Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 25, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Evolent Health, Inc. | ||
Entity Central Index Key | 1,628,908 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Volunteer Filers | No | ||
Entity Well-Known Seasoned Issuer | No | ||
Public Float | $ 258.1 | ||
Document Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Class A | |||
Entity Common Stock, Shares Outstanding | 42,558,769 | ||
Class B | |||
Entity Common Stock, Shares Outstanding | 17,524,596 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 145,726 | $ 0 |
Restricted cash | 4,703 | 0 |
Accounts receivable, net (amounts related to affiliates: 2015 - $10,185; 2014 - zero) | 20,381 | 0 |
Prepaid expenses and other current assets (amounts related to affiliates: 2015 - $1,220; 2014 - $0) | 4,208 | 0 |
Investments, at amortized cost | 9,445 | 0 |
Total current assets | 184,463 | 0 |
Restricted cash | 1,582 | 0 |
Investments, at amortized cost | 44,618 | 0 |
Property and equipment, net | 12,796 | 0 |
Intangible assets, net | 163,152 | 0 |
Goodwill | 608,903 | 0 |
Equity method investment | 0 | 37,203 |
Total assets | 1,015,514 | 37,203 |
Current liabilities: | ||
Accounts payable (amounts related to affiliates: 2015 - $13,311; 2014 - zero) | 16,699 | 0 |
Accrued liabilities (amounts related to affiliates: 2015 - $828; 2014 - zero) | 6,047 | 0 |
Accrued compensation and employee benefits | 21,925 | 0 |
Deferred revenue | 14,835 | 0 |
Total current liabilities | 59,506 | 0 |
Other long-term liabilities | 111 | 0 |
Deferred tax liabilities, net | 21,318 | 0 |
Total liabilities | $ 80,935 | $ 0 |
Commitments and Contingencies | ||
Redeemable Preferred Stock | ||
Redeemable preferred stock, value | $ 0 | $ 39,273 |
Shareholders' Equity (Deficit) | ||
Additional paid-in-capital | 342,063 | 23,733 |
Retained earnings (accumulated deficit) | 306,688 | (25,806) |
Total shareholders' equity (deficit) attributable to Evolent Health, Inc. | 649,341 | (2,070) |
Non-controlling interests | 285,238 | 0 |
Total equity (deficit) | 934,579 | (2,070) |
Total liabilities, redeemable preferred stock and shareholders' equity (deficit) | 1,015,514 | 37,203 |
Series A Preferred Stock | ||
Shareholders' Equity (Deficit) | ||
Preferred stock | 0 | 2 |
Class A | ||
Shareholders' Equity (Deficit) | ||
Common stock | 415 | 1 |
Class B | ||
Shareholders' Equity (Deficit) | ||
Common stock | 175 | 0 |
Preferred Stock | Series A Redeemable Preferred Stock | ||
Redeemable Preferred Stock | ||
Redeemable preferred stock, value | 0 | 12,847 |
Preferred Stock | Series B Redeemable Preferred Stock | ||
Redeemable Preferred Stock | ||
Redeemable preferred stock, value | 0 | 24,833 |
Preferred Stock | Series B-1 Redeemable Preferred Stock | ||
Redeemable Preferred Stock | ||
Redeemable preferred stock, value | 0 | 1,593 |
Preferred Stock | Series A Preferred Stock | ||
Shareholders' Equity (Deficit) | ||
Total equity (deficit) | $ 0 | $ 2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid expenses and other current assets, related parties | $ 1,220 | $ 0 |
Accounts receivable, related parties | 10,185 | 0 |
Accounts payable, related parties | 13,311 | 0 |
Accrued liabilities, related parties | $ 828 | $ 0 |
Series A Redeemable Preferred Stock | ||
Temporary equity, shares authorized | 0 | 7,900,000 |
Temporary equity, shares issued | 0 | 7,900,000 |
Temporary equity, shares outstanding | 0 | 7,900,000 |
Temporary equity, liquidation preference | $ 0 | $ 25,018 |
Series B Redeemable Preferred Stock | ||
Temporary equity, shares authorized | 0 | 6,467,376 |
Temporary equity, shares issued | 0 | 6,467,376 |
Temporary equity, shares outstanding | 0 | 6,467,376 |
Temporary equity, liquidation preference | $ 0 | $ 27,359 |
Series B-1 Redeemable Preferred Stock | ||
Temporary equity, shares authorized | 0 | 1,953,124 |
Temporary equity, shares issued | 0 | 360,420 |
Temporary equity, shares outstanding | 0 | 360,420 |
Temporary equity, liquidation preference | $ 0 | $ 1,478 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0.001 |
Preferred stock, shares authorized | 0 | 7,700,000 |
Preferred stock, shares issued | 0 | 7,400,000 |
Preferred stock, shares outstanding | 0 | 7,400,000 |
Preferred stock, liquidation preference, value | $ 0 | $ 23,200 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 750,000,000 | 33,812,808 |
Common stock, shares, issued | 41,491,498 | 4,047,484 |
Common stock, shares, outstanding | 41,491,498 | 4,047,484 |
Class B | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0 |
Common stock, shares authorized | 100,000,000 | 0 |
Common stock, shares, issued | 17,524,596 | 0 |
Common stock, shares, outstanding | 17,524,596 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenue | ||||
Transformation | [1] | $ 19,906 | $ 0 | $ 22,130 |
Platform and operations | [1] | 76,972 | 0 | 3,541 |
Total revenue | 96,878 | 0 | 25,671 | |
Expenses | ||||
Cost of revenues (exclusive of depreciation and amortization presented below) | [1] | 57,398 | 0 | 30,018 |
Selling, general and administrative expenses | [1] | 75,286 | 0 | 15,600 |
Depreciation and amortization expenses | 7,166 | 0 | 1,208 | |
Total operating expenses | 139,850 | 0 | 46,826 | |
Operating income (loss) | (42,972) | 0 | (21,155) | |
Interest income (expense), net | 293 | 0 | (820) | |
Other income (expense), net | 0 | 0 | 1 | |
Gain on consolidation | 414,133 | 0 | 0 | |
Gain on deconsolidation | 0 | 0 | 46,246 | |
Income (loss) from affiliate | (28,165) | (25,246) | (4,241) | |
Income (loss) before income taxes and non-controlling interests | 343,289 | (25,246) | 20,031 | |
Provision (benefit) for income taxes | 23,475 | 0 | 8 | |
Net income (loss) | 319,814 | (25,246) | 20,023 | |
Net income (loss) attributable to non-controlling interests | (12,680) | 0 | 0 | |
Net income (loss) attributable to Evolent Health, Inc. | 332,494 | (25,246) | 20,023 | |
Earnings (Loss) Available to Common Shareholders | ||||
Basic | 330,310 | (31,137) | 2,418 | |
Diluted | $ 319,814 | $ (31,137) | $ 2,957 | |
Earnings (Loss) per Common Share | ||||
Basic (in dollars per share) | $ 13.14 | $ (13.46) | $ 2.51 | |
Diluted (in dollars per share) | $ 6.93 | $ (13.46) | $ 0.99 | |
Weighted-Average Common Shares Outstanding | ||||
Basic (in shares) | 25,129 | 2,314 | 964 | |
Diluted (in shares) | 46,136 | 2,314 | 2,988 | |
Affiliates | ||||
Revenue | ||||
Transformation | $ 940 | $ 0 | $ 9,078 | |
Platform and operations | 23,642 | 0 | 3,542 | |
Expenses | ||||
Cost of revenues (exclusive of depreciation and amortization presented below) | 14,050 | 0 | 910 | |
Selling, general and administrative expenses | $ 1,542 | $ 0 | $ 686 | |
[1] | Amounts related to affiliates included above are as follows (see Note 15) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ 319,814 | $ (25,246) | $ 20,023 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Gain on consolidation | (414,133) | 0 | 0 |
Gain on deconsolidation | 0 | 0 | (46,246) |
Loss from equity method investees | 28,165 | 25,246 | 4,241 |
Depreciation and amortization expenses | 7,166 | 0 | 1,208 |
Stock-based compensation expense | 14,730 | 0 | 91 |
Deferred tax provision | 23,460 | 0 | 0 |
Other | 172 | 0 | 827 |
Changes in assets and liabilities: | |||
Accounts receivables, net | 11,756 | 0 | (8,670) |
Prepaid expenses and other current assets | (2,036) | 0 | (2,162) |
Accounts payable | 2,764 | 0 | (843) |
Accrued liabilities | (3,788) | 0 | 1,193 |
Accrued compensation and employee benefits | 11,402 | 0 | 4,144 |
Deferred revenue | (17,998) | 0 | 8,677 |
Other current liabilities | 58 | 0 | 3,888 |
Net cash provided by (used in) operating activities | (18,468) | 0 | (13,629) |
Cash Flows from Investing Activities | |||
Cash acquired upon consolidation of affiliate | 13,065 | 0 | 0 |
Cash transferred upon deconsolidation of affiliate | 0 | 0 | (15,521) |
Purchases of investments | (54,234) | 0 | 0 |
Maturities and sales of investments | 4,000 | 0 | 0 |
Purchases of property and equipment | (6,515) | 0 | (10,438) |
Change in restricted cash | 0 | 0 | 50 |
Net cash provided by (used in) investing activities | (43,684) | 0 | (25,909) |
Cash Flows from Financing Activities | |||
Proceeds from initial public offering, net of offering costs | 209,087 | 0 | 0 |
Proceeds from stock option exercises | 152 | 0 | 0 |
Proceeds from issuance of convertible notes | 0 | 0 | 23,000 |
Payments of deferred offering costs | (1,361) | 0 | 0 |
Net cash provided by (used in) financing activities | 207,878 | 0 | 34,286 |
Net increase (decrease) in cash and cash equivalents | 145,726 | 0 | (5,252) |
Cash and cash equivalents as of beginning-of-year | 0 | 0 | 5,252 |
Cash and cash equivalents as of end-of-year | 145,726 | 0 | 0 |
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Non-cash contribution of common stock to Evolent Health LLC prior to the Offering Reorganization | 21,810 | 11,091 | 1,235 |
Non-cash settlement of accounts receivable through reacquisition of Series A preferred stock | 0 | 0 | 219 |
Conversion of accrued interest from convertible notes to equity | 0 | 0 | 469 |
Conversion of convertible notes to equity | 0 | 0 | 12,978 |
Effects of the Offering Reorganization: | |||
Reclassification of deferred offering costs acquired to additional paid-in capital | 3,154 | 0 | 0 |
Conversion of existing equity as part of the Offering Reorganization | 39,014 | 0 | 0 |
Assumption of non-controlling interest as a result of merger with TPG affiliate | 34,875 | 0 | 0 |
Series B Redeemable Preferred Stock | |||
Cash Flows from Financing Activities | |||
Proceeds from issuance of series B preferred stock | 0 | 0 | 11,386 |
Series A Preferred Stock | |||
Cash Flows from Financing Activities | |||
Repurchase of series A preferred stock | 0 | 0 | (100) |
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Non-cash repurchase of series A preferred stock | 0 | (1,500) | 0 |
Series B-1 Redeemable Preferred Stock | |||
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Issuance of stock | 0 | 1,593 | 0 |
Class A Common Stock | |||
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Issuance of stock | 0 | 325 | 0 |
Class B common stock | |||
Supplemental Disclosure of Non-cash Investing and Financing Activities | |||
Issuance of stock | $ 196 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) AND REDEEMABLE PREFERRED STOCK - USD ($) $ in Thousands | Total | Series A Redeemable | Series B Redeemable | Series B-1 Redeemable | Class A | Class B | Preferred StockSeries A Redeemable | Preferred StockSeries B Redeemable | Preferred StockSeries B-1 Redeemable | Preferred StockSeries A | Common StockClass A | Common StockClass B | Additional Paid-in Capital | Additional Paid-in CapitalClass A | Additional Paid-in CapitalClass B | Retained Earnings (Accumulated Deficit) | Non-controlling Interests | Non-controlling InterestsClass B |
Beginning balance, shares at Dec. 31, 2012 | 0 | 0 | 0 | |||||||||||||||
Beginning balance, amount at Dec. 31, 2012 | $ 0 | $ 0 | $ 0 | |||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||
Issuance of preferred stock, shares | 6,468,000 | |||||||||||||||||
Issuance of preferred stock, amount | $ 24,833 | |||||||||||||||||
Reclassification to redeemable stock, shares | 7,900,000 | |||||||||||||||||
Reclassification to redeemable stock, amount | $ 12,847 | |||||||||||||||||
Ending balance, shares at Dec. 31, 2013 | 7,900,000 | 6,468,000 | 0 | |||||||||||||||
Ending balance, amount at Dec. 31, 2013 | $ 12,847 | $ 24,833 | $ 0 | |||||||||||||||
Beginning balance, shares at Dec. 31, 2012 | 15,800,000 | 3,772,000 | 0 | |||||||||||||||
Beginning balance, amount at Dec. 31, 2012 | 5,201 | $ 4 | $ 0 | $ 0 | $ 25,780 | $ (20,583) | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Non-cash issuance of common stock to Evolent Health, LLC | 1,111 | 1,111 | ||||||||||||||||
Effects of the Offering Reorganization (2015) | ||||||||||||||||||
Stock-based compensation subsequent to the Offering Reorganization | 91 | 91 | ||||||||||||||||
Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests | 0 | |||||||||||||||||
Repurchase of series A preferred stock, shares | (200,000) | |||||||||||||||||
Repurchase of series A preferred stock, value | (319) | (319) | 0 | 0 | ||||||||||||||
Issuance of restricted stock, shares | 52,000 | |||||||||||||||||
Reclassification to redeemable stock, shares | (7,900,000) | |||||||||||||||||
Reclassification to redeemable stock, value | (12,847) | $ (2) | (12,845) | |||||||||||||||
Net income (loss) | 20,023 | 20,023 | ||||||||||||||||
Ending balance, shares at Dec. 31, 2013 | 7,700,000 | 3,824,000 | 0 | |||||||||||||||
Ending balance, amount at Dec. 31, 2013 | 13,260 | $ 2 | $ 0 | $ 0 | 13,818 | (560) | 0 | |||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||
Issuance of preferred stock, shares | 360,000 | |||||||||||||||||
Issuance of preferred stock, amount | $ 1,593 | |||||||||||||||||
Ending balance, shares at Dec. 31, 2014 | 7,900,000 | 6,467,376 | 360,420 | 7,900,000 | 6,468,000 | 360,000 | ||||||||||||
Ending balance, amount at Dec. 31, 2014 | 39,273 | $ 12,847 | $ 24,833 | $ 1,593 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Non-cash issuance of common stock to Evolent Health, LLC | 11,091 | 11,091 | ||||||||||||||||
Effects of the Offering Reorganization (2015) | ||||||||||||||||||
Issuance of common stock, shares | 272,000 | |||||||||||||||||
Issuance of common stock, amount | 325 | $ 1 | 324 | |||||||||||||||
Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests | 0 | |||||||||||||||||
Repurchase of series A preferred stock, shares | (300,000) | |||||||||||||||||
Repurchase of series A preferred stock, value | (1,500) | (1,500) | 0 | 0 | ||||||||||||||
Net income (loss) | (25,246) | (25,246) | ||||||||||||||||
Forfeiture of restricted stock, shares | (48,000) | |||||||||||||||||
Ending balance, shares at Dec. 31, 2014 | 7,400,000 | 4,048,000 | 0 | |||||||||||||||
Ending balance, amount at Dec. 31, 2014 | (2,070) | $ 2 | $ 1 | $ 0 | 23,733 | (25,806) | 0 | |||||||||||
Effects of the Offering Reorganization (2015) | ||||||||||||||||||
Conversion of existing equity, shares | (7,900,000) | (6,468,000) | (360,000) | |||||||||||||||
Conversion of existing equity, amount | $ (12,847) | $ (24,833) | $ (1,593) | |||||||||||||||
Ending balance, shares at Dec. 31, 2015 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Ending balance, amount at Dec. 31, 2015 | 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Non-cash issuance of common stock to Evolent Health, LLC | 21,810 | 21,810 | ||||||||||||||||
Net income (loss) prior to the Offering Reorganization | (28,165) | (28,165) | ||||||||||||||||
Effects of the Offering Reorganization (2015) | ||||||||||||||||||
Conversion of existing equity, shares | (7,400,000) | 22,128,000 | ||||||||||||||||
Conversion of existing equity, amount | 39,273 | $ (2) | $ 261 | 39,014 | ||||||||||||||
Issuance of common stock, shares | 13,225,000 | 19,576,000 | ||||||||||||||||
Issuance of common stock, amount | $ 205,933 | $ 332,793 | $ 132 | $ 196 | $ 205,801 | $ (196) | $ 332,793 | |||||||||||
Merger with TPG affiliate, shares | 2,051,000 | (2,051,000) | ||||||||||||||||
Merger with TPG affiliate, value | 0 | $ 21 | $ (21) | 34,875 | (34,875) | |||||||||||||
Tax effect of the Offering Reorganization | 2,144 | 2,144 | ||||||||||||||||
Stock-based compensation subsequent to the Offering Reorganization | 14,730 | 14,730 | ||||||||||||||||
Exercise of stock options, shares | 39,000 | |||||||||||||||||
Exercise of stock options, amount | 152 | 152 | ||||||||||||||||
Net income (loss) subsequent to Offering Reorganization, including portion attributable to non-controlling interest | 360,659 | |||||||||||||||||
Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests | (12,680) | (12,680) | ||||||||||||||||
Net income (loss) subsequent to Offering Reorganization | 347,979 | |||||||||||||||||
Net income (loss) | 332,494 | |||||||||||||||||
Ending balance, shares at Dec. 31, 2015 | 0 | 41,491,000 | 17,525,000 | |||||||||||||||
Ending balance, amount at Dec. 31, 2015 | $ 934,579 | $ 0 | $ 415 | $ 175 | $ 342,063 | $ 306,688 | $ 285,238 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Evolent Health, Inc. was incorporated in December 2014 in the state of Delaware, and is a managed services firm that supports integrated health systems in their migration toward value-based care and population health management. The Company’s services include providing customers with a population management platform, integrated data and analytics capabilities, PBM services and comprehensive health plan administration services. Together these services enable health systems to manage patient health in a more cost-effective manner. The Company’s contracts are structured as a combination of advisory fees, monthly member service fees, percentage of plan premiums and shared medical savings arrangements. The Company’s headquarters is located in Arlington, Virginia. Our predecessor, Evolent Health Holdings, merged with and into Evolent Health, Inc. As a result, the consolidated financial statements of Evolent Health, Inc. reflect the historical accounting of Evolent Health Holdings. Prior to the organizational transactions noted below, due to certain participating rights granted to our investor TPG during our Series B round of equity financing (“Series B Reorganization” as further described in Note 4) in 2013, Evolent Health Holdings did not control Evolent Health LLC, our operating subsidiary company, but was able to exert significant influence and, accordingly, accounted for its investment in Evolent Health LLC using the equity method of accounting from September 23, 2013, through June 3, 2015. Subsequent to the organizational transactions and IPO described below, we own 70.3% of Evolent Health LLC, hold 100% of the voting rights, are the sole managing member and, therefore, control its operations. Accordingly, the financial results of Evolent Health LLC are consolidated in the financial statements of Evolent Health, Inc. subsequent to the Offering Reorganization. Initial Public Offering On June 5, 2015, we completed an IPO of 13,225,000 shares of our Class A common stock at a public offering price of $17.00 per share. We received $209.1 million in proceeds, net of underwriting discounts and commissions. Offering expenses incurred were $3.2 million which were recorded as a reduction of proceeds from the offering. We used the net proceeds to purchase newly-issued Class A common units from Evolent Health LLC, our consolidated subsidiary. Evolent Health LLC will use the net proceeds for working capital and other general corporate purposes. See Note 4 for further details surrounding the IPO and related transactions. Organizational Transactions In connection with the IPO, we completed the following organizational transactions (the “Offering Reorganization”) as further described in Note 4 : • We amended and restated our certificate of incorporation to, among other things, authorize two classes of common stock - Class A common stock and Class B exchangeable common stock. Both classes of stock will vote together as a single class. • We acquired, by merger, an affiliate of a member of Evolent Health LLC, for which we issued 2,051,468 shares of Class A common stock. • We issued shares of our Class B exchangeable common stock to certain existing members of Evolent Health LLC. Since its inception, the Company has incurred significant losses from operations. As of December 31, 2015 , the Company had cash and cash equivalents of $145.7 million . The Company believes it has sufficient liquidity for the next 12 months as of December 31, 2015 . |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with GAAP. Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below. As discussed in Note 4 , amounts as of December 31, 2014, for the period January 1, 2015, through June 3, 2015, for the year ended December 31, 2014 , and for the period September 23, 2013 , through December 31, 2013, presented in our consolidated financial statements and notes to consolidated financial statements represent the historical operations of our predecessor entity, Evolent Health Holdings, which did not consolidate the operations of Evolent Health LLC for the period September 24, 2013, through June 3, 2015. The amounts as of December 31, 2015 , for the period from June 4, 2015, through December 31, 2015 , and for the period from January 1, 2013, through September 22, 2013, reflect our operations, which consolidate the operations of Evolent Health LLC. All inter-company accounts and transactions have been eliminated in consolidation. Summary of Significant Accounting Policies Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. In the accompanying consolidated financial statements, estimates are used for, but not limited to, the valuation of assets, liabilities, consideration related to business combinations and step acquisitions, revenue recognition including discounts and credits, estimated selling prices for deliverables in multiple element arrangements, contingent payments, allowance for doubtful accounts, depreciable lives of assets, impairment of long lived assets (including equity method investments), stock-based compensation, deferred income taxes and valuation allowance, contingent liabilities, valuation of intangible assets (including goodwill) and the useful lives of intangible assets. Fair Value Measurement Our Consolidated Balance Sheets include various financial instruments (primarily restricted cash, investments, accounts receivable, accounts payable, accrued expenses, deferred revenue and other current liabilities) that are carried at cost and that approximate fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include: • Level 1 - inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date; • Level 2 - inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and • Level 3 - inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. Financial Assets and Liabilities Measured at Fair Value We hold a majority of our cash and cash equivalents, or $122.3 million , in a money market fund which is measured at fair value using Level 1 inputs. Non-financial Assets and Liabilities Measured at Fair Value . The Company does not have any non-financial assets and liabilities measured at fair value on a recurring basis. The Company measures certain non-financial assets and liabilities, including property and equipment, goodwill and intangible assets, at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be impaired. See Note 7 for additional details surrounding our goodwill and intangible assets. On June 4, 2015, the Company completed the Offering Reorganization, following which we were required to remeasure the assets, liabilities and non-controlling interests of our former equity-method investee, Evolent Health LLC, at fair value. Information regarding the determination and allocation of the fair value of the assets and liabilities are further described within Note 4 . Cash and Cash Equivalents The Company holds materially all of our cash and cash equivalents in money market funds with original maturities of three months or less that are carried at cost which approximates fair value. Restricted Cash Restricted cash is carried at cost, which approximates fair value, and includes cash used to collateralize various contractual obligations (in thousands) as follows as of December 31, 2015: Letters of credit for facility leases $ 3,710 Other 2,575 Total restricted cash 6,285 Non-current restricted cash 1,582 Current restricted cash $ 4,703 We had no restricted cash as of December 31, 2014. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded when amounts are contractually billable under our customer contracts and are recorded at the invoiced amount and do not bear interest. The Company’s contracts typically include installment payments that do not necessarily correlate to the pattern of revenue recognition. In assessing the valuation of the allowance for doubtful accounts, management reviews the collectability of accounts receivable on an individual account basis. The allowance is adjusted periodically based on management’s determination of collectability, and any accounts that are determined to be uncollectible are written off against the allowance. As of December 31, 2015 , the Company had not recorded an allowance for doubtful accounts as all amounts were determined to be collectible. Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are computed using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. The following summarizes the estimated useful lives by asset classification: Computer hardware 3 years Furniture and equipment 3 years Internal-use software development costs 7 years Leasehold improvements Shorter of useful life or remaining lease term When an item is sold or retired, the cost and related accumulated depreciation or amortization is eliminated and the resulting gain or loss, if any, is recorded in our Consolidated Statements of Operations. We periodically review the carrying value of our long-lived assets, including property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. For long-lived assets to be held and used, impairments are recognized when the carrying amount of a long-lived asset group is not recoverable and exceeds fair value. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset group exceeds its fair value. As noted above, on June 4, 2015, the Company completed the Offering Reorganization, following which we were required to remeasure the assets, liabilities and non-controlling interests of our equity-method investee, Evolent Health LLC, at fair value. Information regarding the determination and allocation of the fair value of the assets and liabilities are further described within Note 4 . Software Development Costs The Company capitalizes the cost of developing internal-use software, consisting primarily of personnel and related expenses (including stock-based compensation and employee taxes and benefits) for employees and third parties who devote time to their respective projects. Internal-use software costs are capitalized during the application development stage – when the research stage is complete and management has committed to a project to develop software that will be used for its intended purpose and any costs incurred during subsequent efforts to significantly upgrade and enhance the functionality of the software are also capitalized. Capitalized software costs are included in property and equipment, net on our Consolidated Balance Sheets. Amortization of internal-use software costs are recorded on a straight-line basis over their estimated useful life and begin once the project is substantially complete and the software is ready for its intended purpose. As noted above, on June 4, 2015, the Company completed the Offering Reorganization, following which we were required to remeasure the assets, liabilities and non-controlling interests of our equity-method investee, Evolent Health LLC, at fair value. Information regarding the determination and allocation of the fair value of the assets and liabilities are further described within Note 4 . Research and Development Costs Research and development costs consist primarily of personnel and related expenses (including stock-based compensation) for employees engaged in research and development activities as well as third party fees. All such costs are expensed as incurred. We focus our research and development efforts on activities that support our technology infrastructure, clinical program development, data analytics and network development capabilities. Research and development costs were $5.8 million , zero and $2.0 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Goodwill We recognize the excess of the purchase price, plus the fair value of any non-controlling interests in the acquiree, over the fair value of identifiable net assets acquired as goodwill. Goodwill is not amortized, but is reviewed at least annually for indications of impairment, with consideration given to financial performance and other relevant factors. We perform a two-step test in our evaluation of the carrying value of goodwill, if qualitative factors determine it is necessary to complete the two-step goodwill impairment test. In Step 1 of the evaluation, the fair value is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and Step 2 is not required. If the fair value estimate is less than the carrying value, it is an indicator that impairment may exist, and Step 2 is required. In Step 2, the implied fair value of goodwill is determined. The fair value as determined in Step 1 is assigned to all of its net assets (recognized and unrecognized) as if the entity was acquired in a business combination as of the date of the impairment test. If the implied fair value of goodwill is lower than its carrying amount, goodwill is impaired and written down to its fair value; and a charge is reported in impairment of goodwill on our Consolidated Statements of Operations. See Note 7 for additional discussion about our goodwill impairment test conducted during the fourth quarter of 2015. Intangible Assets, Net As noted above, on June 4, 2015, the Company completed the Offering Reorganization, following which we were required to remeasure the assets, liabilities and non-controlling interests of our equity-method investee, Evolent Health LLC, at fair value. Information regarding the determination and allocation of the fair value of the assets and liabilities are further described within Note 4 . Identified intangible assets are recorded at their estimated fair values at the date of acquisition and are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are used. The following summarizes the estimated useful lives by asset classification: Corporate trade name 20 years Customer relationships 25 years Technology 7 years Intangible assets are reviewed for impairment if circumstances indicate the Company may not be able to recover the asset’s carrying value. The Company evaluates recoverability by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group exceed the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to cover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. Leases The Company leases all of its office space and enters into various other operating lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. The operating lease agreements may contain tenant improvement allowances, rent holidays or rent escalation clauses. When such items are included in a lease agreement, the Company records a deferred rent asset or liability on the balance sheets equal to the difference between the rent expense and future minimum lease payments due. The rent expense related to these items is recognized on a straight-line basis in the Consolidated Statements of Operations over the terms of the leases. As of December 31, 2015 and 2014, the Company had not entered into any capital leases. Impairment of Equity Method Investments The Company considers potential impairment triggers for its equity method investment, and the equity method investment will be written down to fair value if there is evidence of a loss in value which is other-than-temporary. The Company may estimate the fair value of its equity method investments by considering recent investee equity transactions, discounted cash flow analyses, and recent operating results. If the fair value of the investment has dropped below the carrying amount, management considers several factors when determining whether other-than-temporary impairment has occurred. The estimation of fair value and whether other-than-temporary impairment has occurred requires the application of significant judgment and future results may vary from current assumptions. There was no such impairment for the years ended December 31, 2015 , 2014 or 2013 . As discussed further in Note 4 , after June 3, 2015, the Company consolidated the operations of its former equity-method investee, Evolent Health LLC; therefore, the Company no longer accounts for its investment as an equity-method investment. Deferred Revenue Deferred revenue consists of billings or payments received in advance of providing the requisite services or other instances where the revenue recognition criteria have not been met. Revenue Recognition Revenue from the Company’s services is recognized when there is persuasive evidence of an arrangement, performance or delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. At times, the Company enters into contracts that contain multiple deliverables and we evaluate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) if the delivered item has value to the customer on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, and delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the vendor. Revenue is then allocated to the units of accounting based on an estimate of each unit’s relative selling price. Revenue Recognition - Transformation Transformation contracts consist of strategic assessments, or blueprint contracts, and implementation contracts. Based on the strategic assessment generated in a blueprint contract, a customer may decide to move forward with a population health or health plan strategy; in these cases, the customer enters into an implementation contract in which the Company provides services related to the launch of this strategy. The Company recognizes revenue associated with transformation contracts based on a proportionate performance method, where revenue is recognized each period in proportion to the amount of the contract completed during that period. Contract completion is measured using output measures as best estimated by labor hours incurred compared to the total estimated labor hours necessary to complete our performance obligations contained in the contract. Revenue Recognition - Platform and Operations After the transformation phase, the Company often enters into a multi-year service contract with its customers where various population health, health plan operations and PBM services are provided on an ongoing basis to the members of the customers’ plans typically in exchange for a monthly service fee, PMPM fee or a percentage of plan premiums. Revenue from these contracts is recognized in the month in which the services are delivered. In certain arrangements, there is a contingent portion of our service fee including meeting service level targets, sharing in rebates, shared medical savings arrangements based on financial performance and other performance measures. The Company continuously monitors its compliance with these arrangements and recognizes revenue when the amount is estimable and there is evidence to support meeting the criteria. Credits and Discounts We also provide credits and discounts to our customers often based on achieving certain volume commitments or other criteria. Credits are assessed to determine whether they reflect significant and incremental discounts. If the discounts are significant, the Company allocates them between the contract deliverables or future purchases as appropriate. If the future credit expires unused, it is recognized as revenue at that time. Stock-based Compensation The Company sponsors a stock-based incentive plan that provides for the issuance of stock-based awards to employees of our consolidated subsidiary, Evolent Health LLC. Our stock-based awards generally vest over a four year period and expire ten years from the date of grant. Subsequent to the Series B Reorganization in 2013, stock-based awards were granted in the stock of the Company to employees of its equity-method investee, Evolent Health LLC. As such, the Company was required to use a “non-employee” model for recognizing stock-based compensation, which required the awards to be marked-to-market through net income at the end of each reporting period until vesting occurred. Subsequent to the Offering Reorganization described in Note 4 , stock-based awards are granted in the Company’s stock to the Company’s consolidated subsidiary and compensation costs are therefore recognized using an “employee” model. Under the “employee” model, we no longer mark the awards to market at the end of each reporting period. We expense the fair value of stock-based awards included in our incentive compensation plans. Fair value of stock options is determined using a Black-Scholes options valuation methodology. The fair value of the awards is expensed over the performance or service period, which generally corresponds to the vesting period, on a straight-line basis and is recognized as an increase to additional paid-in capital. Stock-based compensation expense is reflected in cost of revenue and selling, general and administrative expenses in our Consolidated Statements of Operations. Additionally we capitalize personnel expenses attributable to the development of internal-use software, which include stock-based compensation costs. Income Taxes Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to the extent required. Considerable judgment and the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance, we consider many factors, including: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of temporary differences; the length of time carryovers can be utilized; and any tax planning strategies we would employ to avoid a tax benefit from expiring unused. We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. We did not have any such amounts accrued as of December 31, 2015 and 2014, and we have not identified any uncertain income tax positions that could have a material impact to the consolidated financial statements. We are subject to taxation in various jurisdictions in the U.S. and remain subject to examination by taxing jurisdictions for the years 2011 and all subsequent periods due to the availability of NOL carryforwards. We are a holding company and our assets consist of our direct ownership in Evolent Health LLC, for which we are the managing member. Evolent Health LLC is classified as a partnership for U.S. federal and applicable state and local income tax purposes and, as such, is not subject to U.S. federal, state and local income taxes. Taxable income or loss generated by Evolent Health LLC is allocated to holders of its units, including us, on a pro rata basis. Accordingly, we are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Evolent Health LLC. Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to Class A common shareholders by the weighted-average number of Class A common shares outstanding. For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings per share by dividing net income available to Class A common shareholders by the weighted average number of Class A common shares assuming the conversion of the convertible preferred securities, which occurred on the date of the Offering Reorganization, occurred at the beginning of the respective period, plus the impact of all potential dilutive common shares, consisting primarily of common stock options and unvested restricted stock awards using the treasury stock method and our exchangeable Class B common stock. For periods of net loss, shares used in the earnings (loss) per share calculation represent basic shares as using diluted shares would be anti-dilutive. Prior to the Offering Reorganization, the Company issued securities other than common stock that participated in dividends (“participating securities”), and therefore, we utilized the two-class method to calculate earnings (loss) per share for the applicable periods. Participating securities include redeemable convertible preferred stock. The two-class method requires a portion of earnings to be allocated to the participating securities to determine the earnings available to common stockholders. Earnings (loss) available to the common stockholders is equal to net income (loss) less dividends paid on preferred stock, assumed periodic cumulative preferred stock dividends, repurchases of preferred stock for an amount in excess of carrying value and an allocation of any remaining earnings (loss) in accordance with the bylaws between the outstanding common and preferred stock as of the end of each applicable period. Operating Segments Operating segments are defined as components of a business that earn revenue and incur expenses for which discrete financial information is available that is evaluated, on a regular basis, by the chief operating decision maker (“CODM”) to decide how to allocate resources and assess performance. The Company’s CODM, the Chief Executive Officer, allocates resources at a consolidated level and therefore the Company views its operations and manages its business as one operating segment. All of the Company’s revenue is generated in the United States and all assets are located in the United States. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Adoption of New Accounting Standards In November 2015, the FASB ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position instead of separately presented as current and non-current under the current guidance. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We early adopted the requirements of this standard as of October 1, 2015, and included the required disclosures in Notes 4 and 11. The adoption of this ASU did not have a material impact on our consolidated financial statements. In prior periods our deferred tax assets and deferred tax liabilities were presented separately on our Consolidated Balance Sheets and such amounts netted to zero. We have retrospectively applied this ASU to our 2014 consolidated balance sheet presented herein and, therefore, no longer present deferred tax assets or liabilities in the period. Total assets and total liabilities decreased $1.1 million as a result of the adoption of this ASU. In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments , to simplify the accounting for measurement-period adjustments. The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2017. The provisions within this ASU must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. We early adopted the requirements of this standard as of October 1, 2015, and included the required disclosures in Note 4. Future Adoption of New Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , in order to clarify the principles of recognizing revenue. This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods or services in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. The FASB defines a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation. By completing all five steps of the process, the core principles of revenue recognition will be achieved. The amendments in the standard are effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. We will adopt the requirements of this standard effective January 1, 2018, and are currently evaluating the impact of the adoption on our financial condition and results of operations. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This standard requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards by requiring an assessment for a period of one year after the date that the financial statements are issued. Further, based on certain conditions and circumstances, additional disclosures may be required. This standard is effective beginning with the first annual period ending after December 15, 2016, and for all annual and interim periods thereafter. Early application is permitted. The Company does not expect this standard to have an impact on the Company’s financial statements or related disclosures. We have evaluated all other issued and unadopted ASUs and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. |
