Evolent Health (EVH) FY2025 10-K Risk Factors: 6 New, 11 Dropped

What the changes say

Customer concentration shifted with Molina now representing 25.7 percent of revenue.
Total indebtedness rose to $934.0 million.
Goodwill and intangible assets declined to $694.5 million and $584.9 million.

What changed since the prior 10-K

New

NewRisks Relating to Our Business and Strategy
adversely affect our ongoing revenues, financial results (including potential impairments), the collectability of our accounts receivable and our bad debt reserves and net income (loss)
Our contracts are not guaranteed and can be terminated for convenience or performance failures, impacting our revenues and accounts receivable.
NewRisks Relating to Our Business and Strategy
cause us to reduce our rates. A reduction in performance-based contract rates which are not accompanied by a reduction in covered services or expected underlying care trends could result in a decrease of our profitability and operating margins
We face rate pressure in performance-based contracts, particularly in oncology and cardiovascular, without corresponding cost reductions.
NewRisks Relating to Our Industry and Market
We face intense competition, which could limit our ability to maintain or expand market share within our industry, and if we do not maintain or expand our market share our business and operating results will be harmed
We face intense competition in our fragmented market from well-financed companies offering rapidly evolving technology.
NewRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
and maintenance costs. In addition, if our data suppliers choose to discontinue support of the licensed technology in the future, we might not be able to modify or adapt our own solutions
We rely heavily on internet infrastructure, data centers, and third-party suppliers whose failures could disrupt our cloud-based solutions.
NewRisks Relating to Indebtedness
We have significant debt and other obligations, which could adversely affect our financial health and our ability to obtain financing in the future, and to react to changes in our business
We have $934.0 million of outstanding indebtedness as of December 31, 2025, which limits our financial flexibility and growth.
NewRisks Relating to Ownership of Our Class A Common Stock
Our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limited
Our net operating loss carryforwards and tax attributes may be limited if we experience an ownership change under Section 382.

Dropped

DroppedRisks Relating to Our Business and Strategy
original partner contracts and consequently have and could negatively impact our revenues, financial results (including potential impairments), business and prospects
DroppedRisks Relating to Our Business and Strategy
Exclusivity and right of first refusal clauses in some of our partner and founder contracts may prohibit us from partnering with certain other providers in the future, and as a result may limit our growth
Dependence on a limited number of partners and their creditworthiness.
DroppedRisks Relating to Our Industry and Market
The market for our solutions is fragmented, competitive and characterized by rapidly evolving technology standards, customer needs and the frequent introduction of new products and services. Our competitors range from smaller niche companies to large, well-financed and technologically-sophisticated entities
DroppedRisks Relating to Our Industry and Market
AI and replaced it with a new EO that directs Administration leaders to solicit stakeholder input and produce a new AI Action Plan in 2025 designed to promote AI innovation primarily. It may also begin to introduce some regulatory frameworks and guardrails
DroppedRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
unauthorized manner to third parties, or our intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide us with competitive advantages, which could result in costly redesign efforts, discontinuance of certain offerings or other competitive harm
DroppedRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed technology on reasonable terms or at all, or obtain similar technology from another source, our revenue and earnings could be adversely impacted
DroppedRisks Relating to Internal Control Over Financial Reporting and Other Financial Matters
If we identify material weaknesses in the future, we and our auditor may conclude that our internal control over financial reporting is not effective and we may be unable to produce timely and accurate financial statements, any of which could adversely impact our investors’ confidence and our stock price
DroppedRisks Relating to Internal Control Over Financial Reporting and Other Financial Matters
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis
DroppedRisks Relating to Indebtedness and our Series A Preferred Stock
We have $675.0 million of principal amount of indebtedness outstanding as of December 31, 2024. In addition, we have 175,000 shares of Series A Preferred Stock outstanding
DroppedRisks Relating to Ownership of Our Class A Common Stock
In connection with the consummation of the NIA acquisition, we issued 175,000 shares of Series A Preferred Stock to Ares (through one or more of its funds and managed accounts)
DroppedRisks Relating to Ownership of Our Class A Common Stock
The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments

Reworded

99% rewrittenRisks Relating to Our Industry and Market
The health care regulatory and political framework is uncertain and evolving
Updated regulatory references to point to Item 1 Business Regulation and noted ongoing state and federal focus on healthcare delivery.
66% rewrittenRisks Relating to Financial Matters
We have recorded a significant amount of goodwill, and we may never realize the full value of our intangible assets, causing us to record impairments that may negatively affect our results of operations
Updated goodwill and intangible asset figures to $694.5 million and $584.9 million as of December 31, 2025.
58% rewrittenRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
Any restrictions on our use of, or ability to license, data, or our failure to license data and integrate third-party technologies, could have a material adverse effect on our business, financial condition and results of operations
Maintained core third-party data and technology license risks without material textual alterations.
51% rewrittenRisks Relating to Our Business and Strategy
Any integration may be unpredictable, or subject to delays or changed circumstances, and we and any targets may not perform in accordance with our expectations
Replaced the specific 2025 put option disclosure for a joint venture partner with broader joint venture liability and capital contribution risks.
51% rewrittenRisks Relating to Our Industry and Market
Our offerings could be subject to audits by CMS and other governmental payers and whistleblower claims under the False Claims Act
Retained CMS audit and False Claims Act risk disclosures without substantive textual changes.
37% rewrittenRisks Relating to Our Business and Strategy
We derive a significant portion of our revenues from our largest partners. The loss, termination or renegotiation of our relationship or contract with a significant partner, or multiple partners in the aggregate, could negatively impact our results
Updated top customer revenue concentrations for 2025, with Molina at 25.7 percent, Cook County at 16.4 percent, Florida Blue at 14.2 percent, and Centene at 12.2 percent, dropping Humana.
37% rewrittenRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business, financial condition and results of operations
Retained third-party intellectual property infringement claims and litigation risks without material textual changes.
36% rewrittenRisks Relating to Indebtedness
We are exposed to interest rate risk under the Credit Agreements, which could cause the Company’s debt service obligations to increase significantly
Removed references to Series A Preferred Stock when discussing SOFR-based interest rate risk under Credit Agreements.
Was: We are exposed to interest rate risk under the Credit Agreement and the terms of our Series A Preferred Stock, which could cause the Company’s debt service obligations to increase significantly
32% rewrittenRisks Relating to Ownership of Our Class A Common Stock
The market price of our Class A common stock could decline due to the large number of shares of Class A common stock issuable upon conversion of our convertible notes, or by sales or issuances of substantial amounts of our Class A common stock
Was: The market price of our Class A common stock could decline due to the large number of shares of Class A common stock issuable upon conversion of our convertible notes or the Series A Preferred Stock, or by sales or issuances of substantial amounts of our Class A common stock
26% rewrittenRisks Relating to Ownership of Our Class A Common Stock
We are and may become subject to litigation, proceedings, government inquiries, reviews, audits or investigations which could have a material adverse effect on our business, financial condition and results of operations
24% rewrittenRisks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology
Our business is subject to online security risks, and if we are unable to safeguard the security and privacy of confidential data, we may face significant liabilities and our reputation and business will be harmed
24% rewrittenRisks Relating to Our Business and Strategy
Failure to accurately predict our exposure under performance-based contracts could result in a reduction in profitability for our Performance Suite
21% rewrittenRisks Relating to Our Business and Strategy
Our revenues and the growth of our business rely, in part, on the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes
21% rewrittenRisks Relating to Ownership of Our Class A Common Stock
We expect that our stock price will be volatile and may fluctuate or decline significantly

All 57 risk factors

Headings as the filing states them, in filing order.

