Evolent Health, Inc. (EVH): BCG Matrix [Dec-2025 Updated]

You're looking at Evolent Health, Inc. (EVH) at the end of 2025, and honestly, the portfolio looks like a classic growth story hitting a pivot point. We've got the Medicaid segment, now 47% of Q3 revenue, shining as a Star right alongside high-growth specialty platforms, while the Performance Suite, still 60% of the pie, is the reliable Cash Cow anchoring the $144 million to $154 million EBITDA forecast. But, you also see clear Dogs, like the Medicare segment shrinking to 27% of revenue, and Question Marks like the high leverage at 6.7x debt multiple that demands those big investments, such as the $35 million in 2025 software spend, to finally turn the corner. Dive in below to see exactly where Evolent Health needs to place its bets to fund the future.

Background of Evolent Health, Inc. (EVH)

You're looking at Evolent Health, Inc. (EVH) as of late 2025, and honestly, the story is one of strategic pivots amidst financial pressure. Evolent Health, Inc. specializes in delivering better health outcomes for people with complex conditions by offering solutions designed to simplify healthcare and manage affordability. They focus heavily on specialty condition management, like oncology and cardiology, and support health systems moving toward value-based care models.

Let's look at the numbers coming out of the third quarter of 2025, reported on November 6, 2025. Evolent Health posted Q3 2025 revenue of $479.5 million, which was an 8% sequential jump and slightly beat expectations by 2.58%. The Adjusted EBITDA for the quarter was $39.0 million, showing a 23% improvement year-over-year. Still, the market focused on the earnings miss: Earnings Per Share (EPS) came in at $0.05, falling short of the $0.11 forecast by 54.55%.

The business mix is definitely shifting, which you need to keep in mind. Comparing year-over-year for Q3, Medicaid revenue grew its share from 35% to 47% of the total, while Medicare saw its contribution shrink from 38% to 27%. Furthermore, the Performance Suite, a core offering, saw its revenue proportion drop from 70% to 60% of the total revenue compared to Q3 2024. This shift suggests near-term headwinds in certain government programs, even as the company secures new business.

For the full year 2025, Evolent Health narrowed its guidance to a revenue range between $1.87 billion and $1.88 billion, with Adjusted EBITDA expected to land between $144 million and $154 million. On the growth front, they are banking on new deals; they secured 13 new contracts year-to-date, and the preliminary forecast for 2026 revenue is approximately $2.5 billion, driven by new annualized revenue expected to launch next year.

A major strategic move late in 2025 was the agreement to sell the Evolent Care Partners (ECP) business, which is their value-based primary care segment. The deal is valued up to $113 million, with $100 million expected at closing in Q4 2025, and the proceeds are earmarked to pay down senior debt. This divestiture is intended to sharpen the focus on specialty condition management and accelerate deleveraging, especially since the Net Debt to LTM Adjusted EBITDA ratio had climbed to 6.7x by Q3 2025. The company expects this action to result in a net leverage ratio around 5.5 times by year-end 2025.

Evolent Health, Inc. (EVH) - BCG Matrix: Stars

You're looking at the growth engines for Evolent Health, Inc. (EVH) right now-the Stars. These are the business units dominating fast-growing markets, but they demand serious capital to maintain that lead. They are the future Cash Cows, provided we keep feeding them investment.

Specialty Technology and Services Suite and Performance Suite Growth

The market for Evolent Health's complex specialty care solutions is showing robust demand, which is why the Performance Suite and its related technology offerings are firmly in the Star quadrant. The company secured two new revenue agreements in Q3 2025 alone, bringing the year-to-date total to 13 new signings across its Performance Suite, Specialty Technology and Services Suite, Administrative Services, and Case-based products.

A key indicator of this high-growth, high-share status is the recent major contract win. Evolent Health signed an agreement with a large regional Blues plan to launch the Performance Suite for Oncology across more than 650,000 members in the Medicare Advantage (MA) and Commercial lines of business. Furthermore, an existing partner expanded its services to add Oncology to its existing Tech & Services Suite. This focus on high-complexity areas is paying off in market penetration, even if the immediate revenue impact is weighted toward future years.

Here's a quick look at the revenue per unit for these key offerings in Q3 2025, showing where the immediate cash flow is concentrated:

The goal here is to sustain this market share until the high-growth phase slows, turning these investments into reliable cash generators.

