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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Evolent Health Inc | NYSE:EVH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.02 | 0.07% | 27.12 | 27.4196 | 26.985 | 27.28 | 603,570 | 18:46:45 |
WASHINGTON, Feb. 23, 2022 /PRNewswire/ -- Evolent Health, Inc. (NYSE: EVH), a health care company that delivers proven clinical and administrative solutions to payers and providers, today announced financial results for the quarter and full year ended December 31, 2021.
Highlights from the fourth quarter and full year 2021 announcement include (all comparisons are to the quarter and full year ended December 31, 2020):
Quarter ended December 31, 2021:
Full year Ended December 31, 2021:
Also today, Evolent announced four new partnerships and a new initial partner implementation:
Seth Blackley, Chief Executive Officer and Co-Founder of Evolent Health stated, "2021 was a highly successful year for Evolent Health on multiple fronts. Our excellent fourth quarter results cap a year characterized by strong performance financially, operationally and from a sales perspective. We exceeded our original 2021 commitments through strong execution across the year. The new partner announcements today are further evidence of the differentiation of our value proposition to a broad range of customers. Together with the ten agreements announced during the prior year, these new wins provide Evolent Health strong visibility into strong and durable forward revenue and earnings growth."
Mr. Blackley added, "I want to thank Evolent's 3,500 Evolenteers worldwide for their passion and commitment to improving healthcare through innovation focused on quality and efficiency of healthcare delivery. We are excited to capitalize on our momentum with health plans and healthcare providers and to help drive the continuing evolution of value-based care in the U.S."
Financial Results of Evolent Health, Inc.
In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we may use or discuss non-GAAP financial measures. Definitions of the non-GAAP financial measures, as well as reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this earnings release. See Financial Statement Presentation and Non-GAAP Financial Measures for more information.
Segment Highlights: Clinical Solutions
Segment Highlights: Evolent Health Services
Reported Results
Evolent Health, Inc. reported the following results in accordance with U.S. generally accepted accounting principles ("GAAP"):
Total cash and cash equivalents was $266.3 million as of December 31, 2021.
Adjusted Results
Business Outlook
First Quarter 2022 Guidance
For the three months ending March 31, 2022, revenue is expected to be in the range of approximately $280.0 million to $295.0 million. Adjusted EBITDA is expected to be in the range of approximately $20.0 million to $25.0 million.
Full Year 2022 Guidance
Revenue for the year ending December 31, 2022 is expected to be in the range of approximately $1.12 billion to $1.18 billion. Adjusted EBITDA is expected to be in the range of approximately $80.0 million to $90.0 million.
This "Business Outlook" section contains forward-looking statements, and actual results may differ materially. Factors that may cause actual results to differ materially from our current expectations are set forth below in "Forward Looking Statements - Cautionary Language" and Evolent Health, Inc.'s filings with the Securities and Exchange Commission ("SEC").
Additional Outlook Information
Cash deployed for software development is expected to be in the range of $25 million - $30 million.
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a conference call to discuss its fourth quarter performance this evening, February 23, 2022, at 5:00 p.m., Eastern Time. To listen to a live broadcast via the internet and view the accompanying materials, please visit the Company's Investor Relations website at http://ir.evolenthealth.com. To participate by telephone, dial 855.940.9467 or 412.317.6034 for international callers, and ask to join the "Evolent Health call." Participants are advised to dial in at least fifteen minutes prior to the call to register. The call will be archived on the company's website for one week and will be available beginning later this evening. Evolent Health invites all interested parties to attend the conference call.
About Evolent Health
Evolent Health (NYSE: EVH) delivers proven clinical and administrative solutions that improve whole-person health while making health care simpler and more affordable. Our solutions encompass total cost of care management, specialty care management, and administrative simplification. Evolent serves a national base of leading payers and providers, is the first company to receive the National Committee for Quality Assurance's Population Health Program Accreditation, and is consistently recognized as a top place to work in health care nationally. Learn more about how Evolent is changing the way health care is delivered by visiting evolenthealth.com.
Contacts:
Seth Frank
Investor Relations
sfrank@evolenthealth.com
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Revenue, Adjusted Transformation Services Revenue, Adjusted Platform and Operations Services Revenue, Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted Depreciation and Amortization Expenses, Adjusted Total Operating Expenses, Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted Earnings (Loss) Available to Common Shareholders and Adjusted Earnings (Loss) per Share Available to Common Shareholders, which are all non-GAAP financial measures, as supplemental measures to help investors evaluate our fundamental operational performance.
Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses are defined as cost of revenue and selling, general and administrative expenses, respectively, adjusted to exclude the impact of stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs related to acquisitions and business combinations, securities offerings, discontinued operations and other one-time adjustments. Management uses Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses as supplemental performance measures, which are also useful to investors, because they facilitate an understanding of our long term operational costs while removing the effect of costs that are not expected to reoccur frequently (e.g. acquisition-related costs) and non-cash (e.g. stock-based compensation expenses) in nature. Additionally, these supplemental performance measures facilitate understanding a breakdown of our Adjusted Total Operating Expenses. Adjustments for acquisition-related costs incurred generally represent professional service fees and direct expenses related to acquisitions. Because we do not acquire businesses on a predictable cycle, we do not consider the amount of acquisition-related costs to be a representative component of the day-to-day operating performance of our business.
Adjusted Depreciation and Amortization Expenses is defined as depreciation and amortization expenses adjusted to exclude the impact of amortization expenses related to intangible assets acquired through asset acquisitions and business combinations. Management uses Adjusted Depreciation and Amortization Expenses as a supplemental performance measure because it reflects a complete view of the operational results. The measure is also useful to investors because it facilitates understanding a breakdown of our Adjusted Total Operating Expenses.
Adjusted Total Operating Expenses is defined as the sum of Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses and Adjusted Depreciation and Amortization Expenses, and reflects the adjustments made in those non-GAAP measures. Adjusted Total Operating Expenses is further adjusted to exclude the impact of (gain) loss on disposal of assets and items arising from acquisitions and business combinations, such as changes in fair value of contingent consideration and indemnification assets.
Adjusted Operating Income (Loss) is defined as Adjusted Revenue less Adjusted Total Operating Expenses, and reflects the adjustments made in those non-GAAP measures. Management uses Adjusted Total Operating Expenses and Adjusted Operating Income (Loss) because the removal of acquisition costs, one-time or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance, and believes these measures are useful to investors because they give investors insight into our core operating performance.
Adjusted EBITDA is defined as EBITDA (net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, (provision) benefit for income taxes, depreciation and amortization expenses), adjusted to exclude equity method investment impairment, gain on the transfer of membership, loss on repayment of debt, loss on extinguishment of debt, goodwill impairment, gain (loss) from equity method investees, loss on disposal of assets and consolidation, changes in fair value of contingent consideration and indemnification asset, net loss attributable to non-controlling interests, other income (expense), net, repositioning costs, stock-based compensation expense, severance costs, amortization of contract cost assets, strategy and shareholder advisory expenses, acquisition-related costs and gain (loss) from discontinued operations.
Management uses Adjusted EBITDA as a supplemental performance measure because the removal of acquisition-related costs, one-time or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.
Adjusted EBITDA Margin is as defined Adjusted EBITDA divided by Revenue. Management uses Adjusted EBITDA margin as a supplemental performance measure because it allows the investor to understand operational performance compared to revenues over time. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.
Adjusted Earnings (Loss) Available to Common Shareholders is defined as earnings (loss) attributable to common shareholders adjusted to exclude gain from equity method investees, other income (expense), net, gain on transfer of membership, loss on repayment of debt, goodwill impairment, loss on disposal of assets, impairment of equity method investees, changes in fair value of contingent consideration and indemnification assets, net loss attributable to non-controlling interests, loss on extinguishment of debt, purchase accounting adjustments, repositioning costs, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, gain (loss) from discontinued operations, strategy and shareholder advisory services and acquisition-related costs.
Adjusted Earnings (Loss) per Share Available to Common Shareholders is defined as Adjusted Earnings (Loss) Available to Common Shareholders divided by Weighted-Average Common Shares, and reflects the adjustments made in those non-GAAP measures.
Management uses Adjusted Earnings (Loss) Available to Common Shareholders and Adjusted Earnings (Loss) per Share Available to Common Shareholders because excluding non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that these measures are also useful to investors for the same reason.
Revenue Excluding Divested Assets is defined as the sum of revenue, less revenue from our divested health plan assets of Passport, Lighthouse and Miami Children's when divested. Management uses Total Revenue Excluding Divested Assets as a supplemental performance measure because it reflects our on-going operational results. The measures are useful to investors because it reflects the full view of our operational performance in line with how we generate our long-term forecasts.
These adjusted measures do not represent and should not be considered as alternatives to GAAP measurements, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. A reconciliation of these adjusted measures to their most comparable GAAP financial measures is presented in the tables below. We believe these measures are useful across time in evaluating our fundamental core operating performance.
Lives on Platform and Per Member Per Month ("PMPM") Fee
Total Lives on Platform are calculated by summing our Evolent Health Services Lives on Platform and our Clinical Solutions Lives on Platform. Evolent Health Services Lives on Platform are calculated by summing members on our value-based care and comprehensive health plan administrative platform. Clinical Solutions Lives on Platform are calculated by summing the Clinical Solutions Lives on Platform in our Performance suite and New Century Health Technology and Services suite Lives on Platform. Clinical Solutions Lives on Platform in our Performance suite are calculated by summing members covered for oncology specialty care services and members covered for cardiology specialty care services for contracts not under ASO arrangements. New Century Health Technology and Services suite Lives on Platform are calculated by summing members covered for oncology specialty care services, members covered for cardiology specialty care services and members covered for advance care planning services for contracts under ASO arrangements. Members covered for more than one category are counted in each category.
