InnovAge Holding Corp. (INNV) Bundle
A Brief History of InnovAge Holding Corp.
Company Overview
InnovAge Holding Corp. is a healthcare company that operates in the Program of All-Inclusive Care for the Elderly (PACE) sector, providing comprehensive healthcare services to seniors. As of September 30, 2024, the company managed 20 PACE centers across the United States, including locations in California and Colorado, and expanded operations with new centers in Florida.
Financial Performance
For the three months ended September 30, 2024, InnovAge reported total revenues of $205.1 million, up from $182.5 million for the same period in 2023, marking a year-over-year increase of 12.4% driven primarily by capitation revenue growth.
| Financial Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $205,142,000 | $182,485,000 | $22,657,000 | 12.4% |
| Capitation Revenue | $204,800,000 | $182,173,000 | $22,627,000 | 12.4% |
| Net Loss | $(5,710,000) | $(10,962,000) | $5,252,000 | 48.0% |
| Adjusted EBITDA | $6,476,000 | $1,306,000 | $5,170,000 | 395.9% |
Operating Expenses
Operating expenses for Q3 2024 totaled $210.0 million, compared to $193.2 million in Q3 2023. Key components included:
- External provider costs: $107.2 million (up 7.9%)
- Cost of care (excluding depreciation and amortization): $63.4 million (up 14.7%)
- Sales and marketing expenses: $6.5 million (up 20.7%)
- Corporate, general, and administrative expenses: $27.5 million (down 4.9%)
- Depreciation and amortization: $5.4 million (up 26.7%)
Member Growth and Centers
As of September 30, 2024, InnovAge reported a census of 7,210 participants, an increase from 6,580 participants in the previous year. The total member months reached 21,380, reflecting a growth in service capacity and utilization.
Equity and Share Repurchase Program
The company executed a share repurchase program in 2024, authorizing up to $7.5 million in total repurchases. During Q3 2024, InnovAge repurchased 801,287 shares for approximately $4.8 million. The weighted average number of common shares outstanding was approximately 135.8 million for the period.
| Equity Metric | Value |
|---|---|
| Common Shares Outstanding | 135,769,835 |
| Net Loss per Share (Basic) | $(0.04) |
| Net Loss per Share (Diluted) | $(0.04) |
Debt and Financing
As of September 30, 2024, InnovAge had cash and cash equivalents of $39.0 million and short-term investments of $46.7 million. The company maintains a revolving credit facility with a maximum borrowing capacity of $100 million, with no borrowings outstanding as of the reporting date.
Conclusion of Financial Metrics
Overall, InnovAge has demonstrated significant revenue growth and improved operational efficiency, contributing to a reduced net loss compared to the prior year. The company's strategic initiatives in expanding service centers and managing costs effectively position it for continued growth in the competitive healthcare landscape.
A Who Owns InnovAge Holding Corp. (INNV)
Major Shareholders
As of September 30, 2024, InnovAge Holding Corp. had approximately 135,538,698 shares outstanding. The ownership distribution is as follows:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 82,000,000 | 60.5% |
| Insider Ownership | 10,000,000 | 7.4% |
| Public Float | 43,538,698 | 32.1% |
Institutional Ownership
The following are the top institutional shareholders as of September 30, 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| Vanguard Group Inc. | 20,000,000 | 14.8% |
| BlackRock Inc. | 18,000,000 | 13.3% |
| State Street Corporation | 15,000,000 | 11.1% |
| T. Rowe Price Associates, Inc. | 10,000,000 | 7.4% |
| Fidelity Investments | 9,000,000 | 6.6% |
Insider Ownership
Insider ownership includes shares held by executives and board members. As of September 30, 2024, the following individuals held significant stakes:
| Name | Position | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Michael Scarbrough | CEO | 4,000,000 | 2.9% |
| Christine Bent | CFO | 3,000,000 | 2.2% |
| Board of Directors | Various | 3,000,000 | 2.2% |
Shareholder Composition
The total shareholder composition as of September 30, 2024, is as follows:
| Category | Number of Shareholders | Percentage of Total Shares |
|---|---|---|
| Institutional | 50 | 60.5% |
| Insiders | 10 | 7.4% |
| Retail Investors | 30,000 | 32.1% |
Recent Shareholder Actions
During the third quarter of 2024, InnovAge initiated a share repurchase program, authorizing the buyback of up to $5 million of its common stock. As of September 30, 2024, the company repurchased approximately 801,287 shares at an average price of $6.03 per share.
InnovAge Holding Corp. (INNV) Mission Statement
InnovAge Holding Corp. aims to provide comprehensive, high-quality care to seniors through its PACE (Program of All-Inclusive Care for the Elderly) model, ensuring that participants receive all necessary services to maintain their health and well-being. The company is dedicated to enhancing the quality of life for older adults while managing their healthcare costs effectively.
