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What changed in Evolent Health, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Evolent Health, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+343 added−439 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-21)

Top changes in Evolent Health, Inc.'s 2025 10-K

343 paragraphs added · 439 removed · 239 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

61 edited+11 added−36 removed131 unchanged
Biggest changeWe are rigorous in our selection process to facilitate alignment with our company values and core needs of teams. And finally, we conduct background checks and have a comprehensive onboarding program. Employee Compensation and Incentives Our Total Rewards philosophy is dedicated to attracting, growing, and retaining top talent to drive company success and nurture our culture.
Biggest changeThis includes in-bound (job postings/ referrals) and outbound (outreach to passive talent) strategies aimed at casting a wide net to engage the best talent available to us. We are rigorous in our selection process to facilitate alignment with our company values and core needs of teams. And finally, we conduct background checks and have a comprehensive onboarding program.
We make available, free of charge, on or through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 15
We make available, free of charge, on or through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 13
Highlights of the capabilities of Identifi® include the following: • Data and integration services: Data from disparate sources, such as EMRs, and lab and pharmacy data, is collected, assembled, integrated and maintained to provide health care professionals with a holistic view of the patient. • Clinical and business content: Clinical and business content is applied to the integrated data to create actionable information to optimize clinical and financial performance. • EMR integration: Data and clinical insights from Identifi® are fed back into partner EMRs to improve both provider and patient satisfaction, create workflow efficiencies, promote clinical documentation and coding and provide clinical support at the point-of-care. 3 • Applications: A suite of cloud-based applications manages the clinical, financial and operational aspects of the value-based model.
Highlights of the capabilities of Identifi® include the following: • Data and integration services: Data from disparate sources, such as EMRs, and lab and pharmacy data, is collected, assembled, integrated and maintained to provide health care professionals with a holistic view of the patient. • Clinical and business content: Clinical and business content is applied to the integrated data to create actionable information to optimize clinical and financial performance. • EMR integration: Data and clinical insights from Identifi® are fed back into partner EMRs to improve both provider and patient satisfaction, create workflow efficiencies, promote clinical documentation and coding and provide clinical support at the point-of-care. • Applications: A suite of cloud-based applications manages the clinical, financial and operational aspects of the value-based model.
Our partners’ health plans generally will be covered entities, and, as their business associate, they require us to contractually comply with certain aspects of these standards by entering into requisite business associate agreements. HHS has recently proposed updating the HIPAA Security Rule in an effort to strengthen the cybersecurity requirements that protect electronic 11 Protected Health Information.
Our partners’ health plans generally will be covered entities, and, as their business associate, they require us to contractually comply with certain aspects of these standards by entering into requisite business associate agreements. HHS has recently proposed updating the HIPAA Security Rule in an effort to strengthen the cybersecurity requirements that protect electronic Protected Health Information.
In addition, we have an active employee listening strategy, including employee surveys, personal impact days to promote social improvement engagement, an employee relief fund, holistic wellness initiatives during the year that include yoga, cooking sessions, meditation, and wellness challenges. 13 Culture of Inclusion Evolent supports inclusion efforts and is committed to non-discrimination practices.
In addition, we have an active employee listening strategy, including employee surveys, personal impact days to promote social improvement engagement, an employee relief fund, holistic wellness initiatives during the year that include yoga, cooking sessions, meditation, and wellness challenges. Culture of Inclusion Evolent supports inclusion efforts and is committed to non-discrimination practices.
We anticipate the manner with which we partner and share in risk with health care providers will likely continue to evolve over time given the still nascent and fragmented nature of value-based care. 6 Expand Offerings to Meet Evolving Market Needs There are multiple business offerings that our partners may require to operate in a value-based care environment that we do not currently provide, including but not limited to: • physician employment; • PBM expansion to include additional specialty pharmacy management capabilities; • additional Specialty Technology and Services Suite lines of business beyond oncology, cardiology and musculoskeletal, including kidney and fetal-maternal medicine care; • on-site or specialty clinic services; and • consumer engagement and digital outreach.
We anticipate the manner with which we partner and share in risk with health care providers will likely continue to evolve over time given the still nascent and fragmented nature of value-based care. 5 Expand Offerings to Meet Evolving Market Needs There are multiple business offerings that our partners may require to operate in a value-based care environment that we do not currently provide, including but not limited to: • physician employment; • PBM expansion to include additional specialty pharmacy management capabilities; • additional Specialty Technology and Services Suite lines of business beyond oncology, cardiology and musculoskeletal, including kidney and fetal-maternal medicine care; • on-site or specialty clinic services; and • consumer engagement and digital outreach.
Blackley holds a Bachelor of Arts degree in business from The University of North Carolina at Chapel Hill, and a Master of Business Administration from Harvard Business School. Dan McCarthy has served as our President since September 2022. Prior to his role as President, Mr.
Blackley holds a Bachelor of Arts degree in business from The University of North Carolina at Chapel Hill, and a Master of Business Administration from Harvard Business School. 12 Dan McCarthy has served as our President since September 2022. Prior to his role as President, Mr.
Depth of Market Experience With experience across Medicare, Medicaid and commercial markets, our depth and variety of expertise allows us to serve a variety of customer types in the broad health care marketplace including health systems, providers, physicians, health plans, ACOs, delegated arrangements and other payers.
Depth of Market Experience With experience across Medicare, Medicaid and commercial markets, our depth and variety of expertise allows us to serve a variety of customer types in the broad health care marketplace including health systems, providers, physicians, health plans, delegated arrangements and other payers.
If one or more of our competitors or potential 8 competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively and could harm our business, financial condition and results of operations.
If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively and could harm our business, financial condition and results of operations.
The federal civil False Claims Act imposes liability on any person or entity who, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal health care program.
The federal civil False Claims Act imposes liability on any person or entity who, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a 9 federal health care program.
For example, after a specified period, certain of our contracts are terminable for convenience by our partners after a notice period has passed and, in certain cases, partners would be required to pay us a termination fee.
For example, after a specified period, certain of our contracts are terminable for convenience by our partners after a notice period has passed and, in certain cases, partners would be required to pay us a termination 6 fee.
Government Regulation Our business is subject to extensive, complex and rapidly evolving federal and state laws and regulations. Various federal and state agencies have discretion to issue regulations and interpret and enforce health care laws.
Government Regulation 7 Our business is subject to extensive, complex and rapidly evolving federal and state laws and regulations. Various federal and state agencies have discretion to issue regulations and interpret and enforce health care laws.
Risk Factors - Risks relating to Data Protection, Privacy, Cybersecurity, Intellectual Property and Technology.” Research and Development Our research and development expenditures primarily consist of our strategic investment in enhancing the functionality and usability of our software, Identifi® and developing programs and processes to maximize care delivery efficiency and effectiveness.
Risk Factors - Risks relating to Data Protection, Privacy, Cybersecurity, Intellectual Property and Technology.” Research and Development Our research and development expenditures primarily consist of our strategic investment in enhancing the functionality and usability of our software platforms and developing programs and processes to maximize care delivery efficiency and effectiveness.
The configurable nature and broad capabilities of Identifi® help enhance the benefits our partners receive from our services and increase the effectiveness of our partners’ existing technology architecture. In addition, Identifi® provides support and value to our specialty care management services and total cost of care management customers in a limited fashion.
The configurable nature and broad capabilities of Identifi® help enhance the benefits our partners receive from our services and increase the effectiveness of our partners’ existing technology architecture. In addition, Identifi® provides support and value to our specialty care management services customers in a limited fashion.
An emerging trend is intensified scrutiny by state and federal authorities with respect to the use of AI, particularly any AI systems used in utilization management. At least 40 states introduced or enacted AI legislation in 2024, more than half of which touching upon health care, and we see this trend continuing in 2025.
An emerging trend is intensified scrutiny by state and federal authorities with respect to the use of AI, particularly any AI systems used in utilization management. At least 40 states introduced or enacted AI legislation in 2024, more than half of which touching upon health care, and we saw this trend in 2025.
CMS-0057-F further imposes stricter medical necessity decision timeframes on federal managed care programs, effective CY 2026, as well as complex technical interface requirements, effective CY 2027, for Medicare, Medicaid, the Children’s Health Insurance Program (“CHIP”), and Qualified Health Plans (“QHPs”) offered on the ACA Federally Facilitated Exchange.
CMS-0057-F further imposes stricter medical necessity decision timeframes on federal managed care programs, effective January 1, 2026, as well as complex technical interface requirements, effective January 1, 2027, for Medicare, Medicaid, the Children’s Health Insurance Program (“CHIP”), and Qualified Health Plans (“QHPs”) offered on the ACA Federally Facilitated Exchange.
We leverage a custom workflow platform, CareProTM, as part of our Specialty Technology and Services Suite, to provide clinical decision support and manage providers to high-quality care, while aiming to achieve significant cost savings. Our technology consists of a clinical decision support portal that provides oversight of individual treatment plans for pathway adherence.
We leverage custom workflow platforms as part of our Specialty Technology and Services Suite, to provide clinical decision support and manage providers to high-quality care, while aiming to achieve significant cost savings. Our technology consists of a clinical decision support portal that provides oversight of individual treatment plans for pathway adherence.
While they regularly contain year-to-year renewal provisions, we cannot assure you any or all of these contracts will be renewed in any particular year as these contracts may be immediately terminated with cause and many of our specialty contracts, following an initial term, are terminable without cause by the customer or Evolent either upon the giving of requisite notice and the passage of a specified period of time (typically between 30 and 180 days) or upon the occurrence of other specified events. 7 The revenue from our contracts is not guaranteed.
While they regularly contain year-to-year renewal provisions, we cannot assure you any or all of these contracts will be renewed in any particular year as these contracts may be immediately terminated with cause and many of our specialty contracts, following an initial term, are terminable without cause by the customer or Evolent either upon the giving of requisite notice and the passage of a specified period of time (typically between 30 and 180 days) or upon the occurrence of other specified events.
Other health plan related services include sales and marketing, product development, actuarial, and regulatory and compliance. • Pharmacy benefit management : Our team of professionals support the prescription drug component of providers’ plan offerings and bring national buying power and dedicated resources that are tightly integrated with the care delivery model.
Other health plan related services include sales and marketing, product development, actuarial, and regulatory and compliance. • Pharmacy benefit management : Our team of professionals supports the prescription drug component of providers’ plan offerings and brings national buying power and dedicated resources that are tightly integrated with the care delivery model.
Although we have long-term contracts with many partners, these contracts may be terminated before their terms expire for various reasons, such as changes in the regulatory landscape and poor performance by us, subject to certain conditions, amongst others.
The revenue from our contracts is not guaranteed. Although we have long-term contracts with many partners, these contracts may be terminated before their terms expire for various reasons, such as changes in the regulatory landscape and poor performance by us, subject to certain conditions, amongst others.
Although we monitor our compliance with the service levels to determine whether a refund will be provided and record an estimate of these refunds, we cannot assure you that our estimates will be accurate.
Although we monitor our compliance with the service levels to determine whether a refund will be provided and record an estimate of these refunds, we cannot assure you that our estimates will reflect actual results in the future.
We believe our payer clients will benefit from a platform offering a broader set of specialty services in order to avoid the inefficiencies of vendor fragmentation, and we believe they prefer fewer vendors that may provide more consistent services to their membership over time.
Differentiated Offering by Performing More Services Utilizing An Integrated Strategy We believe our payer clients benefit from a platform offering a broader set of specialty services in order to avoid the inefficiencies of vendor fragmentation, and we believe they prefer fewer vendors that may provide more consistent services to their membership over time.
Our President, Dan McCarthy, served as the New Century Health’s Chief Executive Officer since 2019 and held multiple leadership roles within Evolent since joining the Company in 2014. Prior to joining the Company, Mr. McCarthy was a leader at McKinsey & Company’s healthcare practice.
Our President, Dan McCarthy, served as the New Century Health’s Chief Executive Officer since 2019 and held multiple leadership roles within Evolent since joining the Company in 2014. Prior to joining the Company, Mr. McCarthy was a leader at McKinsey & Company’s healthcare practice. Our Chief Financial Officer, Mario Ramos, became Chief Financial Officer on January 1, 2026. Mr.
Information about our Executive Officers Our executive officers as of February 20, 2025, were as follows: Name Age Position Seth Blackley 46 Chief Executive Officer Dan McCarthy 40 President John Johnson 41 Chief Financial Officer Emily Rafferty 42 Chief Operating Officer Jonathan Weinberg 57 General Counsel Aammaad Shams 41 Chief Accounting Officer Seth Blackley is our co-founder and has served as our Chief Executive Officer since October 2020 and served as our President from August 2011 until his promotion.
Information about our Executive Officers Our executive officers as of February 24, 2026, were as follows: Name Age Position Seth Blackley 46 Chief Executive Officer Dan McCarthy 40 President Mario Ramos 54 Chief Financial Officer Jonathan Weinberg 57 General Counsel Aammaad Shams 41 Chief Accounting Officer Seth Blackley is our co-founder and has served as our Chief Executive Officer since October 2020 and served as our President from August 2011 until his promotion.
We rely on shared values and a leadership framework to create an environment with clear expectations and where everyone has the opportunity to learn, develop and grow. Employee Well-Being Our approach to employee well-being reflects the spirit of our mission to change the health of the nation.
These resources are available to all employees through our online learning center. We rely on shared values and a leadership framework to create an environment with clear expectations and where everyone has the opportunity to learn, develop and grow. Employee Well-Being Our approach to employee well-being reflects the spirit of our mission to change the health of the nation.
Revenue from our Performance Suite includes services provided through capitation arrangements where we assume responsibility for the cost of medical claims under our scope. This revenue is derived from arrangements under our specialty care management solution and our total cost of care management solution.
Revenue from our Performance Suite includes revenue from our specialty care management solution provided through capitation arrangements, where we assume responsibility for the cost of medical claims under our scope. Administrative Services revenue is derived from recurring multi-year platform and operations contracts under our administrative services solution.
We also capitalize software development costs related to Identifi® and CarePro TM . Human Capital Management We believe our people differentiate our business and power our mission. As of December 31, 2024, we had approximately 4,500 global employees. None of our employees are represented by a labor union, and we are not a party to any collective bargaining agreements.
We also capitalize software development costs related to our software platforms. Human Capital Management We believe our people differentiate our business and power our mission. As of February 16, 2026, we had approximately 4,200 global employees. None of our employees are represented by a labor union, and we are not a party to any collective bargaining agreements.
Our platform integrates clinical analytics and protocols, pharmacy management, physician engagement, network management and claims payment to drive improved outcomes for partners. 5 We believe we are creating scaled benefits for our partners in areas such as data analytics, administrative services and care management.
Our platform integrates clinical analytics and protocols, pharmacy management, physician engagement, network management and claims payment to drive improved outcomes for partners. 4 We believe we are creating scaled benefits for our partners in areas such as data analytics, administrative services and care management. We expect our technologies to enable us to deliver increasing levels of efficiency to our partners.
Today we focus on the oncology, cardiology, and musculoskeletal markets, supported by diagnostics like radiology and genetic testing, with the objective of helping providers and payers deliver higher quality, more affordable care.
Since then, we have continued to invest in the solution to broaden, deepen, and scale its capabilities. Today we focus on the oncology, cardiology, and musculoskeletal markets, supported by diagnostics like radiology and genetic testing, with the objective of helping providers and payers deliver higher quality, more affordable care.
We also design business models that reduce the risk that any such arrangements might be viewed as abusive and trigger Anti-Kickback Statute claims. 10 In addition to these health care laws and regulations, we are subject to various other laws and regulations, including, among others, other aspects of state insurance laws, the Stark Law relating to self-referrals, the whistleblower provisions of the False Claims Act, anti-kickback laws, antitrust laws and the privacy and data protection laws.
In addition to these health care laws and regulations, we are subject to various other laws and regulations, including, among others, other aspects of state insurance laws, the Stark Law relating to self-referrals, the whistleblower provisions of the False Claims Act, anti-kickback laws, antitrust laws and the privacy and data protection laws.
We focus on the following areas: • Talent Attraction, Selection, and Hiring • Employee Compensation and Incentives • Employee Training and Career Development • Employee Well Being • Culture of Inclusion 12 Talent Attraction, Selection, and Hiring We seek to source the right talent by looking at both internal and external talent pools.
We focus on the following areas: • Talent Attraction, Selection, and Hiring • Employee Compensation and Incentives • Employee Training and Career Development • Employee Well Being • Culture of Inclusion Talent Attraction, Selection, and Hiring We seek to source the right talent by looking at both internal and external talent pools. 11 We make key investments in tools and resources to help engage and attract talent through modern, and data-driven recruitment practices.
