InnovAge Holding Corp reported solid early progress in Q1 2025, with revenue of $205.1 million and a center-level contribution margin of $34.5 million (16.8% of revenue). Adjusted EBITDA reached $6.5 million, delivering an improving profitability trajectory despite ongoing de novo center investments and a managed-care powered model. Net loss narrowed to approximately $5.7 million, reflecting disciplined cost control and higher census. Census stood at about 7,210 participants across 20 centers, marking ~10% year-over-year growth and ~3% quarter-over-quarter growth, underscoring solid demand for InnovAge’s PACE-based care model.
Management commentary emphasizes a disciplined, portfolio-based approach to value creation via Clinical Value Initiatives (CVI) and Operational Value Initiatives (OVI), ongoing improvement in risk-adjusted revenue through EPIC-driven chronic-condition recapture, and a continued focus on fixed-cost leverage to drive margin expansion. The company also highlighted leadership changes (new President and COO Michael Scarbrough) and strong employee and participant engagement metrics (Employee Engagement Score 79%, NPS 56). While enrollment delays in some markets (notably California and Colorado) persist, management reports early signs of improvement in enrollment processing times and remains hopeful for stronger execution through the Medicare annual enrollment period.
Looking forward, InnovAge reaffirmed FY2025 guidance: ending census 7,300–7,750 participants; 86,000–89,000 member months; total revenue of $815–$865 million; Adjusted EBITDA of $24–$31 million; and de novo losses of $18–$20 million. The guidance implies a gradual, seasonally tempered buildup into the back half of the year as member-month dynamics compound. Investors should monitor enrollment processing timelines, the pace of CVI/OVI-driven cost containment, EPIC-driven risk-score optimization, and regulatory developments in California and other markets as key near-term catalysts or headwinds.