FALSE000183437600018343762025-02-042025-02-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2025
INNOVAGE HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware001-4015981-0710819
(State or other jurisdiction
of incorporation)		(Commission File Number)(IRS Employer
Identification No.)
8950 E. Lowry Boulevard
Denver, CO
80230
(Address of principal executive offices)(Zip Code)
(844) 803-8745
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)		Name of each exchange on which
registered
Common Stock, $0.001 par value
INNV
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02.    Results of Operations and Financial Condition.
On February 4, 2025, InnovAge Holding Corp. issued a press release announcing financial results for the second fiscal quarter ended December 31, 2024, and related matters. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated in this Item 2.02 by reference.
The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such disclosure in this Form 8-K in such a filing.
Item 9.01.    Financial Statements and Exhibits.
(d) Exhibits
ExhibitDescription
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INNOVAGE HOLDING CORP.
Date: February 4, 2025
By:
/s/ Benjamin C. Adams
Name:
Benjamin C. Adams
Title:
Chief Financial Officer


Exhibit 99.1
tmb-20221108xex99d1002a.jpg
INNOVAGE ANNOUNCES FINANCIAL RESULTS FOR THE
FISCAL SECOND QUARTER ENDED DECEMBER 31, 2024
DENVER, CO., February 4, 2025 (GLOBE NEWSWIRE) -- InnovAge Holding Corp. (“InnovAge” or the “Company”) (Nasdaq: INNV), an industry leader in providing comprehensive healthcare programs to frail, predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE), today announced financial results for its fiscal second quarter ended December 31, 2024.

“Our second quarter results reflect the meaningful progress we are making to strengthen the business, drive top-line growth and margin improvement,” said CEO Patrick Blair. “We are entering calendar year 2025 with positive momentum while remaining unwavering in our commitment to delivering exceptional high quality care and creating meaningful value for participants, caregivers, regulatory partners, and our investors.”

Financial Results

Three Months Ended December 31,
20242023
in thousands, except percentages and per share amounts
Total revenues$208,999 $188,898 
Loss Before Income Taxes(13,457)(3,728)
Net Loss(13,491)(3,821)
Net Loss margin(6.5)%(2.0)%
Net Loss Attributable to InnovAge Holding Corp.(13,221)(3,447)
Net Loss per share - basic and diluted$(0.10)$(0.03)
Center-level Contribution Margin(1)
$37,065 $33,613 
Adjusted EBITDA(1)
$5,869 $6,900 
Adjusted EBITDA margin(1)
2.8 %3.7 %
Fiscal Second Quarter 2025 Financial Performance
•Total revenue of $209.0 million, increased approximately 10.6% compared to $188.9 million in the second quarter of fiscal year 2024
•Loss Before Income Taxes of $13.5 million increased approximately 261.0%, compared to a Loss Before Income Taxes of $3.7 million in the second quarter of fiscal year 2024


•Loss Before Income Taxes as a percent of revenue was 6.4%, an increase of 4.4 percentage points compared to Loss Before Income Tax as a percent of revenue of 2.0% in the second quarter of fiscal year 2024
•Center-level Contribution Margin(1) of $37.1 million, increased 10.3% compared to $33.6 million in the second quarter of fiscal year 2024
•Center-level Contribution Margin(1) as a percent of revenue of 17.7%, decreased 0.1 percentage points compared to 17.8% in the second quarter of fiscal year 2024
•Net loss of $13.5 million, compared to net loss of $3.8 million in the second quarter of fiscal year 2024
•Net loss margin of 6.5%, an increase of 4.5 percentage points compared to a net loss margin of 2.0% in the second quarter of fiscal year 2024
•Net loss attributable to InnovAge Holding Corp. of $13.2 million, or a loss of $0.10 per share, compared to net loss of $3.4 million, or a loss of $0.03 per share in the second quarter of fiscal year 2024
•Adjusted EBITDA(1) of $5.9 million, a decrease of $1.0 million compared to Adjusted EBITDA of $6.9 million in the second quarter of fiscal year 2024
•Adjusted EBITDA(1) margin of 2.8%, a decrease of 0.9 percentage points compared to 3.7% in the second quarter of fiscal year 2024
•Census of approximately 7,480 participants compared to 6,780 participants in the second quarter of fiscal year 2024
•Ended the second quarter of fiscal year 2025 with $46.1 million in cash and cash equivalents plus $40.8 million in short-term investments, and $78.3 million in debt on the balance sheet, representing debt under the Company’s senior secured term loan, convertible term loan and finance leases

(1) Center-level Contribution Margin and Center-level Contribution Margin as a percentage of revenue, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. Effective for the year ended June 30, 2024 and going forward, the Company has revised its calculation of Adjusted EBITDA and has recast the presentation for each of the three and six months ended December 31, 2023 to conform to the current presentation. For more details and for a definition and reconciliation of these non-GAAP measures to the most closely comparable GAAP measures for the periods indicated, see “Note Regarding Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Measures.”



