UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
WASHINGTON, D.C. 20549
|
_________________________
|
FORM 10-Q
|
_________________________
|
☒
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
32-0454912
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
800 N. Glebe Road, Suite 500, Arlington, Virginia
|
22203
|
(Address of principal executive offices)
|
(Zip Code)
|
Item
|
|
Page
|
|
|
|
1.
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||
2.
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||
3.
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||
4.
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||
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1.
|
||
1A.
|
||
2.
|
||
3.
|
||
4.
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||
5.
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||
6.
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||
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||
|
E-1
|
•
|
The structural change in the market for healthcare in the United States;
|
•
|
Our ability to effectively manage our growth;
|
•
|
The significant portion of revenue we derive from our largest partners;
|
•
|
Our ability to offer new and innovative products and services;
|
•
|
The growth and success of our partners, which is difficult to predict and is subject to factors outside of our control;
|
•
|
Our ability to attract new partners;
|
•
|
Our ability to recover the significant upfront costs in our partner relationships;
|
•
|
Our ability to estimate the size of our target market;
|
•
|
Our ability to maintain and enhance our reputation and brand recognition;
|
•
|
Consolidation in the healthcare industry;
|
•
|
Competition which could limit our ability to maintain or expand market share within our industry;
|
•
|
Our ability to partner with providers due to exclusivity provisions in our contracts;
|
•
|
Uncertainty in the healthcare regulatory framework;
|
•
|
Restrictions and penalties as a result of privacy and data protection laws;
|
•
|
Adequate protection of our intellectual property;
|
•
|
Any alleged infringement, misappropriation or violation of third-party proprietary rights;
|
•
|
Our use of “open source” software;
|
•
|
Our ability to protect the confidentiality of our trade secrets, know-how and other proprietary information;
|
•
|
Our reliance on third parties;
|
•
|
Our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
|
•
|
Data loss or corruption due to failures or errors in our systems and service disruptions at our data centers;
|
•
|
Breaches or failures of our security measures;
|
•
|
Our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our users;
|
•
|
Our dependency on our key personnel, and our ability to attract, hire, integrate and retain key personnel;
|
•
|
Risks related to future acquisition opportunities;
|
•
|
The risk of potential future goodwill impairment on our results of operations;
|
•
|
Our future indebtedness and our ability to obtain additional financing;
|
•
|
Our ability to achieve profitability in the future;
|
•
|
The requirements of being a public company;
|
•
|
Our adjusted results may not be representative of our future performance;
|
•
|
The risk of potential future litigation;
|
•
|
Our ability to remediate the material weakness in our internal control over financial reporting;
|
•
|
Our holding company structure and dependence on distributions from Evolent Health LLC;
|
•
|
Our obligations to make payments to certain of our pre-IPO investors for certain tax benefits we may claim in the future;
|
•
|
Our ability to utilize benefits under the Tax Receivables Agreement;
|
•
|
Our ability to realize all or a portion of the tax benefits that we currently expect to result from future exchanges of Class B common units for our Class A common stock, and to utilize certain tax attributes of Evolent Health Holdings and an affiliate of TPG;
|
•
|
Distributions that Evolent Health LLC will be required to make to us and to the other members of Evolent Health LLC;
|
•
|
Our obligations to make payments under the Tax Receivables Agreement that may be accelerated or may exceed the tax benefits we realize;
|
•
|
Different interests among our pre-IPO investors, or between us and our pre-IPO investors;
|
•
|
The terms of agreements between us and certain of our pre-IPO investors;
|
•
|
Our exemption from certain corporate governance requirements due to our status as a “controlled company” within the meaning of New York Stock Exchange rules;
|
•
|
The potential volatility of our Class A common stock price;
|
•
|
The potential decline of our Class A common stock price if a substantial number of shares become available for sale or if a large number of Class B common units is exchanged for shares of Class A common stock;
|
•
|
Provisions in our certificate of incorporation and bylaws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us;
|
•
|
The ability of certain of our investors to compete with us without restrictions;
|
•
|
Provisions in our certificate of incorporation which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
|
•
|
Our intention not to pay cash dividends on our Class A common stock; and
|
•
|
Our status as an “emerging growth company.”
