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Segment Reporting | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting 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 care 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 income (loss) attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, provision (benefit) for income taxes, depreciation and amortization expenses, adjusted to exclude gain on transfer of membership, loss on extinguishment/repayment of debt, net, gain from equity method investees, changes in fair value of contingent consideration, change in the tax receivable agreement liability, other income (expense), net, repositioning costs, stock-based compensation expense, severance costs, amortization of contract cost assets, strategy and shareholder advisory services, acquisition-related costs and 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 (in thousands):
| Evolent Health Services |  | Clinical Solutions |  | Intersegment Eliminations |  | Subtotal |  | Corporate (1) |  | Consolidated Total
Revenue |  |  |  |  |  |  |  |  |  |  |
For the Three Months Ended September 30, 2022 |  |  |  |  |  |  |  |
Total revenue | $ | 107,033 |  |  | $ | 245,257 |  |  | $ | 295 |  |  | $ | 352,585 |  |  | $ | — |  |  | $ | 352,585 |
For the Three Months Ended September 30, 2021 |  |  |  |  |  |  |  |
Total revenue | $ | 63,315 |  |  | $ | 159,614 |  |  | $ | (458) |  |  | $ | 222,471 |  |  | $ | — |  |  | $ | 222,471 |
| Evolent Health Services |  | Clinical Solutions |  | Subtotal |  | Corporate (1) |  | Consolidated Total |  |
For the Three Months Ended September 30, 2022 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 18,507 |  |  | $ | 16,303 |  |  | $ | 34,810 |  |  | $ | (6,755) |  |  | $ | 28,055 |  |  |
For the Three Months Ended September 30, 2021 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | (3,353) |  |  | $ | 23,883 |  |  | $ | 20,530 |  |  | $ | (6,765) |  |  | $ | 13,765 |  |  |
| Evolent Health Services |  | Clinical Solutions |  | Intersegment Eliminations |  | Subtotal |  | Corporate (1) |  | Consolidated Total
Revenue |  |  |  |  |  |  |  |  |  |  |
For the Nine Months Ended September 30, 2022 |  |  |  |  |  |  |  |
Total revenue | $ | 307,147 |  |  | $ | 663,060 |  |  | $ | (626) |  |  | $ | 969,581 |  |  | $ | — |  |  | $ | 969,581 |
For the Nine Months Ended September 30, 2021 |  |  |  |  |  |  |  |
Total revenue | $ | 223,924 |  |  | $ | 437,031 |  |  | $ | (1,356) |  |  | $ | 659,599 |  |  | $ | — |  |  | $ | 659,599 |
| Evolent Health Services |  | Clinical Solutions |  | Subtotal |  | Corporate (1) |  | Consolidated Total |  |
For the Nine Months Ended September 30, 2022 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 41,854 |  |  | $ | 51,988 |  |  | $ | 93,842 |  |  | $ | (19,793) |  |  | $ | 74,049 |  |  |
For the Nine Months Ended September 30, 2021 |  |  |  |  |  |  |  |
Adjusted EBITDA | $ | 9,120 |  |  | $ | 53,456 |  |  | $ | 62,576 |  |  | $ | (20,558) |  |  | $ | 42,018 |  |  |
———————— (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 income (loss) attributable to common shareholders of Evolent Health, Inc. (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net income (loss) attributable to common shareholders of Evolent Health, Inc. | $ | 2,123 |  |  | $ | (13,040) |  |  | $ | (7,815) |  |  | $ | (31,954) |
Less: |  |  |  |  |  |  |
Interest income | 425 |  |  | 120 |  |  | 765 |  |  | 311 |
Interest expense | (4,754) |  |  | (6,367) |  |  | (9,143) |  |  | (18,978) |
Benefit from (provision for) income taxes | 45,516 |  |  | (234) |  |  | 44,498 |  |  | (936) |
Change in tax receivable agreement liability | (42,870) |  |  | — |  |  | (42,870) |  |  | — |
Depreciation and amortization expenses | (17,196) |  |  | (14,859) |  |  | (47,414) |  |  | (44,962) |
Gain on transfer of membership | — |  |  | — |  |  | — |  |  | 22,969 |
Loss on extinguishment/repayment of debt, net | (10,192) |  |  | — |  |  | (10,192) |  |  | (19,158) |
Gain from equity method investees | 1,392 |  |  | 63 |  |  | 3,940 |  |  | 12,725 |
Change in fair value of contingent consideration | 12,700 |  |  | 225 |  |  | 5,822 |  |  | 819 |
Other income (expense), net | (345) |  |  | (41) |  |  | 130 |  |  | (73) |
Repositioning costs | — |  |  | — |  |  | — |  |  | (6,043) |
Stock-based compensation expense | (6,992) |  |  | (4,395) |  |  | (19,350) |  |  | (11,754) |
Severance costs | (996) |  |  | — |  |  | (1,035) |  |  | (52) |
Amortization of contract cost assets | (25) |  |  | (110) |  |  | (79) |  |  | (433) |
Strategy and shareholder advisory expenses | — |  |  | — |  |  | — |  |  | (6,513) |
Acquisition costs | (2,595) |  |  | (1,207) |  |  | (6,473) |  |  | (3,277) |
Gain (loss) from discontinued operations (1) | — |  |  | — |  |  | (463) |  |  | 1,383 |
Adjusted EBITDA | $ | 28,055 |  |  | $ | 13,765 |  |  | $ | 74,049 |  |  | $ | 42,018 |
———————— (1)Includes $(0.5) million loss on disposal of discontinued operations for the nine months ended September 30, 2022 and $1.9 million gain on disposal of discontinued operations for the nine months ended September 30, 2021, respectively. 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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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