Full Fiscal Year 2025 Financial Guidance

Based on information as of today, February 4, 2025, InnovAge is confirming the following financial guidance.
LowHigh
dollars in millions
Census7,300 7,750 
Total Member Months(1)
86,000 89,000 
Total revenues$815 $865 
Adjusted EBITDA(2)
$24 $31 

Expected results and estimates may be impacted by factors outside the Company’s control, and actual results may be materially different from this guidance. See “Forward-Looking Statements - Safe Harbor” herein.

(1) We define Total Member Months as the total number of participants as of period end multiplied by the number of months within a year in which each participant was enrolled in our program. Management believes this is a useful metric as it more precisely tracks the number of participants the Company serves throughout the year.

(2)Adjusted EBITDA is a non-GAAP measure. See “Note Regarding Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Measures” for a definition of Adjusted EBITDA and a reconciliation to net loss, the most closely comparable GAAP measure. The Company is unable to provide guidance for net loss or a reconciliation of the Company’s Adjusted EBITDA guidance because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. The Company’s inability to do so is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities and other one-time or exceptional items.
Conference Call
The Company will host a conference call this afternoon at 5:00 PM Eastern Time.  A live audio webcast of the call will be available on the Company’s website, https://investor.innovage.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for a limited time.  To access the call by phone, please go to this link (registration link), for dialing instructions and a unique access pin.  We encourage participants to dial into the call fifteen minutes ahead of the scheduled start time.
About InnovAge
InnovAge is a market leader in managing the care of high-cost, frail, predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE). With a mission of enabling older adults to age independently in their own homes for as long as safely possible, InnovAge’s patient-centered care model is designed to improve the quality of care our participants receive while reducing over-utilization of high-cost care settings. InnovAge believes its PACE healthcare model is one in which all constituencies — participants, their families, providers and government payors — “win.” As of December 31, 2024, InnovAge served approximately 7,480 participants across 20 centers in six states. https://www.innovage.com.
Investor Contact:
Ryan Kubota
rkubota@innovage.com


Media Contact:
Lara Hazenfield
lhazenfield@innovage.com
Forward-Looking Statements - Safe Harbor
This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements may be identified by the fact that they do not relate strictly to historical or current facts. Examples of forward-looking statements include, among others, statements we make regarding quarterly or annual financial guidance; financial outlook, including future revenues and future earnings; the viability of our growth strategy including our ability or expectations to increase the number of participants we serve, to build and/or open de novo centers, or to identify and execute tuck-in acquisitions, joint ventures and strategic partnerships; our ability to control costs, mitigate the effects of elevated expenses, expand our payor capabilities, implement clinical value and operational value initiatives and strengthen enterprise functions; our expectations with respect to audits, post-sanction work, legal proceedings and government investigations and actions; relationships and discussions with regulatory agencies; our ability to effectively implement operational excellence as a provider across all our centers; reimbursement and regulatory developments; market developments; new services; integration activities; industry and market opportunity; and the effects of any of the foregoing on our future results of operations or financial conditions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on currently available information and our current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control and may cause our actual results and financial condition to differ materially. Important factors that could cause our actual results and financial condition to differ materially include, among others, the following: (i) the viability of our growth strategy, including our ability to obtain licenses to open our de novo centers in Downey and Bakersfield, California, and our ability to ramp up our de novo centers in Florida; (ii) our ability to identify and successfully complete acquisitions, joint ventures and strategic partnerships; (iii) our ability to attract new participants and retain existing participants; (iv) the impact on our business from ongoing macroeconomic related challenges, including labor shortages, labor competition and inflation; (v) inspections, reviews, audits, and investigations under the federal and state government programs, including any corrective action and adverse findings thereunder; (vi) legal proceedings, enforcement actions and litigation malpractice and privacy disputes, which are costly to defend; (vii) under our PACE contracts, we assume all of the risk that the cost of providing services will exceed our compensation; (viii) the dependence of our revenues upon a limited number of government payors; (ix) the risk that our submissions to government payors may contain inaccurate or unsupportable information, including regarding risk adjustment scores of participants, subjecting us to repayment obligations or penalties; and (x) the impact on our business of renegotiation, non-renewal or termination of capitation agreements with government payors.

