Premier (PINC) Q2 2025 earnings summary

Executive summary

• Revenue and profitability for the first half of fiscal 2025 met expectations, with Supply Chain Services outperforming and Performance Services underperforming; net revenue for Q2 FY2025 was $240.3M, down 14% year-over-year.

• Adjusted EBITDA for the quarter was $50.1M (20.8% margin), down 48% year-over-year; adjusted EPS was $0.25 ($0.27 excluding Contigo Health).

• GAAP net loss from continuing operations was $45.8M, mainly due to a $126.8M goodwill impairment in Performance Services.

• The company completed the sale of S2S Global and the network assets of Contigo Health, with further divestitures planned.

• Share repurchases exceeded 29M shares for $600M, with $200M repurchased in early January 2025; $0.21 per share dividend declared for March.

Financial highlights

• Net revenue for Q2 FY2025 was $240.3M, down 14% year-over-year, driven by declines in both Supply Chain Services and Performance Services.

• Adjusted EBITDA was $50.1M, and adjusted EPS was $0.25, both down sharply year-over-year.

• Free cash flow for the first half was $73.9M, up $33M year-over-year, aided by a lawsuit settlement and minority investment distribution.

• Cash and cash equivalents at quarter-end were $85.9M; $100M outstanding on the $1B credit facility, with $65M repaid in January.

• Operating expenses rose 75% to $264.0M, mainly due to the goodwill impairment.

Outlook and guidance

• Fiscal 2025 total net revenue guidance (excluding Contigo Health): $940M–$1.01B, midpoint reaffirmed.

• Adjusted EBITDA guidance: $237M–$253M; adjusted EPS guidance raised to $1.26–$1.34, reflecting share repurchases.

• Net administrative fees revenue guidance increased to $525M–$545M.

• Capital expenditures expected at $90M–$100M; effective tax rate 24%–26%.

• GPO business expected to have flat to slightly higher net administrative fees in Q3, with a sequential increase in Q4.