```markdown [Executive Summary](index=1&type=section&id=Executive%20Summary) Evolent Health exceeded Q2 EBITDA targets, raised full-year profitability outlook, and saw accelerating new business, driven by demand for specialty care solutions and progress with Auth Intelligence AI [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Evolent Health exceeded its Q2 EBITDA targets and raised its full-year profitability outlook, driven by a rapidly accelerating new business pipeline and robust demand for complex specialty care solutions. The company also noted progress with its Auth Intelligence AI and automation targets - **Evolent** exceeded **Q2 EBITDA targets** and raised the **full-year profitability outlook**[3](index=3&type=chunk) - The company anticipates exceeding **historical growth rates for 2026** due to a **rapidly accelerating new business pipeline**[3](index=3&type=chunk) - **Auth Intelligence**, one year after launch, is on track to achieve **near-term AI and automation targets by the end of 2025**, aspiring to become a market leader in clinical data exchange and AI[3](index=3&type=chunk) - **Robust demand** for Evolent's **complex specialty care solutions** is driven by **rising medical costs** impacting health plans[3](index=3&type=chunk) Financial Highlights (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------- | :-------- | :-------- | :------- | | Revenue | $444,328 | $647,145 | -31.3% | | Net loss attributable to common shareholders | $(51,090) | $(6,383) | -700.4% | | Net loss margin | (11.5)% | (1.0)% | -10.5 pp | | Adjusted EBITDA | $37,547 | $51,950 | -27.7% | | Adjusted EBITDA Margin | 8.5% | 8.0% | +0.5 pp | Operational Highlights (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :-------- | :-------- | :------- | | Performance Suite Lives on Platform | 6,490 | 6,901 | -5.9% | | Specialty Technology and Services Suite Lives on Platform | 77,019 | 71,701 | +7.4% | | Administrative Services Lives on Platform | 1,231 | 1,268 | -2.9% | | Cases | 13 | 15 | -13.3% | | Average Unique Members | 40,201 | 39,856 | +0.9% | Average PMPM Fees/Revenue per Case (Q2 2025 vs Q2 2024) ($) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :-------- | :-------- | :------- | | Performance Suite | $13.76 | $22.30 | -38.3% | | Specialty Technology and Services Suite | $0.35 | $0.38 | -7.9% | | Administrative Services | $15.13 | $15.97 | -5.2% | | Cases | $2,969 | $2,849 | +4.2% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Seth Blackley, Co-Founder and CEO, highlighted Evolent's strong Q2 performance, exceeding EBITDA targets and raising the full-year profitability outlook. He emphasized the accelerating new business pipeline, the company's critical role in improving healthcare quality and affordability, and confidence in achieving AI and automation targets with Auth Intelligence - **Evolent** exceeded **Q2 EBITDA targets** and raised the **full-year profitability outlook**[3](index=3&type=chunk) - The company expects to exceed historical growth rates for 2026 due to a rapidly accelerating new business pipeline[3](index=3&type=chunk) - Evolent's solutions aim to improve quality for members, reduce administrative burden for providers, and manage affordability for the system[3](index=3&type=chunk) - Confidence in achieving near-term AI and automation targets exiting 2025 with Auth Intelligence, aiming to become a leader in clinical data exchange and AI[3](index=3&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) Evolent Health reported a significant GAAP net loss in Q2 2025, while adjusted results showed a decrease in Adjusted EBITDA despite margin improvement, alongside mixed operational metric trends [GAAP Reported Results](index=2&type=section&id=GAAP%20Reported%20Results) Evolent Health reported a net loss attributable to common shareholders of $(51.1) million for Q2 2025, a significant increase from $(6.4) million in Q2 2024, despite a decrease in revenue. Loss per share also increased substantially GAAP Financial Results (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------- | :-------- | :-------- | :------- | | Revenue | $444,328 | $647,145 | -31.3% | | Cost of revenue | $343,943 | $540,302 | -36.3% | | Selling, general and administrative expenses | $75,209 | $69,185 | +8.7% | | Net loss attributable to common shareholders | $(51,090) | $(6,383) | -700.4% | | Net loss margin | (11.5)% | (1.0)% | -10.5 pp | | Loss per share (Basic and diluted) | $(0.44) | $(0.06) | -633.3% | - **Total cash and cash equivalents** were **$151.0 million** as of June 30, 2025[5](index=5&type=chunk) [Non-GAAP Adjusted Results](index=2&type=section&id=Non-GAAP%20Adjusted%20Results) Evolent Health's adjusted results for Q2 2025 show a decrease in Adjusted EBITDA and a shift from adjusted income to adjusted loss per common share compared to Q2 2024, despite an increase in Adjusted EBITDA margin Adjusted Financial Results (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------- | :-------- | :-------- | :------- | | Adjusted cost of revenue | $342,893 | $539,095 | -36.4% | | Adjusted selling, general and administrative expenses | $63,888 | $56,100 | +13.9% | | Adjusted EBITDA | $37,547 | $51,950 | -27.7% | | Adjusted EBITDA margin | 8.5% | 8.0% | +0.5 pp | | Adjusted income (loss) attributable to common shareholders | $(11,013) | $21,065 | -152.3% | | Adjusted income (loss) per common share (Basic) | $(0.10) | $0.18 | -155.6% | [Key Operational