Phreesia Inc (PHR) 2021 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Phreesia Second Quarter 2021 Earnings Conference Call. (Operator Instructions)

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 Second Quarter of Fiscal Year 2021, which ended on July 31, 2020. Participating on today's call from Phreesia, our 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 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 release and supplemental materials, which were furnished with our Form 8-K filed after the market closed on September 8 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. As fall approaches, we hope that everyone's families are safe and healthy. Once again, we are participating on today's call from 3 different locations. So we appreciate your patience with us. Our second quarter results demonstrate the agility, depth and overall commitment of our entire organization in a very challenging environment. I'm proud of Phreesia's ability to serve our clients, take care of our team and further our mission of creating a better, more engaging health care experience as our communities grapple with the current pandemic.

For the fiscal second quarter, total revenue was $35 million, up 14% year-over-year. The average number of provider clients was 1,668, up 7% year-over-year. Average revenue per provider client was 17,360, up 5% year-over-year. Adjusted EBITDA was $1.2 million, up approximately $400,000 year-over-year. The pandemic has forced health care providers across the country to rethink every aspect of their day-to-day operations. Phreesia's network gives providers, tools they need to keep their patients and staff safe while operating reliably and efficiently. I would like to highlight 2 new Phreesia clients, Advent Health and Health First. Advent Health became a client in mid-March. We work closely with the Advent team to accelerate the rollout in order to help Advent scale and reduce exposure between patients and staff during in person visits.

In order to move rapidly, we supplemented the rollout team with our sales development representatives, also known as SDRs. Our teams took nearly 1,000 of Advent's ambulatory practices live. We also took 44 Advent acute care hospitals live over the first 90 days. All of this work was done remotely by both teams. This was a very complex and well-coordinated rollout. Phreesia's network and APIs are now embedded into Advent's consumer-facing ecosystem.

Next, I would like to talk about Health First, a fully integrated delivery network in Central Florida. Phreesia went live with Health First during the second quarter. Similar to Advent, our teams work collaboratively and move quickly. Most of Health First ambulatory locations went live in less than a month. Health First is currently expanding its deployment of the Phreesia network to its 4 acute care hospitals.

At Phreesia, we believe that if we continue to invest in our people and product and take care of our clients, our clients will drive a phenomenal amount of value from being part of our network. Class research recognized our team as an outperformer in its recent review of vendors' response to the pandemic, specifically siting our team for being upfront, strategic and flexible. I would like to congratulate our team mates on this very nice recognition.

In July, Phreesia welcomed Melanie Goldberg (sic) [Lainie Goldstein] to our Board of Directors. Lainie has been the CFO of Take-Two Interactive for 17 years. And brings more than 30 years of financial and business experience in the software, entertainment, retail and apparel industries. In August, Allison Hoffman joined as our General Counsel. Bringing 25 years of legal and people management experience to Phreesia, including leadership roles at public and private companies in various industries and various stages of growth.

I'll now 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 second quarter, including some considerations for the rest of the fiscal year.

First, revenue. Total revenue was $35 million, up 14% year-over-year. Subscription and related service revenue was $17.1 million in the quarter, up 22% year-over-year, primarily due to new provider clients added during the quarter, expansion and cross-selling of existing provider clients and hire-related services revenue. Payment processing fee revenue was $11.8 million in the quarter, up 1% year-over-year. While many health care providers have reopened and trends are improving. Patient visits for the quarter continued to be below their pre-COVID-19 levels. Payment processing volume across the Phreesia network was only slightly higher in the fiscal second quarter compared to the first quarter. This is because visits were significantly higher in the first half of the fiscal first quarter, which took place prior to March 13, when the United States declared a national emergency with respect to COVID-19.

Life science revenue was $6.1 million in the quarter, up 18% year-over-year. Provider revenue, which combines revenue from subscription and related services and payment processing fees was $29 million, up 13% year-over-year. The 2 drivers of the 13% provider revenue growth were average provider client growth, up 7% year-over-year and average revenue per provider client, up 5% year-over-year. Life science revenue was $6.1 million, up 18% year-over-year.

