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McKassonChief Administrative and Financial 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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒ No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐ No   ☒

As of October 31, 2024, there were 96,108,595 shares of the registrant’s Class A common stock, par value $0.01 per share outstanding.

Statements made in this Quarterly Report on Form 10-Q for the three months ended September 30, 2024 for Premier, Inc. (this “Quarterly Report”) that are not statements of historical or current facts, such as those under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. Forward-looking statements may include comments as to our beliefs and expectations regarding future events and trends affecting our business and are necessarily subject to risks and uncertainties, many of which are outside our control. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

•competition which could limit our ability to maintain or expand market share within our industry;

•our reliance on administrative fees that we receive from suppliers to our group purchasing organization (“GPO”) and our ability to maintain and add new GPO members, which will depend in part on competitive pressure to increase the administrative fee share we pay to members;

•consolidation in the healthcare industry;

•potential delays in recognizing or increasing revenue if the sales cycle or implementation period takes longer than expected;

•the impact to our business if members of our GPO programs reduce activity levels or terminate or elect not to renew their contracts on substantially similar terms or at all;

•the rate at which the markets for our software as a service (“SaaS”) or licensed-based clinical analytics products and services develop and the potential for existing licensed-based customers to convert to SaaS subscriptions;

•the dependency of our members on payments from third-party payers;

•our ability to maintain third-party provider and strategic alliances or enter into new alliances;

•our ability to timely offer new and innovative products and services, including the integration of artificial intelligence and the risks associated with artificial intelligence due to the evolving nature of the technology and legal and regulatory framework;

•the portion of our revenues that we receive from our largest members and other customers;

•risks and expenses related to future acquisition opportunities and integration of previous or future acquisitions, including the potential for impairments resulting from acquisitions;

•financial and operational risks associated with non-controlling investments in other businesses or other joint ventures that we do not control, particularly early-stage companies;

•pending and potential litigation;

•our reliance on Internet infrastructure, bandwidth providers, data center providers and other third parties and our own systems for providing services to our users;

•data loss or corruption due to failures or errors in our systems and service disruptions at our data centers, or breaches or failures of our security measures;

•the financial, operational, legal and reputational consequences of cyber-attacks or other data security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our members or other third parties;

•our ability to use, disclose, de-identify or license data and to integrate third-party technologies;

•our use of “open source” software;

•our dependency on contract manufacturing facilities located in various parts of the world;

•inventory risk we face in the event of a potential material decline in demand or price for the personal protective equipment or other products we may have purchased at elevated market prices or fixed prices;

•our ability to attract, hire, integrate and retain key personnel;

•the impact of continuing uncertain economic conditions to our business operations due to, but not limited to, inflation and recessionary fears;

•the financial and operational uncertainty due to global macroeconomic, geopolitical, and business conditions, trends and events and the impact of any associated supply chain challenges;

•the impact of global climate change or by regulatory responses to such change;

•changes and uncertainty in the political, economic or regulatory environment affecting healthcare organizations, including with respect to the status of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010;

•our compliance with complex international, federal and state laws, rules and regulations governing financial relationships among healthcare providers and the submission of false or fraudulent healthcare claims;

•interpretation and enforcement of current or future antitrust laws and regulations;

•compliance with complex federal, state and international privacy, security and breach notification laws;

•compliance with current or future laws, rules and regulations relating to information blocking provisions of the 21st Century Cures Act issued by the Office of the National Coordinator for Health Information Technology (the “ONC Rules”) that may cause our certified Health Information Technology products to be regulated by the ONC Rules;

•compliance with current or future laws, rules and regulations adopted by the Food and Drug Administration applicable to our software applications that may be considered medical devices;

•adequate protection of our intellectual property and potential claims against our use of the intellectual property of third parties;

•potential for additional indirect tax liabilities, such as gross receipts and sales and use taxes, in certain jurisdictions;

•changes in tax laws that materially impact our tax rate, income tax expense, anticipated tax benefits, deferred tax assets, cash flows and profitability and potential material tax disputes;

•the impact of payments required under notes payable to former limited partners related to the early termination of the Unit Exchange and Tax Receivable Acceleration Agreements (the “Unit Exchange Agreements”) issued in connection with our August 2020 Restructuring on our overall cash flow and our ability to fully realize the expected tax benefits to match such fixed payment obligations under those notes payable;

•provisions in our certificate of incorporation and bylaws and provisions of Delaware law and other applicable laws that discourage or prevent strategic transactions, including a takeover of us;

