Evolent Health, Inc.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
EVH$4.58+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001628908-25-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001628908-25-000116
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 110 previous paragraphs and 129 current paragraphs.
72 unchanged; 28 reworded; 18 added; 10 removed; 0 previous and 11 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Regulatory Uncertainty
Current report
Subsequent to the end of the second quarter of 2025, on July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. The OBBBA amends U.S. tax law, including provisions related to research and development and interest expense. The Company is currently evaluating the impact of the OBBBA on its condensed consolidated financial statements.
Current report
Exchange and Ares Transaction
Current report
On June 19, 2025, in connection with the Company’s entry into Amendment No. 5 to the First Lien Credit Agreement, the Company and EVH LLC entered into a Commitment Letter with Ares which provides the Company the Incremental Facility to retire its 2025 Notes on or before October 15, 2025 (the maturity date of the 2025 Notes) and for working capital, subject to certain conditions. The Company may draw on the Incremental Facility at its sole option, in an amount such that its balance of cash and cash equivalents after paying off the 2025 Convertible Notes is no more than $125.0 million, satisfying the company's working capital needs, business operations and to support recent acceleration in its organic new revenue bookings forecast for 2026 go-lives. In lieu of the Incremental Facility, the Company is considering other financing sources in an effort to optimize its capital structure, which to the extent obtained, would similarly provide sufficient financing for working capital needs, business operations and to support recent acceleration in organic growth in response to high market demand for the Company's services. The Incremental Facility includes both First Lien and Second Lien term loan tranches. If the Incremental Facility is entered, the interest rate for both existing term loans outstanding under the First Lien Credit Agreement and new loans under the Incremental Facility will be the relevant Adjusted Term SOFR Rate plus 6.00% until a compliance certificate is delivered for the fourth full quarter after draw, with step down tiers thereafter based on senior secured leverage. The Incremental Facility also provides for an exit fee payable upon the retirement of amounts up to amounts drawn on the Incremental Facility. After the payment of fees and expenses incurred in connection with the Commitment Letter, some of which were paid prior to any borrowing under the Incremental Facility, the Company will have sufficient liquidity for working capital and other general corporate purposes.
Current report
On August 7, 2025, the Company completed the exchange of its existing Series A Preferred Shares for a new second lien term loan facility on substantively similar economic terms to the existing Series A Preferred Shares, with no common stock conversion feature. See “Part II – Item 5. Other Information.”
Current report
Selling, general, and administrative expenses increased by $6.0 million, or 8.7%, to $75.2 million for the three months ended June 30, 2025, as compared to 2024. The increase was primarily driven by higher personnel costs of $7.5 million, offset by lower stock compensation of $0.9 million due to the achievement and change in projected achievement of certain performance measurements and lower lease expense of $2.1 million due to the termination of certain real estate leases.
Current report
Revenue
Current report
Cost of Revenue
Current report
Depreciation and Amortization Expenses
Current report
Extinguishment of Series A Preferred Stock
Current report
On June 19, 2025, the Company entered into Amendment No. 5 which provided, in part, that failure to consummate the Exchange of our Series A Preferred Stock for new Second Lien Term Loans in certain circumstances will constitute an event of default under the First Lien Credit Agreement. Amendment No. 5 was accounted for as an extinguishment and reissuance of the Series A Preferred Stock. The Series A Preferred Stock post-amendment was recorded at fair value, including a $9.0 million charge to extinguishment of Series A Preferred Stock on the consolidated statement of operations and comprehensive income (loss) and the remainder as a deemed dividend.
Current report
Provision for (Benefit from) Income Taxes
Current report
An income tax provision (benefit) of $(0.8) million and $0.6 million for the three and six months ended June 30, 2025, respectively, and $(0.2) million and $0.3 million for the three and six months ended June 30, 2024, respectively, which resulted in effective tax rates of 4.0% and (0.8)% for the three and six months ended June 30, 2025, respectively, and (17.5)% and (2.1)% for the three and six months ended June 30, 2024, respectively. The income tax expense (benefit) recorded during the three and six months ended June 30, 2025, primarily relates to non-deductible expenses and state and foreign taxes. The income tax expense recorded during the three and six months ended June 30, 2024, primarily relates to state and foreign taxes.
