Evolent Health announces $140 million convertible notes offering

WASHINGTON - Evolent Health, Inc. (NYSE:EVH), a healthcare company with a market capitalization of $1.05 billion, announced Monday its plan to offer $140 million in convertible senior notes due 2031, with an option for initial purchasers to buy an additional $20 million in notes. While the company is not currently profitable, InvestingPro data shows analysts expect profitability to return this year.

According to the company’s press release, the notes will be offered exclusively to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

Evolent intends to use up to $100 million of the proceeds to repurchase a portion of its existing 1.50% convertible senior notes due 2025, and approximately $40 million to buy back shares of its Class A common stock in privately negotiated transactions concurrent with the pricing of the offering.

The notes will be convertible into cash, shares of Evolent’s Class A common stock, or a combination of both, at the company’s discretion. Interest will be payable semiannually on February 15 and August 15, beginning February 15, 2026, with the notes maturing on August 15, 2031.

Starting August 20, 2026, Evolent may terminate the conversion rights under certain conditions related to the company’s stock price performance.

The healthcare company, which focuses on improving outcomes for patients with complex conditions, noted that the interest rate, conversion rate, conversion price, and other terms will be determined when the offering is priced.

Neither the notes nor any Class A common stock issuable upon conversion will be registered under the Securities Act or state securities laws, limiting their sale to exemptions from registration requirements. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations, with analysts maintaining a strong buy consensus and setting price targets significantly above current levels. For deeper insights into Evolent Health’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Evolent Health disclosed its second-quarter 2025 financial results, which did not meet analysts’ expectations. The company reported an earnings per share (EPS) of -$0.10, significantly below the anticipated $0.08, representing a negative surprise of 225%. Additionally, Evolent Health’s revenue was $444 million, which fell short of the projected $459.4 million, marking a 3.28% shortfall. These figures highlight a challenging quarter for the company, as it struggled to meet financial forecasts. Despite these earnings and revenue misses, the stock’s after-hours trading saw a slight increase. Investors may be watching closely for any strategic adjustments or guidance updates from Evolent Health in response to these results.

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