•our indebtedness and our ability to obtain additional financing on favorable terms, including our ability to renew or replace our long-term credit facility at or before maturity;

•fluctuation of our quarterly cash flows, revenues and results of operations;

•failure to maintain an effective system of internal controls over financial reporting or an inability to remediate any weaknesses identified and the related costs of remediation;

•the impact on the price of our Class A common stock (“Common Stock”) if we cease paying dividends or reduce dividend payments from current levels;

•the number of shares of our Common Stock repurchased by us pursuant to any then existing Common Stock repurchase program and the timing of any such repurchases;

•the number of shares of Common Stock eligible for sale after the issuance of Common Stock in our August 2020 Restructuring and the potential impact of such sales; and

•the risk factors discussed under the heading “Risk Factors” under Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the “2024 Annual Report”) filed with the Securities and Exchange Commission (“SEC”), as updated by our Quarterly Reports on Form 10-Q (including this Quarterly Report) filed with the SEC.

More information on potential factors that could affect our financial results is included from time to time in the “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or similarly captioned sections of this Quarterly Report and our other periodic and current filings made from time to time with the SEC, which are available from the SEC at www.sec.gov or our website at http://investors.premierinc.com (the contents of which are not part of this Quarterly Report). You should not place undue reliance on any of our forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

References to the “August 2020 Restructuring” are references to our corporate restructuring on August 11, 2020 in which we (i) eliminated our dual-class ownership structure and (ii) exercised our right to terminate the Tax Receivable Agreement (the “TRA”). For additional information and details regarding the August 2020 Restructuring, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

References to “operating income from revenues sold to OMNIA” are references to operating income from revenues sold to OMNIA Partners, LLC (“OMNIA”) in connection with the sale of non-healthcare GPO member contracts in July 2024, less royalty fees retained.

			Class A Common Stock												Treasury Stock												Additional Paid-In Capital						(Accumulated Deficit) Retained Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
			Shares						Amount						Shares						Amount
Balance at June 30, 2024			105,027						$	1,115					6,429						$	(250,129)					$	2,105,684					$	105,590					$	(29)					$	1,962,231
Issuance of Class A common stock under equity incentive plan			491						5						—						—						—						—						—						5
Treasury stock			(7,723)						—						7,723						(139,207)						80,000						—						—						(59,207)
Retirement of Class A common stock			—						(142)						(14,152)						389,336						—						(389,194)						—						—
Stock-based compensation expense			—						—						—						—						6,931						—						—						6,931
Repurchase of vested restricted units for employee tax-withholding			—						—						—						—						(4,985)						—						—						(4,985)
Net income			—						—						—						—						—						71,336						—						71,336
Net income attributable to non-controlling interest			—						—						—						—						552						(552)						—						—
Change in ownership of consolidated entity			—						—						—						—						26						—						—						26
Dividends ($0.21 per share)			—						—						—						—						—						(21,590)						—						(21,590)
Distribution of investment in unconsolidated affiliate to non-controlling interests			—						—						—						—						—						(585)						—						(585)
Foreign currency translation adjustment			—						—						—						—						—						—						21						21
Balance at September 30, 2024			97,795						$	978					—						$	—					$	2,188,208					$	(234,995)					$	(8)					$	1,954,183

Premier, Inc. (“Premier” or the “Company”) is a publicly held, for-profit Delaware corporation located in the United States. The Company is a holding company with no material business operations of its own. The Company’s primary asset is its equity interest in its wholly owned subsidiary Premier Healthcare Solutions, Inc., a Delaware corporation (“PHSI”). The Company conducts substantially all of its business operations through PHSI and its other consolidated subsidiaries. The Company, together with its subsidiaries and affiliates, is a leading technology-driven healthcare improvement company that unites hospitals, health systems, physicians, employers, product suppliers, service providers, and other healthcare providers and organizations to improve and innovate in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry and continues to expand its capabilities to more fully address and coordinate care improvement and standardization in the employer, payer and life sciences markets. Additionally, the Company also provides some of the various products and services noted above to non-healthcare businesses, including through its direct sourcing activities as well as continued access to its group purchasing organization (“GPO”) programs for non-healthcare members whose contracts were sold to OMNIA Partners, LLC (“OMNIA”) (see Note 9 - Liability Related to the Sale of Future Revenues).

The Company’s business model and solutions are designed to provide its members and other customers access to scale efficiencies, spread the cost of their development, provide actionable intelligence derived from anonymized data in the Company’s enterprise data warehouse, mitigate the risk of innovation and disseminate best practices to help the Company’s members and other customers succeed in their transformation to higher quality and more cost-effective healthcare.

