You ought to learn the next dialogue and evaluation of our monetary situation
and outcomes of operations along side our unaudited consolidated
monetary statements and associated notes showing elsewhere on this Quarterly
Report on Form 10-Q and our monetary statements and associated notes thereto
included in our Form 10-Okay for the fiscal 12 months ended January 31, 2022, filed with
the SEC on March 31, 2022. In addition to historic monetary info, the
following dialogue and evaluation and knowledge set forth elsewhere on this
Quarterly Report on Form 10-Q include forward-looking statements that contain
dangers, uncertainties and assumptions. Our precise outcomes may differ materially
from these anticipated by these forward-looking statements because of many
elements. We talk about elements that we imagine may trigger or contribute to those
variations beneath and elsewhere on this Quarterly Report on Form 10-Q, together with
these set forth underneath “Risk Factors” and “Special Note Regarding Forward-Looking
Statements.”
Financial Highlights
•Total income elevated 33% to $67.9 million within the three months ended July 31,
2022, as in contrast with $51.0 million within the three months ended July 31, 2021.
•Total income elevated 32% to $131.2 million within the six months ended July 31,
2022, as in contrast with $99.3 million within the six months ended July 31, 2021.
•Net loss was $46.7 million within the three months ended July 31, 2022, as in contrast
to $24.4 million within the three months ended July 31, 2021.
•Net loss was $98.0 million within the six months ended July 31, 2022, as in contrast
to $35.4 million within the six months ended July 31, 2021.
•Adjusted EBITDA was detrimental $26.0 million within the three months ended July 31,
2022, as in comparison with detrimental $11.0 million within the three months ended July 31,
2021.
•Adjusted EBITDA was detrimental $56.5 million within the six months ended July 31,
2022, as in comparison with detrimental $11.0 million within the six months ended July 31,
2021
•Net money utilized in working actions was $19.8 million and $53.5 million for
the three and 6 months ended July 31, 2022, respectively.
•Net money utilized in working actions was $6.7 million and $12.2 million for
the three and 6 months ended July 31, 2021, respectively.
•Free money stream was detrimental $25.7 million and detrimental $66.4 million for the
three and 6 months ended July 31, 2022, respectively, in comparison with detrimental
$9.9 million and detrimental $22.3 million for the three and 6 months ended
July 31, 2021, respectively.
•Cash and money equivalents as of July 31, 2022 was $240.7 million, a lower of
$73.1 million in comparison with January 31, 2022.
For a reconciliation of Adjusted EBITDA to web loss and a reconciliation of free
money stream to web money utilized in working actions, and for extra info as
to how we outline and calculate such measures, see the part beneath titled
“Non-GAAP monetary measures.”
Overview
We are a number one supplier of complete software program options that enhance the
operational and monetary efficiency of healthcare organizations by activating
sufferers of their care to optimize affected person well being outcomes. As evidenced in
business survey studies from KLAS, now we have been acknowledged as a pacesetter primarily based on
our integration capabilities with healthcare providers consumer organizations, the
broad adoption of our affected person consumption functionalities, our response to the
COVID-19 pandemic and by total consumer satisfaction. Through our SaaS-based
expertise platform, which we check with because the Phreesia Platform or our Platform,
we provide healthcare providers shoppers a strong suite of built-in options that
handle affected person entry, registration, funds and scientific assist. Our Platform
additionally supplies life sciences corporations, affected person advocacy, public curiosity and
different not-for-profit organizations with a channel for focused and direct
communication with sufferers.
We serve an array of healthcare providers shoppers of all sizes throughout over 25
specialties, starting from single-specialty practices, together with inside and
household medication, urology, dermatology, and orthopedics, to giant,
multi-specialty
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teams, well being methods in addition to regional and nationwide payers and different
organizations that present different forms of healthcare-related providers. Our life
sciences income is generated from shoppers within the pharmaceutical, biotechnology
and medical gadget industries in addition to affected person advocacy, public curiosity and
different not-for-profit organizations in search of to activate, have interaction and educate
sufferers about matters essential to their well being.
We derive income from (i) subscription charges from healthcare providers shoppers
for entry to the Phreesia Platform and associated skilled providers charges,
(ii) fee processing charges primarily based on ranges of affected person fee quantity processed
by the Phreesia Platform and (iii) charges from life sciences corporations to
ship advertising and marketing content material to sufferers utilizing the Phreesia Platform. We have
sturdy visibility into our enterprise as nearly all of our income is derived
from recurring subscription charges and re-occurring fee processing charges.
We market and promote our services and products to healthcare providers shoppers
all through the United States utilizing a direct gross sales group. Our demand
technology crew develops content material and identifies prospects that our gross sales
growth crew researches and qualifies to generate high-grade, actionable
gross sales leads. Our direct gross sales drive executes on these certified gross sales leads,
partnering with consumer providers to make sure prospects are educated on the breadth
of our capabilities and demonstrable worth proposition, with the purpose of
attracting and retaining shoppers and increasing their use of our Platform over
time. Most of our Platform options are contracted pursuant to annual,
auto-renewing agreements. Our gross sales usually contain aggressive processes and
gross sales cycles have, on common, various in length from three months to 6
months, relying on the scale of the potential consumer. In addition, by
Phreesia University (Phreesia’s in-house coaching program), occasions, consumer
conferences and webinars, we assist our healthcare providers shoppers optimize their
companies and, in consequence, assist consumer retention.
