• Q1 Revenue: $483.6 million, impacted by contractual changes and true-ups.

• Adjusted EBITDA Impact: Favorable net impact of $0.4 million from prior year development.

• Annual Revenue Guidance: Between $2.06 billion and $2.11 billion.

• Adjusted EBITDA Guidance for 2025: Between $135 million and $165 million.

• Q2 Revenue Guidance: Between $440 million and $470 million.

• Q2 Adjusted EBITDA Guidance: Between $33 million and $40 million.

• Cash and Liquidity: Ended Q1 with $247 million in cash and total liquidity over $300 million.

• Net Leverage Ratio: 4.1 times last 12-month adjusted EBITDA.

• Cash Flow from Operations: $4.6 million in Q1, with an expectation of $40 million for the rest of the year.

• Oncology Trend Assumption: 12% for April through December, despite Q1 being lower.

• New Revenue Agreements: Five new agreements expected to add $10 million in annualized revenue.

• Warning! GuruFocus has detected 2 Warning Signs with EVH.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Evolent Health Inc (NYSE:EVH) reported Q1 financial results at the high end of expectations, indicating a strong start to 2025.

• The company secured five new revenue agreements in Q1, expanding its reach in specialty condition management.

• Evolent Health Inc (NYSE:EVH) successfully renewed a major contract with one of its top 10 customers through 2030, showcasing strong customer retention.

• The Performance Suite pipeline is the largest in the company's history, indicating robust demand for its solutions.

• Evolent Health Inc (NYSE:EVH) is making significant progress in AI-led automation, enhancing clinician satisfaction and productivity.

Negative Points

• Revenue was impacted by contractual changes, resulting in a shift from gross to net accounting for two Performance Suite contracts.

• The company experienced a retroactive revenue impact of minus $12.9 million due to final capitation rate adjustments.

• Evolent Health Inc (NYSE:EVH) anticipates a modest increase in net debt across the April to December period.

• The oncology cost trend is running below the expected 12%, but the company has not yet adjusted its guidance to reflect this.

• Potential policy changes, such as Medicaid work requirements, could impact adjusted EBITDA by $8 million to $10 million.

Q & A Highlights

Q: Given the sequential decline in Performance Suite PMPM due to a lower mix of MA revenue, is this PMPM level a good baseline going forward? A: John Johnson, CFO: This is a good baseline level for now. We have a large new Performance Suite go-live later this year in MA for oncology, which should cause it to tick back up slightly.