Metrics](index=1&type=section&id=Key%20Operational%20Metrics) Evolent's operational metrics for Q2 2025 show mixed trends, with growth in Specialty Technology and Services Suite Lives on Platform and Cases revenue per case, but declines in Performance Suite and Administrative Services metrics Average Lives on Platform/Cases (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :-------- | :-------- | :------- | | Performance Suite | 6,490 | 6,901 | -5.9% | | Specialty Technology and Services Suite | 77,019 | 71,701 | +7.4% | | Administrative Services | 1,231 | 1,268 | -2.9% | | Cases | 13 | 15 | -13.3% | | Average Unique Members | 40,201 | 39,856 | +0.9% | Average PMPM Fees/Revenue per Case (Q2 2025 vs Q2 2024) ($) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :-------- | :-------- | :------- | | Performance Suite | $13.76 | $22.30 | -38.3% | | Specialty Technology and Services Suite | $0.35 | $0.38 | -7.9% | | Administrative Services | $15.13 | $15.97 | -5.2% | | Cases | $2,969 | $2,849 | +4.2% | [Business Developments](index=2&type=section&id=Business%20Developments) Evolent Health secured four new revenue agreements in Q2 2025, expanding existing partnerships with new states, lines of business, and specialty care solutions [New Revenue Agreements](index=2&type=section&id=New%20Revenue%20Agreements) Evolent announced four new revenue agreements in Q2 2025, bringing the year-to-date total to 11. These agreements include expansions with existing national and regional partners, adding new states, lines of business, and specialty care solutions like Oncology, Cardiology, Radiation Oncology, and Musculoskeletal services - **Evolent** announced **four new revenue agreements** in **Q2 2025**, bringing the year-to-date total to **11**[4](index=4&type=chunk) - An existing national partner is adding a new state in the mid-west for Oncology and Cardiology - An existing partner in the north-east will add cardiology, radiation oncology, and musculoskeletal solutions across multiple lines of business for more than 400,000 members - A regional partner in New England will add musculoskeletal and cardiology services across multiple lines of business - A national partner will add additional musculoskeletal services to a plan in the northeast[7](index=7&type=chunk) [Business Outlook and Guidance](index=3&type=section&id=Business%20Outlook%20and%20Guidance) Evolent Health provided Q3 2025 guidance and revised its full-year 2025 outlook, raising Adjusted EBITDA while adjusting revenue due to go-live timing, maintaining strong customer retention [Third Quarter 2025 Guidance](index=3&type=section&id=Third%20Quarter%202025%20Guidance) For the third quarter ending September 30, 2025, Evolent expects revenue to be in the range of $460 million to $480 million, and Adjusted EBITDA to be between $34 million and $42 million Third Quarter 2025 Guidance ($ in millions) | Metric | Range | | :------------- | :------------ | | Revenue | $460M - $480M | | Adjusted EBITDA | $34M - $42M | [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Evolent revised its full-year 2025 guidance, raising the Adjusted EBITDA outlook to $140 million to $165 million. The revenue outlook was adjusted to $1.85 billion to $1.88 billion, reflecting updated go-live timing for certain Performance Suite launches, while customer retention and pipeline activity remain strong Full Year 2025 Guidance ($ in millions/billions) | Metric | Range | | :------------- | :------------ | | Adjusted EBITDA | $140M - $165M (raised) | | Revenue | $1.85B - $1.88B (revised) | - The **revenue outlook revision** is due to **updated go-live timing** for certain Performance Suite launches[10](index=10&type=chunk) - The company continues to experience **strong customer retention** and **late-stage pipeline activity**[10](index=10&type=chunk) [Capitalized Software Development Outlook](index=3&type=section&id=Capitalized%20Software%20Development%20Outlook) Evolent reiterated its expectation to deploy approximately $35 million in cash for capitalized software development during 2025 - Expected **cash deployment** for **capitalized software development** in **2025**: approximately **$35 million**[11](index=11&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) Evolent Health, Inc. specializes in improving healthcare outcomes for complex conditions, providing details on its Q2 2025 conference call and investor relations contact [About Evolent Health, Inc.](index=3&type=section&id=About%20Evolent%20Health,%20Inc.) Evolent specializes in improving health outcomes for individuals with complex conditions by providing solutions that make healthcare simpler and more affordable. The company serves a national base of leading payers and providers and is recognized as a top workplace in healthcare - **Evolent** specializes in **better health outcomes** for people with **complex conditions**[14](index=14&type=chunk) - Provides **proven solutions** that make **health care simpler and more affordable**[14](index=14&type=chunk) - Serves a **national base of leading payers and providers** and is consistently recognized as a **top place to work in health care**[14](index=14&type=chunk) [Web and Conference Call Information](index=3&type=section&id=Web%20and%20Conference%20Call%20Information) Evolent Health held a conference call on August 7, 2025, to discuss its financial performance. Details for accessing the live broadcast via the investor relations website and participating by