Financial Data and Key Metrics Changes - Q3 revenue reached $479.5 million, exceeding expectations and at the top of the guidance range, with full-year revenue expected between $1.87 billion and $1.88 billion [3][18] - Adjusted EBITDA for Q3 was $39 million, representing a 23% year-over-year growth [8][19] - The company ended the quarter with $116.7 million in cash and equivalents, and net debt of $910 million [20][22] Business Line Data and Key Metrics Changes - The Performance Suite and Technology and Services Suite contributed to revenue growth, with new contracts expected to add over $550 million in 2026 revenue [4][6] - The specialty Performance Suite care margin was approximately 7%, consistent with year-to-date performance [19] Market Data and Key Metrics Changes - The company anticipates a contraction of approximately 3% in Medicare Advantage membership for 2026, with a significant decline expected in the exchange market [14][15] - Revenue from exchanges this year is around $360 million, split evenly between the Performance Suite and Technology and Services [34][35] Company Strategy and Development Direction - The company is focused on organic growth, margin expansion, and disciplined capital allocation, with a long-term goal to auto-approve over 80% of baseline authorization volume [8][9] - A strategic partnership with American Oncology Network aims to enhance provider alignment and improve cancer care without relying on utilization management [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture market share despite a challenging operating environment, particularly in oncology [10][14] - The outlook for 2026 adjusted EBITDA is uncertain due to potential membership declines in key markets, but new contracts are expected to provide significant growth opportunities [15][17] Other Important Information - The company is transitioning its CFO role, with Mario Ramos set to join as the new CFO [24][25] - The divestiture of Evolent Care Partners is expected to close later this year, with proceeds used to reduce debt [9][22] Q&A Session Summary Question: Discussion on new contract wins and peak margins - Management confirmed that all new contracts are under the enhanced performance suite, with a reasonable mature margin target of around 10% [26][27][29] Question: Factors affecting 2026 EBITDA - Key factors include growth, cost structure efficiencies, and membership trends, with membership being the most uncertain variable [30][31][32] Question: MA growth assumptions for enrollment next year - Management noted that if current partners gain market share, it would positively impact revenue, particularly in the Technology and Services Suite [33] Question: Impact of HIX subsidies expiration - Management expressed confidence in pricing for 2026, with protections in contracts to mitigate acuity shifts [34][36] Question: Oncology trends and their progression - Oncology trends have remained stable throughout the year, with a slight increase in utilization noted in exchanges [37] Question: Pipeline pacing and go-live timing - The demand remains significant, and there is potential for new contracts to go live in 2026 [38] Question: Adversity in exchanges and membership impact - The benefits rush is primarily seen in cardiology, with a conservative approach taken for trend acceleration in the exchange line of business [40][41] Question: Product development and oncology navigation solution - The navigation solution is expected to expand into more markets, with a focus on improving care quality and affordability [46][48] Question: Revenue generation from the American Oncology partnership - The partnership aims to improve quality and reduce costs, with potential indirect revenue generation through payer interest [49]

Financial Data and Key Metrics Changes - Q2 adjusted EBITDA was $37.5 million, in the top half of the range, driven by strong results across technology and services and performance suite models [16] - Q2 revenue was $444 million, $11 million below the midpoint of guidance, primarily due to lower revenue for 2024 and go-live timing issues [19][20] - The company updated its full-year revenue outlook to between $1.85 billion and $1.88 billion [27] Business Line Data and Key Metrics Changes - The performance suite normalized oncology trend was approximately 10.5%, modestly below the initial forecast of 12% [16] - The company achieved four new revenue agreements, bringing the total to 11 new agreements year-to-date [5] - The oncology performance suite offering is expanding to include inpatient or Part A oncology costs, reflecting an addressable market expansion [8] Market Data and Key Metrics Changes - About 25% of Q2 revenue and over 80% of new business announced for 2026 is in Medicare, with expectations of a return to normal macro membership growth [25] - Approximately 10% of Q2 revenue is in the commercial fully insured line of business, expected to remain stable [25] - Medicaid revenue accounted for about 45% of Q2 revenue, with typical annual growth of 2% to 3% expected [25] Company Strategy and Development Direction - The company is focused on organic growth, margin expansion, and capital allocation, with no plans for M&A in the near term [12] - The strategy includes enhancing AI and automation capabilities to improve efficiency and member experience [10] - The company aims to grow adjusted EBITDA at 20% per year despite industry volatility [14] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment with elevated utilization and lagging premiums [12] - The company expects strong selling conditions in the coming years due to pressures on health plans [8] - Management remains cautiously optimistic about future performance, maintaining a conservative approach to forecasting [9] Other Important Information - The company plans to launch its partnership with Aetna in Q1 2026, targeting 250,000 Medicare Advantage members in Florida [6][7] - The company has a strong late-stage pipeline and anticipates additional growth announcements in the fall [8] Q&A Session Summary Question: Aetna partnership and market density - Management highlighted the significance of the Aetna partnership and its potential for expansion into additional states, with expected margin ramp consistent with typical performance suite margins [29][33] Question: Changes in contract structuring and customer engagement - Management noted that the pipeline has grown to $1 billion, driven by enhanced contract terms and the industry's challenges in managing high-cost specialty categories [35][37] Question: Aetna contract launch timeline - Management expressed confidence in the Aetna contract launch timeframe, emphasizing the importance of having all necessary components in place for a successful rollout [40] Question: Exchange business and ACA risk pools - Management acknowledged the lower margin nature of the exchange business and indicated a focus on protecting downside risks while growing the business [43][45] Question: Performance Suite pipeline and specialty focus - Management indicated that the Performance Suite pipeline is heavily focused on oncology, with a mix of national and regional plans [47][49] Question: Revenue growth expectations for 2026 - Management projected a clear path to exceeding $2.5 billion in revenue for 2026, based on the weighted pipeline and expected go-live timing [53][55]