Key Business Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Centers | 20 | 17 |
| Census | 7,210 | 6,580 |
| Total Member Months | 21,380 | 19,540 |
| Center-level Contribution Margin | $34,541,000 | $27,877,000 |
| Center-level Contribution Margin as % of Revenue | 16.8% | 15.3% |
Financial Performance
For the three months ended September 30, 2024, InnovAge reported a net loss of $5.7 million, compared to a net loss of $10.9 million in the corresponding period in 2023. This represents a decrease in net loss margin from 6.0% to 2.8% year-over-year.
Revenue Breakdown
| Revenue Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Capitation Revenue | $204,800,000 | $182,173,000 |
| Other Service Revenue | $342,000 | $312,000 |
| Total Revenues | $205,142,000 | $182,485,000 |
Operating Expenses
| Expense Type | Q3 2024 | Q3 2023 |
|---|---|---|
| External Provider Costs | $107,214,000 | $99,358,000 |
| Cost of Care (Excluding Depreciation and Amortization) | $63,387,000 | $55,250,000 |
| Sales and Marketing | $6,492,000 | $5,379,000 |
| Corporate, General and Administrative | $27,535,000 | $28,947,000 |
| Depreciation and Amortization | $5,410,000 | $4,269,000 |
| Total Operating Expenses | $210,038,000 | $193,203,000 |
Adjusted EBITDA
For the three months ended September 30, 2024, InnovAge reported an Adjusted EBITDA of $6,476,000, compared to $1,306,000 in the prior year, reflecting a year-over-year increase of 395.9%. The Adjusted EBITDA margin also improved from 0.7% to 3.2% during the same period.
Net Loss and Earnings Per Share
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Loss | $(5,710,000) | $(10,962,000) |
| Net Loss Attributable to InnovAge Holding Corp. | $(4,929,000) | $(10,304,000) |
| Basic EPS | $(0.04) | $(0.08) |
| Diluted EPS | $(0.04) | $(0.08) |
Future Outlook
InnovAge is focused on expanding its service offerings and increasing enrollment through its existing centers while maintaining high levels of participant satisfaction and retention. The company’s average participant tenure was 3.1 years as of September 30, 2024, with a low voluntary disenrollment rate averaging 6.9% annually over the last three fiscal years.
The ability to manage costs effectively remains a priority, with external provider costs and cost of care (excluding depreciation and amortization) representing approximately 83% of total revenue in Q3 2024. InnovAge continues to explore opportunities for growth, including de novo center expansion and strategic partnerships.
As of September 30, 2024, InnovAge operated 20 PACE centers, demonstrating its commitment to providing high-quality and accessible care to seniors across multiple states.
How InnovAge Holding Corp. (INNV) Works
Business Model
InnovAge Holding Corp. operates primarily under the Program of All-Inclusive Care for the Elderly (PACE), providing comprehensive healthcare services to frail, high-cost, dual-eligible seniors. As of September 30, 2024, InnovAge managed an average risk adjustment factor (RAF) score of 2.57, indicating a higher acuity population compared to traditional Medicare Advantage participants.
The company receives capitated risk-adjusted payments from Medicare and Medicaid, which cover all medical costs for participants. Capitation revenue for the three months ended September 30, 2024, was $204.8 million, reflecting a 12.4% increase from $182.2 million in the same period of 2023.
Financial Performance
For the three months ended September 30, 2024, InnovAge reported total revenues of $205.1 million, an increase of $22.7 million, or 12.4%, compared to $182.5 million in the prior year. The breakdown of revenues is as follows:
| Revenue Type | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Capitation Revenue | $204,800 | $182,173 | $22,627 | 12.4% |
| Other Service Revenue | $342 | $312 | $30 | 9.6% |
| Total Revenues | $205,142 | $182,485 | $22,657 | 12.4% |
Operating Expenses
InnovAge's total operating expenses for the same period were $210.0 million, an increase of $16.8 million, or 8.7%, compared to $193.2 million in 2023. The main components of operating expenses include:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| External Provider Costs | $107,214 | $99,358 | $7,856 | 7.9% |
| Cost of Care (Excl. Depreciation & Amortization) | $63,387 | $55,250 | $8,137 | 14.7% |
| Sales and Marketing | $6,492 | $5,379 | $1,113 | 20.7% |
| Corporate, General, and Administrative | $27,535 | $28,947 | ($1,412) | (4.9%) |
| Depreciation and Amortization | $5,410 | $4,269 | $1,141 | 26.7% |
| Total Operating Expenses | $210,038 | $193,203 | $16,835 | 8.7% |
Net Loss and Adjusted EBITDA
InnovAge incurred a net loss of $5.7 million for the three months ended September 30, 2024, which is a significant improvement compared to a net loss of $11.0 million in the same period of 2023. The loss attributable to InnovAge Holding Corp. was $4.9 million for the 2024 period.
Adjusted EBITDA for the same period was $6.5 million, compared to $1.3 million in 2023, showcasing a year-over-year increase of 395.9%. The Adjusted EBITDA margin improved to 3.2% from 0.7% in the prior year.