Our life sciences revenue is based largely on the delivery of messages at a contracted price per message to targeted patients and our team was successful in delivering more messages than in the prior year period. Moving on to expenses. I will 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 in our Form 10-Q filed with the SEC. Cost of revenue was $5.1 million or 14.7% of total revenue, up 110 basis points year-over-year, and reflects a ramp-up in client services and support during the period.

Sales and marketing expense was $9.3 million or 26.6% of total revenue, up 110 basis points year-over-year as we continue to invest in future growth. Research and development expense grew 10% year-over-year to $5 million and down 50 basis points year-over-year as a percentage of revenue.

General and administrative expense was $7.7 million or 22% of total revenue, up 110 basis points year-over-year. As we have previously indicated, this figure has been increasing as a result of continued ramping of public company expenses. From a modeling perspective, we expect to begin to see operating leverage in the back half of fiscal 2022. In general, the increases in cost of revenue, sales and marketing and G&A expenses as a percentage of revenue are consistent with our comments in June, that we began hiring and would expect to see that hiring reflected in our expenses through the remaining 3 quarters of the year in support of anticipated growth.

Payment processing expense was $6.7 million, a decline of 5% year-over-year. While payment processing revenue was up 1% year-over-year, expenses were down 5% year-over-year. These trends are due to the mix of transaction type and lower cost routing of payments, mirroring trends we saw in the fiscal first quarter.

Adjusted EBITDA was $1.2 million, up from $741,000 in the prior year. This increase reflects the combination of higher total revenue and lower payment processing expense. Shares outstanding as of July 31 were 37.9 million.

Cash on the balance sheet on July 31 was $84.2 million, down $6.1 million from April 30. Cash flow from operations for the quarter was an outflow of $2.4 million versus an inflow of $600,000 in the prior year quarter. And capital expenditure for the quarter was $4.3 million, up $1.4 million year-over-year. And that $4.3 million includes $1.6 million of capitalized software development.

We will invest more cash into the business in fiscal '21 compared to fiscal '20 as we ramp up hiring across the organization to support our anticipated growth. To reiterate Chaim's comments, I am very proud of our team's ability to stay focused during the pandemic, positioning us to grow with our clients, and we are encouraged by the trend towards more providers getting back to delivering care to those who need it. Now we are ready to take your questions. Operator?

(Operator Instructions)

Your first question comes from the line of Anne Samuel with JPMorgan.

Congrats on the nice quarter. As we think about provider client growth, how should we be thinking about the length of your sales cycle? And is there still any lingering carryover from COVID disruption that happen in March and April that might kind of still be impacting that number as we look forward?

Anne, thanks for that question. I think one of the things to think about is in this -- in our Q2 quarter, one of our pressing strategic imperatives was getting as many people live as fast as possible. So we really pull forward as many of our clients go-lives as we could. And the reason we did that is we and our clients felt very strongly that Phreesia was helping keep their patients and staff safe using zero contact. So -- and I think we reiterated a little bit earlier that we actually moved a lot of our SDRs into implementation so that we can accelerate as many of the go-lives as possible.

Okay. That makes sense. And then I guess on life sciences, that was obviously, once again, really strong growth. Were there any shifts or unusual items in that?

And then looking out at the next quarter, you're up against a really difficult compare because you had such a great quarter last year. How should we think about lapping that?

I think our life sciences team has done just a phenomenal job. What we're seeing now is the investment we've been making over the last 12 to 18 months in building up that team. And investing in data science and new product offerings. And so -- but I do think it was a pretty hard comp last year. And we're doing it in a very challenging environment.

But I know that team's working as many hours as are possible today to make sure that we're able to deliver very relevant messages to the right patients, so that they can get the care they need from their providers.

Next question comes from the line of Ryan Daniels with William Blair.

It sounds like a very positive data point. When you speak to the hiring in the outlook for growth. Can you give a little bit more detail on, number one, key focus areas for hiring? And number two, the SDR reps? Are they moving back into the sales position at this point? Or are they still somewhat deployed in other areas?

