Announces Two Operating Partner Additions and
One Expansion
WASHINGTON, May 4, 2022
/PRNewswire/ -- Evolent Health, Inc. (NYSE: EVH), a health care
company that delivers proven clinical and administrative solutions
to payers and providers, today announced financial results for the
quarter ended March 31, 2022.
Highlights from the first quarter of 2022 announcement
include:
Quarter ended March 31, 2022:
- GAAP revenue of $297.1 million,
an increase of $82.0 million, or
38.1%, from the three months ended March 31,
2021.
-
- Revenue excluding revenue from divested assets increased 42.1%
from the three months ended March 31,
2021.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $5.4 million resulting in a
net loss margin of (1.8)%.
- Achieved Adjusted EBITDA of $24.3
million resulting in an Adjusted EBITDA margin of 8.2%.
- Total Lives on Platform of 20.3 million as of March 31, 2022, composed of 2.1 million Evolent
Health Services Lives on Platform and 18.2 million Clinical
Solutions Lives on Platform.
Also today, Evolent announced the following partnership
additions:
- AvMed, a not-for-profit health plan headquartered in
Miami, Florida, will expand its
relationship with New Century Health, adding the Performance suite
for oncology. AvMed has been a highly valued client for New Century
Health's Technology and Services suite within cardiology. In
addition, AvMed will adopt New Century Health's Technology and
Services radiation oncology solution to support the management of
populations impacted by cancer.
- In 2022, an independent physician group headquartered in
California has engaged with
Evolent Care Partners to participate in the Medicare Shared Savings
Program across a portion of its Medicare fee for service population
through multiple member primary care physician practices.
Additionally, the Company announced the following partnership
expansion:
- Beginning in 2023, Bright Healthcare plans to significantly
expand the implementation to certain Individual Family Plan
membership beyond the approximately 350,000 lives that migrated to
Evolent Health Services in 2022.
Seth Blackley, Chief Executive
Officer, and Co-Founder of Evolent Health stated, "The first
quarter marks a strong beginning of the year on the heels of a
successful 2021. The Company continues to demonstrate strong
organic growth and margin expansion, while optimizing the
deployment of shareholder capital. In support of organic growth, we
announced two additional operating partnerships today, bringing our
total for the year to 6 versus our annual target of 6-8 new
partners. We also announced an exciting client expansion for 2023.
As we continue to see strong execution across the business, with
particularly high growth in New Century Health and Evolent Care
Partners, we remain well positioned against our near and
longer-term business objectives."
Mr. Blackley added, "As we look ahead for 2022, I am confident
in the value of our solutions, the depth of our talent and the
durability of our strategy. Together, these assets enable us to
execute successfully on our mission to help transform U.S.
healthcare. Because we have captured only a small fraction of our
value-based-care addressable market, I am confident we are well
positioned to grow our impact significantly throughout this year
and beyond."
Financial Results of Evolent Health, Inc.
In our earnings releases, prepared remarks, conference calls,
slide presentations and webcasts, we may use or discuss non-GAAP
financial measures. Definitions of the non-GAAP financial measures,
as well as reconciliations of non-GAAP financial measures to the
most directly comparable GAAP financial measures are included in
this earnings release. See Financial Statement Presentation and
Non-GAAP Financial Measures for more information.
Segment Highlights: Clinical Solutions
- Revenue of $190.2 million, up
46.1%, from $130.2 million from the
three months ended March 31,
2021.
-
- Revenue excluding revenue from divested assets of $190.2 million, up 46.1%, from the three months
ended March 31, 2021.
- Adjusted EBITDA of $22.2 million
and $16.0 million for the three
months ended March 31, 2022 and 2021,
respectively.
-
- Adjusted EBITDA margin of 11.7% and 12.3% for the three months
ended March 31, 2022 and 2021,
respectively.
- Clinical Solutions Lives on Platform in our Performance suite
was 1.5 million with a Clinical Solutions Performance suite Average
PMPM of $38.07 and in our New Century
Health Technology and Services suite Lives on Platform was 16.7
million with a New Century Health Technology and Services suite
Average PMPM of $0.38 as of
March 31, 2022.
Segment Highlights: Evolent Health Services
- Revenue of $106.9 million, up
25.9%, from $84.8 million for the
three months ended March 31,
2021.
-
- Revenue excluding revenue from divested assets of $105.2 million, up 35.4% from the three months
ended March 31, 2021.
- Adjusted EBITDA of $8.2 million
and $5.9 million for the three months
ended March 31, 2022 and 2021,
respectively.
-
- Adjusted EBITDA margin of 7.7% and 7.0% for the three months
ended March 31, 2022 and 2021,
respectively.
- Evolent Health Services Lives on Platform was 2.1 million with
a Evolent Health Services Average PMPM of $19.17 as of March 31,
2022.
Reported Results
Evolent Health, Inc. reported the following results in
accordance with U.S. generally accepted accounting principles
("GAAP"):
- Revenue of $297.1 million and
$215.1 million for the three months
ended March 31, 2022 and 2021,
respectively.
- Cost of revenue of $219.7 million
and $157.8 million for the three
months ended March 31, 2022 and 2021,
respectively.
