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; Q2 net revenue was $240.3M, down 14% year-over-year.

• The company reaffirmed total net revenue and adjusted EBITDA guidance midpoints, and raised the midpoint for adjusted EPS guidance by $0.08, reflecting confidence in ongoing execution.

• Significant portfolio adjustments included the completed divestitures of S2S Global (October 2024) and Contigo Health network assets (January 2025), with further asset sales in progress.

• Results reflect a $126.8M goodwill impairment in Performance Services and a $51.7M loss on the S2S Global divestiture.

• Leadership changes and talent recruitment are underway to reinvigorate Performance Services.

Financial highlights

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

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

• Adjusted EBITDA was $50.1M (20.8% margin), down 48% year-over-year; adjusted EPS was $0.25 ($0.27 excluding Contigo Health), down 51% year-over-year.

• Free cash flow for the first half was $73.9M, up $33M year-over-year, aided by a derivative lawsuit settlement and a 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 2025.

Outlook and guidance

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

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

• Net administrative fees revenue guidance increased to $525M–$545M; capital expenditures expected at $90M–$100M; effective tax rate 24%–26%.

• Profitability (adjusted EBITDA and EPS) expected to be more weighted to Q4 due to timing and mix of revenue.

• Management expects continued pressure on net administrative fees due to higher fee shares in renewed GPO contracts and ongoing market and regulatory uncertainties.