Q4 2024 Phreesia Inc Earnings Call
Participants
Balaji Gandhi; Chief Financial Officer; Phreesia Inc
Chaim Indig; Chief Executive Officer, Director; Phreesia Inc
Ryan Daniels; Analyst; William Blair & Company
Richard Close; Analyst; Canaccord Genuity Group Inc.
Anil Sharma; Analyst; JPMorgan Chase & Co.
John Ransom; Analyst; Raymond James
Jesse Pichel; Analyst; Piper Sandler
Daniel Grosslight; Analyst; Citi
Glen Santangelo; Analyst; Jefferies
Sean Dodge; Analyst; RBC Capital Markets
Jack Wallace; Analyst; Guggenheim Securities, LLC
Presentation
Operator
Good evening, ladies and gentlemen. Welcome to the Phreesia's fiscal fourth Quarter 2024 earnings conference call. (Operator Instructions)
First, I would like to introduce Balaji Gandhi, Phreesia's Chief Financial Officer. Mr. Gandhi, you may begin.
Balaji Gandhi
Thank you, operator. Good evening and welcome to Phreesia's earnings conference call for the fiscal fourth quarter of 2024, which ended on January 31 of 2024. Joining me on today's call is Chaim 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 8-K submission to the SEC, including our quarterly stakeholder letter, both issued after the market closed today. These documents are available on the Investor Relations section of our website at ir.phreesia.com. As a reminder, today's call is being recorded and a replay will be available on our Investor Relations website at ir.phreesia.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. Forward-looking statements are subject to various risks, 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 press release, our stakeholder letter, and our risk factors included in our SEC filings, including in our annual report on Form 10-K 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 in order to provide additional information to investors. These non-GAAP measures should be considered in addition to in 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 release and stakeholder letter, which were furnished with our Form 8-K filed after the market closed today with the SEC and may also be found on our Investor Relations website at ir.phreesia.com.
I will now turn the call over to our CEO, Chaim Indig.
Chaim Indig
Thank you, Balaji, and good evening, everyone. Thank you for participating in our fourth-quarter earnings call. Our stakeholder letter and earnings release were published about an hour ago. So let me start the call with a couple of highlights. I am very pleased with our fourth quarter and fiscal year performance, both financially and operationally, Phreesia is in a new era that extends our impact beyond patient intake. Our growing set of solutions expands our capabilities outside of the point-of-care, while still aligning with our mission to make care easier every day.
In fiscal 2024, we facilitated more than $150 million patient visits approximately 25% more than fiscal 2023. For the fourth quarter, total revenue was $95 million, up 24% year over year. Adjusted EBITDA was negative $3.5 million, a $14 million improvement year over year.
Before I turn it to Balaji to discuss our fiscal 2025 outlook, I would like to thank Mike Ricci colleagues for their hard work and commitment to our mission, but also like to thank our clients and investors for their continued support. We are all very proud of the work we did, and we are excited to continue to deliver growth while returning to profitability in fiscal 2025.
Let me now hand it over to Balaji.
Balaji Gandhi
Thanks, Chaim, and good evening. Everyone, we provided our initial outlook for fiscal 2025 when we released our fiscal third quarter results on December 5th of last year. Today, we are maintaining our revenue outlook for fiscal year 2025 at $424 million to $434 million. We are also updating our adjusted EBITDA outlook for fiscal year 2025 to a new range of $12 million to $20 million from a previous range of $10 million to 20. Our updated outlook reflects our ongoing focus on improving efficiency and operating leverage. We are also providing a forecast for the number of average health care services clients or HSC.s. We expect to add in the first quarter of fiscal 2025, we expect to see HSC.s increased by at least 100 in the first quarter compared to the fourth quarter as we prioritize the HSE prospects that we believe can drive profitable revenue growth across subscription and related services, payment processing and network solutions. It is worth noting that our forecast for HFC growth in the first quarter was incorporated into our fiscal 2025 revenue outlook, which we provided back in December. And we are now maintaining one final note, we believe that our current cash and cash equivalents balance, along with cash generated in the normal course of business, give us sufficient flexibility to reach our outlook for fiscal 2025 and to plan for continued profitable growth in fiscal 2026.
Operator I think we can now open it up, correct.
Question and Answer Session
Operator
(Operator Instructions) Ryan Daniels with William Blair. Please go ahead.
Ryan Daniels
Hey, guys, can you hear me?
Hello?
Can you hear me BRIAN?
Yes, can you hear me?
Yes, Brian, we can hear you.
Okay. Perfect.
That Balaji, wanted to ask you a question about the 100 average client adds. It seems very deliberate in your language about prioritizing prospects that can drive profitable growth. Can you dive into that? Is that really more of a focus on certain specialties that can add more growth and things like network solutions or have higher billing prospects of better payment processing sales? Just any color there that stood out to me?
