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Evolent Health Inc (NYSE:EVH)
Q2 2019 Earnings Call
Aug 6, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to Evolent Health Earnings Conference Call for the quarter ended June 30th, 2019. As a reminder, this conference call is being recorded. Your host for the call today is Mr. Frank Williams, Chief Executive Officer of Evolent Health. 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 entitled Investor Relations. Here are some important introductory information.

This call contains forward-looking statements under the US Federal Securities 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 the current and periodic filings. For additional information on the company's results and outlook, please refer to its second quarter news press release issued earlier today.

As a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available 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 8-K filed by the company with the SEC earlier today. At this time, I will turn the call over to the company's Chief Executive Officer, Mr. Frank Williams.

Frank Williams -- Chief Executive Officer & Co-Founder

Thank you and good evening. I'm Frank Williams, Chief Executive Officer of Evolent Health, and I'm joined by John Johnson, our Chief Financial Officer, and Nicky McGrane, our Executive Vice President of Corporate Performance. I'll open the call this evening with a summary of our recent financial results, as well as an update on the market, our current pipeline and progress on Evolent's key strategic priorities for the year. I'll then hand it to John to take us through a more detailed financial review of the second quarter. I'll close with a summary of our key differentiators and how they drive tangible value for our partners. And as always, we'll be happy to take questions at the end of the call.

In terms of our results, total adjusted revenue for the quarter ended June 30th, 2019, increased 32.9% to $192.1 million from the comparable quarter of the prior year. Adjusted EBITDA for the quarter ended June 30th, 2019 was negative $7.7 million compared to $4.9 million for the quarter ended June 30th, 2018. As of June 30th, 2019, we had approximately 3.5 million total lives on the platform and with three partner additions this quarter, we welcomed six new partners to the Evolent national network already this year.

Overall, we're pleased with our top line results for the second quarter and the progress we've made in meeting our key strategic objectives for 2019. With strong operational and clinical performance across our network, we're seeing solid same-store growth as well as one of the strongest new business pipelines in our history. As a result, we enter the second half of the year with increasing visibility into significant growth both on the top and bottom line as we head into 2020.

In terms of the macro environment, we're pleased to see continued strong momentum in the core markets that we serve. In Medicaid and Medicare, the administration's actions demonstrate a core commitment to moving the market to value-based reimbursement. Over the past nine months, CMS revamped its Medicare Shared Savings Program Pathways to success, launched a primary cares initiative and is in the final stages of creating a direct contracting model with providers. All of these offerings create several paths forward for providers interested in pursuing risk-based reimbursement for their Medicare patient populations.

On the Medicare Advantage side, where total enrollment is expected to double over the next decade, we continue to see strong policy support program improvements and consistent annual rate increases from CMS. Our health policy team continues to serve as a convener for our partner network to work closely with the administration on new program concepts as well as modifications to existing programs that will encourage broad industry participation. For example, we're currently weighing out on the next version of CMS' oncology care model, which aims to provide higher quality integrated oncology care at a lower cost to Medicare.

Based on our extensive experience in cancer care with New Century Health, we have an exciting opportunity to drive financial and clinical results for organizations participating in the oncology care model and we look forward to driving demonstrable improvements in clinical and financial outcomes. We're also seeing the same trend in specialty care management with national and regional payers. Both cancer and cardiovascular care represents significant pain points for payers that struggle to manage a broad network of physicians, complex drug regimens, rapidly evolving clinical pathways and appropriate [Indecipherable] side of service, given the high variability in cost. New Century's deep expertise in total cost of care management through innovative data analysis, pathway development and specialist-to-specialist engagement offers a unique solution to address rapid increases in medical trend and sub-optimal clinical outcomes. Given the market dynamics, in fact that oncology and cardiology represent 25% of Medicare spend, we expect government policy will continue to be an additional catalyst in spurring ongoing demand for these services in the market. It's the combination of increasing cost pressure, administrative and clinical complexity and the inability to effectively engage providers and patients that's opening up significant opportunities for Evolent across all lines of business.

The breadth of our current offering, which serves the population health, health plan services and specialty care management markets has doubled our total addressable market while ensuring we have multiple entry points and cross-sell opportunities across our partner network. You can see the diversification of our solutions reflected in several of our last partnership announcements. A Blue Cross plan where we're helping to manage an exchange population, existing Medicaid plans where we're providing our full suite of health plan services, Medicare ACO's that need integrated solutions to effectively engage patients with chronic conditions and comprehensive oncology speciality management services for Medicaid plan with rapidly rising drug costs and above-market cost trends.

As a result, the breadth of our offering and market leadership position have translated into one of the largest weighted pipelines in our history, with several opportunities either recently closed or in late stage evaluation. In terms of new partners, one area of recent focus has been identifying high performing physician groups in markets where we can add a significant number of lives and leverage our integrated platform to deliver market leading clinical and financial performance. The new ACO program sponsored by CMS are an excellent catalyst for market expansion, and to that end, i'm excited to announce new partnerships with three provider organizations, Michigan Health Professionals, Integrated ACO and the South Bend Clinic. These organizations are high performance provider groups that have a line of sight to significant Medicare lives in their respective markets. Michigan Health Professionals is a network of nearly 400 independent physicians in the Detroit area who support nearly 25,000 Medicare beneficiaries in its Medicare ACO. Integrated ACO is a network of 55 physician practices spread across several major markets in Texas. Over the years, Integrated ACOs are under strong reputation for delivering efficient, high quality care to more than 10,000 Medicare beneficiaries and has significant growth opportunities in the Austin and San Antonio markets. The South Bend Clinic is an independent employee provider group in Indiana that currently manages over 7000 Medicare beneficiaries in its Medicare ACO.

Also in the Medicare ACO segment, WakeMed Key Community Care has decided to evolve its partnership with Evolent by agreeing to enter MSSP next year. Over the last several years, WKCC has earned a fantastic reputation as a market leader that consistently provides high value care to the population it serves. Entering the Medicare ACO program is not only a vote of confidence in our partnership, but will also make a significant impact on the lives of Medicare beneficiaries in North Carolina. Across those four partners in 2020, we anticipate supporting more than 60,000 lives initially in CMS's Pathways to Success program and expect to substantially increase the number of Medicare risk lives under management across the next several years.

