Good morning, ladies and gentlemen and welcome to the Phreesia Fiscal First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. I would now like to introduce Balaji Gandhi, Vice President Investor Relations, for Phreesia. Mr. Gandhi, you may begin.

Thank you, operator. Good morning and welcome to Phreesia’s earnings conference call for the first quarter of fiscal year 2021, which ended on April 30, 2020. Participating in today’s call from Phreesia are Chief Executive Officer and Co-Founder, Chaim Indig and Chief Financial Officer, Tom Altier. Following prepared remarks from Chaim and Tom, we will conduct a Q&A session. A complete disclosure of our results can be found in our earnings press release issued yesterday evening, as well as in our related Form 8-K submission to the SEC, both of which 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 following the conclusion of the call. During today’s call, we will make forward-looking statements pursuant to the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, including statements relating to the expected performance of our business, future financial results, our strategy, our partnerships, expected launches of products and services, long-term growth, overall future prospects, and the impact of the COVID-19 pandemic on our business. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call, in particular those described in our Risk Factors included in our Form 10-Q, which will be filed with the SEC later today. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligation to update them except as required by applicable law. We will 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 and 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 press release and supplemental materials, which were furnished through our Form 8-K filed after the market closed on June 8th 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.

Thank you, Balaji. Good morning, everyone. We hope that everyone listening to today's call is safely adjusting to the challenging guidelines related to the pandemic and are engaged in the activities in your communities that are helping drive much-needed social change. We are participating on the call from three different locations so we appreciate your patience with us. Let me start by acknowledging all the healthcare provider organizations and medical professionals for their continued bravery and dedication. We are pleased with our fiscal first quarter results and are proud of our entire team's ability to deliver our results in the challenging pandemic environment. I would like to specifically acknowledge our sales and client services colleagues. These teams exhibited agility and flexibility in a rapidly changing environment. Their ability to embrace adversity aligns with Phreesia’s mission to create a better and more engaging healthcare experience and is something I admire, particularly as we continue to operate in an uncertain environment in the summer and fall. For the fiscal first quarter, total revenue was $33.4 million, up 18% year-over-year. The average number of provider clients was 1,632, up 5% year-over-year. Average revenue per provider client was $16,735, up 7% year-over-year. Adjusted EBITDA was $1.5 million, up $1.8 million year-over-year. Healthcare providers across the country are beginning to book more appointments; access to healthcare is not optional. Patients need to be seen by providers and safety needs to be prioritized. Now I will turn the call over to Tom.

