InnovAge Announces Financial Results for the Fiscal Second Quarter Ended December 31, 2025
Rhea-AI Summary
InnovAge (Nasdaq: INNV) reported fiscal Q2 ended December 31, 2025 results showing revenue of $239.7M (+14.7% YoY) and net income of $11.8M versus a loss in prior-year quarter. Adjusted EBITDA was $22.2M and center-level contribution margin was $52.8M (22.0% of revenue).
The company raised fiscal 2026 revenue and Adjusted EBITDA guidance to a range of $925M–$950M and $70M–$75M, while full-year ending census guidance stayed at 7,900–8,100 members.
Positive
- Total revenues +14.7% to $239.7M
- Net income turnaround to $11.8M from prior-year loss
- Adjusted EBITDA increased by $16.3M to $22.2M
- Center-level Contribution Margin +42.5% to $52.8M
- Combined cash and short-term investments of $126.0M
Negative
- Debt on balance sheet of $69.9M
- Company unable to reconcile Adjusted EBITDA guidance to net income, limiting GAAP visibility
- Business remains dependent on a limited number of government payors, a stated material risk
News Market Reaction
On the day this news was published, INNV declined 0.70%, reflecting a mild negative market reaction. Argus tracked a peak move of +34.7% during that session. Our momentum scanner triggered 29 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $8M from the company's valuation, bringing the market cap to $1.10B at that time. Trading volume was exceptionally heavy at 11.8x the daily average, suggesting significant selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
INNV gained 2.7% pre-release while peers showed mixed moves: AMN +3.33%, NUTX +7.5%, SNDA +1.83%, but AUNA -1.84% and AGL -6.98%. The mixed peer tape points to a company-specific narrative around these earnings.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 04 | Quarterly earnings | Positive | +2.1% | Revenue, net income and Adjusted EBITDA all improved versus prior-year quarter. |
| Sep 09 | Annual results | Negative | -2.8% | Full-year revenue grew but net loss widened, tempering the otherwise solid top line. |
| May 06 | Quarterly earnings | Positive | +14.4% | Double-digit revenue growth and stronger Adjusted EBITDA despite a wider net loss. |
| Feb 04 | Quarterly earnings | Negative | -9.1% | Loss before taxes and Adjusted EBITDA margin both deteriorated year over year. |
| Nov 05 | Quarterly earnings | Positive | +3.8% | Revenue growth, smaller net loss and higher Adjusted EBITDA signaled improving trends. |
Across the last five earnings releases, INNV’s price moves consistently aligned with the tone of results, often reacting positively when revenue growth and EBITDA trends improved and selling off when losses or margins deteriorated.
Over the past year, InnovAge’s earnings reports have highlighted steady census growth and rising revenue, with total revenue progressing from $205.1M in fiscal Q1 2025 to $236.1M in fiscal Q1 2026. Earlier quarters showed a transition from net losses toward profitability and expanding Adjusted EBITDA and center-level contribution margin. Guidance for fiscal 2026 revenue of $900–$950M and Adjusted EBITDA of $56–$65M was previously outlined, and the current Q2 2026 report adds higher revenue, stronger margins, and raised guidance within that framework.
Historical Comparison
Across the last five earnings releases, INNV’s average move was about 6.44%. Q2 2026 results, with higher revenue, stronger margins and raised guidance, are consistent with prior earnings events that have typically driven meaningful post-report repricing.
Earnings releases show progression from revenue of $205.1M in fiscal Q1 2025 to $236.1M in fiscal Q1 2026, improving Adjusted EBITDA and center-level contribution margins, and guidance stepping up toward $900–$950M revenue and higher EBITDA for fiscal 2026. The current Q2 2026 report extends that trend with further revenue growth, a shift to net income, and higher margin targets.
Market Pulse Summary
This announcement reports fiscal Q2 2026 results with revenue of $239.7M, a return to net income and materially higher Adjusted EBITDA and margins, plus raised full-year guidance for both revenue and EBITDA. It continues a multi-quarter trend of census growth and improving profitability. Investors may track whether future quarters sustain these margins, how guidance evolves, and how regulatory or reimbursement dynamics affect the PACE-focused business model.