Current report
The increase in accretion of redemption value in excess of par excluding extinguishment of Series A Preferred Stock was driven by the extinguishment and reissuance of our Series A Preferred Stock as a result of Amendment No. 5. The Series A Preferred Stock post-amendment is recorded at fair value.
Current report
The Series A Preferred Stock was exchanged into the Second Lien Term Loans on August 7, 2025. Refer to the discussions in “Part I - Item 1. Financial Statements - Note 23. Subsequent Events” for additional information on the Exchange and the related termination of the Investors Rights Agreement and Registration Rights Agreement.
Current report
Cash flows used in financing activities of $88.5 million for the six months ended June 30, 2024, were primarily related to $6.1 million
Current report
Additional cash used in financing activities included $66.6 million, the portion of the NIA contingent consideration representing the
Current report
fair value at the acquisition date.
Removed paragraphs (10)
Previous report
Repositioning Costs
Previous report
During the second quarter of 2023, the Company implemented a broad set of repositioning initiatives designed to further align the Company’s assets and talent towards the value-based specialty care opportunity, with the intent of streamlining its operations and supporting the goal of realizing long-term sustainable earnings growth (the “2023 Repositioning Plan”). These initiatives include making organizational changes across the business that resulted in severance, termination benefits and related payroll taxes and dedicated employee costs associated with recent acquisitions as well as third-party professional fees. Dedicated employee costs primarily include project management and technology staff costs needed to migrate acquired businesses to Evolent’s integrated technology platform and costs related to the consolidation of brands, internal operations, strategies, processes and platforms. Dedicated employee costs are limited to employees that had no role in ongoing operations and had no planned role at Evolent once the repositioning activities are completed. Professional services costs primarily relate to services provided by a third-party vendor to review our operating model and organizational design in order to improve our profitability, create value through our solutions and invest in strategic opportunities in future periods. Office space consolidation includes early termination penalties and associated expenses. Costs associated with the 2023 Repositioning Plan were recorded in selling, general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). The 2023 Repositioning Plan was completed during the second quarter of 2024.
Previous report
The following table provides a summary of our total costs associated with our repositioning plans the three months ended March 31, 2024 by major type of cost (in thousands):
Previous report
Selling, General and Administrative Expenses
Previous report
Selling, General and Administrative Expenses
Previous report
Provision for Income Taxes
Previous report
A provision for income taxes of $1.5 million and $0.6 million was recognized for the three months ended March 31, 2025 and 2024, respectively, which resulted in effective tax rates of (2.3)% and (3.4)%, respectively.
Previous report
April 2025, we made a payment of $51.5 million to settle the exercise of the put option on one of our equity method investments. See “Part I - Item 1. Financial Statements - Note 16” for further details of the Company’s loss on option exercise.
Previous report
Prepaid Expenses and Other Current Assets
Previous report
Prepaid expenses and other current assets are carried at cost and includes prepaid expenses and non-trade accounts receivable. During the three months ended March 31, 2025, prepaid and other current assets increased due to higher non-trade accounts receivable of $4.3 million.
Reworded paragraphs (28)
Previous wording
During 2024, the medical claims costs in our Performance Suite grew at a significantly faster rate than historical norms, negatively impacting our financial results. This growth was driven in part by higher disease prevalence as well as higher cost per active patient. Based on commentary from other market participants, we believe these cost increases were industry-wide and not specific to Evolent. Our results in the three months ended March 31, 2025 were also impacted by growth in medical claims cost that continued to grow faster than our historical averages, though slower than the previous quarters.
Current wording
During 2024, the medical claims costs in our Performance Suite grew at a significantly faster rate than historical norms, negatively impacting our financial results. This growth was driven in part by higher disease prevalence as well as higher cost per active patient. Based on commentary from other market participants, we believe these cost increases were industry-wide and not specific to Evolent. Our results for the first half of 2025 were also impacted by growth in medical claims cost that continued to grow faster than our historical averages, though slower than the previous quarters.