- Selling, general and administrative expenses of $58.9 million and $58.6
million for the three months ended March 31, 2022 and 2021, respectively.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(5.4) million and
$(9.8) million for the three months
ended March 31, 2022 and 2021,
respectively.
-
- Net loss margin of (1.8)% and (4.6)% for the three months ended
March 31, 2022 and 2021,
respectively.
- Loss attributable to common shareholders of Evolent Health,
Inc., per basic and diluted share, of $(0.06) and $(0.12)
for the three months ended March 31,
2022 and 2021, respectively.
Total cash and cash equivalents was $210.2 million as of March
31, 2022.
Adjusted Results
- Adjusted cost of revenue of $218.5
million and $157.1 million for
the three months ended March 31, 2022
and 2021, respectively.
- Adjusted selling, general and administrative expenses of
$54.3 million and $43.0 million for the three months ended
March 31, 2022 and 2021,
respectively.
- Adjusted EBITDA of $24.3 million
and $14.9 million for the three
months ended March 31, 2022 and 2021,
respectively.
-
- Adjusted EBITDA margin of 8.2% and 6.9% for the three months
ended March 31, 2022 and 2021,
respectively.
- Adjusted income (loss) attributable to common shareholders of
$10.4 million and $(1.2) million for the three months ended
March 31, 2022 and 2021,
respectively.
- Adjusted income (loss) per share attributable to common
shareholders of $0.12 and
$(0.01) for the three months ended
March 31, 2022 and 2021,
respectively.
Business Outlook
Second Quarter 2022 Guidance
For the three months ending June 30,
2022, revenue is expected to be in the range of
approximately $290.0 million to
$305.0 million. Adjusted EBITDA is
expected to be in the range of approximately $18.0 million to $23.0
million.
Full Year 2022 Guidance
Revenue for the year ending December 31,
2022 is expected to be in the range of approximately
$1.16 billion to $1.21 billion. Adjusted EBITDA is expected to be
in the range of approximately $85.0
million to $95.0 million.
This "Business Outlook" section contains forward-looking
statements, and actual results may differ materially. Factors that
may cause actual results to differ materially from our current
expectations are set forth below in "Forward Looking Statements -
Cautionary Language" and Evolent Health, Inc.'s filings with the
Securities and Exchange Commission ("SEC").
Additional Outlook Information
Cash deployed for software development is expected to be in the
range of $25 million - $30 million for the year ended December 31, 2022.
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a
conference call to discuss its first quarter performance this
evening, May 4, 2022, at 5:00 p.m.,
Eastern Time. To listen to a live broadcast via the internet
and view the accompanying materials, please visit the Company's
Investor Relations website at http://ir.evolenthealth.com. To
participate by telephone, dial 855.940.9467 or 412.317.6034 for
international callers, and ask to join the "Evolent Health call."
Participants are advised to dial in at least fifteen minutes prior
to the call to register. The call will be archived on the company's
website for one week and will be available beginning later this
evening. Evolent Health invites all interested parties to attend
the conference call.
About Evolent Health
Evolent Health (NYSE: EVH) delivers proven clinical and
administrative solutions that improve whole-person health while
making health care simpler and more affordable. Our solutions
encompass total cost of care management, specialty care management,
and administrative simplification. Evolent serves a national base
of leading payers and providers, is the first company to receive
the National Committee for Quality Assurance's Population Health
Program Accreditation, and is consistently recognized as a top
place to work in health care nationally. Learn more about how
Evolent is changing the way health care is delivered by visiting
evolenthealth.com.
Contacts:
Seth Frank
Investor Relations
sfrank@evolenthealth.com
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined
in accordance with GAAP, we present and discuss Revenue Excluding
Divested Assets, Adjusted Cost of Revenue, Adjusted Selling,
General and Administrative Expenses, Adjusted Depreciation and
Amortization Expenses, Adjusted Total Operating Expenses, Adjusted
Operating Income (Loss), Adjusted EBITDA, Adjusted Earnings (Loss)
Available to Common Shareholders and Adjusted Earnings (Loss) per
Share Available to Common Shareholders, which are all non-GAAP
financial measures, as supplemental measures to help investors
evaluate our fundamental operational performance.
Adjusted Cost of Revenue and Adjusted Selling, General and
Administrative Expenses are defined as cost of revenue and selling,
general and administrative expenses, respectively, adjusted to
exclude the impact of stock-based compensation expenses, severance
costs, amortization of contract cost assets recorded as a result of
a one-time ASC 606 transition adjustment, acquisition-related costs
related to acquisitions and business combinations, securities
offerings, discontinued operations, strategy and shareholder
advisory services and certain one-time adjustments. Management uses
Adjusted Cost of Revenue and Adjusted Selling, General and
Administrative Expenses as supplemental performance measures, which
are also useful to investors, because they facilitate an
understanding of our long-term operational costs while removing the
effect of costs that are not expected to reoccur frequently (e.g.
acquisition-related costs) and non-cash (e.g. stock-based
compensation expenses) in nature. Additionally, these supplemental
performance measures facilitate understanding a breakdown of our
Adjusted Total Operating Expenses. Adjustments for
acquisition-related costs incurred generally represent professional
service fees and direct expenses related to acquisitions. Because
we do not acquire businesses on a predictable cycle, we do not
consider the amount of acquisition-related costs to be a
representative component of the day-to-day operating performance of
our business.
