EVH

Evolent Health’s second quarter results drew a significant positive market reaction, reflecting outperformance versus Wall Street’s expectations on both revenue and profitability. Management pointed to the successful launch of the Highmark contract and robust customer renewals as key drivers. CEO Seth Blackley specifically highlighted that clinical engagement metrics for new partnerships, such as Aetna and Highmark, were trending above target, signaling strong execution in the company’s core value-based care solutions. Evolent’s ongoing focus on automation, particularly through its Auth Intelligence platform, was also cited as a contributor to operational efficiency. Is now the time to buy EVH? Find out in our full research report (it’s free). Revenue: $652.5 million vs analyst estimates of $596.7 million (46.9% year-on-year growth, 9.4% beat) Adjusted EPS: $0.02 vs analyst estimates of -$0.02 (significant beat) Adjusted EBITDA: $28.05 million vs analyst estimates of $23.14 million (4.3% margin, 21.2% beat) The company lifted its revenue guidance for the full year to $2.65 billion at the midpoint from $2.5 billion, a 6% increase EBITDA guidance for the full year is $127.5 million at the midpoint, in line with analyst expectations Operating Margin: -1.5%, down from -0.3% in the same quarter last year Sales Volumes were down 1.8% year on year Market Capitalization: $471.5 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Kevin Caliendo (UBS) asked about Evolent’s reserving process in light of industry utilization trends, and CFO Mario Ramos stated the company’s approach aligns with broader industry practices and he feels “comfortably optimistic” about their adequacy. John Stansel (JPMorgan) inquired whether margin compression is expected as new Performance Suite contracts scale. Ramos explained that while overall margins appear lower due to contract mix, margins within the Performance Suite itself are improving as contracts mature. Zachary Haggerty (KeyBanc Capital Markets) questioned trends in oncology cost structure, and CEO Seth Blackley confirmed drugs remain roughly 75% of oncology costs, with little change in the overall cost mix. Eduardo Ron (Truist) sought quantification of Medicaid and exchange headwinds versus Medicare Advantage growth. Ramos estimated a 20% decline in Medicaid expansion members but emphasized that Performance Suite contract wins provide a meaningful offset. Luismario Higuera (Citi) asked about the current size of the new business pipeline; Blackley reported that the pipeline has refilled, with several large national plans now under consideration, particularly in oncology. Looking forward, the StockStory team is closely monitoring (1) the pace and quality of major Performance Suite launches, especially in oncology and with new large clients; (2) the operational impact and financial returns from scaling the Auth Intelligence platform across client contracts; and (3) the company’s ability to mitigate membership attrition in Medicaid and exchanges through cross-selling and new client wins. Progress on cost reduction and further customer renewals will also be critical markers for sustained growth. Evolent Health currently trades at $4.15, up from $3.08 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:00 a.m. ET Chief Executive Officer - Seth Blackley Chief Financial Officer - Mario Ramos Operator: Welcome to the Evolent Earnings Conference Call for the Second Quarter ended June 30, 2026. As a reminder, this conference call is being recorded. Your hosts for the call today from Evolent are Seth Blackley, Chief Executive Officer; and Mario Ramos, Chief Financial Officer. 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 titled Investor Relations. This conference call will contain forward-looking statements under U.S. federal laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the company's reports that are filed with the Securities and Exchange Commission, including cautionary statements included in our current and periodic filings. For additional information on the company's results and outlook, please refer to our second quarter press release issued earlier today. Finally, as a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available in the summary presentation available in the Investor Relations section of our website or in the company's press release issued today and posted on the Investor Relations website, ir.evolent.com, and the Form 8-K filed by the company with the SEC earlier today. In addition to reconciliations, we provide details on the numbers and operating metrics for the quarter in both our press release and supplemental investor presentation. [Operator Instructions] And now I will turn the call over to Evolent's CEO, Seth Blackley. Seth Blackley: Good morning, and thank you for joining us. Today, we reported a strong second quarter with results that reflect our continued ability to execute on our commitments. In a dynamic health care environment, our performance underscores the mission-critical nature of our business, the dedication of our team and what we believe is the continued value of our solutions to our customers. For the quarter, Evolent reported total revenue of $653 million, up 31% versus Q1 and adjusted EBITDA of $28 million, a 27% increase versus Q1. Our Q2 2026 medical expense ratio, or MER, was 95% compared to 93% in Q1, reflecting the expected impact of the launch of Highmark on May 1, 2026. Given our performance in the first half of the year and our current visibility into the remainder of 2026, we're increasing our full year revenue guidance range to $2.6 billion to $2.7 billion and increasing the midpoint of our adjusted EBITDA guidance by narrowing the range to $120 million to $135 million. We continue to expect a full year MER of approximately 93% and believe we are well positioned to build on our progress in the quarters ahead. Mario will walk you through our financial results in more detail in a few moments, but I first want to provide you with updates in three key areas of: one, growth and renewals; two, our new Performance Suite oncology arrangements; and three, our AI platform and related cost improvement opportunities. First, regarding revenue growth, we continue to see a very positive sales environment. To that end, we have two partnership announcements today. First, we're preparing for the go-live of an oncology Performance Suite partnership with an existing advanced imaging client. The partnership will cover approximately 1.5 million lives across Medicaid and Medicare populations spread through 11 states. We currently expect this business to launch by December 2026, subject to certain regulatory approvals and to generate approximately $300 million in annualized revenue. As with other recent Performance Suite arrangements, this relationship includes the full enhanced contractual protections we've discussed on previous calls. And second, a current regional Blue Cross plan and former NIA customer has signed an agreement to broaden its use of our Evolent specialty technology and services platform by adding new products and extending existing products to additional populations. We expect these implementations to occur during the third and fourth quarters of this year. While the total annualized revenue from this contract extension is less than $5 million, we expect to generate strong adjusted EBITDA from the contract. Contracts like these continue to prove out the cross-sell opportunity available to us across our entire customer base. Taken together, these announcements demonstrate that our customers are increasingly choosing to expand their relationships with us by adopting additional products and expanding current products across existing populations. As important as our new customer growth is the strength of retention of our existing customers. 2026 has been an outstanding year for renewals as we have successfully renewed three of our largest customers. These renewals, combined with our Aetna and Highmark contracts, which launched this year, not only give us confidence about the strong foundation of our business, but they also provide us with significant visibility into our 2027 outlook. Next, I want to update you on our 2026 Performance Suite launches with Aetna and Highmark. We had a successful launch with Highmark on May 1, supported by strong collaboration between our teams. While we're only a few months into the launch, we are encouraged by the positive early indicators. Currently, clinical engagement rates are trending above our targets and provider engagement has exceeded our initial go-live expectations. We expect to have greater visibility into claims performance over the next few months, but we're incredibly happy with our progress so far. With respect to Aetna, which launched earlier this year, we continue to see strong clinical engagement results, also above our targets and initial claims-based performance that is in line with our expectations. Given the scale of these two partnerships and their importance to our 2026 and 2027 P&Ls, the strong execution is an important additional data point supporting the overall strength of our business. Finally, I want to update you on our continued efforts around AI and automation through our Auth Intelligence platform. We remain focused on our long-term objective of automatically approving 80% of authorization volume, simplifying the prior authorization experience for providers and patients. We believe Q2 is a tipping point in our AI journey as we saw these efforts take root and accelerate past the pilot phases and to a point of meaningful scale with a clear line of sight to more. The results and impact of these AI-enabled capabilities, which are built on our 2024 Machinify acquisition are at the high end of our expectations, giving us increased confidence in our 2027 outlook. We also believe we have been improving our performance as we scale. Among customers where these models have been deployed, we are seeing auto approval rate improvements of up to 20 percentage points. For example, auto approval rates that were 55% are now 75% with no degradation to clinical quality or value to our partners. And as a reminder, Evolent has a hard and fast rule that a clinician is always making any recommendation to change treatment and AI is only used to speed up the process or to approve a case. Importantly, we're seeing the cases approved through our AI models are completed within minutes instead of days, improving timeliness and we believe reducing administrative burden for providers and for patients. We're also seeing a large benefit for our employees who are able to spend more of their time practicing at the top of their license and getting patients faster answers, both of which are important to the job satisfaction of our team. Today, more than 1/3 of our authorization volume that was previously requiring manual clinical review is now being evaluated through our Auth Intelligence platform, and we continue to believe this platform will be a key element of our ability to meet our long-term margin targets and our customer needs. Finally, Auth Intelligence will be aggressively deployed in Q1 2027 as part of one of the major renewals I mentioned earlier in the