Evolent Health, Inc. (NYSE:EVH) Q2 2023 Earnings Call Transcript

So it feels pretty good, Ryan.

Ryan Daniels: Okay. Perfect. And then John, maybe one for you just on Medicaid redeterminations. I want to make sure I heard you correctly. Can you just go through the impact that you are contemplating in the guidance regarding churn and revenue impact? And then, maybe number two, it sounds like some states have paused redeterminations and a couple plans have indicated that maybe it’s progressing a little bit better. So, net-net is it right in line with what you’re thinking or maybe a little bit better? Thanks.

John Johnson: Yes. So our thinking on this hasn’t changed, so I’ll give our expectation for this year and then also for into next year when the redeterminations are complete. For this year, we anticipate a gross reduction in Medicaid membership of between 8% to 10% comparing end of last December to end of this December, which is about we think two-thirds of the way there ending with total redetermination impact on a growth basis probably middle of next year in the mid-teens. On the speed question, I think what I wanted to highlight in my prepared remarks there was the amount of our revenue that really just started redeterminations four weeks ago, five weeks ago. And so it’s still too early for us on our populations to see is it going slower or faster than expected.

What I would say is we’ve been encouraged both in talking to our partners and in hearing some of the MCO announcements over the last couple of weeks at the way both CMS and the Managed Care organizations are working to ensure that Medicaid enrollees stay enrolled where they’re eligible.

Ryan Daniels: Okay, perfect. That’s very helpful clarification. Thank you.

Seth Blackley: Thanks Ryan.

Operator: The next question comes from Charles Rhyee with TD Cowan. Please go ahead.

Charles Rhyee: Yes. Thanks for taking the questions and then congrats on the quarter. Maybe if we think about the pathway to the $300 million, obviously we have a lot of moving parts here with new – with like the Humana partnership kind of ramping up and some of the new partnerships you signed. Can you give us a sense of timing on when you – when we should start expect some of these to start hitting? I know with Humana ramping, it sounds like you’re saying starting here in the third quarter more with EBITDA contribution coming more next year. The new – and the new – sorry, tech and services partnership that you announced, when would that you expect that one to start? Is that would be one of next year or is that sometime this year as well? Maybe just for some of the new ones a sense of timing where we should start to expect contribution either both from top line and EBITDA, that’d be great.

John Johnson: Yes. So on the – let take those in turn. I’m going to focus first on EBITDA and then I’ll circle back to growth. As you think about the path to $300 million, one of the things that we’ve sought to communicate there is, if you look at our TTM EBITDA today of $158 million add in the remainder of the acquired EBITDA then you’d see a pro forma EBITDA of about $190 million. On top of that, as I mentioned in my prepared remarks, we have a couple hundred million dollars of new Performance Suite revenue that’s live today that is not really contributing in that $190 million. And so that is going to add by the time we’re exiting next year north of $25 million of flow through down to the EBITDA line. Now you start to stack up on top of that some of these announcements that we’ve made, the Humana relationship going live, which will be generating EBITDA probably mid next year.