InnovAge (INNV)2025-05-06 21:23Participant and Service Overview - As of March 31, 2025, InnovAge served approximately 7,530 PACE participants across 20 centers in six states[128] - The average risk adjustment factor (RAF) score for participants is 2.46, indicating a higher acuity population compared to Medicare Advantage participants[136] - The average participant tenure was 3.1 years as of March 31, 2025, with a low voluntary disenrollment rate of 6.9% annually over the last three fiscal years[136] - The company operated 20 PACE centers as of March 31, 2025, an increase from 19 centers in the previous year[173] - Total member months increased to 66,130 for the nine months ended March 31, 2025, compared to 60,030 for the same period in 2024[173] Financial Performance - Total revenues for the nine months ended March 31, 2025, reached 67.8 million, or 12.0%, from 217.8 million, an increase of 192.8 million for the same period in 2024[150] - The increase in capitation revenue for the three months ended March 31, 2025, was driven by a 20.7 million increase in member months[150] - Center-level contribution margin rose to 95.5 million in the prior year, reflecting a 12.0% increase in total revenue[177] - Adjusted EBITDA increased to 11.2 million for the same period in 2024[173] - The Adjusted EBITDA margin for the nine months ended March 31, 2025, was 3.7%, compared to 2.0% for the same period in 2024[181] Expenses and Costs - External provider costs represented approximately 82% of revenue for the nine months ended March 31, 2025[136] - InnovAge experienced increased costs of care per participant due to rising salaries, wages, and benefits, as well as third-party service provider costs[129] - Corporate, general and administrative expenses increased to 11.0 million, or 40.1%, from 69.5 million, an increase of 59.1 million for the same period in 2024[154] - Total operating expenses for the nine months ended March 31, 2025, were 77.1 million from 12.5 million, or 15.3%, to 81.7 million for the same period in 2024[159] Net Loss and Financial Position - Net loss attributable to InnovAge Holding Corp. for the three months ended March 31, 2025, was 5.9 million for the same period in 2024[149] - Net loss attributable to the company was 21.0 million for the same period in 2024[173] - The net loss margin increased to (4.8)% for the nine months ended March 31, 2025, compared to (3.7)% for the same period in 2024[173] Cash Flow and Debt - As of March 31, 2025, the company had cash and cash equivalents of 3.6 million from June 30, 2024[188] - The company had 60.9 million under the Term Loan Facility, which matures on March 8, 2026[190] - For the nine months ended March 31, 2025, net cash provided by operating activities was 62.6 million compared to a net cash used of 0.4 million in costs associated with organizational restructure for the nine months ended March 31, 2025, and $2.6 million for third-party consultants in the same period of 2024[198] - The interest rate on the Term Loan Facility was 6.14% as of March 31, 2025, with variable interest rates exposing the company to market risk[207] Strategic Initiatives and Future Outlook - The company plans to invest in its centers and value-based care model to support long-term growth, expecting expenses to rise in the short term[137] - The company plans to continue investing in resources and initiatives to provide necessary and quality services to participants[189] - The company anticipates continued enrollment processing delays and eligibility gaps due to state-specific procedures, particularly in California[130] - The company does not anticipate paying any cash dividends in the foreseeable future, intending to retain available funds for business development and debt repayment[197] - Inflation has not had a material effect on the company's operating results, although future inflation could impact financial conditions[211]