Phreesia, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 15, 2024. In addition to historical financial information, the following discussion and analysis and information set forth elsewhere in this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q, including those set forth under “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and our financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on March 13, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. As a result of many factors, including those factors set forth under “Risk Factors” and “Special Note Regarding Forward-Looking Statements: in this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the follow discussion and analysis.

Previous 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.

Current wording

•Net cash provided by operating activities was $14.9 million for the three months ended April 30, 2025, as compared to net cash used in operating activities of $0.7 million for the three months ended April 30, 2024.

Previous 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.

Current wording

•Cash and cash equivalents as of April 30, 2025 was $90.9 million, an increase of $6.7 million as compared to January 31, 2025.

Previous 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.”

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 calculate such measures, see the section below titled “Non-GAAP financial measures.”

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 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.

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. Phreesia’s mission is to make care easier every day. We have created an integrated and streamlined system that automates data capture and activates patients before, during and after their interaction with their healthcare services provider. 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 better understand their patients and connect them to needed services, resulting in improved health outcomes. We also provide life sciences companies, government entities, patient advocacy, public interest and not-for-profit and other organizations with a channel for direct education and communication with patients in a privacy-protected environment. Our solutions also include additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specialty and condition expertise.

Previous wording

We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups, and health systems as well as regional and national payers and other organizations that provide other types of healthcare-related services. Our Network solutions revenue (as described below) is generated from clients in the pharmaceutical, biotechnology and medical device industries as well as payers, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health.

Current wording

We serve an array of healthcare services clients of all sizes across over 25 specialties, ranging from single-specialty practices, including internal and family medicine, urology, dermatology, and orthopedics, to large, multi-specialty groups, and health systems as well as other organizations that provide other types of healthcare-related services. Our network solutions clients include life sciences companies in the pharmaceutical, biotechnology and medical device industries, as well as government entities, patient advocacy, public interest and other not-for-profit organizations seeking to activate, engage and educate patients about topics critical to their health. Our goal is to help patients have more informed conversations to help them make decisions about their care.

Previous wording

We derive revenue from (i) subscription fees from healthcare services clients for access to our solutions and related professional services fees, (ii) payment processing fees based on levels of patient payment volume processed through our solutions and (iii) fees from life sciences and payer clients for delivering direct communications to help activate, engage and educate patients about topics critical to their health using our solutions. We also generate revenue through our additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specific clinical expertise. We have strong visibility into our business as the majority of our revenue is derived from recurring subscription fees and re-occurring payment processing fees.

Current wording

We derive revenue from (i) subscription fees from healthcare services clients for access to our solutions and related professional services fees, (ii) payment processing fees based on levels of patient payment volume processed through our solutions and (iii) fees from life sciences companies and other organizations for delivering direct communications to help activate, engage and educate patients about topics critical to their health using our solutions. We also generate revenue through our additional products and services such as the MediFind provider directory, which helps patients find care based on providers' specialty and condition expertise. We have strong visibility into our business as the majority of our revenue is derived from recurring subscription fees and re-occurring payment processing fees.

Previous wording

We market and sell our products and services to healthcare services prospects throughout the U.S. using a direct sales organization. Our database team is responsible for the hygiene and health of our data and is tasked with validating information by using various tools to enrich it. This data powers our sales development organization. Our marketing team identifies customer profiles, develops content and deploys one-to-many communications to soften the market. This helps prepare our sales development team to outbound to prospects. The sales development team creates opportunities and works with the direct sales team to qualify those opportunities. Our sales force executes on these qualified sales leads, partnering with sales enablement and client services to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time. Most of our healthcare services customer contracts are structured as annual, auto-renewing agreements. Our sales typically involve competitive processes and sales cycles have, on average, varied in duration from three months to six months, depending on the size of the potential client. In addition, through Phreesia University (Phreesia’s in-house training program), events, client conferences and webinars, we help our healthcare services clients optimize their businesses and, as a result, support client retention.

Current wording

We market and sell our products and services to healthcare services prospects throughout the U.S. using a direct sales organization. Our database team is responsible for the hygiene and health of our data and is tasked with validating information by using various tools to enrich it. This data powers our sales development organization. Our marketing team identifies customer profiles, develops content and deploys one-to-many communications to soften the market. This helps prepare our sales development team to engage with new prospective customers. The sales development team creates opportunities and works with the direct sales team to qualify those opportunities. Our sales force executes on these qualified sales leads, partnering with our sales enablement and client services functions to ensure prospects are educated on the breadth of our capabilities and demonstrable value proposition, with the goal of attracting and retaining clients and expanding their use of our solutions over time. Most of our healthcare services customer contracts are structured as annual, auto-renewing agreements. Our sales typically involve competitive processes, and sales cycles have, on average, varied in duration from three months to six months, depending on the size of the potential client. After we secure new deals, our sales team offers additional add-on solutions and services to healthcare services customers, expanding the breadth of solutions provided to clients, which we believe increases customer satisfaction and retention. In addition, through Phreesia University (Phreesia’s in-house training program), live and virtual events, we help our healthcare services clients optimize their businesses and, as a result, support client retention.

