NYSE:EVH
Evolent Health, Inc.
AI-powered digital health platform helping healthcare systems optimize workflows and reduce operational costs through advanced analytics.
Key Metrics
Investment Thesis
Bull Case
Evolent Health operates at a critical inflection point where its revenue has more than doubled over five years, positioning it as a market leader in the rapidly expanding digital health analytics sector. The positive operating cash flow demonstrates that the business model is becoming self-sustaining despite recent accounting losses, potentially signaling an upcoming path to profitability. Investors with a long-term horizon may view the current valuation as attractive given the high barriers to entry and sticky nature of its healthcare provider contracts.
Bear Case
The dramatic deterioration in net income from 2024 to 2025, coupled with a retained earnings deficit exceeding $1.3B, raises serious doubts about the sustainability of the company's current growth trajectory. With liabilities significantly outweighing equity and a heavy reliance on non-operating adjustments, the balance sheet appears fragile under current market conditions. Until the company consistently demonstrates GAAP profitability alongside its revenue growth, any stock price appreciation remains speculative rather than fundamental.
About Evolent Health, Inc.
Evolent Health is a digital health technology company that leverages artificial intelligence and machine learning to optimize healthcare operations. Serving providers across the United States, the firm delivers analytics-driven solutions designed to reduce costs, improve patient outcomes, and enhance care delivery efficiency.
Analysis
Management Discussion
Despite a 51% revenue increase from 2023 to 2024, the company recorded a massive net loss of $579.4M in 2025, indicating that top-line growth is not being matched by operational efficiency. The cash flow from operations turned positive at $38.8M, yet this was insufficient to cover the $65.8M in accrued expenses and significant share repurchases, resulting in a net change in cash of only $2.2M. The divergence between gross profit margins and operating expenses suggests that scaling the AI platform requires substantial investment in general and administrative costs before achieving breakeven.
Industry Overview
The digital health sector is experiencing rapid expansion as healthcare providers seek technology to mitigate burnout and rising operational costs. Within this landscape, AI-driven analytics platforms are transitioning from novelty to necessity, creating a competitive environment where data quality and clinical integration speed define market share. Regulatory scrutiny is intensifying as the industry matures, requiring companies to navigate complex compliance landscapes while scaling their proprietary algorithms.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.35B | $1.96B | $2.55B | $1.88B |
| Cost of Revenue | $1.04B | $1.50B | $2.19B | $1.48B |
| Gross Profit | $316.6M | $460.5M | $367.4M | $399.9M |
| Operating Expenses | $312.9M | $531.7M | $407.8M | $810.0M |
| Operating Income | $3.6M | $-71.2M | $-40.5M | $-410.1M |
| G&A | $269.3M | $358.1M | $263.1M | $303.9M |
| Stock-Based Comp | $34.0M | $40.5M | $39.7M | $39.7M |
| D&A | $67.2M | $123.4M | $118.4M | $115.9M |
| Depreciation | $32.0M | $32.4M | $30.3M | $26.3M |
| Amortization | $35.2M | $91.0M | $88.1M | $89.6M |
| Other OpEx | $43.7M | $173.6M | $144.8M | $506.2M |
| Non-Operating Income | $-65.7M | $-131.2M | $-22.6M | $-124.5M |
| Interest Expense | $15.6M | $54.2M | — | — |
| Interest Income | $1.4M | $5.3M | $5.5M | $4.2M |
| Pre-Tax Income | $-62.1M | $-202.4M | $-63.0M | $-534.6M |
| Income Tax | $-43.4M | $-89.4M | $-1.4M | $-126.0K |
| Continuing Ops | $-18.7M | $-113.0M | $-61.6M | $-534.5M |
| Discontinued Ops | $-463.0K | $0 | $0 | $-44.9M |
| Net Income | $-19.2M | $-113.0M | $-61.6M | $-579.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $-19.2M | $-113.0M | $-61.6M | $-579.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $478.1M | $683.7M | $607.1M | $506.4M |
