Phreesia, Inc. (NYSE: PHR) reports fiscal Q2 2027 results with 10% revenue growth and higher profitability
Phreesia News: Key Takeaways
- Fiscal second-quarter revenue rose 10% year-over-year to $129.5 million (quarter ended July 31, 2026).
- Net income increased to $1.9 million from $0.7 million a year earlier; operating income was $7.6 million versus an operating loss of $1.5 million.
- Adjusted EBITDA was $32.9 million, up from $22.1 million in the prior-year quarter.
- Operating cash flow was $18.3 million and free cash flow was $13.8 million, both higher than the prior-year quarter.
- The company maintained fiscal 2027 guidance for revenue of $510 million to $520 million and Adjusted EBITDA of $125 million to $135 million.
- Phreesia said it reduced debt principal by over $23 million during the quarter; borrowings outstanding under its Capital One credit facility were $61 million as of July 31, 2026.
Phreesia fiscal Q2 2027: Key Financials
| Metric | Q2 fiscal 2027 | Q2 fiscal 2026 | Change |
|---|---|---|---|
| Total revenue | $129.5 million | $117.3 million | +10% |
| Operating income (loss) | $7.6 million | ($1.5 million) | Loss to profit |
| Net income | $1.9 million | $0.7 million | +193% |
| Diluted EPS | $0.03 | $0.01 | +200% |
| Adjusted EBITDA (non-GAAP) | $32.9 million | $22.1 million | +49% |
| Net cash provided by operating activities | $18.3 million | $14.8 million | +23% |
| Free cash flow (non-GAAP) | $13.8 million | $9.6 million | +44% |
| Cash, cash equivalents and restricted cash | $74.6 million (as of July 31, 2026) | $73.8 million (as of Jan. 31, 2026) | +$0.8 million |
What happened?
Phreesia, Inc. reported fiscal second-quarter results showing higher revenue and improved profitability versus the prior-year period. Revenue increased to $129.5 million, driven by growth in payment solutions and network solutions, partly offset by a decline in subscription and related services revenue.
For the quarter, subscription and related services revenue was $52.7 million (down from $53.7 million), payment solutions revenue was $38.5 million (up from $28.4 million), and network solutions revenue was $38.3 million (up from $35.2 million). The company reported operating income of $7.6 million compared with an operating loss of $1.5 million in the prior-year quarter.
Phreesia generated operating cash flow of $18.3 million and free cash flow of $13.8 million for the quarter. Cash, cash equivalents and restricted cash totaled $74.6 million as of July 31, 2026, and the company reported $61 million of borrowings outstanding under its Capital One credit facility at quarter-end.
The company also provided an update on a restructuring plan implemented on May 7, 2026, intended to reduce operating expenses and align costs with business priorities. The plan includes eliminating approximately 220 positions, about half of which are contractor roles. Phreesia expects total restructuring charges of about $10 million, and recorded approximately $2.8 million of restructuring charges during the fiscal second quarter. The company expects the plan to be substantially completed during fiscal year 2027.
For fiscal 2027, Phreesia maintained its outlook for revenue of $510 million to $520 million and Adjusted EBITDA of $125 million to $135 million. The company said the revenue range assumes approximately $37 million of contribution from AccessOne and no additional revenue from potential future acquisitions completed between now and January 31, 2027. Phreesia also maintained its expectations for AHSC growth in the mid-single-digit percentage range and for total revenue per AHSC to grow in the low-single-digit percentage range in fiscal 2027.
Company Commentary
“Phreesia delivered a solid fiscal second quarter, with revenue growth and profitability expansion in line with our expectations. We generated positive operating and free cash flow again this quarter, which together with available cash allowed us to reduce debt principal by over $23 million while maintaining a healthy cash balance,”
Chaim Indig, CEO and Co-Founder
“We remain enthusiastic about two products that we believe will drive future growth, AccessOne and ProviderConnect, as well as the impact that our artificial intelligence (AI) investments are beginning to have on many aspects of our products and broader organization.”
Chaim Indig, CEO and Co-Founder
Why this matters for investors
The quarter showed improved profitability and cash generation, with operating income turning positive year-over-year and higher Adjusted EBITDA, operating cash flow, and free cash flow. Phreesia also reported reducing debt principal by over $23 million while keeping cash, cash equivalents and restricted cash broadly stable versus the start of the fiscal year.
Guidance was reaffirmed for both revenue and Adjusted EBITDA for fiscal 2027, which may help investors assess whether recent performance is tracking to management’s expectations. The company also outlined that it expects to complete its restructuring plan during fiscal 2027, with approximately $10 million of total restructuring charges anticipated.