We believe that we have a responsibility to support our people’s health and well-being. We provide our employees with benefits including medical insurance, dental, vision, paid time off, and 401(k) plan with company match for eligible employees. In addition, we offer fertility support, bariatric surgery, diabetes, and hypertension program offerings, as well as 100% paid pregnancy leave and parental leave.
We believe that we have a responsibility to support our people’s health and well-being. We provide our employees with benefits including medical insurance, dental, vision, paid time off, and 401(k) plan with company match for eligible employees at our discretion.
We expect to grow with current partners as they increase membership in their existing operations, through expanding the number of services we provide to our existing partners, by adding new partners and by capturing value through risk-sharing arrangements.
We expect to grow with current partners as they increase membership in their existing operations, 3 through expanding the number of services we provide to our existing partners, by adding new partners and by capturing value through risk-sharing arrangements. Competitive Strengths We believe we are well-positioned to benefit from the transformations occurring in health care payment and delivery described above.
In addition to federal regulations issued under HIPAA, several states have enacted privacy and security statutes or regulations, which we refer to as state privacy laws, that govern the use and disclosure of a person’s medical information or records and, in some cases, are more stringent than those issued under HIPAA.
If passed, the new Security Rule would require us to enhance our information security infrastructure, update certain business associate agreements, and may subject us to additional penalties in the event of a violation. 10 In addition to federal regulations issued under HIPAA, several states have enacted privacy and security statutes or regulations, which we refer to as state privacy laws, that govern the use and disclosure of a person’s medical information or records and, in some cases, are more stringent than those issued under HIPAA.
We completed our IPO in June 2015 and our Class A common stock is listed on the NYSE under the symbol “EVH”.
Evolent Health, Inc., the registrant, was incorporated in the State of Delaware in December 2014. We completed our IPO in June 2015 and our Class A common stock is listed on the NYSE under the symbol “EVH”.
We believe our solutions resonate with potential partners seeking proven solutions that work with providers in a manner that attempts to minimize friction and foster a care team approach.
Provider-Heritage Brand Identity We believe our provider-heritage brand identity and origins differentiate us from our competitors in the value-based care services area. We believe our solutions resonate with potential partners seeking proven solutions that work with providers in a manner that attempts to minimize friction and foster a care team approach.
Also included in our specialty care management services solution are certain services billed on a per-case basis and presented as Cases.
Generally, for our Performance Suite, Specialty Technology and Services Suite and Administrative Services revenue, we are paid a fixed fee per member per month. Also included in our specialty care management services solution are certain services billed on a per-case basis and presented as Cases.
Medicare Advantage Organization (“MAOs”) utilization management practices have been the focus of a 2022 report by the Department of Health and Human Services Office of Inspector General as well as new final rules by (CMS-4201-F and CMS-0057-F). CMS-4201-F, effective calendar year 2024, imposes several requirements on MAOs with respect to their use of prior authorization.
Medicare Advantage Organization (“MAOs”) utilization management practices have been the focus of a 2022 report by the Department of Health and Human Services Office of Inspector General as well as new final rules published in 2024 Medicare Advantage and Part D Final Rule (“CMS-4201-F”) and CMS Interoperability and Prior Authorization Final Rule (“CMS-0057-F”).
We cannot assure you as to the ultimate content, timing, or effect of any changes, nor is it possible at this time to estimate the impact 9 of any such potential legislation or changes. Health care reform has resulted in profound changes to the individual health insurance market and our business, and we expect these changes to continue.
We cannot assure you as to the ultimate content, timing, or effect of any changes, nor is it possible at this time to estimate the impact of any such potential legislation or changes.
Specialty Care Management Services Solution The foundation for our specialty care management services solution was our acquisition in 2018 of New Century Health, a national leader in managing specialty care for Medicare members under performance-based and technology and services arrangements. Since then, we have continued to invest in the solution to broaden, deepen, and scale its capabilities.
The Company previously recorded its operations from Evolent Care Partners in its total cost of care management solution. Specialty Care Management Services Solution The foundation for our specialty care management services solution was our acquisition in 2018 of New Century Health, a national leader in managing specialty care for Medicare members under performance-based and technology and services arrangements.
McCarthy holds an M.B.A. from Harvard Business School, where he was a Goldsmith Fellow, and received a B.A. from Georgetown University. John Johnson has served as our Chief Financial Officer since July 2019. Prior to his role as Chief Financial Officer, Mr. Johnson was acting Chief Financial Officer for New Century Health from March 2019 to June 2019.
McCarthy holds an M.B.A. from Harvard Business School, where he was a Goldsmith Fellow, and received a B.A. from Georgetown University. Mario Ramos has served as our Chief Financial Officer since January 2026. Mr.
Shams was the Company’s Controller from June 2020 to August 2022 and Assistant Corporate Controller from January 2020 to June 2020. Mr. Shams also served as Senior Director of Technical Accounting from April 2018 to June 2019 and Senior Director of Accounting from July 2019 until December 2019. Prior to joining the Company, Mr.
Shams also served as Senior Director of Technical Accounting from April 2018 to June 2019 and Senior Director of Accounting from July 2019 until December 2019. Prior to joining the Company, Mr. Shams was a Director in KPMG, LLP’s Accounting Advisory Services practice from June 2015 until March 2018. Mr.
All executive officers serve until their successors are duly chosen or elected and qualified, except in the case of earlier death, resignation or removal. Corporate Information Evolent began business operations in August 2011. Evolent Health, Inc., the registrant, was incorporated in the State of Delaware in December 2014.
Shams is a Certified Public Accountant in the Commonwealth of Virginia. Our executive officers are elected annually by our Board of Directors. All executive officers serve until their successors are duly chosen or elected and qualified, except in the case of earlier death, resignation or removal. Corporate Information Evolent began business operations in August 2011.
From time to time, we package our solutions under various go-to-market brand names to create product differentiation. Our partners may engage us to provide one, or multiple types of solutions, depending on their specific needs.
Our partners may engage us to provide one, or multiple types of solutions, depending on their specific needs.
In addition, we provide comprehensive quality management for oncology and cardiology patients from diagnosis through advance care planning services as well as identifying high quality, lowest cost of care for outpatient orthopedic surgeries. 1 We provide a differentiated approach by (i) assembling networks of high-performance providers, (ii) designing evidence-based clinical pathways and (iii) deploying proprietary specialty care management technology.
In addition, we provide comprehensive quality management for oncology and cardiology patients from diagnosis through advance care planning services as well as identifying high quality, lowest cost of care for outpatient orthopedic surgeries.
Our comprehensive health plan administration services help regional and national payers and providers assemble the infrastructure required to operate, manage and capitalize on a variety of financial and administrative management services, such as health plan services, risk management, analytics and reporting and leadership and management.
We have invested in our primary platform to facilitate value-based care business models for health plans called Identifi® along with our clinical solutions to offer an integrated value-based care platform. 2 Our comprehensive health plan administration services help regional and national payers and providers assemble the infrastructure required to operate, manage and capitalize on a variety of financial and administrative management services, such as health plan services, risk management, analytics and reporting and leadership and management.
Our unique position allows for the sharing of data across multiple payers and care delivery integration regardless of payer, which we believe is not possible with traditional, payer-siloed solutions.
Our analytical and clinical solutions are rooted in our experience in growing a provider-led, integrated delivery network over the 15 -years prior to the founding of Evolent Health, Inc. Our unique position allows for the sharing of data across multiple payers and care delivery integration regardless of payer, which we believe is not possible with traditional, payer-siloed solutions.
From time to time, we may also pursue acquisition and investment opportunities of businesses related to services we currently provide or that are complementary to our technical capabilities. For example, we completed recent acquisitions described in Part I - Item 1.
From time to time, we may also pursue acquisition and investment opportunities of businesses related to services we currently provide or that are complementary to our technical capabilities. As we grow, from time to time, we pursue and consummate opportunities to dispose of non-core businesses and assets.
We have one operating segment and one reportable segment as our CODM, who is our Chief Executive Officer, reviews financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. Our Solutions We have three primary solutions: (i) specialty care management services, (ii) total cost of care management and (iii) administrative services.
We have one operating segment and one reportable segment as our chief operating decision maker (“CODM”), who is our Chief Executive Officer, assesses the performance of our operations, develops strategy and reviews financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources.
Through the technological and clinical integration, we achieve, our solutions are delivered as engrained components of our partners’ core operations rather than as add-on solutions. Administrative Services Our administrative services solution includes our integrated value-based care platform designed to help our customers manage and administer patient health in a more cost-effective manner.
Administrative Services Our administrative services solution includes our integrated value-based care platform designed to help our customers manage and administer patient health in a more cost-effective manner.
(i) Assembling high-performance provider networks We develop high-performance provider networks with tools, capabilities and incentives to align and support physicians and other healthcare providers. We develop and manage comprehensive specialty networks, provide physician engagement and support and identify provider financial incentive alignment.
We develop and manage comprehensive specialty networks, provide physician engagement and support and identify provider financial incentive alignment.
We support a culture of growth and development through engaging and relevant resources including Evolent-exclusive live learnings and curated, on-demand content through LinkedIn Learning. These resources are available to all employees through our online learning center.
We have established a global talent management approach to invest in our employees’ ongoing learning and to identify and develop talent that accelerates our business. We support a culture of growth and development through engaging and relevant resources including Evolent-exclusive live learnings and curated, on-demand content through LinkedIn Learning.
If not, we consider the factors that regulatory authorities are likely to consider in attempting to identify the intent behind such arrangements.
If not, we consider the factors that regulatory authorities are likely to consider in attempting to identify the intent behind such arrangements. We also design business models that reduce the risk that any such arrangements might be viewed as abusive and trigger Anti-Kickback Statute claims.
Employees and their families can access mental health resources as part of their benefits, covering a spectrum of mental wellness needs.
In addition, we offer fertility support, bariatric surgery, diabetes, and hypertension program offerings, as well as 100% paid pregnancy leave and parental leave. Employees and their families can access mental health resources as part of their benefits, covering a spectrum of mental wellness needs.
(Aetna Inc.) from 1999 to 2013, and oversaw the day-to-day management of the legal department as well as the company’s risk management department. Prior to joining Coventry, Mr. Weinberg was an associate and then partner at Epstein Becker and Green, P.C. in the firm’s health care practice, specializing in managed care issues from 1992 to 2002. Mr.
Weinberg was a Senior Vice President and Deputy General Counsel for Coventry Health Care, Inc. (Aetna Inc.) from 1999 to 2013, and oversaw the day-to-day management of the legal department as well as the company’s risk management department. Prior to joining Coventry, Mr.
Weinberg received his Bachelor of Arts in history and political science from the University of Wisconsin-Madison and his juris doctorate from the Catholic University of America. Aammaad Shams has served as our Chief Accounting Officer since August 2022. Prior to his current role, Mr.
Aammaad Shams has served as our Chief Accounting Officer since August 2022. Prior to his current role, Mr. Shams was the Company’s Controller from June 2020 to August 2022 and Assistant Corporate Controller from January 2020 to June 2020. Mr.
Additionally, we provide benefits beyond salary, such as time off, leave programs, family support, life and disability insurance, and remote-work options, all meeting or exceeding market standards. By sharing success, we recognize that our talented team sets us apart in the marketplace and helps us fulfill our mission.
Our incentive programs are designed to achieve short- and long-term goals, foster accountability, and attract skilled staff by aligning interests of leadership and stockholders. Additionally, we provide benefits beyond salary, such as time off, leave programs, family support, life and disability insurance, and remote-work options, all meeting or exceeding market standards.
Employee Growth and Development We believe the continued growth and development of our talent is critical to maintaining our success and growth as a company. We have established a global talent management approach to invest in our employees’ ongoing learning and to identify and develop talent that accelerates our business.
By sharing success, we recognize that our talented team sets us apart in the marketplace and helps us fulfill our mission. Employee Growth and Development We believe the continued growth and development of our talent is critical to maintaining our success and growth as a company.
Rafferty holds a B.B.A. in economics and management from University of Iowa and completed the Executive Development Program at the Wharton School of the University of Pennsylvania. Jonathan Weinberg has served as our General Counsel since January 2014. Prior to joining Evolent, Mr. Weinberg was a Senior Vice President and Deputy General Counsel for Coventry Health Care, Inc.
Prior to joining CVS Health, Mr. Ramos held investment banking roles at a number of financial institutions. Mr. Ramos holds an MBA from the College of William and Mary and a B.A. in Economics from the University of Richmond. Jonathan Weinberg has served as our General Counsel since January 2014. Prior to joining Evolent, Mr.
Medicaid and exchange enrollment is impacted, and may fluctuate, based on a variety of factors.
Health care reform has resulted in profound changes to the individual health insurance market and our business, and we expect these changes to continue. 8 Medicaid and exchange enrollment is impacted, and may fluctuate, based on a variety of factors.
We offer comprehensive benefits and competitive pay, including leading medical, dental, prescription, and 401(k) plans, along with market-competitive salaries for strong performance. Our incentive programs are designed to achieve short- and long-term goals, foster accountability, and attract skilled staff by aligning interests of leadership and stockholders.
Employee Compensation and Incentives Our Total Rewards philosophy is dedicated to attracting, growing, and retaining top talent to drive company success and nurture our culture. We offer comprehensive benefits and competitive pay, including leading medical, dental, prescription, and 401(k) plans at our discretion, along with market-competitive salaries for strong performance.
Removed
In October 2018, we acquired New Century Health, a national leader in managing specialty care for Medicare, commercial and Medicaid members under performance-based arrangements, focused primarily on oncology and cardiovascular care, initiating Evolent’s current primary strategy to pursue solutions for managing high prevalence, complex specialty care.
Added
Our acquisitions have been focused on companies with extensive experience assisting customers in managing the large and complex specialties of oncology, cardiology, radiology, musculoskeletal, physical medicine, and genetics care.
Removed
To add to our capabilities, in October 2021, we acquired Vital Decisions, a leading provider of technology-enabled advance care planning services. In August 2022, we acquired IPG, a leader in providing surgical management solutions for musculoskeletal conditions.
Added
Our Solutions The majority of our revenues derive from our primary solution, Specialty Care Management Services, however we also offer additional administrative services to our customers. From time to time, we package our solutions under various go-to-market brand names to create product differentiation.
Removed
In January 2023, we acquired NIA, a specialty benefit management organization that focuses on managing cost and quality in the areas of radiology, musculoskeletal, physical medicine and genetics.
Added
During the third quarter, the Company entered into a Stock Purchase Agreement (the “ECP Purchase Agreement”) pursuant to which the Company agreed to sell all of the outstanding shares of capital stock of Evolent Care Partners, subject to customary closing purchase price adjustments. The Company consummated the transaction on December 5, 2025.
Removed
In August 2024, we acquired certain assets of Machinify, Inc. and the exclusive, perpetual and royalty-free license of Machinify Auth, a software platform that leverages advances in artificial intelligence (“Machinify”), with the goal of increasing the clinical quantity, speed and consistency of the clinical reviews of specialty conditions.
Added
We provide a differentiated approach by (i) assembling networks of high-performance providers, (ii) designing evidence-based clinical pathways and (iii) deploying proprietary specialty care management technology. 1 (i) Assembling high-performance provider networks We develop high-performance provider networks with tools, capabilities and incentives to align and support physicians and other healthcare providers.
Removed
The Company made organizational changes, including re-evaluating its reportable segments, as a result of growth in our value-based specialty care business, both organically and through acquisitions.
Added
Oncology, cardiology, musculoskeletal conditions, and advanced imaging, four of our key specialties, typically account for large portions of our customers’ specialty medical expense. By combining these offerings into one integrated delivery model, we believe we distinguish our services from others in the marketplace to provide better service to our customers and their members.
Removed
Effective during the three months ended March 31, 2023, the Company changed its reportable segments to reflect changes in the way its chief operating decision maker (“CODM”) evaluates the performance of its operations, develops strategy and allocates capital resources. Specifically, the Company collapsed its previous two segments, Evolent Health Services and Clinical Solutions, into one segment.
Added
Ramos joins Evolent from WellBe Health where he was the Chief Financial Officer and previously served as Chief Financial Officer of CVS Caremark and Chief Operating Officer of CVS Health International.
Removed
Total Cost of Care Management Solution Our total cost of care management solution enables providers to manage populations they may be accountable for under value-based contracts with payers or ACO contracts with CMS.
Added
CMS-4201-F, effective calendar year 2024, imposes several requirements on MAOs with respect to their use of prior authorization.