Medicaid Segment Dominance

The shift in Evolent Health's business mix clearly points to the Medicaid segment as a high-share leader in what is still a growing, albeit volatile, market. In Q3 2025, the Medicaid segment grew to represent 47% of total revenue. To put that in perspective, this is a significant jump from 35% of total revenue in Q3 2024.

This rapid proportional growth suggests Evolent Health is successfully capturing market share within this segment. However, management noted that the 2026 Adjusted EBITDA outlook carries more uncertainty than usual specifically because of potential membership shifts in the Medicaid line for some customers.

Enhanced Performance Suite Model and Future Revenue Projections

The Enhanced Performance Suite model is the vehicle Evolent Health is using to capture future growth, balancing disciplined expansion with improved contract structures. The success of this model is directly tied to the company's aggressive top-line forecast.

The preliminary 2026 revenue forecast stands at approximately $2.5 billion under contract. This projection is underpinned by significant new business:

• Announced new annualized revenue set to launch in 2026 is more than $750 million.
• New signings are expected to drive more than 30% top-line growth in 2026.
• One specific new contract is anticipated to contribute north of $500 million in revenue annually once mature.

These new deals are structured with enhanced protections, like retroactive adjustments and bidirectional risk corridors, which is a strategic move to reduce volatility as the business scales rapidly.

Value-Based Care Platform for Complex Conditions

Evolent Health's focus on value-based care for complex conditions places it in a market segment with strong secular tailwinds. The broader Global Value-Based Healthcare Solutions Market is projected to expand at a Compound Annual Growth Rate (CAGR) of 9.4% between 2025 and 2033.

The company is actively addressing this high-growth space through specific product lines:

• Focus on specialty condition management, particularly oncology, cardiology, and musculoskeletal care.
• AI-powered tools, like the Auth Intelligence platform, are projected to reduce administrative overhead by 20-30% in targeted specialties.
• The company is strategically divesting its primary care business to focus capital and effort on this core specialty business.

If onboarding takes 14+ days, churn risk rises, so the AI efficiency improvements are critical to maintaining a competitive edge in service delivery.

Evolent Health, Inc. (EVH) - BCG Matrix: Cash Cows

You're looking at the engine room of Evolent Health, Inc. (EVH) portfolio, the segment that generates the necessary capital to fund riskier growth bets. These Cash Cows operate in mature areas where market share is established, and the focus shifts from aggressive expansion to maximizing cash conversion.

The Performance Suite is definitely the anchor here, still representing the largest portion of the business. For the third quarter of 2025, this segment accounted for 60% of total revenue, which was $479.533 million in that period. That translates to roughly $287.72 million in Q3 2025 revenue for the Performance Suite alone. The normalized oncology cost trend in Q3 2025 was running just under 11% year-over-year, but the segment's Q3 2025 Care margin was approximately 7%. Management is targeting a mature margin of around 10% for the Performance Suite under the enhanced model, trading some upside for lower volatility.

A key driver for this segment's strong cash generation was the successful renegotiation of core oncology management contracts. Management emphasized that these efforts secured an estimated $115 million in Adjusted EBITDA improvement for the full year 2025. This financial underpinning is critical, as the entire company's full-year 2025 Adjusted EBITDA guidance of $144 million to $154 million is largely anchored by the stability and cash flow from this mature, high-share business. Honestly, without this predictable cash flow, funding the rest of the portfolio becomes a much tougher conversation.

Here's a quick look at how the segment's financial performance and expectations stack up:

The high relative market share here means Evolent Health, Inc. can afford to keep promotional and placement investments low, focusing instead on infrastructure improvements that boost efficiency and cash flow further. You want to maintain this position because it's the source of capital for everything else.

• Secure the $115 million in expected 2025 Adjusted EBITDA improvement.
• Maintain the normalized oncology cost trend below the 12% assumption.
• Drive the Performance Suite margin toward the 10% mature target.
• Ensure the segment's cash flow solidly supports the $144 million to $154 million FY2025 Adjusted EBITDA guidance.

Finance: draft 13-week cash view by Friday.

Evolent Health, Inc. (EVH) - BCG Matrix: Dogs

Dogs are business units or products characterized by a low market share in a low-growth market. For Evolent Health, Inc. (EVH), these areas require careful management, often leading to divestiture to free up capital and management focus for higher-potential segments.

