Evolent Health (NYSE:EVH) reported fourth-quarter results that landed in the upper half of management’s guidance range, as leadership emphasized continued momentum across organic growth, profitability initiatives, and capital allocation discipline. Executives also laid out a 2026 outlook shaped by large new Performance Suite launches, contract structure changes, and a significant headwind from exchange membership declines tied to the “One Big Beautiful Bill.”
Fourth-quarter results and 2025 performance
For the fourth quarter of 2025, Evolent posted revenue of $469 million and Adjusted EBITDA of $37.8 million, which CFO John Johnson said exceeded the midpoint of guidance. On a full-year basis, and adjusting for the company’s ACO divestiture, management said baseline 2025 revenue would have been $1.7 billion and Adjusted EBITDA would have been approximately $141 million.
On the expense side, management said 2025 non-claims expenses (including non-claims cost of revenue and SG&A) totaled approximately $765 million for the year and $190 million in the quarter, with the quarterly level helped by cost initiatives and lower expense accruals.
2026 guidance: revenue growth with a back-half-weighted EBITDA ramp
Management forecast 2026 revenue of $2.4 billion to $2.6 billion (with CEO Seth Blackley citing $2.5 billion at the midpoint), representing approximately 30% growth at the midpoint. Adjusted EBITDA guidance was $110 million to $140 million (midpoint $125 million).
Executives said two major factors pressure 2026 Adjusted EBITDA, primarily in the first half of the year:
- New Performance Suite launches: 2026 launches are expected to generate approximately $900 million of 2026 revenue, with go-lives in Q1 and Q2. Management said this estimate rose from a prior $550 million projection due to membership shifts and expanded scope in one new contract, but was offset by membership losses at several legacy Performance Suite partners during open enrollment.
- Exchange-related declines: Management said the “One Big Beautiful Bill” eliminated approximately $40 million of contribution from expected exchange membership disenrollment and plan closures, noting one large customer’s exchange membership was down up to 60% and the next largest down about 40%.
CFO Johnson said EBITDA is expected to be 70% weighted to the back half of 2026, reflecting reserve dynamics and contract implementation timing. At the midpoint, the company expects $20 million of Adjusted EBITDA in Q1, with $10 million to $15 million sequential improvement per quarter in both Q3 and Q4. Blackley and Johnson both stated they expect a Q4 2026 run-rate Adjusted EBITDA above $150 million, though management also noted reserve reversals and contractual impacts can create differences between quarterly results and run-rate implications.
Oncology mix shift and contract model transition
A major theme of the call was the company’s increasing focus on oncology. Management said it expects approximately 65% of 2026 company revenue to come from oncology, up from 36% in 2025, with oncology described as the core growth driver. Blackley pointed to what the company views as substantial clinical variability in oncology prescribing patterns and said Evolent’s value proposition is engaging physicians and reducing variability while “guarantee[ing] the quality and cost benefits” for customers.
Management also provided an update on its move to the Enhanced Performance Suite contract model, which includes revenue rate adjustments for certain medical expense factors and MER corridors to limit downside. Blackley said roughly 90% of Performance Suite revenue is now under the enhanced model, with key customers retained and two major new customers signed under the structure in the past year. He reiterated the company’s expectation that enhanced model margins are around 10% versus 15% under the prior model, though management sees some opportunity to target higher margins in certain contracts depending on downside exposure trade-offs.
Looking longer term, management said it is targeting Performance Suite margins across the full book in a 7% to 10% range as it prioritizes predictability over maximum margin.
New business wins and pipeline commentary
Blackley disclosed that the large oncology partnership announced in November is with Highmark. Management said the partnership has since expanded to additional geographies and capabilities, is expected to go live on May 1, and is projected to contribute over $550 million of revenue in 2026 and over $800 million in 2027. The Highmark contract will be under the Enhanced Performance Suite model, similar to Aetna, according to management.
The company also said it launched its Performance Suite in oncology in an additional state with an existing national partner. Blackley reported strong retention, stating Evolent retained specialty TNS logos covering over 98% of 2025 revenue.
On the pipeline, Blackley said late-stage opportunities remain balanced between Performance Suite and Tech and Services. He added that the 2026 framework is “pretty well locked down,” and management does not expect to announce a new Performance Suite deal that creates incremental drag on 2026 results.
Cost actions, cash flow, and balance sheet
Management emphasized ongoing efficiency work, including AI and automation initiatives and a reduction in force announced a few weeks prior to the call. Blackley said the company slightly exceeded the previously communicated $20 million Q4 2025 annualized savings target. Johnson provided more detail, projecting 2026 non-claims expense base of approximately $675 million at the midpoint, a $90 million reduction from 2025 levels—about $40 million tied to the ECP divestiture and $50 million from efficiency initiatives.
On cash flow, management said cash flow from operations was $39 million in Q4, with year-end cash of $152 million. Evolent finished 2025 with net debt of $782 million, below the company’s expected range. Johnson noted this included a $15 million client overpayment that will be repaid and weigh on 2026 cash flow. For 2026, the company anticipates generating $10 million to $20 million in cash flow from operations after paying about $60 million in cash interest expense, and expects to invest $25 million to $30 million in software development and CapEx.
Addressing questions on liability management and discounted debt trading levels, management said it remains focused on execution and deleveraging, while noting it would evaluate opportunities that could add shareholder value against other liquidity considerations.
About Evolent Health (NYSE:EVH)
Evolent Health, Inc is a U.S.-based healthcare technology and services company that partners with health systems, physician organizations and health plans to design, build and operate value-based care programs. Headquartered in Arlington, Virginia, the company was founded in 2011 as a joint venture between TPG and the University of Pittsburgh Medical Center (UPMC). Evolent Health aims to help its clients transition from fee-for-service payment models to value-based care arrangements by leveraging its proprietary technology platforms and clinical expertise.
The company’s core offerings include care management solutions, population health analytics and clinical advisory services.