Evolent Health Services average per member per month ("PMPM") fee is defined as platform and operations revenue pertaining to the Evolent Health Services segment during the period reported divided by the average of the beginning and ending Evolent Health Services segment membership during the period reported divided by the number of months in the period. Clinical Solutions Performance suite Average PMPM fee is defined as platform and operations services revenue pertaining to our Clinical Solutions Performance suite during the period reported divided by the average of the beginning and ending Clinical Solutions Performance suite membership during the period reported divided by the number of months in the period. New Century Health Technology and Services suite Average PMPM fee is defined as platform and operations revenue pertaining to the New Century Health Technology and Services suite during the period reported divided by the average of the beginning and ending New Century Health Technology and Services suite membership during the period reported divided by the number of months in the period.
Management uses lives on platform and PMPM fees because we believe that they provide insight into the unit economics of our services. We believe that these measures are also useful to investors because they allow further insight into the period over period operational performance. We believe that these measures are also useful to investors because they allow further insight into the period over period operational performance.
Evolent Health, Inc. | |||||||
Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||
(unaudited, in thousands, except per share data) | |||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Revenue | |||||||
Transformation services | $ 6,220 | $ 1,190 | $ 11,204 | $ 11,990 | |||
Platform and operations services | 242,138 | 245,346 | 896,753 | 912,649 | |||
Total revenue | 248,358 | 246,536 | 907,957 | 924,639 | |||
Expenses | |||||||
Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) | 164,480 | 174,833 | 657,551 | 696,581 | |||
Selling, general and administrative expenses | 66,917 | 58,663 | 219,499 | 210,412 | |||
Depreciation and amortization expenses | 15,075 | 14,705 | 60,037 | 60,835 | |||
Loss (gain) on disposal of assets and consolidation | — | (5,749) | — | 698 | |||
Loss on extinguishment of debt, net | — | — | — | 4,789 | |||
Goodwill impairment | — | — | — | 215,100 | |||
Change in fair value of contingent consideration and indemnification asset | 14,100 | 4,352 | 13,281 | 3,860 | |||
Total operating expenses | 260,572 | 246,804 | 950,368 | 1,192,275 | |||
Operating loss | (12,214) | (268) | (42,411) | (267,636) | |||
Interest income | 96 | (1) | 407 | 2,633 | |||
Interest expense | (6,447) | (8,338) | (25,425) | (28,325) | |||
Impairment of equity method investments | — | — | — | (47,133) | |||
Gain from equity method investees | 454 | (975) | 13,179 | 10,039 | |||
Gain on transfer of membership | 22,969 | — | 45,938 | — | |||
Loss on repayment of debt | (2,185) | — | (21,343) | — | |||
Other expense, net | (73) | (292) | (146) | (118) | |||
Loss from continuing operations before income taxes | 2,600 | (9,874) | (29,801) | (330,540) | |||
Provision (benefit) for income taxes | (453) | 763 | 483 | (2,368) | |||
Loss from continuing operations | 3,053 | (10,637) | (30,284) | (328,172) | |||
Loss from discontinued operations, net of tax (1) | (8,700) | (3,166) | (7,317) | (6,074) | |||
Net loss | (5,647) | (13,803) | (37,601) | (334,246) | |||
Net loss attributable to non-controlling interests | — | 822 | — | — | |||
Net loss attributable to common shareholders of Evolent Health, Inc | $ (5,647) | $ (14,625) | $ (37,601) | $ (334,246) | |||
Loss per common share | |||||||
Basic and diluted | |||||||
Continuing operations | $ 0.03 | $ (0.13) | $ (0.35) | $ (3.86) | |||
Discontinued operations | (0.09) | (0.04) | (0.09) | (0.08) | |||
Basic and diluted loss per share attributable to common shareholders of Evolent Health, Inc | $ (0.06) | $ (0.17) | $ (0.44) | $ (3.94) | |||
Weighted-average common shares outstanding | |||||||
Basic and diluted | 88,326 | 84,289 | 86,067 | 84,928 | |||
Comprehensive loss | |||||||
Net loss | $ (5,647) | $ (13,803) | $ (37,601) | $ (334,246) | |||
Other comprehensive loss, net of taxes, related to: | |||||||
Foreign currency translation adjustment | 1 | 42 | (84) | (44) | |||
Total comprehensive loss | (5,646) | (13,761) | (37,685) | (334,290) | |||
