Q2 2026 Evolent Health Inc Earnings Call

August 6, 2026

Operator: Welcome to the Evolent earnings conference call for Q2 ended 30 June 2026. As a reminder, this conference call is being recorded. Your hosts for the call today from Evolent are Seth Blackley, Chief Executive Officer, and Mario Ramos, Chief Financial Officer. This call will be archived and available later this evening and for the next week via the webcast on the company's website in the section titled Investor Relations. This conference call will contain forward-looking statements under US federal laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the company's reports that are filed with the Securities and Exchange Commission, including cautionary statements included in our current and periodic filings.

Operator: Welcome to the Evolent Earnings Conference Call for Q2 ended 30 June 2026. As a reminder, this conference call is being recorded. Your hosts for the call today from Evolent are Seth Blackley, Chief Executive Officer, and Mario Ramos, Chief Financial Officer. This call will be archived and available later this evening and for the next week via the webcast on the company's website in the section titled Investor Relations. This conference call will contain forward-looking statements under US federal laws.

Operator: These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the company's reports that are filed with the Securities and Exchange Commission, including cautionary statements included in our current and periodic filings. For additional information on the company's results and outlook, please refer to our Q2 press release issued earlier today.

Speaker #1: expectations. A description of some of the risks and uncertainties can be found laws. in the company's reports that are filed with the Securities and Exchange Commission, including cautionary These statements are subject to statements included in our current and periodic filings.

Operator: For additional information on the company's results and outlook, please refer to our Q2 press release issued earlier today. Finally, as a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available in the summary presentation available in the investor relations section of our website or in the company's press release issued today and posted on the investor relations website ir.evolent.com and the Form 8-K filed by the company with the SEC earlier today. In addition to reconciliations, we provide details on the numbers and operating metrics for the quarter in both our press release and supplemental investor presentation. If you require operator assistance, please press star then zero. Now I will turn the call over to Evolent's CEO, Seth Blackley.

Operator: Finally, as a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available in the summary presentation available in the investor relations section of our website or in the company's press release issued today and posted on the investor relations website ir.evolent.com and the Form 8-K filed by the company with the SEC earlier today. In addition to reconciliations, we provide details on the numbers and operating metrics for the quarter in both our press release and supplemental investor presentation. If you require operator assistance, please press star then zero. Now I will turn the call over to Evolent's CEO, Seth Blackley.

Speaker #1: today. Finally, as a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available in the summary presentation available in the Investor Relations section of our website or in the company's press release issued today and posted on the Investor Relations website IR.Evolent.com and the Form 8K filed by the company with the SEC earlier today.

Speaker #1: star then zero. If you require And now, I I will turn the call over to Evolent's CEO, Seth Blackley.

Seth Blackley: Good morning, thank you for joining us. Today, we reported a strong Q2 with results that reflect our continued ability to execute on our commitments. In a dynamic healthcare environment, our performance underscores the mission-critical nature of our business, the dedication of our team, and what we believe is the continued value of our solutions to our customers. For the quarter, Evolent reported total revenue of $653 million, up 31% versus Q1, and Adjusted EBITDA of $28 million, a 27% increase versus Q1. Our Q2 2026 medical expense ratio, or MER, was 95% compared to 93% in Q1, reflecting the expected impact of the launch of Highmark on 1 May 2026.

Speaker #2: Good morning, and thank you for joining us. Today, we reported a strong second quarter. With results that reflect our continued ability to execute on our commitments.

Speaker #2: In a dynamic healthcare environment, our performance underscores the mission-critical nature of our business, the dedication of our team, and what we believe is the continued value of our solutions to our customers.

Speaker #2: For the quarter, Evolent reported total revenue of $653 million, up 31% versus Q1, and adjusted EBITDA of $28 million, a 27% increase versus Q1.

Seth Blackley: Our Q2 2026 medical expense ratio, or MER, was 95% compared to 93% in Q1, reflecting the expected impact of the launch of Highmark on 1 May 2026. Given our performance in the H1 of the year at our current visibility into the remainder of 2026, we're increasing our full year revenue guidance range to $2.6 to 2.7 billion and increasing the midpoint of our Adjusted EBITDA guidance by narrowing the range to $120 to 135 million. We continue to expect a full year MER of approximately 93% and believe we are well positioned to build on our progress in the quarters ahead.

Speaker #2: Our Q2 2026 medical expense ratio, or MER, was 95% compared to 93% in Q1, reflecting the expected impact of the launch of Highmark on May 1, 2026.

Seth Blackley: Given our performance in the H1 of the year at our current visibility into the remainder of 2026, we're increasing our full year revenue guidance range to $2.6 to $2.7 billion and increasing the midpoint of our Adjusted EBITDA guidance by narrowing the range to $120 to $135 million. We continue to expect a full year MER of approximately 93% and believe we are well positioned to build on our progress in the quarters ahead. Mario will walk you through our financial results in more detail in a few moments. I first want to provide you with updates in three key areas of one, growth and renewals, two, our new Performance Suite oncology arrangements, and three, our AI platform and related cost improvement opportunities. First, regarding revenue growth, we continue to see a very positive sales environment. To that end, we have two partnership announcements today.

Speaker #2: Given our performance in the first half of the year, at our current visibility into the remainder of 2026, we're increasing our full-year revenue guidance range to $2.6 to $2.7 billion.

Seth Blackley: Mario will walk you through our financial results in more detail in a few moments. I first want to provide you with updates in three key areas of one, growth and renewals, two, our new Performance Suite oncology arrangements, and three, our AI platform and related cost improvement opportunities. First, regarding revenue growth, we continue to see a very positive sales environment. To that end, we have two partnership announcements today.

Seth Blackley: First, we're preparing for the go live of an Oncology Performance Suite partnership with an existing advanced imaging client. The partnership will cover approximately 1.5 million lives across Medicaid and Medicare populations spread through 11 states. We currently expect this business to launch by December 2026, subject to certain regulatory approvals, and to generate approximately $300 million in annualized revenue. As with other recent Performance Suite arrangements, this relationship includes the full enhanced contractual protections we've discussed on previous calls. Second, a current regional Blue Cross plan and former NIA customer has signed an agreement to broaden its use of our Evolent specialty technology and services platform by adding new products and extending existing products to additional populations. We expect these implementations to occur during Q3 and Q4 of this year.

Seth Blackley: Second, a current regional Blue Cross plan and former NIA customer has signed an agreement to broaden its use of our Evolent specialty technology and services platform by adding new products and extending existing products to additional populations. We expect these implementations to occur during Q3 and Q4 of this year. While the total annualized revenue from this contract extension is less than $5 million, we expect to generate strong Adjusted EBITDA from the contract.

Seth Blackley: While the total annualized revenue from this contract extension is less than $5 million, we expect to generate strong Adjusted EBITDA from the contract. Contracts like these continue to prove out the cross-sell opportunity available to us across our entire customer base. Taken together, these announcements demonstrate that our customers are increasingly choosing to expand their relationships with us by adopting additional products and expanding current products across existing populations. As important as our new customer growth is the strength of retention of our existing customers. 2026 has been an outstanding year for renewals, as we have successfully renewed three of our largest customers. These renewals, combined with our Aetna and Highmark contracts which launched this year, not only give us confidence about the strong foundation of our business, but they also provide us with significant visibility into our 2027 outlook.

Seth Blackley: Contracts like these continue to prove out the cross-sell opportunity available to us across our entire customer base. Taken together, these announcements demonstrate that our customers are increasingly choosing to expand their relationships with us by adopting additional products and expanding current products across existing populations. As important as our new customer growth is the strength of retention of our existing customers. 2026 has been an outstanding year for renewals, as we have successfully renewed three of our largest customers.

Seth Blackley: These renewals, combined with our Aetna and Highmark contracts which launched this year, not only give us confidence about the strong foundation of our business, but they also provide us with significant visibility into our 2027 outlook. Next, I want to update you on our 2026 Performance Suite launches with Aetna and Highmark. We had a successful launch with Highmark on 1 May, supported by strong collaboration between our teams. While we're only a few months into the launch, we are encouraged by the positive early indicators.

Seth Blackley: Next, I want to update you on our 2026 Performance Suite launches with Aetna and Highmark. We had a successful launch with Highmark on 1 May, supported by strong collaboration between our teams. While we're only a few months into the launch, we are encouraged by the positive early indicators. Currently, clinical engagement rates are trending above our targets, and provider engagement has exceeded our initial go live expectations. We expect to have greater visibility into claims performance over the next few months, but we're incredibly happy with our progress so far. With respect to Aetna, which launched earlier this year, we continue to see strong clinical engagement results also above our targets and initial claims-based performance that is in line with our expectations.

Seth Blackley: Currently, clinical engagement rates are trending above our targets, and provider engagement has exceeded our initial go live expectations. We expect to have greater visibility into claims performance over the next few months, but we're incredibly happy with our progress so far. With respect to Aetna, which launched earlier this year, we continue to see strong clinical engagement results also above our targets and initial claims-based performance that is in line with our expectations.

While we're only a few months into the launch, we are encouraged by the positive early indicators.

Currently clinical engagement rates are trending above our targets and provider engagement has exceeded our initial go live expectations.

We expect to have greater visibility into claims performance over the next few months, but we're incredibly happy with our progress so far.

