Evolent Health(US:EVH)2025-11-06 22:47Financial Performance - Total revenue for Q3 2025 was $479.5 million, a decrease of 22.8% compared to $621.4 million in Q3 2024[20] - Operating income for Q3 2025 was $886 thousand, compared to an operating loss of $16.3 million in Q3 2024[20] - Net loss attributable to common shareholders for Q3 2025 was $26.9 million, compared to a net loss of $31.2 million in Q3 2024[20] - The company reported a comprehensive loss of $27.6 million for Q3 2025, compared to a comprehensive loss of $31.2 million in Q3 2024[20] - For the three months ended September 30, 2025, Evolent Health, Inc. reported a net income attributable to common shareholders of $(26,930) thousand, compared to a net income of $(31,231) thousand for the same period in 2024, reflecting an improvement of approximately 13.5%[23] - For the nine months ended September 30, 2025, the company experienced a net loss attributable to common shareholders of $(150,270) thousand, compared to a net loss of $(62,839) thousand for the same period in 2024, representing a significant increase in losses[26] - The company reported a net cash decrease of $35.492 million for the nine months ended September 30, 2025, compared to a decrease of $95.606 million for the same period in 2024, showing a significant improvement[42] Assets and Liabilities - Total assets decreased to $2.45 billion as of September 30, 2025, down from $2.54 billion at the end of 2024[18] - Current liabilities decreased significantly to $429.9 million from $715.5 million at the end of 2024, a reduction of 40%[17] - Long-term debt increased to $1.05 billion as of September 30, 2025, compared to $490.5 million at the end of 2024[17] - Total shareholders' equity decreased to $842.2 million as of September 30, 2025, down from $1.00 billion at the end of 2024[18] - The total shareholders' equity as of September 30, 2025, was $842,233 thousand, an increase from $1,038,685 thousand as of September 30, 2024, indicating a decrease of about 18.9% year-over-year[26] Cash Flow and Investments - Cash flows used in operating activities for the nine months ended September 30, 2025, were $(9,957) thousand, a decrease from cash provided of $44,996 thousand in the same period of 2024[28] - The total amount of cash flows used in investing activities for the nine months ended September 30, 2025, was $(82,386) thousand, compared to $(43,002) thousand in the same period of 2024, reflecting an increase in investment outflows[28] - The company reported stock-based compensation expenses of $37,343 thousand for the nine months ended September 30, 2025, compared to $45,861 thousand for the same period in 2024, showing a reduction of approximately 18.6%[28] Revenue Sources - Medicaid revenue increased to $227.5 million for the three months ended September 30, 2025, compared to $214.6 million in 2024, while Medicare revenue decreased significantly from $238.5 million in 2024 to $128.7 million in 2025[82] - The company derived 25.7% of its revenue for the three months ended September 30, 2025, from Molina Healthcare, Inc., compared to 14.9% for the same period in 2024[145] - Revenue from services agreements with joint ventures was $3.9 million for the three months ended September 30, 2025, compared to $3.0 million for the same period in 2024, marking a 30.3% increase[171] Debt and Financing - The company issued $166.8 million of 4.50% Convertible Senior Notes due 2031, with net proceeds of approximately $161.0 million after fees[113] - The company repurchased approximately $167.4 million of its 2025 Notes for $166.8 million in cash, resulting in a $0.4 million gain on extinguishment of short-term debt[113] - The Company entered into a Commitment Letter on June 19, 2025, providing up to $150.0 million in non-dilutive debt capital to retire its 2025 Notes[120] Operational Highlights - The company operates through one reportable segment, with financial performance evaluated on a consolidated basis[34] - The company focuses on research and development activities that support technology infrastructure, clinical program development, and data analytics, with all related costs expensed as incurred[54] - Approximately 78% of gross accounts receivable as of September 30, 2025, was netted against claims payable, up from 67% as of December 31, 2024, indicating improved cash flow management[57] Regulatory and Legal Matters - The Company is cooperating with a Department of Justice investigation concerning allegations related to unsupported diagnosis codes submitted by a former customer[141] Tax and Compliance - The company recorded an income tax provision of $0.9 million for the three months ended September 30, 2025, resulting in an effective tax rate of (4.5)%, compared to an effective tax rate of 2.6% for the same period in 2024[165] - The company had unrecognized tax benefits of $2.5 million as of September 30, 2025, which could affect the overall effective tax rate if recognized[166]