investor presentation · 2021. 4. 12. · the securities act and section 21e of the securities...
TRANSCRIPT
Investor
PresentationMarch 2021
This presentation includes express or implied statements that are not historical facts and are considered forward- looking within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking
statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or
of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words:
“may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we
believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational
or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.
Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors
that are beyond our control, including, without limitation, statements about our future financial performance, including our revenue, cash flows, costs of
revenue and operating expenses; our anticipated growth; our predictions about our industry; the impact of the COVID-19 pandemic on our business and our
ability to attract, retain and cross-sell to healthcare provider clients. The forward-looking statements contained in this release are also subject to other risks and
uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form
10-K for the fiscal year ended January 31, 2021 that will be filed with the SEC on March 31, 2021. The forward-looking statements in this presentation 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, any forward-
looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the
occurrence of unanticipated events, except as required by law.
DISCLAIMERS AND FORWARD-LOOKING STATEMENTS
2
To create a better, more engaging
healthcare experience
OUR MISSION
3
4
How we do it: Software-as-a-Service (SaaS) platform to manage the
patient intake process and an integrated patient payments solution for
secure processing of patient payments
~1,800 healthcare
provider organizationsis Patient Intake
~$2.0Bpatient payments
processed in FY21
Who we are: Leading provider of comprehensive solutions that
transform the healthcare experience by engaging patients in their care$149Mrevenue in FY21
19% revenue
growth in FY21
What we do: Enable healthcare provider organizations to optimize
operational efficiency, improve profitability and enhance clinical care
~$9B total
addressable market
ATTRACTIVE INDUSTRY TAILWINDS
5
Wasteful
Spending
Increasing Patient
ResponsibilityIncreasing
Consumerism
Shift to Value-Based
Care Models
• $586B out-of-pocket spend by 2027
• HDHPs represent 46% of health plan market2
• Provider organizations collect only half of patient balances after initial visit
• Demand for higher
quality care, cost transparency, shared decision
making and convenience
• 70%+ of patients use online reviewsas first step in physician search
• Payment model shift to incentivize
value and quality
• Requires high levels of documentation,
robust data, sophisticated payment-attribution capabilities and substantive patient engagement
Focus on
Personalized
Healthcare Solutions
• Need to directly reach patients when making care decisions
• Current marketing strategies not as effective as targeted outreach
• 1.2M intake staff represent $37B in annual spending
• $3.6T U.S. healthcare spend1
• $1.1T U.S. healthcare waste1
• ~$300B admin-related waste1
1 In 20182 As of the first half of 2018
OUR VALUE PROPOSITION AND HOW WE MAKE MONEY
6
Providers
• Simplified operations & enhanced staff efficiency
• Improved cash flow and profitability
• Enhanced clinical quality
• Improved patient experience
• Highly visible subscription fees charged on a per provider per month basis (PMPM)
• Based on number and type of applications elected
Patients
• Improved patient experience
• High patient usage
• Flexible payment options
• Engagement in care
• Re-occurring payment processing fees
• Based on level of patient payment volume processed through Phreesia Platform
Life Sciences Companies
• Targeted, direct digital marketing
• Improved brand conversion and adherence
• Feedback from patient voice
• Fees from the sale of digital marketing solutions to life sciences companies
• Based on guaranteed number of engagements with target audiences
Va
lue
pro
po
sitio
nH
ow
we
ma
ke
m
on
ey
Staff Use These:
IN THE OFFICE
Phreesia Dashboard
AT HOME, ON THE GO, IN THE OFFICE
Mobile
IN THE OFFICEPhreesiaPad
Arrivals Station
Patients Use These:
IN THE OFFICE
Analytics
OUR END-TO-END PATIENT INTAKE SOLUTION
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Real-time Integration
Electronic Medical Record
Practice Management
System
Practice Data Warehouses
APIsPayment Networks
PayersTelehealth
Vendors
THE PHREESIA PLATFORM
Robust analytic
tools
Commitment to privacy
and security
Reliable and scalable
platform
Real-time integration with
leading PMs and EMRs
Patient Intake Platform
Appointments
Online appointment requests
Referrals
Appointments queue to track requests
Revenue Cycle
Insurance verification
POS payments
Card on file
Payment plans
Online payments
Clinical Support
Clinical screening tools and PROs for 25+
specialties
Behavioral health screenings for primary
care
Patient ActivationRegistration
Social determinants of health screening
Mobile
Intake for Telehealth
Consent management
Payment assurance
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Patient chat
Branded patient announcements
Patient surveysAutomated self-
scheduling
Flexible APIs
8
Intake Workflows
Zero-Contact Intake
Typical entry-level package
Health campaigns
Life Sciences
Patient Connect
Patient Insights
Advanced Analytics
COVID-19 Screening Module
In its annual “Best in KLAS: Software and Services” report, KLAS named Phreesia the
2021 Best in KLAS for Patient Intake Management, based on survey data from
provider groups on customer experience pillars, such as loyalty, value and more.