Key Terms
program of all-inclusive care for the elderly (pace) medical
capitation revenue financial
center-level contribution margin financial
adjusted ebitda financial
non-gaap financial measures financial
operating lease obligations financial
AI-generated analysis. Not financial advice.
DENVER, Feb. 03, 2026 (GLOBE NEWSWIRE) -- InnovAge Holding Corp. (“InnovAge” or the “Company”) (Nasdaq: INNV), an industry leader in providing comprehensive healthcare programs to frail, predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE), today announced financial results for its fiscal second quarter ended December 31, 2025.
“InnovAge delivered strong operating and financial results this quarter, reflecting continued progress in building a scalable, high-quality PACE platform,” said Patrick Blair, CEO. “Our performance is rooted in disciplined execution and a care model that prioritizes clinical outcomes, participant experience, and responsible stewardship of public resources. We remain focused on sustainable growth, close partnership with regulators, and long-term value for participants, payors, and shareholders.”
Financial Results
| Three Months Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| in thousands, except percentages and per share amounts | |||||||
| Total revenues | $ | 239,708 | $ | 208,999 | |||
| Income (Loss) Before Income Taxes | 12,456 | (13,457 | ) | ||||
| Net Income (Loss) | 11,805 | (13,491 | ) | ||||
| Net Income (Loss) margin | 4.9 | % | (6.5 | )% | |||
| Net Income (Loss) Attributable to InnovAge Holding Corp. | 10,618 | (13,221 | ) | ||||
| Net Income (Loss) per share - basic and diluted | $ | 0.08 | $ | (0.10 | ) | ||
| Center-level Contribution Margin(1) | $ | 52,825 | $ | 37,065 | |||
| Adjusted EBITDA(1) | $ | 22,151 | $ | 5,869 | |||
| Adjusted EBITDA margin(1) | 9.2 | % | 2.8 | % | |||
Fiscal Second Quarter 2026 Financial Performance
- Total revenues of
$239.7 million , increased approximately14.7% compared to$209.0 million in the second quarter of fiscal year 2025 - Income Before Income Taxes of
$12.5 million increased approximately192.6% , compared to a Loss Before Income Taxes of$13.5 million in the second quarter of fiscal year 2025 - Income Before Income Taxes as a percent of revenue was
5.2% , an increase of 11.6 percentage points, compared to Loss Before Income Tax as a percent of revenue of6.4% in the second quarter of fiscal year 2025 - Center-level Contribution Margin(1) of
$52.8 million , increased42.5% compared to$37.1 million in the second quarter of fiscal year 2025 - Center-level Contribution Margin(1) as a percent of revenue was
22.0% , an increase of 4.3 percentage points compared to17.7% in the second quarter of fiscal year 2025 - Net income of
$11.8 million , compared to net loss of$13.5 million in the second quarter of fiscal year 2025 - Net income margin of
4.9% , an increase of 11.4 percentage points, compared to a net loss margin of6.5% in the second quarter of fiscal year 2025 - Net income attributable to InnovAge Holding Corp. of
$10.6 million , or earnings per share of$0.08 , compared to net loss attributable to InnovAge Holding Corp. of$13.2 million , or a loss per share of$0.10 in the second quarter of fiscal year 2025 - Adjusted EBITDA(1) of
$22.2 million , an increase of$16.3 million , compared to Adjusted EBITDA of$5.9 million in the second quarter of fiscal year 2025 - Adjusted EBITDA(1) margin of
9.2% , an increase of 6.4 percentage points, compared to2.8% in the second quarter of fiscal year 2025 - Census of approximately 8,010 participants compared to 7,480 participants in the second quarter of fiscal year 2025
- Ended the second quarter of fiscal year 2026 with
$83.2 million in cash and cash equivalents plus$42.8 million in short-term investments, and$69.9 million in debt on the balance sheet, representing debt under the Company’s senior secured term loan, revolving credit facility and finance lease obligations
(1) Center-level Contribution Margin and Center-level Contribution Margin as a percentage of revenue, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. For more details and for a definition and reconciliation of these non-GAAP measures to the most closely comparable GAAP measures for the periods indicated, see “Note Regarding Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Measures.”
