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Welcome to the Evolent Earnings Conference Call for the Quarter and Year-Ended December 31, 2023. As a reminder, this conference call is being recorded. Host for the call today from Evolent are Seth Blackley, Chief Executive Officer; and John Johnson, Chief Financial Officer. The call will be archived and available later this evening and for next week via the webcast on the company's website in the section titled Investor Relations. I'll now hand the call over to Seth Frank, Evolent's Vice President of Investor Relations.

Thank you, and good evening. 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 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 fourth 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 section of the company's website ir.evolenthealth.com and the Form 8-K filed by the company with the SEC earlier today. And now, I'll turn the call over to Evolent's CEO, Seth Blackley.

Good evening, and thanks for joining us. I'm excited to share with you our results for the fourth quarter and the full-year 2023. We had another outstanding year achieving our profitability, cash flow, new business growth and operating goals for all of our stakeholders, and we remain focused on our mission of improving care for people with complex conditions. Looking ahead, today, we're providing a strong financial outlook for 2024, as well as reiterating confidence in our $300 million adjusted EBITDA run rate exit target for 2024. In addition, we'll be providing a detailed bridge between our Q4 2023 results and our $300 million run rate adjusted EBITDA target. For all the details on the numbers and metrics, please review the press release and our supplemental investor presentation on the IR website as mentioned earlier. John and I will focus our comments on specific call outs that merit comment or context from us, so we have plenty of time for your questions at the end. With that, let's move to the results. Fourth quarter revenue totaled $556.1 million, growth of 45.4% year-over-year, at the top end of our guidance range. Adjusted EBITDA totaled $48.1 million, growth of 48.9%, and at the midpoint of our guide. Evolent's core specialty care offerings drove 88% of total revenue in the quarter. Year-over-year, specialty care revenue grew approximately 74% versus a year ago, with the NIA acquisition contributing approximately 19% to reported growth. The balance of 55% came from organic growth. Cash flow is a critical component of our sustainable financial model, and we ended the fourth quarter in 2024 in a strong position ahead of where we anticipated due to exceptionally strong cash collections. Cash flow from operations in the quarter totaled $89.4 million and we ended the year with $193 million of cash on hand. Our financial goal for 2023 was to increase our cash balance by more than $120 million before interest, debt activity, acquisition costs, earnouts and dividends. And with the strong Q4, we ended the year at over $175 million on this metric. Our average product members grew to almost $80 million for the quarter. All of this growth is despite the Medicaid redeterminations headwind we've experienced in the back half of 2023. Before we get into some of our new growth announcements, let me say a few words about 2023 overall. For the year, we ended with revenue of $1.96 billion, 45% year-over-year growth. Adjusted EBITDA for 2023 totaled $194.7 million, both at the high-end of our initial guidance from a year ago. I'm incredibly proud of our team of approximately 5,000 committed, mission-driven professionals worldwide who work so hard to help us collectively deliver what we promised to both shareholders and customers during a year when many in the industry faced headwinds. As we've been communicating for some time, we believe the challenges in managed care represent opportunities for Evolent given our unique value proposition and low penetration within our addressable market. Going forward, we continue to be focused on the principles of value creation that John, the team and I have used to guide the company for the last three and a half years. As a reminder, those principles are: One, strong organic growth. Two, grow in profitability. And three, disciplined capital allocation. On organic growth, we have consistently outperformed our new business targets, announcing an average of 11 new partners annually for the past three years versus a target of six to eight per year. This statistic has been a useful directional indicator, but has also underrepresented our growth. For example, counting important same store expansions, which have become even more important since the NIA acquisition, we had 12 new revenue contracts in 2023 alone versus nine using the operating partner metric. Given that context, beginning with this year, we are simplifying our disclosure and plan to count and track all material new revenue agreements, whether with new or existing partners, and we'll refer to this metric today and going forward as new revenue agreements. So far in 2024, we have added four of these agreements, two we announced at the January Investor Conference, and two additional new revenue agreements today. Today, we are announcing Evolent's first enterprise oncology technology and services agreement, which we recently signed with an existing health plan client. Specifically, we will now be providing radiation and surgical oncology management services to add to the medical oncology services we are already providing to this health plan, which is one of the 10 largest health plans in the country. We believe this is an important agreement as it provides a path for us to bundle our radiation and surgical management capabilities and with our medical oncology in the Technology and Services Suite, creating a PMPM expansion opportunity for the future. For example, surgical oncology costs represent