We additionally promote services and products to pharmaceutical manufacturers and promoting
companies by our direct gross sales and
advertising and marketing groups.
Since our inception, now we have targeted considerably all of our gross sales efforts
inside the United States. Accordingly, considerably all of our income from
historic intervals has come from the United States, and our present technique is
to proceed to focus considerably all of our gross sales efforts inside the United
States.
Our income progress has been primarily natural and displays our important
addition of latest healthcare providers shoppers and elevated income from present
shoppers. New healthcare providers shoppers are outlined as shoppers that go reside in
the relevant interval and present healthcare providers shoppers are outlined as
shoppers that go reside in any interval earlier than the relevant interval.
Investments in Growth
During the fiscal 12 months ended January 31, 2022, we accelerated hiring and total
investments throughout all areas of Phreesia to arrange for our anticipated progress
in shoppers and use of our platform. The progress in expenditures from the six
months ended July 31, 2021 to the six months ended July 31, 2022 displays the
investments made throughout the fiscal 12 months ended January 31, 2022. In fiscal 2023
and thereafter, we anticipate progress in our crew and compensation to average.
Recent developments
COVID-19
In March 2020, the World Health Organization declared the continuing outbreak of a
novel pressure of coronavirus, or COVID-19, a pandemic. There continues to be
uncertainty as to the length and extent to which the worldwide COVID-19 pandemic,
in addition to the emergence of latest variants, might adversely influence our enterprise
operations, monetary efficiency, and outcomes of operations, in addition to
macroeconomic circumstances, presently.
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Key Metrics
We frequently evaluate the next key metrics to measure our efficiency,
establish traits affecting our enterprise, formulate monetary projections, make
strategic enterprise selections and assess working capital wants.
Three months ended Six months ended
July 31, July 31,
Unaudited 2022 2021 2022 2021
Key Metrics:
Healthcare providers shoppers (common over
interval) 2,776 1,987 2,651 1,945
Average income per healthcare providers
consumer $ 18,248 $ 19,720 $ 37,397 $ 39,932
We stay targeted on constructing safe and dependable merchandise that derive a powerful
return on funding for our shoppers and implementing them with velocity and ease.
This technique continues to allow us to develop our community of healthcare providers
shoppers. As disclosed in our Annual Report on Form 10-Okay for the fiscal 12 months
ended January 31, 2022, throughout the fourth quarter of fiscal 12 months 2022, we
renamed our key metric “supplier shoppers (common over interval)” to “healthcare
providers shoppers (common over interval)”. We additionally renamed our key metric “common
income per supplier consumer” to “common income per healthcare providers
consumer.”
•Healthcare providers shoppers. We outline healthcare providers shoppers because the
common variety of healthcare providers consumer organizations that generate income
every month throughout the relevant interval. In instances the place we act as a
subcontractor offering white-label providers to our companion’s shoppers, we deal with
the contractual relationship as a single healthcare providers consumer. We imagine
progress within the variety of healthcare providers shoppers is a key indicator of the
efficiency of our enterprise and relies upon, partially, on our means to efficiently
develop and market our Platform to healthcare providers organizations which can be
not but shoppers. While progress within the variety of healthcare providers shoppers is an
vital indicator of anticipated income progress, it additionally informs our administration
of the areas of our enterprise that can require additional funding to assist
anticipated future healthcare providers consumer progress. For instance, because the variety of
healthcare providers shoppers will increase, we may have so as to add to our buyer
assist crew and make investments to keep up effectiveness and efficiency of our
Platform and software program for our healthcare providers shoppers and their sufferers.
•Average income per healthcare providers consumer. We outline common income per
healthcare providers consumer as the entire subscription and associated providers and
fee processing income generated from healthcare providers shoppers in a given
interval divided by the common variety of healthcare providers shoppers that
generate income every month throughout that very same interval. We are targeted on
regularly delivering worth to our healthcare providers shoppers and imagine that
our means to extend common income per healthcare providers consumer is an
indicator of the long-term worth of the Phreesia platform. Average income per
healthcare providers consumer was $18,248 within the three months ended July 31, 2022
as in comparison with $19,720 in the identical interval within the prior 12 months, a lower of seven%.
The decline was primarily pushed by healthcare providers consumer progress
considerably outpacing fee processing quantity and income progress.
Additionally, the combination of options utilized by new shoppers throughout Patient Access,
Registration, Revenue Cycle and Clinical Support choices has been a
contributing issue to the declining traits on this metric.
