Full Press Release Details
Evolent Health Announces Fourth Quarter and Full Year 2022 Results
WASHINGTON (February 22, 2023) - Evolent Health, Inc. (NYSE EVH), a health care company that delivers proven clinical and administrative solutions to payers and providers, today announced financial results for the quarter ended December 31, 2022.
Highlights from the fourth quarter and full year 2022 announcement include
Quarter ended December 31, 2022
Revenue of $382.4 million, an increase of $134.1 million, or 54.0%, from the three months ended December 31, 2021.
Net loss attributable to common shareholders of Evolent Health, Inc. of $11.3 million resulting in a net loss margin of (3.0)%.
Achieved Adjusted EBITDA of $32.3 million resulting in an Adjusted EBITDA margin of 8.4%.
Total Lives on Platform of 20.6 million as of December 31, 2022, composed of 2.2 million Evolent Health Services Lives on Platform and 18.5 million Clinical Solutions Lives on Platform, compared to 17.7 million Total Lives on Platform as of December 31, 2021.
Total cases managed during the quarter within surgical management and advanced care planning totaled 15.7 thousand, yielding an average per case revenue of $2.8 thousand.
Full year ended December 31, 2022
Revenue of $1,352.0 million, an increase of $444.1 million, or 48.9%, from the year ended December 31, 2021.
Net loss attributable to common shareholders of Evolent Health, Inc. of $19.2 million resulting in a net loss margin of (1.4)%.
Achieved Adjusted EBITDA of $106.3 million resulting in an Adjusted EBITDA margin of 7.9%.
For 2023, Evolent announced the following new operating partnerships to begin the 2023-year sales cycle
In January 2023, the Company announced a significant sale of its Performance Suite offering to an existing client, the fifth largest health insurance Company in the United States as measured by membership. Evolent will provide its oncology solution to Medicare Advantage patients in both Florida and Arizona, driving over $250M in new revenue in 2024. This new agreement is anticipated to go live in mid-2023
A new Performance Suite agreement for 2023 with a large regional health plan within Evolent Care Partners. The agreement includes up and downside risk for an initial population of Medicare Advantage lives.
Seth Blackley, Chief Executive Officer, and Co-Founder of Evolent Health stated, "The fourth quarter of 2022 caps off a highly successful year of financial performance and strong execution against our strategic and operational goals. We carry strong momentum into 2023 and we are highly focused on continuing to execute against our three core operating priorities. I'd also like to thank our team of approximately 4,000 employees for their commitment to our mission and their contributions to the strength of Evolent."
Financial Results of Evolent Health, Inc.
In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we may use or discuss non-GAAP financial measures. Definitions of the non-GAAP financial measures, as well as reconciliations of non-GAAP
financial measures to the most directly comparable GAAP financial measures are included in this earnings release. See Financial Statement Presentation and Non-GAAP Financial Measures for more information.
Evolent Health, Inc. reported the following results in accordance with U.S. generally accepted accounting principles ("GAAP")
Revenue of $382.4 million and $248.4 million for the three months ended December 31, 2022 and 2021, respectively, and $1,352.0 million and $908.0 million for the years ended December 31, 2022 and 2021, respectively.
Cost of revenue of $299.4 million and $164.5 million for the three months ended December 31, 2022 and 2021, respectively, and $1,035.4 million and $657.6 million for the years ended December 31, 2022 and 2021, respectively.
Selling, general and administrative expenses of $82.9 million and $66.9 million for the three months ended December 31, 2022 and 2021, respectively, and $269.3 million and $219.5 million for the years ended December 31, 2022 and 2021, respectively.
Net loss attributable to common shareholders of Evolent Health, Inc. of $(11.3) million and $(5.6) million for the three months ended December 31, 2022 and 2021, respectively, and $(19.2) million and $(37.6) million for the years ended December 31, 2022 and 2021, respectively.
Net loss margin of (3.0)% and (2.3)% for the three months ended December 31, 2022 and 2021, respectively, and (1.4)% and (4.1)% for the years ended December 31, 2022 and 2021, respectively.
Loss attributable to common shareholders of Evolent Health, Inc., per basic and diluted share, of $(0.11) and $(0.06) for the three months ended December 31, 2022 and 2021, respectively, and $(0.20) and $(0.44) for the years ended December 31, 2022 and 2021, respectively.