Total comprehensive loss attributable to non-controlling interests | — | 822 | — | — | |||
Total comprehensive loss attributable to common shareholders of Evolent Health, Inc | $ (5,646) | $ (14,583) | $ (37,685) | $ (334,290) |
———————— | |
(1) | Includes $6.8 million loss on disposal of discontinued operations for the year ended December 31, 2021. |
Evolent Health, Inc. | |||
Condensed Consolidated Balance Sheets | |||
(in thousands, unaudited) | |||
December 31, | |||
2021 | 2020 | ||
Cash and cash equivalents | $ 266,280 | $ 319,002 | |
Restricted cash and restricted investments | 88,662 | 21,028 | |
Total current assets | 523,960 | 547,649 | |
Intangible assets, net | 279,784 | 264,992 | |
Goodwill | 426,297 | 349,029 | |
Total assets | 1,419,458 | 1,371,700 | |
Accounts payable | 96,084 | 31,975 | |
Debt, net of discount | 215,676 | 289,900 | |
Total liabilities | 725,825 | 752,100 | |
Total shareholders' equity | 693,633 | 619,600 | |
Total liabilities and shareholders' equity | 1,419,458 | 1,371,700 |
Evolent Health, Inc. | |||
Condensed Consolidated Statements of Cash Flows | |||
(in thousands, unaudited) | |||
For the Year Ended December 31, | |||
2021 | 2020 | ||
Net cash and restricted cash (used in) provided by continuing operations | |||
Net cash and restricted cash provided by (used in) operating activities | $ 38,747 | $ (16,225) | |
Net cash and restricted cash (used in) provided by investing activities | (15,786) | 261,072 | |
Net cash and restricted cash used in financing activities | (29,548) | (11,862) | |
Effect of exchange rate on cash and cash equivalents and restricted cash | (52) | 65 | |
Net (decrease) increase in cash and cash equivalents and restricted cash | (6,639) | 233,050 | |
Cash and cash equivalents and restricted cash as of beginning-of-period (1) | 361,581 | 128,531 | |
Cash and cash equivalents and restricted cash as of end-of-period (1) | $ 354,942 | $ 361,581 | |
Net cash and restricted cash provided by (used in) discontinued operations | |||
Cash flows provided by operating activities | $ 5,002 | $ 6,852 | |
Cash flows (used in) provided by investing activities | (2,494) | 2,636 |
———————— | |
(1) | As a result of the closing of the sale of True Health during the first quarter of 2021, the consolidated statements of operations, consolidated balance sheets, and related financial information reflect the Company's operations and assets and liabilities of True Health as discontinued operations for all periods presented. Cash flows and comprehensive income have not been adjusted and are included in the consolidated statements of cash flows and consolidated statements of comprehensive income (loss) for all periods presented. |
Evolent Health, Inc. | ||||||||||||||||||||
Reconciliation of Adjusted Results of Operations | ||||||||||||||||||||
(in thousands, unaudited) | ||||||||||||||||||||
For the Three Months Ended December 31, 2021 | For the Three Months Ended December 31, 2020 | Evolent Health, Inc as Reported | Evolent Health, Inc as Adjusted | |||||||||||||||||
Evolent | Evolent | Evolent | Evolent | |||||||||||||||||
Health, Inc | Health, Inc | Health, Inc | Health, Inc | Change Over Prior Period | Change Over Prior Period | |||||||||||||||
as Reported | Adjustments | as Adjusted | as Reported | Adjustments | as Adjusted | $ | % | $ | % | |||||||||||
Revenue | ||||||||||||||||||||
Transformation services | $ 6,220 | $ — | $ 6,220 | $ 1,190 | $ — | $ 1,190 | $ 5,030 | 422.7 % | $ 5,030 | 422.7 % | ||||||||||
Platform and operations services (1) | 242,138 | — | 242,138 | 245,346 | — | 245,346 | (3,208) | (1.3) % | (3,208) | (1.3) % | ||||||||||
Total revenue | 248,358 | — | 248,358 | 246,536 | — | 246,536 | 1,822 | 0.7 % | 1,822 | 0.7 % | ||||||||||
Expenses | ||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) (1) | 164,480 | (654) | 163,826 | 174,833 | (409) | 174,424 | (10,353) | (5.9) % | (10,598) | (6.1) % | ||||||||||
Selling, general and administrative expenses (2) | 66,917 | (6,682) | 60,235 | 58,663 | (6,944) | 51,719 | 8,254 | 14.1 % | 8,516 | 16.5 % | ||||||||||
Depreciation and amortization expenses (3) | 15,075 | (3,539) | 11,536 | 14,705 | (5,823) | 8,882 | 370 | 2.5 % | 2,654 | 29.9 % | ||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | — | — % | — | — % | ||||||||||
Gain on disposal of assets | — | — | — | (5,749) | 5,749 | — | 5,749 | 100.0 % | — | — % | ||||||||||