Additional Information
Three months ended Six months ended
July 31, July 31,
Unaudited 2022 2021 2022 2021
Patient fee quantity (in hundreds of thousands) $ 811 $ 696 $ 1,648 $ 1,397
Payment facilitator quantity share 80 % 78 %
80 % 78 %
•Patient fee quantity. We imagine that affected person fee quantity is an indicator
of each the underlying well being of our healthcare providers shoppers’ companies and
the persevering with shift of healthcare prices to sufferers. We measure affected person fee
quantity as the entire greenback quantity of transactions between our healthcare
providers shoppers and their sufferers using our fee platform, together with
through credit score and debit playing cards that we course of as a fee facilitator in addition to
money and verify funds and credit score and debit transactions for which we act as a
gateway to different fee processors.
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•Payment facilitator quantity share. We outline fee facilitator quantity
share as the amount of credit score and debit card affected person fee quantity that we
course of as a fee facilitator as a share of whole affected person fee
quantity. Payment facilitator quantity is a significant driver of our fee processing
income. Our fee facilitator quantity share may decline barely over
time ought to we improve our penetration of enterprise prospects which can be much less
possible to make use of Phreesia as a fee facilitator.
Components of statements of operations
Revenue
We generate income primarily from offering an built-in SaaS-based software program
and fee platform for the healthcare business. We derive income from
subscription charges and associated providers generated from our healthcare providers
shoppers for entry to the Phreesia Platform, fee processing charges primarily based on
the degrees of affected person fee quantity processed by the Phreesia Platform,
and from digital advertising and marketing income from life sciences corporations to achieve,
educate and talk with sufferers when they’re most receptive and actively
in search of care.
Our whole income consists of the next:
•Subscription and associated providers. We primarily generate subscription charges from
our healthcare providers shoppers primarily based on the variety of healthcare providers
shoppers that subscribe to and make the most of the Phreesia Platform. Our healthcare
providers shoppers are usually billed month-to-month in arrears, although in some
situations, healthcare providers shoppers might decide to be billed quarterly or
yearly prematurely. Subscription charges are usually auto-debited from
healthcare providers shoppers’ accounts each month. As we goal and add bigger
enterprise healthcare providers shoppers, these shoppers might select to contract
otherwise than our typical per healthcare providers consumer subscription mannequin.
To the extent we cost in an alternate method with bigger enterprise
healthcare providers shoppers, we anticipate that such a pricing mannequin will recur and,
mixed with our per healthcare providers consumer subscription charges, will
improve as a share of our whole income. In addition, we obtain sure
charges from healthcare providers shoppers for skilled providers related to
our implementation providers in addition to journey and expense reimbursements,
transport and dealing with charges, gross sales of {hardware} (PhreesiaPads and Arrivals
Kiosks), on-site assist and coaching.
•Payment processing charges. We generate income from fee processing charges primarily based
on the variety of transactions and the degrees of affected person fee quantity processed
by the Phreesia Platform. Payment processing charges are typically calculated
as a share of the entire transaction greenback worth processed and/or a price per
transaction. Credit and debit affected person fee quantity processed by our
fee facilitator mannequin represented 80% and 78% of our affected person fee quantity
within the three months ended July 31, 2022 and 2021, respectively. Credit and debit
affected person fee quantity processed by our fee facilitator mannequin
represented roughly 80% and 78% of our affected person fee quantity within the six months
ended July 31, 2022 and 2021, respectively. The the rest of our affected person fee
quantity consists of credit score and debit transactions for which Phreesia acts as a
gateway to a different fee processor, and money and verify transactions.
Utilization traits have been dynamic by the pandemic, diverging from our
pre-pandemic seasonality. We anticipate the setting to stay dynamic by
fiscal 12 months 2023.
•Life sciences. We generate income from the sale of digital advertising and marketing options
to life sciences corporations. As we increase our healthcare providers consumer base, we
improve the variety of new sufferers we are able to attain to ship focused advertising and marketing
content material on behalf of our life sciences shoppers.
Cost of income (excluding depreciation and amortization)
Our value of income primarily consists of personnel prices, together with salaries,
stock-based compensation, advantages and bonuses for implementation and technical
assist, and infrastructure prices to function our Platform akin to internet hosting charges
and charges paid to varied third-party suppliers for entry to their expertise,
in addition to prices to confirm insurance coverage eligibility and advantages.
Payment processing expense
Payment processing expense consists primarily of interchange charges set by fee
card networks and which can be in the end paid to the card-issuing monetary
establishment, evaluation charges paid to fee card networks, and charges paid to
third-party fee processors and gateways. Payment processing expense might
improve as a share of fee processing income if card networks elevate
pricing for interchange and evaluation charges or if we scale back pricing to our
shoppers.
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Sales and advertising and marketing
Sales and advertising and marketing expense consists primarily of personnel prices, together with
salaries, stock-based compensation, commissions, bonuses and advantages prices for
our gross sales and advertising and marketing personnel. Sales and advertising and marketing expense additionally consists of
prices for promoting, promotional and different advertising and marketing actions, in addition to
sure charges paid to varied third-party companions for gross sales and lead technology.
Advertising is expensed as incurred.
Research and growth
Research and growth expense consists of prices to develop our merchandise and
providers that don’t meet the factors for capitalization as internal-use
software program. These prices consist primarily of personnel prices, together with salaries,
stock-based compensation, advantages and bonuses for our growth personnel.
