InnovAge Inc. delivered a sweeping financial turnaround in fiscal 2026, with adjusted EBITDA surging approximately 175% to $94.6 million as the PACE operator expanded its participant base.
Total revenue climbed 15.9% year-over-year to $989.7 million, up from $853.7 million in fiscal 2025, driven by census growth and improved center-level performance.
Net loss narrowed sharply to $0.7 million from $35.3 million in the prior year, while net loss attributable to InnovAge came in at $2.5 million, or $0.02 per share.
Center-level Contribution Margin rose to $227.8 million, representing 23.0% of revenue, compared with $153.6 million, or 18.0% of revenue, in the year prior.
“Fiscal 2026 was an exceptional year for InnovAge and reflects the significant progress we have made strengthening the company,” said Patrick Blair, Chief Executive Officer of InnovAge.
Blair added that the company enters fiscal 2027 “in a strong position, with a durable foundation to serve more seniors and to deliver high-quality care.”
For fiscal 2027, InnovAge projected revenue of $1.05 billion to $1.085 billion, with adjusted EBITDA forecast in the range of $105 million to $115 million.
The company targets ending census of approximately 8,625 to 8,850 participants, reflecting growth of roughly 5% to 7.5%, with member months projected at 101,000 to 102,500.
Adjusted EBITDA margin is expected to reach between 10.0% and 10.6%, while de novo losses are projected to fall sharply to $0.4 million to $0.8 million from $10.6 million in fiscal 2026.
Management anticipates a Medicare rate increase of approximately 1.5% to 2%, including the effect of the continuing transition to the V28 risk-adjustment model, alongside low-single-digit Medicaid rate increases.
The company will shift to a 50/50 blend of the V22 and V28 Medicare payment models effective January 1, compared with a 10% V28 and 90% legacy-model blend in the current year.
InnovAge’s participant population has a high prevalence of dementia, which is treated more favorably under the V28 model, potentially benefiting the company’s reimbursement profile going forward.
Margin expansion is expected to come from utilization management, efficiencies in internal care operations, and continued improvement in general and administrative costs across the business.
Operational highlights include the integration of AI tools for clinical decision-making, pharmacy optimization, and transportation logistics, all aimed at improving participant care and overall efficiency.
Blair described the company’s next strategic phase, called “InnovAge 3.0,” as an effort to scale the platform after first building and then strengthening its operating and compliance foundations.
The strategy encompasses growing enrollment at existing centers, expanding center capacity, and evaluating de novo markets, acquisitions, joint ventures, and other partnerships for future growth.
Management flagged that approximately 70% of InnovAge’s census is concentrated in California and Colorado, meaning rate outcomes in those states carry meaningful risk for fiscal 2027 guidance.
The company’s heavy reliance on Medicare and Medicaid PACE contracts, alongside labor costs and inflationary pressures, remains a key uncertainty that could complicate the projected margin trajectory.
INNV shares fell 2.14% in regular trading to $10.52, then jumped 9.03% in after-hours trading to $11.47, suggesting investors welcomed the stronger profitability outlook and fiscal 2027 guidance.