call. In closing, let me touch on how we're currently thinking about 2027. First, we expect strong revenue growth supported by the strength of our renewing business and the continued growth of our new business. At the same time, we're committed to delivering strong adjusted EBITDA growth in 2027 against the backdrop of year 1 investments that come with new Performance Suite growth, AI investments and expected membership declines in Medicaid and the exchange. We feel confident in committing to strong adjusted EBITDA growth in the year ahead despite those headwinds based on the proven performance of our Auth Intelligence platform, a highly disciplined approach to managing our operating expenses and what we expect to be the stability and performance of our Performance Suite book of business. With that, let me turn it over to Mario. Mario Ramos: Thank you, Seth, and good morning, everyone. We delivered solid second quarter financial results that were above our expectations and the outlook we discussed on the Q1 2026 call in May. Total revenue was $653 million, up 31% versus Q1 2026, and adjusted EBITDA was $28 million, up 27% quarter-over-quarter. The outperformance in adjusted EBITDA versus expectations was driven by the recognition of prior year development in Q2 that we had previously anticipated to recognize in Q3. Given this Q2 timing favorability, we now expect the previously discussed Q2 to Q3 adjusted EBITDA increase of $10 million to $15 million to be more modest. I will address this in more detail later in the call. Turning to revenue by product type. Performance Suite revenue was $485 million, up 50% quarter-over-quarter, driven primarily by higher membership from the launch of Highmark on May 1. Specialty Tech and Services revenue totaled $78 million, a decrease of 3% compared with the first quarter. The revenue decline was driven by code review scope changes as part of AHIP commitments and not by client attrition or pricing pressure. On Administrative Services, revenue declined by 3% sequentially to $48 million, largely due to a prior year reserve true-up recorded in the first quarter. Our medical expense ratio or MER for Q2 was 95%, approximately 200 basis points higher than Q1 2026, but in line with our expectations, primarily due to the impact of the Highmark launch and its associated higher reserves. Please note that we did see higher acuity in our exchange populations consistent with Q1. However, as we discussed during the Q1 call, our contracts are structured to protect against changes in prevalence. Adjusted cost of revenue, excluding medical claims, but including medical device costs and adjusted SG&A totaled $163 million for the quarter, improving 5% sequentially. The improvement versus the prior quarter was driven primarily by previously discussed expense management. We ended Q2 with $115.7 million in unrestricted cash and $808.3 million of net debt. We took the opportunity to pay down the ABL revolver by $10 million to bring the balance to its minimum draw of $62.5 million. As expected, cash decreased from our Q1 2026 balance, reflecting approximately $10 million of cash used in operating activities and approximately $7 million of capital expenditures during the quarter. As a reminder, operating cash flow this quarter was unusually low due to the repayment of pass-through PBM proceeds, which had positively impacted Q1 2026 by approximately $20 million. Without this pass-through payment, we would have generated approximately $10 million in operating cash flow for the quarter. Turning to full year 2026 guidance. As Seth noted, we are increasingly confident in our ability to deliver on our goals for 2026 and therefore, are raising our 2026 revenue guidance from the previous range of $2.4 billion to $2.6 billion to $2.6 billion to $2.7 billion. We're also tightening our adjusted EBITDA guidance range from the $110 million to $140 million to $120 million to $135 million. We continue to expect MER for the full year to be approximately 93%. On revenue, we expect Q3 and Q4 to be meaningfully higher than Q2, driven primarily by Performance Suite revenue. In Q3, we will benefit from another quarter of Highmark revenue, along with the launch of several markets associated with the Performance Suite expansion we highlighted last quarter. On medical claims costs, we continue to expect our MER to be higher in Q3 as we see a full quarter's impact of the Highmark launch. From there, we continue to expect MER to improve meaningfully into Q4 as we see the impact of our clinical programs begin to take effect and favorable contractual true-ups flow through. Finally, on the quarterly adjusted EBITDA cadence, we are refining our sequential improvement for the second half given the timing of favorable PYD moving from Q3 to Q2. We now expect a more modest Q2 to Q3 increase in the range of approximately $4 million to $7 million and an increase from Q3 to Q4 in the range of $7 million to $15 million. A few additional items related to our full year outlook. We continue to expect adjusted cost of revenue, excluding medical claims, but including medical device costs plus adjusted SG&A of approximately $675 million for the year. As we enter the second half of the year, we remain encouraged by the momentum we are seeing in operational efficiency across the business. We continue to expect cash flow from operations for the year of $10 million to $20 million after approximately $60 million of annual cash interest expense. We continue to expect $25 million to $30 million in software development and capital expenditures for 2026. Let me close with some early perspectives on 2027 and how we will address our leverage and refinancing of our debt. Based on the revenue currently under agreement and customer renewals already completed, we expect revenue growth of more than 25% in 2027. Any new contract signings over the next few quarters would further increase this number, and we expect to achieve this 25% growth while absorbing ongoing membership headwinds from Medicaid work requirements and client-specific market exits and attrition. On earnings, we remain committed to delivering meaningful adjusted EBITDA growth in 2027 and beyond. Improved Performance Suite care margins, coupled with significant cost reduction and productivity initiatives underpin our expectation that the midpoint of our 2027 adjusted EBITDA outlook is expected to be at or above $150 million. That's 1-5-0. This outlook incorporates the significant headwinds from Medicaid, further exchange membership attrition and some expected client-specific membership attrition. For example, our midpoint reflects both the revenue and acuity impacts that large Medicaid and exchange-focused managed care companies have noted over the last several weeks. Our midpoint also assumes the earnings drag from signing additional Performance Suite contracts over the coming months, which would likely drive 2027 revenue growth even higher than the 25%. One driver of adjusted EBITDA growth in 2027 will be additional OpEx reductions. We have launched a comprehensive review of our cost structure across the enterprise to ensure spending is aligned with our strategic priorities, focused on the highest return opportunities and driving greater efficiency at scale. This may include modest additional investments in additional operating expenses in Q3 and Q4, all of which are contemplated in our 2026 guidance to drive additional cost savings in 2027 and beyond. We also believe this return to earnings growth will drive meaningful improvement in operating cash flow conversion in 2027. As I have discussed previously, our 2026 operating cash flow has been impacted by approximately $20 million of onetime items. As we move beyond the majority of those items, we expect cash flow performance to improve. We expect to deliver this earnings growth while also accelerating AI and technology investments, which will have a significant ROI across the enterprise in 2027 and beyond. As Seth mentioned earlier, the testing of the next phase in AI and technology investments is already producing encouraging results. Now let me address the issue that I'm personally most focused on, which is our capital structure. We have identified several different ways to improve our capital structure and address our 2029 maturities. This will be through a combination of adjusted EBITDA growth, improved cash flow conversion, disciplined capital allocation and via the pursuit of capital markets and strategic options available to us. Taken together, we see a clear path to significantly improving our leverage ratios and our maturity profile within the next 12 to 24 months. While it is too early to determine what the ultimate path will be, we are actively advancing this work. This will enhance financial flexibility and free capital to pursue several opportunities that we believe can create significant long-term shareholder value. To wrap up, we're pleased with our second quarter execution and the momentum we're seeing across the business. Our results year-to-date, combined with increased visibility into the second half and a clear road map for 2027 give us confidence in our outlook. We remain focused on disciplined execution, delivering on our commitments and creating long-term value for our clients and shareholders. With that, operator, please open the call for questions. Operator: [Operator Instructions] The first question comes from Kevin Caliendo with UBS. Kevin Caliendo: I wanted to talk a little bit, Mario, I just want to ask, you went through a whole process with your contracting and how you thought about reserving for it. And now that we're sort of 4, 5, 6 months into that process, how is that looking? Do you feel like you've like reserved properly and accounted for these properly? Is it conservative? Just wondering how you view the way you approached it now, now that you have a handful of months of experience there. That's my first one. And then the second one is talking about just sort of anything that you're seeing from a utilization perspective. There's a lot of changes going on with ASP rules and things like that. And I'm wondering if there's been any effect on behavior one way or the other, particularly in Part B drugs like oncology and the like. And if it's affecting your ability to understand trends in any way, shape or form or if anything is changing, if you're seeing anything different? Mario Ramos: Yes. Thanks, Kevin. I think on the first question, I would say we're probably in line with everything that I've seen in the industry where we're definitely -- if I look at favorable prior period development as a way to think through whether we're over under reserving. We've all -- industry came out of a period of very tough utilization numbers and expenses, and I think we're all kind of rebounding from that. And our numbers look very similar to the broader industry, I would say. So I feel comfortably optimistic that we're doing the right thing. And I think the whole industry is headed in the right direction, and we're -- we certainly fit that bill. So that's how I would put that. But there's -- as you guys know, that could change in any quarter, but we feel good as we sit here today. The second question