INVO Fertility, Inc. Q2 FY2026 earnings call

INVO Fertility has completed a strategic restructuring and is now positioned for focused growth in fertility clinic operations. Key highlights are organized below:

• Strategic Restructuring and Balance Sheet Improvements

  • Divested majority interest in Nya Therapeutics in 2025, refocusing the company exclusively on fertility clinic operations, eliminating prior structural complexity for a small firm
  • Completed all outstanding SEC filings (delayed 2025 10-K and Q1 2026 10-Q) in June 2026, regained compliance with NASDAQ timely filing requirements
  • Converted or retired all Series C2 preferred stock, eliminated warrant liabilities, and raised $7.1 million in net proceeds from warrant exercises in H1 2026; proceeds were used to pay $2 million in deferred acquisition consideration and $200,000 in debt principal, reducing total liabilities from $13 million at end-2025 to $9.3 million at June 30, 2026
  • Entered a $15 million equity purchase facility with Alumni Capital in July 2026 for discretionary financial flexibility, with no obligation to draw the full commitment

• Recent Operational Milestones

  • Acquired Family Beginnings (Indiana) in February 2026, with its first full quarter of contribution in Q2 2026; the clinic is an established, profitable practice with a full range of fertility services
  • Acquired the remaining 50% interest in the Birmingham, Alabama joint venture clinic in June 2026, gaining full operational control and enabling full consolidation of results going forward
  • Added operational improvements to existing clinics: Wisconsin Fertility Institute joined the Progene Network to expand access to employer-sponsored patients, and added time-lapse incubation technology for improved embryo monitoring and patient engagement

• Core Operating Model and Growth Strategy

  • Operating model pairs independent, well-reputed local clinical teams with centralized shared services (finance, billing, HR, marketing, administration) to reduce clinical team administrative burden, improve execution, and grow volumes without imposing a one-size-fits-all model
  • Growth priorities are: 1) grow patient volumes and expand services at existing owned clinics, 2) increase ownership/control of clinics to optimize platform performance, 3) drive organic growth via expanded access, new patient-centered services and clinical innovation, 4) acquire additional established, profitable independent fertility clinics that meet strategic and financial criteria
  • Immediate corporate goal is to grow clinic-level earnings to spread fixed corporate/public company costs across a larger base, and achieve sustained consolidated profitability

INVO Fertility operates two core reporting segments: Fertility Clinic Services and legacy corporate/non-clinic operations. For Q2 FY2026:

• Fertility Clinic Services: Generated total revenue of $2.18 million, representing 100% of the company's total revenue (the company divested its majority stake in Nya Therapeutics in 2025 and now focuses exclusively on fertility services). This is a 17% increase from $1.86 million in Q2 FY2025. Clinic-level adjusted EBITDA (before corporate and public company costs) was $333,000 in Q2 FY2026, up from $164,000 in Q1 FY2026 and $951,000 for full-year FY2025. The $312,000 year-over-year revenue increase was driven primarily by the full-quarter contribution of the acquired Family Beginnings clinic in Indiana, with an additional $100,000 of one-time staffing costs at the Georgia clinic contributing to cost increases.
• Corporate/Non-Recurring Items: A $2.5 million non-cash gain on remeasurement of the existing Birmingham clinic joint venture investment contributed to positive reported net income, but this is not part of recurring operating performance. Consolidated adjusted EBITDA for the full company was negative $1 million in Q2 FY2026, compared to negative $600,000 in Q2 FY2025, due to ongoing corporate and public company infrastructure costs.

Management did not provide specific numerical revenue or earnings guidance for future periods. Key forward-looking statements include:

• Management believes existing clinic profitability provides a strong foundation to achieve consolidated corporate-level profitability as the network grows, which is a clear and achievable objective
• The fertility industry is expected to continue steady growth supported by macro tailwinds including policy changes improving patient affordability
• Management expects to successfully execute additional strategic acquisitions of qualifying independent fertility clinics, given a robust pipeline of prospective targets
• Management will deploy capital selectively for acquisitions and growth initiatives, aligned with market conditions and liquidity needs

• Forward-looking statements (including profitability targets and acquisition execution) are subject to risks and uncertainties that could cause actual results to differ materially from projections, as detailed in the company's SEC filings
• The company is not yet profitable on a consolidated recurring operating basis, and requires additional capital to fund operations and growth until consolidated cash flow is sufficient
• Acquisition execution carries integration risks; the company must successfully integrate acquired practices without disrupting patient care and meet performance improvement targets
• The company needs to prove its shared service model can consistently improve clinic performance and that acquisitions can be integrated with discipline

Q: What is the current market appetite among independent fertility clinics for acquisition by INVO Fertility?

A: Over half of the U.S. fertility industry is already consolidated by private market players, leaving a large number of independently operated clinics. Many independent owners are interested in joining larger networks, and INVO's public platform offers a unique, advantageous alternative to private consolidation. INVO has strong ongoing conversations with multiple prospective targets and is confident it can execute additional acquisitions.

Q: Can you provide more detail on the non-cash remeasurement gain from the Birmingham clinic acquisition?

A: The gain came from measuring the fair value of INVO's pre-existing 50% investment in the Birmingham joint venture at the time the remaining 50% stake was acquired, per accounting requirements.

Q: What broad market tailwinds is INVO seeing in the fertility industry right now?

A: The industry has long benefited from a large untapped patient population and growing insurance coverage improving affordability. Recent supportive policy actions from the current administration have further strengthened this backdrop, by addressing affordability barriers that prevent many patients from accessing care. These factors will continue to drive steady industry growth that benefits INVO.