| Cash & Equivalents | $188.2M | $192.8M | $104.2M | $151.9M |
| Accounts Receivable | $254.7M | $446.7M | $414.7M | $309.9M |
| Prepaid Expenses | $20.7M | $30.3M | $28.9M | $18.5M |
| Other Current Assets | $14.5M | $13.8M | $59.3M | $26.1M |
| Long-Term Assets | $1.34B | $2.00B | $1.94B | $1.39B |
| PP&E (Net) | $87.9M | $78.2M | $73.2M | $80.8M |
| Intangibles | $442.8M | $752.0M | $680.2M | $584.9M |
| Goodwill | $722.8M | $1.12B | $1.14B | $694.5M |
| Operating Leases | $49.0M | $12.0M | $6.1M | $4.4M |
| Other LT Assets | $36.8M | $37.9M | $40.5M | $28.3M |
| Total Assets | $1.82B | $2.68B | $2.54B | $1.90B |
| Current Liabilities | $433.4M | $674.2M | $715.5M | $385.3M |
| Accounts Payable | $57.2M | $48.2M | $96.0M | $59.8M |
| Current Leases | $7.1M | $9.7M | $26.7M | $15.3M |
| Deferred Revenue | $5.8M | $6.0M | $2.5M | $1.2M |
| Other Current Liab | $252.2M | $460.4M | $523.9M | $243.2M |
| Long-Term Liabilities | $524.4M | $759.9M | $637.5M | $1.10B |
| Long-Term Debt | $413.0M | $597.0M | $490.5M | $970.5M |
| LT Operating Leases | $56.0M | $38.0M | $25.0M | $3.8M |
| Other LT Liab | $52.9M | $123.7M | $122.0M | $124.3M |
| Total Liabilities | $957.9M | $1.43B | $1.35B | $1.48B |
| Shareholders' Equity | $859.4M | $1.25B | $1.19B | $415.2M |
| Paid-In Capital | $1.49B | $1.81B | $1.80B | $1.79B |
| Retained Earnings | $-606.2M | $-719.2M | $-780.8M | $-1.32B |
| AOCI | $-1.2M | $-1.3M | $-1.8M | $-2.6M |
| Total L&E | $1.82B | $2.68B | $2.54B | $1.90B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $-19.2M | $-113.0M | $-61.6M | $-579.4M |
| Non-Cash Adjustments | $35.7M | $246.5M | $146.6M | $625.8M |
| Working Capital Changes | $-28.1M | $9.1M | $-66.2M | $-7.6M |
| Cash from Operations | $-11.6M | $142.6M | $18.8M | $38.8M |
| Cash from Investing | $-259.1M | $-415.5M | $-62.9M | $-233.0K |
| Debt Issuances | $219.7M | $647.5M | — | — |
| Debt Repayments | — | $464.2M | $0 | — |
| Share Buybacks | — | — | — | $40.0M |
| Cash from Financing | $131.5M | $281.3M | $-565.0K | $-35.9M |
| FX Effect | $-657.0K | $-79.0K | $-229.0K | $-486.0K |
| Net Change in Cash | $-139.8M | $8.3M | $-45.0M | $2.2M |
| Beginning Cash | $354.9M | $215.2M | $223.5M | $178.5M |
| Ending Cash | $215.2M | $223.5M | $178.5M | $180.7M |
Frequently Asked Questions
How does Evolent Health, Inc. make money?
The company's revenue is primarily driven by its core Evolent Health SaaS platform which provides real-time data insights to healthcare providers. Additional streams include professional services related to data integration, consulting engagements for system implementation, and specialized licensing of proprietary AI models to hospital networks and payer organizations.
What are the main risks for EVH?
The company faces significant leverage risk with total liabilities of $1.48B against only $415M in shareholders' equity, making it vulnerable to interest rate hikes or credit tightening. Persistent net losses and a widening deficit suggest underlying profitability challenges that could deter new institutional capital inflows. Regulatory headwinds related to data privacy laws for healthcare information could disrupt core analytics operations. High accounts receivable of $309.9M relative to cash reserves raises potential liquidity concerns if collection periods extend.
What is EVH's competitive advantage?
Evolent Health possesses a deep proprietary dataset derived from millions of patient records, enabling highly accurate predictive analytics that competitors lack. The firm has established strong long-term contracts with major healthcare systems, creating high switching costs and stable recurring revenue streams. Its focus on solving specific operational inefficiencies rather than generic monitoring tools provides a differentiated value proposition to C-suite executives.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.