Previous wording

We also sell products and services to life sciences and payer organizations, healthcare advertising agencies and advocacy groups as well as advertising agencies through our direct sales and marketing teams. Unlike healthcare services programs, most of the life science campaigns need to be measured and resold each year. Like healthcare services, the marketing team supports net new business and client retention for life sciences by educating ideal customer profiles about the value of Phreesia and the positive impact on health outcomes Phreesia campaigns have on patients.

Current wording

We also sell products and services to life sciences and other organizations, healthcare advertising agencies, government entities and advocacy groups through our direct sales and marketing teams. Unlike healthcare services programs, most of the life science campaigns need to be measured and resold each year. Like healthcare services, the marketing team supports net new business and client retention for network solutions by educating ideal customer profiles about the value of Phreesia and the positive impact on health outcomes Phreesia campaigns have on patients.

Previous 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.

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, the conflict in the Middle East and the intensification of the hostilities between India and Pakistan, 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, tariff and trade issues, 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 change in U.S. presidential administration has resulted in, and may continue to cause, 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

•AHSCs. We define AHSCs as the average number of clients that generate subscription and related services or payment processing revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients. While growth in AHSCs is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future AHSC growth. For example, as AHSCs increase, we may need to add to our customer support team and invest to maintain effectiveness and performance of our solutions for our healthcare services clients and their patients.

Current wording

•AHSCs. We define AHSCs as the average number of clients that generate subscription and related services or payment processing revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner's clients, we treat the contractual relationship as a single healthcare services client. We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our solutions to healthcare services organizations that are not yet clients. We believe growth in AHSCs provides useful information to investors as an important indicator of expected revenue growth. In addition, growth in AHSCs informs our management of the areas of our business that will require further investment to support expected future AHSC growth. For example, as AHSCs increase, we may need to add to our customer support team and invest to maintain effectiveness and performance of our solutions for our healthcare services clients and their patients.

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 $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.

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, government entities, patient advocacy, public interest and 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 provides useful information to investors as an indicator of the long-term value of our solutions. Total revenue per AHSC was $26,283 for the three months ended April 30, 2025 compared to $24,900 for the same period in the prior year, an increase of 6%. The increase was primarily driven by revenue growth that outpaced AHSC growth.

Previous wording

We generate revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry. We derive revenue from subscription fees and related services generated from our healthcare services clients for access to our solutions, payment processing fees based on the levels of patient payment volume we process, and from fees from life sciences and payer clients for delivering direct communications to help activate, engage and educate patients about topics critical to their health.

Current wording

We generate revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry. We derive revenue from subscription fees and related services generated from our healthcare services clients for access to our solutions, payment processing fees based on the levels of patient payment volume we process, and from fees from life sciences companies and other organizations for delivering direct communications to help activate, engage and educate patients about topics critical to their health.

Previous wording

•Network solutions. We generate revenue from life sciences and payer clients for delivering direct communications to patients. As we expand our healthcare services client base, we increase the number of new patients we can reach to deliver our direct communications that help activate, engage and educate patients about topics critical to their health on behalf of life sciences and payer clients.

Current wording

•Network solutions. We generate revenue from life sciences companies and other organizations for delivering direct communications to patients. As we expand our healthcare services client base, we increase the number of new patients we can reach to deliver our direct communications to help activate, engage and educate patients about topics critical to their health on behalf of life sciences companies and other organizations.

Previous wording

Payment processing expense consists primarily of interchange fees set by payment card networks and that are ultimately paid to the card-issuing financial institution, assessment fees paid to payment card networks, and fees paid to third-party payment processors and gateways. Payment processing expense may increase as a percentage of payment processing revenue if card networks raise pricing for interchange and assessment fees or if we reduce pricing to our clients.

Current wording

Payment processing expense consists primarily of interchange fees set by payment card networks that are ultimately paid to the card-issuing financial institution, assessment fees paid to payment card networks, and fees paid to third-party payment processors and gateways. Payment processing expense may increase as a percentage of payment processing revenue if card networks raise pricing for interchange and assessment fees or if we reduce pricing to our clients.

