v3.23.1

Leases | 12 Months Ended
--- | ---
Jan. 31, 2023
Leases [Abstract] |
Leases | Leases (a) Phreesia as Lessee The Company leases several office premises and third-party data center space in the U.S and Canada 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, 2023 and 2022 was as follows:
| January 31,
| 2023 |  | 2022
Operating leases: |  |  |
Lease right-of-use assets | $ | 569 |  |  | $ | 2,337 |
Lease liabilities, current | 934 |  |  | 1,281 |
Lease liabilities, non-current | 349 |  |  | 1,276 |
Total operating lease liabilities | $ | 1,283 |  |  | $ | 2,557 |
Finance leases: |  |  |
Property and equipment, at cost | $ | 27,813 |  |  | $ | 27,310 |
Accumulated depreciation | (20,657) |  |  | (15,025) |
Property and equipment, net | $ | 7,156 |  |  | $ | 12,285 |
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt) | 4,926 |  |  | 5,600 |
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt) | 2,725 |  |  | 7,284 |
Total finance lease liabilities | $ | 7,651 |  |  | $ | 12,884 |
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 lease assets and liabilities using its incremental borrowing rate given that the implicit rate to each lease is not readily determinable. As of January 31, 2023, for operating leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.5%. As of January 31, 2023, for finance leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.6%. The components of lease expense for the years ended January 31, 2023, 2022 and 2021 were as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Operating leases: |  |  |  |  |
Operating lease cost | $ | 1,835 |  |  | $ | 1,096 |  |  | $ | 1,766 |
Variable lease cost | 62 |  |  | 223 |  |  | 257 |
Total operating lease cost | $ | 1,897 |  |  | $ | 1,319 |  |  | $ | 2,023 |
Finance leases: |  |  |  |  |
Amortization of right-of-use assets | $ | 5,632 |  |  | $ | 4,636 |  |  | $ | 2,876 |
Interest on lease liabilities | 368 |  |  | 378 |  |  | 326 |
Total finance lease cost | $ | 6,000 |  |  | $ | 5,014 |  |  | $ | 3,202 |
The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2023:
| January 31, 2023
| Operating |  | Finance
Maturity of lease liabilities |  |  |
Fiscal year ending January 31, |  |  |
2024 | $ | 958 |  |  | $ | 5,102 |
2025 | 225 |  |  | 2,566 |
2026 | 86 |  |  | 209 |
2027 | 42 |  |  | — |
Thereafter | 7 |  |  | — |
Total future minimum lease payments | $ | 1,318 |  |  | $ | 7,877 |
Less: interest | (35) |  |  | (226) |
Present value of lease liabilities | $ | 1,283 |  |  | $ | 7,651 |
As of January 31, 2023, the Company has signed a finance lease for computer equipment which does not commence until April 2023. Total undiscounted payments through the fiscal year ended January 31, 2027 related to the lease are $8,058 and are excluded from the table above but are included in our 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, 2023, 2022 and 2021 was as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Supplemental cash flow information |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash used for operating leases | $ | 1,347 |  |  | $ | 1,206 |  |  | $ | 1,629 |
Operating cash used for finance leases | 396 |  |  | 377 |  |  | 326 |
Financing cash used for finance leases | 5,731 |  |  | 4,267 |  |  | 2,630 |
Total | $ | 7,474 |  |  | $ | 5,850 |  |  | $ | 4,585 |
(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 are classified as operating leases. During the years ended January 31, 2023, 2022 and 2021, the Company recognized $10,197, $6,489 and $6,312, 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, 2023 and 2022, except for those with terms of one year or less.
Leases | Leases (a) Phreesia as Lessee The Company leases several office premises and third-party data center space in the U.S and Canada 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, 2023 and 2022 was as follows:
| January 31,
| 2023 |  | 2022
Operating leases: |  |  |
Lease right-of-use assets | $ | 569 |  |  | $ | 2,337 |
Lease liabilities, current | 934 |  |  | 1,281 |
Lease liabilities, non-current | 349 |  |  | 1,276 |
Total operating lease liabilities | $ | 1,283 |  |  | $ | 2,557 |
Finance leases: |  |  |
Property and equipment, at cost | $ | 27,813 |  |  | $ | 27,310 |
Accumulated depreciation | (20,657) |  |  | (15,025) |
Property and equipment, net | $ | 7,156 |  |  | $ | 12,285 |
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt) | 4,926 |  |  | 5,600 |
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt) | 2,725 |  |  | 7,284 |
Total finance lease liabilities | $ | 7,651 |  |  | $ | 12,884 |
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 lease assets and liabilities using its incremental borrowing rate given that the implicit rate to each lease is not readily determinable. As of January 31, 2023, for operating leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.5%. As of January 31, 2023, for finance leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.6%. The components of lease expense for the years ended January 31, 2023, 2022 and 2021 were as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Operating leases: |  |  |  |  |
Operating lease cost | $ | 1,835 |  |  | $ | 1,096 |  |  | $ | 1,766 |
Variable lease cost | 62 |  |  | 223 |  |  | 257 |
Total operating lease cost | $ | 1,897 |  |  | $ | 1,319 |  |  | $ | 2,023 |
Finance leases: |  |  |  |  |
Amortization of right-of-use assets | $ | 5,632 |  |  | $ | 4,636 |  |  | $ | 2,876 |
Interest on lease liabilities | 368 |  |  | 378 |  |  | 326 |
Total finance lease cost | $ | 6,000 |  |  | $ | 5,014 |  |  | $ | 3,202 |
The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2023:
| January 31, 2023
| Operating |  | Finance
Maturity of lease liabilities |  |  |
Fiscal year ending January 31, |  |  |
2024 | $ | 958 |  |  | $ | 5,102 |
2025 | 225 |  |  | 2,566 |
2026 | 86 |  |  | 209 |
2027 | 42 |  |  | — |
Thereafter | 7 |  |  | — |
Total future minimum lease payments | $ | 1,318 |  |  | $ | 7,877 |
Less: interest | (35) |  |  | (226) |
Present value of lease liabilities | $ | 1,283 |  |  | $ | 7,651 |
As of January 31, 2023, the Company has signed a finance lease for computer equipment which does not commence until April 2023. Total undiscounted payments through the fiscal year ended January 31, 2027 related to the lease are $8,058 and are excluded from the table above but are included in our 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, 2023, 2022 and 2021 was as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Supplemental cash flow information |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash used for operating leases | $ | 1,347 |  |  | $ | 1,206 |  |  | $ | 1,629 |
Operating cash used for finance leases | 396 |  |  | 377 |  |  | 326 |
Financing cash used for finance leases | 5,731 |  |  | 4,267 |  |  | 2,630 |
Total | $ | 7,474 |  |  | $ | 5,850 |  |  | $ | 4,585 |
(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 are classified as operating leases. During the years ended January 31, 2023, 2022 and 2021, the Company recognized $10,197, $6,489 and $6,312, 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, 2023 and 2022, except for those with terms of one year or less.