With respect to Etna, which launched. Earlier this year, we continue to see strong clinical engagement results. Also above our targets and initial claims based performance that is in line with our expectations

Seth Blackley: Given the scale of these two partnerships and their importance to our 2026 and 2027 P&Ls, the strong execution is an important additional data point supporting the overall strength of our business. Finally, I want to update you on our continued efforts around AI and automation through our Auth Intelligence platform. We remain focused on our long-term objective of automatically approving 80% of authorization volume, simplifying the prior authorization experience for providers and patients. We believe Q2 is a tipping point in our AI journey as we saw these efforts take root and accelerate past the pilot phases into a point of meaningful scale with a clear line of sight to more. The results and impact of these AI-enabled capabilities, which are built on our 2024 Machinify acquisition, are at the high end of our expectations, giving us increased confidence in our 2027 outlook.

Given the scale of these 2 Partnerships and their importance to our 2026 and 2027 p&ls.

The strong execution is an important additional data points supporting the overall strength of our business.

Finally, I want to update you on our continued efforts around Ai and automation through our off intelligence platform.

We remain focused on our long-term objective of automatically approving, 80% of authorization volume.

Simplifying. The prior authorization, experience for providers and patients.

We Believe Q2 is a Tipping Point in our AI Journey, as you saw these efforts, take root and accelerate past the pilot phases and to a point of meaningful scale.

With a clear line of sight to more.

Seth Blackley: The results and impact of these AI-enabled capabilities, which are built on our 2024 Machinify acquisition, are at the high end of our expectations, giving us increased confidence in our 2027 outlook. We also believe we have been improving our performance as we scale. Among customers where these models have been deployed, we are seeing auto approval rate improvements of up to 20 percentage points. For example, auto approval rates that were 55% are now 75%, with no degradation to clinical quality or value to our partners.

Seth Blackley: We also believe we have been improving our performance as we scale. Among customers where these models have been deployed, we are seeing auto approval rate improvements of up to 20 percentage points. For example, auto approval rates that were 55% are now 75%, with no degradation to clinical quality or value to our partners. As a reminder, Evolent Health has a hard and fast rule that a clinician is always making any recommendation to change treatment and as AI is only used to speed up the process or to approve a case. Importantly, we're seeing the cases approved through our AI models are completed within minutes instead of days, improving timeliness and we believe reducing administrative burden for providers and for patients.

The results. And impact of these AI enabled capabilities, which are built on. Our 2024, machinify acquisition are at the high end of our expectations, giving us increased confidence in our 2027 Outlook.

We also believe we have been improving our performance as we scale.

Among customers where these models have been deployed, we are seeing Auto approval rate improvements of up to 20 percentage points. For example, Auto approval rates that were 55% are now 75% with no degradation to clinical quality or value to our partners,

Seth Blackley: As a reminder, Evolent Health has a hard and fast rule that a clinician is always making any recommendation to change treatment and as AI is only used to speed up the process or to approve a case. Importantly, we're seeing the cases approved through our AI models are completed within minutes instead of days, improving timeliness and we believe reducing administrative burden for providers and for patients.

and as a reminder,

everyone has a hard and fast rule that a clinician is always making any recommendation to change treatment and as AI is only used to speed up the process or to approve a case.

Importantly.

Seth Blackley: We're also seeing a large benefit for our employees who are able to spend more of their time practicing at the top of their license and getting patients faster answers, both of which are important to the job satisfaction of our team. Today, more than one-third of our authorization volume that was previously requiring manual clinical review is now being evaluated through our Auth Intelligence platform, and we continue to believe this platform will be a key element of our ability to meet our long-term margin targets and our customer needs. Finally, Auth Intelligence will be aggressively deployed in Q1 2027 as part of one of the major renewals I mentioned earlier in the call. In closing, let me touch on how we're currently thinking about 2027. First, we expect strong revenue growth supported by the strength of our renewing business and the continued growth of our new business.

We're seeing that cases approved through our AI models are completed within minutes instead of days, improving timeliness. And we believe this is reducing administrative burden for providers and for patients.

We're also seeing a large benefit for our employees, who are able to spend more time, more of their time, practicing at the top of their license.

Today, more than 1, third of our authorization. Volume that was previously requiring manual. Clinical review is now being evaluated through our off intelligence platform and we continue to believe this platform will be a key element of our ability to meet our long-term margin targets, and our customer needs.

Seth Blackley: Finally, Auth Intelligence will be aggressively deployed in Q1 2027 as part of one of the major renewals I mentioned earlier in the call. In closing, let me touch on how we're currently thinking about 2027. First, we expect strong revenue growth supported by the strength of our renewing business and the continued growth of our new business. At the same time, we're committed to delivering strong Adjusted EBITDA growth in 2027 against the backdrop of year one investments that come with new Performance Suite growth, AI investments, and expected membership declines in Medicaid and the exchange.

Finally, auth intelligence will be aggressively deployed in q1 2027. As part of 1, of the major renewals I mentioned earlier in the call.

And closing.

Let me touch on how we're currently thinking about 2027.

Seth Blackley: At the same time, we're committed to delivering strong Adjusted EBITDA growth in 2027 against the backdrop of year one investments that come with new Performance Suite growth, AI investments, and expected membership declines in Medicaid and the exchange. We feel confident in committing to strong Adjusted EBITDA growth in the year ahead despite those headwinds based on the proven performance of our Auth Intelligence platform, a highly disciplined approach to managing our operating expenses, and what we expect to be the stability and performance of our Performance Suite book of business. With that, let me turn it over to Mario.

First, we expect strong revenue growth, supported by the strength of our renewing business and the continued growth of our new business.

At the same time, we're committed to delivering strong adjusted ebit, dog growth in 2027 against the backdrop of year, 1 Investments that come with new performance Suite growth.

Seth Blackley: We feel confident in committing to strong Adjusted EBITDA growth in the year ahead despite those headwinds based on the proven performance of our Auth Intelligence platform, a highly disciplined approach to managing our operating expenses, and what we expect to be the stability and performance of our Performance Suite book of business. With that, let me turn it over to Mario.

AI Investments and expected membership. Declines in Medicaid. And the exchange

We feel confident in committing to strong adjusted Eva dog growth in the year ahead, despite those headwinds based on the proven performance.

Of our authentic platform, a highly disciplined approach to managing our operating expenses.

and what we expect to be the stability and performance of our performance Suite book of business,

With that, let me turn it over to Mario.

Mario Ramos: Thank you, Seth, and good morning, everyone. We delivered solid Q2 financial results that were above our expectations and the outlook we discussed on the Q1 2026 call in May. Total revenue was $653 million, up 31% versus Q1 2026, and Adjusted EBITDA was $28 million, up 27% quarter over quarter. The outperformance in Adjusted EBITDA versus expectations was driven by the recognition of prior year development in Q2 that we had previously anticipated to recognize in Q3. Given this Q2 timing favorability, we now expect the previously discussed Q2 to Q3 Adjusted EBITDA increase of $10 million to $15 million to be more modest. I will address this in more detail later in the call. Turning to revenue by product type, Performance Suite revenue was $485 million, up 50% quarter over quarter, driven primarily by higher membership from the launch of Highmark on 1 May.

Thank you. Seth and good morning, everyone.

we delivered solid second quarter Financial results that were above our expectations and the Outlook we discussed on the q1 2026 call in May

Total revenue was 653 million.

Up 31% versus q1 2026.

And adjusted e, but that was 28 million.

Up 27% quarter over quarter.

the outperformance and adjusted ebita versus expectations was driven by the recognition of Prior year development in Q2 that we had previously anticipated or recognized in Q3,

Mario Ramos: Given this Q2 timing favorability, we now expect the previously discussed Q2 to Q3 Adjusted EBITDA increase of $10 million to $15 million to be more modest. I will address this in more detail later in the call. Turning to revenue by product type, Performance Suite revenue was $485 million, up 50% quarter over quarter, driven primarily by higher membership from the launch of Highmark on 1 May. Specialty Tech and Services revenue totaled $78 million, a decrease of 3% compared with Q1.

Given this Q2 timing favorability. We now expect the previously discussed Q2 to Q3 adjusted ebit increase of 10 million to 15 million to be more modest.

A little, I will address this in more detail later in the call.

Turning to revenue by product type performance. Suite Revenue was 485 million.

Up. 50% quarter over quarter.

Driven primarily by higher membership from the launch of Highmark on May 1st.

Mario Ramos: Specialty Tech and Services revenue totaled $78 million, a decrease of 3% compared with Q1. The revenue decline was driven by code review scope changes as part of AHIP commitments and not by client attrition or pricing pressure. On administrative services, revenue declined by 3% sequentially to $48 million, largely due to a prior year reserve true-up recorded in Q1. Our MER for Q2 was 95%, approximately 200 basis points higher than Q1 2026, but in line with our expectations, primarily due to the impact of the Highmark launch and its associated higher reserves. Please note that we did see higher acuity in our exchange populations consistent with Q1. However, as we discussed during the Q1 call, our contracts are structured to protect against changes in prevalence.

Specialty Tech and Services revenue totaled $78 million.

A decrease of 3% compared with the first quarter.

Mario Ramos: The revenue decline was driven by code review scope changes as part of AHIP commitments and not by client attrition or pricing pressure. On administrative services, revenue declined by 3% sequentially to $48 million, largely due to a prior year reserve true-up recorded in Q1. Our MER for Q2 was 95%, approximately 200 basis points higher than Q1 2026, but in line with our expectations, primarily due to the impact of the Highmark launch and its associated higher reserves. Please note that we did see higher acuity in our exchange populations consistent with Q1.

The revenue decline was driven by code review scope changes as part of AIP, commitments and not by client attrition or pricing pressure.

On Administrative Services, revenue declined by 3% sequentially to $48 million.