Balaji Gandhi
Yes, Sharon, and I apologize for the I think we had some technical difficulty on first question. So whoever that was dialing and maybe come back into the queue and Ryan on your question, I think this goes back to some comments we made last quarter in our letter and I think you're hitting on some of the points, which is it's revenue, it's profitability, but it's also payback and the return we get. So we feel really good about the clients that we're adding currently and expect to in the future in terms of the type of revenue and the type of profit we expect to generate off them. And that's yes, that's really, Bobby, I would say at this point.
Ryan Daniels
Okay. And then a quick follow-up for you.
Balaji Gandhi
Anything we should consider with the profitability cadence in Q1, given number one, some of the noise would change.
And then number two, I noticed you had an all employee event probably have some costs associated with that. I don't know if it's enough to move the needle but any of those two things can have an impact?
Ryan Daniels
Thank you.
Balaji Gandhi
Yes. So I think the events that we talked about was a Q4 event. So both those costs were largely in the fourth quarter, some in terms of a change. And I think we can maybe talk a little bit more about that. I think we're out of the question, but I think in terms of guidance or the outlook and the cadence?
Nothing really to call out, Ryan, I think we'd call out though there is seasonality around payments which are stronger, which has an impact on margin. That's nothing new this year versus previous years.
Ryan Daniels
Okay. Perfect. Thank you. I'll hop back in the queue. Appreciate the color.
Operator
Richard Close with Canaccord Genuity. Please go ahead.
Richard Close
And yes, thanks for the question and congratulations on a strong year. Maybe just go down the change path a little bit farther. I noticed in the letter you talked about security investments and just curious what you're doing there, how you're helping clients with security and maybe just discuss your high level thoughts on change the change tack and any impacts positive or negative that you see?
Chaim Indig
Yes. So I think the pace of the question, Richard, this is time by all of trying to break down the question a little bit, and then we'll try to answer some of the some of the commentary around change in the letter. We reference our investment security and I think that's really a tough Mike, really wanting to call out to all of our stakeholders that we over the last couple years have been dramatically increasing our internal spend, both as an absolute dollar. And as a percentage in security and compliance, we and we think it is really important. We take our role as a steward of data and unbelievably seriously, but also to be fair, we know how much our clients depend on our service, and we expect to keep increasing that investment and end it, and it's baked into our R & D and number and velocity, I'm sure can talk more about that. But we just we did think it was really important as we as we have over the last couple of years significantly increase that net investment level.
And then in terms of change, look, let's start with it. It's been pretty terrible for a lot of our clients. There's really no sugar coating that like a major part of the health care infrastructure was attacked and it pretty terrible. And we're doing everything we can to help our clients just collect dollars and making sure that they can they can keep running their businesses as they were. And from what we can tell, almost all of them still are, although it's really putting strain on them in terms of how we work with change, they were one of our clearing houses. So we, as part of our service, provide eligibility and benefit checks as part of a lot of our services. And we've been working with changes in one of our clearinghouses for years had to call out our team from one of the last couple of weeks really quickly when they identified that started moving to our backup and alternate clearinghouses to move the vast majority of our volume. They did that above and beyond. Normally what they do, it was a ton of work. I can't thank them enough. I know it made a big difference to our clients so that it really didn't disrupt their business, but it looked this is a this was a pretty big attack on American on the American healthcare infrastructure and IT. I think it's pretty shitty.
Richard Close
Thank you.
Operator
Our next question comes from the line of Anil Sharma with JPMorgan. Please go ahead.
Anil Sharma
Yes, thanks for taking the question. And you called out in your letter that payment processing was helped in some part by better utilization. And I was just wondering if maybe you could touch on what utilization you're embedding within your full year forecast for the year?
Balaji Gandhi
Well, any thanks for the question. I think this is something we've talked about a lot on these calls is the swing factors. The biggest swing factors on payment processing is things like weather and things like where different days on the calendar fall in a given quarter. And that's how we sort of model it. We model it with years of history and experience like that. Obviously, weather can can can play a role which is not as predictable, but that's sort of it. I don't think we sort of talk about like specific patterns in usage or utilization of services as being as big a swing factor.
Anil Sharma
Great. Thanks. And then maybe just one more, and I'm hoping you could touch on your PostScript engagement product on how that works. And is there are you partnering with the pharmacies, maybe Ted can measure volatility or is there an opportunity to do that?
