INNV

Wall Street expects a year-over-year increase in earnings on higher revenues when InnovAge Holding Corp. (INNV) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on September 8. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of +800%. Revenues are expected to be $238.35 million, up 7.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 4.17% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For InnovAge, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +22.73%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that InnovAge will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that InnovAge would post earnings of $0.06 per share when it actually produced a loss of -$0.22, delivering a surprise of -466.67%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. InnovAge appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InnovAge Holding Corp. (INNV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HealthEquity (HQY) came out with quarterly earnings of $1.24 per share, beating the Zacks Consensus Estimate of $1.19 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.20%. A quarter ago, it was expected that this provider of services for managing health care accounts would post earnings of $1.11 per share when it actually produced earnings of $1.24, delivering a surprise of +11.71%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. HealthEquity, which belongs to the Zacks Medical Services industry, posted revenues of $350.73 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 0.14%. This compares to year-ago revenues of $325.83 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. HealthEquity shares have added about 14% since the beginning of the year versus the S&P 500's gain of 12.1%. While HealthEquity has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for HealthEquity was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.15 on $347.49 million in revenues for the coming quarter and $4.71 on $1.42 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Services is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, InnovAge Holding Corp. (INNV), has yet to report results for the quarter ended June 2026. The results are expected to be released on September 8. This company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of +800%. The consensus EPS estimate for the quarter has been revised 4.2% lower over the last 30 days to the current level. InnovAge Holding Corp.'s revenues are expected to be $238.35 million, up 7.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HealthEquity, Inc. (HQY) : Free Stock Analysis Report InnovAge Holding Corp. (INNV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

DocGo Inc. (DCGO) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of a loss of $0.04 per share. This compares to a loss of $0.11 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +500.00%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.12, delivering a surprise of -500%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Motion Acquisition, which belongs to the Zacks Medical Services industry, posted revenues of $73.43 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.28%. This compares to year-ago revenues of $80.42 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Motion Acquisition shares have lost about 24% since the beginning of the year versus the S&P 500's gain of 13.7%. While Motion Acquisition has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Motion Acquisition was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is breakeven on $76.37 million in revenues for the coming quarter and -$0.12 on $307.88 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Services is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. InnovAge Holding Corp. (INNV), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of +800%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. InnovAge Holding Corp.'s revenues are expected to be $234.17 million, up 5.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DocGo Inc. (DCGO) : Free Stock Analysis Report InnovAge Holding Corp. (INNV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

InnovAge reported Q3 revenue of $251.9 million (up 15.5%) with adjusted EBITDA of $30.5 million and a center-level contribution margin of $61 million (24.2% of revenue), and it raised fiscal 2026 guidance to Revenue $950–$975M and Adjusted EBITDA $85–$90M. Despite margin improvement, net loss widened to $29.9 million as corporate G&A jumped 98.3% largely from increased litigation liability; the company ended the quarter with $95.5 million cash, $43.1 million short-term investments and $69.4 million total debt, while de novo losses fell to $1.8 million. Management cautioned fiscal 2027 visibility is limited, noting Medicare rates may rise only ~1.5%–2% and Medicaid increases could be smaller—creating potential top-line pressure—while planning to reinvest in clinical teams, pilot AI tools, and pursue acquisitions/JVs to drive growth without sacrificing margin. Interested in InnovAge Holding Corp.? Here are five stocks we like better. InnovAge (NASDAQ:INNV) reported fiscal third-quarter 2026 results that management said reflected “stronger operating execution” and the benefits of investments made to strengthen its platform. The company, which operates Programs of All-Inclusive Care for the Elderly (PACE) centers, posted approximately $252 million in total revenue, a center-level contribution margin of $61 million, and adjusted EBITDA of $30 million for the quarter, according to CEO Patrick Blair. CFO Ben Adams said InnovAge served approximately 8,050 participants across 20 centers in six states as of March 31, 2026, representing 6.9% growth versus the prior-year period and 0.5% sequential growth. Member months totaled 24,060, up 6.7% year-over-year and 0.4% sequentially, which Adams attributed in part to “normal seasonal growth resulting from the Medicare Advantage open enrollment period.” → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook Total revenue was $251.9 million, up 15.5% from $218.1 million in the fiscal third quarter of 2025, driven by higher capitation rates and growth in member months. Adams said capitation rates benefited from annual Medicaid and Medicare rate increases and “a lower revenue reserve,” while enrollment expansion occurred across California, Colorado, and Florida centers. Sequentially, revenue rose 5.1%, “primarily due to higher capitation rates” from annual rate updates in California and Medicare effective Jan. 1, 2026. On profitability, Adams reported center-level contribution margin of $61 million, compared with $40.7 million a year earlier. As a percentage of revenue, center-level contribution margin was 24.2%, up about 550 basis points year-over-year and up 220 basis points sequentially. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches InnovAge raised its fiscal 2026 guidance for revenue and adjusted EBITDA for a second time, citing year-to-date performance. Blair said the company now expects: Revenue of $950 million to $975 million Adjusted EBITDA of $85 million to $90 million Adams added that other full-year guidance items were unchanged, including ending census of 7,900 to 8,100 participants and de novo losses of $11.5 million to $13.5 million. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Adams said external provider costs were $113.2 million, up 5% year-over-year. The increase was driven by member-month growth, “partially offset by a reduction in cost per participant.” He attributed the lower cost per participant to reduced permanent nursing facility utilization and lower pharmacy expense following a transition to in-house pharmacy services, partially offset by rate increases for assisted living and nursing facility services and higher assisted living utilization. Sequentially, external provider costs increased 1.1% due to modest membership growth and a slight increase in cost per participant tied to seasonal inpatient admissions. Cost of care excluding depreciation and amortization was $77.7 million, up 11.8% year-over-year, reflecting member-month growth and higher cost per participant. Adams cited higher salaries, wages, and benefits due to higher wage rates (partially offset by reduced headcount), higher third-party fees and shipping costs associated with in-house pharmacy services, and higher contract services and fleet costs, including contract transportation. Sequentially, cost of care rose 3.7%, driven by the annual reset of employee benefits and payroll taxes and higher consulting expense, partially offset by lower contract transportation. Sales and marketing expense was approximately $8.7 million, up 26.3% year-over-year due to higher wage rates and increased marketing spend to support growth. Corporate general and administrative expense was $76.5 million, up 98.3% from the prior-year period, which Adams said was “primarily driven by an increase