Along with WKCC, we're currently in the midst of one of the largest same-store growth cycles in our company's history as several partners are expanding their service base with Evolent or adding new populations. This obviously represents an exciting vote of confidence in our partnership model as well as the broader movement to value-based care.

A few examples include two partners entering the Medicare Advantage segment, leveraging Evolent's platform to support market entry and operations, a large ACO adding several payer delegated risk arrangements to substantially expand total premiums under management, addition of well over 300,000 Medicaid lives for New Century Health across several markets for both oncology and cardiovascular services, supporting an existing health system partner to develop a clinically integrated network to rapidly expand its value-based footprint. Having this level of same-store sales and new partner additions at this time in the year gives us high visibility into an exciting revenue outlook for next year.

To that end, in terms of setting up 2020 for strong revenue and margin expansion and solidifying our market leadership position, we've made steady progress toward our three key priorities for the year: driving top line growth, stabilizing and improving performance at Passport Health Plan and aligning our cost structure to reflect our approach to the market.

On the top line, our focus for the year has been to achieve double-digit year-over-year growth by Q4 and set up a resumption of mid-teens organic growth in 2020. Given the positive market dynamics that I referenced earlier and a great effort by our business development team, we're on track to achieve those goals. In the fourth quarter, we expect our top line to be north of 10% growth versus Q4 of last year, and we have high visibility given that over 90% of our estimated revenues for Q4 are currently under contract. The building blocks of the sequential growth in the year include higher transformation revenues as we expect to step up in implementations in Q3 and Q4 as we prepare for ACO and Medicare Advantage launches in 2020, continued ramp up of partnerships already announced this year. Empower, River City Medical Group and Premera will all be fully operational by the fourth quarter and these three partners will add over 375,000 lives to the platform.

Same-store sales across our partner network, most notably with New Century successfully cross-selling into passport and other clients in Q4, Passport kicked off on August 1st and will be fully up and running in the fourth quarter. Lastly, we have a few late stage pipeline opportunities that we expect to start within the calendar year. All in, we have a diverse and balanced set of new business coming on in the second half and Q1 of next year that sets us up well for a resumption of mid-teens growth in 2020.

Our second priority has been around returning Passport to profitability and responding to the recently released Medicaid RFP. As of June, we've seen an 8 percentage point improvement in margins and anticipate an additional four points of improvement to continue in the third quarter. The improvement has been generated through multiple medical expense initiatives, higher payment rates, lower admin spending and a more integrated approach to behavioral health, dental and pharmacy. We've also seen incredibly positive feedback from members, which is a reminder as to why Passport has had consistently strong member satisfaction scores over the years according to Consumer Assessment of Health Care Providers and survey system data. We've also seen incredibly positive service feedback from members, which is a reminder as to why Passport has had consistently strong member satisfaction scores over the years, according to consumer assessment of healthcare providers and system survey data.

As we look to Q4 and our goal of positive contribution, we will have an additional modest rate increase effective in Q3 as well as the full complement of medical expense initiatives in place. Improvement in both of these metrics gives us a clear line of sight for meeting our goal of driving a positive margin in the plan. In terms of the RFP, Passport submitted a comprehensive response on July 3rd and anticipates the award decision to come in the month of October. Last week, the attorney general announced that his office has approved the transaction, and while other approvals are still needed, we remain on track to close the deal in Q4 of this year. Lastly, Passports Board announced that they're dropping their lawsuit with the State regarding retroactive rate relief, which we believe is a very positive step in establishing a collaborative and productive relationship with the Commonwealth. Clearly an incredible effort and tremendous progress by the team in a short period of time with an exciting opportunity to build on Passport's twenty-year history as a leading Medicaid plan in Kentucky. Our last objective for this year has been to enter 2020 with a leaner cost structure, which combined with strong top line growth, will drive significant margin expansion.

Across this year, we've worked to streamline operations, eliminate unnecessary redundancy, leverage AI and machine learning in our core processes and focus on improved contract profitability with select partners. As we look to Q4, we remain focused on achieving a run rate adjusted EBITDA of $40 to $50 million, which implies a $20 million improvement versus the second quarter. The sources of that improvement are two-fold. First, our Q4 top line forecast is substantially contracted with $40 million higher revenue than in Q2 and we expect to see a flow through of approximately 25%. That implies that one half of the EBITDA approvemnet in the back half of the year is coming from revenue growth.

The other half of the EBITDA improvement is coming from cost initiatives through Q2 that have already lowered operating expenses by $11 million in the quarter and will contribute roughly $10 million of additional improvement with a full quarter impact by Q4. All in all, we're well on our way to achieving our key objectives for setting up 2020 with mid-teens growth and strong margin expansion. With six new partners this year, a strong new partner pipeline, and strong same-store growth, we feel very good about our overall growth strategy and continued position as a market leader. We've also made excellent progress with Passport providing significant cost reductions, strong clinical outcomes and high levels of service satisfaction for its members. With that overview, I'll turn it over to John to speak about our financial performance on the quarter and our outlook for the remainder of the year.

John Johnson -- Chief Financial Officer

Thanks, Frank, and good evening, everyone. Today, I will cover our financial results for the second quarter of 2019 and we'll finish with an overview of our 2019 outlook. Overall as Frank mentioned, we made significant progress during the second quarter toward our goal of $40 million to $50 million in run rate adjusted EBITDA by the end of the year. And our second quarter results tracked according to our expectations across revenue, operating expenses and adjusted EBITDA. Beginning with our consolidated second quarter results, adjusted revenue increased 32.9% year-over-year to $192.1 million, mostly through the impact of the New Century acquisition as well as growth within our True Health segment from the previously announced reinsurance agreements with New Mexico Health Connections. Adjusted EBITDA decreased $12.6 million year-over-year to minus $7.7 million. Adjusted loss available for class A and Class B Common Shareholders was minus $21.4 million or minus $0.26 per share for the quarter, compared to minus $2.3 million or minus $0.03 per share in the same period of the prior year.

