UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 10-Q _________________________ (Mark One) S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37415 _________________________ Evolent Health, Inc. (Exact name of registra ...

Evolent Health, Inc. (NYSE:EVH) Q1 2023 Results Conference Call May 3, 2023 5:00 PM ET Company Participants Seth Frank - VP, IR Seth Blackley - CEO John Johnson - CFO Conference Call Participants Sandy Draper - Guggenheim Partners Anne Samuel - JP Morgan Charles Rhyee - TD Cowen David Larsen - BTIG Jailendra Singh - Truist Jeff Garro - Stephens Jessica Tassan - Piper Sandler Richard Close - Canaccord Genuity Ryan Daniels - William Blair Sean Dodge - RBC Capital Markets Operator Welcome to Evolent Health's E ...

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) For Q1 2023, Evolent Health reported **$427.7 million** revenue and a **$26.3 million** net loss, with total assets growing to **$2.6 billion** due to the NIA acquisition Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $157,519 | $188,200 | | Intangible assets, net | $825,857 | $442,784 | | Goodwill | $1,117,945 | $722,774 | | **Total assets** | **$2,589,459** | **$1,817,293** | | Long-term debt, net | $632,277 | $412,986 | | Tax receivable agreement liability | $112,134 | $45,950 | | **Total liabilities** | **$1,297,091** | **$957,876** | | Total shareholders' equity | $1,121,743 | $859,417 | Consolidated Statement of Operations Highlights (unaudited, except per share data) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Revenue | $427,690 | $297,057 | | Total operating expenses | $438,045 | $299,855 | | Operating loss | $(10,355) | $(2,798) | | Net loss attributable to common shareholders | $(26,258) | $(5,350) | | Loss per common share (Basic and diluted) | $(0.24) | $(0.06) | Consolidated Statement of Cash Flows Highlights (unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,974) | $(57,442) | | Net cash (used in) provided by investing activities | $(394,993) | $16,766 | | Net cash provided by (used in) financing activities | $379,729 | $(51,376) | | Net decrease in cash and cash equivalents | $(23,188) | $(92,156) | - Effective Q1 2023, the company changed its reportable segments, collapsing previous Evolent Health Services and Clinical Solutions segments into a single segment to reflect changes in performance evaluation and resource allocation, with historical disclosures recast[34](index=34&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew **44.0%** to **$427.7 million** primarily from acquisitions and new partnerships, while operating loss widened due to increased expenses, prompting a new repositioning plan Results of Operations Comparison | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($ in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $427,690 | $297,057 | $130,633 | 44.0% | | Cost of revenue | $310,475 | $219,739 | $90,736 | 41.3% | | SG&A expenses | $89,726 | $58,932 | $30,794 | 52.3% | | Operating loss | $(10,355) | $(2,798) | $(7,557) | (270.1)% | - The increase in revenue was primarily due to **$82.5 million** from the acquisitions of NIA, IPG, and Vital Decisions, and **$48.1 million** from new and expanded partner relationships[248](index=248&type=chunk) - The company completed its acquisition of National Imaging Associates (NIA) on January 20, 2023, for consideration including **$387.8 million** in cash, debt financing, and **8.5 million** shares of Class A common stock[216](index=216&type=chunk)[217](index=217&type=chunk) - In Q1 2023, the company initiated a "Repositioning Plan" involving organizational changes and cost-reduction initiatives to improve operational efficiency and profitability[220](index=220&type=chunk) Revenue by End-Market | End-Market | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Medicaid | $183,034 | $130,501 | | Medicare | $127,669 | $104,399 | | Commercial and other | $116,987 | $62,157 | | **Total** | **$427,690** | **$297,057** | [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from its floating-rate debt and preferred stock, with a **1%** SOFR increase potentially adding **$4.5 million** in annual interest expense and **$1.8 million** in preferred dividends - The company has significant exposure to interest rate fluctuations due to its floating-rate instruments, including a **$415.0 million** term loan, a **$37.5 million** revolving facility, and **$175.0 million** of Series A Preferred Stock[283](index=283&type=chunk) - For every **1%** increase in the SOFR, the company estimates an additional annual interest expense of **$4.5 million** and an additional **$1.8 million** in preferred dividends[283](index=283&type=chunk) - The company has foreign currency risk from operating expenses denominated in Indian Rupee and Philippine Peso, but the impact was not material for the quarter[285](index=285&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2023, excluding recent acquisitions from internal control over financial reporting assessment as permitted by SEC guidelines - Management concluded that disclosure controls