in litigation liability.” Net loss was $29.9 million, compared with a net loss of $11.1 million in the year-ago quarter. The company reported a net loss of $0.22 per share on a weighted-average share count of approximately 135.7 million shares on a fully diluted basis. Adjusted EBITDA was $30.5 million, up from $10.8 million in the prior-year quarter and $22.2 million in the fiscal second quarter of 2026. Adjusted EBITDA margin was 12.1%, compared with 4.9% in the year-ago quarter and 9.2% sequentially. Adams said InnovAge does not add back de novo center losses in adjusted EBITDA. De novo losses were $1.8 million in the quarter, “primarily related to our Orlando, Florida center,” compared with $3.5 million in the prior-year quarter and $4.7 million in the fiscal second quarter of 2026. InnovAge ended the quarter with $95.5 million in cash and cash equivalents and $43.1 million in short-term investments, Adams said. Total debt was $69.4 million, consisting of borrowings under a senior secured term loan, revolving credit facility, and finance leases. The company recorded $18.1 million of positive cash flow from operations in the quarter and reported capital expenditures of $3.6 million. Management repeatedly emphasized that fiscal 2027 visibility is still developing, with more detailed commentary expected on the fourth-quarter and full-year call in early September. Still, Blair provided an early perspective on Medicare and Medicaid dynamics. On Medicare, Blair said the final 2027 rate notice was more favorable than initially proposed, particularly for Medicare Advantage plans, aided by deferred changes to the V28 risk model transition. However, he said the benefit is “more limited” for PACE due to different rate-setting and transition timelines. As a result, InnovAge expects Medicare rates to increase “approximately 1.5% to 2%” in fiscal 2027, which Blair described as more modest than what Medicare Advantage plans may experience. On Medicaid, Blair said the company is seeing “early indications” of increasing state budget pressures, but characterized the environment as “normal cycle variability, not a change in the underlying economics of the model.” Adams echoed that view, noting that early signals suggest fiscal 2027 Medicaid rate increases “may be lower than what we have experienced historically,” which, combined with a more modest Medicare rate environment, “could create top-line pressure in fiscal 2027.” Both executives said they view the dynamic as near-term rather than structural. In response to a KeyBanc question about the durability of the quarter’s revenue upside, management pointed to favorable Medicaid rates and improved Medicare risk scores that began in January and “rolled through the second half of the year,” with California cited as an important driver of the Jan. 1 rate change. Management said improvements in risk scores should be durable absent major enrollment mix changes, while also cautioning they can fluctuate over time. Blair described improving financial performance as “an enabler, not an endpoint,” saying InnovAge plans to reinvest in clinical teams, its interdisciplinary model, technology, and quality measurement. He said the company is also investing in growth, including new Florida centers that are “still maturing from an operations and financial perspective.” Blair highlighted early and “closely monitored” AI applications intended to improve care coordination and participant experience, with clinical AI work led by Dr. Paul Taheri. He said the company is piloting tools to synthesize participant records for care planning and to identify potential risks such as medication interactions or avoidable acute events. InnovAge is also applying AI to operational functions including scheduling, transportation, and care coordination, with Blair citing “structural inefficiencies” that can lead to cancellations, unused capacity, and administrative burden. On growth strategy, Blair told analysts the company is beginning to evaluate a broader set of alternatives—including acquisitions, joint ventures, partnerships, and participation in new programs and demonstration models—alongside efforts to fill existing centers and expand sales capabilities. He cited a prior acquisition in California about 18 months earlier as an example that showed InnovAge can “bolt on smaller PACE programs” and potentially achieve a “de-risk de novo” profile versus starting from scratch. Asked how InnovAge might balance growth versus profitability in a potentially tighter rate year, Adams said the company believes investing “very heavily in quality” and participant experience can drive both growth and financial outcomes. Blair added that InnovAge is continuing to test and refine its sales and marketing model, explore new channels and partnerships, and reduce disenrollment by understanding why participants leave. He said that after achieving margin progress faster than anticipated, the company’s priority is “investing in growth while maintaining a consistent margin,” rather than emphasizing further margin expansion. InnovAge Holdings, Inc (NASDAQ:INNV) is a healthcare services company that specializes in caring for seniors through the Program of All-Inclusive Care for the Elderly (PACE). Designed for individuals who are eligible for both Medicare and Medicaid, the PACE model integrates medical care, social services and long-term care—delivered primarily in participants' homes and community-based centers. InnovAge's approach centers on interdisciplinary care teams that coordinate everything from primary and specialty medical services to nutritional counseling and recreational activities. The company's core offerings include comprehensive in-home assessments, physician and nursing services, physical and occupational therapy, prescription medication management, and transportation to medical appointments. The article "InnovAge Q3 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Tuesday, May 5, 2026 at 5 p.m. ET Chief Executive Officer — Patrick Blair Chief Financial Officer — Benjamin Adams Vice President, Investor Relations — Ryan Kubota Ryan Kubota: Thank you, operator. Good afternoon, and thank you all for joining the InnovAge 2026 Fiscal Third Quarter Earnings Call. With me today is Patrick Blair, CEO; and Ben Adams, CFO. Today, after the market closed, we issued an earnings press release containing detailed information on our fiscal third quarter results. You may access the release on the Investor Relations section of our company website, innovage.com. For those listening to the rebroadcast of this call, we remind you that the remarks made herein are as of today, Tuesday, May 5, 2026, and have not been updated subsequent to this call. During our call, we will refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings press release posted on our website. We will also make statements that are considered forward-looking, including those related to our 2026 fiscal year projections and guidance, future growth prospects and growth strategy, our clinical and operational value initiatives, the effects of recent legislation and federal budget cuts, including Medicare and Medicaid rate pressures, seasonality of cost trends, the status of current and future legal proceedings and regulatory actions and other expectations. Listeners are cautioned that all of our forward-looking statements involve certain assumptions that are inherently subject to risks and uncertainties that can cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors and other discussions included in our annual report on Form 10-K for fiscal year 2025 and any subsequent reports filed with the SEC, including our most recent quarterly report on Form 10-Q. After the completion of our prepared remarks, we will open the call for questions. I will now turn the call over to our CEO, Patrick Blair. Patrick? Patrick Blair: Thank you, Ryan, and good afternoon, everyone. I'd like to begin by thanking our InnovAge colleagues, our participants and their families, our government partners and our investor community for your continued trust and support. The work our teams do every day to care for a very complex and vulnerable population is what drives our performance, and I'm proud of the progress we're making and the consistency we're beginning to demonstrate as an organization. We delivered a solid third quarter and continue to see steady momentum across the business. These results reflect stronger operating execution and the benefits of the investments we've made over the past few years to strengthen the platform. For the quarter, we reported approximately $252 million in total revenue, center-level contribution margin of $61 million and adjusted EBITDA of $30 million. We ended the quarter serving approximately 8,050 participants in 6 states across 20 centers. Based on our year-to-date operating trends and financial performance, we are once again raising our