EVH - Earnings call transcript Q3 2021

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Operator

Welcome to Evolent Health Earnings Conference Call for the Quarter Ended September 30, 2021.

As a reminder, this conference call is being recorded.

Your host for the call today is Mr. Seth Blackley, Chief Executive Officer of Evolent Health. This call will be archived and available later this evening and for the next week via the webcast on the company’s website in the section entitled Investor Relations.

introductory important some is information. Here forward-looking This the under call contains U.S. statements laws. securities federal or statements and differ results experience risks subject materially expectations. that historical These to actual uncertainties are could cause from present to of A reports filings. Commission, and company’s filed including risks description statements are of and can in in that and be Securities the periodic included uncertainties with cautionary the found Exchange current some the

today. on press refer information additional earlier to release the news second quarter and please For company’s outlook, its issued results

As At non-GAAP comparable call measures company’s to IR.EvolentHealth.com, a of Relations to the the X-K company’s the and this ahead. company’s company the and are the filed section today’s I the reminder, with will go discussed Executive during Investor today reconciliations Blackley. measures call Please in on issued most the Seth GAAP turn press the Officer, of posted earlier Mr. direct over release available website, by time, Chief today. the SEC

Seth Blackley

evening. which Chief open the three, and by a Chief organic efficient key an I’ll Officer. you update and results, Executive Financial and recent two, John this margins; strong themes, Johnson, on Seth evening joined EBITDA our Health, Evolent good investment summary call with I’m Thank are: including of one, our Officer I’m of growth; our Blackley, expanding allocation. capital

focus review more as I’ll financial of I’ll it well key areas. to hand quarter detailed guidance. then the John results highlights business. us the share close the I’ll take through across summary fourth Next, a innovations on third our provide to with as of quarter

call. questions happy at As the end to be of take always, the we’ll

section your presentation the highlights quarterly available financials shared website, have of Events a IR and a We our for IR.EvolentHealth.com. reference on and summary of our

the revenue XXXX quarter Adjusted was $XX.X for for Turning for million. financial September quarter. was XXXX million. and results ended EBITDA ended the $XXX.X September quarter XX, overview Total the to the XX,

and lives on million we on approximately had on XX.X suite, XX.X a and and Century Technology million we year. earnings the New pleased lives we’re EBITDA performance XX, Overall, guidance revenue both for total million our the organic And lives including growth X on are the our of additional Health platform. continued raising across September Services of adjusted XXXX, As momentum platform, an the Suite power. plus with

investment partnerships, Turning to this our assets, of excludes an growth. year partners. divested partners to XX.X%, deliver revenue theme total represents to organic strong X we our happy to update investment of bringing continue on year-over-year to our our exceeding X X growth new Today, result themes, our I’m X XX new as new first of announce target on which and

group with the care. levels new continues into help to and entered pleased over expand physician Care to has network is before deliver This of growth continue XXXX. current Medical increase in and Care medical XXXX opportunity new XXXX. on its be care, providers Evolent in ability Care in demonstrated Sunflower grow X, with strong Northern X with not better Medical our Evolent a We’re drivers based with we Group, XX% and announce a New markets compensation by XXX agreements by additional ACO growth group already City, York. add expanded Partners’ providers, practices as will more to January from partners into provider driven These and Kansas announced Partners a groups August, Group, new State medical to the Evolent the two Partners network, in Together

Vital New platform. to agreement excited Decisions into we’re Health England, leading health a New announce our Century to entered plan Additionally, with provider-owned we not-for-profit an Health’s utilize

partnership program to our Massachusetts medical offering to and future has Living and along rationale will work Decisions planning to Medicaid of help advanced went individuals’ states. Well teams commercial plans. of solutions in reflected New the October are England’s possibility this for Century members care live specialists, out access last Vital our Century in in The signing care on New and who members integrated will communicated the care and England over telehealth XXX,XXX preferences This and laid care validation families Health New to New Medicare, Health select digital through with we its ensure goals the been have further with geography are be transaction quarter. platform and X, neighboring and