Full Fiscal Year 2026 Financial Guidance
Based on information as of today, February 3, 2026, InnovAge is raising full year fiscal 2026 financial guidance, except for ending census which remains unchanged, to the following:
| Low | High | ||||||
| dollars in millions | |||||||
| Census | 7,900 | 8,100 | |||||
| Total Member Months(1) | 92,900 | 95,700 | |||||
| Total revenues | $ | 925 | $ | 950 | |||
| Adjusted EBITDA(2) | $ | 70 | $ | 75 | |||
Expected results and estimates may be impacted by factors outside the Company’s control, and actual results may be materially different from this guidance. See “Forward-Looking Statements - Safe Harbor” included herein.
(1) We define Total Member Months as the total number of participants as of period end multiplied by the number of months within a year in which each participant was enrolled in our program. Management believes this is a useful metric as it more precisely tracks the number of participants the Company serves throughout the year.
(2)Adjusted EBITDA is a non-GAAP measure. See “Note Regarding Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Measures” for a definition of Adjusted EBITDA and a reconciliation to net income (loss), the most closely comparable GAAP measure. The Company is unable to provide guidance for net income (loss) or a reconciliation of the Company’s Adjusted EBITDA guidance because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. The Company’s inability to do so is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities and other one-time or exceptional items.
Conference Call
The Company will host a conference call this afternoon at 5:00 PM Eastern Time. A live audio webcast of the call will be available on the Company’s website, https://investor.innovage.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for a limited time. To access the call by phone, please go to this link (registration link), for dialing instructions and a unique access pin. We encourage participants to dial into the call fifteen minutes ahead of the scheduled start time.
About InnovAge
InnovAge is a market leader in managing the care of high-cost, frail, and predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE). With a mission of enabling older adults to age independently in their own homes for as long as safely possible, InnovAge’s patient-centered care model is designed to improve the quality of care our participants receive while reducing over-utilization of high-cost care settings. InnovAge believes its PACE healthcare model is one in which all constituencies — participants, their families, providers and government payors — “win.” As of December 31, 2025, InnovAge served approximately 8,010 participants across 20 centers in six states. https://www.innovage.com.
Investor Contact:
Ryan Kubota
rkubota@innovage.com
Media Contact:
Lara Hazenfield
lhazenfield@innovage.com
Forward-Looking Statements - Safe Harbor
This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements may be identified by the fact that they do not relate strictly to historical or current facts. Examples of forward-looking statements include, among others, statements we may make regarding quarterly or annual guidance; financial outlook, including future revenues and future earnings; mid-term and long-term financial goals; the viability of our growth strategy including our ability or expectations to increase the number of participants we serve, build and/or open de novo centers, or to identify and execute tuck-in acquisitions, joint ventures and other strategic partnerships; the expected impact of government policies and the macroeconomic environment; our ability to control costs, mitigate the effects of elevated expenses or reduced healthcare budgets, expand our payer capabilities, implement clinical value and operational value initiatives and strengthen enterprise functions; and the effects of any of the foregoing on our future results of operations or financial conditions.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control and may cause our actual results and financial condition to differ materially. Important factors that could cause our actual results and financial condition to differ materially include, among others, the following: (i) the viability of our growth strategy, including our ability to find suitable geographies for new centers and to attract new participant and retain existing participants in new and existing centers and our ability to obtain licenses to open such centers; (ii) our ability to identify, successfully complete and integrate acquisitions, joint ventures another strategic partnerships; (iii) the impact on our business from ongoing macroeconomic related challenges, including labor shortages, labor competition, inflation, tariffs and trade disputes; (iv) inspections, reviews, audits and investigations under the federal and state government programs, including our ability to sufficiently cure any deficiencies identified; (v) legal proceedings, enforcement actions and litigation and disputes; (vi) under our PACE contracts, we assume all of the risk that the cost of providing services will exceed our compensation; (vii) the dependence of our revenues upon a limited number of government payors, including the risk of sudden loss of any of our government contracts; (viii) the impact of state and federal efforts to reduce healthcare spending, including recent legislation reducing the budget that funds Medicaid; (ix) the risk that our submissions to government payors may contain inaccurate or unsupportable information, including regarding risk adjustment scores of participants, subjecting us to repayment obligations or penalties; (x) and our ability to comply with the continued listing requirements of Nasdaq.