fiscal year 2026 guidance for revenue and adjusted EBITDA. We now expect revenue in the range of $950 million to $975 million and adjusted EBITDA in the range of $85 million to $90 million. Overall, our performance continues to show steady year-over-year improvement across key operational and clinical metrics. Our performance this year has been supported by several in-year factors that came in more favorably than we expected, including better-than-expected Medicaid rates and favorable Medicare risk scores and continued discipline across medical management. So as we think about our momentum, we believe it is real and increasingly durable, but we are also being thoughtful about our assumptions as we look ahead to fiscal 2027. Just as importantly, we view our improving financial performance as an enabler, not an endpoint. The progress we're making is allowing us to reinvest in the business in ways that we believe directly benefit participants and strengthen the model over the long term. That includes continued investment in our clinical teams and interdisciplinary model, advancing our technology platform, including early and closely monitored applications of AI to improve care coordination and participant experience and strengthening how we measure and manage quality. We are also investing in growth, including our new centers in Florida, which are still maturing from an operations and financial perspective. Given the complexity of the PACE population we serve, these long-term investments are essential. Our goal is to deliver strong, sustainable performance while continuing to invest in the model and be a responsible partner to states and the federal government. In the PACE model, financial performance and quality are not separate. They are directly linked. When we improve quality, we see better participant outcomes, more consistent engagement, lower unnecessary utilization and ultimately better fiscal management for our state and federal partners. We track a wide range of required quality and utilization metrics, and these remain an important part of how we manage the business day-to-day. But we also recognize that many of these measures, while necessary, don't fully capture what matters most to our participants or to the full value of the model. At its core, our focus is helping participants maintain their independence, remain in the community for as long as possible and receive care that is individualized and aligned with their goals. This includes supporting caregivers, coordinating care across the continuum and intervening early before issues escalate. Over the past several years, we have made meaningful investments in our clinical teams, our care model and our operational infrastructure to strengthen our ability to deliver on those outcomes. More recently, we have begun to invest more intentionally in how we measure them. We are in the early stages of developing a more comprehensive set of outcome-oriented measures focused on areas like functional trajectory, the ability of participants to remain in the community and further aligning care with participant goals. These are areas where we believe the PACE model delivers meaningful value. Our initial focus is on building the data, processes and operational consistency required to measure these outcomes reliably. As the capabilities mature, we expect to incorporate them more formally into how we manage the business. We believe this is an important step, not only in demonstrating the full value of the PACE model, but also in ensuring that our continued financial progress is clearly aligned with better outcomes for the participants we serve and the partners we support. AI is another area in which we are investing more heavily. When we think about the objectives we share with our regulators, improving participant experience, enhancing outcomes for a complex population and doing so in a cost-effective way, we believe AI with the appropriate oversight has the potential to be a meaningful enabler. While still early, the work we've done over the past several months increases our confidence that these capabilities can have a real impact on both the quality and efficiency of our model. Much of our clinical AI work is being led by Dr. Paul Taheri. Although Paul has only been with us a short time, he has quickly stepped in to help shape our approach, bring a strong focus on practical application, clinical rigor and ensuring these tools are designed to support, not replace clinical judgment. We're piloting a range of use cases designed to support our clinicians and to streamline operations. In our clinical workflows, we're piloting AI tools to help synthesize information across the participant record to support care planning and to identify potential risks such as medication interactions or avoidable acute events. The goal is to increase the quality of the care we provide for our participants and enable our teams to operate more effectively at the top of their license. We are also applying these capabilities to operational areas such as scheduling, transportation and care coordination, where we see meaningful opportunity to reduce friction, improve the participant experience and better utilize our existing capacity. One area we are particularly focused on is how we schedule and deliver services across our centers. Today, there are structural inefficiencies that can lead to cancellations, unused capacity and administrative burden. We believe AI-enabled scheduling and coordination can help address these challenges, allowing us to improve the experience, to serve more participants within our existing footprint and to increase capacity over time. Importantly, we're approaching this work with discipline. We're testing, learning and measuring impact before scaling. And we're focused on use cases where we see clear alignment between improved outcomes, better participant experience and more efficient operations. Over time, we believe these investments will further strengthen our platform and expand our ability to deliver high-quality coordinated care at scale. Stepping back, one of the things these results and the progress we've made over the past several years now allow us to do is to take a more forward-looking view on growth. Over the last 4 years, our focus has been on stabilizing and strengthening the platform. And as a result of that work, we're now beginning to generate more consistent earnings and cash flow, which gives us greater strategic flexibility as we look ahead. That flexibility allows us to take a more proactive and thoughtful approach to growth. First, we continue to see meaningful opportunity within our existing footprint by filling our current centers, strengthening our sales capabilities and expanding our reach through new channels and partnerships. At the same time, we're beginning to evaluate a broader set of potential growth alternatives that could allow us to expand our model to more seniors over time. These may include acquisitions, joint ventures, partnerships or participation in new programs and demonstration models that align with our capabilities. Overall, we're entering the next phase as an organization, one that positions us well to expand access to our model and to serve more seniors who can benefit from it. Before I conclude, I'd like to spend a few minutes on the rate environment. As we know, this is an important area of focus for everyone. Ben will provide more detailed visibility into our fiscal 2027 outlook, including rates on our fourth quarter and fiscal year earnings call in early September. But given where we sit today, we thought it would be helpful to share some early perspective on how we're thinking about the environment, recognizing that our visibility is still evolving. Starting with Medicare. The final 2027 rate notice came in more favorable than initially proposed, particularly for Medicare Advantage plans. That improvement was driven in part by deferred changes to the V28 risk model transition, which had a more meaningful impact on MA than on PACE. For PACE, our rate setting framework and transition time line are different. And given the complexity of the population we serve, the benefit from the deferred changes to V28 is more limited. The net result is that we expect Medicare rates to increase approximately 1.5% to 2% in fiscal year 2027, which is more modest and increase than what will likely be experienced by MA plans. On the Medicaid side, we're beginning to see early indications from our state partners that budget pressures are increasing. That said, it's important to step back and view Medicaid rates in PACE over a longer horizon. This has always been a program with some degree of year-to-year variability. There are periods where rates run ahead of cost trend and margins expand and periods like the one we're planning for where cost trends may outpace rate growth and margins can tighten without other offsetting