|
|
As of
|
|
As of
|
||||
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
111,292
|
|
|
$
|
145,726
|
|
Restricted cash
|
6,747
|
|
|
4,703
|
|
||
Accounts receivable, net (amounts related to affiliates: 2016 - $7,164; 2015 - $10,185)
|
25,216
|
|
|
20,381
|
|
||
Prepaid expenses and other current assets (amounts related to affiliates: 2016 - $29; 2015 - $1,220)
|
4,215
|
|
|
4,208
|
|
||
Investments, at amortized cost
|
20,096
|
|
|
9,445
|
|
||
Total current assets
|
167,566
|
|
|
184,463
|
|
||
Restricted cash
|
1,579
|
|
|
1,582
|
|
||
Investments, at amortized cost
|
33,879
|
|
|
44,618
|
|
||
Property and equipment, net
|
15,537
|
|
|
12,796
|
|
||
Intangible assets, net
|
168,072
|
|
|
163,152
|
|
||
Goodwill
|
459,703
|
|
|
608,903
|
|
||
Prepaid expenses and other non-current assets
|
10,127
|
|
|
—
|
|
||
Total assets
|
$
|
856,463
|
|
|
$
|
1,015,514
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable (amounts related to affiliates: 2016 - $15,607; 2015 - $13,311)
|
$
|
17,042
|
|
|
$
|
16,699
|
|
Accrued liabilities (amounts related to affiliates: 2016 - $982; 2015 - $828)
|
7,551
|
|
|
6,047
|
|
||
Accrued compensation and employee benefits
|
9,623
|
|
|
21,925
|
|
||
Deferred revenue
|
18,329
|
|
|
14,835
|
|
||
Total current liabilities
|
52,545
|
|
|
59,506
|
|
||
Other long-term liabilities
|
7,927
|
|
|
111
|
|
||
Deferred tax liabilities, net
|
20,329
|
|
|
21,318
|
|
||
Total liabilities
|
80,801
|
|
|
80,935
|
|
||
|
|
|
|
||||
Commitments and Contingencies (See Note 8)
|
|
|
|
||||
|
|
|
|
||||
Shareholders' Equity (Deficit)
|
|
|
|
|
|
||
Class A common stock - $0.01 par value; 750,000,000 shares authorized; 42,565,019 and 41,491,498
|
|
|
|
|
|
||
shares issued and outstanding as of March 31, 2016, and December 31, 2015, respectively
|
426
|
|
|
415
|
|
||
Class B common stock - $0.01 par value; 100,000,000 shares authorized; 17,524,596
|
|
|
|
|
|
||
shares issued and outstanding as of March 31, 2016, and December 31, 2015
|
175
|
|
|
175
|
|
||
Additional paid-in-capital
|
357,047
|
|
|
342,063
|
|
||
Retained earnings (accumulated deficit)
|
183,876
|
|
|
306,688
|
|
||
Total shareholders' equity (deficit) attributable to Evolent Health, Inc.
|
541,524
|
|
|
649,341
|
|
||
Non-controlling interests
|
234,138
|
|
|
285,238
|
|
||
Total equity (deficit)
|
775,662
|
|
|
934,579
|
|
||
Total liabilities and shareholders' equity (deficit)
|
$
|
856,463
|
|
|
$
|
1,015,514
|
|
|
For the Three
|
||||||
|
Months Ended
|
||||||
|
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue
|
|
|
|
||||
Transformation
(1)
|
$
|
8,114
|
|
|
$
|
—
|
|
Platform and operations
(1)
|
41,335
|
|
|
—
|
|
||
Total revenue
|
49,449
|
|
|
—
|
|
||
|
|
|
|
||||
Expenses
|
|
|
|
||||
Cost of revenue (exclusive of depreciation and amortization
|
|
|
|
||||
presented separately below)
(1)
|
28,562
|
|
|
—
|
|
||
Selling, general and administrative expenses
(1)
|
32,095
|
|
|
—
|
|
||
Depreciation and amortization expenses
|
3,371
|
|
|
—
|
|
||
Goodwill impairment
|
160,600
|
|
|
—
|
|
||
Total operating expenses
|
224,628
|
|
|
—
|
|
||
Operating income (loss)
|
(175,179
|
)
|
|
—
|
|
||
Interest income (expense), net
|
279
|
|
|
—
|
|
||
Income (loss) from affiliate
|
—
|
|
|
(11,319
|
)
|
||
Income (loss) before income taxes and non-controlling interests
|
(174,900
|
)
|
|
(11,319
|
)
|
||
Provision (benefit) for income taxes
|
(988
|
)
|
|
—
|
|
||
Net income (loss)
|
(173,912
|
)
|
|
(11,319
|
)
|
||
Net income (loss) attributable to non-controlling interests
|
(51,100
|
)
|
|
—
|
|
||
Net income (loss) attributable to Evolent Health, Inc.