and procedures were effective as of March 31, 2023[287](index=287&type=chunk) - The company excluded the recent acquisitions of IPG (August 2022) and NIA (January 2023) from its evaluation of internal control over financial reporting, as permitted by the SEC for the first year post-acquisition[288](index=288&type=chunk) [PART II - OTHER INFORMATION](index=55&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) A shareholder derivative action concerning the Passport Health Plan relationship was dismissed by the Delaware Chancery Court on January 5, 2023, resolving the matter - The shareholder derivative action, Lincolnshire Police Pension Fund v. Blackley, et al., was dismissed by the Delaware Chancery Court on January 5, 2023, and the matter is now considered resolved[150](index=150&type=chunk)[292](index=292&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) The company supplemented risk factors, emphasizing increased threats from online security risks and potential financial loss due to banking institution failures - The company faces significant online security risks, including cyber-attacks like ransomware and phishing, which could compromise confidential data and harm the business[294](index=294&type=chunk)[295](index=295&type=chunk) - There is a risk of financial loss from bank failures, as the company is likely to hold cash deposits in excess of the **$250,000** FDIC insurance limit[299](index=299&type=chunk) - Evolving data security and privacy laws (e.g., from the FTC and states like California) require ongoing changes to processes, and non-compliance could lead to significant fines and liability[297](index=297&type=chunk)[298](index=298&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported unregistered sales of Class A common stock for the NIA acquisition and an IPG earn-out provision, with **8,474,576** and **849,715** shares issued respectively - On January 20, 2023, the company issued **8,474,576** shares of Class A common stock in connection with the acquisition of NIA[300](index=300&type=chunk) - On February 1, 2023, the company issued **849,715** shares of Class A common stock to settle a contingent consideration earn-out related to the IPG acquisition[301](index=301&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 10-K _________________________ (Mark One) S ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR (I.R.S. Employer Identification No.) | 800 N. Glebe Road | , Suite 500 , | Arlington | , | Virginia | 22203 | | --- | --- | --- | --- | --- | --- | | | (Address of principal executive offices) | | | | (Zip Code) | For the transition ...

Financial Performance - Q4 2022 revenue reached $382 million, a 54% year-over-year increase[8] - 2022 annual revenue totaled $1352 million, representing a 489% year-over-year growth[16] - Q4 2022 Adjusted EBITDA was $323 million, a 329% year-over-year increase[34] - 2022 Adjusted EBITDA was $1063 million, with a margin of 79% compared to 73% in 2021[34] Segment Performance - Clinical Solutions revenue for Q4 2022 was $2815 million, a 747% year-over-year increase[18] - Evolent Health Services revenue for Q4 2022 was $101 million, a 158% year-over-year increase[18] - Corporate overhead expenses decreased by 203% to $105 million[18] Debt and Cash Flow - Net debt to LTM Adjusted EBITDA was 25x, including five months of Surgery Management (IPG) Adjusted EBITDA[16, 36] - Available cash increased by $25 million in Q4[16] - Total debt was $4218 million, and net debt was $2703 million[36] Guidance - The company anticipates a 2023 revenue range of $192 billion to $196 billion[16] - The company anticipates a 2023 Adjusted EBITDA range of $180 million to $200 million[35]

Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $382.4 million, a growth of 54% compared to the same period in 2021, with base business growth at 39% after excluding $37 million of acquired revenue [47] - Adjusted EBITDA for Q4 2022 totaled $32.3 million, representing a 33% increase year-over-year [47] - For the full year 2022, total revenue reached $1.352 billion, a growth of 49%, while adjusted EBITDA was $106.3 million, reflecting a 60% annual growth [47] Business Line Data and Key Metrics Changes - Clinical Solutions segment revenue grew 35% to $281.5 million in Q4 2022, with adjusted EBITDA of $26.7 million, a slight decline compared to the previous year [54] - Evolent Health Services revenue increased 16% to $101 million in Q4 2022, with adjusted EBITDA rising to $16.1 million from $7.9 million in the prior year [92] - The Performance suite added over 1.8 million lives during 2022, significantly increasing pricing from an average fee of $0.29 PMPM on technology and services to approximately $26 PMPM on the performance suite [48] Market Data and Key Metrics Changes - The company ended 2022 with 20.6 million lives, an organic growth of approximately 3 million lives from the prior year [60] - The average PMPM fee for the Performance suite was $25.78, down from $32.33 a year ago, attributed to higher growth in Medicaid and commercial lines of business [54] Company Strategy and Development Direction - The company aims to reach a $300 million annual run rate adjusted EBITDA by the end of 2024, focusing on organic growth, expanding margins, and optimal capital allocation [87] - The strategy includes moving from technology and services arrangements into the Performance suite to drive value for patients and health plan partners [8] - The acquisition of NIA is expected to contribute significantly to revenue and adjusted EBITDA, reinforcing the balanced approach between technology services and performance suite business models [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives and highlighted the importance of execution in driving growth [28] - The company anticipates a reduction in Medicaid membership by 8% to 10% by the end of the year, primarily impacting top-line revenue but not significantly affecting the bottom line [5] - Management noted that the integrated platform approach is resonating well with customers, indicating a positive outlook for future partnerships and expansions [10] Other Important Information - The company plans to consolidate operations into a single reportable segment starting Q1 2023, which will affect how adjusted EBITDA is tracked [70] - The employee engagement score was approximately 90% in 2022, indicating a strong cultural health and productivity within the workforce [84] Q&A Session Summary Question: Can you provide details on the new Performance suite agreement within Evolent Care Partners? - The agreement involves a couple of thousand lives and is expected to generate around $15 million annually, with potential to expand to $50 million with other Medicare Advantage partners [98] Question: How do you expect the cadence of synergies from the NIA integration to progress? - The integration is expected to proceed smoothly, with synergies being realized as the year progresses [80] Question: Can you elaborate on the Humana expansion and its potential? - The expansion includes two states, with significant revenue potential exceeding $250 million in 2024, and lays groundwork for further state expansions [83]

Financial Data and Key Metrics Changes - Evolent Health's total revenue for Q3 2022 was $352.6 million, representing a growth of approximately 58.5% year-over-year [8] - Year-over-year organic revenue growth was approximately 49%, excluding the two-month contribution from IPG [8] - Adjusted EBITDA for Q3 totaled $28.1 million, an increase of $14.3 million or over 100% compared to the previous year [8][9] - The company achieved positive net income for the first time, marking an important milestone in its maturation [27] Business Line Data and Key Metrics Changes - Clinical Solutions revenue grew 53.7% to $245.3 million, up from $159.6 million in the same period last year [35] - Evolent Health Services revenue increased 70.8% to $107.3 million, up from $62.9 million in Q3 2021 [38] - Membership in Evolent Health Services for the Performance Suite was 2.1 million, compared to 1.6 million in Q3 2021, with a PMPM fee of $16.41 versus $13.19 [38] Market Data and Key Metrics Changes - The company ended Q3 with 19.5 million lives managed, a growth of 32% from 14.7 million a year ago [10] - The PMPM fee for Clinical Solutions was $27.02, down from $34.16 in the previous year, driven by a mix shift towards Medicaid and commercial members [36] - Lives on the Technology & Services suite increased to 14.9 million from 11.7 million year-over-year, with a PMPM fee of $0.29 versus $0.36 [36] Company Strategy and Development Direction - Evolent's core operating priorities include strong organic growth, expanding margins, and optimal capital allocation [14] - The company is focused on value-based care, which aligns incentives across the healthcare system [12] - Evolent aims to deepen its capabilities in value-based specialty operations and strategy through leadership enhancements [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying value of their model to drive earnings growth despite challenges from the pandemic [30] - The company sees significant opportunities in the value-based care landscape, with less than 7% of primary care revenues linked to value-based arrangements [12][13] - Evolent is well-positioned for future growth, with a diversified pipeline of opportunities across various health plans [49][85] Other Important Information - The acquisition of IPG closed in August, and integration is progressing well, allowing for cross-sells and new logo conversions [24] - The company ended the quarter with $156.8 million in cash, with expectations of being cash flow positive in Q4 [40] - Evolent's capital allocation strategy focuses on investing in innovation, strategic M&A, and maintaining a disciplined balance sheet [20] Q&A Session Summary Question: Expectations for revenue contribution from new partnerships - The expanded Molina partnership is expected to contribute between $35 million and $40 million of run rate revenue, going live in the first half of next year [48] Question: Recent changes for MSSP implications - The