Phreesia, Inc.

Ladies and gentlemen, thank you for standing by my name is Abby and I would I will be your conference operator today. At this time, I would like to welcome everyone to the freesia third quarter fiscal 2026 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 session, if you would like to ask a question during that time simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 a second time. Thank you. And I would now like to turn the conference over to Balaji Gandhi, Chief Financial Officer. You may begin.

Thank you, operator. Good morning, and welcome to Freesia's earnings conference call for the third quarter of fiscal 2026, which ended on October 31st of 2025. Joining me on today's call is Haim Indig, our Chief Executive Officer. A more complete discussion of our results can be found in our earnings press release and in our related Form 8K 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.freesia.com. As a reminder, today's call is being recorded and a replay will be available on our investor relations website at ir.freesia.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 and acquisitions. Forward-looking statements are subject to various risks and 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 pressure lease, our stakeholder letter, and our risk factors included in our SEC filings, including in our quarterly report on Form 10Q 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, such as adjusted EBITDA and free cash flows, 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 released and stakeholder letter, which were furnished with our Form 8K filed after the market closed today with the SEC, and may also be found on our investor relations website at ir.freesia.com. I will now turn the call over to our CEO. Hi, Mindy.

Thank you, Balaji, and good evening, everyone. Thank you for joining our third quarter fiscal 2026 earnings call. I'm very proud and thankful of our team, the work they do for our clients, and their contribution to another solid quarter of growth and profitability. Balaji will review some of the highlights of our results and update our outlook. Before I hand it off to Balaji, I'd like to frame our view of Freesia's next three years for all of you. Today, we have a large network of healthcare providers who rely on Freesia's products and services. have new emerging products that extend our reach in ways that is consistent with our mission to make care easier every day. We believe these emerging products will enable us to sustain growth and enhance stakeholder value. I'd like to highlight two of the product areas we are excited about. First, provider financing. It's no secret that patient financial responsibility has been rising in this country. And we expect this trend to continue. People can't afford to pay their bills all at once. Our platform has enabled us to track this trend for years. For healthcare providers, this means more patient balances go unpaid. Payment cycles get longer and providers carry more financial risk. Hospitals and health systems have seen the number of days cash on hand decline by 28% since 2022. As a result, providers need tools to convert patient receivables into predictable cash flow. Patient balances often take years to resolve, which creates working capital pressure for providers. Our financing solutions improve days cash on hand and decrease days outstanding. Financing or payment plan programs can significantly improve the patient experience and affordability and decreases the need to use credit cards or a home equity line. Our expansion into the provider financing market through the acquisition of AccessOne helps us solve this large and growing problem with a market-leading solution. We believe we have a new growth lever to complement our existing solutions for providers and are excited about this opportunity. The second emerging market for us is healthcare provider or HCP marketing. HCP engagement is a natural extension of the offering that works so well to engage patients. We help providers and life sciences partners engage patients just before key visits where important health decisions are made, supporting behavioral change and positive measurable outcomes. Now we're extending that same proven playbook to engage healthcare providers in addition to patients. This positions Frisia to participate in a multibillion-dollar HCP digital marketing opportunity while leveraging the trusted relationships and infrastructure we've already built. Our approach differentiates Frisia by closing the loop between patient and provider engagements. Because we're embedded in clinical workflows, we help coordinate consumer and HCP messaging, ensuring that both are prepared for upcoming appointments, reaching physicians with relevant evidence-based information before they see the right patient, not weeks or months later. Our ability to align both sides of the care conversation is something we believe no one else in the market can do as comprehensively as Grisha. Our acquisitions are central to our ability to understand, reach, and engage healthcare providers. MediFind brings deep insights into appointments with active providers and specialty care patterns, helping us identify when specific clinicians need information about specific conditions or treatments based on their upcoming appointments. Connect on Call, now free to on call, along with our voice AI capabilities, allow us to introduce high value moments directly into the provider workflow. Together, these assets create a premium endemic offering and help us reach a broad set of providers in the natural flow of care, not just when they're off the clock. This new initiative plays into our strength. We have two decades of experience working with thousands of provider organizations in the top 10 pharma companies, earning a reputation for performance, compliance and truly consultative partnerships. By making HCP activation available within that same trusted ecosystem and centered on real care encounters, we believe it will deepen our relationship with both providers and life sciences clients, while adding a durable, differentiated revenue stream to Freesia's growth story. We look forward to updating you on these two important initiatives when we speak in 2026. I'll now turn it over to Balaji to walk through the Q3 results, our updated outlook for fiscal 2026, and an initial view into fiscal 2027. Thank you, Haim.

