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Segment Reporting | 6 Months Ended
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Jun. 30, 2021
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting Commencing with the three months ended March 31, 2021, we define our reportable segments based on the way the CODM, the chief executive officer, manages the operations for purposes of allocating resources and assessing performance. We classify our operations into two reportable segments as follows: •Evolent Health Services, which houses our Administrative Simplification solution and certain supporting population health infrastructure; and •Clinical Solutions, which includes our specialty management and physician-oriented total cost of care solutions, along with the New Century Health and Evolent Care Partners brands. In the ordinary course of business, our reportable segments enter into transactions with one another. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues and expenses recognized by the segment that is the counterparty to the transaction are eliminated in consolidation and do not affect consolidated results. The CODM uses revenue in accordance with U.S. GAAP and Adjusted EBITDA as the relevant segment performance measures to evaluate the performance of the segments and allocate resources. Adjusted EBITDA is a segment performance financial measure that offers a useful view of the overall operation of our businesses and may be different than similarly-titled segment performance financial measures used by other companies. Adjusted EBITDA is defined as net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, (provision) benefit for income taxes, depreciation and amortization expenses, adjusted to exclude equity method investment impairment, loss on extinguishment of debt, gain (loss) from equity method investees, gain (loss) on disposal of assets and consolidation, goodwill impairment, changes in fair value of contingent consideration and indemnification asset, other income (expense), net, net loss attributable to non-controlling interests, ASC 606 transition adjustments, purchase accounting adjustments, repositioning costs, stock-based compensation expense, severance costs, amortization of contract cost assets, shareholder advisory services, acquisition-related costs and gain (loss) from discontinued operations. Management considers revenue and Adjusted EBITDA to be the appropriate metrics to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as they eliminate the effect of items which are not indicative of each segment's core operating performance. The following tables present our segment information for the three and six months ended June 30, 2021 and 2020 (in thousands). Prior-year segment information (including segments total Adjusted EBITDA) has been restated to conform to the reporting structure change described in Note 1.
| Evolent Health Services |  | Clinical Solutions |  | Intersegment Eliminations |  | Subtotal |  | Corporate (1) |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |  |
For the Three Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Transformation services | $ | 2,564 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,564 |  |  | $ | — |  |  | $ | 2,564 |
Platform and operations services | 72,759 |  |  | 147,194 |  |  | (460) |  |  | 219,493 |  |  | — |  |  | 219,493 |
Total revenue | $ | 75,323 |  |  | $ | 147,194 |  |  | $ | (460) |  |  | $ | 222,057 |  |  | $ | — |  |  | $ | 222,057 |
For the Three Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Transformation services | $ | 755 |  |  | $ | — |  |  | $ | — |  |  | $ | 755 |  |  | $ | — |  |  | $ | 755 |
Platform and operations services | 86,432 |  |  | 130,780 |  |  | (668) |  |  | 216,544 |  |  | — |  |  | 216,544 |
Total revenue | $ | 87,187 |  |  | $ | 130,780 |  |  | $ | (668) |  |  | $ | 217,299 |  |  | $ | — |  |  | $ | 217,299 |
| Evolent Health Services |  | Clinical Solutions |  | Subtotal |  | Corporate (1) |  | Segments Total |  |
For the Three Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 6,531 |  |  | $ | 13,597 |  |  | $ | 20,128 |  |  | $ | (6,782) |  |  | $ | 13,346 |  |  |