Ryan, thanks for those questions. Sorry, I'll kind of get all of them. So what we're hiring across the board. We have whether it's engineering and finance or whether it's an early career program, which supports implementation, our SDRs, our client success and our tech support team. So across the organization, we're hiring and we've seen a ramp-up, and we're doing it in a remote world.

From an SDR standpoint, we did start moving them all, a lot of them back at the tail end of last quarter. So we should hopefully, over the next 2 quarters, see the output of that, ramp happened.

I think we ended the last quarter at 59 SDRs, and this morning, I think we have a little over 70 -- smack, I wanted to say, 71 SDRs as of this morning. So that sales motion is ramping up and those people have moved back from implementation and the other rules they had in the organization back to being SDRs, if they wanted to.

Okay. Perfect. Very helpful. And then as a follow-up, just on the inpatient space, it seems like a lot of systems that really start that make more active investments in things like virtual waiting rooms and digital check-ins and patient navigation through the system.

Are you seeing that in your book-of-business, though, I know you announced some large partnerships with both inpatient and outpatient units. But are you starting to see a little bit of an uptick in the inpatient market as well?

So I can't comment as the broader market. But what I can say is that in -- for us, the acute inpatient space is an area that we've been meaningfully investing for and for the last couple of years. And I still think it's very early to articulate what that market looks like. But what I do know is that hospitals want to have a common front door with their ambulatory groups. They also want to streamline how they intake patients and provide a better, more thoughtful, patient and consumer experience. And especially during this time period, they'd also like to make a zero contact. And so we have seen with a lot of our current clients, observant of interest.

Question comes from the line of Stephanie Davis with SVB Leerink.

Good Quarter. Given the growth in telemedicine access that you guys have participated in, which likely captures some appointments that would have been skipped pre-pandemic. Is it possible that a return in volume could actually be more than 100% of your prior volume as you're still only 9% off right now from prior levels in telemedicine [just] has happened?

I don't have a crystal ball. And I don't know what the future holds. But I do think -- we're actually -- we think we are not guiding right now. The -- but what I would say is that, look, telemedicine is a new way for patients to be able to have access to care. And if it allows people especially with social determinants of health that aren't able to access care, either from a specialist or a primary care provider where they would have not been -- had access, that's a great thing. I don't know what's going to happen in 12 to 24 months in terms of care and access, but I do know that providers want to provide care to patients that need it.

And I do think that telemedicine allows them the ability to reach patients in a way that they wouldn't have otherwise. That being said, there's only so many hours in the day. And when we talk to providers, they're working full long base today. And they were pre pandemic, and they are as much as they can now. And so I think there's -- what I do caution is that there is only so many hours in a day for them to be seeing patients.

Understood some upper levels and sort of region. So one more follow-up on volume. I know you've talked about this before during the IPO. But what sort of impact do you normally see from flu season? And how should we think about the puts and takes of a weak flu season or a nonexisting flu season?

If we -- because of the makeup of our network, I think flu has less of an impact than it probably would have if we were overly weighted to primary care or urgent care. I think it's bad when people get sick, generally speaking. And so I hope that flu season is low, especially considering we're also grappling with a pandemic. And I think that, generally, you see, like when we talk to our pediatric groups because they're -- they see a little bit more sickness it's been most just because they see kids, they are seeing slightly lower sick volume.

But on the grand scheme of sort of volume for us, it's in the low single digits. I don't think it -- I wouldn't say it's materially moves the needle one way or the other.

Your next question comes from the line of John Ransom with Raymond James.

Just wanted to prod a little bit on this hospital opportunity. Yes, I think we all know what it is you do for physician offices on the intake side. What's exactly different about what you do at the hospital level? And how long did it take you to build up the capabilities? And what additional capabilities, if any, do you need to continue to kind of roll forward in that new TAM?

So that's a great question, John. I don't want to go into very long specifics on what we're doing. But if you think about it, the value proposition there is people wait in line when they go to that hospital to check in, to go either for the service or for the urgent care that they need in an emergency room or for their surgeries or to get birth. And they still have lots of paperwork to fill out. They still have to give all their information. And right now, the constraint is the registrar. And so a lot of that initial experience that they have at a hospital is still sitting in "waiting room" and/or telling a patient where and when they need to go somewhere.