Let me start with a quick review of our fiscal third quarter. Total revenue was $120.3 million, a 13% increase year over year. Adjusted EBITDA was $29.1 million, an increase of $19 million year-over-year and $7 million quarter-over-quarter. We achieved another major milestone this quarter with our adjusted EBITDA margin reaching an all-time high of 24%, representing an improvement of 5 percentage points quarter-over-quarter and 15 percentage points year-over-year. The fiscal third quarter G&A expense line included a one-time G&A tax benefit, which increased adjusted EBITDA by $900,000. Third quarter average healthcare services clients, or AHSCs, came in at 4,520, an increase of 53 from the prior quarter. This performance was in line with our expectations, and we believe we are on track to reach 4,500 average healthcare services clients, or AHSCs, for the full fiscal year. Meeting this target implies adding approximately 70 clients in the fiscal fourth quarter, excluding the impact from the Access One acquisition. Total revenue per HSE was $26,622, up 6% year-over-year. The steady year-over-year increase in total revenue per HSE is consistent with our expectations and a key element of our growth strategy that we have been discussing for several quarters. We are pleased with the continued progress of this metric as it has returned to the levels last seen in the third quarter of fiscal 2022 and reflects our focus on improving returns on investment and attach rates of our collective offerings across our three revenue streams. Net income remained positive at $4.3 million this quarter, representing our second consecutive quarter of delivering positive net income. Our fiscal third quarter results reflect the continued momentum in both our revenue growth and operating leverage. I'm incredibly proud of the team's disciplined execution and focus, which again enabled us to deliver strong financial performance while staying true to our mission and values. I also want to acknowledge all the regions that played a role in successfully closing the access 1 acquisition. And I joined him and welcoming our new colleagues from access 1. Now, turning to the balance sheet and cash flow. We ended the quarter with 106.4Million dollars in cash and cash equivalents. This compares to 98.3Million in the prior quarter. Operating cash flow was 15.5Million of 9.7Million year over year. Free cash flow was 8.8Million. Up 7.2Million dollars year over year. We have now achieved positive operating cash flow and free cash flow for 5 consecutive quarters. We expect the magnitude of improvement on a quarter to quarter basis. To vary based on specific timing of invoicing and payments. Which you can see in working capital along with. A footnote on the balance sheet as you look ahead to the 4th quarter. The access 1 purchase price was funded with approximately 53Million dollars of cash. and a $110 million secured bridge loan entered into on the closing date of the acquisition. You can find more information about our bridge loan in our 8K filing from November 12th. We expect to refinance or replace the bridge loan with a long-term credit facility. Before moving into our updated financial outlook for fiscal 2026 and new outlook for fiscal 2027, let me provide a few highlights on access one. AccessOne provides financing solutions that help healthcare providers reduce patient accounts receivable and accelerate cash flow. Its technology integrates directly into provider workflows, giving providers the tools to offer flexible payment solutions to their patients. We expect AccessOne will add approximately 80 AHSCs on an annualized basis. AccessOne manages a portfolio of approximately $450 million And providers typically operate under either a funded or an unfunded model. In the funded model, providers receive cash upfront. In the unfunded model, providers are paid as patients make payments. In both models, the healthcare provider retains most of the financial risk, not Access One. The funded model is offered to clients through Access One's relationship with PNC Bank. Across these models, Access One generates a blended take rate that averages 4 to 12% on its managed portfolio, depending on the type of provider and the mix between funded and unfunded programs. Operating costs, including those associated with the PNC bank relationship, range from 65% to 75% of revenue. Now transitioning to our updated financial outlook. Let's start with fiscal 2026. We are updating our revenue outlook for fiscal year 2026 to a range of $479 million to $481 million, compared to our prior range of $472 million to $482 million. The updated outlook includes approximately $7.5 million of revenue contribution from Access One between the close date and our fiscal year-end date. The update reflects our latest views on Access One's performance since the closing on November 12th and the progress we have made to date in the selling season for network solutions. We are updating our adjusted EBITDA outlook for fiscal year 2026 to a range of $99 million to $101 million, an increase from our prior range of $87 million to $92 million. This revised outlook includes the expected adjusted EBITDA contribution from Access 1 from the date of closing through the end of our fiscal year. We want to remind you from a modeling perspective As you think about the quarter-over-quarter progression of adjusted EBITDA, that the third quarter includes a one-time G&A expense tax benefit of $900,000. And the fiscal fourth quarter is typically burdened by higher payroll taxes as we begin the new calendar year. We are updating our outlook for AHFCs to approximately 4,515 for the full fiscal year of 2026, up from our prior expectation of $4,500. This revised outlook reflects the addition of approximately 15 AHSCs from Access 1 between the close date and our fiscal year end. Additionally, we continue to expect total revenue per AHSC in fiscal 26 to increase from fiscal 2025. Moving on to fiscal 2027, consistent with our prior years, we are introducing our early outlook on revenue adjusted EBITDA, AHSCs, and revenue per AHSC for fiscal year 2027. For fiscal year 2027, we expect revenue to be in the range of $545 million to $559 million. We anticipate that Access One will contribute approximately 6.5% of our fiscal 2027 total revenue outlook. We expect adjusted EBITDA for fiscal 2027 to be in a range of $125 million to $135 million. In fiscal 2027, we expect AHSCs to grow in the mid single digit percentage range and total revenue per AHSC to grow double digit percent. Operator, I think we can now open up the lines for the Q&A session.