Segment Highlights Clinical Solutions
Revenue of $281.5 million, up 74.7%, from $161.1 million from the three months ended December 31, 2021.
Adjusted EBITDA of $26.7 million and $29.5 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted EBITDA margin of 9.5% and 18.3% for the three months ended December 31, 2022 and 2021, respectively.
Clinical Solutions Lives on Platform in our Performance Suite was 3.3 million as of December 31, 2022 with a Clinical Solutions Performance suite Average PMPM of $25.78 for the three months ended December 31, 2022 resulting in revenue of $224.6 million. Clinical Solutions Lives on Platform in in our New Century Health Technology and Services suite Lives on Platform was 15.2 million as of December 31, 2022 with an Average PMPM of $0.29 for the three months ended December 31, 2022 resulting in revenue of $13.1 million. Clinical Solutions Cases was 15.7 thousand with a quarterly Revenue per Case of $2.8 thousand for the three months ended December 31, 2022 resulting in revenue of $43.8 million.
Segment Highlights Evolent Health Services
Revenue of $101.0 million, up 15.7%, from $87.2 million from the three months ended December 31, 2021.
Adjusted EBITDA of $16.1 million and $7.9 million for the three months ended December 31, 2022 and 2021, respectively.
Adjusted EBITDA margin of 15.9% and 9.1% for the three months ended December 31, 2022 and 2021, respectively.
Evolent Health Services Lives on Platform was 2.2 million as of December 31, 2022 with Evolent Health Services Average PMPM of $15.29 for the three months ended December 31, 2022.
Total cash and cash equivalents was $188.2 million as of December 31, 2022.
Adjusted cost of revenue of $296.8 million and $163.8 million for the three months ended December 31, 2022 and 2021, respectively, and $1,029.4 million and $655.0 million for the years ended December 31, 2022 and 2021, respectively.
Adjusted selling, general and administrative expenses of $53.3 million and $60.2 million for the three months ended December 31, 2022 and 2021, respectively, and $216.3 million and $186.6 million for the years ended December 31, 2022 and 2021, respectively.
Adjusted EBITDA of $32.3 million and $24.3 million for the three months ended December 31, 2022 and 2021, respectively, and $106.3 million and $66.3 million for the years ended December 31, 2022 and 2021, respectively.
Adjusted EBITDA margin of 8.4% and 9.8% for the three months ended December 31, 2022 and 2021, respectively, and 7.9% and 7.3% for the years ended December 31, 2022 and 2021, respectively.
Adjusted income attributable to common shareholders of $10.4 million and $6.9 million for the three months ended December 31, 2022 and 2021, respectively, and $89.2 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively.
Adjusted income per share attributable to common shareholders of $0.10 and $0.08 for the three months ended December 31, 2022 and 2021, respectively, and $0.95 and $0.02 for the years ended December 31, 2022 and 2021, respectively.
We do not believe we can meaningfully reconcile guidance for non-GAAP Adjusted EBITDA to net income (loss) attributable to common shareholders of Evolent Health, Inc. because the company cannot provide guidance for the more significant reconciling items between net income (loss) attributable to common shareholders of Evolent Health, Inc. and Adjusted EBITDA without unreasonable effort. This is due to the fact that future period non-GAAP guidance includes adjustments for items not indicative of our core operations, and as a result from changes to our business due to acquisitions and other events. Such items may, from time to time, include gain on transfer of membership loss on repayment extinguishment of debt gain from equity method investees, change in fair value of contingent consideration, change in tax receivable agreement liability, other income (expense), repositioning costs, stock-based compensation expense, severance costs, amortization of contract cost assets, strategy and shareholder advisory expenses, acquisition-related costs, loss from discontinued operations, and certain other items the company believes to be non-indicative of its ongoing operations. Such adjustments may be affected by changes in ongoing assumptions, judgements, as well as nonrecurring, unusual or unanticipated charges, expenses or gains (losses) or other items that may not directly correlate to the underlying performance of our business operations. The exact amount of these adjustments are not currently determinable but may be significant.
The first quarter 2023 and full year 2023 guidance presented below includes the impact of the NIA transaction which closed on January 20, 2023.
First Quarter 2023 Guidance
For the three months ending March 31, 2023, revenue is expected to be in the range of approximately $420 million to $440 million. Adjusted EBITDA is expected to be in the range of approximately $45 million to $50 million.
