Evolent Health Announces Second Quarter 2020 Results WASHINGTON, D.C.

Evolent Health Announces Second Quarter 2020 Results

WASHINGTON, D.C., August 4, 2020 - 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 June 30, 2020.

Highlights from the second quarter of 2020 announcement include (all comparisons are to the quarter ended June 30, 2019)

GAAP revenue of $238.6 million, an increase of 24.3%.

Net loss attributable to common shareholders of Evolent Health, Inc. of $(203.5) million inclusive of a non-cash goodwill impairment of $215.1 million, and Adjusted EBITDA of $9.0 million.

Lives on platform of approximately 3.1 million.

Evolent adds two new partners that will leverage New Century Health's specialty care management services across three regions.

Additional announcements

Evolent announces executive promotions.

On July 17, 2020, Evolent announced that its partner, Passport Health Plan, and Molina Healthcare, Inc., entered into a definitive agreement for Molina to acquire certain assets of Passport.

Frank Williams, chief executive officer of Evolent Health, Inc., commented, Overall, we're quite pleased with our results as we exceeded our key operational and financial targets for the second quarter. In terms of our ongoing response to COVID, we continue to support our partners comprehensively as the pandemic evolves and are heartened that the initiatives we put in place earlier this year are having a positive impact on the populations that we serve. Based on the strong visibility we have on the remainder of 2020, we expect to out-perform our original revenue and profit guidance for the calendar year and anticipate revenues in our Services business to grow by over 30 percent. In addition, this past quarter, we continued to make solid progress on our margin enhancement initiatives and achieved an important goal of becoming cash flow positive ahead of our previous timing estimates."

Mr. Williams continued, We believe the impact of the pandemic on the overall economy-including pressure on state, federal and employer budgets-will likely lead to an even greater market focus on reducing health care costs through value-based care arrangements. In terms of our pipeline, we are continuing to see significant interest in our service offerings, as evidenced by the addition of two new partners across three regions this quarter. First, New Century Health is providing its comprehensive oncology and cardiovascular management services to a regional health plan in the Southeast to support approximately 20,000 Medicare Advantage members. Second, we are also very excited to enter into an agreement with Molina, a national payer with a strong track record of delivering high-quality service to well over three million members. Starting in early 2021, Molina will deploy New Century Health's cardiovascular care management services offering to support its Medicaid members in the Commonwealth of Kentucky, as well as in the State of Washington. We are delighted to continue our strong momentum this year in terms of continuing to expand our national network of partners.

Mr. Williams concluded, Looking ahead, we remain intensely focused on helping our partners support community health and serve vulnerable patients and members during the pandemic. From a broader business perspective, we will continue to focus on driving growth and margin expansion efforts across the remainder of the year to support our key financial and strategic objectives heading into 2021."

Executive Promotions Co-Founder and President Seth Blackley to Be Promoted to Chief Executive Officer on October 1, 2020 Frank Williams to Remain as Executive Chairman.

Evolent also announced today that President Seth Blackley will be promoted to Chief Executive Officer, effective October 1, 2020. Frank Williams, currently CEO, will remain as Executive Chairman.

Now in his ninth year with Evolent serving as President, Mr. Blackley was previously responsible for the Company's growth strategy, go to market approach, new product development and most recently led the New Century Health business since its acquisition in 2018. Across the past eighteen months, Mr. Blackley has also had broad responsibility over operations and account management for the Company's Services segment.

Mr. Williams commented, We're all excited for Seth and for the opportunities for Evolent to grow and prosper under his leadership. Across his tenure since co-founding the business in 2011, Seth has been instrumental in developing and driving our growth strategy, enhancing key product offerings, and positioning Evolent as the market leader in the value-based care marketplace. Seth's natural leadership, deep knowledge of the business, and keen understanding of the end markets we serve have earned him the admiration and respect of our employees, members and shareholders. His mastery of all aspects of the business, his vision for the future and his commitment to our mission make him uniquely prepared to lead the firm across our next phase of growth. For my part, I look forward to serving as Executive Chairman and continuing a strong partnership forged with Seth and the entire management team to enhance our impact, continue our growth and serve our key constituencies across the coming years.

