Title

Presentation

Evolent Health, Inc. beats earnings expectations. Reported EPS is $-0.02, expectations were $-0.05.

Operator: Welcome to the Evolent Earnings Conference Call for the First Quarter ended March 31, 2026. As a reminder, this conference call is being recorded. Your hosts for the call today from Evolent are Seth Blackley, Chief Executive Officer; and Mario Ramos, Chief Financial Officer. This call will be archived and available later this evening and for the next week via the webcast on the company’s website in the section titled Investor Relations. This conference call will contain forward-looking statements under the U.S. federal laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the company’s reports that are filed with the Securities and Exchange Commission, including cautionary statements included in our current and periodic filings.

For additional information on the company’s results and outlook, please refer to our third quarter press release issued earlier today. Finally, as a reminder, reconciliations of non-GAAP measures discussed during today’s call to the most direct comparable GAAP measures are available in the summary presentation available in the Investor Relations section of our website or in the company’s press release issued today and posted on the Investor Relations website, ir.evolent.com, and the Form 8-K filed by the company with the SEC earlier today. In addition to reconciliations, we provide details on the numbers and operating metrics for the quarter in both our press release and supplemental investor presentation. And now I will turn the call over to Evolent’s CEO, Seth Blackley.

Please go ahead.

Seth Blackley: Good morning, and thank you for joining us. Today, Evolent reported strong first quarter results that were in line with our expectations. Our performance reflects the continued focus and discipline with which we are executing the plan we laid out to you on our call in February. For the quarter, Evolent reported total revenue of $496 million, representing 9% sequential growth versus Q4 2025, excluding the divestiture of Evolent Care Partners or ECP, and adjusted EBITDA of $22 million, consistent with our expectations and the outlook we provided in February. Our medical expense ratio or MER for Q1 2026 was 93%, improving 150 basis points versus Q4 2025, excluding ECP. This performance, we believe, underscores our disciplined execution and our belief in the growing importance and demand for Evolent solutions in the marketplace.

Looking ahead to the full year, we feel confident in our ability to continue delivering against our outlook and priorities. Accordingly, we are reiterating our 2026 revenue guidance range of $2.4 billion to $2.6 billion as well as our adjusted EBITDA guidance range of $110 million to $140 million and estimated MER will be approximately 93% for the full year. Mario will walk you through our financial results in more detail in a few moments, but I first want to touch on several key business highlights. Starting with our new Performance Suite launches, we had a successful launch with Aetna on January 1, supported by strong collaboration with the Aetna team. While it remains early, initial indicators are encouraging with our clinical intervention and provider engagement metrics above our internal targets for Q1.

We will have greater visibility into the performance over the course of the year, but we’re happy with the start. We’re also pleased to have launched with Highmark on May 1. We have had great collaboration with the Highmark team on the launch, and I will be excited to give you a broader update on Highmark in the coming quarters. Our pipeline for new business remains strong as we continue to see demand for our products, specifically in oncology. While the market has seen some positive developments this quarter, overall medical trend remains elevated for our plan partners and oncology, in particular, continues to be one of the most challenging categories for health plans to manage as they seek to balance quality outcomes with affordability. We believe Evolent is recognized as a leader in helping health plans manage both quality and cost for cancer care.

Our recent wins with marquee plans like Highmark and Aetna as well as our renewal rates with existing partners point to our market position today. At the core of our work in oncology are 2 simple principles: first and foremost, ensuring patients receive the very best care; and second, the cost of that care is thoughtfully managed. I often share with our partners that if I had a family member diagnosed with cancer, I’d absolutely want the Evolent clinical team to review the case. The clinical reality is that according to certain studies, up to 30% or more of cancer cases involve either an incorrect diagnosis or a suboptimal treatment plan prior to any second review, which is somewhat understandable when you consider, for example, that there are up to 32 different approvable regimens for a typical advanced metastatic non-small cell lung cancer case.