telephone were provided, with an archive available for one week - **Conference call** held on **August 7, 2025**, at **5:00 p.m. Eastern Time**[13](index=13&type=chunk) - **Live broadcast** and accompanying materials available on the Company's **Investor Relations website** at http://ir.evolent.com[13](index=13&type=chunk) - **Telephone participation details** provided for domestic and international callers[13](index=13&type=chunk) [Contacts](index=3&type=section&id=Contacts) For investor relations inquiries, Evolent Health can be contacted via email at investorrelations@evolent.com - **Investor relations contact**: investorrelations@evolent.com[15](index=15&type=chunk) [Supplemental Information](index=5&type=section&id=Supplemental%20Information) This section provides definitions for Evolent Health's key operational metrics and explains the rationale and adjustments for its non-GAAP financial measures [Definitions of Key Operational Metrics](index=5&type=section&id=Definitions%20of%20Key%20Operational%20Metrics) This section defines key operational metrics used by Evolent, including Revenue Agreements, Lives on Platform (Performance Suite, Specialty Technology and Services Suite, Administrative Services), Cases, PMPM Fees, Revenue per Case, and Average Unique Members, explaining their calculation and relevance for evaluating unit economics and operational performance - **Revenue Agreements:** Include incremental revenue from new partner entities or additional sales to existing partners (services, geographic, line of business expansions, or conversion of Specialty Technology to Performance Suite contracts) Excludes renewals, membership growth within existing contracts, or transaction-related purchase agreements - **Lives on Platform:** Calculated by summing monthly members covered for specialty care services (Performance Suite, Specialty Technology and Services Suite) or administrative services (Administrative Services), divided by the number of months in the period - **Cases:** Sum of individuals receiving services through surgery management and advanced care planning programs in a given period - **Average PMPM Fee:** Revenue for a specific suite divided by its Lives on Platform for the period, divided by the number of months - **Revenue per Case:** Revenue for surgery management and advanced care planning programs divided by the number of cases - **Average Unique Members:** Sum of members covered by Performance Suite, Specialty Technology and Services Suite, and Administrative Services, with members crossing multiple solutions counted only once from the solution with maximum members[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Management uses these measures to provide insight into the **unit economics of services** and **period-over-period operational performance**[20](index=20&type=chunk) [Non-GAAP Financial Measures Explanation](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Evolent presents several non-GAAP financial measures, including Adjusted Cost of Revenue, Adjusted SG&A, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Income (Loss) Attributable to Common Shareholders, and Adjusted EPS. These measures are used to provide investors with a clearer understanding of fundamental operational performance by excluding non-recurring or non-operational costs such as stock-based compensation, severance, transaction-related, and repositioning costs - **Non-GAAP financial measures** are presented as supplemental measures to help investors evaluate **fundamental operational performance**[28](index=28&type=chunk) - **Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses:** Exclude stock-based compensation, severance, transaction-related, and repositioning costs to facilitate understanding of long-term operational costs - **Adjusted EBITDA:** Excludes various non-operating and non-cash items from net loss attributable to common shareholders to focus on operational performance - **Adjusted EBITDA Margin:** Adjusted EBITDA divided by Revenue, useful for understanding operational performance compared to revenues over time - **Adjusted Income (Loss) Attributable to Common Shareholders and Adjusted Income (Loss) per Share Attributable to Common Shareholders:** Adjust net loss for various non-GAAP items and their tax impact to provide a more comparable measure of net profitability and a meaningful basis for forecasting future performance[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - These adjusted measures are **not alternatives to GAAP measurements** and may not be comparable to similarly titled measures reported by other companies[37](index=37&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) Evolent Health's Q2 2025 consolidated financial statements show a significant net loss, decreased total assets with increased cash and long-term debt, and net cash used in operating activities [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For the three months ended June 30, 2025, Evolent Health reported a net loss attributable to common shareholders of $(51.1) million, a substantial increase from $(6.4) million in the prior year, primarily due to decreased revenue and increased interest expense and dividends on Series A Preferred Stock Consolidated Statements of Operations (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------------------- | :-------- | :-------- | :------- | | Revenue | $444,328 | $647,145 | -31.3% | | Total operating expenses | $445,499 | $639,357 | -30.3% | | Operating income (loss) | $(1,171) | $7,788 | -115.0% | | Net loss attributable to common shareholders | $(51,090) | $(6,383) | -700.4% | | Basic and diluted loss per common share | $(0.44) | $(0.06) | -633.3% | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Evolent Health's total assets decreased to $2.46 billion from $2.54 billion at December 31, 2024. Notable changes include an increase in cash and cash equivalents, a decrease in accounts receivable, and a significant increase in long-term debt Consolidated Balance Sheets (June 30, 2025 vs December 31, 2024) ($ in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :----------------------------------- | :-------------- | :------------- | :------- | | Total assets | $2,461,532 | $2,544,411 | -3.3% | | Cash and cash equivalents | $150,995 | $104,203 | +44.9% | | Accounts receivable, net | $358,756 | $414,681 | -13.5% | | Total current liabilities | $557,519 | $715,501 | -22.1% | | Long-term debt, net | $648,455 | $490,520 | +32.2% | | Total liabilities | $1,336,727 | $1,352,979 | -1.2% | | Total shareholders' equity | $896,005 | $1,001,259 | -10.5% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Evolent Health reported net cash used in operating activities of $(25.8) million, a significant shift from cash provided in the prior year. Investing activities also used more cash, while financing activities provided a net cash inflow, leading to a slight net decrease in cash and restricted cash Consolidated Statements of Cash Flows (Six Months Ended June 30, 2025 vs 2024) ($ in thousands) | Metric | 2025 | 2024 | Change | | :--------------------------------------------------- | :--------- | :--------- | :------- | | Net cash and restricted cash (used in) provided by operating activities | $(25,769) | $26,326 | -197.9% | | Net cash and restricted cash used in investing activities | $(73,624) | $(23,273) | -216.3% | | Net cash and restricted cash provided by (used in) financing activities | $98,927 | $(88,499) | +211.7% | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(526) | $(85,508) | +99.4% | | Cash and cash equivalents and restricted cash as of end-of-period | $177,970 | $137,949 | +29.0% | [Non-GAAP Reconciliations](index=13&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of Evolent Health's GAAP to non-GAAP financial measures, including Adjusted Cost of Revenue, SG&A, EBITDA, and Adjusted Income (Loss) Attributable to Common Shareholders [Reconciliation of Adjusted Cost of Revenue](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Cost%20of%20Revenue) For Q2 2025, Adjusted Cost of Revenue was $342.9 million, derived by subtracting $1.1 million in stock-based compensation from the GAAP Cost of Revenue of $343.9 million Reconciliation of Adjusted Cost of Revenue (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :-------- | :-------- | :------- | | Cost of revenue (GAAP) | $343,943 | $540,302 | -36.3% | | Less: Stock-based compensation | $1,050 | $1,207 | -13.0% | | Adjusted cost of revenue | $342,893 | $539,095 | -36.4% | [Reconciliation of Adjusted Selling, General and Administrative Expenses](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Selling,%20General%20and%20Administrative%20Expenses) Adjusted Selling, General and Administrative Expenses for Q2 2025 totaled $63.9 million, after excluding $10.5 million in stock-based compensation, $0.8 million in severance costs, and other non-recurring items from the GAAP figure Reconciliation of Adjusted SG&A (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------- | :-------- | :-------- | :------- | | Selling, general and administrative expenses (GAAP) | $75,209 | $69,185 | +8.7% | | Less: Stock-based compensation | $10,530 | $11,452 | -8.0% | | Less: Severance costs | $791 | $800 | -1.1% | | Less: Transaction-related costs | $0 | $163 | -100.0% | | Less: Repositioning costs | $0 | $670 | -100.0% | | Adjusted selling, general and administrative expenses | $63,888 | $56,100 | +13.9% | [Reconciliation of Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Evolent's Adjusted EBITDA for Q2 2025 was $37.5 million, a decrease from $52.0 million in Q2 2024. This was calculated by adjusting the GAAP net loss attributable to common shareholders for various non-operating and non-cash items, including interest expense, depreciation and amortization, stock-based compensation, and dividends on Series A Preferred Stock Reconciliation of Adjusted EBITDA (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------- | :-------- | :-------- | :------- | | Net loss attributable to common shareholders (GAAP) | $(51,090) | $(6,383) | -700.4% | | Interest expense | $11,601 | $5,995 | +93.5% | | Depreciation and amortization expenses | $23,141 | $29,870 | -22.6% | | Stock-based compensation expense | $11,580 | $12,659 | -8.5% | | Dividends and accretion of Series A Preferred Stock | $31,193 | $7,979 | +290.9% | | Adjusted EBITDA | $37,547 | $51,950 | -27.7% | | Adjusted EBITDA margin | 8.5% | 8.0% | +0.5 pp | [Reconciliation of Adjusted Income (Loss) Attributable to Common Shareholders](index=15&type=section&id=Reconciliation%20of%20Adjusted%20Income%20(Loss)%20Attributable%20to%20Common%20Shareholders) Evolent reported an Adjusted loss attributable to common shareholders of $(11.0) million for Q2 2025, a significant decline from an Adjusted income of $21.1 million in Q2 2024. This adjustment involved removing various non-GAAP items, including