Second, deliver expansion. adjusted on of to we margin our continue theme

for EBITDA third, margin adjusted met on And the focused on disciplined remain Our was expectations. performance capital our results we quarter EBITDA allocation. adjusted and track

generated we head discuss to will this I are available execution, This in John the for the year, XXXX. momentum the quarter are care Value-based expecting As continued end cash continues pipeline, our out on a as with operations of significant is diverse section, business momentum total by encouraged and balance from $XXX driven and generation relationships new with expansion continue want execute significant in macro-environment. a to existing cash share macro-environment. detail a performance quarter, we more strong we close flow To more a we into the themes to our do and gather momentum. cash by of favorable little and investment our the million. detail, key Overall, balance third on

is on vast indicating new beneficiaries As by an plan value-based be are released example, majority plan, relationships Medicare Medicaid objective transforming in strategic One and strategic the doubling down the recently path to will ensuring care. the all XXXX. administration of of a CMS value-based

to our year through as this our Advantage performance approximately As of And enrollment to Medicare is approximately a X% XXX,XXX grow already XXXX. today, have expand lives forecasted by we in market continues Advantage Medicare opportunity on suite.

primary issues. potentially in increase and models longstanding more will value Another Health. solve believe which opportunities Equally, and mandatory if program, Partners CMS’ New the within quality likely is we specialty continue Care not to to of Medicare Evolent plan for focus Fee-For-Service private models turn importantly, present to care and would Century to cost value-based payers

for expansion Health. Evolent, Century pipeline XX% the creating FDA in These exceed macro-environment to role For and therapeutics, trends and we annually, are trends filled New example, ongoing payers cost well healthcare. tailwinds feel high-cost important this of for strong with is an for transformation positioned play oncology an in ideal oncology the

updates X I’ll the Turning solutions. section, to on provide our next

Our our is lower making profits A in of are allocation the part direct X growth in quality these create solutions. the a in and result X continually better higher of and focus of these capital mission. sure delivering on innovate core form our strategy to we’re value outcomes areas, we care, costs

few focused this a you of innovation. give me Let examples

exaggeration of discarded. dollars are that it’s year each are treating the First, billions in poured but to say our been specialty could down in solution drug the Health, money an have other that of area, New This eventually spent that Century patients. opened, are vials not drain form

reducing could units with For on breast close Herceptin. a that example, program to in guidelines Herceptin, cancer Century New spent was patients. This lowering recently We both new lowering XXXX, product this the review while with therapeutic opportunities drug dose opening discarded on of of patient of for waste, and to issue, covered rounds based Medicare to that went our Humana. therapeutic. close within this Centene clinical fewer a additional clinical treat spending live the a treat optimal just effect detailed of $XX amount vials To module to rounding one the and address developed have creating toxicity and optimally module their million women with costs doses X,XXX has to often literature, and partners automatically

are combination and members. October New the is is X, Vital our will partnership acquisition engagement of a to that of with of talented we closed We’re Vital quality now organization. Vital team with the also and And the excited of to the to early Health Evolent on Decisions welcome while Vital’s report partners it’s Health deliver believe Century growth happy and great Health England member that Again, of early, New the breadth their ability the physician still ability momentum. family. indicator engagement Decisions Century increase service to New we We part

total about of Next, I’d a Care cost more our like on Evolent Solutions section to care Clinical of Partners. in bit the segment, going the innovation share

pleased simple last to developed expertise enable reminder, the built dollar Evolent for with a on Evolent scaled Care to CMS of an for progress. X place a themselves in to results physicians years this are made care ACO physician succeed through in, available at we for September, announced In operation, of Partners, higher as physicians managing Care risk model. idea our among primary through evolution launched to primary of we’re history arrangement. use solution X the risk capabilities year first in early top independent As Through Partners, the our year which well Care serve margins our directly opportunity basis the ideal XXXX we primary Health very Services on with looking and larger care and have partner in the fee care to first Evolent XX% we independent as for market decade, The over program. results the business premium is Evolent by Partners the a principles. ACOs much a this as the

