Summary of InnovAge FY Conference Call - November 14, 2025 Industry Overview - The discussion revolves around the aging in place healthcare model, focusing on the challenges and opportunities in providing care for the elderly in their homes rather than in institutional settings [4][69]. Key Points and Arguments Aging Population and Healthcare System - The healthcare system must adapt to accommodate over 30 years of post-retirement life as people live longer [4][69]. - There is a need to address inefficiencies in the current aging care system to make longevity economically sustainable [4][69]. Inefficiencies in Home Care - Pippa Schulman from DispatchHealth highlights the complexity of delivering care at home, noting that reimbursement structures are confusing and do not support home-based care adequately [7][8]. - Joe Camorra from SCAN Health Plan emphasizes the increasing complexity of matching resources to the needs of aging patients, leading to administrative waste [9][10]. Role of Private Capital - The panelists agree on the importance of private capital in scaling aging-in-place healthcare models, as the not-for-profit sector struggles to drive models to scale [16][17]. - Private funding is seen as essential for innovation and rapid deployment of healthcare solutions [16][18]. Technology and AI in Home Care - AI is viewed as a tool to improve logistics and patient care by better matching patients with the right resources and care plans [25][30]. - The panelists discuss the potential of AI to streamline operations and enhance patient interactions, allowing clinicians to focus more on care rather than administrative tasks [30][32]. Trust and Patient Engagement - Building trust with patients is crucial, as many elderly individuals feel overwhelmed by the healthcare system and require time to establish rapport with their caregivers [36][37]. - The need for personalized care that respects the individual’s preferences and functional status is emphasized [91]. Future Innovations - The panelists express optimism about the future of aging in place, anticipating more coordinated care models and simplified payment structures [60][61]. - There is a call for a permanent payment model for home-based care to facilitate better service delivery [69]. Challenges in the PACE Model - The PACE (Program for All-Inclusive Care for the Elderly) model faces growth limitations due to geographic accessibility and competition from other care models [95][96]. - The need for policy changes to promote coordinated care programs like PACE is highlighted [95]. Other Important Insights - The discussion touches on the importance of socialization and community engagement for the elderly, as loneliness is a significant issue for aging individuals [66][70]. - The panelists stress the need for a user-centered design in healthcare technology to cater to a diverse elderly population [87][88]. This summary encapsulates the key discussions and insights from the InnovAge FY Conference Call, focusing on the challenges and opportunities in the aging in place healthcare model.

Core Insights - InnovAge Holding Corp and Tampa General Hospital have formed a joint venture to enhance access to the Program of All-inclusive Care for the Elderly (PACE) in the Tampa Bay region, aiming to provide comprehensive healthcare to frail seniors [1][2][3] InnovAge Overview - InnovAge is a leader in managing care for high-cost, frail seniors, focusing on enabling them to age independently at home. As of September 30, 2025, InnovAge served approximately 7,890 participants across 20 centers in six states [4] Tampa General Hospital Overview - Tampa General Hospital is a 1,529-bed not-for-profit academic health system, recognized as one of the largest hospitals in America. It is the highest-ranked hospital in Tampa Bay according to U.S. News & World Report's 2025-2026 Best Hospitals [5][6] Partnership Goals - The partnership aims to expand access to PACE's person-centered care model, which allows seniors to live independently while receiving a full range of medical, social, and in-home support, often at little to no cost for dual-eligible individuals under Medicaid and Medicare [2][3] Community Impact - The collaboration emphasizes the importance of supporting caregivers through education and respite services, thereby empowering families alongside their loved ones. The partnership also includes community support initiatives, such as donations to local organizations [3]

Core Viewpoint - InnovAge Holding Corp. reported quarterly earnings of $0.06 per share, significantly beating the Zacks Consensus Estimate of $0.01 per share, and showing an improvement from a loss of $0.04 per share a year ago, indicating a strong earnings surprise of +500.00% [1] Financial Performance - The company posted revenues of $236.11 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.01%, and showing an increase from $205.14 million in the same quarter last year [2] - Over the last four quarters, InnovAge has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - InnovAge shares have increased approximately 20.6% since the beginning of the year, outperforming the S&P 500's gain of 16.5% [3] Future Outlook - The company's earnings outlook will be crucial for determining the sustainability of its stock price movement, with current consensus EPS estimates at $0.04 for the coming quarter and $0.24 for the current fiscal year [4][7] - The estimate revisions trend for InnovAge was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical Services industry, to which InnovAge belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting that the industry outlook could materially impact stock performance [8]