improvements. Over time, these dynamics tend to balance out. Rates have kept pace with the underlying cost of caring for this population and have supported appropriate and sustainable margins for operators who execute well at scale. We believe we're seeing normal cycle variability, not a change in the underlying economics of the model. Importantly, this is where the strength of our model matters because we are fully accountable for both the clinical and cost side of the equation, we can manage through periods like this and protect performance over time. So while we have benefited from a more favorable rate environment in fiscal 2026 and are planning for a more tempered environment in fiscal 2027, we remain confident in the durability of the model and our ability to execute through the cycle. As we approach the end of the fiscal year, we believe InnovAge is operating from a position of strength. The work we've done over the past several years is translating into more consistent performance and a more disciplined integrated operating model. We're focused on continuing to deliver strong, sustainable performance while investing in the model, supporting our participants and being a responsible partner to the states and the federal government. With that, I'll turn it over to Ben to walk through our financial performance in more detail. Benjamin Adams: Thank you, Patrick. Today, I will provide some highlights from our third quarter fiscal year 2026 financial performance and insight into some of the trends we saw during the fiscal third quarter. Starting with census. We served approximately 8,050 participants across 20 centers as of March 31, 2026, which represents growth of 6.9% compared to the third quarter of fiscal year 2025 and sequential quarter growth of 0.5%. We reported 24,060 member months in the third quarter, an increase of approximately 6.7% compared to the third quarter of fiscal year 2025 and an increase of approximately 0.4% over the second quarter of fiscal year 2026. Our third quarter census increase reflects normal seasonal growth resulting from the Medicare Advantage open enrollment period. Total revenues of $251.9 million increased 15.5% compared to $218.1 million in the third quarter of fiscal year 2025, driven by higher capitation rates and growth in member months. The capitation rate increase reflects annual Medicaid and Medicare rate increases and a lower revenue reserve, while member month growth was driven by enrollment expansion across our California, Colorado and Florida centers. Compared to the second quarter of fiscal year 2026, total revenues increased 5.1%, primarily due to higher capitation rates driven by annual rate increases in California and Medicare, both effective January 1, 2026. We incurred $113.2 million of external provider costs in the third quarter of fiscal year 2026, representing an increase of 5% compared to the third quarter of fiscal year 2025. The year-over-year increase was driven by growth in member months, partially offset by a reduction in cost per participant. Lower cost per participant was primarily attributable to reduced permanent nursing facility utilization and lower pharmacy expense following the transition to in-house pharmacy services. These improvements were partially offset by annual rate increases for assisted living and permanent nursing facility services as well as higher assisted living utilization. Compared to the second quarter of fiscal year 2026, external provider costs increased 1.1%, driven by modest growth in member months and a slight increase in cost per participant related to seasonal growth in the volume and cost of inpatient admissions. Cost of care, excluding depreciation and amortization, was $77.7 million in the third quarter, an increase of 11.8% compared to the third quarter of fiscal year 2025. The year-over-year increase reflects growth in member months and higher cost per participant. The increase was primarily driven by a net increase in salaries, wages and benefits due to higher wage rates, partially offset by reduced headcount, higher third-party fees and shipping costs associated with in-house pharmacy services and higher contract services and fleet costs, inclusive of contract transportation. Cost of care, excluding depreciation and amortization, increased 3.7% compared to the second quarter of fiscal year 2026, driven by higher salaries, wages and benefits associated with the annual reset of employee benefits and payroll taxes as well as an increase in consulting expense, partially offset by lower contract transportation. Center-level contribution margin, which we define as total revenues less external provider costs and cost of care, excluding depreciation and amortization, which includes all medical and pharmacy costs was $61 million for the quarter compared to $40.7 million for the third quarter of fiscal year 2025. As a percentage of revenue, center level contribution margin of 24.2% increased by approximately 550 basis points in the quarter compared to 18.7% in the third quarter of fiscal year 2025. Compared to the second quarter of fiscal year 2026, center level contribution margin increased 15.5% from $52.8 million and as a percentage of revenue increased 220 basis points compared to 22% over the same period. Sales and marketing expenses of approximately $8.7 million increased 26.3% compared to the third quarter of fiscal year 2025, primarily driven by higher wage rates and increased marketing spend to support growth. Sales and marketing expenses increased by approximately 8.2% compared to the second quarter of fiscal year 2026, driven by sales compensation and marketing spend timing. Corporate general and administrative expenses of $76.5 million increased 98.3% compared to the third quarter of fiscal year 2025, primarily driven by an increase in litigation liability. Corporate general and administrative expenses increased 187.6% compared to the second quarter of fiscal year 2026, primarily due to the litigation liability. Net loss was $29.9 million for the quarter compared to net loss of $11.1 million in the third quarter of fiscal year 2025. We reported a net loss of $0.22 per share, and our weighted average share count was approximately 135.7 million shares for the quarter on a fully diluted basis. Adjusted EBITDA was $30.5 million for the quarter compared to $10.8 million in the third quarter of fiscal year 2025 and $22.2 million in the second quarter of 2026. Our adjusted EBITDA margin was 12.1% for the quarter compared to 4.9% in the third quarter of fiscal year 2025 and 9.2% in the second quarter of fiscal year 2026. We do not add back losses incurred by our de novo centers in the calculation of adjusted EBITDA. De novo center losses are defined as net losses related to preopening and start-up ramp through the first 24 months of de novo operations. Accordingly, this quarter's de novo losses do not include our Tampa and Crenshaw centers as both have progressed beyond the initial 24-month de novo period. For the third quarter, de novo losses were $1.8 million, primarily related to our Orlando, Florida center. This compares to $3.5 million of de novo losses in the third quarter of fiscal year 2025 and $4.7 million of de novo losses in the second quarter of fiscal year 2026. Turning to our balance sheet. We ended the quarter with $95.5 million in cash and cash equivalents, plus $43.1 million in short-term investments. We had $69.4 million in total debt on the balance sheet, representing debt under our senior secured term loan, revolving credit facility and finance leases. For the third quarter, we recorded positive cash flow from operations of $18.1 million and had $3.6 million of capital expenditures. Building on the strong performance we delivered through the first 9 months of fiscal 2026 and based on information available today, we are updating our full year revenue and adjusted EBITDA outlook. All other guidance metrics remained unchanged. We expect our ending census for fiscal year 2026 to be between 7,900 and 8,100 participants and member months to be in the range of 92,900 to 95,700. We are now projecting total revenue for fiscal 2026 in the range of $950 million to $975 million. Adjusted EBITDA is now projected to be in the range of $85 million to $90 million, and we anticipate that de novo losses for fiscal year 2026 will be in the $11.5 million to $13.5 million range. As we enter the final quarter of fiscal 2026 and begin planning for fiscal 2027, I'd like to share a few observations on where we stand today and how we're thinking about the year ahead. First, the business is performing well overall. Our sustained focus on quality, compliance and operational discipline has created a stronger and more resilient foundation. Over the past several years, we have meaningfully improved the consistency and predictability of the business, and we now have better data and insight to inform care