|
$
|
(122,812
|
)
|
|
$
|
(11,319
|
)
|
|
|
|
|
||||
Earnings (Loss) Available to Common Shareholders
|
|
|
|
||||
Basic
|
$
|
(122,812
|
)
|
|
$
|
(12,609
|
)
|
Diluted
|
(122,812
|
)
|
|
(12,609
|
)
|
||
|
|
|
|
||||
Earnings (Loss) per Common Share
|
|
|
|
||||
Basic
|
$
|
(2.91
|
)
|
|
$
|
(4.22
|
)
|
Diluted
|
(2.91
|
)
|
|
(4.22
|
)
|
||
|
|
|
|
||||
Weighted-Average Common Shares Outstanding
|
|
|
|
||||
Basic
|
42,185
|
|
|
2,988
|
|
||
Diluted
|
42,185
|
|
|
2,988
|
|
|
For the Three
|
||||||
|
Months Ended
|
||||||
|
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
(173,912
|
)
|
|
$
|
(11,319
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Loss from affiliates
|
—
|
|
|
11,319
|
|
||
Depreciation and amortization
|
3,371
|
|
|
—
|
|
||
Goodwill impairment
|
160,600
|
|
|
—
|
|
||
Stock-based compensation expense
|
4,436
|
|
|
—
|
|
||
Deferred tax provision
|
(988
|
)
|
|
—
|
|
||
Other
|
110
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Accounts receivables, net
|
(4,835
|
)
|
|
—
|
|
||
Prepaid expenses and other current assets
|
656
|
|
|
—
|
|
||
Accounts payable
|
(2,896
|
)
|
|
—
|
|
||
Accrued liabilities
|
1,414
|
|
|
—
|
|
||
Accrued compensation and employee benefits
|
(12,302
|
)
|
|
—
|
|
||
Deferred revenue
|
3,494
|
|
|
—
|
|
||
Other long-term liabilities
|
48
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
(20,804
|
)
|
|
—
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
||||
Cash paid in connection with acquisition
|
(11,500
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
(3,353
|
)
|
|
—
|
|
||
Change in restricted cash
|
1,198
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
(13,655
|
)
|
|
—
|
|
||
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
||||
Proceeds from stock option exercises
|
25
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
25
|
|
|
—
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(34,434
|
)
|
|
—
|
|
||
Cash and cash equivalents as of beginning-of-period
|
145,726
|
|
|
—
|
|
||
Cash and cash equivalents as of end-of-period
|
$
|
111,292
|
|
|
$
|
—
|
|
|
|
|
|
||||
Supplemental Disclosure of Non-cash Investing and Financing Activities
|
|
|
|
||||
Non-cash contribution of common stock to Evolent Health LLC prior to the Offering Reorganization
|
$
|
—
|
|
|
$
|
8,019
|
|
Accrued property and equipment purchases
|
90
|
|
|
—
|
|
||
Stock issued in connection with business combinations
|
10,534
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
|
||||||||||||||||||||||||||||||
|
Series A Redeemable
|
|
Series B Redeemable
|
Series B-1 Redeemable
|
Series A
|
|
Class A
|
|
Class B
|
Additional
|
(Accum-
|
|
Non-
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Preferred Stock
|
|
Preferred Stock
|
|
Preferred Stock
|
|
Common Stock
|
|
Common Stock
|
|
Paid-in
|
|
ulated
|
controlling
|
Equity
|
||||||||||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit)
|
|
Interests
|
|
(Deficit)
|
||||||||||||||||||||||||||
Balance as of December 31, 2014
|
7,900
|
|
|
$
|
12,847
|
|
|
6,468
|
|
|
$
|
24,833
|
|
|
360
|
|
|
$
|
1,593
|
|
|
7,400
|
|
|
$
|
2
|
|
|
4,048
|
|
|
$
|
1
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
23,733
|
|
|
$
|
(25,806
|
)
|
|
$
|
—
|
|
|
$
|
(2,070
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Non-cash issuance of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
to Evolent Health LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,810
|
|
|
—
|
|
|
—
|
|
|
21,810
|
|
||||||||||
Net income (loss) prior to the Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Reorganization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,165
|
)
|
|
—
|
|
|
(28,165
|
)
|
||||||||||
Effects of the Offering Reorganization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Conversion of existing equity
|
(7,900
|
)
|
|
(12,847
|
)
|
|
(6,468
|
)
|
|
(24,833
|
)
|
|
(360
|
)
|
|
(1,593
|
)
|
|
(7,400
|
)
|
|
(2
|
)
|
|
22,128
|
|
|
261
|
|
|
—
|
|
|
—
|
|
|
39,014
|
|
|
—
|
|
|
—
|
|
|
39,273
|
|
||||||||||
Issuance of Class B common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,576
|
|
|
196
|
|
|
(196
|
)
|
|
—
|
|
|
332,793
|
|
|
332,793
|
|
||||||||||
Merger with TPG affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,051
|
|
|
21
|
|
|
(2,051
|
)
|
|
(21
|
)
|
|
34,875
|
|
|
—
|
|
|
(34,875
|
)
|
|
—
|
|
||||||||||
Issuance of Class A common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
sold in initial public offering, net of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,225
|
|
|
132
|
|
|
—
|
|
|