Chaim Indig
And we'll not get through who were to tell what I am very excited about this data science jumping right to the end. Any I know this is a product that's been worked on for quite some time. I'm really excited about it. I know the team is too and this is a competitive simplest form. When you get a script from the provider, it just makes so much sense to be able to get a reminder to Philips building your prescription is just so important at every stage, right? If you're if you're a doctor things that you need to be on a therapy, you should they should nudge you have as many as much as possible to fill that therapy and answer any of your questions and frankly also know why why and if you're not doing it today to better inform you as to why it's important. And so we've been working on this product for some time when it was developed all in-house, early indications are it's the response has been phenomenal. The impact to patients has been looking very tremendous and we're pretty excited about it and early on. I don't think we're talking about who we're partnering up with it. But data I'm personally pretty excited about it. It's nice. It's a really nice valuable add-on. Two are our patients and providers.
Anil Sharma
It sounds exciting. Thank you.
Operator
Our next question comes from the line of John Ransom with Raymond James. Please go ahead.
John Ransom
Good afternoon. So it looks like you guys are kind of settling into a nice Groove with G&A leverage and and the like, as we think about your company, let's just think five years out and assume because it's easy math that you can grow your top line 20% for the foreseeable future. How should we think about concurrent growth in G&A and marketing and R&D that would accompany a theoretical kind of five-year 20%?
Balaji Gandhi
Yes. Yes. John dysplasia. So first of all, I mean, I know you're trying to project out, but, you know, we're really formally talking about fiscal 25, but I mean, we've tried to be helpful. I think we made some pretty some specific comments about G&A, where we did a lot of analysis on public company costs, and we felt that to be a world-class public company and have all the right processes and procedures and people in place. We were going to have to make some investments we could choose to delay them. We chose not to. So we feel pretty good about where we're running now to support a larger organization. But there's obviously, you know, the cost of things go up every year, but it's not like there's an order of magnitude increase in the resources we need.
Chaim Indig
And I think you've seen you've seen that operating leverage happen for years now.
Yes, the dollar amount, August, that changed Well, then let's let's give you a question that you might answer that the SD. and our hiring season is coming up. How do we think about you've had some different thoughts about how quickly or how quickly you grow that have seen our force and maybe talk about your goals for hiring kind of your learnings of productivity as you tried to ramp that up a couple of years ago, why? Because there is a couple of things drove the ramp up on our SDR team that were really important. One we were at we ramped it up a lot quicker also acknowledging that we we really have been out of the STR market for everybody because of COVID for over a year. Some of it was just filling in a lot of hiring that we because we really didn't hire any net new STRs during COVID just started during the peak pandemic periods. So that was some of the John tours. We were really backfilling sort of the running season. But the productivity of our NCR team not only just keeps quite frankly, we're liking the productivity improvement. It keeps improving. But I think how and how we hire and also how we qualify and drive opportunities into the provider organization we have now I think we have not just SCRs, but we have a lot of other tools at our disposal, which have been also proving to be very effective. We're right now, we're pretty happy with the cadence that we see on the provider sales organization and the STR organization on landing and expanding our provider footprint. And it's been I've been really excited and proud of that team. They've been executing very well for driving driving really good returns for all of us, why do you want to add a number to that finance or are the qualitative qualitative?
John Ransom
Perfect. I think your dog liked it. I never saw this, and I know included, but that's okay. Over here, Al, I go on mute now like what we're saying. Thank you.
Operator
Our next question comes from the line of Jesse Pichel with Piper Sandler.
Jesse Pichel
I am Hi. Thanks so much for taking my question. And I was hoping you could maybe talk a little bit about what we see on MelaFind.com today, we see obviously providers buy specialty clinical trials that are open for enrollment and on drug, your ball for a particular condition. Curious to know and how much how many of those items are you monetizing today, if any, at all? And just the extent to which you've integrated the site with, that's the intake management platform.
Chaim Indig
So I there's a great question Jess, and thanks for asking about. Maybe the integration effort is very much well on its way. We're booking appointments, thousands of appointments every day now forever, and it's going very well and they're being done in real time. And so from a technology integration, I think that's on track from a monetization effort. I think we were very we've been very specific on that we're going to take a pretty slow and the monetization we are monetizing into the vast majority of the traffic. It's at the site still has not monetized, but we expect that to change over the coming.
Jesse Pichel
Sorry, do you expect that to change over the coming years? Or is that an FY 20 or FY 25 event over coming years?
Chaim Indig
Prologis nothing has had on years years, yes.
Jesse Pichel
Okay. Go all night. And my follow-up is just on post-click engagement. Is that the kind of first time that you all have monetized the I guess at the inventory, and I'm curious to know, I think you said it launched in the fourth quarter. Is that on is that like revenue generating in the fourth quarter just sales commenced in 4Q.
Chaim Indig
What I say I'm I'm pretty sure it was revenue generating in Q1 that Sanjay, you can follow-up if we could follow up with you on that if I don't get the note right now from the team, I'm sure someone's going to have some, you know, some and we have had other products in the post script engagement area. I think this is probably the most robust and this is built off the learnings of a lot of the previous products that we had in the space when the Fed had to confirm?
