XML 46 R29.htm IDEA: XBRL DOCUMENT v3.22.4
Segment Reporting
12 Months Ended
Dec. 31, 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 loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, (provision for) benefit from income taxes, depreciation and amortization expenses, adjusted to exclude equity method investment impairment, gain on transfer of membership, loss on extinguishment/repayment of debt, net, goodwill impairment, gain from equity method investees, loss on disposal of assets, 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 expenses, acquisition-related costs and 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 ServicesClinical SolutionsIntersegment
Eliminations
Subtotal
Corporate (1)
Consolidated Total
Revenue
For the Year Ended December 31, 2022
Total revenue$408,371 $944,511 $(869)$1,352,013 $— $1,352,013 
For the Year Ended December 31, 2021
Total revenue$311,627 $598,144 $(1,814)$907,957 $— $907,957 
For the Year Ended December 31, 2020
Total revenue$385,134 $542,279 $(2,774)$924,639 $— $924,639 
Evolent Health ServicesClinical SolutionsSubtotal
Corporate (1)
Consolidated Total
For the Year Ended December 31, 2022
Adjusted EBITDA$57,936 $78,639 $136,575 $(30,244)$106,331 
For the Year Ended December 31, 2021
Adjusted EBITDA$17,063 $82,920 $99,983 $(33,666)$66,317 
For the Year Ended December 31, 2020
Adjusted EBITDA$57,731 $26,864 $84,595 $(36,022)$48,573 
————————
(1)Corporate includes various finance, human resources, legal, executive and other corporate infrastructure expenses.
The following table presents our reconciliation of consolidated segments total Adjusted EBITDA to net income (loss) attributable to common shareholders of Evolent Health, Inc. (in thousands):
For the Year Ended December 31,
202220212020
Net loss attributable to common shareholders of Evolent Health, Inc.$(19,164)$(37,601)$(334,246)
Less:
Interest income1,369 407 2,633 
Interest expense(15,572)(25,425)(28,325)
Benefit from (provision for) income taxes43,376 (483)2,368 
Depreciation and amortization expenses(67,195)(60,037)(60,835)
Equity method investment impairment— — (47,133)
Gain on transfer of membership— 45,938 — 
Change in tax receivable agreement liability(45,950)— — 
Loss on extinguishment/repayment of debt, net(10,192)(21,343)(4,789)
Goodwill impairment— — (215,100)
Gain from equity method investees4,569 13,179 10,039 
Loss on disposal of assets— — (698)
Change in fair value of contingent consideration 23,522 (13,281)(3,860)
Other income (expense), net57 (146)(118)
Repositioning costs— (7,318)(1,275)
Stock-based compensation expense(33,981)(16,711)(14,606)
Severance costs(13,265)(198)(8,986)
Amortization of contract cost assets(99)(476)(3,944)
Strategy and shareholder advisory expenses— (6,513)— 
Acquisition costs(11,671)(4,194)(2,116)
Loss from discontinued operations (1)
(463)(7,317)(6,074)
Adjusted EBITDA$106,331 $66,317 $48,573 
————————
(1)Includes $0.5 million and $6.8 million loss on disposal of discontinued operations for the years ended December 31, 2022 and 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.