Change in fair value of contingent consideration and indemnification asset | 14,100 | (14,100) | — | 4,352 | (4,352) | — | 9,748 | 224.0 % | — | — % | ||||||||||
Total operating expenses | 260,572 | (24,975) | 235,597 | 246,804 | (11,779) | 235,025 | 13,768 | 5.6 % | 572 | 0.2 % | ||||||||||
Operating income (loss) | $ (12,214) | $ 24,975 | $ 12,761 | $ (268) | $ 11,779 | $ 11,511 | $ (11,946) | (4,457.5) % | $ 1,250 | 10.9 % | ||||||||||
Total operating expenses as a percentage of total revenue | 104.9 % | 94.9 % | 100.1 % | 95.3 % |
———— | |
(1) | Adjustments to cost of revenue include $(0.6) million and $(0.5) million in stock-based compensation expense and $(9) thousand and $48 thousand related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment for the three months ended December 31, 2021 and 2020, respectively. |
(2) | Adjustments to selling, general and administrative expenses include $(4.3) million and $(3.8) million in stock-based compensation expense, $(2.3) million and $(2.1) million of acquisition-related costs resulting from acquisitions and business combinations and $(58.0) thousand and $(1.1) million of severance costs for the three months ended December 31, 2021 and 2020. |
(3) | Adjustments to depreciation and amortization expenses of approximately $3.5 million and $5.8 million for the three months ended December 31, 2021 and 2020, respectively, relate to amortization of intangible assets acquired via asset acquisitions and business combinations. |
For the Year Ended December 31, 2021 | For the Year Ended December 31, 2020 | Evolent Health, Inc as Reported | Evolent Health, Inc as Adjusted | |||||||||||||||||
Evolent | Evolent | Evolent | Evolent | |||||||||||||||||
Health, Inc | Health, Inc | Health, Inc | Health, Inc | Change Over Prior Period | Change Over Prior Period | |||||||||||||||
as Reported | Adjustments | as Adjusted | as Reported | Adjustments | as Adjusted | $ | % | $ | % | |||||||||||
Revenue | ||||||||||||||||||||
Transformation services | $ 11,204 | $ — | $ 11,204 | $ 11,990 | $ — | $ 11,990 | $ (786) | (6.6) % | $ (786) | (6.6) % | ||||||||||
Platform and operations services | 896,753 | — | 896,753 | 912,649 | — | 912,649 | (15,896) | (1.7) % | (15,896) | (1.7) % | ||||||||||
Total revenue | 907,957 | — | 907,957 | 924,639 | — | 924,639 | (16,682) | (1.8) % | (16,682) | (1.8) % | ||||||||||
Expenses | ||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) (1) | 657,551 | (2,538) | 655,013 | 696,581 | (7,629) | 688,952 | (39,030) | (5.6) % | (33,939) | (4.9) % | ||||||||||
Selling, general and administrative expenses (2) | 219,499 | (32,872) | 186,627 | 210,412 | (23,298) | 187,114 | 9,087 | 4.3 % | (487) | (0.3) % | ||||||||||
Goodwill impairment | — | — | — | 215,100 | (215,100) | — | (215,100) | (100.0) % | — | — % | ||||||||||
Depreciation and amortization expenses (3) | 60,037 | (20,529) | 39,508 | 60,835 | (23,336) | 37,499 | (798) | (1.3) % | 2,009 | 5.4 % | ||||||||||
Loss on disposal of assets | — | — | — | 698 | (698) | — | (698) | (100.0) % | — | — % | ||||||||||
Loss on extinguishment of debt | — | — | — | 4,789 | (4,789) | — | (4,789) | (100.0) % | — | — % | ||||||||||
Change in fair value of contingent consideration and indemnification asset | 13,281 | (13,281) | — | 3,860 | (3,860) | — | 9,421 | 244.1 % | — | — % | ||||||||||
Total operating expenses | 950,368 | (69,220) | 881,148 | 1,192,275 | (278,710) | 913,565 | (241,907) | (20.3) % | (32,417) | (3.5) % | ||||||||||
Operating income (loss) | $ (42,411) | $ 69,220 | $ 26,809 | $ (267,636) | $ 278,710 | $ 11,074 | $ 225,225 | 84.2 % | $ 15,735 | 142.1 % | ||||||||||
Total operating expenses as a percentage of total revenue | 104.7 % | 97.0 % | 128.9 % | 98.8 % |
———— | |
(1) | Adjustments to cost of revenue include $(2.3) million and $(1.8) million in stock-based compensation expense, $(0.3) million and $(3.7) million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment for the year ended December 31, 2021 and 2020, respectively. Adjustments for the year ended December 31, 2020 also include $(2.2) million of severance costs. |
(2) | Adjustments to selling, general and administrative expenses include $(14.4) million and $(12.8) million in stock-based compensation expense, $(7.3) million and $(1.3) million of repositioning costs, $(4.2) million and $(2.4) million of acquisition-related costs resulting from acquisitions and business combinations and $(0.2) million and $(6.8 million) of severance costs for the year ended December 31, 2021 and 2020, respectively. Adjustments for the year ended December 31, 2021 also include $(6.5) million of shareholder advisory services and $(0.2) million of amortization of contract cost assets. |
