Evolent Health, Inc · NYSE:EVH
Evolent Health — J.P. Morgan Healthcare Conference 2020
28 slides from Evolent Health's conference presentation, Jan 15, 2020
Slide 1: J.P. Morgan Healthcare Conference: Evolent Health
J.P. Morgan Healthcare Conference: Evolent Health January 15, 2020 1 Confidential – Do Not Distribute
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation and in other written or oral statements made by us or on our behalf are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). A forward-looking statement is a statement that is
Slide 3: Safe Harbor Statement (continued)
Safe Harbor Statement (continued) The risks included here are not exhaustive. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Our Annual Report on Form 10-K for the ye
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Revenue, Adjusted Transformation Revenue, Adjusted Platform and Operations Revenue, Adjusted Services Revenue, Adjusted EBITDA, Adjusted EBITDA Margin
Slide 5: Introductions
Introductions Frank Williams Seth Blackley John Johnson Chief Executive Officer President Chief Financial Officer, and Co-Founder, and Co-Founder, Evolent Health Evolent Health Evolent Health 5 Confidential – Do Not Distribute
Slide 6: Market Context: The Structural Problem in Health Care
Market Context: The Structural Problem in Health Care Traditional fee-for-service payment pits payers and providers against each other and leaves patients caught in the middle ??? Payer Provider Patient 6 Confidential – Do Not Distribute
Slide 7: The Result: Not Getting What We Pay For
The Result: Not Getting What We Pay For Highest Cost, Out of Control Poor Customer Lowest Life Expectancy Specialty Spending Satisfaction U.S. spends more on health U.S. spending on oncology Health insurers ranked 21 out care than other high-income drugs rose 60% from 2013 to of 23 industries that r
Slide 8: The Opportunity: Industry Transformation Through Value-Based Care
The Opportunity: Industry Transformation Through Value-Based Care Highest Cost, Out of Control Poor Customer Lowest Life Expectancy Specialty Spending Satisfaction Total Cost of Care Specialty Care Administrative Management Management Simplification Transformation requires integrated capabilities th
Slide 9: What Makes Evolent Unique: Our Integrated Capabilities
What Makes Evolent Unique: Our Integrated Capabilities Evolent is the bridge between payers and providers… Payer Provider …helping patients receive high quality care that is cost-effective, Patient evidence-based and seamless 9 Confidential – Do Not Distribute
Slide 10: Evolent Today: National Footprint of Payer and Provider Partners
Evolent Today: National Footprint of Payer and Provider Partners National Payers Regional Payers ~$800M 35+ 40+ LTM revenue* partners states 3.7M 3,200+ Health Systems Physicians lives supported employees *LTM Q3 2019 GAAP Revenue. Inclusive of Services and True Health 10 Confidential – Do Not Distr
Slide 11: Key Investment Themes
Key Investment Themes 1 Evolent’s Solutions Create Differentiated Clinical and Administrative Value 2 Significant Total Addressable Market Across Payers and Providers 3 Strong Market Momentum and Growth Outlook 4 Attractive Financial Profile Driven by Scalability & Long-Term Margin Expansion 11 Conf
Slide 12: Our Solutions Enable Payers and Providers to Succeed in Value-Based Care
1 Our Solutions Enable Payers and Providers to Succeed in Value-Based Care Clinical Administrative Total Cost of Care Specialty Care Administrative Opportunity Management Management Simplification Key Solution Integrated clinical programs Precision Pathways℠ in Comprehensive health plan Components a
Slide 13: How We Do It: Total Cost of Care Management
How We Do It: Total Cost of Care Management Market • Midwest health system serves 96,000 managed care lives, including Overview Next Generation ACO, MA, Employee and Commercial lines of business • Partnership began in 2014 and includes MSSP, MA, Employee and Evolent Commercial LOBs Partnership • Evo
Slide 14: How We Do It: Specialty Care Management
How We Do It: Specialty Care Management WITH SUBSTANTIAL ROOTED IN CLINICAL EVIDENCE BASED FOREMOST ON QUALITY COST SAVINGS Anti-Cancer Regimens Average Cost Per Treatment Level 2 Pathways Example Options $ Thousands National Guidelines A B C D E F G H I $30 Physician Trade Organizations B C E G H E
Slide 15: How We Do It: Administrative Simplification
