Evolent Health(EVH) - 2024 Q4 - Annual Results

Financial Performance - Revenue for Q4 2024 was $646.5 million, representing a 16.3% increase compared to Q4 2023, while total revenue for the year reached $2,554.7 million, reflecting a 30.1% growth year-over-year[3] - Net loss attributable to common shareholders for Q4 2024 was $30.6 million, with a net loss margin of (4.7)%, and for the full year, the net loss was $93.5 million, resulting in a net loss margin of (3.7)%[3] - Adjusted EBITDA for Q4 2024 was $22.6 million, with an adjusted EBITDA margin of 3.5%, and for the full year, adjusted EBITDA totaled $160.5 million, yielding a margin of 6.3%[3] - Operating loss for Q4 2024 was $18.60 million, a slight improvement from a loss of $21.35 million in Q4 2023[25] - The company reported a net cash provided by operating activities of $18.77 million for the year ended December 31, 2024, down from $142.58 million in 2023[29] - Adjusted EBITDA for Q4 2024 was $22.6 million, down from $48.1 million in Q4 2023, resulting in an Adjusted EBITDA margin of 3.5% compared to 8.6% in the previous year[46] - Adjusted income attributable to common shareholders for the year 2024 was $47.4 million, compared to $53.7 million in 2023, with an adjusted income per share of $0.41 versus $0.48[48] Revenue Guidance and Projections - For Q1 2025, revenue is projected to be between $440 million and $470 million, with adjusted EBITDA expected in the range of $31 million to $37 million[10] - Full year 2025 revenue guidance is approximately $2.06 billion to $2.11 billion, indicating a projected annual growth of 15%-18% after adjusting for one-time contract changes[11] Cost and Investment - The company plans to invest approximately $35 million in cash for capitalized software development during 2025[12] - Total liabilities decreased to $1.35 billion in 2024 from $1.43 billion in 2023[27] - The total cost of revenue for the year ended December 31, 2024, was $2.19 billion, compared to $1.50 billion in 2023, indicating a significant increase in operational scale[43] Partner Relationships and Market Strategy - The company achieved 100% partner contract retention across its top customers, which collectively accounted for over 90% of 2024 revenue[3] - Evolent signed contract amendments in all three Performance Suite negotiations, expected to generate an annual improvement of $115 million in net income and adjusted EBITDA for 2025 compared to Q4 2024[3] - The company emphasizes the importance of attracting new partners and capturing new opportunities to drive growth[52] Risks and Challenges - The company derives a significant portion of its revenue from major partners, with potential risks related to the loss or renegotiation of these relationships[52] - Future performance is subject to uncertainties, including governmental funding reductions and policy changes affecting partner success[52] - There are risks associated with managing growth and maintaining an efficient cost structure amid competitive pressures[52] - The company faces challenges related to data security and privacy, which could impact its reputation and operational effectiveness[53] - The ability to achieve profitability in the future remains uncertain, influenced by various financial obligations and market conditions[53] - The impact of inflationary pressures and rising consumer costs is a concern for the company's business operations[56] - The company is subject to risks from litigation proceedings and government inquiries, which could affect its financial performance[56] Cash and Assets - Total cash and cash equivalents as of December 31, 2024, were $104.2 million[6] - Cash and cash equivalents decreased to $104.20 million as of December 31, 2024, down from $192.83 million in 2023[27] - Total assets decreased to $2.54 billion in 2024 from $2.68 billion in 2023[27] Stock and Dividends - The company does not intend to pay cash dividends on its Class A common stock, which may affect investor returns[56]