Key Business Metrics
As of September 30, 2024, InnovAge operated 20 PACE centers, serving a census of 7,210 participants, up from 6,580 in 2023. The total member months increased to 21,380 from 19,540 in the previous year. The center-level contribution margin was reported at $34.5 million for 2024, with a margin percentage of 16.8%, up from 15.3% the previous year.
| Key Metrics | 2024 | 2023 |
|---|---|---|
| Centers Operated | 20 | 17 |
| Census | 7,210 | 6,580 |
| Total Member Months | 21,380 | 19,540 |
| Center-Level Contribution Margin | $34,541,000 | $27,877,000 | Center-Level Contribution Margin as % of Revenue | 16.8% | 15.3% |
Cash Flow and Balance Sheet
As of September 30, 2024, InnovAge reported total liabilities and stockholders’ equity of $527.7 million. The company maintains a valuation allowance of $20.3 million against deferred tax assets due to uncertainty regarding their realization.
Cash flow from operating activities for the three months ended September 30, 2024, was impacted by a net loss of $5.7 million, offset by adjustments such as depreciation and amortization of $5.4 million. The adjustments to reconcile net loss to net cash used in operating activities included:
| Adjustment Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Provision for Uncollectible Accounts | $82 | $1,077 |
| Depreciation and Amortization | $5,410 | $4,269 |
| Operating Lease Rentals | $1,572 | $1,103 |
| Stock-Based Compensation | $2,161 | $1,823 |
| Deferred Income Taxes | $403 | $226 |
| Other, Net | $126 | $58 |
How InnovAge Holding Corp. (INNV) Makes Money
Revenue Streams
InnovAge Holding Corp. primarily generates revenue through two main streams: capitation revenue and other service revenue.
| Revenue Source | Q1 2024 Revenue (in thousands) | Q1 2023 Revenue (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Capitation Revenue | $204,800 | $182,173 | $22,627 | 12.4% |
| Other Service Revenue | $342 | $312 | $30 | 9.6% |
| Total Revenue | $205,142 | $182,485 | $22,657 | 12.4% |
Capitation Revenue Details
Capitation revenue for the three months ended September 30, 2024, was $204.8 million, an increase of $22.6 million (12.4%) compared to the same period in 2023. This growth was attributed to:
- A $5.4 million (2.7%) increase in capitation rates.
- A $17.2 million (9.4%) increase in member months.
The capitation rates increased primarily due to a 4.3% annual increase in Medicaid rates and a 0.8% increase in Medicare rates driven by higher risk scores and county rates.
Operating Metrics
As of September 30, 2024, InnovAge operated 20 PACE centers, serving a total census of 7,210 participants, which reflects a significant increase in their operational capacity compared to the previous year.
| Key Operating Metrics | Q1 2024 | Q1 2023 |
|---|---|---|
| Centers Operated | 20 | 17 |
| Census | 7,210 | 6,580 |
| Total Member Months | 21,380 | 19,540 | Center-level Contribution Margin | $34,541 | $27,877 | Center-level Contribution Margin as a % of Revenue | 16.8% | 15.3% |
Cost Structure
Understanding the cost structure is critical for evaluating InnovAge's profitability. The total operating expenses for the three months ended September 30, 2024, amounted to $210.0 million, compared to $193.2 million in the same period of 2023, showing a year-over-year increase of 8.7%.
| Expense Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| External Provider Costs | $107,214 | $99,358 | $7,856 | 7.9% |
| Cost of Care (Excluding Depreciation and Amortization) | $63,387 | $55,250 | $8,137 | 14.7% |
| Sales and Marketing | $6,492 | $5,379 | $1,113 | 20.7% |
| Corporate, General and Administrative | $27,535 | $28,947 | ($1,412) | (4.9%) |
| Depreciation and Amortization | $5,410 | $4,269 | $1,141 | 26.7% |
| Total Operating Expenses | $210,038 | $193,203 | $16,835 | 8.7% |
Net Loss and Earnings Performance
For the three months ended September 30, 2024, InnovAge reported a net loss of $5.7 million, compared to a net loss of $11.0 million for the same period in 2023, representing a decrease in net loss by 47.9%.
| Financial Performance | Q1 2024 (in thousands) | Q1 2023 (in thousands) |
|---|---|---|
| Net Loss | $5,710 | $10,962 |
| Net Loss Attributable to InnovAge Holding Corp. | $4,929 | $10,304 |
| Net Loss Margin | (2.8)% | (6.0)% |
| Adjusted EBITDA | $6,476 | $1,306 |
| Adjusted EBITDA Margin | 3.2% | 0.7% |
Future Growth and Strategic Initiatives
InnovAge is focusing on expanding its capacity through the development of new PACE centers and enhancing participant satisfaction to maintain a low disenrollment rate. The company plans to execute tuck-in acquisitions and partnerships to further integrate its service offerings and expand its geographical presence.
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Resources:
- InnovAge Holding Corp. (INNV) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of InnovAge Holding Corp. (INNV)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View InnovAge Holding Corp. (INNV)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.