and are just large care have primary opportunity our smaller care providers independent practices. primary the in under XXX,XXX approximately half First, is members

only we and our care, based works. focus what on works Second, experience on what we value-based in know

drive interventions physician interventions for are instance Insight Our and solution, how Identifi, proprietary partners. we Prioritize one of for efficiency our Panel prioritize of a module care practices. managers

believe Medicare, of many we to This the For care savings physicians, at wellness Care trusted means wellness and over in led the positive a recently year In quality, increase XX% form primary rate maximizing critical maximizing profits. conducting care of no completed to savings Evolent have to in chronic care patients between on highly Based our scale. patients. for example, directly annual national Care campaign shown are focus time. to Evolent came effects annual on relationships We on experience to care to should visits. increased wellness preventative and visits is that X one, efficiency and providers meaningfully to increase building have years Based at our quality on foundation physicians. these over each savings delivered the efficiency differentiated visits compensation operating primary relentless of and ACOs, in the a and for $X been of of this more invested months, experience, dollar our Partners, condition for quality patients management. Evolent and operating visits the Partners support campaign and These first care, cost in long-term

X.X% Health expected our Care evolution physician average as with third compared profits. savings first to X.X% Evolent fee both our resulted Services Evolent of the example, This served ACOs compensation to Partners. For model the in by Evolent create year year partner and of in in operations an for tailwinds

This providers. $XX of partner it investment. with changing means Overall, their year means model combined growth growth with their gross year-over-year for with savings for Evolent XX,XXX affiliating model this next gives capital and practice, for produced headed affiliate savings momentum have grow performance burdens, significant Today, unique million without members. Third, providers XX,XXX This with by giving we the we Care we into up grow system already members can us other rates without strong can in contracted XXXX. with year. continued expected expansions approximately Partners XXXX undue

busy Evolent solution. million Health Evolent programs. operators by Medicare plan ACOs health saved previously health deployed platform value end-to-end same technology administrative partners with with to Evolent segment when and a is plan and the Services in risk-bearing for $XXX Health this makes is and integrated this our by We of implementing clinical administrative our unique platform been announced our results. year next solutions clinical going Services solutions year. Care live powerful in total leading continues this our risk-bearing physicians. in with driving a Services supported results Partners strong Finally, in coupling health XXXX our provide to that partnership We’ve for believe Evolent existing plans Health providers This

major of in supporting opportunities. differentiators to partnership market coupled our will focus through provide believe and and market. as while improved We with well Identifi, expect expands care technical proprietary technology this Care relationships, and important Health we services. We as other broad are of across importantly, platform integration and the have leading Health health clinical outcomes, of Evolent array Services decade lowering plan be growing both continues cross-selling as continues geographies the Health a PMPMs services, the with of New Century multiple Evolent Overall, value as consistent solutions the to experience unique care, cost our as Evolent. a technology, XXX,XXX deliver our our broad Further, important Evolent nationally. This other partnership across Services provide lives value-based Partners for upside Evolent, innovations to support

strong our financial XXXX, performance performance good it for you very solutions are head as to are and our give guidance. traction to have new well momentum we seeing into now we turn our partners. John differentiated we in to As I’ll more quarter, about delivering provide the over as as partners, details with

John Johnson

Thanks, everyone. Seth, and evening, good

Our X and growth, with profitability, of on financial all cash results strong the delivered strategic organic flow. for quarter goals attractive our

a bit say walking by ending me with and Let each through segment about guidance. before results

addition on Our end CAGR year-to-date and Vital last track number with XXXX demonstrating that about platforms XX.X was the of since year, of now XX/X, it assets, At than $XX divested the now period million. the is growth revenue a XX.X% we quarter, million exceeds on higher with excluding members record a consistent XX%. had same our the Decisions for of of

strong, in the clinical Care Evolent and by was particularly profitability savings segment, shared in for our Partners quarter Our our driven solution.