Previous wording
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 three months ended March 31, 2025. However, significant sustained inflation driven by the macroeconomic environment or other factors could negatively impact our margins, profitability and results of operations in future periods.
Current wording
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 three and six months ended June 30, 2025, respectively. However, significant sustained inflation driven by the macroeconomic environment or other factors could negatively impact our margins, profitability and results of operations in future periods.
Previous wording
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 includes requirements that an entity disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are greater than five percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The standard also requires that entities disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) each disaggregated between domestic and foreign. The Company adopted ASU 2023-09 effective January 1, 2025 however the adoption does not have a significant impact to our income tax disclosures.
Current wording
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 includes requirements that an entity disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are greater than five percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. The standard also requires that entities disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) each disaggregated between domestic and foreign. The Company adopted ASU 2023-09 effective January 1, 2025. We do not expect this standard to have a material impact to our results of operations, cash flows or financial condition.
Previous wording
Approximately $0.7 million and $1.0 million of total cost of revenue was attributable to stock-based compensation expense for the three months ended March 31, 2025, and 2024, respectively. Cost of revenue represented 78.8% and 83.7% of total revenue for the three months ended March 31, 2025, and 2024 respectively. Our cost of revenue decreased as a percentage of our total revenue due to a shift in mix in our business towards higher margin product types. We anticipate continued growth in the cost of treatment for cancer and cardiovascular patients over time, which we expect to be offset in part by contractual protections within our Performance Suite and the impact of our clinical interventions.
Current wording
Approximately $1.1 million and $1.2 million of total cost of revenue was attributable to stock-based compensation expense for the three months ended June 30, 2025, and 2024 respectively. Cost of revenue represented 77.4% and 83.5% of total revenue for the three months ended June 30, 2025, and 2024 respectively. Our cost of revenue decreased as a percentage of our total revenue due to a shift in mix in our business towards higher margin product types. We anticipate continued growth in the cost of treatment for cancer and cardiovascular patients over time, which we expect to be offset by contractual protections within our Performance Suite and the impact of our clinical interventions.
Previous wording
Approximately $10.4 million and $17.8 million of total selling, general and administrative expenses were attributable to stock-based compensation expense for the three months ended March 31, 2025 and 2024, respectively. Acquisition and severance costs accounted for approximately $1.7 million and $0.4 million of total selling, general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively. Selling, general and administrative expenses represented 16.2% and 12.4% of total revenue for the three months ended March 31, 2025, as compared to 2024, respectively, driven in part by the Company’s 2023 Repositioning Plan which concluded in the second quarter of 2024.
Current wording
Approximately $10.5 million and $11.5 million of total selling, general and administrative costs were attributable to stock-based compensation expense for the three months ended June 30, 2025, and 2024, respectively. Acquisition and severance costs accounted for approximately $0.8 million and $1.0 million of total selling, general and administrative expenses for the three months ended June 30, 2025 and 2024, respectively. Selling, general and administrative expenses represented 16.9% and 10.7% of total revenue for the three months ended June 30, 2025, as compared to 2024, respectively, driven primarily from contractual updates with certain customers in our Performance Suite.
Previous wording
Total revenue decreased $156.0 million, or 24.4%, to $483.6 million for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily from contractual updates with certain customers in our Performance Suite, including (i) $127.4 million from transitioning a customer from Performance Suite to Specialty Technology and Services Suite, (ii) $25.7 million related to the narrowing of scope of a Performance Suite customer; and (iii) $16.0 million from lower gain share revenue. These reductions were offset in part by $15.6 million of growth in other Performance Suite and Specialty Technology and Services contracts, net of reductions in membership at certain of our health plan clients as a result of Medicaid redeterminations and certain customers exiting their Medicaid Advantage operations in certain markets, unrelated to Evolent.
