InnovAge (US:INNV)2024-09-10 23:17Financial Data and Key Metrics Changes - The company reported revenue of approximately $199 million for Q4 2024, a sequential improvement of approximately 3.3% compared to Q3 2024 [4] - Full year revenue for fiscal 2024 was approximately $764 million, an increase of approximately 11% compared to fiscal 2023 [5] - Adjusted EBITDA for fiscal 2024 was $16.5 million, compared to an adjusted EBITDA loss of $3.4 million in fiscal 2023, representing an improvement of approximately $20 million [6][25] - The net loss for fiscal 2024 was $23.2 million, compared to a net loss of $43.6 million in fiscal 2023 [23] Business Line Data and Key Metrics Changes - Center level contribution margin for Q4 2024 was $36.6 million, representing an 18.3% margin, while for the full year it was approximately $132 million, a 17.3% margin [4][5] - The company served approximately 7,020 participants across 20 centers as of June 30, 2024, representing a 9.6% increase from 2023 [17] - External provider costs for fiscal 2024 were $403 million, a 7.6% increase compared to fiscal 2023, driven by an increase in member months and cost per participant [18] Market Data and Key Metrics Changes - The company reported 80,840 member months in fiscal 2024, a 4.5% increase compared to the prior year [17] - The increase in total revenue was primarily driven by an increase in member months and higher Medicaid and Medicare capitation rates [17] Company Strategy and Development Direction - The company plans to achieve a census range of 7,300 to 7,750 and total revenue of $815 million to $865 million for fiscal 2025 [9][27] - The company is focused on operational excellence and has implemented Operational Value Initiatives (OVIs) to drive staff productivity and operating efficiency [15][30] - The company views fiscal 2025 as an important year for achieving long-term goals and expects to maintain high-quality compliant care [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full potential and responsible growth in fiscal 2025 despite challenges with enrollment processing times in some states [11][12] - The company anticipates improvement in profitability as the year progresses, with adjusted EBITDA margins expected to reach 8% to 9% over the intermediate term [9][30] - Management noted that state processing delays are impacting enrollment but expects these challenges to resolve, potentially leading to upside in gross enrollment [50] Other Important Information - The company completed the Epic EMR rollout in all 20 centers and sold a non-core senior living facility to reinvest in core business [7][8] - The company has made significant investments in technology and operational improvements to enhance service quality and compliance [30] Q&A Session Summary Question: Can you walk us through the EBITDA guidance for fiscal '25? - Management indicated that the guidance is based on growth trends observed in the previous year, factoring in state processing delays and new de novo centers [33][34] Question: How do you view the margin target relative to the long-term goal? - Management confirmed that the current margin is a step towards the long-term target of 8% to 9%, with expectations for linear progression over the next few years [37][38] Question: What is the impact of state delays on enrollment growth? - Management acknowledged that state delays are primarily related to Medicaid redeterminations and are expected to clear up soon, impacting larger states where most enrollment occurs [49][50] Question: How does the company view competition from health systems entering the PACE market? - Management welcomed the interest from health systems like Kaiser, viewing it as validation of the PACE model and an opportunity to build awareness rather than a significant competitive threat [52][53]