Organizational Transactions
Organizational Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Organizational Transactions [Abstract] | |
Organizational Transactions | Organizational Transactions The Offering Reorganization Evolent Health, Inc. was incorporated as a Delaware corporation on December 12, 2014, for the purpose of pursuing the Company’s IPO. Immediately prior to the completion of the IPO in June 2015, we amended and restated our certificate of incorporation to, among other things, authorize two classes of common stock, Class A common stock and Class B common stock (the “Offering Reorganization”). Each share of our Class A common stock and Class B common stock entitles its holder to one vote on all matters to be voted on by stockholders, and holders of Class A common stock and holders of Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval (except as otherwise required by law). Pursuant to the Offering Reorganization: • Evolent Health Holdings merged with and into Evolent Health, Inc. and the surviving corporation of the merger was Evolent Health, Inc.; • An affiliate of TPG merged with and into Evolent Health, Inc. and the surviving corporation of the merger was Evolent Health, Inc.; • Each of the then-existing stockholders of Evolent Health Holdings received four shares of our Class A common stock and the right to certain payments under the TRA in exchange for each share of Class A common stock held in Evolent Health Holdings; • TPG received 2,051,468 shares of Class A common stock of Evolent Health, Inc., together with the right to certain payments under the TRA in exchange for 100% of the equity that it held in its affiliate that was merged with Evolent Health, Inc.; and • We issued shares of our Class B common stock and the right to certain payments under the TRA to The Advisory Board, TPG and another investor each of which was a member of Evolent Health LLC prior to the Offering Reorganization. The existing shareholders of Evolent Health Holdings held the same economic and voting interest before and after the merger of Evolent Health Holdings with and into Evolent Health, Inc., which represents a transaction among entities with a high degree of common ownership. As such, the merger is viewed as non-substantive and the consolidated financial statements of Evolent Health, Inc. reflect the historical accounting of Evolent Health Holdings except that the legal capital reflects the capital of Evolent Health, Inc. In addition, in connection with the Offering Reorganization, Evolent Health LLC amended and restated its operating agreement to establish two classes of equity (voting Class A common units and non-voting Class B common units); after the amendment, the pre-reorganization members of Evolent Health LLC (other than Evolent Health, Inc.) hold 100% of the Class B common units and Evolent Health, Inc. holds the Class A voting common units. Evolent Health LLC’s Class B common units can be exchanged (together with a corresponding number of shares of our Class B common stock) for one share of our Class A common stock. As a result of the Offering Reorganization, Evolent Health, Inc. obtained voting control over Evolent Health LLC and therefore consolidated Evolent Health LLC and recognized a gain of $414.1 million upon obtaining control. The gain represents the excess of the fair value of our interest in Evolent Health LLC’s net assets over the carrying value of our equity method investment prior to the Offering Reorganization and is included in gain on consolidation in the Consolidated Statements of Operations. We accounted for obtaining control of Evolent Health LLC as a step acquisition and, accordingly, recognized the fair value of Evolent Health LLC’s assets acquired, liabilities assumed, non-controlling interests recognized and the remeasurement gain recorded on the previously held equity interests. As the acquisition was the result of the Offering Reorganization and not the purchase of additional interest in Evolent Health LLC, there were no assets acquired or liabilities assumed, and there was no purchase price paid as a part of the transaction. The allocation of the value of the transaction (in thousands) is included below: Goodwill $ 608,903 Intangible assets 169,000 Cash and restricted cash 21,930 Other assets 49,239 Remeasurement gain on previously held equity interest (414,133 ) Liabilities and deferred revenue (71,299 ) Non-controlling interests (332,793 ) Carrying value of previously held equity interest (30,847 ) Purchase price $ — The estimated fair value of Evolent Health LLC was determined using a business enterprise valuation approach that discounted Evolent Health LLC’s projected cash flows based on an estimate of its weighted average cost of capital. Evolent Health LLC’s fair value was estimated to be $777.8 million . In addition, we determined the fair value of Evolent Health LLC’s tangible and identifiable intangible assets, deferred revenue and other liabilities, based on various income and market approaches, including the relief from royalty method for trade name and technologies, and the discounted cash flow method for customer relationships, both of which use Level 3 inputs (see Note 2 for discussion of fair value and use of Level 3 inputs). We are amortizing the acquired identifiable intangible assets over their estimated useful lives (see Note 2 for discussion of useful lives for intangible assets). The Offering Reorganization was structured as a tax-free exchange and, therefore, did not result in tax deductible goodwill. After the Offering Reorganization and the IPO, we own 70.3% of the economic interests and 100% of the voting rights in Evolent Health LLC. Our operations will continue to be conducted through Evolent Health LLC and subsequent to the Offering Reorganization the financial results of Evolent Health LLC are consolidated in the financial statements of Evolent Health, Inc. Evolent Health, Inc. is a holding company whose principal asset is all of the Class A common units it holds in Evolent Health LLC, and its only business is to act as sole managing member of Evolent Health LLC. The Company recorded a measurement period adjustment of $5.1 million to income tax benefit in the fourth quarter of 2015 resulting from the finalization of purchase accounting related to the Offering Reorganization as we were still within the measurement period. Pro forma financial information (unaudited) The unaudited pro forma statement of operations data presented below gives effect to the consolidation of Evolent Health LLC as if it had occurred on January 1, 2014. The following amounts include adjustments to: • Remove the gain recognized upon the consolidation of the previously held equity interests in 2015 and reclassify said amount to 2014; • Remove transaction costs of $4.3 million in 2015 and reclassify said amounts to 2014; • Record amortization expenses related to intangible assets beginning January 1, 2014; and • Record adjustments of income taxes associated with these pro forma adjustments. This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations or of the results that would have occurred had the consolidation taken place on January 1, 2014. The pro forma adjustments were based on available information and assumptions that the Company believes are reasonable to reflect the impact of this acquisition on the Company’s historical financial information on a pro forma basis (in thousands). For the Years Ended December 31, 2015 2014 Revenue $ 163,520 $ 95,888 Net income (loss) (82,321 ) 307,162 Net income (loss) attributable to non-controlling interests (28,386 ) (29,470 ) Net income (loss) attributable to Evolent Health, Inc. (53,935 ) 336,632 Net income (loss) available to common shareholders: Basic $ (1.55 ) $ 13.33 Diluted (1.55 ) 6.73 Associated with the business combination, deferred revenue was recorded only to the extent that it represented an obligation assumed by the acquirer. As a result, existing deferred revenue was reduced by $4.9 million to account for the deferred revenue at fair value. Within the pro formas, the 2015 revenue has been increased by $4.8 million to reflect the reversal of this fair value adjustment. As of June 3, 2015, prior to the Offering Reorganization, Evolent Health LLC recorded short-term and long-term deferred rent associated with operating leases of $0.9 million and $5.4 million , respectively. These amounts were not recorded by Evolent Health, Inc. as part of the Offering Reorganization as they do not meet the definition of an asset for the business combination. Evolent Health LLC Governance The Company serves as sole managing member of Evolent Health LLC. As such, it controls Evolent Health LLC’s business and affairs and is responsible for the management of its business. Coordination of Evolent Health, Inc. and Evolent Health LLC We must, at all times, maintain a one -to-one ratio between the number of outstanding shares of our Class A common stock and the number of outstanding Class A common units of Evolent Health LLC. Issuances of Common Units Evolent Health LLC may only issue Class A common units to us, as the sole managing member of Evolent Health LLC. Class B common units may be issued only to persons or entities we permit (The Advisory Board, TPG and another investor). Such issuances of Class B common units shall be made in exchange for cash or other consideration. Class B common units may not be transferred as Class B common units except to certain permitted transferees and in accordance with the restrictions on transfer set forth in the third amended and restated operating agreement of Evolent Health LLC. Any such transfer must be accompanied by the transfer of an equal number of shares of our Class B common stock. We entered into an exchange agreement with Evolent Health LLC, The Advisory Board, TPG and another investor. Pursuant to and subject to the terms of the exchange agreement and the third amended and restated operating agreement of Evolent Health LLC, holders of Class B common units, at any time and from time to time, may exchange one or more Class B common units, together with an equal number of shares of our Class B common stock, for shares of our Class A common stock on a one -for-one basis. The amount of Class A common stock issued or conveyed will be subject to equitable adjustments for stock splits, stock dividends and reclassifications. As holders exchange their Class B common units and Class B common stock for Class A common stock, our interest in Evolent Health LLC will increase. Series B Reorganization On September 23, 2013, the company undertook a reorganization in connection with a new round of equity financing (collectively the Series B Reorganization). The Series B Reorganization included the creation of Evolent Health Holdings and the conversion of the former Evolent Health, Inc. (“Evolent, Inc.”) into Evolent Health LLC, a limited liability company that is treated as a partnership for tax purposes. Each outstanding share of Evolent, Inc.’s stock was contributed to Evolent Health Holdings in exchange for a like number and class of membership units in Evolent Health LLC. Additionally, the then existing convertible notes of $13.5 million held by certain existing shareholders were transferred to Evolent Health Holdings. The existing shareholders of Evolent, Inc. received shares of stock in Evolent Health Holdings in exchange for their interest in Evolent, Inc. in a like number and class of shares previously held in Evolent, Inc. The Series B Reorganization represented a transaction among entities with a high degree of common ownership as both prior to and subsequent to the Series B Reorganization, the shareholders of Evolent Health Holdings held the exact same economic and voting interests in Evolent Health Holdings, and ultimately Evolent Health LLC, that they previously held in Evolent, Inc. Therefore, as a result of the Series B Reorganization, the financial statements of the registrant reflect the historical accounting of Evolent, Inc. through the date of the Series B Reorganization on September 23, 2013. Immediately subsequent to the Series B Reorganization, Evolent Health Holdings and Evolent Health LLC completed the issuance of series B equity. This issuance consisted of Evolent Health Holdings selling 6,467,376 series B preferred shares to UPMC for cash proceeds of $11.4 million and conversion of its convertible notes and accrued interest of $13.5 million . Evolent Health Holdings contributed the proceeds of this sale to Evolent Health LLC in exchange for series B preferred units in Evolent Health LLC. In addition, Evolent Health LLC directly sold 19,576,064 newly issued series B preferred units to new and existing shareholders for cash proceeds of $64.8 million and conversion of outstanding convertible notes and accrued interest of $10.4 million . Additionally, Evolent Health LLC directly issued shares to investors other than Evolent Health Holdings, including a new investor. Immediately following the Series B Reorganization, Evolent Health Holdings owned 57% of the equity and voting interests in Evolent LLC; however, certain participating rights were granted to a new investor in Evolent Health LLC such that Evolent Health Holdings no longer controlled Evolent Health LLC. As a result of this loss of control, Evolent Health Holdings deconsolidated Evolent Health LLC and recognized a gain resulting from this deconsolidation in its Statements of Operations. Evolent Health Holdings exercised significant influence over Evolent Health LLC; therefore, Evolent LLC was reflected as an equity method investment subsequent to the Series B Reorganization, as noted above, and a proportionate share of the income or loss of Evolent Health LLC’s operations was recognized in its Statements of Operations. Subsequent to the deconsolidation, the Company prospectively ceased recording the consolidated results of Evolent Health LLC and recorded only its proportionate share of income or loss of Evolent Health LLC based upon the Master Investor Rights’ Agreement executed by the Company, Evolent Health LLC and each of the shareholders at the time of the Series B Reorganization. Upon the Series B Reorganization, the net assets of $7.8 million of Evolent Health LLC were deconsolidated from Evolent Health Holdings, an equity method investment in Evolent Health LLC of $54.1 million was recorded, representing the fair value of Evolent Health Holdings’ retained ownership in Evolent Health LLC, and a gain upon deconsolidation of $46.2 million was recorded. The fair value of the equity method investment was determined using customary valuation methods. The underlying assumptions including volatility, time to liquidity event and marketability were generally not observable in the marketplace, and, therefore, involved significant judgments. The gain was recorded within “Gain on deconsolidation” within the Statements of Operations. This was a nontaxable transaction which resulted in deferred tax liabilities of $16.6 million being recorded at the date of the Series B Reorganization related to the book versus tax basis differential of the equity method investment. The recording of these deferred tax liabilities resulted in the release of an equal amount of valuation allowance related to the Company’s deferred tax assets, resulting in no net impact to income tax expense. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | Investments The amortized cost, gross unrealized gains and losses, and fair value of our investments (in thousands) as of December 31, 2015 , were as follows: Gross Gross Amortized Unrealized Unrealized Fair Costs Gains Losses Value U.S. Treasury bills $ 28,306 $ 115 $ 181 $ 28,240 Corporate bonds 25,757 110 80 25,787 Total investments $ 54,063 $ 225 $ 261 $ 54,027 We held no investments as of December 31, 2014. The amortized cost and fair value of our investments by contractual maturities (in thousands) as of December 31, 2015 , were as follows: Amortized Fair Cost Value Due in one year or less $ 9,445 $ 9,451 Due after one year through five years 44,618 44,576 Total $ 54,063 $ 54,027 Our investments are classified as held-to-maturity as we have both the intent and ability to hold the investments until their individual maturities. There were no identified events or changes in circumstances that had a significant adverse effect on the values of these investments. If there was evidence of a decline in fair value below the amortized cost basis which is other than temporary the cost basis of the individual security would be written down to fair value as a new cost basis and the amount of the write-down would be included in earnings. The new cost basis would not be changed for subsequent recoveries in fair value. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net The following summarizes our property and equipment (in thousands) as of December 31, 2015: Computer hardware $ 232 Furniture and equipment 1,604 Internal-use software development costs 6,363 Leasehold improvements 5,830 Total property and equipment 14,029 Accumulated depreciation and amortization (1,233 ) Total property and equipment, net $ 12,796 We had no property or equipment as of December 31, 2014 or 2013; however, amounts were recorded during 2013 prior to the Series B Reorganization. The Company capitalized $6.4 million , zero and zero of these internal-use software development costs for the years ended December 31, 2015 , 2014 and 2013, respectively. The net book value of capitalized internal-use software development costs was $6.3 million as of December 31, 2015 . Depreciation expense related to property and equipment was $1.2 million , zero and $0.8 million for the years ended December 31, 2015 (subsequent to the date of the Offering Reorganization), 2014 and 2013 (prior to the date of the Series B Reorganization), respectively, of which amortization expense related to capitalized internal-use software development costs was less than $0.1 million , zero and zero for the years ended December 31, 2015 (subsequent to the date of the Offering Reorganization), 2014 and 2013 (prior to the date of the Series B Reorganization), respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill As part of the Offering Reorganization described in Note 4 , we recorded $608.9 million in goodwill on our Consolidated Balance Sheets. Goodwill has an indefinite life and is not amortized; rather it is reviewed for impairment at least annually on October 31 or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company believes that no such impairment indicators existed prior to or subsequent to our annual testing date during 2015 and, accordingly, did not recognize any impairment of goodwill. On October 31, 2015, we performed our annual impairment test. To determine the implied fair value for our single reporting unit, we utilize both a discounted cash flow valuation approach (“income approach”) and a market multiple valuation approach (“market approach”). In determining the estimated fair value, we consider discounted cash flow calculations of management’s estimates of future financial performance, management’s long-term plans, the level of our own share price and assumptions that market participants would make in valuing our reporting unit. This analysis requires us to make judgments about revenues, expenses, fixed asset and working capital requirements, the timing of exchanges of our Class B common shares, capital market assumptions and discount rates. As of October 31, 2015, our single reporting unit passed the Step 1 analysis as the implied fair value was greater than the carrying value. In interim periods between annual goodwill reviews, we also evaluate qualitative factors including, but not limited to (i) macroeconomic conditions, (ii) industry and market considerations, (iii) our overall financial performance including an analysis of our current and projected cash flows, revenue and earnings, (iv) a sustained decrease in share price and (v) other relevant entity-specific events including changes in strategy, customers, or litigation. As a result of the Offering Reorganization, we revalued our consolidated balance sheet to the market value of our IPO share price of $17.00 . Subsequent to December 31, 2015, our share price has remained significantly below the IPO price. If a sustained decrease in the price of our Class A common stock continues, we may be required to write down a portion of our $608.9 million of goodwill. For example, the closing price of our Class A common stock on the NYSE on February 25, 2016, was $8.71 . If our Class A common stock price remains at a similar level through the first quarter of 2016, it is more likely than not that we will be required to write down a portion of our $608.9 million of goodwill on our Consolidated Balance Sheets and report a charge in impairment of goodwill on our Consolidated Statements of Operations for the relevant periods. Any impairment charges that we may record in the future could be material to our results of operations. Intangible Assets, Net As part of the Offering Reorganization described in Note 4 , intangible assets of $169.0 million were recorded on our Consolidated Balance Sheets. Details of our intangible assets (in thousands) as of December 31, 2015 , are presented below: Weighted- Average Gross Net Remaining Carrying Accumulated Carrying Useful Life Amount Amortization Value Corporate trade name 19.4 $ 19,000 $ 554 $ 18,446 Customer relationships 24.4 120,000 2,797 117,203 Technology 6.4 30,000 2,497 27,503 Total $ 169,000 $ 5,848 $ 163,152 We had no intangible assets as of December 31, 2014. Amortization expense related to intangible assets for the years ended December 31, 2015 , 2014 and 2013 (prior to the Series B Reorganization), was $5.8 million , zero and $0.4 million , respectively. Amortization expense in 2013 was related to a software license contributed by UPMC for use and resale as part of our service offerings. Future estimated amortization of intangible assets for the next five years as of December 31, 2015 , is approximately $10.0 million per year. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies UPMC Reseller Agreement The Company and the UPMC are parties to a Reseller, Services and Non-Competition Agreement, dated August 31, 2011 (the “Original UPMC Reseller Agreement”), which was amended and restated by the parties on June 27, 2013 (as so amended, the “UPMC Reseller Agreement”). Under the terms of the UPMC Reseller Agreement, UPMC has appointed the Company as a non-exclusive reseller of certain services, subject to certain conditions and limitations specified in the UPMC Reseller Agreement. If the Company failed to generate minimum revenue for UPMC as a result of the provision of services during the four year period ended August 31, 2015, UPMC would be entitled to receive, for no consideration, up to 1,000,000 shares of Class A common stock, based on a formula set forth in the UPMC Reseller Agreement. The Company met this commitment in the first quarter of 2015. In consideration for the Company’s obligations under the UPMC Reseller Agreement and subject to certain conditions described therein, UPMC has agreed not to sell certain products and services directly to the Company’s customers and top prospects. The Advisory Board Company Reseller Agreement The Company and The Advisory Board are parties to a Services, Reseller, and Non-Competition Agreement, dated August 31, 2011 (the “Original Advisory Board Reseller Agreement”), which was amended and restated by the parties on June 27, 2013, and May 1, 2015 (as so amended, the “Advisory Board Company Reseller Agreement”). Under the terms of the Advisory Board Company Reseller Agreement, The Advisory Board shall provide certain services to the Company on an as-requested basis. In addition, The Advisory Board has a right of first offer to provide certain specified services during the term of the Agreement and has the rights to collect certain fees for specified referrals. Contingencies Tax Receivables Agreement In connection with the Offering Reorganization, the Company entered into the TRA with certain of its investors, which provides for the payment by the Company to these investors of 85% of the amount of the tax benefits, if any, that the Company is deemed to realize as a result of increases in our tax basis related to exchanges of Class B common units as well as tax benefits attributable to the future utilization of pre-IPO NOLs. These payment obligations are obligations of the Company. For purposes of the TRA, the benefit deemed realized by the Company will be computed by comparing its actual income tax liability to the amount of such taxes that the Company would have been required to pay had there been no increase to the tax basis of the assets of the Company as a result of the exchanges or had the Company had no NOL carryforward balance. The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including: • The timing of the exchanges and the price of the Class A shares at the time of the transaction, triggering a tax basis increase in the Company’s asset and a corresponding benefit to be realized under the TRA; and • The amount and timing of our taxable income - the Company will be required to pay 85% of the tax savings as and when realized, if any. If the Company does not have taxable income, it will not be required to make payments under the TRA for that taxable year because no tax savings were actually realized. Due to the items noted above, the fact that no share exchanges have occurred as of December 31, 2015 , and that the Company’s historical losses have not been utilized, the Company has not recorded a liability pursuant to the TRA. Litigation Matters We are engaged from time to time in certain legal disputes arising in the ordinary course of business, including employment claims. When the likelihood of a loss contingency becomes probable and the amount of the loss can be reasonably estimated, we accrue a liability for the loss contingency. We continue to review accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. We had no such accruals as of December 31, 2015 . Commitments Lease Commitments The Company has entered into lease agreements for its office location in Arlington, Virginia. In connection with these lease agreements, the Company is required to maintain a $2.0 million letter of credit, which declines annually throughout the term of the lease, and restricted cash of $1.7 million . As of December 31, 2015 , the restricted funds held in connection with the lease were $3.7 million . Total rental expense on operating leases for the years ended December 31, 2015 , 2014 and 2013, was $2.3 million , zero and $1.5 million . Future minimum rental commitments (in thousands) as of December 31, 2015 , were as follows: 2016 $ 3,254 2017 3,335 2018 3,418 2019 3,504 2020 3,591 Thereafter — Total $ 17,102 Indemnifications The Company’s customer agreements generally include a provision by which the Company agrees to defend its customers against third party claims (a) for death, bodily injury, or damage to personal property caused by Company negligence or willful misconduct, (b) by former or current Company employees arising from such managed service agreements, (c) for intellectual property infringement under specified conditions and (d) for Company violation of applicable laws, and to indemnify them against any damages and costs awarded in connection with such claims. To date, the Company has not incurred any material costs as a result of such indemnities and has not accrued any liabilities related to such obligations in the accompanying financial statements. Registration rights agreement We entered into a registration rights agreement with The Advisory Board, UPMC, TPG and another investor to register for sale under the Securities Act, shares of our Class A common stock, including those delivered in exchange for Class B common units in the circumstances described above. Subject to certain conditions and limitations, this agreement provides these investors with certain demand, piggyback and shelf registration rights. The registration rights granted under the registration rights agreement will terminate upon the date the holders of shares that are a party thereto no longer hold any such shares that are entitled to registration rights. We will pay all expenses relating to any demand, piggyback or shelf registration, other than underwriting discounts and commissions and any transfer taxes, subject to specified conditions and limitations. The registration rights agreement will include customary indemnification provisions, including indemnification of the participating holders of shares of Class A common stock and their directors, officers and employees by us for any losses, claims, damages or liabilities in respect thereof and expenses to which such holders may become subject under the Securities Act, state law or otherwise. Credit and Concentration Risk The Company is subject to significant concentrations of credit risk related to cash and cash equivalents, investments and accounts receivable. The Company’s cash and cash equivalents and investments are held at financial institutions that management believes to be of high credit quality. While the Company maintains its cash and cash equivalents and investments with financial institutions with high credit ratings, it often maintains these deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses on cash and cash equivalents or investments to date. The following table summarizes those customers who represented at least 10% of our revenue for the periods presented: For the Years Ended December 31, 2015 2013 Customer A 11.2 % 12.6 % Customer B 11.8 % 10.2 % Customer C 19.6 % 34.2 % Customer D 14.1 % 13.2 % Customer E 15.6 % * * Represents less than 10.0% of the respective balance The following table summarizes those customers who represented at least 10% of our accounts receivable as of December 31, 2015: Customer B 28.1 % Customer C 23.2 % Customer E 12.9 % Customer F 11.4 % At times our contracts may be amended to change the nature and price of the services and/or the time period over which they are provided. In 2015, we signed two amendments to our agreement with Piedmont WellStar Health Plan, noted as customer C above, that reduced our expected revenue under that contract in future periods. In connection with the amendments, the customer also sold its 2.2% ownership interest in us to certain of our pre-IPO investors, consisting of TPG, The Advisory Board and UPMC. During the fourth quarter of 2015, we agreed to amend the terms of our contract with WakeMed Health and Hospitals and changed our fee structure from a PMPM-based fee to a combination of a fixed-fee and a performance-based fee. The fixed portion of our fee will be an amount equal to approximately 60% of our 2015 revenue attributable to this customer. The performance-based portion of our fee relates to populations that will move to a new program. The performance-based fee for these populations, which accounted for approximately 30% of our 2015 revenue attributable to WakeMed Health and Hospitals, is contingent upon our customer achieving certain performance metrics. In addition, if WakeMed Health and Hospitals exceeds the performance metrics, we will be entitled to additional payments under the amended agreement. The performance metrics will be measured and the revenue related to the performance-based fees will be recognized in the calendar year following the relevant service period. As a result, revenue we recognize in 2016 attributable to WakeMed Health and Hospitals will be limited to the fixed fee attributable to this customer. Additionally, as part of the amendment, we were released from an exclusivity provision and as a result we will be able to pursue our strategy to expand into the Medicaid market in certain geographic areas that were previously restricted. The Company is also subject to significant concentration risk as a significant portion of our revenue is derived from services provided to our customers on our behalf by UPMC. UPMC is a founding investor in our organization and we have entered into a long-term agreement with them to conduct these services on our behalf; however, in the event of a disruption in service from UPMC, our revenue would be adversely impacted while we obtained a replacement vendor. The Company is also subject to significant concentration risk as materially all of our cash and cash equivalents are held in a single money market fund. As of December 31, 2015 , $122.3 million of cash and cash equivalents were held in a money market fund. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share The following table sets forth the computation of basic and diluted earnings per share available for common stockholders (in thousands, except per share data): For the Years Ended December 31, 2015 2014 2013 Net income (loss) $ 319,814 $ (25,246 ) $ 20,023 Less: Net income (loss) attributable to non-controlling interests (12,680 ) — — Undeclared cumulative preferred dividends 2,184 5,141 3,659 Redemption of preferred stock at amount in excess of carrying value — 750 — Undistributed income allocated to participating securities — — 13,946 Net income (loss) available for common shareholders - Basic 330,310 (31,137 ) 2,418 Add: Net income (loss) attributable to non-controlling interests (12,680 ) — — Undeclared cumulative preferred dividends converted during the period 2,184 — — Adjustment to net income for dilutive securities — — 539 Net income (loss) available for common shareholders - Diluted $ 319,814 $ (31,137 ) $ 2,957 Weighted-average common shares outstanding - Basic 25,129 2,314 964 Dilutive effect of restricted stock and restricted stock units 17 — 269 Dilutive effect of options 1,510 — — Dilutive effect of convertible preferred stock — — 1,755 Assumed conversion of convertible preferred stock at beginning-of-period 9,397 — — Assumed conversion of Class B common shares to Class A common shares 10,083 — — Weighted-average common shares outstanding - Diluted 46,136 2,314 2,988 Earnings (Loss) per Common Share Basic $ 13.14 $ (13.46 ) $ 2.51 Diluted 6.93 (13.46 ) 0.99 Anti-dilutive shares (in thousands) excluded from the calculation of weighted-average common shares presented above are presented below: For the Years Ended December 31, 2015 2014 2013 Convertible preferred stock — 22,222 15,721 Restricted stock — 792 — Total — 23,014 15,721 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation 2011 and 2015 Equity Incentive Plans The Company issues awards, including stock options, restricted stock and RSUs, under the Evolent Health Holdings, Inc. 2011 Equity Incentive Plan (the “2011 Plan”) and the 2015 Evolent Health, Inc. Omnibus Incentive Compensation Plan (the “2015 Plan”). We assumed the 2011 Plan in connection with the merger of Evolent Health Holdings with and into Evolent Health, Inc. The 2011 Plan allows for the grant of an array of equity-based and cash incentive awards to our directors, employees, including named executive officers, and other service providers. The 2011 Plan was amended on September 23, 2013, to increase the number of shares authorized to 9,141,268 shares of the Company’s common stock. As of December 31, 2015 and 2014, 5,067,900 and 4,156,400 stock options, respectively, and 3,775,240 shares of restricted stock have been issued, net of forfeitures, under the 2011 Plan. On May 1, 2015, the Board of Directors approved and authorized the 2015 Plan which provides for the issuance of 6,000,000 shares of the Company’s Class A common stock. As of December 31, 2015 , 673,778 stock options and 333,354 RSUs have been issued, net of forfeitures, under the 2015 Plan. We follow an employee model for our stock-based compensation as awards are granted in the stock of the Company to employees of the consolidated subsidiary, Evolent Health LLC. During the period subsequent to the Series B Reorganization and prior to the Offering Reorganization, stock-based awards were granted in the stock of the Company to employees of the equity method investee, Evolent Health, LLC. As the employees of Evolent Health LLC were not providing service to the Company, we did not record stock-based compensation during that period; however, under Evolent Health LLC’s Amended and Restated Operating Agreement, Evolent Health LLC was required to issue an identical amount of common units to the Company in exchange for the underlying stock that had been awarded. As a result, the Company recorded an increase in the equity method investment and a non-cash issuance of common equity during the noted period. Additionally, as the stock-based awards were granted in the stock of a non-consolidated entity, Evolent Health LLC followed a “non-employee” model for recording stock-based compensation which required the awards to be marked-to-market through net income at the end of each reporting period until vesting occurred. See below for details on how the Company and our equity-method investee determined the value of our common stock for purposes of stock-based compensation prior to our IPO. Common Stock Valuation The historical valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. In the absence of a public trading market, we considered all relevant facts and circumstances known at the time of valuation, made certain assumptions based on future expectations and exercised significant judgment to determine the fair value of our common stock. The factors considered in determining the fair value included, but were not limited to the following: • Valuations of our common stock; • Recent issuances of preferred stock, as well as the rights, preferences and privileges of our preferred stock relative to our common stock; • The Company’s historical financial results and estimated trends and projections for our future operating and financial performance; • Likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions; • The market performance of comparable, publicly-traded companies; and • The overall economic and industry conditions and outlook. Stock-based Compensation Expense Total compensation expense (in thousands) by award type and line item in our consolidated financial statements were as follows: For the Years Ended December 31, 2015 2014 2013 Award Type Stock options $ 8,913 $ — $ — Restricted stock 4,875 — 1,111 RSUs 942 — — Total $ 14,730 $ — $ 1,111 Line Item Cost of revenue $ 1,144 $ — $ 77 Selling, general and administrative expenses 13,586 — 1,034 Total $ 14,730 $ — $ 1,111 We recorded $4.9 million in stock-based compensation during 2015, for the acceleration of our unvested restricted shares which vested immediately after the Offering Reorganization and prior to the IPO. Less than $0.1 million of stock-based compensation included in the totals above was capitalized as software development costs in 2015, 2014 and 2013. Total unrecognized compensation expense (in thousands) and expected weighted-average period (in years) by award type for all of our stock-based incentive plans as of December 31, 2015, were as follows: Weighted- Average Expense Period Stock options $ 37,898 2.43 RSUs 4,558 3.11 Total $ 42,456 Stock Options Options awarded under the incentive compensation plans are generally subject to a four -year graded service vesting period where 25% of the award vests after each year of service and have a maximum term of 10 years . Information with respect to our options is presented in the following disclosures. The option price assumptions used for our stock option awards were as follows: For the Years Ended December 31, 2015 2014 Weighted-average fair value per option granted $ 10.41 $ 7.48 Assumptions: Expected life (in years) 6.25 6.25 Expected volatility 45 % 35 % Risk-free interest rate 1.4 - 1.8% 1.8 - 2.0% Dividend yield — % — % No options were granted during 2013. The fair value of options is determined using a Black-Scholes options valuation model with the assumptions disclosed in the table above. The dividend rate is based on the expected dividend rate during the expected life of the option. Expected volatility is based on the historical volatility of a peer group of public companies over the most recent period commensurate with the estimated expected term of the Company’s awards due to the limited history of our own stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of the options granted represents the weighted-average period of time from the grant date to the date of exercise, expiration or cancellation based on the midpoint convention. Information with respect to our stock options (aggregate intrinsic value shown in thousands, weighted-average remaining contractual term shown in years) was as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding as of December 31, 2014 4,144,400 $ 3.84 Granted 1,823,425 11.08 Exercised (39,750 ) 3.84 Forfeited (238,147 ) 6.89 Outstanding as of December 31, 2015 5,689,928 $ 6.03 8.63 $ 34,589 Vested and expected to vest after December 31, 2015 5,436,134 $ 14.77 8.63 $ 33,093 Exercisable at December 31, 2015 1,697,450 $ 10.71 9.01 $ 14,018 The total fair value of options vested during the years ended December 31, 2015, 2014 and 2013, was $11.1 million , $2.3 million and zero , respectively. The total intrinsic value of options exercised during 2015, 2014 and 2013 was $0.5 million , less than $0.1 million and zero , respectively. We issue new shares to satisfy option exercises. Restricted stock Restricted stock awarded under the incentive compensation plans are generally subject to a graded service vesting period where 25% of the award vests after one year of service and the remaining award vests quarterly thereafter. Restricted stock awards are issued to the participants for no consideration. Information with respect to our restricted stock is presented below: Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2014 1,275,792 $ 0.15 Vested (1,275,792 ) 0.15 Outstanding as of December 31, 2015 — $ — Restricted Stock Units RSUs awarded under the incentive compensation plans are generally subject to a four -year graded service vesting period where 25% of the award vests after each year of service and are issued to the participants for no consideration. Information with respect to our RSUs is presented below: Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2014 — $ — Granted 351,672 16.85 Forfeited (18,318 ) 17.00 Outstanding as of December 31, 2015 333,354 $ 16.84 Taxes The company uses the “with and without” approach for recognizing the excess tax benefits from stock-based compensation. Under the “with and without” approach, windfalls are considered realized and recognizable for financial statement purposes only when an incremental cash benefit is provided after considering all other tax benefits, including NOLs, available to the company. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company incurs U.S. federal, state and local income taxes on the Company’s allocable share of taxable income of Evolent Health LLC. For financial reporting purposes, income before income tax is derived exclusively from U.S. sources. Components of income tax expense (benefit) consist of the following: For the Years Ended December 31, 2015 2014 2013 Current Federal $ 15 $ — $ 8 State and local — — — Total current tax expense 15 — 8 Deferred Federal 20,586 — — State and local 2,874 — — Total deferred tax expense 23,460 — — Total tax expense $ 23,475 $ — $ 8 A reconciliation of the U.S. statutory tax rate to our effective tax rate is presented below: For the Years Ended December 31, 2015 2014 2013 U.S. statutory tax rate 35.0 % 35.0 % 35.0 % U.S. state income taxes, net of U.S. federal tax benefit 4.9 % 4.0 % 2.8 % Change in valuation allowance 4.4 % (26.5 )% (33.7 )% Remeasurement gain (40.1 )% — % (5.0 )% Non-deductible stock-based compensation expense 1.0 % (11.0 )% — % Other, net 1.6 % (1.5 )% 0.9 % Effective rate 6.8 % — % — % Deferred tax balances reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the tax rates in effect when the temporary differences are expected to be recovered or settled. Significant components of the Company’s deferred tax assets and liabilities were as follows: As of December 31, 2015 2014 Deferred Tax Assets Start-up and organizational costs $ 362 $ 406 Internally developed software costs 8,085 4,655 Net operating loss carryovers 39,717 30,683 Other 521 105 Subtotal 48,685 35,849 Valuation allowance (19,974 ) (6,915 ) Total deferred tax assets 28,711 28,934 Deferred Tax Liabilities Equity-method investment 50,029 28,934 Total deferred tax liabilities 50,029 28,934 Net deferred tax assets (liabilities) $ (21,318 ) $ — Changes in our valuation allowance were as follows: For the Years Ended December 31, 2015 2014 2013 Balance at beginning-of-year $ 6,914 $ 98 $ 7,236 Charged to costs and expenses 15,202 6,816 (7,138 ) Charged to other accounts (1) (2,142 ) — — Balance at end-of-year $ 19,974 $ 6,914 $ 98 (1) Amounts charged to other accounts includes $2.1 million charged to additional paid-in-capital for the year ended December 31, 2015 Pursuant to the Offering Reorganization, the Company recorded $23.5 million in income tax provision for the year ended December 31, 2015 , due to changes in our deferred tax liability related to the increased difference in the book basis compared to the tax basis in our partnership interest in Evolent Health LLC. The Company continues to record a valuation allowance against the assets that are not more likely than not to be realized, without considering potentially offsetting deferred tax liabilities established with respect to certain indefinite lived components, or components of the deferred tax liability expected to reverse outside of the net operating loss carryover period, and as such were not considered a source of future taxable income for realizing the deferred tax assets. For the year ended December 31, 2014 , the effective tax rate was 0% , due to the impact of the full valuation allowance recorded against the Company’s net deferred tax assets; therefore, the Company recorded no provision or benefit for income taxes for these periods. The Offering Reorganization was treated as a nontaxable transaction and as such there was no step-up to fair value to the historical tax bases of the assets. The Company is required to record a deferred tax asset or liability resulting from book and tax basis differences related to assets and liabilities; therefore, as a result of the Offering Reorganization, the Company established a deferred tax liability in the amount of $21.3 million during the year ended December 31, 2015 , as income tax expense in the amount of $23.5 million and additional-paid-in capital of $2.1 million . As of December 31, 2015 , the Company had NOLs of approximately $99.6 million available to offset future taxable income that begin to expire in 2031 through 2035 . However, as realization of such tax benefit is not more likely than not, based on management’s evaluation, the Company has also established a valuation allowance. Internal Revenue Code Section 382 imposes limitations on the utilization of NOLs in the event of certain changes in ownership of the Company, which may have occurred or could occur in the future. This could impose an annual limit on the Company’s ability to utilize pre-IPO NOLs and could cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect. As of each applicable period-end, the Company has not recognized any uncertain tax positions, penalties or interest as we have concluded that no such positions exist. The Company is not currently subject to income tax audits in any U.S. or state jurisdictions for any tax year. Tax Receivables Agreement Pursuant to the Offering Reorganization, subsequent exchanges of Class B common units of Evolent Health LLC, together with an equal number of shares of our Class B common stock, for shares of our Class A common stock, are expected to increase our tax basis in our share of Evolent Health LLC’s tangible and intangible assets. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits and, therefore, may reduce the amount of tax that we would otherwise be required to pay in the future. In addition, certain NOLs of Evolent Health Holdings (and of an affiliate of TPG) are available to us as a result of the Offering Reorganization. As part of the Offering Reorganization, we entered into a TRA with the holders of Class B common units. The agreement requires us to pay to such holders 85% of the cash savings, if any, in U.S. federal, state and local and foreign income tax (as applicable) we realize as a result of any deductions attributable to future increases in tax basis following the exchanges described above (calculated assuming that any post-offering transfer of Class B common units had not occurred) or deductions attributable to imputed interest or future increases in tax basis following payments made under the TRA. We are accounting for these payments as contingent liabilities and will recognize them in our Consolidated Statements of Operations when their realization is probable. Additionally, pursuant to the same agreement we will pay the former stockholders of Evolent Health Holdings 85% of the amount of the cash savings, if any, in U.S. federal, state and local and foreign income tax that we realize as a result of the utilization of the NOLs of Evolent Health Holdings (and the affiliate of TPG) attributable to periods prior to the Offering Reorganization, approximately $79.3 million, as well as deductions attributable to imputed interest on any payments made under the agreement. We will benefit from the remaining 15% of any realized cash savings. The TRA was effective upon the completion of the Offering Reorganization and will remain in effect until all such tax benefits have been used or expired, or until the agreement is terminated. See Note 8 for additional discussion of the implications of the TRA. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We sponsor a tax-qualified 401(k) retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. We make matching contributions to the plan in accordance with the plan documents and various limitations under Section 401(a) of the Internal Revenue Code of 1986, as amended. After the Offering Reorganization in 2015 we contributed $2.4 million to the plan, and prior to Series B Reorganization LLC in 2013 we contributed $0.6 million to the plan. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment After the Series B Reorganization in 2013 and prior to the Offering Reorganization described in Note 4 , we did not control Evolent Health LLC, but were able to exert significant influence and, accordingly, accounted for our investment in Evolent Health LLC using the equity method of accounting. Subsequent to the Offering Reorganization, the Company consolidates the results of operations of Evolent Health LLC. The allocation of profits and losses to the shareholders of Evolent Health LLC were based upon the second amended and restated operating agreement of Evolent Health LLC. As part of recording our equity portion of the losses of Evolent Health LLC, the Company applied the hypothetical liquidation at book value basis of accounting which allocates profits and losses to the members based upon the value that would accrue to each member at each period end based upon a theoretical liquidation at book value at that time. During the period January 1, 2015, through June 3, 2015, Evolent Health, Inc.’s proportionate share of the losses of Evolent Health LLC was $28.2 million which included $0.8 million related to the amortization of a basis differential. During the year ended December 31, 2014 , Evolent Health, Inc.’s proportional share of the losses of Evolent Health LLC was $25.2 million , which included $2.0 million , related to the amortization of a basis differential. During the period from September 23, 2013, through December 31, 2013, Evolent Health, Inc.’s proportional share of the losses of Evolent Health LLC as $4.2 million , which included $0.7 million related to the amortization of a basis differential. The following is a summary of the financial position (in thousands) of Evolent Health LLC as of December 31, 2014: Assets Current assets $ 56,718 Non-current assets 27,586 Total assets $ 84,304 Liabilities Current liabilities $ 50,029 Non-current liabilities 5,772 Total liabilities 55,801 Redeemable Preferred Units and Members' Equity Redeemable preferred units 15,734 Members' equity 12,769 Total liabilities, redeemable preferred units and members' equity $ 84,304 The summary of the financial position of Evolent Health LLC as of December 31, 2015, is not presented above as the Company consolidates the results of Evolent Health LLC after the date of the Offering Reorganization. The following is a summary of the operating results of Evolent Health LLC (in thousands) for the periods in which it was accounted for as an equity method investment: For the Years Ended December 31, 2015 (1) 2014 2013 (2) Total revenue $ 61,814 $ 100,888 $ 14,610 Cost of revenue (exclusive of depreciation and amortization) 44,839 73,122 16,309 Gross profit 16,975 27,766 (1,699 ) Operating income (loss) (44,119 ) (52,449 ) (10,832 ) Net income (loss) (44,079 ) (52,263 ) (10,832 ) (1) January 1, 2015, through June 3, 2015. (2) September 23, 2013, through December 31, 2013. |
Non-controlling Interests
Non-controlling Interests | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests In connection with the closing of the IPO, we used the net proceeds of the IPO to purchase 13,225,000 newly-issued Class A common units in Evolent Health LLC. Additionally we acquired 2,051,468 Class A common units in Evolent Health LLC, at $17.00 per unit, as a result of the merger of the TPG affiliate with and into Evolent Health, Inc. as further described in Note 4. As of December 31, 2015 , we owned 70.3% of Evolent Health LLC. Changes in non-controlling interests (in thousands) for the year ended December 31, 2015, were: Non-controlling interests as of beginning-of-period $ — Estimated fair value of non-controlling interests as a result of the Offering Reorganization 332,793 Decrease in non-controlling interests as a result of the merger of the TPG affiliate with and into Evolent Health, Inc. (34,875 ) Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests (12,680 ) Non-controlling interests as of end-of-period $ 285,238 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties The Company works closely with both of its founding investors, The Advisory Board and UPMC. The relationship with The Advisory Board is centered on educating health system CEOs on innovations in the healthcare space. In return, the Company makes valuable connections with CEOs of health systems that could then become customers. The Company’s relationship with UPMC is a subcontractor relationship where UPMC has agreed to execute certain tasks (primarily TPA services) necessary to deliver on the Company’s customer commitments. Prior to the Offering Reorganization, we issued shares of our stock to certain of our customers while concurrently entering into revenue contracts with those customers. Those customers are considered related parties and the balances and/or transactions with them are reported on our consolidated financial statements. |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited) The unaudited quarterly results of operations (in thousands, except per share data) were as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2015 Total revenue $ — $ 10,414 $ 40,406 $ 46,058 Total operating expenses — 21,953 57,652 60,245 Net income (loss) (11,319 ) 356,488 (17,088 ) (8,267 ) Net income (loss) attributable to non-controlling interests — (3,424 ) (5,108 ) (4,148 ) Net income (loss) attributable to Evolent Health, Inc. (11,319 ) 359,912 (11,980 ) (4,119 ) Earnings (loss) per common share Basic $ (4.22 ) $ 25.69 $ (0.29 ) $ (0.10 ) Diluted (4.22 ) 9.73 (0.29 ) (0.10 ) 2014 Total revenue $ — $ — $ — $ — Total operating expenses — — — — Net income (loss) (5,442 ) (5,939 ) (3,167 ) (10,698 ) Net income (loss) attributable to non-controlling interests — — — — Net income (loss) attributable to Evolent Health, Inc. (5,442 ) (5,939 ) (3,167 ) (10,698 ) Earnings (loss) per common share Basic $ (3.35 ) $ (3.17 ) $ (2.07 ) $ (4.37 ) Diluted (3.35 ) (3.17 ) (2.07 ) (4.37 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 1, 2016, the Company entered into a strategic alliance with University Health Care d/b/a Passport Health Plan (“Passport”), a leading nonprofit community-based and provider-sponsored health plan administering Kentucky Medicaid and federal Medicare Advantage benefits to over 280,000 Kentucky Medicaid and Medicare Advantage beneficiaries. As part of the transaction, we issued 1,067,271 Class A common shares to acquire capabilities and assets from Passport to enable us to build out a Medicaid Center of Excellence based in Louisville, Kentucky. Additional equity consideration of up to $10.0 million may be earned by Passport should we obtain new third party Medicaid businesses in future periods. This transaction also includes a 10 -year arrangement under which we will provide various health plan management and managed care services to Passport. We have not yet finalized the accounting for this transaction which will be included in our financial results beginning February 1, 2016. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with GAAP. |
Accounting estimates and assumptions | Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. In the accompanying consolidated financial statements, estimates are used for, but not limited to, the valuation of assets, liabilities, consideration related to business combinations and step acquisitions, revenue recognition including discounts and credits, estimated selling prices for deliverables in multiple element arrangements, contingent payments, allowance for doubtful accounts, depreciable lives of assets, impairment of long lived assets (including equity method investments), stock-based compensation, deferred income taxes and valuation allowance, contingent liabilities, valuation of intangible assets (including goodwill) and the useful lives of intangible assets. |
Fair value measurement | Fair Value Measurement Our Consolidated Balance Sheets include various financial instruments (primarily restricted cash, investments, accounts receivable, accounts payable, accrued expenses, deferred revenue and other current liabilities) that are carried at cost and that approximate fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include: • Level 1 - inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date; • Level 2 - inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and • Level 3 - inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. Financial Assets and Liabilities Measured at Fair Value We hold a majority of our cash and cash equivalents, or $122.3 million , in a money market fund which is measured at fair value using Level 1 inputs. Non-financial Assets and Liabilities Measured at Fair Value . The Company does not have any non-financial assets and liabilities measured at fair value on a recurring basis. The Company measures certain non-financial assets and liabilities, including property and equipment, goodwill and intangible assets, at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be impaired. |
Cash and cash equivalents | Cash and Cash Equivalents The Company holds materially all of our cash and cash equivalents in money market funds with original maturities of three months or less that are carried at cost which approximates fair value. |
Restricted cash | Restricted Cash Restricted cash is carried at cost, which approximates fair value, and includes cash used to collateralize various contractual obligations |
Accounts receivable and allowance for doubtful accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded when amounts are contractually billable under our customer contracts and are recorded at the invoiced amount and do not bear interest. The Company’s contracts typically include installment payments that do not necessarily correlate to the pattern of revenue recognition. In assessing the valuation of the allowance for doubtful accounts, management reviews the collectability of accounts receivable on an individual account basis. The allowance is adjusted periodically based on management’s determination of collectability, and any accounts that are determined to be uncollectible are written off against the allowance. |