As of August 5th, 2019, there were 83.8 million shares of our Class A common stock outstanding and 0.7 million shares of our Class B common stock outstanding. Within consolidated adjusted EBITDA, adjusted cost of revenue, which includes claims expenses increased to $142.7 million or 74.3% of adjusted revenue for the second quarter compared to $86.6 million or 59.9% of adjusted revenue in the same quarter of the prior year.

Adjusted SG&A expenses increased to $57.1 million or 29.7% of adjusted revenue for the second quarter, compared to $53.0 million or 36.7% of adjusted revenue in the same quarter of the prior year. The increase in both adjusted cost of revenue and adjusted SG&A expenses year-over-year was due primarily to the costs assumed from the assets acquired as part of the New Century transaction, as well as additional personnel costs and third-party support services across the organization.

Combined, our total adjusted cost of revenue and adjusted SG&A expenses as a percentage of total adjusted revenue increased to 104% in the second quarter of 2019 compared to 96.6% in the same quarter of the prior year.

Now I will take you through the second quarter results by segment. In our Services segment, second quarter adjusted services revenue increased 19.4% to $149.7 million, up from $125.4 million in the same period of the prior year. Adjusted transformation revenue in the second quarter accounted for $1.9 million or 1.3% of our total adjusted services revenue for the second quarter, compared to $8.2 million in the same quarter last year.

Adjusted platform and operations revenue accounted for $147.8 million or 98.7% of our total adjusted services revenue for the second quarter compared to $117.2 million in the same quarter last year. On a year-over-year basis the increase in adjusted services revenue was primarily driven by the impact of the acquisition of New Century.

As of June 30th, 2019, we had approximately 3.5 million lives on our services platform. Our average PMPM fees for the quarter was $14.22, compared to $13.24 in the same period of the prior year. Adjusted EBITDA from our services segment for the quarter was minus $8.8 million, down $14.4 million from $5.6 million in the prior year.

Our performance in the second quarter was on track relative to our expectations, with adjusted EBITDA increasing by $6.7 million sequentially versus the first quarter. With the combined effect of revenue growth and the impact of cost reduction efforts, we expect to achieve a run rate target of $40 million to $50 million in adjusted EBITDA by Q4, driving a material turnaround in profitability from the first half of the year.

Turning to our True Health segment, we had premium revenue of $45.8 million in the second quarter, up $22.8 million from the same quarter last year, largely due to the amended reinsurance agreements with New Mexico Health Connections entered into during the fourth quarter of 2018.

Our owned health plan, True health served an average of just over 17,000 large and small group members in New Mexico in the quarter, generating $22.4 million of the total $45.8 million of premium revenue in the quarter. Adjusted EBITDA from True Health for the quarter was $1.1 million. Our combined medical cost ratio was 78.8% in the second quarter and in line with the 79.8% MCR we experienced in the first quarter.

Turning to the balance sheet. We finished the second quarter with $110 million in cash and cash equivalents and investments. A decrease of $74.7 million relative to the end of the first quarter of 2019. The principal uses of cash in the second quarter were a $40 million loan to Passport Health and a $15 million investment in our True Health JV with GlobalHealth in Oklahoma.

With regard to Passport, commensurate with formally filing the RFP, we chose to increase our planned advance to $40 million to put some extra cushion on the balance sheet. Long- term debt at quarter end consisted of $225.6 million net carrying value of our 2021 and 2025 convertible senior notes.

For the second quarter, cash used by operations was $13.5 million. Cash used in investing activities during the quarter was $65.3 million and largely attributable to approximately $8.3 million of capitalized software development expenses and purchases of PP&E, $3.3 million of purchases of investments, $15 million of investments associated with the previously announced GlobalHealth Partnership and $40 million advance to Passport for regulatory capital requirements. Cash used by financing activities during the quarter was $11.4 million and predominantly due to decreases to restricted cash accounts held on behalf of our partners for claims processing purposes.

In summary, as Frank laid out in his comments, we are on track to achieve our top line and adjusted EBITDA targets for the fourth quarter, thus marking a material improvement over the first half of the year. However, timing delays on contract start dates and realization of cost savings is impacting on our third quarter and thus full year outlook. And we are adjusting our guidance accordingly.

We are now forecasting total revenue of $825 million to $850 million for the calendar year 2019. The components of revenue are as follows: for the full year 2019, we expect adjusted services revenues to be in the range of $664 million to $684 million. For the full year 2019, we are forecasting True Health segment revenues of $175 million to $180 million. For the full year, we are forecasting intercompany eliminations of minus $14 million. With respect to full year adjusted EBITDA, we are now forecasting a range of minus $10 million to minus $2 million.

For the third quarter specifically, we are forecasting total revenue of $213.5 million to $225.5 million. The components of revenue are as follows: for the third quarter of 2019, we expect services revenues of $175 million to $185 million. For the third quarter of 2019, we are forecasting True Health segment revenues of $42 million to $44 million. For the third quarter, we are forecasting intercompany eliminations of minus $3.5 million. We are forecasting adjusted EBITDA of $2 million to $6 million.

With that, I will turn it back over to Frank.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks, John. I want to close with a brief recap of our primary sources of differentiation, the drive value for our partners and establish our position as a leader in the market. First, the level of clinical, administrative and operational integration in our core platform is highly unique in what is a very fragmented industry.

If you're a provider of health plan managing a value-based risk business, it's critical to have an integrated platform that pulls in a variety of data to drive clinical workflow, including claims and comprehensive medical information on the population that you're serving. For instance, if you have members at risk for an acute care episode, are you able to identify them early and then provide the appropriate level of support and follow up to avoid a hospital stay or further health deterioration? The ability to have a consolidated view into claims, individual benefit information and important clinical details allows you to take the right action in a matter of hours instead of weeks. This ability to pull together comprehensive data sets in one easy place to drive clinical workflow and prospectively impact the course of care has been a struggle historically for most payers. The issue is even more difficult for providers that many times have completely different systems and reporting requirements for the variety of payers that they serve. Having an integrated platform is a one stop shop that can work across payers, pulling critical claims and clinical data and essentially act as a connector between parent provider is a real differentiator and drive significant improvements in clinical and financial performance.