—
|
|
|
205,801
|
|
|
—
|
|
|
—
|
|
|
205,933
|
|
||||||||||
Tax effect of Offering Reorganization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,144
|
|
|
—
|
|
|
—
|
|
|
2,144
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
subsequent to the Offering Reorganization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,730
|
|
|
—
|
|
|
—
|
|
|
14,730
|
|
||||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
—
|
|
|
152
|
|
||||||||||
Net income (loss) subsequent to the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Offering Reorganization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
360,659
|
|
|
(12,680
|
)
|
|
347,979
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Balance as of December 31, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,491
|
|
|
415
|
|
|
17,525
|
|
|
175
|
|
|
342,063
|
|
|
306,688
|
|
|
285,238
|
|
|
934,579
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,436
|
|
|
—
|
|
|
—
|
|
|
4,436
|
|
||||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||||||||
Issuance of common stock for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
business combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,067
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
10,523
|
|
|
—
|
|
|
—
|
|
|
10,534
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,812
|
)
|
|
(51,100
|
)
|
|
(173,912
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Balance as of March 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
42,565
|
|
|
$
|
426
|
|
|
17,525
|
|
|
$
|
175
|
|
|
$
|
357,047
|
|
|
$
|
183,876
|
|
|
$
|
234,138
|
|
|
$
|
775,662
|
|
•
|
We amended and restated our certificate of incorporation to, among other things, authorize two classes of common stock - Class A common stock and Class B exchangeable common stock. Both classes of stock will vote together as a single class.
|
•
|
We acquired, by merger, an affiliate of a member of Evolent Health LLC, for which we issued
2,051,468
shares of Class A common stock.
|
•
|
We issued shares of our Class B exchangeable common stock to certain existing members of Evolent Health LLC.
|
|
As of
|
|
As of
|
|
||||
|
March 31,
|
December 31,
|
||||||
|
2016
|
|
2015
|
|
||||
Letters of credit for facility leases
|
$
|
2,516
|
|
|
$
|
3,710
|
|
|
Pharmacy benefit management services
|
5,685
|
|
|
2,479
|
|
|
||
Other
|
125
|
|
|
96
|
|
|
||
Total restricted cash
|
8,326
|
|
|
6,285
|
|
|
||
Non-current restricted cash
|
1,579
|
|
|
1,582
|
|
|
||
Current restricted cash
|
$
|
6,747
|
|
|
$
|
4,703
|
|
|
Purchase price
|
$
|
18,200
|
|
|
Less amount allocated to prepaid asset
|
6,900
|
|
|
|
Goodwill
|
$
|
11,300
|
|
|
•
|
Evolent Health Holdings merged with and into Evolent Health, Inc. and the surviving corporation of the merger was Evolent Health, Inc.;
|
•
|
An affiliate of TPG merged with and into Evolent Health, Inc. and the surviving corporation of the merger was Evolent Health, Inc.;
|
•
|
Each of the then-existing stockholders of Evolent Health Holdings received
four
shares of our Class A common stock and the right to certain payments under the Tax Receivables Agreement ("TRA") in exchange for each share of Class A common stock held in Evolent Health Holdings;
|
•
|
TPG received
2,051,468
shares of Class A common stock of Evolent Health, Inc., together with the right to certain payments under the TRA in exchange for
100%
of the equity that it held in its affiliate that was merged with Evolent Health, Inc.; and
|
•
|
We issued shares of our Class B common stock and the right to certain payments under the TRA to The Advisory Board Company ("The Advisory Board"), TPG and another investor each of which was a member of Evolent Health LLC prior to the Offering Reorganization.
|
•
|
Remove transaction costs related to the Passport transaction of
$0.2 million
recorded in the first quarter of 2016 and reclassify said amounts to the first quarter of 2015;
|
•
|
Remove transaction costs related to the Passport transaction of
$0.2 million
recorded in the fourth quarter of 2015 and reclassify said amounts to the first quarter of 2015;
|
•
|
Remove transaction costs related to the Offering Reorganization of
$1.2 million
in 2015 and reclassify said amount to 2014;
|
•
|
Record amortization expenses related to intangible assets beginning January 1, 2014, for intangibles related to the Offering Reorganization and beginning January 1, 2015, for intangibles related to the Passport transaction; and
|
•
|
Record adjustments of income taxes associated with these pro forma adjustments.