Forward-looking statements are based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. We advise you to not place undue reliance on forward-looking statements and to review our risk factors and other disclosures included in the reports we file or furnish with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.


Note Regarding Use of Non-GAAP Financial Measures
In addition to reporting financial information in accordance with generally accepted accounting principles (“GAAP”), the Company is also reporting Center-level Contribution Margin, Center-level Contribution Margin as a percentage of revenue, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP measures are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to net income (loss) before income taxes, net income (loss) before income taxes margin, net income (loss) and net income (loss) margin, as applicable, as determined by GAAP. We believe that these non-GAAP measures are appropriate measures of operating performance because the metrics eliminate the impact of certain expenses that, in the case of Adjusted EBITDA, do not relate to our ongoing business performance, allowing us to more effectively evaluate our core operating performance and trends from period to period. We believe that these non-GAAP measures help investors and analysts in comparing our results across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, including net income (loss) before taxes, net income (loss) before taxes margin, net income (loss), and net income (loss) margin.

The Company’s management uses Center-level Contribution Margin as the measure for assessing performance of its operating segments. For purpose of evaluating Center-level Contribution Margin on a center-by-center basis, we do not allocate our sales and marketing expense or corporate, general and administrative expenses across our centers. We define Center-level Contribution Margin as total revenues less external provider costs and cost of care, excluding depreciation and amortization, which includes all medical and pharmacy costs.

In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA. Our use of the term Adjusted EBITDA varies from others in our industry. We define Adjusted EBITDA as net loss adjusted for interest expense, net, other investment income, depreciation and amortization, and provision (benefit) for income tax as well as addbacks for non-recurring expenses or exceptional items, including charges relating to management equity compensation, litigation costs and settlement, M&A diligence, transaction and integration, business optimization, electronic medical record (“EMR”) implementation, impairment of right-of-use (“ROU”) asset and construction in progress and loss on minority equity interest investment. Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage of our total revenue. Effective for the year ended June 30, 2024, and going forward, the Company has revised its calculation of Adjusted EBITDA to no longer exclude de novo center development costs and to reflect the impact of other investment income. The presentation for the three and six months ended December 31, 2023 has been recast to conform to the current presentation. For a full reconciliation of Center-level Contribution Margin and Adjusted EBITDA to the most closely comparable GAAP financial measures, please see the attachment to this earnings release.


Schedule 1
InnovAge
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS) (UNAUDITED)
December 31,
2024		June 30,
2024
Assets
Current Assets
Cash and cash equivalents$46,078 $56,946 
Short-term investments40,775 45,833 
Restricted cash13 14 
Accounts receivable, net of allowance ($756 – December 31, 2024 and $6,729 – June 30, 2024)
49,759 48,106 
Prepaid expenses28,003 18,919 
Income tax receivable3,324 3,324 
Total current assets167,952 173,142 
Noncurrent Assets
Property and equipment, net179,024 193,022 
Operating lease assets25,293 28,416 
Investments2,645 2,645 
Deposits and other5,713 5,949 
Goodwill139,949 139,949 
Other intangible assets, net4,208 4,538 
Total noncurrent assets356,832 374,519 
Total assets$524,784 $547,661 
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses$58,048 $55,459 
Reported and estimated claims59,268 55,404 
Due to Medicaid and Medicare13,857 15,197 
Current portion of long-term debt3,795 3,795 
Current portion of finance lease obligations5,246 4,599 
Current portion of operating lease obligations4,759 4,145 
Total current liabilities144,973 138,599 
Noncurrent Liabilities
Deferred tax liability, net7,896 7,460 
Finance lease obligations8,965 12,743 
Operating lease obligations23,849 26,275 
Other noncurrent liabilities1,353 1,298 
Long-term debt, net of debt issuance costs59,795 61,478 
Total liabilities246,831 247,853 
Commitments and Contingencies
Redeemable Noncontrolling Interests21,611 22,200 
Stockholders’ Equity
Common stock, $0.001 par value; 500,000,000 authorized as of December 31, 2024 and June 30, 2024; 136,395,383 issued and 135,349,150 outstanding as of December 31, 2024 and 136,152,858 issued and 136,116,299 outstanding as of June 30, 2024
136 136 
Treasury stock at cost, 1,046,233 and 36,559 shares as of December 31, 2024 and June 30, 2024, respectively
(6,092)(179)
Additional paid-in capital340,874 337,615 
Retained deficit(86,461)(68,311)
Total InnovAge Holding Corp. 248,457 269,261 
Noncontrolling interests7,885 8,347 
Total stockholders’ equity256,342 277,608 
Total liabilities and stockholders’ equity$524,784 $547,661 


