second quarter of 2026
Filed Aug 6, 2026Evolent reported higher second-quarter revenue and a narrower GAAP net loss, while Adjusted EBITDA and Adjusted EBITDA margin declined and medical expense ratios increased; the company raised 2026 revenue guidance and tightened its Adjusted EBITDA range.
Revenue increased to $ 652,520 from $ 444,328 and net loss narrowed to $ (28,364) from $ (51,090), but Adjusted EBITDA declined to $ 28,050 from $ 37,547, Adjusted EBITDA margin declined to 4.3 % from 8.5 %, and the Medical Expense Ratio increased to 95.3 % from 80.0 %.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $ 652,520 | – | – |
| Cost of revenueGAAP | $ 571,684 | – | – |
| Selling, general and administrative expensesGAAP | $ 68,831 | – | – |
| Net loss attributable to common shareholders of Evolent Health, Inc.GAAP | $ (28,364) | – | – |
| Net loss marginGAAP | (4.3) % | – | – |
| Loss per share attributable to common shareholders of Evolent Health, Inc. Basic and dilutedGAAP | $ (0.25) | – | – |
| Adjusted cost of revenuenon-GAAP | $ 570,989 | – | – |
| Adjusted selling, general and administrative expensesnon-GAAP | $ 53,481 | – | – |
| Adjusted EBITDAnon-GAAP | $ 28,050 | – | – |
| Adjusted EBITDA marginnon-GAAP | 4.3 % | – | – |
| Adjusted income (loss) attributable to common shareholdersnon-GAAP | $ 2,226 | – | – |
| Adjusted income (loss) per share attributable to common shareholders: Basic and dilutednon-GAAP | $ 0.02 | – | – |
| Performance Suite Average Lives on Platformother | 6,715 | – | – |
| Specialty Technology and Services Suite Average Lives on Platformother | 75,641 | – | – |
| Administrative Services Average Lives on Platformother | 1,189 | – | – |
| Casesother | 12 | – | – |
| Average Unique Membersother | 39,956 | – | – |
| Performance Suite Average PMPM Feesother | $ 24.05 | – | – |
| Specialty Technology and Services Suite Average PMPM Feesother | 0.34 | – | – |
| Administrative Services Average PMPM Feesother | 13.46 | – | – |
| Revenue per Caseother | 3,608 | – | – |
| Medical Expense Ratioother | 95.3 % | – | – |
| Medical Expense Ratio excluding Evolent Care Partnersother | 95.3 % | – | – |
Full Year 2026 outlook
- Revenue$2.6 to $2.7 billion
- NoteAdjusted EBITDA: $120 to $135 million
- Notecash for capitalized software development: $25 million to $30 million
What drove it
- The Company stated that rising medical costs impacting health plans continue to drive robust demand for its complex specialty care solutions.
- The Company is preparing to launch an Oncology Performance Suite partnership with an existing advanced imaging client by December 2026, subject to certain regulatory approvals.
- The Oncology Performance Suite partnership will cover approximately 1.5 million lives across Medicaid and Medicare populations spread through 11 states and is expected to generate approximately $300 million in annualized revenue.
- An existing Specialty Technology & Services Suite regional Blues plan client signed an agreement to add new products and extend existing solutions to additional populations. Implementations are expected during the third and fourth quarters of this year.
- The Company expects annualized revenue from the expanded Specialty Technology & Services Suite contract to be less than $5 million.
- The Company expects 2027 revenue growth of over 25% compared to 2026, based on contracts in place today, upcoming launches scheduled, and strong continuing demand for its oncology solution.
- The Company expects the midpoint of its 2027 Adjusted EBITDA outlook to be at or above $150 million, driven by expected improved Performance Suite care margins and a strong focus on expense reductions.
Concerns
- Adjusted EBITDA decreased to $ 28,050 from $ 37,547 and Adjusted EBITDA margin declined to 4.3 % from 8.5 %.
- Medical Expense Ratio increased to 95.3 % from 80.0 %, while Medical Expense Ratio excluding Evolent Care Partners increased to 95.3 % from 84.9 %.
- Specialty Technology and Services Suite Average Lives on Platform declined to 75,641 from 77,019, Administrative Services Average Lives on Platform declined to 1,189 from 1,231, Cases declined to 12 from 13, and Average Unique Members declined to 39,956 from 40,201.
- The Company cited significant continued industry headwinds from Medicaid and other client specific membership attrition in its 2027 outlook commentary.
- The anticipated Oncology Performance Suite partnership launch is subject to certain regulatory approvals.
What to watch
- Launch timing by December 2026 and regulatory approvals for the Oncology Performance Suite partnership.
- Implementation timing during the third and fourth quarters of this year for the Specialty Technology & Services Suite client expansion.
