CONTRACT BALANCES |
12 Months Ended |
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Jun. 30, 2025 | |
| Revenue from Contract with Customer [Abstract] | |
| CONTRACT BALANCES | (7) CONTRACT BALANCES Contract Assets, Deferred Revenue, and Revenue Share Obligations The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets (unbilled receivables), and deferred revenue on the Consolidated Balance Sheets. Contract assets decreased by $17.6 million during the year ended June 30, 2025 primarily due to invoices issued for margin improvement services relating to certain Performance Services contracts where revenue was recognized ahead of invoicing and the timing of cash received from contracted suppliers based on members’ purchases, partially offset by revenue recognition from licensing contracts. The revenue recognition from licensing contracts represents performance obligations that have been satisfied prior to customer invoicing offset by the timing of invoicing related to the licensing contracts. Revenue share obligations increased by $54.5 million during the year ended June 30, 2025 compared to the year ended June 30, 2024 primarily driven by higher average revenue fee share percentage in the underlying revenue share arrangements. Revenue recognized during the year ended June 30, 2025 that was included in the opening balance of deferred revenue at June 30, 2024 was $16.5 million, which is a result of satisfying performance obligations primarily within the Performance Services segment. 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). Net revenue of $3.6 million was recognized during the year ended June 30, 2025 from performance obligations that were satisfied or partially satisfied on or before June 30, 2024. The net revenue recognized was driven by an increase of $8.0 million in net administrative fees revenue related to under-forecasted cash receipts received in the current period, partially offset by a decrease of $4.4 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 $13.0 million was recognized during the year ended June 30, 2024 from performance obligations that were satisfied or partially satisfied on or before June 30, 2023. The net revenue recognized was driven by an increase of $7.8 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 $5.2 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 June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $751.1 million. The Company expects to recognize 35% of the remaining performance obligations over the next twelve months, an additional 23% over the following twelve months and an additional 33% over the following 36 months, with the remainder recognized thereafter. Contract Costs The Company capitalizes the incremental costs of obtaining and fulfilling a contract, which include sales commissions and costs associated with implementing SaaS informatics tools. At June 30, 2025, the Company had $25.8 million in capitalized contract costs, including $16.3 million related to sales commissions and $9.5 million related to implementation costs. The Company recognized $11.6 million of related amortization expense for the year ended June 30, 2025. At June 30, 2024, the Company had $25.5 million in capitalized contract costs, including $16.1 million related to sales commissions and $9.4 million related to implementation costs. The Company recognized $11.0 million of related amortization expense for the year ended June 30, 2024.
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