is, I would -- our -- we're a little bit unique in the sense that we have some very specific markets with some incumbent clients, let's say, or older clients, and then we have some really new markets. I would say as a blanket statement, when you cut through things like mix, where we have to really isolate different markets and contracts and take out things like prevalence, right, the headline sort of trend number doesn't really work for us in making those comparisons. When we kind of pull back the layer and we're seeing the data come in, again, we're not seeing anything different than the broader industry where markets -- where we're seeing populations that are consistent and haven't changed acuity, trend has continued to modulate and improve. We, unfortunately, have some noise in our -- in some of the markets we serve because clients have made decisions around how they're going to serve certain markets. And so prevalence we talked about can be very different. So that's really, I would say, unique to us and our clients. And if you look at some of the calls from our clients, they're saying the same thing, which is they're still making adjustments, membership is changing, mix is changing. So they're kind of -- they're walking through their numbers in that context, and I think we're no different in that regard. Operator: The next question comes from John Stansel with JPMorgan. John Stansel: Just want to talk about when we think of the '27 guidance or directional commentary at this point, I appreciate the greater than 25% growth in the top line. It feels like margins might take a bit of a step down there. And I hear everything about the large contracts you've launched this year improving. It sounds like some operational improvements as well. Can you just talk through kind of puts and takes on the margin side entering '27 and what you're seeing? Mario Ramos: I think the biggest change that you guys are going to see is, obviously, as -- and you've seen it this year, the Performance Suite business has a much smaller margin. It's just the way the business works, right? You have this very large amount of revenue from our capitated agreements. And on a per member, we make even more money. We've talked a lot about that. But when you accelerate growth in that business because you're talking about single-digit margins, the average margin of the business is going to look like it's compressing. But when you take a look at the Performance Suite independently, that's the opposite is happening. We're maturing some of the contracts. So the margin is expanding in that business, which is a large part of why we feel confident about the number we are providing the outlook in 2027. Operator: The next question comes from Matthew Gilmore with KeyBanc Capital Markets. Zachary Haggerty: This is Zach on for Matt. So it sounds like trends kind of in line with your expectations. But if we dig into oncology, can you remind us what percentage of your oncology costs are drugs versus procedure or surgical volumes? I guess just curious to see if there's been any discernible change in how those costs have trended between drugs and surgical services. Seth Blackley: Yes. Drugs are, I'd say, about 75% of the total cost in oncology. That's not really changed. It might be going up a little bit, but that continues to be the main lever that we're addressing. That's really why these clients are hiring us to help manage that. No, there's really not a change, as Mario said in the -- in the first few questions, I think we've been appropriately conservative around how we thought about trend and reserving and all these sorts of things, and that's part of the reason you're seeing our commentary on where we're looking for '26 and '27 as we feel really good about where we sit today. Operator: The next question comes from Jailendra Singh with Truist. Eduardo Ron: This is Eduardo on for Jailendra. Again, I really appreciate the commentary on the greater than 25% revenue growth for 2027 and that your customers are still in flux a bit on their plans. But hoping you could help us quantify, I guess, the top line headwinds you're expecting on the Medicaid side from work requirements and on the exchanges from the customers potentially exiting some markets. And bifurcate that, I guess, versus the growth side where maybe it's the Medicare Advantage side of the business and these new contracts? Just trying to frame how we should think about that. Mario Ramos: Yes. So I think there are a couple of things. One that's industry-driven, which I can talk about more freely. We're looking at probably a 20% decline of Medicaid expansion members, which I think it's a number that after talking to a lot of clients and industry people, feels like a good number. And so that roughly translates to 4% to 5% membership in Medicaid for us, Eduardo. I think beyond that, the challenge to talk specifically with numbers is there are a lot of client-driven assumptions that we're making. We are trying to stay really close to our bigger clients. You know who they are. And if you listen to their calls, you could probably get some guidance on what they're saying and apply it to us in our membership book. But again, I think it wouldn't be appropriate for us to go into more detail because then we'd be talking about client-specific sort of assumptions. But we do think T&S next year will probably be flat to down a bit because of the membership headwinds. But the flip side of that is we're really excited about Performance Suite. We should be adding, as we said, a large portion of that growth is Performance Suite business. The pipeline looks strong. So it's unfortunate that we have these industry-wide headwinds and client-specific headwinds. But beyond that, we're really confident with how we're executing and growing the Performance Suite in particular. Operator: The next question comes from Charles Rhyee with TD Cowen. Lucas Romanski: This is Lucas on for Charles. I wanted to ask specifically about the other client-specific membership declines you're expecting in 2027 in that framework. Can you unpack this a little bit? Are these customers that have indicated to you that they intend to exit certain markets? We've heard some MCOs talk about exiting certain Medicaid states separate from the work requirements. Is this what you're referring to? And then can you kind of help us understand, are these clients providing you with any advanced notice on their decisions to exit these markets? Mario Ramos: Yes, that's primarily what we're talking about. I think there's -- again, there are several large clients of ours that are going through this process. It's not new. We are staying close to them. And I think they're also looking at their own numbers for '27 and trying to figure out what the right answer is. We're trying to stay close. We have monthly business reviews with them where this often comes up. But I think at this point, we're taking all data that we have available to us to figure out what the right assumptions are. We think we -- membership will be under pressure. Again, a lot of this is industry, but a lot of it is client specific. We don't believe that's going to continue on '27. I think the industry is very far into sort of the rationalization that they've all talked about in the last 12 to 18 months. So we are staying very close to clients as much as we can. Seth Blackley: Yes. And maybe just to pile on to Zach's question and Eduardo's question. I think Mario was giving you some of the building blocks of the components of the headwind on membership side. The reason we're growing despite all that is back up a little bit as we're -- we have 6.7 million lives in the Performance Suite. It's less than 2% of the country. We are getting a lot of demand to do more of that. And so I think just reframing and reminding ourselves that we have actually a small market share and a big opportunity. And so we feel very good about being able to grow past these couple of headwinds that Mario discussed that are out there for the industry. And as they burn off over the next few years, I think the market growth opportunity will still be there. Operator: The next question comes from Daniel Grosslight with Citi. Luismario Higuera: This is Luis on for Daniel. I know you briefly touched on the pipeline. And I think last year, you sized the weighted pipeline at $650 million. And obviously, since then, you've announced several very large deals. But my question is like as we sit here today, has this pipeline refilled? And what does the current size look like? Seth Blackley: Yes. I mean it's very similar to what the comments I was just making. The pipeline has refilled. We have a pretty small market share in a very big market. So there are a lot of opportunities left. Those spread across regional Blue plans and regional plans. We also have a couple of the top 10 plans in the country that we don't yet have that are now in the pipeline that previously weren't that have come into the pipeline over the last 6 months. So it does feel really good. I think the -- particularly in oncology, as you can see, I think we have the leading product in the market and continue to get a lot of traction and would expect to continue to have more announcements like we did this quarter where we're able to bring on attractive new contracts. Operator: The next question comes from Ryan Daniels with William Blair. Dustin Scaringe: This is Dustin on for Ryan. Oncology gets a lot of focus. It's good to see growth there, driving the favorable '27 outlook. But just wondering if you can talk about some of the other conditions like cardio, MSK. What are you seeing in those states as it impacts your business? Seth Blackley: Dustin. So actually interesting. One of the two announcements today, the second one, the tech and services one includes MSK and cardio. And we are continuing to see real demand for that. I think the way that this often plays out and is the case in the announcement we made today is oncology may be the tip of the spear. And it is the first product that comes into a new account. But once we start working with a partner, and I'm really proud of our team, we are consistently getting high marks from them on, hey, we like working with you. You're doing a good job. What else can you do for us? And that playbook is really strong. If you imagine you're a client dealing with 12 or 13 specialty conditions, would you prefer to do it with 12 or 13 best-in-class providers? Or would you rather have a couple of key strategic partners? And definitely, the latter is true. And so we're going to get a lot of benefit of the doubt if we deliver. And so we're very focused on all of our clients, when we get a new client in particular, make sure we're delivering and then you'll get the right to add these other ones, and we are seeing that. I think it's going to be more in this pull-through category. You've also seen this with one of our -- both of our big MCO Medicaid partners have pulled through lots of different products. So I think that's going to be the pattern, but those products are doing great. There's a lot of demand for them, and our teams at Evolent are doing a great job managing those products. Operator: The next question comes