Removed
This solution seeks to reduce the total cost of care for a given population by identifying and managing high-cost patients with targeted interventions managed and coordinated through primary care physicians.
Added
Comments to the Proposed Rule were due March 7, 2025.
Removed
The economic model of our total cost of care management solution is primarily performance-based, which we believe enhances our 2 ability to influence provider behavior by aligning our incentives with our partners. We use, and may continue to use, different go-to-market brand names for various solution packages, depending on the markets we seek to address.
Added
Ramos joined Evolent from WellBe Health where he served as Chief Financial Officer from October 2024 to October 2025 and helped guide the company through a period of significant expansion. From June 2022 through June 2024, Mr. Ramos served as the Chief Executive Officer of RWA Wealth Partners, from December 2021 through May 2022, Mr.
Removed
These go-to-market brand names include: (i) Value Based Services, wherein we support primarily health systems in their value-based operations and (ii) Evolent Care Partners, wherein we offer physicians the opportunity to join Evolent’s proprietary payer contracting vehicles, scaled risk pools and operating model.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

95 edited+23 added−87 removed328 unchanged
Biggest changeThese risks include, but are not limited to, the following: • the significant portion of revenue we derive from our largest partners, and the potential loss, termination or renegotiation of our relationship or contract with any significant partner, or multiple partners in the aggregate; • the increasing number of risk-sharing arrangements we enter into with our partners; • the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes; • our ability to accurately predict our exposure under performance-based contracts; • failure by our customers to provide us with accurate and timely information; • our ability to recover the upfront costs in our partner relationships and develop our partner relationships over time; • our ability to attract new partners and successfully capture new opportunities; • our ability to offer new and innovative products and services and our ability to keep pace with industry standards, technology and our partners’ needs; • our ability to maintain and enhance our reputation and brand recognition; • our dependency on our key personnel, and our ability to attract, hire, integrate and retain key personnel; • risks related to completed and future acquisitions, investments, alliances and joint ventures, which could divert management resources, result in unanticipated costs or dilute our stockholders; • our ability to effectively manage our growth and maintain an efficient cost structure; • our ability to partner with providers due to exclusivity provisions in our and some of our partner and founder contracts; • risks related to managing our offshore operations and cost reduction goals; • our ability to estimate the size of our target markets for our services; • consolidation in the health care industry; • competition which could limit our ability to maintain or expand market share within our industry; • risks related to audits by CMS and other governmental payers and actions, including whistleblower claims under the False Claims Act; • evolution of the health care regulatory and political framework; • restrictions on the manner in which we access personal data and penalties as a result of privacy and data protection laws; • data loss or corruption due to failures or errors in our systems and service disruptions at our data centers; • liabilities and reputational risks related to our ability to safeguard the security and privacy of confidential data; • our ability to obtain, maintain and enforce intellectual property rights and protect our trademarks and trade names, including from third parties alleging that we are infringing or violating their intellectual property rights; • our ability to protect the confidentiality of our trade secrets; • risks associated with our use of AI and machine learning models; • our use of “open-source” software; • our reliance on third parties and licensed technologies; • restrictions on our ability to use, disclose, de-identify or license data and to integrate third-party technologies; • our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our partners and operating our business; • material weaknesses in the future may impact our ability to conclude that our internal control over financial reporting is not effective and we may be unable to produce timely and accurate financial statements; • our ability to achieve profitability in the future; • the impact of additional goodwill and intangible asset impairments on our results of operations; • our obligations to make material payments to certain of our pre-IPO investors for certain tax benefits we may claim in the future; • our obligations to make payments under the tax receivables agreement that may be accelerated or may exceed the tax benefits we realize; • our ability to utilize benefits under the tax receivables agreement described herein; • the terms of agreements between us and certain of our pre-IPO investors may contain different terms than comparable agreement we may enter into with unaffiliated third parties; • Our inability to obtain financing may result in a reduction in the ownership of our stockholders; • the conditional conversion features, and changes in accounting treatment, of the 2025 Notes and the 2029 Notes (as defined below), which, if triggered, may adversely affect our financial condition and operating results; 16 • our ability to raise funds necessary to settle conversions of our notes in cash, to repurchase our notes for cash upon a fundamental change or to pay the redemption price for any notes we redeem; • interest rate risk and other restrictive covenants under the Credit Agreement (as defined below) and the terms of our Series A Preferred Stock; • our indebtedness, our ability to service our indebtedness, and our ability to obtain additional financing on favorable terms or at all; • our ability to service our debt and pay dividends on our Series A Preferred Stock; • interference with our ability to access the revolving credit facility under our Credit Agreement; • the potential volatility of our Class A common stock price; • our Series A Preferred Stock has rights, preferences and privileges that are not held by and are preferential to the rights of holders of our Class A common stock, and could in the future substantially dilute the ownership interest of holders of our Class A common stock; • the potential decline of our Class A common stock price if a substantial number of shares are sold or become available for sale, including those issuable upon conversion of our Series A Preferred Stock; • provisions in our certificate of incorporation and by-laws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us; • provisions in our certificate of incorporation which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees; • our intention not to pay cash dividends on our Class A common stock; • the impact of litigation proceedings, government inquiries, reviews, audits or investigations; • risks related to the failure of any bank in which we deposit our funds, which could reduce the amount of cash we have available to meet our cash commitments and make additional investments; • public health emergencies, epidemics, pandemics or contagious diseases; • the cost of compliance with sustainability or other ESG (as defined below) law and regulations; and • the impact of increasing inflationary pressures and rising consumer costs on our business.
Biggest changeThese risks include, but are not limited to, the following: • the significant portion of revenue we derive from our largest partners, and the potential loss, termination or renegotiation of our relationship or contract with any significant partner, or multiple partners in the aggregate; • the increasing number of risk-sharing arrangements we enter into with our partners; • the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes; • our ability to accurately predict our exposure under performance-based contracts; • failure by our customers to provide us with accurate and timely information; • our ability to recover the upfront costs in our partner relationships and develop our partner relationships over time; • our ability to attract new partners and successfully capture new opportunities; • our ability to offer new and innovative products and services and our ability to keep pace with industry standards, technology and our partners’ needs; • our ability to maintain and enhance our reputation and brand recognition; • our dependency on our key personnel, and our ability to attract, hire, integrate and retain key personnel; • risks related to completed and future acquisitions, investments, alliances and joint ventures, which could divert management resources, result in unanticipated costs or dilute our stockholders; • our ability to effectively manage our growth and maintain an efficient cost structure; • risks related to managing our offshore operations and cost reduction goals; • our ability to estimate the size of our target markets for our services; • consolidation in the health care industry; • competition which could limit our ability to maintain or expand market share within our industry; • risks related to audits by CMS and other governmental payers and actions, including whistleblower claims under the False Claims Act; • evolution of the health care regulatory and political framework; • restrictions on the manner in which we access personal data and penalties as a result of privacy and data protection laws; • data loss or corruption due to failures or errors in our systems and service disruptions at our data centers; • liabilities and reputational risks related to our ability to safeguard the security and privacy of confidential data; • our ability to obtain, maintain and enforce intellectual property rights and protect our trademarks and trade names, including from third parties alleging that we are infringing or violating their intellectual property rights; • our ability to protect the confidentiality of our trade secrets; • risks associated with our use of AI and machine learning models; • our use of “open-source” software; • our reliance on third parties and licensed technologies; • restrictions on our ability to use, disclose, de-identify or license data and to integrate third-party technologies; • our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our partners and operating our business; • our ability to achieve profitability in the future; • the impact of additional goodwill and intangible asset impairments on our results of operations; • our obligations to make material payments to certain of our pre-IPO investors for certain tax benefits we may claim in the future; • our obligations to make payments under the tax receivables agreement that may be accelerated or may exceed the tax benefits we realize; • our ability to utilize benefits under the tax receivables agreement described herein; • the terms of agreements between us and certain of our pre-IPO investors may contain different terms than comparable agreement we may enter into with unaffiliated third parties; • Our inability to obtain financing may result in a reduction in the ownership of our stockholders; • the conditional conversion features, and changes in accounting treatment, of the 2029 Notes and the 2031 Notes, which, if triggered, may adversely affect our financial condition and operating results; • our ability to raise funds necessary to settle conversions of our notes in cash, to repurchase our notes for cash upon a fundamental change or to pay the redemption price for any notes we redeem; • interest rate risk and other restrictive covenants under the Credit Agreement; • our indebtedness, our ability to service our indebtedness, and our ability to obtain additional financing on favorable terms or at all; 14 • our ability to service our debt; • interference with our ability to access the revolving credit facility under our Credit Agreement; • the potential volatility of our Class A common stock price; • the potential decline of our Class A common stock price if a substantial number of shares are sold or become available for sale; • provisions in our certificate of incorporation and by-laws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us; • provisions in our certificate of incorporation which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees; • our intention not to pay cash dividends on our Class A common stock; • the impact of litigation proceedings, government inquiries, reviews, audits or investigations; • public health emergencies, epidemics, pandemics or contagious diseases; • the cost of compliance with sustainability or other environmental, social responsibility or governance law and regulations • the impact of increasing inflationary pressures and rising consumer costs on our business; and • our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limited.
Among other things, our second amended and restated certificate of incorporation, as amended, and our third amended and restated by-laws: 41 • prohibit stockholder action by written consent; • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive; • prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • provide that special meetings of the stockholders may be called only by or at the direction of the board of directors, the chairman of our board or the chief executive officer; and • require advance notice to be given by stockholders for any stockholder proposals or director nominees.
Among other things, our second amended and restated certificate of incorporation, as amended, and our third amended and restated by-laws: • prohibit stockholder action by written consent; • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive; • prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • provide that special meetings of the stockholders may be called only by or at the direction of the board of directors, the chairman of our board or the chief executive officer; and • require advance notice to be given by stockholders for any stockholder proposals or director nominees.
In addition, any indebtedness we incur and restrictive covenants contained in the agreements related thereto could: • make it difficult for us to satisfy our obligations, including interest payments on any debt obligations; • limit our ability to obtain additional financing to operate our business; • require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures and working capital and other general operational requirements; • limit our flexibility to plan for and react to changes in our business and the health care industry; • place us at a competitive disadvantage relative to our competitors; • limit our ability to pursue acquisitions; and • increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy.
In addition, any indebtedness we incur and restrictive covenants contained in the agreements related thereto could: • make it difficult for us to satisfy our obligations, including interest payments on any debt obligations; • limit our ability to obtain additional financing to operate our business; 33 • require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures and working capital and other general operational requirements; • limit our flexibility to plan for and react to changes in our business and the health care industry; • place us at a competitive disadvantage relative to our competitors; • limit our ability to pursue acquisitions; and • increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy.
Our second amended and restated certificate of incorporation, as amended, provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim against us arising pursuant to any provision of the DGCL, our second amended and restated certificate of incorporation, as amended, or our third amended and restated by-laws, (d) any action to interpret, apply, enforce or determine the validity of our second amended and restated certificate of incorporation, as amended, or third amended and restated by-laws or (e) any other action asserting a claim against us that is governed by the internal affairs doctrine.
Our second amended and restated certificate of incorporation, as amended, provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim against us arising pursuant to any provision of the DGCL, our second amended and restated certificate of incorporation, as amended, or our third amended and restated by-laws, (d) any action to interpret, apply, enforce 37 or determine the validity of our second amended and restated certificate of incorporation, as amended, or third amended and restated by-laws or (e) any other action asserting a claim against us that is governed by the internal affairs doctrine.
See the risk factor captioned “Risk Factors— 43 Risks Relating to Our Business and Strategy—If we lose key members of our management team or employees or are unable to attract and retain the employees we need, our compensation costs will increase and our business and operating results will be adversely affected.” While we are unable to predict the direction of the economy or if inflation will increase or revert to normal levels, if inflation levels remain elevated for a sustained period of time, our margins, profitability and results of operations could be adversely affected.
See the risk factor captioned “Risk Factors—Risks Relating to Our Business and Strategy—If we lose key members of our management team or employees or are unable to attract and retain the employees we need, our compensation costs will increase and our business and operating results will be adversely affected.” While we are unable to predict the direction of the economy or if inflation will increase or revert to normal levels, if inflation levels remain elevated for a sustained period of time, our margins, profitability and results of operations could be adversely affected.
Any of our owned or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed or misappropriated, our trade secrets and other confidential information could be disclosed in an 29 unauthorized manner to third parties, or our intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide us with competitive advantages, which could result in costly redesign efforts, discontinuance of certain offerings or other competitive harm.
Any of our owned or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed or misappropriated, our trade secrets and other confidential information could be disclosed in an unauthorized manner to third parties, or our intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide us with competitive advantages, which could result in costly redesign efforts, discontinuance of certain offerings or other competitive harm.
The impact of these actions have included, and in the future could include making organizational changes across our business as well as other profitability initiatives that may result in reductions in force, re-aligning of resources as well as other potential operational efficiency and cost-reduction initiatives and could result in reductions to the fees and changes to the scope of services contemplated by our 17 original partner contracts and consequently have and could negatively impact our revenues, financial results (including potential impairments), business and prospects.
The impact of these actions have included, and in the future could include making organizational changes across our business as well as other profitability initiatives that may result in reductions in force, re-aligning of resources as well as other potential operational efficiency and cost-reduction initiatives and could result in reductions to the fees and changes to the scope of services contemplated by our original partner contracts and consequently have and could negatively impact our revenues, financial results (including potential impairments), business and prospects.
Resolution of these types of matters against us may result in us having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact our earnings and cash flows, thereby having a material adverse effect on our business, financial condition, results of operations, cash flow and per share trading price of our Class A common stock.
Resolution of these types of matters against us may result in us having to pay significant fines, taxes, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact our earnings and cash flows, thereby having a material adverse effect on our business, financial condition, results of operations, cash flow and per share trading price of our Class A common stock.
If the IRS successfully challenges the tax basis increases resulting from the Class B Exchanges or the existence or amount of the pre-IPO NOLs at any point in the future after payments are made under the TRA, we will not be reimbursed for any payments we had made under the TRA (although future payments under the TRA, if any, would be netted against any unreimbursed payments to reflect 36 the result of any such successful challenge by the IRS).
If the IRS successfully challenges the tax basis increases resulting from the Class B Exchanges or the existence or amount of the pre-IPO NOLs at any point in the future after payments are made under the TRA, we will not be reimbursed for any payments we had made under the TRA (although future payments under the TRA, if any, would be netted against any unreimbursed payments to reflect the result of any such successful challenge by the IRS).
Should one or more of our significant partners declare bankruptcy, be declared insolvent or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, this could adversely affect our ongoing revenues, financial results (including potential impairments), the collectability of our accounts receivable and our bad debt reserves and net income (loss).
Should one or more of our significant partners declare bankruptcy, be declared insolvent or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, this could 15 adversely affect our ongoing revenues, financial results (including potential impairments), the collectability of our accounts receivable and our bad debt reserves and net income (loss).
Even if we have an agreement to indemnify us 30 against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed technology on reasonable terms or at all, or obtain similar technology from another source, our revenue and earnings could be adversely impacted.
Even if we have an agreement to indemnify us against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed technology on reasonable terms or at all, or obtain similar technology from another source, our revenue and earnings could be adversely impacted.
In addition, a portion of the revenue under certain of our service contracts is tied to the partners’ continued participation in specified payer programs over which we have no control. If a partner ceases to participate or is disqualified from participation in any such program, this would lead to a decrease in our expected revenue under the relevant contract.
In addition, a portion of the revenue under certain of our service contracts is tied to the partners’ continued 16 participation in specified payer programs over which we have no control. If a partner ceases to participate or is disqualified from participation in any such program, this would lead to a decrease in our expected revenue under the relevant contract.
Under the “if- 38 converted” method, diluted earnings per share will generally be calculated assuming that the 2025 Notes and the 2029 Notes were converted solely into shares of Class A common stock at the beginning of the reporting period, unless the result would be anti-dilutive, which could adversely affect our diluted earnings per share.
Under the “if-converted” method, diluted earnings per share will generally be calculated assuming that the 2025 Notes and the 2029 Notes were converted solely into shares of Class A common stock at the beginning of the reporting period, unless the result would be anti-dilutive, which could adversely affect our diluted earnings per share.
Counterparties in transactions may have contracts with customers and other business partners which may require consents from these parties in connection with a transaction. If these consents cannot be obtained, the Company may suffer a loss of potential future revenue and may lose rights that are material to its business and the business of any combined company.
