Phreesia (NYSE:PHR) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.
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The full earnings call is available at https://events.q4inc.com/attendee/953036497
Summary
Phreesia reported first quarter fiscal 2027 revenue of $130.9 million, up 13% year-over-year, with significant growth in payment solutions (40%) and network solutions (15%).
The company introduced new metrics, Total Managed Payments and Payment Solutions Revenue Rate, to provide more insights into its payment ecosystem.
Phreesia maintained its fiscal 2027 revenue guidance of $510 million to $520 million, despite some variability in Network Solutions client commitments.
Operational highlights include refinancing its Bridge Loan with a new $275 million facility and expanding AccessOne's securitization facility with PNC Bank.
Management emphasized strategic initiatives such as integrating AccessOne's financing solutions and leveraging AI for operational efficiencies.
Full Transcript
OPERATOR
Good evening ladies and gentlemen and welcome to Phreesia first quarter fiscal 2027 earnings conference call. At this time all participants are in a listen only mode. We will provide instructions for the question and answer session to follow. First, I would like to introduce Balaji Gandhi, Phreesia's chief financial officer. Mr. Gandhi, you may begin.
Balaji Gandhi (Chief Financial Officer)
Thank you operator Good evening and welcome to Phreesia's Earnings Conference call for the first quarter of fiscal 2027 which ended on April 30th of 2026. Joining me on today's call is Haim 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 8K submission to the SEC, including our quarterly Stakeholder Letter, both issued after the markets close today. These documents are available on the Investor Relations section of our [email protected] As a reminder, today's call is being recorded and a replay will be available on our Investor relations [email protected] following the conclusion of the call. During today's call we may make forward looking statements including statements regarding trends, our anticipated growth and our strategies, predictions about our industry and the anticipated performance of our business, including our outlook and visibility regarding future financial results. Forward looking statements are subject to various risks and 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 Quarterly report on Form 10Q 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 such as 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 such as adjusted EBITDA and free cash flow, 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 Release and Stakeholder Letter which were furnished with our Form 8K after the markets closed today with the SEC and may also be found on our investor relations [email protected] I will now turn the call over to our CEO Jaime Indig.
Haim Indig (Chief Executive Officer)
Good evening and thank you all for joining our first quarter fiscal 2027 earnings call. Before I hand it off to Balaji to provide some highlights on our financial results and outlook, I want to take a moment to recognize the people who make Phreesia what it is. Our team has shown up with real commitment, not just this quarter, but through a sustained period of transformation that required a lot of grit, a lot of trust and difficult decisions. I am both grateful for the people who are on the team and excited about what we're building together. We've done serious foundational work over the last few years on our infrastructure, our security, our operational discipline and it's paying off. We believe we are a unique company in our space due to our scale, experience and profitability. We believe we have a unique opportunity to tap into these strengths to play our best game over the next several years. Three key factors are shaping our positive outlook. First, we're always striving to set the pace on patient intake by offering what we see as the most differentiated solution in our targeted markets and by making sure our clients feel that difference. That means continuing to bring front end solutions that improve provider cash flow and enable meaningful patient and provider engagements on behalf of our Network Solution clients. Second, we're prioritizing bringing Access1's financing solution to more of our base clients and integrating Axis One into our payment workflow. We believe this can improve cash flow for our healthcare provider clients and unlock a new level of client loyalty and retention. And third, AI is fundamentally changing what's possible for us at scale in ways that I expect will show up clearly in our near term and long term results. I'm excited about what our team can accomplish together by leveraging our client relationships, our capital and our ideas. I'll now turn the call over to Balaji.
