InnovAge Holding Corp. reported its fiscal second‑quarter results for the period ended December 31 2025, posting revenue of $239.7 million—an increase of 14.7% year‑over‑year—and adjusted EBITDA of $22.2 million, which translates to a 9.2% margin. Net income reached $11.8 million, and earnings per share were $0.08, beating the consensus estimate of $0.04 by $0.04 (a 100% upside).
The earnings beat was driven by disciplined cost management and a sharp improvement in revenue integrity. The company’s PACE model, which integrates medical, social, and long‑term care services, delivered higher utilization and better Medicaid eligibility outcomes, allowing the firm to capture more revenue per participant while keeping operating costs in check. The 9.2% adjusted EBITDA margin reflects both the scale advantage of its 20‑center footprint—where in‑house pharmacy and ancillary services reduce external provider spend—and the successful execution of cost‑control initiatives that limited the 1.5% rise in external provider costs to $108.9 million.
Guidance for fiscal 2026 has been raised. Revenue is now projected at $925–$950 million, up from the previous $900–$950 million range, while adjusted EBITDA guidance has increased to $70–$75 million, a significant lift from the earlier $56–$65 million target. The higher guidance signals management’s confidence in sustained demand for its integrated care model and the continued realization of cost efficiencies as the company scales its operations.
This quarter marks the first profitable period since InnovAge’s initial public offering. The prior quarter ended with a net loss of $13.5 million, and the company’s de‑novo centers in Florida reported a loss of $4.7 million for the quarter. Despite these losses, the firm served 8,010 participants as of December 31 2025, a 7.1% increase from the same period a year earlier, underscoring steady enrollment growth.
CEO Patrick Blair highlighted the company’s “continued momentum across the business and disciplined execution across our clinical, operational and financial initiatives.” CFO Benjamin Adams noted that the improved revenue integrity—particularly around Medicaid eligibility and redeterminations—has been a key driver of the 9.2% adjusted EBITDA margin, exceeding the company’s intermediate‑term goal.
Investors responded positively to the results, citing the strong earnings beat, margin expansion, and upward guidance as evidence of effective execution and a robust outlook for the company’s integrated care model.
The market reaction was largely driven by the company’s ability to turn a loss into a profit, the significant improvement in adjusted EBITDA margin, and the confidence expressed in the updated fiscal guidance, all of which reinforce InnovAge’s position as the largest PACE provider in the United States.
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