purchase accounting adjustments, stock-based compensation, and the tax impact of these adjustments Reconciliation of Adjusted Income (Loss) (Q2 2025 vs Q2 2024) ($ in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------------------------- | :-------- | :-------- | :------- | | Net loss attributable to common shareholders (GAAP) | $(51,090) | $(6,383) | -700.4% | | Purchase accounting adjustments | $13,364 | $17,189 | -22.2% | | Stock-based compensation expense | $11,580 | $12,659 | -8.5% | | Tax impact | $2,927 | $(5,600) | +152.3% | | Adjusted income (loss) attributable to common shareholders | $(11,013) | $21,065 | -152.3% | | Adjusted income (loss) per common share (Basic) | $(0.10) | $0.18 | -155.6% | [Forward-Looking Statements and Risk Factors](index=16&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines cautionary language regarding forward-looking statements, detailing various risks and uncertainties that could materially impact Evolent Health's future performance [Forward-Looking Statements - Cautionary Language](index=16&type=section&id=Forward-Looking%20Statements%20-%20Cautionary%20Language) This section provides cautionary language regarding forward-looking statements, indicating that actual results may differ materially from expectations due to various risks and uncertainties. It outlines numerous factors that could impact future performance, including reliance on large partners, risk-sharing arrangements, ability to attract new partners, regulatory changes, data security, and the use of AI, advising investors not to place undue reliance on these statements - **Forward-looking statements** are predictions based on current expectations and projections about future events, subject to **risks and uncertainties** that may cause actual results to differ materially[47](index=47&type=chunk)[48](index=48&type=chunk) - **Significant portion of revenue derived from largest partners**, with potential for loss, termination, or renegotiation of contracts - **Increasing number of risk-sharing arrangements** and the ability to accurately predict exposure under performance-based contracts - **Ability to attract new partners** and offer new and innovative products and services, keeping pace with industry standards and technology - **Dependency on key personnel** and the ability to attract, hire, integrate, and retain them - **Risks related to completed and future acquisitions**, investments, alliances, and joint ventures, which could divert management resources or result in unanticipated costs - **Evolution of the healthcare regulatory and political framework**, restrictions on data access, and penalties from privacy and data protection laws - **Data loss or corruption due to system failures**, service disruptions, and liabilities related to safeguarding confidential data security and privacy - **Risks associated with the use of artificial intelligence (AI)** and machine learning models - **Ability to achieve profitability in the future** and the impact of additional goodwill and intangible asset impairments - **Indebtedness**, ability to service debt, and obtain additional financing on favorable terms - **Potential volatility of Class A common stock price** and provisions that discourage or prevent strategic transactions - **Impact of litigation proceedings**, government inquiries, public health emergencies, and increasing inflationary pressures[48](index=48&type=chunk)[51](index=51&type=chunk) - Investors should **not place undue reliance on forward-looking statements** as a prediction of actual results, and the company undertakes no obligation to publicly update them[50](index=50&type=chunk) ```

Core Insights - Evolent Health reported financial results for the second quarter of 2025, highlighting a significant net loss and a decrease in revenue compared to the previous year, but also an increase in adjusted EBITDA and a positive outlook for future growth [1][2][6][10]. Financial Performance - Revenue for the three months ended June 30, 2025, was $444.3 million, down from $647.1 million in the same period of 2024, representing a decrease of approximately 31.3% [6][10]. - The net loss attributable to common shareholders was $51.1 million, compared to a loss of $6.4 million in the prior year, resulting in a net loss margin of 11.5% [6][10]. - Adjusted EBITDA for the quarter was $37.5 million, with an adjusted EBITDA margin of 8.5%, up from 8.0% in the previous year [7][10]. Business Developments - Evolent signed four new revenue agreements in the second quarter, bringing the total for the year to date to 11, indicating strong demand for its services [3][4]. - The company is experiencing a rapidly accelerating pipeline for new business, with expectations to exceed historical growth rates in 2026 [2][10]. Guidance and Outlook - For the third quarter of 2025, Evolent expects revenue to be in the range of $460 million to $480 million and adjusted EBITDA between $34 million and $42 million [9][10]. - The full-year revenue outlook for 2025 has been revised to approximately $1.85 billion to $1.88 billion, with adjusted EBITDA expected to be in the range of $140 million to $165 million [10][11]. Operational Metrics - The average unique members on the platform increased to 40,201, compared to 39,856 in the previous year [6]. - The average PMPM fee for the Performance Suite decreased to $13.76 from $22.30 year-over-year, reflecting changes in service utilization [6][18].