Adjusted Depreciation and Amortization Expenses is defined as
depreciation and amortization expenses adjusted to exclude the
impact of amortization expenses related to intangible assets
acquired through asset acquisitions and business combinations.
Management uses Adjusted Depreciation and Amortization Expenses as
a supplemental performance measure because it reflects a complete
view of the operational results. The measure is also useful to
investors because it facilitates understanding a breakdown of our
Adjusted Total Operating Expenses.
Adjusted Total Operating Expenses is defined as the sum of
Adjusted Cost of Revenue, Adjusted Selling, General and
Administrative Expenses and Adjusted Depreciation and Amortization
Expenses, and reflects the adjustments made in those non-GAAP
measures. Adjusted Total Operating Expenses is further adjusted to
exclude the impact of (gain) loss on disposal of assets and items
arising from acquisitions and business combinations, such as
changes in fair value of contingent consideration.
Adjusted Operating Income (Loss) is defined as Adjusted Revenue
less Adjusted Total Operating Expenses, and reflects the
adjustments made in those non-GAAP measures. Management uses
Adjusted Total Operating Expenses and Adjusted Operating Income
(Loss) because the removal of acquisition costs, one-time or
non-cash items (e.g. depreciation, amortization and stock-based
compensation expenses) allows us to focus on operational
performance, and believes these measures are useful to investors
because they give investors insight into our core operating
performance.
Adjusted EBITDA is defined as net loss attributable to common
shareholders of Evolent Health, Inc. before interest income,
interest expense, provision for income taxes, depreciation and
amortization expenses, adjusted to exclude gain on transfer of
membership, loss on repayment of debt, gain from equity method
investees, changes in fair value of contingent consideration, other
income (expense), net, repositioning costs, stock-based
compensation expense, severance costs, amortization of contract
cost assets, strategy and shareholder advisory services,
acquisition-related costs and gain from discontinued
operations.
Management uses Adjusted EBITDA as a supplemental performance
measure because the removal of acquisition-related costs, one-time
or non-cash items (e.g. depreciation, amortization and stock-based
compensation expenses) allows us to focus on operational
performance. We believe that this measure is also useful to
investors because it allows further insight into the period over
period operational performance in a manner that is comparable to
other organizations in our industry and in the market in
general.
Adjusted EBITDA Margin is as defined Adjusted EBITDA divided by
Revenue. Management uses Adjusted EBITDA margin as a supplemental
performance measure because it allows the investor to understand
operational performance compared to revenues over time. We believe
that this measure is also useful to investors because it allows
further insight into the period over period operational performance
in a manner that is comparable to other organizations in our
industry and in the market in general.
Adjusted Earnings (Loss) Available to Common Shareholders is
defined as net loss attributable to common shareholders of Evolent
Health, Inc. adjusted to exclude gain from equity method investees,
other income (expense), net, gain on transfer of membership, loss
on repayment of debt, changes in fair value of contingent
consideration, purchase accounting adjustments, repositioning
costs, stock-based compensation expenses, severance costs,
amortization of contract cost assets recorded as a result of a
one-time ASC 606 transition adjustment, gain from discontinued
operations, strategy and shareholder advisory services and
acquisition-related costs.
Adjusted Earnings (Loss) per Share Available to Common
Shareholders is defined as Adjusted Earnings (Loss) Available to
Common Shareholders divided by Weighted-Average Common Shares, and
reflects the adjustments made in those non-GAAP measures.
Management uses Adjusted Earnings (Loss) Available to Common
Shareholders and Adjusted Earnings (Loss) per Share Available to
Common Shareholders because excluding non-cash items (e.g.
depreciation, amortization and stock-based compensation expenses)
allows us to focus on operational performance. We believe that
these measures are also useful to investors for the same
reason.
Revenue Excluding Divested Assets is defined as the sum of
revenue, less revenue from our divested health plan assets of
Passport, Lighthouse and Miami Children's when divested. Management
uses Total Revenue Excluding Divested Assets as a supplemental
performance measure because it reflects our on-going operational
results. The measure is useful to investors because it reflects the
current view of our operational performance in line with how we
generate our long-term forecasts.
These adjusted measures do not represent and should not be
considered as alternatives to GAAP measurements, and our
calculations thereof may not be comparable to similarly entitled
measures reported by other companies. A reconciliation of these
adjusted measures to their most comparable GAAP financial measures
is presented in the tables below. We believe these measures are
useful across time in evaluating our fundamental core operating
performance.
Lives on Platform and Per Member Per Month ("PMPM")
Fee
Total Lives on Platform are calculated by summing our Evolent
Health Services Lives on Platform and our Clinical Solutions Lives
on Platform. Evolent Health Services Lives on Platform are
calculated by summing members on our value-based care and
comprehensive health plan administrative platform. Clinical
Solutions Lives on Platform are calculated by summing the Clinical
Solutions Lives on Platform in our Performance suite and New
Century Health Technology and Services suite Lives on Platform.
Clinical Solutions Lives on Platform in our Performance suite are
calculated by summing members covered for oncology specialty care
services and members covered for cardiology specialty care services
for contracts not under ASO arrangements. New Century Health
Technology and Services suite Lives on Platform are calculated by
summing members covered for oncology specialty care services,
members covered for cardiology specialty care services and members
covered for advance care planning services for contracts under ASO
arrangements. Members covered for more than one category are
counted in each category.
