Evolent Health(US:EVH)2022-02-24 02:21Financial Data and Key Metrics Changes - For Q4 2021, total revenue was $248.4 million, with revenue excluding divested assets at $245.9 million, reflecting a 39.7% year-over-year growth rate [7][33] - Full year 2021 total revenue reached $908 million, with revenue excluding divested assets at $890.6 million, indicating a growth of 36.7% [9] - Adjusted EBITDA for Q4 was $24.3 million, exceeding the outlook range of $14 million to $18 million [7][33] - Full year adjusted EBITDA totaled $66.3 million, representing a growth of 36.5% year-over-year [9][32] Business Line Data and Key Metrics Changes - Clinical Solutions segment revenue for Q4 increased 9.9% to $161.1 million, with adjusted EBITDA rising to $29.5 million from $8.6 million in the prior year [34] - Evolent Health Services segment revenue decreased 12.7% to $87.2 million, but grew 26.5% excluding divested assets [36] - Membership in the Performance suite for Clinical Solutions was 1.5 million, while Technology and Services suite membership grew to 16.9 million [35] Market Data and Key Metrics Changes - As of December 31, 2021, Evolent's services covered 20 million lives, representing approximately 6% of the U.S. population [8] - The company expects to add over 500,000 members to the Performance suite through migrations with Molina Healthcare [56] Company Strategy and Development Direction - Evolent's strategic focus includes strong organic growth, expanding margins, and optimal capital deployment [6][12] - The company plans to continue investing in R&D, strategic M&A, and innovative partnerships to enhance market leadership [19][25] - Evolent aims for total revenue growth between 23% and 30% in 2022, with adjusted EBITDA projected between $80 million and $90 million [10][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro environment for value-based care, citing strong demand for solutions from both public and private sectors [29] - The company anticipates strong visibility for 2022 revenue, with the majority already under contract [40] - Management highlighted the importance of proving value to partners to facilitate growth opportunities [44][48] Other Important Information - The acquisition of Vital Decisions is expected to enhance capabilities in managing end-of-life care costs, particularly in oncology and cardiology [22][23] - Evolent ended 2021 with $215.6 million in available cash and a net leverage of 1.1x trailing 12-month adjusted EBITDA [32][39] Q&A Session Summary Question: Can you talk about the up-sell to Molina as a case study? - Management discussed two growth vectors: converting existing Technology and Services suite clients to the Performance suite and expanding into new geographies [44] Question: What are the roadblocks to moving to the Performance suite? - Management noted the need to prove value and the dynamics within the organization as potential roadblocks [45][48] Question: Do you expect a larger percentage of revenue from Performance-based fees in 2022? - Management confirmed an expected increase in revenue from Performance suite contracts [49] Question: What inflections in demand are seen in the pipeline? - Management noted strong demand across all three solutions, particularly in high-cost specialties like cardiology and oncology [52] Question: Can you provide more color on new partnerships and expected PMPM? - Management provided revenue expectations for new partnerships, including Blue Cross and Bright Health, with varying PMPMs [55][56] Question: What is the status of the Cook County RFP? - Management expects a decision on the Cook County RFP in late Q1 [58] Question: Can you elaborate on the North Carolina primary care arrangement? - Management confirmed a capitation model with risk included, indicating confidence in the margin profile [73] Question: How does Evolent guard against challenges in Medicare Advantage margins? - Management stated that their model is capital-light and has not seen spikes in claims costs [76]