or briefly these $XX profits comment savings lives. of we $XX In translates month per me XXXX, on to savings member million per about created to how shared presentation. and XX,XXX across in reference X Let Page the I’ll Evolent,

the for XX,XXX as Performance earlier, the also of Medicare on per we performance. with the data network, analyze The for then have We to year. on expenses Of models bulk time, profit. and those savings substantially, and the As per savings a savings, we the keeps revenue as the XX% QX and becomes The of in we $XX that is revenue solution physicians would operating month portion for the share recognize opportunity other those the in Evolent XXXX. Partners. each after over the and savings the Care XX% the was in Seth creating grown lives mentioned expansion shared first earnings our receive revenue delay a Year revenue an grow recognized Evolent expect member rest recognized

quarters. We seasonality revenue expect in year, And from leading strong, other by elevated Solutions cash, flow capital. the our in to results and the in Cash timing into period we EBITDA million persist cash Clinical available of next this working versus with was ended to excluding which cash quarter driven a QX available cash million of value net we of deployed held notes software purchases end, as was for the face development Net for quarter LTM define our Passport. Cash of Xx debt PP&E $XXX.X and at million. in convertible leverage less adjusted $X debt, resulting was versus EBITDA. $XXX

half of third, XXXX our for of Passport’s choose X the X in XX/X; and a look holders those to either we membership. over normal at second remaining payment quarters, mature the in we notes this a outside notes or equity items payments cash purchase As next the I $XX may quarter us first, convertible retirement; of in December, would million cash Decisions and $XX.X second, our million of note conversion in main our Vital of first on deployed balance will for $XX of expect sheet we the XXXX operations: million earn-out the

let consolidated through ending with million of before in on take $XXX.X the an update specific segments quarter Now, represents decrease Total guidance. me a and you of results year-over-year. X.X% revenue

well as revenue partner growth prior our less importantly, million trajectory. the result with lower $XXX.X the same to year million margin a revenue million growth. Adjusted of from new prior increased XX.X% $XX.X expansion sales with due as additions assets $XXX.X the of More of year base, on period EBITDA of in the from consistent divested same-store

the period year. increased segment Solutions second the Turning revenue from the prior to our million up Clinical $XXX.X XX.X% same $XXX.X to our of million, in segment, results quarter within in

divested adjusted relative at was the This New Health performance grew million Excluding Evolent Solutions timing first during year. assets, shared Clinical revenue in from by $X XX.X%. performance EBITDA Century minus million, of from QX year. half clinical the solutions consistent with performance to revenue strong Partners, $XX.X largely at driven was remaining compared prior savings Care to EBITDA the

Century million PMPM Solutions’ elevated which XX.X prior suite Looking EBITDA costs was COVID. our same at prior our of versus a million year. The relative Solutions with of revenue comparison, Membership year, expectations the Solutions relative growth in PMPM was related for the QX Within $XX.X in the $X.XX membership, by in New year-over-year XXXX, for Services Clinical to QX commercial a $X.XX Advantage. with Clinical quarter X.X decline Health of million, quarter segment, with impacted our New PMPM with performance $XX.XX. the and Health X.X XX.X% in million million. Technology of in Medicare was Suite Century X.X in prior Health Membership of was to $XX.XX strong Services Evolent the and consistent PMPM of And in the Clinical than has versus to lower QX to year. slightly Medicaid in decreased line third

assets, of Services by in the our million, Health from to Suite Health EBITDA segment $XX.XX was X.X%. in million factors. prior X.X Excluding revenue was the for grew Evolent minus from the Services PMPM year. with EBITDA million Membership our compared in million a two $XX.XX. relative segment Evolent was Health X.X divested for revenue Adjusted to This Services year, $XX.X versus QX driven of prior quarter Evolent Performance $X.X

with strong execution. First, the core with first Evolent Health year EBITDA Services of two the consistent was quarters continued

sale last plan of performance as a assets payments year, part XXXX results. Second, additional operating for eligible based an are on we our Passport’s of for