delivery and operational decision-making. Second, as Patrick mentioned, we are beginning to see rate pressures emerge as we engage with our state Medicaid partners. While it remains early in the rate setting process, initial indications suggest rate increases in fiscal 2027 may be lower than what we have experienced historically. If this persists and when combined with a more modest Medicare rate environment, it could create top line pressure in fiscal 2027. That said, we view this as a near-term dynamic rather than as a structural shift. Currently, we do not believe these conditions represent a new long-term run rate, and we expect the rate environment to normalize over time. Importantly, our improved cost discipline, operating visibility and focus on execution position us to manage through this period. In closing, we are pleased with the strong performance we delivered this quarter and year-to-date. The business is operating from a position of strength, and our updated guidance reflects both our execution to date and our current assessment of the operating environment. As we continue to refine our operations, we are placing greater emphasis on the full participant experience and evaluating opportunities to enhance care, delivery, efficiency and outcomes over time. We remain committed to disciplined execution as we close out fiscal 2026, and we believe we are positioned to manage near-term headwinds and to build long-term value. Operator, that concludes our prepared remarks. Please open the line for questions. Operator: [Operator Instructions] Our first question comes from Matthew Gillmor with KeyBanc. Matthew Gillmor: I guess I wanted to first follow up on the comments around 2027. Could you maybe first help frame up sort of the change in the Medicaid rate increases that you've seen on a go-forward basis versus maybe the rearview just so we get a sense for the change in that dynamic? And then as a follow-up to that, one of the things we've been particularly encouraged by has been your ability to keep cost growth sort of almost flat for the last 2 years. So as you're thinking about the go forward, I was just curious about your confidence in able to maintain your cost growth at those levels, which presumably would help the dynamic for 2027 and maybe what you're doing to prepare the organization for what you think may be a more challenging rate environment next year? Patrick Blair: Matt, it's Patrick. Thanks for the question. Overall, I'd say we don't have rates for fiscal year '27 yet. We're just, I think, navigating along with the states what is a pretty complex fiscal backdrop. I mean, states are seeing a combination of factors with sort of post-pandemic funding and broader budget pressures and they're having to rebalance across various health care priorities. So I think what we're doing is just trying to be transparent that it's going to be a different environment for rates than we have seen in the past. I mean this is pretty typical of operating in a state partnered model. It's not new or unexpected. I think our approach has been and is currently as we sort of head into the '27 rate setting is just to stay very closely aligned with our state partners and continue to focus on delivering high-quality care and outcomes and operate as efficiently as we can. One of the things we do hear consistently with every state is just the belief in the PACE value proposition and how well aligned it is to what the states are trying to achieve and caring for this really high needs population is something they take very seriously. So we're -- I think just overall, we still know very little about '27. So I wanted to just make sure I shared that. But I think that's sort of how we view it. So in summary, we're kind of mindful of the broader environment, but we think we have the ability to navigate it just like we have in the past. Now that kind of probably takes me to your second point about our ability to manage sort of cost trends in an inflationary environment. We're still feeling very confident about that. And as I shared in my remarks, we have a lot of work underway right now that's AI supported. So I mentioned in some of the opening remarks, some of the clinical work we're doing. But we believe there is a lot of opportunity across our care model to really empower our providers to better information to help them avoid unnecessary specialist referrals, avoid ER visits, unnecessary services, in some ways, providing as much care as possible in our centers. I mentioned, I think, scheduling. It's another area where we're using AI to really understand the throughput of our centers and understand something as straightforward as the impact the cancellations have on our transportation, on our staffing. And we're learning a lot about our business and the drivers and AI is really supporting that. And we think there's a lot of prep capacity. We think there's manual workflows that we can work around. We think there's augmentations to our staffing models that we can pursue that will make us more efficient and deliver a better participant experience. So that's a long way of sort of saying that the rate environment is one where we're used to navigating it. We'll do that successfully, and we're working hard to define next year's OVIs, operational value initiatives like the scheduling example and clinical value initiatives that we're doing to take clinical variation out of the system, we think there's real opportunity to operate more efficiency, improve the patient experience, deliver better clinical outcomes and do all of that in a very complex sort of fiscal backdrop for states. Ben, anything to add? Benjamin Adams: I actually don't have anything to add. I think that was exactly where we think of it. Matthew Gillmor: Okay. Great. That was really helpful. I appreciate it. And then as a follow-up, I did want to ask about revenue performance on the quarter. It's obviously a very strong quarter overall. But on the top line, you had mentioned better Medicaid rates and also some favorability with RAF. I was hoping you could discuss the details of that a little bit better. And one point I wanted to get at or one thing I wanted to ask about was just the sustainability of the revenue upside you saw in the quarter. I guess I normally would think of RAF and Medicaid rates as sustainable in future quarters, but I just wanted to get your perspective on that dynamic. Benjamin Adams: Yes. I guess, well, you're right, we did start seeing in the back half of the year, a step-up in rates on the Medicaid side and a step-up in risk scores, right? So both of those things were positive starting in January, and they rolled through the second half of the year. If you think about sort of which states sort of kick in with their rates on January 1, California is an important one for us. And we had a pretty good rate environment in California this year following on some difficult years in California. So that benefited us in the second half of the year. If you think about the risk scores, you're right, I think of those, assuming we don't have a mix -- a change in the mix of enrollment or some other mix in our population, that improvement in risk scores ought to be durable going forward in the future. But obviously, you kind of got to watch it every -- as you go into the future because they might -- they do change a little bit, but we're hoping for some durability there. And I think Patrick commented on the rate outlook a moment ago as it relates to Medicaid. So you can sort of factor some of those comments into how we're thinking about California for next year, which would be the next time it would renew in January. Operator: Our next question comes from Jared Haase with William Blair. Jared Haase: I appreciate all the color thus far. Patrick, I think you talked a little bit about sort of emphasizing the flexibility that you have now just based on the stable profile that you've reached here with the model in terms of the go-forward growth strategy, and I think you outlined a couple of different levers, whether that's M&A, joint ventures, partnerships. And then I think you even alluded to potentially some new programs or demonstrations. And so I was wondering if we could just dig into your thinking there a little bit further, maybe force rank some of those different options that are -- that you have available to you as to what might be more realistic over the next handful of quarters. And I'd also love to press on the new programs or demonstration models, how you guys are thinking about that and what programs seem interesting to you? Patrick Blair: Well, thanks for the question. I would start by just reminding folks that in many ways, we think of ourselves as having kind of come out of the turnaround at the beginning of the calendar year. And now we're in a place where we're feeling and seeing a lot stronger operational, financial and sort of compliance