from David Larsen with BTIG. David Larsen: Congratulations on the good quarter. Can you talk a little bit about the Performance Suite revenue wins? The sequential increase in revenue from 1Q to 2Q was, I thought, very, very good. And then can you talk about the PMPM rate in Performance Suite that came in above our expectations? And then also, are you finding the need to basically call on like the bands, the risk bands that you have with certain Performance Suite customers? Are costs coming in too high in some cases and you got to enforce sort of that band? Or are costs coming in sort of like in line with your expectations? Mario Ramos: So on the sequential increase, David, that was driven primarily by the Highmark launch. We had 2 months only of Highmark launched May 1. So that was the big driver. We will also obviously see a good pop of that in the Q3 because of the third month wrapping into the third quarter. And similar on the PMPM, Highmark having a lot of Medicare members typically has a higher PMPM. And so that drove the PMPMs higher for the quarter. Seth Blackley: And on your last question, David, I think the contractual protections, I think the way to think about that is less that we have to go call on them. They're more mechanical and they flow into each contract based on a schedule that's set up and there's an actuarial process that goes back and forth and it just rolls in. So I think those are standard fare at this point, and people are used to them. And they can go in both directions, right? It's a mechanical thing that depends upon what's acuity, what's price, these things that we don't control. And that process is a pretty well-oiled machine at this point. Operator: The next question comes from Ryan Halsted with RBC. Kevin Meli: This is Kevin on for Ryan. I was just curious if you guys are seeing any shift in the acuity of your Medicaid membership pool? And if so, if you guys could talk to that. Mario Ramos: Much less so on Medicaid. I think the acuity shifts that we've seen have been more on the exchange side. There have been some on the Medicaid, too, but I would caution again because I think maybe specific to our clients and our markets. So I don't know that, that's a representation of the general market. But certainly, we've seen some of that in both exchange and Medicaid, more so on the exchange side. Seth Blackley: And that to David's point, that's one of the automatic adjusters that just rolls in and it can go in either direction. Right now, it's a positive cap rate adjustment to the upside because the acuity is going up. If it goes in the other direction, it will go the other direction. So that system is kind of working well to make it fair. I think that's the right way to think about it, fair for us and fair for the clients so that our work, our clinical work and the value we capture from it is tied to -- directly to the things that we do. Operator: The next question comes from Jessica Tassan with Piper Sandler. Sahil Veeramoney: It's Sahil on for Jess. Mario, I wanted to come back to the medical expense ratio. I think if I net the prior period items in the reserve table, I think I get to roughly around sort of 3 points of the 95% you reported, which would put the current period ratio kind of closer to 98%. And I completely understand that the launch size of Highmark kind of gets reserved conservatively by that design, so not super surprised by that gap. But I think you've also talked about holding the full year at 93%. And I think you've said the third quarter kind of steps higher than the second. So can you sort of like help us understand with the fourth quarter, what number -- what is that -- what number actually kind of gets you there to average out to 93%? Mario Ramos: Yes. No problem. I think you generally have it correct in terms of the order of magnitude of the prior period impact. Again, we fully expect the MER to be where it is when we launch. We have a very elevated level of MER. Highmark is very unique because it's a very high percentage of our Performance Suite business, even with only 2 months in the quarter. So it is driving and Aetna is not fully -- not even close to fully mature. We just launched in January. And so that's not a -- that's also a contributor to that. We went up 200 basis points. I think our expectation for the fourth quarter, and if you go back to our Q1 call, we referenced this, we're probably expecting a gradual improvement of about 250 basis points by the fourth quarter. And that's driven partly by the reserves being the reserve process being complete. There will be some clinical improvement in there with particularly Aetna that should be long enough that we're making an impact. But also we do start reversing some of the new business loads that we typically have in the beginning of the contract. So with Highmark, there will be a little bit of a tailwind on the reserving side in the fourth quarter as well. So directionally, you have those numbers right. Operator: The next question comes from [ Ali Khan ] with [ Grow Holding ]. The next question comes from Matthew Shea from Piper Sandler. Matthew Shea: This is Matthew Shea with Needham. Congrats on a really nice quarter here. Hopping over from another call, so apologies if this got hit on, but I wanted to touch on Medicaid in 2027. With redeterminations and the shorter retroactive eligibility windows, there's concern members will cycle on and off Medicaid plans more often. Seth, you've talked about the importance of continuous data feeds from a plan to drive your clinical intervention rates and that engagement rates are ultimately a good indicator for savings. So does that Medicaid turnover plus the fragmented claims data and shorter retroactive eligibility windows that come with it -- does that degrade your ability to identify and engage members early enough to hit your targeted clinical savings in Medicaid? And if so, like how are you reflecting that in your savings assumptions or reserving, if at all? Seth Blackley: Yes. Let me take the first part of that. Mario can answer the second on reserving. It really doesn't change our ability to do the interventions. I think unlike what the industry might call care management, which might be a 3-, 6-, 12-month process to engage a patient in a program, enroll them, work through a lot of different things. Ours is more, hey, somebody is getting a cancer treatment over the next 90 days or 180 days, they typically stay on their plan, by the way, while they're in those treatment bands. And our engagement is around the selection of the therapeutic medication. It's around the surgical intervention, and it's not a long-term process. So we don't feel like that affects it. I do think you weren't on for this part, I think, earlier, but there's a lot of adjustments that you do have to make if the risk pool is changing. If you're getting a more sick population, acuity is going up or vice versa, you got to make adjustments for that. But that's what our contracts do. It's a mechanical process so that we can isolate, hey, what is the cost per case on an apples-to-apples basis and what value are we creating through our work. And I think we've got a well-honed process to do that. I'll let Mario comment on the reserves, but I think it will be kind of the same theme. Mario Ramos: Yes. No, and I think the reserves follow that process you've just talked about, and we take all that into account and what we're looking at in the data, what is contractually available to us, which tends to protect from these swings that we don't control. So it's an extension of what Seth said basically. Seth Blackley: Yes. And look, I mean, one of the things that a lot of the questions today have hit on, which I'll just step back a little bit and reiterate, if you're any of these health plans, what's your #1 problem right now? It's probably Part B is [indiscernible] therapeutics. And most of that is in oncology. So whether it's Medicaid or commercial or Medicare Advantage, cancer is a giant driver of trend. And the sophistication of the drug pipeline that has been coming out for the last 10 years and is going to come out for the next 10, probably AI-led drug development and testing is going to accelerate that. They do not have a good way to manage that. Part B is not covered by their PBM. Part B runs through the distributors, it's straight down to the oncologist. It's sort of the Wild West, right? And they don't have a good way to manage it. I think we have over now 15 years, developed a very sophisticated way of doing it that I think is the best in the industry. I think we're taking share because we're good at it. I think we're able to negotiate contract terms that are fair to them and us because we have good demand for the product. And I don't see that stopping for a long, long time because we have small market share and oncology is a big problem. And so that's -- you guys have heard us now for multiple years be very focused on this. And I think the MERs, the client growth are both pointing to the ability to do that and being a long-term cycle for us. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Seth Blackley for any closing remarks. Seth Blackley: Thanks for the time this morning. We look forward to talking to each of you soon. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Evolent Health, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Evolent Health wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Evolent Health (EVH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Evolent Health, Inc? Here are five stocks we like better. Evolent raised its 2026 outlook after Q2 revenue rose 31% sequentially to $653 million and adjusted EBITDA increased 27% to $28 million. Full-year revenue guidance is now $2.6 billion–$2.7 billion, while adjusted EBITDA guidance narrowed to $120 million–$135 million. The May launch of the Highmark partnership drove a 50% sequential increase in Performance Suite revenue to $485 million. Evolent reported encouraging early clinical and provider engagement, though the medical expense ratio rose to 95% due largely to higher reserves tied to the launch. Evolent announced an oncology agreement expected to generate about $300 million in annualized revenue and said AI automation, cost controls and maturing contracts should support 2027 revenue growth above 25% and adjusted EBITDA of at least $150 million at the midpoint. Evolent Health (NYSE:EVH) reported second-quarter revenue of $653 million, up 31% from the first quarter, and adjusted EBITDA of $28 million, up 27% sequentially, as the company benefited from the May launch of its Highmark partnership and continued growth in its Performance Suite business. Chief Executive Officer Seth Blackley said the results reflected the company’s ability to execute in a changing healthcare environment. Evolent raised its full-year revenue guidance to a range of $2.6 billion to $2.7 billion, from a prior range of $2.4 billion to $2.6 billion. It also narrowed adjusted EBITDA guidance to $120 million to $135 million, compared with its previous outlook of $110 million to $140 million. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The company maintained its expectation for a full-year medical expense ratio, or MER, of approximately 93%. Performance Suite revenue totaled $485 million in the second quarter, rising 50% from the first quarter. Chief Financial Officer Mario Ramos said the increase was driven primarily by higher membership following the Highmark launch on May 1. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Evolent’s MER was 95% during the second quarter, compared with 93% in the first quarter. Ramos said the increase was expected and largely reflected the Highmark launch and its associated higher reserves. The company also continued to see higher acuity among exchange populations, though it said its contracts include protections against changes in prevalence. Blackley said early results from the Highmark program were encouraging, with clinical engagement rates above targets and provider engagement exceeding initial go-live expectations. The company expects greater visibility into claims performance over the next several months. → No Hangover: Revisiting Microsoft One Week After Earnings Evolent also said its Aetna partnership, which began earlier in 2026, continued to produce clinical engagement above targets, while initial claims-based performance was in line with expectations. For the second half, Ramos said revenue in both the third and fourth quarters is expected to be meaningfully above the second-quarter level, primarily due to Performance Suite revenue. The third quarter is expected to include a full quarter of Highmark revenue and launches in several markets tied to a previously announced Performance Suite expansion. The company announced an oncology Performance Suite agreement with an existing advanced-imaging client. The arrangement is expected to cover roughly 1.5 million Medicare and Medicaid lives across 11 states and is anticipated to launch by December 2026, subject to regulatory approvals. Evolent expects the oncology contract to generate approximately $300 million in annualized revenue. Blackley said the agreement includes the company’s enhanced contractual protections used in other recent Performance Suite arrangements. The company also expanded its relationship with a regional Blue Cross plan and former NIA customer. The customer will add products and extend existing products to additional populations using Evolent’s specialty technology and services platform. Implementations are expected during the third and fourth quarters. While annualized revenue from that extension is expected to be less than $5 million, Blackley said Evolent expects the agreement to generate strong adjusted EBITDA and demonstrate the company’s cross-selling opportunity within its existing customer base. Specialty technology and services revenue was $78 million, down 3% sequentially. Ramos attributed the decline to code-review scope changes related to AHIP commitments, rather than client attrition or pricing pressure. Administrative Services revenue also declined 3% to $48 million, primarily because the first quarter included a prior-year reserve true-up. Blackley highlighted the company’s Auth Intelligence platform, which was built on Evolent’s 2024 acquisition of Machinify. Evolent is pursuing a long-term goal of automatically approving 80% of authorization volume, while maintaining a requirement that clinicians make recommendations involving treatment changes. More than one-third of authorization volume that previously required manual clinical review is now being evaluated through the platform, according to Blackley. Among customers where the models have been deployed, Evolent has seen auto-approval rates improve by as much as 20 percentage points. He said certain cases previously requiring days to complete can now be approved in minutes. Auth Intelligence is scheduled for an aggressive deployment in the first quarter of 2027 as part of a major customer renewal. Management said the platform, along with expense discipline and other productivity measures, is expected to support long-term margin goals. Based on contracted revenue and completed customer renewals, Evolent expects revenue growth of more than 25% in 2027. Ramos said the outlook includes anticipated membership pressure from Medicaid work requirements, exchange attrition and client-specific market exits. The company expects the midpoint of its 2027 adjusted EBITDA outlook to be at or above $150 million. Ramos said the outlook assumes improving Performance Suite care margins, operating-expense reductions and ongoing AI and technology investment. While growth in the capitated Performance Suite business can reduce the company’s consolidated margin percentage, he said margins within the Performance Suite business are expected to expand as contracts mature. Evolent ended the quarter with $115.7 million in unrestricted cash and $808.3 million in net debt. The company reduced its asset-based lending revolver by $10 million to its minimum draw of $62.5 million. Ramos said Evolent has identified several possible ways to address its 2029 debt maturities, including EBITDA growth, improved cash-flow conversion, disciplined capital allocation and potential capital-markets or strategic actions. The company expects to improve leverage ratios and its maturity profile over the next 12 to 24 months, though management said it was too early to determine the ultimate path. Evolent Health, Inc is a U.S.-based healthcare technology and services company that partners with health systems, physician organizations and health plans to design, build and operate value-based care programs. Headquartered in Arlington, Virginia, the company was founded in 2011 as a joint venture between TPG and the University of Pittsburgh Medical Center (UPMC). Evolent Health aims to help its clients transition from fee-for-service payment models to value-based care arrangements by leveraging its proprietary technology platforms and clinical expertise. The company's core offerings include care management solutions, population health analytics and clinical advisory services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Evolent Health Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Evolent Health (EVH) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.01 per share. This compares to a loss of $0.1 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +300.00%. A quarter ago, it was expected that this health care software and consulting services provider would post a loss of $0.05 per share when it actually produced a loss of $0.02, delivering a surprise of +60%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Evolent Health, which belongs to the Zacks Medical Info Systems industry, posted revenues of $652.52 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.77%. This compares to year-ago revenues of $444.33 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Evolent Health shares have lost about 23% since the beginning of the year versus the S&P 500's gain of 12.8%. While Evolent Health has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Evolent Health was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.07 on $669.73 million in revenues for the coming quarter and $0.20 on $2.48 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Info Systems is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Claritev Corporation (CTEV), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 7. This company is expected to post quarterly loss of $4.10 per share in its upcoming report, which represents a year-over-year change of -1381.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Claritev Corporation's revenues are expected to be $246.15 million, up 1.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Evolent Health, Inc (EVH) : Free Stock Analysis Report Claritev Corporation (CTEV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by the successful launch of the Highmark partnership on May 1, 2026, which significantly expanded the Performance Suite membership base. Management attributes strong clinical and provider engagement rates in new Aetna and Highmark contracts as early indicators of long-term profitability and operational stability. The company is successfully executing a cross-sell strategy, evidenced by a regional Blue Cross plan expanding from legacy NIA services to the broader specialty technology platform. A 'tipping point' in AI adoption was reached via the Auth Intelligence platform, which has improved auto-approval rates by up to 20 percentage points in scaled deployments. Strategic positioning in oncology addresses a critical market need as health plans struggle to manage complex Part B drug trends that fall outside traditional PBM oversight. Management emphasized that 2026 has been an 'outstanding' year for renewals, successfully securing three of their largest customers to provide high visibility into 2027 revenue. Management expects 2027 revenue growth of more than 25%, supported by existing agreements and recent renewals despite anticipated industry-wide membership headwinds. The 2027 adjusted EBITDA midpoint is projected at or above $150 million, underpinned by maturing Performance Suite margins and aggressive AI-driven cost reductions. Guidance assumes a 20% decline in Medicaid expansion members and accounts for specific market exits by large managed care partners. The company plans to aggressively deploy its Auth Intelligence platform in Q1 2027 as a primary lever for meeting long-term margin targets and reducing administrative burdens. Capital allocation will focus on addressing 2029 debt maturities through a combination of EBITDA growth, improved cash flow conversion, and potential strategic options. The Q2 medical expense ratio (MER) rose to 95% due to the expected impact of the Highmark launch and its associated higher initial reserves. Adjusted EBITDA outperformance in Q2 was partially due to the timing of prior year development recognition that was originally anticipated for Q3. Specialty Tech and Services revenue saw a 3% decline driven by code review scope changes related to AHIP commitments rather than client attrition. Operating cash flow was impacted by a $20 million one-time repayment of pass-through PBM proceeds, which management views as a non-recurring headwind. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated they are 'comfortably optimistic' regarding current reserve levels, noting that their experience aligns with broader industry rebounds from high utilization periods. Contractual structures are designed to protect against changes in prevalence and acuity, particularly in exchange populations where higher acuity has been observed. While consolidated margins may appear to compress due to the high-revenue, lower-margin nature of capitated agreements, individual Performance Suite contracts are seeing margin expansion as they mature. The shift in business mix toward the Performance Suite is the primary driver of the 2027 revenue growth outlook. Management clarified that shorter eligibility windows do not degrade clinical savings because oncology interventions are typically short-term (90-180 days) rather than long-term care management. Automatic contractual adjusters for acuity ensure that Evolent is compensated fairly if the remaining Medicaid risk pool becomes sicker during redeterminations.