While some of this gap can be addressed through traditional utilization management, we believe to more fully close the gap, treating oncologists need to have ready access to the very latest evidence and data as well as the right financial incentives to select the best care plan for my family member or yours. Further, pairing our traditional oncology solution with consumer-facing solutions like our member navigation platform are critical to fully close the gap. And of course, we believe we’ve been able to show that when we help oncologists and patients pick the right care plan the first time, costs on average come down, a win-win for the patient and the system. As a result of all these dynamics, we’re increasingly seeing interest in our solution, and we’re addressing this market demand with both our technology and services solution and with our enhanced Performance Suite solution, which has narrow corridors and the protections we’ve shared with you on the last earnings calls.

Enhanced Performance Suite structure allows us to reduce some of our direct risk exposure while still offering guarantees to our clients. We believe this shift creates a more sustainable, attractive operating model for our clients, Evolent and our shareholders. In terms of new announcements, we have 2 new contracts to announce today. First, an existing Performance Suite client has signed a contract for our advanced imaging solution for 4.5 million lives across commercial, Medicaid and Medicare Advantage. We expect this contract to go live in Q3, subject to state regulatory approvals in certain states, and we view this agreement as further validation of our ability to cross-sell solutions into our existing client base. More broadly, we believe this new contract validates the nation’s leading payers are looking for a trusted partner, not just for our leading solution in oncology, but that there is value in having our company provide our services and technology for multiple integrated solutions.

Imaging, in particular, benefits from product integration given the importance of diagnostics for oncology, cardiology and musculoskeletal specialties. And second, in the Performance Suite, one of our national payer clients is expanding their existing oncology and cardiology solution in several new markets across commercial and Medicare Advantage. This expansion is expected to generate over $200 million of annual revenue and slated to go live in Q3, subject to regulatory approvals in certain states. We believe this new win is strategically important, reflecting growing client confidence in our platform and our ability to scale existing solutions across new populations. Similar to our other new Performance Suite launches, this oncology and cardiology expansion will run at higher MERs initially due to reserve building.

We had already incorporated this new expansion into our full year MER expectation, so this announcement does not change our outlook. With respect to our update on the exchange impact, we’ve seen declines in exchange membership in the Performance Suite as clients saw reduced membership in select markets as previously communicated over the last few quarters. On the specialty D&S side of the business, early indicators are that the exchange membership decline may be slightly lower than the 40% we had assumed, but the data is still coming in, and we expect better clarity around this by the end of Q2. For now, our guidance for the full year continues to take a cautious approach and assumes the 40% decline we referenced previously. Turning to our continued efforts around AI and automation.

We recently added a number of strong technology and data science players to our team, including naming Archie Mayani as our Chief Product Officer. Archie brings deep expertise scaling technology-enabled health care platforms and her leadership further strengthens our ability to execute against our product and automation road map. We continue to test automation initiatives while preserving and in many cases, enhancing the value we deliver to our customers and patients. Our ability to automatically approve authorizations through the use of technology and AI continues to expand and remains central to our goal of auto improving approximately 80% of authorization volume with the goal of making the process easier for providers and patients while driving down our internal operating costs.

Deployment of new AI models is accelerated, particularly within our imaging solution. Our initial rollouts have shown auto approval increases in the high teens on cases evaluated by these models and in some cases, up to 30%, all with minimal clinical value loss for our customers. Finally, touching on our capital structure. We ended the quarter with unrestricted cash of $142 million and net debt of $792 million. With no debt maturities until 2029, we continue to believe that we have the balance sheet strength to support near-term execution while maintaining a clear and credible path to deleveraging over the long term. To conclude, Evolent is off to a solid start in 2026. Our disciplined execution in Q1, expanding Performance Suite footprint and strong early momentum gives us confidence in our full year outlook.

Stepping back from the quarter and 2026, we believe there is a large long-term opportunity for Evolent that is supported by 2 major super cycles. First, despite the strength of our product and the opportunity to reduce variability in care and oncology care, Evolent today only manages approximately 10% of the oncology market. We believe this is due to 2 factors. One, we’ve only been accelerating our work in this area across the last 5 years. And two, we believe that approximately half of the market is still in-sourced by health plans. As costs and complexities to treat cancer diagnoses have continued to accelerate over the last 5 years, more plans are making the decision to outsource oncology management and upgrade to a more sophisticated partner like Evolent.