Thank you. And we'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press star one a second time. If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question. Again, it is star one if you would like to join the queue. And our first question comes from the line of Sean Dodge with BMO Capital Markets. Your line is open.

Yeah, thanks. Congratulations on the quarter and on closing the acquisition. You mentioned the new emerging solution areas that will help to continue driving higher revenue per AHSC. On access one, maybe just anything more you can share on the growth potential for that business specifically over the next couple of years and how you can accelerate it, like how much room is left to continue expanding within their existing base, and then maybe anything that you need to kind of change about that before you can start cross-selling it into the legacy Frisia base. When does that become an opportunity?

I, so we're really excited to be able to, Tad Piper- Take this to some of our base clients right now, the product is is really not suited for the vast majority of our clients, so it will need some work. Tad Piper- and investment before we can take it to the vast majority of our base, just because of the facility and blot you can answer more questions about that but. Tad Piper- Look, we think that we plan on investing and go to market, and I think this is it's a really strong product offering that. has for years been under invested and go to market and some of those have to do with the dynamics of the market and the company itself and we expect over the next couple quarters to start investing into its go-to-market motion and both for new clients and existing clients and you know sean i'll just add that investment that i'm talking about that's you know baked into our outlook for for 2027

And a lot of that is just resources we have within the company and obviously the ones that are coming over with the acquisition or have come over with the acquisition. And then just around growth, I mean, the question itself, I think this is the largest acquisition we've done. This is something we think over multi-years will contribute a lot. We acquired it with that thesis. We wouldn't read too much into what's implied in the 27 guidance and revenue. It's just you know, if you do an acquisition, you close it in November, it's the responsible thing to do is just, you know, set the bar where we have, and we have very high expectations for it.

And our next question comes from the line of Scott Schoenhaus with KeyBank Capital Markets. Your line is open.

Hey, guys. Thanks for taking my question. I guess one for Balaji really quickly, and then one for the team. But first on the financing, Balaji, You mentioned you're going to refinance or take on a new loan. Can you maybe provide more color there on what you're seeing in the marketplace and what you expect? And then maybe for Haim and Balaji, this mid-single-digit AFC growth for next year, maybe talk about your go-to-market strategy in terms of what products, what your core products you're going to market to drive that growth, and then how do you think about that growth holistically with this new marketing opportunity? Thanks.

Okay, I'll start on the financing. So we are already pretty actively looking at replacing the bridge, and we just wanted to be positioned to move really quickly on the acquisition, but moving quickly to have something long-term in place. And you should be hearing about that in the next few months. You know, in terms of the appetite out there, there's a lot of demand to do something with us. I think we were very intentional about doing an acquisition of this size and financing it this way for a long time based on our free cash flow and, you know, our EBITDA. So I feel pretty good about all that.

Yeah, and then from a go-to-market motion, look, we have two very different go-to-market teams on the provider side. We're seeing still a lot of demand for intake, and a lot of our new AI offerings are driving a lot of uptake and inbound, very specifically our voice AI offerings. workflows and applications. It's a new modality on the same platform, so we're seeing a lot of demand for it. And then on the network solution side, Patient Connect has been very successful, and we expect that to be continued growth. But some of the newer offerings, such as postscript engagement, and now the interest we've been getting in our HTTP offering has been really exciting.