Second, everyone brings a wealth of health plan to clinical and operational expertise in serving Medicaid, Medicare, commercial and exchange populations, experience we've amassed serving over 35 partners and 3.5 million lives. The uniqueness in our role and acting as a bridge between payers and providers to facilitate much more collaborative and effective approaches to managing complex patient populations. This takes deep expertise, experience working with both providers and payers and collaborative solutions which balance the objectives of payers, providers and patients. Our employee base over 3000 strong is one of the most talented groups assembled in the healthcare services world and is absolutely committed to improving the health of the partner communities we serve.

Lastly, patients with chronic conditions drive a substantial portion of healthcare spending in the US and require a thoughtful and evidence-based approach driven by sophisticated data analytics, comprehensive clinical program development and unique modalities for effective provider and patient engagement. Across the last eight years, everyone has developed deep expertise in managing chronic condition patients and driving improved health outcomes and significant reductions in total costs. In part, this is the result of our continued investment in sophisticated analytics, predictive patient identification and selecting the correct modality to most effectively engage and graduate patients in our clinical programs. These are critical competencies to managing large, complex patient populations and ultimately represents the difference in market leading performance in a healthcare world increasingly focused on driving reimbursement systems based on demonstrable outcomes.

Questions and Answers:

Frank Williams -- Chief Executive Officer & Co-Founder

Thank you again for participating in tonight's call. With that, we'll end our formal remarks and take the questions.

Operator

We will now begin the question and answer session. (Operator Instructions) And our first question comes from Ryan Daniel of William Blair. Please go ahead.

Ryan Daniels -- William Blair -- Analyst

Hey, guys. Thanks for all the details. I wanted to dive into the pipeline and a little bit more color. Frank, I think you've talked about the weighted pipeline being the largest or one of the largest in company history. So I'm curious if you can talk about that in several aspects. One, is it really around care management, TPA? Two, is it kind of a core Evolent and more of the New Century? And then three, any specific payer categories that you're seeing particularly strengthen?

Frank Williams -- Chief Executive Officer & Co-Founder

Great. Thanks, Ryan. So, one of the things that we've talked about recently is the fact that we really have diversified our service portfolio. If you think about our original market being in population health, that's obviously where we built up a lot of infrastructure and capability. Still a lot of growth and momentum with what's going on with the SOMOS ACO programs, and new launches there. We also have the health plan services side, which serves existing provider plans as well as regional health plans. And then we have specialty care management, which goes all the way from provider plans to regional plans to national plans. What that's effectively done is increased our addressable market and obviously given us a much more diverse approach to the market.

If you step back, one obviously feel good about the fact that we have six partners and again, very diverse set of partners in the beginning of the year across that spectrum that I just mentioned. And then if you look in the late stage pipeline and sort of what you see there, I would say across all of them.

So we still have a number of organizations that are interested in the government ACO programs and see that as a good way to enter Medicare. We have organizations focused on Medicare Advantage and see possibilities there between now and the end of the year. On the health plan services side, continued opportunities with regional Medicaid plans that already have lives and scale, but want greater sophistication in terms of infrastructure and the clinical tie that we have to the identified platform. I mean, if you look at New Century, I would say a very diverse pipeline really spanning Medicaid and Medicare, which is nice because that's been a new addition since the acquisition is seeing very strong application in Medicaid, but also across both regional and national plans.

So if you step back and again look at the weighted pipe and how we think about it, I would say, one, we've already closed enough business to give us very strong confidence in mid- teens growth for next year. So that's highly visible based on where we sit today. And then you look at the additional things we have in the pipeline, and I would say we'd close a few of what are very large opportunities in late stages and we see even accelerated growth over that level.

So we don't need to sweep the pipeline. We need basically nothing to add or very little to add to feel very confident in mid-teens. And I would say a few of the things in the pipeline that close would give us confidence to go beyond that going into next year. So I would say one of the best six months that we've had from a pipeline perspective. And also what I feel good about is the fact that a lot of it's coming from our existing partner base. So to have substantial growth at NCH, across a few of our Medicaid partners, across several 100,000 lives, that's big -- a big add in terms of revenue.

I mentioned the Medicare Advantage additions with two of our partners, some delegated risk arrangement so very diverse across almost all segments that we serve. And again, very strong visibility going into next year.

Ryan Daniels -- William Blair -- Analyst

Okay. Very helpful color and then it's a follow up here and this may be difficult to discuss on a public earnings call, but largest pipeline, you've seen one of the best same-store growth outlooks in company history which is a great data point, Passport clearly improving, yet your stock is sitting here at an all time low. So I'm curious what the board has thought of potential strategic alternatives or ways to create value, share repurchases, anything of that nature that you could share with the investment community. Thanks.

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I think we've been very focused, obviously, on a specific agenda we have this year. One was our returning top line growth to double-digit growth by the second half of the year and then teens growth next year, driving significant margin expansion. You know, if you -- if you do all of that, you have a service business approaching $1 billion in revenue which again, we believe on a comparable basis surely drives a lot of equity value. Second, we realized there was a lot of questions about the investment in Passport, whether that was a shift in strategy, whether that was going to be a good investment for us. We believe we're proving out the thesis that we can drive strong financial performance, that surely the investment from a value perspective, if Passport wins the RFP, will be seen as a very strong investment and obviously a lot of strategic options as to how we evolve our relationship there, how we leverage the network and how we continue to collaborate with our provider partners. But we think it's a very valuable asset in Kentucky and that it can have massive economic benefit for us over time.

So our -- our immediate focus has been executing on that. And we felt very strongly that as we deliver against that, that we'll see a rebound in -- in the stock price and generally in investor confidence, and hopefully some of the things we're talking about on the call today in terms of visibility and really achieving the main tenants of our plan by the fourth quarter and into next year in order to help to build that confidence.

What I would say is we're always mindful of lifting up our heads and seeing where we sit strategically in the market, where are we from a value perspective? Where do we sit vis a vis the various players in the market? Are we building a valuable and differentiated asset? Are we thinking through the options for how to take advantage of that and monetize it?

