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PINC Premier

Participants
Angie McCabe Vice President of Investor Relations
Mike Alkire President & Chief Executive Officer
Craig McKasson Chief Financial Officer & Chief Administrative Officer
Jailendra Singh Credit Suisse
Jared Haase William Blair
Richard Close Canaccord Genuity
Jessica Tassan Piper Sandler
Iris Long Berenberg Capital Market
Bill Sutherland The Benchmark Company
Stephanie Davis SVB Leerink
Call transcript
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Operator

Good morning, my name is Dexter and I'll be your conference operator today. At this time, I would like to welcome everyone to the Premier Inc. Fiscal Year 2021 Third Quarter Results and Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

conference recorded. this reminder, a is being As Ms. Angie may begin the conference. McCabe, you

Angie McCabe

you, fiscal Premier's Welcome third Thank to call. XXXX Dexter. quarter conference

this Alkire, Mike Craig Administrative morning and Financial speakers and and Chief McKasson, our Officer. CEO; our Our President are

are to Risk our we detailed to such soon. of to these non-GAAP financial evaluate cash Safe encourage as appropriate, measures actual financial non-GAAP where Management's Reconciliations review Also, materially measures free discussed and of remind forward-looking These update statements Relations you flow started, today and could Harbor quarter our will or disclosures. other affect in earnings forward-looking website and section that results to expect including XX-Q slides We this measures business. adjusted appendix of to to the supplemental file statements and SEC, discussed future available are to Form investors.premierinc.com. our to Alkire. soon. Factors that conference refer third Factor our our from SEC Before which slides obligation we call want our turn for call today. earnings we included release now remarks the of those we the fiscal in presentation speak Form everyone certain get filings in over in Mike furnish results accompanying are the this X-K, earnings accompanying I the to in supplemental and our today which financial to GAAP we release contain the as expect the differ undertake at I will them. with might no Investor the

Mike Alkire

for of remainder fiscal on fiscal morning, quarter outlook XXXX our a today the XXXX. year Good for us everyone thoughts joining Thanks, for preliminary and fiscal third results, thank this and of you Angie. discussion

transform with extensive other as deliver and role to a access chosen the and I healthcare today, healthcare. our more have continue our cost smooth to Premier that Before ensure artificial that to helps started, she honored members. role. to provider Premier our takes I to strategic continue as together on continued her her intelligence an thank we on we board Susan been and company and an network Susan humbled her company, Premier healthcare me lead let in and our her and enabled customers journey want is industry-leading and by higher to platform solutions to perspectives leadership provide shaping members I'm get work technology it to quality, say with and for advisory transition, to for look forward effective insights closely I into

highlights for some to Turning third quarter. the

of expectations pleased XX%, the with our grew and increased XXXX, quarter reflect performance XX%, services exceeded quarter chain supply Compared another which fiscal and are results third revenue net performance. with X%. fundamental strong We revenue segment grew net consolidated services of our revenue segment net

As that amended we per primarily in GPO adjusted share agreements the year-over-year and due to executed August XXXX. earnings adjusted and declined were expected, EBITDA extended

leading to guidance increasing be net am a vision, technology-based Adjusted mission solutions the range in a EPS are with I our our and morning million, ranges. $XXX XXXX adjusted role take view to in the financial remarks. Craig we $X.XX as and our our of continued consolidated We to discuss to in and values; We path million new that Premiers also and long results will history be to announced on range $XXX to business focused $X.XX. provider. fiscal the healthcare a currently commitment billion. into technology, improvement, of EBITDA background be share my $X.XXX the you updated of in this forward. With Premier's of expect want I revenue Premier's I of $X.XXX in for evolution morning his guidance billion range This process in on my and to CEO,

passionate And of use and other customers stockholders, cost deliver something reduce inefficiencies. higher on will and plan, goals my I'm as lower priorities about. data healthcare I'm We our that deliver differentiated focused members part to we and our other and our stakeholders. to strategies to to members network, our waste other three advance our and and quality learning as and long-term This vast machine is key very achieve help value

we our values, includes financial growth, vision consistent and and This focus innovation, a executing and enhancing of culture accountability. and mission, delivering reinforcing are and on discipline operational mindset First, our our with performance.

nurture continuing into and strong our core to while also our the technology. members needs employers, business. to of relationships life our data our with We markets Second, we diversifying believe and sciences us business payers, adjacent expanding are companies position our and through serve

