Phreesia Inc
For the period ended Oct 31, 2024. Filed Dec 9, 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.
Oct 31, 2024 · Filed Dec 9, 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 2024-07-31; filed 2024-09-05.
0001412408-24-000139
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-10-31; filed 2024-12-09.
0001412408-24-000146
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 180 previous paragraphs and 176 current paragraphs.
96 unchanged; 71 reworded; 9 added; 12 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 27 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 (9)
Current report
•Adjusted EBITDA was $9.8 million in the three months ended October 31, 2024, as compared to negative $6.6 million in the three months ended October 31, 2023.
Current report
•Adjusted EBITDA was $20.4 million in the nine months ended October 31, 2024, as compared to negative $31.9 million in the nine months ended October 31, 2023.
Current report
•Free cash flow was $1.6 million for the three months ended October 31, 2024, as compared to negative $11.6 million for the three months ended October 31, 2023.
Current report
•Free cash flow was $0.9 million for the nine months ended October 31, 2024, as compared to negative $46.5 million for the nine months ended October 31, 2023.
Current report
Other expense, net
Current report
Sales and marketing expense decreased $6.4 million to $30.1 million for the three months ended October 31, 2024, as compared to $36.5 million for the three months ended October 31, 2023. The decrease primarily resulted from a $3.4 million decrease in labor costs as well as a $3.0 million decrease in other third-party sales and marketing costs.
Current report
Research and development expense increased $0.8 million to $29.3 million for the three months ended October 31, 2024, as compared to $28.5 million for the three months ended October 31, 2023. The increase primarily resulted from a $0.8 million increase in software and other third-party costs.
Current report
Other expense, net
Current report
During the nine months ended October 31, 2024, net cash used in financing activities was $4.9 million, primarily consisting of $6.1 million used for principal payments on finance leases and financing arrangements and $1.7 million used for principal payments on acquisition-related liabilities, partially offset by $3.0 million in proceeds from our equity compensation plans.
Removed paragraphs (12)
Previous 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.
Previous 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.
Previous 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.
Previous report
•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 report
Other (expense) income, net
Previous 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.
Previous 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.
Previous report
Other (expense) income, net
Previous 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.
Previous report
During the six months ended July 31, 2023, net cash used in operating activities was $23.0 million, as our cash paid to employees and suppliers exceeded our cash received from customers in connection with our normal operations.
Previous 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.
Previous 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.
Reworded paragraphs (71)
Previous 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.
Current wording
•Total revenue increased 17% to $106.8 million in the three months ended October 31, 2024, as compared with $91.6 million in the three months ended October 31, 2023.
Previous wording
•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 wording
•Total revenue increased 19% to $310.1 million in the nine months ended October 31, 2024, as compared with $261.3 million in the nine months ended October 31, 2023.
Previous 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.
Current wording
•Net loss was $14.4 million in the three months ended October 31, 2024, as compared to a net loss of $31.9 million in the three months ended October 31, 2023.
Previous wording
•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 wording
•Net loss was $52.1 million in the nine months ended October 31, 2024, as compared to a net loss of $106.2 million in the nine months ended October 31, 2023.
Previous 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.
Current wording
•Net cash provided by operating activities was $5.8 million for the three months ended October 31, 2024, as compared to net cash used in operating activities of $6.3 million for the three months ended October 31, 2023.
Previous wording
•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 wording
•Net cash provided by operating activities was $16.1 million for the nine months ended October 31, 2024, as compared to net cash used in operating activities of $29.3 million for the nine months ended October 31, 2023.
Previous 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.
Current wording
•Cash and cash equivalents as of October 31, 2024 was $81.7 million, a decrease of $5.8 million compared to January 31, 2024.
Previous wording
We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care. Our solutions include SaaS-based integrated tools that manage patient access, registration and payments. We have tools to communicate with patients about their health and have demonstrated increased rates of preventive care and vaccinations. Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers to better understand their patients and connect them to needed services, resulting in improved health outcomes. We also provide life sciences companies, health plans and other payer organizations (payers), patient advocacy, public interest and other not-for-profit organizations with a channel for direct communication with patients. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise.
Current wording
We are a leading provider of comprehensive software solutions that improve the operational and financial performance of healthcare organizations and improve health outcomes by helping patients take a more active role in their care. Our solutions include SaaS-based integrated tools that manage patient access, registration and payments. We offer tools to communicate with patients about their health that have demonstrated increased rates of preventive care and vaccinations. Additionally, our solutions include clinical assessments to screen patients for a variety of physical, behavioral and mental health conditions, helping providers to better understand their patients and connect them to needed services, resulting in improved health outcomes. We also provide life sciences companies, health plans and other payer organizations (payer), patient advocacy, public interest and other not-for-profit organizations with a channel for direct communication with patients. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise.
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.
Current wording
Payment processing fees revenue generally grows in line with our network growth. However, patient payment volume in the first quarter of fiscal 2025 was negatively impacted by the Change Healthcare outage that began in late February. As we noted in the first quarter of fiscal 2025, this attack impacted a major part of the U.S. healthcare infrastructure including many of our clients.