We believe this will further accelerate over the coming decade as the oncology drug pipeline continues to grow and complexity increases. As such, we expect to be able to meaningfully increase our market share, which in turn should provide a long-term growth opportunity for Evolent. The second super cycle is the massive opportunity that AI can provide in automating specialty reviews. I covered this topic earlier, so I’ll just add that our specialties outside of oncology care are especially well suited to automation, and we’re investing to be a market leader in the innovations necessary to reach the 80% automation threshold goal I referenced earlier. Taken together, we believe these 2 super cycles should help Evolent continue to meet our near-term commitments and expect them to fuel our long-term success.

With that, let me turn it over to Mario to dive into the quarter.

Mario Ramos: Thank you, Seth, and good morning, everyone. We delivered solid first quarter financial results that were in line with our expectations and consistent with the outlook we discussed on the Q4 call in February. Total revenue was $496 million, representing 9% growth versus Q4 2025, excluding ECP. In addition, adjusted EBITDA for the quarter was $22 million. Performance Suite revenue was $323 million, up 26% sequentially versus Q4 2025, excluding ECP, driven primarily by membership from our new Performance Suite launches, partially offset by exchange membership declines in select markets and market exits from clients rationalizing underperforming markets. Specialty Tech and Services revenue totaled $81 million, a decrease of 16% sequentially.

The lower revenue reflects not only actual exchange membership declines, but also includes our estimate of the revenue impact from additional disenrollment following the grace period expiration. We have contractual provisions with our specialty T&S clients that require us to return funds after members disenroll. Taken together, this total impact is in line with the 40% membership decline we have previously discussed. We expect to have better visibility into exchange membership by the end of Q2. The impact of exchange membership declines was partially offset by growth in Medicare Advantage membership and the launch of a new specialty for an existing client. Administrative services and cases revenue was $92 million, down 11% quarter-over-quarter, reflecting the expected termination of an administrative services client at the end of last year.

This decline was partially offset by better-than-expected membership growth from existing clients in the first quarter. Our medical expense ratio or MER for Q1 was 93%, improving approximately 150 basis points versus Q4 2025, excluding ECP. As a reminder, Q4 2025 MER was temporarily elevated due to out-of-period true-ups as we recognized a full year of savings shared with clients. Excluding this impact, we saw sequential improvement even though Q1 trend ran above expectations due to higher-than-anticipated prevalence in oncology in a few markets. These markets are almost exclusively exchange markets that experienced membership declines and acuity shifts. We expect the negative impact on our MER from higher prevalence will be retroactively addressed later in the year based on our contractual protections.

This cost pressure was partially offset by net favorable prior year development in Q1. Adjusted cost of revenue, excluding medical claims, but including medical device costs and adjusted SG&A totaled $173 million for the quarter. The variance versus our expectation was driven primarily by elevated exchange member servicing costs within Specialty T&S. This is because we are required to continue servicing members during the grace period even if they ultimately disenroll. This impact was partially offset by efficiency gains in our shared services organization and lower-than-budgeted vendor spend. We believe this exchange-related cost pressure to be temporary and to normalize as we see expected disenrollment in late Q2. We ended Q1 with $142 million in unrestricted cash and $792 million of net debt.

Cash decreased modestly from our Q4 balance, reflecting roughly $1 million of cash used in operating activities and $6 million of capital expenditures during the quarter. Operating cash flow includes the settlement of a onetime $15.5 million client overpayment that we highlighted in February’s earnings call. It also includes approximately $20 million of pass-through PBM proceeds that were received in Q1 with the corresponding payment occurring at the beginning of Q2. Excluding both the onetime client overpayment and the pass-through timing benefit, normalized operating cash flow for the quarter would have been approximately negative $6 million, which was in line with expectations. Turning to full year 2026 guidance, as Seth noted, we remain confident in our ability to deliver on our 2026 plan.