The Company, together with its subsidiaries and affiliates, delivers its integrated platform of solutions through two business segments: Supply Chain Services and Performance Services. See Note 15 - Segments for further information related to the Company’s reportable business segments. The Company has no significant foreign operations or revenues. The Supply Chain Services segment includes one of the largest national healthcare GPO programs in the United States, serving acute and continuum of care sites and providing supply chain co-management and purchased services activities. In fiscal year 2025, Remitra®, the Company’s digital invoicing and payables automation business which provides financial support services to healthcare suppliers and providers, began to be reported as a component of the Supply Chain Services segment to align with the Company’s strategy and operations. For comparability purposes, fiscal year 2024 financial measures are presented with Remitra as a component of Supply Chain Services. The Performance Services segment consists of two sub-brands: PINC AITM, the Company’s technology and services platform with offerings that help optimize performance in three main areas – clinical intelligence, margin improvement and value-based care – using advanced analytics to identify improvement opportunities, consulting and managed services for clinical and operational design, and workflow solutions to hardwire sustainable change in the provider, payer and life sciences markets; and Contigo Health®, the Company’s direct-to-employer business which provides third-party administrator services and management of health-benefit programs that enable healthcare providers that are also payers (e.g., payviders) and employers to contract directly with healthcare providers as well as partner with healthcare providers to provide employers access to a specialized care network through Contigo Health’s centers of excellence program and cost containment and wrap network.

On September 30, 2024, the Company’s wholly owned subsidiary, Premier Supply Chain Improvement, Inc. (“PSCI”), entered into a Contribution and Exchange Agreement (“CEA”) to exchange all outstanding interests in its direct sourcing subsidiary, SVS LLC d/b/a S2S Global (“S2S Global”), to Prestige Ameritech, Ltd. (“Prestige”) for 9,375,000 limited partnership units, or a 20% minority interest, in Prestige. The transaction closed on October 1, 2024.

The Company met the criteria for classifying certain assets and liabilities of the direct sourcing business as a discontinued operation as of September 30, 2024. Accordingly, unless otherwise indicated, information in the notes to the condensed consolidated financial statements has been retrospectively adjusted to reflect continuing operations for all periods presented. See Note 3 - Discontinued Operations and Exit Activities for further information.

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercised control and when applicable, entities for which the Company had a controlling financial interest or was the primary beneficiary.

All intercompany transactions from continuing operations have been eliminated upon consolidation. Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, consisting of normal recurring adjustments, unless otherwise disclosed. Certain amounts in prior periods have been reclassified to conform to the current period presentation. The Company believes that the disclosures are adequate to make the information presented not misleading and should be read in conjunction with the audited consolidated financial statements and related footnotes contained in the 2024 Annual Report.

The following table presents supplementary cash flows information for the three months ended September 30, 2024 and 2023 (in thousands):

The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Significant estimates are evaluated on an ongoing basis, including, but not limited to, estimates for net administrative fees revenue, software licenses, other services and support revenue, contract assets, deferred revenue, contract costs, allowances for credit losses, reserves for net realizable value of inventory, obsolete inventory, useful lives of property and equipment, stock-based compensation, deferred tax balances including valuation allowances on deferred tax assets, uncertain tax positions, values of investments not publicly traded, projected future cash flows used in the evaluation of asset impairments, values of call rights, values of earn-out liabilities and the allocation of purchase prices. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

There have been no material changes to the Company’s significant accounting policies as described in the 2024 Annual Report.

In connection with the sale of certain assets and wind down and exit from the direct sourcing business (see Note 1 - Organization and Basis of Presentation), the Company met the criteria for classifying certain assets and liabilities of S2S Global as a discontinued operation as of September 30, 2024. Prior to its classification as a discontinued operation, S2S Global was included as part of the Supply Chain Services segment.

The Company’s consolidated subsidiary, PRAM Holdings, LLC (“PRAM”), held an approximate 20% interest in Prestige through PRAM’s ownership of Prestige limited partnership units at September 30, 2024 (see Note 4 – Investments). During the three months ended September 30, 2024 and 2023, the Company recorded net income of $0.3 million and $0.1 million, respectively, within equity in net income (loss) of unconsolidated affiliates. Following the CEA transaction, PRAM’s interest in Prestige will be diluted by an approximate 4% as a result of the additional issuance of limited partnership units to the Company. Premier, through its direct ownership interest in Prestige resulting from the CEA and indirect ownership through PRAM, will hold an aggregate 24% membership interest in Prestige. The ongoing ownership interest represents a continuing involvement which the Company has preliminarily concluded represents an equity method investment.

