Investor Presentation September 2019 DISCLAIMERS AND - - PowerPoint PPT Presentation

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Investor Presentation September 2019 DISCLAIMERS AND - - PowerPoint PPT Presentation

Investor Presentation September 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


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Investor Presentation

September 2019

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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.

DISCLAIMERS AND FORWARD-LOOKING STATEMENTS

2 2019 Phreesia Confidential Information

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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

is Patient Intake

$1.4B

patient payments processed in FY19

Who we are: Leading provider of comprehensive solutions that transform the healthcare experience by engaging patients in their care

$100M

revenue in FY19

25%+ revenue

growth in FY19

What we do: Enable healthcare provider organizations to optimize

  • perational efficiency, improve profitability and enhance clinical care

~$7B total

addressable market

2019 Phreesia Confidential Information

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SLIDE 4

Leadership in large, underpenetrated and growing market with strong tailwinds Proven ability to innovate and meet the evolving needs of our clients

INVESTMENT HIGHLIGHTS

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Leading SaaS platform for patient intake and experience with integrated patient payments Attractive, highly scalable financial model Significant and measurable return on investment Founder-led and deeply experienced management team with strong culture Multiple growth opportunities

2019 Phreesia Confidential Information

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ATTRACTIVE INDUSTRY TAILWINDS

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Wasteful Spending Increasing Patient Responsibility Increasing Consumerism Shift to Value-Based Care Models

  • $586B out-of-

pocket spend by 2027

  • HDHPs represent

46% of health plan market2

  • Provider
  • rganizations

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
  • f 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
  • $3.6T U.S.

healthcare spend1

  • $1.1T U.S.

healthcare waste1

  • ~$300B admin-

related waste1

1 In 2018 2 As of the first half of 2018

2019 Phreesia Confidential Information

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OUR VALUE PROPOSITION AND HOW WE MAKE MONEY

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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 Value proposition How we make money

2019 Phreesia Confidential Information

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SLIDE 7

Staff Use These:

IN THE OFFICE Phreesia Dashboard AT HOME, ON THE GO, IN THE OFFICE Mobile IN THE OFFICE PhreesiaPad 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 APIs Payment Networks Payers

2019 Phreesia Confidential Information

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OUR CURRENT AMBULATORY-BASED ADDRESSABLE MARKET

TAM of ~$7B

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)

~890K addressable providers1

in United States

Subscription-Based Revenue

$4.3B

$91B addressable out-of-pocket2

in United States

Consumer-Related Transaction And Payment Processing Fees

$2.2B

Life Sciences DTC point-of-care marketing spend3

$750M

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Current addressable market does not include acute care

2019 Phreesia Confidential Information

~780K active physicians ~77K nurse practitioners ~35K physician assistants

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SCALABLE FROM SMALL BUSINESSES TO LARGE ENTERPRISES

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Serving ~1,600 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

2019 Phreesia Confidential Information

z

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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

Phreesia is the Top-Ranked Patient Intake Management Solution

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Note: KLAS Research is a HCIT data and insights research company

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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

  • Adj. EBITDA positive

in FY19

  • Focus on growing

partnerships (i.e. PM, EHR, Life Sciences, R1)

  • Vital Score

acquisition completed in FY19

Land new clients Grow footprint within existing clients Cross-sell new applications to existing clients Margin expansion through scale Partnerships and M&A

1 In FY19; dollar-based net retention rate is calculated by summing the monthly subscription fees and payment processing revenue of all provider clients that have had revenue during the one-year period prior to the calculation period

and comparing it with the sum of the monthly subscription fees and payment processing revenue (net of contraction, churn and expansion) for the same set of provider clients in the calculation period

107% dollar-based net retention1

2019 Phreesia Confidential Information

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Financial Overview

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FINANCIAL PERFORMANCE HIGHLIGHTS

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  • 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
  • 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

Growth Opportunities Highly Visible Revenue Attractive Economics

2019 Phreesia Confidential Information

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SLIDE 14

SCALABLE AND PREDICTABLE SOURCES OF REVENUE

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  • 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

  • ~95% subscription fees and ~5% related services
  • Includes base package and add-on applications
  • Majority of fees charged per provider per month (PPPM)

Subscription and related services1 Payment processing fees

  • 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

37% 44%

REVENUE MODEL DRIVERS FY19 % REV

  • Sale of targeted digital marketing solutions to patients
  • Contract duration typically 12 months
  • Guaranteed # of engagements with target audience
  • Fees charged per brand engagement