positioning and performance. And so we're beginning to devote more time to evaluating a range of options that we could pursue. M&A is clearly one of them. There are a lot of PACE programs across the country. Many of them are very successful. Some are not. And we've learned from an acquisition we did in California about 18 months ago that we have the ability to bolt on and smaller PACE programs that were maybe struggling to grow, putting them on our platform, on our staffing model in sort of our sales model. It really, in some ways, allows us to pursue a derisked de novo without the longer return on capital that a pure de novo can take. So understanding where those opportunities exist is something that we're spending a little time on. It's hard to handicap this early in the process where that exists. Obviously, some states are -- have more attractive environments than others. And so that's also a layer that we put on that. Partnerships, you've seen some of the partnerships we've done in Florida and in California. We think there's -- those are hospital partnerships. We are seeing kind of the proof of concept play out in a positive way. There's still calibration that has to be done so that both entities are sort of -- and participants are all sort of benefiting in the appropriate ways, but we do see more opportunities to do hospital joint ventures that really help us extend our place in the community. When it comes to PACE in general, I wouldn't want to overlook the opportunity from just basic policy modernization. There are opportunities that are not radical changes to sort of the regulatory contours of the program, more like practical evolutions of the program that would allow us to expand faster, something like simplifying enrollment, making it easier for seniors and families to choose PACE. We're working closely with our industry peers and our industry association to articulate those policy modernization opportunities that we see that could help the PACE program serve more seniors over time. And we're really pleased, I think, with the level of interest and curiosity that we see from CMS and CMMI and their openness to listen to what are the things that could change to really help PACE serve more seniors. So that's sort of the policy horizon. Then I think maybe the last element to your question was the notion of sort of these PACE-inspired adjacencies. We are a big believer that the PACE model can be adapted to serve seniors who are not eligible for PACE today, but could be eligible in the future. These are -- there are opportunities that we see there some via demonstration, some just kind of de novo adjacent new product development that we could pursue. Our focus still is very much on growing our core PACE business. But as we are able to experience better operating performance and a more consistent model, we really believe strongly that PACE can serve a broader segment of the population. And we're kind of doing everything sort of in our power and working with our industry peers to make that case. And so over time, we're hopeful that opportunities that are inspired by our core business and very close to our core business could present themselves, and we'd love to pursue it. Jared Haase: Okay. That's really helpful. And then as a follow-up, I really appreciate all the details you guys provided just regarding rate development and your current view for 2027. If I take a step back from a strategic perspective, if we do find ourselves in an environment where rates are lagging medical cost trend, do you have a bias as it relates to striking the balance between maintaining your current growth levels versus maintaining profitability? I realize from your comments, there are a number of initiatives in place that can sort of drive efficiencies. So maybe there isn't really a trade-off in that way. But I guess I'd just be curious if you do a year like this with a more muted rate environment, how you think about that in one direction or the other? Patrick Blair: I'll ask Ben to maybe share some initial thoughts and then I'll follow. Benjamin Adams: Yes, I'm sorry, I missed some of the question coming through. I couldn't figure it. What exactly is the question? Are you talking about -- are we talking about mitigants in a challenging rate environment? Jared Haase: Exactly. Yes. My thought was just as we think about potentially moving into this more challenging rate environment for 2027, obviously, you outlined a number of initiatives in place. But just kind of philosophically, do you approach your strategy with the mindset of pursuing growth as a priority or maintaining profitability? Benjamin Adams: Yes. Yes. Well, it's really interesting. Patrick talked a lot about quality in his prepared remarks. And I think where we are right now is we've gotten to a point where we're -- we've got some nice margins. We're generating cash flow. And we think one of the best things that we can do in a market that begins to slow down is not aside from looking at strategic things that Patrick talked about, is invest very heavily in quality in our business, in our centers. And I think we all feel really strongly that the better experience we give to our participants, the more likely it is going to drive growth and good financial outcomes for us. So I think what you'll see going into this year is we'll spend a lot of time on improving the patient experience on efficiencies in our center in ways that we can be more intentional in our strategies going forward. So aside from the growth metrics that Patrick talked about before, this sort of reinvest into the business and the quality business, I think, is going to be very important for the coming year. I don't know if that really answered your question. There are other specific areas we'll look at in terms of operational value initiatives and clinical value initiatives like Patrick talked about, but it's sort of a mindset. It's very much driven towards quality as one of the drivers of growth. Patrick Blair: Ben, I might just add that I do feel that we still have opportunity to enhance our sort of sales and marketing model. We made great strides in the last couple of years. But under Matt Huray, our leader of the sales and marketing function, we're really continuing to test and learn and try new things. We are adding new members to the team. We're exploring new channel partnerships. And so setting aside sort of rate, we really are focused on as much new census gross enrollment as we can attract. And there's a lot of great work that's going on in that area. Ben mentioned the participant experience. we are now at a place where we're spending a lot of time to really understand when people leave us, why do they leave us? Did they have a particular encounter that was frustrating. Was there some friction or abrasion in their time with us? Were we slow to recover on a service issue? We're really digging into why people choose to leave. And that's another opportunity to drive growth is to reduce the number of people that decide to leave us. Some of the people, it's voluntary and they're making a conscious decision, but there's also involuntary disenrollment. So we are very focused on sort of the sales and enrollment side of the growth equation as well as the participant experience, keeping people with us longer, basically increasing tenure. I think that's a real bias of ours. And on the margin side, in some ways, we've pulled forward into 2 years what we thought was going to take 3 years from a margin perspective. And now that we're at a place where we're achieving what we set out to and communicated in our Investor Day a few years ago, I think investing in growth while maintaining a consistent margin is probably more of a priority than expanding margins at this point, if that's helpful. Operator: Our next question comes from Benjamin Rossi with JPMorgan. Benjamin Rossi: So following up on your 2027 commentary, I appreciate that you're planning to provide more details next quarter. But as you think about initial enrollment growth, what are your initial thoughts on your aggregate patient risk scores and new member acuity mix? It sounds as though based on your Medicare rate assumptions, you're assuming acuity decline somewhat year-over-year. Is that a fair read? Patrick Blair: No, I don't -- I wouldn't read too much into it. I think we're going through the budgeting process right now. And our fiscal year ends June 30, so we're really getting into the meat of the budgeting process. I don't think we expect a material change in mix shift, either in terms of our population, independent assisted living or folks in nursing facilities or a significant change in risk score mix. But we're sort of getting into that process right now. We'll have more to talk about it when we get through the budget process and we issue guidance in September. Benjamin Rossi: Okay. Understood on that. And just as a follow-up on your updated outlook implies 4Q top line growth will decelerate a bit sequentially, while EBIT growth will remain elevated. What do you assume gets better quarter-over-quarter as we go into the next quarter, either across PMPM trend or cost design? And is there anything discrete across revenue or cost that you'd call out within your progression during fiscal 4Q? Patrick Blair: No, I don't think so. I think that we've generally benefited, as we said before, from better rates in the back half of the year and also better risk scores. And I would expect those trends would kind of continue going into Q4. If you think about how sort of the pattern of gross enrollment works and you can go back and look over the last couple of years, we usually have a pretty good, pretty steady Q4 in terms of gross enrollment growth. And I would think that we probably experienced something not too different from what we've seen in prior years. Operator: And I'm not showing any further questions at this time. And as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day. Before you buy stock in InnovAge, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and InnovAge wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. InnovAge (INNV) Q3 2026 Earnings Transcript was originally published by The Motley Fool