$X negative claims, an on this run-out estimated positive we the had of the or million impact performance of Based $X high-end Passport, to accrual return. of million, are and that original million on to Our amount updated moving estimates estimates return million on which well over overall positive. was capital the track they’re we of to to $XXX remain quarter. exceed with our on meet date, capital pleased $XX of With

the from and of Finally, decreased clinical the commitment XX.X% the delivering prior of year. performance while our operational million, reduce still overhead, This to execute continuing was $X.X in down result period our strong corporate costs on partner to million same to $X.X decrease for organizations.

Turning are the $XXX year. year objectives financial be progress $XXX million. pleased of total to the to for We revenue our expect with we to million in our range now the for against guidance,

full-year forecasting are of in $XX $XX to We million. to be adjusted range EBITDA the million

revenue we million total adjusted we specifically, it quarter over to million. of will $XX EBITDA of adjusted are turn million $XXX forecasting back million. total fourth the And that, For $XX are to forecasting $XXX to With Seth. I

Seth Blackley

Thank you, want with words on to I close few organization. a John. our

First, across the we’re program. Giving annual kick of Xth off organization, our excited to Season

natural next carves communities our for and employees back. have serve. the equity months, we this social our become space DNA X collective extension where and of community Over engagement, and out reflect, impact Evolent Evolent’s is Through in back and Giving a to health improving part social tradition, celebrate to to and equity a commitment culture. communities live give of philanthropy the

questions, themes North scaling to value. of Thanks, Cross we’re and not we recent two, of confident will Tunde our Also, call. the to our maximizing and margins; of And retention an I Sotunde, the the experience our Board Board. welcome employee enhanced creating value the approximately that for everyone. business is mid-teens address important our of even and strong we shareholder Second, very want for to on our scores to going growth market XX%. one, all open In to target; that XX%, drive communities. our proud rates labor a high paths efficiently And have we that diversity to capital. thrilled investment the to had Blue summary, engagement and I’m organic of employee at with allocating finally, the Tunde participating wealth regarding tonight’s the And comment three, Dr. amidst adds report Carolina speculation Shield of Directors. I’m approximately proud partners I we’re all-time in few execution open Blue we’re line CEO of before our for of strong last directly What to remain achieving of, I’m or rumors. remain and market. our driving say in a are growth years company. consistent

up management value With continue Our have open team for and to and Board will maximizing to Q&A. priority. since day-one, committed be this that, shareholder top our been we’ll it

Operator

will of come question our will the Daniels ahead. William session. Please Blair. And begin We from Instructions] [Operator now question-and-answer go first Ryan

Ryan Daniels

momentum question Yeah, I good more taking Thanks business. evening. wanted and bit talk about to continued for the in Vital the the Decisions. congrats little a on

I’m there Obviously, Century has what having Now and with on closed categories kind and of your disease synergies the a Health and of of that those New that integration started kind customers, patient of curious conversations especially process, lot platform. you’re advanced that planning. the existing base several with

I’m what or has deal early looking is closed. since pipeline been So the like curious, the what feedback

Seth Blackley

opportunity the I just that Seth. partners, out Sure, just Ryan. oncology about is other and I’d existing Ryan, market XX% most lots stands end-of-life partners say in general the Thanks to in around that think a very good. the of over potential biggest lot. thing, our for are This been has opportunities cardiology. the talked fact and and of integration. We’ve is out obviously, this the feedback of lots And

with overlap It’s work a just very And doing. the so, high a we’re already that conversation. such there’s natural