That is correct in Q1. It's really in Q1 that we sell into revenue on it.
Jesse Pichel
Got it. Thank you.
Operator
Our next question comes from the line of Daniel Grosslight with Citi. Please go ahead.
Daniel Grosslight
Hey, guys, thanks for taking the question and congrats on the quarter. I've wanted to touch on Connect on call a little bit. So you added I believe 120 clients from from them through the acquisition, have you been able to cross-sell some of the core Phreesia products to those clients? And then have you been able to make any of the cross-sells The other way to your kind of core feature clients, I can connect on costs.
Chaim Indig
So well, first, the core product, I think we've re-branded history, John Call. So I think that's already happened to expect us to keep referring to this three GenCore. I think we've had I think it's too early. I don't I don't know that I'd comment that I know the team is having early success with cross-sell, upselling the old Connect, our core client base. But to be fair, we frankly shared a lot of clients and that delta was mostly clients that we didn't share, right? And so I'm sure that tighter, I know that the team is out there for you with them and trying to cross-sell upsell where possible, where it's a right fit. And I know we're still in the early days of rolling out 3G on coal to our client base and the response from our clients. Our provider clients on 3G phone call has been, and it's been amazing to see if we had an expectation set on the value proposition it the early indications are at this is it's far exceeded even my expectations.
And it's a beautiful product.
Yes, yes.
Balaji Gandhi
And then on cash flow, there was a bit of a step-up in CapEx this quarter sequentially to around 7.9 million. It is the right run rate and that we should be thinking about for 2025. I mean, I think there is some fluctuation quarter to quarter. I don't think you'd be, you know, wrong and if you just run rate at that number, but there will be quarters where it's a little less or a little higher, but in the high 20s.
Chaim Indig
Daniel's one for the year, yes.
Operator
Our next question comes from the line of Glen Santangelo with Jefferies. Please go ahead.
Glen Santangelo
Yes, thanks, for taking my questions. Just two quick ones for me. I appreciate the 1Q provider ad number that you gave us and it's obvious that you're looking to add profitable growth and so I'm kind of curious to get your take on where we are from a penetration perspective and how incrementally harder is it getting to add these profitable providers? And so you know I just for us, you know, for those and trying to take a little bit of a longer term view, I just want to get a sense for where you think we're at. And then maybe I'll give you my follow-up. You know right now, maybe just following up on John's question, it's been an interesting two to three years at the company you were you were very profitable than you were very unprofitable and now you're back to sort of profitability. As you look over the next couple of few years. Obviously, you made great gains on the efficiency side. Do you see any major investments on the horizon or do you feel like the infrastructure is at a pretty good place to continue to be able to leverage and grow, and I'll stop there.
Balaji Gandhi
Thanks.
Chaim Indig
We'll ground there is a lot of questions from my brain to process really quickly and then sort of uncharted and downs It's okay. It's okay. I think the so I mean, let me start in trying to answer as many of these as I can. There's like seven questions, voyage expenses, funding. So let's start with. I still think we are making a lot of investments for ALIK. and look at we have we're spending a lot on R&D. We're spending a lot of our sales marketing organization. What we're doing is we're spending less continuously as a percentage. But I would say, look, even looking back to when we went public, we spent significantly more today than we did then as the dollar amount and we're able to put out phenomenal products that add us a phenomenal amount of value to our clients of all different kinds of clients in our life sciences clients on net from our provider clients and frankly, more and more the consumer itself. And so my view is yes, we we will keep making investments because ultimately, we're a growth company and we have a growth mindset. I think all we're excited to do is just return back to profitability. Frankly, I'm much more comfortable place for us, but now we're still making investments.
And and to answer your first question, is it harder to win clients? I think it's always, you know, hard to win clients in an environment like health care, right, like where margins are tight and expectations are high. And you know, there's just a lot of noise. And frankly, I think the reason we've been successful at it is the team and the team builds great product and sells great product and does a phenomenal job of implementing and supporting our clients. Our customers and appreciate the value we bring them. So I don't take I don't take the job lightly, but I think we've been pretty good at it for going on almost 19 years.
Balaji Gandhi
And Glenn, I was just going to add additionally to John's question to I think we've tried to be pretty consistent about growth and profitability mattering. They both go together and just some numbers to throw out, you know, we actually have increased expenses, operating expenses by 13% if you look to two years ago in the fourth quarter to today, so the highest point, we've invested a lot. But, you know, what's really important is that the revenue's grown 64% over that same period. So that's going to be important to grow. But also getting operating leverage and being profitable and in the future.
Chaim Indig
So hopefully, that's helpful. Thank you very much, Jonathan, a long question?
