Evolent Health (EVH) Reports In-Line Q4 EPS, Beats on Revenues; Offers FY18 Revenue Guidance Below Consensus

Evolent Health (NYSE: EVH) reported Q4 EPS of ($0.04), in-line with the analyst estimate of ($0.04). Revenue for the quarter came in at $114 million versus the consensus estimate of $111.11 million.

Adjusted Results

• Adjusted Revenue of $114.0 million and $90.0 million for the three months ended December 31, 2017 and 2016, respectively, an increase of 26.6%. Adjusted Revenue of $436.4 million and $256.3 million for the years ended December 31, 2017 and 2016, respectively, an increase of 70.3%.
• Adjusted Cost of Revenue of $64.2 million and $55.7 million for the three months ended December 31, 2017 and 2016, respectively, an increase of 15.2%. Adjusted Cost of Revenue of $262.5 million and $149.7 million for the years ended December 31, 2017 and 2016, respectively, an increase of 75.3%.
• Adjusted selling, general and administrative expenses of $46.3 million and $42.0 million for the three months ended December 31, 2017 and 2016, respectively, an increase of 10.2%. Adjusted selling, general and administrative expenses of $176.1 million and $127.9 million for the years ended December 31, 2017 and 2016, respectively, an increase of 37.7%;
• Adjusted EBITDA of $3.5 million and $(7.7) million for the three months ended December 31, 2017 and 2016, respectively. Adjusted EBITDA of $(2.2) million and $(21.4) million for the years ended December 31, 2017 and 2016, respectively.
• Adjusted Loss Available to Class A and Class B Shareholders of $(3.1) million and $(12.0) million for the three months ended December 31, 2017 and 2016, respectively.
• Adjusted Loss Available to Class A and Class B Shareholders of $(24.8) million and $(35.1) million for the years ended December 31, 2017 and 2016, respectively.
• Adjusted Loss per Share Available to Class A and Class B Shareholders of $(0.04) and $(0.18) for the three months ended December 31, 2017 and 2016, respectively.
• Adjusted Loss per Share Available to Class A and Class B Shareholders of $(0.35) and $(0.57) for the years ended December 31, 2017 and 2016, respectively.

Business Outlook

For the full year 2018, Adjusted Revenue is expected to be in the range of approximately $565.0 million to $585.0 million. The components of Adjusted Revenue include Adjusted Services Revenue, which is forecasted to be approximately $495.0 million to $510.0 million, and True Health Premium Revenue, which is forecasted to be approximately $90.0 million to $95.0 million; Intercompany Eliminations are forecasted to be approximately $(20.0) million for the full year. Adjusted EBITDA is expected to be in the range of approximately $18.0 million to $23.0 million.

For the three months ended March 31, 2018, Adjusted Revenue is expected to be in the range of approximately $139.0 million to $143.0 million. The components of Adjusted Revenue include Adjusted Services Revenue, which is forecasted to be approximately $122.0 million to $124.0 million, and True Health Premium Revenue, which is forecasted to be approximately $22.0 million to $24.0 million; Intercompany Eliminations are forecasted to be approximately $(5.0) million for the quarter. Adjusted EBITDA is expected to be in the range of approximately $3.0 million to $5.0 million.

GUIDANCE:

Evolent Health sees FY2018 revenue of $565-585 million, versus the consensus of $600.39 million.

For earnings history and earnings-related data on Evolent Health (EVH) click here.

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