approximately 17% of the PMPM of the cost of oncology in a commercial population according to a recent JAMA study. Most importantly, we believe bundling these services will allow us to provide better, more holistic care to patients. We expect this new agreement announced today to add approximately $10 million in annual technology and services revenue once at full run rate in the third quarter of this year. Our second new revenue agreement disclosed today is for the Performance Suite. As we work to thoughtfully expand our risk model across a broader base of specialties, we rolled out Evolent's first Performance Suite contract for advanced imaging during the fourth quarter of 2023 with a legacy NIA client and Medicaid. This is a large health plan with a presence in multiple states. This Performance Suite arrangement, which we anticipate will contribute over $80 million in total annual revenue is designed with many of the same features as our proven models in oncology and cardiology. This Performance Suite arrangement builds upon an already successful risk sharing relationship that was in place at the time of the NIA acquisition, expanding it into our Performance Suite model. It's important to understand that the cost and scope of care in this arrangement are specific to outpatient advanced imaging, such as MRIs and PET scans in Medicaid. As a result, the PMPMs will be lower than in oncology or cardiology, but we expect with the same general margin profile as our existing Performance Suite business. Finally, as a reminder, we announced two new revenue agreements in January. The first was a multi-product NIA cross-sell to an existing Evolent health plan client in the Northeast. And the second, a new logo health plan in the Southwest with over 100,000 unique lives in commercial and Medicare advantage who will implement our oncology and advanced care planning services through our Technology and Services platform. So, with four new revenue agreements already signed, we're off to a great start with respect to our organic growth goals. Our pipeline also remains strong. During 2023, we began to see progress because of the NIA acquisition that we believe increases Evolent's qualifications and competitiveness for large RFPs. We believe Evolent is positioned to have more conversations with key decision makers both within existing legacy NIA clients and potential new customers. More importantly, health plans and risk bearing physician groups are increasingly turning to us to help manage the cost and quality of specialty care. We have found that many plans have increased their focus on specialty care management over the past six months, some citing the V28 Risk Adjustment changes and others because of general utilization pressures. We're seeing organizations placing particular importance on engaging partners that can help manage these costs in ways that improve patient experience and at the same time will not increase friction with providers. We believe this is where Evolent is truly differentiated. If you look at our work in oncology as an example, many health plans are struggling with the cost of cancer care with many seeing annual cost increases of over 10%. Some of these cost increases are driven by new categories of drugs as well as new indications for existing or new uses of existing medications. One example we've seen in the marketplace is that oncologists are increasingly using immunotherapies for a broad range of cancers. One such therapy, known as checkpoint inhibitors or PD1s, are continuing to grow rapidly. In fact, just one popular PD1 called KEYTRUDA, had annual revenue of $25 billion in 2023. While the cost per patient of these sorts of therapeutics are dramatic, in certain instances they are worth the cost as they can be truly life changing for patients. However, research shows that such treatments are often prescribed when it is known in advance or can be known in advance that they are unlikely to be effective. To discern the effectiveness of therapies, our clinical research has shown that it's critical that a genetic test or other companion diagnostics are completed. Commonly, we partner with a treating oncologist to ensure these companion diagnostics are completed in the hope that the selected therapy will be the most effective for the patient. Our partnership model with oncologists is particularly well-suited for these more complex and high-cost situations when all the options under consideration are approvable and the only way to address cost and quality is by entering into a trust-based dialogue with the treating oncologists. Moving to our second operating priority of strong profitability, let me reiterate a few points and John will also discuss this in more detail. I think the success we had in 2023 and our strong outlook for 2024 is driven by our diversification across Medicare, Medicaid, and commercial. In addition, we have a strong mix between our Technology and Services and Performance Suite businesses. Within the Performance Suite, we continue to see strong results in line with our expectations. While many in the industry had experienced higher than expected utilization, Q4 for us continued our prior trend of inline performance. Our third investment theme is disciplined capital allocation, and in 2023 we made great strides in generating cash, de-levering the business and lowering our cost of debt financing. We ended the quarter at 2.2x net leverage, well ahead of the exit 2023 target we set at the time we acquired NIA of less than 3x. Further, in December, we conducted a successful convertible offering that allowed us to completely swap out our existing term loan, so our only senior facility outstanding consists of $37.5 million through our revolver. And with those comments, let me hand it to John who will provide a deep dive into our profitability and cash story now and for 2024, as well as our financial outlook.