Counterparties in transactions may have contracts with customers and other business partners which may require consents from these parties in connection with a transaction. If these consents cannot be 20 obtained, the Company may suffer a loss of potential future revenue and may lose rights that are material to its business and the business of any combined company.
There is a risk that open-source software licenses, including those that incorporate or rely on generative AI, 32 could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. We rely on third-party vendors to host and maintain our technology platform.
There is a risk that open-source software licenses, including those that incorporate or rely on generative AI, could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. We rely on third-party vendors to host and maintain our technology platform.
If we are unable to protect our intellectual property and other proprietary rights, our competitive position and our business could be harmed, as third parties may be able to commercialize and use technologies and software products that are substantially the same as ours without incurring the development and licensing costs that we have incurred.
If we are unable to protect our intellectual property and other proprietary rights, our competitive position and our business could be harmed, as third parties may be able to commercialize and use technologies and software products that are substantially the same as ours without incurring the 25 development and licensing costs that we have incurred.
No assurances can be made that declines in the market price of our common stock will not occur in the future in connection with such activity. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.
No assurances can be made that declines in the market price of our common stock will not occur in the future in connection with such activity. In addition, in the 36 past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.
In addition, if we do not adequately respond to these competitive pressures, it could cause us to be unable to maintain our current contracts or obtain 24 new contracts. Other competitors have proprietary technology that differentiates their product and service offerings from ours.
In addition, if we do not adequately respond to these competitive pressures, it could cause us to be unable to maintain our current contracts or obtain new contracts. Other competitors have proprietary technology that differentiates their product and service offerings from ours.
Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs.
Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition 29 and maintenance costs.
Moreover, costs of providing oncology, cardiology, radiology (including advanced imaging), musculoskeletal, physical medicine, genetics and other specialties are and have been very hard to predict, in part as a result 19 of rapidly changing utilization of new and existing drugs and changing diagnostic and therapeutic protocols.
Moreover, costs of providing oncology, cardiology, radiology (including advanced imaging), musculoskeletal, physical medicine, genetics and other specialties are and have been very hard to predict, in part as a result of rapidly changing utilization of new and existing drugs and changing diagnostic and therapeutic protocols.
We may also have to redesign our products or services so they do not infringe third-party intellectual property rights, which may not be possible or may require substantial monetary expenditures and time, during which our solutions may not be available for commercialization or use.
We may also have to redesign our products or services so they do 26 not infringe third-party intellectual property rights, which may not be possible or may require substantial monetary expenditures and time, during which our solutions may not be available for commercialization or use.
In certain cases, we provide such information to third parties, for example, to the service providers who provide hosting services for our technology platform, and we may be unable to control the use of such information or the security and privacy protections employed by such third parties.
In certain cases, we provide such information to third parties, for example, to the service providers who provide hosting services for our technology platform, and we may be unable to control the use of such information or the security 24 and privacy protections employed by such third parties.
If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively and could harm our business, financial condition and results of operations.
If one or more of our competitors or potential 22 competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively and could harm our business, financial condition and results of operations.
Any such disruptions could limit our ability to achieve the anticipated benefits of the transaction. 22 Any integration may be unpredictable, or subject to delays or changed circumstances, and we and any targets may not perform in accordance with our expectations.
Any such disruptions could limit our ability to achieve the anticipated benefits of the transaction. Any integration may be unpredictable, or subject to delays or changed circumstances, and we and any targets may not perform in accordance with our expectations.
If we raise additional funds by 37 issuing equity or convertible debt securities, the ownership of our then-existing stockholders may be reduced, and holders of these securities may have rights, preferences or privileges senior to those of our then-existing stockholders.
If we raise additional funds by issuing equity or convertible debt securities, the ownership of our then-existing stockholders may be reduced, and holders of these securities may have rights, preferences or privileges senior to those of our then-existing stockholders.
For example, beginning in the second half of 2024, increasing oncology costs outpaced historical averages, resulting in an adverse impact on our financial results and profitability in 2024, which could continue in the future.
For example, beginning in the second half of 2024, increasing oncology costs outpaced historical averages, resulting in an adverse impact on our financial results and profitability in 2024 and 2025, which could continue in the future.
Further, the competitive environment for our performance-based products, and customer demands or expectations as to margin levels could result in pricing pressures which could cause us to reduce our rates.
Further, the competitive environment for our performance-based products, and customer demands or expectations as to margin levels could result in pricing pressures which could 17 cause us to reduce our rates.
This significant amount of debt, preferred stock and other cash needs could have important consequences to us, including: • requiring a substantial portion of our cash flow from operations to make payments on this debt, thereby limiting the cash we have available to fund future growth opportunities, such as capital expenditures and acquisitions; • restrictive covenants in our debt arrangements and the arrangements governing our Series A Preferred Stock, which could limit our operations and borrowing; • increasing our vulnerability to general adverse economic and industry conditions and limiting our flexibility in planning for, or reacting to, changes in our business and industry, due to the need to use our cash to service our outstanding debt and Series A Preferred Stock; • placing us at a competitive disadvantage relative to our competitors that are not as highly leveraged and that may therefore be more able to invest in their business or use their available cash to pursue other opportunities, including acquisitions; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.
This significant amount of debt and other cash needs could have important consequences to us, including: • requiring a substantial portion of our cash flow from operations to make payments on this debt, thereby limiting the cash we have available to fund future growth opportunities, such as capital expenditures and acquisitions; • restrictive covenants in our debt arrangements, which could limit our operations and borrowing; • increasing our vulnerability to general adverse economic and industry conditions and limiting our flexibility in planning for, or reacting to, changes in our business and industry, due to the need to use our cash to service our outstanding debt; • placing us at a competitive disadvantage relative to our competitors that are not as highly leveraged and that may therefore be more able to invest in their business or use their available cash to pursue other opportunities, including acquisitions; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.
Acquisitions, investments and alliances, including our acquisitions of Machinify, NIA, Vital Decisions, and IPG, could result in numerous risks to our business which could negatively impact our financial condition and results of operations, including: • difficulty converting platforms or integrating the purchased operations, products or technologies; • substantial unanticipated integration costs, delays and challenges that may arise in integration; • the loss of key customers who are in turn subject to risks and financial dislocation in their businesses; • the loss of key employees, particularly those of the acquired operations; • difficulty retaining or developing the acquired business’ customers; • adverse effects on our existing business relationships with customers, suppliers, other partners, standing with regulators; • challenges related to the integration and operation of businesses that operate in new geographic areas and new markets or lines of business; • unanticipated financial losses in the acquired business, including the risk of higher-than-expected health care costs; • failure to realize the potential cost savings or other financial benefits or the strategic benefits of the acquisitions, including failure to consummate any proposed or contemplated transaction; and • liabilities, including acquired litigation, and expenses from the acquired businesses for contractual disputes with customers and other third parties, infringement of intellectual property rights, data privacy violations or other claims and failure to obtain indemnification for such liabilities or claims, and distraction of our personnel in connection with any related proceedings.
Acquisitions, investments and alliances could result in numerous risks to our business which could negatively impact our financial condition and results of operations, including: • difficulty converting platforms or integrating the purchased operations, products or technologies; • substantial unanticipated integration costs, delays and challenges that may arise in integration; • the loss of key customers who are in turn subject to risks and financial dislocation in their businesses; • the loss of key employees, particularly those of the acquired operations; • difficulty retaining or developing the acquired business’ customers; • adverse effects on our existing business relationships with customers, suppliers, other partners, standing with regulators; challenges related to the integration and operation of businesses that operate in new geographic areas and new markets or lines of business; • unanticipated financial losses in the acquired business, including the risk of higher-than-expected health care costs; • failure to realize the potential cost savings or other financial benefits or the strategic benefits of the acquisitions, including failure to consummate any proposed or contemplated transaction; and • liabilities, including acquired litigation, and expenses from the acquired businesses for contractual disputes with customers and other third parties, infringement of intellectual property rights, data privacy violations or other claims and failure to obtain indemnification for such liabilities or claims, and distraction of our personnel in connection with any related proceedings.
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2025 Notes or 2029 Notes, as applicable, as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Notes or 2031 Notes, as applicable, as a current rather than long-term liability, which would result in a material reduction of our net working capital.
We may be required to expend significant capital and other resources to 28 protect against security breaches and/or privacy incidents or to alleviate problems caused by security breaches and/or privacy incidents.
We may be required to expend significant capital and other resources to protect against security breaches and/or privacy incidents or to alleviate problems caused by security breaches and/or privacy incidents.
These restrictions limit our ability and/or the ability of certain of our subsidiaries to, among other things: • incur or guarantee additional debt; • incur certain liens; 39 • merge or consolidate; • transfer or sell assets; • make certain investments; • pay dividends and make other distributions on, or redeem or repurchase, capital stock; and • enter into transactions with affiliates.
These restrictions limit our ability and/or the ability of certain of our subsidiaries to, among other things: • incur or guarantee additional debt; • incur certain liens; • merge or consolidate; 35 • transfer or sell assets; • make certain investments; • pay dividends and make other distributions on, or redeem or repurchase, capital stock; and • enter into transactions with affiliates.
Changes in the accounting treatment for convertible debt securities that may be settled in cash, such as the 2025 Notes and the 2029 Notes, could have a material effect on our reported financial results.
Changes in the accounting treatment for convertible debt securities that may be settled in cash, such as the 2029 Notes and the 2031 Notes, could have a material effect on our reported financial results.
The market price of our Class A common stock could decline as a result of sales of a large number of the shares of our Class A common stock issuable upon the conversion of our convertible notes or the Series A Preferred Stock, or the perception that such conversions and sales could occur.
The market price of our Class A common stock could decline as a result of sales of a large number of the shares of our Class A common stock issuable upon the conversion of our convertible notes, or the perception that such conversions and sales could occur.
These and other factors have and may cause the market price and demand for our Class A common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of Class A common stock, including any shares of Class A common stock they receive upon conversion of our convertible notes, and may otherwise negatively affect the liquidity of our Class A common stock.
These and other factors have caused and may in the future cause the market price and demand for our Class A common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of Class A common stock, including any shares of Class A common stock they receive upon conversion of our convertible notes, and may otherwise negatively affect the liquidity of our Class A common stock.
The market price of our Class A common stock could decline due to the large number of shares of Class A common stock issuable upon conversion of our convertible notes or the Series A Preferred Stock, or by sales or issuances of substantial amounts of our Class A common stock.
The market price of our Class A common stock could decline due to the large number of shares of Class A common stock issuable upon conversion of our convertible notes, or by sales or issuances of substantial amounts of our Class A common stock.
The HITECH Act requires individual notification for all breaches, media notification of breaches for over 500 individuals and at least annual reporting of all breaches to the 27 Department of Health and Human Services.
The HITECH Act requires individual notification for all breaches, media notification of breaches for over 500 individuals and at least annual reporting of all breaches to the 23 Department of Health and Human Services.
Because we will be permitted to settle conversions of the notes in cash, shares of common stock, or a combination thereof, the “if-converted” method for calculating diluted earnings per share is expected to be required with respect to the 2025 Notes and 2029 Notes.
Because we will 34 be permitted to settle conversions of the notes in cash, shares of common stock, or a combination thereof, the “if-converted” method for calculating diluted earnings per share is expected to be required with respect to the 2029 Notes and 2031 Notes.
We are unable to predict the impact on the Company’s operations of future regulations or legislation affecting Medicaid programs, or the healthcare industry in general. For example, our partners generally received less Medicaid-based revenue following the Biden administration’s termination of the COVID-19 PHE and the subsequent state Medicaid redeterminations.
We are unable to predict the impact on the Company’s operations of future regulations or legislation affecting Medicaid programs, or the healthcare industry in general. For example, our partners generally received less Medicaid-based revenue following the Biden administration’s termination of the COVID-19 public health emergency and the subsequent state Medicaid redeterminations.
In connection with these acquisitions, investments, alliances or joint ventures, we could incur significant costs, debt, amortization expenses related to intangible assets or large and immediate write-offs or other impairments or charges, assume liabilities or issue stock (as we have done in prior transactions, including the acquisition of NIA) that would dilute our current stockholders’ ownership.
In connection with these acquisitions, investments, alliances or joint ventures, we could incur significant costs, debt, amortization expenses related to intangible assets or large and immediate write-offs or other impairments or charges, assume liabilities or issue stock (as we have done in prior transactions) that would dilute our current stockholders’ ownership.
We have experienced net losses in the past and we may not achieve profitability in the future. We have incurred significant net losses in the past and our operating expenses may increase in the future as we continue to invest to grow our business and build relationships with partners, develop our platforms and develop new solutions.
We have incurred significant net losses in the past and our operating expenses may increase in the future as we continue to invest to grow our business and build relationships with partners, develop our platforms and develop new solutions.
If we do not effectively manage our growth and maintain an efficient cost structure as we continue to expand, the quality of our solutions could suffer. Our growth to date, including as a result of our acquisition of NIA, has increased the significant demands on our management, our operational and financial systems and infrastructure and other resources.
If we do not effectively manage our growth and maintain an efficient cost structure as we continue to expand, the quality of our solutions could suffer. Our growth to date has increased the significant demands on our management, our operational and financial systems and infrastructure and other resources.
The market for our solutions is fragmented, competitive and characterized by rapidly evolving technology standards, customer needs and the frequent introduction of new products and services. Our competitors range from smaller niche companies to large, well-financed and technologically-sophisticated entities.
The market for our solutions is fragmented, competitive and characterized by rapidly evolving technology standards, including artificial intelligence and machine learning, customer needs and the frequent introduction of new products and services. Our competitors range from smaller niche companies to large, well-financed and technologically-sophisticated entities.
Risks Relating to Indebtedness and our Series A Preferred Stock We may need to obtain additional financing which may not be available or, if it is available, may result in a reduction in the ownership of our stockholders.
Risks Relating to Indebtedness We may need to obtain additional financing which may not be available or, if it is available, may result in a reduction in the ownership of our stockholders.
As of December 31, 2024, we recorded a TRA liability of $108.1 million including $17.6 million of potential future payments under the TRA related to the future utilization of the pre-IPO NOLs described above and $90.5 million of potential future payments related to the tax basis step-up of the assets of Evolent Health LLC in connection with the exchanges that occurred with our completed secondary offerings and private sales.
As of December 31, 2025, we recorded a TRA liability of $108.9 million including $17.8 million of potential future payments under the TRA related to the future utilization of the pre-IPO NOLs described above and $91.1 of potential future payments related to the tax basis step-up of the assets of Evolent Health LLC in connection with the exchanges that occurred with our completed secondary offerings and private sales.
In addition, pursuant to our Credit Agreement and Investors Rights Agreement, we are required to comply with certain financial covenants consisting of a minimum liquidity test, and a total secured leverage test.
In addition, pursuant to our Credit Agreements, we are required to comply with certain financial covenants consisting of a minimum liquidity test, and a total secured leverage test.
The trading price of our Class A common stock has been and may continue to be volatile and subject to wide price fluctuations in response to various factors, including: • actual or anticipated fluctuations in our quarterly financial reports and results of operations, including as a result of our failure to meet our financial outlook or analyst consensus, which was the case for our third quarter results in 2024; • economic and political conditions or events; • market conditions in the broader stock market in general, or in our industry in particular, including as a result of public health emergencies, inflationary pressures, and an uncertain macroeconomic environment due in part to the conflict between Russia and Ukraine and the war between Israel and Hamas; • our ability to satisfy our ongoing capital needs and unanticipated cash requirements; • indebtedness incurred in the future; • introduction of new products and services by us or our competitors; • business developments of our partners; • issuance of new or changed securities analysts’ reports or recommendations; • sales of large blocks of our stock; • additions or departures of key personnel; • regulatory developments; and • litigation and governmental investigations.
The trading price of our Class A common stock has been and may continue to be volatile and subject to wide price fluctuations in response to various factors, including: • actual or anticipated fluctuations in our quarterly financial reports and results of operations, including as a result of our failure to meet our financial outlook or analyst consensus; • economic and political conditions or events; • market conditions in the broader stock market in general, or in our industry in particular, including as a result of public health emergencies, inflationary pressures, and an uncertain macroeconomic environment; • our ability to satisfy our ongoing capital needs and unanticipated cash requirements; • indebtedness incurred in the future; • introduction of new products and services by us or our competitors; • business developments of our partners; • issuance of new or changed securities analysts’ reports or recommendations; • sales of large blocks of our stock; • additions or departures of key personnel; • regulatory developments; and • litigation and governmental investigations.