(3) | Adjustments to depreciation and amortization expenses of approximately $20.5 million and $23.3 million for the year ended December 31, 2021 and 2020, respectively, relate to amortization of intangible assets acquired via asset acquisitions and business combinations. |
Evolent Health, Inc. | |||||||||||
Segment Results | |||||||||||
(in thousands, unaudited) | |||||||||||
Evolent Health Services | Clinical Solutions | Intersegment Eliminations | Subtotal | Corporate(1) | Consolidated | ||||||
Revenue | |||||||||||
For the Three Months Ended December 31, 2021 | |||||||||||
Transformation services | $ 6,220 | $ — | $ — | $ 6,220 | $ — | $ 6,220 | |||||
Platform and operations services | 81,483 | 161,113 | (458) | 242,138 | — | 242,138 | |||||
Total revenue | $ 87,703 | $ 161,113 | $ (458) | $ 248,358 | $ — | $ 248,358 | |||||
For the Three Months Ended December 31, 2020 | |||||||||||
Transformation services | $ 1,190 | $ — | $ — | $ 1,190 | $ — | $ 1,190 | |||||
Platform and operations services | 99,561 | 146,556 | (771) | 245,346 | — | 245,346 | |||||
Total revenue | $ 100,751 | $ 146,556 | $ (771) | $ 246,536 | $ — | $ 246,536 | |||||
Evolent Health Services | Clinical Solutions | Subtotal | Corporate (1) | Segments Total | |||||||
For the Three Months Ended December 31, 2021 | |||||||||||
Adjusted EBITDA | $ 7,943 | $ 29,464 | $ 37,407 | $ (13,108) | $ 24,299 | ||||||
For the Three Months Ended December 31, 2020 | |||||||||||
Adjusted EBITDA | $ 21,370 | $ 8,595 | $ 29,965 | $ (9,570) | $ 20,395 |
Evolent Health Services | Clinical Solutions | Intersegment Eliminations | Subtotal | Corporate (1) | Consolidated | ||||||
Revenue | |||||||||||
For the Year Ended December 31, 2021 | |||||||||||
Transformation services | $ 11,204 | $ — | $ — | $ 11,204 | $ — | $ 11,204 | |||||
Platform and operations services | 300,423 | 598,144 | (1,814) | 896,753 | — | 896,753 | |||||
Total revenue | $ 311,627 | $ 598,144 | $ (1,814) | $ 907,957 | $ — | $ 907,957 | |||||
For the Year Ended December 31, 2020 | |||||||||||
Transformation services | $ 11,990 | $ — | $ — | $ 11,990 | $ — | $ 11,990 | |||||
Platform and operations services | 373,144 | 542,279 | (2,774) | 912,649 | — | 912,649 | |||||
Total revenue | $ 385,134 | $ 542,279 | $ (2,774) | $ 924,639 | $ — | $ 924,639 | |||||
Evolent Health Services | Clinical Solutions | Subtotal | Corporate (1) | Segments Total | |||||||
For the Year Ended December 31, 2021 | |||||||||||
Adjusted EBITDA | $ 17,063 | $ 82,920 | $ 99,983 | $ (33,666) | $ 66,317 | ||||||
For the Year Ended December 31, 2020 | |||||||||||
Adjusted EBITDA | $ 57,731 | $ 26,864 | $ 84,595 | $ (36,022) | $ 48,573 |
———————— | |
(1) | Corporate includes various finance, human resources, legal, executive and other corporate infrastructure expenses. |
Evolent Health, Inc. | |||||||
Reconciliation of Adjusted EBITDA to Net Loss | |||||||
Attributable to Common Shareholders of Evolent Health, Inc. | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Net loss attributable to common shareholders of Evolent Health, Inc. | $ (5,647) | $ (14,625) | $ (37,601) | $ (334,246) | |||
Net income margin | (2.3) % | (5.9) % | (4.1) % | (36.1) % | |||
Less: | |||||||
Interest income | 96 | (1) | 407 | 2,633 | |||
Interest expense | (6,447) | (8,338) | (25,425) | (28,325) | |||
Benefit (provision) for income taxes | 453 | (763) | (483) | 2,368 | |||
Depreciation and amortization expenses | (15,075) | (14,705) | (60,037) | (60,835) | |||
EBITDA | 15,326 | 9,182 | 47,937 | (250,087) | |||
Less: | |||||||
Impairment of equity method investees | — | — | — | (47,133) | |||
Gain on transfer of membership | 22,969 | — | 45,938 | — | |||
Loss on repayment of debt | (2,185) | — | (21,343) | — | |||
Loss on extinguishment of debt | — | — | — | (4,789) | |||
Goodwill impairment | — | — | — | (215,100) | |||
Gain (loss) from equity method investees | 454 | (975) | 13,179 | 10,039 | |||
Loss (gain) on disposal of assets and consolidation | — | 5,749 | — | (698) | |||
Change in fair value of contingent consideration and indemnification asset | (14,100) | (4,352) | (13,281) | (3,860) | |||
Net loss attributable to non-controlling interests | — | (822) | — | — | |||
Other income (expense), net | (73) | (292) | (146) | (118) | |||