Property and equipment, net | Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are computed using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. The following summarizes the estimated useful lives by asset classification: Computer hardware 3 years Furniture and equipment 3 years Internal-use software development costs 7 years Leasehold improvements Shorter of useful life or remaining lease term When an item is sold or retired, the cost and related accumulated depreciation or amortization is eliminated and the resulting gain or loss, if any, is recorded in our Consolidated Statements of Operations. We periodically review the carrying value of our long-lived assets, including property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. For long-lived assets to be held and used, impairments are recognized when the carrying amount of a long-lived asset group is not recoverable and exceeds fair value. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset group exceeds its fair value. |
Software development costs | Software Development Costs The Company capitalizes the cost of developing internal-use software, consisting primarily of personnel and related expenses (including stock-based compensation and employee taxes and benefits) for employees and third parties who devote time to their respective projects. Internal-use software costs are capitalized during the application development stage – when the research stage is complete and management has committed to a project to develop software that will be used for its intended purpose and any costs incurred during subsequent efforts to significantly upgrade and enhance the functionality of the software are also capitalized. Capitalized software costs are included in property and equipment, net on our Consolidated Balance Sheets. Amortization of internal-use software costs are recorded on a straight-line basis over their estimated useful life and begin once the project is substantially complete and the software is ready for its intended purpose. |
Research and development costs | Research and Development Costs Research and development costs consist primarily of personnel and related expenses (including stock-based compensation) for employees engaged in research and development activities as well as third party fees. All such costs are expensed as incurred. We focus our research and development efforts on activities that support our technology infrastructure, clinical program development, data analytics and network development capabilities. |
Goodwill | Goodwill We recognize the excess of the purchase price, plus the fair value of any non-controlling interests in the acquiree, over the fair value of identifiable net assets acquired as goodwill. Goodwill is not amortized, but is reviewed at least annually for indications of impairment, with consideration given to financial performance and other relevant factors. We perform a two-step test in our evaluation of the carrying value of goodwill, if qualitative factors determine it is necessary to complete the two-step goodwill impairment test. In Step 1 of the evaluation, the fair value is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and Step 2 is not required. If the fair value estimate is less than the carrying value, it is an indicator that impairment may exist, and Step 2 is required. In Step 2, the implied fair value of goodwill is determined. The fair value as determined in Step 1 is assigned to all of its net assets (recognized and unrecognized) as if the entity was acquired in a business combination as of the date of the impairment test. If the implied fair value of goodwill is lower than its carrying amount, goodwill is impaired and written down to its fair value; and a charge is reported in impairment of goodwill on our Consolidated Statements of Operations. See Note 7 for additional discussion about our goodwill impairment test conducted during the fourth quarter of 2015. |
Intangible assets, net | Intangible Assets, Net As noted above, on June 4, 2015, the Company completed the Offering Reorganization, following which we were required to remeasure the assets, liabilities and non-controlling interests of our equity-method investee, Evolent Health LLC, at fair value. Information regarding the determination and allocation of the fair value of the assets and liabilities are further described within Note 4 . Identified intangible assets are recorded at their estimated fair values at the date of acquisition and are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are used. The following summarizes the estimated useful lives by asset classification: Corporate trade name 20 years Customer relationships 25 years Technology 7 years Intangible assets are reviewed for impairment if circumstances indicate the Company may not be able to recover the asset’s carrying value. The Company evaluates recoverability by determining whether the undiscounted cash flows expected to result from the use and eventual disposition of that asset or group exceed the carrying value at the evaluation date. If the undiscounted cash flows are not sufficient to cover the carrying value, the Company measures an impairment loss as the excess of the carrying amount of the long-lived asset or group over its fair value. |
Leases | Leases The Company leases all of its office space and enters into various other operating lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. The operating lease agreements may contain tenant improvement allowances, rent holidays or rent escalation clauses. When such items are included in a lease agreement, the Company records a deferred rent asset or liability on the balance sheets equal to the difference between the rent expense and future minimum lease payments due. The rent expense related to these items is recognized on a straight-line basis in the Consolidated Statements of Operations over the terms of the leases. |
Impairment of equity method investments | Impairment of Equity Method Investments The Company considers potential impairment triggers for its equity method investment, and the equity method investment will be written down to fair value if there is evidence of a loss in value which is other-than-temporary. The Company may estimate the fair value of its equity method investments by considering recent investee equity transactions, discounted cash flow analyses, and recent operating results. If the fair value of the investment has dropped below the carrying amount, management considers several factors when determining whether other-than-temporary impairment has occurred. The estimation of fair value and whether other-than-temporary impairment has occurred requires the application of significant judgment and future results may vary from current assumptions. |
Deferred revenue | Deferred Revenue Deferred revenue consists of billings or payments received in advance of providing the requisite services or other instances where the revenue recognition criteria have not been met. |
Revenue recognition | Revenue Recognition Revenue from the Company’s services is recognized when there is persuasive evidence of an arrangement, performance or delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. At times, the Company enters into contracts that contain multiple deliverables and we evaluate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) if the delivered item has value to the customer on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, and delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the vendor. Revenue is then allocated to the units of accounting based on an estimate of each unit’s relative selling price. Revenue Recognition - Transformation Transformation contracts consist of strategic assessments, or blueprint contracts, and implementation contracts. Based on the strategic assessment generated in a blueprint contract, a customer may decide to move forward with a population health or health plan strategy; in these cases, the customer enters into an implementation contract in which the Company provides services related to the launch of this strategy. The Company recognizes revenue associated with transformation contracts based on a proportionate performance method, where revenue is recognized each period in proportion to the amount of the contract completed during that period. Contract completion is measured using output measures as best estimated by labor hours incurred compared to the total estimated labor hours necessary to complete our performance obligations contained in the contract. Revenue Recognition - Platform and Operations After the transformation phase, the Company often enters into a multi-year service contract with its customers where various population health, health plan operations and PBM services are provided on an ongoing basis to the members of the customers’ plans typically in exchange for a monthly service fee, PMPM fee or a percentage of plan premiums. Revenue from these contracts is recognized in the month in which the services are delivered. In certain arrangements, there is a contingent portion of our service fee including meeting service level targets, sharing in rebates, shared medical savings arrangements based on financial performance and other performance measures. The Company continuously monitors its compliance with these arrangements and recognizes revenue when the amount is estimable and there is evidence to support meeting the criteria. Credits and Discounts We also provide credits and discounts to our customers often based on achieving certain volume commitments or other criteria. Credits are assessed to determine whether they reflect significant and incremental discounts. If the discounts are significant, the Company allocates them between the contract deliverables or future purchases as appropriate. If the future credit expires unused, it is recognized as revenue at that time. |
Stock-based compensation | Stock-based Compensation The Company sponsors a stock-based incentive plan that provides for the issuance of stock-based awards to employees of our consolidated subsidiary, Evolent Health LLC. Our stock-based awards generally vest over a four year period and expire ten years from the date of grant. Subsequent to the Series B Reorganization in 2013, stock-based awards were granted in the stock of the Company to employees of its equity-method investee, Evolent Health LLC. As such, the Company was required to use a “non-employee” model for recognizing stock-based compensation, which required the awards to be marked-to-market through net income at the end of each reporting period until vesting occurred. Subsequent to the Offering Reorganization described in Note 4 , stock-based awards are granted in the Company’s stock to the Company’s consolidated subsidiary and compensation costs are therefore recognized using an “employee” model. Under the “employee” model, we no longer mark the awards to market at the end of each reporting period. We expense the fair value of stock-based awards included in our incentive compensation plans. Fair value of stock options is determined using a Black-Scholes options valuation methodology. The fair value of the awards is expensed over the performance or service period, which generally corresponds to the vesting period, on a straight-line basis and is recognized as an increase to additional paid-in capital. Stock-based compensation expense is reflected in cost of revenue and selling, general and administrative expenses in our Consolidated Statements of Operations. Additionally we capitalize personnel expenses attributable to the development of internal-use software, which include stock-based compensation costs. |
Income taxes | Income Taxes Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to the extent required. Considerable judgment and the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance, we consider many factors, including: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of temporary differences; the length of time carryovers can be utilized; and any tax planning strategies we would employ to avoid a tax benefit from expiring unused. We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. We did not have any such amounts accrued as of December 31, 2015 and 2014, and we have not identified any uncertain income tax positions that could have a material impact to the consolidated financial statements. We are subject to taxation in various jurisdictions in the U.S. and remain subject to examination by taxing jurisdictions for the years 2011 and all subsequent periods due to the availability of NOL carryforwards. We are a holding company and our assets consist of our direct ownership in Evolent Health LLC, for which we are the managing member. Evolent Health LLC is classified as a partnership for U.S. federal and applicable state and local income tax purposes and, as such, is not subject to U.S. federal, state and local income taxes. Taxable income or loss generated by Evolent Health LLC is allocated to holders of its units, including us, on a pro rata basis. Accordingly, we are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Evolent Health LLC. |
Earnings (loss) per share | Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to Class A common shareholders by the weighted-average number of Class A common shares outstanding. For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings per share by dividing net income available to Class A common shareholders by the weighted average number of Class A common shares assuming the conversion of the convertible preferred securities, which occurred on the date of the Offering Reorganization, occurred at the beginning of the respective period, plus the impact of all potential dilutive common shares, consisting primarily of common stock options and unvested restricted stock awards using the treasury stock method and our exchangeable Class B common stock. For periods of net loss, shares used in the earnings (loss) per share calculation represent basic shares as using diluted shares would be anti-dilutive. Prior to the Offering Reorganization, the Company issued securities other than common stock that participated in dividends (“participating securities”), and therefore, we utilized the two-class method to calculate earnings (loss) per share for the applicable periods. Participating securities include redeemable convertible preferred stock. The two-class method requires a portion of earnings to be allocated to the participating securities to determine the earnings available to common stockholders. Earnings (loss) available to the common stockholders is equal to net income (loss) less dividends paid on preferred stock, assumed periodic cumulative preferred stock dividends, repurchases of preferred stock for an amount in excess of carrying value and an allocation of any remaining earnings (loss) in accordance with the bylaws between the outstanding common and preferred stock as of the end of each applicable period. |
Operating segments | Operating Segments Operating segments are defined as components of a business that earn revenue and incur expenses for which discrete financial information is available that is evaluated, on a regular basis, by the chief operating decision maker (“CODM”) to decide how to allocate resources and assess performance. The Company’s CODM, the Chief Executive Officer, allocates resources at a consolidated level and therefore the Company views its operations and manages its business as one operating segment. All of the Company’s revenue is generated in the United States and all assets are located in the United States. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Adoption of New Accounting Standards In November 2015, the FASB ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position instead of separately presented as current and non-current under the current guidance. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We early adopted the requirements of this standard as of October 1, 2015, and included the required disclosures in Notes 4 and 11. The adoption of this ASU did not have a material impact on our consolidated financial statements. In prior periods our deferred tax assets and deferred tax liabilities were presented separately on our Consolidated Balance Sheets and such amounts netted to zero. We have retrospectively applied this ASU to our 2014 consolidated balance sheet presented herein and, therefore, no longer present deferred tax assets or liabilities in the period. Total assets and total liabilities decreased $1.1 million as a result of the adoption of this ASU. In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments , to simplify the accounting for measurement-period adjustments. The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2017. The provisions within this ASU must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. We early adopted the requirements of this standard as of October 1, 2015, and included the required disclosures in Note 4. Future Adoption of New Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , in order to clarify the principles of recognizing revenue. This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods or services in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. The FASB defines a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation. By completing all five steps of the process, the core principles of revenue recognition will be achieved. The amendments in the standard are effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016. We will adopt the requirements of this standard effective January 1, 2018, and are currently evaluating the impact of the adoption on our financial condition and results of operations. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This standard requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards by requiring an assessment for a period of one year after the date that the financial statements are issued. Further, based on certain conditions and circumstances, additional disclosures may be required. This standard is effective beginning with the first annual period ending after December 15, 2016, and for all annual and interim periods thereafter. Early application is permitted. The Company does not expect this standard to have an impact on the Company’s financial statements or related disclosures. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash and cash equivalents | Restricted cash is carried at cost, which approximates fair value, and includes cash used to collateralize various contractual obligations (in thousands) as follows as of December 31, 2015: Letters of credit for facility leases $ 3,710 Other 2,575 Total restricted cash 6,285 Non-current restricted cash 1,582 Current restricted cash $ 4,703 |
Summary of property and equipment | The following summarizes the estimated useful lives by asset classification: Computer hardware 3 years Furniture and equipment 3 years Internal-use software development costs 7 years Leasehold improvements Shorter of useful life or remaining lease term The following summarizes our property and equipment (in thousands) as of December 31, 2015: Computer hardware $ 232 Furniture and equipment 1,604 Internal-use software development costs 6,363 Leasehold improvements 5,830 Total property and equipment 14,029 Accumulated depreciation and amortization (1,233 ) Total property and equipment, net $ 12,796 |
Intangible assets estimated useful lives | The following summarizes the estimated useful lives by asset classification: Corporate trade name 20 years Customer relationships 25 years Technology 7 years Details of our intangible assets (in thousands) as of December 31, 2015 , are presented below: Weighted- Average Gross Net Remaining Carrying Accumulated Carrying Useful Life Amount Amortization Value Corporate trade name 19.4 $ 19,000 $ 554 $ 18,446 Customer relationships 24.4 120,000 2,797 117,203 Technology 6.4 30,000 2,497 27,503 Total $ 169,000 $ 5,848 $ 163,152 |
Organizational Transactions (Ta
Organizational Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organizational Transactions [Abstract] | |
Schedule of net assets acquired | The allocation of the value of the transaction (in thousands) is included below: Goodwill $ 608,903 Intangible assets 169,000 Cash and restricted cash 21,930 Other assets 49,239 Remeasurement gain on previously held equity interest (414,133 ) Liabilities and deferred revenue (71,299 ) Non-controlling interests (332,793 ) Carrying value of previously held equity interest (30,847 ) Purchase price $ — |
Business acquisition, pro forma information | This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations or of the results that would have occurred had the consolidation taken place on January 1, 2014. The pro forma adjustments were based on available information and assumptions that the Company believes are reasonable to reflect the impact of this acquisition on the Company’s historical financial information on a pro forma basis (in thousands). For the Years Ended December 31, 2015 2014 Revenue $ 163,520 $ 95,888 Net income (loss) (82,321 ) 307,162 Net income (loss) attributable to non-controlling interests (28,386 ) (29,470 ) Net income (loss) attributable to Evolent Health, Inc. (53,935 ) 336,632 Net income (loss) available to common shareholders: Basic $ (1.55 ) $ 13.33 Diluted (1.55 ) 6.73 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Summary investment holdings | Gross Gross Amortized Unrealized Unrealized Fair Costs Gains Losses Value U.S. Treasury bills $ 28,306 $ 115 $ 181 $ 28,240 Corporate bonds 25,757 110 80 25,787 Total investments $ 54,063 $ 225 $ 261 $ 54,027 |