And our next question comes from the line of Jayalendra Singh with Truist Securities. Your line is open.

thank you and thanks for taking my questions and thanks for all the color on the fiscal 27 outlook if i got my math right your fiscal 27 revenue guidance implies around eight to ten percent core organic growth number i know you guys have talked about double digit code growth so that could be at the high end of that guide can you share some color around how you're thinking of core growth in three business at at least directionally compared with your expectation of fiscal 26 I was more focused on network solution because you're still in the middle of selling season. How much visibility do you have? What level of question are you building in? Just give us some flavor around that and what is built in that 8 to 10 number.

Sure. And so just philosophically, as you know, you know, for several years, we provide an outlook for the next fiscal year before the current one's even over. I think we've gotten good feedback about that. And what that requires us to do is make a lot of assumptions around things like the selling season while they're still going on. So I think even outside of that, you know, still a couple of weeks left here, Jalindra, I think we could comfortably say that we're in a similar situation we were last year at this time. And if you think about the growth in the business outside of what we've told you is coming from Access One, network solutions would be growing the fastest. And I think payment processing you could expect to grow second and subscription third. And I think what you should take away from that is a lot of the commentary Haim had about our ACP products. And earlier in the year, we talked about postscript engagement and appointment readiness. We expect to monetize a lot of the products for providers increasingly in network solutions. So that's what you should take away.

Our next question comes from the line of Brian Tanculet with Jefferies. Your line is open.

Hey, good afternoon. Congrats on the quarter. Maybe, Balaji, just as I think about margins, obviously strong margin performance in the quarter. You've done a good job there. So as I look at the guidance for next year showing about 450 steps of margin expansion, how should I think about the drivers of that and just the sustainability of maintaining, you know, kind of like squeezing margins here and there over the next few years?

Yeah, I mean, I think, you know, team has done an outstanding job of being very good stewards of capital. This was something we really prioritized in the company for the last several years. I think you're comparing year over year. I mean, we've already hit, you know, a pretty good margin here in the third quarter we just released. I think what we want to balance is growth and margin. So your takeaway should be we want to, you know, always do better than we say in terms of growth and always do better in terms of margin. And so I think that outlook sort of reflects the opportunity to do both. I think G&A, we've always talked about G&A as generally an area we can get a lot of leverage on based on the investments we've made there. But I think we'll continue to invest in sales and marketing and R&D so long as there's growth to support it.

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

Yeah, guys, thanks for taking the question. Wanted to dig a little bit more into the new HCP marketing initiative. And I'm curious, I guess, twofold. One, have you actively started to sell that for the 2026 season and kind of what's been the reception from pharma clients? And then second, when you think about that, are you seeing or do you anticipate that it will be all incremental dollars? Or do you think any of your kind of D to C dollars from the pharma companies could shift into HCP such that it's not 100% incremental? Thanks.

So, yes, we have started for select clients, allowing them to start piloting the offering in the new year. So we have been selling it for certain key clients and there has been a lot of demand and we expect to start turning those programs on in the new fiscal year. And then in terms of Is it incremental dollars? We do think it is. Generally speaking, DGC budgets and HCP budgets are very different. So we believe this is a, and I think we've sort of, we've been out there in the market explaining to some of our holders that this is new TAM.

And our next question comes from the line of Ryan McDonald with Needham & Company. Your line is open.

Thanks for taking my question. Falaji, maybe for you, just wanted to ask about the updated 26 guidance. I know you called out $7.5 million of content in fourth quarter from access one, yet we've only increased the guidance range at the midpoint by about $3 million. Is there sort of a $4.5 million hole that we're refilling here or anything we should be concerned about, I guess, within the core subscription or network solutions business? And how is that sort of impacting your outlook of either of those segments kind of heading into 27? Thanks.

I was trying to do the math, Ryan, that you just did. Are you, maybe just repeat that. I couldn't figure out the 4 million that you said.

Yeah, so prior guidance range was 472 to 482. So we're taking a 477 midpoint. Now the midpoint goes to 480 in the updated guidance. And so up by 3 million at the midpoint, but you've got a seven and a half million dollar revenue contribution from access one that wasn't in the prior guidance. So just wondering sort of what's the, I guess the difference there on the adding seven and a half million, but only increasing the guide by about three at the midpoint.

