Phreesia, Inc.PHR
Phreesia, Inc. Debt Disclosure
Finance leases and other debt
As of January 31, 2025 and 2024, the Company had the following outstanding finance lease liabilities and other debt:
| January 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Finance leases | $ | 14,256 | $ | 8,309 | |||||||
| Financing arrangements | 1,913 | 3,124 | |||||||||
| Accrued interest and payments | 24 | 23 | |||||||||
| Total finance lease liabilities and other debt | $ | 16,193 | $ | 11,456 | |||||||
| Less: current portion of finance lease liabilities and other debt | (8,043) | (6,056) | |||||||||
| Long-term finance lease liabilities and other debt | $ | 8,150 | $ | 5,400 | |||||||
(a) Finance leases
See Note 10 - Leases for more information regarding finance leases.
(b) Financing agreements
In June 2023, the Company entered into a software licensing financing agreement (the "financing agreement") in order to finance its software and service licenses. As of January 31, 2025, there was $1,913 in outstanding principal and interest due under the financing agreement. The financing agreement requires the Company to pay $123 per month for 36 months beginning August 2023. The effective interest rate on the financing agreement is 10.5% per annum.
(c) Amended and Restated Loan and Security Agreement with Silicon Valley Bank (“SVB”)
In February 2019 (the "Effective Date"), the Company entered into the Amended and Restated Loan and Security Agreement (the "First SVB Facility") that provided for a $20,000 term loan.
In May 2020 (the "Second SVB Effective Date"), the Company entered into the Second Amended and Restated Loan and Security Agreement (the “Second SVB Facility”) to modify the First SVB Facility. The Second SVB Facility provided for a revolving credit facility with an initial borrowing capacity of $50,000.
In March 2022 (the "Third SVB Effective Date"), the Company entered into a First Loan Modification Agreement to the Second SVB Facility (as amended, the "Third SVB Facility") to increase the borrowing capacity from $50,000 to $100,000 and to reduce the interest rate on the facility. Borrowings under the Third SVB Facility were payable in May 2025. Borrowings under the Third SVB Facility bore interest, which was payable monthly, at a floating rate equal to the greater of 3.25% or the Wall Street Journal Prime Rate minus 0.5%. In addition to principal and interest due under the revolving credit facility, the Company was required to pay an annual commitment fee of approximately $250 per year and a quarterly fee of 0.15% per annum of the average unused revolving line under the facility.
In December 2023, the Company terminated the Third SVB Facility. The Company recorded a $1,118 loss on extinguishment of debt in connection with the termination of the Third SVB Facility.
(d) Capital One Credit Agreement
In December 2023, the Company entered into a Credit Agreement (the "Credit Agreement") for a new 5-year $50,000 senior secured asset-based revolving credit facility ("Capital One Credit Facility") maturing in December 2028, which includes a swingline sub-limit of at least $5,000 and a letter of credit sub-limit of at least $5,000. The new Capital One Credit Facility was entered into with Capital One acting as administrative agent and replaced our previous senior secured revolving credit facility with SVB. The Capital One Credit Facility will give the Company additional financial flexibility, through the facility’s five-year term. The facility is available to the Company for working capital and general corporate purposes. The Capital One Credit Facility bears interest at a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) or a Base Rate as specified in the Credit Agreement. As of January 31, 2025, the interest rate on the Capital One Credit Facility was 7.4%. In addition to principal and interest due under the Capital One Credit Facility, the Company is required to pay an annual fee equal to 0.25% of the unused balance of the facility. Additionally, the Company incurred creditor and third-party fees of $778 upon entering into the Capital One Credit Facility. The Company recorded the fees to deferred financing costs, included within
other assets on its consolidated balance sheets, and will amortize the costs over the term of the Capital One Credit Facility.
The obligations under the Capital One Credit Facility are secured by a first priority security interest in substantially all of the tangible and intangible assets at certain of the Company's U.S. subsidiaries, and by pledges of the equity of certain of the Company's U.S. subsidiaries, in each case subject to customary exclusions.
The Capital One Credit Facility includes financial covenants including, but not limited to requiring the Company to maintain minimum Consolidated EBITDA, minimum Liquidity, a minimum Consolidated Fixed Charge Coverage Ratio a restriction on the amount of dividends and limiting the amount of cash and cash equivalents the Company holds outside Capital One, each as defined in the Credit Agreement. The Company was in compliance with all covenants related to the Credit Agreement as of January 31, 2025.
Maturities of finance leases and other debt in each of the next five years and thereafter are as follows:
| Total | Finance Leases | Other Debt | |||||||||||||||
| Fiscal year ending January 31, | |||||||||||||||||
| 2026 | $ | 8,043 | $ | 6,825 | $ | 1,218 | |||||||||||
| 2027 | 6,033 | 5,314 | 719 | ||||||||||||||
| 2028 | 2,117 | 2,117 | — | ||||||||||||||
| Total maturities of finance leases and other debt | $ | 16,193 | $ | 14,256 | $ | 1,937 | |||||||||||
The following table presents the components of interest income, net:
| Fiscal years ended January 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Interest expense (1) | $ | (2,347) | $ | (1,854) | $ | (1,411) | |||||||||||
| Interest income | 2,677 | 4,065 | 2,475 | ||||||||||||||
| Interest income, net | $ | 330 | $ | 2,211 | $ | 1,064 | |||||||||||
(1) Includes amortization of deferred financing costs and original issue discount | |||||||||||||||||
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About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.