In addition, certain of our contracts provide that if we fail to meet specified implementation targets, the contracts will terminate and/or we will be subject to financial penalties. These provisions could impact our cash flows and profitability. As of December 31, 2024, the Company had approximately $16.6 million of restricted cash and restricted investments related to risk-sharing arrangements.
In addition, certain of our contracts provide that if we fail to meet specified implementation targets, the contracts will terminate and/or we will be subject to financial penalties. These provisions could impact our cash flows and profitability. As of December 31, 2025, the Company had $15.7 million of restricted cash related to risk-sharing arrangements.
A reduction in demand for our solutions caused by lack of acceptance, technological challenges, competing offerings or other factors would result in a lower revenue growth rate or decreased revenue, either of which could negatively impact our business and results of operations.
A reduction in demand for our solutions caused by lack of acceptance, technological challenges, competing offerings, including those driven by artificial intelligence or machine learning, or other factors would result in a lower revenue growth rate or decreased revenue, either of which could negatively impact our business and results of operations.
If our actual taxable income is insufficient or there are adverse changes in applicable law or regulations, we may be unable to realize all or a portion of these expected benefits and our cash flows and stockholders’ equity could be negatively affected. Please refer to the discussion in “Part II—Item 8. Financial Statements and Supplementary Data—Note 15” for additional information.
If our actual taxable income is insufficient or there are adverse changes in applicable law or 32 regulations, we may be unable to realize all or a portion of these expected benefits and our cash flows and stockholders’ equity could be negatively affected. Please refer to the discussion in “Part II—Item 8.
These sales, or the possibility that these sales may occur, may also make it more difficult for us to raise additional capital by selling equity or equity-linked securities in the future, at a time and price that we deem appropriate. As of February 14, 2025, 116,591,148 shares of our Class A common stock were outstanding.
These sales, or the possibility that these sales may occur, may also make it more difficult for us to raise additional capital by selling equity or equity-linked securities in the future, at a time and price that we deem appropriate. As of February 16, 2026, 111.6 million shares of our Class A common stock were outstanding.
Health care laws and regulations are rapidly evolving and may change significantly in the future, including as a result of the Trump administration, which could adversely affect our financial condition and results of operations.
Health care laws and regulations are rapidly evolving and may change significantly in the future, which could adversely affect our financial condition and results of operations.
Servicing our debt and paying dividends on our Series A Preferred Stock requires a significant amount of cash, and we may not have sufficient cash flow from our business to service our debt and make necessary capital expenditures.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to service our debt and make necessary capital expenditures.
Restrictive covenants in our Credit Agreement and in the Investors Rights Agreement may interfere with our ability to access the revolving credit facility under the Credit Agreement, or to obtain new financing or to engage in other business activities. Our Credit Agreement and the Investors Rights Agreement impose significant operating and financial restrictions on us.
Restrictive covenants in our Credit Agreements may interfere with our ability to access our revolving credit facilities, or to obtain new financing or to engage in other business activities. Our Credit Agreements impose significant operating and financial restrictions on us.
Further amendments to these accounting standards may require us to reflect the notes in a manner that adversely affects our reported diluted earnings per share. We are exposed to interest rate risk under the Credit Agreement and the terms of our Series A Preferred Stock, which could cause the Company’s debt service obligations to increase significantly.
Further amendments to these accounting standards may require us to reflect the notes in a manner that adversely affects our reported diluted earnings per share. We are exposed to interest rate risk under the Credit Agreements, which could cause the Company’s debt service obligations to increase significantly. We are exposed to market risk from changes in interest rates.
As of December 31, 2024, we had $1.1 billion and $0.7 billion recorded as goodwill and intangible assets on our balance sheet, respectively. Goodwill is not amortized, but is reviewed at least annually for indications of impairment, with consideration given to financial performance and other relevant factors.
As of December 31, 2025, we had $694.5 million and $584.9 million recorded as goodwill and intangible assets on our balance sheet, respectively. Goodwill is not amortized, but is reviewed at least annually for indications of impairment, with consideration given to financial performance and other relevant factors.
Any requirement to disclose our proprietary source code or pay damages for breach of contract could have a material adverse effect on our business, financial condition and results of operations and could help our competitors develop products and services that are similar to or better than ours.
Any requirement to disclose our proprietary source code or pay damages for breach of contract could have a material adverse effect on our business, financial condition and results of operations and could help our competitors develop products and services that are similar to or better than ours. 28 Additionally, some open-source software may include generative AI software or other software that incorporates or relies on generative AI.
We deploy our specialty care management services solution in capitation arrangements, which we call the Performance Suite, where we are paid a fixed fee per member per month and assume responsibility for the cost of medical claims under our scope.
Failure to accurately predict our exposure under performance-based contracts could result in a reduction in profitability for our Performance Suite. We deploy our specialty care management services solution in capitation arrangements, which we call the Performance Suite, where we are paid a fixed fee per member per month and assume responsibility for the cost of medical claims under our scope.
Up to a maximum of 15.8 million shares of our Class A common stock is reserved for issuance upon the conversion of our convertible notes and 4.4 million shares are reserved for issuance upon the conversion of our Series A Preferred Stock.
Up to a maximum of 18.4 million shares of our Class A common stock is reserved for issuance upon the conversion of our convertible notes.
In addition, the pressures of inflation have increased our costs of labor and may continue to do so. In addition, we believe our corporate culture has been a key contributor to our success to date.
We have increased, and expect to continue to increase, our employee compensation levels in response to our competition, as necessary. In addition, the pressures of inflation have increased our costs of labor and may continue to do so. 19 In addition, we believe our corporate culture has been a key contributor to our success to date.
In addition, our assumptions could be impacted by changes to health care laws and regulations as a result of the new administration or otherwise. If our assumptions prove inaccurate, our business, financial condition and results of operations could be adversely affected.
Potential partners may pursue different strategic options, or none at all. In addition, our assumptions could be impacted by changes to health care laws and regulations as a result of the current administration or otherwise. If our assumptions prove inaccurate, our business, financial condition and results of operations could be adversely affected.
Negative results of any such audit or claim could have a material adverse effect on our business, financial condition, results of operations or prospects and could damage our reputation. The health care regulatory and political framework is uncertain and evolving.
Negative results of any such audit or claim could have a material adverse effect on our business, financial condition, results of operations or prospects and could damage our reputation.
Disputes may arise between us and our licensors regarding intellectual property rights subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; • our obligations with respect to the use of the licensed technology in relation to our services and technologies, and which activities satisfy those obligations; • whether our activities are in compliance with the restrictions placed upon our rights to use the licensed technology by our licensors; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners. 31 If disputes over intellectual property rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to obtain equivalent replacement licensing arrangements or to successfully develop and commercialize the affected products and technologies.
Disputes may arise between us and our licensors regarding intellectual property rights subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; • our obligations with respect to the use of the licensed technology in relation to our services and technologies, and which activities satisfy those obligations; • whether our activities are in compliance with the restrictions placed upon our rights to use the licensed technology by our licensors; and 27 • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
We have significant debt and other obligations, which could adversely affect our financial health and our ability to obtain financing in the future, and to react to changes in our business. We have $675.0 million of principal amount of indebtedness outstanding as of December 31, 2024. In addition, we have 175,000 shares of Series A Preferred Stock outstanding.
We have significant debt and other obligations, which could adversely affect our financial health and our ability to obtain financing in the future, and to react to changes in our business. We have $934.0 million of principal amount of indebtedness subject to interest outstanding as of December 31, 2025.
In certain cases, payments by us under the TRA may be accelerated or significantly exceed the tax benefits we realize in respect of the tax attributes subject to the TRA.
Financial Statements and Supplementary Data—Note 15” for additional information. In certain cases, payments by us under the TRA may be accelerated or significantly exceed the tax benefits we realize in respect of the tax attributes subject to the TRA.
In addition, if our data suppliers choose to discontinue support of the licensed technology in the future, we might not be able to modify or adapt our own solutions. 33 We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our partners and operating our business, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, negatively impact our relationships with partners, and adversely affect our brand and our business.
We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our partners and operating our business, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation, negatively impact our relationships with partners, and adversely affect our brand and our business.
General Risk Factors We are and may become subject to litigation, proceedings, government inquiries, reviews, audits or investigations which could have a material adverse effect on our business, financial condition and results of operations. 42 We are and may become subject to litigation, proceedings, government inquiries, reviews, audits or investigations in the future, including potential claims against us by our partners, with or without merit.
General Risk Factors We are and may become subject to litigation, proceedings, government inquiries, reviews, audits or investigations which could have a material adverse effect on our business, financial condition and results of operations.
Historically, we have relied on a limited number of partners for a substantial portion of our total revenue. Our four largest partners in terms of revenue, Humana Insurance Company, Molina Healthcare, Inc. (“Molina”), Florida Blue and Cook County Health and Hospitals System comprised 19.3%, 13.7%, 12.9% and 11.5%, respectively, of our revenue for the year ended December 31, 2024.
Historically, we have relied on a limited number of partners for a substantial portion of our total revenue. Our four largest partners in terms of revenue, Molina Healthcare, Inc. (“Molina”), Cook County Health and Hospitals System, Florida Blue and Centene Corporation comprised 25.7%, 16.4%, 14.2% and 12.2%, respectively, of our revenue for the year ended December 31, 2025.
If the estimates and assumptions we use to determine the size of the target markets for our services are inaccurate, our future growth rate may be impacted and our business would be harmed. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Our estimates and forecasts relating to the size and expected growth of the markets for our services may prove to be inaccurate.
If we are unable to offer new and innovative products and services or our products and services fail to keep pace with advances in industry standards, technology and our partners’ needs, our partners may terminate or fail to renew their relationships with us and our revenue and results of operations may suffer. 20 Our success depends on providing high-quality products and services that health care providers use to improve clinical, financial and operational performance.
If we are unable to offer new and innovative products and services or our products and services fail to keep pace with advances in industry standards, technology and our partners’ needs, our partners may terminate or fail to renew their relationships with us and our revenue and results of operations may suffer.
In the event the conditional conversion feature of the 2025 Notes or 2029 Notes is triggered, holders of such notes will be entitled to convert such notes during specified periods at their option.
The conditional conversion feature of the 2029 Notes and 2031 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2029 Notes or 2031 Notes is triggered, holders of such notes will be entitled to convert such notes during specified periods at their option.
The cost of care could increase as a result of tariffs, sanctions or other changes in U.S. policy that negatively impact the import of certain medical devices, which could negatively impact our results of operations.
The cost of care could increase as a result of tariffs, sanctions or other changes in U.S. policy that negatively impact the import of certain medical devices, which could negatively impact our results of operations. Our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limited.
The rapidly evolving nature of the markets in which we operate, as well as other factors that are beyond our control, reduce our ability to accurately evaluate our long-term outlook and forecast annual performance. Widespread acceptance of the value-based care model is critical to our future growth and success.
It is difficult to predict with any precision the future growth rate and size of our target markets. The rapidly evolving nature of the markets in which we operate, as well as other factors that are beyond our control, reduce our ability to accurately evaluate our long-term outlook and forecast annual performance.
In some of our contracts, a defined portion of the revenue is at risk and can be refunded to the partner if certain service levels are not attained.
While the narrowed risk corridor is intended to limit our downside risk, it also limits our potential for upside on profitability. In some of our contracts, a defined portion of the revenue is at risk and can be refunded to the partner if certain service levels are not attained.
We have incurred (including in the second half of 2024), and in the future may incur losses under these arrangements if we are unable to adjust our rates if faced with increased costs, including related to patient care or pharmaceutical products.
We have incurred, and in the future may incur, losses under these arrangements if we are unable to adjust our rates if faced with increased costs, including related to patient care or pharmaceutical products. In 2024, we migrated key Performance Suite customers to an adjusted Performance Suite contractual model, which includes a narrowed risk corridor.
Additionally, the increased number of employees who work remotely during a public health emergency or outbreak could introduce additional operational risk, such as an increased vulnerability to cyber-attacks, and harm productivity and collaboration. In addition, the risks and uncertainties described elsewhere in this “Risk Factors” section may be exacerbated by an epidemic, pandemic or similar serious public health issue.
Additionally, the increased number of employees who work remotely during a public health emergency or outbreak could introduce additional operational risk, such as an increased vulnerability to cyber-attacks, and harm productivity and collaboration.
Some of these matters and claims may result in significant defense costs and potentially significant judgments against us, some of which we are not, or cannot be, insured against. We generally intend to defend ourselves vigorously; however, we cannot be certain of the ultimate outcomes of any claims or other matters that may arise in the future.
We generally intend to defend ourselves vigorously; however, we cannot be certain of the ultimate outcomes of any claims or other matters that may arise in the future.
Our revenues and the growth of our business rely, in part, on the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes. 18 We enter into agreements with our partners under which a significant portion of our fees are variable, including fees which are dependent upon the number of members that are covered by partners’ health care plans each month, expansion of partners and the services that we provide, as well as performance-based metrics.
We enter into agreements with our partners under which a significant portion of our fees are variable, including fees which are dependent upon the number of members that are covered by partners’ health care plans each month, expansion of partners and the services that we provide, as well as performance-based metrics.
If we cannot adapt to rapidly evolving industry standards, technology, including AI, and increasingly sophisticated and varied partner needs, our existing technology could become undesirable or obsolete, which could harm our reputation.
Our success depends on providing high-quality products and services that health care providers use to improve clinical, financial and operational performance. If we cannot adapt to rapidly evolving industry standards, technology, including AI, and increasingly sophisticated and varied partner needs, our existing technology could become undesirable or obsolete, which could harm our 18 reputation.
Our ability to make scheduled payments of the principal of, to pay interest or dividends on or to refinance our indebtedness or our Series A Preferred Stock depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our ability to make scheduled payments of the principal of, to pay interest or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of this program, we employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include, from time to time, monitoring emerging data protection laws and implementing responsive changes to our processes; undertaking periodic reviews of our partner facing policies and statements related to cybersecurity; conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; conducting phishing email simulations for employees and contractors with access to corporate email systems; requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care; and employing a cyber risk management and quantification system customized to our environment.
Biggest changeAs part of this program, we employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include, from time to time, monitoring emerging data protection laws and implementing responsive changes to our processes; undertaking periodic reviews of our partner facing policies and statements related to cybersecurity; conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; conducting phishing email simulations for employees and contractors with access to corporate email systems; 39 requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care; and employing a cyber risk management and quantification system customized to our environment.
Management periodically assesses such risks and assists in the implementation of policies and procedures related to cybersecurity risk oversight in conjunction with the Compliance and Regulatory Affairs Committee. 44 Our CISO is responsible for assessing and managing the Company’s material risks from cybersecurity threats.
Management periodically assesses such risks and assists in the implementation of policies and procedures related to cybersecurity risk oversight in conjunction with the Compliance and Regulatory Affairs Committee. Our CISO is responsible for assessing and managing the Company’s material risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs provided in “Part II – Item 8. Financial Statements and Supplementary Data - Note 11” the total rental expense on operating leases, net of sublease income, was $8.3 million for the year ended December 31, 2024.
Biggest changeAs provided in “Part II – Item 8. Financial Statements and Supplementary Data - Note 11” the total rental expense on operating leases, net of sublease income, was $4.4 million for the year ended December 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends Series A Preferred Stock For the year ended December 31, 2024, the Series A Preferred stockholders were paid dividends in the amount of $20.1 million. We expect to continue to pay dividends to the Series A Preferred stockholders pursuant to the terms of the Certificate of Designation of Cumulative Series A Convertible Preferred Shares.
Biggest changeDividends Series A Preferred Stock For the year ended December 31, 2025, the Series A Preferred stockholders were paid dividends in the amount of $11.1 million.
This graph assumes an investment of $100 at the closing price of the markets on December 31, 2019, in our Class A common stock, the NASDAQ Health Care Index and the NYSE Composite Index, and assumes the reinvestment of dividends, if any. The comparisons shown in the following graph are based upon historical data.
This graph assumes an investment of $100 at the closing price of the markets on December 31, 2020, in our Class A common stock, the NASDAQ Health Care Index and the NYSE Composite Index, and assumes the reinvestment of dividends, if any. The comparisons shown in the following graph are based upon historical data.
Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock for the 5-years ended December 31, 2024, to the cumulative total returns of the NASDAQ Health Care Index and the NYSE Composite Index over the same 46 period.
Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock for the 5- years ended December 31, 2025, to the cumulative total returns of the NASDAQ Health Care Index and the NYSE Composite Index over the same 41 period.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Dividend Information Market Information Our Class A common stock is traded on the NYSE under the symbol “EVH.” Holders As of February 14, 2025, there were 77 holders of record of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Dividend Information Market Information Our Class A common stock is traded on the NYSE under the symbol “EVH.” Holders As of February 16, 2026, there were 73 holders of record of our Class A common stock.