Research and growth expense additionally consists of third-party companion charges and
third-party consulting charges, offset by any internal-use software program growth
value capitalized throughout the identical interval.
General and administrative
General and administrative expense consists primarily of personnel prices,
together with salaries, stock-based compensation, bonuses and advantages for our
government, finance, authorized, safety, human assets, info expertise and
different administrative personnel. General and administrative expense additionally consists of
software program prices to assist our finance, authorized and human assets operations,
insurance coverage prices in addition to charges to third-party suppliers for accounting, authorized
and consulting providers, prices for varied non income-based taxes and allotted
overhead. We anticipate basic and administrative expense to proceed to extend
in absolute {dollars} as we develop our operations and proceed to function as a
public firm, though we anticipate such expense to start to say no as a
share of whole income over time.
Depreciation
Depreciation represents depreciation expense for PhreesiaPads and Arrivals
Kiosks, knowledge middle and different laptop {hardware}, bought laptop software program,
furnishings and fixtures and leasehold enhancements.
Amortization
Amortization primarily represents amortization of our capitalized internal-use
software program associated to the Phreesia Platform in addition to amortization of acquired
intangible property.
Other (expense) revenue, web
Our different expense and revenue line gadgets include the next:
•Other revenue (expense), web. Other revenue (expense), web consists of international
currency-related good points and losses and different miscellaneous revenue (expense).
•Interest revenue. Interest revenue consists of curiosity earned on our money and
money equal balances. Interest revenue has not been materials to our
operations so far.
•Interest expense. Interest expense consists primarily of the curiosity incurred
on our financing obligations in addition to amortization of reductions and deferred
financing prices.
Provision for revenue taxes
Based upon our cumulative pre-tax losses lately and out there proof,
now we have decided that it’s extra possible than not that sure deferred tax
property as of July 31, 2022 is not going to be realized within the close to time period. Consequently,
now we have established a valuation allowance towards our deferred tax property that
are usually not extra possible than to not be realized. In future intervals, if we conclude
now we have future taxable revenue ample to understand the deferred tax property, we
might scale back or remove the valuation allowance.
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Comparison of outcomes of operations for the three and 6 months ended July 31,
2022 and 2021
Revenue
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Subscription and associated providers $ 31,069 $ 22,885 $ 8,184 36 %
Payment processing charges 19,581 16,306 3,275 20 %
Life sciences 17,217 11,816 5,401 46 %
Total income $ 67,867 $ 51,007 $ 16,860 33 %
•Subscription and associated providers. Our subscription and associated providers
income from healthcare providers organizations elevated $8.2 million to $31.1
million for the three months ended July 31, 2022, as in comparison with $22.9 million
for the three months ended July 31, 2021, primarily on account of new healthcare
providers shoppers added in addition to growth of and cross-selling to present
healthcare providers shoppers.
•Payment processing charges. Our income from affected person funds processed by
the Phreesia Platform
elevated $3.3 million to $19.6 million for the three months ended July 31,
2022, as in comparison with $16.3 million for the three months ended July 31, 2021, due
to the addition of extra healthcare providers shoppers and growth of providers
supplied to present healthcare providers shoppers.
•Life sciences. Our income from life science shoppers for digital advertising and marketing
elevated $5.4 million to $17.2 million for the three months ended July 31,
2022, as in comparison with $11.8 million for the three months ended July 31, 2021, due
to a rise in new digital advertising and marketing options applications and deeper affected person
outreach among the many present applications.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Subscription and associated providers $ 60,170 $ 44,704 $ 15,466 35 %
Payment processing charges 38,962 32,950 6,012 18 %
Life sciences 32,089 21,644 10,445 48 %
Total income $ 131,221 $ 99,298 $ 31,923 32 %
•Subscription and associated providers. Our subscription and associated providers
income from healthcare providers organizations elevated $15.5 million to $60.2
million for the six months ended July 31, 2022, as in comparison with $44.7 million for
the six months ended July 31, 2021, primarily on account of new healthcare providers
shoppers added in addition to growth of and cross-selling to present healthcare
providers shoppers.
•Payment processing charges. Our income from affected person funds processed by
the Phreesia Platform
elevated $6.0 million to $39.0 million for the six months ended July 31, 2022,
as in comparison with $33.0 million for the six months ended July 31, 2021, as a result of
addition of extra healthcare providers shoppers and growth of providers supplied
to present healthcare providers shoppers.
•Life sciences. Our income from life science shoppers for digital advertising and marketing
elevated $10.4 million to $32.1 million for the three months ended July 31,
2022, as in comparison with $21.6 million for the three months ended July 31, 2021, due
to a rise in new digital advertising and marketing options applications and deeper affected person
outreach among the many present applications.
Cost of income (excluding depreciation and amortization)
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Cost of income (excluding depreciation and
amortization) $ 14,873 $ 10,032 $ 4,841 48 %
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Cost of income (excluding depreciation and amortization) elevated $4.8 million
to $14.9 million for the three months ended July 31, 2022, as in comparison with $10.0
million for the three months ended July 31, 2021. The improve resulted
primarily from a $2.2 million improve in worker compensation and advantages
prices pushed by increased compensation for present workers and elevated
headcount in addition to increased exterior providers prices.