|
|
For the Three
|
||||||
|
Months Ended
|
||||||
|
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue
|
$
|
52,642
|
|
|
$
|
45,150
|
|
Net income (loss)
|
(171,850
|
)
|
|
(14,595
|
)
|
||
Net income (loss) attributable
|
|
|
|
||||
to non-controlling interests
|
(50,180
|
)
|
|
(6,103
|
)
|
||
Net income (loss) attributable
|
|
|
|
||||
to Evolent Health, Inc.
|
(121,670
|
)
|
|
(8,492
|
)
|
||
|
|
|
|
||||
Net income (loss) available to
|
|
|
|
||||
common shareholders:
|
|
|
|
||||
Basic
|
(2.86
|
)
|
|
(0.32
|
)
|
||
Diluted
|
(2.86
|
)
|
|
(0.32
|
)
|
|
|
As of March 31, 2016
|
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
||||||||||||||||
|
Amortized
|
Unrealized
|
Unrealized
|
|
Fair
|
|
Amortized
|
Unrealized
|
Unrealized
|
|
Fair
|
||||||||||||||||||||||||||||
|
|
Costs
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
|
Costs
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
||||||||||||||||
U.S. Treasury bills
|
|
$
|
28,260
|
|
|
|
$
|
40
|
|
|
|
$
|
33
|
|
|
|
$
|
28,267
|
|
|
|
$
|
28,306
|
|
|
|
$
|
115
|
|
|
|
$
|
181
|
|
|
|
$
|
28,240
|
|
Corporate bonds
|
|
25,715
|
|
|
|
97
|
|
|
|
9
|
|
|
|
25,803
|
|
|
|
25,757
|
|
|
|
110
|
|
|
|
80
|
|
|
|
25,787
|
|
||||||||
Total investments
|
|
$
|
53,975
|
|
|
|
$
|
137
|
|
|
|
$
|
42
|
|
|
|
$
|
54,070
|
|
|
|
$
|
54,063
|
|
|
|
$
|
225
|
|
|
|
$
|
261
|
|
|
|
$
|
54,027
|
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||||||||||||
|
Amortized
|
|
Fair
|
|
Amortized
|
|
Fair
|
||||||||
|
Cost
|
|
Value
|
|
Cost
|
|
Value
|
||||||||
Due in one year or less
|
$
|
20,096
|
|
|
$
|
20,163
|
|
|
$
|
9,445
|
|
|
$
|
9,451
|
|
Due after one year through five years
|
33,879
|
|
|
33,907
|
|
|
44,618
|
|
|
44,576
|
|
||||
Total
|
$
|
53,975
|
|
|
$
|
54,070
|
|
|
$
|
54,063
|
|
|
$
|
54,027
|
|
|
As of
|
|
|
As of
|
|
||||
|
March 31,
|
|
December 31,
|
||||||
|
2016
|
|
|
2015
|
|
||||
Computer hardware
|
$
|
251
|
|
|
|
$
|
232
|
|
|
Furniture and equipment
|
1,604
|
|
|
|
1,604
|
|
|
||
Internal-use software development costs
|
9,787
|
|
|
|
6,363
|
|
|
||
Leasehold improvements
|
5,830
|
|
|
|
5,830
|
|
|
||
Total property and equipment
|
17,472
|
|
|
|
14,029
|
|
|
||
Accumulated depreciation and amortization
|
(1,935
|
)
|
|
|
(1,233
|
)
|
|
||
Total property and equipment, net
|
$
|
15,537
|
|
|
|
$
|
12,796
|
|
|
|
|
As of March 31, 2016
|
||||||||||||||
|
|
Weighted-
|
|
|
||||||||||||
|
|
Average
|
|
Gross
|
|
|
|
|
|
Net
|
||||||
|
Remaining
|
Carrying
|
Accumulated
|
Carrying
|
||||||||||||
|
Useful Life
|
Amount
|
Amortization
|
Value
|
||||||||||||
Corporate trade name
|
|
19.2
|
|
$
|
19,000
|
|
|
|
$
|
791
|
|
|
|
$
|
18,209
|
|
Customer relationships
|
|
23.5
|
|
127,500
|
|
|
|
4,068
|
|
|
|
123,432
|
|
|||
Technology
|
|
6.2
|
|
30,000
|
|
|
|
3,569
|
|
|
|
26,431
|
|
|||
Total
|
|
|
|
$
|
176,500
|
|
|
|
$
|
8,428
|
|
|
|
$
|
168,072
|
|
|
|
As of December 31, 2015
|
||||||||||||||
|
|
Weighted-
|
|
|
||||||||||||
|
|
Average
|
|
Gross
|
|
|
|
|
|
Net
|
||||||
|
Remaining
|
Carrying
|
Accumulated
|
Carrying
|
||||||||||||
|
Useful Life
|
Amount
|
Amortization
|
Value
|
||||||||||||
Corporate trade name
|
|
19.4
|
|
$
|
19,000
|
|
|
|
$
|
554
|
|
|
|
$
|
18,446
|
|
Customer relationships
|
|
24.4
|
|
120,000
|
|
|
|
2,797
|
|
|
|
117,203
|
|
|||
Technology
|
|
6.4
|
|
30,000
|
|
|
|
2,497
|
|
|
|
27,503
|
|
|||
Total
|
|
|
|
$
|
169,000
|
|
|
|
$
|
5,848
|
|
|
|
$
|
163,152
|
|
•
|
The timing of the exchanges and the price of the Class A shares at the time of the transaction, triggering a tax basis increase in the Company's asset and a corresponding benefit to be realized under the TRA; and
|
•
|
The amount and timing of our taxable income - the Company will be required to pay 85% of the tax savings as and when realized, if any. If the Company does not have taxable income, it will not be required to make payments under the TRA for that taxable year because no tax savings were actually realized.