Previous wording

•Other expense, net. Other expense, net consists of foreign currency-related losses and gains and other miscellaneous (expense) income.

Current wording

•Other income (expense), net. Other expense, net consists of foreign currency-related losses and gains and other miscellaneous income (expense).

Previous wording

Comparison of results of operations for the three and nine months ended October 31, 2024 and 2023

Current wording

Comparison of results of operations for the three months ended April 30, 2025 and 2024

Previous 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.

Current wording

•Subscription and related services. Our subscription and related services revenue from healthcare services organizations increased $7.6 million to $54.4 million for the three months ended April 30, 2025, as compared to $46.7 million for the three months ended April 30, 2024, primarily due to 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 $1.5 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.

Current wording

•Payment processing fees. Our revenue from patient payments processed through our solutions increased $2.9 million to $29.9 million for the three months ended April 30, 2025, as compared to $27.1 million for the three months ended April 30, 2024, due to the addition of new healthcare services clients, which drove increases in patient visits and patient payments processed through our platform.

Previous 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.

Current wording

•Network solutions. Our revenue from life sciences companies and other organizations increased $4.2 million to $31.7 million for the three months ended April 30, 2025, as compared to $27.4 million for the three months ended April 30, 2024, due to an increase in engagement, education programs and deeper patient outreach among the existing programs.

Previous 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.

Current wording

Stock compensation incurred related to cost of revenue was $1.1 million and $1.2 million for the three months ended April 30, 2025 and 2024, respectively.

Previous 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.

Current wording

Payment processing expense increased $3.1 million to $21.4 million for the three months ended April 30, 2025, as compared to $18.3 million for the three months ended April 30, 2024. 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

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 wording

Sales and marketing expense decreased $6.0 million to $26.0 million for the three months ended April 30, 2025, as compared to $32.0 million for the three months ended April 30, 2024. The decrease resulted primarily from a $6.5 million decrease in labor costs, partially offset by a $0.6 million increase in other third-party sales and marketing costs.

Previous 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.

Current wording

Stock compensation incurred related to sales and marketing expense was $5.2 million and $5.8 million for the three months ended April 30, 2025 and 2024, respectively.

Previous 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.

Current wording

Research and development expense increased $2.9 million to $31.8 million for the three months ended April 30, 2025, as compared to $28.9 million for the three months ended April 30, 2024. The increase resulted primarily from a $1.4 million increase in labor costs, a $1.1 million increase in software costs and a $0.5 million increase in other third-party costs.

Previous 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.

Current wording

Stock compensation incurred related to research and development expense was $4.4 million and $3.6 million for the three months ended April 30, 2025 and 2024, respectively.

Previous 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.

Current wording

Stock compensation incurred related to general and administrative expense was $6.6 million and $6.2 million for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

Depreciation expense decreased $0.9 million to $3.6 million for the three months ended October 31, 2024, as compared to $4.5 million for the three months ended October 31, 2023. The decrease was primarily attributable to lower computer equipment depreciation.

Current wording

Depreciation expense decreased $0.5 million to $3.0 million for the three months ended April 30, 2025, as compared to $3.5 million for the three months ended April 30, 2024. The decrease was primarily attributable to lower computer equipment depreciation.

Previous wording

Amortization expense increased $0.5 million to $3.5 million for the three months ended October 31, 2024 as compared to $3.0 million for the three months ended October 31, 2023. The increase was primarily driven by higher amortization of capitalized internal-use software development costs as well as amortization of intangible assets acquired during fiscal 2024.

Current wording

Amortization expense increased $0.7 million to $3.9 million for the three months ended April 30, 2025 as compared to $3.1 million for the three months ended April 30, 2024. The increase was primarily driven by higher amortization of capitalized internal-use software development costs.

Previous wording

Other expense, net was expense of $0.1 million for the three months ended October 31, 2024 as compared to expense of less than $0.1 million for the three months ended October 31, 2023. Other expense, net is comprised primarily of foreign exchange losses.

Current wording

Other income (expense), net was income of $0.3 million for the three months ended April 30, 2025 as compared to expense of less than $0.1 million for the three months ended April 30, 2024. Other income (expense), net is comprised primarily of foreign exchange gains and losses and other miscellaneous income (expense).