Repositioning costs | (1,275) | (1,275) | (7,318) | (1,275) | |||
Stock-based compensation expense | (4,957) | (4,231) | (16,711) | (14,606) | |||
Severance costs | (146) | (1,096) | (198) | (8,986) | |||
Amortization of contract cost assets | (43) | (127) | (476) | (3,944) | |||
Strategy and shareholder advisory expenses | — | — | (6,513) | — | |||
Acquisition-related costs | (917) | (626) | (4,194) | (2,116) | |||
Gain (loss) from discontinued operations (1) | (8,700) | (3,166) | (7,317) | (6,074) | |||
Adjusted EBITDA | $ 24,299 | $ 20,395 | $ 66,317 | $ 48,573 | |||
Adjusted EBITDA margin | 9.8 % | 8.3 % | 7.3 % | 5.3 % |
———————— | |
(1) | Includes $6.8 million loss on disposal of discontinued operations for the year ended December 31, 2021. |
Evolent Health, Inc. | |||||||||||
Reconciliation of Adjusted EBITDA to Net Loss | |||||||||||
Attributable to Common Shareholders of Evolent Health, Inc. | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Evolent Health Services | Clinical | Corporate | |||||||||
For the Three Months Ended December 31, | For the Three Months Ended December 31, | For the Three Months Ended December 31, | |||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||
Net loss attributable to common shareholders of Evolent Health, Inc. | $ (3,348) | $ 9,185 | $ 22,480 | $ 4,385 | $ (24,779) | $ (28,195) | |||||
Net income margin | (3.8) % | 9.1 % | 14.0 % | 3.0 % | |||||||
Less: | |||||||||||
Interest income | — | — | — | — | 96 | (1) | |||||
Interest expense | — | — | — | — | (6,447) | (8,338) | |||||
Benefit (provision) for income taxes | — | — | — | — | 453 | (763) | |||||
Depreciation and amortization expenses | (9,968) | (10,900) | (5,107) | (3,805) | — | — | |||||
EBITDA | 6,620 | 20,085 | 27,587 | 8,190 | (18,881) | (19,093) | |||||
Less: | |||||||||||
Gain (loss) from equity method investees | — | — | — | — | 454 | (975) | |||||
Gain on transfer of membership | — | — | — | — | 22,969 | — | |||||
Loss (gain) on disposal of assets | — | — | — | — | — | 5,749 | |||||
Change in fair value of contingent consideration and indemnification asset | — | — | — | — | (14,100) | (4,352) | |||||
Other expense, net | — | — | — | — | (73) | (292) | |||||
Net loss attributable to non-controlling interests | — | — | — | — | — | (822) | |||||
Loss on extinguishment of debt | — | — | — | — | (2,185) | — | |||||
Repositioning costs | (671) | — | — | — | (604) | (1,275) | |||||
Stock-based compensation expense | (611) | (389) | (1,350) | (422) | (2,996) | (3,420) | |||||
Severance costs | 2 | (768) | — | 17 | (148) | (345) | |||||
Amortization of contract cost assets | (43) | (127) | — | — | — | — | |||||
Acquisition-related costs | — | — | (527) | — | (390) | (626) | |||||
Loss from discontinued operations | — | — | — | — | (8,700) | (3,166) | |||||
Adjusted EBITDA | $ 7,943 | $ 21,369 | $ 29,464 | $ 8,595 | $ (13,108) | $ (9,569) | |||||
Adjusted EBITDA margin | 9.1 % | 21.2 % | 18.3 % | 5.9 % |
Evolent Health, Inc. | |||||||
Reconciliation of Adjusted Earnings (Loss) Available to Common | |||||||
Shareholders to Net Loss Attributable to Common Shareholders | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Net Loss Attributable to Common Shareholders of Evolent Health, Inc. (a) | $ (5,647) | $ (14,625) | $ (37,601) | $ (334,246) | |||
Less: | |||||||
Gain (loss) from equity method investees | 454 | (975) | 13,179 | 10,039 | |||
Other expense, net | (73) | (292) | (146) | (118) | |||
Gain on transfer of membership | 22,969 | — | 45,938 | — | |||
Loss on repayment of debt | (2,185) | — | (21,343) | — | |||
Loss (gain) on disposal of assets and consolidation | — | 5,749 | — | (698) | |||
Goodwill impairment | — | — | — | (215,100) | |||
Loss on extinguishment of debt | — | — | — | (4,789) | |||
Impairment of equity method Investees | — | — | — | (47,133) | |||
Change in fair value of contingent consideration and indemnification asset | (14,100) | (4,352) | (13,281) | (3,860) | |||
Net loss attributable to non-controlling interests | — | (822) | — | — | |||
Purchase accounting adjustments | (3,539) | (5,823) | (20,529) | (23,336) | |||
Repositioning costs | (1,275) | (1,275) | (7,318) | (1,275) | |||
Stock-based compensation expense | (4,957) | (4,231) | (16,711) | (14,606) | |||
Severance costs | (146) | (1,096) | (198) | (8,986) | |||
Amortization of contract cost assets | (43) | (127) | (476) | (3,944) | |||
Loss from discontinued operations (1) | (8,700) | (3,166) | (7,317) | (6,074) | |||