Balaji Gandhi (Chief Financial Officer)
Thank you, Haim Let me start with a few highlights from our first quarter fiscal 2027 results and then I'll move into our outlook for the full fiscal year 2027. For the first quarter of fiscal year 2027, revenue was $130.9 million up 13% year over year. Year over year growth was led by payment solutions at 40% followed by network solutions at 15%. The 40% year over year Payment Solutions growth reflects the fact that the prior year period included no contribution from AccessOne. As the acquisition closed in our fourth quarter of fiscal year 2026, adjusted EBITDA was $30.5 million compared to $20.8 million in the same period in the prior year, representing an adjusted EBITDA margin of 23%. First quarter average healthcare services clients, or AHSCs, reached 4,708, an increase of 50 from the prior quarter and an increase from 297 or 7% year over year. These results were in line with our expectations. First quarter total revenue per AHSC was $27,811, up 6% year over year. Net income was $3 million in the quarter compared to a net loss of 3.9 million in the same period in the prior year, representing our third consecutive quarter of positive net income. We are also introducing two new metrics this quarter, Total Managed Payments and Payment Solutions Revenue Rate. Total Managed Payments combines our legacy patient payment volume with Access One's managed portfolio of cardholder receivables, giving investors a single view of the scale of our payments ecosystem. Payment Solutions Revenue Rate consists of our total Payment Solutions revenue divided by total Managed payments, demonstrating how changes in volume and portfolio size translate into revenue. Total managed payments were 1.786 billion in the first quarter of fiscal 2027 and our payment solutions revenue rate was 2.3%. For more information on these metrics, please refer to our earnings press release and stakeholder letter. Now turning to the balance sheet and cash flow updates on March 13th we completed the refinancing of our Bridge Loan. We repaid all outstanding indebtedness under the bridge loan using $92 million of borrowings from a new five year $275 million senior secured revolving credit facility with Capital One maturing on March 13, 2031. The unused borrowing capacity is available for working capital, capital expenditures, acquisitions and general corporate purposes. Cash cash equivalents and restricted cash as of April 30, 2026 were $76.4 million compared to $73.8 million at January 31, 2026. At April 30, 2026, $1.7 million of our restricted cash was included with other long term assets. We ended the first quarter with $84 million of borrowings outstanding on our new Capital One credit facility, reflecting an $8 million pay down during the quarter. Net cash provided by operating activities was $23.9 million in the quarter, an improvement of $9.1 million year over year. Free cash flow was $16.4 million, an improvement of $8.9 million year over year. We expect that quarter to quarter operating cash flow and free cash flow performance will fluctuate based on a variety of factors including the specific timing of invoicing and payments which you can see in working capital along with CAPEX. Additionally, on April 30, we expanded Access1's securitization facility with PNC bank and extended the term through April 2029. This development reinforces our investment thesis behind the AccessOne acquisition in two key ways. First, we increased the facility limit from $200 million to $300 million, giving us greater capacity to offer AccessOne solutions to our clients. Second, the amendment also expanded our ability to offer upfront funding to non investment grade clients. Many of Phreesia's clients are non investment grade and we are excited to offer them financing solutions that drive cash flow improvement Now Transitioning to our Financial Outlook for fiscal year 2027 our fiscal 2027 outlook is unchanged from what we provided in March. For maintaining our revenue outlook for fiscal year 2027, we expect revenue to be in the range of 510 million to $520 million. As we noted last quarter, Network Solutions clients are committing lower spend levels for the second half of fiscal 2027 than we had anticipated last December. Certain clients are committing fewer dollars due to brand specific dynamics, including the impact of regulatory policies. Though we do not believe these developments are signaling a structural shift in demand for Freezia solutions, there is now more variability in our internal Network Solutions revenue forecasting, particularly in the second half of each fiscal year. Our visibility into revenue across other parts of the business is generally consistent with our views in March 2026. The revenue range provided for fiscal 2027 assumes approximately $37 million of contribution from Access One and no additional revenue from potential future acquisitions completed between now and January 31, 2027. We are maintaining our adjusted EBITDA outlook for fiscal 2027. We expect adjusted EBITDA to be in the range of 125 million to 135 million dollars. In addition to our continued belief in the operating leverage embedded within our model, we have more recently identified opportunities to reduce our reliance on manual processes across Phreesia, including through the adoption of artificial intelligence in May 2026. Subsequent to quarter end, we implemented a restructuring plan intended to reduce operating expenses and better align our cost structure with our current business priorities. The plan is expected to result in meaningful annualized run rate expense savings which were reflected in our adjusted EBITDA outlook provided on March 30, 2026. We are maintaining our expectations for AHSC growth in the mid single digit percentage range and we're maintaining our outlook for total Revenue per AHSC to grow in a low single digit percentage range for fiscal 2027. I would like to join HAIM in recognizing the significant contributions from everyone at Phreesia to our solid financial profile. Operator. I think we can now open up the lines for the Q and A session.
OPERATOR
We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a follow up, please rejoin the queue after your question has been fielded. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality if you were muted locally. Please remember to unmute your device. Please stand by while we compile the Q and A roster. Your first question comes from the line of Sean Dodge with BMO Capital Markets. Sean, your line is open. Please go ahead.
