Evolent Health, Inc · NYSE:EVH
Evolent Health — 44th Annual William Blair Growth Stock Conference (June 2024)
28 slides from Evolent Health's conference presentation, Jun 4, 2024
Slide 1: 44th Annual William Blair Growth Stock Conference
44th Annual William Blair Growth Stock Conference June 4, 2024
Slide 2: Disclaimers
Disclaimers 2 Certain statements made 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 not
Slide 3: Evolent seeks to drive better outcomes across healthcare
Evolent | 3 Evolent seeks to drive better outcomes across healthcare Patients Health Plans & Risk ProvidersProviders Our User Our Customer Our Motivation Less Friction. Appropriate Care. Higher Quality. Lower Costs. Better Treatment. Better Health. Selected Customers Evolent supports health plans an
Slide 4: Evolent is a differentiated platform for value-based specialty care
Evolent is a differentiated platform for value-based specialty care • Specialty care is large unmet need in today’s healthcare landscape = Total Specialty $150B1TAM for Evolent • Evolent’s solutions increase quality and lower costs for highly complex conditions, including cancer, cardiovascular dise
Slide 5: Multi-year track record delivering top and bottom-line growth
Multi-year track record delivering top and bottom-line growth Revenue excluding divested assets1 ($MM) $652 $891 $1,351 $1,955 $2,565 2020 2021 2022 2023 2024E (Midpoint)2 CAGR 41% Adjusted EBITDA3 ($MM) $49 $66 $106 $195 $250 2020 2021 2022 2023 2024E (Midpoint)2 5 1. Non-GAAP measure, see “Non-GAA
Slide 6: The opportunity in value-based specialty care
The opportunity in value-based specialty care Large Specialty TAM with Low Penetration Significant Customer Unmet Need Uneven Quality Spiraling Costs Broken Experience U.S. spend increased by >$50B for oncology, cardiology and MSK alone between 2015 and 20203 75% of low-value care comes from special
Slide 7: Our vision for transforming specialty care nationally
Our vision for transforming specialty care nationally Extensive Clinical Complexity Traditional UM Creates Friction Provider Misalignment Patient Voice Not Included 1 2 3 4 CHALLENGES OUR SOLUTION • Deep bench of ~1,400 clinicians across the organization • Independent scientific advisory boards • Pr
Slide 8: Comprehensive platform for specialty care
Comprehensive platform for specialty care Provider Alignment Next Gen Decision Support Differentiated Member Journey Oncology Cardiology Musculoskeletal Radiology Genetic Testing Configurable Technology and Administrative Platform Actionable Analytics and Integration End-of-Life Deep Multi- Specialt
Slide 9: How the product works in practice - oncology
How the product works in practice - oncology Advisory Board $ Practicing Physicians Physician Trade Organizations National Guidelines Level 2 Pathways Level 1 Precision Pathways ROOTED IN CLINICAL EVIDENCE TUNED FOR THE PATIENT COST TRANSPARENCY DRIVES SAVINGS Efficacy Toxicity A B C D E G Optimal V
Slide 10: Examples of unlocking growth through strong performance
Examples of unlocking growth through strong performance… Business Model Initial Partnership Current Partnership Annual Revenue 2020 2021 2022 2023 10 ▪ Tech & Services ▪ 1 State, 1 Line of Business ▪ Medical Oncology ▪ National Footprint, All Lines of Business ▪ Medical Oncology, Radiation Oncology,
Slide 11: Continued runway remaining across partner base
... with continued runway remaining across partner base Penetration Rate at Top 10 EVH Customers by Payer Total Membership1 % Capture of Total Addressable Product Lives 11 Excludes vertically integrated customers. 1. Products deployed as of 4/2024. ~16% Weighted average penetration on product lives
Slide 12: Proven growth algorithm across 70+ health plan customers
70+ Health Plan Customers Add Partners 39.9 million average unique members1 Add Unique Members 2.0 PMPM products per unique member1 Add Products ~5% of product-members covered in Performance Suite today1 Add Performance Suite 80.6 million product members 1 2 3 4 Proven growth algorithm 15k member ca
Slide 13: Evolent's business models make for a compelling combination
Evolent’s business models make for a compelling combination and underpin our ability to deliver targeted client savings Performance Suite Technology and Services Suite/Other Business Model Target Mature Flow-Through Margins Avg PMPM Fees/Revenue1 Potential Long-Term Growth • Recurring Capitation; Ta
Slide 14: Attractive gross margin profiles
2022 margin for populations launched before 2019 Average margin by performance year for populations launched since 20191 Attractive gross margin profiles * Gross Profits PMPM$ highly dependent upon line of business (e.g., Medicaid vs. Medicare) Performance Suite margin maturation supported by multi-