Investments classified by contractual maturity date | The amortized cost and fair value of our investments by contractual maturities (in thousands) as of December 31, 2015 , were as follows: Amortized Fair Cost Value Due in one year or less $ 9,445 $ 9,451 Due after one year through five years 44,618 44,576 Total $ 54,063 $ 54,027 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | The following summarizes the estimated useful lives by asset classification: Computer hardware 3 years Furniture and equipment 3 years Internal-use software development costs 7 years Leasehold improvements Shorter of useful life or remaining lease term The following summarizes our property and equipment (in thousands) as of December 31, 2015: Computer hardware $ 232 Furniture and equipment 1,604 Internal-use software development costs 6,363 Leasehold improvements 5,830 Total property and equipment 14,029 Accumulated depreciation and amortization (1,233 ) Total property and equipment, net $ 12,796 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets details | The following summarizes the estimated useful lives by asset classification: Corporate trade name 20 years Customer relationships 25 years Technology 7 years Details of our intangible assets (in thousands) as of December 31, 2015 , are presented below: Weighted- Average Gross Net Remaining Carrying Accumulated Carrying Useful Life Amount Amortization Value Corporate trade name 19.4 $ 19,000 $ 554 $ 18,446 Customer relationships 24.4 120,000 2,797 117,203 Technology 6.4 30,000 2,497 27,503 Total $ 169,000 $ 5,848 $ 163,152 |
Commitments and Contingencies
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rental commitments | Future minimum rental commitments (in thousands) as of December 31, 2015 , were as follows: 2016 $ 3,254 2017 3,335 2018 3,418 2019 3,504 2020 3,591 Thereafter — Total $ 17,102 |
Summary of major customers | The following table summarizes those customers who represented at least 10% of our revenue for the periods presented: For the Years Ended December 31, 2015 2013 Customer A 11.2 % 12.6 % Customer B 11.8 % 10.2 % Customer C 19.6 % 34.2 % Customer D 14.1 % 13.2 % Customer E 15.6 % * * Represents less than 10.0% of the respective balance The following table summarizes those customers who represented at least 10% of our accounts receivable as of December 31, 2015: Customer B 28.1 % Customer C 23.2 % Customer E 12.9 % Customer F 11.4 % |
Earnings (Loss) Per Common Sh31
Earnings (Loss) Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share available for common stockholders (in thousands, except per share data): For the Years Ended December 31, 2015 2014 2013 Net income (loss) $ 319,814 $ (25,246 ) $ 20,023 Less: Net income (loss) attributable to non-controlling interests (12,680 ) — — Undeclared cumulative preferred dividends 2,184 5,141 3,659 Redemption of preferred stock at amount in excess of carrying value — 750 — Undistributed income allocated to participating securities — — 13,946 Net income (loss) available for common shareholders - Basic 330,310 (31,137 ) 2,418 Add: Net income (loss) attributable to non-controlling interests (12,680 ) — — Undeclared cumulative preferred dividends converted during the period 2,184 — — Adjustment to net income for dilutive securities — — 539 Net income (loss) available for common shareholders - Diluted $ 319,814 $ (31,137 ) $ 2,957 Weighted-average common shares outstanding - Basic 25,129 2,314 964 Dilutive effect of restricted stock and restricted stock units 17 — 269 Dilutive effect of options 1,510 — — Dilutive effect of convertible preferred stock — — 1,755 Assumed conversion of convertible preferred stock at beginning-of-period 9,397 — — Assumed conversion of Class B common shares to Class A common shares 10,083 — — Weighted-average common shares outstanding - Diluted 46,136 2,314 2,988 Earnings (Loss) per Common Share Basic $ 13.14 $ (13.46 ) $ 2.51 Diluted 6.93 (13.46 ) 0.99 |
Schedule of antidilutive securities excluded from computation of earnings per share | Anti-dilutive shares (in thousands) excluded from the calculation of weighted-average common shares presented above are presented below: For the Years Ended December 31, 2015 2014 2013 Convertible preferred stock — 22,222 15,721 Restricted stock — 792 — Total — 23,014 15,721 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense | Total compensation expense (in thousands) by award type and line item in our consolidated financial statements were as follows: For the Years Ended December 31, 2015 2014 2013 Award Type Stock options $ 8,913 $ — $ — Restricted stock 4,875 — 1,111 RSUs 942 — — Total $ 14,730 $ — $ 1,111 Line Item Cost of revenue $ 1,144 $ — $ 77 Selling, general and administrative expenses 13,586 — 1,034 Total $ 14,730 $ — $ 1,111 |
Schedule of unrecognized compensation expense | Total unrecognized compensation expense (in thousands) and expected weighted-average period (in years) by award type for all of our stock-based incentive plans as of December 31, 2015, were as follows: Weighted- Average Expense Period Stock options $ 37,898 2.43 RSUs 4,558 3.11 Total $ 42,456 |
Option price assumptions | The option price assumptions used for our stock option awards were as follows: For the Years Ended December 31, 2015 2014 Weighted-average fair value per option granted $ 10.41 $ 7.48 Assumptions: Expected life (in years) 6.25 6.25 Expected volatility 45 % 35 % Risk-free interest rate 1.4 - 1.8% 1.8 - 2.0% Dividend yield — % — % |
Stock option information | Information with respect to our stock options (aggregate intrinsic value shown in thousands, weighted-average remaining contractual term shown in years) was as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding as of December 31, 2014 4,144,400 $ 3.84 Granted 1,823,425 11.08 Exercised (39,750 ) 3.84 Forfeited (238,147 ) 6.89 Outstanding as of December 31, 2015 5,689,928 $ 6.03 8.63 $ 34,589 Vested and expected to vest after December 31, 2015 5,436,134 $ 14.77 8.63 $ 33,093 Exercisable at December 31, 2015 1,697,450 $ 10.71 9.01 $ 14,018 |
Restricted stock information | Information with respect to our restricted stock is presented below: Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2014 1,275,792 $ 0.15 Vested (1,275,792 ) 0.15 Outstanding as of December 31, 2015 — $ — |
Restricted stock units information | Information with respect to our RSUs is presented below: Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2014 — $ — Granted 351,672 16.85 Forfeited (18,318 ) 17.00 Outstanding as of December 31, 2015 333,354 $ 16.84 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | Components of income tax expense (benefit) consist of the following: For the Years Ended December 31, 2015 2014 2013 Current Federal $ 15 $ — $ 8 State and local — — — Total current tax expense 15 — 8 Deferred Federal 20,586 — — State and local 2,874 — — Total deferred tax expense 23,460 — — Total tax expense $ 23,475 $ — $ 8 |
Schedule of reconciliation of the U.S. statutory tax rate to our effective tax rate | A reconciliation of the U.S. statutory tax rate to our effective tax rate is presented below: For the Years Ended December 31, 2015 2014 2013 U.S. statutory tax rate 35.0 % 35.0 % 35.0 % U.S. state income taxes, net of U.S. federal tax benefit 4.9 % 4.0 % 2.8 % Change in valuation allowance 4.4 % (26.5 )% (33.7 )% Remeasurement gain (40.1 )% — % (5.0 )% Non-deductible stock-based compensation expense 1.0 % (11.0 )% — % Other, net 1.6 % (1.5 )% 0.9 % Effective rate 6.8 % — % — % |
Schedule of deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows: As of December 31, 2015 2014 Deferred Tax Assets Start-up and organizational costs $ 362 $ 406 Internally developed software costs 8,085 4,655 Net operating loss carryovers 39,717 30,683 Other 521 105 Subtotal 48,685 35,849 Valuation allowance (19,974 ) (6,915 ) Total deferred tax assets 28,711 28,934 Deferred Tax Liabilities Equity-method investment 50,029 28,934 Total deferred tax liabilities 50,029 28,934 Net deferred tax assets (liabilities) $ (21,318 ) $ — |
Changes in valuation allowance | Changes in our valuation allowance were as follows: For the Years Ended December 31, 2015 2014 2013 Balance at beginning-of-year $ 6,914 $ 98 $ 7,236 Charged to costs and expenses 15,202 6,816 (7,138 ) Charged to other accounts (1) (2,142 ) — — Balance at end-of-year $ 19,974 $ 6,914 $ 98 (1) Amounts charged to other accounts includes $2.1 million charged to additional paid-in-capital for the year ended December 31, 2015 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investments | The following is a summary of the financial position (in thousands) of Evolent Health LLC as of December 31, 2014: Assets Current assets $ 56,718 Non-current assets 27,586 Total assets $ 84,304 Liabilities Current liabilities $ 50,029 Non-current liabilities 5,772 Total liabilities 55,801 Redeemable Preferred Units and Members' Equity Redeemable preferred units 15,734 Members' equity 12,769 Total liabilities, redeemable preferred units and members' equity $ 84,304 The summary of the financial position of Evolent Health LLC as of December 31, 2015, is not presented above as the Company consolidates the results of Evolent Health LLC after the date of the Offering Reorganization. The following is a summary of the operating results of Evolent Health LLC (in thousands) for the periods in which it was accounted for as an equity method investment: For the Years Ended December 31, 2015 (1) 2014 2013 (2) Total revenue $ 61,814 $ 100,888 $ 14,610 Cost of revenue (exclusive of depreciation and amortization) 44,839 73,122 16,309 Gross profit 16,975 27,766 (1,699 ) Operating income (loss) (44,119 ) (52,449 ) (10,832 ) Net income (loss) (44,079 ) (52,263 ) (10,832 ) (1) January 1, 2015, through June 3, 2015. (2) September 23, 2013, through December 31, 2013. |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in non-controlling interests | Changes in non-controlling interests (in thousands) for the year ended December 31, 2015, were: Non-controlling interests as of beginning-of-period $ — Estimated fair value of non-controlling interests as a result of the Offering Reorganization 332,793 Decrease in non-controlling interests as a result of the merger of the TPG affiliate with and into Evolent Health, Inc. (34,875 ) Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests (12,680 ) Non-controlling interests as of end-of-period $ 285,238 |
Quarterly Results of Operatio36
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Quarterly results of operations | The unaudited quarterly results of operations (in thousands, except per share data) were as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2015 Total revenue $ — $ 10,414 $ 40,406 $ 46,058 Total operating expenses — 21,953 57,652 60,245 Net income (loss) (11,319 ) 356,488 (17,088 ) (8,267 ) Net income (loss) attributable to non-controlling interests — (3,424 ) (5,108 ) (4,148 ) Net income (loss) attributable to Evolent Health, Inc. (11,319 ) 359,912 (11,980 ) (4,119 ) Earnings (loss) per common share Basic $ (4.22 ) $ 25.69 $ (0.29 ) $ (0.10 ) Diluted (4.22 ) 9.73 (0.29 ) (0.10 ) 2014 Total revenue $ — $ — $ — $ — Total operating expenses — — — — Net income (loss) (5,442 ) (5,939 ) (3,167 ) (10,698 ) Net income (loss) attributable to non-controlling interests — — — — Net income (loss) attributable to Evolent Health, Inc. (5,442 ) (5,939 ) (3,167 ) (10,698 ) Earnings (loss) per common share Basic $ (3.35 ) $ (3.17 ) $ (2.07 ) $ (4.37 ) Diluted (3.35 ) (3.17 ) (2.07 ) (4.37 ) |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Organization [Line Items] | |||||
Proceeds from initial public offering, net of offering costs | $ 209,100 | $ 209,087 | $ 0 | $ 0 | |
Offering expenses | $ 3,200 | 1,361 | 0 | 0 | |
Cash and cash equivalents | $ 145,726 | $ 0 | $ 0 | $ 5,252 | |
Common Stock | Class A | |||||
Organization [Line Items] | |||||
Common shares authorized | 13,225,000 | 13,225,000 | 272,000 | ||
Share price (in dollars per share) | $ 17 | ||||
Shares issued in acquisition | 2,051,468 | 2,051,000 | |||
Evolent Health LLC | Pre-Organization Members | |||||
Organization [Line Items] | |||||
Evolent Health LLC ownership interest | 100.00% | ||||
Evolent Health LLC | |||||
Organization [Line Items] | |||||
Parent's ownership percentage | 70.30% |
Basis of Presentation and Sum38
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Money market funds | $ 122,300 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Total restricted cash | 6,285 | ||
Non-current restricted cash | 1,582 | $ 0 | |
Current restricted cash | 4,703 | 0 | |
Research and development costs | 5,800 | $ 0 | $ 2,000 |
Letters of credit for facility leases | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Total restricted cash | 3,710 | ||
Other | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Total restricted cash | $ 2,575 |
Basis of Presentation and Sum39
Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful Life of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Computer hardware | |
Property and Equipment [Line Items] | |
Useful life | 3 years |
Furniture and equipment | |
Property and Equipment [Line Items] | |
Useful life | 3 years |
Internal-use software development costs | |
Property and Equipment [Line Items] | |
Useful life | 7 years |
Basis and Presentation and Summ
Basis and Presentation and Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Corporate trade name | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 20 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 25 years |
Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 7 years |
Recently Issued Accounting St41
Recently Issued Accounting Standards Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Assets | $ 1,015,514 | $ 37,203 |
Liabilities | 80,935 | $ 0 |
New accounting pronouncement, early adoption, effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Assets | 1,100 | |
Liabilities | $ 1,100 |
Organizational Transactions - N
Organizational Transactions - Narrative (Details) $ in Millions | Jun. 05, 2015USD ($)classvoteshares | Dec. 31, 2015USD ($) | Dec. 31, 2015 |
Class of Stock [Line Items] | |||
Number of classes of common stock | class | 2 | ||
Measurement period adjustment to income tax benefit | $ | $ 5.1 | ||
Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Number of classes of common stock | class | 2 | ||
Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Parent's ownership percentage | 70.30% | 70.30% | |
Pre-Organization Members | Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Evolent Health LLC ownership interest | 100.00% | ||
Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Estimated fair value of Evolent Health LLC | $ | $ 777.8 | ||
Class A | |||
Class of Stock [Line Items] | |||
Number of votes per share of commons stock | vote | 1 | ||
Class A | Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Required ratio of outstanding shares of Class A common stock to Class A common units | 1 | ||
Class A | Evolent Health Holdings, Inc. Merger | |||
Class of Stock [Line Items] | |||
Shares of Class A common stock receivable in exchange for each share of Class A common stock held in Evolent Health Holdings | shares | 4 | ||
Class A | Affiliate of TPG Merger | Texas Pacific Group | |||
Class of Stock [Line Items] | |||
Percent of common stock held in affiliate exchanged for shares of Class A common stock and the right to certain payments under the TRA | 100.00% | ||
Class B | |||
Class of Stock [Line Items] | |||
Number of votes per share of commons stock | vote | 1 | ||
Class B | Evolent Health LLC | |||
Class of Stock [Line Items] | |||
Exchange ratio of Class B common units to Class A common stock | 1 |
Organizational Transactions -43
Organizational Transactions - Net Assets Acquired (Details) - USD ($) $ in Thousands | Jun. 05, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 608,903 | $ 0 | |
Evolent Health LLC | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 608,903 | ||
Intangible assets | 169,000 | ||
Cash and restricted cash | 21,930 | ||
Other assets | 49,239 | ||
Remeasurement gain on previously held equity interest | (414,133) | ||
Liabilities and deferred revenue | (71,299) | ||
Non-controlling interests | (332,793) | ||
Carrying value of previously held equity interest | (30,847) | ||
Purchase price | $ 0 |
Organizational Transactions - P
Organizational Transactions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jun. 03, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Adjustment for removal of transaction costs | $ 4,300 | ||
Revenue | 164 | $ 96 | |
Net income (loss) | (82) | 307 | |
Net income (loss) attributable to non-controlling interests | (28) | (29) | |
Net income (loss) attributable to Evolent Health, Inc. | $ (54) | $ 337 | |
Net income (loss) available to common shareholders, basic (in dollars per share) | $ (1.55) | $ 13.33 | |
Net income (loss) available to common shareholders, diluted (in dollars per share) | $ (1.55) | $ 6.73 | |
Deferred revenue | $ 4,900 | ||
Deferred rent, current | $ 900 | ||
Deferred rent, noncurrent | $ 5,400 | ||
Fair Value Adjustment to Revenue | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Revenue | $ 4,800 |
Organizational Transactions - S
Organizational Transactions - Series B Reorganization (Details) - USD ($) $ in Thousands | Sep. 23, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||
Conversion of convertible notes to equity | $ 0 | $ 0 | $ 12,978 | |
Gain on deconsolidation | 0 | 0 | 46,246 | |
Deferred tax liabilities | 50,029 | 28,934 | ||
Deconsolidation of Subsidiary | ||||
Class of Stock [Line Items] | ||||
Deferred tax liabilities | $ 16,600 | |||
Evolent Health LLC | ||||
Class of Stock [Line Items] | ||||
Equity method investments | 54,100 | |||
University of Pittsburgh Medical Center | ||||
Class of Stock [Line Items] | ||||
Conversion of convertible notes to equity | $ 13,500 | |||
Series B Redeemable Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Proceeds from issuance of series B preferred stock | $ 0 | $ 0 | $ 11,386 | |
Evolent Health Holdings | ||||
Class of Stock [Line Items] | ||||
Evolent Health LLC ownership interest | 57.00% | |||
Evolent Health Holdings | Series B Redeemable Preferred Stock | University of Pittsburgh Medical Center | ||||
Class of Stock [Line Items] | ||||
Issuance of preferred stock, shares | 6,467,376 | |||
Proceeds from issuance of series B preferred stock | $ 11,400 | |||
Evolent Health LLC | Deconsolidation of Subsidiary | ||||
Class of Stock [Line Items] | ||||
Equity method investment net assets | 7,800 | |||
Gain on deconsolidation | 46,200 | |||
Evolent Health LLC | Shareholders | ||||
Class of Stock [Line Items] | ||||
Proceeds from issuance of preferred stock | 64,800 | |||
Evolent Health LLC | Series B Redeemable Preferred Stock | Shareholders | ||||
Class of Stock [Line Items] | ||||
Conversion of convertible notes to equity | $ 10,400 | |||
Evolent Health LLC | Series B Preferred Units | Shareholders | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock, shares | 19,576,064 | |||
Transfer of Convertible Notes | Evolent Health Holdings | Shareholders | ||||
Class of Stock [Line Items] | ||||
Convertible notes transferred | $ 13,500 |
Investments - Investment Summar
Investments - Investment Summary (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Schedule of Held-to-maturity Securities [Line Items] | |
Amortized cost | $ 54,063 |
Gross Unrealized Gains | 225 |
Gross Unrealized Losses | 261 |
Fair Value | 54,027 |
U.S. Treasury bills | |
Schedule of Held-to-maturity Securities [Line Items] | |
Amortized cost | 28,306 |
Gross Unrealized Gains | 115 |
Gross Unrealized Losses | 181 |
Fair Value | 28,240 |
Corporate bonds | |
Schedule of Held-to-maturity Securities [Line Items] | |
Amortized cost | 25,757 |
Gross Unrealized Gains | 110 |
Gross Unrealized Losses | 80 |
Fair Value | $ 25,787 |
Investments - Contractual Matur
Investments - Contractual Maturity (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Investments [Abstract] | |
Due in one year or less, Amortized Cost | $ 9,445 |
Due in one year or less, Fair Value | 9,451 |
Due after one year through five years, Amortized Cost | 44,618 |
Due after one year through five years, Fair Value | 44,576 |
Amortized cost | 54,063 |
Fair Value | $ 54,027 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 22, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment [Line Items] | |||||
Total property and equipment | $ 14,029,000 | $ 14,029,000 | $ 0 | $ 0 | |