Largely due to a prior year Reserve, true up recorded in the first quarter.

Our medical expense ratio or near.

For Q2, it was 95%, approximately 200 basis points higher than Q1 2026, but in line with our expectations, primarily due to the impact of the Highmark launch and its associated higher reserves.

Mario Ramos: However, as we discussed during the Q1 call, our contracts are structured to protect against changes in prevalence. Adjusted cost of revenue, excluding medical claims, but including medical device costs and adjusted SG&A, totaled $163 million for the quarter, improving 5% sequentially. The improvement versus the prior quarter was driven primarily by previously discussed expense management. We ended Q2 with $115.7 million in unrestricted cash and $808.3 million of net debt. We took the opportunity to pay down the ABL revolver by $10 million to bring the balance to its minimum draw of $62.5 million.

Please note that we did see higher Acuity in our exchange. Populations consistent with q1.

However, as we discussed during the q1 call, our contracts are structured to protect against changes in prevalence.

Mario Ramos: Adjusted cost of revenue, excluding medical claims, but including medical device costs and adjusted SG&A, totaled $163 million for the quarter, improving 5% sequentially. The improvement versus the prior quarter was driven primarily by previously discussed expense management. We ended Q2 with $115.7 million in unrestricted cash and $808.3 million of net debt. We took the opportunity to pay down the ABL revolver by $10 million to bring the balance to its minimum draw of $62.5 million. As expected, cash decreased from our Q1 2026 balance, reflecting approximately $10 million of cash used in operating activities and approximately $7 million of capital expenditures during the quarter. As a reminder, operating cash flow this quarter was unusually low due to the repayment of pass-through PBM proceeds, which had positively impacted Q1 2026 by approximately $20 million.

Adjusted cost of Revenue excluding medical claims, but including medical device costs.

And adjusted sgna.

Totaled 163 million for the quarter.

Improving 5% sequentially.

The Improvement versus the prior quarter was driven primarily by previously, discussed expense management.

We ended Q2 with $115.7 million in unrestricted cash.

And 808.3 million of net debt.

We took the opportunity to pay down the ABL revolver by $10 million to bring the balance to its minimum draw of $62.5 million.

Mario Ramos: As expected, cash decreased from our Q1 2026 balance, reflecting approximately $10 million of cash used in operating activities and approximately $7 million of capital expenditures during the quarter. As a reminder, operating cash flow this quarter was unusually low due to the repayment of pass-through PBM proceeds, which had positively impacted Q1 2026 by approximately $20 million. Without this pass-through payment, we would have generated approximately $10 million in operating cash flow for the quarter.

As expected cash decreased from our q1 2026 balance reflecting approximately, 10 million of cash used in operating activities.

And approximately 7 million of capital expenditures doing the quarter.

Operating cash flow. This quarter was unusually low due to the repayment of pass through PDM proceeds, which had positively impacted q1 2026 by approximately 20 million.

Mario Ramos: Without this pass-through payment, we would have generated approximately $10 million in operating cash flow for the quarter. Turning to full year 2026 guidance, as Seth noted, we are increasingly confident in our ability to deliver on our goals for 2026, and therefore are raising our 2026 revenue guidance from the previous range of $2.4 to 2.6 billion to $2.6 to 2.7 billion. We are also tightening our Adjusted EBITDA guidance range from the $110 to 140 million to $120 to 135 million. We continue to expect MER for the full year to be approximately 93%. On revenue, we expect Q3 and Q4 to be meaningfully higher than Q2, driven primarily by Performance Suite revenue. In Q3, we will benefit from another quarter of Highmark revenue, along with the launch of several markets associated with the Performance Suite expansion we highlighted last quarter.

Without this pass through payment, we would have generated approximately 10 million in operating cash flow for the quarter.

Mario Ramos: Turning to full year 2026 guidance, as Seth noted, we are increasingly confident in our ability to deliver on our goals for 2026, and therefore are raising our 2026 revenue guidance from the previous range of $2.4 to 2.6 billion to $2.6 to 2.7 billion. We are also tightening our Adjusted EBITDA guidance range from the $110 to 140 million to $120 to 135 million. We continue to expect MER for the full year to be approximately 93%. On revenue, we expect Q3 and Q4 to be meaningfully higher than Q2, driven primarily by Performance Suite revenue. In Q3, we will benefit from another quarter of Highmark revenue, along with the launch of several markets associated with the Performance Suite expansion we highlighted last quarter.

Turning to full year 2026 guidance as Seth noted, we are increasingly confident in our ability to deliver on our goals for 2026.

And therefore, our raising our 2026 Revenue guidance.

From the previous range of 2.4 to 2.6 billion.

To 2.6 to 2.7 billion.

We're also tightening our adjusted EBITDA guidance range from $110 million to $140 million.

To 120 to 135 million.

We continue to expect MLR for the full year to be approximately 93%.

On Revenue, we expect Q3 and Q4 to be meaningfully higher than Q2.

Driven primarily by performance wheat Revenue.

In Q3, we will benefit from another quarter of Highmark Revenue along with the loss of several markets associated with the performance. Suite expansion, we highlighted last quarter

Mario Ramos: On medical claims cost, we continue to expect our MER to be higher in Q3 as we see a full quarter's impact of the Highmark launch. From there, we continue to expect MER to improve meaningfully into Q4 as we see the impact of our clinical programs begin to take effect and favorable contractual true-ups flow through. Finally, on the quarterly Adjusted EBITDA cadence, we are refining our sequential improvement for H2 given the timing of favorable PYD moving from Q3 to Q2. We now expect a more modest Q2 to Q3 increase in the range of approximately $4 to 7 million. An increase from Q3 to Q4 in the range of $7 to 15 million. A few additional items related to our full year outlook.

On medical claims cost. We continue to expect our me to be higher in Q3 as we see, a full quarters impact of the high Mark launch.

From there, we continue to expect em to improve meaningful into Q4.

as we see the impact of our clinical programs begin to take effect and favorable contractual true-ups flow through,

Finally, on the quarterly adjusted ebit. Docs.

We are refining our sequential improvement for the second half, given the timing of favorable PYD moving from Q3 to Q2.

Mario Ramos: We now expect a more modest Q2 to Q3 increase in the range of approximately $4 to 7 million. An increase from Q3 to Q4 in the range of $7 to 15 million. A few additional items related to our full year outlook. We continue to expect adjusted cost of revenue, excluding medical claims, but including medical device costs, plus adjusted SG&A of approximately $675 million for the year. As we enter the second half of the year, we remain encouraged by the momentum we are seeing in operational efficiency across the business.

We now expect a more modest Q2 to Q3 increase in the range of approximately.

4 to 7 million.

And an increase from Q3 to Q4, in the range of 7 to 15 million.

A few additional items related to our full-year outlook.

Mario Ramos: We continue to expect adjusted cost of revenue, excluding medical claims, but including medical device costs, plus adjusted SG&A of approximately $675 million for the year. As we enter the second half of the year, we remain encouraged by the momentum we are seeing in operational efficiency across the business. We continue to expect cash flow from operations for the year of $10 million to $20 million after approximately $60 million of annual cash interest expense. We continue to expect $25 million to $30 million in software development and capital expenditures for 2026. Let me close with some early perspectives on 2027 and how we will address our leverage and refinancing of our debt. Based on the revenue currently under agreement and customer renewals already completed, we expect revenue growth of more than 25% in 2027.

We continue to expect adjusted cost of Revenue excluding medical claims but including medical device costs plus adjusted sgna of approximately 675 million for the year.

as we enter the second half of the year,

We remain encouraged by the momentum we are seeing in operational efficiency across the business.

Mario Ramos: We continue to expect cash flow from operations for the year of $10 million to $20 million after approximately $60 million of annual cash interest expense. We continue to expect $25 million to $30 million in software development and capital expenditures for 2026. Let me close with some early perspectives on 2027 and how we will address our leverage and refinancing of our debt. Based on the revenue currently under agreement and customer renewals already completed, we expect revenue growth of more than 25% in 2027.

We continue to expect cash flow from operations for the year of 10 million, to 20 million offer, approximately 60 million of annual, cash interest expense.

We continue to expect 25 million to 30 million in software development in capital expenditures for 2026.

Let me close with some early prospectives on 2027 and how we will address our leverage and refinancing of our debt.

Based on the revenue currently under agreement.

And customer renewals already completed.

We expect revenue growth of more than 25% in 2027.

Mario Ramos: Any new contract signings over the next few quarters would further increase this number. We expect to achieve this 25% growth while absorbing ongoing membership headwinds from Medicaid work requirements and client-specific market exits and attrition. On earnings, we remain committed to delivering meaningful adjusted EBITDA growth in 2027 and beyond. Improved Performance Suite care margins, coupled with significant cost reduction and productivity initiatives, underpin our expectation that the midpoint of our 2027 adjusted EBITDA outlook is expected to be at or above $150 million. That's 150. This outlook incorporates the significant headwinds from Medicaid, further exchange membership attrition, and some expected client-specific membership attrition. For example, our midpoint reflects both the revenue and acuity impacts that large Medicaid and exchange-focused managed care companies have noted over the last several weeks.

Any new contract signings over the next few quarters would further increase this number.

And we expect to achieve this 25% growth while absorbing ongoing membership. Headwinds for Medicaid, work requirements and client specific Market access and attrition

On earnings, we remain committed to delivering meaningful adjusted. Ebita growth in 2027 and Beyond.

Improved performance Suite care margins.

Coupled with significant cost reduction in productivity initiatives.

