InnovAge Posts $9.8 Million Profit After Litigation Loss
The PACE operator reported $262.0 million of revenue in the three months ended June 30, 2026, and issued fiscal 2027 Adjusted EBITDA guidance of $105 million to $115 million.
InnovAge Holding Corp. (INNV) swung to net income of $9.8 million in the three months ended June 30, 2026, after a net loss of $29.9 million in the immediately preceding quarter, as one-time litigation charges that had weighed on the prior period largely receded.
The Denver-based operator of PACE programs for frail, predominantly dual-eligible seniors reported total revenues of $262.0 million, up about 4.0% from $251.9 million in the three months ended March 31, 2026. Sequential revenue growth slowed from about 5.1% in the prior quarter, when revenue of $251.9 million compared with $239.7 million in the three months ended December 31, 2025.
Litigation costs and settlements added back to Adjusted EBITDA were $2.8 million in the June quarter, versus $51.9 million in the March quarter. The company said the June add-back included $2.4 million of accrued losses for potential resolutions.
Adjusted EBITDA was $24.3 million in the three months ended June 30, 2026, down from $30.5 million in the three months ended March 31, 2026. Adjusted EBITDA margin compressed to 9.3% from 12.1% in the March quarter, after expanding from 9.2% in the December quarter.
Center-level Contribution Margin was $62.6 million, up from $61.0 million in the March quarter. The margin as a percentage of revenue declined to 23.9% from 24.2% in the March quarter, after rising from 22.0% in the December quarter.
Income before income taxes was $9.7 million, compared with a loss of $4.2 million a year earlier. Net income attributable to InnovAge was $8.3 million, or $0.06 a share, versus a loss of $0.01 a share a year earlier.
Impairments and loss on assets held for sale were $3.1 million in the June quarter, versus $5.1 million a year earlier. The company said the June charges included ROU asset and construction-in-progress impairments related to a previously planned de novo center in Downey, California.
Cash and cash equivalents were $97.9 million at June 30, 2026. Long-term debt, net of debt issuance costs, was $45.5 million.
For the full year ended June 30, 2026, total revenues were $989.7 million, up about 15.9% from $853.7 million in 2025. Income before income taxes was $0.3 million, compared with a loss of $34.0 million a year earlier. Net loss was $0.7 million, or $0.02 a share, compared with a net loss of $35.3 million, or $0.22 a share, in 2025.
Full-year Adjusted EBITDA was $94.6 million, up $60.1 million from $34.5 million in 2025, with an Adjusted EBITDA margin of 9.6% versus 4.0%. Center-level Contribution Margin for the year was $227.8 million, or 23.0% of revenue. Census was approximately 8,230 participants as of June 30, 2026, compared with 7,740 a year earlier, and member months were approximately 96,050 versus 89,130.
Chief Executive Officer Patrick Blair said fiscal 2026 was an exceptional year and that the company enters fiscal 2027 in a strong position, with a durable foundation to serve more seniors and deliver high-quality care.
Based on information as of September 8, 2026, InnovAge issued fiscal 2027 guidance of census of 8,625 to 8,850, total member months of 101,000 to 102,500, total revenues of $1,050 million to $1,085 million, and Adjusted EBITDA of $105 million to $115 million. The company said it is unable to provide guidance for net income or a reconciliation of Adjusted EBITDA because it cannot provide a meaningful or accurate calculation of certain reconciling items without unreasonable effort.
As of June 30, 2026, InnovAge served approximately 8,230 participants across 20 centers in six states.