However, given we’re only days into the Highmark launch and do not yet have certainty around the ultimate exchange disenrollment impact, we are reiterating our 2026 guidance, revenue range of $2.4 billion to $2.6 billion and adjusted EBITDA range of $110 million to $140 million. We continue to expect MER for the full year to be approximately 93%. In the Performance Suite, our revenue guidance assumes the continued ramp of our new launches, offset by the membership declines we experienced in Q1 from exchange membership and market exits. In Specialty P&S, our revenue guidance assumes the approximately 40% decline in exchange membership we referenced earlier. As noted, the impact of both the actual and the expected incremental disenrollment required to reach the 40% decline is reflected in Q1 revenue.

We should have better visibility into the final outcome of this dynamic by the end of Q2. On MER, we continue to expect MER to increase throughout the year and peak in Q3 as we see the full impact of the Highmark launch. As discussed, this reflects elevated reserves consistent with a new contract combined with normal seasonality. From there, we expect MER to improve steadily through year-end as the impact of our clinical programs and favorable contractual true-ups flow through in the second half of the year. Finally, on the quarterly adjusted EBITDA cadence, we believe Q2 will be in line with Q1 due to typical seasonality with a $10 million to $15 million sequential improvement per quarter in both Q3 and Q4. A few additional items related to our full year outlook.

We continue to expect adjusted cost of revenue, excluding medical claims, but including medical device costs plus adjusted SG&A of approximately $675 million for the year. The elevated Q1 cost pressure related to exchange volumes is expected to moderate, and our efficiency initiatives are tracking on plan. We continue to expect cash flow from operations of $10 million to $20 million for the year after approximately $60 million of annual cash interest expense. We continue to also expect $25 million to $30 million in software development and capital expenditures for 2026. To wrap up, we are pleased with our first quarter execution and the underlying trends we’re seeing across the business. While we’re still in the early stages of the Highmark ramp and continue to monitor exchange dynamics, our Q1 performance reinforces our confidence in the plan we laid out and our ability to deliver on our full year priorities.

We are reiterating our 2026 guidance and remain focused on disciplined execution, operating efficiency and delivering value for our clients and shareholders. With that, operator, please open the line for questions.

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Operator: [Operator Instructions] Our first question will come from John Stansel with JPMorgan.

John Stansel: Maybe a bigger picture one here. I think we’ve heard commentary in the space around not just relaxation of prior authorizations, but standardization across payers and prior authorizations. I guess as we think about the longer-term outlook and how payers are approaching complex care and prior authorizations in general, how are you thinking about that kind of compare and contrast the near-term demand that you see with a robust pipeline and some of those changes that may come down the pipe?

Seth Blackley: Yes. Great, John, thank you for that question. I’d make, I guess, 3 comments on that. Number one, we’re big fans of the standardization that’s happening. I think it’s the right answer for patients and for physicians and it’s very consistent with what you heard us doing with the application of AI to improve as much as possible. So that’s kind of point one. I think point two, I think it’s important for you guys to have the framing around sort of Evolent is a bit of a tale of 2 cities, meaning vast majority of Evolent’s growth is coming in oncology, but about 95% of Evolent’s approval volume, like the factory that we have to go through to do the work is not oncology. It’s all of our other specialties because there’s so much volume in things like imaging or cardiology, right?

So — and I think oncology, in particular, right, is so much more complex. It’s going to be harder to standardize. That example of 32 approvable regimens, the pace of scientific innovation, there’s 300 journal articles a month getting published in oncology. So I think the 95-5 rule of the 95 or whatever the example is for the entire industry being as automated as possible, fantastic. Good for everybody, good for us, good for our cost, good for patients, everybody. I think the 5 in our example that is the oncology is where our growth is coming from, where you need such deep clinical expertise and where you’re going to need a little bit more of a human touch to help manage this because it’s not — in most cases, these things are not something that is subject to UM.

A lot of these interventions we’re making are about nudges or incentives or a conversation with the treating oncologists. And then the third thing is just to reiterate it because I think the industry needs this narrative. AI is amazing for doing the automation. We and nobody is ever going to be using AI to provide an adverse determination or a suggestion for a different plan. That’s where a human has to come in.