Forward-looking statements are based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. We advise you to not place undue reliance on forward-looking statements and to review our risk factors and other disclosures included in the reports we file or furnish with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Note Regarding Use of Non-GAAP Financial Measures
In addition to reporting financial information in accordance with generally accepted accounting principles (“GAAP”), the Company is also reporting Center-level Contribution Margin, Center-level Contribution Margin as a percent of revenue, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP measures are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to the most directly comparable GAAP measures. We believe that these non-GAAP measures are appropriate measures of operating performance because they allow us to more effectively evaluate our core operating performance and trends from period to period. Our definitions and calculations of non-GAAP measures may vary and not be comparable to similarly titled measures reported by other companies. We believe that these non-GAAP measures help investors and analysts in comparing our results across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
The Company’s management uses Center-level Contribution Margin as the measure for assessing performance of its operating segments and allocating resources, predominantly in the annual budget and forecasting process. For the purpose of evaluating Center-level Contribution Margin on a center-by-center basis, we do not allocate our sales and marketing expense or corporate, general and administrative expenses across our centers. We define Center-level Contribution Margin as total revenues less external provider costs and cost of care, excluding depreciation and amortization, which includes all medical and pharmacy costs.
We define Adjusted EBITDA as net income (loss) adjusted for interest expense, net, other investment income, depreciation and amortization, and provision (benefit) for income tax as well as addbacks for non-recurring expenses or exceptional items, including charges relating to management equity compensation, litigation costs and settlement, M&A diligence, transaction and integration, business optimization, loss on assets held for sale, and loss (gain) on sale of assets. Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage of our total revenue.
Schedule 1
InnovAge
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES) (UNAUDITED)
| December 31, 2025 | June 30, 2025 | ||||||
| Assets | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 83,203 | $ | 64,129 | |||
| Short-term investments | 42,755 | 41,775 | |||||
| Restricted cash | 10 | 11 | |||||
| Accounts receivable | 21,302 | 36,373 | |||||
| Prepaid expenses | 31,274 | 24,472 | |||||
| Income tax receivable | 3,310 | 3,310 | |||||
| Assets held for sale | — | 6,038 | |||||
| Total current assets | 181,854 | 176,108 | |||||
| Noncurrent Assets | |||||||
| Property and equipment, net | 164,589 | 168,044 | |||||
| Operating lease assets | 24,765 | 26,901 | |||||
| Deposits and other | 10,680 | 9,875 | |||||
| Goodwill | 142,046 | 142,046 | |||||
| Other intangible assets, net | 3,548 | 3,877 | |||||
| Total noncurrent assets | 345,628 | 350,743 | |||||
| Total assets | $ | 527,482 | $ | 526,851 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 55,899 | $ | 76,750 | |||
| Reported and estimated claims | 62,443 | 58,971 | |||||
| Due to Medicaid and Medicare | 14,042 | 14,382 | |||||
| Current portion of long-term debt | 2,536 | 2,250 | |||||
| Current portion of finance lease obligations | 5,000 | 5,234 | |||||
| Current portion of operating lease obligations | 4,782 | 4,682 | |||||
| Liabilities held for sale | — | 2,538 | |||||
| Total current liabilities | 144,702 | 164,807 | |||||
| Noncurrent Liabilities | |||||||
| Deferred tax liability, net | 9,272 | 8,761 | |||||
| Finance lease obligations | 5,411 | 7,535 | |||||
| Operating lease obligations | 21,640 | 23,918 | |||||
| Other noncurrent liabilities | 1,704 | 1,458 | |||||
| Long-term debt, net of debt issuance costs | 55,990 | 57,464 | |||||
| Total liabilities | 238,719 | 263,943 | |||||