And I would just say that, you know, we've got a Board that is obviously highly experienced. And, you know, if we didn't see a rebound to the -- to the equity and get the strong performance that we anticipate, then obviously that might open up various options, some of the ones that you described, whether that's strategic positioning of the company with those [Phonetic] stock repurchase, all of those things, you know, would be -- would be on the table based on -- on where we sit. But right now, I think it's been building confidence in our plan, executing on and getting to where we wanted to get by the fourth quarter, setting up a service business, approaching $1 billion in revenue with mid-teens, potentially higher growth and strong margin expansion, and then having demonstrated that we could invest in an asset that we believe is a very valuable asset and begin to demonstrate that value. And it obviously has its own stand-alone asset value. And I think a smart investor will look at that and say, I got to add up these pieces, particularly relative to comparable companies and the addressable market that everyone has. And and we will be back to where we want to be from a stock price perspective. So that -- that's right now, our current focus.

Ryan Daniels -- William Blair -- Analyst

Okay. I really appreciate that, fair comment. Thank you so much.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Robert Jones of Goldman Sachs. Please go ahead.

Robert Jones -- Goldman Sachs -- Analyst

Great. Thanks for the questions. Yeah, Frank, just wanted to go back to your expectations for mid-teens growth next year. You know, clearly sounds like a lot of confidence, good line of sight into getting to at least that number. But I wanted to ask on a few of the assumptions behind some key swing factors. So maybe just throw out three of them and just hear what you guys are thinking as far as how they play out relative to that expectation. So I guess the first obvious one would just be, Passport and the success level assumed in the Kentucky RFP process. I know it's mid-year, but I'm sure it would have some impact on -- on next year.

The other one would just be, what are you assuming around the incremental Medicaid enrollment in Florida. And then just the last one would be around the expectation around Beacon Health, in light of the proposed acquisition of that plan. So just kind of, even directionally how you're thinking about those three swing factors relative to that mid-teens growth would be helpful.

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, great question. First on Passport, if we win the RFP based on what we see today with largely things that are contracted, we would be at high-teens, potentially higher with Passport winning. With Passport losing, we'd be more in the neighborhood of low-teens. So either way, we still see very strong revenue growth heading into next year. With Florida, we do believe that we have the opportunity to increase membership growth there, but we're not assuming that in any of the assumptions that I just gave you about growth.

So any upside there would be upside on the numbers that I just gave you. And then on Beacon, Beacon has reiterated their commitment to Evolent and our partnership. We work together in several markets. We're valued -- we're viewed as a very important strategic partner for them. We actually work together at Passport, which as you can imagine, is a very large contract, that they would be part of our RFP response.

We work with them in Arkansas. We work with them in New York. So we see that as something that has been going well that will expand over time. We obviously want to make sure that we have a very integrated approach with our offerings. So that's very important that we're delivering seamless service to members and that we're being innovative there. So there's a lot we ask of them in terms of how they evolve. I mean, obviously we need to work together well, but we see that as a very strong relationship and if anything, that's been reiterated since the acquisition. So that -- that hopefully gives you a sense, we're not, again, depending on a bunch of new different things to get us to where we need to get to from our revenue perspective for 2020.

Robert Jones -- Goldman Sachs -- Analyst

No, no, that makes a ton of sense. I guess just on the EBITDA and clearly the confidence to exit the year at the run rate that you guys have been pointing to, but obviously yet in the quarter, you're -- you're lowering the expectations for the year, next quarter, I think, looks based on the guidance, not as robust as where you expect to be in 4Q. Can you maybe just talk a little bit about how EBITDA has played out and what's kind of been impacting the profitability causing a little bit more volatility and then obviously as it relates to that, what gives you the confidence that the the year end exit rate is still very much intact?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I'll start and then I'll have John comment on -- on specifics. If you think about where we started the year, we had a relatively ambitious agenda. We wanted to get to double-digit growth and $40 million to $50 million in contribution by the fourth quarter. That was really our goal. And what we really care about is the setup for 2020, ongoing growth and margin expansion. I think the message you're getting on the call is -- is we're very confident in our path toward our objectives in 2020. And then we feel very good about Q4. What you do see in our business, when you're driving that kind of increase from Q1 to Q4 is as you're bringing on new top line revenue, start dates really matter. So we had a couple of contracts that we expected to start mid-Q2, one at the beginning of Q3 and those moved a couple of months because of regulatory approvals against some things outside of our control. So you have a couple of things move that are fairly large opportunities. We have another thing, again, expected to start mid-Q3, which will start at the beginning of Q4, and that can then influence the flow of EBITDA in Q2 and Q3. The good news is all of those things are contracted. We have a clear line of sight on start dates. There's no ambiguity of those starting and running through Q4 and then John will comment on those. But on the cost side, you'll also have some things that you anticipate are going to be fully in place by the second quarter and a certain part of it slips into the third quarter. And so we've had a little bit of that in the middle of the year. I would say on overall targets and what we needed to do, we obviously took on a lot at the beginning of the year and I feel very good about where we are. But you will see some of those quarter-to-quarter fluctuations. John, anything you want to add to that?

John Johnson -- Chief Financial Officer

Yeah, I'll just add one piece of color around the cost side. If you look at the OpEx on the services line from Q1 to Q2, we saw an $11 million sequential improvement there. That does not fully reflect the full impact of the initiatives and actions we've put in place during the quarter. And so as Frank indicated, we will see incremental improvement flowing into Q3, and then again into Q4 from actions that have already been taken.

Robert Jones -- Goldman Sachs -- Analyst

Understood. Thank you.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Jamie Stockton of Wells Fargo. Please go ahead.

Jamie Stockton -- Wells Fargo -- Analyst

Hey, good evening. Thanks for taking my questions. Maybe just one more on -- on where Bob started as far as to the kind of mid-teens outlook for next year, the premium piece of the revenue, is it -- is it reasonable to assume that in the mid teens growth number that you're assuming that the premium piece is really maybe just growing mid single-digits or something like that?

Frank Williams -- Chief Executive Officer & Co-Founder

So on the premium piece, we're not assuming a significant growth on the premium piece, so I wouldn't -- really when we're talking mid-teens growth, we're really talking the service part of our business. On -- On the New Mexico side, we do anticipate some growth, but I'm not really factoring that in into the mid-teens. But we're really talking about the the core service business.