Current wording
Total revenue decreased $358.8 million, or 27.9%, to $928.0 million for the six months ended June 30, 2025, compared to the same period in 2024. The decrease was primarily from contractual updates with certain customers in our Performance Suite, including (i) $257.6 million from transitioning a customer from Performance Suite to Specialty Technology and Services Suite, (ii) $96.6 million related to the narrowing of scope of certain Performance Suite customers; and (iii) $7.8 million from lower gain share revenue. These reductions were offset in part by $25.7 million of growth in other Performance Suite and Specialty Technology and Services contracts, net of reductions in membership at certain of our health plan clients as a result of Medicaid redeterminations and certain customers exiting their Medicaid Advantage operations in certain markets, unrelated to Evolent.
Previous wording
Cost of revenue decreased by $154.4 million, or (28.8)%, to $381.2 million for the three months ended March 31, 2025, as compared to 2024, principally as a result of the 24.4% decrease in our revenue compared to year ended March 31, 2024. The decrease included approximately $138.7 million of lower claims cost compared to the prior year period, which is primarily attributable to transitioning certain Performance Suite to Specialty and Technology Service Suite and narrowing of scope. Additionally, we experienced decreases of $3.6 million from lower personnel costs compared to the prior year.
Current wording
Cost of revenue decreased by $350.7 million, or (32.6)%, to $725.1 million for the six months ended June 30, 2025, as compared to 2024, principally as a result of the 27.9% decrease in our revenue compared to year ended June 30, 2024. The decrease included approximately $343.2 million of lower claims cost compared to the prior year period, which is primarily attributable to transitioning certain Performance Suite to Specialty and Technology Service Suite and narrowing of scope. Additionally, we experienced decreases of $0.7 million from lower personnel costs compared to the prior year.
Previous wording
Selling, general, and administrative expenses decreased by $0.7 million, or 0.9%, to $78.4 million for the three months ended March 31, 2025, as compared to 2024. The decrease was primarily driven by lower stock compensation of $7.4 million due to the achievement and change in projected achievement of certain performance measurements, offset by a $3.5 million increase in bad debt expense versus the prior period reflecting a return to normal collections timing and $1.7 million increase in personnel costs.
Current wording
Selling, general, and administrative expenses increased by $5.3 million, or 3.6%, to $153.6 million for the six months ended June 30, 2025, as compared to 2024. The increase was primarily driven by higher personnel costs of $9.2 million and a $3.3 million increase in bad debt expense versus the prior period reflecting a return to normal collections timing, offset by lower stock compensation of $8.3 million due to the achievement and change in projected achievement of certain performance measurements.
Previous wording
Depreciation and amortization expenses decreased $5.4 million, or 18.5%, to $24.1 million for the three months ended March 31, 2025, as compared to 2024 primarily due to $5.7 million of accelerated amortization on our retired trade names during the three months ended March, 31, 2024, offset by $0.4 million of higher amortization on provider network contracts. Depreciation and amortization expenses include $13.4 million and $17.4 million for the three months ended March 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.
Current wording
Depreciation and amortization expenses decreased $12.2 million, or 20.5%, to $47.2 million for the six months ended June 30, 2025, as compared to 2024 primarily due to $11.2 million of accelerated amortization on our retired trade names for the six months ended June 30, 2025, offset by $0.4 million of higher amortization on provider network contracts. Depreciation and amortization expenses include $26.7 million and $34.5 million for the six months ended June 30, 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.
Previous wording
During the year ended December 31, 2024, the Company terminated its Chicago, IL lease effective October 31, 2024. We recorded an additional $1.9 million loss on lease termination related to negotiated termination payments and real estate commissions.
Current wording
During the year ended December 31, 2024, the Company terminated its Chicago, IL lease effective October 31, 2024. We recorded an additional $1.9 million loss on lease termination related to negotiated termination payments and real estate commissions for the six months ended June 30, 2025.