Third, This includes more portfolio increasing right assets and enhancing the complement refining be we will unique of of assets. creative acquiring, building, approach capabilities. our the our in and to of value

recent diversify provider the automate this an healthcare. acquisition to further of healthcare, key approach. digitize and payments portfolio invoicing capabilities expansion solutions technology of to by streams chain. Delivery these of Our Services, our leading assets example electronic solutions grow the is and Adding in financial invoicing tech-enable a will of revenue the for for is of all We and payment strategy our component to Invoice and capabilities supply enabled technology of our our advancing accelerating aspects believe IDS

drive expansion total these expect which to to to opportunities contract We give enable continue member visibility will in will us spend and GPO us to GPO the greater further capabilities also compliance. identify contract

opportunity advanced and reduce parties. by members and invoice cost total us enhancing technology provides the to enabling In payment addition, of our use between communications workflow help care contracted for to IDS automated an

have our us Over well that the of that ahead past are us. several positions the years, we foundation; for strengthened opportunities one

costs. data. data of which clinical, our at our capabilities repositories insights We processing safely care have expanding decision-making is technology with the provide to members and language to integrated with in actionable we and healthcare variations point real-time by long-standing reduce including operational believe strategic relationships reduce the industry's the physician access of our enhanced and of one platform financial largest what We've natural

expanded further clinical new begin and identification authorization. prior of cases adjacent artificial for and used including have solving of in patients such our intelligence monetization the of for as We the markets trials processes use to costly manual

forward financial We continue free experience And have strategies. reflected advance balance flow position a industry leadership, Under to with as cash from our enablement of free financial areas look strength further a accelerate technology we strong to sheet, a generation. our cash significant my the expertise. leadership team our and of our we by and respected to operate will

technology environment to Our members and through new help healthcare requirements are markets evolution to and lower higher this these in health quality with Washington, and that I'll anticipated changes DC. partner new the a with other and cost. the address drive enablement view expectations our necessary helping and navigate environment now customers outcomes of in efficiency Premier future. adjacent discuss confronted our now an into improved is will critical require in being regarding some

cost includes economic is administration coverage the improve to expand and pandemic, Congress attention transitioning the While focused quality on reforms and effectiveness. healthcare to and This healthcare remain recovery. ending Biden

to may First, in members, improve we services and health make for investments greater quality anticipate which and ability for system to a technical an improved incremental result environment hospitals costs. take reduce them willingness and in reimbursement or to

performance increased value-based transparency, and analytics payment an support and are to care there models. to that evidence-based positioned pricing Second, on to We through support move we is focus our risk-based capabilities improvement. incentives care including believe alternative well members

we Third, multi-year we we a there is these look taken role a support achieving automating healthcare our chain. strong for to We continue supply are members authorization healthcare has our the create our partnering well believe In are to many very positioned to The finally, play our goals. chain partnerships already results. current bipartisan prior with forward members antiquated action other members to steps, opportunities pandemic meet through our resilient systems third our supply to and healthcare in in Premier the improve and quarter expect then, system. to technology-enabled And we towards strategic support we progress further supporting customers authorization solution. with prior US summary, and through resiliency. pleased needs our

focused we McKasson financial delivering on strategy, our our operational and for meaningful members other stakeholders. we the are now and all for of financial and our and execution, expectations. solutions customers of will look I to value discussion long-term advancing Craig our turn to over forward, our As performance create to call a

Craig McKasson

third brief for a of fiscal discussion XXXX regarding fiscal details results remainder our financial Thanks, guidance our and begin XXXX. updated of provide quarter Mike. the with I'll

us. the in our quarter, the and We with ahead are pleased opportunities performance of we're excited about strong

preliminary our next thoughts still you plan, are I year. XXXX we provide developing While also with will fiscal fiscal our for

prior and of of the of $XXX.X quarter. from impact fees In contract agreements from For for purchase success XXXX. from the members of quarter. while the associated need Acurity a business, other in million the were the revenue and $XXX the certain in prior in year effective growth the fees Applied PPE of demand as with in respect result quarter, X, net chain ongoing the by prior including non-cash as our third of declines Plus analytics from members partially Design primarily was to in year ongoing revenue our quarter, the during million products services, third resiliency the our prior net has our programs which as impact and core quarter products, GAAP from The contract Sciences, growth during compared needed and quarter. in enterprise acquisition approximately the segment, million $X the profitability, revenues Products resulting of revenue across incremental and were reduced our $XX with the to administrative current portfolio prior in the our year Performance categories consolidated XXX% and prior acquisition quarter, acute $XX.X we the related deliver our increased million million the on and offset pandemic. suppliers quarter revenue addition negative the license by period our With segment XXXX, Health amortization and and year to: with XXXX, administrative contract revenue Virginia items penetration well Healthcare driven ongoing result critically administrative our and agreements as of mitigate Demonstrating million one, pandemic. were was of site decreased our a quarter. revenue revenue agreements, Nexera XXXX, supplies these in as year year XX% by revenue from income and $XX.X on driven performance million by commodity the in net a Mason amended as three, of spend fees Health to COVID-XX chain incremental services administrative the the part new expected which February securing prior revenue our fees of compared entered revenue Improvement included in high business compared analytics compared low Community July Contigo segment period products growth primarily significant year and growth of COVID-XX well revenue delivered high in Health members, year GAAP net increased revenue product in May GPO prepaid increased margin alternate the of with Management commitment year new the incremental as And lower related businesses. with aggregated Consulting in In driven to asset the extended compared quarter. increased to businesses. during due required utilization low-cost revenue $XXX.X for third prior given net net fees by as our ago with supply our license primarily XX% enterprise in increases offset high-quality compliance of growth System services Two, quarter in performance Supply result the to pandemic. impact in and partially ramp-up addition million System, X% GPO services by both, Cost profitability other of administrative $X These and into