This is the third consecutive year that KLAS has named Phreesia as the top patient
intake solution
Phreesia Named the 2021 Best in KLAS
for Patient Intake Management
9Phreesia Confidential & Proprietary Information
OUR CURRENT ADDRESSABLE MARKET
TAM of ~$9B
Source: (1) IQIVIA, Definitive Healthcare and company estimates (2) Kaiser Family Foundation, BLS Data, American Association of Nurse Practitioners, National Commission of Certification of Physician Assistants - assumes ~1,022,000 total physicians; ~237,000 NPs of which ~110,000 are out-of-hospital taking appointments and 36,000 in hospital taking appointments; 106,000 PAs, of which ~42,000 are out-of-hospital taking appointments and 41,000 in hospital taking appointments; (3) CMS, includes out-of-pocket spending for physician, clinical and other professional services; (4) ZS Associates, projected spending in point-of-care marketing in pharma (2014 – 2020)
~50K addressable provider clients1
in United States
Subscription-Based Revenue
$6.3B
$93B addressable out-of-pocket3
in United States
Consumer-Related Transaction
And Payment Processing Fees
$2.3B
Life Sciences
DTC point-of-care
marketing spend4
$850M
10
~1.3M individual providers2:
~1.0M active physicians
~146K nurse practitioners
~83K physician assistants
SCALABLE FROM SMALL BUSINESSES TO LARGE ENTERPRISES
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Serving over 1,800 healthcare provider organizations
25+ medical specialties of varying sizes
Serving 13 of the top 20 global pharma companies
Providers Life Sciences
Physician groups Health systems Pharma manufacturers
~40 life sciences brands
• Top 3 global pharma company
• Top 3 global biotech company
• Top 5 diabetes pharma manufacturer
• Top 5 oncology pharma manufacturer
z
MULTIPLE GROWTH OPPORTUNITIES
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• Direct sales model
• Acute care market in early innings
• Focus on larger providers
• Additional providers within existing clients
• New sites
• New providers within existing sites
• Proven ability to continuously innovate
• Appointments, Cost Estimation and Mobile
• Upsell new applications
• New applications and new and larger clients highly scalable on existing platform
• History of generating positive Adj. EBITDA but will prioritize investing in growth above profitability
• Opportunistic approach
• Vital Score in FY19
• Two apps from Geisinger and Merck in FQ3 21
• QueueDr in FQ4 21
Land new clients
Grow footprint
within existing
clients
Cross-sell new
applications to
existing clients
Margin
expansion
through scale
Partnerships and
M&A
Financial Overview
13
SCALABLE AND PREDICTABLE SOURCES OF REVENUE
14
• Fees earned as % of processed patient payments
• ~80%+ volume: Credit / debit transactions processed on
Phreesia payment facilitator model
• Remaining volume: Cash, check and credit gateway
transactions to other payment processors
• Includes base package and add-on applications
• Majority of fees charged per provider per month (PPPM)
Su
bsc
rip
tio
n
an
d r
ela
ted
serv
ice
s1
Pa
ym
en
t
pro
ce
ssin
g
fee
s
• Increase in payment volume from
patients of existing and new providers /
clients
• Increase in patient financial responsibility
• New provider clients
• Expansion within existing clients
• New products and applications
34%
46%
REVENUE MODEL DRIVERS FY21 % REV
• Sale of targeted digital marketing solutions to patients
• Contract duration typically 12 months
