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Sep 30, 2024
Evolent Health Q3 2024 Earnings Report
Evolent Health's Q3 2024 performance was impacted by losses in the Performance Suite despite overall revenue growth and record new contract agreements.
Key Takeaways
Evolent Health reported a 21.6% increase in revenue to $621.4 million for Q3 2024, driven by strong demand for its complex specialty care solutions and a record six new contract agreements. However, the company experienced a net loss of $(31.2) million, with Adjusted EBITDA negatively impacted by losses in the Performance Suite due to higher paid claims in prior periods and a spike in oncology costs.
Revenue increased by 21.6% to $621.4 million compared to Q3 2023.
Net loss attributable to common shareholders was $(31.2) million.
Adjusted EBITDA was $31.8 million, with a margin of 5.1%.
Announced a record six new contract agreements, including a major oncology Performance Suite agreement.
Evolent Health
Evolent Health
Forward Guidance
For Q4 2024, revenue is expected to be in the range of $642.0 million to $667.0 million, and Adjusted EBITDA is expected to be in the range of $22.0 million to $37.0 million. For the full year 2024, revenue is expected to be approximately $2.55 billion to $2.575 billion, and Adjusted EBITDA is expected to be approximately $160.0 million to $175.0 million.
Positive Outlook
- Revenue is expected to be in the range of $642.0 million to $667.0 million for Q4 2024.
- Adjusted EBITDA is expected to be in the range of $22.0 million to $37.0 million for Q4 2024.
- Full year 2024 revenue is expected to be approximately $2.55 billion to $2.575 billion.
- Full year 2024 Adjusted EBITDA is expected to be approximately $160.0 million to $175.0 million.
- Evolent continues to expect average annual revenue growth in excess of 15% and average Adjusted EBITDA growth of 20% on a long-term basis.
Challenges Ahead
- Adjusted EBITDA result was negatively impacted by losses in Performance Suite.
- Medical costs increased by $42 million in Q3 relative to expectations.
- No longer expects to exit 2024 at an Adjusted EBITDA run rate of $300 million.
- Significant shifts in medical expenses experienced in the managed care industry.
- Cannot provide guidance for the more significant reconciling items between net income (loss) attributable to common shareholders of Evolent Health, Inc. and Adjusted EBITDA without unreasonable effort.