And we're building and deploying those capabilities. So if you think about a hospital with maybe multiple entrances with different access points, it's streamlining those access points so that patients are able to intake faster into the facility and be directed on where to go, providing a significantly better experience, with often better economics because you need less staffing.

And frankly, in a COVID environment, it's safer because it's done with no contact.

Okay. And how many people do you have? I know you've got to deal with R1, but do you have dedicated marketing people for the hospital sector yet? Or you just -- are you kind of taking these referrals on from R1?

No. We -- so -- but Advent is not with R1, neither was Memorial. We do have dedicated people working on the -- in the acute market for us.

(Operator Instructions)

Your next question comes from the line of Donald Hooker with KeyBanc.

I would just maybe for Chaim, just maybe high-level perspective on some of the operating environment. If we look ahead and there is hypothetically a big second wave of COVID-19. What would you have learned from this first wave that would make the second wave perhaps a little different?

That's a interesting question. Look, our #1 priority is keeping our staff as everyone says, it's the staff, that's our providers, it's patients and whether it's first wave, second wave, third wave. I just think COVID-19 is here with us today, and we don't have a vaccine. So we're treating it as if we're in the -- we're still in the main wave.

We're not -- most of our people are not traveling. The vast majority of our implementations are remote, and it's only being done in absolutely necessary conditions. So what -- the way we're treating the environment right now is that we're still in that first wave. And we're being very cautious.

And we've kept all of our offices closed, and we intend to remain virtual going forward.

Okay. And maybe just my follow-up would be, in terms of the new provider adds, client adds in the quarter, which looked great. And you commented on that briefly, you may not have an answer to this, but were there any sort of pockets of demand? It's such an unusual environment. Were there any sort of areas that drove that year-over-year growth? Or if not, or if it was more just broad based?

I think what we really did is we just really looked at everyone that was in the queue to go live, and we just did everything possible to get them live as fast as possible because it just made a meaningful impact to their organizations and to their patients. And we heard it. And we heard it in the class analysis. We heard it from our practices.

I've gotten just a ton of e-mails and so -- and just what we've been able to do to help these practices just open back up. So I'm just really proud of the organization for mobilizing and prioritizing keeping people safe. And it's something that, I think it aligns with our mission, and it's something I'm really proud of, personally.

Your question comes from the line of Sean Wieland with Piper Sandler.

Maybe could you call out what the acute care revenue was in the quarter or maybe number of clients that you've got live on that now?

We don't disclose that to date, and we'll let you know when we do. How many clients live or the revenue number, but it's still pretty early and it's still pretty small.

Okay. Sub 10%, safe to say?

Tom?

Yes, that's correct, Sean.

Okay. How about on the -- same-store sales growth is up with, obviously, volumes being down. Wanted to get a little bit more insight as the primary drivers of the same-store sales growth for example, zero client intake, what percent of clients have that today? And maybe what are some of the other key drivers of that same-store sales growth?

I don't have the number, Sandy. I can get back to you on what percentage are running some version of zero contact. But I think what we've seen from a same-store sales is that it's a mixture of expands. It's a mixture of cross-sell and upsell. And it's also a mixture of making sure that we're providing all the necessary workflows to these practices to make sure that they're able to do what they need to do to see patients. But I'd say it's mostly driven by expansion.

Expansion of number of providers at the client that's using it?

Correct. So that's a definite amount of driver.

Tom, would you agree?

Yes. Again, that's correct, Sean. Expansion is the largest driver.

Okay. All right. And Tom, what's the hiring ramp that you're talking about? Can you maybe quantify that on the impact to OpEx?

Well, we're -- as we said in the first quarter, we are -- we've started hiring again and expect to ramp up pretty aggressively in the second half here. As Chaim mentioned before in all areas of the business, particularly in the early career program.

Your next question comes from the line of Glen Santangelo with Guggenheim.

Chaim, I also wanted to follow-up on the inpatient side. I get it that the revenues are small today, but I was really trying to understand maybe how the economic arrangements work with these customers and how that may be different from physicians to help us think about how the impact of an Advent Health or First Health, for example, might change or augment your growth algorithm?