| Commitments and Contingencies | |||||||
| Redeemable Noncontrolling Interests | 27,595 | 25,010 | |||||
| Stockholders’ Equity | |||||||
| Common stock, | 137 | 137 | |||||
| Treasury stock at cost, 1,462,979 shares as of December 31, 2025 and June 30, 2025 | (7,500 | ) | (7,500 | ) | |||
| Additional paid-in capital | 346,559 | 343,378 | |||||
| Retained deficit | (82,410 | ) | (101,047 | ) | |||
| Total InnovAge Holding Corp. | 256,786 | 234,968 | |||||
| Noncontrolling interests | 4,382 | 2,930 | |||||
| Total stockholders’ equity | 261,168 | 237,898 | |||||
| Total liabilities and stockholders’ equity | $ | 527,482 | $ | 526,851 | |||
Schedule 2
InnovAge
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA) (UNAUDITED)
| Three Months Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Revenues | |||||||
| Capitation revenue | $ | 239,620 | $ | 208,674 | |||
| Other service revenue | 88 | 325 | |||||
| Total revenues | 239,708 | 208,999 | |||||
| Expenses | |||||||
| External provider costs | 111,999 | 107,873 | |||||
| Cost of care, excluding depreciation and amortization | 74,884 | 64,061 | |||||
| Sales and marketing | 8,078 | 7,704 | |||||
| Corporate, general and administrative | 26,608 | 28,103 | |||||
| Depreciation and amortization | 4,877 | 5,319 | |||||
| Impairments and loss on assets held for sale | — | 8,495 | |||||
| Total expenses | 226,446 | 221,555 | |||||
| Operating Income (Loss) | 13,262 | (12,556 | ) | ||||
| Other Income (Expense) | |||||||
| Interest expense, net | (1,246 | ) | (760 | ) | |||
| Other income (expense) | 440 | (157 | ) | ||||
| Gain on equity method investment | — | 16 | |||||
| Total other expense | (806 | ) | (901 | ) | |||
| Income (Loss) Before Income Taxes | 12,456 | (13,457 | ) | ||||
| Provision for Income Taxes | 651 | 34 | |||||
| Net Income (Loss) | 11,805 | (13,491 | ) | ||||
| Less: net income (loss) attributable to noncontrolling interests | 1,187 | (270 | ) | ||||
| Net Income (Loss) Attributable to InnovAge Holding Corp. | $ | 10,618 | $ | (13,221 | ) | ||
| Weighted-average number of common shares outstanding - basic | 135,686,130 | 135,439,668 | |||||
| Weighted-average number of common shares outstanding - diluted | 136,351,004 | 135,439,668 | |||||
| Net income (loss) per share - basic | $ | 0.08 | $ | (0.10 | ) | ||
| Net income (loss) per share - diluted | $ | 0.08 | $ | (0.10 | ) | ||
Schedule 3
InnovAge
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
| Six Months Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Operating Activities | |||||||
| Net income (loss) | $ | 19,474 | $ | (19,201 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||
| (Gain) loss on disposal of assets | (374 | ) | 15 | ||||
| Provision for uncollectible accounts | — | 524 | |||||
| Depreciation and amortization | 9,962 | 10,730 | |||||
| Operating lease rentals | 3,078 | 3,107 | |||||
| Impairments and loss on assets held for sale | 104 | 8,495 | |||||
| Amortization of deferred financing costs | 405 | 215 | |||||
| Stock-based compensation | 3,524 | 4,035 | |||||
| Deferred income taxes | 511 | 437 | |||||
| Other, net | 1,403 | 709 | |||||
| Changes in operating assets and liabilities | |||||||
| Accounts receivable | 15,071 | (2,176 | ) | ||||
| Prepaid expenses and other current assets | (6,795 | ) | (9,084 | ) | |||
| Deposits and other | (1,498 | ) | (629 | ) | |||
| Accounts payable and accrued expenses | (19,590 | ) | 2,717 | ||||
| Reported and estimated claims | 3,472 | 3,864 | |||||
| Due to Medicaid and Medicare | (341 | ) | (1,340 | ) | |||
| Operating lease liabilities | (3,121 | ) | (3,181 | ) | |||
| Net cash provided by (used in) operating activities | 25,285 | (763 | ) | ||||
| Investing Activities | |||||||
| Purchases of property and equipment | (6,440 | ) | (3,543 | ) | |||
| Purchases of short-term investments | (995 | ) | (1,147 | ) | |||
| Proceeds from sale of assets held for sale | 3,716 | — | |||||
| Proceeds from sale of short-term investments | — | 6,300 | |||||
| Net cash (used in) provided by investing activities | (3,719 | ) | 1,610 | ||||
| Financing Activities | |||||||
| Payments for finance lease obligations | (2,714 | ) | (3,130 | ) | |||
| Principal payments on long-term debt | (60,646 | ) | (1,898 | ) | |||