decreased primarily million decreased $XXX.X quarter, third increased chain services segment earnings EBITDA net services $XX.X expected, mainly from by consolidated prepaid which as prior adjusted from the XX% million, and income $X.XX. XX% decreased per and of a XX% share of of adjusted was the result decreased X% quarter. the supply EBITDA year amortization $XXX.X amended in ago of Acurity decline year Adjusted which we the non-cash quarter fees. due $XX quarter-over-quarter, performance from to of extended and agreements the GPO administrative adjusted million, to adjusted the As partially XX% year million of This EBITDA offset prior a

tax $XXX.X utilization current a Our tax the now than lower expect $X.XX the primarily slightly allowance This of a the effective deferred of our was historical operating rate resulted tax release anticipated third XX%, change effective we assets with and in in XXXX, losses. year for benefit results share from from remainder compared the which primarily diluted a we expected the earnings per the fiscal in associated for GPO of balance months of XX, rate the XXXX. administrative on decrease for previously quarter and to valuation agreements the net operations COVID-XX March perspective, XXXX with of $XXX.X million liquidity ended was impact a The March nine revenue $X.XX was From fees year. for months ended result as cash to due the nine and of net flow and pandemic. sheet the million lower prior amended XX,

from the cash resulting tax of of as payable result $XXX.X of a in XX, limited as agreement inventory, addition, cash $XXX.X was Free to payments to year by XX, higher Premier cash decrease primarily with aggregated driven ended by impacted $XX.X pandemic also PPE March we due well In million totaled of a Board XX, restructure. XXXX. company's former for activities. ago. were a the million primarily same offset partially June to record quarterly month levels working flow compared dividend March nine in of purchasing stockholders activities, as impact distributions share factors XXXX the compared same the operating capital, period of $X.XX and XX, of partners impacted Cash changes LP was period in expected, On cash as factors of limited of including elimination restructure per connection for XXXX of the net part $XX.X at of tax the the X. as early a equivalents June XXXX that partners made termination as Directors net from by declared the The to also XXXX. operating the on million These the provided with at with receivable April August Premier's June of XXXX XX, the million cash

an year $X repaid as outstanding to revolving billion that $XX million of $XXX five facility and balance of March million and Our credit subsequent balance. XX, we quarter end of

our capabilities about the out investments excited XXXX make so acquisition to or we're next year their technology. IDS; over although the addition, to of early stages, expect and we In operational March are these in incremental build further still

years million believe the meaningful will Our deliver with members double-digit goal $XX $XXX capital. to XX functionality over a five fully to deliver the is in our on invested operational and to next have over to to suppliers We million and next months. currently enhanced return three capability XX revenue will this profitability,

earlier, is the of increased year full March we our As fiscal on remainder on our this through year. our Mike year XXXX with based year-to-date our guidance current for fiscal and XX, visibility updating XXXX expectations fiscal this of remainder are the which performance highlighted

the may incorporate Our significant healthcare does incorporates and undertake. consistent the that prior related our and acquisitions with certain effect not years, it to future guidance any market, key assumptions business we of

We are guidance. making the following updates our to

million $XXX revenue revenue billion primarily million, and million. services $XXX $X.XX million fees increasing direct of of are net sourcing comprised $XXX chain products net billion, We of to to revenue supply segment GPO $X.X to $XXX administrative to

the to $XXX the range in of million to of for growth produce low range range Together a end these to for year. prior billion. net revenue $XXX $X.XXX revenue X% are of services representing net increase segment range by new to the million a We $X.XXX consolidated expected increasing performance narrowing over an XX% billion