For the quarter ended June 2026, Evolent Health (EVH) reported revenue of $652.52 million, up 46.9% over the same period last year. EPS came in at $0.02, compared to -$0.10 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $611.13 million, representing a surprise of +6.77%. The company delivered an EPS surprise of +300%, with the consensus EPS estimate being -$0.01. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Evolent Health performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Average PMPM Fees / Revenue per Case - Performance Suite: $24.05 compared to the $20.99 average estimate based on two analysts. Average PMPM Fees / Revenue per Case - Specialty Technology and Services Suite: $0.34 versus $0.35 estimated by two analysts on average. Average PMPM Fees / Revenue per Case - Administrative Services: $13.46 versus $15.03 estimated by two analysts on average. Average Lives on Platform / Cases - Cases: 12 thousand versus 11.1 thousand estimated by two analysts on average. Average Lives on Platform / Cases - Performance Suite: 6.72 million versus 6.86 million estimated by two analysts on average. Average Lives on Platform / Cases - Specialty Technology and Services Suite: 75.64 million compared to the 75.28 million average estimate based on two analysts. Average Lives on Platform / Cases - Administrative Services: 1.19 million versus the two-analyst average estimate of 1.12 million. Average PMPM Fees / Revenue per Case - Cases: $3,608.00 compared to the $3,795.59 average estimate based on two analysts. Total Revenue by product type- Performance Suite: $484.5 million compared to the $441.89 million average estimate based on three analysts. The reported number represents a change of +80.8% year over year. Total Revenue by product type- Cases: $41.87 million versus $41.09 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +7% change. Total Revenue by product type- Administrative Services: $47.99 million versus the three-analyst average estimate of $49.59 million. The reported number represents a year-over-year change of -14.1%. Total Revenue by product type- Specialty Technology and Services Suite: $78.16 million versus $80.06 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -4% change. View all Key Company Metrics for Evolent Health here>>> Shares of Evolent Health have returned -45% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Evolent Health, Inc (EVH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: $653 million, up 31% versus Q1 2026. Adjusted EBITDA: $28 million, a 27% increase versus Q1 2026. Medical Expense Ratio (MER): 95% in Q2 2026, compared to 93% in Q1 2026. Performance Suite Revenue: $485 million, up 50% quarter-over-quarter. Specialty Tech and Services Revenue: $78 million, a decrease of 3% compared with Q1 2026. Administrative Services Revenue: $48 million, down 3% sequentially. Adjusted Cost of Revenue (excluding medical claims) and Adjusted SG&A: $163 million, improving 5% sequentially. Cash Position: Ended Q2 with $115.7 million in unrestricted cash and $808.3 million of net debt. Full Year 2026 Revenue Guidance: Raised to $2.6 billion to $2.7 billion. Full Year 2026 Adjusted EBITDA Guidance: Tightened to $120 million to $135 million. Full Year 2026 MER Guidance: Approximately 93%. 2027 Revenue Growth Expectation: More than 25%. 2027 Adjusted EBITDA Outlook: Midpoint expected to be at or above $150 million. Warning! GuruFocus has detected 6 Warning Signs with EVH. Is EVH fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Evolent Health Inc (NYSE:EVH) reported strong Q2 2026 results with total revenue of $653 million, up 31% quarter-over-quarter, and adjusted EBITDA of $28 million, up 27% quarter-over-quarter, exceeding expectations. The company raised its full-year 2026 revenue guidance to $2.6-$2.7 billion and narrowed adjusted EBITDA guidance to $120-$135 million, reflecting increased confidence in its outlook. Evolent Health Inc (NYSE:EVH) announced a new oncology Performance Suite partnership covering approximately 1.5 million lives across 11 states, expected to generate about $300 million in annualized revenue, and a contract extension with a regional Blue Cross plan, demonstrating strong cross-sell opportunities. The company successfully renewed three of its largest customers in 2026, providing significant visibility into 2027 revenue growth of more than 25%. Evolent Health Inc (NYSE:EVH)'s Auth Intelligence platform is scaling effectively, with auto-approval rates improving by up to 20 percentage points and over one-third of previously manual authorization volume now evaluated through AI, supporting long-term margin targets. Early indicators from the Highmark and Aetna Performance Suite launches are positive, with clinical and provider engagement rates trending above targets, and claims performance in line with expectations. Evolent Health Inc (NYSE:EVH)'s Q2 2026 medical expense ratio (MER) was 95%, up 200 basis points from Q1, reflecting the expected impact of the Highmark launch and higher acuity in exchange populations. The company faces significant headwinds in 2027, including an expected 20% decline in Medicaid expansion members, which translates to a 4-5% membership decline in Medicaid, and further exchange membership attrition. Evolent Health Inc (NYSE:EVH) expects Specialty Tech and Services revenue to be flat to down in 2027 due to membership headwinds, and the company is absorbing ongoing client-specific market exits and attrition. The company's operating cash flow in Q2 was unusually low due to the repayment of pass-through PBM proceeds, and full-year 2026 cash flow from operations is expected to be only $10-$20 million after interest expenses. Evolent Health Inc (NYSE:EVH) has a significant net debt of $808.3 million and is actively working to address its 2029 maturities, with a clear path to improving leverage ratios but no definitive plan yet. The company anticipates a more modest Q2 to Q3 adjusted EBITDA increase of $4-$7 million due to the timing of favorable prior year development, and expects MER to remain elevated in Q3 before improving in Q4. Q: Can you provide more detail on the company's 2027 revenue growth and margin outlook, particularly the puts and takes on the margin side?A: Mario Ramos (CFO) explained that the company expects revenue growth of more than 25% in 2027, driven primarily by Performance Suite business. While the overall margin may appear compressed due to the large revenue base of capitated agreements with single-digit margins, the Performance Suite segment's margins are actually expanding as contracts mature. The company remains committed to delivering meaningful adjusted EBITDA growth, with the midpoint of the 2027 outlook expected to be at or above $150 million, despite headwinds from Medicaid membership declines, exchange attrition, and client-specific market exits. Q: How is the company's reserving process looking now that several months have passed since the launch of new contracts, and are there any changes in utilization trends, particularly in Part B drugs like oncology?A: Mario Ramos (CFO) stated that the company's reserving is in line with industry trends, with favorable prior period development indicating they are appropriately reserved. On utilization, the company is not seeing anything different from the broader industry, with trend continuing to modulate and improve in stable populations. However, there is noise in some markets due to client decisions on how to serve certain markets, which affects prevalence and mix. Seth Blackley (CEO) added that drugs represent about 75% of total oncology costs, and this has not changed significantly. Q: Can you quantify the top-line headwinds expected in 2027 from Medicaid work requirements and exchange market exits, and how does this compare to growth from new contracts?A: Mario Ramos (CFO) indicated that the company expects approximately a 20% decline in Medicaid expansion members, translating to a 4% to 5% membership decline in Medicaid. Specialty Tech and Services revenue is expected to be flat to down slightly next year due to membership headwinds. However, this is offset by strong Performance Suite growth, which will drive the majority of the 25%+ revenue growth. The company is staying close to large clients to model client-specific assumptions but cannot provide more granular detail without discussing client-specific information. Q: What is the current size of the sales pipeline, and has it refilled following recent large deal announcements?A: Seth Blackley (CEO) confirmed that the pipeline has refilled, noting the company has a small market share (less than 2% of the country's lives in Performance Suite) in a very large market. Opportunities span regional Blue plans and regional plans, and notably, a couple of top 10 national plans that were previously not in the pipeline have entered over the last six months. The oncology product continues to gain traction, and the company expects more announcements similar to the new Performance Suite partnership announced this quarter. Q: Can you discuss the performance and demand for non-oncology conditions like cardiology and MSK?A: Seth Blackley (CEO) explained that oncology often serves as the entry point for new client relationships, but the company sees strong pull-through demand for other specialty conditions like MSK and cardiology. One of the announcements today includes MSK and cardio in a tech and services contract extension. The strategy is to deliver excellent results on the first product, then expand to additional conditions, as clients prefer fewer strategic partners over managing 12-13 separate specialty providers. This pattern has been successful with both large MCO Medicaid partners. Q: What drove the strong sequential increase in Performance Suite revenue and PMPM rates in Q2, and are contractual risk bands being enforced?A: Mario Ramos (CFO) attributed the sequential revenue increase primarily to the Highmark launch on May 1, with two months of revenue recognized in Q2. The higher PMPM was driven by Highmark's significant Medicare membership. Seth Blackley (CEO) clarified that contractual protections are mechanical and flow through automatically based on actuarial processes, rather than requiring active enforcement. These adjustments can go in either direction depending on acuity and price factors outside the company's control. Q: Are you seeing any shifts in acuity within the Medicaid membership pool?A: Mario Ramos (CFO) noted that acuity shifts have been more pronounced on the exchange side than in Medicaid, though some shifts have occurred in both. Seth Blackley (CEO) added that these acuity changes trigger automatic contractual adjusters, which currently provide positive cap rate adjustments to the upside. This system ensures fairness for both Evolent and clients, tying clinical work and captured value directly to the company's performance. Q: Can you help reconcile the Q2 MER of 95% with the full-year guidance of approximately 93%, and what is implied for Q4?A: Mario Ramos (CFO) confirmed that the elevated Q2 MER is expected given the Highmark launch and its conservative reserving, along with the immature Aetna contract. The company expects a gradual improvement of approximately 250 basis points by Q4, driven by completion of the reserve process, clinical improvements (particularly with Aetna), and reversal of new business loads. Highmark will also provide a tailwind on the reserving side in Q4. Q: Does Medicaid turnover and fragmented claims data from redeterminations and shorter retroactive eligibility windows degrade the ability to identify and engage members early enough to hit targeted clinical savings?A: Seth Blackley (CEO) explained that this does not change the company's ability to perform interventions, as Evolent's model differs from traditional care management. The engagement is focused on specific treatment decisions (e.g., therapeutic medication selection, surgical interventions) over 90-180 day periods, during which members typically remain on their plans. Mario Ramos (CFO) added that reserves follow this process, taking into account contractual protections that shield the company from swings outside its control. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

