Evolent Health (EVH) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $496.2 million, up 2.6% year-over-year and 9% sequentially, driven by new Performance Suite contracts and commercial momentum, partially offset by the ECP divestiture and lower Medicare membership.

• Adjusted EBITDA was $22.1 million, in line with guidance, while net loss attributable to common shareholders narrowed to $26.6 million from $72.3 million year-over-year.

• Medical Expense Ratio (MER) improved to 93.3%, a 150 basis point sequential improvement, but up from 84.0% year-over-year, reflecting higher claims costs.

• Strong new business momentum with successful launches for Aetna and Highmark, and two new contracts announced, including a $200 million annual revenue expansion.

• Liquidity remains strong with $142.0 million in cash and $52.5 million revolver availability as of March 31, 2026.

Financial highlights

• Q1 2026 revenue was $496.2 million, up from $483.6 million in Q1 2025 and 9% sequentially from Q4 2025, excluding ECP.

• Adjusted EBITDA margin for Q1 2026 was 4.4%, with LTM Adjusted EBITDA at $136.4 million.

• Net loss margin for Q1 2026 was (5.4)%, improved from (14.9)% year-over-year.

• Performance Suite revenue grew 26% sequentially to $323.3 million, while Specialty T&S revenue declined 16% to $80.8 million.

• Ended Q1 with $142.0 million in unrestricted cash and $791.9 million in net debt.

Outlook and guidance

• Full-year 2026 revenue guidance reiterated at $2.4–$2.6 billion and adjusted EBITDA at $110–$140 million.

• MER expected to be approximately 93% for the year, peaking in Q3 due to new launches and seasonality.

• Adjusted cost of revenue plus SG&A expected at $675 million for 2026; capitalized software development spend projected at $25–$30 million.

• Cash flow from operations projected at $10–$20 million after $60 million in annual cash interest expense.

• Industry-wide increases in medical claims costs and regulatory changes are expected to continue impacting results.