Evolent Health, Inc.

Total revenue was $653 million in Q2 2026, up 31% versus Q1 2026. Adjusted EBITDA was $28 million, up 27% sequentially. Medical expense ratio (MER) was 95% versus 93% in Q1, reflecting the expected impact of the Highmark launch. Performance Suite revenue was $485 million, up 50% quarter-over-quarter; Specialty Tech and Services revenue was $78 million, down 3%; and Administrative Services revenue was $48 million, down 3%. Cash and debt ended the quarter with $115.7 million in unrestricted cash and $808.3 million of net debt. For 2026, management raised revenue guidance from $2.4 billion-$2.6 billion to $2.6 billion-$2.7 billion and tightened adjusted EBITDA guidance from $110 million-$140 million to $120 million-$135 million. Full-year MER is still expected to be approximately 93%. They expect Q3 and Q4 revenue to be meaningfully higher than Q2, with Q3 MER higher on the full-quarter impact of Highmark and Q4 MER improving meaningfully as clinical programs and contractual true-ups flow through. They now expect Q2-to-Q3 adjusted EBITDA to increase by about $4 million-$7 million and Q3-to-Q4 by $7 million-$15 million. They also guided to cash flow from operations of $10 million-$20 million, about $60 million of annual cash interest expense, and $25 million-$30 million of software development and capital expenditures for 2026.

Seth Blackley framed the quarter as evidence that Evolent is executing well in a dynamic health care environment. He emphasized strong sales momentum, renewal strength, and what he called a tipping point for the Auth Intelligence AI platform, noting that more than 1/3 of authorization volume previously requiring manual review is now being evaluated through that platform. His tone was confident and constructive, with repeated references to small market share, a large opportunity, and visibility into 2027.

Mario Ramos said Q2 results were above expectations, with the EBITDA beat tied to prior-year development being recognized in Q2 instead of Q3. He highlighted the mix in Performance Suite revenue, said higher MER was expected because of Highmark, and pointed to cost discipline, with adjusted cost of revenue plus SG&A at $163 million, improving 5% sequentially. He ended with a focus on balance sheet and capital structure, citing $115.7 million of unrestricted cash, $808.3 million of net debt, a $10 million ABL paydown to the minimum draw of $62.5 million, and a plan to address 2029 maturities through EBITDA growth, cash flow conversion, disciplined capital allocation, and capital markets or strategic options.

Analysts focused on whether reserving and trend assumptions were conservative enough, what was happening with utilization and oncology drug trends, and how 2027 margins would be affected by faster Performance Suite growth. Management said reserving looked broadly consistent with the industry, that trend has continued to modulate and improve in comparable populations, and that oncology drugs still account for about 75% of total oncology cost with no major change. They also said 2027 margin pressure from Performance Suite mix should be offset by margin expansion within that business, and that more than 25% revenue growth in 2027 is achievable despite Medicaid expansion declines and client-specific market exits.