Point So for very solved treating one. challenge solutions and point right, being well there’s the physicians, for that families, the oncologists, that’s pain-point, just other which incredible that is two, not of here today market. patients, for by cardiologists kind validation a in is

doing, of been a is and that I because mentioned, just goodness, overlap up.” fabulous. you about like this that we’d what And talk integrate We’re the it it. can about in to with if there’s So talking thank you interested “Oh, it you’re feeling brought of,

it’s a coming that weeks feels just lot. have we now, how been to those have lots had that two But in, gone thesis those of Ryan. right themes have I’d a we good pleasantly so, just closed ago, all And surprised probably it say, validated a and few two off work conversations good the and like further start, now. by main hear it right very Obviously, very ahead. we feels the

Ryan Daniels

in new Okay. if we about That’s just quicker that’s year, the partners, your think goal, offering X if nicely of conversion XX the closed pulled or would XXXX ahead given the better obviously, helpful. that pipeline, product X to on And into broader just or maybe I’m some guidance you’ve curious have more or have the then, conversion XXXX. forward of shots as in might opportunity partnerships you for anticipated

about and at how we pipeline as sales? then So look do think that, the current status we for of potential XXXX the the

Seth Blackley

Yeah, Look, factors combination terms Ryan. question. it’s the a creating in products of think that of good another differentiated number I value, different the of are

are the job. doing excellent an think I teams

We’re fully staffed.

in are high focused a macro-environment really is We’re executing good. very the standard. And and

in So right, on a the about more rest really next not how when Care a might in of And something place. year. New the this that the bit remaining Partners in firing have more year those Century a too, year are on many matters see too, pipeline few main versus next year. Care for I you in just it’s many bit of of think mix them and think terms than things a are factors. for that EHS. we’ve that Evolent the Partners what’s things And, good are the to year from going from part happened many is from after are a say little handful really well. Evolent But speaking, given and this we of how had generally That’s cylinders, There’s is I And we pulled obviously, what of maybe them wouldn’t that in little a and run how we forward all past.

Ryan Daniels

And margin good I’m getting kind you’re front, Also, the there. that the the or of what some decline a know you’ve given you and revenue remind restructuring the just leverage blueprint synergies had growth. good achieved forward. obviously, going That’s Okay. us pretty on same-store I divested plan you’ve on especially then, curious, performance, if could is great. given year-over-year, assets.

Are to kind So Or what’s we going had? of growth EBITDA strong synergies the XXXX, going performance? think about be organic it through, the driver be Thanks. performance? mostly shining more is to to in the corporate-level as there driving margin be

John Johnson

John. Hey, Ryan. It’s question. Good

So third I’d improvement second we time is and may and and the as we mature have SG&A forward, year. this new leverage. say their year, partnerships clinical levers, that improvements, then flow recall, of what ahead X our main the improving cost margin is obviously, plan And this maturation you look of through, over we’re

Our now points a our when guidance perspective basis midpoint of higher the year. we margin from is than started XXX

Largely we is of early cost really that a good of about So that. capture feel result the work. savings

and clients, there. as EBITDA feel margin mid-teens into leverage. us in of by clinical the getting is So, year, good target of front and we adjusted we by look maturation by XXXX, about next continued that at new the moving driven opportunity principally time, the SG&A to Over continue

this With expansion year, the result. year-over-year since forward this the little lower, we’ve in captured into reductions the already year’s a that into cost next pull probably, is of year

Ryan Daniels

much. Okay, that’s very helpful color. Thank so you

Operator

question comes next Piper The of Sandler. ahead. go Please Sean from Wieland

Sean Wieland

thanks Hi, much. very

into new states some year. that that is next expanding is along go with? in a new that Is endeavor you something that every new So, market? [C&C] we naturally [ph] for Or noticed

Seth Blackley

an Sean, Hey, us. it’s opportunity for

As we we we already have were several different more have live couple maybe times about to level the partner that and talked expand. a that states and in handful conversations of have with at a state-by-state of others, then

that expand their with bigger. make those so just new them relationship that that opportunities will be And opportunity

Sean Wieland

included, – that’s those not And are Okay, then… so so right?