Stock compensation expense included in value of income was $1.0 million and $0.5
million for the three months ended July 31, 2022 and 2021, respectively.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Cost of income (excluding depreciation and
amortization) $ 29,259 $ 18,566 $ 10,693 58 %
Cost of income (excluding depreciation and amortization) elevated $10.7
million to $29.3 million for the six months ended July 31, 2022, as in comparison with
$18.6 million for the six months ended July 31, 2021. The improve resulted
primarily from a $5.5 million improve in worker compensation and advantages
prices pushed by increased compensation for present workers and elevated
headcount in addition to increased exterior providers prices.
Stock compensation incurred associated to value of income was $1.8 million and $0.9
million for the six months ended July 31, 2022 and 2021, respectively.
Payment processing expense
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Payment processing expense $ 12,554 $ 9,648 $ 2,906 30 %
Payment processing expense elevated $2.9 million to $12.6 million for the three
months ended July 31, 2022, as in comparison with $9.6 million for the three months
ended July 31, 2021. The improve resulted primarily from a rise in affected person
funds processed by the Phreesia Platform pushed by a rise in
affected person visits over the prior 12 months.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Payment processing expense $ 24,712 $ 19,373 $ 5,339 28 %
Payment processing expense elevated $5.3 million to $24.7 million for the six
months ended July 31, 2022, as in comparison with $19.4 million for the six months
ended July 31, 2021. The improve resulted primarily from a rise in affected person
funds processed by the Phreesia Platform pushed by a rise in
affected person visits over the prior 12 months.
Sales and advertising and marketing
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Sales and advertising and marketing $ 38,341 $ 22,167 $ 16,174 73 %
Sales and advertising and marketing expense elevated $16.2 million to $38.3 million for the
three months ended July 31, 2022, as in comparison with $22.2 million for the three
months ended July 31, 2021. The improve was primarily attributable to a $13.4
million improve in whole compensation and advantages prices pushed by the upper
compensation for present workers and elevated headcount, in addition to increased
third-party advertising and marketing and promoting prices.
Stock compensation expense included in gross sales and advertising and marketing expense was $5.4
million and $2.2 million for the three months ended July 31, 2022 and 2021,
respectively.
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Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Sales and advertising and marketing $ 78,372 $ 37,179 $ 41,193 111 %
Sales and advertising and marketing expense elevated $41.2 million to $78.4 million for the six
months ended July 31, 2022, as in comparison with $37.2 million for the six months
ended July 31, 2021. The improve was primarily attributable to a $34.8 million
improve in whole compensation prices pushed by increased compensation for present
workers and elevated headcount in addition to increased third-party advertising and marketing and
promoting prices.
Stock compensation incurred associated to gross sales and advertising and marketing expense was $11.1
million and $3.9 million for the six months ended July 31, 2022 and 2021,
respectively.
Research and growth
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Research and growth $ 22,542 $ 11,443 $ 11,099 97 %
Research and growth expense elevated $11.1 million to $22.5 million for
the three months ended July 31, 2022, as in comparison with $11.4 million for the three
months ended July 31, 2021. The improve resulted primarily from a $7.8 million
improve in whole compensation and advantages prices pushed by increased compensation
for present workers and elevated headcount, a $1.9 million improve in
exterior providers prices, in addition to increased software program bills.
Stock compensation expense included in analysis and growth expense was $3.0
million and $1.1 million for the three months ended July 31, 2022 and 2021,
respectively.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Research and growth $ 43,177 $ 19,497 $ 23,680 121 %
Research and growth expense elevated $23.7 million to $43.2 million for
the six months ended July 31, 2022, as in comparison with $19.5 million for the six
months ended July 31, 2021. The improve resulted primarily from a $17.9 million
improve in whole compensation and advantages prices pushed by increased compensation
for present workers and elevated headcount, a $3.0 million improve in
exterior providers prices in addition to increased software program bills.
Stock compensation incurred associated to analysis and growth expense was $5.5
million and $2.0 million for the six months ended July 31, 2022 and 2021,
respectively.
General and administrative
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
General and administrative $ 20,073 $ 16,244 $ 3,829 24 %
General and administrative expense elevated $3.8 million to $20.1 million for
the three months ended July 31, 2022, as in comparison with $16.2 million for the three
months ended July 31, 2021. The improve resulted primarily from a $3.3 million
improve in whole compensation and advantages prices pushed by increased compensation
for present workers and elevated headcount to assist our progress as a public
firm.
Stock compensation incurred associated to basic and administrative expense was
$5.2 million and $3.4 million for the three months ended July 31, 2022 and 2021,
respectively.
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Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
General and administrative $ 40,928 $ 28,915 $ 12,013 42 %
General and administrative expense elevated $12.0 million to $40.9 million for
the six months ended July 31, 2021, as in comparison with $28.9 million for the six
months ended July 31, 2021. The improve resulted primarily from a $8.6 million
improve in whole compensation prices pushed by a rise in headcount to
assist our progress as a public firm, a $1.1 million improve in exterior
providers prices and better software program prices.