Risks Relating to Our Business and Strategy

01We derive a significant portion of our revenues from our largest partners. The loss, termination or renegotiation of our relationship or contract with a significant partner, or multiple partners in the aggregate, could negatively impact our results37% rewritten
02adversely affect our ongoing revenues, financial results (including potential impairments), the collectability of our accounts receivable and our bad debt reserves and net income (loss)New
03Our Performance Suite contracts involve risk sharing arrangements with partners, pursuant to which our revenues and profitability could be limited and negatively impacted
04Our revenues and the growth of our business rely, in part, on the growth and success of our partners and certain revenues from our engagements, which are difficult to predict and are subject to factors outside of our control, including governmental funding reductions and other policy changes21% rewritten
05Failure to accurately predict our exposure under performance-based contracts could result in a reduction in profitability for our Performance Suite24% rewritten
06cause us to reduce our rates. A reduction in performance-based contract rates which are not accompanied by a reduction in covered services or expected underlying care trends could result in a decrease of our profitability and operating marginsNew
07Failure by our customers to provide us with accurate and timely information could impact our profitability
08We typically incur significant upfront costs in our partner relationships, and if we are unable to develop or grow these partner relationships over time, we are unlikely to recover these costs, and our operating results may suffer
09If we do not continue to attract new partners and successfully capture new opportunities with new or existing partners, we may not achieve our financial projections, and our results of operations would be harmed
10If we are unable to offer new and innovative products and services or our products and services fail to keep pace with advances in industry standards, technology and our partners’ needs, our partners may terminate or fail to renew their relationships with us and our revenue and results of operations may suffer
11If we are not able to maintain and enhance our reputation and brand recognition, our business and results of operations will be harmed
12If we lose key members of our management team or employees or are unable to attract and retain the employees we need, our compensation costs will increase and our business and operating results will be adversely affected
13We have made and entered into, and may in the future make and enter into, acquisitions, investments, alliances and joint ventures, which may be difficult to integrate, divert management resources, result in unanticipated costs or dilute our stockholders
14Any integration may be unpredictable, or subject to delays or changed circumstances, and we and any targets may not perform in accordance with our expectations51% rewritten
15If we fail to effectively manage our growth and cost structure, our business and results of operations could be harmed
16Our offshore support and professional services may prove difficult to manage or may not allow us to realize our cost reduction goals

Risks Relating to Our Industry and Market

17If the estimates and assumptions we use to determine the size of the target markets for our services are inaccurate, our future growth rate may be impacted and our business would be harmed
18Consolidation in the health care industry could have a material adverse effect on our business, financial condition and results of operations
19We face intense competition, which could limit our ability to maintain or expand market share within our industry, and if we do not maintain or expand our market share our business and operating results will be harmedNew
20Our offerings could be subject to audits by CMS and other governmental payers and whistleblower claims under the False Claims Act51% rewritten
21The health care regulatory and political framework is uncertain and evolving99% rewritten

Risks Related to Data Protection Privacy, Cybersecurity, Intellectual Property and Technology

22We are subject to data privacy and protection laws governing the collection, use, disclosure and security of health information, which may impose restrictions on the manner in which we access personal data and subject us to penalties if we are unable to fully comply with such laws
23Department of Health and Human Services. Failure to comply with the HITECH Act could result in fines and penalties that could have a material adverse effect on us
24Data loss or corruption due to failures or errors in our systems or service disruptions at our data centers may adversely affect our reputation and relationships with existing partners, which could have a negative impact on our business, financial condition and results of operations
25Our business is subject to online security risks, and if we are unable to safeguard the security and privacy of confidential data, we may face significant liabilities and our reputation and business will be harmed24% rewritten
26If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected
27Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business, financial condition and results of operations37% rewritten
28If we are unable to protect the confidentiality of our trade secrets, know-how and other proprietary information, the value of our technology and products could be adversely affected
29We depend on certain technologies that are licensed to us. We do not control the intellectual property rights covering these technologies and any loss of our rights to these technologies or the rights licensed to us could prevent us from developing and/or commercializing our products
30We face risks associated with our use of artificial intelligence and machine learning models
31Our use of “open-source” software could adversely affect our ability to offer our services and subject us to possible litigation
32We rely on third-party vendors to host and maintain our technology platform
33Any restrictions on our use of, or ability to license, data, or our failure to license data and integrate third-party technologies, could have a material adverse effect on our business, financial condition and results of operations58% rewritten
34and maintenance costs. In addition, if our data suppliers choose to discontinue support of the licensed technology in the future, we might not be able to modify or adapt our own solutionsNew

