Evolent Health(US:EVH)2023-02-23 04:29Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $382.4 million, a growth of 54% compared to the same period in 2021, with base business growth at 39% after excluding $37 million of acquired revenue [47] - Adjusted EBITDA for Q4 2022 totaled $32.3 million, representing a 33% increase year-over-year [47] - For the full year 2022, total revenue reached $1.352 billion, a growth of 49%, while adjusted EBITDA was $106.3 million, reflecting a 60% annual growth [47] Business Line Data and Key Metrics Changes - Clinical Solutions segment revenue grew 35% to $281.5 million in Q4 2022, with adjusted EBITDA of $26.7 million, a slight decline compared to the previous year [54] - Evolent Health Services revenue increased 16% to $101 million in Q4 2022, with adjusted EBITDA rising to $16.1 million from $7.9 million in the prior year [92] - The Performance suite added over 1.8 million lives during 2022, significantly increasing pricing from an average fee of $0.29 PMPM on technology and services to approximately $26 PMPM on the performance suite [48] Market Data and Key Metrics Changes - The company ended 2022 with 20.6 million lives, an organic growth of approximately 3 million lives from the prior year [60] - The average PMPM fee for the Performance suite was $25.78, down from $32.33 a year ago, attributed to higher growth in Medicaid and commercial lines of business [54] Company Strategy and Development Direction - The company aims to reach a $300 million annual run rate adjusted EBITDA by the end of 2024, focusing on organic growth, expanding margins, and optimal capital allocation [87] - The strategy includes moving from technology and services arrangements into the Performance suite to drive value for patients and health plan partners [8] - The acquisition of NIA is expected to contribute significantly to revenue and adjusted EBITDA, reinforcing the balanced approach between technology services and performance suite business models [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives and highlighted the importance of execution in driving growth [28] - The company anticipates a reduction in Medicaid membership by 8% to 10% by the end of the year, primarily impacting top-line revenue but not significantly affecting the bottom line [5] - Management noted that the integrated platform approach is resonating well with customers, indicating a positive outlook for future partnerships and expansions [10] Other Important Information - The company plans to consolidate operations into a single reportable segment starting Q1 2023, which will affect how adjusted EBITDA is tracked [70] - The employee engagement score was approximately 90% in 2022, indicating a strong cultural health and productivity within the workforce [84] Q&A Session Summary Question: Can you provide details on the new Performance suite agreement within Evolent Care Partners? - The agreement involves a couple of thousand lives and is expected to generate around $15 million annually, with potential to expand to $50 million with other Medicare Advantage partners [98] Question: How do you expect the cadence of synergies from the NIA integration to progress? - The integration is expected to proceed smoothly, with synergies being realized as the year progresses [80] Question: Can you elaborate on the Humana expansion and its potential? - The expansion includes two states, with significant revenue potential exceeding $250 million in 2024, and lays groundwork for further state expansions [83]