Jamie Stockton -- Wells Fargo -- Analyst

Okay, that's great. And then my other question is about the balance sheet. I think John may have thrown out like a $110 million cash number. You guys haven't closed the Passport deal which is gonna be 70. If you could just talk about how -- what are your thoughts on how, kind of, you'll manage the balance sheet from here? Obviously, you're seeing an improvement in adjusted EBITDA, which been presumably is going to have a beneficial impact on, kind of, what free cash flow looks like. But just what your thoughts are on the balance sheet from here would be great

Nicky McGrane -- Executive Vice President, Corporate Performance

Hey, Jamie, it's Nicky. I would say on that point two things. One is, as you said, I mean we would expect to be cash flow neutral between for the remainder of the year based on the dynamics in the business. So that's one thing. And secondly, as we talked about before, we would look to replenish the balance sheet and add more cash to the balance sheet. We've looked at the debt options in depth with the Passport timing likely a Q4 event. We'll sort of line that up -- that action up with closer to the timing there. But we're comfortable with where we sit, with what the outlook is on a cash flow basis for the year end and our options to replenish the balance sheet. So all in all, we feel comfortable where we sit.

Jamie Stockton -- Wells Fargo -- Analyst

Okay, thank you.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Sean Weiland of Piper Jaffray. Please go ahead.

Sean Wieland -- Piper Jaffray -- Analyst

Hi. Thanks. So I got a follow up on Bob's line of questioning on that -- on the growth rate. You characterized Passport as taking you from a high-teens growth to a low-teens growth, which, you know, if that's maybe 500 basis points of revenue would size Passport in the maybe $40 million to $50 million range. I thought it was more than that. And so can you set me straight on that?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah. And John can chime in. If you think about Passport, we've -- we will have added New Century as you go into next year. We've also expanded our service offerings. So that's an increase off our base. So that contract in total is well over $150 million in revenue. If we lose the RFP of Passport, we'll still serve out the membership through the middle of the year. So you'd still get 50% of your full run rate revenue for the year and you'd still have some run out probably in revenues. So you'd have a portion of that revenue come off.

And that's the difference between a high-teens and a low-teens rate.

Sean Wieland -- Piper Jaffray -- Analyst

Okay, got it. So -- but the overall passport contribution to revenue is in the$150 million range or will be once it's all built out...(Multiple Speakers)

Frank Williams -- Chief Executive Officer & Co-Founder

It will be just around [Phonetic] It could be higher than that. I mean, we're just starting that contract in August. So, you know, we need to see the number of lives that the NCH services apply to and we'll have better visibility on that as we get toward the end of the year. But, you know, we sort of set our base, as I remember, it was in the $80 million, $90 million range. Initially, we thought New Century as well as some of the additional services we're adding this year would add to that. And so, you know, I would think about it as, you know, well over $150 million, but in that zone, with potential to grow beyond that as we go into next year.

Sean Wieland -- Piper Jaffray -- Analyst

Okay. And is it fair to ask what the contribution to EBITDA is?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I'd say on EBITDA, I mean it has similar contribution margins to our overall business. So, I mean, John, you can, you know, just in terms of overall contribution margins, that's similar. It's not an outsized contract from that perspective. But if, you know, if you run the math, that obviously is important from a contribution margin perspective.

Sean Wieland -- Piper Jaffray -- Analyst

Okay. And one more, if I could. What was the $9.6 million gain in the quarter? Did I miss something?

John Johnson -- Chief Financial Officer

Yeah, that was related to the global transaction as the gain in the assets that we contributed to the JV.

Sean Wieland -- Piper Jaffray -- Analyst

Okay, thank you very much.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Matthew Gillmor of Robert Baird. Please go ahead.

Matthew Gillmor -- Robert W. Baird & Co. -- Analyst

Thanks for the question. I Wanted to get an update on Passport's financial position. You made some comments about their margin trajectory that seem very positive. Were this profitability metrics on an EBITDA basis or net income? And then you also talked about the $40 million plan advance just given their trajectory on margins, can you give us some sense for when you'd recoup that loan?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I would say the plan is a nonprofit, so they're not a taxpayer. If you look at the margin improvement that has occurred, it's been about eight points of improvement, if you look at January run rate to June run rate. So that's pretty significant. Some of that coming from the rate increase that was effective April 1st. The other portion coming from expense initiatives, clinical programs that we've put in place, which are engaging a higher proportion of patients and therefore having an impact on hospitalizations and medical costs.

We expect an additional four points of margin improvement coming into this quarter. Some of that is based on a small rate improvement that will be effective in Q3. So additional to the one that happened in April, we'll also have a full quarter of our expense reduction initiatives coming into the quarter and then New Century, which will take a little while to ramp but launched August 1st. So, we probably won't get the full benefit of that until the -- until the fourth quarter. But right now, we're feeling pretty good about exiting Q3 at break even at least and then as we head into Q4, with New Century taking hold and a few other initiatives being at a positive contribution level. So, I would say right on plan, the team very focused.

We've built a lot of confidence just in terms of the expertise we brought. We're working very closely with the Passport team. And again, I feel very good about where we are. You know, on your last question going into the RFP. I think we wanted to top off the balance sheet so that we have appropriate cushion there from a capital perspective. You know, as we enter that process and as we begin to generate positive contribution on a monthly basis, that would obviously lessen the level of ongoing balance sheet support. We won't likely close the transaction until the very end of the year. And so you need to sort of balance those two things and we think we'll be at -- at roughly where our original estimates were in terms of capital contribution.

Matthew Gillmor -- Robert W. Baird & Co. -- Analyst

All right. Fair enough. And then on the pipeline side, Frank, you mentioned there's several sort of late stage deals that could close and potentially get launched. It sounds like those were relatively chunky opportunities. Can can you at least give us some sense for sort of where they would fit in the business? Is that more on the health plan, services side or more specialty management or [Indecipherable] health?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, and just to be clear, what we've -- what we've said is that, you know, 95% of our Q4 run rate is contracted. So high visibility. Those are contracts that we know are starting in between now and the fourth quarter. So we're really talking about a small amount of incremental revenue in terms of our Q4 run rate. So what I'm really referring to is this, we want to add additional growth and setting up '20 and '21 beyond mid-teens. It's then looking to what's -- what's in the late stage pipeline. And I would say they're a combination of a few things, a few existing plans that are looking to improve the sophistication of their health plan services platform that want the tie-in to identify so they can continue to innovate clinically.