How should we think about those financial relationships?

That's a great question. But I don't want to share our pricing model for acute for competitive reasons. But I assume you understand that. And eventually, I'm sure Balaji will have a slide that explains all that.

Okay. Maybe if I could just add a follow-up on an earlier question about the sales cycle. I think in the past, you said it takes about 90 days to bring a physician online after you sell them. And if we sort of think about maybe April, May and June being sort of the height of the pandemic, is it reasonable to think that as we look out to this next quarter that we may see the impact of maybe slower results in the height of the pandemic play out in this next fiscal quarter?

I understand you don't want to give guidance, but I'm just trying to think about how the sales cycle may have impacted 2Q versus what we should be expecting in 3Q?

I think that's fair to say. And I think that's a good color. I think the -- this next quarter, we're going to see a lot of those practices that we probably would have taken live already live. And our priority is making sure that we're servicing and setting up the next couple of quarters beyond that. Definitely, we will see some of the growth in this quarter.

Your next question comes from the line of Daniel Grosslight with Citi.

I want to kind of follow-up on Glen's question there on the sales cycle because you have that 90-day implementation on getting a provider aboard and then 90 days from that to really kind of generating revenue here. So I guess as we look at the providers that you signed during the most difficult time period, which will show up in the next couple of quarters, how does the entry point in terms of pricing compared to that of those who you sold pre-pandemic?

That's a great question. We're not, obviously, for competitive reasons, going to talk about pricing. But our core priority is always making sure that we align with the needs of our providers and our life sciences companies and make sure that they could treat and care for patients the way they need to and want to. But at this time, and probably in the future, we won't talk about it sort of promotions and pricing. But it's a good question.

Okay. Okay. And then maybe just at a little bit of a higher level. It seems like the data that you put out with Commonwealth has utilization kind of plateauing at around 9% below the pre-COVID baseline. How does this compare to what you were expecting heading into the quarter? And what -- I understand you're not giving guidance here, but at a high level, what are your expectations for health care utilization for the rest of the year?

And what signposts do you think you'll need to be able to really provide fiscal year guidance?

This is -- I think what's really important is I don't know what to expect, right? And we sort of -- we do multiple scenarios all throughout our planning process to think through the highs and the lows. We didn't know going into Q2 that we would see the growth that we did, right, to come back. So -- and I would argue that either did a lot of our providers.

So I think from a monthly basis or even a weekly basis as we look at this utilization levels, I think we're continuously finding different movement throughout the United States. And I would also argue that it's not. I don't necessarily just think about it as 9%. I think different specialties are coming back in a different way. Ways in different parts of the country. And as we see spikes in different communities, it impacts patients and it impacts providers, right? So I don't want to look into that crystal ball and sort of hope that I could tell you what it would look like. I have no idea.

Your next question comes from the line of Sean Dodge with RBC Capital Markets.

Chaim, maybe on the value proposition, going back to your comments around the strengthening Phreesia has seen in that post-pandemic here. If we take a step back and assume volumes in payments at some point return to normal. Does -- or I guess, how does the enhancements you've made, you've seen change your view on the potential long-term growth trajectory for the company. I guess do you come out of the pandemic better than you went in? And how much better?

We -- I feel like we went into the pandemic, like in great shape. And I think we will come out of this pandemic in great shape. Relatively speaking. I think the real change is going to be to the health care system and to patients and how -- and the strength of the provider and health system community because they had a lot of pain and a lot of people, lost lives and got really sick. So my -- and still are. So I would think about -- look, our -- I don't think going into this, we would have thought as Phreesia is one of our propositions is helping keep the patients and providers safe.

And I think that is a value proposition that will remain and it's one that we sell on today that people get Phreesia for today. It doesn't replace our really significant ROI on labor and cash flow efficiency and the ability to collect data where they wouldn't have otherwise or the ability to have a better patient experience and staff experience. So I think it just supplements that. And I think it accelerated in a lot of products that we had already been working on, and it changes the nature of intake.