|
Customer A
|
18.3
|
%
|
Customer B
|
14.2
|
%
|
Customer C
|
12.9
|
%
|
Customer D
|
11.4
|
%
|
|
As of
|
|
As of
|
|
||
|
March 31,
|
December 31,
|
||||
|
2016
|
|
2015
|
|
||
Customer A
|
12.6
|
%
|
|
12.9
|
%
|
|
Customer B
|
16.6
|
%
|
|
*
|
|
|
Customer D
|
30.8
|
%
|
|
28.1
|
%
|
|
Customer E
|
12.5
|
%
|
|
23.2
|
%
|
|
Customer F
|
11.5
|
%
|
|
11.4
|
%
|
|
|
For the Three
|
||||||
|
Months Ended
|
||||||
|
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net income (loss)
|
$
|
(173,912
|
)
|
|
$
|
(11,319
|
)
|
Less:
|
|
|
|
||||
Net income (loss) attributable to non-controlling interests
|
(51,100
|
)
|
|
—
|
|
||
Undeclared cumulative preferred dividends
|
—
|
|
|
1,290
|
|
||
Net income (loss) available for common shareholders
(1)
|
$
|
(122,812
|
)
|
|
$
|
(12,609
|
)
|
|
|
|
|
||||
Weighted-average common shares outstanding
(1)(2)
|
42,185
|
|
|
2,988
|
|
||
|
|
|
|
||||
Earnings (Loss) per Common Share
|
|
|
|
||||
Basic
|
$
|
(2.91
|
)
|
|
$
|
(4.22
|
)
|
Diluted
|
(2.91
|
)
|
|
(4.22
|
)
|
(1)
|
Both our Class A and Class B common shares participate equally in the earnings or losses of Evolent Health, Inc.; therefore, shares of our Class B common stock are not considered dilutive shares for the purposes of calculating our diluted earnings (loss) per common share as the related adjustment to net income (loss) available for common shareholders would equally offset the additional shares resulting in the same earnings (loss) per common share.
|
(2)
|
For periods of net loss, shares used in the earnings (loss) per common share calculation represent basic shares as using diluted shares would be anti-dilutive.
|
|
|
For the Three
|
||||
|
|
Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2016
|
|
2015
|
||
Convertible preferred stock
|
|
—
|
|
|
22,128
|
|
Restricted stock and restricted stock units
|
|
12
|
|
|
605
|
|
Options
|
|
457
|
|
|
1,159
|
|
Total
|
|
469
|
|
|
23,892
|
|
|
For the Three
|
||||
|
Months Ended
|
||||
|
|
March 31,
|
|
||
|
|
2016
|
|
||
Award Type
|
|
|
|
|
|
Stock options
|
|
$
|
3,929
|
|
|
Restricted stock units ("RSU")
|
|
507
|
|
|
|
Total
|
|
$
|
4,436
|
|
|
|
|
|
|
||
Line Item
|
|
|
|
||
Cost of revenue
|
|
$
|
395
|
|
|
Selling, general and
|
|
|
|
||
administrative expenses
|
|
4,041
|
|
|
|
Total
|
|
$
|
4,436
|
|
|
|
For the Three
|
||||
|
Months Ended
|
||||
|
|
March 31,
|
|
||
|
|
2015
|
|
||
Total revenue
|
|
$
|
37,041
|
|
|
Cost of revenue (exclusive of
|
|
|
|
||
depreciation and amortization)
|
|
26,454
|
|
|
|
Gross profit
|
|
10,587
|
|
|
|
Operating income (loss)
|
|
(19,347
|
)
|
|
|
Net income (loss)
|
|
(19,315
|
)
|
|
|
For the Three
|
||||
|
Months Ended
|
||||
|
|
March 31,
|
|
||
|
|
2016
|
|
||
Non-controlling interests as of beginning-of-period
|
|
$
|
285,238
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
(51,100
|
)
|
|
|
Non-controlling interests as of end-of-period
|
|
$
|
234,138
|
|
|
|
For the Three Months Ended March 31, 2016
|
|
For the Three Months Ended March 31, 2015
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
Evolent
|
|
|
|
|
|
Evolent
|
|
|
Evolent
|
|
|
Evolent
|
|
|
|
|
|
Evolent
|
|
|
|
|
|
|||||||||||||||||
|
|
Health, Inc.