Mario Ramos: That's 150. This outlook incorporates the significant headwinds from Medicaid, further exchange membership attrition, and some expected client-specific membership attrition. For example, our midpoint reflects both the revenue and acuity impacts that large Medicaid and exchange-focused managed care companies have noted over the last several weeks. Our midpoint also assumes the earnings drag from signing additional Performance Suite contracts over the coming months, which would likely drive 2027 revenue growth even higher than the 25%.

Underpin our expectation that the midpoint of our 2027 adjusted EBIT outlook is expected to be at or above $150 million. That's one-five-zero.

This Outlook incorporates the significant headwinds for Medicaid.

Further exchange membership attrition.

And some expected clients—specific membership, attrition.

For example.

Our midpoint reflects, both the revenue and Acuity impacts that large, Medicaid and exchange Focus, managed care. Companies have noted over the last several weeks.

Mario Ramos: Our midpoint also assumes the earnings drag from signing additional Performance Suite contracts over the coming months, which would likely drive 2027 revenue growth even higher than the 25%. One driver of adjusted EBITDA growth in 2027 will be additional OpEx reductions. We have launched a comprehensive review of our cost structure across the enterprise to ensure spending is aligned with our strategic priorities, focused on the highest return opportunities, and driving greater efficiency at scale. This may include modest additional investments in additional operating expenses in Q3 and Q4, all of which are contemplated in our 2026 guidance to drive additional cost savings in 2027 and beyond. We also believe this return to earnings growth will drive meaningful improvement in operating cash flow conversion in 2027. As I have discussed previously, our 2026 operating cash flow has been impacted by approximately $20 million of one-time items.

Signing additional performance Suite contracts over the coming months, which would likely Drive 2027, Revenue growth, even higher than the 25%.

Mario Ramos: One driver of adjusted EBITDA growth in 2027 will be additional OpEx reductions. We have launched a comprehensive review of our cost structure across the enterprise to ensure spending is aligned with our strategic priorities, focused on the highest return opportunities, and driving greater efficiency at scale. This may include modest additional investments in additional operating expenses in Q3 and Q4, all of which are contemplated in our 2026 guidance to drive additional cost savings in 2027 and beyond. We also believe this return to earnings growth will drive meaningful improvement in operating cash flow conversion in 2027.

1 driver of adjusted ebit, dog growth in 2027.

Will be additional Opex. Reductions

We have launched a comprehensive review of our cost structure across the Enterprise to ensure spending is aligned with our strategic priorities.

Focus on the highest return opportunities.

And driving greater efficiency at scale.

This may include modest additional investments in additional operating expenses in Q3 and Q4.

All of which are contemplated in our 2026 guidance.

To drive additional cost Savings in 2027 and Beyond.

We also believe this return to earnings growth.

Will drive meaningful Improvement in operating cash flow conversion in 2027.

Mario Ramos: As I have discussed previously, our 2026 operating cash flow has been impacted by approximately $20 million of one-time items. As we move beyond the majority of those items, we expect cash flow performance to improve. We expect to deliver this earnings growth while also accelerating AI and technology investments, which will have a significant ROI across the enterprise in 2027 and beyond. As Seth mentioned earlier, the testing of the next phase in AI and technology investments is already producing encouraging results.

As I have discussed, previously, our 2026 operating cash flow has been impacted by approximately 20 million of 1 time items.

Mario Ramos: As we move beyond the majority of those items, we expect cash flow performance to improve. We expect to deliver this earnings growth while also accelerating AI and technology investments, which will have a significant ROI across the enterprise in 2027 and beyond. As Seth mentioned earlier, the testing of the next phase in AI and technology investments is already producing encouraging results. Now, let me address the issue that I'm personally most focused on, which is our capital structure. We have identified several different ways to improve our capital structure and address our 2029 maturities. This will be through a combination of adjusted EBITDA growth, improved cash flow conversion, disciplined capital allocation, and via the pursuit of capital markets and strategic options available to us. Taken together, we see a clear path to significantly improving our leverage ratios and our maturity profile within the next 12 to 24 months.

As we move beyond the majority of those items, we expect cash flow performance to improve.

We expected to to deliver this earnings growth while also accelerating Ai and Technology Investments, which will have a significant Roi across the Enterprise in 20127 and Beyond

A Seth mentioned earlier the testing of the next phase in Ai and Technology Investments is already producing encouraging results.

Mario Ramos: Now, let me address the issue that I'm personally most focused on, which is our capital structure. We have identified several different ways to improve our capital structure and address our 2029 maturities. This will be through a combination of adjusted EBITDA growth, improved cash flow conversion, disciplined capital allocation, and via the pursuit of capital markets and strategic options available to us. Taken together, we see a clear path to significantly improving our leverage ratios and our maturity profile within the next 12 to 24 months.

Now, let me address the issue that I'm personally most focused on which is our capital structure.

We have identified several different ways to improve our capital structure and address our 2029 maturities.

This will be through a combination of adjusted ebit, dog growth.

Improved cash, flow conversion.

Discipline. Capital, allocation.

And via the pursuit of capital markets and strategic options available to us.

Taken together, we see a clear path to significantly improving our leverage ratios and our maturity profile within the next 12 to 24 months.

Mario Ramos: While it is too early to determine what the ultimate path will be, we are actively advancing this work. This will enhance financial flexibility and free capital to pursue several opportunities that we believe can create significant long-term shareholder value. To wrap up, we're pleased with our Q2 execution and the momentum we're seeing across the business. Our results year to date, combined with increased visibility into the H2 and a clear roadmap for 2027, give us confidence in our outlook. We remain focused on disciplined execution, delivering on our commitments, and creating long-term value for our clients and shareholders. With that, operator, please open the call for questions.

While it is too early to determine what the ultimate path will be,

We are actively advancing this work.

This will enhance Financial flexibility and free Capital to pursue several opportunities that we believe can create significant long-term shareholder value.

To wrap up. We're pleased with our second quarter execution and the momentum, we're seeing across the business.

Our results year to date combined with increased visibility to the second half and a clear roadmap for 2027.

Give us confidence in our Outlook.

We remain focused on this discipline, execution, delivery on our commitments and creating long-term value for our clients and shareholders.

With that, operator, please open the call for questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question comes from Kevin Caliendo with UBS. Please go ahead.

We will now begin the question and answer session. To ask a question, you may press star, then 1, on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. Please limit yourself to one question.

At this time, we will pause momentarily to assemble our roster.

The first question comes from Kevin, kando with UBS.

Please go ahead.

Kevin Caliendo: Good morning, guys. Thanks for taking my question. I wanted to talk a little bit, Mario, I just want to ask you went through a whole process with your contracting and how you thought about reserving for it. Now that we're sort of four, five, six months into that process, how is that looking? Do you feel like you've reserved properly and accounted for these properly? Is it conservative? Just wondering how you viewed the way you approached it now that you have a handful of months of experience there. That's my first one. Then the second one is talking about just sort of anything that you're seeing from a utilization perspective.

Good morning guys. Thanks for taking my question.

Kevin Caliendo: Then the second one is talking about just sort of anything that you're seeing from a utilization perspective. There's a lot of changes going on with ASP rules and things like that. I'm wondering if there's been any effect on behavior one way or the other, particularly in Part D drugs like oncology and the like. If it's affecting your ability to understand trend in any way, shape, or form, or if anything's changing, if you're seeing anything different.

Um, I wanted to talk a little bit. Um, Mario, I just want to ask you, you went through a whole process with your Contracting and and how you thought about reserving for it. And now that we're sort of 4 or 5 6 months into that process. How is that looking? Do you feel like you've? You've it's like reserved properly and and accounted for these properly, is it conservative? Um, just wondering how you viewed the way you approached it. Now now that you have you know, a handful of months of experience there that that's my first 1 and then the second 1

um, is

Kevin Caliendo: There's a lot of changes going on with ASP rules and things like that. I'm wondering if there's been any effect on behavior one way or the other, particularly in Part D drugs like oncology and the like. If it's affecting your ability to understand trend in any way, shape, or form, or if anything's changing, if you're seeing anything different.

like, and if, if it's affecting your ability to understand Trends, in any way, shape, or form, or if anything's changing, if you're seeing anything different,

Mario Ramos: Yeah. Thanks, Kevin. I think on the first question, I would say we're probably in line with everything that I've seen in the industry where we're definitely, if I look at favorable prior period development as a way to think through whether we're over or under reserving. Industry came out of a period of very tough utilization numbers and expenses, and I think we're all kind of rebounding from that. Our numbers look very similar to the broader industry, I would say. I feel comfortably optimistic that we're doing the right thing, and I think the whole industry's headed in the right direction, and we certainly fit that bill. That's how I would put that. As you guys know, that could change in any quarter. We feel good as we sit here today.

Yeah.

Thanks, Kevin. I think on the first question, I would say we're probably in line with

everything that I've seen in the industry, where, you know, we are we're definitely if if I look at

you know favorable prior period development as a way to Think Through whether we're over under reserving, you know we've we've all industry came out of a period of very tough utilization numbers and expenses and I think we're all kind of rebounding from that and I our numbers look very similar to

you know the broader industry I would say. So I I feel I feel comfortably optimistic that we're we're we're we're doing the right thing and and I think the whole industry is headed in the right direction and we're

Mario Ramos: That's how I would put that. As you guys know, that could change in any quarter. We feel good as we sit here today. The second question is, we're a little bit unique in the sense that we have some very specific markets with some incumbent clients, let's say, or older clients, and then we have some really new markets. I would say as a blanket statement, when you cut through things like mix, where we have to really isolate different markets and contracts and take out things like prevalence, right?