Slide 15: On track to targeted exit Adjusted EBITDA run-rate
On track to targeted exit Adjusted EBITDA1 run-rate Primary Factors Driving Growth During 2024 to Q4 Exit Run Rate(e) ($, millions) 1. Non-GAAP measure, see “Non-GAAP Financial Measures” for definition and Appendix A for reconciliation to GAAP. Q4 2023 net loss attributable to common shareholders wa
Slide 16: Consistent capital allocation priorities
Consistent capital allocation priorities Enhancing Core Business through Product Investment • Ensuring our products and teams are world-class, enabling strong customer satisfaction, retention, growth and profitability • Continued strong annual R&D investment Disciplined Core- Accelerating M&A • Disc
Slide 17: Accelerating Value Creation through Strategic M&A: NIA Case Study
Accelerating Value Creation through Strategic M&A: NIA Case Study Meeting a Key Strategic Need • Existing/prospective Evolent customers increasingly expressing a preference for one vendor to address multiple specialties • Evolent management determined adding additional specialties likely to accelera
Slide 18: The opportunity for responsible AI in specialty management
The opportunity for responsible AI in specialty management Provider Burden 14 hours time per week spent per practicing physician on prior authorizations2 Clinical Evidence 175+ New journal articles per month in clinical oncology alone 23-24 TTM1 Time-Consuming Manual Reviews for Payers up to 30 minu
Slide 19: How acquired AI platform fits into the Evolent portfolio
How acquired AI platform fits into the Evolent portfolio Provider Alignment Expanded Next Gen Decision Support Differentiated Member Journey Oncology Cardiology MSK Radiology Genetic Testing Configurable Technology and Administrative Platform Actionable Analytics and Integration End-of-Life Deep Mul
Slide 20: Machinify Auth carveout acquisition accelerates Evolent's product roadmap
Machinify Auth carveout acquisition accelerates Evolent's product roadmap Machinify Background • Backed by Google Ventures, Battery Ventures, and others • Founded 2016 in Silicon Valley with leading technology and data science expertise • AI platform leveraging healthcare data at scale to drive down
Slide 21: Outlook for 2024
Outlook1 for 2024 Adjusted EBITDA target and long-term growth rates • 2024 revenue range of $2.53-$2.60 billion; 2024 Adjusted EBITDA2,3 $235-$265 million • Q2 2024 revenue range of $625-$645 million; Q2 Adjusted EBITDA2,3 of $48-$62 million • $300M run-rate Adjusted EBITDA2,3 exiting 2024 • Out-yea
Slide 22: Appendix
Appendix 22
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company views the following activities as integral to understanding its non-GAAP financial measures: • Repositioning costs include severance, termination benefits and related payroll taxes of $1.8 million, dedicated employee costs of $1.2 million, third-party professi
Slide 24: How we calculated product type: PMPM, lives, cases and new revenue agreements
How we calculated product type: PMPM, lives, cases and new revenue agreements Performance Suite Lives on Platform are calculated by summing monthly members covered for specialty care services for contracts not under ASO arrangements, plus members managed by Complex Care in risk arrangements and divi
Slide 25: Appendix A – Evolent Adjusted EBITDA Reconciliation
Appendix A – Evolent Adjusted EBITDA Reconciliation ($ in millions) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Net income (loss) attributable to common shareholders of Evolent Health, Inc. $(25.2) $(41.4) $(33.2) $(41.4) $(
Slide 26: Appendix A (cont'd) – Evolent Adjusted EBITDA Reconciliation
Appendix A (cont'd) – Evolent Adjusted EBITDA Reconciliation ($ in millions) 2023 2022 2021 2020 Net loss attributable to common shareholders of Evolent Health, Inc. $(142.3) $(19.2) $(37.6) $(334.2) Less: Interest income 5.3 1.4 0.4 2.6 Interest expense (54.2) (15.6) (25.4) (28.3) Benefit from (pro
Slide 27: Appendix B – Net Debt to LTM Adjusted EBITDA
Appendix B – Net Debt to LTM Adjusted EBITDA 1. Principal amounts of long-term debt were comprised of $402.5M of 2029 Notes, $172.5M of 2025 Notes and $37.5M and of Ares Credit Facilities as of March 31, 2024. ($ in thousands) 3/31/20241 Long-term debt, net of discount $597,901 Net discount and defe
Slide 28: Appendix C – Revenue from Divested Assets
Appendix C – Revenue from Divested Assets 28 ($ in millions) 2023 2022 2021 2020 Revenue $1,963.9 $1,352.0 $(37.6) $(334.2) Less: Divested assets 8.9 1.0 0.4 2.6 Revenue from divested assets $1,955.0 $1,351 $66.3 $48.6
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