For the Three Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 6,948 |  |  | $ | 12,200 |  |  | $ | 19,148 |  |  | $ | (8,629) |  |  | $ | 10,519 |  |  |
| Evolent Health Services |  | Clinical Solutions |  | Intersegment Eliminations |  | Subtotal |  | Corporate (1) |  | Consolidated
Revenue |  |  |  |  |  |  |  |  |  |  |
For the Six Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Transformation services | $ | 2,909 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,909 |  |  | $ | — |  |  | $ | 2,909 |
Platform and operations services | 157,700 |  |  | 277,417 |  |  | (898) |  |  | 434,219 |  |  | — |  |  | 434,219 |
Total revenue | $ | 160,609 |  |  | $ | 277,417 |  |  | $ | (898) |  |  | $ | 437,128 |  |  | $ | — |  |  | $ | 437,128 |
For the Six Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Transformation services | $ | 5,993 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,993 |  |  | $ | — |  |  | $ | 5,993 |
Platform and operations services | 178,222 |  |  | 255,652 |  |  | (1,336) |  |  | 432,538 |  |  | — |  |  | 432,538 |
Total revenue | $ | 184,215 |  |  | $ | 255,652 |  |  | $ | (1,336) |  |  | $ | 438,531 |  |  | $ | — |  |  | $ | 438,531 |
| Evolent Health Services |  | Clinical Solutions |  | Subtotal |  | Corporate (1) |  | Segments Total |  |
For the Six Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 12,473 |  |  | $ | 29,573 |  |  | $ | 42,046 |  |  | $ | (13,793) |  |  | $ | 28,253 |  |  |
For the Six Months Ended June 30, 2020 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 11,716 |  |  | $ | 19,243 |  |  | $ | 30,959 |  |  | $ | (16,564) |  |  | $ | 14,395 |  |  |
———————— (1)Corporate includes various finance, human resources, legal, executive, and other corporate infrastructure expenses. The following table presents our reconciliation of consolidated segments total Adjusted EBITDA to net loss attributable to common shareholders of Evolent Health, Inc. for the three and six months ended June 30, 2021 and 2020 (in thousands):
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Net loss attributable to common shareholders of Evolent Health, Inc. | $ | (9,107) |  |  | $ | (203,521) |  |  | $ | (18,914) |  |  | $ | (282,273) |
Less: |  |  |  |  |  |  |
Interest income | 68 |  |  | 705 |  |  | 191 |  |  | 1,475 |
Interest expense | (6,274) |  |  | (6,290) |  |  | (12,611) |  |  | (12,571) |
(Provision) benefit for income taxes | (91) |  |  | 3,904 |  |  | (702) |  |  | 3,634 |
Depreciation and amortization expenses | (14,916) |  |  | (15,618) |  |  | (30,103) |  |  | (31,596) |
Equity method investment impairment | — |  |  | — |  |  | — |  |  | (47,133) |
Gain on transfer of membership | — |  |  | — |  |  | 22,969 |  |  | — |
Loss on repayment of debt, net | — |  |  | — |  |  | (19,158) |  |  | — |
Goodwill impairment | — |  |  | (215,100) |  |  | — |  |  | (215,100) |
Gain from equity method investees | 4,879 |  |  | 25,143 |  |  | 12,662 |  |  | 24,731 |
Loss on disposal of assets | — |  |  | — |  |  | — |  |  | (6,447) |
Change in fair value of contingent consideration and indemnification asset | — |  |  | (756) |  |  | 594 |  |  | 3,062 |
Other expense, net | (18) |  |  | 354 |  |  | (32) |  |  | 284 |
Repositioning costs | (663) |  |  | — |  |  | (6,043) |  |  | — |
Stock-based compensation expense | (3,653) |  |  | (3,703) |  |  | (7,359) |  |  | (7,211) |
Severance costs | — |  |  | (30) |  |  | (52) |  |  | (6,133) |
Amortization of contract cost assets | (196) |  |  | (767) |  |  | (323) |  |  | (1,207) |
Strategy and shareholder advisory expenses | (1,513) |  |  | — |  |  | (6,513) |  |  | — |
Acquisition costs | (76) |  |  | (374) |  |  | (2,070) |  |  | (683) |
Gain (loss) from discontinued operations (1) | — |  |  | (1,508) |  |  | 1,383 |  |  | (1,773) |
Adjusted EBITDA | $ | 13,346 |  |  | $ | 10,519 |  |  | $ | 28,253 |  |  | $ | 14,395 |
———————— (1)Includes $1.9 million gain on disposal of discontinued operations for the six months ended June 30, 2021. Asset information by segment is not a key measure of performance used by the CODM. Accordingly, we have not disclosed asset information by segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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