new MSSP rule is seen as generally positive, with adjustments expected to improve future shared savings calculations [51] Question: Insights on Molina's partnership and state engagement - When entering a state, not all lives are managed initially, but there are opportunities for future growth [54] Question: Impact of Medicaid mix on PMPM - The decline in PMPM is attributed to a mix shift towards Medicaid, which has a lower prevalence of certain diseases [57] Question: Cost savings from operations in the Philippines - The company views the opportunity to expand operations in the Philippines as meaningful over a multiyear span [60] Question: Outlook for full capitation relationships - There are ongoing conversations regarding full capitation arrangements, particularly in Medicare Advantage plans [62] Question: Bundled approach in go-to-market strategy - Evolent is adopting a more bundled approach to selling multiple offerings as one contract, which aligns with payer preferences [66] Question: EBITDA guidance and growth trajectory - The company reaffirms its mid-teen EBITDA margin target for 2024, with expectations for continued organic revenue growth [81]

PART I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The IPG acquisition drove significant increases in assets and liabilities, improving Q3 net income and reducing the nine-month net loss [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $156,756 | $266,280 | | Goodwill | $722,790 | $426,297 | | Intangible assets, net | $451,398 | $279,784 | | **Total assets** | **$1,759,182** | **$1,419,458** | | Long-term debt, net | $412,444 | $215,676 | | Tax receivable agreement liability | $42,870 | $0 | | **Total liabilities** | **$903,044** | **$725,825** | | **Total shareholders' equity** | **$856,138** | **$693,633** | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $352,585 | $222,471 | $969,581 | $659,599 | | Operating income (loss) | $12,951 | $(6,581) | $5,520 | $(30,197) | | Net income (loss) | $2,123 | $(13,040) | $(7,815) | $(31,954) | | Diluted EPS | $0.02 | $(0.15) | $(0.09) | $(0.37) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(47,248) | $(27,909) | | Net cash (used in) provided by investing activities | $(254,659) | $38,582 | | Net cash provided by (used in) financing activities | $142,395 | $(90,446) | | **Net decrease in cash** | **$(160,124)** | **$(79,826)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the IPG acquisition's impact on assets and liabilities, new credit agreements, and a potential material goodwill impairment [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights strong Q3 revenue growth from new partners and the IPG acquisition, discusses segment performance, liquidity, and a potential Q4 goodwill impairment [Business Overview and Recent Developments](index=43&type=section&id=Business%20Overview%20and%20Recent%20Developments) - Evolent is a market leader in value-based care, providing integrated solutions to providers and payers through two segments: **Evolent Health Services (EHS)** and **Clinical Solutions**[215](index=215&type=chunk)[217](index=217&type=chunk) - On August 1, 2022, the company acquired Implantable Provider Group (IPG) for total consideration of **$461.7 million**, consisting of cash, stock, and contingent earn-outs. IPG is consolidated into the Clinical Solutions segment[229](index=229&type=chunk)[230](index=230&type=chunk) - To finance the IPG acquisition, the company entered into a new credit agreement on August 1, 2022, for a **$175.0 million term loan** and a **$50.0 million revolving credit facility**[231](index=231&type=chunk) - In August 2022, the company exchanged **$92.8 million of its 2024 Convertible Notes** for **5.4 million shares of Class A common stock**, resulting in a **$10.2 million loss on debt extinguishment**[232](index=232&type=chunk) - Subsequent Event: On October 11, 2022, Bright Health Group notified the company of its intent to exit certain business lines, which may cause a **material goodwill impairment** to the EHS segment (with **$214.2 million of goodwill**) in Q4 2022[233](index=233&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Consolidated Results Summary (in thousands) | Metric | Q3 2022 | Q3 2021 | Change | 9 Months 2022 | 9 Months 2021 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $352,585 | $222,471 | +58.5% | $969,581 | $659,599 | +47.0% | | Cost of Revenue | $266,617 | $163,126 | +63.4% | $736,061 | $493,071 | +49.3% | | SG&A | $68,521 | $51,292 | +33.6% | $186,408 | $152,582 | +22.2% | | Operating Income (Loss) | $12,951 | $(6,581) | +296.8% | $5,520 | $(30,197) | +118.3% | - Q3 2022 revenue growth of **$130.1 million** was driven by new partners and expansion. Evolent Health Services revenue grew by **$44.5 million**, and Clinical Solutions revenue grew by **$85.6 million**[258](index=258&type=chunk)[259](index=259&type=chunk) - Cost of revenue for Q3 2022 increased by **$103.5 million**, primarily due to **$68.6 million in higher claims activity**, **$11.7 million in higher personnel costs**, and **$15.1 million in