Full Year 2023 Guidance
Revenue for the year ending December 31, 2023 is expected to be in the range of approximately $1.92 billion to $1.96 billion. Adjusted EBITDA is expected to be in the range of approximately $180 million to $200 million.
This Business Outlook section contains forward-looking statements, and actual results may differ materially. Factors that may cause actual results to differ materially from our current expectations are set forth below in Forward Looking Statements - Cautionary Language and Evolent Health, Inc.'s filings with the Securities and Exchange Commission ( SEC ).
Additional Outlook Information
Cash deployed for software development is expected to be in the range of $35 million - $40 million for the year ended December 31, 2023.
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a conference call to discuss its fourth quarter performance this evening, February 22, 2023, at 5 00 p.m., Eastern Time. To listen to a live broadcast via the internet and view the accompanying materials, please visit the Company's Investor Relations website at http ir.evolenthealth.com. To participate by telephone, dial 855.940.9467 or 412.317.6034 for international callers, and ask to join the Evolent Health call. Participants are advised to dial in at least fifteen minutes prior to the call to register. The call will be archived on the
company's website for one week and will be available beginning later this evening. Evolent Health invites all interested parties to attend the conference call.
About Evolent Health
Evolent Health (NYSE EVH) delivers proven clinical and administrative solutions that improve whole-person health while making health care simpler and more affordable. Our solutions encompass total cost of care management, specialty care management, and administrative simplification. Evolent serves a national base of leading payers and providers, is the first company to receive the National Committee for Quality Assurance's Population Health Program Accreditation, and is consistently recognized as a top place to work in health care nationally. Learn more about how Evolent is changing the way health care is delivered by visiting evolenthealth.com.
sfrank evolenthealth.com
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted Depreciation and Amortization Expenses, Adjusted Total Operating Expenses, Adjusted Change in the Fair Value of Contingent Consideration, Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted Income Available to Common Shareholders and Adjusted Income per Common Share Available to Common Shareholders, which are all non-GAAP financial measures, as supplemental measures to help investors evaluate our fundamental operational performance.
Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses are defined as cost of revenue and selling, general and administrative expenses, respectively, adjusted to exclude the impact of stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs related to acquisitions and business combinations, securities offerings, discontinued operations and strategy and shareholder advisory services. Management uses Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses as supplemental performance measures, which are also useful to investors, because they facilitate an understanding of our long-term operational costs while removing the effect of acquisition-related costs, severance and termination payments and non-cash items such as stock-based compensation expenses. Additionally, these supplemental performance measures facilitate understanding a breakdown of our Adjusted Total Operating Expenses. Adjustments for acquisition-related costs incurred generally represent professional service fees and direct expenses related to acquisitions. We do not consider the amount of acquisition-related costs to be a representative component of the day-to-day operating performance of our business.
Adjusted Depreciation and Amortization Expenses is defined as depreciation and amortization expenses adjusted to exclude the impact of amortization expenses related to intangible assets acquired through asset acquisitions and business combinations. Management uses Adjusted Depreciation and Amortization Expenses as a supplemental performance measure because it reflects a complete view of the operational results. The measure is also useful to investors because it facilitates understanding a breakdown of our Adjusted Total Operating Expenses.
Adjusted Change in the Fair Value of Contingent Consideration is defined as changes in the fair value of contingent consideration adjusted to exclude the impact of contingent consideration related to contingent consideration incurred through asset acquisitions and business combinations. Management uses Adjusted Change in the Fair Value of Contingent Consideration as a supplemental performance measure because it reflects a complete view of the operational results. The measure is also useful to investors because it facilitates understanding a breakdown of our Adjusted Total Operating Expenses.
Adjusted Total Operating Expenses is defined as the sum of Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses and Adjusted Depreciation and Amortization Expenses, and reflects the adjustments made in those non-GAAP measures. Adjusted Total Operating Expenses is further adjusted to exclude the impact of (gain) loss on disposal of assets and items arising from acquisitions and business combinations, such as changes in fair value of contingent consideration.
Adjusted Operating Income (Loss) is defined as Adjusted Revenue less Adjusted Total Operating Expenses, and reflects the adjustments made in those non-GAAP measures. Management uses Adjusted Total Operating Expenses and Adjusted Operating Income (Loss) because the removal of acquisition costs, severance or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance, and believes these measures are useful to investors because they give investors insight into our core operating performance.