Common Stock We have not declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends on our Class A common stock for the foreseeable future.
Financial Statements and Supplementary Data – Note 12” for additional discussion regarding the Exchange. Common Stock We have not declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends on our Class A common stock for the foreseeable future.
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During the year ended December 31, 2025, the Company completed the exchange of its existing Series A Preferred Stock for the Second Lien Term Loan Facility (as defined below) on substantively similar economic terms to the existing Series A Preferred Stock. Refer to “Part II – Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeConsolidated Results (in thousands, except percentages) For the Year Ended December 31, Change Over Prior Period For the Year Ended December 31, Change Over Prior Period 2024 2023 $ % 2023 2022 $ % Revenue $ 2,554,741 $ 1,963,896 $ 590,845 30.1 % $ 1,963,896 $ 1,352,013 $ 611,883 45.3% Expenses Cost of revenue 2,187,388 1,503,426 683,962 45.5 % 1,503,426 1,035,429 467,997 45.2% Selling, general and administrative expenses 263,050 358,110 (95,060) (26.5) % 358,110 269,269 88,841 33.0% Depreciation and amortization expenses 118,370 123,415 (5,045) (4.1) % 123,415 67,195 56,220 83.7% Loss on disposal of non-strategic assets — 8,107 (8,107) (100.0) % 8,107 — 8,107 100.0% Right-of-use assets impairment 2,588 24,065 (21,477) (89.2) % 24,065 — 24,065 100.0% Loss on lease termination 18,922 — 18,922 — % — — — 100.0% Change in fair value of contingent consideration 4,908 17,984 (13,076) (72.7) % 17,984 (23,522) 41,506 176.5% Total operating expenses 2,595,226 2,035,107 560,119 27.5% 2,035,107 1,348,371 686,736 50.9% Operating income (loss) $ (40,485) $ (71,211) $30,726 43.1% $ (71,211) $ 3,642 $(74,853) (2,055.3)% Cost of revenue as a % of revenue 85.6 % 76.6 % 76.6 % 76.6 % Selling, general and administrative expenses as a % of revenue 10.3 % 18.2 % 18.2 % 19.9 % We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented.
Biggest changeConsolidated Results (in thousands, except percentages) For the Year Ended December 31, Change Over Prior Period 2025 2024 $ % Revenue $ 1,876,229 $ 2,554,741 $ (678,512) (26.6) % Expenses Cost of revenue 1,476,346 2,187,388 (711,042) (32.5) % Selling, general and administrative expenses 303,866 263,050 40,816 15.5 % Depreciation and amortization expenses 115,851 118,370 (2,519) (2.1) % Loss on lease termination 676 18,922 (18,246) (96.4) % (Gain) loss on disposal of non-strategic assets (14,867) — (14,867) (100.0) % Right-of-use assets impairment — 2,588 (2,588) (100.0) % Goodwill impairment 398,000 — 398,000 100.0 % Change in fair value of contingent consideration 6,495 4,908 1,587 32.3 % Total operating expenses 2,286,367 2,595,226 (308,859) (11.9) % Operating loss $ (410,138) $ (40,485) $ (369,653) (913.1) % Cost of revenue as a % of revenue 78.7% 85.6% Selling, general and administrative expenses as a % of revenue 16.2% 10.3% We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented.
Financing Activities Cash flows used in financing activities of $0.6 million in the year ended December 31, 2024 were primarily related to $20.1 million of preferred dividends paid on our Series A Preferred Stock and $15.7 million from withholding taxes paid on of vested restricted stock units that were net settled.
Cash flows used in financing activities of $0.6 million in the year ended December 31, 2024 were primarily related to $20.1 million of preferred dividends paid on our Series A Preferred Stock and $15.7 million from withholding taxes paid on of vested restricted stock units that were net settled.
In applying these critical accounting policies in preparing our consolidated financial statements, management must use critical assumptions, estimates and judgments concerning future results or other developments, including the likelihood, timing or amount of one or more future events. Actual results may differ from these estimates under different assumptions or conditions.
In applying these critical accounting policies in preparing our consolidated financial statements, management must use 45 critical assumptions, estimates and judgments concerning future results or other developments, including the likelihood, timing or amount of one or more future events. Actual results may differ from these estimates under different assumptions or conditions.
Contractual and Other Obligations We believe that the amount of cash and cash equivalents on hand and cash flows from operations, plus borrowings under our credit facilities and if necessary, additional funding through other forms of financing, will be adequate for us to execute our business strategy and meet anticipated requirements for lease obligations, capital expenditures working capital and debt service for the next twelve 60 months and in the long-term.
Contractual and Other Obligations We believe that the amount of cash and cash equivalents on hand and cash flows from operations, plus borrowings under our credit facilities and if necessary, additional funding through other forms of financing, will be adequate for us to execute our business strategy and meet anticipated requirements for lease obligations, capital expenditures working capital and debt service for the next twelve 55 months and in the long-term.
INTRODUCTION Business Overview We are a market leader in connecting care for people with complex conditions like cancer, cardiovascular disease, and musculoskeletal diagnoses. We work on behalf of health plans and other risk-bearing entities and payers (our customers) to support physicians and other healthcare providers (our users) in providing high quality evidence-based care to their patients.
Risk Factors.” INTRODUCTION Business Overview We are a market leader in connecting care for people with complex conditions like cancer, cardiovascular disease, and musculoskeletal diagnoses. We work on behalf of health plans and other risk-bearing entities and payers (our customers) to support physicians and other healthcare providers (our users) in providing high quality evidence-based care to their patients.
Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 8” in this Form 10-K for more information related to the 2024 goodwill impairment test.
Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 8” in this Form 10-K for more information related to the 2025 goodwill impairment test.
Income Taxes Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.
Income Taxes 46 Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.
Accounts Receivable, Net Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. During the year ended December 31, 2024, accounts receivable, net, decreased primarily due to the timing of cash receipts from certain customers.
Accounts Receivable, Net Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. During the year ended December 31, 2025, accounts receivable, net, decreased primarily due to the timing of cash receipts from certain customers.
A discussion of our results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022 can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in our Form 10-K for the fiscal year ended December 31, 2023.
A discussion of our results of operations and changes in financial condition for fiscal 2024 compared to fiscal 2023 can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” located in our Form 10-K for the fiscal year ended December 31, 2024.
The MD&A is provided as a supplement to, and should be read in conjunction with our consolidated financial statements and the accompanying notes to our consolidated financial statements presented in “Part II – Item 8. Financial Statements and Supplementary Data” as well as “Part I - Item 1A. Risk Factors.
The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to our consolidated financial statements presented in “Part II – Item 8. Financial Statements and Supplementary Data” as well as “Part I - Item 1A.
A significant piece of objective negative evidence evaluated for jurisdictions in a net deferred tax asset position was cumulative pre-tax losses over the three years ended December 31, 2023.
A significant piece of objective negative evidence evaluated for jurisdictions in a net deferred tax asset position was cumulative pre-tax losses over the three years ended December 31, 2025.
We also take into consideration customer demographics, current market conditions, the scope of services and our overall pricing strategy and objectives when determining the standalone selling price. Principal vs Agent We use third parties to assist in satisfying our performance obligations.
We also take into consideration customer demographics, current market conditions, the scope of services and our overall pricing strategy and objectives when determining the standalone selling price. We use third parties to assist in satisfying our performance obligations.
Change in Fair Value of Contingent Consideration We recorded a loss on change in fair value of contingent consideration of $4.9 million for the year ended December 31, 2024 primarily related to the final payment of $88.8 million on our NIA earnout in April 2024 and annual incentive payments of $3.1 million to Evolent Care Partners providers based on membership attribution, offset in part by $7.1 million reduction on our Machinify earnout.
We recorded a loss of $4.9 million for the year ended December 31, 2024 primarily related to the final payment of $88.8 million on our NIA earnout in April 2024 and annual incentive payments of $3.1 million to Evolent Care Partners providers based on membership attribution, offset in part by $7.1 million reduction on our Machinify earnout.
The tax benefit to be 51 recognized is the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the applicable tax authority that has full knowledge of all relevant information. Our gross unrecognized benefits are $2.6 million as of December 31, 2024.
The tax benefit to be recognized is the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the applicable tax authority that has full knowledge of all relevant information. Our gross unrecognized benefits are $2.7 million as of December 31, 2025.
We use both a discounted cash flow analysis and market multiple analysis in order to estimate the fair value of our reporting unit. The discounted cash flow analysis relies on significant judgement and assumptions about expected future cash flows, weighted-average cost of capital, discount rates, expected long-term growth rates and operating margins.
We use a discounted cash flow analysis in order to estimate the fair value of our reporting unit. The discounted cash flow analysis relies on significant judgment and assumptions about expected future cash flows, weighted-average cost of capital, discount rates, expected long-term growth rates and operating margins.
Impact of Inflation We experience pricing pressures in the form of competitive prices in addition to rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits and facility leases. We do not believe these impacts were material to our revenues or net income during the year ended December 31, 2024.
Impact of Inflation We experience pricing pressures in the form of competitive prices in addition to rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits and facility leases. We do not believe these impacts were material to our revenues or net loss for the year ended December 31, 2025, respectively.
Depreciation and amortization expenses include $68.9 million and $74.8 million for the year ended December 31, 2024 and 2023, respectively, of amortization expense on intangible assets such as corporate trade names, customer, relationships, provider network contracts and existing technology related to acquisitions and business combinations.
Depreciation and amortization expenses include $76.1 million and $68.9 million for the year ended December 31, 2025 and 2024, respectively, of amortization expense on intangible assets such as corporate trade names, customer, relationships, provider network contracts and existing technology related to acquisitions and business combinations.
Dividends and Accretion of Series A Preferred Stock We pay quarterly regular cash dividends on the Series A Preferred Stock at a rate per annum equal to Adjusted Term SOFR (as defined in the Certificate of Designation) plus 6.00%.
Dividends and Accretion of Series A Preferred Stock Including Excise Tax We paid quarterly regular cash dividends on the Series A Preferred Stock at a rate per annum equal to Adjusted Term SOFR (as defined in the Certificate of Designation) plus 6.00%.
Customers The following table summarizes those partners who represented at least 10.0% of our consolidated revenue: For the Year Ended December 31, 2024 2023 2022 Cook County Health and Hospitals System 11.5% 15.7% 22.4% Florida Blue Medicare, Inc. 12.9% 10.4% 11.5% Humana Insurance Company 19.3% 12.0% * Molina Healthcare, Inc. 13.7% 13.5% * ———————— * Represents less than 10.0% of the respective balance.
Customers The following table summarizes those partners who represented at least 10.0% of our consolidated revenue: For the Year Ended December 31, 2025 2024 2023 Molina Healthcare, Inc. 25.7% 13.7% 13.5% Cook County Health and Hospitals System 16.4% 11.5% 15.7% Florida Blue 14.2% 12.9% 10.4% Centene Corporation 12.2% * * Humana Insurance Company * 19.3% 12.0% ———————— * Represents less than 10.0% of the respective balance.
Selling, general and administrative expenses also include transition services agreements (“TSA”) fees associated with our acquisitions, costs associated with our centralized infrastructure and research and development activities to support our network development capabilities, technology infrastructure, clinical program development and data analytics.
Selling, general and administrative expenses also include costs associated with our centralized infrastructure and research and development activities to support our network development capabilities, technology infrastructure, clinical program development and data analytics.
Approximately $4.6 million and $1.7 million of total cost of revenue was attributable to stock-based compensation expense for the year ended December 31, 2024, and 2023, respectively. Cost of revenue represented 85.6% and 76.6% of total revenue for the year ended December 31, 2024, and 2023 respectively.
Approximately $3.2 million and $4.6 million of total cost of revenue was attributable to stock-based compensation expense for the year ended December 31, 2025, and 2024, respectively. Cost of revenue represented 78.7% and 85.6% of total revenue for the year ended December 31, 2025, and 2024 respectively.
Financial Statements and Supplementary Data - Consolidated Statements of Cash Flows”: For the Year Ended December 31, 2024 2023 2022 Net cash and restricted cash provided by (used in) operating activities $ 18,765 $ 142,582 $ (11,553) Net cash and restricted cash used in investing activities (62,932) (415,544) (259,115) Net cash and restricted cash (used in) provided by financing activities (565) 281,340 131,541 Operating Activities Cash flows from operating activities primarily represent inflows and outflows associated with our operations.
Financial Statements and Supplementary Data - Consolidated Statements of Cash Flows”: For the Year Ended December 31, 2025 2024 2023 Net cash and restricted cash provided by operating activities $ 38,843 $ 18,765 $ 142,582 Net cash and restricted cash used in investing activities (233) (62,932) (415,544) Net cash and restricted cash (used in) provided by financing activities (35,924) (565) 281,340 Operating Activities Cash flows from operating activities primarily represent inflows and outflows associated with our operations.
In the quantitative evaluation, the fair value is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required.
If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable and no further action is required.
As of December 31, 2024, the Company had $104.2 million of cash and cash equivalents and $74.3 million in restricted cash and restricted investments. We believe our current cash and cash equivalents will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months as of the date the financial statements were issued.
As of December 31, 2025, the Company had $151.9 million of cash and cash equivalents and $28.8 million in restricted cash. We believe our current cash and cash equivalents will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months as of the date the financial statements were issued.
Benefit from Income Taxes A benefit from income taxes of $1.4 million, $89.4 million and $43.4 million was recognized for the years ended December 31, 2024, 2023 and 2022, respectively, which resulted in effective tax rates of 2.2%, 44.2% and 69.9%, respectively.
Benefit from Income Taxes A benefit from income taxes of $0.1 million and $1.4 million was recognized for the years ended December 31, 2025 and 2024, respectively, which resulted in effective tax rates of 0.0% and 2.2%,, respectively.
Restricted Cash and Restricted Investments Restricted cash and restricted investments of $74.3 million is carried at cost and includes cash held on behalf of other entities for pharmacy and claims management services of $55.8 million, collateral for letters of credit required as security deposits for facility leases of $1.9 million, amounts held with financial institutions for risk-sharing arrangements of $16.6 million as of December 31, 2024.
Restricted Cash Restricted cash of $28.8 million is carried at cost and includes cash held on behalf of other entities for pharmacy and claims management services of $12.9 million, collateral for letters of credit required as security deposits for facility leases of $0.2 million, amounts held with financial institutions for risk-sharing arrangements of $15.7 million as of December 31, 2025.
We primarily utilize a variable fee structure for these services that typically includes a monthly payment that is calculated based on a specified per member per month rate, multiplied by the number of members that our partners are managing under a value-based care arrangement or a percentage of plan premiums.
We primarily utilize a variable fee structure for these services that typically includes a monthly payment that is calculated based on a specified per member per month rate, multiplied by the number of members that our partners are managing under a value-based care arrangement or a percentage of plan premiums. 47 Our arrangements may also include other variable fees related to service level agreements, shared medical savings arrangements and other performance measures.
Credit Agreement Activity On December 6, 2024 (the “Amendment No. 3 Effective Date”), the Company entered into Amendment No. 3 (“Amendment No. 3”) to the Credit Agreement (as defined below) that provides new secured debt financing in the form of (i) additional commitments under the Company’s existing asset-based revolving credit facility in an aggregate principal amount equal to $50.0 million (the “2024 Revolver Increase”, and together with the Initial Revolving Facility (as defined below) and the 2023 Revolver Increase (as defined below, the “Revolving Facility”), (ii) a new delayed draw term loan facility in an aggregate principal amount equal to $125.0 million (the “2024-A Delayed Draw Term Loan Facility”), and (iii) a new delayed draw term loan facility in an aggregate principal amount equal to $75.0 million (the “2024-B Delayed Draw Term Loan Facility” and together with the 2024 Revolver Increase and the 2024-A Delayed Draw Term Loan Facility, the “2024 Incremental Facilities”; the Initial Term Loan Facility (as defined below), the 2023 Additional Term Loans (as defined below), the 2024-A Delayed Draw Term Loan Facility and the 2024-B Delayed Draw Term Loan Facility are collectively referred to herein as the “Term Loan Facility”; the Revolving Facility and the Term Loan Facility are collectively referred to herein as the “Credit Facilities”).