WASHINGTON, Aug. 6, 2026 /PRNewswire/ -- Evolent Health, Inc. (NYSE: EVH) ("Evolent" or the "Company"), a company that specializes in better health outcomes for people with complex conditions through proven solutions that make health care simpler and more affordable, today announced financial results for the three months ended June 30, 2026. Seth Blackley, Co-Founder and Chief Executive Officer of Evolent stated, "We believe our results for the second quarter of 2026, our updated 2026 guidance and our 2027 outlook all demonstrate that Evolent is delivering strong growth, profitability and cash flow. We are confident in our emerging AI-led operational model that we believe allows us to deliver excellent client and clinical outcomes, while being highly disciplined with our cost structure." Mario Ramos, Chief Financial Officer of Evolent stated, "Looking ahead to 2027, based on contracts in place today, upcoming launches scheduled and the strong continuing demand for our oncology solution, we expect to see revenue growth of over 25% compared to 2026. We expect the midpoint of our 2027 Adjusted EBITDA outlook will be at or above $150 million driven by expected improved Performance Suite care margins and a strong focus on expense reductions, despite significant continued industry headwinds from Medicaid and other client specific membership attrition. We also expect improved cash flow conversion, which, together with targeted debt reduction initiatives we are currently evaluating, we believe provides a clear path to addressing our capital structure and enhancing financial flexibility." Highlights include (dollars in thousands, except for average PMPM fees and revenue per case): The rising medical costs impacting health plans continue to drive robust demand for Evolent's complex specialty care solutions. Evolent has two partnership announcements, bringing the year-to-date total to four: First, we are preparing for the go live of an Oncology Performance Suite partnership with an existing advanced imaging client. The partnership will cover approximately 1.5 million lives across Medicaid and Medicare populations spread through 11 states. We currently expect this business to launch by December 2026, subject to certain regulatory approvals, and generate approximately $300 million in annualized revenue. As with other recent Performance Suite arrangements, this relationship includes Evolent's full enhanced contractual protections. Second, an existing Specialty Technology & Services Suite client, a regional Blues plan customer, has signed an agreement to broaden its use of our Specialty Technology & Services Suite by adding new products and extending existing solutions to additional populations. We expect these implementations to occur during the third and fourth quarters of this year and annualized revenue from this contract to be less than $5 million. Financial Results of Evolent Health, Inc. In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we may use or discuss financial measures not prepared in accordance with generally accepted accounting principles ("GAAP"). 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 presented herein. See "Non-GAAP Financial Measures" for more information. Reported Results Evolent Health, Inc. reported the following results in accordance with GAAP (dollars in thousands, except for per share data): Total cash and cash equivalents was $115.7 million as of June 30, 2026. Adjusted Results Evolent Health, Inc. reported the following adjusted results (dollars in thousands, except for per share data): Business Outlook The Company does not believe it can meaningfully reconcile guidance for non-GAAP Adjusted EBITDA to net income (loss) attributable to common shareholders of Evolent Health, Inc. because the Company cannot provide guidance for the more significant reconciling items between net income (loss) attributable to common shareholders of Evolent Health, Inc. and Adjusted EBITDA without unreasonable effort. This is due to the fact that future period non-GAAP guidance includes adjustments for items not indicative of our core operations, and as a result from changes to our business due to transactions and other events. Such items may, from time to time, include change in tax receivable agreement liability, other refinancing fees, gain (loss) from equity method investees, gain (loss) on repayment/extinguishment of debt, other income (expense), gain (loss) on disposal of non-strategic assets, goodwill impairments, right-of-use asset impairments, gain (loss) on lease terminations, stock-based compensation expense, severance costs and transaction-related costs. Such adjustments may be affected by changes in ongoing assumptions, judgments, as well as nonrecurring, unusual or unanticipated charges, expenses or gains (losses) or other items that may not directly correlate to the underlying performance of our business operations. The exact amount of these adjustments is not currently determinable but may be significant. Full Year 2026 Guidance Incorporating its year-to-date performance, the Company is raising its 2026 revenue guidance range to $2.6 to $2.7 billion. The Company is also tightening its Adjusted EBITDA guidance range to $120 to $135 million. Additional Outlook Information The Company expects to deploy $25 million to $30 million in cash for capitalized software development during 2026. 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 in addition to those set forth above are set forth below in "Forward Looking Statements - Cautionary Language" and Evolent Health, Inc.'s filings with the Securities and Exchange Commission ("SEC"). Web and Conference Call Information Evolent Health, Inc. will hold a conference call to discuss its financial performance and related matters this morning, August 6, 2026, at 8:00 a.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.evolent.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 invites all interested parties to attend the conference call. About Evolent Evolent specializes in better health outcomes for people with complex conditions through proven solutions that make health care simpler and more affordable. Evolent serves a national base of leading payers and providers 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 evolent.com. Contacts: [email protected] Definitions Revenue Agreements Evolent reports the number of new revenue agreements signed for Performance Suite, Specialty Technology and Services Suite, Administrative Services and Case-based products. A new revenue agreement includes incremental revenue to the Company reflecting contracts for services to both new partner entities, corporations or health plans as well as additional sales to existing partners. New revenue agreements may include incremental services, geographic, or line of business expansions or a combination thereof. The conversion of Specialty Technology and Services Suite contracts to Performance Suite are also included in this definition. The Company does not count renewals for existing scope, growth of membership within an existing contract scope or transaction-related purchase agreements, if applicable, in this metric. Lives on Platform and Per Member Per Month ("PMPM") Fee Performance Suite Lives on Platform are calculated by summing monthly members covered for specialty care services for contracts not under ASO arrangements divided by the number of months in the period. Specialty Technology and Services Suite Lives on Platform are calculated by summing monthly members covered for oncology, cardiology, musculoskeletal, advanced imaging and other diagnostic specialty care services for contracts under ASO arrangements divided by the number of months in the period. Administrative Services Lives on Platform are calculated by summing monthly members covered for administrative services implementation and core performance services divided by the number of months in the period. Cases are calculated by summing the number of individuals receiving services through our surgery management and advanced care planning programs in a given period. Members covered for more than one category are counted in each category. Performance Suite Average PMPM fee is defined as revenue pertaining to our Performance Suite during the period reported divided by Performance Suite Lives on Platform for the period divided by the number of months in the period. Specialty Technology and Services Suite Average PMPM fee is defined as revenue pertaining to the Specialty Technology and Services Suite during the period reported divided by Specialty Technology and Services Suite Lives on Platform for the period divided by the number of months in the period. Administrative Services Average PMPM fee is defined as revenue pertaining to the Administrative Services during the period reported divided by the Administrative Services Lives on Platform for the period divided by the number of months in the period. Revenue per Case is calculated by the revenue pertaining to surgery management and advanced care planning programs divided by the number of cases for a given period. Average Unique Members are calculated by summing members covered by our Performance Suite, Specialty Technology and Services Suite and Administrative Services. In cases where partners cross between multiple solutions, we only capture members from the solution with the maximum number of members. Management uses Lives on Platform, PMPM fees, Cases, Revenue per Case and Average Unique Members 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. Medical Expense Ratio Medical Expense Ratio ("MER") is a key performance indicator used by management for purposes of monitoring operating performance and is calculated as GAAP total claims incurred related to our specialty care management services solution divided by GAAP revenue related to our Performance Suite. Management believes MER is useful to investors because it provides insight into the efficiency with which medical costs are managed relative to revenue and helps identify trends in the underlying performance. For periods prior to the consummation of the sale of Evolent Care Partners ("ECP") in December 2025, we present non-GAAP MER excluding revenues from ECP because is not indicative of ongoing operations. Non-GAAP Financial Measures The Company views the following activities as integral to understanding its non-GAAP financial measures: Transaction-related costs include but are not limited to integration consultants, investor outreach services, external valuation and accounting advisory services, legal fees, transaction bonuses paid to certain employees and other transaction related costs. We adjust these costs because transaction-related costs are expensed when incurred and are not indicative of Evolent's normal operating costs. Purchase accounting adjustments include amortization expense on intangible assets such as corporate trade names, customer, relationships, provider network contracts and existing technology related to acquisitions and business combinations. We believe it is important for the reader to understand that revenue generated from acquisitions is included within revenue in calculating adjusted income to common shareholders however amortization expense from acquired intangible assets is excluded in determining adjusted income to common shareholders because it does not directly relate to the services performed for the Company's customers. In addition to disclosing financial results that are determined in accordance with GAAP, we present Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Income (Loss) Attributable 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 calculated in accordance with GAAP, respectively, adjusted to exclude the impact of stock-based compensation expenses, severance costs and transaction-related costs. Management believes Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses are useful to investors, because they facilitate an understanding of our long-term operational costs while removing the effect of costs that are not a representative component of the day-to-day operating performance of our business, and are useful to management as supplemental performance measures. Adjusted EBITDA is defined as net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, benefit from (provision for) income taxes, depreciation and amortization expenses, extinguishment of Series A Preferred Stock and other refinancing fees, gain (loss) from equity method investees, loss on option exercise, change in fair value of contingent consideration, other income (expense), net, loss on lease termination, stock-based compensation expense, severance costs, dividends and accretion of Series A Preferred Stock and transaction-related costs. Management believes that Adjusted EBITDA is useful to investors because it allows investors to evaluate the Company's performance using tools that management uses to evaluate past performance and prospects for future performance. Management also uses Adjusted EBITDA as a supplemental performance measure because the removal of adjustments to net loss attributable to common shareholders of Evolent Health, Inc. allows us to focus on operational performance. Adjusted EBITDA Margin is defined Adjusted EBITDA divided by Revenue. Management believes that this measure is useful to investors because it allows further insight into the period over period operational performance. Management also uses Adjusted EBITDA Margin as a supplemental performance measure because it allows the investor to understand operational performance compared to revenues over time. Adjusted Income (Loss) Attributable to Common Shareholders is defined as net loss attributable to common shareholders of Evolent Health, Inc. adjusted to gain (loss) from equity method investees, other income (expense), net, benefit from (provision for) income taxes, change in fair value of contingent consideration, extinguishment of Series A Preferred Stock and other refinancing fees, loss on option exercise, purchase accounting adjustments, loss on lease termination, stock-based compensation expense, severance costs, transaction-related costs and the tax impact of non-GAAP adjustments. Adjusted Income (Loss) per Share Attributable to Common Shareholders is defined as Adjusted Income (Loss) Attributable to Common Shareholders divided by Weighted-Average Common Shares, and reflects the adjustments made in those non-GAAP measures. Management believes that Adjusted Income (Loss) Attributable to Common Shareholders and Adjusted Income (Loss) per Share Attributable to Common Shareholders are useful to investors because they provide a measure of the Company's net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. 