|
|
|
|
|
|
Health, Inc.
|
|
|
Health, Inc.
|
|
|
Health LLC
|
|
|
|
|
|
Health, Inc.
|
|
|
Change Over Prior Period
|
|||||||||||||||||||
(in thousands)
|
as Reported
|
Adjustments
|
as Adjusted
|
as Reported
|
Operations
(1)
|
Adjustments
|
as Adjusted
|
|
$
|
|
%
|
|||||||||||||||||||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transformation
(2)
|
|
$
|
8,114
|
|
|
|
$
|
87
|
|
|
|
$
|
8,201
|
|
|
|
$
|
—
|
|
|
|
$
|
10,376
|
|
|
|
$
|
—
|
|
|
|
$
|
10,376
|
|
|
|
$
|
(2,175
|
)
|
|
(21.0
|
)%
|
Platform and operations
|
|
41,335
|
|
|
|
—
|
|
|
|
41,335
|
|
|
|
—
|
|
|
|
26,665
|
|
|
|
—
|
|
|
|
26,665
|
|
|
|
14,670
|
|
|
55.0
|
%
|
||||||||
Total revenue
|
|
49,449
|
|
|
|
87
|
|
|
|
49,536
|
|
|
|
—
|
|
|
|
37,041
|
|
|
|
—
|
|
|
|
37,041
|
|
|
|
12,495
|
|
|
33.7
|
%
|
||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cost of revenue (exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
presented separately below)
(3)
|
|
28,562
|
|
|
|
(406
|
)
|
|
|
28,156
|
|
|
|
—
|
|
|
|
26,454
|
|
|
|
(439
|
)
|
|
|
26,015
|
|
|
|
2,141
|
|
|
8.2
|
%
|
||||||||
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
administrative expenses
(4)
|
|
32,095
|
|
|
|
(4,086
|
)
|
|
|
28,009
|
|
|
|
—
|
|
|
|
28,451
|
|
|
|
(8,577
|
)
|
|
|
19,874
|
|
|
|
8,135
|
|
|
40.9
|
%
|
||||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
expenses
|
|
3,371
|
|
|
|
—
|
|
|
|
3,371
|
|
|
|
—
|
|
|
|
1,483
|
|
|
|
—
|
|
|
|
1,483
|
|
|
|
1,888
|
|
|
127.3
|
%
|
||||||||
Goodwill impairment
(5)
|
|
160,600
|
|
|
|
(160,600
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
%
|
||||||||
Total operating expenses
|
|
224,628
|
|
|
|
(165,092
|
)
|
|
|
59,536
|
|
|
|
—
|
|
|
|
56,388
|
|
|
|
(9,016
|
)
|
|
|
47,372
|
|
|
|
12,164
|
|
|
25.7
|
%
|
||||||||
Operating income (loss)
|
|
$
|
(175,179
|
)
|
|
|
$
|
165,179
|
|
|
|
$
|
(10,000
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(19,347
|
)
|
|
|
$
|
9,016
|
|
|
|
$
|
(10,331
|
)
|
|
|
$
|
331
|
|
|
(3.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transformation revenue as
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
a % of total revenue
|
|
|
|
|
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
28.0
|
%
|
|
|
|
|
|
|||||||||||||||
Platform and operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
as a % of total revenue
|
|
|
|
|
|
|
|
83.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
72.0
|
%
|
|
|
|
|
|
|||||||||||||||
Cost of revenue as a %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
of total revenue
|
|
|
|
|
|
|
|
56.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
70.2
|
%
|
|
|
|
|
|
|||||||||||||||
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
expenses as a % of total revenue
|
|
|
|
|
|
|
|
56.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
53.7
|
%
|
|
|
|
|
|
(1)
|
Represents the operational results of Evolent Health LLC for the period January 1, 2015, through March 31, 2015, prior to consolidation.