Performance in the third quarter was driven by stronger operating execution and the realization of multi-year platform investments, resulting in steady momentum across clinical and operational metrics. Financial results benefited from several favorable in-year factors, including better-than-expected Medicaid rates, improved Medicare risk scores, and continued discipline in medical management. Management views current financial progress as an enabler for reinvestment into the business, specifically targeting clinical teams, technology, and quality measurement rather than treating margins as an endpoint. The company is transitioning from a stabilization phase into a growth phase, leveraging consistent earnings and cash flow to explore proactive expansion through acquisitions, joint ventures, and partnerships. A strategic emphasis is being placed on 'outcome-oriented' measures, such as functional trajectory and community retention, to better demonstrate the PACE model's value to state and federal partners. The integration of AI is being prioritized to address structural inefficiencies in scheduling and transportation, aiming to increase center capacity and improve the participant experience without increasing headcount. Management characterizes the PACE model's financial performance and clinical quality as directly linked, where improved outcomes naturally lead to lower unnecessary utilization and better fiscal management. Medicare rates for fiscal year 2027 are expected to increase by approximately 1.5% to 2%, a more modest rise than Medicare Advantage plans due to different risk model transition timelines. Early indications from state partners suggest increasing budget pressures that may lead to lower Medicaid rate increases in fiscal 2027 compared to historical norms. Management views potential near-term margin tightening as a 'normal cycle variability' rather than a structural shift in the underlying economics of the PACE model. Future growth strategy includes evaluating 'PACE-inspired adjacencies' to serve seniors who are not currently eligible for the program but could benefit from similar coordinated care models. The company intends to prioritize investing in growth and maintaining consistent margins over further margin expansion in the immediate future. Corporate general and administrative expenses saw a significant increase primarily due to a one-time litigation liability charge. External provider costs per participant were reduced year-over-year, driven by lower permanent nursing facility utilization and savings from the transition to in-house pharmacy services. De novo losses decreased to $1.8 million, primarily related to the Orlando, Florida center, as the Tampa and Crenshaw centers were no longer included after maturing beyond their initial 24-month start-up periods. The company reported positive cash flow from operations of $18.1 million, reflecting the improved predictability and discipline of the integrated operating model. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management plans to offset more tempered rates by using AI to reduce clinical variation and eliminate manual workflow friction in scheduling and transportation. The company is focusing on 'operational value initiatives' to unlock latent capacity within existing centers, allowing for growth without proportional cost increases. Acquisitions of smaller PACE programs are viewed as 'derisked de novos' that can be quickly scaled using InnovAge’s established staffing and sales models. Hospital joint ventures in Florida and California are serving as proof-of-concept for extending the company's reach into the community through institutional partnerships. The improvement in Medicare risk scores (RAF) is expected to be durable assuming the population mix remains stable, providing a higher revenue baseline for future periods. Management noted that while Medicaid rates vary by state, the long-term trend has historically supported sustainable margins for operators executing at scale. InnovAge is working with industry peers and CMS to advocate for practical regulatory evolutions, such as simplifying the enrollment process to make it easier for families to choose PACE. There is growing curiosity from CMMI regarding how the PACE model can be adapted to serve a broader segment of the senior population. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

DENVER, May 05, 2026 (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 third quarter ended March 31, 2026. We delivered a solid third quarter, reflecting continued improvement in operating execution and financial performance,” said Patrick Blair, Chief Executive Officer of InnovAge. “These results are being driven by stronger performance across our centers and the benefits of the investments we’ve made over the past several years to strengthen our platform. At the same time, we continue reinvesting in our clinical teams, technology, and quality capabilities to further improve participant outcomes and experience over the long term. Based on our performance year to date, we are raising our fiscal 2026 revenue and Adjusted EBITDA guidance. Financial Results Fiscal Third Quarter 2026 Financial Performance Total revenues of $251.9 million, increased approximately 15.5% compared to $218.1 million in the third quarter of fiscal year 2025 Loss Before Income Taxes of $29.8 million decreased approximately 169.2%, compared to a Loss Before Income Taxes of $11.1 million in the third quarter of fiscal year 2025 Loss Before Income Taxes as a percent of revenue was 11.8%, an increase of 6.7 percentage points, compared to Loss Before Income Tax as a percent of revenue of 5.1% in the third quarter of fiscal year 2025 Center-level Contribution Margin(1) of $61.0 million, increased 49.8% compared to $40.7 million in the third quarter of fiscal year 2025 Center-level Contribution Margin(1) as a percent of revenue was 24.2%, an increase of 5.5 percentage points compared to 18.7% in the third quarter of fiscal year 2025 Net loss of $29.9 million, compared to net loss of $11.1 million in the third quarter of fiscal year 2025 Net loss margin of 11.9%, an increase of 6.8 percentage points, compared to a net loss margin of 5.1% in the third quarter of fiscal year 2025 Net loss attributable to InnovAge Holding Corp. of $29.5 million, or loss per share of $0.22, compared to net loss attributable to InnovAge Holding Corp. of $11.4 million, or a loss per share of $0.08 in the third quarter of fiscal year 2025 Adjusted EBITDA(1) of $30.5 million, an increase of $19.7 million, compared to Adjusted EBITDA of $10.8 million in the third quarter of fiscal year 2025 Adjusted EBITDA(1) margin of 12.1%, an increase of 7.2 percentage points, compared to 4.9% in the third quarter of fiscal year 2025 Census of approximately 8,050 participants compared to 7,530 participants in the third quarter of fiscal year 2025 Ended the third quarter of fiscal year 2026 with $95.5 million in cash and cash equivalents plus $43.1 million in short-term investments, and $69.4 million in debt on the balance sheet, representing debt under the Company’s senior secured term loan, revolving credit facility and finance lease obligations (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. 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” below. Full Fiscal Year 2026 Financial Guidance Based on information as of today, May 5, 2026, InnovAge is raising total revenues and Adjusted EBITDA guidance for the full year fiscal 2026. Census and Total Member Months remain unchanged. 