Evolent Health, Inc. (EVH) Q3 2025 Earnings Summary

Executive Summary

Q3 revenue of $479.533M was at the top of guidance and beat S&P Global consensus ($467.5M*), while adjusted EPS of $0.05 missed consensus ($0.10*) as management prioritized conservative reserves and initial reserve build for new Performance Suite launches .
Adjusted EBITDA of $38.955M (8.1% margin) was in the upper half of guidance; sequential revenue grew 8% on higher-fee mix and new launches; normalized oncology trend remains just under 11% y/y .
Strategic pipeline strengthened: 13 new contracts YTD; signed contracts support a preliminary 2026 revenue forecast of ~$2.5B and >$750M in newly annualized revenue launching in 2026, with >90% of 2026 Performance Suite revenue covered by enhanced protections and risk corridors .
Q4 and FY25 outlook narrowed and reiterated: Q4 revenue $462–$472M; Q4 Adj. EBITDA $30–$40M; FY25 revenue $1.87–$1.88B; FY25 Adj. EBITDA $144–$154M. CFO transition announced (Mario Ramos effective 1/1/26); Evolent Care Partners sale expected to close in 2025 with proceeds used to reduce senior debt—key deleveraging catalyst .

What Went Well and What Went Wrong

What Went Well
- Beat on revenue and delivered Adjusted EBITDA in the upper half of guidance; CEO: “We are happy to deliver a strong quarter, in the top half of our guidance for both Adjusted EBITDA and revenue…” .
- Commercial traction: signed two new agreements in Q3 (13 YTD) and now forecasting ~$2.5B 2026 revenue under contract; large regional Blues oncology Performance Suite expected to contribute >$500M annually at maturity (est. ~$300M in 2026) .
- Product and operating leverage: early AI efficiency gains (Auth Intelligence reviewer copilot in MSK) and enhanced pricing protections (prevalence/mix adjusters and risk corridors) set a path for “lower volatility, more predictability” at ~10% mature margins in Performance Suite .
What Went Wrong
- EPS miss vs consensus as company maintained conservative reserving for exchange “benefits rush,” primarily in cardiology, and built initial reserves for new Performance Suite launches; adjusted EPS $0.05 vs $0.10* consensus .
- Membership uncertainty and exchange policy overhang (subsidy timing) drove a wider range of 2026 EBITDA outcomes; management noted difficulty delivering “meaningful” growth in 2026 if exchange declines skew to high end and MA shrinks ~3% as per CMS forecast .
- Y/Y revenue down (to $479.5M from $621.4M) while net loss persists; interest expense remains elevated given the capital structure (net loss margin -5.6%) .

Financial Results

Sequential trend (Q1–Q3 2025)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$483.649	$444.328	$479.533
Net Loss ($USD Millions)	$(72.250)	$(51.090)	$(26.930)
Net Loss Margin (%)	(14.9)%	(11.5)%	(5.6)%
Adjusted EBITDA ($USD Millions)	$36.860	$37.547	$38.955
Adjusted EBITDA Margin (%)	7.6%	8.5%	8.1%
Adjusted EPS (Basic)	$0.06	$(0.10)	$0.05

Year-over-year comparison (Q3 2024 vs Q3 2025)

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$621.401	$479.533
Net Loss ($USD Millions)	$(31.231)	$(26.930)
Net Loss Margin (%)	(5.0)%	(5.6)%
Adjusted EBITDA ($USD Millions)	$31.801	$38.955
Adjusted EBITDA Margin (%)	5.1%	8.1%
Adjusted EPS (Basic)	$0.04	$0.05

Consensus vs Actual (S&P Global)

Metric	Consensus (Q3 2025)	Actual (Q3 2025)
Revenue ($USD)	$467,491,940*	$479,533,000
Primary EPS	$0.1025*	$0.05

Values with asterisk (*) retrieved from S&P Global.

KPIs by solution

KPI	Q3 2024	Q2 2025	Q3 2025
Performance Suite Lives on Platform	6,916	6,490	6,474
Specialty Tech & Services Suite Lives	74,192	77,019	78,050
Administrative Services Lives	1,258	1,231	1,222
Average Unique Members	41,444	40,201	40,781
Performance Suite Avg PMPM ($)	20.97	13.76	14.77
Specialty Tech & Services Avg PMPM ($)	0.38	0.35	0.40
Admin Services Avg PMPM ($)	15.74	15.13	15.77
Revenue per Case ($)	3,113	2,969	3,236

Additional operating commentary: Specialty Performance Suite care margin ~7% YTD; normalized oncology trend just under 11% y/y .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3 2025	$460M – $480M	Actual $479.5M	In-line/high end
Adjusted EBITDA	Q3 2025	$34M – $42M	Actual $39.0M	In-line
Revenue	Q4 2025	—	$462M – $472M	New (reiterated on call)
Adjusted EBITDA	Q4 2025	—	$30M – $40M	New (reiterated on call)
Revenue	FY 2025	$1.85B – $1.88B	$1.87B – $1.88B	Narrowed/raised low end
Adjusted EBITDA	FY 2025	$140M – $165M	$144M – $154M	Narrowed (higher floor, lower ceiling)
Capitalized software cash spend	FY 2025	~$35M	~$35M	Maintained