Leases | Leases (a) Phreesia as Lessee The Company leases several office premises and third-party data center space in the U.S and Canada 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, 2023 and 2022 was as follows:
| January 31,
| 2023 |  | 2022
Operating leases: |  |  |
Lease right-of-use assets | $ | 569 |  |  | $ | 2,337 |
Lease liabilities, current | 934 |  |  | 1,281 |
Lease liabilities, non-current | 349 |  |  | 1,276 |
Total operating lease liabilities | $ | 1,283 |  |  | $ | 2,557 |
Finance leases: |  |  |
Property and equipment, at cost | $ | 27,813 |  |  | $ | 27,310 |
Accumulated depreciation | (20,657) |  |  | (15,025) |
Property and equipment, net | $ | 7,156 |  |  | $ | 12,285 |
Lease liabilities, current (included in Current portion of finance lease liabilities and other debt) | 4,926 |  |  | 5,600 |
Lease liabilities, non-current (included in Long-term finance lease liabilities and other debt) | 2,725 |  |  | 7,284 |
Total finance lease liabilities | $ | 7,651 |  |  | $ | 12,884 |
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 lease assets and liabilities using its incremental borrowing rate given that the implicit rate to each lease is not readily determinable. As of January 31, 2023, for operating leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.5%. As of January 31, 2023, for finance leases, the weighted-average remaining lease term is 1.6 years and the weighted-average discount rate is 3.6%. The components of lease expense for the years ended January 31, 2023, 2022 and 2021 were as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Operating leases: |  |  |  |  |
Operating lease cost | $ | 1,835 |  |  | $ | 1,096 |  |  | $ | 1,766 |
Variable lease cost | 62 |  |  | 223 |  |  | 257 |
Total operating lease cost | $ | 1,897 |  |  | $ | 1,319 |  |  | $ | 2,023 |
Finance leases: |  |  |  |  |
Amortization of right-of-use assets | $ | 5,632 |  |  | $ | 4,636 |  |  | $ | 2,876 |
Interest on lease liabilities | 368 |  |  | 378 |  |  | 326 |
Total finance lease cost | $ | 6,000 |  |  | $ | 5,014 |  |  | $ | 3,202 |
The following represents a schedule of maturing lease commitments for operating and finance leases as of January 31, 2023:
| January 31, 2023
| Operating |  | Finance
Maturity of lease liabilities |  |  |
Fiscal year ending January 31, |  |  |
2024 | $ | 958 |  |  | $ | 5,102 |
2025 | 225 |  |  | 2,566 |
2026 | 86 |  |  | 209 |
2027 | 42 |  |  | — |
Thereafter | 7 |  |  | — |
Total future minimum lease payments | $ | 1,318 |  |  | $ | 7,877 |
Less: interest | (35) |  |  | (226) |
Present value of lease liabilities | $ | 1,283 |  |  | $ | 7,651 |
As of January 31, 2023, the Company has signed a finance lease for computer equipment which does not commence until April 2023. Total undiscounted payments through the fiscal year ended January 31, 2027 related to the lease are $8,058 and are excluded from the table above but are included in our 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, 2023, 2022 and 2021 was as follows:
| Fiscal years ended January 31,
| 2023 |  | 2022 |  | 2021
Supplemental cash flow information |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash used for operating leases | $ | 1,347 |  |  | $ | 1,206 |  |  | $ | 1,629 |
Operating cash used for finance leases | 396 |  |  | 377 |  |  | 326 |
Financing cash used for finance leases | 5,731 |  |  | 4,267 |  |  | 2,630 |
Total | $ | 7,474 |  |  | $ | 5,850 |  |  | $ | 4,585 |
(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 are classified as operating leases. During the years ended January 31, 2023, 2022 and 2021, the Company recognized $10,197, $6,489 and $6,312, 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, 2023 and 2022, except for those with terms of one year or less.

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