In order to affect the exchange and provide for the relationship between Premier and Prestige, the Company entered into various agreements, including, among others, the CEA and a transition services agreement. As part of the agreements, the Company has agreed to provide certain transitional services as detailed within respective transition services agreements for a period of time not to exceed one year after the sale. Income related to these transitional services will be immaterial. As part of the CEA, Prestige will remit the first $4.0 million of sales associated with a certain international manufacturing facility back to Premier. Any incremental revenue will be retained by Prestige.

During the three months ended September 30, 2024 and 2023, the Company recorded revenue of $0.6 million and $0.9 million, respectively, within net administrative fees generated through administrative fees resulting from GPO members’ purchases on S2S Global’s supplier contracts. The Company expects this relationship to continue subsequent to Premier’s disposal of S2S Global.

The following table summarizes the major classes of assets and liabilities classified as discontinued operations at September 30, 2024 and June 30, 2024 (in thousands):

The following table summarizes the major components of net (loss) income from discontinued operations for the three months ended September 30, 2024 and 2023 (in thousands):

The Company’s investments in unconsolidated affiliates consisted of the following (in thousands):

The Company’s wholly owned subsidiary, Premier Supply Chain Improvement, Inc. (“PSCI”), held a 49% interest in FFF Enterprises, Inc. (“FFF”) through its ownership of stock of FFF at September 30, 2024 and June 30, 2024. On March 3, 2023, the Company and the majority shareholder of FFF amended the FFF shareholders’ agreement and as of the date of the amendment, the Company accounts for its investment in FFF at cost less impairments, if any, plus or minus any observable changes in fair value (refer to the Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for additional information and details regarding the March 2023 amendment). The Company accounts for its investment in FFF as part of the Supply Chain Services segment.

The Company’s consolidated subsidiary, ExPre Holdings, LLC (“ExPre”), held an approximate 6% interest in Exela Holdings, Inc. (“Exela”) through ExPre’s ownership of Exela Class A common stock at September 30, 2024 and June 30, 2024. At September 30, 2024 and June 30, 2024, the Company owned approximately 15% of the membership interest of ExPre, with the remainder of the membership interests held by 11 member health systems or their affiliates. The Company accounts for its investment in Exela using the equity method of accounting and includes the investment as part of the Supply Chain Services segment.

The Company’s wholly owned subsidiary, PHSI, held an approximate 7% interest in Qventus, Inc. (“Qventus”) through PHSI’s ownership of Qventus Series C preferred stock at September 30, 2024 and June 30, 2024. The Company accounts for its investment in Qventus at cost less impairments, if any, plus or minus any observable changes in fair value. The Company includes Qventus as part of the Performance Services segment.

The Company’s consolidated subsidiary, PRAM Holdings, LLC (“PRAM”), held an approximate 20% interest in Prestige Ameritech Ltd. (“Prestige”) through PRAM’s ownership of Prestige limited partnership units at September 30, 2024 and June 30, 2024. At September 30, 2024 and June 30, 2024, the Company owned approximately 26% of the membership interest of PRAM, with the remainder of the membership interests held by 16 member health systems or their affiliates. The Company accounts for its investment in Prestige using the equity method of accounting and includes the investment as part of the Supply Chain Services segment.

On September 30, 2024, the Company’s wholly owned subsidiary, PSCI, entered into a contribution and exchange agreement with Prestige. The transaction closed on October 1, 2024, at which time PSCI exchanged all of its holdings in S2S Global for a 20% minority interest in Prestige. As of October 1, 2024, the Company held an approximate 24% interest in Prestige, comprised of the 20% direct ownership interest through its sale of S2S Global (see Note 3 - Discontinued Operations and Exit Activities) as well as its indirect ownership interest through PRAM.

The following table represents the Company’s financial assets and liabilities, which are measured at fair value on a recurring basis (in thousands):

Deferred compensation plan assets consisted of highly liquid mutual fund investments, which were classified as Level 1. The current portion of deferred compensation plan assets ($10.8 million and $6.8 million at September 30, 2024 and June 30, 2024, respectively) was included in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets.

Earn-out liabilities have been established in connection with certain acquisitions, including the acquisition of substantially all of the assets and certain liabilities of Acurity, Inc. and Nexera, Inc. (the “Acurity and Nexera asset acquisition”) in February 2020. The earn-out liability related to the Acurity and Nexera asset acquisition was based upon the Company’s achievement of a range of member renewals on terms agreed to by the Company and Greater New York Hospital Association based on prevailing market conditions in December 2023. Earn-out liabilities are classified as Level 3 of the fair value hierarchy.