The following table summarizes key financial metrics related to the segments and activities identified as potential Dogs or candidates for divestiture as of the third quarter of 2025.

The characteristics aligning these areas with the Dogs quadrant involve market contraction, low profitability, and strategic pruning.

• Medicare segment revenue share declined significantly, falling from 38% of total revenue in Q3 2024 to 27% in Q3 2025, directly attributed to market headwinds in the Medicare Advantage space.
• Legacy, low-margin administrative services, which generated $170.9 million in Q3 2025 revenue, are not central to the core focus on value-based specialty care, suggesting lower growth potential and margin contribution compared to newer offerings.
• The divestiture of Evolent Care Partners (ECP), a non-core asset, was agreed upon for a total value up to $113 million, with $100 million paid upfront, specifically to pay down senior debt.
• The divested ECP unit was estimated to be generating roughly $10 million in adjusted EBITDA, which is being replaced by an expected annual interest expense reduction of approximately $10 million from the debt prepayment.
• The transaction is projected to improve annual cash flow by more than $7 million annually, net of the reduced cash generation from ECP, signaling a move away from cash-consuming or low-return activities.
• Overall financial pressure is evident as the Net Debt to Last Twelve Months Adjusted EBITDA ratio increased sharply from 2.8x in Q3 2024 to 6.7x in Q3 2025, with total debt reaching approximately $1.06 billion as of Q3 2025.

The strategy here is clear: minimize exposure to these lower-return areas. The sale of ECP, for instance, accelerates deleveraging, which is a necessary action given the leverage metrics. It's about cutting bait on assets that don't fit the future profile, even if they were once significant revenue contributors.

Evolent Health, Inc. (EVH) - BCG Matrix: Question Marks

You're looking at business units that are burning cash today but operate in markets where Evolent Health, Inc. believes significant future revenue is possible. These are the classic Question Marks, requiring a decision: feed them heavily or divest.

New Oncology Navigation Solution

The push in oncology represents a high-growth area where Evolent Health, Inc. is actively investing to capture market share. A key indicator of this investment is the recent contract win with one of the largest Blue Cross plans to launch the Performance suite for oncology across more than 650,000 members. At maturity, this specific agreement is expected to contribute north of $500 million in revenue annually. Furthermore, Evolent Health, Inc. bolstered this segment by purchasing the oncology navigation assets of one of its joint ventures. This move signals a direct investment to scale this specific offering.

Surgical and Musculoskeletal Management Solutions

New platforms in specialty markets like Surgical and Musculoskeletal Management are also categorized here, showing low current revenue contribution relative to their potential. In the first quarter of 2025, Evolent Health, Inc. secured two new revenue agreements specifically for surgical management solutions with health plans. Separately, an existing partner expanded to include musculoskeletal solutions across multiple lines of business for over 400,000 members. These Q1 2025 new and expanded agreements are projected to generate approximately $10 million in annualized specialty technology and services revenue.

Company Investment and Net Loss Position

These growth initiatives, which have not yet translated into sustained profitability, contribute to the overall company's net loss position, demanding continued investment. For instance, Evolent Health, Inc. reiterated its expectation to deploy approximately $35 million in cash for capitalized software development during 2025 to build out these platforms. The financial reality of this investment phase is evident in the reported net losses:

The company's full-year 2025 revenue guidance was revised to a range of $1.87 billion to $1.88 billion, with Adjusted EBITDA guided between $144 million and $154 million, showing the path to turning growth into positive returns is still being navigated.

High Leverage Demanding Star-Level Profitability

The cash consumption inherent in Question Marks is compounded by the company's current leverage profile, which requires a clear path to Star-level profitability to manage debt obligations. Evolent Health, Inc.'s capital structure metrics show this pressure point clearly. In the third quarter of 2025, the leverage ratio stood at 6.7x on a Last Twelve Months (LTM) Adjusted EBITDA basis. This compares to 2.8x in Q3 2024. Total debt rose to approximately $1.06 billion in Q3 2025, with net debt reported at $910 million at that time. The company is actively working to address this, planning to use proceeds from the Evolent Care Partners divestiture to repay approximately $100 million of its senior term loan, which is expected to reduce annual cash interest by about $10 million.

You need to watch the conversion of these high-growth prospects into margin-accretive revenue streams.