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. 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 our ability to weather current dynamics, continue to expand our footprint, future actions, trends in our businesses, prospective services, new partner additions/expansions, our guidance and business outlook and 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 significant portion of revenue we derive from our largest partners, and the potential loss, termination or renegotiation of our relationship or contract with any significant partner, or multiple partners in the aggregate; the increasing number of risk-sharing arrangements we enter into with our partners; the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes; our ability to accurately predict our exposure under performance-based contracts; failure by our customers to provide us with accurate and timely information; our ability to recover the upfront costs in our partner relationships and develop our partner relationships over time; our ability to attract new partners and successfully capture new opportunities; our ability to offer new and innovative products and services and our ability to keep pace with industry standards, technology and our partners' needs; our ability to maintain and enhance our reputation and brand recognition; our dependency on our key personnel, and our ability to attract, hire, integrate and retain key personnel; risks related to completed and future acquisitions, investments, alliances and joint ventures, which could divert management resources, result in unanticipated costs or dilute our stockholders; our ability to effectively manage our growth and maintain an efficient cost structure; risks related to managing our offshore operations and cost reduction goals; our ability to estimate the size of our target markets for our services; consolidation in the health care industry; competition which could limit our ability to maintain or expand market share within our industry; risks related to audits by CMS and other governmental payers and actions, including whistleblower claims under the False Claims Act; evolution of the healthcare regulatory and political framework; restrictions on the manner in which we access personal data and penalties as a result of privacy and data protection laws; data loss or corruption due to failures or errors in our systems and service disruptions at our data centers; liabilities and reputational risks related to our ability to safeguard the security and privacy of confidential data; our ability to obtain, maintain and enforce intellectual property rights and protect our trademarks and trade names, including from third parties alleging that we are infringing or violating their intellectual property rights; our ability to protect the confidentiality of our trade secrets; risks associated with our use of artificial intelligence and machine learning models; our use of "open-source" software; our reliance on third parties and licensed technologies; restrictions on our ability to use, disclose, de-identify or license data and to integrate third-party technologies; our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our partners and operating our business; our ability to achieve profitability in the future; the impact of additional goodwill and intangible asset impairments on our results of operations; our obligations to make material payments to certain of our pre-IPO investors for certain tax benefits we may claim in the future; our obligations to make payments under the tax receivables agreement that may be accelerated or may exceed the tax benefits we realize; our ability to utilize benefits under the tax receivables agreement described herein; the terms of agreements between us and certain of our pre-IPO investors may contain different terms than comparable agreement we may enter into with unaffiliated third parties; our inability to obtain financing may result in a reduction in the ownership of our stockholders; the conditional conversion features, and changes in accounting treatment of the 2029 Notes and the 2031 Notes, which, if triggered, may adversely affect our financial condition and operating results; our ability to raise funds necessary to settle conversions of our notes in cash, to repurchase our notes for cash upon a fundamental change or to pay the redemption price for any notes we redeem; interest rate risk and other restrictive covenants under our First Lien Credit Agreement and the second lien credit agreement, by and among the Company, Evolent Health LLC, as borrower, certain subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and Ares Capital Corporation, as administrative agent and collateral agent; our indebtedness, our ability to service our indebtedness, and our ability to obtain additional financing on favorable terms or at all; interference with our ability to access the first and second lien credit facilities under our Credit Agreements; the potential volatility of our Class A common stock price; provisions in our certificate of incorporation and by-laws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us; provisions in our certificate of incorporation which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees; our intention not to pay cash dividends on our Class A common stock; the impact of litigation proceedings, government inquiries, reviews, audits or investigations; public health emergencies, epidemics, pandemics or contagious diseases; the cost of compliance with sustainability or other environmental, social responsibility or governance law and regulations; the impact of increasing inflationary pressures and rising consumer costs on our business; and our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limited. 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/evolent-announces-second-quarter-2026-results-302844413.html

Koninklijke Philips N.V. PHG reported second-quarter 2026 adjusted earnings of €0.49 per share, up 36.1% from €0.36 a year ago. The improvement reflected higher sales, productivity measures and a U.S. tariff refund benefit.Sales increased 0.5% year over year to €4.36 billion. Comparable sales increased 4% year over year, which was driven by growth across all segments. The Diagnosis & Treatment segment recorded 2% growth, Connected Care recorded 2% growth and Personal Health showed 8% growth.Comparable order intake declined 1% after growing 6% in the prior-year quarter. The decrease was due to certain large Connected Care orders in North America shifting into the third quarter rather than weaker underlying demand.Growth geographies recorded a 13% increase, driven by Central Eastern Europe, Latin America and the Indian subcontinent. Comparable sales in Mature geographies increased 1%. North America grew 3%, partly offset by a 2% decline in Western Europe and a 1% decrease in Other mature geographies. Philips noted that customer demand remained healthy despite an uncertain macro environment. Koninklijke Philips N.V. price-consensus-eps-surprise-chart | Koninklijke Philips N.V. Quote Philips’ stock lost 0.19% in pre-market trading. Diagnosis & Treatment sales were nearly flat at €2.09 billion. Comparable sales increased 2%, as high-single-digit growth in Image Guided Therapy was partly offset by a low-single-digit decline in Precision Diagnosis. Adjusted EBITA margin rose 40 basis points to 13.9%, including the tariff refund benefit.Connected Care sales declined 6.9% year over year to €1.18 billion, although comparable sales increased 2%. Mid-single-digit growth in Monitoring drove the improvement. Adjusted EBITA margin expanded to 17.8% from 10.4%, helped by the refund, productivity measures and operational improvements.Personal Health sales increased 5.5% year over year to €909 million. Comparable sales grew 8% year over year, driven by double-digit growth in Growth geographies and mid-single-digit growth in Mature geographies. Adjusted EBITA margin jumped to 23% from 15.2%, supported by higher sales, productivity and favorable product mix. Other segment sales amounted to €182 million, up 51.7% on a year-over-year basis. Gross margin contracted 30 basis points (bps) on a year-over-year basis to 49.3% in the reported quarter.General & administrative expenses, as a percentage of sales, were 3.5%, which was in line on a year-over-year basis. Moreover, selling expenses decreased 80 bps year over year to 24.2%. Research & development expenses decreased 190 bps to 9.2%.Restructuring, acquisition-related and other items amounted to €20 million compared with €86 million a year ago. Philips remains on track to deliver its three-year €1.5 billion productivity program, with €132 million in savings achieved in the second quarter.Philips’ adjusted EBITA increased 32.8% year over year to €717 million. The adjusted EBITA margin expanded 400 basis points to 16.4%, including a 420-basis-point benefit from the U.S. tariff refund. Adjusted EBITA, excluding the tariff refund, slightly decreased, mainly due to cost inflation and higher tariffs, partly offset by higher sales and productivity measures. As of June 30, 2026, Philips’ cash and cash equivalents were €1.79 billion compared with €2.79 billion as of Dec. 31, 2025.Total debt was €7.46 billion compared with €8.08 billion as of Dec. 31, 2025, mainly due to bond repayments.Operating cash flow was €376 million compared with €387 million in the year-ago quarter. Higher working capital outflows were partly offset by the receipt of the U.S. tariff refund.Free cash flow was €222 million compared with €230 million a year earlier, as the tariff refund largely offset higher working capital outflows. Philips reiterated its 2026 comparable sales growth outlook of 3%-4.5%. The company continues to expect Connected Care and Personal Health growth near the upper end of the range and Diagnosis & Treatment near the lower end.Including the tariff refund, management raised its adjusted EBITA margin outlook to 13.5%-14% from 12.5%-13%. The free cash flow forecast increased to €1.5-€1.7 billion from €1.3-€1.5 billion.Excluding the refund, the underlying margin and free cash flow outlooks were unchanged. The guidance incorporates currently known tariffs but excludes ongoing Philips Respironics-related proceedings. Philips currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader Zacks Medical sector include Agilent Technologies A, Evolent Health EVH, and DexCom DXCM. Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of Agilent Technologies have gained 3.3% in the year-to-date period. Agilent Technologies is set to report the third quarter of fiscal 2026 results on Aug. 26.Evolent Health shares have lost 6.5% in the year-to-date period. Evolent Health is scheduled to report its second-quarter 2026 results on Aug. 06.DexCom shares have gained 12.8% in the year-to-date period. DexCom is set to report its second-quarter 2026 results on July 30. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Koninklijke Philips N.V. (PHG) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report DexCom, Inc. (DXCM) : Free Stock Analysis Report Evolent Health, Inc (EVH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research