Strategy and shareholder advisory expenses | — | — | (6,513) | — | |||
Acquisition-related costs | (917) | (626) | (4,194) | (2,116) | |||
Adjusted Income (Loss) Attributable to Common Shareholders (b) | $ 6,865 | $ 2,411 | $ 1,308 | $ (12,250) | |||
Loss per Share Attributable to Common Shareholders - Basic and Diluted (a) (2) | $ (0.06) | $ (0.17) | $ (0.44) | $ (3.94) | |||
Adjusted Income (Loss) per Share Available to Common Shareholders (b) | $ 0.08 | $ 0.03 | $ 0.02 | $ (0.14) | |||
Weighted-average common shares - basic and diluted (2) | 88,326 | 84,289 | 86,067 | 84,928 |
———————— | |
(1) | Includes $6.8 million loss on disposal of discontinued operations for the year ended December 31, 2021. |
(2) | For periods of net loss, shares used in both the basic and diluted earnings per share calculation represent basic shares as using diluted shares would be anti-dilutive. |
Evolent Health, Inc. | |||||||
Reconciliation of Revenue from Divested Assets | |||||||
to Revenue | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
For the Three Months | For the Year Ended | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Total revenue | $ 248,358 | $ 246,536 | $ 907,957 | $ 924,639 | |||
Less: | |||||||
Revenue from divested assets | 2,501 | 70,543 | 17,355 | 273,015 | |||
Total revenue excluding divested assets | 245,857 | 175,993 | 890,602 | 651,624 | |||
Clinical Solutions revenue | $ 161,113 | $ 146,556 | $ 598,144 | $ 542,279 | |||
Less: | |||||||
Revenue from divested assets | (973) | 36,806 | (411) | 134,442 | |||
Clinical Solutions revenue excluding divested assets | 162,086 | 109,750 | 598,555 | 407,837 | |||
Evolent Health Services revenue | 87,245 | 99,980 | 309,813 | 382,360 | |||
Less: | |||||||
Revenue from divested assets | 3,474 | 33,737 | 17,766 | 138,573 | |||
Evolent Health Services revenue excluding divested assets | 83,771 | 66,243 | 292,047 | 243,787 | |||
Total revenue excluding divested assets | $ 245,857 | $ 175,993 | $ 890,602 | $ 651,624 |
Evolent Health, Inc. | |||
Guidance Reconciliation | |||
(in thousands, unaudited) | |||
For the Three | For the Year Ended December 31, 2022 | ||
Net loss attributable to common shareholders of Evolent Health, Inc. | $ (4,900) | $ (27,000) | |
Less: | |||
Interest income | 125 | 500 | |
Interest expense | (6,000) | (24,000) | |
Depreciation and amortization expenses | (16,250) | (65,000) | |
EBITDA | 17,225 | 61,500 | |
Less: | |||
Gain from equity method investees | 800 | 800 | |
Other income (expense), net | (50) | (200) | |
Stock-based compensation expense | (5,000) | (20,000) | |
Amortization of contract cost assets | (25) | (100) | |
Acquisition-related costs | (1,000) | (4,000) | |
Adjusted EBITDA | $ 22,500 | $ 85,000 |
The guidance reconciliation provided above reconciles the midpoint of the respective guidance ranges to the most comparable GAAP measure.
FORWARD-LOOKING STATEMENTS - CAUTIONARY LANGUAGE
Certain statements made in this report and in other written or oral statements made by us or on our behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like: "believe," "anticipate," "expect," "estimate," "aim," "predict," "potential," "continue," "plan," "project," "will," "should," "shall," "may," "might" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in our businesses, prospective services, partner relationships, future performance or financial results and the closing of pending transactions and the outcome of contingencies, such as legal proceedings. We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.
These statements are only predictions based on our current expectations and projections about future events. Forward-looking statements involve risks and uncertainties that may cause actual results, level of activity, performance or achievements to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements, include, among others:
The risks included here are not exhaustive. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Our periodic reports and other documents filed with the SEC include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.
Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, we undertake no obligation to publicly update any forward-looking statements to reflect events or circumstances that occur after the date of this release.
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SOURCE Evolent Health
Copyright 2022 PR Newswire
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