Financial Data and Key Metrics Changes - Total revenue for the first quarter of fiscal 2026 was reported at $236.1 million, representing a 15% increase compared to $205.1 million in the first quarter of fiscal 2025 [4][16] - Adjusted EBITDA more than doubled to $17.6 million from $6.5 million in the first quarter of fiscal 2025, with an adjusted EBITDA margin of 7.5% compared to 3.2% in the prior year [4][21] - Net income was $7.7 million, a significant improvement from a net loss of $5.7 million in the first quarter of fiscal 2025 [20][21] Business Line Data and Key Metrics Changes - Census grew to an all-time high of 7,890 participants, up nearly 2% quarter over quarter and 9.4% year over year [5][15] - Member months increased to 23,500, reflecting a 9.9% increase compared to the first quarter of fiscal 2025 [15][16] - Center-level contribution margin was $51.4 million, representing 21.8% of revenue, an increase of approximately 320 basis points from the previous quarter [19] Market Data and Key Metrics Changes - The operating environment for value-based care models remains challenging, with many Medicare Advantage and Medicaid-managed services experiencing declining reimbursement levels [5][6] - InnovAge's PACE model has shown resilience, with total participant expense per month declining sequentially compared to the previous quarter [6][7] Company Strategy and Development Direction - The company is focused on executing a multi-pronged growth strategy, including existing center growth, joint ventures, M&A, and new center openings [8] - Recent leadership changes are aimed at strengthening operations and enhancing organizational capabilities [9][10] - InnovAge aims to expand access to its services and educate policymakers about the value of the PACE model [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and progress, while cautioning against annualizing first-quarter results due to seasonality and the small scale of the business [13][14] - The company reaffirmed its fiscal year 2026 guidance, projecting total revenue between $900 million and $950 million [22][23] Other Important Information - The company reported a positive cash flow from operations of $3.9 million and had $67.1 million in cash and equivalents at the end of the quarter [22] - The company is strategically insourcing key services to improve cost control and care coordination [8][9] Q&A Session Summary Question: How is the company thinking about margin progression for the remainder of the year? - Management noted that there are several factors influencing margin progression, including Medicaid eligibility changes and seasonal trends [25][26] Question: How does the company view the competitive dynamics in the market? - Management acknowledged a competitive market but expressed confidence in their positioning and the strength of their offering compared to traditional Medicare Advantage plans [29][30][31] Question: What are the trends in cost management and clinical initiatives? - Management highlighted efforts in optimizing discharges and managing readmissions, as well as the benefits of in-house pharmacy services [35][36][37] Question: How mature are the clinical value initiatives? - Management estimated that they are about 50% along the path to standardizing processes and improving care coordination [42][43]

Operations and Growth - As of September 30, 2025, InnovAge served approximately 7,890 PACE participants and operated 20 PACE centers across six states[116] - InnovAge has acquired four PACE organizations since fiscal year 2019, expanding into one new state and five new markets[130] - The company plans to continue investing in its centers and value-based care model, expecting expenses to increase in absolute dollars to support growth[130] - The company plans to continue investing in resources and initiatives to enhance service quality for participants[167] - The company may pursue acquisitions or investments in complementary businesses, services, and technologies in the future[171] Financial Performance - Total revenues for the three months ended September 30, 2025, were $236.1 million, an increase of $30.9 million, or 15.1%, compared to $205.1 million for the same period in 2024[142] - Capitation revenue was $235.8 million for the three months ended September 30, 2025, reflecting a $31.0 million increase, or 15.1%, driven by a 4.7% increase in capitation rates and a 9.9% increase in member months[143] - For the three months ended September 30, 2025, net income was $7.7 million, compared to a net loss of $5.7 million for the same period in 2024, representing a significant turnaround[161] - The increase in net income margin to 3.2% in 2025 from a net loss margin of 2.8% in 2024 reflects improved operational efficiency[162] - Operating income for the three months ended September 30, 2025, was $8.3 million, compared to a loss of $4.9 million for the same period in 2024[142] Costs and Expenses - Cost of care, excluding depreciation and amortization, represented approximately 78% of revenue for the three months ended September 30, 2025[127] - The company experienced increased costs due to labor market pressures and competition, impacting staffing and enrollment capacity[118] - Sales and marketing expenses increased to $7.6 million for the three months ended September 30, 2025, up $1.1 million, or 17.1%, compared to $6.5 million for the same period in 2024[146] - Corporate, general and administrative expenses rose to $30.3 million for the three months ended September 30, 2025, an increase of $2.7 million, or 9.9%, compared to $27.5 million for the same period in 2024[147] - Cost of care (excluding depreciation and amortization) was $75.9 million for the three months ended September 30, 2025, an increase of $12.5 million, or 19.7%, compared to $63.4 million for the same period in 2024[145] Cash Flow and Liquidity - The company had cash and cash equivalents of $67.1 million as of September 30, 2025, an increase of $3.0 million from June 30, 2025[166] - For the three months ended September 30, 2025, net cash provided by operating activities was $3,924,000, a significant increase of $11,440,000 compared to a net cash used of $7,516,000 in the same period of 2024[176] - The overall net change in cash, cash equivalents, and restricted cash improved to $3,099,000 in 2025 from a decrease of $17,928,000 in 2024, reflecting a positive cash flow trend[176] - The net cash used in investing activities decreased to $814,000 in 2025 from $2,790,000 in 2024, primarily due to $3.7 million of net proceeds from asset sales[177] - Net cash used in financing activities decreased significantly from $7,622,000 in 2024 to $11,000 in 2025, attributed to a lack of share repurchases in the current year[178] Regulatory and Market Environment - The OBBBA, adopted in July 2025, mandates significant reductions in federal Medicaid spending, which may decrease Medicaid enrollment among PACE participants[121] - The company continues to monitor processing delays in Medicaid redetermination applications, which could impact financial performance[120] - There have been no material changes to the company's quantitative and qualitative disclosures about market risk for the three months ended September 30, 2025[185] - The company emphasizes that actual results may differ from estimates and assumptions used in financial reporting, which could impact reported results of operations and financial condition[182] Future Outlook - The company anticipates general and administrative expenses to decrease as a percentage of revenue over the long term, despite expected increases in absolute dollars due to public company costs[139] - The company intends to retain substantially all available funds and future earnings for business development and debt repayment, with no anticipated cash dividends in the foreseeable future[174] - The company qualifies as an "emerging growth company" and expects to maintain this status through the end of fiscal year 2026, allowing it to take advantage of certain reporting exemptions[179] - The company plans to utilize longer phase-in periods for adopting new accounting standards under the JOBS Act, which may affect comparability with other companies[180]