Stock compensation expense included typically and administrative expense was
$10.3 million and $6.3 million for the six months ended July 31, 2022 and 2021,
respectively.
Depreciation
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Depreciation $ 4,220 $ 3,701 $ 519 14 %
Depreciation expense elevated $0.5 million to $4.2 million for the three months
ended July 31, 2022, as in comparison with $3.7 million for the three months ended
July 31, 2021. The improve was primarily attributable to increased laptop
gear and knowledge middle gear depreciation.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Depreciation $ 8,498 $ 6,998 $ 1,500 21 %
Depreciation expense elevated $1.5 million to $8.5 million for the six months
ended July 31, 2022 as in comparison with $7.0 million for the six months ended
July 31, 2021. The improve was primarily attributable to increased knowledge middle
gear depreciation.
Amortization
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Amortization $ 1,599 $ 1,580 $ 19 1 %
Amortization expense remained flat at $1.6 million for the three months ended
July 31, 2022 as in comparison with $1.6 million for the three months ended July 31,
2021.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Amortization $ 3,203 $ 3,231 $ (28) (1) %
Amortization expense remained flat at $3.2 million for the six months ended
July 31, 2022, as in comparison with $3.2 million for the six months ended July 31,
2021.
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Other revenue (expense), web
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Other revenue (expense), web $ 38 $ (90) $ 128 (142) %
Other revenue (expense), web was not important and remained comparatively flat
throughout the three months ended July 31, 2022 and 2021.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Other revenue (expense), web $ 7 $ (24) $ 31
(129) %
Other revenue (expense), web was not important and remained comparatively flat
throughout the six months ended July 31, 2022 and 2021.
Interest (expense) revenue, web
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Interest (expense) revenue, web $ (206) $ (207) $ 1 – %
Interest expense, web remained flat at $0.2 million for the three months ended
July 31, 2022, as in comparison with $0.2 million for the three months ended July 31,
2021.
Six months ended
July 31,
(in 1000’s) 2022 2021 $
Change % Change
Interest (expense) revenue, web $ (589) $ (445) $ (144) 32 %
Interest expense, web elevated $0.1 million to $0.6 million for the six months
ended July 31, 2022, as in comparison with $0.4 million for the six months ended
July 31, 2021. The improve was primarily attributable to increased dedication charges
associated to the Third SVB Facility in addition to curiosity expense associated to finance
leases we entered into throughout fiscal 12 months 2022.
Provision for revenue taxes
Three months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Provision for revenue taxes $ (213) $ (288) $ 75 (26) %
Provision for revenue taxes decreased by lower than $0.1 million to $0.2 million
for the three months ended July 31, 2022, as in contrast $0.3 million for the three
months ended July 31, 2021. Provision for revenue taxes relates primarily to
utilization of Canadian web working loss carryforwards and state revenue taxes.
Six months ended
July 31,
(in 1000’s) 2022 2021 $ Change % Change
Provision for revenue taxes $ (448) $ (437) $ (11) 3 %
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Provision for revenue taxes remained flat at $0.4 million for the six months
ended July 31, 2022, as in comparison with the six months ended July 31, 2021.
Provision for revenue taxes relates primarily to utilization of Canadian web
working loss carryforwards and state revenue taxes.
Non-GAAP monetary measures
Adjusted EBITDA is a supplemental measure of our efficiency that isn’t
required by, or introduced in accordance with, GAAP. Adjusted EBITDA is just not a
measurement of our monetary efficiency underneath GAAP and shouldn’t be thought-about
as an alternative choice to web revenue or loss or some other efficiency measure derived
in accordance with GAAP, or as an alternative choice to money flows from working
actions as a measure of our liquidity. We outline Adjusted EBITDA as web
revenue or loss earlier than curiosity expense (revenue), web, provision for revenue
taxes, depreciation and amortization, and earlier than stock-based compensation
expense, change in truthful worth of contingent consideration liabilities and different
(revenue) expense, web.
We have supplied beneath a reconciliation of Adjusted EBITDA to web loss, essentially the most
straight comparable GAAP monetary measure. We have introduced Adjusted EBITDA in
this Quarterly Report on Form 10-Q as a result of it’s a key measure utilized by our
administration and board of administrators to grasp and consider our core working
efficiency and traits, to arrange and approve our annual finances, and to develop
brief and long-term operational plans. In explicit, we imagine that the
exclusion of the quantities eradicated in calculating Adjusted EBITDA can present a
helpful measure for period-to-period comparisons of our core enterprise.
Accordingly, we imagine that Adjusted EBITDA supplies helpful info to
traders and others in understanding and evaluating our working ends in
the identical method as our administration and board of administrators.