Thanks Seth. I'll focus my remarks tonight on five areas. First, some metrics around our growth. Second, adjusted EBITDA growth, where it's coming from and our path to our $300 million target. Third, a perspective on our 2023 cash flow performance and a look ahead to what we expect for cash production in 2024. Fourth, our view on key factors affecting the managed care environment in 2024 and how they might affect Evolent. And finally, I will close with our Q1 and 2024 outlook and guidance. Beginning with top line growth. I believe Q4 of '23 demonstrates the value of our balanced growth strategy with our cross-sell delivering growth in product members despite a quarter-over-quarter decline in unique members due to Medicaid redeterminations. We're excited to continue delivering on our strategy of more products per unique member and we ended the year at two products per unique member, up from an average of 1.6 in the first quarter of 2023. With the expansion of Evolent's Performance Suite into advanced imaging, as Seth discussed, I want to give investors a few reference points on Performance Suite PMPMs. Our capitation fees are based on the actual underlying costs of the scope that we manage, and so PMPMs can vary by population, geography, and specialty. For example, oncology Performance Suite fees in Medicare are typically between $40 and $70 per member per month. Since cancer prevalence is relatively lower in Medicaid populations, fees for a similar scope of work might be between $10 and $20 per member per month. Similarly, we anticipate advanced imaging performance suite fees will vary by line of business with a smaller average based on typical costs from $3 at the low end to $10 at the high end. Turning to adjusted EBITDA expansion, which remains a consistent long-term pillar for shareholder value creation. We are pleased to be on-track with our profit targets as we exit the year, delivering adjusted EBITDA growth of almost 49% relative to Q4 of 2022. In May of '23, at our Investor Day, we articulated three primary sources of adjusted EBITDA growth. First, adjusted EBITDA from our recent acquisitions. Second, the maturation of our Performance Suite contracts. And third, new growth. As you can see on Slide 8 of the presentation, our year-over-year performance for Q4 resulted from these same sources of core business performance, with over $12 million of quarterly adjusted EBITDA growth from our core organic business drivers versus the same quarter last year, nearly $50 million in annualized improvements. For example, looking at 2022 Performance Suite launches, we saw an improvement of over 10 percentage points in our margins between Q4 of '22 and Q4 of '23, consistent with our targets and the result of both initial actuarial conservatism and quality and cost improvements through our model. During 2023, this performance in our core business was offset in part by expected headwinds for Medicaid redeterminations and the runout of certain legacy Administrative Services clients during 2023. Importantly, these headwinds are well understood and time-bound with the Administrative Services impact complete as we exit '23, while our core business drivers will continue to propel us towards our $300 million adjusted EBITDA exit run rate target for 2024. You can see this detailed on Slide 9 of the presentation. First, we anticipate an approximate $4 million headwind to quarterly adjusted EBITDA from Medicaid redeterminations relative to Q4 of '23, which I'll discuss more in a bit. Second, realizing the contractual synergies from the NIA deal by the end of this year adds approximately $35 million in annual adjusted EBITDA, or approximately $9 million on a quarterly basis. For our Performance Suite, we are projecting approximately an incremental $13 million in quarterly adjusted EBITDA exiting this year. And finally, on new profitable growth. We have already announced deals that we expect will contribute approximately an additional $5 million in quarterly adjusted EBITDA once they arrive leaving the range of $4 million in quarterly adjusted EBITDA as our go get. Let me provide some additional color on each element of this bridge. First, recall that the NIA related synergies are both revenue and cost based. We feel high confidence in achieving them and they are contractual in nature. New services agreements that have already started phasing in on the revenue side. On the cost side, we continue to expect to exit transition services agreement later this quarter. For the Performance Suite, the forecasted improvement is primarily driven by initial margin expansion of just over 10% on the over $400 million in Performance Suite revenue launched during 2023 and is consistent with what we experienced for '22 launches across 2023. And for the new business front, recall that we initially targeted $50 million of our $300 million run rate adjusted EBITDA from new growth in May of '23, or about nine months ago. We have in the range of $16 million, or approximately $4 million per quarter of that gap remaining. Continuing at the same sales pace would likely get us beyond our year-end target. Turning now to cash. When we announced the NIA transaction, we set a goal for 2023 to increase our cash balance by more than $120 million before paying interest, net debt activity, acquisition costs, earnouts, and dividends. Our fiscal discipline delivered more than $175 million on this metric resulting in a year-end cash balance of $193 million. We are pleased to have delivered this in a year where we were also investing heavily in integration