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 $2.0 million in the fiscal second 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 $1.4 million in the third quarter of fiscal 2025.
Previous 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.
Current wording
While the accelerated wind-down of the clearinghouse relationship negatively impacted payment processing revenue, which increased by 6% over the third quarter of fiscal 2024, the accelerated wind-down did not materially impact our total revenue, which increased by 17% over the third quarter of fiscal 2024, our net cash provided by (used in) operating activities, which improved by $12.1 million over the third quarter of fiscal 2024, or our overall results of operations.
Previous wording
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 wording
During November 2024, CHC and their parent company, UnitedHealth Group, confirmed to Phreesia that none of the data sent to CHC by Phreesia on behalf of our clients was impacted as a part of this security incident.
Previous wording
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 wording
Over several releases this year (July 9, 2024, August 15, 2024, September 27, 2024 and October 17, 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.
Previous wording
Our business is directly and indirectly affected by macroeconomic conditions, geopolitical conditions and the state of global financial markets. Recent geopolitical uncertainty resulting, in part, from military conflict between Russia and Ukraine and the conflict in the Middle East, as well as other macro-economic conditions, such as the impact of pandemics, increased interest rates, inflation in the cost of goods, services and labor, or a recession or an economic slowdown in the U.S. or internationally have contributed to significant volatility and declines in global financial markets. The uncertainty over the extent and duration of the ongoing conflict and these macroeconomic conditions continues to cause disruptions to businesses and markets worldwide. While none of these factors individually has had a material impact on our business to date, it is difficult to predict the potential impact these factors may have on our future business results, and each could adversely impact our business operations, financial performance and results of operations.
Current wording
Our business is directly and indirectly affected by macroeconomic conditions, geopolitical conditions and the state of global financial markets. Geopolitical uncertainty resulting, in part, from the military conflict between Russia and Ukraine and the conflict in the Middle East, as well as other macro-economic conditions, such as the impact of pandemics, changes in interest rates, inflation in the cost of goods, services and labor, or a recession or an economic slowdown in the U.S. or internationally, have contributed to significant volatility and declines in global financial markets. The uncertainty over the extent and duration of the ongoing conflicts and these macroeconomic conditions continues to cause disruptions to businesses and markets worldwide. Additionally, the results of the 2024 U.S. presidential and congressional elections may result in additional geopolitical and macroeconomic uncertainty. While none of these factors individually has had a material impact on our business to date, it is difficult to predict the potential impact these factors may have on our future business results, and each could adversely impact our business operations, financial performance and results of operations.
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 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.
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 $17,481 in the three months ended October 31, 2024 compared to $17,845 in the same period in the prior year, a decrease of 2%. 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 $24,494 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.
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 $25,207 in the three months ended October 31, 2024 as compared to $24,842 in the same period in the prior year, a increase of 1%. The increase was driven primarily by network solutions revenue growth that outpaced AHSC growth.
Previous wording
•Subscription and related services. We primarily generate subscription fees from our healthcare services clients based on the number of healthcare services clients that subscribe to and utilize our solutions. Our healthcare services clients are typically billed monthly in arrears, though in some instances, healthcare services clients may opt to be billed quarterly or annually in advance. Subscription fees are typically auto-debited from healthcare services clients’ accounts every month. As we target and add larger enterprise healthcare services clients, these clients may choose to contract differently than our typical per healthcare services client subscription model. To the extent we charge in an alternative manner with larger enterprise healthcare services clients, we expect that such a pricing model will recur and, combined with our per healthcare services client subscription fees, will increase as a percentage of our total revenue. In addition, we receive certain fees from healthcare services clients for professional services associated with our implementation services as well as travel and expense reimbursements, shipping and handling fees, sales of hardware (PhreesiaPads and Arrivals Kiosks), on-site support and training.
Current wording
•Subscription and related services. We primarily generate subscription fees from our healthcare services clients based on the number of healthcare services clients that subscribe to and utilize our solutions. Our healthcare services clients are typically billed monthly in arrears, though in some instances, healthcare services clients may opt to be billed quarterly or annually in advance. Subscription fees are typically auto-debited from healthcare services clients’ accounts every month. As we target and add larger enterprise healthcare services clients, these clients may choose to contract differently than our typical per healthcare services client subscription model. To the extent we charge in an alternative manner with larger enterprise healthcare services clients, we expect that such a pricing model will recur and, combined with our per healthcare services client subscription fees, will increase as a percentage of our total revenue. In addition, we receive certain fees from healthcare services clients for professional services associated with our implementation services as well as travel and expense reimbursements, shipping and handling fees, leasing and sales of hardware (PhreesiaPads and Arrivals Kiosks), on-site support and training.
Previous wording
•Other (expense) income, net. Other (expense) income, net consists of foreign currency-related losses and gains and other miscellaneous (expense) income.
Current wording
•Other expense, net. Other expense, net consists of foreign currency-related losses and gains and other miscellaneous (expense) income.
Previous wording
Comparison of results of operations for the three and six months ended July 31, 2024 and 2023
Current wording
Comparison of results of operations for the three and nine months ended October 31, 2024 and 2023
Previous 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.