Company to Participate in Upcoming Conferences WASHINGTON, July 14, 2025 /PRNewswire/ -- Evolent Health, Inc. (NYSE: EVH), a company focused on achieving better health outcomes for people with complex conditions, today announced it will release its second quarter 2025 financial results on Thursday, August 7, 2025, after market close, with a conference call to follow at 5 p.m. ET. An audio playback of the conference call will be available on Evolent's investor relations website for 90 days after the call. Up ...

Core Insights - Evolent Health, Inc. has announced new leadership appointments to enhance its clinical and financial teams, aiming to innovate in specialty care [1][4] Leadership Additions - Dr. David Lim has been appointed as chief clinical officer, leading a 300-person medical team, with extensive experience in value-based care and technology-enabled healthcare [2][4] - John Way has joined as CFO of Performance Suite, overseeing financial aspects of at-risk specialty condition management products, bringing over 20 years of financial management experience [3][4] Company Vision - Evolent's CEO, Seth Blackley, expressed enthusiasm for the new leaders, highlighting their commitment to transforming specialty care for patients, payers, and providers [4] - The company is recognized for its focus on better health outcomes for complex conditions and is a leading destination for talented leaders in the healthcare field [5]

Company Overview - Evolent Health (EVH) shares increased by 6.9% to close at $9.25, with notable trading volume compared to typical sessions, and a total gain of 17.5% over the past four weeks [1] - The company is a provider of health care software and consulting services [3] Financial Performance - Evolent Health's Q2 2025 adjusted EBITDA guidance is set at $33-$40 million, while the full year adjusted EBITDA guidance is projected to be between $135 million and $165 million [2] - The upcoming quarterly earnings are expected to be $0.09 per share, reflecting a year-over-year decline of 70%, with revenues anticipated at $457.4 million, down 29.3% from the same quarter last year [3] Market Sentiment - Investor optimism regarding Evolent Health's 2025 financial guidance is driving the stock's price rise [2] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Context - Evolent Health is part of the Zacks Medical Info Systems industry, which includes other companies like American Well Corporation (AMWL) [4] - American Well's consensus EPS estimate has increased by 5.7% over the past month, with a year-over-year change of 43.5% [5]

Core Insights - Evolent Health, Inc. is experiencing oncology cost trends below expectations for 2025, leading to a positive outlook for Q2 and full-year Adjusted EBITDA guidance [1][2] - The company has signed a Commitment Letter with Ares Management Credit funds to secure additional non-dilutive capital, which will support its growth and address 2025 Convertible Notes [2][3] - Evolent has significantly increased its forecast for new revenue bookings going into 2026 due to an acceleration in business development activities [3] Financial Guidance - The company reiterates its Q2 2025 Adjusted EBITDA guidance of $33 million to $40 million and full-year guidance of $135 million to $165 million [1][2] - If current trends continue, Evolent anticipates being in the top half of its Q2 Adjusted EBITDA range [2] Strategic Initiatives - The availability of incremental non-dilutive capital will allow Evolent to meet working capital needs associated with its higher growth forecast [3] - Evolent focuses on improving health outcomes for individuals with complex conditions through innovative solutions [3]

Evolent Health (EVH) FY Conference Summary Company Overview - **Company**: Evolent Health (EVH) - **Industry**: Healthcare Services, specifically focusing on oncology, cardiology, and musculoskeletal (MSK) conditions - **Key Executives**: Seth Blackley (CEO), John Johnson (CFO) Core Points and Arguments 1. **Market Dynamics**: The healthcare market has faced significant headwinds, including MA plans exiting markets and Medicaid redetermination affecting customer coverage. Despite these challenges, there is a strong demand for Evolent's solutions, indicating a positive long-term growth outlook [3][4] 2. **Oncology Focus**: Evolent's primary focus is on oncology, which is a critical area as 40% of individuals will be diagnosed with cancer in their lifetime. The company aims to improve the accuracy of cancer diagnoses and treatment plans from 65% to 85% adherence to evidence-based medicine [7][8][9] 3. **Customer Base**: Evolent's main customers include major insurance companies such as Humana, Centene, and Molina. The company helps these insurers manage quality and adherence to treatment protocols [10][11] 4. **Operational Scale**: Evolent employs 4,500 staff, including 1,500 clinical professionals and 350 physicians, conducting 8 million case reviews annually in oncology and related fields [12] 5. **Cost Reduction**: Evolent's interventions typically lead to a 20% reduction in total costs over three years, although some cases may result in higher costs due to more effective