Acurity and Nexera Earn-out (a)

The earn-out liability arising from expected earn-out payments related to the Acurity and Nexera asset acquisition was measured on the acquisition date using a probability-weighted expected payment model and was remeasured periodically due to changes in management’s estimates of the number of transferred member renewals and market conditions. In determining the fair value of the contingent liabilities, management reviewed the current results of the acquired business, along with projected results for the remaining earn-out period, to calculate the expected earn-out payment to be made based on the contractual terms set out in the acquisition agreement. The Acurity and Nexera earn-out liability did not utilize a credit spread at September 30, 2024. At June 30, 2024, the Acurity and Nexera earn-out liability utilized a credit spread of 1.0%. At September 30, 2024, the maximum number of transferred member renewals had been achieved. As a result, the earn-out payment was determined to be $30.0 million, which is expected to be paid in the third quarter of fiscal year 2025. The fair value of the Acurity and Nexera earn-out liability at September 30, 2024 and June 30, 2024 was $30.0 million and $28.5 million, respectively.

A reconciliation of the Company’s Level 3 earn-out liabilities is as follows (in thousands):

_________________________________

(a)Gains on level 3 liability balances will decrease the liability ending balance, and losses on level 3 liability balances will increase the liability ending balance.

As a result of the August 2020 Restructuring, the Company recorded non-interest bearing notes payable to former limited partners during the first quarter of fiscal year 2021. Although these notes are non-interest bearing, they include a Level 2 input associated with an implied fixed annual interest rate of 1.8% (see Note 8 - Debt and Notes Payable). As of September 30, 2024 and June 30, 2024, the notes payable to former limited partners were recorded net of discounts of $0.7 million and $1.2 million, respectively.

At September 30, 2024, the Company had no non-interest bearing notes payable. At June 30, 2024, the fair values of non-interest bearing notes payable, classified as Level 2, were equal to the carrying value based on an assumed market interest rate of 1.6%.

The fair values of cash, accounts receivable, accounts payable, accrued liabilities and the Credit Facility (as defined in Note 8 - Debt and Notes Payable) approximated carrying value due to the short-term nature of these financial instruments.

Revenue recognized during the three months ended September 30, 2024 that was included in the opening balance of deferred revenue at June 30, 2024 was $10.0 million, which is a result of satisfying certain performance obligations.

A performance obligation is a contractual obligation to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contracts may have a single performance obligation as the agreement to transfer individual goods or services is not separately identifiable from other contractual obligations and, therefore, not distinct, while other contracts may have multiple performance obligations, most commonly due to the contract covering multiple phases or deliverable arrangements (licensing fees, software-as-a-service (“SaaS”) subscription fees, maintenance and support fees, and professional fees for consulting services).

Refer to the Company’s significant accounting policies in the 2024 Annual Report for discussion of revenue recognition on contracts with customers.

Net revenue of $4.7 million was recognized during the three months ended September 30, 2024 from performance obligations that were satisfied or partially satisfied in prior periods. The net revenue recognized was driven by an increase of $4.5 million in net administrative fees revenue related to under-forecasted cash receipts received in the current period and an increase of $0.2 million associated with revised forecasts from underlying contracts that include variable consideration components as well as additional fluctuations due to input method contracts which occur in the normal course of business.

Net revenue of $5.3 million was recognized during the three months ended September 30, 2023 from performance obligations that were satisfied or partially satisfied in prior periods. The net revenue recognized was driven by an increase of $3.8 million associated with revised forecasts from underlying contracts that include variable consideration components as well as additional fluctuations due to input method contracts which occur in the normal course of business and an increase of $1.5 million in net administrative fees revenue related to under-forecasted cash receipts received in the current period.

Remaining performance obligations represent the portion of the transaction price that has not yet been satisfied or achieved. As of September 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $724.8 million. The Company expects to recognize approximately 39% of the remaining performance obligations over the next twelve months, an additional 22% over the following twelve months and an additional 28% over the following 36 months, with the remainder recognized thereafter.

During the year ended June 30, 2024, the Company recorded pre-tax goodwill and intangible asset impairment charges of $16.5 million and $113.5 million, respectively, related to the Contigo Health reporting unit. At September 30, 2024 and June 30, 2024, the Contigo Health reporting unit’s goodwill and intangible assets were fully impaired.