Previous wording
We recorded a loss on change in fair value of contingent consideration of $(0.3) million for the three months ended March 31, 2025 related to our Machinify earnout. We recorded $8.9 million the three months ended March 31, 2024 related to the liabilities acquired as a result of the acquisitions of NIA. See “Part I - Item 1. Financial Statements - Note 17” in this Form 10-Q for more information related to changes in the fair value of contingent consideration.
Current wording
We recorded a loss on change in fair value of contingent consideration of $2.9 million for the six months ended June 30, 2025, related to our Machinify earnout. We recorded $8.9 million for the six months ended June 30, 2024 related to the liabilities acquired as a result of the acquisitions of NIA in January 2023. See “Part I - Item 1. Financial Statements - Note 17” in this Form 10-Q for more information related to changes in the fair value of contingent consideration.
Previous wording
Our interest expense for the three months ended March 31, 2025 is primarily attributable to our Credit Agreement with Ares as well as the 2025 Notes and 2029 Notes. We recorded interest expense (including amortization of deferred financing costs) of approximately $10.4 million and $6.0 million for the three months ended March 31, 2025 and 2024, respectively. The increase in interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is driven primarily by interest incurred Ares Term Loan Facility borrowings in January 2025 and Ares Revolving Facility in December 2024. See “Part I - Item 1. Financial Statements - Note 9” in this Form 10-Q for more information related to interest expense by debt issuance.
Current wording
Our interest expense for the six months ended June 30, 2025 and 2024 is primarily attributable to our First Lien Credit Agreement with Ares as well as the 2025 Notes and 2029 Notes. We recorded interest expense (including amortization of deferred financing costs) of approximately $11.6 million and $22.0 million for the three and six months ended June 30, 2025, respectively, and $6.0 million and $12.0 million for the three and six months ended June 30, 2024, respectively. The increase in interest expense for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 is driven primarily by interest incurred Ares Term Loan Facility borrowings in January 2025 and Ares Revolving Facility in December 2024. See “Part I - Item 1. Financial Statements - Note 9” in this Form 10-Q for more information related to interest expense by debt issuance.
Previous wording
During the three months ended March 31, 2025, we agreed to purchase the portion of one of our equity method investments that we did not own from our joint venture partner for the price of $51.5 million. The purchase price was fixed based on a previously negotiated put/call structure. The loss of $52.3 million represents the difference between the purchase price under the put option and the estimated fair value of the interests acquired. The joint venture was primarily focused on a portfolio of oncology clinics, a member navigation platform and practice alignment arm. The oncology clinics in the joint venture were shut down or otherwise disposed of prior to the payment of the put option, and the joint venture will have no continuing operations.
Current wording
During the three months ended June 30, 2025, we completed the purchase of a portion of one of our equity method investments that we did not own from our joint venture partner for the price of $51.5 million. The purchase price was fixed based on a previously negotiated put/call structure. The loss of $52.5 million represents the difference between the purchase price under the put option and the estimated fair value of the interests acquired. The joint venture was primarily focused on a portfolio of oncology clinics, a member navigation platform and practice alignment arm. The oncology clinics in the joint venture were shut down or otherwise disposed of prior to the payment of the put option, and the joint venture will have no continuing operations.
Previous wording
The Company reported net loss attributable to common shareholders of Evolent Health, Inc. of $72.3 million and $25.2 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had $246.5 million of cash and cash equivalents and $31.3 million in restricted cash.
Current wording
The Company reported net loss attributable to common shareholders of Evolent Health, Inc. of $123.3 million and $31.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had $151.0 million of cash and cash equivalents and $27.0 million in restricted cash.
Previous wording
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. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities and the timing and extent of our spending to support our investment efforts and expansion into other markets. We may also seek to invest in, or acquire complementary businesses, applications or technologies, which may require us to seek sources of financing.
Current wording
We believe our current cash and cash equivalents and undrawn Revolving Facility 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. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities and the timing and extent of our spending to support our investment efforts and expansion into other markets. We may also seek to invest in, or acquire complementary businesses, applications or technologies, which may require us to seek sources of financing.
