v3.23.1

Composition of certain financial statement captions | 12 Months Ended
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Jan. 31, 2023
Composition Of Certain Financial Statement [Abstract] |
Composition of certain financial statement captions | Composition of certain financial statement captions (a) Accrued expenses Accrued expenses at January 31, 2023 and 2022 are as follows:
| January 31,
| 2023 |  | 2022
Payroll-related expenses and taxes | $ | 10,345 |  |  | $ | 10,780 |
Payment processing fees liability | 4,796 |  |  | 3,502 |
Acquisition-related liabilities | 96 |  |  | 96 |
Tax liabilities | 1,491 |  |  | 2,093 |
Information technology services | 2,249 |  |  | 1,266 |
Other | 2,833 |  |  | 2,391 |
Total | $ | 21,810 |  |  | $ | 20,128 |
(b) Property and equipment Property and equipment at January 31, 2023 and 2022 are as follows:
| Useful life (years) |  | January 31,
2023 |  | 2022
PhreesiaPads and Arrivals Kiosks | 3 |  | $ | 17,932 |  |  | $ | 26,387 |
Computer equipment | 3 |  | 54,485 |  |  | 53,957 |
Computer software | 3 to 5 |  | 8,571 |  |  | 5,311 |
Hardware development | 3 |  | 529 |  |  | 1,024 |
Furniture and fixtures | 7 |  | — |  |  | 539 |
Leasehold improvements | 2 |  | — |  |  | 748 |
Total property and equipment |  |  | $ | 81,517 |  |  | $ | 87,966 |
Less accumulated depreciation |  |  | (59,847) |  |  | (53,321) |
Property and equipment — net |  |  | $ | 21,670 |  |  | $ | 34,645 |
Depreciation expense related to property and equipment amounted to $17,988, $14,985 and $9,770 for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. Assets acquired under finance leases included in computer equipment were $27,813 and $27,310 at January 31, 2023 and 2022, respectively. Accumulated amortization of assets under finance leases was $20,657 and $15,025 at January 31, 2023 and 2022, respectively. (c) Capitalized internal-use software For the fiscal years ended January 31, 2023, 2022 and 2021, the Company capitalized $23,604, $12,830 and $7,663 of costs related to the Phreesia Platform, respectively. During the fiscal years ended January 31, 2023, 2022 and 2021 amortization expense related to capitalized internal-use software was $5,945, $5,664 and $5,884, respectively. (d) Intangible assets and goodwill The following presents the details of intangible assets as of January 31, 2023 and January 31, 2022.
|  | Useful Life |  | January 31,
|  | (years) |  | 2023 |  | 2022
Acquired technology |  | 5 |  | $ | 1,410 |  |  | $ | 1,410 |
Customer relationship |  | 7 to 10 |  | 6,340 |  |  | 6,340 |
License |  | 15 |  | 6,200 |  |  | 6,200 |
Total intangible assets, gross carrying value |  |  |  | $ | 13,950 |  |  | $ | 13,950 |
Less accumulated amortization |  |  |  | (2,549) |  |  | (1,178) |
Net carrying value |  |  |  | $ | 11,401 |  |  | $ | 12,772 |
The remaining useful life for acquired technology in years is 2.7 and 3.5 as of January 31, 2023 and 2022, respectively. The remaining useful life for customer relationships in years is 8.3 and 9.2 as of January 31, 2023 and 2022, respectively. The remaining useful life for the license to the Patient Activation Measure ("PAM"®) in years is 13.8 and 14.8 as of January 31, 2023 and 2022, respectively. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and are being amortized over the estimated useful life in proportion to the economic benefits consumed using the straight-line method. The amortization of intangible assets is not deductible for income tax purposes. Amortization expense associated with intangible assets for the fiscal years ended January 31, 2023, 2022 and 2021 was $1,371, $653 and $254, respectively. The estimated amortization expense for intangible assets for the next five years and thereafter is as follows as of January 31, 2023:
| January 31, 2023
2024 | $ | 1,358 |
2025 | 1,273 |
2026 | 1,242 |
2027 | 949 |
Thereafter | 6,579 |
Total | $ | 11,401 |
The following table presents a roll-forward of goodwill for the years ended January 31, 2022 and 2023:
Balance at January 31, 2021 | $ | 8,307 |
Goodwill acquired during the year ended January 31, 2022 | 25,314 |
Balance at January 31, 2022 | 33,621 |
Measurement period adjustments to goodwill during the year ended January 31, 2023 | 115 |
Balance at January 31, 2023 | $ | 33,736 |
The Company did not record any impairments of goodwill during the years ended January 31, 2023, 2022 or 2021. Additions to goodwill during the year ended January 31, 2022 are net of a $96 measurement period adjustment for the QueueDr acquisition. Additions to goodwill during the year ended January 31, 2023 represent measurement period adjustments for the Insignia acquisition. Substantially all of the Company's goodwill is amortizable for tax purposes. (e) Accounts receivable Accounts Receivable as of January 31, 2023 and 2022 are as follows:
| January 31,
| 2023 |  | 2022
Billed | $ | 51,458 |  |  | $ | 40,733 |
Unbilled | 989 |  |  | 392 |
Total accounts receivable, gross | 52,447 |  |  | 41,125 |
Less accounts receivable allowances | (1,053) |  |  | (863) |
Total accounts receivable | $ | 51,394 |  |  | $ | 40,262 |
Activity in our allowance for doubtful accounts was as follows for the years ended January 31, 2023 and 2022:
Balance, January 31, 2021 |  | $ | 699 |
Bad debt expense |  | 212 |
Write-offs and adjustments |  | (48) |
Balance, January 31, 2022 |  | 863 |
Bad debt expense |  | 587 |
Write-offs and adjustments |  | (397) |
Balance, January 31, 2023 |  | $ | 1,053 |
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. (f) Prepaid and other current assets Prepaid and other current assets as of January 31, 2023 and 2022 are as follows:
| January 31,
| 2023 |  | 2022
Prepaid software and business systems | $ | 3,426 |  |  | $ | 3,738 |
Prepaid data center expenses | 2,389 |  |  | 3,230 |
Prepaid insurance | 1,552 |  |  | 1,924 |
Other prepaid expenses and other current assets | 3,342 |  |  | 2,151 |
Total prepaid and other current assets | $ | 10,709 |  |  | $ | 11,043 |
(g) Cloud computing implementation costs The Company enters into cloud computing service contracts to support its sales and marketing, product development and administrative activities. 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 and within other assets on its consolidated balance sheets. Once placed in service, the Company amortizes these costs over the remaining subscription term to the same caption in the consolidated statements of operations as the related cloud subscription. Capitalized implementation costs for cloud computing arrangements accounted for as service contracts were $1,532 as of January 31, 2023. Accumulated amortization of capitalized implementation costs for these arrangements was $610 as of January 31, 2023. (h) Other (expense) income, net Other (expense) income, net for the year ended January 31, 2023 and 2022 was expense of $175 and $78, respectively, driven by foreign exchange losses, partially offset by other miscellaneous income.

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