Evolent Health(US:EVH)2025-05-08 21:54Financial Performance - Total revenue for Q1 2025 was $483,649, a decrease of 24.4% compared to $639,653 in Q1 2024[21] - Operating loss for Q1 2025 was $1,622, significantly improved from a loss of $13,409 in Q1 2024[21] - Net loss attributable to common shareholders for Q1 2025 was $72,250, compared to a loss of $25,225 in Q1 2024, representing a 186.5% increase in losses[21] - The company reported a basic and diluted loss per common share of $0.63 for Q1 2025, compared to $0.22 for Q1 2024[21] - For the three months ended March 31, 2025, the net loss before preferred dividends was $64,618,000, compared to a net loss of $17,280,000 for the same period in 2024, indicating a significant increase in losses[28] - The net cash provided by operating activities for the three months ended March 31, 2025, was $4,565,000, slightly down from $4,909,000 in the same period of 2024[28] - The company incurred a loss on option exercise amounting to $52,348,000 during the three months ended March 31, 2025, which was a new expense not reported in the previous year[28] - The company recorded total dividends and accretion related to the Series A Preferred Stock of $7.63 million for the three months ended March 31, 2025[151] - The net loss attributable to common shareholders for the three months ended March 31, 2025, was $72,250,000, compared to a net loss of $25,225,000 for the same period in 2024[187] Cash and Liquidity - Cash and cash equivalents increased to $246,547 in Q1 2025 from $104,203 in Q4 2024, reflecting a 136.5% increase[17] - As of March 31, 2025, the company had unrestricted cash and cash equivalents of $246.5 million, indicating sufficient liquidity to meet working capital and capital expenditure requirements for at least the next twelve months[32] - Approximately 96.6% of the Company's $277.8 million in cash and cash equivalents were held in FDIC participating banks or overnight sweep accounts, while 3.4% were in international banks[130] Assets and Liabilities - Total assets rose to $2,653,451 in Q1 2025, up from $2,544,411 in Q4 2024, marking a 4.3% increase[18] - Total liabilities increased to $1,524,702 in Q1 2025 from $1,352,979 in Q4 2024, representing a 12.7% rise[18] - Current liabilities totaled $739,097 in Q1 2025, compared to $715,501 in Q4 2024, indicating a 3.3% increase[18] - Long-term debt increased to $647,532 in Q1 2025 from $490,520 in Q4 2024, a significant increase of 32.0%[18] - Total shareholders' equity decreased to $935,521 in Q1 2025 from $1,001,259 in Q4 2024, a decline of 6.6%[18] Revenue and Contracts - Medicaid revenue for the three months ended March 31, 2025, was $188.124 million, down from $215.124 million in 2024, while Medicare revenue dropped from $286.960 million to $115.318 million[76] - The company recognizes revenue over time using the time elapsed output method, with fixed consideration recognized ratably over the contract term[74] - The company’s revenue contracts are typically multi-year arrangements aimed at lowering medical expenses for partners[72] - Approximately $29.6 million of transaction price has been allocated to performance obligations that are unsatisfied as of March 31, 2025, with an expectation to recognize 85% of this by December 31, 2025[77] Investments and Acquisitions - The company completed the acquisition of Machinify, Inc. for a total consideration of $28.5 million, including $19.5 million in cash and a contingent consideration fair valued at $9.0 million[70][71] - Identifiable intangible assets acquired from Machinify will be amortized on a straight-line basis over an estimated useful life of 5 years[71] - The contingent consideration related to the Machinify transaction includes an earn-out consideration of $1,102,000 as of March 31, 2025, compared to $1,900,000 as of December 31, 2024[171] Expenses and Costs - Medical expenses and device costs for the three months ended March 31, 2025, totaled $292,676,000, down from $431,336,000 in 2024[187] - The company incurred total costs of $9,929,000 associated with its repositioning plans for the three months ended March 31, 2024[185] - The company experienced pricing pressures from competitive pricing and rising costs for inflation-sensitive operating expenses, but these did not materially impact revenues or net income in early 2025[208] Tax and Equity - The Company recognized an income tax provision of $1.5 million for the three months ended March 31, 2025, resulting in an effective tax rate of (2.3)%[158] - The Company had unrecognized tax benefits of $2.5 million as of March 31, 2025, which could affect the overall effective tax rate if recognized[159] Reserves and Claims - The company maintains reserves for liabilities related to payments to providers and pharmacies under performance-based arrangements, reflecting actual payments and incurred but not reported claims[189] - The balance for reserves related to claims and performance-based arrangements increased to $333,842 thousand as of March 31, 2025, compared to $368,639 thousand in the prior year[196] - Total claims incurred for the three months ended March 31, 2025, were $205,992 thousand, a decrease from $359,693 thousand in the same period of 2024[196]