Sean Dodge (Equity Analyst)
Afternoon. Maybe just on Access one. Balaji, you said the new agreement with pnc, there's two dimensions to it. You can you expanded the size of the facility but now you can also offer to other types of providers. How should we think about like what that means kind of incrementally or quantitatively for the AccessOne opportunity over the next couple of years, the cross selling into freezer space, like how quickly, how meaningfully can that start to contribute and then as you sell into these other types of providers, are the economics of those different than what like a typical legacy Access One client would be?
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks Sean. There's a lot in there. I'll try to hit on all those. So first of all, just stepping back, this is an area that Phreesia has been thinking about entering for many, many years. And I think one of the areas why we're interested is because of our base of clients that are in a lot of the special medical specialties and are non investment grade. So this was definitely an important milestone to, to get to and we think there's other sources of capital as we continue to, to penetrate this part of the market. Probably a little bit early to talk about like the how the economics might differ but at the end of the day I think we just keep pointing to some of the prepared remarks and what's in the letter which is we're trying to drive cash flow improvement for these healthcare providers and this just gives us more capital and opens up the, the you know, the addressable market into our base which you know we have a long history with working with a lot of these clients. So there's a lot of trust Built there as well.
OPERATOR
Your next question comes from the line of Stan Berenstein with Wells Fargo. Stan, your line is open. Please go ahead.
Stan Berenstein (Equity Analyst)
Yes, hi. Thanks for taking my questions. I just want to maybe ask more holistically. Obviously your growth engine is shifting a bit away from subscriptions towards payments and network. Can you just maybe talk about, you know, what changes are you making to your sales and marketing teams to kind of pivot and drive growth in other areas of your business and how is the go to market different from where it was a year ago? Thank you.
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks, Dan. So I think one important way to think about all this is Phreesia has always been a product led growth organization. So it does always start with the product. And I think if you think about on the provider part of this, there's the software that we implement and the clients benefit from. I think you're referring to the monetization of it, which is clearly shifting. We have been talking about this for I think at least two years of this philosophy of better, faster and cheaper in terms of the software for our provider clients. This is deliberately moderating subscription pricing to keep retention strong, drive the downstream economics in payments and network solutions. So you're seeing some sequential moves, moves in, you know that generally what you'd expect with that strategy in the sequential, you know, change in subscription revenue in terms of the go to market, it's still very product oriented. So you know, we build a lot of new capabilities, our team implements them and our sales motion is very much still trying to get those products in the hands of the providers to drive value. It's just the monetization that is shifting.
OPERATOR
Your next question comes from the line of Scott Schoenhaus with KeyBank. Scott, your line is open. Please go ahead.
Scott Schoenhaus (Equity Analyst)
Hey, thanks guys for taking my question. I guess my question will be on the network solutions. You mentioned in the investor letter about seeing some strength with the newly launched provider product. Maybe we could touch more on that. You know, what's basically embedded in your guidance. I know you're talking continued caution around the back half set up, but maybe dive deeper in what you're seeing on the new provider connect side of things. Thanks.
Balaji Gandhi (Chief Financial Officer)
Sure. Thanks, Scott. I think there's two different threads here on all things network solutions. I think we've spent a lot of time both this quarter and last quarter talking about what's happening in fiscal 27 as it relates to the demand and end markets. I think way down below that underneath is this new area that we're pretty excited about that we just launched earlier this fiscal year, working from base of zero in fiscal 26, we're very excited about it. We've had a lot of wins and a lot of momentum. There is some contribution from that built into our fiscal 27 guidance. But really I think the way to think about it is it gives us a Runway for fiscal 28, 29, 30 where we're not just relying on the patient connect side of things, but on the provider connect side of things. So the team did an excellent job of getting that launched and I think there's a lot of good momentum there.
OPERATOR
Your next question comes from a line of Brian, Ken Kalute with Jefferies. Brian, your line is open. Please go ahead.
Brian Ken Kalute (Equity Analyst)
Hey, good afternoon guys. Maybe just a quick question. It looks like labor cost efficiency efficiencies in RDN sales and marketing in Q1 showed up even before they reached. So was there any rifts that happened in Q1? And then after this, how do we think about the ability for freezer to drive margin expansion going forward? You know, as you grow revenues and are there more cost efficiency opportunities longer term? Thanks.
