Premier (PINC) investor relations material

Company overview and recent performance

• Operates as a healthcare performance improvement company with supply chain, technology, and advisory services, generating about $1B in annual revenue and a $2B market cap.

• EBITDA margins are in the mid-20% range, with expectations for improvement over the next few years.

• Manages $87B in purchasing spend, serving 4,300 health systems and 300,000 sites, with access to nearly half of U.S. hospital discharges.

• Recent strategic review led to divestitures and significant share buybacks, with a focus now on executing long-term growth strategies.

• Over-delivered in Q3 and Q4, with positive momentum expected to continue into 2026 and an inflection point anticipated in 2027.

Supply chain services and contract dynamics

• Supply chain services account for over 60% of revenue, with gross administrative fees growing 3–4% annually.

• Contract penetration remains around 60%, indicating ongoing opportunities for increased member spend and fee growth.

• Recent contract restructuring with large members has increased fee share paid back, creating a headwind for FY2025 but expected to be completed by FY2026.

• Growth is primarily driven by existing members, with new wins like Allspire providing additional tailwinds.

• Digital and co-management supply chain businesses are growing at double-digit rates, expected to drive faster growth post-2026.

Performance services and advisory momentum

• Performance services represent less than 40% of revenue, with advisory services expected to grow by at least 25% in FY2026.

• Four recent large advisory contract wins are the biggest in recent history, each spanning 18–24 months and performance-based.

• Advisory contracts focus on cost reduction for clients, with upside potential tied to savings achieved.

• Advisory business was a drag on margins in FY2025 but is expected to drive margin improvement as it scales.

• Long-term target for advisory EBITDA margins is about 30%, with overall performance services margins expected to improve in FY2026 and inflect in 2027.