Mr. Blackley commented, "I'm excited by the opportunity to step into the CEO role and believe that Evolent is well positioned to build exceptional value for our payer and provider partners in a dynamic and high-growth market. I look forward to the opportunity to continue leading our talented team in building a company that seeks to drive transformative change in the health care industry as well as strong returns for shareholders. It is an honor to lead an organization with such a strong asset base and I look forward to working with Frank to ensure a focused and disciplined approach to executing on the growth strategy ahead of us."

On July 17, 2020, Evolent announced that its Partner, Passport Health Plan, and Molina Healthcare, Inc., entered into a definitive agreement for Molina to acquire certain assets of Passport

Molina Healthcare, Inc. ( Molina ) and Passport Health Plan ( Passport ) entered into a definitive agreement for Molina to acquire certain assets of Passport, including Passport's brand, operational and clinical infrastructure, and certain provider and vendor agreements. The parties also entered into a separate transaction for the sale of Passport's real estate holdings to Molina. For more details, visit http ir.evolenthealth.com news to read the July 17, 2020 announcement.

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 $238.6 million and $192.0 million for the three months ended June 30, 2020 and 2019, respectively, an increase of 24.3%

Services revenue of $217.3 million and $149.5 million for the three months ended June 30, 2020 and 2019, respectively, before intersegment eliminations of $(4.2) million and $(3.1) million, respectively and

True Health premiums revenue of $25.5 million and $45.8 million for the three months ended June 30, 2020 and 2019, respectively, before intersegment eliminations of $(39.0) thousand and $(0.3) million, respectively.

Cost of revenue of $165.8 million and $108.4 million for the three months ended June 30, 2020 and 2019, respectively, an increase of 53.0%.

True Health claims expenses of $18.1 million and $36.1 million for the three months ended June 30, 2020 and 2019, respectively, a decrease of (49.7)%.

Selling, general and administrative expenses of $50.5 million and $66.9 million for the three months ended June 30, 2020 and 2019, respectively, a decrease of (24.5)%.

Net loss attributable to common shareholders of Evolent Health, Inc. of $(203.5) million and $(31.6) million for the three months ended June 30, 2020 and 2019, respectively.

Loss attributable to common shareholders of Evolent Health, Inc., per basic and diluted share, of $(2.38) and $(0.38) for the three months ended June 30, 2020 and 2019, respectively.

Adjusted Revenue of $238.6 million and $192.1 million for the three months ended June 30, 2020 and 2019, respectively, an increase of 24.2%

Adjusted Services Revenue of $217.3 million and $149.7 million for the three months ended June 30, 2020 and 2019, respectively, before intersegment eliminations of $(4.2) million and $(3.1) million, respectively and

True Health premiums revenue of $25.5 million and $45.8 million for the three months ended June 30, 2020 and 2019, respectively, before intersegment eliminations of $(39.0) thousand and $(0.3) million, respectively.

Adjusted Cost of Revenue of $164.8 million and $106.6 million for the three months ended June 30, 2020 and 2019, respectively, an increase of 54.5%.

True Health claims expenses of $18.1 million and $36.1 million for the three months ended June 30, 2020 and 2019, respectively, a decrease of (49.7)%.

Adjusted selling, general and administrative expenses of $46.7 million and $57.1 million for the three months ended June 30, 2020 and 2019, respectively, a decrease of (18.2)%.

Adjusted EBITDA of $9.0 million and $(7.7) million for the three months ended June 30, 2020 and 2019, respectively.

Adjusted loss available to common shareholders of $(2.3) million and $(21.4) million for the three months ended June 30, 2020 and 2019, respectively.

Adjusted loss per share available to common shareholders of $(0.03) and $(0.26) for the three months ended June 30, 2020 and 2019, respectively.

Total cash and cash equivalents and investments as of June 30, 2020, was $115.2 million.