I would say those make up a few and some of those are Medicaid oriented, but also in Medicare. And then the second piece is New Century, where I would say for what has been a short time since we acquired the business in the fourth quarter of last year, I think we've put a pretty strong team against it. We've leveraged our existing network as we talked about, and then also been really thoughtful about our go-to-market approach. And I would say we have a very strong pipeline there as well. Some of those opportunities, because you're working with existing regional plans that have a large number of lives, have the potential to be quite significant in terms of their revenue contribution.

They'll generally have an implementation cycle. So those probably wouldn't -- wouldn't implement until the end of the first quarter of next year, but those could be substantial contributors to '20 and 2021.

Matthew Gillmor -- Robert W. Baird & Co. -- Analyst

Got it. Thank you.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Richard Close of Canaccord Genuity. Please go ahead.

Richard Close -- Canaccord Genuity -- Analyst

Great. Thanks for the update here and the questions. Just on the same-store growth, I was wondering, Frank, if you can just maybe talk a little bit about the total number of lives that you're talking about with all that business and maybe the timing of when all that comes on.

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I would say if you look at a few segments, the MA lives with two partners that I mentioned would come on in January. I don't have an exact estimate, but again, there you're going to be ramping new plan. So, you know, probably it'd be under 10,000 lives, but they're Medicare lives, so a higher PMPM. Probably about 10,000 there.

I mentioned that we have some that we've already announced which are over 300,000 lives, which will come on by the fourth quarter. Actually, some of those are new. So to be fair, not -- not same-store. If you look at NCH , Passport and a couple of the other opportunities we see in the Medicaid segment and with one of our Medicare clients, it's probably 300,000 lives, over 300,000 lives across those plans. That's obviously a higher PMPM. So, you know, that's a substantial revenue generator. And then we have a partner and ACO that's expecting to add pretty substantial book of delegated risk lives that could be again hard to estimate, but that could be over 100,000. They could range from 50,000 lives to 150,000 lives from that perspective.

So, if you add all that up, it's a substantial growth in the next year coming from same-store, which again, we feel very good about. It's obviously easier to scale when you already have the relationship. And then with six new additions this year on the -- on the new side, as well as the pipeline that I just referenced, we have the potential to go beyond that -- that growth estimate for next year.

Richard Close -- Canaccord Genuity -- Analyst

Okay. And a follow up maybe on the Pathways program. How are you seeing that shake -- shake out? Obviously, you had some success in adding new people or new clients this quarter. How do you think that trends, you know, as we enter 2020?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I would just say our plan has been to be highly selective in terms of new partners we add in that program and the ACO programs in general. We want partners that have a strong historical track record of MLR performance with their Medicaid populations that have a large geographic area of potential population to scale to, that potentially have interest in other populations.

So we don't end up in a situation where we're working with 5000 lives and we're really not driving scale on those markets. So we want to be working with winners that ultimately can add tens of thousands of lives, you know, over 50,000 lives, over 100,000 lives in their markets across time, and so I would say we're less focused on numbers there and number of partners, but selecting the right ones and having ones that -- that successfully scale and grow over time. So I think you'll see some additional announcements there, you know, as we continue to add organizations to that program. But we're not planning on building a very large cohort of ACO's that have a small number of lives. That's not where our business focus is.

Richard Close -- Canaccord Genuity -- Analyst

Okay. Thank you.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

Our next question comes from Mohan Naidu of Oppenheimer. Please go ahead.

Mohan Naidu -- Oppenheimer & Co. -- Analyst

Thanks for taking my questions. Frank, on -- first on the pipeline strength and the six partnerships that you have signed so far, can you talk about your implementation capacity to handle that and especially as you see more pipeline converting toward the second half of this year?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, that's a good question. Obviously, when we have this kind of growth to accommodate across, you know, a variety of different segments, we need to make sure we're ready to launch, that we have the capacity that we can hit the ground running on day one. I would say we feel good about our capacity at this point and ability to deliver based on the opportunities that I just talked about. I would say if we get additional wins, we probably will need to think about staffing up for those implementations that we have the accurate lead time because we're obviously stretched to accommodate the growth going into next year.

So that's something we've dealt with in the past. You know, we obviously have a very strong pipeline in our overall recruiting efforts and feel like we can accommodate that. But we would need to respond quickly and we definitely would need to do some incremental hiring, you know, as we -- as we head into next year.

Mohan Naidu -- Oppenheimer & Co. -- Analyst

Thanks for that color. Maybe one quick one on Cook CountyCare. Any updates on the program position, what you're seeing in that program so far? And you know, given that the state budget position is not such an envious position right now, how do you see that program sustaining?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, I would say, you know, we really have had a strong relationship with CountyCare. They've got a very strong leadership team in place in the health plan. We've expanded our relationship across time. I think they're a very highly regarded plan in the community. And we think that they'll continue to be a great partner for us going into the future. The state is obviously under economic pressure. There's been, you know a lot of speculation about what's going to happen in the state Medicaid plan, et cetera. You know, it's our belief that it's a very important community asset. It contributes a lot to the broader health system, that it's incredibly important to beneficiaries in the county and has a lot of political support. And -- and we think they'll be a strong plan going forward. And I think if you ultimately look at how they're performing, how they contribute to the overall health system that they are a part of, you know, they make a very important and significant contribution. If you look at the full picture of the economics, they drive for the whole system. So I think a very valuable asset. Again, one we've had a strong working relationship with. Obviously, we want them to be as efficient as we can. I mean, I think that's one of the reasons we have the partnership we do because of the scale we bring, the additional ways we can add value for them, things like New Century, which frankly, for all of our partners that are in the risk business can -- can add value over time and looking for those types of opportunities. But again, strong relationship and we think they'll be around for a long time.

Mohan Naidu -- Oppenheimer & Co. -- Analyst

Thanks for the color, Frank.

Operator

Our next question comes from Charles Rhyee of Cowen. Please go ahead.

Charles Rhyee -- Cowen & Co. -- Analyst

Yeah, yeah, thanks for taking the question. Just had a quick question. I think you talked about investing capital of $40 million into Passport, is that separate from the $20 million line of credit that was announced in the original deal? And then secondly, any kind of color you can give around sort of the bid submission, you know, I guess I would assume from -- from this investment as well as line of credit you made -- any kind of requirements needed for bidding on Passport?