|
(2)
|
As part of the Offering Reorganization and as a result of gaining control of Evolent Health LLC, we recorded the fair value of deferred revenue resulting in a $4.9 million reduction to the book value. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 4" in our 2015 Form 10-K and Note 4 in this Form 10-Q for additional details of the Offering Reorganization. Adjustments to transformation revenue include less than $0.1 million in purchase accounting adjustments which reflect the portion of the adjustment that would have been recognized in the period January 1, 2016, though March 31, 2016, as a result of the Offering Reorganization.
|
(3)
|
Adjustments to cost of revenue include $0.4 million in stock-based compensation expense for the period January 1, 2016, through March 31, 2016, and $0.4 million in stock-based compensation expense for the period January 1, 2015, through March 31, 2015. Stock-based compensation expense includes the value of equity awards granted to employees and non-employee directors of the Company or our equity method investee, Evolent Health LLC.
|
(4)
|
Adjustments to selling, general and administrative expenses include stock-based compensation expense of $4.0 million for the period January 1, 2016, through March 31, 2016, and $7.6 million for the period January 1, 2015, through March 31, 2015. Stock-based compensation expense includes the value of equity awards granted to employees and non-employee directors of the Company or our equity method investee, Evolent Health LLC. The adjustments also include transaction costs resulting from acquisitions and business combinations completed during the period January 1, 2016, through March 31, 2016, of less than $0.1 million, and transaction costs related to the Offering Reorganization and the IPO for the period January 1, 2015, through March 31, 2015, of $1.0 million. Transaction costs consisted primarily of legal and advisory fees.
|
(5)
|
The adjustment represents a write down of goodwill as described in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates."
|
|
Less
|
|
|
|
|
|
More
|
|
|
||||||||||
|
Than
|
|
1 to 3
|
|
3 to 5
|
|
Than
|
|
|
||||||||||
|
1 Year
|
|
Years
|
|
Years
|
|
5 Years
|
|
Total
|
||||||||||
Operating leases for facilities
|
$
|
3,274
|
|
|
$
|
6,795
|
|
|
$
|
6,231
|
|
|
$
|
—
|
|
|
$
|
16,300
|
|
Purchase obligations
|
3,683
|
|
|
1,621
|
|
|
—
|
|
|
—
|
|
|
5,304
|
|
|||||
Total
|
$
|
6,957
|
|
|
$
|
8,416
|
|
|
$
|
6,231
|
|
|
$
|
—
|
|
|
$
|
21,604
|
|
•
|
Increase our ownership in our consolidated operating subsidiary, Evolent Health LLC. See "Item 1. Financial Statements - Note 4” for additional information;
|
•
|
Increase the number of outstanding shares of our Class A common shares. See “Item 1. Financial Statements - Note 9” for information relating to potentially dilutive securities and the impact on our historical earnings per share; and
|
•
|
Increase our tax basis in our share of Evolent Health LLC’s tangible and intangible assets and possibly subject us to payments under the TRA agreement. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 11” in our 2015 Form 10-K for further information on tax matters related to the exchange of Class B common shares.
|
By:
|
/s/ Nicholas McGrane
|
|
Name:
|
Nicholas McGrane
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
By:
|
/s/ Lydia Stone
|
|
Name:
|
Lydia Stone
|
|
Title:
|
Principal Accounting Officer and Controller
|
Service Completion Date
|
Aggregate Percentage of Options Eligible to Vest
|
Aggregate Number of Options Eligible to Vest
|
Third anniversary of grant date
|
50%
|
|
Fourth anniversary of grant date
|
100%
|
|
If to the Company:
|
Evolent Health, Inc.
800 N. Glebe Road, Suite 500
Arlington, VA 22203
Attention: General Counsel
|
|
|
If to you:
|
To your address as most recently supplied to the Company and set forth in the Company’s records
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Evolent Health, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
May 16, 2016
|
/s/ Frank Williams
|
|
|
|
Name: Frank Williams
|
|
|
|
Title: Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Evolent Health, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
May 16, 2016
|
/s/ Nicholas McGrane
|
|
|
|
Name: Nicholas McGrane
|
|
|
|
Title: Chief Financial Officer
|
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 2016
(the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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May 16, 2016
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/s/ Frank Williams
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Name: Frank Williams
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Title: Chief Executive Officer
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1.
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The Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 2016
(the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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May 16, 2016
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/s/ Nicholas McGrane
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Name: Nicholas McGrane
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Title: Chief Financial Officer
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