Seth Blackley

Correct.

Sean Wieland

partnerships. not for you’re year? range done just by to there then you’ll maybe on Ryan that your revisit on – end the talking about, year? where new And yet And reason was guidance Is follow-up Okay. guidance of upper a what there you’re I is of of at that be end the the suspect the

Seth Blackley

couple say comment, would I macro and question specifically. Sean, mean, just a I’ll in I make your answer general,

had pipeline remains as partners a have growth. on as We good well year, and good same-store feels the the it both very new strong

we But the not metrics we year, for right of We’re about the next specific the can targets into in give head good of will not now. or we’re obviously as changing guidance year but where a changing for right number year are, we February next reasons. now of any host we feel full

Sean Wieland

Okay, thanks very much.

Seth Blackley

Sure. No problem.

Operator

The next Please from Rhyee question comes ahead. Cowen. go of Charles

Charles Rhyee

guys. taking for thanks Yeah, the questions

of obviously when make growth help in faster partnership to the Just think extra given the maybe we right the up kind are by there color on wins if we absolute I be and understand, kind is but because us this driven but for the performance about assets. on about thinking at digits, about signed? Clinical then a when side, particularly savings we want partnerships performance more growth, similar growing obviously, you John, like year, And the by Is to revenue of it, maybe in deficit Solutions, captured, of EBITDA the strong segment. mid-high-single just as much new dollars, look we’re of now will we’re talking one about, clinical next range about the looks it would EBITDA great? be be that revenue any of along growth looking Health it Services Evolent should think at follow

Seth Blackley

on on yet named, a Health side, your But numbers wouldn’t bit we in last very which in segments, expect grow really Services look next such we specifically, clinical the would I take talked not X difference today take I it’s and we’ve think about and a between at second the closer will rapidly. will haven’t John, name. the qualitative to the a one, the provide now. high-single-digits clinical growth administrative the one. after, had Obviously, your it pass years be year. we one Charles, February over year, very, of next those the Seth. to but high But a guiding still rates in headed Evolent answer can I’ll little more including there this come in then John have will to side, Yeah, huge into little and other time, today’s obviously that’s detail question. for and signings, the I’ll And bit if together for first point you handful

John Johnson

ways. that at X next Yeah. And, I expansion Charles, on EBITDA really for think, year, in looking

the our that clients then, that from clinical went contributes from year. margin we in And growth we leverage SG&A that second, anticipate through will The to next also this first expansion In see will certainly year. be live some expansion. particular, flow is those

will a it of those. of So combination be both

Charles Rhyee

John, any past to comment fourth or And estimated related that the at quarter $XX just the might maybe performance that for this recently year million? Are your at payments there on, all? into next either Passport in accrual trail Okay. you to about expected follow-up other

John Johnson

for the half we that other Passport principal question. sheets, of terms good earn-out anticipate million side, continue you in that’s one in return the of purchase then, I which one Today, to Evolent several as able to know, is capital next the remaining the finally, Yeah, over the those to believe $XX will the balance around plan. quarters. as the payments. the that on the are items And that earn-out, we at primary payment second million be the I X back referenced, we time The – price $XX this from

Charles Rhyee

just the timing issue? is remind you can a million And what that me again, performance? for that certain timing Or a is earn-out, to tied $XX that are Thanks.

John Johnson

and we timing expect XXXX. Just in of it QX

Charles Rhyee

Thanks. great. Okay,

John Johnson

Yeah.

Seth Blackley

Thanks, Charles.

Operator

next go [Operator our David Larsen ahead. Instructions] And come Please BTIG. of question from will

David Larsen

Can of that the win, might roll the period the the report talk on time Hi, around look PMPM will I there? you quarter. platform? increase Decisions to, is there be PMPM good congratulations services? XXX,XXX at Can think, members. account performance like bit for an you in-sell opportunity color about onto and what mentioned We rate Vital the And any rate what give the a press little you in of of

Seth Blackley

David, can one. I that sure, take Yeah,

the and what knew I for business first about we is which point about excited we’re that into growing just confirmation signing think Vital, in of this is the generally itself.