and business restructuring to align our organization with our go-forward strategy in value-based specialty care. Going forward, we plan to provide an outlook for the cash from operations line on our cash flow statement. Our cash from operations in 2023 was $142 million, which included a benefit from net working capital of approximately $37 million. As we've previously noted, our working capital can fluctuate based on timing of customer payments. Our target for 2024 of at least $150 million in operating cash flow includes an expectation for a modest use of cash for working capital during the year. Overall, net of working capital fluctuations, we would expect growth of $80 million in our cash from operations in 2024 relative to 2023. Our capital allocation priorities for cash flow remain the same as they have been for several years. To reiterate, first, we will continue to invest in capitalized product development to advance our core strategy of value-based specialty care. Second, targeted strategic M&A that accelerates this strategy. And third, a disciplined capital structure that balances reasonable net leverage, share count and cash interest. We continue to anticipate approximately $30 million annually in capital expenditures, primarily capitalized software development costs, to continue our reinvestment in the business and competitive leadership in complex specialty care. The environment for managed care organizations, our primary customer base, has recently been characterized by two important themes. In Medicaid, representing 35% of our revenue, the primary question has been the impact of redeterminations on the top and bottom lines. In Medicare Advantage, representing about 42% of our revenue, the primary question has been elevated utilization. We'd like to reiterate today our views on how these trends impact Evolent. First, Medicaid redeterminations continue to track our expectations. We ended the year with a gross Medicaid membership decline of 8.5% on a same-store basis compared to our forecast of 8% to 10%. And we continue to forecast a total decline in the mid-teens by the middle of this year. As the membership has changed, we've seen an expected modest increase in utilization metrics in our Performance Suite business. For example, we saw an average of 4.89 authorizations for cardiology services per 1,000 Medicaid members in a typical population leading up to the start of redeterminations. That same stat in Q4 of '23 was up by 1% to 4.94 authorizations per 1,000 members. We estimate that the total year-over-year impact on the bottom line from Medicaid redeterminations was approximately $3 million in Q4, again, consistent with our expectations. Importantly, sitting here in February, we are now more than 50% of the way through this process and believe we have very good insight into how it is playing out. We have assumed in our guide an additional $3.5 million in quarterly impact being fully in place by the summer, which we believe is a reasonable estimate of our total gross exposure. Next, regarding utilization, particularly within Medicare Advantage, there are several significant shifts underway in the MA population. The V28 risk model has prompted many payers to revise their plan benefit design beginning in 2024. There is growing preference among MA members for PPO plans versus HMO plans, which tend to have more limited networks. And the commentary from many MCOs indicates elevated utilization during Q4, particularly for inpatients and supplemental benefit cost drivers. As we think about Evolent, recall that most of the risk that we take in specialty care requires a prior authorization. This gives us substantial insight into trends without having to wait for claims to develop. I want to be very clear that we have not seen in our Q4 data any statistically significant trends on the key leading indicators that would suggest elevated costs in our risk areas. With that said, and at the same time, given the number of moving pieces and unknowns in Medicare Advantage for 2024, we believe it prudent to take a thoughtful approach to our annual guidance for this year and with a wider range than we typically give. So let's then turn to 2024 guidance. On the top line, we are projecting full-year revenues of between $2.4 billion and $2.5 billion, representing approximately 25% organic growth at the midpoint, well ahead of our baseline mid-teens long-term outlook, and driven by continued strong uptake of our Performance Suite products. On the bottom line, we are projecting full-year adjusted EBITDA of between $235 million and $265 million, representing approximately 30% year-over-year growth at the midpoint. The bottom one-third of this outlook includes a buffer for potential unexpected increases in medical utilization in 2024, given the industry factors I mentioned a moment ago. For the first quarter, we are expecting revenues between $595 million and $610 million and adjusted EBITDA between $52 million and $58 million. We expect sequential quarter-to-quarter growth in both revenue and adjusted EBITDA across this year as we ramp towards our exit adjusted EBITDA target of $300 million with the first half accounting for about 45% of our adjusted EBITDA for the year. This spread of adjusted EBITDA between the first and second half of the year is consistent with Evolent's performance in 2021 and 2022. We are targeting cash from operations of $150 million or better for the year and expect to deploy approximately $30 million in capitalized software development. With that, we'll open it up for questions.

