Phreesia, Inc. (PHR) Q1 2023 Earnings Report, Transcript and Summary

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Phreesia Fiscal First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer. [Operator Instructions] Thank you. Balaji Gandhi, you may begin your conference.

Thank you, operator. Welcome to Phreesia’s earnings conference call for the fiscal first quarter of 2023, which ended on April 30th of 2022. Joining me on today's call are Chaim Indig, our Chief Executive Officer and Co-Founder and Randy Rasmussen, our Chief Financial Officer. A complete discussion of our results can be found in our earnings press release and in our related Form 8-K submission to the SEC, including our quarterly stakeholder letter, both issued after the markets closed today. These documents are available on the Investor Relations section of our website at ir.phreesia.com. As a reminder, today's call is being recorded and a replay will be available on our Investor Relations website at ir.phreesia.com. following the conclusion of the call. During today's call, we may make forward-looking statements, including statements regarding trends, our anticipated growth, our strategies, predictions about our industry and the anticipated performance of our business, including our outlook regarding future financial results. Forward-looking statements are subject to various risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements. Such risks are described more fully in our earnings press release [Technical Difficulty] SEC filings, including in our quarterly report on Form 10-Q that will be filed with the SEC tomorrow. The forward-looking statements made on this call will be based on our current views and expectations and speak only as of the date on which the statements are made. We undertake no obligation to update and expressly disclaim the obligation to update these forward-looking statements to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events. We may also refer to certain financial measures not in accordance with Generally Accepted Accounting Principles in order to provide additional information to investors. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release and stakeholder letter, which were furnished with our Form 8-K after the market closed on today with the SEC and may also be found on our Investor Relations website at ir.phreesia.com. With that overlay, let me hit a couple of the highlights from the quarter in case you have not had a chance to review the earnings release in the quarterly letter. First, our investments continue to drive strong growth in our network and the first quarter average healthcare services clients were up 33% year-over-year. Second, payment processing revenue in the quarter reflected patient utilization trends that were slightly below our expectations based on our prior experience. We think this trend could persist in the remainder of the year, which is the main reason we're maintaining our revenue outlook for the year at $271 million to $275 million, this range implies growth of 27% to 29% year-over-year. Third, life sciences growth was up a strong 51% year-over-year and revenue was down a slight 563,000 sequentially from Q4. This sequential trend is consistent with historical periods where you see Q4 to Q1, flat to down due to seasonality. We continue to be pleased with our team's performance in this area and we expected it, this team's continued performance to contribute to our overall growth in fiscal ‘23. And the last highlight we began to see strong operating leverage across all of our investments over the past year, which is why we've taken up the adjusted EBITDA outlook for the year to a range of negative $126 million to negative $122 million, which is up from our prior outlook of negative $154 million to negative $149 million. And before jumping into the Q&A session, let me hand it over to our CEO, Chaim Indig.

Thank you, Balaji, and good evening, everyone. Thanks for thanks for participating in our fiscal first quarter earnings call. I'm very proud of our team for their commitment to our clients and their mission, Internally, we think of ourselves as operators, who provide an amazing experience across over 100 million patient visits a year that impacts the entire healthcare ecosystem. We're able to do this, because of our outstanding and committed product and engineering organization. And I want to say thank you to all of that. For 17-years, we have felt strongly that if we build great product and put in the hands of our clients, we will produce a great return and they will remain happy clients. It's been wonderful to see the net effect of our product and engineering tools working with our go to market teams and we know it will continue to pay dividends for all of our stakeholders in the years to come. I'm sure we'll get a deeper into the highlights Balaji touched on, as well as other topics. But let me add, it's been great to be out there and meeting in person again, about the opportunity with future colleagues, clients and shareholders in person over the past few months and really does make a difference. We look forward to seeing many of you over the summer and the months that follow. Operator, if we could open up for Q&A now.

Thank you. [Operator Instructions] Your first question today comes from the line of Anne Samuel with JPMorgan. Your line is now open.

