Leases

12 Months Ended

Jan. 31, 2024

Leases [Abstract]

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The table below only considers lease obligations through the renewal date as the Company is not reasonably certain to elect the option to extend its leases beyond the option date. No arrangements contain residual value guarantees or restrictions imposed on the leases. The Company is also committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

During the year ended January 31, 2023, the Company ceased using its office premises in Ottawa, Canada and Raleigh, North Carolina. Additionally, during the year ended January 31, 2023, the Company decided to cease using its office premise in Portland, Oregon by April 2023. In connection with these decisions, the Company shortened the useful lives of the related right of use assets to end on the cease use date for each lease. The financial impact of the change in useful lives of the related right of use assets was not significant.

Supplemental balance sheet information related to operating and finance leases as of January 31, 2024 and 2023 was as follows:

	January 31,
	2024		2023
Operating leases:
Lease right-of-use assets	$	266	$	569
Lease liabilities, current	$	393	$	934
Lease liabilities, non-current	134		349
Total operating lease liabilities	$	527	$	1,283
Finance leases:
Property and equipment, at cost	$	35,250	$	27,813
Accumulated depreciation	(27,399)		(20,657)
Property and equipment, net	$	7,851	$	7,156
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt)	4,958		4,926
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt)	3,351		2,725
Total finance lease liabilities	$	8,309	$	7,651

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of January 31, 2024, for operating leases, the weighted-average remaining lease term is 1.3 years and the weighted-average discount rate is 5.0%. As of January 31, 2024, for finance leases, the weighted-average remaining lease term is 1.8 years and the weighted-average discount rate is 6.3%.

The components of lease expense for the years ended January 31, 2024, 2023 and 2022 were as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Operating leases:
Operating lease cost	$	740	$	1,835	$	1,096
Variable lease cost	47		62		223
Total operating lease cost	$	787	$	1,897	$	1,319
Finance leases:
Amortization of right-of-use assets	$	6,742	$	5,632	$	4,636
Interest on lease liabilities	580		368		378
Total finance lease cost	$	7,322	$	6,000	$	5,014

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2024:

	January 31, 2024
	Operating		Finance
Maturity of lease liabilities
Fiscal year ending January 31,
2025	$	404	$	5,343
2026	86		2,986
2027	42		521
2028	7		—
Total future minimum lease payments	$	539	$	8,850
Less: interest	(12)		(541)
Present value of lease liabilities	$	527	$	8,309

As of January 31, 2024, the Company has signed a finance lease for computer equipment which does not commence until April 2024. Total undiscounted payments through the fiscal year ended January 31, 2028, related to the lease are $7,413 and are excluded from the table above but are included in the Company's other contractual commitments. See Note 11 - Commitments and contingencies for additional information regarding other contractual commitments.

Other supplemental cash flow information for the years ended January 31, 2024, 2023 and 2022 was as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	1,238	$	1,347	$	1,206
Operating cash used for finance leases	535		396		377
Financing cash used for finance leases	6,779		5,731		4,267

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements is classified as operating leases.

During the years ended January 31, 2024, 2023 and 2022, the Company recognized $10,307, $10,197 and $6,489, respectively in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of January 31, 2024 and 2023, except for those with terms of one year or less.

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The table below only considers lease obligations through the renewal date as the Company is not reasonably certain to elect the option to extend its leases beyond the option date. No arrangements contain residual value guarantees or restrictions imposed on the leases. The Company is also committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

During the year ended January 31, 2023, the Company ceased using its office premises in Ottawa, Canada and Raleigh, North Carolina. Additionally, during the year ended January 31, 2023, the Company decided to cease using its office premise in Portland, Oregon by April 2023. In connection with these decisions, the Company shortened the useful lives of the related right of use assets to end on the cease use date for each lease. The financial impact of the change in useful lives of the related right of use assets was not significant.

Supplemental balance sheet information related to operating and finance leases as of January 31, 2024 and 2023 was as follows:

	January 31,
	2024		2023
Operating leases:
Lease right-of-use assets	$	266	$	569
Lease liabilities, current	$	393	$	934
Lease liabilities, non-current	134		349
Total operating lease liabilities	$	527	$	1,283
Finance leases:
Property and equipment, at cost	$	35,250	$	27,813
Accumulated depreciation	(27,399)		(20,657)
Property and equipment, net	$	7,851	$	7,156
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt)	4,958		4,926
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt)	3,351		2,725
Total finance lease liabilities	$	8,309	$	7,651

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of January 31, 2024, for operating leases, the weighted-average remaining lease term is 1.3 years and the weighted-average discount rate is 5.0%. As of January 31, 2024, for finance leases, the weighted-average remaining lease term is 1.8 years and the weighted-average discount rate is 6.3%.

The components of lease expense for the years ended January 31, 2024, 2023 and 2022 were as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Operating leases:
Operating lease cost	$	740	$	1,835	$	1,096
Variable lease cost	47		62		223
Total operating lease cost	$	787	$	1,897	$	1,319
Finance leases:
Amortization of right-of-use assets	$	6,742	$	5,632	$	4,636
Interest on lease liabilities	580		368		378
Total finance lease cost	$	7,322	$	6,000	$	5,014

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2024:

	January 31, 2024
	Operating		Finance
Maturity of lease liabilities
Fiscal year ending January 31,
2025	$	404	$	5,343
2026	86		2,986
2027	42		521
2028	7		—
Total future minimum lease payments	$	539	$	8,850
Less: interest	(12)		(541)
Present value of lease liabilities	$	527	$	8,309

As of January 31, 2024, the Company has signed a finance lease for computer equipment which does not commence until April 2024. Total undiscounted payments through the fiscal year ended January 31, 2028, related to the lease are $7,413 and are excluded from the table above but are included in the Company's other contractual commitments. See Note 11 - Commitments and contingencies for additional information regarding other contractual commitments.