Financial Performance - Total revenues for the first quarter of fiscal 2026 were $236.1 million, a 15.1% increase from $205.1 million in the same period of fiscal 2025[4] - Income before income taxes was $7.9 million, a significant increase of approximately 249.2% compared to a loss of $5.3 million in the first quarter of fiscal 2025[4] - Net income for the quarter was $7.7 million, compared to a net loss of $5.7 million in the first quarter of fiscal 2025[7] - Adjusted EBITDA reached $17.6 million, an increase of $11.2 million from $6.5 million in the first quarter of fiscal 2025[7] - Adjusted EBITDA margin for the quarter was 7.5%, an increase of 4.3 percentage points from 3.2% in the first quarter of fiscal 2025[7] - Net income margin was 3.2%, an increase of 6.0 percentage points compared to a net loss margin of 2.8% in the first quarter of fiscal 2025[7] - Operating income for the three months ended September 30, 2025, was $8,289 thousand, compared to an operating loss of $4,896 thousand in the same period of 2024[19] - For the three months ended September 30, 2025, total revenues reached $236.1 million, an increase from $205.1 million for the same period in 2024, representing a growth of approximately 15.1%[35] - Capitation revenue for the three months ended June 30, 2025, was $852.4 million, with total revenues amounting to $853.7 million, indicating a strong performance in revenue generation[35] Cash and Investments - The company ended the quarter with $67.1 million in cash and cash equivalents and $42.3 million in short-term investments, with $71.5 million in debt[7] - Cash and cash equivalents at the end of the period increased to $67,157 thousand from $39,032 thousand year-over-year[22] - The company reported a net cash provided by operating activities of $3,924 thousand for the three months ended September 30, 2025, compared to a net cash used of $7,516 thousand in the same period of 2024[22] Participant Metrics - The census of participants increased to approximately 7,890, compared to 7,210 participants in the first quarter of fiscal 2025[7] Liabilities and Assets - Total current liabilities decreased to $138,489 thousand as of September 30, 2025, down from $164,807 thousand as of June 30, 2025[18] - Accounts receivable, net, decreased to $23,174 thousand from $36,373 thousand, indicating improved cash collection[18] - Total assets decreased to $510,234 thousand as of September 30, 2025, from $526,851 thousand as of June 30, 2025[18] Costs and Expenses - External provider costs for the three months ended September 30, 2025, were $108.9 million, slightly up from $107.2 million in the same period of the previous year[35] - The company reported an impairment loss of $2.6 million for the investment in DispatchHealth Holdings Inc. for the three months ended June 30, 2025[32] - The company incurred $2.1 million in costs associated with organizational restructuring and executive severance for the three months ended June 30, 2025[31] - Loss before income taxes for the three months ended June 30, 2025, was $34.0 million, representing a loss of 4.0% of total revenue[35] - The company experienced a loss on assets held for sale amounting to $104,000 for the three months ended September 30, 2025[35] Business Initiatives - The company is actively pursuing business optimization initiatives, which include one-time investments aimed at enhancing technology and compliance systems[31] Guidance - Full fiscal year 2026 revenue guidance is set between $900 million and $950 million[6] Contribution Margin - Center-level contribution margin was $51.4 million, up 48.7% from $34.5 million in the first quarter of fiscal 2025[7] - The Center-Level Contribution Margin for the three months ended September 30, 2025, was $51.4 million, which is 21.8% of total revenue, compared to 16.8% for the same period in 2024[35]