Balaji Gandhi (Chief Financial Officer)
Yeah, let me, let me just sort of make sure I understood that. So I think one question you're talking about is was there anything in Q1 that contributed to margin improvement? Any changes that were happening? And then two, I think you're asking more forward looking. So in terms of like just stepping back, I mean, I think as many of you on the call can probably appreciate, we, we put a lot of capital to work into the business, you know, three, four or five years ago. And I think we've had a lot of these calls talking about operating leverage. And so we're constantly looking at, you know, areas to drive efficiency. But we also made that upfront investment that we thought we'd get years of productivity from. So that's really, I think, Brian, the answer on your first part of the question, nothing to call out, out of the ordinary. Obviously the announcement we made in May was a little, was, was different, which is why it was, you know, called out and presented the way it was. But I think Q1, nothing, nothing to call out going forward. I think, you know, our, our, our outlook, financial outlook, you know, assumes continued improvement throughout the year on margins. I don't think we're going to talk beyond that, but to get to the place we are, we feel very good where we have a lot of optionality and paths to kind of, you know, driving more growth in the business and having pretty good margins.
OPERATOR
Your next question comes from the line of Jared Haas with William Blair Jared, your line is open. Please go ahead.
Jared Haas (Equity Analyst)
Yeah, hey guys, thanks for taking the questions. You know, in the letter you also talked about some investments in clinical integrations to sort of better support the oncology or other specialty providers. And so I just wanted to hear a little bit more, I guess just number one, where you're seeing the biggest opportunity for investment for that specific segment of the market. And then I'd love to hear a little bit about, I think you sort of flagged the unique workflows associated with those types of providers. So where does Freezia kind of fit into that and where there might be some differentiation to help address those challenges? Thanks.
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks, Jared. So, I mean this is something we do call out from time to time in our letters because when you think about the flywheel of the business and you know, what we talked about in the go to market motion and how we monetize products, our alignment with the right specialties is really valuable to our Network Solutions team as they offer products like Patient Connect and Provider Connect. So we can drive a lot of value for the providers. We can drive a lot of value for the various brands that we work with. I think Phreesia's, you know, I think we sort of created this category. I think in Heim's opening remarks, you know, he talked about just how patient intake has evolved as Frija has, you know, been throughout its 20 plus year history. So I think we should think about is just we're constantly kind of the pace car and setting the standard there. And when we work with a lot of these specialties, I think we can, you know, really differentiate how information's collected and integrated across the systems.
OPERATOR
Your next question comes from the line of Ryan McDonald with Needham. Ryan, your line is open. Please go ahead.
Ryan McDonald
Hi, thanks for taking my question. Maybe two on the networking solutions business. I realize you didn't change any of the guidance on the top line for the full year, but just curious how confident conversations are evolving as you're heading into the back half of the year about potential sort of unlocking of incremental budget on the patient connect side and on provider count. Given it's such a new solution in the marketplace. What opportunities are you potentially seeing to be included into some of that, you know, late year innovation spend on newer solutions in the market that could create some potential upside. Thanks.
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks Ryan. You got a lot, you got a lot in there. I think on, in terms of the second half of the year, I mean, I think it sort of speaks for itself. There's we, you know, we had our last earnings call for the fiscal year end on March 30, so not a lot of time has passed. I don't think we have really anything worth sharing here, which is obviously why we maintain the revenue guidance for the year. So we'll, we'll provide updates as the year goes by. I think we will know incrementally some more in September when we, when we report the fiscal second quarter, but nothing really to call out since March. I think you asked some questions about new product and innovation and I think what you should really just think about is we're trying to have a lot of value where we can deliver the right kind of messages to patients to impact their outcomes. On the provider side, there's a lot of friction in the provider. So we're not creating products that are inventing problems. We hear a lot of feedback from our clients and we're just trying to build products that address some real needs. Needs. And again, we're fortunate enough to have different ways of monetizing those products.
OPERATOR
Your next question comes from the line of Jeff Garo with Stevens. Jeff, your line is open. Please go ahead.
Jeff Garo (Equity Analyst)
Yeah, good afternoon. Thanks for taking the questions. I'll ask another one on the product side and I'll try to kind of lump in Provider Connect with Voice AI. Curious to get an update on Voice AI specifically and then just to tie it back to that Provider Connect product. The general momentum, trying to create more engagement with providers as you release more features and functionality and software products that pertain more to them versus the patient or more administrative staff. Thanks. Yeah.
