InnovAge Holding Corp. Q3 FY2026 earnings call

• CEO Patrick Blair thanked colleagues, participants, etc. and mentioned solid third quarter performance, steady momentum, raising fiscal year 2026 guidance. - Discussed investments in clinical teams, technology platform (AI applications), growth (new centers in Florida), and forward-looking view on growth including existing footprint opportunities and broader growth alternatives. - Spoke about rate environment, Medicare and Medicaid rate expectations. - CFO Ben Adams walked through financial performance details like census growth, revenue increase, external provider costs, center-level contribution margin, expenses, net loss, adjusted EBITDA, balance sheet, and updated full year guidance.

For the third quarter, total revenue was approximately $252 million. Center-level contribution margin was $61 million, which was $40.7 million in the third quarter of fiscal year 2025. Adjusted EBITDA was $30 million, compared to $10.8 million in the third quarter of fiscal year 2025. Ended the quarter serving approximately 8,050 participants in six states across 20 centers. Total revenue for fiscal 2026 is now projected in the range of $950 to $975 million, adjusted EBITDA in the range of $85 to $90 million, ending census between 7,900 and 8,100 participants, and member months in the range of $92,900 to $95,700

• Raising fiscal year 2026 guidance for revenue to $950 - $975 million and adjusted EBITDA to $85 - $90 million. - Expecting ending census for fiscal 2026 to be between 7,900 and 8,100 participants and member months in the range of $92,900 - $95,700. - De novo losses for fiscal year 2026 anticipated to be in the $11.5 - $13.5 million range. - Ben mentioned updated full year revenue and adjusted EBITDA outlook based on first nine months performance and current information.

• Forward-looking statements involve assumptions subject to risks and uncertainties that can cause actual results to differ from expectations. - Medicaid rate pressures and seasonality of cost trends are risks. - Potential impact of recent legislation and federal budget cuts, including Medicare and Medicaid rate pressures. - Status of current and future legal proceedings and regulatory actions pose risks.

Q: Follow up on 2027 Medicaid rate increases and cost growth confidence.

A: Patrick said they don't have 2027 rates yet, navigating with states, and confident in managing cost trends with AI - supported initiatives.

Q: Revenue performance details and sustainability.

A: Patrick and Ben discussed better Medicaid rates and RAF favorability, with RAF improvement expected to be durable.

Q: Growth strategy levers.

A: Patrick talked about M&A, partnerships, policy modernization, and PACE - inspired adjacencies.

Q: Rate environment and balance between growth and profitability.

A: Ben said they'll invest in quality to drive growth and good financial outcomes.

Q: 2027 enrollment growth and acuity mix.

A: Patrick said they're in the budgeting process, no material change expected in mix shift.

Q: 4Q top line growth deceleration and 4Q expectations.

A: Ben said they generally benefited from better rates and risk scores in the back half and expected trends to continue in Q4