Hi, guys. Thanks for the question and congrats on the strong local growth this quarter. I was hoping maybe you could touch on some of the dynamics around revenue per provider client and what caused the decline there?

So and historically you're talking about total health care services revenue?

Yes.

So the revenue per client you're talking about the 19.2?

Yes, so the revenue per provider client?

Yes. So I would said the year-over-year. Yes, I think from the perspective of maybe talked about this in the past, where, you know, we're doing a big land and expand as we get additional clients often they come in, and, you know, the first dollar revenue comes in and we expand into other areas. If you look at it quarter-over-quarter, but there was nice expansion on the revenue per client. And I think, you know, also in the table, I think we also showed too if you look at the subscription per provider client, it's been consistent at 11,500, you know, for several quarters now. So, you know, we see that continuing to go, you know, at that level or higher as we move into the future quarters.

Okay.

And Anne I think, I was just going to have, I think, Randy brought up a good point, which is, you know, we talked to lot of people about those two lines independently. So if you actually look at subscription per client and payments per client, you sort of see that story that Randy talked about a little better.

Okay. Very helpful. And, you know, it's something maybe you could touch on EBITDA, you know, you raised your EBITDA outlook by more than you beat today, you've now got an improved timeline for profitability. I was hoping maybe you could talk about what some of those profitability levers are coming in better than you expected?

Yes. I think, you know, we made some significant investments in fiscal ‘22, and I think G&A is a really good example, where we made some investments. We went live with a new ERP system last year. And we're seeing the benefits of that this year, and I think the leverage on those investments is accelerated versus what our expectation is. And I think there's also, when we did guidance for the year a couple months ago, there's still some questions about Ukraine and some of our third-party providers and I think we have more clarity there. So, you know, that's also helped us revise our expectations for the year.

Great. And then just one housekeeping question, I didn't see it in the letter. I was hoping you could provide how many SDRs you have now?

It's the same as it was at year end, that’s 232. Q - Anne Samuel Great. Thanks very much guys.

Your next question comes from the line of Ryan Daniels with William Blair. Your line is now open.

Yes, guys. Congrats on the strong start to the fiscal year. Thanks for the questions. Curious, what you're seeing in regards to patient utilization trends, I know you mentioned in your prepared comments it was lower than anticipated. Is that more a dynamic of COVID-related issues with patients coming in? Or is it some of the challenges your client base is seeing in workforce and just retaining or maintaining productivity of the healthcare workers?

Hey, Ryan. This is Chaim, I think we're hearing it's a mixture of COVID hitting their staff and obviously their patients, but also just staff like -- staffing levels. And I think we're seeing that as a combination throughout, I don't think there's any one answer, and I think we've seen it fluctuates throughout the entire health care ecosystem.

Okay, that's helpful. And then --

And then it switch offs for our providers. We're just trying to make sure that they -- we're providing them all the tools, so they could they could treat the patients they will -- that needs to treated.

Yes, absolutely. And then I guess my follow-up, I'd love to get an update on your offering for social determinants of help. You specifically called that out in some detail in your stakeholder letter, it’s a topic we focused on a lot of late. And I think regulators and payers and providers are all focused on it. So I'm curious what kind of traction you're seeing there and what maybe future investments or growth outlook for that specific product offering is? Thank you.

Yes, well, you know, Ryan, I just brought that up. The social determinants of help are not just impacting people's health and their wellness and how they get treated. But there are also things that people we found working for us, they’re often have a hard time to bringing up that they want to address, whether it's food insecurity or domestic violence or having a safe place to sleep. And what we really focused on is not monetizing social determinants of health, but empowering our providers to figure out, who needs help and how they need help. And making sure we do it in scale in a non-judgmental way. Then that's just an important part of doing the right thing. And, you know, I don't know what the economic benefit of social determinants are aligned, but I know it's just the right thing to do. And people go with the healthcare to do the right thing, and we will keep doing that as an organization.

Okay. Appreciate that. And Chaim congrats on the announcements on your best places to work. I know culture is important for you, so kudos on that. Thanks.

