InnovAge (INNV) Q2 2025 earnings summary

Executive summary

• Fiscal Q2 results aligned with expectations, reaffirming FY2025 guidance set in September, with revenue growth, margin improvement, and census expansion reflecting progress on a multi-year transformation roadmap.

• Served 7,480 PACE participants as of December 31, 2024, operating 20 centers across six states, maintaining status as the largest PACE provider in the U.S.

• Continued strong demand for PACE services, with industry-wide expansion and bipartisan policy support.

• Ongoing operational optimization, technology investments, and leadership changes are driving efficiency and scalability.

• One-time adjustments impacted financials, including an $8.5M impairment for a halted Louisville center.

Financial highlights

• Q2 revenue was $209M, up 10.6% year-over-year and 1.9% sequentially; six-month revenues were $414.1M, up 11.5%.

• Center-level contribution margin was $37.1M (17.7%), up from $34.5M (16.8%) in Q1.

• Adjusted EBITDA was $5.9M for Q2 (2.8% margin), and $12.3M for six months (3.0% margin); net loss was $13.5M for Q2, or $0.10 per share.

• De novo center losses were $4M in Q2, primarily from new and acquired centers.

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

Outlook and guidance

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

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

• Medicaid rate increases in CA and PA effective January 1, 2025, expected to benefit results.

• Expect continued elevated operating expenses through FY2025 due to census growth, wage inflation, and compliance investments.

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