• Guaranteed # of engagements with target audience
• Fees charged per brand engagementLife
Sc
ien
ce
s • New life sciences clients
• Expansion within existing clients
• Purposeful controlled growth
• Investment in new data and analytics
products represent upside potential
20%
1 In addition to subscription revenue, Phreesia generates certain fees from provider clients for professional services associated with implementation, travel and expense reimbursements, shipping and handling, sale of hardware (PhreesiaPads and Arrivals Kiosks), on-site support and training
Strong visibility into revenue at the beginning of the fiscal period based on contracted business
Pro
vid
er
1,571
1,711
1,603
1,808
FY 20 FY 21 FQ4 20 FQ4 21
+9%
$6 $10
$27
$32
FQ4 20 FQ4 21
$22 $30
$103
$119
FY 20 FY 21
STRONG OPERATING AND FINANCIAL PERFORMANCE
15
TOTAL REVENUE ($M)
FY ended January 31
$125
$149
+19%
ProviderLife Sciences
1 For a reconciliation to the nearest GAAP measure, please see slide 21
$33
$42
$4.8 $3.8
$1.3
($0.1)
FY 20 FY 21 FQ4 20 FQ4 21
ADJ. EBITDA ($M)1
AVG. NUMBER OF
PROVIDER CLIENTS
AVG. PROVIDER
REVENUE PER CLIENT ($K)
$65,486
$69,499
FY 20 FY 21
$16,708
$17,858
FQ4 20 FQ4 21
+27%
+13% +6%
+7%+16%
+21%
Appendix
16
DETAILED INCOME STATEMENT
171 For a reconciliation to the nearest GAAP measure, please see slide 18
$M
Fiscal year ended January 31 Three months ended January 31
FY 2020 FY 2021 Q4 2020 Q4 2021
Revenue:
Subscription and Related Services Revenue $56.4 $69.0 $15.1 $18.8
Payment Processing Revenue 46.5 49.9 11.7 13.4
Total Provider Revenue $102.9 $118.9 $26.8 $32.3
% Growth 20.6%
Life Sciences $21.9 $29.7 $6.0 $9.5
% Growth 57.7%
Total Revenue $124.8 $148.7 $32.8 $41.8
% YoY Growth 25% 19% 24% 27%
Expenses:
Cost of revenues (excl. depreciation and amortization) $16.8 $23.5 $4.2 $7.0
Payment Processing Expense 27.9 28.9 6.9 7.8
Sales and Marketing 32.4 43.0 8.2 13.0
Research and Development 18.6 22.6 4.9 6.4
General and Adminstrative 30.5 40.5 9.6 11.7
Depreciation 8.8 9.8 2.3 2.6
Amortization 5.2 6.1 1.3 1.6
Total Expenses $140.1 $174.3 $37.5 $50.1
Operating loss ($15.3) ($25.7) ($4.7) ($8.3)
Operating Margin (12.3%) (17.3%) (14.2%) (19.8%)
Other Income (Expense) ($1.0) $0.0 (0.3) 0.2
Change in Fair Value of Warrant Liability (3.3) 0.0 0.0 0.0
Change in Fair Value of Contingent Consideration Liabilities 0.0 0.1 0.0 0.1
Interest (Income) Expense (2.4) (1.6) (0.7) (0.4)
Total Other Income (Loss) ($6.8) ($1.6) ($1.0) ($0.1)
(Benefit From) Provision for Taxes (1.8) 0.0 (2.0) (0.3)
Net Income (Loss) ($20.3) ($27.3) ($3.7) ($8.1)
Net Margin % (16.3%) (18.4%) (11.2%) (19.4%)
Memo: Adjusted EBITDA1
$4.8 $3.8 $1.3 ($0.1)
% Margin 3.8% 2.6% 4.1% (0.2%)
ADJUSTED EBITDA RECONCILIATION1
18
1 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
$M
Fiscal year ended January 31 Three months ended January 31
FY 2020 FY 2021 Q4 2020 Q4 2021Reconciliation to Adjusted EBITDA
Net Income (Loss) ($20.3) ($27.3) ($3.7) ($8.1)
Interest (Income) Expense 2.4 1.6 0.7 0.4
Depreciation and Amortization 13.9 15.9 3.7 4.3
Stock-Based Compensation Expense 6.2 13.5 2.3 3.9
(Benefit From) Provision for Taxes (1.8) 0.0 (2.0) (0.3)
Change in Fair Value of Warrant Liability 3.3 0.0 0.0 0.0
Change in Fair Value Contingent Consideration Liabilities 0.0 0.1 0.0 0.1
Other (Income) Expense 1.0 (0.0) 0.3 (0.2)
Adjusted EBITDA1 $4.8 $3.8 $1.3 ($0.1)
Adjusted EBITDA Margin % 3.8% 2.6% 4.1% (0.2%)
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