Evolent Health Services average per member per month ("PMPM")
fee is defined as platform and operations revenue pertaining to the
Evolent Health Services segment during the period reported divided
by the average of the beginning and ending Evolent Health Services
segment membership during the period reported divided by the number
of months in the period. Clinical Solutions Performance suite
Average PMPM fee is defined as platform and operations services
revenue pertaining to our Clinical Solutions Performance suite
during the period reported divided by the average of the beginning
and ending Clinical Solutions Performance suite membership during
the period reported divided by the number of months in the period.
New Century Health Technology and Services suite Average PMPM fee
is defined as platform and operations revenue pertaining to the New
Century Health Technology and Services suite during the period
reported divided by the average of the beginning and ending New
Century Health Technology and Services suite membership during the
period reported divided by the number of months in the period.
Management uses lives on platform and PMPM fees because we
believe that they provide insight into the unit economics of our
services. We believe that these measures are also useful to
investors because they allow further insight into the period over
period operational performance. We believe that these measures are
also useful to investors because they allow further insight into
the period over period operational performance.
Evolent Health,
Inc.
Consolidated
Statements of Operations and Comprehensive Income
(Loss)
(unaudited, in
thousands, except per share data)
|
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
Revenue
|
$ 297,057
|
|
$ 215,071
|
|
|
|
|
Expenses
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization expenses presented
separately below)
|
219,739
|
|
157,832
|
Selling, general and
administrative expenses
|
58,932
|
|
58,591
|
Depreciation and
amortization expenses
|
15,106
|
|
15,187
|
Change in fair value of
contingent consideration
|
6,078
|
|
(594)
|
Total operating expenses
|
299,855
|
|
231,016
|
Operating loss
|
(2,798)
|
|
(15,945)
|
Interest income
|
117
|
|
123
|
Interest expense
|
(2,241)
|
|
(6,337)
|
Gain from equity method investees
|
596
|
|
7,783
|
Gain on transfer of membership
|
—
|
|
22,969
|
Loss on repayment of debt
|
—
|
|
(19,158)
|
Other income (expense), net
|
178
|
|
(14)
|
Loss from continuing operations
before income taxes
|
(4,148)
|
|
(10,579)
|
Provision for income
taxes
|
1,202
|
|
611
|
Loss from continuing
operations
|
(5,350)
|
|
(11,190)
|
Income from discontinued
operations, net of tax (1)
|
—
|
|
1,383
|
Net
loss attributable to common shareholders of Evolent Health,
Inc.
|
$
(5,350)
|
|
$
(9,807)
|
|
|
|
|
Loss per common share
|
|
|
|
Basic and
diluted
|
|
|
|
Continuing operations
|
$
(0.06)
|
|
$
(0.13)
|
Discontinued operations
|
—
|
|
0.01
|
Basic and diluted loss
per share attributable to common shareholders of Evolent Health,
Inc.
|
$
(0.06)
|
|
$
(0.12)
|
|
|
|
|
Weighted-average common shares
outstanding
|
|
|
|
Basic and
diluted
|
89,509
|
|
84,670
|
|
|
|
|
Comprehensive loss
|
|
|
|
Net loss
|
$
(5,350)
|
|
$
(9,807)
|
Other comprehensive
loss, net of taxes, related to:
|
|
|
|
Foreign currency translation adjustment
|
(132)
|
|
(31)
|
Total comprehensive loss
attributable to common shareholders of Evolent Health,
Inc.
|
$
(5,482)
|
|
$
(9,838)
|
————————
|
(1)
Includes $1.9 million gain on disposal of discontinued
operations for the three months ended March 31, 2021.
|
Evolent Health,
Inc.
Condensed
Consolidated Balance Sheets
(in thousands,
unaudited)
|
|
|
March 31,
2022
|
|
December 31,
2021
|
Cash and cash
equivalents
|
$
210,158
|
|
$
266,280
|
Restricted cash and
restricted investments
|
52,628
|
|
88,662
|
Total current
assets
|
463,388
|
|
523,960
|
Intangible assets,
net
|
272,213
|
|
279,784
|
Goodwill
|
426,274
|
|
426,297
|
Total assets
|
1,339,149
|
|
1,419,458
|
|
|
|
|
Accounts
payable
|
64,036
|
|
96,084
|
Debt, net of
discount
|
282,598
|
|
215,676
|
Total
liabilities
|
727,940
|
|
725,825
|
|
|
|
|
Total shareholders'
equity
|
611,209
|
|
693,633
|
Total liabilities and
shareholders' equity
|
1,339,149
|
|
1,419,458
|
Evolent Health,
Inc.