Correct. Okay. Got it. Thanks. That's helpful. So yeah, that's, you know, a lot of that is just being a bit more measured around network solutions. I don't think it's, A surprise probably to anyone on this call that, you know, there's a lot of decisions and a lot of fluidity out there and we're in the selling season. So just given where we are, I think we wanted to be a bit more measured on our network solutions. If you had to, you know, allocate that 4 million bucks to somewhere, we'd say it's mostly there. And by the way, there's a lot of timing and visibility that we'll get, but I don't think it's anything to read into about next year.

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

Yeah, thanks for the question. Congratulations on the acquisition and the quarter. Just curious if you guys could talk a little bit more about Access One, the funded and unfunded, how we think about like the demand in various products or those offerings. And then just like how you expect any type of seasonality in that business in terms of selling new customers and etc.

So I'll give you, Richard, what you're bringing up is something we really liked about this platform is the flexibility they have in having a variety of different ways to service the needs of their client. We actually found it to be the most, there's a couple of different offerings in the space. And when we looked at them, what we found about Access One is it was most advanced technology with by far the most scale and flexibility. So in all of our experience in working with healthcare clients is they want different things based on their needs. And with the Access One portfolio, whether it's funding or partial funding or full funding, platform gives us the flexibility to meet them where they need that help and we we feel like it gives us the flexibility to have a multitude of offerings to help them increase their cash flow specifically cut the days outstanding we expect over the next couple years to learn a lot about which offerings resonate with which types of clients and i'm sure we'll be back talking about that as we see It grew out in the marketplace, and we're pretty excited about it.

And as far as seasonality, Richard, I think our go-to-market will probably be similar to how we position ourselves with providers. So from that motion, I don't think you should see anything different. However, we'll learn this as we go, Richard, but I think you could see more chunkiness in terms of how this revenue drops in when we do expand or land a new client, and we'll obviously communicate that as that happens, which we expect it to.

And our next question comes from the line of Daniel Grossleit with Citi. Your line is open.

Hi, guys. Thanks for taking the question. Well, I actually wanted to go back to the commentary you made around the fluidity in the network solution selling season this year. Is any of that due to just unknowns around how DTC works? advertising writ large is going to develop, given just some of the political issues around that? And what gives you confidence that this fluidity is just really going to happen in fiscal 26 and won't really impact fiscal 27? Thanks.

Yeah. Thanks, Daniel. So a couple of points there. First of all, yes, it is around the DTC topic, and I think that's why we're being a bit more measured. I think one earlier comment we made was as we sit here today on December 8th, we're in a similar place, you know, we were last year at this time, but the numbers get bigger and the dollars are bigger. So that's one thing to consider. And then as far as just our positioning, and I think we've been talking about this in the past, when you think about our product, and how we lead with permission and the value we bring to our life sciences clients and the return and value they see from that, we think we're very well positioned long term with the commentary and regulatory information that's come out of the administration so far. In fact, we agree with a fair amount of that. So we think that's good and we think we're on the right side of where they're trying to go. But that said, we got to get through the next several weeks to have a little more visibility. made the comments we did.

And our next question comes from the line of Jeff Garrow with Stevens. Your line is open.

Yeah, good afternoon. Thanks for taking the question. I want to go back to the HCP opportunity and maybe ask about MediFind a little bit more specifically. We saw a recent partnership announcement between two provider directories that to some extent compete with each other and to some extent compete with MediFind. So I was hoping you could update us on MediFinds' tractions and Freesia and MediFinds' competitive advantages from offering an integrated platform connecting providers with scheduling and other patient engagement capabilities. Thanks. Hey, Jeff.

We're curious what partnership you're talking about. Do you mind sharing it? Because I don't think we're familiar with it.

Healthgrades is going to be using ZocDoc's scheduling capabilities. Got it. Got it.

We weren't aware of that. And we don't see it as being very competitive in the marketplace. What we've heard from a lot of specialists is that they're not in need of paying for leads. And that's in fact, a lot of them think that it's just unethical and wrong. And so what our view on that has been for some time, How do we help the right patients find the right doctors, not just the doctors that are willing to pay to get product placement in a directory? And so we've really focused our effort on driving and becoming the go-to source for the top specialists to be found by providers. And what we're pretty excited about is that, you know, by building it into the Frisia platform, we're seeing just a phenomenal amount of uptick in volume usage, and we expect to keep investing heavily into this platform for some period of time.