Adjusted EBITDA is defined as net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, provision (benefit) for income taxes, depreciation and amortization expenses, adjusted to exclude gain on transfer of membership, loss on extinguishment repayment of debt, net, gain from equity method investees, changes in fair value of contingent consideration, change in the tax receivable agreement liability, other income (expense), net, repositioning costs, stock-based compensation expense, severance costs, amortization of contract cost assets, strategy and shareholder advisory services, acquisition-related costs and loss from discontinued operations.
Management uses Adjusted EBITDA as a supplemental performance measure because the removal of acquisition-related costs, severance or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.
Adjusted EBITDA Margin is as defined Adjusted EBITDA divided by Revenue. Management uses Adjusted EBITDA Margin as a supplemental performance measure because it allows the investor to understand operational performance compared to revenues over time. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.
Adjusted Income Available to Common Shareholders is defined as net loss attributable to common shareholders of Evolent Health, Inc. adjusted to exclude gain from equity method investees, other income (expense), net, gain on transfer of membership, loss on extinguishment of debt, net, loss on repayment of debt, changes in fair value of contingent consideration, change in tax receivable agreement liability, purchase accounting adjustments, repositioning costs, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, gain (loss) from discontinued operations, strategy and shareholder advisory services and acquisition-related costs.
Adjusted Income per Share Available to Common Shareholders is defined as Adjusted Income Available to Common Shareholders divided by Weighted-Average Common Shares, and reflects the adjustments made in those non-GAAP measures.
Management uses Adjusted Income Available to Common Shareholders and Adjusted Income per Share Available to Common Shareholders because excluding non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that these measures are also useful to investors for the same reason.
These adjusted measures do not represent and should not be considered as alternatives to GAAP measurements, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. A reconciliation of these adjusted measures to their most comparable GAAP financial measures is presented in the tables below. We believe these measures are useful across time in evaluating our fundamental core operating performance.
Lives on Platform and Per Member Per Month ("PMPM") Fee
Total Lives on Platform are calculated by summing our Evolent Health Services Lives on Platform and our Clinical Solutions Lives on Platform. Evolent Health Services Lives on Platform are calculated by summing members on our value-based care and comprehensive health plan administrative platform. Clinical Solutions Lives on Platform are calculated by summing the Clinical Solutions Lives on Platform in our Performance suite and New Century Health Technology and Services suite Lives on Platform.
Clinical Solutions Lives on Platform in our Performance Suite are calculated by summing members covered for oncology specialty care services and members covered for cardiology specialty care services for contracts not under ASO arrangements. New Century Health Technology and Services Suite Lives on Platform are calculated by summing members covered for oncology specialty care services, members covered for cardiology specialty care services and members covered for advance care planning services for contracts under ASO arrangements. Members covered for more than one category are counted in each category. Clinical Solutions Cases are calculated by summing the number of individuals receiving services through our IPG and Vital Decisions programs in a given period.
Clinical Solutions Performance Suite Average PMPM fee is defined as platform and operations services revenue pertaining to our Clinical Solutions Performance Suite during the period reported divided by the average of the beginning and ending Clinical Solutions Performance Suite Lives on Platform for the period divided by the number of months in the period. New Century Health Technology and Services Suite Average PMPM fee is defined as platform and operations revenue pertaining to the New Century Health Technology and Services Suite during the period reported divided by the average of the beginning and ending New Century Health Technology and Services Suite Lives on Platform for the period divided by the number of months in the period. Clinical Solutions Revenue per Case is calculated by the revenue pertaining to IPG and Vital Decisions divided by the number of cases for a given period.
Evolent Health Services average per member per month ("PMPM") fee is defined as platform and operations revenue pertaining to the Evolent Health Services segment during the period reported divided by the average of the beginning and ending Evolent Health Services Lives on Platform for the period divided by the number of months in the period.
Management uses lives on platform, PMPM fees, cases and revenue per case because we believe that they provide insight into the unit economics of our services. We believe that these measures are also useful to investors because they allow further insight into the period over period operational performance. We believe that these measures are also useful to investors because they allow further insight into the period over period operational performance.