- Performance Suite care margins and expense reductions cited as drivers of the 2027 Adjusted EBITDA outlook.
- Cash flow conversion and the Company's targeted debt reduction initiatives under evaluation.
- Medical costs impacting health plans and Medicaid and other client specific membership attrition.
Balance sheet and cash flow
- Total cash and cash equivalents was $115.7 million as of June 30, 2026.
- The Company expects to deploy $25 million to $30 million in cash for capitalized software development during 2026.
- The Company is evaluating targeted debt reduction initiatives.
Analysis
Evolent reported second-quarter revenue of $ 652,520, compared with $ 444,328 in the prior-year period. GAAP net loss attributable to common shareholders narrowed to $ (28,364) from $ (51,090), and net loss margin improved to (4.3) % from (11.5) %. Adjusted income attributable to common shareholders was $ 2,226, compared with adjusted loss attributable to common shareholders of $ (11,013), while adjusted diluted income per share was $ 0.02 compared with adjusted diluted loss per share of $ (0.10).
Profitability metrics were weaker on an adjusted EBITDA basis. Adjusted EBITDA was $ 28,050, compared with $ 37,547, and Adjusted EBITDA margin was 4.3 % compared with 8.5 %. Cost of revenue was $ 571,684 compared with $ 343,943, while the Medical Expense Ratio increased to 95.3 % from 80.0 %. The Medical Expense Ratio excluding Evolent Care Partners was also 95.3 %, compared with 84.9 %. These care-cost metrics are important because management expects improved Performance Suite care margins to support its 2027 Adjusted EBITDA outlook.
Operating metrics show a divergent mix. Performance Suite Average Lives on Platform increased to 6,715 from 6,490, and its Average PMPM Fees increased to $ 24.05 from $ 13.76. Specialty Technology and Services Suite Average Lives on Platform declined to 75,641 from 77,019 and its Average PMPM Fees declined to 0.34 from 0.35. Administrative Services Average Lives on Platform declined to 1,189 from 1,231 and its Average PMPM Fees declined to 13.46 from 15.13. Cases were 12 compared with 13, while Revenue per Case was 3,608 compared with 2,969.
The company raised full-year 2026 revenue guidance to $2.6 to $2.7 billion and tightened its Adjusted EBITDA range to $120 to $135 million. It also expects to deploy $25 million to $30 million in cash for capitalized software development during 2026. Total cash and cash equivalents was $115.7 million as of June 30, 2026. No capital-return activity was disclosed in the provided filing text.
Growth visibility is supported by two partnership announcements. The planned Oncology Performance Suite partnership is expected to cover approximately 1.5 million lives, launch by December 2026 subject to regulatory approvals, and generate approximately $300 million in annualized revenue. A Specialty Technology & Services Suite expansion is expected to be implemented during the third and fourth quarters of this year and generate annualized revenue of less than $5 million. Management's 2027 outlook calls for revenue growth of over 25% compared to 2026 and midpoint Adjusted EBITDA at or above $150 million, but it also cites significant continued industry headwinds from Medicaid and other client specific membership attrition.
Management, verbatim
We believe our results for the second quarter of 2026, our updated 2026 guidance and our 2027 outlook all demonstrate that Evolent is delivering strong growth, profitability and cash flow. We are confident in our emerging AI-led operational model that we believe allows us to deliver excellent client and clinical outcomes, while being highly disciplined with our cost structure.
Seth Blackley, Co-Founder and Chief Executive Officer of Evolent
Looking ahead to 2027, based on contracts in place today, upcoming launches scheduled and the strong continuing demand for our oncology solution, we expect to see revenue growth of over 25% compared to 2026. We expect the midpoint of our 2027 Adjusted EBITDA outlook will be at or above $150 million driven by expected improved Performance Suite care margins and a strong focus on expense reductions, despite significant continued industry headwinds from Medicaid and other client specific membership attrition. We also expect improved cash flow conversion, which, together with targeted debt reduction initiatives we are currently evaluating, we believe provides a clear path to addressing our capital structure and enhancing financial flexibility.
Mario Ramos, Chief Financial Officer of Evolent
Not in the filing
stated, not guessed- Prior-quarter comparisons for all reported quarterly metrics.
- Reported revenue by business segment or product suite.
- Gross profit or gross margin.
- GAAP operating income (loss) and operating margin.
- Operating cash flow.
- Free cash flow.
- Debt balance and debt maturity details.
- Share repurchases, dividends, or other reported capital-return activity.
- Prior full-year 2026 guidance needed to compare the updated guidance with prior guidance.
- Quantified 2027 revenue guidance range.
- Quantified 2027 Adjusted EBITDA guidance range beyond the statement that the midpoint will be at or above $150 million.
- Guidance for gross margin, operating expenses, and tax rate.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.