Certainly fit that bill. So that's, that's how I would put that. But there's, you know, as you guys know that that could change in any quarter. But we feel good as we sit here today,

Mario Ramos: The second question is, we're a little bit unique in the sense that we have some very specific markets with some incumbent clients, let's say, or older clients, and then we have some really new markets. I would say as a blanket statement, when you cut through things like mix, where we have to really isolate different markets and contracts and take out things like prevalence, right? The headline sort of trend number doesn't really work for us in making those comparisons. When we kind of pull back the layer and we're seeing the data come in, again, we're not seeing anything different than the broader industry where we're seeing populations that are consistent and haven't changed acuity. Trend has continued to modulate and improve.

um, the second question is, you know, I would

Our Mark, we're a little bit unique, uh, in the sense that we have, some very specific markets, with some incumbent, uh, clients let's say, or or or older clients, and then we have some really new markets.

I would say, as a blanket statement, when you cut through things like mix—uh, where we have to really isolate,

Mario Ramos: The headline sort of trend number doesn't really work for us in making those comparisons. When we kind of pull back the layer and we're seeing the data come in, again, we're not seeing anything different than the broader industry where we're seeing populations that are consistent and haven't changed acuity. Trend has continued to modulate and improve.

Different markets and contracts, and take out things like prevalence. Writing the headline sort of trend number doesn't really work for us in making those comparisons when we kind of pull back the layer. And we're seeing the data come in,

Mario Ramos: We unfortunately have some noise in some of the markets we serve because clients have made decisions around how they're going to serve certain markets, prevalence, we talked about, can be very different. That's really, I would say, unique to us and our clients, and if you look at some of the calls from our clients, they're saying the same thing, which is they're still making adjustments. Membership is changing, mix is changing. They're walking through their numbers in that context, and I think we're no different in that regard.

Again, we're not seeing anything different than the broader industry, where, where markets are, you know, where we're seeing populations. That are consistent and haven't changed Acuity. Trend has continued to, um, modulate and and improve. Um, we unfortunately have some noise in our in some of the markets we serve because clients have made decisions around, um, how they're going to serve certain markets. And so prevalence, we talked about can be very different so that that's really, I would say unique to us and our clients. And if you look at some of the calls from our clients, they they're saying the same thing which is they're still making adjustments. Membership is changing, mix is changing. So they're they're kind of they're walking through their numbers in that context. And I think we're no different in that regard.

Operator: Thank you. The next question comes from John Stansel with J.P. Morgan. Please go ahead.

Thank you. The next question comes from. John stansel with JP Morgan. Please go ahead.

John Stansel: Great. Thanks for taking the question. Just want to talk about when we think of the 2027 guidance, or directional commentary at this point, appreciate the greater than 25% growth on the top line. It feels like margins might take a bit of a step down there. I hear everything about the large contracts you've launched this year improving. Sounds like some operational improvements as well. Can you just talk through kind of puts and takes on the margin side entering 2027 and what you're seeing? Thanks.

Mario Ramos: I think the biggest change that you guys are going to see is, obviously, you've seen it this year, the Performance Suite business has a much smaller margin. It's just the way the business works, right? You have this very large amount of revenue from our capitated agreements. On a per member, we make even more money. We've talked a lot about that. When you accelerate growth in that business, because you're talking about single digit margins, the average margin of the business is going to look like it's compressing. When you take a look at the Performance Suite independently, the opposite is happening. We're maturing some of the contracts. The margin is expanding in that business, which is a large part of why we feel confident about the number we are providing the outlook in 2027.

Great, thanks for taking the question. Just want to talk about, when we think of the 27 guidance, um, or directional commentary at this point. I appreciate the greater than 25% growth in the Top Line. It feels like margins might take a bit of a step down there. And I, I hear everything about, you know, the large contracts, you've launched this year, improving, uh, sounds like, some operational improvements as well. Can you just talk through kind of puts and takes on the margin side, entering 27 and what you're seeing? Thanks.

I I think the biggest the biggest change that you guys are are going to see is obviously is and you've seen it this year.

The the performance Suite business has a much smaller margin. Uh, it's just the way the business works, right? You have this

um,

Very uh, very large amount of revenue from our capitated agreements and on a per member, we make even more money. We've talked a lot about that, but uh, when you accelerate growth in that business because you're talking about single digit margins, the average margin of the business is going to look like it's compressing but when you when you when you take uh when you take a look at the performance Suite independently, that's the the opposite is happening. We're maturing some of the contracts. So the margin is

Expanding in that business, which is a large part of why we feel confident about the number. We are providing the Outlook in 2027

Operator: Thank you. The next question comes from Matthew Gilmore with KeyBanc Capital Markets. Please go ahead.

Thank you. The next question comes from Matthew Gilmour. With keybanc capital markets, please go ahead.

[Analyst] (KeyBanc Capital Markets): Hey, good morning. This is Zach. I'm for Matt. Appreciate you taking the question. It sounds like trends kind of in line with your expectations. If we dig into oncology, can you remind us what percentage of your oncology costs are drugs versus procedure or surgical volumes? I guess, just curious to see if there's been any discernible change in how those costs have trended between drugs and surgical services. Thanks.

Matthew Gillmor: Hey, good morning. This is Zach. I'm for Matt. Appreciate you taking the question. It sounds like trends kind of in line with your expectations. If we dig into oncology, can you remind us what percentage of your oncology costs are drugs versus procedure or surgical volumes? I guess, just curious to see if there's been any discernible change in how those costs have trended between drugs and surgical services. Thanks.

Hey, good morning. This is zaken from Matt. Um appreciate you taking the question. So it sounds like Trends uh kind of in line with your expectations. But if we dig into oncology can you remind us what percentage of your oncology costs are drugs versus procedure or surgical volumes? I guess just curious to see if there's been any discernable change and other costs of trying to

Uh, between drugs and certain Services, text.

Seth Blackley: Yeah. Drugs are, I'd say about 75% of the total cost in oncology. That's not really changed. It might be going up a little bit, but that continues to be the main lever that we're addressing. That's really why these clients are hiring us, is to help manage that. There's really not a change, as Mario said in the first few questions. We've been appropriately conservative around how we've thought about trend and reserving and all these sorts of things, and that's part of the reason you're seeing our commentary on where we're looking for 2026 and 2027, is we feel really good about where we sit today.

Yeah. Um, drugs are you know I'd say about 75% of the total cost in oncology? That's not really changed. It might be going up a little bit, but that continues to be

The main lever that we're addressing—it's really why these clients are hiring us: to help manage that. And, you know, there's really not a change, as Mario said, in the—

In the first few questions, I think, you know, I think we've been appropriately conservative around how we've thought about Trends and reserving, and all these sorts of things. And that's, you know, part of the reason you're seeing our commentary on, uh, you know, where we're looking for 26 and 27 as we feel, you know, really good about where we sit today.

Operator: Thank you. The next question comes from Jailendra Singh with Truist. Please go ahead.

Thank you. The next question comes from Chelland Singh with Truist. Please go ahead.

[Analyst] (Truist): Hi, guys. Thanks. This is Eduardo on for Jailendra. Again, really appreciate the commentary on the greater than 25% of revenue growth for 2027, and that your customers are still in flux a bit on their plans. Hoping you could help us quantify, I guess, the top-line headwinds you're expecting on the Medicaid side from work requirements and on the exchanges from the customers potentially exiting some markets. Bifurcate that, I guess, versus the growth side, where maybe it's the Medicare Advantage side of the business and these new contracts. Just trying to frame how we should think about that.

Hi guys. Uh thanks, this is Edwardo on for Jill lyndra. Um again really appreciate the commentary on the greater than 25% of Revenue growth for 2027 and you know that your customers are still in flux a bit on their plans. But hoping you could help us quantify, I guess the Top Line, headwinds, You're Expecting on the Medicaid side from work requirements and on the exchanges from the customers, potentially exiting some some markets and bifurcate that, I guess versus the, the growth side where maybe it's the Medicare Advantage side of the business and these new contracts just trying to frame uh, how we should think about that.

Mario Ramos: Yeah. I think there are a couple things. One that's industry-driven, which I can talk about more freely. We're looking at probably a 20% decline of Medicaid expansion members, which I think it's a number that, after talking to a lot of clients and industry people, feels like a good number. That roughly translates to 4% to 5% membership in Medicaid for us, Eduardo. Beyond that, the challenge of to talk specifically with numbers is there are a lot of client-driven assumptions that we're making. We are trying to stay really close to our bigger clients, you know who they are, and if you listen to their calls, you could probably get some guidance on what they're saying and apply it to us and our membership book.

Yeah. So I I think um there there are a couple things 1 1 that 1 there's industry driven which I I can talk about more freely, you know, we

Mario Ramos: We are trying to stay really close to our bigger clients, you know who they are, and if you listen to their calls, you could probably get some guidance on what they're saying and apply it to us and our membership book. Again, I think it wouldn't be appropriate for us to go into more detail because then we'd be talking about client-specific sort of assumptions. We do think T&S next year will probably be flat to down a bit because of the membership headwinds.

Mario Ramos: Again, I think it wouldn't be appropriate for us to go into more detail because then we'd be talking about client-specific sort of assumptions. We do think T&S next year will probably be flat to down a bit because of the membership headwinds. The flip side of that is we're really excited about Performance Suite. We should be adding, as we said, a large portion of that growth is Performance Suite business. The pipeline looks strong. It's unfortunate that we have these industry-wide headwinds and client-specific headwinds, but beyond that, we're really confident with how we're executing and growing the Performance Suite in particular.