Previous wording
Cash flows provided by operating activities of $4.6 million for the three months ended March 31, 2025 were affected by increases in accounts receivable of $15.8 million from timing of our partner and vendor payments lower higher cash receipts from certain performance-based customers, offset by a reduction reserve for claims and performance-based arrangements of $15.1 million due to the timing of claims payments and a reduction in accrued compensation and benefits of $2.2 million due to the timing of 2024 bonus payments and severance of $1.0 million.
Current wording
Cash flows used in operating activities of $25.8 million for the six months ended June 30, 2025 were driven primarily by $67.5 million in payments to clients for reconciliations of performance suite contracts from prior years; these contracts have since been restructured. This was included in an overall reduction in reserve for claims and performance-based arrangements of $131.5 million due to the timing of claims payments, offset in part by decreases in accounts receivable of $55.9 million from timing of our partner and vendor payments and an increase in accrued compensation and benefits of $4.5 million due to the timing of 2024 bonus payments and severance of $1.8 million.
Previous wording
Cash flows provided by operating activities of $4.9 million for the three months ended March 31, 2024 were affected by decreases in accounts receivable from timing of our partner and vendor payments including higher cash receipts from certain performance-based customers as well as an increase of $8.9 million from contingent consideration, which was more than offset by payment for claims and performance-based arrangements of $(35.4) million and a reduction of our accrued compensation and employee benefits due to end of year bonus payments of $(27.3) million.
Current wording
Cash flows provided by operating activities of $26.3 million for the six months ended June 30, 2024 were affected by decreases in accounts receivable from timing of our partner and vendor payments including higher cash receipts from certain performance-based customers as well as an increase of $8.9 million from contingent consideration, which was more than offset by payment for claims and performance-based arrangements of $86.5 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 included in cash flows provided by operating activities
Previous wording
Cash flows used in investing activities of $13.1 million in the three months ended March 31, 2025 were primarily attributable to cash paid for asset acquisitions and business combinations of $4.5 million and $8.6 million of investments in internal-use software and purchases of property and equipment.
Current wording
Cash flows used in investing activities of $73.6 million for the six months ended June 30, 2025 were primarily attributable to cash paid for asset acquisitions and business combinations of $56.0 million and investments in internal-use software and purchases of property and equipment of $17.4 million .
Previous wording
Cash flows used in investing activities of $9.7 million in the three months ended March 31, 2024 were primarily attributable to a purchase of investments for $3.0 million and $5.3 million of investments in internal-use software and purchases of property and equipment.
Current wording
Cash flows used in investing activities of $23.3 million for the six months ended June 30, 2024 were primarily attributable to a purchase of investments for $4.9 million and $12.5 million of investments in internal-use software and purchases of property and equipment.
Previous wording
Cash flows used in financing activities of $107.9 million in the three months ended March 31, 2025 were primarily related to $221.0 million of borrowings under our Term Loan Facility, offset, in part by $62.5 million of repayments under our Revolving Facility and $41.5 million related to changes in working capital balances related to claims processing.
Current wording
Cash flows provided by financing activities of $98.9 million for the six months ended June 30, 2025 were primarily related to $221.0 million of borrowings under our Term Loan Facility, offset, in part by $62.5 million of repayments under our Revolving Facility, $44.8 million related to changes in working capital balances related to claims processing and $9.2 million of preferred dividends paid on our Series A Preferred Stock.
Previous wording
Cash flows provided by financing activities of $14.9 million in three months ended March 31, 2024, were primarily related to $37.5 million of restricted cash inflows from working capital related to claims processing offset, in part by $3.8 million from the payment of contingent consideration, $5.1 million of preferred dividends paid on our Series A Preferred Stock and $14.3 million from withholding taxes paid in respect of vested restricted stock units that were net settled.
Current wording
of restricted cash inflows from working capital related to claims processing offset, in part by $10.1 million of preferred dividends paid
Previous wording
(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. The remaining termination payments will be $25.2 million in 2025 and $12.9 million in 2026 including $1.2 million of leasing commissions to be paid in 2025, respectively.