Other supplemental cash flow information for the years ended January 31, 2024, 2023 and 2022 was as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	1,238	$	1,347	$	1,206
Operating cash used for finance leases	535		396		377
Financing cash used for finance leases	6,779		5,731		4,267

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements is classified as operating leases.

During the years ended January 31, 2024, 2023 and 2022, the Company recognized $10,307, $10,197 and $6,489, respectively in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of January 31, 2024 and 2023, except for those with terms of one year or less.

Leases

Leases

(a) Phreesia as Lessee

The Company leases office premises and third-party data center space in the U.S under operating leases which expire on various dates through March 2027. Certain of these arrangements have escalating rent payment provisions or optional renewal clauses. The table below only considers lease obligations through the renewal date as the Company is not reasonably certain to elect the option to extend its leases beyond the option date. No arrangements contain residual value guarantees or restrictions imposed on the leases. The Company is also committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below.

The Company has also entered into various finance lease arrangements for computer equipment. These agreements are typically for two to three years and are secured by the underlying equipment.

During the year ended January 31, 2023, the Company ceased using its office premises in Ottawa, Canada and Raleigh, North Carolina. Additionally, during the year ended January 31, 2023, the Company decided to cease using its office premise in Portland, Oregon by April 2023. In connection with these decisions, the Company shortened the useful lives of the related right of use assets to end on the cease use date for each lease. The financial impact of the change in useful lives of the related right of use assets was not significant.

Supplemental balance sheet information related to operating and finance leases as of January 31, 2024 and 2023 was as follows:

	January 31,
	2024		2023
Operating leases:
Lease right-of-use assets	$	266	$	569
Lease liabilities, current	$	393	$	934
Lease liabilities, non-current	134		349
Total operating lease liabilities	$	527	$	1,283
Finance leases:
Property and equipment, at cost	$	35,250	$	27,813
Accumulated depreciation	(27,399)		(20,657)
Property and equipment, net	$	7,851	$	7,156
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt)	4,958		4,926
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt)	3,351		2,725
Total finance lease liabilities	$	8,309	$	7,651

For office leases and leased equipment, the Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance, utilities and equipment maintenance.

As of January 31, 2024, for operating leases, the weighted-average remaining lease term is 1.3 years and the weighted-average discount rate is 5.0%. As of January 31, 2024, for finance leases, the weighted-average remaining lease term is 1.8 years and the weighted-average discount rate is 6.3%.

The components of lease expense for the years ended January 31, 2024, 2023 and 2022 were as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Operating leases:
Operating lease cost	$	740	$	1,835	$	1,096
Variable lease cost	47		62		223
Total operating lease cost	$	787	$	1,897	$	1,319
Finance leases:
Amortization of right-of-use assets	$	6,742	$	5,632	$	4,636
Interest on lease liabilities	580		368		378
Total finance lease cost	$	7,322	$	6,000	$	5,014

Amortization of right-of-use assets for finance leases is included within depreciation expense on the Company's consolidated statements of operations.

The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2024:

	January 31, 2024
	Operating		Finance
Maturity of lease liabilities
Fiscal year ending January 31,
2025	$	404	$	5,343
2026	86		2,986
2027	42		521
2028	7		—
Total future minimum lease payments	$	539	$	8,850
Less: interest	(12)		(541)
Present value of lease liabilities	$	527	$	8,309

As of January 31, 2024, the Company has signed a finance lease for computer equipment which does not commence until April 2024. Total undiscounted payments through the fiscal year ended January 31, 2028, related to the lease are $7,413 and are excluded from the table above but are included in the Company's other contractual commitments. See Note 11 - Commitments and contingencies for additional information regarding other contractual commitments.

Other supplemental cash flow information for the years ended January 31, 2024, 2023 and 2022 was as follows:

	Fiscal years ended January 31,
	2024		2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	1,238	$	1,347	$	1,206
Operating cash used for finance leases	535		396		377
Financing cash used for finance leases	6,779		5,731		4,267

(b) Phreesia as Lessor

In connection with the patient intake and registration process, Phreesia offers its customers the ability to lease PhreesiaPads and Arrivals Kiosks along with their monthly subscription. These rentals fall under the guidance of ASC 842. The Company elected the practical expedient to not separate lease and non-lease components. More specifically, all contractual hardware maintenance is included with the hardware lease components. The leases contain no variable lease payments, no options to extend the lease that are reasonably certain to be exercised, and do not give the lessee an option to purchase the hardware at the end of the lease term. Additionally, the lease term does not represent a major part of the remaining economic life of the assets, and the present value of the lease payments does not equal or exceed substantially all of the fair value of the assets. As a result, all leased hardware in the SaaS arrangements is classified as operating leases.

During the years ended January 31, 2024, 2023 and 2022, the Company recognized $10,307, $10,197 and $6,489, respectively in subscription and related services revenue related to the leasing of PhreesiaPads and Arrivals Kiosks.

Future lease payments receivable under operating leases were immaterial as of January 31, 2024 and 2023, except for those with terms of one year or less.