Yes. Thank you. We will now begin the question-and-answer session. [Operator Instructions]. And the first question comes from Kevin Caliendo with UBS.

Hi guys, it's actually Andrea Alfonso in for Kevin. Thank you so much for taking my question. I appreciate all the color on thinking about the sequential trends into the year. I guess you talked about some of the Admin Service run out, et cetera. And I guess maybe if you sort of extract all those things and extract the Medicaid redeterminations impacted in the first half, how do we think about just kind of the cadence of capture? And then I guess embedded within sort of the expectation for new business wins impacting that, is that sort of more of a third quarter, fourth quarter contribution?

Hey, Andrea, happy to take that one. I'd say two things. First, relative to cadence across the year, the performance overall, and then specific to your question on new business wins, as we look at EBITDA performance in '23 and compare to our key drivers in '24, one of the core observations that we would make is some of the headwinds that we experienced in '23 from the Administrative Services run out and Medicaid redeterminations are mostly now behind us, with a little bit to go on the Medicaid side. And our expectation for continued organic specialty performance in terms of increased adjusted EBITDA is very consistent with our recent performance. Now so that's how I characterize our outlook here as we move towards the $300 million exit run rate. On the new business side, I'd split that into what is already contracted, which you see on the page, about $5 million of quarterly contribution there. That'll be phasing in largely across the first half of this year and the remainder that you see on the page of about $4 million per quarter is likely phasing in more across the full-year.

Thank you. And the next question comes from Jailendra Singh with Truist Securities.

Thank you, and thanks for taking my questions. First, a quick cleanup question. This Medicaid plan for imaging contract is rolled out intra quarter and Q4. We calculate like PMPM in the range of $5. Are we in the ballpark and should we expect the lives to kind of increase from Q4 to Q1 because it was rolled out intra quarter, Seth, one clarification? My main question is around the new contract with an existing health plan to add radiation and surgical oncology services to existing medical oncology services, do you see opportunities with your other medical oncology services contract to add these additional oncology services, or do you think there was something unique about this health plan, and if there is an opportunity, are you willing to quantify?

Hey, Jailendra, I'll take the first part. You're in the zone on the PMPMs, and we would expect an increase in the average Performance Suite lives in Q1 since we'll have a full quarter of that go live. I'll turn it to Seth for the other piece.