Thank you, Chaim and good morning everyone. I'll review the income statement, balance sheet, and cash flows for the fiscal first quarter including some considerations for modeling for the rest of the fiscal year. First revenue, as Chaim mentioned total revenue was $33.4 million, up 18% year-over-year. We report our revenue in three line items; subscription and related services which were $15.6 million in the quarter, up 23% year-over-year, payment processing fees which were $11.7 million in the quarter, up 1% year-over-year, and Life Sciences, which was $6.1 million in the quarter, up 50% year-over-year. Let's start with provider revenue, which combines revenue from subscription and related services and payment processing fees. Provider revenue was $27.3 million, up 13% year-over-year and the two drivers of the 13% provider revenue growth were average provider client growth and average revenue per provider client. Average provider clients grew 5% year-over-year and average revenue per provider client grew 7% year-over-year. Average revenue per provider client growth was directly impacted by a decline in patient visits for provider clients as the outbreak of COVID-19 resulted in various responses including government-imposed quarantines. From the middle of March through the end of April, patient visits declined approximately 50% compared to the beginning of March. The visit decline significantly impacted our payment processing revenue. Consequently, our average revenue per provider client growth was negatively impacted. We estimate that the decline in patient visits negatively impacted provider revenue growth by approximately $3 million in the quarter and year-over-year average revenue per provider client growth by approximately 13 percentage points. Patient visit trends across our provider network continued to be below pre-COVID-19 levels. I will now cover Life Sciences revenue, which was $6.1 million, up 50% year-over-year. And our Life Sciences revenue is based largely on the delivery of messages at contracted price per message to targeted patients. Messaging campaigns are sold for a specified number of messages delivered to qualified patients over an expected timeframe and revenue is recognized as messages are delivered. Strong fiscal first quarter performance was driven by our team successfully selling and expanding some of our current programs. And it is also worth noting that we had an easier comparable quarter in Life Sciences, which impacts the year-over-year growth rate. Moving on to expenses. I'll review several expense line items on an adjusted non-GAAP basis, which excludes stock-based compensation expense for each line item. Please note that a full reconciliation of GAAP to non-GAAP measures, including adjusted EBITDA is included in our earnings press release and our form filed with the SEC. Cost of revenue was $4.6 million, or 13.9% of total revenue, which is down 10 basis points year-over-year. Sales and marketing expense was $8.7 million, or 26.1% of total revenue, down 60 basis points year-over-year. Research and development expense was $4.6 million, or 13.6% of total revenue, down 120 basis points year-over-year. General and administrative expenses were $7.1 million or 21.3% of total revenue, up 40 basis points year-over-year. As we have previously indicated, this figure will increase as a result of continued ramping of public company expenses. From a modeling perspective, we expect to see operating leverage in G&A during fiscal 2022. Payment processing expense was $6.8 million, which declined 1% year-over-year due to lower payment processing volume and some lower cost containment routing. It's also worth noting that payment processing revenue was up 1% year-over-year, while expenses were down 1% year-over-year, which is due to a mix of transactions priced with higher per transaction revenue offset by a decrease in the volume of patient payments. Adjusted EBITDA was $1.5 million, up $1.8 million year-over-year. This increase reflects the combination of higher total revenue and delayed spending in hiring and lower payment processing expense. Shares outstanding as of April 30th were 37.6 million. Cash on the balance sheet at April 30th was $90.3 million flat from January 31, 2020 which includes the benefit of $1.7 million in proceeds from the issuance of common stock upon the exercise of stock options. Cash flow from operations for the quarter was an inflow of $1.9 million versus an inflow of an even $2 million in the prior year quarter. Capital expenditures for the quarter were $3.1 million, up $400,000 year-over-year and the $3.1 million includes $1.2 million of capitalized software development. In summary, we’re proud of our performance in the quarter in spite of the effects of the pandemic. And I think we're ready to take your questions now.

Your first question comes from the line of Anne Samuel with J.P. Morgan. Anne, your line is open.

Hey guys, thanks for taking the question. You spoke on the last call about virtual waiting rooms and other ways to help your patients feel safe returning, so what kind of demand are you seeing for those products and is that still within your existing customer base, are you starting to see maybe demand from some new customers for that?

Hi Anne, thanks for the question. It's mostly been with our existing clients, the demand, and it's placed a ton of demands on our organization setting up those workflows. We turned on two-way chat so that you could actually wait in your car while you're waiting for the doctor. That’s been wildly successful. I personally have used Phreesia’s virtual waiting room. My youngest daughter broke her leg about three weeks, like five weeks ago at this point. And I went to a Phreesia client, waited in the car, and had a two-way text check-in, and then they told me when it was time to come in, and it was an amazing experience. So we also, I think there was an article that came out yesterday in The Wall Street Journal which referenced one of our clients using a virtual waiting room, and that is a good example of that.

That's great. I went to the doctor this week and we did an hour in the waiting room and wished that they had had the Phreesia virtual waiting room, I could have sat in my car. My next question is around the subscription base, you were still able to achieve mid-single-digit growth in provider clients. So is it fair to assume that the sales process saw a little impact or was there some maybe February outperformance that drove that?

No, I think it would be incorrect to say that the sales organization and implementation haven't been affected. However, a significant part of the quarter was simply a continuation of what we've seen historically, where most of our clients go live within 90 days after sales. We put in a lot of effort to ensure as many clients went live as possible ahead of the quarter. Additionally, many of those clients transitioned to what we refer to as zero contact intake, and we continued to bring them live throughout the quarter. Therefore, much of this is a result of effective execution from the implementation team and a strong year-end performance in the previous fourth quarter.

