InnovAge (US:INNV)2025-05-06 22:02Financial Data and Key Metrics Changes - The company reported revenue of $218.1 million, representing a 13% year-over-year increase [8][23] - Adjusted EBITDA was $10.8 million, with a margin of 4.9%, improving more than 3.5 times compared to the same quarter last year [9][29] - The net loss was $11.1 million, compared to a net loss of $6.2 million in the same quarter last year [28] Business Line Data and Key Metrics Changes - Census grew to approximately 7,530 participants, reflecting a 10% annual increase [9][11] - Center level contribution was $40.7 million, with an 18.7% margin, improving by approximately 110 basis points year-over-year [8][26] - External provider costs were $107.9 million, a 7.9% increase year-over-year, but cost per participant decreased [24][25] Market Data and Key Metrics Changes - The increase in member months was primarily due to growth in existing California and Colorado centers, along with new centers in Florida [23][24] - The company experienced a modest sequential growth due to seasonal headwinds during Medicare's Annual Enrollment Period [11][12] Company Strategy and Development Direction - The company is focused on operational excellence and building a scalable, tech-enabled platform for sustainable growth [10][18] - There is an emphasis on integrating pharmacy services into the clinical model to improve medication adherence and reduce costs [17][18] - The company is actively engaging with policymakers to advocate for the PACE model, which is seen as a high-value solution for seniors [7][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate policy uncertainties and maintain operational predictability [19][20] - The company reaffirmed its fiscal year 2025 guidance, expecting ending census between 7,750 and 7,850 participants [31] Other Important Information - The company has made strategic progress in its pharmacy initiative, successfully transitioning to in-house pharmacy services [17] - There was a significant increase in corporate general and administrative expenses due to the accrual of a stockholder lawsuit settlement [27][28] Q&A Session Summary Question: Initial 2026 guidance and Medicare/Medicaid rate development - Management indicated that it is early for 2026 guidance but expects reasonable Medicare rates and some positive indications for Medicaid rates [34][36][39] Question: Changes in pharmacy utilization trends - Management noted no significant changes in pharmacy utilization trends, emphasizing that their reimbursement model differs from traditional Medicare Advantage [40][41] Question: Engagement with regulators regarding PACE - Management highlighted increased engagement with regulators, focusing on the value of PACE and the populations served [44][45][48] Question: De novo losses and enrollment trends - Management confirmed that de novo losses are tracking with expectations and that census growth is consistent with projections [66][71] Question: Cost of care and investments - Management discussed investments in insourcing services and the impact on cost of care, indicating a potential for normalized growth rates moving forward [72][75]