$XXX $X.XX. as to million in million, be to range earnings range share adjusted well the the $XXX per of be as in are to EBITDA increasing of adjusted We to $X.XX

of a that fiscal administrative continue deferral revenue the to on Our net quarter by $XX a further following be utilization, other lower based pressured as overall the decrease the potential approximately of stockpiles as the anticipated of $XX related million may procedures, expect expect our COVID-XX fiscal first XXXX overall their and result non-healthcare XXXX products many of build-up by result of use, We in the the and in sourcing fees quarter completing to for is fiscal needed pandemic. to a in as result level areas healthcare million elective revenue PPE purchasing sequentially GPO of of of members as subsides from certain well the currently ongoing items. certain we as with assumptions; of fourth direct quarter lower demand third a guidance critically XXXX step-down PPE continue products lower to

As we variability will timing with during any fiscal performance due recognition have agreements the and year. segment, the previously magnitude and services of enterprise periodic revenue license our profitability engagements in in the of be given communicated these there associated analytics to

capital expenditures in the be to fiscal of expect be lower year. million million originally and to the We now to anticipated slightly for we range $XXX $XXX than

expected rate reflect will fiscal an year tax for Lastly, XXXX net of income effective we now full XX%. adjusted

effective look ranging XX%. level ahead we to back between As to rate more the to we to tax XX% fiscal XXXX, expect a normalized revert

to us As any able continue we higher respectively. not or could end tax the lower evaluate able leverage we to bring to extent the to end range or will appropriate the the of strategies and always, planning are it opportunities,

focused priorities position laid our remain long-term we executing to to further look for on commented key as Mike business out XXXX the and Finally, success he earlier, we high the COVID-XX per excluding as strengthen forward fiscal of digits, EBITDA growth annual our share. adjusted of multi-year to earnings and compounded consolidated net impact mid targets revenue, adjusted single pandemic for rate achieve and on the

process fiscal finalizing XXXX plan. our in still are the We of

past actions during Importantly, fiscal performance the that XXXX in year been beyond. on and we taking focused will drive have our

in to a single-digit remaining factors; EBITDA. in view annual be to net of impact multi-year result by large of to to digits Our did which a XXXX from end we mid high not will in targeted on level for currently the two mid and across be of the second, growth to consolidated the rate subsequent the revenue range is growth. targets our growth XXXX the to higher administrative of low our years fiscal to some We perform to high growth compound incremental fee agree and adjusted customers. part amended agreements, low restructuring This initial XX% end previously And guided result drive the for further GPO revenue solutions high-single as future higher driven in target share in as near net a range will first, fees XX% profitability members that gain August traction other [ph] incremental our investments to. expect at members our at that in

expect open guidance financial XXXX for our on today. call. Thank now earnings our We your and opportunities excited across the longer fiscal for call businesses. quarter fourth up we'll We about questions. year term provide Dexter, you to full time near very remain

Operator

first [Operator Mr. line question comes the from of Samuel [ph] Instructions] from Your JP you, Thank Morgan. Craig.

is open. line Your

Unidentified Analyst

focus hoping I customer congrats care? much with great maybe out the was What's appetite and that for marketplace? the on quarter. provide there you to your what seeing like bit on could so base are little on and with color all value-based the in the align increased more looking Thanks incrementally a you the

Mike Alkire

is this Yes, Mike.

interesting. it's So,

little administration, value-based positively value-based we've as by bit the to with we're signs out And but encouraged on Biden the coming the be tell pointing and we're DC. more a agnostic more not a So to the the I obviously, the are care. too care. early know, of tell, of that are you where business towards But but positioned net so commentary think new is, to a actions little it's reliant it's everything early really

Unidentified Analyst

thank Very helpful, you.

Mike Alkire

Thank you.

Operator

Jailendra Singh comes question line Suisse. the from from next of Credit Your

open. Your line is

Jailendra Singh

on My Intellia is congrats a when Yes. Thank -- healthcare you was partners I to wanted system weeks back. a few some get around few win color good understanding good [ph] it from and quarter. morning and GPO. announced days community you contract back

expecting the from was you're from Just from acquisition wondering if emerging or that opportunities and combination? [ph], additional it some -- the of Intellia fallout seeing you're if

Mike Alkire

Yes.