At both September 30, 2024 and June 30, 2024, the Company had goodwill balances recorded at Supply Chain Services and Performance Services of $408.3 million and $587.5 million, respectively. At both September 30, 2024 and June 30, 2024, the Company had accumulated impairment losses to goodwill at Performance Services of $70.9 million, all of which related to the Contigo Health reporting unit.

Intangible assets, net consisted of the following (in thousands):

The net carrying value of intangible assets by segment was as follows (in thousands):

The estimated amortization expense for each of the next five fiscal years and thereafter is as follows (in thousands):

(a)As of September 30, 2024, estimated amortization expense is for the period from October 1, 2024 to June 30, 2025.

Long-term debt and notes payable consisted of the following (in thousands):

PHSI, along with its consolidated subsidiaries, Premier LP and PSCI (“Co-Borrowers”), and certain domestic subsidiaries of the Co-Borrowers, as guarantors, entered into a senior unsecured Amended and Restated Credit Agreement, dated as of December 12, 2022, subsequently amended by a First Amendment to Credit Agreement dated as of September 23, 2024 (the “Credit Facility”). The Credit Facility has a maturity date of December 12, 2027, subject to up to two one-year extensions, and provides for borrowings of up to $1.0 billion with (i) a $50.0 million sub-facility for standby letters of credit and (ii) a $100.0 million sub-facility for swingline loans. The Credit Facility also provides that Co-Borrowers may from time to time (i) incur incremental term loans and (ii) request an increase in the revolving commitments under the Credit Facility, together up to an aggregate of $350.0 million, subject to the approval of the lenders providing such term loans or revolving commitment increase. The Credit Facility contains an unconditional and irrevocable guaranty of all obligations of Co-Borrowers under the Credit Facility by the current and future guarantors. Premier is not a guarantor under the Credit Facility.

At both September 30, 2024 and June 30, 2024, the Company had no outstanding borrowings under the Credit Facility with $995.0 million of available borrowing capacity after reductions for outstanding letters of credit. For the three months ended September 30, 2024, the Company had no new borrowings or repayments under the Credit Facility. At both September 30, 2024 and June 30, 2024, the annual commitment fee, based on the actual daily unused amount of commitments under the Credit Facility, was 0.125%.

On September 23, 2024, the Credit Facility was amended to revise certain definitions related to the Company’s sale of non-healthcare GPO member contracts to OMNIA (see Note 9 - Liability Related to the Sale of Future Revenues). The Company was in compliance with all covenants at September 30, 2024 and June 30, 2024.

At September 30, 2024 and June 30, 2024, the Company had $76.3 million and $101.5 million of notes payable to former limited partners (“LP”), net of discounts on notes payable of $0.7 million and $1.2 million, respectively, recorded to current portion of notes payable to former limited partners in the accompanying Condensed Consolidated Balance Sheets. The notes payable to former LPs were issued in connection with the early termination of the TRA as part of the August 2020 Restructuring. Although the notes payable to former LPs are non-interest bearing, pursuant to GAAP requirements, they were recorded net of imputed interest at a fixed annual rate of 1.8%.

At June 30, 2024, the Company had $1.0 million in other notes payable, which was included in current portion of long-term debt in the accompanying Condensed Consolidated Balance Sheets. Other notes payable do not bear interest and generally have stated maturities of three to five years from their date of issuance.

On July 25, 2023 (the “Closing Date”), the Company sold the equity interest in its wholly-owned subsidiary, Non-Healthcare Holdings, LLC, pursuant to an equity purchase agreement with OMNIA (“Equity Purchase Agreement”) for a total purchase price of $723.8 million, all of which has been received as of September 30, 2024. Pursuant to the terms of the Equity Purchase Agreement, OMNIA acquired Premier’s non-healthcare GPO member agreements which includes the associated net cash flows generated from administrative fees from purchasing on supplier contracts and in conjunction with the execution of the Equity Purchase Agreement, the Company and OMNIA entered into a 10-year channel partnership agreement (the “Channel Agreement”).

Additionally, the Company has the right to retain royalty fees over the term of the Channel Agreement based on the continued growth of the non-healthcare GPO member agreements.

As payments for administrative fees are remitted to OMNIA, the balance of Premier’s obligation will effectively be repaid over the term of the Channel Agreement. The Company calculated the effective interest rate based on future expected revenue, which resulted in an effective annual interest rate of 2.5% which will remain consistent throughout the life of the Channel Agreement.

