Investor Presentation
Fiscal Fourth Quarter 2019
DISCLAIMERS AND FORWARD-LOOKING STATEMENTS
Statements we make in this presentation may include statements which 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, which are usually identified by the use of words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "seeks," "should," "will," "could," "appears," "shall," "target," "contemplated,"
"predicts," "potential," "continue" and variations and negatives of such words or similar expressions. We intend these forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved.
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 and ability to achieve profitability, including our
revenue, costs of revenue and operating expenses; our anticipated growth and growth strategies and our ability to effectively manage that growth; the
sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our ability to maintain the security and availability of our platform; our predictions about our industry (including total addressable market) and market trends for healthcare technology solutions; our ability to attract, retain and cross-sell to healthcare provider clients; our ability to maintain renewal rates for healthcare provider clients; our ability to maintain, protect and enhance our intellectual property; our ability to comply with modified or new laws and regulations applying to our business; the increased expenses associated with being a public company; and our outstanding debt under our credit facility, as well as those set forth in the prospectus for our recent offering of our shares of common stock that was filed with the SEC on July 19, 2019 and our other filings with the U.S. Securities and Exchange Commission, including "Risk Factors" sections contained therein.
We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.
This presentation may include certain non-GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix.
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is Patient Intake
Who we are: Leading provider of comprehensive solutions that transform the healthcare experience by engaging patients in their care
What we do: Enable healthcare provider organizations to optimize
operational efficiency, improve profitability and enhance clinical care
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
~1,600 healthcare provider organizations
$1.4B
patient payments processed in FY19
$100M
revenue in FY19
25%+ revenue growth in FY19
~$7B total addressable market
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INVESTMENT HIGHLIGHTS
Leadership in large, underpenetrated and growing market with strong tailwinds
Leading SaaS platform for patient intake and experience with integrated patient payments
Significant and measurable return on investment
Proven ability to innovate and meet the evolving needs of our clients
Attractive, highly scalable financial model
Multiple growth opportunities
Founder-led and deeply experienced management team with strong culture
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ATTRACTIVE INDUSTRY TAILWINDS
Wasteful | Increasing Patient | Increasing | Shift to Value-Based | Focus on |
Spending | Responsibility | Consumerism | Care Models | Personalized |
Healthcare Solutions |
- 1.2M intake staff
- $3.6T U.S. healthcare spend1
- $1.1T U.S. healthcare waste1
- ~$300B admin- related waste1
- $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 reviews as first step in physician search
- Payment model shift to incentivize value and quality
- Requires high levels of documentation, robust data, sophisticated payment-attributioncapabilities and substantive patient engagement
- Need to directly reach patients when making care decisions
- Current marketing strategies not as effective as targeted outreach
1 In 2018
2 As of the first half of 2018
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OUR VALUE PROPOSITION AND HOW WE MAKE MONEY
Value proposition
How we make money
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-occurringpayment 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
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OUR END-TO-END PATIENT INTAKE SOLUTION
Patients Use These: | Staff Use These: |
AT HOME, ON THE GO, | IN THE OFFICE | IN THE OFFICE | IN THE OFFICE |
IN THE OFFICE | PhreesiaPad | ||
Mobile | Arrivals Station | Phreesia Dashboard | Analytics |
Real-time Integration
Electronic | Practice | Practice Data | Payment | |||||||
Management | Payers | APIs | ||||||||
Medical Record | Warehouses | Networks | ||||||||
System | ||||||||||
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LEADING SaaS PLATFORM FOR PATIENT INTAKE AND EXPERIENCE
Registration | Revenue Cycle | Clinical Support | Patient Activation | Appointments | Life Sciences | ||
Mobile and in-office registration
Registration Dashboard
Specialty-specific
workflows
Consent management
