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SEGMENTS
12 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
SEGMENTS
(18) SEGMENTS
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 and direct sourcing activities. The Performance Services segment consists of three sub-brands: PINC AI, the Company’s technology and services platform; Contigo Health, the Company’s direct-to-employer business; and Remitra, the Company’s digital invoicing and payables automation business.
The following table presents disaggregated revenue by reportable business segment and underlying source (in thousands):
Year Ended June 30,
202320222021
Net revenue:
Supply Chain Services
Net administrative fees$611,035 $601,128 $572,700 
Software licenses, other services and support44,261 37,312 26,812 
Services and software licenses655,296 638,440 599,512 
Products244,659 393,506 744,122 
Total Supply Chain Services (a)(b)
899,955 1,031,946 1,343,634 
Performance Services
Software licenses, other services and support
SaaS-based products subscriptions187,618 193,586 198,512 
Consulting services80,292 64,087 58,851 
Software licenses72,376 65,621 56,157 
Other95,891 77,689 63,998 
Total Performance Services (a)
436,177 400,983 377,518 
Total segment net revenue1,336,132 1,432,929 1,721,152 
Eliminations (a)
(37)(28)— 
Net revenue$1,336,095 $1,432,901 $1,721,152 
_________________________________
(a)Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material.
(b)Consolidated net revenue for the fiscal year ended June 30, 2021 included revenue generated from our largest customer, a non-healthcare customer, which accounted for approximately 15% of our consolidated net revenue. The significant increase in revenue generated from our largest customer in the fiscal year ended June 30, 2021 was due to the increase in products revenue primarily as of result of the COVID-19 pandemic.
Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands):
Year Ended June 30,
Depreciation and amortization expense (a):
202320222021
Supply Chain Services$54,425 $55,424 $37,073 
Performance Services71,006 64,674 75,391 
Corporate8,362 9,009 8,598 
Total depreciation and amortization expense$133,793 $129,107 $121,062 
Capital expenditures:
Supply Chain Services$26,545 $29,677 $10,408 
Performance Services51,532 51,298 72,068 
Corporate4,225 6,465 6,400 
Total capital expenditures$82,302 $87,440 $88,876 
Year Ended June 30,
Total assets:20232022
Supply Chain Services$1,317,076 $1,406,108 
Performance Services1,209,353 1,054,687 
Corporate845,062 896,336 
Total assets3,371,491 3,357,131 
Eliminations (b)
(4)(4)
Total assets, net$3,371,487 $3,357,127 
_________________________________
(a)Includes amortization of purchased intangible assets.
(b)Includes eliminations of intersegment transactions which occur during the ordinary course of business.
The Company uses Segment Adjusted EBITDA (a financial measure not determined in accordance with generally accepted accounting principles (“Non-GAAP”)) as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. The Company also uses Segment Adjusted EBITDA to facilitate the comparison of the segment operating performance on a consistent basis from period to period. The Company defines Segment Adjusted EBITDA as the segment’s net revenue less cost of revenue and operating expenses directly attributable to the segment excluding depreciation and amortization, amortization of purchased intangible assets, merger and acquisition-related expenses, and non-recurring or non-cash items, and including equity in net income of unconsolidated affiliates. Operating expenses directly attributable to the segment include expenses associated with sales and marketing, general and administrative, and product development activities specific to the operation of each segment. General and administrative corporate expenses that are not specific to a particular segment are not included in the calculation of Segment Adjusted EBITDA. Segment Adjusted EBITDA also excludes any income and expense that has been classified as discontinued operations.
For more information on Segment Adjusted EBITDA and the use of Non-GAAP financial measures, see “Our Use of Non-GAAP Financial Measures” within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
A reconciliation of income before income taxes to the unaudited Segment Adjusted EBITDA, a Non-GAAP financial measure, is as follows (in thousands):
Year Ended June 30,
202320222021
Income before income taxes$249,998 $326,900 $250,641 
Equity in net income of unconsolidated affiliates (a)
(16,068)(23,505)(21,073)
Interest expense, net14,470 11,142 11,964 
(Gain) loss on FFF put and call rights (b)
— (64,110)27,352 
Other (income) expense, net(6,307)9,646 (11,967)
Operating income242,093 260,073 256,917 
Depreciation and amortization85,691 85,171 76,309 
Amortization of purchased intangible assets48,102 43,936 44,753 
Stock-based compensation (c)
14,355 46,809 35,915 
Acquisition- and disposition-related expenses17,151 11,453 18,095 
Strategic initiative and financial restructuring-related expenses13,831 18,005 6,990 
Equity in net income of unconsolidated affiliates (a)
16,068 23,505 21,073 
Deferred compensation plan expense (income) (d)
5,422 (9,401)12,745 
Impairment of assets56,718 18,829 — 
Other reconciling items, net352 302 433 
Adjusted EBITDA$499,783 $498,682 $473,230 
Segment Adjusted EBITDA:
Supply Chain Services (e)
$499,431 $500,854 $467,868 
Performance Services (e)
123,859 126,938 132,225 
Corporate(123,507)(129,110)(126,863)
Adjusted EBITDA$499,783 $498,682 $473,230 
_________________________________
(a)Refer to Note 4 - Investments for further information.
(b)Refer to Note 5 - Fair Value Measurements for more information.
(c)Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.6 million, $0.6 million and $0.5 million for the years ended June 30, 2023, 2022 and 2021, respectively.
(d)Represents changes in deferred compensation plan liabilities resulting from realized and unrealized gains and losses and dividend income on deferred compensation plan assets.
(e)Includes intersegment revenue which is eliminated in consolidation.