Condensed
Consolidated Statements of Cash Flows
(in thousands,
unaudited)
|
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
Net cash and restricted cash used in continuing
operations
|
|
|
|
Net cash and restricted
cash used in operating activities
|
$
(57,442)
|
|
$
(48,163)
|
Net cash and restricted
cash provided by investing activities
|
16,766
|
|
45,951
|
Net cash and restricted
cash used in financing activities
|
(51,376)
|
|
(55,584)
|
Effect of exchange rate
on cash and cash equivalents and restricted cash
|
(104)
|
|
1
|
Net decrease in cash
and cash equivalents and restricted cash
|
(92,156)
|
|
(57,795)
|
Cash and cash
equivalents and restricted cash as of beginning-of-period
(1)
|
354,942
|
|
361,564
|
Cash and cash equivalents and restricted cash as of
end-of-period (1)
|
$
262,786
|
|
$
303,769
|
|
|
|
|
Net cash and restricted cash provided by (used in)
discontinued operations
|
|
|
|
Cash flows provided by
operating activities
|
$
—
|
|
$
5,002
|
Cash flows used in
investing activities
|
—
|
|
(2,494)
|
————————
|
(1) As a
result of the closing of the sale of True Health during the first
quarter of 2021, the consolidated statement of operations and
related
financial information reflect the
Company's operations and assets and liabilities of True Health as
discontinued operations. Cash flows and
comprehensive income have not been
adjusted and are included in the consolidated statements of cash
flows and consolidated statements
of comprehensive income (loss) for the
three months ended March 31, 2021.
|
EvolentHealth,
Inc.
Reconciliation of
Adjusted Results of Operations
(in thousands,
unaudited)
|
|
|
For the Three Months Ended March 31,
2022
|
|
|
For the Three Months Ended March 31,
2021
|
|
Evolent Health, Inc.
as Reported
|
|
Evolent Health, Inc.
as Adjusted
|
|
Evolent
|
|
|
|
Evolent
|
|
|
Evolent
|
|
|
|
Evolent
|
|
|
|
Health, Inc.
|
|
|
|
Health, Inc.
|
|
|
Health, Inc.
|
|
|
|
Health, Inc.
|
|
Change Over Prior Period
|
|
Change Over Prior Period
|
|
as Reported
|
|
Adjustments
|
|
as Adjusted
|
|
|
as Reported
|
|
Adjustments
|
|
as Adjusted
|
|
$
|
|
%
|
|
$
|
|
%
|
Revenue
|
$
297,057
|
|
$
—
|
|
$
297,057
|
|
|
$
215,071
|
|
$
—
|
|
$
215,071
|
|
$
81,986
|
|
38.1%
|
|
$
81,986
|
|
38.1%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of
depreciation and amortization
expenses presented separately
below) (1)
|
219,739
|
|
(1,195)
|
|
218,544
|
|
|
157,832
|
|
(689)
|
|
157,143
|
|
61,907
|
|
39.2%
|
|
61,401
|
|
39.1%
|
Selling, general and
administrative
expenses (2)
|
58,932
|
|
(4,674)
|
|
54,258
|
|
|
58,591
|
|
(15,570)
|
|
43,021
|
|
341
|
|
0.6%
|
|
11,237
|
|
26.1%
|
Depreciation and
amortization
expenses (3)
|
15,106
|
|
(4,569)
|
|
10,537
|
|
|
15,187
|
|
(5,906)
|
|
9,281
|
|
(81)
|
|
(0.5)%
|
|
1,256
|
|
13.5%
|
Change in fair value of
contingent
consideration
|
6,078
|
|
(6,078)
|
|
—
|
|
|
(594)
|
|
594
|
|
—
|
|
6,672
|
|
1,123.2%
|
|
—
|
|
—%
|
Total operating expenses
|
299,855
|
|
(16,516)
|
|
283,339
|
|
|
231,016
|
|
(21,571)
|
|
209,445
|
|
68,839
|
|
29.8%
|
|
73,894
|
|
35.3%
|
Operating income
(loss)
|
$
(2,798)
|
|
$
16,516
|
|
$
13,718
|
|
|
$
(15,945)
|
|
$
21,571
|
|
$
5,626
|
|
$
13,147
|
|
82.5%
|
|
$
8,092
|
|
143.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a
percentage of total revenue
|
100.9%
|
|
|
|
95.4%
|
|
|
107.4%
|
|
|
|
97.4%
|
|
|
|
|
|
|
|
|
|
————
|
(1)
|
Adjustments to cost of
revenue include $0.8 million and $0.6 million in stock-based
compensation expense, $0.4 million and $0.1 million related to the
amortization of contract cost assets recorded as a result of the
one-time ASC 606 transition adjustment for the three months ended
March 31, 2022 and 2021, respectively.
|
(2)
|
Adjustments to selling,
general and administrative expenses include $4.5 million and $3.1
million in stock-based compensation expense and $0.5 million and
$2.2 million of acquisition-related costs resulting from
acquisitions and business combinations for the three months ended
March 31, 2022 and 2021, respectively. Adjustments for the three
months ended March 31, 2021 include $5.3 million of repositioning
costs and $5.0 million of strategy and shareholder advisory
expenses.
|
(3)
|
Adjustments to
depreciation and amortization expenses of approximately $4.6
million and $5.9 million for the three months ended March 31, 2022
and 2021, respectively, relate to amortization of intangible assets
acquired via asset acquisitions and business
combinations.
|
Evolent Health,
Inc.