Current wording
(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. The remaining termination payments will be $8.0 million in 2025 and $12.9 million in 2026, respectively.
Previous wording
During the three months ended March 31, 2025, the Company borrowed $200.0 million under its Term Loan Facility. As of March 31, 2025, there was $200.0 million and $62.5 million outstanding under the Company’s Term Loan Facility and Revolving Facility, respectively, all of which is subject to interest rates based on the SOFR. The interest rate for all Loans will be calculated, at the option of the borrowers, (a) in the case of the Revolving Facility, at either the Adjusted Term SOFR plus 4.00%, or the base rate plus 3.00% and (b) in the case of the Term Loan Facility, at either the Adjusted Term SOFR plus 5.50% or the base rate plus 4.50%, subject to step downs based on a total secured leverage ratio. 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.
Current wording
During the six months ended June 30, 2025, the Company borrowed $200.0 million under its Term Loan Facility. As of June 30, 2025, there was $200.0 million and $62.5 million outstanding under the Company’s Term Loan Facility and Revolving Facility, respectively, all of which is subject to interest rates based on the SOFR. The interest rate for all Loans will be calculated, at the option of the borrowers, (a) in the case of the Revolving Facility, at either the Adjusted Term SOFR plus 4.00%, or the base rate plus 3.00% and (b) in the case of the Term Loan Facility, at either the Adjusted Term SOFR plus 5.50% or the base rate plus 4.50%, subject to step downs based on a total secured leverage ratio. The Company used 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.
Previous wording
In addition, as of March 31, 2025, we had 175,000 shares of the Series A Preferred Stock outstanding. Regular dividends on the Series A Preferred Stock are 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%. The regular dividend rate will also increase by 2.0% per annum upon the occurrence and during the continuance of certain triggering events.
Current wording
In addition, as of June 30, 2025, we had 175,000 shares of the Series A Preferred Stock outstanding, which were exchanged for second lien term loans on August 7, 2025. Regular dividends on the Series A Preferred Stock were 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%.
Previous wording
The Company holds ownership interests in joint ventures and other entities which are accounted for under the equity method. Our joint ventures and other investments from time to time may, and some do, include put or call features under which we could be contractually required to purchase interests from our joint venture partner at an exercise price determined in reference to a multiple of the dollar amount of our joint venture partner’s total capital contributions, the performance of the joint venture, and other factors. In
Current wording
The Company holds ownership interests in joint ventures and other entities which are accounted for under the equity method. Our joint ventures and other investments may include put or call features under which we could be contractually required to purchase interests from our joint venture partner at an exercise price determined in reference to a multiple of the dollar amount of our joint venture partner’s total capital contributions, the performance of the joint venture, and other factors. During the three months ended June 30, 2025, we completed the purchase of a portion of one of our equity method investments that we did not own from our joint venture partner for the price of $51.5 million. The purchase price was fixed based on a previously negotiated put/call structure. See “Part I - Item 1. Financial Statements - Note 16” for further details of the Company’s loss on option exercise.
Previous wording
Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. During the three months ended March 31, 2025, accounts receivable, net, decreased primarily due to the timing of cash receipts from certain customers.
Current wording
Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. During the six months ended June 30, 2025, accounts receivable, net, decreased primarily due to the timing of cash receipts from certain customers.
Previous wording
Restricted cash of $31.3 million is carried at cost and includes cash held on behalf of other entities for pharmacy and claims management services of $14.3 million, collateral for letters of credit required as security deposits for facility leases of $0.3 million, amounts held with financial institutions for risk-sharing arrangements of $16.7 million as of March 31, 2025. See “Part I - Item 1. Financial Statements - Note 2” for further details of the Company’s restricted cash balances.
Current wording
Restricted cash of $27.0 million is carried at cost and includes cash held on behalf of other entities for pharmacy and claims management services of $11.0 million, collateral for letters of credit required as security deposits for facility leases of $0.3 million, amounts held with financial institutions for risk-sharing arrangements of $15.6 million as of June 30, 2025. See “Part I - Item 1. Financial Statements - Note 2” for further details of the Company’s restricted cash balances.