Operator: Our next question comes from Charles Rhyee with TD Cowen.

Lucas Romanski: This is Lucas on for Charles. Congrats on a good quarter. Your guys’ 1Q MER ratio was better than our estimate. Can you talk about what you saw in the quarter from an oncology and cardiology perspective? And then also, did you guys see any benefit in the quarter related to heavy weather storms in January and February?

Mario Ramos: Great question. On oncology and cardiology, I think we’re pretty much where we thought we would be very close. The exception is a couple of markets where we had higher prevalence because membership dropped a bit, as I had in my comments, membership dropped a little bit. And as a result, acuity was a bit higher than expected. But again, as we’ve been talking about for the last few quarters, that’s exactly the type of contractual protection that we have. So the good news is even though we absorbed a little bit of higher MER in those couple of markets, we expect to make up for that via these contractual protections later in the year.

Seth Blackley: Yes. And then on the weather thing, I do not think that’s material for us. I mean people for elective things, I think it’s more material for things like oncology treatment, people tend to figure out a way to get there and get it done.

Operator: Our next question comes from Jared Haase with William Blair.

Jared Haase: Seth, I think you talked a little bit about the early indicators being good with the launch with Aetna. And I think you mentioned some of the metrics around clinical intervention and provider engagement are maybe tracking above expectations. And I just wanted to double-click on that. I’m curious if there’s anything unique to that partner specifically or just perhaps it’s an indicator that just as you sign more and more of these deals over the years, you’re just getting more efficient with launches. And I wonder if you could then extrapolate that into maybe a faster margin ramp with some of these new Performance Suite engagements.

Seth Blackley: Yes. Thank you for the question. Yes. Look, I think the metric we really look at is this clinical intervention rate, which think of that as how often are we engaging successfully around our pathways, right? And that should be the leading indicator of the value that we create. I do think it’s largely attributable to the teams doing a great job, and that’s the Aetna team and the Evolent team together. A lot of credit to Dan and our team for the work we’re doing to execute on our clinical team. And so I do think it’s about execution. As to whether that then translates into a faster margin ramp, I don’t think we’re ready to go there yet, but I do feel like the operations Human team is doing a great job.

Operator: Our next question comes from Kevin Caliendo with UBS.

Kevin Caliendo: I’ve got 2. In terms of the 2 new contracts, I appreciate that, and congrats on each. How should we think about the potential earnings contribution ramp from those? Just given there’s a sort of new diligence around reserving for these and the likes, there used to be a fact pattern around how to think about the profitability ramp as the new contract came on board over 1, 2, 3 years. I’m just wondering if those ramps, and I understand the 2 contracts aren’t the same, but how to think about the contribution expectations from each? And then the second one is just to follow up on the prior auth questions. Did anything change in 1Q? Are there any different behaviors happening in the beginning of 2026 versus what was happening in 2025? Is there a movement to more biosimilars? Or are you seeing anything in the marketplace? Are you guys doing anything different that could be affecting trends and particularly in oncology?

Seth Blackley: Great. Mario, I will start with the build, and then I’ll come back to around your…

Mario Ramos: Kevin. No change to what we’ve discussed in the past. There is a ramp to ability, which one of the contracts is a risk contract. So it does impact the short term. Nothing that we haven’t accounted for in our guidance and our commentary. But again, I think it just creates more potential for next year as we ramp up profitability. The other contract, it’s — there is a gain share component. So there’s a little bit of an impact also in the beginning. But again, nothing different than what we’ve accounted for and discussed with you guys for the year. So basically, no news in that regard. We still are working through different types of structures actually going forward. We may be able to make some changes and tweaks where we can improve the ramp-up. But for now, it’s what we have discussed with you guys in the past. Do you want to address?

Seth Blackley: Yes. Yes. Look, on the your question on is anything new this quarter versus a year ago. Look, I’ll reiterate what I said earlier. It is a bit of a tale of 2 cities where in the categories of specialties that are standardizable, simpler, more rote, we’re all moving aggressively to doing as much as we can using technology to quickly authorize and automate that work, which, again, I think if I’m a patient, to my family member, it is exactly what I want. I want it simple, I want it fast, I want it done. It’s good for the patient. It’s good for the doctor. It’s good for the health plan. It’s good for Evolent’s cost structure if we’re able to do that, right? So that’s new and different across the last years ramping, and we’re really supportive of it and trying to lead in that area.