Segment
Results
(in thousands,
unaudited)
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Intersegment Eliminations
|
|
Subtotal
|
|
Corporate (1)
|
|
Consolidated
Total
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2022
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
107,318
|
|
$
190,199
|
|
$
(460)
|
|
$ 297,057
|
|
$
—
|
|
$
297,057
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2021
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
85,286
|
|
$
130,223
|
|
$
(438)
|
|
$ 215,071
|
|
$
—
|
|
$
215,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Subtotal
|
|
Corporate (1)
|
|
Consolidated
Total
|
|
|
For the Three Months Ended March 31,
2022
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 8,217
|
|
$
22,196
|
|
$
30,413
|
|
$
(6,158)
|
|
$
24,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
2021
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 5,942
|
|
$
15,976
|
|
$
21,918
|
|
$
(7,011)
|
|
$
14,907
|
|
|
————————
|
(1)
Corporate includes various finance, human resources, legal,
executive and other corporate infrastructure expenses.
|
Evolent Health,
Inc.
Reconciliation of
Adjusted EBITDA to Net Loss
Attributable to
Common Shareholders of Evolent Health,
Inc.
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
Net loss attributable to common shareholders of
Evolent Health, Inc.
|
$
(5,350)
|
|
$
(9,807)
|
Net loss margin
|
(1.8)%
|
|
(4.6)%
|
|
|
|
|
Less:
|
|
|
|
Interest income
|
117
|
|
123
|
Interest expense
|
(2,241)
|
|
(6,337)
|
Provision for income taxes
|
(1,202)
|
|
(611)
|
Depreciation and amortization expenses
|
(15,106)
|
|
(15,187)
|
Gain on transfer of membership
|
—
|
|
22,969
|
Loss on repayment of debt
|
—
|
|
(19,158)
|
Gain from equity method investees
|
596
|
|
7,783
|
Change in fair value of contingent consideration
|
(6,078)
|
|
594
|
Other income (expense), net
|
178
|
|
(14)
|
Repositioning costs
|
—
|
|
(5,380)
|
Stock-based compensation expense
|
(5,346)
|
|
(3,706)
|
Severance costs
|
(39)
|
|
(52)
|
Amortization of contract cost assets
|
(27)
|
|
(127)
|
Strategy and shareholder advisory expenses
|
—
|
|
(5,000)
|
Acquisition-related costs
|
(457)
|
|
(1,994)
|
Gain from discontinued operations (1)
|
—
|
|
1,383
|
Adjusted EBITDA
|
$ 24,255
|
|
$ 14,907
|
|
|
|
|
Adjusted EBITDA margin
|
8.2%
|
|
6.9%
|
————————
|
(1)
Includes $1.9 million gain on disposal of discontinued
operations for the three months ended March 31, 2021.
|
Evolent Health,
Inc.
Reconciliation of
Adjusted EBITDA to Net Loss
Attributable to
Common Shareholders of Evolent Health,
Inc.
(in thousands, except
per share data)
(unaudited)
|
|
|
Evolent Health
Services
|
|
Clinical
|
|
Corporate
|
|
For the Three Months
Ended March 31,
|
|
For the Three Months
Ended March 31,
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net loss attributable to common
shareholders of Evolent Health, Inc.
|
$
(2,243)
|
|
$ 13,052
|
|
$ 14,452
|
|
$ 11,143
|
|
$
(17,559)
|
|
$
(34,002)
|
Net income margin
|
(2.1)%
|
|
15.3%
|
|
7.6%
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
—
|
|
—
|
|
—
|
|
—
|
|
117
|
|
123
|
Interest expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,241)
|
|
(6,337)
|
Benefit (provision) for income taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,202)
|
|
(611)
|
Depreciation and amortization
expenses
|
(9,624)
|
|
(11,068)
|
|
(5,482)
|
|
(4,119)
|
|
—
|
|
—
|
Gain (loss) from equity method
investees
|
—
|
|
—
|
|
—
|
|
—
|
|
596
|
|
7,783
|
Gain on transfer of membership
|
—
|
|
22,969
|
|
—
|
|
—
|
|
—
|
|
—
|
Loss (gain) on disposal of assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Change in fair value of contingent
consideration
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,078)
|
|
594
|
Other income (expense), net
|
—
|
|
—
|
|
—
|
|
—
|
|
178
|
|
(14)
|
Loss on extinguishment of debt
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(19,158)
|
Repositioning costs
|
—
|
|
(5,380)
|
|
—
|
|
—
|
|
—
|
|
—
|
Stock-based compensation
expense
|
(820)
|
|
(667)
|
|
(1,797)
|
|
(489)
|
|
(2,729)
|
|
(2,550)
|
Severance costs
|
—
|
|
—
|
|
—
|
|
—
|
|
(39)
|
|
(52)
|
Amortization of contract cost
assets
|
(16)
|
|
(127)
|
|
—
|
|
—
|
|
(11)
|
|
—
|
Strategy and shareholder advisory
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,000)
|
Acquisition-related costs
|
—
|
|
—
|
|
(465)
|
|
(225)
|
|
8
|
|
(1,769)
|
Gain from discontinued operations
|
—
|
|
1,383
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted EBITDA
|
$
8,217
|
|
$
5,942
|
|
$ 22,196
|
|
$ 15,976
|
|
$ (6,158)
|
|
$ (7,011)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
7.7%
|
|
7.0%
|
|
11.7%
|
|
12.3%
|
|
|
|
|
Evolent Health,
Inc.