We're looking at, uh, probably 20% decline of, uh, Medicaid, expansion members. Um, which I, I think, I, I think it's a number that, um, after talking to a lot of clients and and Industry, people feels like a, a good number, uh, and so that roughly translates to 4 to 5 percent membership in, uh, Medicaid for us Eduardo. Um, I think beyond that the challenge of, to talk specifically with numbers is, there are a lot of client driven assumptions that we're making, uh, we are trying to stay really close to the big, our bigger clients you, you know, who they are. And, and if you, if you listen to their calls, um, you, you you, you could probably get some guidance on what what they're saying, and apply it to us. And our membership book, uh,

Mario Ramos: The flip side of that is we're really excited about Performance Suite. We should be adding, as we said, a large portion of that growth is Performance Suite business. The pipeline looks strong. It's unfortunate that we have these industry-wide headwinds and client-specific headwinds, but beyond that, we're really confident with how we're executing and growing the Performance Suite in particular.

But again, I think it, it wouldn't be appropriate for us to go into more detail, because then we'd be talking about client specific sort of assumptions. But we do think we do think tnx. Next year, will will probably be flat to down a bit because of the membership. Uh, headwinds. But the flip side of that is we're really excited about performance Suite. We should be adding as we said, you know, large portion of that growth is performance, Suite business, the pipeline looks strong. Um, so so it's, you know, it's unfortunate that we have these industry-wide headwinds, and clients specific headwinds, but beyond that, we're we're really confident with how we're executing and growing the performance Suite in particular.

Operator: Thank you. The next question comes from Charles Rhyee with TD Cowen. Please go ahead.

Thank you. The next question comes from Charles Reed. With TD Cohen, please go ahead.

[Analyst] (TD Cowen): Hi, this is Lucas on for Charles. Thanks for taking the questions. Wanted to ask specifically about the other client-specific membership declines you're expecting in 2027 in that framework. Can you unpack this a little bit? Are these customers that have indicated to you that they intend to exit certain markets? We've heard some MCOs talk about exiting certain Medicaid states separate from the work requirements. Is this what you're referring to? Can you kind of help us understand, are these clients providing you with any advance notice on their decisions to exit these markets?

Hi. This is Lucas on for Charles. Uh, thanks for taking the questions. Wanted to ask, uh, specifically about the, uh, the other client specific, uh, membership. Uh,

Declines, You're Expecting in 2027 and that framework. Uh, can you unpack this a little bit? Uh are these customers that have indicated to you? That they intend to exit certain markets? We've heard some mcos uh talk about exiting certain Medicaid States, you know, separate from the work requirements uh is this what you're referring to? And then can you kind of help us understand? You know, are they are these clients? Providing you with any uh advanced notice uh on their decisions to exit these markets.

Mario Ramos: Yeah, that's primarily what we're talking about. I think there are several large clients of ours that are going through this process. It's not new. We are staying close to them, and I think they're also looking at their own numbers for 2027 and trying to figure out what the right answer is. We're trying to stay close. We have monthly business reviews with them where this often comes up. I think, at this point, we're taking all data that we have available to us to figure out what the right assumptions are. We think membership will be under pressure. Again, a lot of this is industry, but a lot of it is client-specific. We don't believe that's going to continue on 2027. I think the industry is very far into sort of the rationalization that they've all talked about in the last 12 to 18 months.

Yeah, that's primarily what we're talking about. I think there's again. There are several large clients of ours that are going through this process. It's not new, we are staying close to them. And, and

Mario Ramos: I think, at this point, we're taking all data that we have available to us to figure out what the right assumptions are. We think membership will be under pressure. Again, a lot of this is industry, but a lot of it is client-specific. We don't believe that's going to continue on 2027. I think the industry is very far into sort of the rationalization that they've all talked about in the last 12 to 18 months. We are staying very close to clients as much as we can.

Um, you know, I think I think, uh, they also they're also looking at their own numbers for 27 and trying to figure out what the right answer is. We're trying to stay closed, we have monthly business reviews with them where this often comes up.

Mario Ramos: We are staying very close to clients as much as we can.

Talked about in the last 12, to 18 months. So, um, we are staying very close to clients as much as we can.

Seth Blackley: Yeah. Maybe just to pile on to that question and Eduardo's question, I think Mario's given you some of the building blocks of the components of the headwind on membership side. The reason we're growing despite all that is, for you to back up a little bit, is we have 6.7 million lives in the Performance Suite. It's less than 2% of the country. We are getting a lot of demand to do more of that. I think just reframing, reminding ourselves that we have actually a very small market share and a big opportunity. We feel very good about being able to grow past these couple headwinds that Mario discussed that are out there for the industry. As they burn off over the next few years, I think the market growth opportunity will still be there.

yeah, and maybe just, you know,

To pile on to that question and Eduardo's question, I think.

You know, Mario's giving you some of the building blocks of the components of the headwind on membership side. The the reason we're growing despite all that is feed you back up a little bit as we're if 6.7 million lives in the performance Suite. It's less than 2% of the country. We

Are getting a lot of demand to do more of that. And so I think just

You know, reframe and reminding ourselves that we have actually a very small market share in a big opportunity. And so we feel very good about being able to

grow past these couple headwinds that Mario discussed. Um, that are out there for the industry and as they burn off over the next few years, I think the the market growth opportunity will still be there.

Operator: Thank you. The next question comes from Daniel Grosslight with Citi. Please go ahead.

Thank you. The next question comes from Daniel, gross. Light with City, please go ahead.

[Analyst] (Citi): Hey, this is Luis on for Daniel, and thank you for taking my question. I know you briefly touched on the pipeline, and I think last year you sized the weighted pipeline at $1,550 million. Obviously, since then, you've announced several very large deals. My question is, as we sit here today, has this pipeline refilled and what does the current size look like? Thanks.

Daniel Grosslight: Hey, this is Luis on for Daniel, and thank you for taking my question. I know you briefly touched on the pipeline, and I think last year you sized the weighted pipeline at $1,550 million. Obviously, since then, you've announced several very large deals. My question is, as we sit here today, has this pipeline refilled and what does the current size look like? Thanks.

Hey, this is Luis on for Daniel and thank you for taking my question. Uh, I know you briefly touched on the pipeline and I think last year's size the way to pipeline at 1650 million and obviously since then he's announced several very large deals. But my question is like as we sit here today uh has this pipeline refilled and and what is the current size look like, thanks.

Seth Blackley: Yeah. It's very similar to what the comments I was just making. The pipeline has refilled. We have pretty small market share in a very big market, so there are a lot of opportunities left. Those spread across regional Blue plans or regional plans. We also have a couple of the top 10 plans in the country that we don't yet have that are now in the pipeline that previously weren't, that have come into the pipeline over the last 6 months. It does feel really good. I think particularly in oncology, as you can see, I think we have the leading product in the market and continue to get a lot of traction and would expect to continue to have more announcements like we did this quarter where we're able to bring on attractive new contracts.

Yeah, I mean it's it's very similar to what the comments. I was just making the pipe 1 has a refilled.

Um, we have, you know, pretty small market share in a very big market. So there are a lot of opportunities left those spread across, you know, Regional Blue plans and Regional plans. Uh, we also have a couple of the, you know, top 10 plans in the country that we don't yet have that are now in the pipeline that previously weren't, uh, that have come into the pipeline over the last 6 months.

So it does feel really good. I think the particularly in oncology, as you can see, um, I think we have the leading product in the market and continue to get a lot of traction and would expect to continue to have

You know, more announcements. Like we did this quarter where we're able to bring on attractive new contracts,

[Analyst] (Citi): Thank you.

Daniel Grosslight: Thank you.

Thank you.

Seth Blackley: You're welcome.

You're welcome.

Operator: Thank you. The next question comes from Ryan Daniels with William Blair. Please go ahead.

Thank you. The next question comes from Ryan Daniels with William Blair. Please go ahead.

[Analyst] (William Blair): Hi, everyone. This is Dustin on for Ryan. Thanks for taking our question. Oncology gets a lot of focus. It is good to see growth there driving the favorable 2027 outlook. Just wondering if you can talk about some of the other conditions like cardio, MSK. What are you seeing in those states as it impacts your business? Thank you.

Ryan Daniels: Hi, everyone. This is Dustin on for Ryan. Thanks for taking our question. Oncology gets a lot of focus. It is good to see growth there driving the favorable 2027 outlook. Just wondering if you can talk about some of the other conditions like cardio, MSK. What are you seeing in those states as it impacts your business? Thank you.

Hi everyone. This is Dustin on, for Ryan, thanks for taking our question. Um, oncology gets a lot of focus. It's good to see growth there driving, the favorable, 27 Outlook, but just wondering if you can talk about some of the other conditions, like cardio msk, um, what are you seeing in those States as it impacts your business. Thank you.

Seth Blackley: Yeah, Dustin. Actually interesting, one of the two announcements today, the second one, the tech and services one includes MSK and cardio, and we are continuing to see real demand for that. I think the way that this often plays out, and is the case in the announcement we made today, is oncology may be the tip of the spear, and it is the first product that comes into a new account. Once we start working with a partner, and I am really proud of our team, we are consistently getting high marks from them on, Hey, we like working with you. You are doing a good job. What else can you do for us? That playbook is really strong.

Dustin. So um actually interesting you know 1 of the 2 announced this today. Um the second 1 the tech and services, 1 includes msk and Cardio.

