Evolent Health, Inc. (EVH) Q1 2025 Earnings Summary

Executive Summary

Q1 2025 revenue of $483.65M beat S&P Global consensus by ~5% (actual $483.65M vs $460.28M estimate*) on contract-related gross-to-net timing and launch true-ups; adjusted EPS of $0.06 missed consensus of ~$0.10 as GAAP net loss widened from a one-time loss on option exercise *.
Adjusted EBITDA of $36.86M rose sequentially and margin expanded to 7.6%, while oncology trend indicators ran modestly below the company’s 12% assumption; EVH reiterated Q2 and full‑year 2025 revenue and Adjusted EBITDA guidance .
Management announced five new revenue agreements across oncology, MSK, and imaging and launched an integrated oncology navigation solution; AI‑based “Auth Intel” processed >200K reviews, improving turnaround and productivity .
CFO flagged revenue mechanics: ~$55M one‑time gross revenue from a contract converting to net on Apr 1 and a ($12.9M) retro revenue true‑up (EBITDA‑neutral), with FY’25 revenue reduced by ~$33M (EBITDA‑neutral) from updated capitation rates .
Post‑quarter, EVH reiterated Q2 and FY Adjusted EBITDA and indicated top‑half Q2 EBITDA if favorable oncology trend persists through June, and secured optional non‑dilutive capital for 2025 converts (potential positive stock catalyst) .

What Went Well and What Went Wrong

What Went Well

Strong top‑line vs consensus and solid sequential profitability: Revenue $483.65M beat S&P consensus ($460.28M*) and Adjusted EBITDA improved sequentially to $36.86M (7.6% margin) *.
Oncology cost trend moderation and positive leading indicators: management saw Q1 oncology trend “modestly lower” than the 12% assumption; authorizations (leading indicator) were down vs forecast, with similar April patterns .
Commercial traction and innovation: five new revenue agreements, largest Performance Suite pipeline in firm history, and launch of integrated oncology navigation (expected live across 300K members by end‑May); quote: “our updated Performance Suite model…is getting great traction” .
- Quote (CEO): “We deployed our…Auth Intel AI solution on over 200,000 reviews…leading to higher clinician satisfaction, faster patient response times and enhanced productivity.”

What Went Wrong

GAAP net loss widened on non‑operational items: Net loss of $(72.25)M (−14.9% margin) was impacted by a $52.35M loss on option exercise and higher interest expense .
Year‑over‑year declines: Revenue fell vs Q1’24 due to structural shifts (gross‑to‑net) and true‑ups, and Adjusted EBITDA decreased YoY to $36.86M from $54.10M .
Performance Suite PMPM compression: Average PMPM declined to $15.57 (vs $21.19 YoY) due to mix (lower MA exposure from contractual changes), though “same‑store” PMPMs showed pricing strength; management expects some uplift later in 2025 with MA go‑lives .

Financial Results

P&L Summary vs Prior Periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$621.40	$646.54	$483.65
Net Loss ($USD Millions)	$(31.23)	$(30.62)	$(72.25)
Net Loss Margin (%)	(5.0)%	(4.7)%	(14.9)%
Adjusted EBITDA ($USD Millions)	$31.80	$22.61	$36.86
Adjusted EBITDA Margin (%)	5.1%	3.5%	7.6%
Adjusted EPS (Basic) ($)	$0.04	$(0.02)	$0.06

Actual vs S&P Global Consensus – Q1 2025

Metric	S&P Global Consensus	Actual	Surprise
Revenue ($USD Millions)	$460.28*	$483.65	+$23.37 (+5.1%)*
Primary EPS ($)	$0.096*	$0.06	−$0.036 (miss)*
EBITDA ($USD Millions)	$33.82*	$19.46*	−$14.36 (miss)*

Notes: Asterisks indicate values retrieved from S&P Global. Company reports Adjusted EBITDA of $36.86M (7.6% margin) for Q1 2025; S&P’s EBITDA definition may differ from company “Adjusted EBITDA,” which reconciles for items like stock comp, loss on option exercise, dividends/accretion on preferred, etc. *.

Operating KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Performance Suite Lives (000s)	6,916	7,145	6,486
Specialty Tech & Services Lives (000s)	74,192	75,161	77,079
Administrative Services Lives (000s)	1,258	1,203	1,213
Cases (count)	13	16	14
Avg Unique Members (000s)	41.444	40.712	40.628
Performance Suite Avg PMPM ($)	20.97	21.32	15.57
Spec. Tech & Services Avg PMPM ($)	0.38	0.37	0.36
Administrative Services Avg PMPM ($)	15.74	16.43	15.72
Revenue per Case ($)	3,113	3,073	2,947

Context: Q1 Performance Suite PMPM reflects lower MA mix from contract conversions to Technology & Services and a gross-to-net shift; management cited >20% YoY “same‑store” PMPM increases on the largest oncology contracts .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q2 2025	n/a	$440–$470	New
Adjusted EBITDA ($M)	Q2 2025	n/a	$33–$40	New
Revenue ($B)	FY 2025	$2.06–$2.11	$2.06–$2.11 (reiterated)	Maintained
Adjusted EBITDA ($M)	FY 2025	$135–$165	$135–$165 (reiterated)	Maintained
Capitalized software cash ($M)	FY 2025	~$35	~$35 (reiterated)	Maintained