Reconciliation of
Adjusted Earnings (Loss) Available to Common
Shareholders to Net
Loss Attributable to Common Shareholders
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
Net Loss Attributable to Common Shareholders of
Evolent Health, Inc. (a)
|
$ (5,350)
|
|
$ (9,807)
|
Less:
|
|
|
|
Gain from equity method investees
|
596
|
|
7,783
|
Other expense, net
|
178
|
|
(14)
|
Gain on transfer of membership
|
—
|
|
22,969
|
Loss on repayment of debt
|
—
|
|
(19,158)
|
Change in fair value of contingent consideration
|
(6,078)
|
|
594
|
Purchase accounting adjustments
|
(4,569)
|
|
(5,906)
|
Repositioning costs
|
—
|
|
(5,380)
|
Stock-based compensation expense
|
(5,346)
|
|
(3,706)
|
Severance costs
|
(39)
|
|
(52)
|
Amortization of contract cost assets
|
(27)
|
|
(127)
|
Gain from discontinued operations (1)
|
—
|
|
1,383
|
Strategy and shareholder advisory expenses
|
—
|
|
(5,000)
|
Acquisition-related costs
|
(457)
|
|
(1,994)
|
Adjusted Income (Loss) Attributable to Common
Shareholders (b)
|
$
10,392
|
|
$ (1,199)
|
|
|
|
|
Loss per Share Attributable to Common Shareholders -
Basic and Diluted (a) (2)
|
$
(0.06)
|
|
$
(0.12)
|
|
|
|
|
Adjusted Income (Loss) per Share Available to Common
Shareholders (b)
|
$
0.12
|
|
$
(0.01)
|
|
|
|
|
Weighted-average common
shares - basic and diluted (2)
|
89,509
|
|
84,670
|
————————
|
(1)
Includes $1.9 million gain on disposal of discontinued
operations for the three months ended March 31, 2021.
|
(2) For
periods of net loss, shares used in both the basic and diluted
earnings per share calculation represent basic shares as using
diluted
shares would be
anti-dilutive.
|
Evolent Health,
Inc.
Reconciliation of
Revenue from Divested Assets
to
Revenue
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three Months
Ended March 31,
|
|
2022
|
|
2021
|
Total
revenue
|
$
297,057
|
|
$
215,071
|
Less:
|
|
|
|
Revenue from divested assets
|
1,658
|
|
7,211
|
Total revenue excluding
divested assets
|
295,399
|
|
207,860
|
|
|
|
|
Clinical Solutions
revenue
|
$
190,199
|
|
$
130,223
|
Less:
|
|
|
|
Revenue from divested assets
|
—
|
|
71
|
Clinical Solutions revenue
excluding divested assets
|
190,199
|
|
130,152
|
|
|
|
|
Evolent Health Services
revenue
|
106,858
|
|
84,848
|
Less:
|
|
|
|
Revenue from divested assets
|
1,658
|
|
7,140
|
Evolent Health Services revenue
excluding divested assets
|
105,200
|
|
77,708
|
Total revenue excluding
divested assets
|
$
295,399
|
|
$
207,860
|
Evolent Health,
Inc.
Guidance
Reconciliation
(in thousands,
unaudited)
|
|
|
For the Three
Months Ended
June 30, 2022
|
|
For the Year Ended December 31,
2022
|
Net loss attributable to common shareholders of
Evolent Health, Inc.
|
$
(7,625)
|
|
$
(21,690)
|
Less:
|
|
|
|
Interest income
|
250
|
|
867
|
Interest expense
|
(2,500)
|
|
(9,741)
|
Income tax expense
|
—
|
|
(1,202)
|
Depreciation and amortization expenses
|
(15,250)
|
|
(60,811)
|
Gain from equity method investees
|
—
|
|
596
|
Other income (expense), net
|
—
|
|
345
|
Change in contingent consideration
|
(4,100)
|
|
(16,300)
|
Stock-based compensation expense
|
(5,500)
|
|
(21,846)
|
Severance costs
|
—
|
|
(39)
|
Amortization of contract cost assets
|
(25)
|
|
(102)
|
Acquisition-related costs
|
(1,000)
|
|
(3,457)
|
Adjusted EBITDA
|
$
20,500
|
|
$
90,000
|
|
The guidance
reconciliation provided above reconciles the midpoint of the
respective guidance ranges to the most
comparable GAAP measure.
|
FORWARD-LOOKING STATEMENTS - CAUTIONARY
LANGUAGE
Certain statements made in this report and in other written or
oral statements made by us or on our behalf are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 ("PSLRA"). A forward-looking statement is a
statement that is not a historical fact and, without limitation,
includes any statement that may predict, forecast, indicate or
imply future results, performance or achievements, and may contain
words like: "believe," "anticipate," "expect," "estimate," "aim,"
"predict," "potential," "continue," "plan," "project," "will,"
"should," "shall," "may," "might" and other words or phrases with
similar meaning in connection with a discussion of future operating
or financial performance. In particular, these include statements
relating to our ability to grow our impact significantly throughout
this year and beyond, future actions, trends in our businesses,
prospective services, new partner additions/expansions, our
guidance and business outlook and future performance or financial
results, and the closing of pending transactions and the outcome of
contingencies, such as legal proceedings. We claim the protection
afforded by the safe harbor for forward-looking statements provided
by the PSLRA.