We are not providing forward looking guidance for GAAP reported financial measures. A reconciliation of forward looking Adjusted EBITDA financial measures to net loss attributable to common shareholders of Evolent Health, Inc., the most comparable GAAP financial measure, is provided in the "Guidance Reconciliation" table below.

For the full year 2020, Adjusted Revenue is expected to be in the range of approximately $995.0 million to $1.035 billion. The components of Adjusted Revenue include Adjusted Services revenue, which is forecasted to be approximately $900.0 million to $930.0 million, and True Health premiums revenue, which is forecasted to be approximately $115.0 million to $125.0 million intersegment eliminations are forecasted to be approximately $(20.0) million for the full year. Adjusted EBITDA is expected to be in the range of approximately $32.0 million to $38.0 million.

For the three months ended September 30, 2020, Adjusted Revenue is expected to be in the range of approximately $258.0 million to $272.0 million. The components of Adjusted Revenue include Adjusted Services revenue, which is forecasted to be approximately $235.0 million to $245.0 million, and True Health premiums revenue, which is forecasted to be approximately $28.0 million to $32.0 million intersegment eliminations are forecasted to be approximately $(5.0) million for the quarter. Adjusted EBITDA is expected to be in the range of approximately $10.0 million to $14.0 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").

Web and Conference Call Information

As previously announced, Evolent Health, Inc. will hold a conference call to discuss its second quarter and full year performance this evening, August 4, 2020, at 5 00 p.m., Eastern Time. The conference call will be available via live webcast on 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.

Financial Statement Presentation

Evolent Health, Inc. is a holding company and its principal asset is all of the Class A common units in its operating subsidiary, Evolent Health LLC, which has owned all of our operating assets and substantially all of our business since inception. The financial results of Evolent Health LLC are consolidated in the financial statements of Evolent Health, Inc.

Non-GAAP Financial Measures

In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue, Adjusted Platform and Operations Services Revenue, Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted Depreciation and Amortization Expenses, Adjusted Total Operating Expenses, Adjusted Operating Income (Loss), Adjusted EBITDA, Services Adjusted EBITDA, True Health Adjusted EBITDA, Adjusted Earnings (Loss) Available to Common Shareholders, Adjusted Earnings (Loss) per Share Available to Common Shareholders and Adjusted Weighted-Average Common Shares, which are all non-GAAP financial measures, as supplemental measures to help investors evaluate our fundamental operational performance.

Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue are defined as transformation services revenue and platform and operations services revenue, respectively, before the effect of intersegment eliminations and adjusted to exclude the impact of purchase accounting adjustments.

Adjusted Services Revenue is defined as the sum of Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue. Adjusted Revenue is defined as the sum of Adjusted Services Revenue and True Health premiums revenue, less relevant intersegment eliminations. Management uses Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue as supplemental performance measures because they reflect a complete view of the operational results. The measures are also useful to investors because they reflect the full view of our operational performance in line with how we generate our long term forecasts.

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 and other one-time adjustments. 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 costs that are not expected to reoccur frequently (e.g. acquisition-related costs) and non-cash (e.g. stock-based compensation expenses) in nature. 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. Because we do not acquire businesses on a predictable cycle, 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 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 adjustments such as goodwill impairment, equity method investment impairment, severance costs, and items arising from acquisitions and business combinations, such as changes in fair value of contingent consideration and indemnification assets.

Adjusted Operating Income (Loss) is defined as Adjusted Revenue less Adjusted Total Operating Expenses, and reflects the adjustments made in those non-GAAP measures.

Adjusted EBITDA is defined as EBITDA (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 equity method investment impairment, gain (loss) from equity method investees, gain (loss) on disposal of assets, goodwill impairment, changes in fair value of contingent consideration and indemnification asset, other income (expense), net, net loss attributable to non-controlling interests, purchase accounting adjustments, 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, and other infrequently occurring adjustments.

Management uses Adjusted EBITDA as a supplemental performance measure because the removal of acquisition-related costs, one-time 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 Earnings (Loss) Available to Common Shareholders is defined as earnings (loss) available to common shareholders adjusted to exclude, income (loss) from equity method investees, other income (expense), net, gain (loss) on disposal of assets, impairment of equity method investees, goodwill impairment, changes in fair value of contingent consideration and indemnification assets, net (income) loss attributable to non-controlling interests, purchase accounting adjustments, 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 and other one-time adjustments.