That's really helpful. Thanks, guys.

Your next question comes from the line of Ryan Daniels with William Blair. Ryan, your line is open.

Good morning. This is Barrett in for Ryan. Thanks for the questions here. I'm curious, we have heard a lot about companies focusing on digital patient-focused solutions, things like virtual waiting rooms and tele-health and all this sort of thing. I'm curious if you've seen any early signs of changes in terms of market dynamics through your conversations with providers specifically, if there are maybe any new players that you're starting to hear about in those conversations in this space that maybe you hadn't competed against in the past, is there any color would be great?

In the 15, 16 years that we've been doing Phreesia, we've continuously seen new entrants come into this space and try their hand at what looks like a pretty easy thing to do. What’s hard to do is patient intake at scale. And I sort of welcome the idea that there are more companies sort of making noise in the space because it's sort of a rising tide lifts all boats and most organizations, when they're looking for a solution, tend to look at us at the same time, right, as the market leader. But healthcare needs innovation and the more companies investing in that innovation, the better.

Yeah, I got it. Yeah, that's really helpful. And then maybe just a quick follow-up on the average revenue per provider client in the quarter. Obviously, there were some headwinds really COVID-19 but you still saw growth there. I'm curious if you've seen any shift in terms of the specific drivers just around whether that sort of balance between expanding and adding incremental seats with your existing base, clients adding more solutions or selling to larger clients overall?

There's been some shift. I don't think we're prepared to go into detail about that. But that's a great question.

Got it, fair enough. Thanks a lot.

Thank you. Be safe.

Your next question comes from the line of Stephanie Davis Demko with SVB Leerink. Stephanie, your line is open.

Hey, guys. Thank you for taking my questions. Just following up on the prior sales question from the Q, when you were not able to report a sale this quarter, how much of that would you attribute to a push out in demand versus the competitive take away versus maybe something else?

I don't think we've seen any change in competitive dynamics, like mostly we've seen the same thing we've always seen, which is just bandwidth and budget when we haven't won a deal. And I will tell you it’s probably shifted way more to bandwidth and budget in conversations than traditionally. But, I don't think we've seen something unnaturally happen. I think it's just harder that people don't; it's hard to make decisions right now in healthcare and economic environment that's rapidly changing.

It's difficult to make decisions in a very uncertain environment. Continuing on that path of uncertainty, you've observed some early improvements in utilization. Looking ahead, do you anticipate any areas where the recovery might take longer, such as surgery centers, which could face scheduling delays that might lead to a plateau in recovery?

So I'm sure that you guys have people with MPHs or PhDs, and MDs that can give you a better view on what's going to open when. We understand when it's happening but despite my mother's best desire, I never became a doctor. So I don't think I'm in a position to give a view on how and when pandemics will change and or when health policy will change in certain states. I know that people need to get that to care and doctors want to treat their patients. And we know that PPE has become more widely available and best practices are starting to change rapidly. So do I think that this is a need or want, I think it's a need and I think it's going to happen as soon as government staff, healthcare professionals, and patients feel comfortable about their safety.

Maybe putting that another way, looking towards the end of the year, would it be wrong to assume a recovery back to par?

Stephanie, I really don't have an answer. I can't predict whether there will be a significant second or third wave. It wouldn't be fair to speculate on this, considering that there are others with much more expertise in the matter and also for the sake of our investors.

Alright, understood. Thank you guys.

The next question comes from line of Sean Wieland of Piper Sandler. Sean, your line is open.

Thank you, good morning. The numbers were clearly better than we expected. You warned us last quarter about a potential setback, and we may have experienced that in the payment processing business. However, it’s evident that it’s not as severe as it could have been. My question is whether this was market-related; did the market perform stronger than you anticipated, or were there aspects of the model that proved to be more resilient than you expected?