Our use of Adjusted EBITDA has limitations as an analytical device, and it’s best to
not think about it in isolation or as an alternative choice to evaluation of our monetary
outcomes as reported underneath GAAP. Some of those limitations are as follows:
•Although depreciation and amortization expense are non-cash expenses, the property
being depreciated and amortized might have to get replaced sooner or later, and
Adjusted EBITDA doesn’t mirror money capital expenditure necessities for such
replacements or for brand new capital expenditure necessities;
•Adjusted EBITDA doesn’t mirror: (1) modifications in, or money necessities for, our
working capital wants; (2) the possibly dilutive influence of non-cash
stock-based compensation; (3) tax funds that will characterize a discount in
money out there to us; or (4) curiosity expense (revenue), web; and
•Other corporations, together with corporations in our business, might calculate Adjusted
EBITDA or equally titled measures otherwise, which reduces its usefulness as
a comparative measure.
Because of those and different limitations, it’s best to think about Adjusted EBITDA
together with different GAAP-based monetary efficiency measures, together with varied
money stream metrics, web loss, and our GAAP monetary outcomes. The following desk
presents a reconciliation of Adjusted EBITDA to web loss for every of the intervals
indicated:
Three months ended Six months ended
July 31, July 31,
(in 1000’s, unaudited) 2022 2021 2022 2021
Net loss $ (46,716) $ (24,393) $ (97,958) $ (35,367)
Interest expense (revenue), web 206 207 589 445
Provision for revenue taxes 213 288 448 437
Depreciation and amortization 5,819 5,281 11,701 10,229
Stock-based compensation expense 14,558 7,273 28,709 13,047
Change in truthful worth of contingent
consideration liabilities – 209 – 209
Other (revenue) expense, web (38) 90 (7) 24
Adjusted EBITDA $ (25,958) $ (11,045) $ (56,518) $ (10,976)
We calculate free money stream as web money utilized in working actions much less
capitalized internal-use software program growth prices and purchases of property
and gear.
Additionally, free money stream is a supplemental measure of our efficiency that
is just not required by, or introduced in accordance with, GAAP. We think about free money
stream to be a liquidity measure that gives helpful info to administration
and traders about the amount of money generated by our enterprise that may be
used for strategic
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alternatives, together with investing in our enterprise, making strategic
investments, partnerships and acquisitions and strengthening our monetary
place.
The following desk presents a reconciliation of free money stream from web money
utilized in working actions, essentially the most straight comparable GAAP monetary
measure, for every of the intervals indicated:
Three months ended Six months ended
July 31, July 31,
(in 1000’s) 2022 2021 2022 2021
Net money utilized in working actions $ (19,843) $ (6,729) $ (53,476) $ (12,202)
Less:
Capitalized internal-use software program (5,003) (2,107) (10,242) (5,023)
Purchases of property and gear (849) (1,047) (2,634) (5,030)
Free money stream $ (25,695) $ (9,883) $ (66,352) $ (22,255)
Liquidity and capital assets
In April 2021, we accomplished a follow-on providing of our frequent inventory. In
reference to this providing, we issued and offered 5,175,000 shares of frequent
inventory at an issuance value of $50.00 per share leading to web proceeds of
$245.8 million, after deducting underwriting reductions and commissions.
As of July 31, 2022 and January 31, 2022, we had money and money equivalents of
$240.7 million and $313.8 million, respectively. Cash and money equivalents
consist of cash market accounts and money on deposit.
We imagine that our present money and money equivalents, together with our out there
monetary assets from our credit score facility, can be ample to satisfy our
wants for no less than the following 12 months. Our future capital necessities and the
adequacy of obtainable funds will rely upon many elements, together with these set
forth underneath “Risk elements.”
In the occasion that extra financing is required from exterior sources, we might
be unable to lift the funds on acceptable phrases, if in any respect. If we’re unable to
elevate extra capital when desired, our enterprise, working outcomes and
monetary situation could possibly be adversely affected.
Silicon Valley Bank facility
Second SVB Facility
On May 5, 2020, we entered into the Second SVB Facility. The Second SVB Facility
supplied for a revolving line of credit score of as much as $50.0 million (with choices to
improve as much as $65.0 million). We transferred the $20.0 million excellent
stability on a earlier SVB Facility, the First SVB Facility time period mortgage, plus
associated prepayment charges, into the revolving credit score borrowings excellent underneath
the Second SVB Facility. As of January 31, 2022, the rate of interest on the Second
SVB Facility was 4.5%. Borrowings underneath the Second SVB Facility have been payable on
May 5, 2025. We repaid the excellent stability on the Second SVB Facility in
January 2021.
Third SVB Facility
On March 28, 2022, we entered into the Third SVB Facility to extend the
borrowing capability from $50.0 million to $100.0 million. The Third SVB Facility
additionally lowered the rate of interest to the higher of three.25% or the Wall Street
Journal Prime Rate minus 0.5%, amended the annual dedication charges to
roughly $0.3 million per 12 months and amended the quarterly price to 0.15% per
annum of the common unused revolving line underneath the power. Borrowings underneath
the Third SVB Facility are payable on May 5, 2025. As of July 31, 2022, the
rate of interest on the Third SVB Facility was 5.0%. As of July 31, 2022, we had no
excellent stability on the Third SVB Facility and $100,0 million of obtainable
borrowings underneath the power.