Yes, Jailendra, I think the answer to the second question is yes, we do see additional opportunities for both radiation and surgical oncology. Across the Technology and Services side, we do very little of that today. And so, across all of our Technology and Services arrangements where we have Med-Onc, I think that's a clear opportunity. And then on the Performance Suite side, we actually do a little bit of radiation oncology today, and we don't do surgical oncology. So I think there surgical oncology is an opportunity. We wanted to quantify the PMPM around surgery, which we did in the script, just to give you a sense to your point of it's not immaterial what the opportunity is here just for surgery and radiation is also attractive, so this is -- you know, I think it's a real development for the company and will benefit us both on the Technology and the Performance Suite side.

Thank you. And the next question comes from Jeff Garro with Stephens.

Yes, good afternoon and thanks for taking the questions. Maybe ask a little bit more on the $4 million EBITDA go get. And certainly, some positive comments from you guys about the pipeline and the set-up to achieve that target. But I was hoping to get more comments on visibility and whether there's multiple paths to achieve that $4 million target? And any color you could provide on the types of contracts that you think could get you there, I would assume it's more Technology and Services, but would love to hear what you have to say. Thanks.

Yes, sure, Jeff, a good question. I think, look the thing we tried to do in the script, which I'll just reiterate, is that we have been pacing ahead of the schedule that we would need to achieve to get there, on the timeline for the $300 million exit we've been pacing slightly ahead of that. So I think the bottom line is we need to kind of continue what we're doing, and we'll easily get there. In terms of the paths to get there, there are multiple ways to get there. I would say Tech Services is the main part of that. But if you go back to when we talked about this gap and what's there, there's some Performance Suite maturation opportunity as well. That's not in the numbers on the page, and I won't break down what's what on that, but more of one or more of the other could both get us there to your point. And just in terms of the pipeline, which I'm sure we'll talk about at some point in this call in a little more detail, we've got a lot in the pipeline, lots of opportunities, whether they're RFPs or net new opportunities or same-store growth. So we feel really good about the path to kind of closing that gap by the end of the year.

Thank you. And the next question comes from Stephanie Davis of Barclays.

Hi guys. This is Anna Kruszenski on for Stephanie. Thank you for taking my questions. So you noted that the wider guidance range reflects the unknowns around utilization. Just curious if you could speak to what the high-end and what the low-end of guidance assumes? And just any level of visibility you can share beyond the four new revenue agreements?

Yes, let me take that first piece. You know as we think about what could take us to the bottom, what could take us to the top end of the range. As I noted in the prepared remarks, that bottom third is about $10 million, is what we're viewing as our buffer for unexpected medical utilization, which again we're not seeing. But given what we have seen in the industry writ large, we believe it's prudent to have in our outlook. On the top side of the range what could take us to $265 million and beyond this year really is two things. One is timing of go lives largely of our Technology and Services Suite clients, and two outcomes during the year on the Performance Suite. That's how we'd think about the range.

Thank you. And the next question comes from Ryan Daniels with William Blair.

Yes, thanks for taking the questions, guys. Congrats on the strong performance. Seth, you set this one up. But I do want to hit on the pipeline and let me actually phrase it with a little bit more detail. Obviously, some of the Medicaid plans getting hit with redetermination. You mentioned MA plans, they've got higher utilization in V28. And then you've got things like prior authorization and pressure on utilization management, hitting all payer types, including commercial. So maybe you can unpack the pipeline a little bit and how these various things are kind of driving demand for solutions such as yours and where you're seeing kind of different puts and takes in the pipeline for your product offerings? Thanks.

Yes, happy to Ryan. So look, I'd probably put it into three categories. One is the things that we have been seeing for the last three years have continued, which is kind of traditional demand for the product. I think the second category, which is newer is around what I would call more acute medical loss ratio pressure, right, where payer A is underwriting pressure and has a gap to their goal for their fourth quarter of this year and beyond. And that deal would have taken a year or six months to work on before all of a sudden, it's a much shorter sales cycle, more focused team on their side, and frankly more RFPs and also organic opportunities. So that's kind of the second category that's newer for us over the last, say, six months. And then the third category I would define around more integrated bundled offerings that are available to us now because of NIA and IPG and Vital and Evolent all kind of pulled together in a fully integrated fashion that were really not available to us, call it a year ago. And those have ramped, we've now several of those in different pockets and things like that along the way. But I think that third category is going to kind of be an evergreen category for us at this point and looks very promising. That help, Ryan?