Update after quarter: On June 20, EVH reiterated Q2 and full‑year Adjusted EBITDA and indicated potential for top‑half Q2 Adjusted EBITDA if favorable oncology trends continue; also secured optional non‑dilutive financing for 2025 converts .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Oncology cost trend	Q3: industry‑wide spike hurt EBITDA ; Q4: assumptions embedded in 2025 guide	Q1 trend modestly below 12% assumption; similar April indicators	Improving vs H2’24
Performance Suite model/risk corridors	Q4: signed amendments to improve 2025 P&L (+$115M YoY impact)	Narrow corridor model gaining traction; pipeline at record; not in corridor early in year	Constructive
AI/automation	Q3: launched initiatives (company-wide)	“Auth Intel” processed >200K reviews; faster turnaround, higher productivity	Scaling
Oncology navigation	Not explicitly launched in Q3/Q4 releases	Official launch; integrating protocols + OCP assets + Careology; live across ~300K members by end‑May	New growth vector
Revenue mechanics (gross→net, true‑ups)	Q4 guide included contract changes; Q1’25 guide set	+$55M one‑time gross revenue; ($12.9M) retro true‑up; FY revenue −$33M (all EBITDA‑neutral)	Transitional Q1
Policy/tariffs	Q3: macro headwinds; Q4: outlook reaffirmed	Tariffs: capitation rate resets mitigate impact; CMS/MSSP commentary seen as encouraging; Medicaid work requirements exposure <$10M EBITDA	Manageable

Management Commentary

Strategic posture: Focus on organic growth, profitability expansion, and capital allocation; Performance Suite pipeline “largest…in the firm’s history” with favorable early margin indicators .
Oncology strategy: Launching integrated navigation (protocols + OCP navigation/practice alignment + Careology app) to expand value pool (10–20% incremental savings estimate) and address Part A costs while enhancing quality and member experience .
AI execution: “Auth Intel” AI automation scaled to >200K reviews, improving speed and clinician satisfaction; company reiterates AI only used on approvals, not denials .
Capital allocation and liquidity: 1Q cash $246.5M; targeting debt paydown and cash generation; optional non‑dilutive capital for 2025 converts; expects cash >$85M YE 2025 after retiring 2025 converts .
Quotes:
- CEO: “Q1…at the high end of our expectations…we are reiterating our outlook for full year 2025” .
- CFO: “Q1 revenue…impacted by…+$55M one‑time gross revenue… and a ($12.9M) retroactive revenue impact…with favorable net EBITDA impact of $0.4M” .
- CFO: “Oncology trend…modestly lower than…12%…driven by modestly lower prevalence and strong clinical management” .

Q&A Highlights

PMPM baseline and mix: Lower MA mix post recontracting drives lower reported Performance Suite PMPM; current level a reasonable baseline, with MA oncology go‑live expected to lift PMPM later in 2025 .
Claims visibility and leading indicators: ~55–60% claims completion at quarter close; authorizations running below forecast; April indicators similar to Q1 .
Oncology navigation ROI: Navigation expected to increase savings pool by ~10–20%, especially on Part A, while improving member experience; supportive of both Tech & Services and Performance Suite models .
Performance Suite lives cadence: ~600K lives converted to Tech & Services; some additional reductions offset by other growth; annual repricing cadence captures acuity changes .
Policy/tariffs: Capitation resets mitigate potential pharma tariff impacts; Medicaid work requirements exposure estimated <$10M Adjusted EBITDA; MSSP commentary seen as supportive of value‑based care .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue beat by ~$23M (actual $483.65M vs $460.28M*); Primary EPS missed ($0.06 vs $0.096*). EBITDA comparisons are definition‑sensitive: company Adjusted EBITDA was $36.86M vs S&P EBITDA consensus of $33.82M*, while S&P’s “actual EBITDA” field shows $19.46M*, likely reflecting a non‑adjusted definition *.
Street revisions: With oncology trend running below plan and reiteration of Q2 and FY guidance, revenue/EPS models may tilt modestly higher on revenue and Adjusted EBITDA cadence; June 20 commentary implies Q2 Adjusted EBITDA potentially in the top half of the range if trends persist *.

Note: Asterisks indicate values retrieved from S&P Global.

Key Takeaways for Investors

Revenue beat with sequential margin expansion, while oncology trend moderation and strong selling environment underpin reiterated 2025 guide—constructive setup if Q2 confirms trend .
Expect Street focus on definitional EBITDA vs Adjusted EBITDA; trading narrative likely keys off Adjusted EBITDA and oncology trend disclosures rather than GAAP noise (e.g., option exercise loss) .
Contract mechanics distorted Q1 revenue (gross‑to‑net and true‑ups); effects were EBITDA‑neutral but lower FY revenue baseline by ~$33M—watch Q2 for clean run‑rate .
Oncology navigation + AI automation can expand addressable savings and improve provider/member experience—potentially a commercial differentiator and gross margin lever into 2026 .
Capital/liquidity risk management progressing (optional financing for 2025 converts; YE cash >$85M after retirement) reducing near‑term balance sheet overhang .
Near‑term catalyst: Q2 print and claims completion could validate lower oncology trend and position EVH toward top half of EBITDA guidance (management commentary) .
Watch PMPM mix shifts and MA oncology go‑live timing in 2H for potential uplift to reported PMPM and margins .

Appendix: Additional Financial Details

Cash and cash equivalents: $246.5M as of Mar 31, 2025 .
Q2 2025 guidance: Revenue $440–$470M; Adjusted EBITDA $33–$40M .
FY 2025 guidance: Revenue $2.06–$2.11B; Adjusted EBITDA $135–$165M; ~$35M capitalized software cash .