Current wording
•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $6.8 million to $49.4 million for the three months ended October 31, 2024, as compared to $42.6 million for the three months ended October 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 $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.
Current wording
•Payment processing fees. Our revenue from patient payments processed through our solutions increased $1.5 million to $24.7 million for the three months ended October 31, 2024, as compared to $23.2 million for the three months ended October 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 October 31, 2024 were reduced by approximately $1.4 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 $5.3 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.
Current wording
•Network solutions. Our revenue from life science and payer clients increased $6.9 million to $32.7 million for the three months ended October 31, 2024, as compared to $25.8 million for the three months ended October 31, 2023, due to an increase engagement, education programs and deeper patient outreach among the existing programs.
Previous wording
•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 wording
•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $24.9 million to $144.7 million for the nine months ended October 31, 2024, as compared to $119.8 million for the nine months ended October 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 $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 wording
•Payment processing fees. Our revenue from patient payments processed through our solutions increased $6.0 million to $77.1 million for the nine months ended October 31, 2024, as compared to $71.1 million for the nine months ended October 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 nine months ended October 31, 2024 were reduced by approximately $4.7 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.
Previous wording
•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 wording
•Network solutions. Our revenue from life science and payer clients increased $17.9 million to $88.4 million for the nine months ended October 31, 2024, as compared to $70.4 million for the nine months ended October 31, 2023, due to an increase engagement, education programs and deeper patient outreach among the existing programs.
Previous wording
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 wording
Cost of revenue (excluding depreciation and amortization) increased $2.3 million to $17.9 million for the three months ended October 31, 2024, as compared to $15.5 million for the three months ended October 31, 2023. The increase primarily resulted from a $2.8 million increase in other third-party costs driven by growth in revenue, partially offset by a $0.5 million decrease in labor costs.
Previous wording
Stock compensation incurred related to cost of revenue was $1.2 million for both the three months ended July 31, 2024 and 2023.
Current wording
Stock compensation incurred related to cost of revenue was $1.3 million for the three months ended October 31, 2024, as well as for the three months ended October 31, 2023.
Previous 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.
Current wording
Cost of revenue (excluding depreciation and amortization) increased $4.8 million to $49.7 million for the nine months ended October 31, 2024, as compared to $44.9 million for the nine months ended October 31, 2023. The increase primarily resulted from a $5.1 million increase in other third-party costs driven by growth in revenue, partially offset by a $0.2 million decrease in labor costs.
Previous wording
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 wording
Stock compensation incurred related to cost of revenue was $3.7 million and $3.5 million for the nine months ended October 31, 2024 and 2023, respectively.
Previous 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.
Current wording
Payment processing expense increased $1.3 million to $16.7 million for the three months ended October 31, 2024, as compared to $15.4 million for the three months ended October 31, 2023. The increase primarily resulted 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 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 wording
Payment processing expense increased $4.3 million to $51.6 million for the nine months ended October 31, 2024, as compared to $47.4 million for the nine months ended October 31, 2023. The increase primarily resulted 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 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 wording
Payment processing expense for the nine months ended October 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 $5.3 million and $7.1 million for the three months ended July 31, 2024 and 2023, respectively.
Current wording
Stock compensation incurred related to sales and marketing expense was $5.4 million and $6.3 million for the three months ended October 31, 2024 and 2023, respectively.
Previous wording
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 wording
Sales and marketing expense decreased $18.9 million to $92.3 million for the nine months ended October 31, 2024, as compared to $111.1 million for the nine months ended October 31, 2023. The decrease primarily resulted from a $13.5 million decrease in labor costs and a $5.3 million decrease in other third-party sales and marketing costs.
Previous wording
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 wording
Stock compensation incurred related to sales and marketing expense was $16.5 million and $19.9 million for the nine months ended October 31, 2024 and 2023, respectively.
Previous 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.
Current wording
Stock compensation incurred related to research and development expense was $3.8 million and $4.6 million for the three months ended October 31, 2024 and 2023, respectively.
Previous 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.
Current wording
Research and development expense increased $5.3 million to $87.7 million for the nine months ended October 31, 2024, as compared to $82.5 million for the nine months ended October 31, 2023. The increase resulted primarily from a $2.4 million increase in software costs, a $2.2 million increase in labor costs and a $0.7 million increase in other third-party costs.
Previous wording
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 wording
Stock compensation incurred related to research and development expense was $11.0 million and $13.0 million for the nine months ended October 31, 2024 and 2023, respectively.
Previous wording
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 wording
General and administrative expense decreased $0.6 million to $19.6 million for the three months ended October 31, 2024, as compared to $20.2 million for the three months ended October 31, 2023. The decrease primarily resulted from a decrease in third-party costs associated with prior-year acquisitions, partially offset by an increase in other third-party costs, including a $0.6 million increase in professional services costs.
Previous 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.
Current wording
Stock compensation incurred related to general and administrative expense was $6.0 million and $5.8 million for the three months ended October 31, 2024 and 2023, respectively.
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Previous report — wording carried elsewhere
As we noted last quarter, this attack impacted a major part of the U.S. healthcare infrastructure including many of our clients.