Phreesia, Inc.

Good morning, ladies and gentlemen, and welcome to the Freesia Fiscal Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. I would now like to introduce Balaji Gandhi, Vice President, Investor Relations for Freesia. Mr. Gandhi, you may begin.

Thank you, Operator. Good morning and welcome to Frisia's earnings conference call for our second quarter of fiscal 2020, which ended on July 31st, 2019. As a reminder, Frisia's fiscal year end is January 31st. Participating on today's call from Frisia are Chief Executive Officer and Co-Founder Chaim Indig and Chief Financial Officer Tom Altier. Following prepared remarks from Chaim and Tom, we will conduct a Q&A session. A complete disclosure of our results can be found in our earnings press release issued yesterday evening as well as in our related Form 8K submission to the SEC, both of which are available on the investor relations section of our website at ir.freesia.com. As a reminder, today's call is being recorded and a replay will be available following the conclusion of the call. During today's call, will make forward-looking statements pursuant to the State Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, including statements relating to the expected performance of our business, future financial results, including guidance for the full fiscal year 2020, our strategy, our partnerships, and expected launches of products and services Long-term growth and overall future prospects. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call. In particular, those described in our risk factors included in our final prospectus for our initial public offering filed with the SEC on July 19, 2019 and the risk factors included in our Form 10-Q that will be filed before September 16, 2019. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligation to update them except as required by applicable law. We will 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 supplemental materials, which were furnished with our Form 8K filed after the markets closed on September 9th Thank you, Balaji.

Good morning, everyone. This is our first public forum since becoming a public company in July, and I would like to take a moment to thank all of those who made significant contributions to Freesia's success over the past 14 years since Evan Roberts and I formed the company. We appreciate the contributions of our early investors and board members, our clients, our partners, and of course our employees, who are also shareholders. In addition to all these important people, we're also appreciative of the trust that has been placed in us by our new shareholders through our IPO. We're excited about the future and the opportunity we have as a public company to fulfill our mission. We are very pleased with the results we released last night. Before we jump into the results, there are two topics that we will cover. First, I'd like to provide some background on Freesia's mission and culture, particularly for those of you who are new to our story. We believe our mission and our culture are an important part of our past, present, and future. Second, I will lay the foundation for how you can expect us to communicate our progress to you each quarter. First, mission and culture. Freesia's mission is to create a better, more engaging healthcare experience. We believe we are materially improving the healthcare experience, but we recognize that we have a long way to go since most of the market has yet to implement Freesia. We look forward to having most of its clients in the years to come. Our team is deeply invested in our mission to improve the healthcare experience. We believe that a Freesia shareholder is also invested in our mission, so we want to update you on one of these initiatives that we are very excited about. First, some background on the opportunity that aligns with our mission. Medical care delivery drives about 10 to 20% of our health status. Factors outside the clinical setting, including socioeconomic factors and a patient's physical environment, determine the remaining 80 to 90%. These indicators are commonly referred to as social determinants of health and include income, access to nutrition, access to transportation, home life and loneliness, as well as environmental factors. On August 26, There was an excellent piece in the New York Times about the transformative healthcare projects underway in the state of North Carolina. Among the projects is a plan to cover non-clinical services because of the increasing acceptance that social determinants like access to healthy food, clean and safe housing, transportation, and social support are non-trivial contributors to health. Frisia is incredibly excited to be a partner in this initiative. Healthcare organizations throughout the state can now use Freesia to deliver North Carolina's standardized social determinants of health screening questions to identify patients who have unmet social needs that impact their overall health. Freesia can alert providers and care coordinators in real time about patients' individual needs so they can more fully understand a person's holistic health. We believe this program will be a beacon to guide other states. While this initiative is not currently a significant contributor to revenue, we do believe it is worth sharing with all of you given that it provides continued validation of the region's value proposition in close alignment with our mission. Let's talk about culture. It's important for our shareholders to understand our company culture because we believe it gives us a competitive advantage. Another important aspect of our culture is our early career program. We started our early career program about five years ago. We made a strategic decision to target new and recent college graduates with less than two years' experience to position us for long-term success. We didn't invent this concept. We studied out the best companies recruited, developed, and retained great people, and then modeled our programs after those companies. Our program gives us a competitive advantage on speed and agility. We're able to pave career paths across Eurasia for our early career hires. Five years into our early career program, We are more bullish than ever about its value. We're very proud of the program. We know that everyone listening to today's call is a very talented, well-networked person, so if you have any referrals for our early career program, please send them to Balaji. Let me now lay the foundation for how we'll communicate our progress to you both today and going forward. In addition to revenue and adjusted EBITDA on our financial statements, we view three additional metrics as useful indicators of our performance on a quarter-to-quarter basis. First, the average number of provider clients. Second, the average revenue per provider client. Third, patient payment volume. Let me cover the highlights of our fiscal 2020 second quarter, which ended July 31st. Total revenue for the quarter was $30.8 million, up 24% year-over-year. The average number of provider clients was 1,558, up 6% year-over-year. Average revenue per provider client in the quarter was $16,472, up 23% year-over-year. Patient payment volume was $464 million in the quarter, up 30% year-over-year. The cost of EBITDA was $0.7 million, down $1 million year-over-year. Tom will spend significant time on these metrics in a few minutes. Let's talk about our approach to guidance. We expect to provide an outlook for total revenue and adjusted EBITDA on an annual basis near the beginning of each fiscal year and updates to those annual figures on a quarterly basis. Our outlook for fiscal year 2020, ending January 31, 2020, is as follows. We expect total revenue to be in the range of $118.5 million to $119 million. We expect fiscal 2020 adjusted EBITDA to remain positive. Going forward, we expect our adjusted EBITDA margin to increase annually. We have seen an increase in public company expenses and have incorporated them into our adjusted EBITDA outlook. Our longer-term adjusted EBITDA margin is 20%. With that, I will now turn the call over to our CFO, Tom, for a detailed financial review.