Evolent Health, Inc. (NYSE: EVH), a company providing an integrated value-based care platform to the nation's leading health systems and physician organizations, today announced financial results for the quarter ended September 30, 2016.

Highlights from the third quarter of 2016 announcement include (all comparisons are to the quarter ended September 30, 2015):

• Revenue of $60.2 million, an increase of 49.0%
• Net income (loss) attributable to Evolent Health, Inc. of $(11.2) million, Adjusted EBITDA of $(3.1) million
• Lives on platform of approximately 1.5 million, an increase of 104.3%
• New partnership agreements established with Banner Health Network and Hill Physicians Medical Group

Frank Williams, Chief Executive Officer of Evolent Health, Inc., commented, "We are pleased to report strong results, having exceeded our financial and operational goals for the quarter as well as strengthening our strategic position in the marketplace. As of today with the addition of Valence Health, we now have long-term operating agreements in place serving approximately 2.5 million members in more than 25 markets nationally. Across the past 90 days, we have had some notable accomplishments, including expanding our partnership with Passport Health Plan to include risk adjustment and pharmacy benefits management services for its 280,000 members, welcoming Valence Health's partners to the Evolent network—including 400,000 MDWise members that go live in early 2017—and welcoming Banner Health and Hill Physicians Medical Group as new long-term operating partners."

Mr. Williams continued, "The addition of two highly sophisticated value-based care organizations in Banner Health and Hill Physicians Medical Group is a testament to the breadth and depth of the Evolent platform in its ability to help providers manage increasing clinical, operational and administrative complexity. Given all of the progress in the last quarter from a market development perspective, as well as consistent expansion across our current client portfolio, we enter 2017 with a high degree of visibility into continued strong revenue growth consistent with our long-term objectives."

Financial Results of Evolent Health, Inc.

Evolent Health, Inc. completed a reorganization of its corporate structure on June 4, 2015 (the "Reorganization"), in connection with the initial public offering of its Class A common stock ("IPO"). Prior to the Reorganization, Evolent Health, Inc. had no operations. As a result, the financial statements of Evolent Health, Inc. for the nine months ended September 30, 2015, do not reflect a complete view of the operational results for that period. In order to provide consistent and comparable metrics for the periods before and after June 4, 2015, the adjusted results of Evolent Health, Inc. presented and discussed in this release reflect the Reorganization as if it had occurred on January 1, 2015, and therefore include the results of Evolent Health LLC for the entire nine month period ended September 30, 2015.

The adjusted results also include certain other adjustments. See "Financial Statement Presentation" and "Non-GAAP Financial Measures" for more information.

Reported Results

Evolent Health, Inc. reported the following United States of America generally accepted accounting principles ("GAAP") results:

Revenue of $60.2 million and $40.4 million for the three months ended September 30, 2016 and 2015, respectively, an increase of 49.0%;

• Cost of revenue of $33.9 million and $24.8 million for the three months ended September 30, 2016 and 2015, respectively, an increase of 36.9%;
• Net income (loss) attributable to Evolent Health, Inc. of $(11.2) million and $(12.0) million for the three months ended September 30, 2016 and 2015, respectively;
• Earnings (loss) available for common shareholders, basic and diluted, of $(11.2) million and $(12.0) million for the three months ended September 30, 2016 and 2015, respectively;
• Earnings (loss) available for common shareholders, per basic and diluted share, of $(0.26) and $(0.29)for the three months ended September 30, 2016 and 2015, respectively.

Total cash, cash equivalents and investments as of September 30, 2016, were $159.5 million.

In addition to closing the previously announced acquisition of Valence Health, the Company completed the acquisition of Aldera Holdings, Inc. ("Aldera") on November 1, 2016. Aldera is the primary software provider for the Valence Health TPA platform.

Adjusted Results

Adjusted Revenue of $60.2 million and $43.3 million for the three months ended September 30, 2016 and 2015, respectively, an increase of 39.1%;

• Adjusted Cost of Revenue of $33.7 million and $24.4 million for the three months ended September 30, 2016 and 2015, respectively, an increase of 38.4%;
• Adjusted EBITDA of $(3.1) million and $(6.7) million for the three months ended September 30, 2016 and 2015, respectively;
• Adjusted Loss Available for Class A and Class B Shareholders of $(6.6) million and $(9.6) million for the three months ended September 30, 2016 and 2015, respectively; and
• Adjusted Loss per Share Available for Class A and Class B Shareholders of $(0.11) and $(0.16) for the three months ended September 30, 2016 and 2015, respectively.

Business Outlook

The fourth quarter will be the first time that we will include the results of Valence and Aldera. Our results will reflect a full quarter of Valence operations and Aldera operations subsequent to November 1st. For the fourth quarter, we are forecasting Adjusted Revenue to be in the range of approximately $84.0 million to $86.0 millionand Adjusted EBITDA to be in the range of approximately $(9.5) million to $(7.5) million. To break it down further, for the core Evolent business, we are maintaining our previously provided Adjusted Revenue guidance for the fourth quarter of approximately $60.0 million to $61.0 million and we are modestly revising our Adjusted EBITDA forecast from a range of approximately $(5.5) million to $(4.5) million to a range of approximately $(5.0) million to $(4.0) million. Additionally, the combined results of Valence and Aldera are forecasted to produce Adjusted Revenue in the range of approximately $24.0 million to $25.0 million, which includes revenue associated with certain state co-operatives that we do not expect to retain as customers in 2017, as well as approximately $1.0 million from Aldera. Adjusted EBITDA for the combined results of Valence and Aldera is forecasted to be in the range of approximately $(4.5) million to $(3.5) million. Aldera is not expected to impact Adjusted EBITDA in the quarter. The Adjusted EBITDA forecast for Valence includes approximately $2.0 millionof expenses, without corresponding incremental revenue, associated with new clients that go live at the beginning of 2017.

Our fourth quarter guidance, combined with our year-to-date September results, translates to the following full-year guidance: Adjusted Revenue in the range of approximately $250.0 million to $252.0 million and Adjusted EBITDA in the range of approximately $(23.0) million to $(21.0) million.

We do not provide separate reconciliations for Adjusted Revenue and Adjusted EBITDA for the core Evolent business, or the Valence and Aldera acquired entities due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including purchase accounting adjustments, transaction costs, and provision/benefit for income taxes at the relevant entity level, the amount of which could be significant.

This "Business Outlook" section contains forward-looking statements, and actual results may differ materially. Factors that may cause actual results to differ materially from our current expectations are set forth in "Forward Looking Statements - Cautionary Language" and Evolent Health, Inc.'s filings with the Securities and Exchange Commission ("SEC").

About Evolent Health

Evolent Health partners with leading health systems to drive value-based care transformation. By providing clinical, analytical and financial capabilities, Evolent Health helps physicians and health systems achieve superior quality and cost results. Evolent Health's approach breaks down barriers, aligns incentives and powers a new model of care delivery resulting in meaningful alignment between providers, payers, physicians and patients. Learn more at: www.evolenthealth.com.