EVH Q3 Deep Dive: Contract Wins and Industry Uncertainty Shape Outlook

Core Insights - Evolent Health reported Q3 CY2025 results with revenue of $479.5 million, a 22.8% decline year on year, but exceeded market expectations by 2.6% [1][6] - The company's non-GAAP profit was $0.05 per share, which was 52.5% below analysts' consensus estimates of $0.11 [1][6] - Revenue guidance for Q4 CY2025 is set at $467 million, which is below analysts' estimates of $472.9 million [1][6] Revenue and Financial Performance - Revenue for Q3 CY2025 was $479.5 million, down 22.8% year on year, but beat analyst estimates of $467.3 million [6] - Adjusted EBITDA was $38.96 million, exceeding analyst estimates of $37.67 million, with an 8.1% margin [6] - Operating margin improved to 0.2%, up from -2.6% in the same quarter last year [6] Management Commentary - Management attributed revenue decline to membership reductions in government exchange and Medicare Advantage markets, along with increased medical utilization in cardiology [3] - CEO Seth Blackley noted the challenging industry environment and emphasized the importance of new contract wins and pipeline growth [3][5] - The company expressed uncertainty regarding future membership changes and highlighted the potential impact of federal policy decisions on revenue and margins [4] Future Outlook - Evolent Health's guidance reflects management's uncertainty about membership trends in the exchange and Medicare Advantage markets [4] - The company anticipates that execution on new contracts and external policy changes will be critical for future growth [4]