POS payments | Care Pathways | Post-visit patient surveys |
Insurance verification | Healthy Child for | Preventive-screening |
pediatrics | outreach for Medicare | |
Payment plans | Women's Wellness | Social determinants of |
health | ||
Online payments | Behavioral health | Service-promotion |
screenings for primary care | messaging | |
Card on file with | Branded patient | |
Payment Assurance | announcements | |
Cost Estimation | Research |
Online appointments | Patient Connect |
Referrals | Patient Insights |
Appointments queue | Advanced Analytics |
to track requests | |
Appointment reminders
Automated self-
scheduling
Included in base package
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OUR CURRENT AMBULATORY-BASED ADDRESSABLE MARKET
Subscription-Based Revenue | Consumer-Related Transaction | Life Sciences |
And Payment Processing Fees | ||
~890K addressable providers1 | $91B addressable out-of-pocket2 | DTC point-of-care |
in United States | in United States | marketing spend3 |
~780K active physicians ~77K nurse practitioners ~35K physician assistants
$4.3B | $2.2B | $750M |
TAM of ~$7B
Current addressable market does not include acute care
Source: (1) Kaiser Family Foundation, BLS Data, American Association of Nurse Practitioners, National Commission of Certification of Physician Assistants - assumes ~1,005,000 total physicians , with ~75% in non-acute care setting and 100% taking appointments; ~165,000 NPs, with ~85% in non-acute care setting and ~55% taking appointments; 90,000 PAs, with ~60% in non-acute care setting and ~65% taking appointments; (2) CMS, includes out-of-pocket spending for physician, clinical and other professional services; (3) ZS Associates, projected spending in point-of-care marketing in pharma (2014 - 2020)
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SCALABLE FROM SMALL BUSINESSES TO LARGE ENTERPRISES
25+ medical specialties of varying sizes | ~40 life sciences brands | |||||||||||||||||||||||
Providers
Physician groups | Health systems |
Serving ~1,600 healthcare provider organizations
Life Sciences
Pharma manufacturers
- Top 3 global pharma company
- Top 3 global biotech company
- Top 5 diabeteszpharma manufacturer
- Top 5 oncology pharma manufacturer
Serving 13 of the top 20
global pharma companies
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Phreesia is the Top-Ranked Patient Intake
Management Solution
2019 Category Leader for Patient Intake Management, based on survey data from
provider groups on areas such as integration, implementation support and overall customer satisfaction
Utilization ranked as the highest among its competitors across functionality
Broadest adoption of KLAS patient intake functionalities in 2018, with most extensive integration capabilities and high client satisfaction
Note: KLAS Research is a HCIT data and insights research company
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MULTIPLE GROWTH OPPORTUNITIES
Grow footprint | Cross-sell new | Margin | Partnerships and | |
Land new clients | within existing | applications to | expansion | |
M&A | ||||
clients | existing clients | through scale | ||
- Direct sales model
- Acute care market in early innings
- Focus on larger providers
• Additional providers | • | Proven ability to | • | New applications | • | Focus on growing | |
within existing clients | continuously | and new and larger | partnerships (i.e. PM, | ||||
• | New sites | innovate | clients highly | EHR, Life Sciences, | |||
• Appointments, | scalable on existing | R1) | |||||
• | New providers | ||||||
Cost Estimation | platform | • | Vital Score | ||||
within existing sites | |||||||
and Mobile | • | Adj. EBITDA positive | acquisition | ||||
• | Upsell new | in FY19 | completed in FY19 | ||||
applications |
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Financial Overview
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FINANCIAL PERFORMANCE HIGHLIGHTS
Highly Visible
Revenue
Attractive
Economics
Growth
Opportunities
- Strong visibility into revenue at the beginning of the fiscal period based on contracted business
- 80%+ revenue from recurring monthly subscriptions and re-occurring payment processing fees
- Contracts typically 1-year in length, with ~90% of provider client contracts renewing each year
- Strong financial discipline with focus on profitable growth
- Platform created for significant scale
- Low marginal cost to support new providers
- Stable recurring revenue and contribution margin from consistent Cohorts, net of churn
- Large and growing addressable market of ~$7B
- Expansion from additional providers from both existing and new Clients
- Additional revenue from product innovations sold to existing clients
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SCALABLE AND PREDICTABLE SOURCES OF REVENUE
Provider | Payment Subscription processing and related feesservices1 |
Life Sciences
REVENUE MODEL
