 2024, as compared to $26.5 million for the three months ended April 30, 2023. The increase resulted primarily from a $1.7 million increase in employee salary and benefits costs and a $0.8 million increase in software costs, partially offset by a decrease in employee stock compensation costs.
Current wording
Research and development expense increased $2.1 million to $29.5 million for the three months ended July 31, 2024, as compared to $27.5 million for the three months ended July 31, 2023. The increase resulted primarily from a $1.0 million increase in labor costs as well as a $1.0 million increase in software costs.
Previous wording
Stock compensation incurred related to research and development expense was $3.6 million and $3.9 million for the three months ended April 30, 2024 and 2023, respectively.
Current wording
Stock compensation incurred related to research and development expense was $3.6 million and $4.6 million for the three months ended July 31, 2024 and 2023, respectively.
Previous wording
General and administrative expense decreased $0.8 million to $19.1 million for the three months ended April 30, 2024, as compared to $19.9 million for the three months ended April 30, 2023. The decrease was primarily related to a $1.0 million decrease in outside services costs and a $0.2 million decrease in employee salary and benefits costs, partially offset by a $0.3 million increase in employee stock compensation costs.
Current wording
General and administrative expense decreased $1.5 million to $19.5 million for the three months ended July 31, 2024, as compared to $21.0 million for the three months ended July 31, 2023. The decrease was primarily related to a $2.2 million decrease in third-party costs associated with prior-year acquisitions as well as a $0.8 million decrease in other third-party general and administrative costs, partially offset by a $1.5 million increase in labor costs.
Previous wording
Stock compensation incurred related to general and administrative expense was $6.2 million and $5.9 million for the three months ended April 30, 2024 and 2023, respectively.
Current wording
Stock compensation incurred related to general and administrative expense was $6.3 million and $5.7 million for the three months ended July 31, 2024 and 2023, respectively.
Previous wording
Depreciation expense decreased $1.0 million to $3.5 million for the three months ended April 30, 2024, as compared to $4.5 million for the three months ended April 30, 2023. The decrease was primarily attributable to lower computer equipment depreciation.
Current wording
Depreciation expense decreased $0.3 million to $3.9 million for the three months ended July 31, 2024, as compared to $4.2 million for the three months ended July 31, 2023. The decrease was primarily attributable to lower computer equipment depreciation.
Previous wording
Amortization expense increased $0.7 million to $3.1 million for the three months ended April 30, 2024 as compared to $2.5 million for the three months ended April 30, 2023. The increase was primarily driven by amortization of intangible assets acquired during fiscal 2024 as well as higher amortization of capitalized internal-use software development costs.
Current wording
Amortization expense increased $0.8 million to $3.4 million for the three months ended July 31, 2024 as compared to $2.5 million for the three months ended July 31, 2023. The increase was primarily driven by amortization of intangible assets acquired during fiscal 2024 as well as higher amortization of capitalized internal-use software development costs.
Previous wording
Other expense, net was expense of less than $0.1 million for the three months ended April 30, 2024 and April 30, 2023. Other expense is comprised primarily of foreign exchange losses and gains.
Current wording
Other (expense) income, net was expense of $0.1 million for the three months ended July 31, 2024 as compared to income of less than $0.1 million for the three months ended July 31, 2023. Other (expense) income, net is comprised primarily of foreign exchange losses and gains.
Previous wording
Interest income, net was $0.2 million for the three months ended April 30, 2024, as compared to $0.7 million for the three months ended April 30, 2023. The decrease is primarily attributable to lower interest income earned from our cash and cash equivalent balances, as well as higher interest expense on our finance leases and other financing obligations.
Current wording
Interest income, net was less than $0.1 million for the three months ended July 31, 2024, as compared to $0.8 million for the three months ended July 31, 2023. The decrease is primarily attributable to lower interest income earned from our cash and cash equivalent balances, as well as higher interest expense on our finance leases and other financing obligations.
