InnovAge (INNV) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 marked a significant transformation, with a 175% increase in adjusted EBITDA year-over-year, a return to profitability in Q4, and progress toward a 10%+ long-term adjusted EBITDA margin target, despite one-time legal accruals impacting net income.

• The business is entering a new phase focused on scaling capabilities, leveraging technology and AI, and expanding its value-based care platform for seniors.

• Investments in leadership, technology, and compliance, including a new President and COO, are aimed at improving participant experience, operational efficiency, and clinical outcomes.

• Federal interest in the PACE model is high, with ongoing policy discussions about expanding access and adapting the model for broader senior populations.

• Participant census and member months both increased, supporting top-line growth.

Financial highlights

• Fiscal 2026 revenue grew 15.9% year-over-year to $989.7 million, driven by increased member months and higher capitation rates.

• Adjusted EBITDA reached $94.6 million (9.6% margin), up from $34.5 million in 2025; Q4 adjusted EBITDA was $24.3 million.

• Net loss for the year was $0.7 million, a significant improvement from a $35.3 million loss in 2025; Q4 net income was $9.8 million.

• Center-level contribution margin rose to $227.8 million (23.0% of revenue), up 500 basis points year-over-year.

• De novo center losses decreased to $10.6 million in 2026 from $15.3 million in 2025.

Outlook and guidance

• Fiscal 2027 guidance: ending census of 8,625–8,850 participants (5–7.5% growth), revenue of $1.05–$1.085 billion, and adjusted EBITDA of $105–$115 million.

• Medicare rate increases expected at 1.5–2%, with Medicaid in the low single digits; rate environment less robust than 2026 but manageable.

• Margin discipline and operational efficiencies are key priorities to support growth and maintain quality.

• De novo losses projected at $0.4–$0.8 million for 2027, with most new centers now out of ramp-up phase.

• Guidance subject to risks including regulatory changes, reimbursement rates, and macroeconomic factors.