I think, transaction that going around back Vital putting is modest, you taken about opportunity And, for New on piece that’s same just is and the the linking is about, about the Century. to doing is around how it for the rarely right? opportunities transaction and very it’s if much by New an that’ll of Century. as England, on we PMPM on sort we of with what Vital, the big that more we you mentioning Vital, talked this think Vital market in it’s of I PMPMs more integration the together referencing. if announced the us basis with be it, and we’re to of with to opportunity. be this a so but you’re with much and standalone really the talked conversion all be any with is going And like, when about the the really important about, New Health cardio The reasonably oncology remember timing was not stats, And, initial itself, ahead earlier big those broadly, tying part that so opportunity

the So point on that’s opportunity. where that’s our your big focus

David Larsen

lives, the at So, do on I month, per math call XXX,XXX that’s potential? $XX member is million, that that almost per let’s the $XX at if

John Johnson

the suite, is Dave, $X.XX PMPM so around New comparable, is Tech The Century this PMPM. and Vital Services Health

David Larsen

if convert service customer? you to performance to them longer-term The Okay. were

John Johnson

it you could $XX were referenced. the a $XX the high X, significantly X as basis. potential – think the sometimes full you as performance they’re higher Yeah, When full times than about full a that the on that you David, and New thinking I you think, about if yeah, for PMPM PMPM, performance referenced be Century basis, on

the So on that’s in that focused we Ohio, it’s to and to, opportunity really about point. think we’re that’s similar your that Molina quarter, of talked really And conversion kind the with what I And like. opportunity. last the looks longer-term

David Larsen

little a mention on at did accounting what Okay. million year a the midpoint. John, the And quick on the behind guide was bit revenue I there one But headwind for one, then had the the basis, adjustment? been increased more quarter of some to you was $X it like revenue sequential related was modeling. a just

John Johnson

accrual savings You in are shared a this for the Yes, toward path correct. updated payments revenue item. was

revenue that the So in hit quarter.

David Larsen

much? And million? for that $X was how

John Johnson

Correct.

David Larsen

have So million. would been revenue $XXX

Okay.

John Johnson

Correct.

David Larsen

helpful. very Okay,

Is there year-over-year XX% the in that was example, up that XXXX, revenue still restated delta reported XQ the excluded? XXXX quarter, rate? we’re for but like Okay, was my I numbers, helpful. when included but of think Lighthouse I at one, it that then, growth rate Is the growth for Passport revenue last Health look last not seeing just and why in True And is XX% are The organically. X%. XQ

John Johnson

release, Passport, your look which answer all of give business. think representation Children’s, your to you is growth those is Did do discontinued year-over-year and at divested the of question? if So of True we that But organic numbers the are now Lighthouse excluding what provide we are Miami point Health, the operations. in assets, press the in which the best the excluding revenue to

David Larsen

so Okay, does. – it

So you say, correct? when growth at talking XXXX XXXX is. to, a you’ve that about sort mid-teens is look it we But growth build time basically top-line XX% growth, revenue to bogey comes if we what from organic revenue the of would models, were when been to XXXX, XXXX, our deliver to is see rate, XX%

John Johnson

That is correct.

David Larsen

thank Okay, much. very Good you quarter.

John Johnson

Thank you.

Seth Blackley

David. Thanks,

Operator

question-and-answer This I Seth turn like to over our for back to concludes the session. any remarks. would conference Blackley closing

Seth Blackley

All right. Have soon. We forward evening. connecting to Thanks everybody’s look time. for a good

Operator

now presentation, attending Thank for disconnect. may and concluded. The you now today’s you conference is

Evolent Health (EVH) 4 Nov 212021 Q3 Earnings call transcript