That's a great question. The key factor has been the phenomenal execution across all areas of the Phreesia organization. We were able to quickly launch products like virtual intake and zero contact intake, which kept us at the forefront of our implementations and made us a necessary solution for our customers. Our implementation team efficiently managed to prepare as much as possible upfront, and our client success team transitioned numerous practices to various workflows while also addressing the needs of the children. We accomplished this with fewer resources than usual. It could have gone differently, but it didn't, thanks to the incredible team. I am both thankful and proud of them.

Okay, so the follow-up to that is it sounds like the new client adds in the quarter were mostly signed before the pandemic hit. So what's the cadence here that we should be looking at if we saw an air pocket and a payment processing growth this quarter, is there an air pocket and new client growth to come and how should we model that in the back half of the year?

I'm missing having Tom next to me at the table because he would likely provide some guidance. Right now, we're all in different locations. The selling environment is not the same as it was in January when we had 65 sales development representatives. Currently, we have just 7, as the rest have been moved to other areas of the organization. However, we are beginning to ramp up hiring again to support our clients and future prospects. I believe that our offering is still desirable, but I don't anticipate the same level of growth in the next couple of quarters as we initially expected. This is likely to affect some of our subscription services and cash flow as well.

Okay, I'm sorry, I got to ask a follow-up to the follow-up. I didn't understand that SDRs, can you…?

Oh, those are sales department representatives. They are the individuals responsible for most of our prospecting and qualifying of our future sales representatives. This is part of our early career program.

Okay.

65, now we got 7.

Where did those extra 58 people go?

We spread them around the company and they volunteered to do any and all types of jobs, sort of make sure that we could support our clients and move over there. We're close, we basically moved them to all different roles in the company to support the organization. And it was important to us and important to them; it's been a great experience.

Alright, thanks for the info.

Thanks.

Your next question comes from the line of Matthew Gillmor with Baird. Matthew, your line is open.

Hey, thanks for the question. Chaim, you mentioned cash flow and DSOs were up a little sequentially. Was that due to the deferral program that you mentioned last call and more broadly, could you just give us a sense for the financial health of the client base and are you seeing any type of uptick with bad debt?

I'll address the first part and then let Tom respond to some of it. I believe healthcare organizations are struggling. One reason we wanted to share that data in collaboration with the Commonwealth Fund and Harvard is to emphasize the significant impact that ambulatory care is experiencing due to the pandemic. This is reflected in the payment volume we receive, which is only a small portion of what they earn. If our revenue is down, so is theirs. I think healthcare providers nationwide are generally facing some level of difficulty. I'll allow Tom to discuss the days outstanding, and I know we've seen a considerable impact from that. Most doctors chose to enter the profession to care for patients, and I don't believe this situation will prevent them from doing that. However, it is causing them financial strain, which is unfortunate. I hope that as a community, we can provide support to these healthcare organizations. Tom, would you like to address the second part?

Yeah Matt, we are seeing some stretching out of payments which was not unexpected and we did increase our allowance you'll see on the balance sheet a little bit during the period. So we are going to see a reduction in cash flow from operations in the second quarter as a result of that issue. And receivables did increase which we have noted on the balance sheet.

Got it, that's helpful. And then as a follow up, I was hoping you could talk a little bit more specifically on the Life Science revenue. You continue to really meaningfully outperform. I think Tom had mentioned good momentum with the sales front. I was just hoping you could kind of give us a sense for what's going on, are you delivering more messages or do you just have sort of more opportunities given that the sales are off, just trying to understand that dynamic and the sustainability?

Our Life Sciences organization has done an excellent job supporting all of our clients by helping them understand the changing dynamics. Our Life Sciences partners have been incredibly supportive of our efforts. In the first quarter of last year, we experienced results that were lower than we anticipated. I don't want to say it was an easier comparison, but it was significantly lower. However, the team executed well and ensured a smooth first quarter. Many of the programs that needed to be resubmitted and redone were completed as quickly as possible, which provided us with significant flexibility for the quarter. Once again, the team performed admirably, focusing on our clients and ensuring that we delivered the most valuable messages to the right patients.

Alright. Thank you.

Thank you.