| Proceeds from the issuance of long-term debt | 60,082 | — | |||||
| Payments on financing costs | (1,989 | ) | — | ||||
| Repurchase of equity securities | — | (5,912 | ) | ||||
| Contribution from joint venture partner | 3,200 | — | |||||
| Taxes paid related to net settlements of stock-based compensation awards | (344 | ) | (776 | ) | |||
| Net cash used in financing activities | (2,411 | ) | (11,716 | ) | |||
| Net change in cash, cash equivalents and restricted cash including cash of | 19,155 | (10,869 | ) | ||||
| Less: change in cash and restricted cash reclassified to assets held for sale | (82 | ) | — | ||||
| INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS & RESTRICTED CASH | 19,073 | (10,869 | ) | ||||
| CASH, CASH EQUIVALENTS & RESTRICTED CASH, BEGINNING OF PERIOD | 64,140 | 56,960 | |||||
| CASH, CASH EQUIVALENTS & RESTRICTED CASH, END OF PERIOD | $ | 83,213 | $ | 46,091 | |||
| Supplemental Cash Flows Information | |||||||
| Interest paid | $ | 2,311 | $ | 2,305 | |||
| Income taxes paid | $ | 341 | $ | 1 | |||
| Property and equipment included in accounts payable | $ | 922 | $ | 161 | |||
| Property and equipment purchased under finance leases | $ | 358 | $ | — | |||
Schedule 4
InnovAge
RECONCILIATION OF GAAP AND NON-GAAP MEASURES
(IN THOUSANDS) (UNAUDITED)
Adjusted EBITDA
| Three months ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Net income (loss) | $ | 11,805 | $ | (13,491 | ) | ||
| Interest expense, net | 1,246 | 760 | |||||
| Other investment income(a) | (483 | ) | 141 | ||||
| Depreciation and amortization | 4,877 | 5,319 | |||||
| Provision for income tax | 651 | 34 | |||||
| Stock-based compensation | 1,216 | 1,873 | |||||
| Litigation costs and settlement(b) | 1,279 | 1,405 | |||||
| M&A diligence, transaction and integration(c) | — | 1,275 | |||||
| Business optimization(d) | 1,560 | 58 | |||||
| Impairments and loss on assets held for sale(e) | — | 8,495 | |||||
| Adjusted EBITDA | $ | 22,151 | $ | 5,869 | |||
| Net income (loss) margin | 4.9 | % | (6.5 | )% | |||
| Adjusted EBITDA margin | 9.2 | % | 2.8 | % | |||
_______________________
| (a) | Reflects investment income related to short-term investments included in our consolidated statement of operations. |
| (b) | Reflects charges/(credits) related to litigation by stockholders, civil investigative demands, and arbitration with our former pharmacy provider. Refer to Note 9, "Commitments and Contingencies" to our condensed consolidated financial statements for more information regarding litigation by stockholders and civil investigative demands. Costs reflected consist of litigation costs considered one-time in nature and outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy. |
| (c) | Reflects charges related to M&A diligence, transactions and integrations. |
| (d) | Reflects charges related to business optimization initiatives. Such charges relate to one-time investments in projects designed to enhance our technology and compliance systems and improve and support the efficiency and effectiveness of our operations. For the three months ended December 31, 2025, this consists of costs related to organizational restructure. For the three months ended December 31, 2024, this primarily includes costs related to other non-recurring projects aimed at reducing costs and improving efficiencies. |
| (e) | For the three months ended December 31, 2024, reflects impairment charges related to ROU asset and construction in progress related to halting developments to a previously planned de novo center in Louisville, Kentucky that the Company is no longer pursuing. |
| Three months ended September 30, | |||
| 2025 | |||
| Net income | $ | 7,669 | |
| Interest expense, net | 1,251 | ||
| Other investment income(a) | (499 | ) | |
| Depreciation and amortization | 5,085 | ||
| Provision for income tax | 247 | ||
| Stock-based compensation | 2,308 | ||
| Litigation costs and settlement(b) | 979 | ||
| Business optimization(c) | 879 | ||
| Loss on assets held for sale(d) | 104 | ||
| Gain on sale of assets(e) | (381 | ) | |
| Adjusted EBITDA | $ | 17,642 | |
| Net income margin | 3.2 | % | |
| Adjusted EBITDA margin | 7.5 | % | |