In oncology, which I think was maybe even more of your question, I think there, it really is exactly what it’s been now for 5 years, and I think it’s going to be for the next 5 or 10, which is incredible pace of innovation. Even as some things may go biosimilar, KEYTRUDA is going to go biosimilar in a couple of years. There’s some cutaneous version. There are new applications. There’s gene therapy, there’s cell therapy. I think if you go do your market checks, call 10 payers and ask them what their #1 cost issue is, it’s going to be Part B drugs, particularly in oncology. And I think that is going to continue to be the case for a long time. These are things that are going to be harder to standardize. They’re approvable, right, which this is not a UM thing.

This is about using evidence and incentives and scorecarding to get to the right answer, and that’s really what we do.

Operator: Our next question comes from Jessica Tassan with Piper Sandler.

Jessica Tassan: Apologies if you’ve been through this already. But I guess just any perspective on kind of the competitive landscape given Cigna’s decision to pursue strategic alternatives on eviCore? Just any thoughts on why a large competitor might want to get out of the market and how that might impact the competitive landscape? And then I guess — again, I apologize if you’ve been through this, but just can you elaborate a little bit on the elevated oncology trend you’re seeing? Like is that exclusively in exchange? And then can you comment just a little bit on trends within Medicare relative to your expectations?

Seth Blackley: Yes. James, on your first question, obviously, we wouldn’t comment on any specific situation, but I do think — I’ll say 2 things. One, I think there is a major long-term trend that is happening, and I talked about it earlier, where I think generally, the plans are going to want to look to third-party specialists to do a lot of this work. And I think the third-party part of that is important, like some separation, right? But the specialist part is probably even more important, which is the level of sophistication required to do this kind of work, whether it’s the clinical sophistication or the AI sophistication, I think, is where the industry is headed generically. So I think that’s number one. And number two, I’ll just say generally Evolent, this is what we do.

And I think we’re here to be a long-term part of the answer for the industry to help solve this problem to balance how do you manage good things for patients and providers and the best quality, first and foremost, but also help moderate the cost pressure, which will translate into rates for consumers and everything else. So I think we view these types of things as positive and in generally, the direction of travel over the next kind of 5 to 10 years.

Mario Ramos: Yes. And on the trend, Jess, as I said, the only elevated sort of trend that we’ve seen has been isolated to a couple of markets where we saw membership drops and acuity went up significantly. So it did not appear to be from utilization or any other factor other than prevalence. So other than that, I think things — the trend has been as expected, fairly stable. And just to reiterate, that prevalence in those couple of markets are — is exactly the type of protection that we have in our contracts going forward.

Operator: Our next question comes from Jeff Garro with Stephens.

Sahil Veeramoney: It’s Sahil on for Jeff. I wanted to follow up on the new business wins, specifically the new advanced imaging contract with the existing Performance Suite client. I think historically, you’ve described imaging as the entry point that drives cross-sell Performance Suite. I think it’s like novel to see sort of the reverse direction this quarter with the PS client adding imaging. So anything to call out on what this client did or saw in consolidating on to more of your unified platform? And is there any sort of recent innovation in the imaging suite that could potentially reinvigorate it as stand-alone growth going forward?

Seth Blackley: Yes. I think a thoughtful question. I think you’re right. It’s a first for us. Look, I think that it highlights a couple of things that you’re pointing out. I think one is that if I’m a health plan and I’m trying to manage my cost and quality and patient experience, I’ve got today dozens and dozens and dozens of partners. And I’d rather have fewer partners to do this kind of work rather than more niche partners. So integration is generally good. I think imaging in particular, usually when you’re doing a scan, it’s of a tumor or of a bone or of a heart and therefore, our ability to integrate across those things is valuable. That is a little bit new. We’re going to be doing more and more and more in that area over time. And so I think that component is also benefits from the work we’re doing. So we’re really excited about this partnership. I hope to see more of these, and it’s a good step for us.

