InnovAge Reports 11.8% Revenue Growth to $853.7 Million Despite Increased Net Loss

InnovAge Holding Corp. reported significant financial developments in its 10-K filing for the fiscal year ending June 30, 2025. The company generated total revenues of $853.7 million, marking an increase of 11.8% from $763.9 million in the previous fiscal year. This growth was primarily driven by an increase in capitation revenue, which rose to $852.4 million, up from $762.6 million, attributed to a 10.3% increase in member months and a 1.4% rise in capitation rates. The company served approximately 7,740 participants, solidifying its position as the largest PACE provider in the United States.

Despite the revenue growth, InnovAge reported a net loss of $35.3 million for the fiscal year, compared to a net loss of $23.2 million in the prior year. The increase in losses was influenced by rising operational costs, including a 17.5% increase in the cost of care, which reached $268.9 million. This rise was largely due to higher salaries and wages, as well as increased expenses related to the opening of new centers and the acquisition of pharmacy assets from Tabula Rasa HealthCare Group. The company also incurred a $13.6 million impairment related to assets held for sale.

Strategically, InnovAge has focused on expanding its operations through both organic growth and acquisitions. The company opened new centers in Florida and acquired two California-based PACE programs, enhancing its service offerings and geographic reach. As of June 30, 2025, InnovAge operated 20 PACE centers across six states, including California, Colorado, Florida, New Mexico, Pennsylvania, and Virginia. The company aims to continue increasing participant enrollment and capacity within existing centers while also pursuing additional acquisitions and partnerships.

Operationally, InnovAge's participant satisfaction remains high, with an Integrated Satisfaction Measurement (I-SAT) Net Promoter Score (NPS) of 56, which is above the national PACE program average. The company has also reported a voluntary disenrollment rate averaging 7.0% annually over the last three years. However, challenges such as labor shortages and increased competition for healthcare professionals have impacted its ability to maintain staffing levels and manage costs effectively.

Looking ahead, InnovAge anticipates continued revenue growth but acknowledges potential challenges stemming from macroeconomic conditions, regulatory changes, and increased operational costs. The company is particularly focused on navigating the implications of the One Big Beautiful Bill Act (OBBBA), which mandates significant reductions in federal Medicaid spending and introduces new work requirements for Medicaid beneficiaries. InnovAge's management remains committed to executing its growth strategy while addressing these challenges to enhance its operational efficiency and participant care.