treatments being recommended [18][19] 6. **Revenue Potential**: Evolent currently generates approximately $2 billion in revenue, with a cross-sell opportunity of $50 billion among existing clients, representing one-third of the total addressable market (TAM) of $150 billion [22][23] 7. **Sales Pipeline**: The weighted sales pipeline has more than doubled over the past year, driven by increasing demand for oncology solutions [25] 8. **Clinical Decision Support**: Evolent utilizes AI and clinical decision support to enhance treatment plans, ensuring adherence to best practices and improving patient outcomes [26][29] 9. **Provider Alignment**: The company engages in peer-to-peer consultations and provides financial incentives to physicians to encourage adherence to evidence-based practices [36][38] 10. **Technology Integration**: Evolent has launched a patient navigation app to assist patients in managing their symptoms and connecting with healthcare professionals [39] Additional Important Insights 1. **Market Challenges**: The managed care market has faced significant challenges, with the current underwriting cycle being particularly difficult. Evolent is focused on margin expansion and improving operational efficiency through automation and AI [45][48] 2. **Alternative Payment Models**: Evolent employs alternative payment models to align incentives between payers and providers, ensuring that oncologists are compensated fairly while reducing overall treatment costs for patients [57][62] 3. **Future Outlook**: The company is optimistic about growth, targeting over 15% organic top-line growth, with less than 5% market share in a vast market of cancer cases [43][44] 4. **Focus on Balance Sheet**: Evolent is prioritizing deleveraging and improving its balance sheet, aiming to reduce leverage ratios over time [53] This summary encapsulates the key points discussed during the Evolent Health FY Conference, highlighting the company's strategic focus, market opportunities, and operational insights.

Company Performance - Evolent Health reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.09 per share, and down from $0.34 per share a year ago, representing an earnings surprise of -33.33% [1] - The company posted revenues of $483.65 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.76%, but down from $639.65 million year-over-year [2] - Over the last four quarters, Evolent Health has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Outlook - Evolent Health shares have declined approximately 7.1% since the beginning of the year, compared to a decline of -4.3% for the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $0.10 on revenues of $492.27 million, and for the current fiscal year, it is $0.42 on revenues of $2.07 billion [7] Industry Context - The Internet - Software industry, to which Evolent Health belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Evolent Health's stock performance [5] - Another company in the same industry, Guidewire Software, is expected to report quarterly earnings of $0.46 per share, reflecting a year-over-year change of +76.9% [9]

Financial Data and Key Metrics Changes - Q1 revenue reached $483.6 million, impacted by two offsetting items, with an adjusted revenue estimate of approximately $450 million without these items [22][24] - The company ended the quarter with cash of $247 million and total liquidity exceeding $300 million, resulting in a net leverage ratio of 4.1 times the last twelve months adjusted EBITDA [27] Business Line Data and Key Metrics Changes - The company added five new revenue agreements in Q1, expanding its reach in surgical management, medical oncology technology services, and musculoskeletal services, expected to generate approximately $10 million in annualized revenue [6][8] - Renewals with existing customers remain strong, with one of the top 10 customers renewing through 2030 [8] Market Data and Key Metrics Changes - The selling environment across Technology and Services and the Performance Suite is reported to be very favorable, with the Performance Suite pipeline being the largest in the firm's history [9] - The company remains less than 5% penetrated in its broader revenue opportunity across all products, indicating significant growth potential [9] Company Strategy and Development Direction - The company focuses on three pillars for shareholder value creation: organic growth, expanding profitability, and optimal capital allocation [5] - Plans for 2025 include balance sheet management, debt paydown, and purchasing oncology navigation assets to accelerate oncology strategy [11][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding long-term growth targets, citing strong demand for specialty condition management solutions [5] - The company anticipates positive operating cash flow for the remainder of the year and plans to continue investing in organic growth [11] Other Important Information - The company reported an employee engagement rate of 89%, indicating strong internal morale which is seen as a leading indicator of performance [19] - The company is not currently expecting any new M&A transactions in the near term but views it as an