Operator
Yes, our next question comes from Sean Dodge with RBC Capital Markets. Please go ahead.
Sean Dodge
Hey, good afternoon. This is Thomas Keller on for Sean. Congrats on the nice quarter and thanks for taking the question. Just a quick modeling one here and kind of a follow-up on an earlier question, but how should we think about the EBITDA cadence kind of heading into fiscal 25 and then over the course of the year.
I know you mentioned a little seasonality on the payment side, but any other particular cost or efficiency actions creating some variability that we need to be thinking about or should we expect this to be pretty?
Balaji Gandhi
It's definitely not definitely not linear for the one of the reasons. I think you brought up the seasonality on payments. I think the other thing to keep in mind is and we've mentioned this in the past, too, but we've seen a lot of operating leverage over the past eight or nine quarters, and it's not going to be as much this year, just if you sort of look at the outlook we provided for revenue and EBITDA, so it will improve throughout the year. But 1Q has some lower margin associated with more payment revenue. And then you just start sort of dropping incremental pretty good incremental margin down as revenue grows. So look, we can happy to talk to you about our model and but we're not providing quarterly guidance, but feel free to follow.
Sean Dodge
Thanks a lot. I'll leave it.
Operator
There comes from the line of Jack Wallace with Guggenheim Securities.
Jack Wallace
Sorry, thanks for taking my questions. I wanted to ask about the growth algorithm going forward, particularly as you target more profitable customers, thinking about the growth in revenue per customer? And how much of that should we be thinking about coming from legacy, but maybe underpenetrated products versus some of the newer products you've rolled out both in R&D as well as some of your tuck-in M&A deals.
Thank you.
Balaji Gandhi
Maybe I can start and Tom can talk about the acquisitions a little bit more like one number Jack, to look at is for the full year fiscal 24, total revenue per client was up, ticked up a little bit, which was a sign of sort of things to come. And I think what we could say is it should be up more in fiscal 25 over 24 than it was in 24 or 23. And that's a combination of everything. I mean, I know it's the base, it's new clients that we think can be profitable as well.
Chaim Indig
And then in terms of the products or the new acquisition, they want to look I think like the adoption of this different products we have has been going very well. I think our CSM team has been doing a great job. And Tom, a lot of that's the testament to these products, adding a ton of value to our clients very, very quickly in, I think our go-to market, which is clearly differentiated in being able to get them into the hands of clients and very easily. And a lot of that's a lot of that is based on the work of our technology organization, just making the products very easy to turn on. So taken everyone, but it's so far we see a lot of our products for all different clients being adopted new or newer acquisitions, but also some of those are some of the products that we've been working on for years and we had in our bag for many, many years. So I think overall, like the teams is doing a very good job around adoption. I'm pretty proud of that.
Balaji Gandhi
And yes, appreciate that. And then as we're thinking about the sources of gross margin expansion, how should we think about and mix shift versus some of those products getting to scale.
And then just lastly, I can sneak a third in there. Why don't we get an SVR count?
Chaim Indig
Thank you.
Balaji Gandhi
Yes, so first of all, on the gross margins, and I think we've talked about there's not a ton of opportunity there. And relative the other three lines we still see, you know, over time, there may be a little bit of opportunity. But if you were sort of modeling 2025, we feel really good about where those gross margins have gotten to and a lot of leverage we've gotten and I would focus more on the other three line items as a source of operating leverage for this year. And I will ask Jack I will come back with the SDR account for you from me. Just grab that number for you.
Chaim Indig
Let me go the next question on that be the questions for me.
Balaji Gandhi
Operator?
I think we can go the next question?
Chaim Indig
Yes.
Operator
And our next question comes from the line of Joe drilling would be key.
Balaji Gandhi
I'm sorry.
Chaim Indig
Great. Thanks for taking my question. And one on network solutions. Just when you look at the maybe standing of later-stage clinical activity at some of the customers that you help in that business or even just the propensity to spend here at year end with marketing decisions. Are you starting to get maybe the sense that the backdrop for new campaigns and just the broader macro that business might face into fiscal 2025 and beyond, do you think that might actually be a better environment because it's obviously better been pretty challenging here over the last 18 months or so I don't think that's a fair question. I think it's too early to tell how the year will play out, but I think the team's doing a great job. I feel really good about sort of the execution and the way the pipeline works looks some. But generally speaking, I think there's a lot of months in a year, and I've seen, I guess I'm having done this for so many years now, I'd say whenever I've thought it's going to get easier, I'm usually wrong. And whenever I think it's going to get harder now I'm often wrong on that, too. So I would say like quickly, we hire great people. We provide great returns on our network to our clients. We and we tried to make sure that the right patients, the right messages, all the time that drive a phenomenal amount of value for those patients and keep doing that, I think we have the opportunities to keep growing our Network Solutions revenue for years to come.
