Composition of certain financial statement captions

12 Months Ended

Jan. 31, 2021

Composition of Certain Financial Statement Captions [Abstract]

Composition of certain financial statement captions

(a) Accrued expenses

Accrued expenses at January 31, 2021 and 2020 are as follows:


	January 31,
	2021		2020
Payroll-related expenses and taxes	$	8,946	$	5,033
Payment processing fees liability	2,853		2,738
Other	6,525		1,472
Total	$	18,324	$	9,243

(b) Property and equipment

Property and equipment at January 31, 2021 and 2020 are as follows:


	Useful life (years)	January 31,
		2021		2020
PhreesiaPads and Arrivals Kiosks	3	$	25,837	$	26,389
Computer equipment	3	33,558		18,394
Computer software	3	5,105		2,297
Hardware development	3	1,024		1,024
Furniture and fixtures	7	539		743
Leasehold improvements	2	745		1,191
Total property and equipment		$	66,808	$	50,038
Less accumulated depreciation		(40,148)		(35,551)
Property and equipment — net		$	26,660	$	14,487

Depreciation expense related to property and equipment amounted to $9,770, $8,753 and $7,552 for the fiscal years ended January 31, 2021, 2020 and 2019, respectively.

Assets acquired under finance leases included in computer equipment were $19,933 and $12,283 at January 31, 2021 and 2020, respectively. Accumulated amortization of assets under finance lease was $10,389 and $7,724 at January 31, 2021 and 2020, respectively.

For the fiscal years ended January 31, 2021, 2020 and 2019, the Company capitalized $7,663, $5,852 and $5,109 of costs related to the Phreesia Platform, respectively.

During the fiscal years ended January 31, 2021, 2020 and 2019 amortization expense of capitalized internal-use software was $5,884, $4,933 and $4,009, respectively. As of January 31, 2021 and 2020, the net book value of the Phreesia Platform was $10,476 and $8,735, respectively.

(d) Intangible assets and goodwill

The following presents the details of intangible assets as of January 31, 2021 and January 31, 2020.


	Useful Life	January 31,
	(years)	2021		2020
Acquired technology	5	$	1,410	$	490
Customer relationship	10	1,840		980
Total intangible assets, gross carrying value		$	3,250	$	1,470
Less accumulated amortization		(525)		(271)
Net carrying value		$	2,725	$	1,199

The remaining useful life for acquired technology in years is 4.4 and 3.9 as of January 31, 2021 and 2020, respectively. The remaining useful life for customer relationships in years is 7.7 and 5.9 as of January 31, 2021 and 2020, respectively. Refer to Note 17 for details of intangible assets acquired in connection with the acquisition of QueueDr.

Amortization expense associated with intangible assets for the fiscal years ended January 31, 2021, 2020 and 2019 was $254, $238 and $33, respectively.

The estimated amortization expense for intangible assets for the next five years and thereafter is as follows as of January 31, 2021:


	January 31, 2021
2022	$	508
2023	508
2024	494
2025	410
2026-Thereafter	805
Total	$	2,725

The following table presents a roll-forward of goodwill for the years ended January 31, 2020 and 2021:


Balance at January 31, 2019	$	250
Balance at January 31, 2020	250
Goodwill acquired during the year ended January 31, 2021	8,057
Balance at January 31, 2021	$	8,307

The Company did not record any impairments of goodwill during the years ended January 31, 2021, 2020 or 2019.

(f) Accounts receivable

Accounts Receivable as of January 31, 2021 and 2020 are as follows:


	January 31,
	2021		2020
Billed	$	28,464	$	22,245
Unbilled	1,287		676
Total accounts receivable, gross	29,751		22,921
Less accounts receivable allowances	(699)		(943)
Total accounts receivable	$	29,052	$	21,978

Activity in our allowance for doubtful accounts was as follows for the year ended January 31, 2021:


	January 31, 2021
Balance, January 31, 2020	$	943
Bad debt expense	454
Write-offs and adjustments	(698)
Balance, January 31, 2021	$	699

The Company’s allowance for doubtful accounts represents the current estimate of expected future losses based on prior bad debt experience as well as considerations for specific customers as applicable. The Company's accounts receivable are considered past due when they are outstanding past the due date listed on the invoice to the customer.The Company writes off accounts receivable and removes the associated allowance for doubtful accounts when the Company deems the receivables to be uncollectible.

(g) Prepaid and other current assets

Prepaid and other current assets as of January 31, 2021 and 2020 are as follows:


	January 31,
	2021		2020
Prepaid software and business systems	$	2,322	$	1,611
Prepaid PhreesiaPads	18		645
Prepaid data center expenses	1,211		751
Prepaid insurance	1,311		1,259
Other prepaid expenses and other current assets	2,392		891
Total prepaid and other current assets	$	7,254	$	5,157

The Company enters into cloud computing service contracts to support its sales and marketing, product development and administrative activities. Subsequent to the adoption of ASU 2018-15 in May 2020, the Company capitalizes certain implementation costs for cloud computing arrangements that meet the definition of a service contract. The Company includes these capitalized implementation costs within Prepaid expenses and other current assets in the table above. Once placed in service, the Company amortizes these costs over the remaining subscription term to the same expense line as the related cloud subscription. Capitalized implementation costs for cloud computing arrangements accounted for as service contracts were $893 for the year ended January 31, 2021. Accumulated amortization of capitalized implementation costs for these arrangements was $23 as of January 31, 2021.

(h) Other income (expense), net

Other income, net for the year ended January 31, 2021 was $1 and was composed primarily of miscellaneous other income of $61, almost entirely offset by foreign exchange losses of $60. Other expense, net for the year ended January 31, 2020 was $1,023 and was composed primarily of loss on extinguishment of debt of $1,073, partially offset by foreign exchange gains of $49. Other expense, net for the year ended January 31, 2019 was primarily foreign exchange losses.