InnovAge (INNV) Q2 2025 earnings summary

Executive summary

• Revenue grew 10.6% year-over-year to $209M in Q2 FY2025, with participant census up to 7,480, maintaining the largest PACE provider status across 20 centers in six states.

• Net loss widened to $13.5M (net loss margin 6.5%) from $3.8M, impacted by one-time items including an $8.5M impairment for a halted Louisville center.

• Adjusted EBITDA was $5.9M (2.8% margin) for Q2, with six-month Adjusted EBITDA at $12.3M (3.0% margin), reflecting higher revenue and cost controls.

• Transformation phase underway, focusing on technology integration, operational efficiency, and scaling, amid labor and regulatory challenges.

• Continued investment in growth initiatives, including acquisitions, new center development, and pharmacy insourcing.

Financial highlights

• Q2 revenue was $209M, up 10.6% year-over-year; six-month revenue reached $414.1M, up 11.5%.

• Center-level Contribution Margin was $37.1M (17.7%) in Q2, with six-month margin at $71.6M (17.3%).

• Adjusted EBITDA for Q2 was $5.9M (2.8% margin), and $12.3M (3.0% margin) for six months.

• Net loss for Q2 was $13.5M (EPS: $(0.10)), compared to $3.8M loss in Q2 FY2024.

• Cash and equivalents at $46.1M, short-term investments $40.8M, total debt $78.3M at quarter end.

Outlook and guidance

• FY2025 guidance reaffirmed: revenue $815–$865M, Adjusted EBITDA $24–$31M, census 7,300–7,750, member months 86,000–89,000.

• DeNovo center losses expected at $18–$20M for FY2025.

• Expect continued elevated operating expenses due to census growth, wage inflation, and compliance investments.

• Medicaid rate increases in CA and PA effective January 1, expected to benefit results.

• Guidance subject to risks including regulatory, operational, and macroeconomic factors.