_______________________
| (a) | Reflects investment income related to short-term investments included in our consolidated statement of operations. |
| (b) | Reflects charges/(credits) related to litigation by stockholders, civil investigative demands, and arbitration with our former pharmacy provider. Refer to Note 9, "Commitments and Contingencies" to our condensed consolidated financial statements for more information regarding litigation by stockholders and civil investigative demands. Costs reflected consist of litigation costs considered one-time in nature and outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy. |
| (c) | Reflects charges related to business optimization initiatives. Such charges relate to one-time investments in projects designed to enhance our technology and compliance systems and improve and support the efficiency and effectiveness of our operations. For the three months ended September 30, 2025, this consists of costs related to organizational restructure and executive severance. |
| (d) | Reflects additional loss related to the Company's sale of its managing member interest in SH1 and the adjacent vacant land. |
| (e) | Reflects gain on sale of center equipment that was originally purchased for the center in Louisville, Kentucky. |
Center-Level Contribution Margin
| Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | ||||||||||||||||||||||
| (In thousands) | PACE | All other(a) | Totals | PACE | All other(a) | Totals | |||||||||||||||||
| Capitation revenue | $ | 239,620 | $ | — | $ | 239,620 | $ | 208,674 | $ | — | $ | 208,674 | |||||||||||
| Other service revenue | 88 | — | 88 | 77 | 248 | 325 | |||||||||||||||||
| Total revenues | 239,708 | — | 239,708 | 208,751 | 248 | 208,999 | |||||||||||||||||
| External provider costs | 111,999 | — | 111,999 | 107,873 | — | 107,873 | |||||||||||||||||
| Cost of care, excluding depreciation and amortization | 74,902 | (18 | ) | 74,884 | 63,916 | 145 | 64,061 | ||||||||||||||||
| Center-Level Contribution Margin | 52,807 | 18 | 52,825 | 36,962 | 103 | 37,065 | |||||||||||||||||
| Sales and marketing | 8,078 | 7,704 | |||||||||||||||||||||
| Corporate, general and administrative | 26,608 | 28,103 | |||||||||||||||||||||
| Depreciation and amortization | 4,877 | 5,319 | |||||||||||||||||||||
| Impairments and loss on assets held for sale | — | 8,495 | |||||||||||||||||||||
| Operating income (loss) | 13,262 | (12,556 | ) | ||||||||||||||||||||
| Other expense | (806 | ) | (901 | ) | |||||||||||||||||||
| Income (Loss) Before Income Taxes | $ | 12,456 | $ | (13,457 | ) | ||||||||||||||||||
| Income (Loss) Before Income Taxes as a percent of revenue | 5.2 | % | (6.4 | )% | |||||||||||||||||||
| Center- Level Contribution Margin as a % of revenue | 22.0 | % | 17.7 | % | |||||||||||||||||||
| September 30, 2025 | |||||||||||
| (In thousands) | PACE | All other(1) | Totals | ||||||||
| Capitation revenue | $ | 235,751 | $ | — | $ | 235,751 | |||||
| Other service revenue | 97 | 257 | 354 | ||||||||
| Total revenues | 235,848 | 257 | 236,105 | ||||||||
| External provider costs | 108,863 | — | 108,863 | ||||||||
| Cost of care, excluding depreciation and amortization | 75,735 | 151 | 75,886 | ||||||||
| Center-Level Contribution Margin | 51,250 | 106 | 51,356 | ||||||||
| Sales and marketing | 7,605 | ||||||||||
| Corporate, general and administrative | 30,273 | ||||||||||
| Depreciation and amortization | 5,085 | ||||||||||
| Loss on assets held for sale | 104 | ||||||||||
| Operating income (loss) | 8,289 | ||||||||||
| Other expense | (373 | ) | |||||||||
| Income Before Income Taxes | $ | 7,916 | |||||||||
| Income Before Income Taxes as a % of revenue | 3.4 | % | |||||||||
| Center- Level Contribution Margin as a % of revenue | 21.8 | % | |||||||||
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| (a) | Center-level Contribution Margin from segments below the quantitative thresholds are primarily attributable to the Senior Housing operating segment of the Company. This segment has never met any of the quantitative thresholds for determining reportable segments. As of September 2025, the Company no longer operates Senior Housing as the remaining Senior Housing assets were sold. |
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