How We Do It: Administrative Simplification Simplified administrative and clinical processes powered by a modern and integrated platform • TPA, enrollment & billing support Health Plan • Medical & utilization management MEDICAL • Payment & program integrity support ECONOMICS Services • Provider netw
Slide 16: Over $130B in Target Addressable Market
2 Over $130B in Target Addressable Market Administrative ✓ Diversified Simplification3 solution Specialty Care portfolio $23B Management2 ✓ Multiple entry points for both Estimated payers and Target $50B Total Cost of Addressable providers Care Management1 Market ✓ Significant cross-sell opportuniti
Slide 17: Breadth and Depth of Recent Pipeline
Breadth and Depth of Recent Pipeline 7 new partnerships announced in 2019 Pipeline and recent partner additions diversified across solution areas Significant cross-sell across payer and provider segments demonstrates forward opportunity with current partner network Strong new business pipeline enter
Slide 18: Passport Health Plan RFP Update
Passport Health Plan RFP Update Current Situation • Passport Health Plan (PHP), a 300,000 member Medicaid plan with a 22-year operating history in Kentucky, has been an Evolent partner since 2016. • On December 30, Evolent closed the transaction that gives Evolent a 70 percent ownership stake in Pas
Slide 19: Strong Market Momentum and Growth Outlook
3 Strong Market Momentum and Growth Outlook STRONG, CONSISTENT GROWTH IN SERVICES BUSINESS BUSINESS MODEL Total Adjusted ✓ Multiple sources of organic Revenue* growth, cross-sell and new 161.3 partnerships 94.0 642.8 Services 538.4 CAGR 436.4 44% ✓ High-visibility driven by recurring revenue through
Slide 20: Attractive Financial Profile Driven by Scalability and Long-Term Margin Expansion
Attractive Financial Profile Driven by Scalability 4 and Long-Term Margin Expansion ADJUSTED EBITDA MARGINS1 Path to Profitability Driven By: ✓ Top-line growth and scale 4.1% • $45M+ growth in quarterly Adjusted 3.7% Services Revenue between Q1 2019 1.5% and Q4 2019 guidance midpoint -0.5% ✓ Reducti
Slide 21: Historical Capital Prioritization
Historical Capital Prioritization MARKET LEADERSHIP AND CAPABILITY ACQUISITIONS PARTNER ALIGNMENT CAPITAL POSITION ✓ Closed on five-year, ✓ Mission and strategic fit ✓ Modest co-investments enable $125M Senior Debt ✓ Attractive financial profile significant long-term Services facility in December ✓
Slide 22: 2020 Outlook
2020 Outlook We will provide formal guidance on 2020 when we announce Q4 results in late February. Preliminary Outlook For 2020, we anticipate a minimum of $820M in revenue in our services segment, or 20% organic growth (vs. midpoint of 2019 guidance). 22 Confidential – Do Not Distribute
Slide 23: Key Investment Themes
Key Investment Themes 1 Evolent’s Solutions Create Differentiated Clinical and Administrative Value 2 Significant Total Addressable Market Across Payers and Providers 3 Strong Market Momentum and Growth Outlook 4 Attractive Financial Profile Driven by Scalability & Long-Term Margin Expansion 23 Conf
Slide 24: Appendix
Appendix 24 Confidential – Do Not Distribute
Slide 25: Appendix A – Adjusted Revenue Reconciliation
Appendix A – Adjusted Revenue Reconciliation Evolent (1) Adjustments to platform and operations services revenue include deferred Evolent Health, Evolent Health LLC Health, Inc. revenue purchase accounting adjustments of approximately $0.2 million ($ in millions) Inc. as Reported Operations Adjustme
Slide 26: Appendix A – Adjusted Revenue Reconciliation (cont'd)
Appendix A – Adjusted Revenue Reconciliation (cont’d) Evolent (1) Adjustments to transformation services revenue and platform and Evolent Health, Evolent Health LLC Health, Inc. operations services revenue for the year ended December 31, 2018, ($ in millions) Inc. as Reported Operations Adjustments
Slide 27: Appendix B – Adjusted EBITDA Reconciliation
Appendix B – Evolent Health, Inc. Adjusted EBITDA Reconciliation ($ in millions) 2016 2017 2018 YTD Q3 2019 Q3 2019 Net income (loss) attributable to Evolent Health, Inc. $ (159.7) $ (60.7) $ (52.6) $ (103.8) $ (25.5) Less: Interest income 0.9 1.6 3.5 3.0 1.1 Interest expense (0.2) (3.7) (5.6) (10.8
Slide 28: N Glebe Rd, Suite • Arlington, VA 22203 • evolenthealth.com
28 Confidential – Do Not Distribute 800 N Glebe Rd, Suite 500 • Arlington, VA 22203 • evolenthealth.com
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