Changes to several factors that could materially affect the amount and timing of payments to OMNIA could result in an increase or decrease to expected future revenue and interest expense related to the sale of future revenues. To the extent the amount or timing of future payments varies materially from the original estimate, the Company will make a cumulative adjustment to the carrying amount of the liability, which will be recorded as a non-cash gain or loss in other income in the Condensed Consolidated Statements of Income and Comprehensive Income. For the three months ended September 30, 2024 and 2023, the Company did not record cumulative adjustments to the carrying amount of the liability.

At September 30, 2024, the Company had $672.6 million of debt related to the sale of non-healthcare GPO member contracts and associated future revenues, of which $41.3 million was recorded to current portion of the liability related to the sale of future revenues in the accompanying Condensed Consolidated Balance Sheets. For the three months ended September 30, 2024, the Company recorded $15.7 million in revenue that was sold to OMNIA in net administrative fees, net of royalty fees retained, and $4.4 million in interest expense related to the sale of future revenues in interest expense, net in the Condensed Consolidated Statements of Income and Comprehensive Income.

A reconciliation of the liability related to the sale of future revenues was as follows (in thousands):

As of September 30, 2024, there were 97,794,635 shares of the Company’s Class A common stock (“Common Stock”), par value $0.01 per share, outstanding.

In February 2024, the Company announced that its Board of Directors approved a new share repurchase authorization for up to $1.0 billion of its Common Stock (the “Share Repurchase Authorization”) and that the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Bank of America, N.A. (“Bank of America”) pursuant to the Share Repurchase Authorization to repurchase an aggregate of $400.0 million of shares of the Company’s Common Stock, excluding fees and expenses. Under the terms of the ASR Agreement, the Company made a payment of $400.0 million to Bank of America and, in February 2024, received initial deliveries of an aggregate of 15.0 million shares of the Company’s Common Stock, or $320.0 million. On July 11, 2024, as final settlement of the share repurchase transaction under the ASR Agreement, the Company received from Bank of America an additional 4.8 million shares of the Company’s Common Stock. In total, the Company repurchased 19.9 million shares of its Common Stock under the ASR Agreement at $20.12 per share, which represents the volume-weighted average share price of the Company’s Common Stock during the term of the ASR Agreement less a discount. The shares delivered were recorded in treasury stock and immediately retired and recorded to retained earnings in the Company’s Condensed Consolidated Balance Sheet.

On August 20, 2024, the Company announced that the Company’s Board of Directors approved the execution of another $200.0 million of Common Stock repurchases under the Share Repurchase Authorization. As of September 30, 2024, the Company had repurchased 2.9 million shares of Common Stock at an average price of $20.18 per share for a total purchase price of $58.0 million. There can be no assurances regarding the timing or number of shares of Common Stock purchased under this authorization. The repurchase authorization may be suspended, delayed or discontinued at any time at the discretion of the Company’s Board of Directors.

During the three months ended September 30, 2024, the Company paid cash dividends of $0.21 per share on outstanding shares of the Company’s Common Stock to stockholders on September 15, 2024. On October 24, 2024, the Board of Directors declared a quarterly cash dividend of $0.21 per share, payable on December 15, 2024 to stockholders of record on December 1, 2024.

Basic earnings per share is computed by dividing net income attributable to stockholders by the weighted average number of shares of Common Stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation, which is calculated using the treasury stock method, includes the impact of all potentially issuable dilutive shares of Common Stock.

The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings per share (in thousands, except per share amounts):

_________________________________

(a)Net income from continuing operations attributable to stockholders was calculated as follows (in thousands):

(b)Stock options and restricted stock units excluded from diluted weighted average shares outstanding as their effects were anti-dilutive totaled 1.6 million for the three months ended September 30, 2024. Additionally, performance share awards excluded from diluted weighted average shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period were 0.3 million for the three months ended September 30, 2024.

Stock options and restricted stock units excluded from diluted weighted average shares outstanding as their effects were anti-dilutive totaled 1.3 million for the three months ended September 30, 2023. Additionally, performance share awards excluded from diluted weighted average shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period were 0.2 million for the three months ended September 30, 2023.

Stock-based compensation expense is recognized over the requisite service period, which generally equals the stated vesting period. The associated deferred tax benefit was calculated at a tax rate of 25% for the three months ended September 30, 2024 and 2023, which represents the expected effective income tax rate at the time of the compensation expense deduction and differs from the Company’s current effective income tax rate.

See Note 13 - Income Taxes for further information related to income taxes.

