Evolent Health(US:EVH)2022-05-05 00:49Financial Data and Key Metrics Changes - Evolent Health reported total revenue of $297.1 million for Q1 2022, representing a 38% increase compared to Q1 2021 [5][19] - Adjusted EBITDA for Q1 2022 was $24.3 million, reflecting a 63% growth year-over-year, with an adjusted EBITDA margin expansion of 130 basis points to 8.2% [5][19] - The company exceeded its revenue outlook range for the quarter, which was $280 to $295 million, and delivered at the high end of its adjusted EBITDA outlook of $20 million to $25 million [5][19] Business Line Data and Key Metrics Changes - Revenue from Clinical Solutions increased by 46.1% to $190.2 million, driven by same-store sales and new client growth [19] - Evolent Health Services revenue grew by 25.9% to $106.9 million, supported by new client go-lives, including the addition of approximately 330,000 Bright HealthCare lives [21] - Membership in the Performance suite for Clinical Solutions was 1.5 million, with a PMPM fee of $38.07, up from $26.32 in the prior year [20] Market Data and Key Metrics Changes - The company ended the quarter covering 20.3 million lives across all platforms, a 74% increase from 11.6 million a year ago [6][18] - The growth was primarily driven by New Century Health and Evolent Care Partners, which together constitute the Clinical Solutions segment [6] - The PMPM fee for the Technology and Services suite decreased slightly to $0.38 from $0.43 in the prior year [21] Company Strategy and Development Direction - Evolent Health focuses on three core operating priorities: strong organic growth, expanding margins, and optimal capital allocation [8][14] - The company aims to drive innovation through internal development, accretive M&A, and strategic partnerships [26][39] - Evolent sees significant opportunities for growth in oncology, cardiology, and musculoskeletal services, responding to customer demand for expanded capabilities [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong revenue growth and margin expansion, driven by the Clinical Solutions segment [13][19] - The macro environment is viewed as a tailwind for growth, with increased urgency for health plans to drive quality care while lowering costs [12][18] - The company raised its revenue guidance for the year to a range of $1.16 to $1.21 billion and adjusted EBITDA to between $85 and $95 million [23] Other Important Information - Evolent Health's cash position at the end of the quarter was $210.2 million, with $156.3 million available after accounting for cash held in regulated accounts [22] - The company anticipates continued strong performance in the second quarter, with adjusted revenue forecasted at $290 million to $305 million [23] Q&A Session Summary Question: Can you discuss the Oncology Care Partners relationship and its financial relevance for 2022? - Management indicated that the relationship is part of their innovation strategy and is not expected to have a significant short-term financial impact [26][28] Question: What are the growth opportunities with existing clients? - Management highlighted the potential for upselling existing clients to the Performance suite, which could lead to significant revenue increases [33][34] Question: How do you view the impact of potential recession on your pipeline? - Management believes that the core dynamics of managing care will remain stable regardless of economic conditions, although they are monitoring the situation [75][72] Question: What is the expected impact of Medicaid redeterminations? - Management expects a slow ramp in membership rolling off due to redeterminations, with minimal impact on overall guidance [60][61] Question: Can you provide details on the performance fees recognized in the quarter? - Performance fees were recognized based on savings driven relative to benchmarks, contributing to the top-line beat [67][68]