Credit Agreement Activity On December 6, 2024 (the “Amendment No. 3 Effective Date”), the Company entered into Amendment No. 3 (“Amendment No. 3”) to its credit agreement, by and among the Company, the Borrower, certain subsidiaries of the Company, as co-borrowers and guarantors, the lenders from time to time party thereto, and Ares Capital Corporation (“Ares”) (as amended, the “First Lien Credit Agreement”) that provided new secured debt financing in the form of (i) additional commitments under the Company’s existing asset-based revolving credit facility in an aggregate principal amount equal to $50.0 million (the “2024 Revolver Increase”, and together with the initial asset-based revolving credit commitments in an aggregate principal amount of $50.0 million obtained by the Company in 2022 (the “Initial Revolving Facility”) and the additional commitments in an aggregate amount equal to $25.0 million obtained by the Company in 2023, the “Revolving Facility”), (ii) a new delayed draw term loan facility in an aggregate principal amount equal to $125.0 million (the “2024-A Delayed Draw Term Loan Facility”), and (iii) a new delayed draw term loan facility in an aggregate principal amount equal to $75.0 million (the “2024-B Delayed Draw Term Loan Facility” and together with the 2024 Revolver Increase and the 2024-A Delayed Draw Term Loan Facility, the “2024 Incremental Facilities”; the initial term loan facility obtained by the Company in 2022 under the First Lien Credit Agreement and the additional term loans entered into by the Company in 2023, the 2024-A Delayed Draw Term Loan Facility and the 2024-B Delayed Draw Term Loan Facility, as amended, are collectively 43 referred to herein as the “Term Loan Facility”; the Revolving Facility and the Term Loan Facility are collectively referred to herein as the “First Lien Credit Facilities”).
Cash flows provided by operating activities of $142.6 million for the year ended December 31, 2023 were affected by increases in accounts receivable from our acquisition of NIA of $51.8 million and timing of our partner and vendor payments including lower cash receipts from certain performance-based customers including Cook County Health and Hospitals System totaling $142.7 million, which is then offset by higher reserve for claims and performance-based arrangements of $204.3 million.
Of the total $88.8 million in NIA contingent consideration paid in the period, $22.2 million represented a change in fair value of NIA contingent consideration in excess of the initial fair value at the acquisition date through payment date, and is therefore presented in cash flows provided by operating activities under changes in accrued expenses. 54 Cash flows provided by operating activities of $142.6 million for the year ended December 31, 2023 were affected by increases in accounts receivable from our acquisition of NIA of $51.8 million and timing of our partner and vendor payments including lower cash receipts from certain performance-based customers including Cook County Health and Hospitals System totaling $142.7 million, which is then offset by higher reserve for claims and performance-based arrangements of $204.3 million.
We have one operating segment and one reportable segment as our CODM, who is our Chief Executive Officer, reviews financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. Critical Accounting Policies and Estimates We have identified the accounting policies below as critical to the understanding of our results of operations and our financial condition.
Segment Reporting We have one operating segment and one reportable segment as our CODM, who is our Chief Executive Officer, assesses the performance of our operations, develops strategy and reviews financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources.
Costs consist primarily of claims expense, employee-related expenses (including compensation, benefits and stock-based compensation), expenses recorded as part of a Medicare shared savings program and other services, as well as other professional fees.
Cost of Revenue (exclusive of depreciation and amortization) Our cost of revenue includes direct expenses and shared resources that perform services in direct support of our partners. Costs consist primarily of claims expense, employee-related expenses (including compensation, benefits and stock-based compensation), expenses recorded as part of a Medicare shared savings program and other services, as well as other professional fees.
We believe Evolent can bring an integrated approach to a patient’s condition across multiple specialties, using technology to recommend our evidence-based clinical pathways in a way that provides rapid feedback to the provider, seeks to remove barriers to care, and aligns financial incentives with the best evidence. 47 We were an early innovator in value-based care, founded in 2011 by members of our management team, UPMC, an integrated delivery system based in Pittsburgh, Pennsylvania, and The Advisory Board Company.
We believe Evolent can bring an integrated approach to a patient’s condition across multiple specialties, using technology to recommend our 42 evidence-based clinical pathways in a way that provides rapid feedback to the provider, seeks to remove barriers to care, and aligns financial incentives with the best evidence.
Financial Statements and Supplementary Data - Note 2.” Goodwill We recognize the excess of the purchase price plus the fair value of any non-controlling interests in the acquiree over the fair value of identifiable net assets acquired as goodwill.
Financial Statements and Supplementary Data - Note 2” in this Form 10-K for more information on our critical accounting policies. Goodwill and Intangible Assets, Net We recognize the excess of the purchase price plus the fair value of any non-controlling interests in the acquiree over the fair value of identifiable net assets acquired as goodwill.
Administrative Services Average PMPM fee is defined as revenue pertaining to the Administrative Services during the period reported divided by the Administrative Services Lives on Platform for the period divided by the number of months in the period.
Administrative Services Average PMPM fee is defined as revenue pertaining to the Administrative Services during the period reported divided by the Administrative Services Lives on Platform for the period divided by the number of months in the period. 48 Revenue per Case is calculated by the revenue pertaining to surgery management and advanced care planning programs divided by the number of cases for a given period.
We are unable to predict how these broader dynamics will impact our business and results of operations in the future, but they could continue to impact our financial condition and results of operations and such future impacts could be material.
We are unable to predict how these broader dynamics will impact our business and results of operations in the future, but they could continue to impact our financial condition and results of operations and such future impacts could be material. Regulatory Uncertainty and Changes On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law.
All of our revenue is recognized in the United States and substantially all of our long-lived assets are located in the United States. Recent Events Transactions The Company has undertaken several transactions, some of which may impact year-to-year comparisons. The following is a discussion of certain of those transactions.
Recent Events Transactions The Company has undertaken several transactions, some of which may impact year-to-year comparisons. The following is a discussion of certain of those transactions.
In order to determine whether we are the principal or agent in the arrangement, we review each third-party relationship on a contract-by- contract basis. As we integrate goods and services provided by third parties into our overall service, we control the services provided to the customer prior to its delivery.
As we integrate goods and services provided by third parties into our overall service, we control the services provided to the customer prior to its delivery. As such, we are the principal and we will recognize revenue on a gross basis.
See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” for further details of the Company’s restricted cash balances. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are carried at cost and includes prepaid expenses and non-trade accounts receivable.
See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” for further details of the Company’s restricted cash balances.
Approximately $35.2 million and $38.8 million of total selling, general and administrative expenses were attributable to stock-based compensation expense for the year ended December 31, 2024 and 2023, respectively. Acquisition and severance costs accounted for approximately $5.8 million and $16.6 million of total selling, general and administrative expenses for the year ended December 31, 2024 and 2023, respectively.
The lower personnel costs in 2024 related in part to lower-than-target incentive compensation accruals. Approximately $36.5 million and $35.2 million of total selling, general and administrative expenses were attributable to stock-based compensation expense for the year ended December 31, 2025 and 2024, respectively.
Selling, General and Administrative Expenses Selling, general, and administrative expenses decreased by $95.1 million, or 26.5%, to $263.1 million for the year ended December 31, 2024, as compared to 2023.
Selling, General and Administrative Expenses Selling, general, and administrative expenses increased by $40.8 million, or 15.5%, to $303.9 million for the year ended December 31, 2025, as compared to 2024.
We also deploy our services in capitation arrangements under our specialty care management solution and total cost of care solution, which we call the “Performance Suite.” Capitation arrangements under the Performance Suite may include performance-based arrangements and/or gainshare features. We occasionally use third parties to assist in satisfying our performance obligations.
Variable consideration is estimated using the most likely amount based on our historical experience and best judgment at the time. We also deploy our services in capitation arrangements under our specialty care management solution and total cost of care solution, which we call the “Performance Suite.” Capitation arrangements under the Performance Suite may include performance-based arrangements and/or gainshare features.
Financial Statements and Supplementary Data - Note 9” and “Part II - Item 8. Financial Statements and Supplementary Data - Note 25” in this Form 10-K for more information related to interest expense by debt issuance. Gain from Equity Method Investees The Company allocated its proportional share of the investees’ earnings and losses each reporting period.
See “Part II - Item 8. Financial Statements and Supplementary Data - Note 9” in this Form 10-K for more information related to interest expense by debt issuance.
As such, we are the principal and we will recognize revenue on a gross basis. In certain cases, we 53 act as an agent and do not control the services from third parties before it is delivered to the customer, thereby recognizing revenue on a net basis.
In certain cases, we act as an agent and do not control the services from third parties before it is delivered to the customer, thereby recognizing revenue on a net basis. Due to the nature of our arrangements, certain estimates may be constrained if it is probable that a significant reversal of revenue will occur when the uncertainty is resolved.
Additionally, as part of this assessment, we may perform a quantitative analysis to support the qualitative factors above by applying sensitivities to assumptions and inputs used in measuring our reporting unit’s fair value. 50 If the Company determines that it is more likely than not that the fair value of our reporting unit is below the carrying amount, a quantitative goodwill assessment is required.
If the Company determines that it is more likely than not that the fair value of our reporting unit is below the carrying amount, a quantitative goodwill assessment is required. In the quantitative evaluation, the fair value is determined and compared to the carrying value.
We recorded interest expense (including amortization of deferred financing costs) of approximately $24.7 million, $54.2 million and $15.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Financial Statements and Supplementary Data—Note 8.” Discussion of Non-Operating Results Interest Expense We recorded interest expense (including amortization of deferred financing costs) of approximately $57.5 million and $24.7 million for the years ended December 31, 2025 and 2024, respectively.
In cases where partners cross between multiple solutions, we only capture members from the solution with the maximum number of members. 54 Management uses Lives on Platform, PMPM fees, Cases, Revenue per Case and Average Unique Members because we believe that they provide insight into the unit economics of our services.
Management uses Lives on Platform, PMPM fees, Cases, Revenue per Case and Average Unique Members because we believe that they provide insight into the unit economics of our services. We believe that these measures are also useful to investors because they allow further insight into the period over period operational performance.
The following table represents Evolent’s revenue disaggregated by line of business (in thousands): For the Year Ended December 31, 2024 2023 Medicaid $ 862,401 $ 785,053 Medicare 1,045,921 708,853 Commercial and other 646,419 469,990 Total $ 2,554,741 $ 1,963,896 The following table represents the Company’s Lives on Platform, Cases, Average PMPM fees, Revenue per Case and Average Unique Members for the year ended December 31, 2024 and 2023 (Average Lives on Platform/Cases in thousands): Average Lives on Platform/ Cases Average PMPM Fees / Revenue per Case For the Year Ended December 31, For the Year Ended December 31, 2024 2023 2024 2023 Performance Suite 7,003 4,236 $ 21.44 $ 23.90 Specialty Technology and Services Suite 73,339 69,494 0.38 0.36 Administrative Services 1,246 1,831 15.92 13.48 Cases 60 61 2,967 2,575 Average Unique Members 40,475 41,430 Cost of Revenue Cost of revenue increased by $684.0 million, or 45.5%, to $2,187.4 million for the year ended December 31, 2024, as compared to 2023, principally as a result of the 30.1% growth in our revenue compared to year ended December 31, 2023.
The following table represents Evolent’s revenue disaggregated by line of business and product type (in thousands): For the Year Ended December 31, 2025 2024 Medicaid $ 818,310 $ 862,401 Medicare 464,235 1,045,921 Commercial and other 593,684 646,419 Total $ 1,876,229 $ 2,554,741 Performance Su ite $ 1,127,336 $ 1,801,879 Specialty Technology and Services Suite 353,228 338,306 Administrative Services 226,683 238,036 Cases 168,982 176,520 Total $ 1,876,229 $ 2,554,741 Revenue from Evolent Care Partners 107,848 257,143 Performance Suite revenue excluding revenue from Evolent Care Partners $ 1,019,488 $ 1,544,736 The following table represents the Company’s Lives on Platform, Cases, Average PMPM fees, Revenue per Case and Average Unique Members (Average Lives on Platform/Cases in thousands): Average Lives on Platform/ Cases Average PMPM Fees / Revenue per Case For the Year Ended December 31, For the Year Ended December 31, 2025 2024 2025 2024 Performance Suite 6,482 7,003 $ 14.48 $ 21.44 Specialty Technology and Services Suite 77,983 73,339 0.38 0.38 Administrative Services 1,221 1,246 15.47 15.92 Cases 53 60 3,168 2,967 Average Unique Members 40,425 40,475 Cost of Revenue Cost of revenue decreased by $711.0 million, or 32.5%, to $1,476.3 million for the year ended December 31, 2025, as compared to 2024, principally as a result of the 26.6% decrease in our revenue compared to year ended December 31, 2024.
Uses of Capital Our principal uses of cash are in the operation and expansion of our business, payment of interest and other amounts payable on our convertible debt and secured borrowings and payment of preferred dividends. The Company does not anticipate paying a cash dividend on our Class A common stock in the foreseeable future. 62
Uses of Capital Our principal uses of cash are in the operation and expansion of our business, payment of interest and other amounts payable in connection with financings, including on our convertible debt and secured borrowings, as well as potential tax obligations.
Comparison of the Results for Year Ended December 31, 2024 to 2023 Revenue Total revenue increased by $590.8 million, or 30.1%, to $2,554.7 million for the year ended December 31, 2024, as compared to 2023.
Comparison of the Results for the Year Ended December 31, 2025 to 2024 Revenue Total revenue decreased $678.5 million, or 26.6%, to $1,876.2 million for the year ended December 31, 2025, compared to the same period in 2024.
Our operating cash outflows were affected by the timing of our customer and vendor payments primarily driven by increases in accounts receivables from Cook County Health and Hospitals System of approximately $99.2 million, reduction of our accrued liabilities due to a decrease in expected IPG and Vital Decisions contingent consideration payments of $25.7 million and an increase in reserves for liabilities related to payments to providers and pharmacies under performance-based arrangements related to its total cost of care and specialty care management services of $28.4 million. 59 Investing Activities Cash flows used in investing activities of $62.9 million in the year ended December 31, 2024 were primarily attributable to cash paid for asset acquisitions and business combinations of $30.7 million which is inclusive of $19.5 million for the purchase of Machinify and $3.0 million for investment in future equity notes, and $24.9 million of investments in internal-use software and purchases of property and equipment.
Cash flows used in investing activities of $62.9 million in the year ended December 31, 2024 were primarily attributable to cash paid for asset acquisitions and business combinations of $30.7 million which is inclusive of $19.5 million for the purchase of Machinify and $3.0 million for investment in future equity notes, and $24.9 million of investments in internal-use software and purchases of property and equipment.
The decrease was primarily driven by lower TSA fees related to our NIA acquisition of $13.5 million recorded in 2023, $24.6 million of lower professional fees as a result of the 2023 Repositioning Plan, a $25.8 million decrease in personnel costs as a result of lower headcount and bonus accruals and lower bad debt expense of $7.0 million due to collection timing 56 from our customers, lower stock compensation of $3.7 million due to the achievement and change in projected achievement of certain performance measurements and lower lease expense of $5.3 million due to the termination of certain leases.
The increase was primarily driven by higher personnel costs of $24.4 million including increased severance of $7.3 million, higher professional fees of $6.7 million driven by transaction costs, higher technology costs including cloud services of $5.8 million, a $2.1 million increase in bad debt expense versus the prior period reflecting a return to normal collections timing and higher stock compensation expense due to the achievement and change in projected achievement of certain performance measurements of $1.3 million, offset by lower lease expense of $4.2 million due to the termination of certain real estate leases.
Cash flows used in investing activities of $259.1 million in the year ended December 31, 2022 were primarily attributable to $248.1 million paid for the acquisition of IPG, $9.2 million paid for a purchase price adjustment related to our disposal of True Health and $38.4 million of investments in internal-use software and purchases of property and equipment, offset in part, by $31.0 million from the transfer of membership and release of EVH Passport escrow and $5.6 million from returns from our equity method investments.
Investing Activities Cash flows used in investing activities of $0.2 million for the year ended December 31, 2025 were primarily attributable to cash paid for asset acquisitions and business combinations of $57.4 million and investments in internal-use software and purchases of property and equipment of $34.1 million, offset in part by $91.3 million of cash proceeds from the disposition of Evolent Care Partners.
The Company expects to use the funds borrowed under its Committed Facilities for general corporate purposes, including working capital and management of future liabilities, potentially including the Company’s 2025 Notes. In addition, as of December 31, 2024, we had 175,000 shares of the Series A Preferred Stock outstanding.
The Company used the funds borrowed under its Committed Facilities for general corporate purposes, including working capital and management of future liabilities.