Yes, that's great color. Thank you so much.

Thank you.

Thank you. And the next question comes from Anne Samuel with JPMorgan.

Hey guys, this is Kyle on for Anne tonight. Congrats on the great quarter. I was just going to ask about the Performance Suite offering in imaging. Does this change how you size your total market within your cross-sell plan that you laid out in your Investor Day? Just trying to think about how we frame this in terms of future partnerships. Thank you.

Hey, Kyle. Yes, it does increase our total addressable market. We haven't really quantified that or updated that. Formally, it does increase it a little bit. We're a couple of billion dollars out of $150 billion market. So I think it doesn't really change the big picture for us, which is we have a lot of running room, but yes, it does make the market a little bit bigger.

Thank you. And the next question comes from Jessica Tassan with Piper Sandler.

Hi guys. Thanks for the question. I wanted to just clarify and understand if the scope of your Florida contract with Humana has changed at all. I think initially it was limited to certain counties. Just curious to know, is that contract now statewide? And then beyond that, just maybe hoping you could talk a little bit about the thought process and kind of the pricing precautions that you took in order to price the advanced imaging Performance Suite solution, and just whether you're expecting kind of equivalent margins in those products in year one, two, three, as you would in the rest of the Performance Suite book? Thanks so much.

Yes. Hey, Jess, I'll answer the first one. No, the Humana Florida has not changed since we announced it, and it's kind of launched and on-track relative to what we shared last year.

Yes, underwriting principles on the new advanced imaging Performance Suite product, very similar to the way that we think about the rest of the risk that we take, looking to be quite specific around the scope, for example, around protections for Evolent in terms of the way that we like to manage our risk and be responsive to the customers' needs in terms of delivering to them a guaranteed outcome, which is one of the key buying factors that we see customers opting for the Performance Suite.

Thank you. And the next question comes from Charles Rhyee with TD Cowen.

Yes, thanks for taking the question. I wanted to follow-up on an earlier question around sort of what can kind of get you to the higher end of the range this year? I think you mentioned sort of on Performance Suite maturation. Maybe when we think about that higher end of the range, are you kind of assuming performance Suite maturation to kind of mirror sort of what we saw in '22 and '23, or would you consider it to be more conservative to sort of the recent maturation experience that you've had so far?

Yes, it's a good question, Charles. I think at the top end of the range, that would be experience consistent with what we saw in '22 and '23. And I think one of the items that's giving us confidence there, both for '24 and as we look at the exit run rate of $300 million, is the performance that we saw across '23 on the '22 launches similar to the performance that we saw across '22 on the '21 launches. So we've now got several years here stacked up of performance that's been consistent with over $400 million of new Performance Suite revenue that was launched in 2023, driving performance and margins and quality on that book of business across this year. Obviously, a very important focus and consistent with, I think our performance over the last couple of years.

Great. Thank you.

Thank you. And the next question comes from Richard Close with Canaccord Genuity.

Yes, thanks for the question. Congratulations on the quarter and I appreciate all the details. Maybe, Seth, on the cross-sell that you mentioned to Ryan's question on the pipeline, can you talk a little bit more about the cross-selling? Are you seeing strengths in any particular product on the cross-selling, or where do you think most of the low hanging fruit is there?