- Includes base package and add-on applications
- Majority of fees charged per provider per month (PPPM)
- Fees earned as % of processed patient payments
- 80%+ volume: Credit / debit transactions processed on Phreesia payment facilitator model
- Remaining volume: Cash, check and credit gateway transactions to other payment processors
- Sale of targeted digital marketing solutions to patients
- Contract duration typically 12 months
- Guaranteed # of engagements with target audience
- Fees charged per brand engagement
DRIVERS
- New provider clients
- Expansion within existing clients
- New products and applications
- Increase in payment volume from patients of existing and new providers / clients
- Increase in patient financial responsibility
- New life sciences clients
- Expansion within existing clients
- Purposeful controlled growth
- Investment in new data and analytics products represent upside potential
FY19 % REV
44%
37%
19%
Strong visibility into revenue at the beginning of the fiscal period based on contracted business
1 In addition to subscription revenue, Phreesia generates certain fees from provider clients for professional services associated with implementation, travel and expense reimbursements, shipping and handling, sale of hardware (PhreesiaPads and Arrivals Stations), on-site support and training
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STRONG OPERATING AND FINANCIAL PERFORMANCE
TOTAL REVENUE ($M)
Life Sciences | Provider | |
AVG. NUMBER OF
PROVIDER CLIENTS
+5% |
AVG. ANNUAL PROVIDER | |
REVENUE PER CLIENT ($K) | ADJ. EBITDA ($M)1 |
+25% | |
$100 | |
$80 | +32% |
$81 | |
$61 | |
$19 | $19 |
FY 18 | FY 19 |
+33% | |
$33 | |
$25 | +31% |
$26 | |
$20 | |
$5 | $7 |
FQ3 19 FQ3 20
1,573 | ||||
+5% | 1,503 | |||
1,490 | ||||
1,416 | ||||
FY 18 | FY 19 | FQ3 19 FQ3 20 |
+26% | |
$54,231 | |
$43,163 | |
FY 18 | FY 19 |
$4 | $3 | ||||
+25% | $0 | ||||
$16,637 | |||||
$13,308 | |||||
($4) | |||||
FQ3 19 | FQ3 20 | FY 18 | FY 19 | FQ3 19 | FQ3 20 |
Strong performance in first two quarters as public company
1 For a reconciliation to the nearest GAAP measure, please see slide 19
FY ended January 31 FQ ended October 31
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Appendix
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DETAILED INCOME STATEMENT
$M
Fiscal year ended January 31, | Three months ended October 31, | |||||
FY 2018 | FY 2019 | Q3 2019 | Q3 2020 | |||
Revenue: | ||||||
Subscription and Related Services Revenue | $32.4 | $43.9 | $10.9 | $14.6 | ||
Payment Processing Revenue | 28.7 | 36.9 | 9.1 | 11.6 | ||
Total Provider Revenue | $61.1 | $80.8 | $20.0 | $26.2 | ||
Life Sciences | $18.7 | $19.1 | $4.8 | $6.7 | ||
Total Revenue | $79.8 | $99.9 | $24.8 | $32.8 | ||
% Growt h | 25.1% | 32.7% | ||||
Expenses: | ||||||
Cost of revenues (excluding depreciation and amortization) | $12.6 | $15.1 | $3.8 | $4.4 | ||
Interchange costs | 17.2 | 21.9 | 5.4 | 6.9 | ||
Sales and Marketing | 24.8 | 26.4 | 7.2 | 8.3 | ||
Research and Development | 11.4 | 14.3 | 3.9 | 4.8 | ||
General and Adminstrative | 18.8 | 20.1 | 4.5 | 7.2 | ||
Depreciation | 6.8 | 7.6 | 2.0 | 2.2 | ||
Amortization | 2.8 | 4.0 | 1.0 | 1.3 | ||
Total Expenses | $94.4 | $109.4 | $27.8 | $35.1 | ||
Operating loss | ($14.6) | ($9.5) | ($3.0) | ($2.2) | ||
Operat ing Margin | (18.2%) | (9.5%) | (12.3%) | (6.8%) | ||
Other Income (Expense) | $0.6 | ($0.0) | $0.2 | $0.1 | ||
Change in Fair Value of Warrant Liability | (0.6) | (2.1) | (0.6) | $0.0 | ||
Interest Income (Expense) | (3.6) | (3.5) | (0.7) | ($0.2) | ||
Total Other Income (Loss) | ($3.6) | ($5.6) | ($1.1) | ($0.1) | ||
Provision for Taxes | 0 | 0 | 0 | (0.1) | ||
Net Income (Loss) | ($18.2) | ($15.1) | ($4.2) | ($2.4) | ||
Net Margin % | (22.8%) | (15.1%) | (16.9%) | (7.4%) | ||
Memo: Adjusted EBITDA 1 | ($4.1) | $3.5 | $0.4 | $3.0 | ||
% Margin | (5.1%) | 3.6% | 1.7% | 9.2% |
1 For a reconciliation to the nearest GAAP measure, please see slide 19 | 18 |
ADJUSTED EBITDA RECONCILIATION1
$M | |||||
Fiscal year ended January 31, | Three months ended October 31, | ||||
Reconciliation to Adjusted EBITDA | FY 2018 | FY 2019 | Q3 2019 | Q3 2020 | |
($18.2) | ($15.1) | ($4.2) | ($2.4) | ||
Net Income (Loss) | |||||
Interest (Income) Expense. Net | 3.6 | 3.5 | 0.7 | 0.2 | |
Depreciation and Amortization | 9.6 | 11.6 | 3.0 | 3.5 | |
Stock-Based Compensation Expense | 0.8 | 1.4 | 0.4 | 1.8 | |
Change in Fair Value of Warrant Liability | 0.6 | 2.1 | 0.6 | 0.0 | |
Income tax provision | 0.0 | 0.0 | 0.0 | 0.1 | |
Other (Income) Expense, Net | (0.6) | 0.0 | (0.2) | (0.1) | |
Adjusted EBITDA | 1 | ($4.1) | $3.5 | $0.4 | $3.0 |
Adjust ed EBITDA Margin % | (5.1%) | 3.6% | 1.7% | 9.2% |
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
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Phreesia Inc. published this content on 09 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 December 2019 21:25:00 UTC