Your next question comes from the line of John Ransom with Raymond James. John, your line is open.

Good morning, everybody. You know clearly you've got a piece of your business that's very volume centric, which is the payment side and you've got the subscription side of the business which should be less volume weighted. But if we think about the subscription business, let's just say hypothetically visits are down 25% in a given quarter, how should we think about the effect on that business from a volume standpoint?

Tom?

Chaim, do you want me to answer that one? Yeah, I'm happy to.

So how do we think about the sensitivity of the subscription; subscription revenue per provider how is that, if at all weighted to changes in volume?

There is some. The overwhelming majority though is not as much tied to volume. I'd say, yes. Tom, did I get that right?

Yes, that's correct. Very few customers have revenue tied to visits. Generally, we're on a per provider per month revenue basis.

And I know your providers aren't always providers they include a large system or it could be an individual doctor practice, but just at a high level to use the baseball analogy, what inning are you in in terms of up-tiering your customers from say the base subscription rate to something closer to the full suite of services?

That's an interesting way to pose the question. I never imagined I would be discussing the full suite during an earnings call. The best approach to this is to recognize that we are constantly working to encourage more of our clients to utilize more aspects of our product. We're still in the early stages of this with most of our clients. Additionally, we have introduced features this year that weren't available before, such as zero contact intake and telehealth. It's important for us to convey to our investors that throughout our history, we have prioritized investing in innovation within healthcare. Our focus is not only on what we currently offer but also on what we will develop in the future. This is crucial for our mission to enhance the healthcare experience. There is a significant need for innovation in healthcare, whether it comes from us or other players in the industry, and we believe this is essential.

And just the last follow-up, we shouldn't expect when you do your third survey with the Commonwealth Fund at that time you might give the market a glimpse of what's happening intra-quarter with your volume trends?

I believe they are planning another release with the Commonwealth Fund. I noticed an internal discussion about it, and if that's true, Balaji will coordinate with the team and file an 8-K. You should then be able to observe some trends. We feel it's crucial to foster a discussion about the pandemic's impact on the healthcare system and patients.

Right, okay, thank you very much.

Thank you.

Your next question comes from the line of Donald Hooker with KeyBanc. Donald, your line is open.

Great, good morning everyone. So just to follow up on the earlier question on the Life Sciences revenues, I think you mentioned those, I was scribbling notes down here, but I think you mentioned that there was a nice year-over-year, easy year-over-year comp and I guess the truth is, even on a rolling fourth quarter basis, those revenues have been really strong. Is there any kind of large project, I mean, how many programs are you working on there, is there anything kind of one-time, I know that you mentioned in the past there's some lumpiness there, but is there any one kind of drug or brand that's maybe driving abnormally strong demand?

It's a great question. I'm not going to provide any guidance or view on that. But it's a great question and I would ask the same kind of one and I would say that, we don't provide much visibility on the number of programs we're doing and who we are doing them for. If you're really interested, just go check into a doctor's office. If that program is needed for your health, you could definitely see it.

Okay, fair enough. And then maybe just my one follow-up would be you commented and we all see the sort of the struggles of ambulatory providers in the U.S. right now. Has there been much need on your behalf to provide any sort of price concessions temporarily, or I think Tom mentioned some maybe some lenient payment terms, but maybe on the revenue line, will there be any sort of concession there that we should sort of brace ourselves for in the coming months?

Alright Donald, we have been trying to be as flexible as possible with our provider organizations and health system clients. I believe that when you take the high road and do what is right, it can be less common, but it's the path I would prefer to take. We will do everything we can to assist our clients, whether that involves product support, workflow, implementation, training, or pricing and deferral options. We do our best in these situations. These organizations are doing critically important work in patient care, and I feel that there is strong alignment between our Board, our employees, and most investors we've spoken to, who have shown great support for our efforts.

Good, thank you.

Your next question comes from the line of Glen Santangelo with Guggenheim. Glen, your line is open.

