Evolent Health (EVH) Piper Sandler 37th Annual Healthcare Conference summary

Market trends and business performance

• Specialty care management trends in oncology and cardiology are in line with expectations, with oncology trends just under 11% and cardiology slightly higher due to a benefits rush ahead of premium increases.

• Two-thirds of revenue is tied to ACA Marketplace and Medicaid, with the remainder from Medicare Advantage; risk pool adjustments and a growing Medicare Advantage pipeline support forecasting.

• Adherence to evidence-based pathways is increased from mid-60% to mid-80% within a few years, driving both quality and cost savings.

• Oncology savings are primarily from optimizing high-cost therapeutics, followed by radiation and end-of-life care; cardiology savings focus on reducing unnecessary surgical interventions.

• Independent oncology practices are slightly more receptive to innovation, but strong outcomes are achieved across both independent and large health systems.

Financial outlook and contract structure

• Performance Suite contracts offer upfront discounts and trend reductions, with 10–20% total opportunity identified through claims analysis.

• Margins in Performance Suite typically start at break-even, reach 5–7% in year two, and target 10% by the end of year two.

• New contracts now include protections for case mix, acuity, new drugs, and price changes, with hard loss corridors in place.

• $750 million in new Performance Suite ACV is expected, with $550 million going live in 2026; minimal EBITDA contribution in 2026 but ramping to 10% margin by 2028.

• 2025 adjusted EBITDA guidance is $149 million, with 80% from tech/services and 20% from Performance Suite; divestiture of an asset will reduce pro forma EBITDA to $139 million.

Operational efficiency and future guidance

• Administrative load in Performance Suite is expected to decrease from 4% to below 3% as scale increases, with care margin improving from 7% to 10% over the next few years.

• Fee-based adjusted EBITDA is expected to rebound in 2026 due to new revenue launches and operational improvements, despite 2025 declines from Medicaid and Medicare Advantage membership reductions.

• AI and efficiency investments are projected to yield a $20 million year-on-year improvement as of year-end.

• ACA Marketplace exposure is about 20% of revenue, with downside scenarios modeled for 2026; EBITDA is expected to remain flat or grow modestly even in a downside case.

• Pricing for 2026 Performance Suite business is protected by contract terms that allow rates to float with actual prevalence and case mix, reducing mispricing risk.