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, and 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 March 31, 2026, InnovAge served approximately 8,050 participants across 20 centers in six states. https://www.innovage.com. Investor Contact: Ryan Kubota [email protected] Media Contact: [email protected] 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 may make regarding quarterly or annual guidance; financial outlook, including future revenues and future earnings; mid-term and long-term financial goals; the viability of our growth strategy including our ability or expectations to increase the number of participants we serve, build and/or open de novo centers, or to identify and execute tuck-in acquisitions, joint ventures and other strategic partnerships; the expected impact of government policies including rate pressures resulting from Medicaid budget cuts, and the macroeconomic environment; our ability to control costs, mitigate the effects of elevated expenses or reduced healthcare budgets, expand our payer capabilities, execute clinical value and operational value initiatives and strengthen enterprise functions; and the effects of any of the foregoing on our future results of operations or financial conditions. 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 find suitable geographies for new centers and to attract new participant and retain existing participants in new and existing centers and our ability to obtain licenses to open such centers; (ii) our ability to identify, successfully complete and integrate acquisitions, joint ventures another strategic partnerships; (iii) the impact of state and federal efforts to reduce healthcare spending, including recent legislation reducing the budget that funds Medicaid (iv) the impact on our business from macroeconomic related challenges, including labor shortages and labor competition; (v) inspections, reviews, audits and investigations under the federal and state government programs, including our ability to sufficiently cure any deficiencies identified; (vi) legal proceedings, enforcement actions and litigation and disputes; (vii) the risk that the cost of providing services will exceed our compensation, which we assume under our PACE contracts; (viii) the dependence of our revenues upon a limited number of government payors, including the risk of sudden loss of any of our government contracts; (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; (x) and our ability to comply with the continued listing requirements of Nasdaq. Forward-looking statements are based only on information currently available to us and speaks only as of the date on which they are 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 not to 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 percent 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 the most directly comparable GAAP measures. We believe that these non-GAAP measures are appropriate measures of operating performance because they allow us to more effectively evaluate our core operating performance and trends from period to period. Our definitions and calculations of non-GAAP measures may vary and not be comparable to similarly titled measures reported by other companies. 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. The Company’s management uses Center-level Contribution Margin as the measure for assessing performance of its operating segments and allocating resources, predominantly in the annual budget and forecasting process. For the 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. We define Adjusted EBITDA as net income (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, impairments and loss on assets held for sale, and loss (gain) on sale of assets. Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage of our total revenue. Schedule 1 Schedule 2 Schedule 3 Schedule 4

InnovAge INNV is scheduled to release third-quarter fiscal 2026 results on May 05, after market close. In the last reported quarter, the company delivered an earnings surprise of 100.00%. The company appears to have entered the second half of fiscal 2026 with strong operational momentum and improving financial visibility. While membership growth is likely to have remained solid, supported by successful Medicaid reinstatements and steady enrollment trends, some normalization is expected as prior tailwinds fade. At the same time, medical cost management and operational efficiencies are likely to have remained favorable, though seasonal pressures such as higher inpatient utilization could weigh modestly on margins. So far this year, INNV’s shares have surged 60.3% against the industry’s fall of 11.6%. The S&P Index has gained 6.5% in the same period. Image Source: Zacks Investment Research The Zacks Consensus Estimate for earnings is pegged at 6 cents per share, indicating an increase of 175% year over year. The consensus mark for revenues is pinned at $234.5 million, implying growth of 7.5% from the prior-year reported figure. InnovAge’s upcoming quarterly performance is likely to have reflected continued operational momentum, though some normalization in margins and seasonal pressures could temper near-term upside following a strong first half. The company recently delivered double-digit revenue growth and a sharp improvement in profitability, driven by better execution across its PACE (Program of All-Inclusive Care for the Elderly) model and favorable rate dynamics. At the consolidated level, revenue growth is expected to have remained healthy, supported by membership expansion and higher capitation rates. Recent strength has been aided by the successful reinstatement of participants who had previously lost Medicaid coverage, which boosted member months and reduced revenue reserves. However, as this tailwind normalizes, growth may increasingly depend on organic enrollment gains and retention improvements. Additionally, while Medicaid rates have been slightly favorable, the broader reimbursement environment remains subject to policy variability, particularly around Medicare risk adjustments. From a cost perspective, medical cost management has emerged as a key driver of margin expansion. The company has demonstrated improved control over inpatient and skilled nursing utilization, alongside benefits from in-house pharmacy operations. These efficiencies are likely to have persisted, though seasonal factors — such as higher flu incidence and elevated inpatient admissions — could pressure medical costs in the near term. Operationally, center-level productivity and SG&A discipline have improved meaningfully through restructuring and better workforce management, which is likely to have contributed to margin expansion. Still, management has indicated that the third quarter is likely to be typically softer due to enrollment seasonality and cost pressures, suggesting some moderation in profitability before reacceleration later in the year. The census growth, participant retention, and continued improvements in revenue integrity will be critical. Initiatives around patient experience and reducing clinical variability could support longer-term growth and margin durability, though these benefits are likely to accrue gradually. Our proven model does not conclusively predict an earnings beat for Stryker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for INNV. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank: The company carries a Zacks Rank #3 at present. InnovAge Holding Corp. price-eps-surprise | InnovAge Holding Corp. Quote Here are some medical product stocks worth considering, as these have the right combination of elements to post an earnings beat this reporting cycle. Microbot Medical MBOT has an Earnings ESP of +8.70% and a Zacks Rank of 2 at present. MBOT’s earnings surpassed estimates in two of the trailing four quarters and missed twice, with the average surprise being 7.53%. The Zacks Consensus Estimate for MBOT’s first-quarter loss per share implies no change from the year-ago reported figure. Henry Schein HSIC has an Earnings ESP of +0.28% and a Zacks Rank #3 at present. The company is slated to release first-quarter 2026 results on May 5. HSIC’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 2.14%. The Zacks Consensus Estimate for HSIC’s first-quarter EPS indicates an improvement of 4.4% from the year-ago reported figure. IDEXX Laboratories IDXX has an Earnings ESP of +0.77% and a Zacks Rank of 3 at present. The company is slated to release first-quarter 2026 results on May 5. IDXX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.11%. The Zacks Consensus Estimate for IDXX’s first-quarter EPS indicates a gain 15.5% from the year-ago reported figure. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Henry Schein, Inc. (HSIC) : Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report InnovAge Holding Corp. (INNV) : Free Stock Analysis Report Microbot Medical Inc. (MBOT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research