Core Insights - InnovAge Holding Corp. reported strong financial results for the fiscal first quarter of 2026, indicating a positive start to the year with a focus on sustainable growth and high-quality care for seniors [1][2][3] Financial Performance - Total revenues reached $236.1 million, a 15.1% increase from $205.1 million in the same quarter of the previous year [3] - Income before income taxes was $7.9 million, a significant turnaround from a loss of $5.3 million in the prior year, representing a 249.2% increase [3] - Net income was $7.7 million compared to a net loss of $5.7 million in the first quarter of fiscal year 2025, with a net income margin of 3.2% [3][20] - Adjusted EBITDA increased to $17.6 million from $6.5 million, with an adjusted EBITDA margin of 7.5% [3][23] - The center-level contribution margin was $51.4 million, up 48.7% from $34.5 million in the previous year, with a margin of 21.8% [3][33] Participant Metrics - The company served approximately 7,890 participants, an increase from 7,210 participants in the first quarter of fiscal year 2025 [3] Cash and Debt Position - As of September 30, 2025, InnovAge had $67.1 million in cash and cash equivalents and $42.3 million in short-term investments, with total debt of $71.5 million [3] Fiscal Year 2026 Guidance - InnovAge provided guidance for the full fiscal year 2026, projecting total revenues between $900 million and $950 million and adjusted EBITDA between $56 million and $65 million [5]

Core Insights - InnovAge Holding Corp. has appointed Dr. Paul Taheri as Chief Medical Officer, effective November 3, 2025, bringing over 30 years of healthcare leadership experience to the company [1][2]. Company Overview - InnovAge is a leader in providing comprehensive healthcare programs for frail, predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE) [1][3]. - The company's mission is to enable older adults to age independently in their homes for as long as safely possible, focusing on patient-centered care to improve quality while reducing high-cost care utilization [3]. Leadership Background - Dr. Paul Taheri has a distinguished background, having served in various leadership roles, including CEO and Deputy Dean for Clinical Affairs at the Yale School of Medicine, and President and CEO of the University of Vermont Medical Group [2]. - His experience includes key positions at the University of Michigan and a Clinical Quality Advisor role at Welsh, Carson, Anderson & Stowe since 2019 [2]. Current Operations - As of June 30, 2025, InnovAge served approximately 7,740 participants across 20 centers in six states, indicating a significant operational footprint in the healthcare sector for seniors [3].

Core Insights - November is historically a strong month for stocks, prompting a focus on companies with steady earnings growth and earnings acceleration, which significantly impacts stock prices [1][9] Earnings Acceleration - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), indicating an increase in quarter-over-quarter earnings growth rates [3] - Companies with earnings acceleration are often undervalued, leading to potential stock price rallies as investors take notice [4] Screening Parameters - The screening criteria for identifying stocks with earnings acceleration include: - Last two quarter-over-quarter EPS growth rates must exceed previous periods' growth rates [6] - Projected EPS growth rates for the upcoming quarter should exceed those of prior periods [6][7] - Additional criteria include a current price of at least $5 and an average 20-day volume of at least 50,000 [8] Identified Stocks - The screening process narrowed down to four stocks, with the top three being: - **Groupon, Inc. (GRPN)**: Expected earnings growth rate of 153% for the current year, operating a marketplace linking consumers to merchants [10] - **BriaCell Therapeutics Corp. (BCTX)**: Expected earnings growth rate of 81.6% for the current year, focused on developing immunotherapies for cancer [11] - **InnovAge Holding Corp. (INNV)**: Expected earnings growth rate of 209.1% for the current year, providing services to help seniors live independently [12]

Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by certain officers and directors of Chegg, Inc. and encourages shareholders to contact the firm to discuss their rights [1][2]. Group 1: Shareholder Rights and Legal Options - Shareholders who acquired Chegg stock on or before May 5, 2020, may seek corporate governance reforms, return of funds, court-approved financial incentives, or other benefits [2][3]. - The firm operates on a contingent fee basis, meaning shareholders would not incur out-of-pocket legal fees [2]. Group 2: Importance of Shareholder Participation - Shareholder involvement is crucial for improving company policies, practices, and oversight, which can enhance overall shareholder value [3]. Group 3: Firm's Background and Experience - Halper Sadeh LLC represents global investors affected by securities fraud and corporate misconduct, having recovered millions for defrauded investors [4].