Evolent Health, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited, in thousands, except per share data)
| For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenue (1) | $ | 382,432 | $ | 248,358 | $ | 1,352,013 | $ | 907,957 | |||||||
| Expenses | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) | 299,368 | 164,480 | 1,035,429 | 657,551 | |||||||||||
| Selling, general and administrative expenses | 82,861 | 66,917 | 269,269 | 219,499 | |||||||||||
| Depreciation and amortization expenses | 19,781 | 15,075 | 67,195 | 60,037 | |||||||||||
| Change in fair value of contingent consideration | (17,700) | 14,100 | (23,522) | 13,281 | |||||||||||
| Total operating expenses | 384,310 | 260,572 | 1,348,371 | 950,368 | |||||||||||
| Operating income (loss) | (1,878) | (12,214) | 3,642 | (42,411) | |||||||||||
| Interest income | 604 | 96 | 1,369 | 407 | |||||||||||
| Interest expense | (6,429) | (6,447) | (15,572) | (25,425) | |||||||||||
| Gain from equity method investees | 629 | 454 | 4,569 | 13,179 | |||||||||||
| Gain on transfer of membership | - | 22,969 | - | 45,938 | |||||||||||
| Loss on extinguishment repayment of debt | - | (2,185) | (10,192) | (21,343) | |||||||||||
| Change in tax receivable agreement liability | (3,080) | - | (45,950) | - | |||||||||||
| Other income (expense), net | (73) | (73) | 57 | (146) | |||||||||||
| Loss from continuing operations before income taxes | (10,227) | 2,600 | (62,077) | (29,801) | |||||||||||
| Provision for (benefit from) income taxes | 1,122 | (453) | (43,376) | 483 | |||||||||||
| Loss from continuing operations | (11,349) | 3,053 | (18,701) | (30,284) | |||||||||||
| Loss from discontinued operations, net of tax (1) | - | (8,700) | (463) | (7,317) | |||||||||||
| Net loss attributable to common shareholders of Evolent Health, Inc. | $ | (11,349) | $ | (5,647) | $ | (19,164) | $ | (37,601) | |||||||
| Loss per common share | |||||||||||||||
| Basic and diluted | |||||||||||||||
| Continuing operations | $ | (0.11) | $ | 0.03 | $ | (0.20) | $ | (0.35) | |||||||
| Discontinued operations | - | (0.09) | - | (0.09) | |||||||||||
| Basic and diluted loss per share attributable to common shareholders of Evolent Health, Inc. | $ | (0.11) | $ | (0.06) | $ | (0.20) | $ | (0.44) | |||||||
| Weighted-average common shares outstanding | |||||||||||||||
| Basic and diluted | 99,798 | 88,326 | 93,699 | 86,067 | |||||||||||
| Comprehensive loss | |||||||||||||||
| Net loss | $ | (11,349) | $ | (5,647) | $ | (19,164) | $ | (37,601) | |||||||
| Other comprehensive loss, net of taxes, related to | |||||||||||||||
| Foreign currency translation adjustment | (134) | 1 | (816) | (84) | |||||||||||
| Total comprehensive loss attributable to common shareholders of Evolent Health, Inc. | $ | (11,483) | $ | (5,646) | $ | (19,980) | $ | (37,685) |
(1)Includes $0.5 million and $6.8 million of loss on disposal of discontinued operations for years ended December 31, 2022 and 2021, respectively.
Evolent Health, Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
| December 31, | |||||||
| 2022 | 2021 | ||||||
| Cash and cash equivalents | $ | 188,200 | $ | 266,280 | |||
| Restricted cash and restricted investments | 26,958 | 88,662 | |||||
| Total current assets | 478,054 | 523,960 | |||||
| Intangible assets, net | 442,784 | 279,784 | |||||
| Goodwill | 722,774 | 426,297 | |||||
| Total assets | 1,817,293 | 1,419,458 | |||||
| Accounts payable | 57,174 | 96,084 | |||||
| Accrued liabilities | 111,198 | 107,241 | |||||
| Long-term debt, net of discount | 412,986 | 215,676 | |||||
| Total liabilities | 957,876 | 725,825 | |||||
| Total shareholders' equity | 859,417 | 693,633 | |||||
| Total liabilities and shareholders' equity | 1,817,293 | 1,419,458 |
Evolent Health, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
| For the Year Ended December 31, | |||||||
| 2022 | 2021 | ||||||
| Net cash and restricted cash used in continuing operations | |||||||
| Net cash and restricted cash provided by (used in) operating activities | $ | (11,553) | $ | 38,747 | |||
| Net cash and restricted cash used in investing activities | (259,115) | (15,786) | |||||
| Net cash and restricted cash provided by (used in) financing activities | 131,541 | (29,548) | |||||
| Effect of exchange rate on cash and cash equivalents and restricted cash | (657) | (52) | |||||
| Net decrease in cash and cash equivalents and restricted cash | (139,784) | (6,639) | |||||
| Cash and cash equivalents and restricted cash as of beginning-of-period (1) | 354,942 | 361,581 | |||||
| Cash and cash equivalents and restricted cash as of end-of-period (1) | $ | 215,158 | $ | 354,942 | |||
| Net cash and restricted cash provided by (used in) discontinued operations | |||||||
| Cash flows provided by operating activities | $ | - | $ | 5,002 | |||
| Cash flows used in investing activities | - | (2,494) |
(1)As a result of the closing of the sale of True Health during the first quarter of 2021, the consolidated statement of operations and related financial information reflect the Company's operations and assets and liabilities of True Health as discontinued operations. Cash flows and comprehensive income have not been adjusted and are included in the consolidated statements of cash flows and consolidated statements of comprehensive income (loss) for year ended December 31, 2021.