Okay.
That's great.
Balaji Gandhi
And then I'm I wanted to dig in a bit more to just what it means to price or prioritize customer prospects that drive profitable growth.
I guess in practice that kind of sounds to me like you're expecting your gross retention to move higher over time. But is that the right way to think of it. So as the average tenure and the installed base is maturing and moving higher, that obviously bears a favorable revenue mix implication that definitely factors into things like customer acquisition costs, is that kind of what you see happening for Phreesia over the next few years at this point?
Yes, sure. Joe. Absolutely. Retention is something we are very religious about. So absolutely focusing on profitable growth and profitable customers, we expect to have an impact on retention. Number two, though, is payback. So I think that's really the thing you underwrite a certain amount of time that you think you can get revenue on how much revenue you can get. And so that's but that's the other thing that's sort of changed, but those two things influence revenue growth and profitability growth.
Chaim Indig
Is that helpful?
Yes.
Balaji Gandhi
No, that's great. I'll leave it there.
Chaim Indig
Thanks.
Great.
Balaji Gandhi
And the DSCR count for January 31st was 1.7 billion over the next question, yes.
Operator
And the next question comes from Jailendra Singh to securities. Please go ahead.
Chaim Indig
Good evening.
Balaji Gandhi
Thanks for taking my questions. A few clarification, if I can. With respect to the quarterly provided at of at least 100 in Q1, is that a good quarterly run rate to use or as we model the year.
Chaim Indig
All of it is specific to Q1.
Balaji Gandhi
Yes. I mean, Jailendra, I know you're getting more familiar with us, Tom. We have in historical periods, given that next quarter number, we do have a decent amount of visibility, and we'll keep sharing that with you as the year goes out. And so I don't want to be let give you a specific number but I think it's a fair like sort of Watermark to think about just know that we've got revenue guidance. So whatever you sort of model in for client growth, you know, it's going to it's going to have a different revenue per client.
Okay. And I want to go back to change health care issues of, I think thanks for the color about that you were you guys able to switch to the clearing house is pretty quickly without much disruption for providers, but have you seen a sea change or any impact on utilization trends at your providers, basically because your payment processing and your network solutions business is exposed to utilization trends, though, any impact on that? And related to that up in a lot of providers across the country are kind of disrupted by this kind of is that impacting in any way the sales cycle like in terms of your their willingness to work with you to roll out new solutions as they are dealing with this change healthcare issues. Just curious like maybe it's going to go beyond just the clearing house, which impact from Change Healthcare.
Chaim Indig
But so from what we can say, we haven't seen providers not seeing any significant utilization changes at our provider groups. And I think I say this all the time most of our providers, first and foremost want to treat their patients. So we haven't seen any change in utilization patterns that I know of and I would probably hear about it if we did some from a flows, the others are selling environment and selling environment. No, I don't think you've seen a material change the selling environment, but obviously, if this goes on for months and months and months, it's just going to be pretty steady.
Yes, that's fair.
Balaji Gandhi
And then a last one, I know maybe, but as you maybe you might not want to give any color there. But just in terms of like as we think about, please segment up for modeling purposes, any directional guidance you want to provide in terms of how should we think about the growth at for each segment in fiscal 25 compared to your overall fiscal 25 and for your Company overall revenue growth guidance for the year any individual segment guidance?
Yes. So I don't want to be clear about the terminology here. 200 would be these are not segments the revenue lines, but I think that's the spirit of your question is more around the revenue lines, right?
Yes, yes. So you know, obviously, there's costs that are spread across all different areas of the company, and we're able to have three different revenue lines. And I think we've been consistent in the past in 20 fiscal 2025 is no different is payment processing lags. So that will be the slowest growth rate of the three with an outlook range of 20% to 22%. I think it's safe to say that the subscription and related services and network solutions revenue lines would outpace payment processing.
Thanks, guys.
Chaim Indig
Sure.
Operator
Our next question comes from the line of Stephanie Davis with Barclays. Please go ahead.
Hey, guys. Hello from Miami. Thank you for taking my question. I had more questions on the profitable client growth. So then looking at the 100 adds for 1Q, is that a question of you being choosier with the pipeline this quarter, you're only pursuing a subset of opportunity that historically cultivated and as you kind of refocus on this and rebuild the pipeline, your client growth can pick up to closer to prior levels? Or is this something where we should think or it takes more time to ramp up in HSC more profitable?
Chaim Indig
Maybe there's more cross-sell.