Operator: Our next question comes from Matthew Gillmore with KeyBanc.

Zachary Haggerty: This is Zach on for Matt. So looking at the reserve to claims table in the slide deck, it looks like there was a favorable revenue true-up of $12 million. Can you remind us what causes the revenue true-ups and give us some context for the $12 million that was booked in the quarter?

Mario Ramos: Yes. The revenue true-up is actually — it brings revenue down. So it’s unfavorable. It kind of nets out with the claims favorability. And there are a number of factors, but typically when we reserve at the end of the year. We’re obviously making estimates on both the revenue side and the claims side because we don’t actually have claims information. So everybody typically focuses on IBNR on the claims. But from time to time, if claims come in lower than we expected in some markets, we actually have a downward revision to the revenue side, and that’s what’s causing it in the quarter.

Operator: Our next question comes from David Larsen with BTIG.

David Larsen: Can you just talk about the actual revenue in the quarter and your expectations for the remainder of the year? I mean revenue came in well below our expectations. I’ll take the EBITDA beat any time. So I like the higher quality revenue, but revenue was low relative to our expectations and you reaffirmed the full year guide. I think that calls for about 30% year-over-year revenue growth. Just color there, like maybe by division or by plan would be very helpful.

Mario Ramos: Sure. I think it’s a spread issue. Obviously, we spent a lot of time trying to explain what our EBITDA ramp was. It’s a little harder with revenue because of all the launches, in particular, the very big Highmark launch, which is why we’re not moving off of our revenue guidance for the year. I think last time, we had talked about the fact that Aetna as they were exiting some markets, our expectation was the membership was going to be a little bit lower than what we had talked about before. That has actually been the case. So that pushed down the first quarter revenue. But we also talked about the fact that Highmark had been coming in higher from a membership expectation than what we expected. So that’s exactly how it’s playing out.

That plus these couple of very, frankly, attractive and big deals that we now are able to announce, which we really couldn’t get into prior caused a little bit of a challenge in walking everybody through what the revenue progression was for the year. But I think the takeaway is even though the headline number might be a little lower than what consensus were, it really — nothing has changed. If anything, we feel even more confident about the rest of the year. As I said, we’re not ready to make any changes to the guidance just because of the very meaningful impacts that we’re going to see over the next 2 months, High Mark and the exchange disenrollment. But I would just say that there’s a little bit of timing in the first quarter that was really a lot harder to model.

But hopefully, it’s clearer now where we’re going for the rest of the year.

Operator: Our next question comes from Jailendra Singh with Truist Securities.

Eduardo Ron: This is Eduardo on for Jailendra. You touched on the prior period revenue portion, but can you speak to the $23 million favorable PYD in the quarter? Was that focused on oncology or cardiology parts of the business? And I guess, how much of that, I guess, relative to the revenue adjustment flow through to EBITDA in the quarter?

Mario Ramos: Yes. So you got to net out the revenue and the claims PYD. So on a net basis, it was a little bit higher than a $10 million favorable impact for the quarter. That’s a little higher than the same quarter last year. But for the year, we’re not expecting that number to change significantly, and it’s very consistent with the prior year, 2025 in particular. On the claims side, the PYD was roughly split a little bit higher on oncology than in cardiology. Again, some very specific markets where as we saw claims run out coming in, they were a little bit better than what we had anticipated and had reserved for. But very consistent with the commentary that we’ve given you guys over the last few quarters where either trend has been coming down and being stable or in select spots where trend has popped up, we’ve had contractual protections.

And sometimes it’s a little harder to determine exactly what the adjustment should be during the quarter. And that’s a little bit of what you’re seeing there as claims came in, we saw favorability and we’re ready to adjust that in the first quarter.

Operator: This concludes our question-and-answer session. I would like to turn the call back over to Seth Blackley for any closing remarks.

Seth Blackley: Thank you for the time this morning. We look forward to connecting over the next week or 2 with everybody. Thanks a lot.

Mario Ramos: Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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