Previous wording
Provision for income taxes increased by $0.2 million to $0.5 million for the three months ended April 30, 2024 compared to $0.3 million for the three months ended April 30, 2023. The increase in provision for income taxes relates primarily to an increase in Canadian and Indian income tax expense.
Current wording
Provision for income taxes increased by $0.1 million to $0.8 million for the three months ended July 31, 2024 compared to $0.6 million for the three months ended July 31, 2023. The increase in provision for income taxes relates primarily to an increase in Canadian and Indian income tax expense.
Previous wording
Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss before interest (income) expense, net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other expense, net.
Current wording
Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss before interest income, net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other expense (income), net.
Previous wording
We calculate free cash flow as net cash used in operating activities less capitalized internal-use software development costs and purchases of property and equipment.
Current wording
We calculate free cash flow as net cash provided by (used in) operating activities less capitalized internal-use software development costs and purchases of property and equipment.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
As we noted last quarter, this attack impacted a major part of the U.S. healthcare infrastructure including many of our clients.
Current report — wording carried from elsewhere
•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $18.2 million to $95.4 million for the six months ended July 31, 2024, as compared to $77.2 million for the six months ended July 31, 2023, primarily due to the new healthcare services clients as well as expansion of and cross-selling to existing healthcare services clients.
Current report — wording carried from elsewhere
•Payment processing fees. Our revenue from patient payments processed through our solutions increased $4.5 million to $52.4 million for the six months ended July 31, 2024, as compared to $47.9 million for the six months ended July 31, 2023, due to the addition of more healthcare services clients, which drove increases in patient visits and patient payments processed through our platform. Payment processing fees for the six months ended July 31, 2024 were reduced by approximately $3.7 million related to the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Current report — wording carried from elsewhere
•Network solutions. Our revenue from life science and payer clients increased $11.0 million to $55.6 million for the six months ended July 31, 2024, as compared to $44.6 million for the six months ended July 31, 2023, due to an increase engagement, education programs and deeper patient outreach among the existing programs.
Current report — wording carried from elsewhere
Payment processing expense increased $3.0 million to $35.0 million for the six months ended July 31, 2024, as compared to $31.9 million for the six months ended July 31, 2023. The increase resulted primarily from the increase in payment processing fees revenue and patient payments processed through our solutions, each driven by an increase in patient visits over the prior year.
Current report — wording carried from elsewhere
Payment processing expense for the six months ended July 31, 2024 was reduced by the accelerated wind-down of a relationship with a clearinghouse client, which occurred in connection with the Change Healthcare cybersecurity incident. See Change Healthcare Cybersecurity Incident section above for additional information regarding the wind-down of this clearinghouse client relationship.
Current report — wording carried from elsewhere
Amortization expense increased $1.5 million to $6.5 million for the six months ended July 31, 2024 as compared to $5.0 million for the six months ended July 31, 2023. The increase was primarily driven by amortization of intangible assets acquired during fiscal 2024 as well as higher amortization of capitalized internal-use software development costs.
Current report — wording carried from elsewhere
Interest income, net was $0.3 million for the six months ended July 31, 2024, as compared to $1.5 million for the six months ended July 31, 2023. The decrease is primarily attributable to lower interest income earned from our cash and cash equivalent balances, as well as higher interest expense on our finance leases and other financing obligations.
Current report — wording carried from elsewhere
Provision for income taxes increased by $0.3 million to $1.3 million for the six months ended July 31, 2024 compared to $1.0 million for the six months ended July 31, 2023. The increase in provision for income taxes relates primarily to an increase in Canadian and Indian income tax expense.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
We are continuing to monitor the situation regarding new developments and remain in close communication with Ascension.
Previous report — wording carried elsewhere
The ConnectOnCall service remains offline, and we are working diligently to assess the potential impact and restore the service. We have engaged with law enforcement, and we are working with a third-party cybersecurity firm and other experts to support our investigation.