Balaji Gandhi
So first of all, I mean, I think one thing that's important to know is many of these clients this is months in the making, right? And then if you think about our go-to-market strategy, so this was something that we went about over the past couple of years and really starting to look at the returns. And obviously, the environment changed last year and look at the returns we're getting. So this is sort of now you're seeing the output of that shift. And I think we're constantly looking at that and looking at obviously, cost of capital is different. I think to John's question, we'll keep you updated as things go, but I don't think they're going to dramatically change. We feel pretty good about the decisions we made last year that led to the clients we added this past quarter and 100 plus that we expect to get in 1Q. But I think this relates to I think Joe's question earlier to think about it as we're trying to drive lots of good client retention or trying to drive revenue per client, we're trying to drive profitability. And so that's for the next quarter, that's 100 plus. If it's higher or if it's lower, it will be through the lens of those.
Those metrics that I just talked about, Copel and for the SDR accounts.
And just to clarify, I forgot my question.
Chaim Indig
Did you say 107 split for looks to prevail or?
Yes, that's just on our provider organization metrics.
Does that comp to the one 75 last quarter.
Chaim Indig
So a 40% decline on he's locating his notes.
Yes.
Balaji Gandhi
So I guess I have two 108 comps to 139 last quarter, a lot of those, which is the South Pacific same number, right?
There did that spur a layoff as you had this new focus on on kind of a certain subset of your clients? Or is there any opportunity to remap your SDRs that maybe historically had a less profitable channel assignment downmarket?
Chaim Indig
Are they or are those SCRs graduated to other roles in the organization. And there's general attrition in that role as well in trauma, although I see, Bob.
Balaji Gandhi
Thank you.
Operator
Yes, our next question comes from the line of Scott Schrier out the KeyBanc fees.
Chaim Indig
Sorry, hey, I'm in velocity. Thanks for taking my questions. So I'm you seem pretty happy you're executing on your go-to-market strategy. Your teams are rapidly building out solutions helping the needs of clients.
Just wanted to follow up on the Change Healthcare over the last three weeks, have you guys been able to deploy new solutions on for your clients to help mitigate the changed Change Healthcare issue? And then also on the payment side, wondering if you're seeing any unusual activity over the last three weeks.
Thanks.
And so I don't forget to Dave to your question, Scott around have we been able to deploy new solutions until they've mostly been new solutions, too, our clients, but some of our newer products has started to get more adoption and use some of the change products for payment and collections in the back end. And we just prioritize making sure those clients and get access to those products as soon as possible so that they could keep operating their business. But all in all, I wouldn't say we've built new products just for helping these clients. It's mostly been growth, accelerating rollout of certain products that have been built for being BUILD-3 profit years.
And so what was the other question I got was the other question, very challenging payment joined us on the payments side is have you seen any behavior changes, I guess, over the last three weeks on the payment side?
No, no.
Balaji Gandhi
Nothing to call out.
Okay, but it's still going to change very much, guys.
Yes.
Operator
Our next question comes from the line of Jeff Garrow with Stevens. Please go ahead.
Chaim Indig
Yes, good afternoon. Thanks for taking my questions and want to ask about network solutions. Revenue in that business. And my rough math says Network Solutions revenue per visit was up about 5% in FY 20 for some US, if you would call out any key driver among mix pricing or adoption to drive that per visit growth and also to put a strategic lens on it. Any comments on what the runway is for network solutions to continue to create additional value for your Life Science Partners?
So we think it was a mixture of all I would say probably a mixture of all of the above suggest that drove continued success. And a lot of that was investment in product and execution and team and Jim thoughtful use of the network. We do expect our life sciences clients to be the driver of our success moving growth moving forward.
Balaji Gandhi
Yes. And Jeff, I think you could actually go back to one of your earlier questions. I wish I could remember who asked it, but I think I really talked about just the power of the network being bigger and thus providing the right relevant content to the right patient. And we have seen a lot more opportunities to do that and a lot more brands. And I think we put in our slide deck. Now we're working with over 90 90 brands today.
Chaim Indig
Now I appreciate that great to see the additional value being driven across a bigger base of visits on the network and maybe to follow up a little further on this throughout your you've given the SDR account and talked about the kind of priorities there, but maybe you could talk a little bit more about your investment in sales and marketing in Network Solutions. Is there incremental investment there? And how should we think about the ability to work with more brands and and create and drive cross-selling of more products. And that our life sciences go-to-market team is they're rock stars and we expect to keep investing in them. And they have frankly, third, they work hard, they're fine and we expect them to continue to be a growing part of our organization. But we also expect to keep getting significant leverage off those organizations, both our provider and our life sciences teams with scale, and we're proud of them. They're doing really well.
Balaji Gandhi
And Jeff, I mean, let me just point out the debt that team that the revenue associated with that area was in our sub 20 million. The 1st year when we went public and our entire sales and marketing expense, that year was 32 million. So I mean investments have been made to point. We'll continue to do that, but significant ones have been made.