Oh, yeah. Thanks for taking my questions. Hi, just I wanted to ask you quickly about the balance sheet. A few minutes ago, you talked about that the company wants to continue to invest in innovation. And I'm kind of curious if any of the dramatic changes in the market are making you rethink some of the strategic priorities or uses for the cash on your balance sheet, maybe with respect to M&A or any new strategic growth opportunities?

That's a great question. My general view is that our balance sheet is designed to support our planned growth. We've evaluated our situation over the years, and our primary focus has been on continuous innovation to meet our clients' needs and investing in our current and future employees. M&A isn't our main focus right now, but we are open to it if it can speed up product development or enhance our team. However, I strongly believe in our ability to innovate and grow our client base organically, which has been our approach for the 15 to 16 years since Evan and I started the company.

Okay, maybe if I can ask just one quick follow-up question on the 5% client growth. It kind of sounds like asking the question a different way, it kind of sounds like that so the result this quarter was really due to strong execution from 4Q and maybe some good implementation in terms of this quarter. But as we think about the environment having changed pretty dramatically in mid-March and you commented that it's impacting the selling process going forward, is it fair to say that we should maybe expect a little bit of an air pocket in terms of client growth as we look out to fiscal 2Q, just given the environment that we find ourselves in right now?

Our experienced investor relations representative Balaji suggests that we should avoid making forward-looking statements. I'm looking at him and he's shaking his head dramatically. I would like to point out that our team has put in significant effort, and we experienced a couple of good weeks at the beginning of the first quarter. It's not solely about the sales process; it also involves our implementation team, customer success team, and product deployment. While I won't comment on any potential slowdowns, I can confidently say this environment is very different from what we encountered in January, February, and the early weeks of March.

Okay, thanks for the comments.

Your next question comes from the line of Jamie Stockton with Wells Fargo. Jamie, your line is open.

Hi, good morning. Thanks for taking my questions. I guess maybe the first one, the Commonwealth data, I think the last release that I saw on that, I think was kind of the second week of May data that was down something like 30% year-over-year or maybe versus the baseline I guess. Is there any more recent kind of view of what you guys are seeing that you could give us closer to the end of May or first week of June?

I don't think we're prepared to give any view on volume or how it's structured and if we do, it's going to be released in conjunction with the Commonwealth Fund and Harvard. And it's really not. We're not doing this to give visibility to our investors. We're doing this to help participate in the policy debate and educate all the stakeholders in what's happening in the healthcare ecosystem, right. And you guys get benefit from it then that's good. But it's generally our view that we're going to publish this the way we have been and when we won't publish it anymore, we will publish it anyway. But I think we still have that. I think it's coming out in a couple weeks. Balaji, is that it?

Yeah, that's right, at the end of June.

I think they're targeting end of June.

Okay, and then maybe just a quick question on the cost front, so I don't know if Tom wants to take this or not but the second quarter should reflect kind of the full quarter of trying to make sure that you guys are doing what you can to keep costs down. I guess I would be curious, I know you don't have a ton of visibility into what the revenue is going to look like but theoretically, maybe there's a little more on the cost front from a visibility standpoint, is there anything specifically that we should be watching out for as we kind of model the second quarter from a cost standpoint?

Jamie, we previously mentioned that we had paused hiring and will reassess that in the second quarter. We anticipate increasing our hiring. However, travel will continue to be significantly restricted, so we don’t expect much change in that area. We should prepare for an uptick in expenses and a clear decrease in cash flow from operations in the second quarter.

Okay, thank you.

Your next question comes from the line of Sean Dodge with RBC Capital Markets. Sean, your line is open.

Good morning, I'm taking a longer-term perspective on Jamie's question about restarting hiring. With the volumes increasing and seemingly on a path back to normal, is this a significant restart or how are you considering balancing the ramp-up of spending and investment against what may still be a somewhat subdued revenue environment for the next couple of quarters?