So I think all of those are just -- I can't imagine. I don't want to specificate as to what the world would have looked like or what it will look like. I know that -- what I do know today is that we're in good shape moving forward, and I'm very optimistic about our opportunity moving forward.

Okay. That's great. And then maybe one on the cash collections, it looks like DSOs were down a little sequentially, but up still a fair amount year-on-year. Is there something changing about revenue mix that's driving that? Or is that related to the deferral program, you all had mentioned offering to some of your clients earlier on in the year?

Yes. That's correct, Sean. The deferral program had some impact on cash collections.

Okay. Is there any bookends you can put around maybe the proportion of clients or member clients that are taking part in that?

Between a quarter and 1/3, I think, took advantage of it.

Your next question comes from the line of David Larsen with Verity.

Can you talk a little bit about the growth rate in the revenue per provider? It looks like the number of providers that you have on the platform grew nicely 7% year-over-year. That's sort of in line with last year. Why would the revenue per provider growth rate slow to like 5% from 23%? Are you -- is there something about the pandemic that is making it harder to sell like a whole portfolio of modules? Or is that a steady -- is that a good number to use this going forward, 5%?

I'll let Tom give more info. But on a high level, I think what you're also seeing is the pressure on payments. Yes, it's -- there is -- that's part of the revenue mix and the different provider clients. Thomas, you want to...

You've got to think about that 1% growth in payment volume and payment revenue and the impact on that.

Okay. That explains it, obviously. And then with Advent and Health First. Did I hear that you deployed the acute care solution to all 4 of the health first hospitals and I think Advent has 50 hospitals. If we think that like each hospital has a lobby and registrar sort in each of their facilities, I mean, has the inpatient solution been -- or is it the plan to deploy it across the networks of those IDNs?

So at Advent, I think we've been public that we're live in 44 of those hospital facilities. So that's the inpatient and I think we're in the process. And Tom could correct me if I'm wrong, we're in the process of going live with the Health First acute facilities, and I think there's 4 of them in Florida.

That's correct. Yes.

Okay. And then without getting too granular, hospitals are typically larger business entities than our physician practices. Substantially, we're talking about like $500 million in net revenue per facility compared to a couple of million for physician practice, just any thoughts around that would be very helpful.

I mean why wouldn't the hospital revenue be significantly higher than your typical physician office?

I don't think we're commenting on where the hospital revenue would be. But I will say that, yes, the revenue tends to be higher, but they do, on average, less intakes. Right? So thankfully, less -- more people go to ambulatory visits than they go to acute visits, right? So you -- a lot of it is not just based on the absolute revenue of the organization. It's based on what is it that we're doing for them? And what does that volume look like? I think you're not -- when you go to an ICU, you're not checking in every day.

1/3 of denials happen because it's inaccurate patient registration. So I imagine that there's going to be a significant improvement in bad debt after they deploy Phreesia. Are you doing any sort of analytics around that to show the value that you're bringing to these facilities?

We -- it's safe to say that we think generally as an organization that when we in the early days and moving forward, when we deploy out a solution, we're continuously looking to be able to validate and articulate our return on investment for our clients. When we try to do it as quickly as possible. So what I can say is that it's something that we looked at. And as we further talk about our acute solution, I'm sure to the marketplace, I'm sure we'll be articulating where we think the ROI wise.

And we do have time for one more question. Our final question comes from the line of John Ransom with Raymond James.

All right. Just going back to payments revenue. How is that trending toward the end of the quarter versus the beginning of the quarter? And then maybe you could give us a peek at how it's trending this quarter, just for modeling purposes, how to think about that?

The -- it improved during the quarter. John.

And John, this is Balaji. I think the Commonwealth data is a valuable tool without us really having -- you could sort of look at the volume data there. And obviously, can't really talk beyond that, but I think the Commonwealth data goes through early mid-August, so that's pretty instructive.

This concludes our question-and-answer session. I will now turn the call back over to Chaim Indig for closing remarks.

I want to thank everyone for joining us today, and I hope that your families, yourself and your organizations are all staying safe. And hopefully, we don't see a spike in COVID-19 in the second half of this year because I'd like everyone to be healthy and safe. Cheers, everyone.

Hope to see you again soon.

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