Evolent Health, Inc · NYSE:EVH
Evolent Health — J.P. Morgan 42nd Annual Healthcare Conference (January 2024)
22 slides from Evolent Health's conference presentation, Jan 8, 2024
Slide 1: J.P. Morgan 42nd Annual Healthcare Conference
J.P. Morgan 42nd Annual Healthcare Conference January 9, 2024
Slide 2: Disclaimers: Safe Harbor Statement
Disclaimers 2 Safe Harbor Statement Certain statements, including but not limited to our ability to achieve our financial outlook and targets, and grow our business, made in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 199
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 $150B1 TAM for Evolent • Evolent’s solutions increase quality and lower costs for highly complex conditions, including cancer, cardiovascular dis
Slide 5: 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 6: 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 7: Comprehensive platform for specialty care
Comprehensive platform for specialty care Provider Alignment 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 Multi- Specialty Expertise
Slide 8: Foundation rooted in evidence-based treatment through curated pathways
Foundation rooted in evidence-based treatment through Evolent’s curated pathways 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 Eff
Slide 9: 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 9 ▪ Tech & Services ▪ 1 State, 1 Line of Business ▪ Medical Oncology ▪ National Footprint, All Lines of Business ▪ Medical Oncology, Radiation Oncology,
Slide 10: Continued runway remaining across partner base
... with continued runway remaining across partner base Payer A Payer D Payer HPayer B Payer E Payer GPayer C Payer I Penetration Rate at Top 10 EVH Customers by Payer Total Membership1 % Capture of Total Addressable Product Lives 0.4% 0.5% 1.1% 1.4% 5% 7% 11% 18% 19% 28% ~14% Weighted average penet
Slide 11: Delivering growth across all levers
72 operating partners1 Add Partners 41.7 million unique members1 Add Unique Members 1.9 PMPM products per unique member1 Add Products ~5% of product-members covered in Performance Suite today1 Add Performance Suite 78.1 million product members 1 2 3 4 Proven growth algorithm 15k member cases at Q3 2
Slide 12: Starting 2024 strong with two new announcements today
Starting 2024 strong with two new announcements today • New partnership with a regional Medicaid plan in the southwest, serving 300,000 unique members across multiple technology & services specialties • Expansion of NIA Technology and Services suite to legacy NCH client in the northeast Successful l
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: Current status to 2024 Adjusted EBITDA exit target
Category Initial Target Status Drivers 2022 Adjusted EBITDA: Starting Point of $106M + Acquired Adjusted EBITDA from NIA and IPG $100 On Track • $65M of $100M included in 2023 outlook • NIA revenue launching across 2024 ($20M) • Visibility into completing technology integration in Q1 ($15M) + Perfor
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: Reiterating 2023 outlook, 2024 Adjusted EBITDA target and long-term growth rates
Reiterating 2023 outlook 2024 Adjusted EBITDA target and long-term growth rates • 2023 revenue range of $1.945 billion - $1.965 billion; 2023 Adjusted EBITDA1, 2 $192-$200 million • Q4 2023 revenue range of $537 million - $557 million; Q4 Adjusted EBITDA1,2 of $45 million - $53 million • $300M run-r
Slide 18: Appendix
evolent Appendix
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company views the following activities as integral to understanding its non-GAAP financial measures: • Repositioning costs are not part of Evolent’s normal course of business and are incurred when there is a business reason to adopt a repositioning plan. Repositioning
Slide 20: How we calculated product type: PMPM, lives, cases and operating partners
How we calculated product type: PMPM, lives, cases and operating partners Performance Suite Lives on Platform are calculated by summing monthly members covered for specialty care services for contracts not under ASO arrangements, plus members managed by Complex Care in risk arrangements and divided
Slide 21: Appendix A – Evolent Adjusted EBITDA Reconciliation
Appendix A – Evolent Adjusted EBITDA Reconciliation ($ in millions) 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 Q2 2020 Q1 2020 Net income (loss) attributable to common shareholders of Evolent Health, Inc. $(33.2) $(41.4) $(26.3) $(11.3) $2
Slide 22: Appendix B – Net Debt to LTM Adjusted EBITDA
Appendix B – Net Debt to LTM Adjusted EBITDA 1. Principal amounts of short-term and long-term debt and comprised of $1.0M and $- of 2024 Notes, $- and $172.5M of 2025 Notes and $442.5M and $225.0 of Ares Credit Facilities as of September 30, 2023. 2. Principal amounts of long-term debt and comprised
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