Evolent Health Inc. (EVH) reported fourth‑quarter 2025 results that showed revenue falling 27.5% to $468.7 million, a sharper decline than the 22.8% drop originally cited. The company’s adjusted earnings before interest, taxes, depreciation and amortization rose 23% to $37.8 million, giving an adjusted EBITDA margin of 8.1%. Net loss attributable to common shareholders reached $429.1 million, a loss margin of 91.6%, and an operating loss margin of 87.1%. Compared with Q4 2024, revenue was $646.5 million and adjusted EBITDA was $22.6 million, underscoring the scale of the revenue contraction and the improvement in operating leverage.
Performance Suite revenue, the company’s core fee‑based service line, fell 41% to $286.9 million, while Specialty Technology and Services Suite revenue grew 9.1% to $93.3 million. The larger decline in Performance Suite reflects the transition of legacy contracts to the new “enhanced Performance Suite” model, which is designed to provide greater revenue predictability and margin protection. The modest growth in the Specialty suite is driven by increased demand for technology‑enabled care management services, partially offsetting the Performance Suite contraction.
Evolent’s management highlighted that the mix shift toward higher‑margin fee‑based services is expected to continue. AI‑driven automation is projected to deliver $20 million in annualized EBITDA gains by year‑end, a figure that exceeds the $20 million target set in 2025 and aligns with the company’s broader cost‑control plan. These initiatives are intended to lift adjusted EBITDA in the second half of 2026, as the new contract model matures and operating costs are reduced.
For 2026, Evolent guided revenue between $2.4 billion and $2.6 billion, a 30% growth target relative to 2025. Adjusted EBITDA guidance is $110 million to $140 million, a midpoint of $125 million that falls short of analyst expectations of $151.6 million. The company cited headwinds from the One Big Beautiful Bill Act and membership declines in exchange products, but emphasized that oncology growth and the enhanced Performance Suite model should mitigate volatility and support profitability.
CEO Seth Blackley noted that the company is “retaining and growing its customers” and that oncology will account for approximately 65% of revenue in 2026, up from 36% in 2025. He also highlighted that the new contract model will deliver over $550 million of revenue in 2026 and over $800 million in 2027, underscoring the strategic importance of the Performance Suite transition.
Market reaction to the earnings was muted, with the stock trading flat in after‑hours. Investors focused on the 27.5% revenue decline, the $429 million net loss, and the adjusted EBITDA guidance that fell below analyst estimates, tempering enthusiasm despite the EPS beat of $0.08 versus a consensus of $0.06.
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