Risks Relating to Financial Matters

35We have experienced net losses in the past and we may not achieve profitability in the future
36We have recorded a significant amount of goodwill, and we may never realize the full value of our intangible assets, causing us to record impairments that may negatively affect our results of operations66% rewritten

Risks Relating to Our Former Up-C Structure

37We are required to pay certain of our pre-IPO investors for certain tax benefits we may claim in the future, and these amounts are expected to be material
38We will not be reimbursed for any payments made under the TRA in the event that any tax benefits are disallowed
39We may not be able to realize all or a portion of the tax benefits that resulted from the exchanges of Class B common units for our Class A common stock or from the utilization of NOLs previously held by Evolent Health Holdings and an affiliate of TPG and from payments made under the TRA
40In certain cases, payments by us under the TRA may be accelerated or significantly exceed the tax benefits we realize in respect of the tax attributes subject to the TRA
41The agreements between us and certain of our pre-IPO investors were made in the context of an affiliated relationship and may contain different terms than comparable agreements with unaffiliated third parties

Risks Relating to Indebtedness

42We may need to obtain additional financing which may not be available or, if it is available, may result in a reduction in the ownership of our stockholders
43The conditional conversion feature of the 2029 Notes and 2031 Notes, if triggered, may adversely affect our financial condition and operating results
44Changes in the accounting treatment for convertible debt securities that may be settled in cash, such as the 2029 Notes and the 2031 Notes, could have a material effect on our reported financial results
45We are exposed to interest rate risk under the Credit Agreements, which could cause the Company’s debt service obligations to increase significantly36% rewritten
46We have significant debt and other obligations, which could adversely affect our financial health and our ability to obtain financing in the future, and to react to changes in our businessNew
47Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to service our debt and make necessary capital expenditures
48Restrictive covenants in our Credit Agreements may interfere with our ability to access our revolving credit facilities, or to obtain new financing or to engage in other business activities

Risks Relating to Ownership of Our Class A Common Stock

49We expect that our stock price will be volatile and may fluctuate or decline significantly21% rewritten
50The market price of our Class A common stock could decline due to the large number of shares of Class A common stock issuable upon conversion of our convertible notes, or by sales or issuances of substantial amounts of our Class A common stock32% rewritten
51Some provisions of Delaware law, our second amended and restated certificate of incorporation, as amended and our third amended and restated by-laws and certain of our contracts may deter third parties from acquiring us
52We do not anticipate paying any cash dividends on our Class A common stock in the foreseeable future
53We are and may become subject to litigation, proceedings, government inquiries, reviews, audits or investigations which could have a material adverse effect on our business, financial condition and results of operations26% rewritten
54Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have adversely affected, and could in the future, adversely affect our business and the business of our partners
55The costs of compliance with sustainability or other environmental, social responsibility or governance laws, regulations, or policies, including investor and client-driven policies and standards, could adversely affect our business
56Inflationary pressures, rising consumer costs and the current economic environment may have a negative effect on our margins, profitability and results of operations
57Our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limitedNew

Other Evolent Health 10-Ks

FY2024 10-K risk factors
62 risks
Evolent Health relies heavily on a few large partners and carries substantial goodwill and intangible assets on its balance sheet. Its Performance Suite involves financial risk-sharing, while information accuracy from customers remains critical.
Filed Feb 21, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.