Hey, Richard. Yes, look I think it comes in a couple of different areas, but let me -- so let me give you a few examples. One place we're seeing some strength is if you're traditional imaging customer, and that's what you had from an NIA perspective, and we have a conversation about the fact that we can incorporate imaging and genetics into a broader condition management model around cardiology or oncology, eventually around MSK, it's obviously just a better proposition for the member and for the plan to look at things holistically rather than just look at a given vertical like imaging, right? So I think that's one good example. Another good example though is where historically it's an Evolent-only customer and we have not included imaging because that was not part of our scope traditionally. And now we step into this radiation oncology -- excuse me, imaging or other types of imaging that makes sense for cardiology or oncology, right? Critical for managing those two conditions, understanding the imaging as, for instance. So I think it's largely around the NIA opportunity. I'd also give you some examples though, around end of life and around IPG. And so, it's little a bit across the board, but I think the imaging NIA example is probably leading the pack, and those others have been attractive as well.

Okay. Thank you.

Thank you. And the next question comes from David Larsen with BTIG.

Hi, this is Jenny Shen on for Dave. So it sounds like utilization has been good with you. Just with the overall increase in hip and knee procedures in the broader space, can you talk about what you're seeing in your MSK business specifically? And also, your longer-term outlook of increasing the amount of risk that you take in that business? Thanks.

Yes, happy to take it. So we do not currently take risk in MSK, so increases in that kind of utilization do not impact us on the risk side. We have talked about building a risk-taking product in musculoskeletal conditions that would look like the rest of our Performance Suite products, and that's on the roadmap for likely a 2025 launch. So it continues to be an important product focus, but not for this year.

Thank you. And the next question comes from Sean Dodge with RBC Capital Markets.

Hey, good afternoon. This is Tommy Schuyler on for Sean. Thanks for taking the question, and thanks for all the detail in the slides. Just wanted to follow-up on the earlier Humana question. How should we think about the potential Performance Suite expansion outside of Florida and Arizona? Is there a fairly structured trial period sort of required before you can expand further, or is this something that could be pushed into some other new states in a relatively short order?

Hey there. Great question. So I think it's actually very akin to our experience with other payers over the last several years in terms of expanding from Performance Suite in one or two states to other states, which is certainly there is an opportunity there and an intention to consider that the first order priority for us is always six to nine months of outstanding performance. We are kind of in that outstanding performance phase right now and really heads down on delivering for our partner there. And I think when we do a good job on delivery, that earns the right to expand into new states. And so that's our expectation that we'll have the opportunity to do that. And it's right answer generally for the payer partners to not just do something in a couple of states but do it more broadly. But right now our priority is on the execution delivery front.

All right. Appreciate it. Thanks a lot.

Welcome.

Thank you. And the next question is from Jack Wallace with Guggenheim.

Hey team. Congrats on the quarter and thanks for taking my questions. Thinking about the imaging opportunity, and when you're upselling that capability, how quickly does that typically turn to revenue? And then I've got a follow-up question.

Yes, Jack look, I think we are already seeing some of that opportunity come to bear fruit for us. We've been -- it's been about a year since we closed the NIA transaction, and we've seen several cross-sells that we've announced. And so, I think we're in that zone now where those opportunities are paying off. It often takes, if you get into one of those conversations, I'll call it six months to have a sales cycle around it. And again, it could be a legacy NIA client, or a legacy Evolent client, it could go in either direction, but it is bearing fruit now.

Excellent. Thanks. And then, really we haven't talked about as much, but the cases business, revenue per case, and they pick-up a bit more fourth quarter, A, what was driving that? And B, you think that it's going to be persistent going forward? Thank you.

Had a tough time understanding you there, Jack.

Jack, could you repeat what you just said? There is an echo.

Yes. Apologies, I'm in an airport, I was wondering about the cases business. It looked like revenue per cases was up a little bit in the fourth quarter, I mean if there's anything structurally going on there that would persist going forward or just timing of activity in the quarter? Thank you.

Yes. Nothing particularly structural. There's a seasonal component and also just regular organic growth.

Excellent. Thank you.

Thank you. [Operator Instructions]. All right. This does conclude the question-and-answer session. I would like to return the floor back to Seth Frank for any closing comments.

Great. Thanks for joining tonight and look forward to connecting with you offline. Have a good evening.