device costs** from the IPG acquisition[262](index=262&type=chunk) - SG&A expenses for Q3 2022 increased by **$17.2 million**, mainly due to the acquisitions of Vital Decisions and IPG, leading to higher personnel costs (**$8.1 million**) and technology services (**$2.6 million**)[263](index=263&type=chunk) - A non-operating loss on debt extinguishment of **$10.2 million** was recorded in Q3 2022 related to the exchange of 2024 Notes[278](index=278&type=chunk) - A charge of **$42.9 million** was recorded for the Tax Receivable Agreement (TRA) liability, triggered by the reduction in the valuation allowance from deferred tax liabilities created by the IPG acquisition[282](index=282&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2022, the company had **$156.8 million in cash and cash equivalents** and believes this is sufficient to meet working capital and capital expenditure needs for the next twelve months[286](index=286&type=chunk)[287](index=287&type=chunk) Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(47,248) | $(27,909) | | Net cash used in/provided by investing activities | $(254,659) | $38,582 | | Net cash provided by (used in) financing activities | $142,395 | $(90,446) | - Cash used in investing activities of **$254.7 million** was primarily for the **$245.0 million acquisition of IPG** and **$27.6 million in capital expenditures**[292](index=292&type=chunk) - Cash provided by financing activities of **$142.4 million** was primarily from **$219.7 million in proceeds** from the new 2022 Credit Agreement, partially offset by claims processing outflows and taxes paid for equity awards[294](index=294&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from its new floating-rate debt, with a 1% SOFR increase adding $2.3 million in annual interest expense, and minor foreign currency risk - The company has **$225.0 million in floating-rate debt** (**$175.0M term loan**, **$50.0M revolving facility**) based on SOFR. For every **1% increase in SOFR**, annual interest expense would increase by **$2.3 million**[305](index=305&type=chunk) - The company's **$196.8 million in convertible notes** are fixed-rate instruments and not subject to interest rate fluctuations[305](index=305&type=chunk) - The company has foreign currency risk from operating expenses denominated in Indian Rupees, recognizing a translation loss of **$0.7 million** for the nine months ended September 30, 2022[307](index=307&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2022, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2022[309](index=309&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[310](index=310&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a settled shareholder class action, expected to be insurance-funded, and an ongoing shareholder derivative action - A shareholder class action lawsuit has been settled for **$23.5 million**, which is expected to be **fully covered by insurance**, resulting in no significant net loss or cash outflow for the company. The settlement is pending final court approval[150](index=150&type=chunk)[315](index=315&type=chunk) - A shareholder derivative action filed in June 2021, related to oversight of the Passport Health Plan, is ongoing. The company has filed a motion to dismiss and believes the case has **little legal or factual merit**[151](index=151&type=chunk)[315](index=315&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) Key risks include inflationary pressures, significant interest rate risk from new floating-rate debt, and restrictive covenants limiting operational flexibility - Increasing inflationary pressures on wages and other costs may **negatively impact** the company's margins, profitability, and results of operations[317](index=317&type=chunk)[318](index=318&type=chunk) - The company is exposed to interest rate risk from its new 2022 Credit Agreement, as its floating rate (based on SOFR) could **significantly increase debt service obligations** if rates continue to rise[319](index=319&type=chunk) - The 2022 Credit Agreement imposes **significant operating and financial restrictions**, including limitations on incurring additional debt, making investments, and paying dividends. Failure to comply with these covenants could result in an **event of default**[320](index=320&type=chunk)[323](index=323&type=chunk)

Evolent Health, Inc. (NYSE:EVH) Q2 2022 Earnings Conference Call August 2, 2022 5:00 PM ET Company Participants Seth Frank - Vice President, Investor Relations Seth Blackley - Chief Executive Officer John Johnson - Chief Financial Officer Conference Call Participants Ryan Daniels - William Blair Sean Dodge - RBC Capital Markets Anne Samuel - JPMorgan Sandy Draper - Guggenheim David Larsen - BTIG Jessica Tassan - Piper Sandler Richard Close - Canaccord Genuity Charles Rhyee - Cowen Operator Good evening and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 10-Q _________________________ (Mark One) S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37415 _________________________ | --- | --- | --- | --- | |----------------- ...