Chaim Indig
Got it. Thanks again for taking the questions.
Operator
Yes, our next question comes from the line of Ryan MacDonald with Needham & Company. Please go ahead.
Chaim Indig
Thanks for taking my questions and congrats on a nice quarter. As we think about the focus on more profitable prospects. Is there any portfolio management going on where you're looking to proactively churn, unprofitable customers? And as we think about the Phreesia fest sort of event, is this sort of like a would you consider it's kind of like a sales kickoff where you can kind of we strategize to go to market motion too, trying to drive and deliver larger initial lands more better cross-sell motion in the effort to drive more profitable, profitable growth things.
So I'll start with free GFS, and then I'm going to remind that I'm going to ask you about the first question because I have already forgotten it. So please invest wisely into sales kick off. It was our first of all Company meeting we've done in seven years and it was just really important to bring the team together because the Company has changed so much in the last seven years and a lot of teams that work collaboratively with each other I didn't get a chance to meet each other and very often is as worried as I should remind all of our stakeholders. We are a fully virtual company. So this is and it was a significant investment, but it also allowed us to really talk about our mission vision and what our values were along we're talking about and moving beyond intake and see that we talk about the go-to-market motion. But we also celebrate our engineering team and we celebrate our Network Solutions organization and we celebrate our support team that's on the frontlines. So this isn't just about our go-to-market motion. This is about our organization and the people that make it, make it valuable and make it all happen. And when your first question was we're out of portfolio management. I think we're always doing that. We think about capital allocation regularly as an organization where we continue to invest in where we where we double down on that investment even or triple down and other areas where we pulled back a little bit and trying to drive better returns from the investments that we've already made.
And I don't think our view is pruning clients. I think our view is Tom, really making sure that clients we do have get the most value out of being a future clients.
Helpful.
Balaji Gandhi
And maybe just a follow-up.
Chaim Indig
I wanted to ask about PAM. Obviously, it's a longer term opportunity here, but and given the inclusion of the miscalculation this year, I'm just curious how you're going about sort of trying to get that in the hands of more physicians and sort of really start to drive that greater usage to create more maybe opportunities for 2026 and beyond.
So just for everyone's edification, the PAM is the patient activation measure, and it's a performance measure that we are the owner of the license from a go-to-market motion. There's a whole team that's really working with our provider clients in getting it live and on were performing hundreds of thousands of pounds on a regular basis. I think we have a lot of clients that have already put up their hands were always adding more. And that body of work is still in its early stages and thought and I'm getting, you know, we've already have over 1 million unique patients that have done a pan. So we feel good that the body of work and the data that we're going to start producing will help help further the our view and generally in the one community view that driving activation drives better outcomes well across the board and Ryan, in addition to the mix of program that you mentioned.
Balaji Gandhi
We have spent a lot of time with the kidney care community to kidney care choices program, and we help them drive a lot.
Great results, we think.
Excellent.
Balaji Gandhi
Thanks for the color.
Operator
Our next question comes from the line of Aaron Kimpton with GPs and JMP. Please go ahead.
Chaim Indig
Great.
Balaji Gandhi
Thank you for the question. I'm sure you guys saw the General Catalyst announcements and provide some help from Northeast Ohio in January with the thesis of kind of building modern, tech-enabled health care delivery platforms that scale so Hi. I'm wondering if you could share your thoughts on nonprofit networks slipping before profit over time and the opportunities and risks you see there for Phreesia? And then secondly, from a patient care perspective and as someone frankly, who was born in a health care system and grew up. And I am curious how you think about the potential of these types of transactions to drive better patient outcomes.
Thank you.
Chaim Indig
I'm sorry. So I'm going to tread carefully on mix and 10 nanometer probably give all these use, but I would say that whether it's a health system is nonprofit by tax to Fintur or for-profit. I think they still have to be able to provide great care and they do often and not seeing and frankly, do it at a loss rate, right? So that they can keep operating the business. And what we're really talking about the difference between for-profit and nonprofit is their tax status. But we have if you look at ambulatory care all across the country, there's funds legally by dedicated professionals that operate in a for-profit manner and deliver care across the manner and those nonprofits. And I think your America's health care system is able to support both nonprofit and for-profit care delivery systems. And there's cases like we have clients in the for-profit space that are just doing amazing work for their clients come into their patient. So I actually think it has more to do with the organization and its tax.
Got it.
Chaim Indig
That's very helpful.
Balaji Gandhi
Thank you.
Operator
Karen offer questions. I'll now turn the call back over to our team for closing remarks.
Chaim Indig
So I want to thank everyone for for listening and supporting Phreesia and we look forward to seeing all of you in the coming months. And I hope everyone has really nice spring and out-of-home budget was actually soon.
Balaji Gandhi
Thank you.
