Evolent Q3 Revenue Rises as Performance Suite Expands

Evolent Health Inc. (NYSE: EVH) reported third-quarter 2026 revenue of $725.4 million, up about 11% sequentially and 51% from $479.5 million a year earlier, as its risk-based Performance Suite accounted for a larger share of the business. The revenue expansion came alongside lower adjusted profitability and a medical expense ratio of 93.0%, while the company outlined plans to deploy up to $50 million toward debt reduction by year-end.

Evolent posted a GAAP net loss attributable to common shareholders of $23.6 million, compared with a $26.9 million loss in the prior-year quarter. The net loss margin improved to 3.2% from 5.6%.

Adjusted EBITDA declined to $34.3 million from $39.0 million, and adjusted EBITDA margin narrowed to 4.7% from 8.1%. Evolent said it continued to manage operating expenses with discipline. The quarter’s 93.0% medical expense ratio reflected favorable in-year claims development that emerged earlier than expected, according to the presentation. The comparable ratio excluding Evolent Care Partners was 91.9% in the third quarter of 2025.

Performance Suite drives revenue mix shift

Performance Suite revenue nearly doubled to $564.3 million from $286.9 million and represented 78% of total revenue, up from 60% a year earlier. Average lives on the Performance Suite platform rose to 7.2 million from 6.5 million, while the average monthly per-member fee increased to $26.14 from $14.77.

Other product categories contracted. Specialty Technology and Services Suite revenue fell to $72.8 million from $93.3 million, Administrative Services revenue declined to $48.3 million from $57.8 million, and Cases revenue decreased to $40.0 million from $41.5 million.

By customer market, Medicare revenue increased to $300.4 million from $128.7 million and accounted for 41% of the quarter’s total. Commercial and Other revenue rose to $220.4 million from $123.3 million, representing 31%. Medicaid revenue declined to $204.5 million from $227.5 million and made up 28% of revenue, compared with 47% a year earlier.

Evolent also renewed its largest Surgical Management client for another four years. The company said existing clients continued to broaden their relationships by adding products, solutions and geographic coverage.

Full-year outlook and debt reduction

For full-year 2026, Evolent expects revenue of $2.6 billion to $2.7 billion and adjusted EBITDA of $130 million to $135 million. It projects $10 million to $20 million of operating cash flow and $26 million to $28 million of cash spending on capitalized software development. The company does not provide a GAAP reconciliation for forward-looking adjusted EBITDA because certain reconciling items cannot be reasonably estimated.

Cash and cash equivalents totaled $148.3 million at September 30, up from $115.7 million at the end of June. Including $62.5 million of revolving-credit availability, total available liquidity was $210.8 million.

Net debt declined sequentially to $775.7 million from $808.3 million. Net leverage was 6.3 times last-12-month adjusted EBITDA of $122.2 million, compared with 6.4 times at June 30. Evolent is targeting up to $50 million of debt reduction by year-end, subject to market conditions and other factors. It retained flexibility over the timing and form of the reduction while seeking to preserve liquidity for operations and investment.

The presentation identified several uncertainties, including reliance on major partners, growing exposure to risk-sharing contracts, the difficulty of forecasting claims under performance-based arrangements and the company’s ability to service its debt. Other risks include healthcare funding and policy changes, customer data quality, regulatory scrutiny, cybersecurity threats, competition and the execution of cost-management initiatives.