Premier, Inc. Reports 14% Revenue Decline and $96M Net Loss in Q2 FY2025

Premier, Inc. reported a significant decline in financial performance for the second quarter of fiscal year 2025, ending December 31, 2024. The company generated net revenue of $240.3 million, a decrease of 14% from $279.9 million in the same period last year. This decline was attributed to a 19% drop in revenue from the Performance Services segment and an 11% decrease in the Supply Chain Services segment. The net loss attributable to stockholders was $96.0 million, compared to a profit of $54.3 million in the prior year, reflecting a loss per share of $1.01.

The company's operating expenses surged by 75% to $264.0 million, primarily driven by a significant increase in selling, general, and administrative (SG&A) expenses, which rose by $116.1 million. This increase was largely due to a goodwill impairment charge of $126.8 million related to the Informatics and Technology Services reporting unit. In contrast, the cost of revenue increased by 5% to $69.1 million, reflecting higher personnel costs associated with new engagements.

Strategically, Premier completed the divestiture of its direct sourcing subsidiary, S2S Global, on October 1, 2024, resulting in a loss of $51.7 million recorded in discontinued operations. The company also sold its non-healthcare group purchasing organization (GPO) member contracts to OMNIA Partners for $723.8 million in July 2023, which has been a significant contributor to its cash flow. As of December 31, 2024, Premier had $85.9 million in cash and cash equivalents, down from $125.1 million at the end of the previous fiscal year.

In terms of operational metrics, Premier's customer engagement has been impacted by the ongoing economic conditions, including inflation and rising input costs. The company reported a decrease in net administrative fees, which fell by 13% in the latest quarter. Despite these challenges, Premier continues to focus on expanding its capabilities in the healthcare sector, particularly in cost management and value-based care solutions.

Looking ahead, Premier anticipates that the current economic environment will continue to influence its operations. The company is committed to addressing competitive pressures and renewing GPO member contracts, which represent a significant portion of its revenue. Premier's management remains focused on strategic initiatives to enhance operational efficiency and drive growth in its core business segments.