Executive Summary
InnovAge reported Q4 2024 revenue of approximately $199.4 million, up 3.3% sequentially and roughly 12.7% year over year, with center-level contribution margins of about 18.3% for the quarter and 17.3% on a full-year basis. Adjusted EBITDA was $5.2 million in the quarter (2.6% margin) and $16.5 million for the full year (2.2% margin), reflecting the company’s transition from a rebuilding phase toward margin recapture as census and utilization improved post-sanctions. Management framed fiscal 2025 guidance at revenue of $815–$865 million and adjusted EBITDA of $24–$31 million, with de novo center losses of $18–$20 million, and a census ending between 7,300 and 7,750 participants (86,000–89,000 member months). The guidance assumes mid-single-digit rate increases across Medicare Part C and Part D, and Medicaid in several states, with a notable 8.8% uplift in Colorado Medicaid rates commencing July 1, 2025. The company continues to execute on strategic initiatives (Epic EMR rollout completed across 20 centers, OVIs, CVIs, Orlando Health joint venture, new Florida centers) while signaling near-term headwinds from enrollment throughput delays in some states and ongoing de novo ramp costs. Overall, InnovAge presents a path to higher normalized EBITDA margins in the intermediate term, supported by improved utilization, disciplined cost management, and ongoing value initiatives, albeit with execution risks tied to regulatory, enrollment, and state-rate dynamics.
Key Performance Indicators
Key Insights
Revenue: Q4 2024 revenue of $199.4 million; YoY growth 12.74%; QoQ growth 3.28%. Gross margin: Q4 gross margin 18.34%. Center-level contribution margin: FY2024 $132.1 million (17.3% margin); Q4 2024 $36.6 million (18.3% margin). Operating income: Q4 -$4.883 million (margin -2.45%); FY2024 net income: -$23.2 million; Q4 net income: -$2.3 million (per transcript) or -$1.7 million (per reported quarter data); EBITDA/Adjusted EBITDA: FY2024 $16.5 million (Adjusted EBITDA margin 2.2%); Q4 2024 Adjust...
Financial Highlights
Revenue: Q4 2024 revenue of $199.4 million; YoY growth 12.74%; QoQ growth 3.28%. Gross margin: Q4 gross margin 18.34%. Center-level contribution margin: FY2024 $132.1 million (17.3% margin); Q4 2024 $36.6 million (18.3% margin). Operating income: Q4 -$4.883 million (margin -2.45%); FY2024 net income: -$23.2 million; Q4 net income: -$2.3 million (per transcript) or -$1.7 million (per reported quarter data); EBITDA/Adjusted EBITDA: FY2024 $16.5 million (Adjusted EBITDA margin 2.2%); Q4 2024 Adjusted EBITDA $5.2 million (2.6% margin). Cash flow: Operating cash flow $1.87 million; Capex $3.3 million; Free cash flow (FCF) after capex: -$1.43 million. Balance sheet: Cash and cash equivalents $56.9 million; Short-term investments $45.8 million; Total cash + investments $102.8 million; Total debt $83.3 million; Net debt (as reported) $56.1 million; Total assets $547.7 million; Total stockholders’ equity $269.3 million; Current ratio 1.25; Debt-to-capitalization 0.30; Price-to-sales 3.44; EV/Revenue (enterprise value multiple) 128.16 (as reported). Revenue drivers include census growth, higher capitation rates, and Medicare/Medicaid rate adjustments; de novo centers contribute to near-term operating losses but are essential for long-term growth.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
199.40M |
12.74% |
3.28% |
| Gross Profit |
36.58M |
28.32% |
7.59% |
| Operating Income |
-4.88M |
55.37% |
15.71% |
| Net Income |
-1.70M |
84.79% |
71.12% |
| EPS |
-0.01 |
84.83% |
68.75% |
Key Financial Ratios
operatingProfitMargin
-2.45%
operatingCashFlowPerShare
$0.01
freeCashFlowPerShare
$-0.01
priceEarningsRatio
-100.82
Management Commentary
Key management takeaways from the earnings call: (1) Revenue and census momentum: Q4 2024 revenue of ~$199 million, up ~3.3% sequentially and census ~7,020; 2024 annual revenue ~$764 million, with center utilization up 440 bps in established centers. (2) Margin and profitability trajectory: Center-level contribution margin rose to 17.3% for FY2024 (vs 14.7% prior year) and 18.3% in Q4; adjusted EBITDA was $16.5 million for FY2024 and $5.2 million in Q4, with plans to reach 8–9% margins in the intermediate term. (3) 2025 guidance and the margin path: 2025 guidance of $815–$865 million in revenue and $24–$31 million in Adjusted EBITDA; de novo center losses of $18–$20 million; census 7,300–7,750; management reiterates a mid-term margin expansion to high-single digits. (4) Strategic initiatives and investments: Epic EMR rollout completed in all 20 centers; OVIs and CVIs introduced to raise center-level productivity and vendor economics; Orlando Health joint venture and Florida de novos (Tampa, Orlando, Crenshaw) proceeding with expected ramp; California audits underway (San Bernardino, Sacramento) with Downey/Bakersfield on hold pending resolution. (5) Enrollment headwinds and rate dynamics: Enrollment throughput delays in some states persist despite post-sanctions recovery; mid-single-digit rate increases across Medicare Part C, Part D, and Medicaid in several states; management believes delays will gradually abate with potential upside if processing accelerates.
Today, we reported revenue of approximately $199 million, a sequential improvement of approximately 3.3% compared to the third quarter.
— Patrick Blair
We expect our ending census for fiscal 2025 to be between 7,300 and 7,750, and member months to be in the range of 86,000 to 89,000.
— Patrick Blair
Forward Guidance
Outlook assessment: InnovAge guides for fiscal 2025 total revenue of $815–$865 million and adjusted EBITDA of $24–$31 million, with de novo losses of $18–$20 million. The growth assumes census progression and steady enrollment themes, offset by ongoing de novo center ramp costs and state enrollment processing delays. Management cites mid-single-digit rate increases across Medicare Part C and Part D, and Medicaid uplift in several states (Colorado +8.8% effective July 1, 2025; Virginia low single-digit; California low single-digit effective Jan 2025; Pennsylvania mid-single-digit). The company expects margins to improve toward the 8–9% Adjusted EBITDA target in the intermediate term, implying a gradual but steady margin ramp, supported by OVIs, CVIs, and broader cost controls. Key risk factors include: (a) pace and certainty of enrollment approvals in California and other states, (b) regulatory actions or delays in California audits affecting expansion plans, (c) competition dynamics in California (e.g., Kaiser entering PACE) and other geographies, (d) reimbursement rate volatility and MI/IRA/Medicaid confidence, and (e) execution risk associated with four new de novo centers and integration of Orlando Health JV. Investors should monitor: enrollment cadence by quarter, timing of de novo center maturity, actual vs. forecast Medicaid rate changes (especially in Colorado), progress on California corrective actions, and the pace of margin recapture toward the 8–9% target.