In the occasion that we terminate the Third SVB Facility previous to the Maturity Date
and don’t change the power with one other SVB facility, we’re required to
pay a termination price equal to $0.2 million plus a % of whole borrowing
capability, each of which might be lowered primarily based on the period of time elapsed
earlier than the termination.
Any of our obligations underneath the Third SVB Facility are secured by a primary
precedence safety curiosity in considerably all of our property, aside from
mental property. The Third SVB Facility features a monetary covenant that
requires us to keep up a minimal Adjusted Quick Ratio, as outlined within the Third
SVB Facility. We have been in compliance with all covenants associated to the Third SVB
Facility as of July 31, 2022.
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The following desk summarizes our sources and makes use of of money for the six months
ended July 31, 2022 and 2021:
Six months ended
July 31,
(in 1000’s) 2022 2021
Cash utilized in working actions $ (53,476) $
(12,202)
Cash utilized in investing actions (12,876)
(10,053)
Cash (utilized in) supplied by financing actions (6,731)
243,328
Net (lower) improve in money and money equivalents $ (73,083) $ 221,073
Operating actions
The main supply of money from working actions is money obtained from our
prospects. The main makes use of of money
for working actions are for payroll, funds to suppliers and workers,
funds for working leases, in addition to money paid for curiosity on our finance
leases and different borrowings and money paid for varied gross sales, property and revenue
taxes.
During the six months ended July 31, 2022, money utilized in working actions was
$53.5 million, as our money paid to workers and suppliers exceeded our money
obtained from prospects in reference to our regular operations.
During the six months ended July 31, 2021, money utilized in working actions was
$12.2 million, as our money paid to workers and suppliers exceeded our money
obtained from prospects in reference to our regular operations.
The change in money utilized in working actions was pushed primarily by increased
worker compensation prices, primarily on account of increased worker headcount as effectively
as a rise in compensation prices for present workers, and better exterior
providers prices, partially offset by a rise in money obtained from prospects
pushed by increased revenues.
Investing actions
During the six months ended July 31, 2022, money utilized in investing actions was
$12.9 million, principally ensuing from capital expenditures, nearly all of
which consisted of $10.2 million of capitalized internal-use software program prices, as
effectively as $2.6 million of purchases of property and gear, principally the
buy of information middle gear.
During the six months ended July 31, 2021, money utilized in investing actions was
$10.1 million, principally ensuing from capital expenditures, nearly all of
which consisted of $5.0 million of purchases of property and gear together with
{hardware} utilized by shoppers and the acquisition of information middle gear, in addition to
capitalized internal-use software program prices of $5.0 million.
Financing actions
During the six months ended July 31, 2022, web money utilized in financing actions
was $6.7 million, primarily consisting of $6.3 million used for treasury inventory
to fulfill tax withholdings on inventory compensation awards, $2.9 million used for
principal funds on finance leases and $0.4 million of financing charges associated
to the Third SVB Facility, partially offset by $3.1 million in proceeds from our
fairness compensation plans.
During the six months ended July 31, 2021, web money supplied by financing
actions was $243.3 million, primarily consisting of $245.8 million in
proceeds from the April 2021 providing of our frequent inventory, web of underwriters’
reductions and commissions, and $3.0 million in proceeds from our fairness
compensation plans, partially offset by $2.0 million used for treasury inventory to
fulfill tax withholdings on inventory compensation awards, $2.1 million used for
principal funds on finance leases, $0.9 million used for principal funds
on different debt and $0.4 million used for funds of contingent consideration for
acquisitions.
Material Cash Requirements
Our materials money necessities relate to leases, financing preparations and
contractual buy commitments and human capital. During the six months ended
July 31, 2022, there have been no important modifications in our materials money
necessities as in comparison with the fabric money necessities from recognized
contractual and different obligations described in our Annual Report on Form 10-Okay
for the fiscal 12 months ended January 31, 2022, filed with the SEC on
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March 31, 2022.
Critical accounting insurance policies and estimates
Our unaudited consolidated monetary statements are ready in accordance with
GAAP and relevant guidelines and laws of the SEC relating to interim monetary
reporting. The preparation of our unaudited consolidated monetary statements
and associated disclosures requires us to make estimates and judgments that have an effect on
the reported quantities of property, liabilities, prices and bills, and the
disclosure of contingent property and liabilities in our monetary statements. We
base our estimates on historic expertise, recognized traits and occasions, and
varied different elements that we imagine are affordable underneath the circumstances,
the outcomes of which kind the premise for making judgments concerning the carrying
values of property and liabilities that aren’t readily obvious from different
sources. We consider our estimates and assumptions on an ongoing foundation. Our
precise outcomes might differ from these estimates underneath completely different assumptions or
circumstances.
There have been no important modifications in our essential accounting insurance policies and
estimates throughout the six months ended July 31, 2022 as in comparison with the essential
accounting insurance policies and estimates described in our Annual Report on Form 10-Okay
for the fiscal 12 months ended January 31, 2022, filed with the SEC on March 31,
2022.
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