InnovAge (US:INNV)2025-09-09 22:00Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $221.4 million, an increase of 11% year-over-year [4] - Total revenue for FY 2025 was $853.7 million, up nearly 12% year-over-year [5] - Adjusted EBITDA for FY 2025 was $34.5 million, compared to $16.5 million in FY 2024, with a margin increase from 2.2% to approximately 4% [5][23] - Net loss for FY 2025 was $35.3 million, compared to a net loss of $23.2 million in FY 2024 [22] Business Line Data and Key Metrics Changes - Center-level contribution margin for FY 2025 was $153.6 million, with a margin of 18%, up 70 basis points from FY 2024 [5][19] - The census at the end of FY 2025 was approximately 7,740 participants, reflecting a 10% year-over-year growth [5][13] - Member months in Q4 2025 were 23,000, an increase of approximately 10.5% compared to Q4 FY 2024 [14] Market Data and Key Metrics Changes - The company experienced a 10% year-over-year increase in census for FY 2025 [9] - The company reported a sequential increase in member months of approximately 2% over Q3 FY 2025 [14] Company Strategy and Development Direction - The company aims to expand access to PACE services, advocating for new pathways such as a Medicare-only option [8] - The focus is on integrating care and improving clinical outcomes while managing costs effectively [7][11] - The company is investing in technology and talent to enhance operational efficiency and scalability [10][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex environment due to recent legislation affecting value-based care models [6] - The guidance for FY 2026 includes projected revenue of $900 million to $950 million and adjusted EBITDA of $56 million to $65 million [9][25] - Management expressed confidence in achieving adjusted EBITDA margins of 8% to 9% over the next few years [9][41] Other Important Information - The company incurred $431.2 million in external provider costs during FY 2025, a 7% increase compared to FY 2024 [15] - The company completed a share repurchase program, acquiring approximately 1,426,000 shares for $7.3 million [24] Q&A Session Summary Question: Impact of member mix on margins and cost trends - Management indicated that the member mix has normalized and is balanced, which may impact risk scores but supports growth and margin expansion [31][32] Question: V-28 payment model implications - Management expects the V-28 Medicare Advantage payment model to be a headwind over the next couple of years, but it is factored into guidance [34][36] Question: Outlook for EBITDA margins - Management confirmed expectations for continued margin expansion, driven by clinical value initiatives and operational improvements [40][41] Question: Opportunities for automation and technology - Management is exploring AI-driven tools and partnerships to enhance efficiency and quality of care [45][48] Question: Medicaid redetermination impact - Management clarified that the redetermination process will create a headwind in the first half of FY 2026, but gross enrollment trends will remain stable [54][56]