Previous wording
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.
Current wording
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 and payment of preferred dividends. The Company does not anticipate paying a cash dividend on our Class A common stock in the foreseeable future.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
Total revenue decreased by $202.8 million, or 31.3%, to $444.3 million for the three months ended June 30, 2025, as compared to 2024. The decrease was primarily from contractual updates with certain customers in our Performance Suite, including (i) $130.4 million from transitioning a customer from Performance Suite to Specialty Technology and Services Suite and (ii) $82.7 million related to the narrowing of scope of certain Performance Suite customers. These reductions were offset in part by $16.0 million of growth in other Performance Suite and Specialty Technology and Services contracts, net of reductions in membership at certain of our health plan clients as a result of Medicaid redeterminations and certain customers exiting their Medicaid Advantage operations in certain markets, unrelated to Evolent.
Current report — wording carried from elsewhere
The following table represents the Company’s Lives on Platform, Cases, PMPM fees and revenue per case for the three months ended June 30, 2025 and 2024 (Average Lives on Platform/Cases in thousands):
Current report — wording carried from elsewhere
Cost of revenue decreased by $196.4 million, or 36.3%, to $343.9 million for the three months ended June 30, 2025, as compared to 2024, principally as a result of the 31.3% decrease in our revenue compared to year ended June 30, 2024. The decrease included approximately $210.6 million of lower claims cost compared to the prior year period, which is primarily attributable to transitioning certain Performance Suite to Specialty and Technology Service Suite and narrowing of scope offset by $2.9 million from higher personnel costs compared to the prior year.
Current report — wording carried from elsewhere
Depreciation and amortization expenses decreased $6.7 million, or 22.5%, to $23.1 million for the three months ended June 30, 2025, as compared to 2024 due primarily due to $5.5 million of accelerated amortization on our retired trade names during 2024 and $1.2 million of lower depreciation of internally developed software. Depreciation and amortization expenses include $13.4 million and $17.2 million for the three months ended June 30, 2025, as compared to 2024, 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.
Current report — wording carried from elsewhere
We recorded a loss on change in fair value of contingent consideration of $3.2 million for the three months ended June 30, 2025 primarily related to our Machinify earnout. See “Part I - Item 1. Financial Statements - Note 17” in this Form 10-Q for more information related to changes in the fair value of contingent consideration.
Current report — wording carried from elsewhere
Comparison of the Results For the Six Months Ended June 30, 2025 to 2024
Current report — wording carried from elsewhere
The following table represents Evolent’s revenue disaggregated by line of business (in thousands):
Current report — wording carried from elsewhere
Approximately $1.7 million and $2.2 million of total cost of revenue was attributable to stock-based compensation expense for the six months ended June 30, 2025, and 2024, respectively. Cost of revenue represented 78.1% and 83.6% of total revenue for the six months ended June 30, 2025, and 2024 respectively. Our cost of revenue decreased as a percentage of our total revenue due to a shift in mix in our business towards higher margin product types. We anticipate continued growth in the cost of treatment for cancer and cardiovascular patients over time, which we expect to be offset in part by contractual protections within our Performance Suite and the impact of our clinical interventions.
Current report — wording carried from elsewhere
Approximately $21.0 million and $29.2 million of total selling, general and administrative expenses were attributable to stock-based compensation expense for the six months ended June 30, 2025 and 2024, respectively. Acquisition and severance costs accounted for approximately $2.5 million and $1.3 million of total selling, general and administrative expenses for the six months ended June 30, 2025 and 2024, respectively. Selling, general and administrative expenses represented 16.6% and 11.5% of total revenue for the six months ended June 30, 2025, as compared to 2024, respectively, driven primarily from contractual updates with certain customers in our Performance Suite.
Current report — wording carried from elsewhere
Change in Fair Value of Contingent Consideration
Current report — wording carried from elsewhere
on our Series A Preferred Stock and $14.7 million from withholding taxes paid on of vested restricted stock units that were net settled.