Schedule 2
InnovAge
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA) (UNAUDITED)
Three Months Ended December 31,Six Months Ended December 31,
2024202320242023
Revenues
Capitation revenue$208,674 $188,561 $413,474 $370,734 
Other service revenue325 337 667 648 
Total revenues208,999 188,898 414,141 371,382 
Expenses
External provider costs107,873 100,964 215,087 200,322 
Cost of care, excluding depreciation and amortization64,061 54,321 127,447 109,570 
Sales and marketing7,704 5,859 14,196 11,237 
Corporate, general and administrative28,103 25,249 55,638 54,197 
Depreciation and amortization5,319 4,290 10,730 8,559 
Impairment of right-of-use asset and construction in progress8,495 — 8,495 — 
Total expenses221,555 190,683 431,593 383,885 
Operating Loss(12,556)(1,785)(17,452)(12,503)
Other Income (Expense)
Interest expense, net(760)(935)(1,408)(1,596)
Other income (expense)(157)874 80 1,517 
Gain (loss) on equity method investment16 (1,882)16 (1,882)
Total other expense(901)(1,943)(1,312)(1,961)
Loss Before Income Taxes(13,457)(3,728)(18,764)(14,464)
Provision for Income Taxes34 93 437 319 
Net Loss(13,491)(3,821)(19,201)(14,783)
Less: net loss attributable to noncontrolling interests(270)(374)(1,051)(1,032)
Net Loss Attributable to InnovAge Holding Corp.$(13,221)$(3,447)$(18,150)$(13,751)
Weighted-average number of common shares outstanding - basic135,439,668135,887,613135,604,751135,839,007
Weighted-average number of common shares outstanding - diluted135,439,668135,887,613135,604,751135,839,007
Net loss per share - basic$(0.10)$(0.03)$(0.13)$(0.10)
Net loss per share - diluted$(0.10)$(0.03)$(0.13)$(0.10)


Schedule 3
InnovAge
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
For the Six Months Ended December 31,
20242023
Operating Activities
Net loss$(19,201)$(14,783)
Adjustments to reconcile net loss to net cash used in operating activities  
Gain (loss) on disposal of assets15 (21)
Provision for uncollectible accounts524 2,881 
Depreciation and amortization10,730 8,559 
Operating lease rentals3,107 2,346 
Impairment of right-of-use asset and construction in progress8,495 — 
Amortization of deferred financing costs215 215 
Stock-based compensation4,035 3,589 
Loss on minority equity interest investment— 1,882 
Deferred income taxes437 319 
Other, net709 9 
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable, net(2,176)(21,430)
Prepaid expenses(9,084)3,014 
Deposits and other(629)(1,396)
Accounts payable and accrued expenses2,717 (2,245)
Reported and estimated claims3,864 4,137 
Due to Medicaid and Medicare(1,340)1,122 
Operating lease liabilities(3,181)(2,362)
Deferred revenue— (28,115)
Net cash used in operating activities(763)(42,279)
Investing Activities  
Purchases of property and equipment(3,543)(4,157)
Purchases of short-term investments(1,147)(1,179)
Proceeds from sale of short-term investments6,300 3,000 
Acquisition of business— (23,916)
Net cash provided by (used in) investing activities1,610 (26,252)
Financing Activities
Payments for finance lease obligations(3,130)(2,107)
Principal payments on long-term debt(1,898)(1,897)
Repurchase of equity securities(5,912)— 
Taxes paid related to net settlements of stock-based compensation awards(776)(634)
Net cash used in financing activities(11,716)(4,638)
DECREASE IN CASH, CASH EQUIVALENTS & RESTRICTED CASH(10,869)(73,169)
CASH, CASH EQUIVALENTS & RESTRICTED CASH, BEGINNING OF PERIOD56,960 127,265 
CASH, CASH EQUIVALENTS & RESTRICTED CASH, END OF PERIOD$46,091 $54,096 
Supplemental Cash Flows Information
Interest paid$2,305 $1,254 
Income taxes paid$1 $— 
Property and equipment included in accounts payable$161 $470 
Property and equipment purchased under finance leases$— $113 