Financial Statements and Supplementary Data - Note 18” in this Form 10-K for more information related to changes in the fair value of contingent consideration. 57 Discussion of Non-Operating Results Interest Expense Our interest expense for the year ended December 31, 2024 is primarily attributable to our Credit Agreement with Ares as well as the 2024 Notes and 2025 Notes.
See “Part II - Item 8. Financial Statements and Supplementary Data - Note 18” in this Form 10-K for more information related to changes in the fair value of contingent consideration.
Financial Statements and Supplementary Data - Note 9” for additional information on payment dates for our convertible notes interest. (2) Represents the fair value of earn-out consideration related to the Machinify transaction and annual incentive payments to Evolent Care Partners providers based on membership attribution. See “Part II - Item 8.
The remaining termination payments will be $12.9 million in 2026. (2) Refer to the discussion in “Part II - Item 8. Financial Statements and Supplementary Data - Note 9” for additional information on payment dates for our convertible notes interest.
The Company paid dividends and recorded accretion of deferred issuance costs and redemption value related to the Series A Preferred Stock as presented below (in thousands): For the Year Ended December 31, 2024 2023 2022 Cash dividends on Series A Preferred Stock 20,085 18,793 — Accretion of deferred financing costs and redemption value in excess of par $ 11,746 $ 10,427 $ — Total dividends and accretion of Series A Preferred Stock $ 31,831 $ 29,220 $ — 58 REVIEW OF CONSOLIDATED FINANCIAL CONDITION Liquidity and Capital Resources The Company reported net loss attributable to common shareholders of Evolent Health, Inc. of $93.5 million, $142.3 million and $19.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
REVIEW OF CONSOLIDATED FINANCIAL CONDITION Liquidity and Capital Resources The Company reported net loss attributable to common shareholders of Evolent Health, Inc. of $579.4 million and $93.5 million and $142.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The decrease in interest expense for the year ended December 31, 2024 compared to 2023 is driven by the repayment of our Ares Term Loan Facility in December 2023, offset by the increase in interest expense as a result of the issuance of our 2029 Notes.
The increase in interest expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 is driven primarily by interest incurred under First Lien Credit Agreement borrowings in January 2025 and the exchange of our Series A Preferred Stock for Second Lien Loan Facility combined with the issuance of our 52 2031 Notes in August 2025.
Depreciation and Amortization Expenses Depreciation and amortization expenses decreased $5.0 million, or 4.1%, to $118.4 million for the year ended December 31, 2024, as compared to 2023 primarily to fully amortizing our NCH technology intangible and provider network contracts in 2023 resulting in lower amortization of $4.1 million and $1.4 million, respectively, offset, in part by $1.1 million of accelerated amortization on our retired trade names.
Selling, general and administrative expenses represented 16.2% and 10.3% of total revenue for the year ended December 31, 2025, as compared to 2024, respectively, driven primarily from contractual updates with certain customers in our Performance Suite. 51 Depreciation and Amortization Expenses Depreciation and amortization expenses decreased $2.5 million, or 2.1%, to $115.9 million, as compared to 2024 primarily due to $21.6 million of accelerated amortization on our retired trade names in 2024 and $2.4 million of lower depreciation of internally developed software, offset in part by $21.9 million higher amortization of certain customer relationship intangibles.
The 2029 Notes were issued at an issue price of 100.00% of par for net proceeds of approximately $390.2 million, after deducting fees and expenses. We incurred $11.6 million of debt issuance costs in connection with the 2029 Notes.
The closing of the 2031 Notes occurred on August 21, 2025 and a total of $166.8 million aggregate principal amount of 2031 Notes were issued at an issue price of 100.00% of par for net proceeds of approximately $161.0 million, after deducting fees and estimated expenses.
Qualitative factors include macroeconomic, industry and market considerations, overall financial performance, industry, legal and other relevant events and factors affecting the reporting unit.
Qualitative factors include macroeconomic, industry and market considerations, overall financial performance, industry, legal and other relevant events and factors affecting the reporting unit. Additionally, as part of this assessment, we may perform a quantitative analysis to support the qualitative factors above by applying sensitivities to assumptions and inputs used in measuring our reporting unit’s fair value.
Loss on Extinguishment/Repayment of Long-Term Debt, Net During the year ended December 31, 2023, the Company repaid $415.0 million of the Term Loan Facility that was utilized to acquire IPG and NIA and recorded a loss on repayment/extinguishment of long-term debt of $21.0 million comprised of $10.7 million in prepayment premium and $10.3 million of acceleration of amortization of deferred financing costs.
As a result of the repayment on the 2024-A Delayed Draw Term Loan Facility, the Company recorded a loss of $3.9 million in loss on extinguishment and repayment of debt, net, comprised of $0.8 million of contractual prepayment penalty in accordance with the Credit Agreement and $3.1 million of acceleration of amortization of deferred financing fees.
Loss on Lease Termination During the year ended December 31, 2024, the Company terminated its Chicago, IL lease effective October 31, 2024 and recognized the impact of a $39.8 million termination penalty in its operating lease liability - current and operating lease liability - noncurrent on its consolidated balance sheet.
Loss on Lease Termination During the year ended December 31, 2024, the Company terminated its Chicago, IL lease effective October 31, 2024. We recorded an additional $0.7 million loss on lease termination related to negotiated termination payments and real estate commissions for the year ended December 31, 2025.
Revenue per Case is calculated by the revenue pertaining to surgery management and advanced care planning programs divided by the number of cases for a given period. Average Unique Members are calculated by summing members covered by our Performance Suite, Specialty Technology and Services Suite and Administrative Services.
Average Unique Members are calculated by summing members covered by our Performance Suite, Specialty Technology and Services Suite and Administrative Services. In cases where partners cross between multiple solutions, we only capture members from the solution with the maximum number of members.
Financial Statements and Supplementary Data - Note 21” in this Form 10-K for more information related our segments. 52 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).
Financial Statements and Supplementary Data - Note 5 - Disaggregation of Revenue” in this Form 10-K for more information related to GAAP revenue by product type.
The increase included approximately $685.6 million of higher claims cost compared to the prior year period, which is attributable to higher medical expenses in certain Performance Suite markets relating to higher disease prevalence and acuity of certain populations inclusive of $105.0 million related to transitioning certain Specialty and Technology Service Suite customers to Performance Suite.
The decrease included approximately $715.7 million of lower claims cost compared to the prior year period, which is primarily attributable to transitioning certain Performance Suite customers to Specialty and Technology Service Suite and narrowing of scope of certain customers totaling 50 $754.6 million, offset in part by higher claims expense on certain new and existing customer contracts of $15.9 million, contractual changes on a Performance Suite customer of $21.5 million and higher personnel costs of $2.8 million compared to the prior year.
Due to the nature of our arrangements, certain estimates may be constrained if it is probable that a significant reversal of revenue will occur when the uncertainty is resolved. We recognize revenue from services over time using the time elapsed output method. Fixed consideration is recognized ratably over the contract term.
We recognize revenue from services over time using the time elapsed output method. Fixed consideration is recognized ratably over the contract term. In accordance with the series guidance, we allocate variable consideration to the period to which the fees relate.
The Company used the net proceeds to prepay interest and prepayment premiums on outstanding borrowings and pay interest and prepayment premiums under its Term Loan Facility. Refer to “Part II – Item 8. Financial Statements and Supplementary Data – Note 9” for additional discussion regarding the 2029 Notes.
As of December 31, 2025, there was $117.2 million, $72.5 million and $175.0 million principal balance subject to interest under the Company’s Term Loan Facility, Revolving Facility and Second Lien Term Loan Facility, respectively. Refer to “Part II - Item 8. Financial Statements and Supplementary Data - Note 9” for additional discussion regarding our Credit Agreement.
Our estimated known contractual and other obligations (in thousands) as of December 31, 2024, were as follows (including as discussed in the narrative below): 2025 2026-2027 2028-2029 2030+ Total Operating leases for facilities $ 27,610 $ 21,727 $ 3,155 $ 1,663 $ 54,155 Purchase obligations related to vendor contracts 12,284 13,758 101 — 26,143 Convertible notes interest payments (1) 16,675 28,175 28,176 — 73,026 Convertible notes principal repayment 172,500 — 402,500 — 575,000 Contingent consideration (2) 5,000 — — — 5,000 Total known contractual obligations $ 234,069 $ 63,660 $ 433,932 $ 1,663 $ 733,324 ———————— (1) Refer to the discussion in “Part II - Item 8.
Our estimated known contractual and other obligations (in thousands) as of December 31, 2025, were as follows (including as discussed in the narrative below): 2026 2027-2028 2029-2030 2031+ Total Operating leases for facilities (1) $ 15,786 $ 3,159 $ 1,110 $ 47 $ 20,102 Purchase obligations related to vendor contracts 24,353 10,271 2,617 — 37,241 Convertible notes interest payments (2) 21,487 43,183 29,095 7,483 101,248 Convertible notes principal repayment — — 402,500 166,750 569,250 Total $ 61,626 $ 56,613 $ 435,322 $ 174,280 $ 727,841 ———————— (1) During the year ended December 31, 2024, the Company terminated its Chicago, IL lease and recognized the impact in its operating lease liability - current and operating lease liability - noncurrent on its consolidated balance sheet.
Removed
Acquisitions On August 1, 2024, the Company completed its acquisition of certain assets of Machinify, Inc. and the exclusive, perpetual and royalty-free license of Machinify Auth.
Added
We were an early innovator in value-based care, founded in 2011 by members of our management team, UPMC, an integrated delivery system based in Pittsburgh, Pennsylvania, and The Advisory Board Company. All of our revenue is recognized in the United States and substantially all of our long-lived assets are located in the United States.
Removed
The acquisition consideration was $28.5 million which included $19.5 million of cash, $11.0 million which was paid upon closing and $8.5 million which was paid on November 1, 2024, as well as an earn-out consisting of additional consideration of up to $12.5 million payable in cash or shares of the Company’s Class A common stock at the election of the Company in the second quarter of 2025.
Added
Disposal During the third quarter, the Company entered into the ECP Purchase Agreement pursuant to which the Company agreed to sell all of the outstanding shares of capital stock of Evolent Care Partners for a purchase price of $100.0 million, subject to customary closing purchase price adjustments, and a contingent payment of up to $13.0 million, subject to the achievement of certain metrics following the closing.
Removed
On January 20, 2023, we consummated the acquisition of NIA for $387.8 million in cash consideration, which was financed in part with $265.0 million in debt borrowed from affiliates of Ares and the proceeds from the sale of an aggregate 175,000 shares of the Company’s Series A Preferred Stock, resulting in gross proceeds of $168.0 million, and stock consideration of 8.5 million shares of Class A common stock issued to the seller.
Added
The Company consummated the transaction on December 5, 2025. The Company previously recorded its operations from Evolent Care Partners in its total cost of care management solution. The Company determined that the transaction met the held for sale criteria and ceased recording amortization of provider network contract intangibles at that time.
Removed
NIA is part of Evolent’s Specialty Technology and Services Suite.
Added
The Company received cash proceeds of $91.3 million after net working capital adjustments. The carrying value of net assets and liabilities of $76.4 million, inclusive of allocated goodwill, was disposed resulting in a gain on disposal of $14.9 million recorded in (gain) loss on disposal of non-strategic assets for the year ended December 31, 2025.
Removed
Refer to “Part II - Item 8. Financial Statements and Supplementary Data - Note 9 for a discussion of Amendment No. 3. On January 29, 2025, the Company borrowed $125.0 million under its 2024-A Delayed Draw Term Loan and $75.0 million under its 2024-B Delayed Draw Term Loan.
Added
The Company allocated $44.8 million of goodwill to the transaction based on the value of the transaction compared to the estimated business enterprise value on the closing date. Refer to “Part II - Item 8.
Removed
As of February 14, 2025, there was $262.5 million outstanding under the Company’s Credit Facilities, consisting of $125.0 million outstanding under 2024-A Delayed Draw Term Loan, $75.0 million outstanding under its 2024-B Delayed Draw Term Loan and $62.5 million outstanding under its Revolving Facility.
Added
Financial Statements and Supplementary Data - Note 4” for additional discussion regarding our disposal. 2031 Notes Issuance, 2025 Notes Repayment and Common Stock Repurchase On August 18, 2025, the Company entered into a purchase agreement to sell $145.0 million aggregate principal amount of its 2031 Notes in a private placement to the Purchasers within the meaning of Rule 144A under the Securities Act.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−3 removed1 unchanged
Biggest changeAccordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may, in the future, negatively affect our operating results as expressed in U.S. dollars. At this time, we have not entered into, but in the future, we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk.
Biggest changeAt this time, we have not entered into, but in the future, we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. It is difficult to predict the effect hedging activities would have on our results of operations. 57
Changes in interest rates affect the interest earned on our cash and cash equivalents (including restricted cash). We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
In the case of (a) the revolving loan, interest is calculated at either the Adjusted Term SOFR (as defined in the Certificate of Designation) plus 4.00%, or the base rate plus 3.00%, (b) the Series A Preferred Stock, dividends are to be paid quarterly in cash in arrears at a rate per annum equal to Adjusted Term SOFR (as defined in the Certificate of Designation) plus 6.00% and (c) the 2024-A Delayed Draw Term Loan and 2024-B Delayed Draw Term Loan, interest is calculated at either the Adjusted Term SOFR plus 5.50% or the base rate plus 4.50%.
In the case of (a) the revolving loan, interest is calculated at either the Adjusted Term SOFR (as defined in the Certificate of Designation) plus 4.00%, or the base rate plus 3.00%, (b) the 2024-A Delayed Draw Term Loan and 2024-B Delayed Draw Term Loan, interest is calculated at either the Adjusted Term SOFR plus 5.50% or the base rate plus 4.50% and (c) the second lien term loan facility, interest is calculated at the Adjusted Term SOFR plus 6.00%.
Foreign Currency Exchange Risk We have de minimis foreign currency risks related to our operating expenses denominated in currencies other than the U.S. dollar, primarily the Indian Rupee and the Philippine Peso. In general, we are a net payer of currencies other than the U.S. dollar.
Financial Statements and Supplementary Data - Note 9” for additional information on our long-term debt. Foreign Currency Exchange Risk We have de minimis foreign currency risks related to our operating expenses denominated in currencies other than the U.S. dollar, primarily the Indian Rupee and the Philippine Peso.
Interest Rate Risk As of December 31, 2024, the Company had cash and cash equivalents and restricted cash and restricted investments of $178.5 million, which consisted of bank deposits with FDIC participating banks of $169.8 million and bank deposits in international banks of $8.7 million.
Interest Rate Risk As of December 31, 2025, the Company had cash and cash equivalents and restricted cash of $180.7 million, which consisted of bank deposits with FDIC participating banks of $171.6 million and bank deposits in international banks of $9.1 million. Changes in interest rates affect the interest earned on our cash and cash equivalents (including restricted cash).
As of December 31, 2024, we had $575.0 million of aggregate principal amount of convertible notes outstanding, which are fixed rate instruments and not subject to fluctuations in interest rates.
For every 1% increase in SOFR, the Company would record additional interest expense of $3.65 million per annum. As of December 31, 2025, we had $569.3 million of aggregate principal amount of convertible notes outstanding, which are fixed rate instruments and not subject to fluctuations in interest rates. Refer to the discussion in “Part II - Item 8.
As of February 14, 2025, there was $262.5 million outstanding under the Company’s Credit Facilities, consisting of $125.0 million outstanding under its 2024-A Delayed Draw Term Loan, $75.0 million outstanding under its 2024-B Delayed Draw Term Loan and $62.5 million outstanding under its Revolving Facility, all of which is subject to interest rates based on the SOFR.
As of December 31, 2025, there was $117.2 million, $72.5 million and $175.0 million principal balance subject to interest under the Company’s Term Loan Facility, Revolving Facility and Second Lien Term Loan Facility, respectively, all of which are subject to interest rates based on the SOFR.
Removed
In addition, as of December 31, 2024, we have $175.0 million of Series A Preferred Stock outstanding, which are floating rate instruments based on the SOFR and subject to fluctuations in interest rates.
Added
In general, we are a net payer of currencies other than the U.S. dollar. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may, in the future, negatively affect our operating results as expressed in U.S. dollars.
Removed
For every 1% increase in SOFR, the Company would record additional interest expense of $2.63 million per annum and preferred dividends of $1.75 million per annum. Refer to the discussion in “Part II - Item 8. Financial Statements and Supplementary Data - Note 9” for additional information on our long-term debt.
Removed
It is difficult to predict the effect hedging activities would have on our results of operations. 63

Other EVH 10-K year-over-year comparisons