Previous wording

Interest income, net was less than $0.1 million for the three months ended October 31, 2024, as compared to $0.5 million for the three months ended October 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 wording

Interest (expense) income, net was expense of $0.2 million for the three months ended April 30, 2025, as compared to income of $0.2 million for the three months ended April 30, 2024. The decrease is primarily attributable to lower interest income earned from our cash and cash equivalent balances, partially offset by lower interest expense on our finance leases and other financing obligations.

Previous wording

Provision for income taxes increased by $0.1 million to $0.4 million for the three months ended October 31, 2024 compared to $0.4 million for the three months ended October 31, 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 $0.2 million to $0.7 million for the three months ended April 30, 2025, as compared to $0.5 million for the three months ended April 30, 2024. 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, net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other expense (income), 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 calculate Adjusted EBITDA as net income or loss before interest expense (income), net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other (income) expense, net.

Previous wording

•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) interest income, net; and

Current wording

•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) interest expense (income), net; and

Previous wording

As of October 31, 2024 and January 31, 2024, we had cash and cash equivalents of $81.7 million and $87.5 million, respectively. Cash and cash equivalents consist of money market mutual funds and cash on deposit.

Current wording

As of April 30, 2025 and January 31, 2025, we had cash and cash equivalents of $90.9 million and $84.2 million, respectively. Cash and cash equivalents consist of money market mutual funds and cash on deposit.

Previous wording

In December 2023, we entered into a 5-year $50 million senior secured asset-based revolving credit facility ("Capital One Credit Facility") maturing in December 2028, which includes a swingline sub-limit of at least $5.0 million and a letter of credit sub-limit of at least $5.0 million. The new Capital One Credit Facility was entered into with Capital One, N.A. (“Capital One”) acting as administrative agent and replaces our previous senior secured revolving credit facility with Silicon Valley Bank, which we terminated the same date. We believe the new Capital One Credit Facility will give us additional financial flexibility through fiscal 2028. The facility is available to us for working capital and general corporate purposes.

Current wording

In December 2023, we entered into a 5-year $50 million senior secured asset-based revolving credit facility ("Capital One Credit Facility") maturing in December 2028, which includes a swingline sub-limit of at least $5.0 million and a letter of credit sub-limit of at least $5.0 million. The Capital One Credit Facility was entered into with Capital One, N.A. (“Capital One”) acting as administrative agent and replaces our previous senior secured revolving credit facility with Silicon Valley Bank, which we terminated on the same date. We believe the Capital One Credit Facility will give us additional financial flexibility through fiscal 2028. The facility is available to us for working capital and general corporate purposes.

Previous wording

The Capital One Credit Facility includes financial covenants including, but not limited to requiring us to maintain minimum Consolidated EBITDA, minimum Liquidity, a minimum Consolidated Fixed Charge Coverage Ratio and limiting the amount of cash and cash equivalents we hold outside Capital One, each as defined in the Credit Agreement.

Current wording

The Capital One Credit Facility includes financial covenants including but not limited to requiring us to maintain minimum Consolidated EBITDA, minimum Liquidity, a minimum Consolidated Fixed Charge Coverage Ratio and limiting the amount of cash and cash equivalents we hold outside Capital One, each as defined in the Credit Agreement. We were in compliance with all covenants related to the Capital One Credit Facility as of April 30, 2025.

Previous wording

In June 2023, we entered into a financing agreement to obtain financing for internal-use software and related software support. As of October 31, 2024, there was $2.2 million in outstanding principal and interest due under the agreement. The financing agreement requires us to pay $0.1 million per month for 36 months beginning August 2023. The effective interest rate on the agreement is 10.5% per annum.

Current wording

In June 2023, we entered into a financing agreement to obtain financing for internal-use software and related software support. As of April 30, 2025, there was $1.6 million in outstanding principal and interest due under the agreement. The financing agreement requires us to pay $0.1 million per month for 36 months beginning August 2023. The effective interest rate on the agreement is 10.5% per annum.

Previous wording

During the three and nine months ended October 31, 2024, net cash provided by operating activities was $5.8 million and $16.1 million, respectively, as our cash received from customers in connection with our normal operations exceeded our cash paid to employees and suppliers.

Current wording

During the three months ended April 30, 2025, net cash provided by operating activities was $14.9 million, as our cash received from customers in connection with our normal operations exceeded our cash paid to employees and suppliers.

Previous wording

During the three and nine months ended October 31, 2023, net cash used in operating activities was $6.3 million and $29.3 million, respectively, as our cash paid to employees and suppliers exceeded our cash received from customers in connection with our normal operations.

Current wording

During the three months ended April 30, 2024, net cash used in operating activities was $0.7 million, as our cash paid to employees and suppliers exceeded our cash received from customers in connection with our normal operations.