Premier Inc (PINC) Q4 2025 Earnings Call Highlights: Exceeding Expectations and Strategic ...

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Total Full Year Revenue: $986 million, $11 million above the midpoint of the guidance range. Adjusted EPS: $1.54, $0.11 above the high end of the guidance range. Fourth Quarter Net Revenue: $258 million, increased 1% sequentially. GAAP Net Income and EPS: $18 million or $0.22 per share. Adjusted EBITDA: $71 million, with a margin of 27.6%. Adjusted EPS for Q4: $0.46. Free Cash Flow: $181 million, with a conversion rate of 69%. Cash and Cash Equivalents: $84 million as of June 30. Outstanding Balance on Credit Facility: $280 million. Fiscal Year 2026 Guidance - Total Net Revenue: $940 million to $1 billion. Fiscal Year 2026 Guidance - Adjusted EBITDA: $230 million to $245 million. Fiscal Year 2026 Guidance - Adjusted EPS: $1.33 to $1.43. Q1 Guidance - Total Net Revenue: $230 million to $245 million. Q1 Guidance - Adjusted EBITDA: $45 million to $50 million. Q1 Guidance - Adjusted EPS: $0.27 to $0.32.

Warning! GuruFocus has detected 11 Warning Signs with PINC.

Release Date: August 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Premier Inc (NASDAQ:PINC) exceeded expectations in revenue and profitability, driven by strong performance in the Supply Chain Services segment. The company completed a $200 million accelerated share repurchase program, returning significant capital to stockholders. Premier Inc (NASDAQ:PINC) signed four large advisory deals and has a robust pipeline heading into fiscal 2026, indicating strong demand for its services. The acquisition of IllumiCare enhances Premier Inc (NASDAQ:PINC)'s ability to deliver real-time insights at the point of care, leveraging AI capabilities. The company's pharmacy and food portfolio continues to grow, attracting new members and serving as key differentiators within its GPO business.

Negative Points

Premier Inc (NASDAQ:PINC) faces significant headwinds such as reimbursement cuts, which are forcing health systems to rethink their cost structures. The Performance Services segment showed lower enterprise license revenue due to tough comparisons with the prior year. The company is still working to rebuild its sales funnel in the advisory business, despite recent large contract wins. Free cash flow decreased year-over-year due to higher performance-related compensation payments and timing of payments to Omnia. Premier Inc (NASDAQ:PINC) anticipates lower revenue and profitability in the first half of fiscal year 2026 due to the ramp-up of headcount to support advisory business success.

Story Continues

Q & A Highlights

Q: Can you discuss any changes in customer buying behavior in the Supply Chain Services segment, particularly in relation to potential tariffs? A: Michael Alkire, President and CEO, stated that there was no significant pull forward of buying behavior due to tariffs. Any increases observed were primarily due to regional issues rather than tariff-related concerns.

Q: What is driving the momentum in the advisory business, and how much of it is market-driven versus execution on your end? A: Michael Alkire highlighted that the momentum is driven by market needs due to financial pressures on health systems and the strong execution by the team led by Dave Zito, President of Performance Services. The advisory business has signed four large deals recently, indicating strong market demand and execution.

Q: Can you provide more details on the progress of the GPO contract renewals and the expected fee share stabilization? A: Glenn Coleman, Chief Financial and Administrative Officer, explained that the fee share is expected to increase to the mid-60% range in fiscal year 2026, with stabilization in the high 60s once all renewals are addressed. The process is nearing completion, with less than 20% of contracts remaining to be renewed.

Q: Could you provide insights into the financial impact and strategic importance of the IllumiCare acquisition? A: Michael Alkire emphasized that IllumiCare addresses critical member pain points, offering significant savings per patient discharge and enhancing clinical decision support capabilities. Glenn Coleman added that IllumiCare is expected to contribute $8 million to $10 million in revenue for fiscal year 2026 and is breakeven on the bottom line.

Q: What are the expectations for revenue and EBITDA growth in fiscal year 2027, and what factors will drive this growth? A: Glenn Coleman stated that growth in fiscal year 2027 will be driven by increased software business renewals, continued advisory business momentum, and synergies from the IllumiCare acquisition. Additionally, lower fee share headwinds and growth in Supply Chain Services are expected to contribute to the rebound.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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