Seth Blackley: If you imagine you are a client dealing with 12 or 13 specialty conditions, would you prefer to do it with 12 or 13 best-in-class providers, or would you rather have a couple key strategic partners? Definitely the latter is true. We are going to get a lot of benefit of the doubt if we deliver. We are very focused on all of our clients, but we get a new client in particular, make sure we are delivering, and then you will get the right to add these other ones. We are seeing that. I think it is going to be more in this pull-through category. You have also seen this with both of our big MCO Medicaid partners have pulled through lots of different products. I think that is going to be the pattern, but those products are doing great. There is a lot of demand for them.

And we are continuing to see real demand for that. I think the way that this often plays out and it's the case, you know, in the announcement we made today is oncology, maybe the tip of the spear and it is the first product that comes into a new account. But once we start working with a partner, um, and I'm really proud of our team. We are consistently getting, you know, High marks from them on. Hey we like working with you, you're doing a good job. What else can you do for us? And that Playbook is really strong. If you imagine you're a client dealing with, you know, 12 or 13 specialty conditions, would you prefer to do it with 12 or 13 best-in-class providers? Or would you rather have a couple key strategic?

Partners. And

You know, definitely the latter is true and so we're going to get a lot of benefit of the doubt if we deliver. And so we're very focused on, you know,

Seth Blackley: We are seeing that. I think it is going to be more in this pull-through category. You have also seen this with both of our big MCO Medicaid partners have pulled through lots of different products. I think that is going to be the pattern, but those products are doing great. There is a lot of demand for them. Our teams at Evolent are doing a great job managing those products.

Seth Blackley: Our teams at Evolent are doing a great job managing those products.

all of our clients but we get a new client in particular, make sure we're delivering and then you'll get the right to add these other ones. And we are seeing that I think it's going to be more in this pull through category. Um, you've also seen this with, you know, 1 of our both of our big MCO. Medicaid Partners have pulled through lots of different products. So I think that's going to be the pattern, but the those products are doing great. There's a lot of demand for them and um, the our our teams that I've wanted to do a great job managing those products.

Operator: Thank you. The next question comes from David Larson with BTIG. Please go ahead.

David Larson: Hi. Congratulations on the good quarter. Can you talk a little bit about the Performance Suite revenue wins? The sequential increase in revenue from Q1 to Q2 was, I thought, very, very good. Can you talk about the PMPM rate in Performance Suite? It came in above our expectations. Also, are you finding the need to basically call on the bands, the risk bands that you have with certain Performance Suite customers? Are costs coming in too high in some cases and you got to enforce sort of that band? Are costs coming in sort of in line with your expectations? Thanks a lot.

David Larsen: Hi. Congratulations on the good quarter. Can you talk a little bit about the Performance Suite revenue wins? The sequential increase in revenue from Q1 to Q2 was, I thought, very, very good. Can you talk about the PMPM rate in Performance Suite? It came in above our expectations. Also, are you finding the need to basically call on the bands, the risk bands that you have with certain Performance Suite customers? Are costs coming in too high in some cases and you got to enforce sort of that band? Are costs coming in sort of in line with your expectations? Thanks a lot.

That was, uh, I thought, very, very good. And then, can you talk about the PMPM rate in Performance Suite? It came in above our expectations. And then also, are you finding the need to, um, basically call on, like, the bands—the risk bands that you have with certain Performance Suite customers? Or are costs coming in too high in some cases and you have to enforce sort of that band, or are costs coming in sort of in line with your expectations? Thanks a lot.

Mario Ramos: On the sequential increase, David, that was driven primarily by the Highmark launch. We had 2 months only of Highmark. It launched 1 May, that was the big driver. We will also obviously see a good pop of that in the Q3 because of the third month wrapping in to the Q3. Similar on the PMPM, Highmark having a lot of Medicare members typically has a higher PMPM, that drove the PMPMs higher for the quarter.

so on the, on the sequential increase,

David, that was driven primarily by the high Mark launch.

we had um, 2 months only of

Of high Market launch May 1st. So that was, that was the Big Driver. Um, we will also obviously see a good pop of that in the Q3 because of the the third month, wrapping in to the third quarter uh and similar on the PMP pm.

Um hi Mark having a lot of Medicare Medicare members typically has a higher PMP pm and so that that drove that drove the PMP PM's higher for the quarter.

Seth Blackley: On your last question, David, I think the contractual protections, I think the way to think about that is less that we have to go call on them. They are more mechanical, and they flow into each contract based on a schedule that is set up, and there is an actuarial process that goes back and forth, and it just rolls in. I think those are standard fare at this point, and people are used to them, and they can go both directions, right? It is a mechanical thing that depends upon what is acuity, what is price, these things that we do not control. That process is a pretty well-oiled machine at this point.

Um yeah and on your last question, David, I think um the contractual protections I think the way to think about that is less that we have to go call on them. They're more mechanical.

And they flow into.

Each contract based on a schedule that's set up and there's an Actuarial process that goes back and forth, and it just rolls in. So, I think those are

You know, standard fare at this point and people are used to them and they can go both directions, right? It's a mechanical thing, that depends upon what's Acuity. What's price? These things that we don't control it. Does that process is a pretty well-oiled machine at this point.

Operator: Thank you. The next question comes from Ryan Halsted with RBC. Please go ahead.

Thank you. The next question comes from Ryan Holstead with RBC. Please go ahead.

[Analyst] (RBC): Hi, team. This is Kevin on for Ryan. I was just curious if you guys have seen any shift in the acuity of your Medicaid membership pool, and if so, if you guys could talk to that.

Ryan Halsted: Hi, team. This is Kevin on for Ryan. I was just curious if you guys have seen any shift in the acuity of your Medicaid membership pool, and if so, if you guys could talk to that.

Hi, Tim. This is Kevin Hunt for Ryan. I was just curious. If you guys have seen any shift in the Acuity of your Medicaid membership pool and if if so you, if you guys could talk to that.

Mario Ramos: Much less so on Medicaid. I think the acuity shifts that we've seen have been more on the exchange side. There have been some on the Medicaid too, I would caution again, because I think maybe specific to our clients and our markets. I don't know that that's a representation of the general market. Certainly, we've seen some of that in both exchange and Medicaid, more so on the exchange side.

Seth Blackley: To David's point, that's one of the automatic adjusters that just rolls in, and it can go in either direction. Right now, it's a positive cap rate adjustment to the upside because the acuity's going up. If it goes the other direction, it'll go in the other direction. That system's kind of working well to make it fair. I think that's the right way to think about it, fair for us and fair for the client, so that our clinical work and the value we capture from it is tied directly to the things that we do.

Um, let let much less so on Medicaid. Uh, I think the acute shifts that we've seen have been more on the, on the exchange side. There have been some on the Medicaid too, but uh, I I would, I would caution again because I think maybe specific to our our clients and our markets. So I I don't know that that's a representation of the General market, but but certainly, uh, we've seen we've seen some of that in both exchange and Medicaid more. So, on the exchange side,

And that to Davis Point, that's 1 of the automatic adjusters that just rolls in and it can go in either direction right now it's you know a positive cap rate adjustment uh to the upside because the Acuity is going up. If it goes you know the direction it will go the other direction, so that's systems kind of working. Well, the, you know, make it fair. I think that's the right way to think about it, fair for us and fair for the clients. So that our work

Our clinical work and the value we capture from it is tied to, to directly to the things that we do.

Operator: Thank you. The next question comes from Jessica Tassan with Piper Sandler. Please go ahead.

Thank you. The next question comes from Jessica tessan with Piper Sandler. Please go ahead.

[Analyst] (Piper Sandler): Hey, it's Sahil on for Jess. Thanks for taking the question. Mario, I wanted to come back to the medical expense ratio. I think if I net the prior period items in the reserve table, I think I get to roughly around 3 points of the 95% you reported, which would put the current period ratio closer to 98%. I completely understand that the launch size of Highmark kind of gets reserved conservatively by that design, so not super surprised by that gap. I think you've also talked about holding the full year at 93%, and I think you've said the Q3 kind of steps higher than the Q2. Can you sort of help us understand with the Q4, what number actually kind of gets you there to average out to 90% to 93%? Thanks.

Hey, it's uh, sahil on for Jess. Thanks for taking the question. Um, Mario I wanted to come back to the medical expense ratio, I think, if I net the prior period items in the reserve table. Um, I think I get to roughly around sort of 3 points of the 94 95% reported, which would put the current period ratio kind of closer to 98%. And I completely understand that the launch size of high Mark, kind of gets reserved conservatively by that design. So, not super surprised by that Gap but I think you've also talked about holding the full year at 93%. And I think you've said the third quarter kind of stepped higher than the second. So can you sort of like, help us understand uh, with the fourth quarter uh, what, what number, what is that? What number actually, kind of gets you there to average out to

Mario Ramos: Yeah. No problem. I think you generally have it correct in terms of the order of magnitude of the prior period impact. Again, we fully expected the MER to be where it is when we launch. We have a very elevated level of MER. Highmark is very unique because it's a very high percentage of our Performance Suite business, even with only 2 months in the quarter. It is driving, and Aetna is not even close to fully mature. We just launched in January, and that's also a contributor to that. We went up 200 basis points. I think our expectation for the Q4, and if you go back to our Q1 call, we referenced this, we're probably expecting a gradual improvement of about 250 basis points by the Q4, and that's driven partly by the reserve process being complete.

90 93%. Thanks. Yeah.

