InnovAge (INNV) Q1 2025 earnings summary

Executive summary

• First quarter fiscal 2025 revenues reached $205.1 million, up 12.4% year-over-year, with Adjusted EBITDA of $6.5 million, a 500% increase year-over-year and margin improving to 3.2%.

• Net loss narrowed to $5.7 million from $11 million year-over-year, with net loss margin improving to 2.8% from 6.0%.

• Participant census increased to approximately 7,210, up 10% year-over-year, reflecting improved sales, marketing, and operational execution.

• Leadership transition included the appointment of a new President and COO, Michael Scarbrough, bringing extensive healthcare experience.

• Served approximately 7,210 PACE participants across 20 centers in six states as of September 30, 2024, maintaining status as the largest PACE provider in the U.S.

Financial highlights

• Total revenues were $205.1 million, up 12.4% year-over-year, driven by higher member months and increased capitation rates.

• Center-level contribution margin increased to $34.5 million (16.8% of revenue), up from $27.9 million (15.3%).

• Net loss narrowed to $5.7 million from $11 million year-over-year; Adjusted EBITDA margin improved to 3.2% from 0.7%.

• Ended the quarter with $39 million in cash, $46.7 million in short-term investments, and $81.3 million in total debt.

• Operating loss improved to $4.9 million from $10.7 million year-over-year.

Outlook and guidance

• Fiscal 2025 guidance: revenue between $815 million and $865 million; Adjusted EBITDA between $24 million and $31 million.

• Participant census expected between 7,300 and 7,750; total member months between 86,000 and 89,000.

• De novo losses for fiscal 2025 expected in the $18–$20 million range.

• Growth expected to be linear with some seasonal slowdown in Q3; financial impact of member month growth weighted toward the back half of the year.

• Expect continued elevated operating expenses in fiscal 2025 due to census growth and labor costs, but anticipate clinical and operational initiatives will help offset cost pressures.