Evolent Health, Inc.
Reconciliation of Adjusted Results of Operations
(in thousands, unaudited)
| For the Three Months Ended December 31, 2022 | For the Three Months Ended December 31, 2021 | Evolent Health, Inc. as Reported | Evolent Health, Inc. as Adjusted | |||||||||||||||||||||||||||||||||||
| Evolent | Evolent | Evolent | Evolent | |||||||||||||||||||||||||||||||||||
| Health, Inc. | Health, Inc. | Health, Inc. | Health, Inc. | Change Over Prior Period | Change Over Prior Period | |||||||||||||||||||||||||||||||||
| as Reported | Adjustments | as Adjusted | as Reported | Adjustments | as Adjusted | $ | % | $ | % | |||||||||||||||||||||||||||||
| Revenue | $ | 382,432 | $ | - | $ | 382,432 | $ | 248,358 | $ | - | $ | 248,358 | $ | 134,074 | 54.0 | % | $ | 134,074 | 54.0 | % | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) (1) | 299,368 | (2,564) | 296,804 | 164,480 | (654) | 163,826 | 134,888 | 82.0 | % | 132,978 | 81.2 | % | ||||||||||||||||||||||||||
| Selling, general and administrative expenses (2) | 82,861 | (29,516) | 53,345 | 66,917 | (6,682) | 60,235 | 15,944 | 23.8 | % | (6,890) | (11.4) | % | ||||||||||||||||||||||||||
| Depreciation and amortization expenses (3) | 19,781 | (4,870) | 14,911 | 15,075 | (3,539) | 11,536 | 4,706 | 31.2 | % | 3,375 | 29.3 | % | ||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (17,700) | 17,700 | - | 14,100 | (14,100) | - | (31,800) | (225.5) | % | - | - | % | ||||||||||||||||||||||||||
| Total operating expenses | 384,310 | (19,250) | 365,060 | 260,572 | (24,975) | 235,597 | 123,738 | 47.5 | % | 129,463 | 55.0 | % | ||||||||||||||||||||||||||
| Operating income (loss) | $ | (1,878) | $ | 19,250 | $ | 17,372 | $ | (12,214) | $ | 24,975 | $ | 12,761 | $ | 10,336 | 84.6 | % | $ | 4,611 | 36.1 | % | ||||||||||||||||||
| Total operating expenses as a percentage of total revenue | 100.5 | % | 95.5 | % | 104.9 | % | 94.9 | % |
(1)Adjustments to cost of revenue include $1.4 million and $0.6 million in stock-based compensation expense for the three months ended December 31, 2022 and 2021, respectively, and $1.2 million of acquisition-related costs for the three months ended December 31, 2022.
(2)Adjustments to selling, general and administrative expenses include $13.2 million and $4.3 million in stock-based compensation expense and $4.0 million and $2.3 million of acquisition-related costs resulting from acquisitions and business combinations for the three months ended December 31, 2022 and 2021, respectively. Adjustments for the three months ended December 31, 2022 include $12.2 million of severance costs.
(3)Adjustments to depreciation and amortization expenses of approximately $4.9 million and $3.5 million for the three months ended December 31, 2022 and 2021, respectively, relate to amortization of intangible assets acquired via asset acquisitions and business combinations.