No problem. I think you generally have it correct. In terms of the order of magnitude of the prior period impact, uh,

again, we fully expected the m to be where it is. Uh, when we launched, we have a very elevated, uh, level of M High Mark is very unique because it's a very high percentage of our um, performance Suite business, even with only 2 months in the quarter. So it it is driving and Aetna, is not fully, you know, not even close to fully mature, we just launched in January and so that that's not a

Mario Ramos: I think our expectation for the Q4, and if you go back to our Q1 call, we referenced this, we're probably expecting a gradual improvement of about 250 basis points by the Q4, and that's driven partly by the reserve process being complete. There will be some clinical improvement in there with particularly Aetna, that should be long enough that we're making an impact. Also, we do start reversing some of the new business loads that we typically have in the beginning of the contract. With Highmark, there'll be a little bit of a tailwind on the reserving side in the Q4 as well. Directionally, you have those numbers right.

Our q1 call. We we referenced this. Um we're we're probably expecting a a gradual Improvement um of about 250 basis points. Um

Uh, by the fourth quarter.

Mario Ramos: There will be some clinical improvement in there with particularly Aetna, that should be long enough that we're making an impact. Also, we do start reversing some of the new business loads that we typically have in the beginning of the contract. With Highmark, there'll be a little bit of a tailwind on the reserving side in the Q4 as well. Directionally, you have those numbers right.

And that's driven partly by the reserves, um, being, uh, the reserve process being complete. There will be some clinical improvement in there, particularly with Aetna. That should be long enough that we're making an impact.

But also we, we do start reversing some of the new business loads that we typically um, that we typically have in the beginning of the contract. So with with high Mark, there'll be a little bit of a pay, a win on the reserving side in the fourth quarter as well. So Direction you have those numbers, right?

Operator: Thank you. The next question comes from Ali Khan with Crow Holding. Please go ahead. Hello, your line is open. The next question comes from Matthew Shea from Piper Sandler. Please go ahead.

Thank you. The next question comes from. Ali Khan with grow holding, please go ahead.

Hello, your line is open.

Okay, the next question comes from Matthew Shea, from Piper Sandler, please go ahead.

Matthew Shea: Hey, this is Matthew Shea with Needham. Thanks for the question and congrats on a really nice quarter here. Hopping over from another call, so apologies if this got hit on, but wanted to touch on Medicaid in 2027. With redeterminations and the shorter retroactive eligibility windows, there's concern members will cycle on and off Medicaid plans more often. Seth, you've talked about the importance of continuous data feeds from a plan to drive your clinical intervention rates, and that engagement rates are ultimately a good indicator for savings. Does that Medicaid turnover, plus the fragmented claims data and shorter retroactive eligibility windows that come with it, does that degrade your ability to identify and engage members early enough to hit your targeted clinical savings in Medicaid? And if so, how are you reflecting that in your savings assumptions or reserving, if at all? Thanks.

Matthew Shea: Does that Medicaid turnover, plus the fragmented claims data and shorter retroactive eligibility windows that come with it, does that degrade your ability to identify and engage members early enough to hit your targeted clinical savings in Medicaid? And if so, how are you reflecting that in your savings assumptions or reserving, if at all? Thanks.

Hey, this is Matthew Shea with nem. Uh, thanks for the question and congrats on a really nice quarter here uh, hopping over from another call. So apologies, if this got hit on, but wanted to touch on Medicaid in, in 2027. Um, you know, with redetermination in the shorter retroactive eligibility Windows, there's concern members will cycle on and off Medicaid plans, more often. Seth, you've talked about the importance of continuous data feeds from a plan to drive your clinical intervention rates and that engagement rates are ultimately a good indicator for saving. So does that Medicaid turnover? Plus the fragmented claims data and shorter retroactive eligibility windows that come with it does that degrade your ability to identify and engage members, early enough to hit your you know, targeted clinical savings and Medicaid. And and if so like how are you reflecting that in your savings assumptions or or reserving uh if at all? Thanks.

Seth Blackley: Yeah, let me take the first part of that. Mario can answer the second on reserving. It really doesn't change our ability to do the interventions. I think unlike what the industry might call care management, which might be a 3, 6, 12-month process to engage a patient in a program, enroll them, work through lots of different things. Ours is more, hey, somebody's getting a cancer treatment over the next 90 days or 180 days. They typically stay on their plan, by the way, while they're in those treatment bands. Our engagement is around the selection of the therapeutic medication. It's around the surgical intervention, and it's not a long-term process. We don't feel like that affects it. I do think, you weren't on for this part, I think, earlier, but there's a lot of adjustments that you do have to make if the risk pool's changing.

Yeah, let me, let me take the first part of that Mario. Can I answer the second on reserving? Um, it really doesn't change our ability to do the interventions. I think unlike

You know what the industry might call care management.

Seth Blackley: They typically stay on their plan, by the way, while they're in those treatment bands. Our engagement is around the selection of the therapeutic medication. It's around the surgical intervention, and it's not a long-term process. We don't feel like that affects it. I do think, you weren't on for this part, I think, earlier, but there's a lot of adjustments that you do have to make if the risk pool's changing.

Which might be a 36 12 months to engage a patient in a program and roll them. Work to lots of different things. Ours is more. Hey somebody's you know, getting a cancer treatment over the next 90 days or 180 days, they typically stay on their plan. By the way, while they're in those treatment bands and our engagement is, you know, around the selection of the therapeutic medication. It's around the surgical intervention and it's not a long-term.

Seth Blackley: If you're getting a sicker population, acuity's going up, or vice versa, you got to make adjustments for that. But that's what our contracts do. It's a mechanical process so that we can isolate, hey, what is the cost per case on an apples-to-apples basis, and what value are we creating through our work? I think we've got a well-honed process to do that. I'll let Mario comment on the reserves, but I think it'll be the same theme.

Mario Ramos: Yeah. No, I think the reserves follow that process you've just talked about, we take all that into account and what we're looking at in the data, what is contractually available to us, which tends to protect from these swings that we don't control. It's an extension of what Seth said, basically.

You know, uh process. So we don't feel like that affects it. I do think you weren't on for this part. I think earlier but there's a lot of adjustments that you do have to make. If the risk pool is changing, if you're getting a more sick, population acute is going up or vice versa, you got to make adjustments for that. But that that's you know what our contracts do. It's a mechanical process so that we can isolate. Hey, what is the cost per case on an Apples to Apples basis and what value are we creating through our work? And, you know, I think we've got a, a well-honed process to do that. Uh, I'll let Mario comment on the reserves, but I think it'll be done at the same team. Yeah, no. And I think the reserves follow that process, you just talked about and we take all that into account and, uh, what, what, what you know what we're looking at, in the data, what is contractually available to us, which, uh, tends to protect from these swings that we don't, uh, control. So, um, it's an

Seth Blackley: Yeah. Look, one of the things that a lot of the questions today have hit on, which I'll just step back a little bit and reiterate, if you're any of these health plans, what's your number one problem right now? It's probably Part B, as in boy, therapeutics, Most of that is in oncology. Whether it's Medicaid or commercial or Medicare Advantage, cancer is a giant driver of trend, The sophistication of the drug pipeline that has been coming out for the last 10 years and is going to come out for the next 10, probably AI-led drug development and testing is going to accelerate that. They do not have a good way to manage that. Part B is not covered by their PBM. Part B runs through the distributors. It's straight down to the oncologist. It's sort of the Wild West, right?

Mention of what Seth said basically.

Yeah, and look, I mean, 1 of the things that a lot of the questions that they have hit on which I'll just step back a little bit and reiterate if you're any of these health plans,

What's Your Number 1 problem? Right now, it's probably Part. B is in boy Therapeutics.

And most of that is in oncology.

So whether it's Medicaid, commercial, or Medicare Advantage, you know, cancer is a giant driver of trend.

Seth Blackley: They do not have a good way to manage that. Part B is not covered by their PBM. Part B runs through the distributors. It's straight down to the oncologist. It's sort of the Wild West, right? They don't have a good way to manage it. I think we have, over now 15 years, developed a very sophisticated way of doing it that I think is the best in the industry. I think we're taking share because we're good at it.

Seth Blackley: They don't have a good way to manage it. I think we have, over now 15 years, developed a very sophisticated way of doing it that I think is the best in the industry. I think we're taking share because we're good at it. I think we're able to negotiate contract terms that are fair to them and us because we have good demand for the product. I don't see that stopping for a long time because we have small market share, Oncology's a big problem. You guys have heard us now for multiple years be very focused on this, I think the MERs, the client growth are both pointing to the ability to do that and being a long-term cycle for us.

Seth Blackley: I think we're able to negotiate contract terms that are fair to them and us because we have good demand for the product. I don't see that stopping for a long time because we have small market share, Oncology's a big problem. You guys have heard us now for multiple years be very focused on this, I think the MERs, the client growth are both pointing to the ability to do that and being a long-term cycle for us.

A very sophisticated way of doing it that I think is the best in the industry. I think we're taking share because we're good at it. I think we're able to

negotiate contract terms that are fair to them and us because we have good demand for the product. Um, and I don't see that stopping for a long, long time because, you know, we have small market share in oncology is a big problem. Um, and so that's, you know, you guys have heard us now for multiple Years, be very focused on this. And I think the uh, the MS, the client growth or both, you know, pointing to the ability to do that and and being a long-term cycle for us.

Operator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Seth Blackley for any closing remarks.

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Seth Blackley for any closing remarks.

Seth Blackley: Thanks for the time this morning. We will look forward to talking to each of you soon.

Thanks for the time this morning, we look forward to talking to each of you soon.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect

Q2 2026 Evolent Health Inc Earnings Call

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