InnovAge — Fiscal Year 2026 Earnings Summary

Financial Performance

• Total revenues for the full year ended June 30, 2026, reached $989.7 million, an increase of approximately 15.9% compared to $853.7 million in 2025.
• Income before income taxes for the full year was $0.3 million, a significant improvement from a loss of $34.0 million in 2025.
• Net loss for the full year narrowed to $0.7 million, a 98% decrease from a net loss of $35.3 million in 2025.
• Net loss attributable to InnovAge Holding Corp. was $2.5 million ($0.02 per share), compared to a net loss of $30.3 million ($0.22 per share) in 2025.
• Center-level Contribution Margin increased 48.3% to $227.8 million in 2026 from $153.6 million in 2025, representing 23.0% of revenue versus 18.0% in the prior year.
• Adjusted EBITDA for the full year rose to $94.6 million from $34.5 million in 2025, with the margin expanding to 9.6% from 4.0%.
• For the quarter ended June 30, 2026, total revenues were $262.0 million compared to $221.4 million in the prior year quarter.
• Net income for the quarter ended June 30, 2026, was $9.8 million, compared to a net loss of $5.0 million in the prior year quarter.
• Adjusted EBITDA for the quarter ended June 30, 2026, was $24.3 million, up from $11.3 million in the prior year quarter.
• Cash and cash equivalents increased to $97.9 million as of June 30, 2026, from $64.1 million in 2025.
• Net cash provided by operating activities for the year ended June 30, 2026, was $64.7 million, compared to $32.9 million in 2025.

Guidance and Future Outlook

• InnovAge issued full fiscal year 2027 guidance for total revenues between $1.05 billion and $1.085 billion.
• Adjusted EBITDA guidance for fiscal year 2027 is set between $105 million and $115 million.
• Census guidance for fiscal year 2027 is projected between 8,625 and 8,850 participants.
• Total member months guidance for fiscal year 2027 is projected between 101,000 and 102,500.
• Management stated the company enters fiscal 2027 in a strong position with a durable foundation to serve more seniors and deliver high-quality care.

Business Segments and Product Lines

• The company serves approximately 8,230 participants across 20 centers in six states as of June 30, 2026.
• Participant census increased to approximately 8,230 in 2026 from 7,740 in 2025.
• Member months increased to approximately 96,050 in 2026 from 89,130 in 2025.
• The Senior Housing operating segment is included in "All other" revenue and contribution margin, as it did not meet quantitative thresholds for a separate reportable segment.
• The Company's model focuses on the Program of All-inclusive Care for the Elderly (PACE) for frail, predominantly dual-eligible seniors.

Market and Competitive Landscape

• InnovAge describes itself as an industry leader in providing comprehensive healthcare programs to frail, predominantly dual-eligible seniors through the PACE model.
• The company's patient-centered care model aims to improve quality of care while reducing over-utilization of high-cost care settings.

Risks and Challenges

• Risks include the potential for government funding reductions, legislative changes, and federal and state budgetary pressures due to dependence on a limited number of government payors.
• The business faces risks related to labor shortages, labor competition, high inflation, and supply chain disruptions.
• There is a risk that the cost of providing services under PACE contracts could exceed compensation.
• Potential reductions in PACE reimbursement rates pose a financial risk.
• The company faces risks regarding the results of periodic inspections, reviews, audits, and investigations under federal and state government programs.
• Litigation costs and settlements, including stockholder class actions and civil investigative demands, represent a significant financial risk.
• The company faces risks associated with the viability of its growth strategy, including obtaining licenses for new centers and attracting/retaining participants.

Management Commentary and Tone

• Patrick Blair, Chief Executive Officer, described fiscal 2026 as an "exceptional year" reflecting significant progress in strengthening the company.
• Management emphasized a focus on disciplined execution and creating sustainable long-term value for all stakeholders.
• The tone indicates confidence in the company's ability to expand its participant base and deliver high-quality care.

Other Key Points

• Litigation costs and settlements included in the Adjusted EBITDA reconciliation for the year ended June 30, 2026, totaled $56.966 million, including $52.4 million in accrued loss for potential resolutions or paid settlements.
• Business optimization charges for the year ended June 30, 2026, were $3.54 million, primarily related to organizational restructure and executive severance.
• The company recorded a gain on the sale of center equipment originally purchased for the Louisville, Kentucky center.
• Impairment charges were recorded related to a previously planned de novo center in Downey, California, and the sale of a managing member interest in SH1.
• Proceeds from long-term debt were $60.1 million in 2026, while principal payments on long-term debt were $71.3 million.
• The company paid $1.99 million in debt issuance costs during the year.
• Contributions from a joint venture partner were $3.2 million, with distributions of $1.6 million.
• No equity securities were repurchased in 2026, compared to $7.3 million in 2025.
• The company is unable to provide guidance for net income or a reconciliation of Adjusted EBITDA guidance due to the inherent difficulty in forecasting certain reconciling items like tax rates and acquisition expenses.