Jailendra, referring think community you're to health. I

in our pricing the a Premier actually our our GPO future quick -- a reminder, So, was know, a a services that think get and as don't all on. technology -- win that really the been that where for a I broad-based significant include -- to we've purchase that just was our of think well as that opportunity, GPO the that what the role was standpoint has. after winning supply costs some it us it highlighted as in to played from chain But areas obviously of Premier win historically the really focus you and I implementing differentiation we and

Jailendra Singh

you see Okay. will last made contracts sharing us this sharing were headwind fee comment quantify then, low-XX% impact, all 'XX how the coming Just some with be about And the fee give some just the Can that, which there. high-XX%, negotiated contracts is with previously. for in And that? color done you much arrangement? you fiscal about in not Craig more

Craig McKasson

any Craig. Sure, can start, I'll color. add and Mike is this then

year. but we about, we a As did restructuring of the agreements when August amended in process, the continued for this that did an members we're and our we have the existing majority vast we the of subset prior or extended had contract place XXXX, GPO they to fiscal restructuring already that evaluation of talked in continuing to under the in agreed sort

the to on fee in made have an to working high cause but have within our been year with the it new from and been there them process of will place so the at not actually the due organization specifically quantify small different a subset have through a we're But low move impact determination range agreements have growth share or XX's forward, a moving And but the very the change partner that that leadership acquisition. with majority we've will magnitude them, a XX's. to point original merger next to to

Mike Alkire

Yes, and only sense we standpoint, business economics there times the that to add are are I'll does thing is it continue we very when make to the provide partnership. a not disciplined Craig. The that about customers, from

So we walk we're for will economics in away if the sense fact business. our makes that not getting

Jailendra Singh

Okay, thanks guys.

Operator

Your comes Ryan line from William next question from of the Daniels Blair.

is line Your open.

Jared Haase

in adjacencies wanted the morning. the that I Hey, for themes the good is you're expand those of good into. last of a prepared I that looking employer And circle talked Jared the life points to This in Ryan. to think Mike, the are remarks; just Haase I you've [ph] good around back sciences; in quarters. we've couple about market know in of to the one about talked some deal

So, I bit a hoping more we was mentioned. the spend little that maybe you could payer time around segment

from areas that curious specific talk you further where that investments where market? can of adding if little about could see I value kind on Premier for any about if curious you some just a that to sitting know add or a so channel? Premier see talk you in proposition But any value value-add could areas think talked further authorization; bit maybe prior Just bit you Premier front. is a there about adjacent that you little you perspective penetrate product

Mike Alkire

Thanks Sure. question. the for

think data valuable lends technology areas you network one our of two -- So that and too. services I our and from well and a mentioned that themselves I to there's perspective, are providing think them, payer

going you're think the something I looking on to about our at very cost is we ways insights working of that first, And authorization into natural aware to the workflow that one initiatives prior So are imaging. space workflow Medicare, PAMA believe which or currently that suggested, on into as literally language which the we're the using reduce you is focus in be embed is that of. is technology high supportive the payers to all for things

of diagnostics market. and potential of other think high the into imaging extension payer cost the just So

So, two; that health Number I have health number have think that's one. of we a systems number care our actually plans.

standpoint, from Health of very, our that into in very linking So them Contigo are many interested initiative.

create need health As about a health meaningful I more do capable geographic current their how services participants to when or for -- wrappers their arena. outside communities and think they of leverage their plan create plan

I So, and two in leveraging obviously offering. Contigo then, prior often, think Health our ways; one,

Jared Haase

And thanks more quick for business sense. your just for sales makes a Could what That maybe that. to and just this then, maybe and kind little implementations is And follow-up; of development a extent think I bit it. activities Craig. you and Got talk remain just split I'm of to a in be kind regarding shared you what person? that fiscal the trying also like? commentary of get And virtual or extent sort remote sense or between normalized impacting to that what look XXXX might of OpEx might profitability.

Craig McKasson

go-forward begin basis, expect. a year. virtual say and that will this back done of do some our that would aggregate, as can we a virtually versus advisory which look -- we but in do do starts with to well, Mike in and I'll well. person, From mix up, be the have next to of not facilities to back prospective I I we which certainly on-site, -- think services add will a that amount business our have force of begun standpoint field as continue capacity we and again, a to go on-site as then start to Sure, virtual travel color a some on expect would fair as we to in our year, as I incremental reconvene continued have have members to OpEx we pick our see

with to fiscal continue I been leverage on has to the overall, through think an we'll also begin pandemic. the opportunity performance XXXX we as across industry that is impact So, certainly return normal. our virtual enhancement members, that more learned for our But but to the be on-site

Jared Haase

on and Okay, congrats great. sense. And quarter. the That makes thanks,

Craig McKasson

Thank you.

Mike Alkire

you. Thank

Operator

We have Close Genuity. Richard a Canaccord from question from

Your line is open.