Life Sciences

  • New life sciences clients
  • Expansion within existing clients
  • Purposeful controlled growth
  • Investment in new data and analytics

products represent upside potential

19%

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

Strong visibility into revenue at the beginning of the fiscal period based on contracted business

Provider

2019 Phreesia Confidential Information

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1,416 1,490 1,450 1,549 FY 18 FY 19 FQ2 19 FQ2 20

+5%

$5 $4 $19 $24

FQ2 19 FQ2 20

$19 $19 $61 $81

FY 18 FY 19

STRONG OPERATING AND FINANCIAL PERFORMANCE

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TOTAL REVENUE ($M)

FY ended January 31 FQ ended April 30

$80 $100

+25%

Provider Life Sciences

1 For a reconciliation to the nearest GAAP measure, please see slide 35

$24 $28 ($4) $4 $1 ($0) FY 18 FY 19 FQ2 19 FQ2 20

  • ADJ. EBITDA ($M)1
  • AVG. NUMBER OF

PROVIDER CLIENTS

  • AVG. ANNUAL PROVIDER

REVENUE PER CLIENT ($K) $43,163 $54,231 FY 18 FY 19

100% organic revenue growth to date

$13,265 $15,649 FQ2 19 FQ2 19

2019 Phreesia Confidential Information

+19% +7% +26% +18%

+32% +26%

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Appendix

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DETAILED INCOME STATEMENT

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1 For a reconciliation to the nearest GAAP measure, please see slide 18

2019 Phreesia Confidential Information

$M Fiscal year ended January 31, Three months ended July 31, FY 2018 FY 2019 Q2 2019 Q2 2020 Revenue: Subscription and Related Services Revenue $32.4 $43.9 $10.5 $14.0 Payment Processing Revenue 28.7 36.9 9.2 11.7 Total Provider Revenue $61.1 $80.8 $19.6 $25.7 Life Sciences $18.7 $19.1 $5.1 $5.1 Total Revenue $79.8 $99.9 $24.8 $30.8 % Growth 25.1% 24.4% Expenses: Cost of revenues (excluding depreciation and amortization $12.6 $15.1 $3.6 $4.2 Interchange costs 17.2 21.9 5.3 7.1 Sales and Marketing 24.8 26.4 6.5 8.1 Research and Development 11.4 14.3 3.2 4.7 General and Adminstrative 18.8 20.1 4.7 7.4 Depreciation 6.8 7.6 1.8 2.1 Amortization 2.8 4.0 1.0 1.3 Total Expenses $94.4 $109.4 $26.0 $35.0 Operating loss ($14.6) ($9.5) ($1.3) ($4.1) Operating Margin (18.2%) (9.5%) (5.0%) (13.4%) Other Income (Expense) $0.6 ($0.0) $0.1 $0.3 Change in Fair Value of Warrant Liability (0.6) (2.1) (0.6) (2.9) Interest Income (Expense) (3.6) (3.5) (0.9) (0.7) Total Other Income (Loss) ($3.6) ($5.6) ($1.3) ($3.3) Provision for Taxes 0.0 0.0 0.0 (0.1) Net Income (Loss) ($18.2) ($15.1) ($2.6) ($7.5) Net Margin % (22.8%) (15.1%) (10.4%) (24.3%) Memo: Adjusted EBITDA 1 ($4.1) $3.5 $1.7 $0.7 % Margin (5.1%) 3.6% 7.0% 2.4%

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ADJUSTED EBITDA RECONCILIATION1

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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

2019 Phreesia Confidential Information

$M Fiscal year ended January 31, Three months ended July 31, FY 2018 FY 2019 Q2 2019 Q2 2020 Reconciliation to Adjusted EBITDA Net Income (Loss) ($18.2) ($15.1) ($2.6) ($7.5) Interest (Income) Expense. Net 3.6 3.5 0.9 0.7 Depreciation and Amortization 9.6 11.6 2.7 3.4 Provision for Taxes 0.0 0.0 0.0 0.1 Stock-Based Compensation Expense 0.8 1.4 0.3 1.5 Change in Fair Value of Warrant Liability 0.6 2.1 0.6 2.9 Other (Income) Expense, Net (0.6) 0.0 (0.1) (0.3) Adjusted EBITDA1 ($4.1) $3.5 $1.7 $0.7 Adjusted EBITDA Margin % (5.1%) 3.6% 7.0% 2.4%