Accumulated depreciation and amortization | (1,233,000) | (1,233,000) | |||
Total property and equipment, net | 12,796,000 | 12,796,000 | 0 | ||
Depreciation expense | 1,200,000 | 0 | 800,000 | ||
Capitalized computer software, amortization (2015 - less than) | 100,000 | $ 0 | 0 | ||
Computer hardware | |||||
Property and Equipment [Line Items] | |||||
Total property and equipment | 232,000 | 232,000 | |||
Furniture and equipment | |||||
Property and Equipment [Line Items] | |||||
Total property and equipment | 1,604,000 | 1,604,000 | |||
Internal-use software development costs | |||||
Property and Equipment [Line Items] | |||||
Total property and equipment | 6,363,000 | 6,363,000 | |||
Total property and equipment, net | 6,300,000 | 6,300,000 | |||
Capitalized computer software additions | 6,400,000 | $ 0 | $ 0 | ||
Leasehold improvements | |||||
Property and Equipment [Line Items] | |||||
Total property and equipment | $ 5,830,000 | $ 5,830,000 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 26, 2016 | Jun. 05, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 608,903,000 | $ 0 | |||
Intangible assets, net | 163,152,000 | 0 | $ 169,000,000 | ||
Gross Carrying Amount | 169,000,000 | ||||
Accumulated Amortization | 5,848,000 | ||||
Net Carrying Amount | 163,152,000 | 0 | |||
Amortization of intangible assets | 5,800,000 | $ 0 | $ 400,000 | ||
Future estimated amortization expense, year one | 10,000,000 | ||||
Future estimated amortization expense, year two | 10,000,000 | ||||
Future estimated amortization expense, year three | 10,000,000 | ||||
Future estimated amortization expense, year four | 10,000,000 | ||||
Future estimated amortization expense, year five | $ 10,000,000 | ||||
Corporate trade name | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Remaining Useful Life | 19 years 5 months | ||||
Gross Carrying Amount | $ 19,000,000 | ||||
Accumulated Amortization | 554,000 | ||||
Net Carrying Amount | $ 18,446,000 | ||||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Remaining Useful Life | 24 years 5 months | ||||
Gross Carrying Amount | $ 120,000,000 | ||||
Accumulated Amortization | 2,797,000 | ||||
Net Carrying Amount | $ 117,203,000 | ||||
Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Remaining Useful Life | 6 years 5 months | ||||
Gross Carrying Amount | $ 30,000,000 | ||||
Accumulated Amortization | 2,497,000 | ||||
Net Carrying Amount | $ 27,503,000 | ||||
Common Stock | Class A | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Share price (in dollars per share) | $ 17 | ||||
Common Stock | Class A | Subsequent event | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Share price (in dollars per share) | $ 8.71 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 27, 2013 | |
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Percent of tax savings to be paid | 85.00% | 85.00% | |||
Restricted cash | $ 1,582,000 | $ 1,582,000 | $ 0 | ||
Restricted funds | 6,285,000 | 6,285,000 | |||
Rent expense | 2,300,000 | $ 0 | $ 1,500,000 | ||
Money market funds | $ 122,300,000 | 122,300,000 | |||
WakeMed Health and Hospitals | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Fixed portion of fees | 60.00% | ||||
Performance-based portion of fees | 30.00% | ||||
Letters of credit for facility leases | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted funds | $ 3,710,000 | 3,710,000 | |||
Minimum | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Letters of credit outstanding, minimum | 2,000,000 | 2,000,000 | |||
Minimum | Letters of credit for facility leases | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted cash | $ 1,700,000 | $ 1,700,000 | |||
Class A Common Stock | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Shares transferred if minimum revenue not met (up to) | 1,000,000 |
Commitments and Contingencies51
Commitments and Contingencies - Future Minimum Rental Commitments (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Future Minimum Rental Commitments | |
2,016 | $ 3,254 |
2,017 | 3,335 |
2,018 | 3,418 |
2,019 | 3,504 |
2,020 | 3,591 |
Thereafter | 0 |
Total | $ 17,102 |
Commitments and Contingencies52
Commitments and Contingencies - Concentration Risk (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)amendment | Dec. 31, 2013 | |
Concentration Risk [Line Items] | ||
Money market funds | $ | $ 122.3 | |
Customer A | Revenues | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.20% | 12.60% |
Customer B | Revenues | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.80% | 10.20% |
Customer B | Accounts Receivable | Customer Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 28.10% | |
Customer C | ||
Concentration Risk [Line Items] | ||
Number of contract amendments | amendment | 2 | |
Ownership interest, noncontrolling interest | 2.20% | |
Customer C | Revenues | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk | 19.60% | 34.20% |
Customer C | Accounts Receivable | Customer Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 23.20% | |
Customer D | Revenues | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk | 14.10% | 13.20% |
Customer E | Revenues | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk | 15.60% | |
Customer E | Accounts Receivable | Customer Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 12.90% | |
Customer F | Accounts Receivable | Customer Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk | 11.40% |
Earnings (Loss) Per Common Sh53
Earnings (Loss) Per Common Share - Computation of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||||||||||
Net income (loss) | $ (8,267) | $ (17,088) | $ 356,488 | $ (11,319) | $ (10,698) | $ (3,167) | $ (5,939) | $ (5,442) | $ 319,814 | $ (25,246) | $ 20,023 |
Less: | |||||||||||
Net income (loss) attributable to non-controlling interests | $ (4,148) | $ (5,108) | $ (3,424) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | (12,680) | 0 | 0 |
Undeclared cumulative preferred dividends | 2,184 | 5,141 | 3,659 | ||||||||
Redemption of preferred stock at amount in excess of carrying value | 0 | 750 | 0 | ||||||||
Undistributed income allocated to participating securities | 0 | 0 | 13,946 | ||||||||
Net income (loss) available for common shareholders - Basic | 330,310 | (31,137) | 2,418 | ||||||||
Add: | |||||||||||
Net income (loss) attributable to non-controlling interests | (12,680) | 0 | 0 | ||||||||
Undeclared cumulative preferred dividends converted during the period | 2,184 | 0 | 0 | ||||||||
Adjustment to net income for dilutive securities | 0 | 0 | 539 | ||||||||
Net income (loss) available for common shareholders - Diluted | $ 319,814 | $ (31,137) | $ 2,957 | ||||||||
Weighted-average common shares outstanding - Basic | 25,129 | 2,314 | 964 | ||||||||
Dilutive effect of convertible preferred stock (in shares) | 0 | 0 | 1,755 | ||||||||
Assumed conversion of convertible preferred stock at beginning-of-period (in shares) | 9,397 | 0 | 0 | ||||||||
Assumed conversion of Class B common shares to Class A common shares (in shares) | 10,083 | 0 | 0 | ||||||||
Weighted-average common shares outstanding - Diluted | 46,136 | 2,314 | 2,988 | ||||||||
Earnings (Loss) per Common Share | |||||||||||
Basic (in dollars per share) | $ (0.10) | $ (0.29) | $ 25.69 | $ (4.22) | $ (4.37) | $ (2.07) | $ (3.17) | $ (3.35) | $ 13.14 | $ (13.46) | $ 2.51 |
Diluted (in dollars per share) | $ (0.10) | $ (0.29) | $ 9.73 | $ (4.22) | $ (4.37) | $ (2.07) | $ (3.17) | $ (3.35) | $ 6.93 | $ (13.46) | $ 0.99 |
Restricted Stock and Restricted Stock Units | |||||||||||
Add: | |||||||||||
Dilutive effect of share-based payment arrangements (in shares) | 17 | 0 | 269 | ||||||||
Stock options | |||||||||||
Add: | |||||||||||
Dilutive effect of share-based payment arrangements (in shares) | 1,510 | 0 | 0 |
Earnings (Loss) Per Common Sh54
Earnings (Loss) Per Common Share - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of antidilutive securities excluded from the calculation of earning per share (in shares) | 0 | 23,014 | 15,721 |
Convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of antidilutive securities excluded from the calculation of earning per share (in shares) | 0 | 22,222 | 15,721 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of antidilutive securities excluded from the calculation of earning per share (in shares) | 0 | 792 | 0 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 01, 2015 | Sep. 23, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options issued (in shares) | 5,689,928 | 4,144,400 | |||
Fair value of options vested | $ 11,100,000 | $ 2,300,000 | $ 0 | ||
Intrinsic value of options exercised (less than $1.0 million - 2014) | $ 500,000 | $ 100,000 | $ 0 | ||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Vesting percentage | 25.00% | ||||
Expiration period | 10 years | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs and shares of restricted stock issued (in shares) | 0 | 1,275,792 | |||
Requisite service period for vesting | 1 year | ||||
Restricted stock | One year | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs and shares of restricted stock issued (in shares) | 333,354 | 0 | |||
Vesting percentage | 25.00% | ||||
Requisite service period for vesting | 4 years | ||||
2011 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options issued (in shares) | 5,067,900 | 4,156,400 | |||
2011 Plan | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs and shares of restricted stock issued (in shares) | 3,775,240 | ||||
2011 Plan | Class A Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 9,141,268 | ||||
2015 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options issued (in shares) | 673,778 | ||||
2015 Plan | RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs and shares of restricted stock issued (in shares) | 333,354 | ||||
2015 Plan | Class A Common Stock | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 6,000,000 |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock-based compensation capitalized as software development costs (less than $0.1 million) | $ 100 | $ 100 | $ 100 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 14,730 | 0 | 1,111 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 1,144 | 0 | 77 |
Selling, general and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 13,586 | 0 | 1,034 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 8,913 | 0 | 0 |
Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 4,875 | 0 | 1,111 |
Accelerated share-based compensation expense | 4,900 | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 942 | $ 0 | $ 0 |
Stock-based Compensation - Unre
Stock-based Compensation - Unrecognized Compensation Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unrecognized compensation, Stock options | $ 37,898 |
Unrecognized compensation, Restricted stock units | 4,558 |
Unrecognized compensation, Total | $ 42,456 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Weighted Average Period | 2 years 5 months 4 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Weighted Average Period | 3 years 1 month 10 days |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted-average fair value per option granted (in dollars per share) | $ 10.41 | $ 7.48 |
Assumptions: | ||
Expected life | 6 years 3 months | 6 years 3 months |
Expected volatility | 45.00% | 35.00% |
Risk-free interest rate, Minimum | 1.40% | 1.80% |
Risk-free interest rate, Maximum | 1.80% | 2.00% |
Dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Shares | ||
Outstanding at the beginning of the period (in shares) | 4,144,400 | |
Granted (in shares) | 1,823,425 | 0 |
Exercised (in shares) | (39,750) | |
Forfeited (in shares) | (238,147) | |
Outstanding at the end of the period (in shares) | 5,689,928 | |
Vested and expected to vest at the end of the period (in shares) | 5,436,134 | |
Exercisable at the end of the period (in shares) | 1,697,450 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 3.84 | |
Granted (in dollars per share) | 11.08 | |
Exercised (in dollars per share) | 3.84 | |
Forfeited (in dollars per share) | 6.89 | |
Outstanding at the end of the period (in dollars per share) | 6.03 | |
Vested and expected to vest at the end of the period (in dollars per share) | 14.77 | |
Exercisable at the end of the period (in dollars per share) | $ 10.71 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding | 8 years 7 months 18 days | |
Vested and expected to vest | 8 years 7 months 18 days | |
Exercisable | 9 years 4 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 34,589 | |
Vested and expected to vest | 33,093 | |
Exercisable | $ 14,018 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock and Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted stock | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 1,275,792 |
Vested (in shares) | shares | (1,275,792) |
Outstanding at the end of the period (in shares) | shares | 0 |
Weighted-Average Grant-Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.15 |
Vested (in dollars per share) | $ / shares | 0.15 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 0 |
RSUs | |
Shares | |
Outstanding at the beginning of the period (in shares) | shares | 0 |
Granted (in shares) | shares | 351,672 |
Forfeited (in shares) | shares | (18,318) |
Outstanding at the end of the period (in shares) | shares | 333,354 |
Weighted-Average Grant-Date Fair Value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 16.85 |
Forfeited (in dollars per share) | $ / shares | 17 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 16.84 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current | |||
Federal | $ 15 | $ 0 | $ 8 |
State and local | 0 | 0 | 0 |
Total current tax expense | 15 | 0 | 8 |
Deferred | |||
Federal | 20,586 | 0 | 0 |
State and local | 2,874 | 0 | 0 |
Total deferred tax expense | 23,460 | 0 | 0 |
Total tax expense | $ 23,475 | $ 0 | $ 8 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Rate to Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
U.S. statutory tax rate | 35.00% | 35.00% | 35.00% |
U.S. state income taxes, net of U.S. federal tax benefit | 4.90% | 4.00% | 2.80% |
Change in valuation allowance | 4.40% | (26.50%) | (33.70%) |
Non-deductible stock-based compensation expense | 1.00% | (11.00%) | 0.00% |
Other, net | 1.60% | (1.50%) | 0.90% |
Effective rate | 6.80% | 0.00% | 0.00% |
Evolent Health LLC | |||
Related Party Transaction [Line Items] | |||
Non-deductible goodwill associated with Reorganizations | (40.10%) | 0.00% | (5.00%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Assets | ||
Start-up and organizational costs | $ 362 | $ 406 |
Internally developed software costs | 8,085 | 4,655 |
Net operating loss carryovers | 39,717 | 30,683 |
Other | 521 | 105 |
Subtotal | 48,685 | 35,849 |
Valuation allowance | (19,974) | (6,915) |
Total deferred tax assets | 28,711 | 28,934 |
Deferred Tax Liabilities | ||
Equity-method investment | 50,029 | 28,934 |
Total deferred tax liabilities | 50,029 | 28,934 |
Net deferred tax assets (liabilities) | $ (21,318) | $ 0 |
Income Taxes Income Taxes - Cha
Income Taxes Income Taxes - Change in Valuation Allowance (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning-of-year | $ 19,974 | $ 6,914 | $ 98 | $ 7,236 |
Charged to costs and expenses | 15,202 | 6,816 | (7,138) | |
Charged to other accounts | (2,142) | 0 | 0 | |
Balance at end-of-year | 19,974 | $ 6,914 | $ 98 | |
Charged to additional paid-in capital | $ 2,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | ||||
Provision (benefit) for income taxes | $ 23,475 | $ 0 | $ 8 | |
Measurement period adjustment to income tax benefit | $ 5,100 | |||
Effective rate | 6.80% | 0.00% | 0.00% | |
Deferred tax liability established from book tax basis differences related to assets and liabilities | $ 21,300 | |||
Tax effect of the Offering Reorganization | 2,144 | |||
Net operating loss carryforwards | 99,600 | $ 99,600 | ||
Tax receivable agreement, percent of cash savings paid to shareholders | 85.00% | |||
Tax receivable agreement, percent of cash savings not paid to shareholders | 15.00% | |||
Periods Prior to June 2015 | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | $ 79,300 | $ 79,300 | ||
Additional Paid-in Capital | ||||
Income Tax Contingency [Line Items] | ||||
Tax effect of the Offering Reorganization | $ 2,144 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 7 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ||
Employer discretionary contribution amount | $ 2.4 | $ 0.6 |
Equity Method Investment (Detai
Equity Method Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Jun. 03, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | |||||
Proportionate share of losses of Evolent Health LLC | $ 28,165 | $ 25,246 | $ 4,241 | ||
Evolent Health LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Proportionate share of losses of Evolent Health LLC | $ 4,200 | $ 28,200 | 25,200 | ||
Amortization of basis differential | $ 700 | $ 800 | $ 2,000 |
Equity Method Investment - Summ
Equity Method Investment - Summarized Financial Information (Details) - Evolent Health LLC - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Jun. 03, 2015 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||
Current assets | $ 56,718 | ||
Non-current assets | 27,586 | ||
Total assets | 84,304 | ||
Current liabilities | 50,029 | ||
Non-current liabilities | 5,772 | ||
Total liabilities | 55,801 | ||
Redeemable preferred units | 15,734 | ||
Members' equity | 12,769 | ||
Total liabilities, redeemable preferred units and members' equity | 84,304 | ||
Total revenue | $ 14,610 | $ 61,814 | 100,888 |
Cost of revenue (exclusive of depreciation and amortization) | 16,309 | 44,839 | 73,122 |
Gross profit | (1,699) | 16,975 | 27,766 |
Operating income (loss) | (10,832) | (44,119) | (52,449) |
Net income (loss) | $ (10,832) | $ (44,079) | $ (52,263) |
Non-controlling Interests (Deta
Non-controlling Interests (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||
Non-controlling interests as of beginning-of-period | $ 0 | $ 0 | ||||||||||
Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests | $ (4,148) | $ (5,108) | $ (3,424) | 0 | $ 0 | $ 0 | $ 0 | $ 0 | (12,680) | $ 0 | $ 0 | |
Non-controlling interests as of end-of-period | $ 285,238 | 0 | $ 285,238 | 0 | ||||||||
Evolent Health LLC | ||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||
Parent's ownership percentage | 70.30% | 70.30% | ||||||||||
Non-controlling Interests | ||||||||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||
Non-controlling interests as of beginning-of-period | $ 0 | $ 0 | ||||||||||
Estimated fair value of non-controlling interests as a result of the Offering Reorganization | 332,793 | |||||||||||
Decrease in non-controlling interests as a result of the merger of the TPG affiliate with and into Evolent Health, Inc. | (34,875) | |||||||||||
Net income (loss) subsequent to the Offering Reorganization attributable to non-controlling interests | (12,680) | |||||||||||
Non-controlling interests as of end-of-period | $ 285,238 | $ 0 | $ 285,238 | $ 0 | ||||||||
Class A | Common Stock | ||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||
Issuance of common stock, shares | 13,225,000 | 13,225,000 | 272,000 | |||||||||
Merger with TPG affiliate, shares | 2,051,468 | 2,051,000 | ||||||||||
Share price (in dollars per share) | $ 17 |
Quarterly Results of Operatio70
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Data [Abstract] | |||||||||||
Total revenue | $ 46,058 | $ 40,406 | $ 10,414 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 96,878 | $ 0 | $ 25,671 |
Total expenses | 60,245 | 57,652 | 21,953 | 0 | 0 | 0 | 0 | 0 | 139,850 | 0 | 46,826 |
Net income (loss) | (8,267) | (17,088) | 356,488 | (11,319) | (10,698) | (3,167) | (5,939) | (5,442) | 319,814 | (25,246) | 20,023 |
Net income (loss) attributable to non-controlling interests | (4,148) | (5,108) | (3,424) | 0 | 0 | 0 | 0 | 0 | (12,680) | 0 | 0 |
Net income (loss) attributable to Evolent Health, Inc. | $ (4,119) | $ (11,980) | $ 359,912 | $ (11,319) | $ (10,698) | $ (3,167) | $ (5,939) | $ (5,442) | $ 332,494 | $ (25,246) | $ 20,023 |
Earnings (loss) per common share - Basic (in dollars per share) | $ (0.10) | $ (0.29) | $ 25.69 | $ (4.22) | $ (4.37) | $ (2.07) | $ (3.17) | $ (3.35) | $ 13.14 | $ (13.46) | $ 2.51 |
Earnings (loss) per common share - Diluted (in dollars per share) | $ (0.10) | $ (0.29) | $ 9.73 | $ (4.22) | $ (4.37) | $ (2.07) | $ (3.17) | $ (3.35) | $ 6.93 | $ (13.46) | $ 0.99 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - Passport beneficiary in Thousands, $ in Millions | Feb. 01, 2016USD ($)beneficiaryshares |
Subsequent Event [Line Items] | |
Number of medicaid and medicare advantage beneficiaries | beneficiary | 280 |
Additional equity consideration (up to) | $ | $ 10 |
Term of health plan management and managed care services arrangement | 10 years |
Common Stock | Class A | |
Subsequent Event [Line Items] | |
Issuance of common stock, shares | shares | 1,067,271 |