Richard Close

portfolio Great, assets. just increasing approach of add Mike, be to where little you're coming in comment Is that need thanks. quarter. could statement? that anything or that you a there you Congratulations on your specific the from terms curious to on can to the value in creative I like you your of if was expand that

Mike Alkire

Yes.

years doing First are extend been couple all, of really lot last partners of over we and the our where we've of help capabilities. a others it looking to for

strong going evolve think going are we So with literally either scale; marry our ability quicker into future within organizations markets, looking life from continuing channel to that maybe of in us maybe markets, about to -- data think claim organizations well data. operational or can be if that to that and with have for more our as expand clinical you they are forward a standpoint sciences so help from as we of of new those as some think partners or have, a our standpoint

-- embed also -- also in maybe partners learning have protocols for looking technology. of that that prior and natural that machine clinical we language we're of into can the think So, areas some our

-- those So are a would examples. be couple of those just

Richard Close

then, adjacent in much we markets? product sort core there us like terms post business about think how And as of can of new Okay. in versus acquisitions guide any the and the focused you is development, is on provide new

Craig McKasson

penetration supply supply capabilities can we we and broadly, is know capabilities will the to a have services This cement side, technology our additional further I technology enhance always earmark; specific of and product for Craig. the to I our things we Richard. access contract say chain we'd suites, drive etcetera. evolution core on look Sure, think to that don't that do chain

about, and for continuum look look the services core think payer ways across of will to and targets component relative enhance although data performance. kind very to tied to the also in those growth we provider potential business, the and I focus employer M&A But to extend, opportunities to capabilities as further we'll partnerships directly On side, and sciences opportunities of to of the improve enhance life Mike our talked continue care. core entire on provider the markets, improving do for those just or the performance our

Richard Close

Okay, you. thank

Operator

of Jessica from Your next question Piper comes from the Tassan line Sandler.

Your line open. is

Jessica Tassan

that impact us just of transactions be Hi, And, other the lapping XXXX? and we those net P&L taking but impact the This transactions February just think And Acurity are them then, Sean. for you Jeff question. any fee left interested, Nexera for that aware was my we thanks could we I of should remind on of if admin what [ph]? is we're in

Craig McKasson

Sure.

Nexera that that Acurity and of with to report we've to fact million a a they about that had entered standpoint were administrative in year. business into disclosed prior required $XX standpoint the way; a GAAP from that's acquisition of a So our the that acquisition, some agreements we from fee prepaid

have that my Premier XX% will as as within of have although to the XX% agreements had that the we've we're that a were so year operating impact and longer now that to acquisition move prepared And couple merger vast of or we've or them we members, some and million with the the entered talked forward. their that that so But healthcare share for should them lapped all where and will prior we million or $XXX they had with terms the we place fee moving under And not the acquisition; So entered forward. that either been members of we're restructuring. do incremental a we of that then, the to majority contracts our non-cash will that be system our to couple agreements quarter per fiscal in five-year to five, remarks talked our percentage of past small the forward. our again, changes into their that had $XXX as a previously no executive in to as had have we about with been result fee beyond, again, we impact prior remain members potentially then amortization about rest fiscal as we be amended to of six into minority amortization, be our largest share having members moving extended disclosed, the GPO of in impact acquired, numbers I happens into the $X consolidation that to then, XXXX move And XXXX agreed due they've business, results about have of historical majority increased had a a of million of again a decision seven-year made in at environment. in

Jessica Tassan

can are performance should color in are drove that quarter? And I nature? ask Any what term services expect just that Got kind the the it. And in we those shorter strength multi-month follow-up and some and helpful. of contracts be of would

Mike Alkire

life In our support, at business our decision quarter and We're this and of clinical Design in a had our interest services Health a general, lot solid really advisory Yes. a continuing strong to Plus obviously acquisition is sciences well. our going quarter. see

Craig McKasson

think -- of just And little color. this I Craig, a bit is

of applied pipeline of really kind of and what delivered the so growth, that's and to consulting applied to will strong sort to call a of projects; respect agreements. data of really our where would short-term we extended short-term growth, in strong new of of growth actually I we and engagements kind have business. ongoing very the we continue mix deliver then see sciences it's they with positive more and data projects a So continue say sciences a part combination

really mentioned are Mike those performance improvement arena; primarily again, of seeing they that improvement period strong margin consulting -- be in tend to As of the growth consulting consulting one-time And to episodic, engagements a in services not time. perform that and practice. deliver are the engagements part over performance

with beyond. and it's -- revenue of then -- just engagements deliver next quarter, quarter beyond so, the into short-term And of and more of blend sort the in as a typical, is kind as to extension

Angie McCabe

Do we any further questions? have

Operator

Okay.

of the Your from Berenberg. Iris next question line Long comes from

Your line is open.