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

Hey there. Just looking at the Q3 EBITDA outperformance and the guide for 2027, what would you say? Because the jump in another seasonality in payroll taxes, but the jumping off point seems a bit stronger than the implied guide. So any comments there other than the 900,000 you mentioned?

Yeah, so there's well, there's there's two items, John. There's the payroll taxes that are a bad guy in Q4, just seasonality. And then we had that 900,000 good guy in Q3. So I think, you know, if you sort of have to use both of those, But I think it implies, you know, a little bit of improvement. But I think to the earlier comment and question we had, we're certainly trying to leave ourselves, you know, some room to continue to perform there. And we expect that margin to get better. Is that helpful?

And marketing spend was the big variance in our model. So maybe in your guide, what are you contemplating for your marketing spend growth?

I think you should expect marketing dollars to go up. I think, you know, we've got obviously a lot of growth initiatives that I spoke about earlier. So the dollar amount, I think you should expect marketing dollars to go up.

And our next question comes from the line of Jessica to Sam with Piper Sandler. Your line is open.

Hi, guys. Thanks for squeezing me in. So congrats on the close of access one. Can you all elaborate a little bit on how free shot on call allows you to enter the provider workflow and surface educational content to the HCP? Just kind of mechanical, mechanically, how does that work? And then can you just remind us how much of network solutions revenues typically books ahead of the start of the calendar year versus upsold or cross-sold inter-year and whether FY26 tracking consistent with historical experience? Thank you.

So we are putting We are testing different types of ad formats, and obviously it's still early, into free draw and call. And so there will be ads in certain parts of the product where they're not creating any intrusive workflow for the provider. It's just in the natural act of using the product. So we're in the process of testing those with our customers now in pilot. So I think it's The early days are early, Jess, but on the early tests that we have seen, we feel pretty confident they'll be very effective.

And then, yeah, and then, Jess, we typically enter a calendar year, because remember, a lot of those clients in the Network Solutions Revenue are operating a calendar year. So we typically enter a calendar year with about 60% to 70% visibility.

And our next question comes from the line of Joe Verink with Baird. Your line is open.

Hey, thanks. Maybe a super quick answer, but going back to Jalindra's question earlier, he was asking about organic growth and FY27 and, Balazs, you mentioned network fastest payment second, subscription third. I just wanted to clarify if that's the organic rank ordering, because I guess it's not intuitive to me why payments would be growing faster than subs next year.

Correct. So Linda's question was specifically excluding access one, which is why we answered it that way. I haven't done the math, Joe, but I think it would either be neck and neck or payments would be faster with access one. I can follow up with you later, but that was specifically about organic.

OK, thanks. And our next question comes from the line of Clark Wright with DA Davidson. Your line is open.

Awesome. Thank you. A lot of mine have been answered, but wanted to real quick touch on if you can help us really understand the assumptions behind the fiscal 2027 top line outlook and the mix that you're seeing right now between the growth and the count of AHSCs versus the total revenue per AHSC. And if the assumptions you've made includes access to one with those figures.

Yes, it does. And I think, you know, again, shortcut math here is we use this average convention in the AHSC. So if it's approximately 80 and we're still, you know, just closing November for Access One, if it's about 80 for a year, we're saying about 15 of it will fall into our fiscal 26. So really about 65 will fall into fiscal 27. So that's about a point of growth. So when we, you know, put in our letter a mid-single-digit AHSC growth, you could say about a point contribution coming from access one in there.

And as a reminder, to star one, if you would like to ask a question. And our next question comes from the line of Jill Endresing with Truist Securities. Your line is open.

Thank you. Thanks for taking my follow-up. I'm curious, with shares trading at these valuation levels, what are your thoughts on returning shareholders some value by a share buyback program, and if that would even be a consideration in light of all the investment opportunities you're focused on?

It would absolutely be a consideration. I think, you know, we did get approval to pursue that last year or earlier this fiscal year, actually. And I think now with this debt facility in place for Access One, we think the best use of free cash flow is to retire that debt. And we also have other areas we want to invest in. But Jalindra, it's absolutely been part of our thinking for several years now to try to take advantage of market dislocation. Obviously, right now, priority is the debt, but it's definitely one of our priorities.

With no additional questions, I will now turn the conference back over to Hyman Digg for closing remarks.

I want to thank everyone for joining us for our earnings call, and I wish everyone a happy holidays and a great new year, and I'll see you all in the new year. Thank you very much.

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.