attractive long-term strategy [11] Q&A Session Summary Question: Is the PMPM level a good baseline going forward? - Management indicated that the current PMPM level is a good baseline, with expectations for a slight increase due to a large new performance suite go-live later in the year [36] Question: What is the visibility on the oncology trend? - Management provided insight that leading indicators show a slight decrease in authorizations, with claims completion for Q1 being about 55-60% complete [40][41] Question: Can you elaborate on the expansion of oncology products? - Management highlighted that the navigation solution is expected to increase value or savings opportunities by 10% to 20%, enhancing the overall oncology management approach [46] Question: What was the growth reduction from recontracting? - Management noted that approximately 600,000 lives converted out of performance suites into technology and services, offset by growth in other areas [49] Question: How has the competitive environment evolved? - Management stated that the competitive environment has not changed significantly, with consistent win rates and a strong pipeline indicating ongoing demand [75] Question: How would potential tariffs impact the model? - Management indicated that performance suite arrangements contain clauses allowing for updates to capitation rates in response to significant changes in unit costs, minimizing potential impacts on profitability [80]

Financial Data and Key Metrics Changes - Q1 revenue reached $483.6 million, impacted by two offsetting items, with an adjusted revenue estimate of approximately $450 million without these items [18][19] - The company ended the quarter with cash of $247 million and total liquidity exceeding $300 million, resulting in a net leverage ratio of 4.1 times adjusted EBITDA [22] - Adjusted EBITDA outlook for 2025 remains between $135 million and $165 million, with revenue guidance unchanged at $2.06 billion to $2.11 billion [27] Business Line Data and Key Metrics Changes - The company added five new revenue agreements in Q1, expanding its reach in surgical management, medical oncology technology services, and musculoskeletal services, expected to generate approximately $10 million in annualized revenue [6][7] - Renewals with existing customers remain strong, with one top customer renewing through 2030 [6] Market Data and Key Metrics Changes - The selling environment across technology and services is reported as favorable, with the Performance Suite pipeline being the largest in the company's history [7] - The company remains less than 5% penetrated in its broader revenue opportunity across all products, indicating significant growth potential [7] Company Strategy and Development Direction - The company focuses on three pillars: organic growth, expanding profitability, and optimal capital allocation, with a strong emphasis on AI-led automation and performance margin maturation [8][9] - The launch of an integrated oncology navigation solution aims to enhance patient engagement and improve clinical outcomes, expected to drive meaningful ROI [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding long-term growth targets, citing strong demand for specialty condition management solutions [4][7] - The company anticipates a modest increase in net debt but expects to generate approximately $40 million in cash flow from operations for the remainder of the year [22] Other Important Information - The company reported an employee engagement rate of 89%, indicating strong internal morale and potential for delivering value to customers and shareholders [16] - The acquisition of oncology navigation assets is expected to enhance the company's oncology strategy and condition management model [9][23] Q&A Session Summary Question: Is the PMPM level a good baseline going forward? - Management indicated that the current PMPM level is a good baseline, with expectations for a slight increase following a large new performance suite go-live later in the year [30][31] Question: What is the visibility on oncology trends? - Management provided insights on leading indicators and noted that claims completion for Q1 was about 55-60%, with ongoing monitoring of authorizations [33][35] Question: How will the navigation solution impact oncology products? - The navigation solution is expected to increase the value or savings opportunity by 10% to 20%, enhancing the company's ability to manage oncology costs [38][41] Question: What was the growth reduction from recontracting? - Approximately 600,000 lives converted out of performance suites into technology and services, with some offsetting growth from other areas [43][44] Question: How has the competitive environment evolved? - The competitive landscape has remained stable, with consistent win rates and conversion rates despite changes in the Performance Suite model [70][72] Question: What is the potential impact of tariffs on the pharma industry? - The company has clauses in its performance suite arrangements that allow for updates to capitation rates in response to significant changes in unit costs, minimizing potential impacts on profitability [75][76]