Balaji Gandhi (Chief Financial Officer)
So in terms of just products, I mean, look, there's a lot of work and effort similar to Access1. I think entering the HCP space is, has been something people at Freezer have been working on for many, many years. So we're very excited to get this launched and get it off the ground there. I think you should assume we're always thinking about other opportunities to engage with the provider directly, Jeff. But I think right now, if we can be successful Provider Connect, I think it'll be translate very well financially and more importantly for our clients.
OPERATOR
Your next question comes from the line of Daniel Grosslight with Citi. Daniel, your line is open. Please go ahead.
Daniel Grosslight (Equity Analyst)
Hi, guys. Thanks for taking the question. Network Solutions was a bit stronger than we expected this quarter. I know there's a lot of variability coming into the second half of the year. Year. But I'm curious if this quarter outperformed your expectations or was it roughly in line with what you were. What's in your internal model. And then I'm also, I guess related to that, curious on how GLPs are performing relative to your expectations. I think last quarter yet you kind of called it out as a bit of a bad guy. But not as much as other factors. But given we've ramped up a bit on the oral side, we'd love to get an Update on how GLPs are performing too.
Balaji Gandhi (Chief Financial Officer)
Yeah. So first with the, with the quarter on Network solutions, very much in line with what we had a shout out to a lot of folks at Freezia and the team in terms of, I think, Daniel, we've talked to you about this. There's a lot of different moving parts into how we run these campaigns and how they're paced. We're not trying to optimize things for a quarter yet. We're a public company and you know, there's the realities of we want to set expectations that we can deliver on. So all that considered was very much in line. As far as the second question, I mean, I don't think we want to get into specific things about clients or specific programs. I think just the commentary we made about generally demand environment and generally how we see things for the year, you know, applies for, for a lot of different areas and I don't think we want to get into specifics.
OPERATOR
Your next question comes from the line of Jalendra Singh with Truist Securities. Jalendra, your line is open. Please go ahead.
Jalendra Singh
Thank you and thanks for taking my question. I want to touch on the subscription business this quarter and I understand a tough year over year cost, but I'm still struggling to figure out why there was a 6% sequential decline in subscription business. And related to that, given where you're starting the year for this business, do you still expect subscription business to grow low single digit? Because that would imply some pickup from Q1 Trend. Give us the comfort on subscription business and where you expect that.
Balaji Gandhi (Chief Financial Officer)
Sure. Thanks, Shalyndra. So all of this sort of thinking and the different revenue lines is reflected in how we built up our fiscal 27 outlook. And so we're not going to get into revenue by revenue, you know, outlook and we provide outlook for the whole business. And that's, you know, we think that actually works against how we run the business. What we can tell you is that the strategy is embedded in the numbers. We feel good about where total revenue per AHSC is headed for the year. And as far as your comment about like sort of where we, where we sort of started in the first quarter, it's very much, you know, part of the way we sort of see the year playing out. And we have again we're fortunate enough to have different paths of getting to that outlook which is 510 to 520 million for the year.
OPERATOR
Your next question comes from the line of Stephen Valakat with Mitsuho Securities. Stephen, your line is open. Please go ahead.
Stephen Valakat (Equity Analyst)
Yeah, thanks. Good afternoon. So most of my good questions have been asked already. So kind of more of a housekeeping one. Also, on the subscription related services revenue, can you just remind us, you mentioned the non recurring revenue in the fiscal first quarter last year but for the rest of the quarters, are there any other, you know, non recurring revenues either up or down that we need to think about or do you have more clean comparisons quarterly for the rest of this year versus the quarters last year?
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks Steve. There's, I mean we called that out last year and obviously, you know, it impacts this year from a year over year comp. There's always like, you know, a couple of million bucks in the, in the related services component. It was just more pronounced last year and impact of the comps this year. But there's nothing else. I think if you looked over our 28 quarters of being public, I think we've called our related services three times. So I don't think there's anything to think about the rest of the year.
OPERATOR
Your next question comes from the line of Jessica Tassen with Piper Sandler. Jessica, your line is open. Please go ahead.
Jessica Tassen (Equity Analyst)
Hi guys. Thanks for the question. So I appreciate the revenue mix shift to networking payments on a per AHSC basis, but I'm just curious, you know, whether you think about the current subscription revenue per ahsc? Does that kind of reflect the floor or. Yeah, does that reflect the floor on kind of how AHSCs perceive the value of their of their substance subscription products or should we expect kind of that there may be continual moderation. Thanks.