Stock-based compensation expense and the resulting deferred tax benefits were as follows (in thousands):

_________________________________

(a)For the three months ended September 30, 2024 and 2023, the deferred tax benefit was reduced by $0.5 million and $0.2 million, respectively, attributable to stock-based compensation expense that is nondeductible for tax purposes pursuant to Section 162(m) as amended by the Tax Cuts and Jobs Act of 2017.

The Premier 2013 Equity Incentive Plan, as amended and restated (and including any further amendments thereto, the “2013 Equity Incentive Plan”), provided for grants of up to 14.8 million shares of Common Stock, all of which were eligible to be issued as non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units or performance share awards. On September 24, 2023, the 2013 Equity Incentive Plan expired; no new grants will be issued under the plan.

The Premier 2023 Equity Incentive Plan (the “2023 Equity Incentive Plan”), which became effective December 1, 2023, provides for grants of up to 6.0 million shares of the Company’s Common Stock, all of which are eligible to be issued as non-qualified stock options, incentive stock options, stock appreciation rights, restricted shares, restricted stock units or performance share awards. As of September 30, 2024, there were approximately 4.1 million shares available for grant under the 2023 Equity Incentive Plan.

The following table includes information related to restricted stock, performance share awards and stock options granted under either the 2013 Equity Incentive Plan or the 2023 Equity Incentive Plan for the three months ended September 30, 2024:

Restricted stock units and restricted stock awards issued prior to June 1, 2023 generally vest in full at the end of a three-year period for employees and a one-year period for directors. Beginning June 1, 2023, restricted stock units and restricted stock awards issued to employees generally vest in equal annual installments over a three-year period. Performance share awards issued and outstanding generally vest at the end of a three-year period subject to whether and to what extent performance targets are met. Stock options generally vest in equal annual installments over a three-year period. Stock options have a term of ten years from the date of grant. Vested stock options will generally expire on the earlier of the scheduled expiration date and twelve months after an employee’s termination with the Company; however, in certain termination circumstances, vested stock options will expire on the earlier of the scheduled expiration date and 90 days after an employee’s termination with the Company.

Unrecognized stock-based compensation expense at September 30, 2024 was as follows (in thousands):

At September 30, 2024, there was no unrecognized stock-based compensation expense for outstanding stock options. There were no options exercised during the three months ended September 30, 2024, and the stock options outstanding and exercisable at September 30, 2024 had zero aggregate intrinsic value.

Income tax expense on continuing operations for the three months ended September 30, 2024 and 2023 was $22.7 million and $13.7 million, respectively. This reflects effective tax rates of 24% and 25% for the three months ended September 30, 2024 and 2023, respectively. The change in the effective tax rate is primarily attributable to changes in stock-based compensation expense, state law repricing and statute of limitation release on uncertain tax positions.

Operating lease expense for the three months ended September 30, 2024 and 2023 was $2.0 million and $2.4 million, respectively. As of September 30, 2024, the weighted average remaining lease term was 1.9 years and the weighted average discount rate was 6%.

Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year were as follows (in thousands):

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(a)As of September 30, 2024, future minimum lease payments are for the period from October 1, 2024 to June 30, 2025.

(b)As of September 30, 2024, the Company had $11.9 million of operating lease liabilities within other current liabilities in the accompanying Condensed Consolidated Balance Sheets.

During the three months ended September 30, 2024, the Company had commitments arising from a lease that had not yet commenced related to a lease modification for its corporate headquarters, which is expected to commence in fiscal year 2026 with an initial lease term of approximately eight years.

The Company is not currently involved in any litigation it believes to be material. The Company is periodically involved in litigation, arising in the ordinary course of business or otherwise, which from time to time may include stockholder derivative or other similar litigation, claims relating to commercial, product liability, tort and personal injury, employment, antitrust, intellectual property, or other regulatory matters. If current or future government regulations, including but not limited to those with respect to antitrust or healthcare laws, are interpreted or enforced in a manner adverse to the Company or its business, the Company may be subject to regulatory inquiries or investigations, enforcement actions, penalties and other material limitations which could have a material adverse effect on the Company’s business, financial condition and results of operations.

The Company delivers its solutions and manages its business through two reportable business segments, the Supply Chain Services segment and the Performance Services segment. The Supply Chain Services segment includes the Company’s GPO, supply chain co-management, purchased services activities and Remitra, the Company’s digital invoicing and payables automation business. The Performance Services segment consists of two sub-brands: PINC AI, the Company’s technology and services platform, and Contigo Health, the Company’s direct-to-employer business.

The following table presents disaggregated revenue by business segment and underlying source (in thousands):

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(a)Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material.

(b)Includes revenue from Contigo Health and certain revenue from PINC AI.

Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands):