InnovAge (INNV) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 marked a significant transformation, with a 175% increase in adjusted EBITDA, a return to profitability, and progress toward a 10%+ long-term adjusted EBITDA margin target.

• The business advanced through platform building, operational strengthening, compliance, and is now scaling capabilities for disciplined growth.

• Investments in technology, AI, and leadership enhanced care quality, participant experience, and operational efficiency, positioning for sustainable growth.

• Strategic focus includes expanding within existing centers, selective M&A, leveraging technology, and exploring new markets and partnerships.

• Leadership was strengthened with a new President and COO to drive operational consistency and growth.

Financial highlights

• Served approximately 8,230 participants as of June 30, 2026, up 6.3% year-over-year; total revenues rose 15.9% to $989.7 million for fiscal 2026.

• Center-level contribution margin increased 48.2% to $227.8 million (23.0% of revenue), up 500 basis points year-over-year.

• Adjusted EBITDA reached $94.6 million (9.6% margin), up from $34.5 million in fiscal 2025; net loss narrowed to $0.7 million from $35.3 million.

• Fourth quarter net income was $9.8 million, reversing a prior quarter loss.

• De novo center losses declined to $10.6 million from $15.3 million year-over-year.

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; guidance reflects a more tempered rate environment and disciplined margin management.

• De novo losses projected at $0.4–$0.8 million for fiscal 2027, with most new center losses behind the company.

• Margin expansion to 10.3% adjusted EBITDA targeted, driven by operational efficiencies, utilization management, and technology investments.

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