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks Jess. I'm going to repeat three words that we say a lot better, faster, cheaper. We think that's just the way that's where the puck is headed. We felt that way for several years and so it is. It does make it very hard to translate what a subscription dollar per client means to the value the client's getting. We want to make sure they're getting a lot of value for it but for us we sort of flip it around internally and don't think about them as different business lines and just think about the total dollars that can come in. So you know, I think we're providing an outlook for the year. I think we try to be as helpful as we can around the modeling. So I don't want to, you know, put ourselves commit to like whether there's a floor or ceiling. But we're not optimizing for that revenue line specifically and generally this is trending in a direction we we've expected.
OPERATOR
Your next question comes from the line of Ryan Halstead with rbc. Ryan, your line is open. Please go ahead.
Balaji Gandhi (Chief Financial Officer)
Good afternoon. Thanks for taking the question. Obviously strong growth in the payment solutions business. Any color you can provide just around, you know, sort of the broader environment and how you're seeing that translate to this business specifically around, you know, utilization trends. Just generally more cost burden being borne by consumers and whether you're seeing that as a driver as well as greater out of pocket or lack of insurance. Just any other color around some of the experience you're seeing in that segment and the results you had for the quarter. Thanks.
OPERATOR
Yeah, thanks Ryan. I would say all of the above. I mean a lot of the points you made are really what we're doing seeing what got us very interested in getting deeper into this space. I think it really does start with cash flow though and you know, the ability for a health care provider, I think as many of you know, to be able to just convert, you know, cash in their business, huge amount of labor expenses, a lot of supplies, etc. Is a big deal. And so you know that's, that's a huge value prop. I think the shift in terms of more dollars being borne by the patient, that's been happening for years and it continues. So again you can almost say like the consumer is like sort of a bigger payer category in general.
Richard Close (Equity Analyst)
Your next question comes from the line of Richard close with Canaccord Genuity. Richard, your line is open. Please go ahead.
Balaji Gandhi (Chief Financial Officer)
Yeah, thanks for the question. Maybe on subscription as it relates to ahsc, you reiterated AHSC growth in the mid single digits. Can you talk a little bit about that number on a gross versus net basis? Just trying to get a sense of maybe churn that's going on and Your thoughts on Access1 how much maybe that helps them potential churn going forward.
OPERATOR
Yeah, thanks Richard. Look, you get, I mean I think we've shared the net number. You've got a lot of data over time. It's interesting. One thing to take away is that it's an average right the A and ahc and we are pretty encouraged by the team's start to the year with 50 average clients in the Way, you know, if you read our footnotes and stuff, how we calculate that, that's, that's very encouraging with a lot of our go to market motions. And so I think, you know, that's a net number. So we added, we added more than we lost. And, you know, the net, the net of it is 50. I think on your second part of your question. Yes, we think the value proposition with Access1 and now being able to even extend that reach into our base clients can absolutely be something that can strengthen the relationships we have with them and strengthen retention.
Gene Manheimer (Equity Analyst)
Your next question comes from the line of Gene Manheimer from Freedom Capital Markets. Gene, your line is open. Please go ahead.
Balaji Gandhi (Chief Financial Officer)
Thanks for taking the questions. Just on the note of, on the Access one, you know, you've owned it for six months now. How would you rate that transaction in terms of, you know, meeting expectations? I know it's early days and the second part of the question would be, can you quantify for us the savings you expect from the restructuring plan that you implemented this month? Thank you.
OPERATOR
Thanks, Gene. It's big. You know, the savings generated are baked into our outlook for the year. We're not going to break out a specific contribution from that, but it's something we plan for on Access 1. I mean, you know, just maybe just take a step back. They operate two complementary programs, funded receivables that represent roughly 40% of the portfolio and then an unfunded portion that's about 60%, where providers retain the receivables and we earn a servicing fee. That composition and strategy continues to evolve, but I'd say generally in front of even this expansion of our relationship with pnc, we're pretty pleased. This was the largest acquisition Frisia has ever done. There's a lot of work to be done, but I think where we are right now, we're pretty pleased to be here with a lot of the milestones that we've hit.
Haim Indig (Chief Executive Officer)
There are no further questions at this time. I will now turn the call over to Haim Indig, CEO for closing remarks. Please go ahead.
OPERATOR
Thanks, everyone for joining the call today. Thank you, Balaji, for doing a wonderful job answering questions and everyone on the Phreesia team for a very good, strong quarter. We'll talk to you again in 90 days. Cheers, everyone.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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