I think we've decided as an organization to start rehiring in our early career program, and we have a number of people starting next week in that program. We should expect larger cash flows this fiscal year compared to last. I'll let Tom handle that, but one thing we've observed over the long-term growth of Phreesia is that if we don't hire into our early career program now, it can have a significant long-lasting impact in the future. Those individuals become our senior implementation leads in a few years. I've seen some of them start their careers at Phreesia and evolve into exceptional leaders and key contributors to our organization. A lot of our current decisions are focused not just on the present but also on our future growth. Tom, would you like to address the cash flow issue?

Yeah, as I mentioned Sean, we expect cash flow from operations to be negative in the quarter and also for the full year higher than last year, higher outflow than last year in terms of your modeling.

Okay, that's helpful. Thanks. And then maybe a quick one on the tele-health offering, are there any updates you can give us on things like what proportion of your provider clients are using the solution and maybe what proportion of the payments you processed during the quarter were derived from tele-health business?

I'm not going to give visibility on the payments. So I will say the majority of our clients or more than 50% of our clients, I believe, approximately have the tele-health offering.

Your next question comes from the line of David Larsen with Verity. David, your line is open. I'm not going to give visibility on the payments. However, I can say that the majority of our clients, or over 50%, are using the tele-health offering.

Hey, can you talk a little bit about your relationship with RCM and they obviously recently acquired Cerner RevWorks Solution or services tied to that. Like, is there any sort of near-term in-cell opportunity into Cerner’s base and how far along are you with the hospital solution in an ideal world, like when would that be up and running?

Those are some great questions. First of all, I want to commend Joe and his team. RCM has been excellent partners. They are exceptional operators with a strong internal capability to execute effectively, and we are proud to have collaborated with them both now and in the future. We have achieved remarkable innovation together. I'll let them discuss the Cerner acquisition since they have a better understanding of it than I do. What I can say is that it's a robust partnership that is making a significant impact on patients and healthcare systems, and we take pride in that relationship. Joe and his team have done an outstanding job, and we are glad to work with them. I assure you that when we have updates regarding hospitals and the acute space, Balaji will prepare a presentation to ensure we discuss it. Our perspective is that the hospital and acute sector is quite challenging. We have made some progress with Memorial, which was highlighted in a Wall Street Journal article yesterday. Memorial is implementing our solution in the acute sector, likely sooner than we expected. We believe we have a long-term opportunity that could be valuable, and as we gain more insight, we see it as our duty to inform our investors. Until then, we will hold off on further details.

Okay, so Memorial is actually using your solution for acute care intake at their registrar sites now, it's fully functional?

That's correct.

Okay, great. And then with these 58 SDRs, what's keeping them from selling right now? I imagine that you have probably at least one SDR in each state so they could probably drive to different physician offices. I mean, when will they be sort of back selling to doc offices in your mind and if you have patient volumes have pulled in maybe 20%, I mean, physician offices are still seeing 80% of their workload, there's still activity there. What's preventing them from getting on the road right now and selling, when in your mind will they all be back in their roles operating in the sales capacity?

Most of the staff is located in the Research Triangle area of North Carolina, primarily focusing on phone-based prospecting rather than fieldwork. We plan to gradually increase their activity over the quarter. This is largely dependent on our capacity to manage the calls effectively. A significant portion of our team is still on furlough, and they are gradually returning to full capacity. It's essential to be deliberate in how we approach these calls, as managing our reputation is critical. Having done this job earlier in my career, I understand the importance of avoiding negative interactions while reaching out. Therefore, we will take a cautious approach to ramping up our efforts in the coming months. The team is eager to return to making calls, and they are an impressive group of individuals.

Okay, great. And then just last one, any color around bookings for the quarter or signed contracts that you can share and if not it is totally understandable.

That is not something we have or ever will get visibility on. But it's a great question. Thank you, everyone and I really appreciate everyone's interest in Phreesia and your support. We hope that everyone's staying safe and is really advocating for the needed social change that our society needs. And I just want to thank all of my peers and teammates at Phreesia for their dedication and hard work. I mean, it's the most proud thing to be able to work next to them. And I miss them, seeing them in person. Cheers.

Ladies and gentlemen, this concludes today's conference call. On behalf of Phreesia, thank you for participating. You may now disconnect.