Schedule 4
InnovAge
RECONCILIATION OF GAAP AND NON-GAAP MEASURES
(IN THOUSANDS) (UNAUDITED)

Adjusted EBITDA
Three months ended December 31,Six months ended December 31,
2024202320242023
Net loss$(13,491)$(3,821)$(19,201)$(14,783)
Interest expense, net760 935 1,408 1,596 
Other investment income(a)
141 (871)(95)(1,198)
Depreciation and amortization5,319 4,290 10,730 8,559 
Provision for income tax34 93 437 319 
Stock-based compensation1,873 1,766 4,035 3,589 
Litigation costs and settlement(b)
1,405 198 4,464 1,905 
M&A diligence, transaction and integration(c)
1,275 284 1,380 174 
Business optimization(d)
58 774 693 2,933 
EMR implementation(e)
— 1,370 — 3,304 
Impairment of right-of-use asset and construction in progress(f)
8,495 — 8,495 — 
Loss on minority equity interest(g)
— 1,882 — 1,882 
Adjusted EBITDA$5,869 $6,900 $12,346 $8,280 
Net loss margin(6.4)%(2.0)%(4.6)%(4.0)%
Adjusted EBITDA margin2.8 %3.7 %3.0 %2.2 %
_______________________
(a)Reflects investment income related to short-term investments included in our consolidated statement of operations. Effective for the year ended June 30, 2024 and going forward, the Company has revised the calculation for Adjusted EBITDA to reflect the impact of investment income. The presentation for the three and six months ended December 31, 2023 has been recast to reflect the impact of other investment income.
(b)Reflects charges/(credits) related to litigation by stockholders, litigation related to de novo center, and civil investigative demands. Refer to Note 9, “Commitments and Contingencies” to our condensed consolidated financial statements contained in our Quarterly Report on Form 10-Q for more information regarding litigation by stockholders and civil investigative demands. Costs reflected consist of litigation costs considered one-time in nature and outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy.
(c)Reflects charges related to M&A transaction and integrations. The presentation for the three and six months ended December 31, 2023 has been recast to no longer exclude de novo center development costs.
(d)Reflects charges related to business optimization initiatives. Such charges relate to one-time investments in projects designed to enhance our technology and compliance systems and improve and support the efficiency and effectiveness of our operations. For the three months ended December 31, 2024, this primarily includes costs related to other non-recurring projects aimed at reducing costs and improving efficiencies. For the six months ended December 31, 2024, this includes (i) $0.4 million of costs associated with organizational restructure and (ii) $0.3 million related to other non-recurring projects aimed at reducing costs and improving efficiencies. For the three months ended December 31, 2023, this includes (i) $0.4 million of costs associated with third party consultants as we implement our core provider initiatives, assess our risk-bearing capabilities, and strengthen our enterprise capabilities and (ii) $0.4 million related to other non-recurring projects aimed at reducing costs and improving efficiencies. For the six months ended December 31,2023, this includes (i) $2.2 million of costs associated with third party consultants as we implement our core provider initiatives, assess our risk-bearing capabilities, and strengthen our enterprise


capabilities, (ii) $0.3 million of costs associated with organizational restructure, and (iii) $0.4 million related to other non-recurring projects aimed at reducing costs and improving efficiencies.
(e)Reflects non-recurring expenses relating to the implementation of a new EMR vendor.
(f)Reflects impairment charges related to ROU asset and construction in progress related to halting developments to a previously planned de novo center in Louisville, Kentucky that the Company is no longer pursuing.
(g)Reflects impairment charges related to our minority equity interest in Jetdoc, Inc.

