Phreesia, Inc. (NYSE:PHR) Q3 2023 Earnings Call Transcript

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Balaji Gandhi: Yeah. From opportunity to close, Glen, we looked at sort of two buckets, sort of small and then in the sort of enterprise area. And in the small, we’ve seen the change maybe tick up by a day or two in terms of opportunity to close. And then more in the enterprise area, it’s been about 10 to 15 days pickup, and this is sort of comparing as of October versus last…

Chaim Indig: So when think about it, taking on a day longer to close some deals and about 10 to 15 days longer to close other deals than we traditionally see. So like — I guess you could say we’ve seen it. I don’t know if that answers your question.

Glen Santangelo: Yeah. No. That’s fine. Maybe if I ask a bigger picture question. Just sort of going back to some comments you made a quarter or two ago about the market in total. I think you said last year, there were about 1 billion physician visits, if I remember correctly. And you said you guys are now at the 100 million mark, so maybe 10% of the market. And maybe at this point, 30% or 40% have done the automated check-in. So I wanted to sort of verify those numbers, but also really get a sense for maybe what percentage of the physicians today already have some type of solution at this point, right? Because I think what investors are really trying to understand is sort of how penetrated we are into the TAM at this point as we are all trying to assess the durability of this revenue growth. Thanks.

Chaim Indig: Yes. So — well, I don’t know if I’ll do a great job answering, and I’m sure Balaji will either jump in or else give the consequence. But we got about 10% based of all the — and it’s not just physicians, it’s also hospital visits, right? So I think the totality is about 1.3 when you look at ambulatory and hospital. And we have seen growth in the hospital market. And so we think we’re about 10% of the available market. And I think we got a long way to go. And frankly, we think that we’ve been winning a fair number of where — people have tried other solutions too, right? And so — and the reason we tend to win is just because of our ability to drive, call it, 80%, 90% self-service rates. And we think that’s what drives the ROI, when the vast majority of patients use the product.

So we think we have, frankly, a long period of growth in front of us, and that’s why we made the investments we did over the last couple of years and why we’re seeing some of the payback. And we really, frankly, appreciate the trust our investors place in us in being able to make those investments to be able to grow share so significantly. And if I take this moment to thank them for that trust.

Balaji Gandhi: And Glen, the only thing I’d add to what Chaim said is just that in 2019, we did disclose — we did about 54 million visits. So about 5% then, closer to 10% now. And we obviously have some ambitions to double the business roughly if you look at our ’25 targets. So that’s sort of the trajectory. But quarter-to-quarter — so we’re doing pretty good.

Glen Santangelo: All right. Thanks a lot. Appreciate the colors.

Operator: Your next question comes from the line of Dale Grosslight with Citi. Your line is now open.

Daniel Grosslight: Hi, guys. Thanks for taking the question. I want to piggyback on some of the questions around adding larger clients for 4Q. Are these clients in your, what I would call your core ambulatory channel or are you seeing strength in the acute care health system setting?

Balaji Gandhi: I mean I think we’re seeing, I think, a lot of expansion activity.

Chaim Indig: Everywhere.

Balaji Gandhi: So we’re in hospitals. We’re in large systems. There’s — the opportunity to expand is there, and we’re doing well.

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