Drivers/why: Management narrowed ranges on exchange utilization and membership variability; Q3 sequential strength came from higher-fee mix and new launches; conservative reserving posture for exchanges maintained into Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2/Q1 2025)	Current Period (Q3 2025)	Trend
AI/automation (Auth Intelligence)	“One-year anniversary… confident in near-term AI and automation targets exiting 2025” ; “AI-based automation initiatives, like Auth Intel, tracking favorably”	Rolled out AI reviewer copilot in MSK; beginning to realize expected efficiency gains; $20M 2026 EBITDA improvement still targeted (unit-cost basis)	Scaling; tangible early benefits
Enhanced Performance Suite (risk corridors, adjusters)	—	>90% of 2026 Performance Suite revenue under enhanced protections; mature margin target ~10%, lower volatility	Risk-managed growth model entrenched
Exchange/MA membership dynamics	—	Exchange “benefits rush” in cardiology; 2026 exchange/MA membership ranges create EBITDA outcome dispersion	Policy-driven uncertainty persists
Product performance: Oncology	—	Normalized oncology trend just under 11% y/y; signed major Blues oncology risk contract (>$500M annual)	Strong demand, scaled wins
Provider partnerships	—	AON partnership: EMR-integrated quality pathways, AI insights, “gold-carding” (no prior auth) to reduce friction and improve outcomes	Deepening provider alignment
Navigation (Part A)	—	Navigation program showing up to 40% reduction in inpatient/ED in matched case studies; expanding markets in 2026	Expanding scope and impact
Capital allocation/deleveraging	—	Evolent Care Partners sale on track; ~$100M senior term loan paydown; no maturities until late 2029	Balance sheet de-risking

Management Commentary

Strategic positioning: “We now have signed contracts that bring our preliminary 2026 revenue forecast to $2.5 billion… winning in the marketplace with our Enhanced Performance Suite model that balances disciplined growth and margin.”
Risk-managed contract structure: “>90% of our Performance Suite revenue in 2026 will be covered by our enhanced protections… risk corridors that limit our downside, enhancing our ability to drive sustainable margin growth.”
Mature margin framework: “10% is a reasonable mature margin… the bell curve is narrower… more predictability, discipline with these contracts is the right trade-off.”
AI and efficiency: “We began rolling out our AI reviewer copilot… beginning to realize the AI efficiency improvements we expected.”
Deleveraging: “We expect to close the previously announced ECP transaction later this year and expect to use the proceeds to pay down our senior debt.”

Q&A Highlights

Profitability targets: Management affirmed ~10% mature margin for Performance Suite under the enhanced model (trading some upside for lower volatility and predictability) .
2026 EBITDA bridge: Key variables are exchange/MA membership, exchange subsidy timing, and cost structure flexibility; AI savings still targeted at ~$20M in 2026; ECP divestiture reduces baseline by ~$10M EBITDA .
Exchange dynamics: Estimated 2025 exchange revenue ~$360M, half risk/half tech & services; contracts have prevalence/mix adjusters and discussions are ongoing to ensure rate adequacy in 2026 .
Utilization: “Benefits rush” seen in cardiology on exchanges Sep–Oct; no variability in Medicaid or MA trends; oncology trend steady just under 11% .
Pipeline and go-lives: Probability-weighted pipeline >$650M annually; some additional 2026 go-lives still possible; expecting strong tailwinds into 2027+ .

Estimates Context

Q3 revenue beat: $479.533M actual vs $467.5M* consensus; adjusted EPS miss: $0.05 actual vs $0.1025* consensus .
Street likely to raise out-year revenue on signed backlog ($2.5B 2026 under contract) but may trim near-term EPS/EBITDA assumptions given exchange policy/membership uncertainty and management’s conservative reserving posture .
Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Revenue momentum returned with an 8% q/q increase and a top-line beat; the backlog for 2026 is substantial and risk-managed (risk corridors/adjusters), reducing earnings volatility over time .
Profitability trajectory remains intact despite EPS miss; Adjusted EBITDA landed in the upper half of guidance, aided by higher-fee mix and AI efficiencies; mature Performance Suite margins ~10% targeted over time .
2026 is a “setup year”: large contracts go live mid-year with minimal initial EBITDA; management points to 2027 as a stronger bottom-line inflection as new contracts mature .
Policy/membership uncertainty is the swing factor; watch exchange subsidy developments, open enrollment outcomes, and MA share shifts at key customers—primary near-term stock catalysts .
Balance sheet improving: ECP sale proceeds expected to reduce senior debt; no significant maturities until late 2029—deleveraging supports equity case through macro variability .
Strategic provider partnerships (AON) and oncology navigation (up to 40% lower inpatient/ED in matched studies) extend the platform into Part A spend and can reinforce payer adoption .
Leadership transition (new CFO Mario Ramos) brings large-scale payer/pharmacy experience; expect continued focus on financial discipline as growth accelerates .

Appendix: Other Relevant Press Releases (Q3 2025 period)

Evolent and American Oncology Network unveil model to improve cancer care while eliminating prior authorization—EMR-integrated pathways, AI analytics (MiBA), and “gold-carding” approach .
Q3 earnings scheduling notice (release and call logistics) .