Three months ended September 30,
2024
Net loss$(5,710)
Interest expense, net1,243 
Other investment income(a)
(831)
Depreciation and amortization5,410 
Provision (benefit) for income tax404 
Stock-based compensation2,161 
Litigation costs and settlement(b)
3,059 
M&A diligence, transaction and integration(c)
105 
Business optimization(d)
635 
Adjusted EBITDA$6,476 
Net loss margin(2.8)%
Adjusted EBITDA margin3.2 %
_______________________
(a)Reflects investment income related to short-term investments included in our consolidated statement of operations. Effective for the year ended June 30, 2024 and going forward, the Company has revised the calculation for Adjusted EBITDA to reflect the impact of investment income. The presentation for the three months ended September 30, 2023 has been recast to reflect the impact of other investment income.
(b)Reflects charges/(credits) related to litigation by stockholders, litigation related to de novo center, and civil investigative demands. Refer to Note 9, “Commitments and Contingencies” to our condensed consolidated financial statements for more information regarding litigation by stockholders and civil investigative demands. Costs reflected consist of litigation costs considered one-time in nature and outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy.
(c)Reflects charges related to M&A transaction and integrations. The presentation for the three months ended September 30, 2024 no longer excludes de novo center development costs.
(d)Reflects charges related to business optimization initiatives. Such charges related to one-time investments in projects designed to enhance our technology and compliance systems and improve and support the efficiency and effectiveness of our operations. For the three months ended September 30, 2024, this includes (i) $0.4 million of costs associated with organizational restructure and (ii) $0.2 million related to other non-recurring projects aimed at reducing costs and improving efficiencies.


Center-Level Contribution Margin

Three Months Ended December 31, 2024Three Months Ended December 31, 2023
(In thousands)PACE
All other(a)
TotalsPACE
All other(a)
Totals
Capitation revenue$208,674 $— $208,674 $188,561 $— $188,561 
Other service revenue77 248 325 68 269 337 
Total revenues208,751 248 208,999 188,629 269 188,898 
External provider costs107,873 — 107,873 100,964 — 100,964 
Cost of care, excluding depreciation and amortization63,916 145 64,061 54,171 150 54,321 
Center-Level Contribution Margin36,962 103 37,065 33,494 119 33,613 
Overhead costs(b)
35,807 — 35,807 31,108 — 31,108 
Depreciation and amortization5,204 115 5,319 4,178 112 4,290 
Interest expense, net(716)(44)(760)(890)(45)(935)
Other income (expense)(157)(157)— — — 
Gain (loss) on equity method investment16 — 16 (1,882)— (1,882)
Loss Before Income Taxes$(13,401)$(56)$(13,457)$(3,690)$(38)$(3,728)
Loss Before Income Taxes as a % of revenue(6.4)%(2.0)%
Center- Level Contribution Margin as a % of revenue17.7 %17.8 %
Three Months Ended September 30, 2024
(In thousands)PACE
All other(1)
Totals
Capitation revenue$204,800 $— $204,800 
Other service revenue96 246 342 
Total revenues204,896 246 205,142 
External provider costs107,214 — 107,214 
Cost of care, excluding depreciation and amortization63,234 153 63,387 
Center-Level Contribution Margin34,448 93 34,541 
Overhead costs(a)
34,027 — 34,027 
Depreciation and amortization5,295 115 5,410 
Interest expense, net1,199 44 1,243 
Gain (loss) on cost and equity method investments— — 
Other income(833)— (833)
Loss Before Income Taxes$(5,240)$(66)$(5,306)
Loss Before Income Taxes as a % of revenue(2.6)%
Center- Level Contribution Margin as a % of revenue16.8 %
_________________________________
(a)Center-level Contribution Margin from segments below the quantitative thresholds are primarily attributable to the Senior Housing operating segment of the Company. This segment has never met any of the quantitative thresholds for determining reportable segments.
(b)Overhead consists of the Sales and marketing and Corporate, general and administrative financial statement line items.

v3.25.0.1
Cover
Feb. 04, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 04, 2025
Entity Registrant Name INNOVAGE HOLDING CORP
Entity Incorporation, State or Country Code DE
Entity File Number 001-40159
Entity Tax Identification Number 81-0710819
Entity Address, Address Line One 8950 E. Lowry Boulevard
Entity Address, City or Town Denver
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80230
City Area Code 844
Local Phone Number 803-8745
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.001 par value
Trading Symbol INNV
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag false
Entity Central Index Key 0001834376
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