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah. Just to clarify, the $40 million is inclusive of the $20 million. There are fee [Phonetic] happened after we announced the deal going into the RFP, I think we wanted them to have some more balance sheet cushion and so we put an additional $20 million and commensurate with the RFP process. The RFP responses were due July 5th. Passport submitted a comprehensive response and we expect to hear in the October time frame based on what we've heard from the Department of Medicaid. No comment on the potential winners or anything like that. We don't obviously have any information or comment on that. We obviously feel that Passport is a real asset in the community, strong track record across the last 20 years, Incredible member satisfaction ratings. We think that it's an important plan that's having a really important impact on the Medicaid recipients that they serve. And we're hopeful when looking forward to trying to build on that, but no specific comments on the RFP.

Charles Rhyee -- Cowen & Co. -- Analyst

Great. Thank you. And if I could just follow up. You talked about sort of the investments you we're making that'll also help drive the growth next year as well. On the investments you're making on the Passport side, is that captured off income statement sort of as part of the equity line or is that -- are you carrying costs on the sort of the Evolent income statement P&O that would benefit sort of the Passport side? Just to -- trying to understand that a little bit.

Frank Williams -- Chief Executive Officer & Co-Founder

Yeah, no. Right now we don't own the plan, Charles. So any -- any investments are on our -- on our side of the ledger. And obviously, this is in the context of the services we provide today. So as we, you know, clinical programs, NCH, et cetera. So kind of normal course in our line of business, and then on our -- our side of the ledger.

Charles Rhyee -- Cowen & Co. -- Analyst

So then would that change versus the transaction closes in the fall? And let's assume that you -- you -- Passport gets renewed, would some of the costs that you're carrying now on the Evolent side, would that shift over, because it would be ostensibly part of operating the plan?

Frank Williams -- Chief Executive Officer & Co-Founder

Again, I think, you know, I mean the -- probably not just because these are services, we're a service provider to them. So we keep that relationship. So I would say those capabilities would sit on our side.

Charles Rhyee -- Cowen & Co. -- Analyst

Okay, that's helpful. Thank you.

Operator

(Operator instructions) Our next question comes from Stephanie Demko of Citi. Please go ahead.

Stephanie Demko -- Citigroup -- Analyst

Hey, guys, thank you for taking my question. Just kind of dovetailing on the strategic alternative question from before. Is there anything structurally or philosophically that would keep you from a take private like an advantage as selling as a public player?

Nicky McGrane -- Executive Vice President, Corporate Performance

Hey, Stephanie. This is Nicky. You know, not something we can really comment on at this point in terms of, you know -- I think Frank talked about it earlier with -- in response to Ryan's question about how we look at the world and how we think about it and where we're focused right now. But in terms of structural or other issues, you know, it's not really something to comment on just in, you know, as Frank said, we're headed down focused on delivering value and we got a lot in front of us. And that's what we're focused today. And not really something that we can comment on.

Stephanie Demko -- Citigroup -- Analyst

Understood. So there is nothing like you can picture that you are one of the only public players and you are selling your solutions for the sales [Phonetic].

Nicky McGrane -- Executive Vice President, Corporate Performance

No, there's nothing like that. No, nothing specific like that, no.

Stephanie Demko -- Citigroup -- Analyst

Okay. Understood. And then just to follow up on the last question when we talked about the spend associated with the Passport performance improvement. Could you tell me a little bit about how that's impacted EBITDA for the year and how we could have thought about EBITDA without that level spend?

Frank Williams -- Chief Executive Officer & Co-Founder

I would say that, you know, if I go back to John's comment to sort of looking at the arc of the year, really the point we're referring to here is in Q3 and that's at the timing primarily to do with how these contracts started. So, yeah, I mean, I think you're seeing some impact in Q3 of the combination effect of, you know, when the contract started and some of the expenses that went against them. So we were sort of ready to go expenses and place the contracts, and the revenue recognition came in a little bit after later than we expected. So it's a combination. It's really just to do with the timing. I don't think there's an undue level of investment into Passport that was not anticipated. It's more just to do with when this contract started up. And you're seeing the Q3 is when we're seeing the impact of that primarily versus Q4, where contracts are up and running for a full quarter, et cetera.. So I think more timing than investment would be the -- the issue at hand in Q3.

Stephanie Demko -- Citigroup -- Analyst

All right. That was helpful. Thank you. And one last quick one. Just given some of the attrition that you did see earlier this year, should we still think about that seven to nine new wins as the number needed to hit your growth target or is that sort of creeping up?

Frank Williams -- Chief Executive Officer & Co-Founder

This is Frank. I mean, I would say we've made it pretty clear that we don't really need a lot of new wins to hit our growth target in our setup for next year. We obviously want to keep growing our partner network, given the fact we're at six for the year, I think we adopt our range into the eight to 10 range just given our our overall size. So right now we feel comfortable being in that range of eight to 10 across this year.

Unidentified Participant

All right. Good to hear. Well, thank you so much, guys. Appreciate it.

Frank Williams -- Chief Executive Officer & Co-Founder

Thanks.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Frank Williams for any closing remarks.

Frank Williams -- Chief Executive Officer & Co-Founder

We appreciate everyone participating in the call. We'll obviously see many of you at up and coming conferences and on the road across the next several couple of weeks. And again, thanks for participating.

Operator

[Operator Closing Remarks]

Duration: 71 minutes

Call participants:

Frank Williams -- Chief Executive Officer & Co-Founder

John Johnson -- Chief Financial Officer

Nicky McGrane -- Executive Vice President, Corporate Performance

Ryan Daniels -- William Blair -- Analyst

Robert Jones -- Goldman Sachs -- Analyst

Jamie Stockton -- Wells Fargo -- Analyst

Sean Wieland -- Piper Jaffray -- Analyst

Matthew Gillmor -- Robert W. Baird & Co. -- Analyst

Richard Close -- Canaccord Genuity -- Analyst

Mohan Naidu -- Oppenheimer & Co. -- Analyst

Charles Rhyee -- Cowen & Co. -- Analyst

Stephanie Demko -- Citigroup -- Analyst

Unidentified Participant

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