Iris Long

morning. good Thanks question. Hi, for my taking

can So, the wondering just life there. same along opportunities about line of you kind if I'm speak on sciences; the

talk a in you sciences mentioned that business? of can about remarks for have And Mike, maybe business clinical So to trial you us you understand you help the bit? then, that little can sort like life your guys kind also, competition recruitment, of what

Mike Alkire

Sure.

I'll this Mike. So, start. is

the we as well. the a So things with do obviously our most business the focused medical device sciences towards area just reminder, for part but industry some is life pharmaceutical as

I the therapies world. into think have our data, because are sweet into partners warm post-drug approval we pharma very, think very being spot really markets. device is we real have very all them see around provides like reacting to real to strong world med and will, if evidence, discoveries a so test-bed, you how as I made, really new strong a Because that therapies the how network, are insights very, in those effectively leverage patient actually

this at company sort So point-of-care ability at we patients good whether recent drug unstructured have to beginning -- sciences also specific trials. one. a with to be would Number work the that's number to or identify of and life data, is the we're because the a look trend; work a because two, not for

utilization being good a pharma behalf so of interest And understand there a trial. patient or technology to of is the good and a of not identify for candidate whether of prospect a that lot on a has

we there identification So, standpoint. significant a that from drug-trial think patient is pretty upside

strong aspects it's our it operational is, As technology, to information ability at natural our world strength and two, we processing relates health -- network to I broad-based a have that of language basically items electronic really. that to look kinds at ability from systems, use very I -- it's competitors, technology, those be glean with things. Premier and our our information of the the the record. think very data; strong standpoint medical language And embed unique It's real about it's also truly and talking with natural the and strong studies been or able three our -- clinical the or to Craig both, have

Iris Long

then great. follow-up question services. Okay, performance on And is my

lower So entirely for kind that pipeline analytics And about maybe analytics the then, due revenue, the to timing; enterprise enterprise and solution? it licensing right? talk of it's bookings maybe is can your like sounds you

Craig McKasson

Sure, this Craig. is

the is because of stickiness in how happen. relationships had so current So, we overtime. with -- pipeline predict portion engagement, have the prior bit headwind it quarter; QX in that work the continue that growth did member agreement at exactly quarter, engagements to From continues of in pipeline develops revenue going the did alignment implication may sort pipeline what to of year, and forward. is that an a which be way But just enterprise we levels and Iris, yes; a the from the long-term recognition to whenever a there relationship. just it's in had moving a year strategic does It's the a time license of at the to into in for majority of strong we quarter that recognized had gets furthers that that's agreements large a analytics contracted those. there prior the the earlier in those license we to the standpoint, hard timing present analytics enter not something it quarters but hit terms enterprise really and revenue like the so little We

Iris Long

Okay, thanks.

Operator

Next question, Benchmark Bill with Sutherland Company.

Bill Sutherland

and morning, mix feel revenue good with SaaS, perpetual additions you for businesses; addition everybody. of Thanks a between if us tech-enabled portfolio the performance services the with and of and services? In about you've -- that growth also in and wonder made could the give I

Craig McKasson

Sure, This Craig. is Bill.

of that to about discussed agreements, either in SaaS the the advisory license-based I'll that both, of or bundled XX% have many the margin improvement to the tied on business continue and that to continue have about collaboratives have think one-to-one we is one working and some where we've is enterprise aspect services of portfolio we're consulting today as we the our payment analytics other to provide that XX% value-based say collective So we that a being of of license issue combination we technology-based a as as or which which well. such revenue services; business in care

Bill Sutherland

XX%, with more like? Craig, roughly would And split perpetual and be the within SaaS what the then,

Craig McKasson

the still analytics had has more up today ramp continues enterprise But in year majority over it agreements have majority a so to of SaaS-based. Significant a but SaaS-based revenue. is so, be vast become or past license the we piece

Bill Sutherland

Mike wondering. next you that the that I was a needle what think that PAMA about stamps -- exactly there That's did [ph]; case is Okay. year? then, finally, fiscal say it this And Should way? in used mover we regarding with

Mike Alkire

I it's our think forecast embedded all and guidance. in our

Bill Sutherland

For fiscal 'XX?

Mike Alkire

right. Yes,

Craig McKasson

year, next contributions target Well, for part contemplated, we intend incremental revenue to to business. factors of 'XX but single-digit yet that haven't we've said from and guidance we that mid issued that fiscal in for that our in growth some included -- high expansion the

Bill Sutherland

Okay. Thanks, everybody.

Mike Alkire

Thank you.

Operator

with SVB Davis Next Leerink. is Stephanie

line is Your open.