It is. This is the only reason we got this amazing company, because this amazing group of people that are committed. And I'm really proud to work with them.

Your next question comes from the line of Jessica Tassan with Piper Sander. Your line is now open.

Hi, thank you so much for taking the question and congrats on the strong EBITDA. So I just had a couple of questions on the Connects offering. First off, I think, we know patients are typically engaging with the intake management, interface and self scheduling, but just curious Phreesia primarily interfacing with Connect. Is it the patient who's a practice admin or the provider themselves? And then just if it's the provider, where does Connect, kind of, sit in the context of the EHR and the provider's practice management interface it?

Well, Jess, that was like a very long question, I think I got it. So that's right.

I'll bear with you.

Alright, so let me see if I can. So you think Connect is awesome like we do, okay, that’s sort of what I've heard.

That’s right, I mean, yes.

All right, and you're trying to figure out who uses Connect. And if you -- so for a very long period of time we do envision Connect really beating us tied to the patient, right? Because they -- it's how they book their appointment, and we -- but right now, the vast majority of the connections with Connect are between the provider staff and the other provider staff, does that answered the question very rarely the actual provider themselves.

Got it. And so the vision is eventually though the patient might be able to access that through the self scheduling or intake management interface. But that --

You still [Multiple Speakers] but we are a focused company.

Okay, got it. And then just are the provider clients who are potentially exclusively participating in the Connect referral network included in the total provider count? Or does the provider have to be at Phreesia intake management and scheduling customer in order to have access?

For a client to be counted, you've got to pay us money. And so if they're a client, they're a client.

[Multiple Speakers] Yes, we count them as soon as first dollar comes in.

That's helpful. And then just finally, in terms of revenue recognition and seasonality of the Connect offering, where is that revenue recognized? And then I would imagine expenses correlated to the sequential recovery in payment volumes, but just want to confirm that, that's true?

Yes. I don't think there's a correlation between adding payment volume right now. It's in the revenue perspective, it's in the subscription number.

Got it. Alright, thanks. That's helpful.

Your next question comes from the line of John Ransom with Raymond James. Your line is now open.

Hey, good afternoon team. This is sort of analyst 101, but a couple of -- first of all, is there anything to call out in sort of the rhythm of smaller clients versus larger clients in your customer growth year-over-year? And then secondly, if we think about the rest of the fiscal year, how should we think about components, the three revenue components, is there anything -- I know you said Life Science is seasonal, but is there anything to think about in terms of how the three interplay the same or different format? Thanks.

I think I'll answer the first part, which is -- we think outside of the client, I think I've said this a couple times, but I appreciate you making me say it again. We care about all clients big and small. We still have [indiscernible]. And, you know, as long as you need help, we'll be there to help you. And I think we've been historically seen the plethora of that happen across our growth in our network. And then what was the other question?

Time and revenue.

I don't know how that's going to be.

I mean, I think, you know, mentioned in the letter, I mean, I think in the Life Science business, typically because of the way that the advertising budgets roll year-over-year, moving from Q4 to Q1 is typically flat or slightly down and then that builds during the year. I think you know, payments also had some seasonality to it based on, you know, the patient responsibility, which is typically paid earlier in our year. But I think the patterns are similar to what we've seen in the other years.

And John, you know, just I think in terms of what we communicated back at the end of March, for the year, I think the only thing to consider is that the reason we're keeping the guidance where it is, is because of this. The payments trends that we saw in the first quarter, but otherwise nothing different from what we saw 60-days ago.

If I could like reset that first question, I wasn't asking like, who's important to see? I just said that the customer adds that you had, was there anything to call out between the mix of larger versus smaller clients in that change. I didn't ask [Multiple Speakers] I apologize.

Yes, okay. Good, I thought you are trying to keep like one more than the other, right. But the answer is no, John, we're not seeing any internal shift in the mix.

Okay. Thank you.

Thank you. The answer is the second thing?

Much better.

Okay. I'm looking really hard. Three -- this is, like, I'm almost three years in. Maybe one day I’ll be good at this.

I know you are. That nobody questions that. Thank you.

Your next question comes from the line of Joe Vruwink with Baird. Your line is now open.

Great. Hi, everyone. A question on going back to the subscription revenue per client and the trend there, it makes sense of given the magnitude that's been on boarded new over the past really five quarters now that you kind of expect sequentially stable trend. I guess it also follows that we'll reach a point where we should start to expect some expansions out of this cohort. Any updated guidance? Yes, I think it's been a couple of years maybe since dollar-based net retention figures were provided, but maybe how that should look as we think about, kind of, a mature customer base that is looking to grow?

I mean, I think last quarter we talked about the low levels of churn that our customer base is very sticky. I think we continue to have success in up sell and cross sell. We haven't given, you know, net revenue retention numbers since the IPO. But, you know, our strategy is still in and expand and we still feel, you know, that that's going very well for us.

And you know, I think, the other thing, Joe, is you could look at where we were when we went public three years ago on subscription revenue per client and look at where we are at this quarter, it's grown meaningfully, it’s just sort of got that step function aspect to it. And in terms of the opportunity, we still think the TAM is 126,000 per client on average and that's all types of clients. And so, you know, that's I think it's close to 3 times in terms of the opportunity we still feel good about that.

Okay. Thanks. That helps. And then last one for me, in terms of at the sequencing of maybe quarterly investments for the remainder of the year. Obviously, the guy kind of entails just annualizing the 1Q EBITDA, is the right way to think of it, you know, kind of, stable with 1Q, OpEx stable with 1Q cost of sales? Or is there anything timing related where things or maybe a bit lower here in 1Q? And so sequentially, there's still a bit of a step up to go?

Yes. You know, maybe Randy, maybe you want to talk about the gross margins? How do we think about that aspect?

Yes, I think if you look at the gross margins, we expect those to expand in the second half of the year. And then I think there are certain expenditures that do have timing, such as corporate events or marketing. Also, you know, we have internally capitalized software, so sometimes that fluctuates from quarter-to-quarter. So those things all affect the timing.

Okay. Thanks guys. Thank you.

Your next question comes from the line of Glen Santangelo with Jefferies. Your line is now open.

Hi, yes, thanks and good evening guys. Hey I just want to follow-up on that sequential EBITDA question previously. If we take your annual revenue guidance, it kind of implies about 6%, sort of, sequential growth here for the remaining three quarters? And so I guess the assumption is that your OpEx is going to grow maybe even faster than that if you're talking about some gross margin expansion in the back half of the year. It was my understanding and I just want to get an update time on the hiring needs of the business. It sounds like we were largely through the investment phase that we talked about on the previous two or three calls. I was wondering if you could update us on that investment phase? And how we should think about the operating expenses on a sequential basis from here relative to revenue growth? A - Chaim Indig Alright, there's a lot. Alright, let me try to unpack that. So are we through the investment phase, and the answer is no. We're continuing to invest, we're just now starting to see really good leverage of these amazing people that we've brought onboard, and they're doing amazing work. And we expect like, we're continuously investing in them and our clients. But will we see the ramp of the number of people that we bring on the organization in the next -- in the near-term at the same pace that we had, I don't think that's the plan. I think, did I answer the question?

Yes. I mean, I guess you did right. I mean, but, you know, what we're looking at, right, is a loss this quarter of about $31 million in EBITDA, right? And you're guiding basically as a previous question kind of implied, right, $125 million for the year. So that would imply a negative $30 million in EBITDA each in the next three quarters, roughly speaking. So it kind of suggests that expenses are growing essentially in line with revenue. You know, and I get it, we don't have all the details. I just want to make sure we're sort of thinking about that right?

Yes.

Yes, and I think Randy talked quite about like timing of certain things. So maybe we could try to be helpful in following up in terms of the cadence of this. But it's a pretty tight range as it is. And we obviously expect to get better as time goes on.

Yes. And so like for example, but, I mean, capitalized software is just, you know, location of cash flows, is it investing or is it in operating and that can affect the EBITDA number. So I think we're just, you know, thoughtful about, you know, how do we forecast that? Because it’s somewhat based on the investments and what the engineering teams are working on.

Yes, perfect. The last question, a lot people are always asking about the balance sheet and the cash needs of the business. And if you look at sort of your cash balance at this point, you’re at -- let's call it, $269 million, I think, right? And it's taking your EBITDA guidance of, call it, minus $125 million right, that's almost I don't call it half the cash, but rough numbers, it's kind of half the cash. And based on your fiscal ’25 guidance, I think you're short of implying that you will reach profitability in fiscal ‘25, is that in one specific quarter of fiscal ‘25? And so how should we think about the cash needs of the business relative to -- I'll call it the three year fiscal plan you've laid out in terms of revenue and profitability in fiscal ‘25? Thanks.

That’s a good question. And, you know, we feel confident that the current cash balance and the line of credit is sufficient to finance our plan to achieve successful 2025 targets. And, you know, that's, you know, if you look at the goal being profitable in 2025, and that implies that revenues grow at a CAGR of 28% and then our expenses will grow somewhere 10% to 11% or less to achieve that profitability.

Okay. Very helpful. Thank you.

Your next question comes from the line of Richard Close with Canaccord Genuity. Your line is now open.

Yes, thanks for taking the questions, congratulations. Maybe a follow-up to -- I think it was -- forget whose question it was, sorry. But there was an HFMA survey out there, said something like 35% of health systems have vacancies on the front staffed and scheduling and registers and whatnot. I was just curious when -- how much do you think that is driving demand for your products? And then when you guys go to market, how important is it showing that freezers, enhancing productivity, maybe they don't need to fill those vacancies going forward? Just any thoughts there?

All right. Richard, I don't know whose question you're following up on. But why don't I give, like, a random statistics, like, shot. I think Kharen told me who runs our marketing organization. Our SCRs last year made 2 million phone calls into healthcare organizations. I think the reason we saw the uptick in clients is not just because they have a need, but we got in front of them and we had a proposition, we had a great product that provided a phenomenal amount of value. But you know, whether it's, you know, changing nature of the healthcare ecosystem, whether it's demand changes, you know, the reason I think we're doing well is because we got a great product and we get it in front of prospects in a very thoughtful and efficient way, and we do it with an amazing group of people. But I don't think, you know, Evan often says, like, fish aren't jumping in our boat, right? We know where to fish.

Okay. That's helpful. And then Randy, maybe with respect to fiscal ‘25, I think you said, you have multiple levers there to reach the targets. I'm wondering if you could just dive in a little bit deeper and specifically what you're meaning there?

Yes, I mean, I think I talked about the investments that we made. I think G&A is a good example where, you know, we grew that organization to support public company and we're at that level now. And I think, you know, as we continue to become more productive, we realize the benefit of that. I think also from, you know, a multi-year perspective, it's like we haven't invested -- we're a remote organization. We haven't invested in the corporate headquarters. We haven't done really large transformation, you know, acquisition. So, you know, that, that enables us to be flexible and not have huge fixed costs in our cost structure. So, you know, all of that helps us, you know, levered towards profitability in 2025.

Okay. And then final question would be on payment facilitation that ticked up a little bit. Can you just go over that number in terms of how we should think about that the rest of the year? Is that just basically the mix of new clients that have come on over the last several quarters that drove that up? Just thoughts around that would be helpful.

And then you're talking about the pay fac percentage, the 80%.

Yes, correct.

And I mean, I think if you look at the last couple of quarters, it's actually been fairly stable. I think, you know, it depends on client mix and if they take our payments or not, you know, of course, some of the larger health systems may have treasury functions where, you know, we're unlikely to win that business, but we try with every new client to win that business, and it's been fairly stable. So I don't expect that number to move a whole lot, you know, in the next couple of quarters.

Okay. Thanks.

Your next question comes from the line of Ryan MacDonald with Needham. Your line is now open.

Hi, thanks for taking my questions and congrats on the great quarter. Chaim maybe the first one for you, in the stakeholder letter, you talked about the research you're doing in class and the report really focusing on sort of the misalignment between what patients want and what vendors currently have. And I think one of the examples was around self scheduling. Just curious, as you kind of have that reporting kind of go out to existing customers, how do you try to drive greater adoption of those additional modules around the self scheduling to expand, sort of, your penetration or wallet share with those customers and maybe close that gap of misalignment?

Yes. I think what was very telling about this, and we really -- were pretty excited about, I like, what you were talking, I'm sorry, I've heard the shuffling, I was, like, moving around the paper so I could look at the report, which is on here. It’s a great report, by the way. This is sort of a lens into how we think about building and where we make investments in product. And when we talk to clients, also explaining to them what their patients are telling them, right? And so sometimes I think there is a push pull with what people think that they want based on what vendors are telling them versus what patients are telling them are important to them. And, you know, we -- what we found is having data has been very, very powerful in being able to best represent the needs of their organizations and how we fit in that, and it's worked really, really well for us over the last 17-years and we continue to invest in that and we hope this is a lens into how we think about our product roadmap and our investments long-term.

That's really helpful. Maybe in terms of my follow-up on the Life Sciences business, I understand sort of a return to normal sequential seasonality before fourth quarter and first quarter. But as we think about your conversations with customers and what mark -- digital marketing budgets look like for this year. Are you seeing any changes or maybe a sort of a comeback down to normal marketing, sort of, campaign trends post pandemic as you think about this year? And I think you used the term in the stakeholder letter that you continue to refine your campaigns. Are you seeing any increased scrutiny around, sort of, the efficacy of some of the campaigns that you're pursuing with your customers? Thanks.

Yes, that’s a -- I think we always assume that there should be a ton of scrutiny around things we do and the value they provide. And that is, you know, why we almost all of them have third-party ROI analysis, why we provide regular reporting to our clients and why we work with them so closely. And I would say that I'm, you know, and I don't want to speak for all of our clients, I don't think there is a rush to return back to paper and pamphlets and you know, I think everyone's questioning how many more ads you could put on, you know, network TV. Because most people aren't just streaming, so I do think we've seen I think we've seen a real change in behavior and now that, you know, we've gotten a lot of these clients using us at scale, we're starting to see the net effects of them seeing their results, and it's been very promising.

Your next question comes from the line of Stephanie Davis with SVB. Your line is now open.

Hey, guys. Thank you for taking my questions. Congrats on the client ads. Do you guys have exposure to [Technical Difficulty] the overall patient visit market? How should we think about your volume exposure to more discretionary areas in medical such as dermal, dental? That could be impacted by a potential recession or inflationary pressures?

I don't really have too much data, I don't think we have that much discretionary, something like, most of, I'd say most of our large derm groups that are more focused on medical derm than they are on cosmetic. And we -- I'd say our dental footprint is almost non-existing outside of health systems, large -- our larger clients in that QHCs that have some dental practices. But I'd say we are nominally focused in things that are elective at this point. And if that changes, we'll probably communicate that to our investors.

Helpful, thank you. And you guys touched on this a little bit on the margin outlook. But I was surprised to see that your adjusted sales and marketing was flattish quarter-over-quarter. Could you help us tease out how much of that was efficiencies? Or how much of that was an end to the sales force build out?

I think most of it was just efficiencies, like, I don't know like -- I don’t think we're communicating the end of our salesforce filled out. I think it's more along the lines of, you know, we have a phenomenal group of operators, who are shareholders and pay attention to where they spend money. And so I would trust them and, you know, they look at how we spend money and they spend it and, you know, where the best place to allocate it for return. And, you know, it's what happens when you have amazing people and you trust them and do the right things.

So is it wrong to assume we flat lined that member for the rest of the year?

I don't think we're saying, whether we flat line it or not, I think we're -- I think -- but we're fairly comfortable with our EBITDA guidance and our revenue guidance. And so eventually, something is got to guess. You can't make, like, just a pie and a pie and we can only try it so many ways.