Adjusted Weighted-Average Common Shares is defined as weighted average common shares (diluted) adjusted to include, in periods of net loss, the dilutive or potentially dilutive effect of the assumed conversion of Class B common shares to Class A common shares.

Adjusted Earnings (Loss) per Share Available to Common Shareholders is defined as Adjusted Earnings (Loss) Available to Common Shareholders divided by Adjusted Weighted-Average Common Shares, and reflects the adjustments made in those non-GAAP measures.

Management uses Adjusted Earnings (Loss) Available to Common Shareholders, Adjusted Weighted-Average Common Shares and Adjusted Earnings (Loss) per Share Available to Common Shareholders

because these performance measures represent our core operating performance distributed amongst all of our investors which is not represented by the GAAP results across time due to our complex equity structure. 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.

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Consolidated Statements of Operations and Comprehensive Income (Loss)

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Condensed Consolidated Balance Sheets

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Condensed Consolidated Statements of Cash Flows

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Reconciliation of Adjusted Results of Operations

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(1)Adjustments to platform and operations services revenue include deferred revenue purchase accounting adjustments of approximately $0.2 million for the three months ended June 30, 2019, resulting from our acquisitions and business combinations.

(2)Adjustments to cost of revenue include $0.5 million and $0.9 million in stock-based compensation expense for the three months ended June 30, 2020 and 2019, respectively. The adjustments also include approximately $0.7 million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment for both the three months ended June 30, 2020 and 2019, respectively. Adjustments for the three months ended June 30, 2020 and 2019 also include $(0.2) million and $2.1 million of severance costs, respectively. Adjustments also include acquisition-related costs of approximately $0.1 million for the three months ended June 30, 2019 resulting from acquisitions and business combinations.

(3)Adjustments to selling, general and administrative expenses include $3.2 million and $3.9 million in stock-based compensation expense for the three months ended June 30, 2020 and 2019, respectively. Adjustments also include acquisition-related costs of $0.4 million and $2.1 million for the three months ended June 30, 2020 and 2019, respectively, resulting from acquisitions and business combinations. Adjustments for the three months ended June 30, 2020 and 2019 also include $0.2 million and $3.9 million of severance costs, respectively.

(4)Adjustments to depreciation and amortization expenses of approximately $6.0 million and $6.4 million for the three months ended June 30, 2020 and 2019, respectively, relate to amortization of intangible assets acquired via asset acquisitions and business combinations.

(1)Adjustments to platform and operations services revenue include deferred revenue purchase accounting adjustments of approximately $0.8 million for the three months ended June 30, 2019, resulting from our acquisitions and business combinations.

(2)Adjustments to cost of revenue include $0.9 million and $1.7 million in stock-based compensation expense for the three months ended June 30, 2020 and 2019, respectively. Adjustments also include acquisition-related costs of approximately $0.1 million for the six months ended June 30, 2019, resulting from acquisitions and business combinations. The adjustments also include approximately $1.1 million and $1.5 million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment for the six months ended June 30, 2020 and 2019, respectively. Adjustments for the six months ended June 30, 2020 also include $2.2 million of severance costs.

(3)Adjustments to selling, general and administrative expenses include $6.3 million and $7.6 million in stock-based compensation expense for the six months ended June 30, 2020 and 2019, respectively. Adjustments also include acquisition-related costs of $0.8 million and $3.1 million for the six months ended June 30, 2020 and 2019, respectively, resulting from acquisitions and business combinations. Adjustments for the six months ended June 30, 2020 and 2019 also include $4.0 million and $14.5 million of severance costs, respectively.

(4)Adjustments to depreciation and amortization expenses of approximately $12.0 million and $12.1 million for the six months ended June 30, 2020 and 2019, respectively, relate to amortization of intangible assets acquired via asset acquisitions and business combinations.

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Reconciliation of Adjusted EBITDA to Net Loss