InnovAge Holding Corp. reported its financial results for the second quarter of fiscal year 2025, ending December 31, 2024, revealing a total revenue of $208.999 million, a 10.6% increase from $188.898 million in the same period last year. The growth was primarily driven by a 10.7% rise in capitation revenue, which reached $208.674 million, up from $188.561 million. However, the company also experienced a net loss of $13.221 million, compared to a loss of $3.447 million in the prior year quarter, reflecting increased operational costs and impairments.
The company's total expenses for the quarter were $221.555 million, a significant increase of 16.2% from $190.683 million in the previous year. This rise was attributed to higher external provider costs, which increased by 6.8% to $107.873 million, and a 17.9% increase in the cost of care, excluding depreciation and amortization, which reached $64.061 million. Additionally, the company recorded an impairment of $8.495 million related to right-of-use assets and construction in progress, linked to the halting of a planned de novo center in Louisville, Kentucky.
InnovAge's operational metrics showed a growth in its participant base, serving approximately 7,480 PACE participants across 20 centers as of December 31, 2024, compared to 6,780 participants in the same period last year. The company reported a total of 43,580 member months, reflecting its expanding reach in the healthcare market. The increase in participant numbers was supported by the acquisition of two California-based PACE programs, ConcertoCare, which was completed in December 2023 for $23.9 million.
Looking ahead, InnovAge anticipates continued challenges related to rising operational costs, particularly in labor and external provider expenses, driven by an increasingly competitive healthcare labor market. The company is focused on enhancing its payer capabilities and implementing clinical and operational value initiatives to mitigate these costs. Additionally, InnovAge is working to address delays in Medicaid enrollment and redetermination processes, which have impacted its revenue collection. The company remains committed to expanding its services and improving participant care while navigating these operational challenges.
About InnovAge Holding Corp.
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