These statements are only predictions based on our current
expectations and projections about future events. Forward-looking
statements involve risks and uncertainties that may cause actual
results, level of activity, performance or achievements to differ
materially from the results contained in the forward-looking
statements. Risks and uncertainties that may cause actual
results to vary materially, some of which are described within the
forward-looking statements, include, among others:
- the significant portion of revenue we derive from our largest
partners, and the potential loss, non-renewal, termination or
renegotiation of our relationship or contract with any significant
partner, or multiple partners in the aggregate;
- evolution in the market for value-based care;
- uncertainty in the health care regulatory framework, including
the potential impact of policy changes;
- our ability to offer new and innovative products and
services;
- risks related to completed and future acquisitions,
investments, alliances and joint ventures, divert management
resources, or result in unanticipated costs or dilute our
stockholders;
- the financial benefits we expect to receive as a result of the
sale of certain assets of Passport may not be realized;
- the growth and success of our partners, which is difficult to
predict and is subject to factors outside of our control, including
governmental funding reductions and other policy changes,
enrollment numbers for our partners' plans, premium pricing
reductions, selection bias in at-risk membership and the ability to
control and, if necessary, reduce health care costs;
- risks relating to our ability to maintain profitability for our
total cost of care and New Century Health's performance-based
contracts and products, including capitation and risk-bearing
contracts;
- our ability to effectively manage our growth and maintain an
efficient cost structure, and to successfully implement cost
cutting measures;
- changes in general economic conditions nationally and
regionally in our markets, including inflation and economic and
business conditions and the impact thereof on the economy resulting
from the COVID-19 pandemic and other public health
emergencies;
- our ability to recover the significant upfront costs in our
partner relationships;
- our ability to attract new partners and successfully capture
new growth opportunities;
- the increasing number of risk-sharing arrangements we enter
into with our partners;
- our ability to estimate the size of our target markets;
- our ability to maintain and enhance our reputation and brand
recognition;
- consolidation in the health care industry;
- competition which could limit our ability to maintain or expand
market share within our industry;
- risks related to governmental payer audits and actions,
including whistleblower claims;
- our ability to partner with providers due to exclusivity
provisions in our contracts;
- risks related to our offshore operations;
- our ability to contain health care costs, implement increases
in premium rates on a timely basis, maintain adequate reserves for
policy benefits or maintain cost effective provider
agreements;
- our dependency on our key personnel, and our ability to
attract, hire, integrate and retain key personnel;
- the impact of additional goodwill and intangible asset
impairments on our results of operations;
- our indebtedness, our ability to service our indebtedness, and
our ability to obtain additional financing;
- our ability to achieve profitability in the future;
- the impact of litigation, including the ongoing class action
lawsuit;
- material weaknesses in the future may impact our ability to
conclude that our internal control over financial reporting is not
effective and we may be unable to produce timely and accurate
financial statements;
- restrictions and penalties as a result of privacy and data
protection laws;
- data loss or corruption due to failures or errors in our
systems and service disruptions at our data centers;
- restrictions and penalties as a result of privacy and data
protection laws;
- adequate protection of our intellectual property, including
trademarks;
- any alleged infringement, misappropriation or violation of
third-party proprietary rights;
- our use of "open source" software;
- our ability to protect the confidentiality of our trade
secrets, know-how and other proprietary information;
- our reliance on third parties and licensed technologies;
- our ability to use, disclose, de-identify or license data and
to integrate third-party technologies;
- our reliance on Internet infrastructure, bandwidth providers,
data center providers, other third parties and our own systems for
providing services to our partners;
- our reliance on third-party vendors to host and maintain our
technology platform;
- our obligations to make payments to certain of our pre-IPO
investors for certain tax benefits we may claim in the future;
- our ability to utilize benefits under the tax receivables
agreement described herein;
- our obligations to make payments under the tax receivables
agreement that may be accelerated or may exceed the tax benefits we
realize;
- the terms of agreements between us and certain of our pre-IPO
investors;
- the conditional conversion features of the 2024 and 2025
convertible notes, which, if triggered, could require us to settle
the 2024 or 2025 convertible notes in cash;
- the potential volatility of our Class A common stock
price;
- the potential decline of our Class A common stock price if a
substantial number of shares are sold or become available for
sale;
- provisions in our second amended and restated certificate of
incorporation and third amended and restated by-laws and provisions
of Delaware law that discourage or
prevent strategic transactions, including a takeover of us;
- the ability of certain of our investors to compete with us
without restrictions;
- provisions in our second amended and restated certificate of
incorporation which could limit our stockholders' ability to obtain
a favorable judicial forum for disputes with us or our directors,
officers or employees; and
- our intention not to pay cash dividends on our Class A common
stock.
The risks included here are not exhaustive. Although we believe
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity,
performance or achievements. Our Annual Report on Form 10-K
for the year ended December 31, 2021
(the "2021 Form 10-K") and other documents filed with the SEC
include additional factors that could affect our businesses and
financial performance. Moreover, we operate in a rapidly changing
and competitive environment. New risk factors emerge from
time to time, and it is not possible for management to predict all
such risk factors.
Further, it is not possible to assess the effect of all risk
factors on our businesses or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results. In addition, we disclaim any obligation to update
any forward-looking statements to reflect events or circumstances
that occur after the date of this report.
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SOURCE Evolent Health