Stephanie Davis

Thank quarter. for on on the congrats the real to evidence taking questions, wanted and world my follow-up you questions. I

Is So different dataset of lot players you dataset would through company where one be or start still sciences walk to differentiate. be universe, peace? of have there multiple datasets is not side much enter a will a something competition a seeing where [ph] need the the us we're dynamics? given with of in to life petition this kind the Just co-op could coexist can it

Mike Alkire

things. of couple Yes,

I in got we've right. all, incredible of that our datasets, said remarks, First earlier some

our we -- more have think about datasets, that clinical X,XXX clinical hospitals to our X,XXX our have we safety. hospitals about in if subscribe datasets, So than you

As hospitals decision you the feedback think we're and about heard in Epic Athena. of -- and of clinical with and forth where stance Cerner and hundreds health, you just getting sort real-time we're support in

our think labor again, hospitals You operational about there. that have participate to datasets, X,XXX we close

most in the with in strong as claims we're very the now that's now, So capable our beginning to doing that we members, got with very, dataset some think just couple And data been we've of well. very a of very, a unique pull we've recently industry. work

and history So these our those datasets meaningful data out our that, data into are of the record the insights differentiate creating think the pull things workflow I of sets and us. And differentiation write or that the capability them and terms pretty truly insights take ability then medical integrating truly workflow life these of our is sciences. of a for significant information electronic out from to for or in to

Stephanie Davis

world; about dataset seeing more post-COVID it? is What for the for improving towards analytics? more it in efficiencies, cases thinking a having used you staffing modeling? then, this the are it And demand Is towards robust

Mike Alkire

Yes.

question. a thank post -- great you, So it's

to So post-COVID normalcy. back health about our getting for all it's systems,

services up elective running is as systems many asking data them Using they're obviously, to downward and more cases help when they flexible they to with those So need reduce costs. those augment back our COVID to quickly to get a of us provide are to Many is kinds more to and the and need our corporate healthcare and structures coming them in them structures. are -- many dynamic as they possible. us to and as a bit procedures as help or as create on cost when cost us trying swing, be asking help of to things

a Patient sciences they're talking really maximize one, from it's system COVID result significant identification some a for normalcy. also employer have in about of companies as been a customers investment kinds standpoint, to that -- ease. of their and think, many So obviously think standpoint, to healthcare continuing And be for life healthcare then, number get are of a as helping much them a employee all turmoil that opportunity for have very us. well. to finally about, Life sciences, of Craig from for real in evidence the form -- be Contigo seem both back ways to drug-trial things I interested I that I the these looking and you have world from is some large our as experienced financial those

our through systems of them looking highest they lowest of care so get with for offering to some scenarios cost, migrate health sort quality Contigo can they're our closely work more And the ensure that and help those to possible.

Stephanie Davis

a good like Sounds setup. guys. Thank you,

Mike Alkire

Thank you.

Operator

from of is question Bank Next [ph] Michael America. from

Unidentified Analyst

curve you PPE, a of demand questions. This business, Craig, expect Thanks couple like see the think couple a of down hearing looking for quarters. mentioned and is about I is see clients of what some quarters? Allen talk sourcing from Mike. Can out in the over the what direct you you taking you're for the you next the step of to

Craig McKasson

Sure.

my I to we stabilized, say, Midwest, coming depends mentioned demand COVID So, and significant remarks, pretty I I of has will certainly as see think upper continuing appropriate in are of more have is so of managing mean down; fashion. people become from news, of COVID the geography. although bit that sort as in many but that prepared kind as seeing to aware it we that wave continuing on more I region in demand sort dramatically. see the are country a at well an in down in effective in you're part I you're think And other everything parts the cases are become far

of I lot PPE is health that and I it some critically they're into important appropriate is year predicament a of that have not so to The highlighted the they stockpiles in a hour that other similar down terms they point spent were happened think other year of ensuring supply. equipment have when that put ago the past that needed of systems as

get a and trend. think And so of that back will up, more normalized that's we been we to built

that step So expect we're had what the our to then, $XX at $XX as this down see articulated, moving third at step quarter. off slight down a QX, into of down from pretty do point. step in the levels I million a significant XXXX we million And fiscal in we

when sort still establish of impact are the and think through we'll have exact an sequential I that We quarters, more to multiple of in we that working over actually August. guidance color issued

Unidentified Analyst

you. thank Great,

Operator

time. There back are Alkire. I no turn further would to like the question at this conference Mr. Mike to

Mike Alkire

you for you Thank our this months on you, in with engaging achieving again the ahead, look making to I you sharing we're Dexter. joining all And and morning. with call our the goals. and progress weeks thank forward

Operator

concludes for This joining. Thank call. you conference today's

disconnect. now You may