Yes, I think Randy's coming around, you know, expense is growing.

Yes, I think longer term, right, they have to grow in, you know, 10% to 11% range, so --

Okay, that’s helpful. Thank you, guys.

Thank you.

Your next question comes from the line of Joe Goodwin with JMP Securities. Your line is now open.

Great. Thank you so much for taking my questions. Can you just talk about the pipeline for your enterprise clients or your larger health systems? And if you've been making any adjustments to go to market motion for these larger customers?

We don't tend to comment on the pipeline. I think our go to market motion for the enterprise has been fairly consistent, Joe, for a fairly -- for quite some time, which is build amazing product, show that it works, land, you know, when you land them, and then continuously add value, add more value, grow the account, and then do it again over and over again and never ever stopped. And do that for our large clients and small ones and treat all of the clients with the way they should be treated, which is unbelievably wild, because they take care of all of our families. And I think that's the way we think about all of our enterprise clients and our small clients.

Got it. Okay, thank you for that. And then, I guess, Chaim are you seeing clients land with more solutions from the get go and are you seeing any changes into what solutions these new clients are actually landing with?

Yes. So what I am hearing a lot from our team, is that we're getting more clients landing with different things as opposed to just intake, right? So, like, we're landing with different products and our clients. And that's great to see, especially as our sales organization has gotten more comfortable and has had more reference accounts and more successes with different product offerings. So, yes, we’re seeing that flat throughout and I always still think, like, you know, we're generally known for intake, you know, because that's what we've been doing for so long. So it’s still the vast majority will be anyone. And it's a great product, so --

Great. Thank you.

Your next question comes from the line of Jack Wallace with Guggenheim. Your line is now open.

Hey, thanks for taking my questions and great job in the quarter. Just further the analogy from earlier, are there any, you know, ponds that are more well stocked than others where you've had more or less success fishing, you know, and that not necessarily the client size, but in some of the specialty areas or geographic regions? Thanks.

Yes. No, I don't think there has been any area, it's I’d say what it really comes down to is just work, right? Like, we just need, a lot of phone calls and sent a lot of emails and, you know, try to find people who had problems and we could help solve. And I think what we continuously find is that people are so busy, you know, trying to take care of their patients and run their ERs and, you know, they're stat like that -- we're -- they're not necessarily looking for solutions. And we're, you know, getting out in front of them, make sure that we can deliver solutions that just add that tremendous value and it's been working. So, like, this past quarter is another testament, as we've had for many years, you know, it's usually just hard work.

Got it. That's helpful. And that you know, and on that front, the efficiencies of the sales and marketing team. Is there a pullback in some of the travel, you know, in entertainment that would be, you know, say a pre-COVID level, obviously, we hired a ton of people over the last year plus. And now as we're seeing the expense line level add a little bit more efficiency on a, let's call it, per rep basis you know, is there a baseline level of or lower level of teeny required to go make the incremental sale, so that's going to carryover going forward? Are we still seeing some of that potentially coming back in the back half of the year?

Yes. I think we -- what our people decide are best travel, you know, say we're big on the entertainment front. So it's -- one just that's a fair idea.

Yes. We have spent a lot of the entertainment.

No, so it's mostly just travel and, you know, and travel to see each other, because I think that is important, you know, you don't it is as much as we can, we try to make sure that we get together in person where it's, like cost effective and reasonable. But, you know, I think we're, I think it mostly has to do with, like, as I said earlier, to Stephanie’s question, which is just making sure that we empower our team to make smart decisions. And if you hire very good people and you empower them to make smart decisions or after not, it works out well for all of us.

Got you. That's helpful. Thank you.

Cheers.

There are no further questions at this time. I would like to turn the call back over to Chaim Indig.

All right. The large you share that to say really nice things to wrap up the call. So thank you everyone for participating, and we look forward to talking to everyone in a couple months. And if you have any questions or comments investors@phreesia.com, it's a great place to reach us. You don't know Balaji's note.

Alright. Have a great one, everyone.

This concludes today's conference call. Thank you for attending. You may now disconnect.