Evolent Health, Inc.

What they do

Evolent provides Specialty Care Management Services, its primary solution, and additional administrative services to health plans and other payers. It assembles high-performance provider networks, designs evidence-based clinical pathways, and deploys proprietary technology to manage care for complex conditions, primarily in oncology, cardiology, and musculoskeletal markets. The company has one operating and reportable segment, with all revenue recognized in the United States.

Revenue drivers

• Performance Suite — Value-based care arrangements where Evolent takes on medical cost risk; average PMPM fee was $24.05 in Q2 2026, with 6,715 average lives on platform; Q2 2026 Medical Expense Ratio was 95.3%.
• Specialty Technology and Services Suite — Technology and services arrangements with lower per-member fees ($0.34 PMPM) but a large live base of 75,641 average lives on platform in Q2 2026.
• Administrative Services — Back-office administrative support to customers; generated $13.46 PMPM in Q2 2026 across 1,189 average lives on platform.
• Customer concentration — Q2 2026 revenue concentration: Molina 22.2%, Highmark 21.8%, Aetna 14.4%, Cook County Health 12.2%.

Recent performance

Q2 2026 revenue was $652.5M, up from $444.3M in Q2 2025, while net loss narrowed to $28.4M from $51.1M. Adjusted EBITDA was $28.1M with a 4.3% margin in Q2 2026, down from $37.5M and 8.5% in the year-ago quarter. Annual revenue grew from $908.0M in 2021 to a peak of $2.55B in 2024, then fell to $1.88B in 2025, with a $579.4M net loss that year. The company divested Evolent Care Partners on December 5, 2025 for $100.0M, plus potential contingent payments up to $13.0M. Medical claims costs in the Performance Suite grew faster than historical norms in 2024 and 2025, pressuring results.

Strategy

Evolent is transitioning to an AI-led operational model aimed at improving client and clinical outcomes while being disciplined on costs. The company expects improved Performance Suite care margins and a strong focus on expense reductions, alongside targeted debt reduction initiatives. It is expanding its Oncology Performance Suite partnerships, with one new deal expected to generate ~$300M in annualized revenue. The divestiture of Evolent Care Partners was part of a shift away from total cost of care management toward specialty care management.

Risks

• Medical cost inflation — Medical claims costs in the Performance Suite grew faster than historical averages in 2024 and 2025, directly compressing margins and causing net losses.
• Membership attrition — Customers are exiting Medicaid and ACA Health Exchange markets and reducing benefits, with membership declines already reported in Q2 2026 and exchange attrition expected to continue.
• Elevated leverage — Long-term debt was $966.5M against shareholder equity of $383.2M as of June 30, 2026, creating financial risk and constraints.
• Customer concentration — Aetna, Molina, Highmark, and Cook County each represented over 10% of Q2 2026 revenue, so loss of one contract could materially affect results.
• Integration and execution risk — Rapid growth through acquisitions and new contracts requires successful integration and adherence to enhanced contractual protections in Performance Suite deals.

Outlook

Management expects 2026 revenue growth of over 25% versus 2026, based on contracts in place, upcoming launches, and continued demand for oncology solutions. The midpoint of 2027 Adjusted EBITDA outlook is expected to be at or above $150 million. The company anticipates improved cash flow conversion, which, combined with debt reduction initiatives currently being evaluated, is expected to enhance financial flexibility.