Press Release: InnovAge Announces Financial Results for the Fiscal Second Quarter Ended December 31, 2025

Dow Jones02-04

DENVER, Feb. 03, 2026 (GLOBE NEWSWIRE) -- InnovAge Holding Corp. ("InnovAge" or the "Company") (Nasdaq: INNV), an industry leader in providing comprehensive healthcare programs to frail, predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE), today announced financial results for its fiscal second quarter ended December 31, 2025.

"InnovAge delivered strong operating and financial results this quarter, reflecting continued progress in building a scalable, high-quality PACE platform," said Patrick Blair, CEO. "Our performance is rooted in disciplined execution and a care model that prioritizes clinical outcomes, participant experience, and responsible stewardship of public resources. We remain focused on sustainable growth, close partnership with regulators, and long-term value for participants, payors, and shareholders."

Financial Results

 
                                       Three Months Ended December 31, 
                                   --------------------------------------- 
                                           2025                 2024 
in thousands, except percentages 
and per share amounts 
Total revenues                      $      239,708        $   208,999 
Income (Loss) Before Income Taxes           12,456            (13,457) 
Net Income (Loss)                           11,805            (13,491) 
Net Income (Loss) margin                       4.9%              (6.5)% 
 
Net Income (Loss) Attributable to 
 InnovAge Holding Corp.                     10,618            (13,221) 
Net Income (Loss) per share - 
 basic and diluted                  $         0.08        $     (0.10) 
                                       -----------  ----   ---------- 
 
Center-level Contribution 
 Margin(1)                          $       52,825        $    37,065 
Adjusted EBITDA(1)                  $       22,151        $     5,869 
Adjusted EBITDA margin(1)                      9.2%               2.8% 
 
 

Fiscal Second Quarter 2026 Financial Performance

   -- Total revenues of $239.7 million, increased approximately 14.7% compared 
      to $209.0 million in the second quarter of fiscal year 2025 
 
   -- Income Before Income Taxes of $12.5 million increased approximately 
      192.6%, compared to a Loss Before Income Taxes of $13.5 million in the 
      second quarter of fiscal year 2025 
 
   -- Income Before Income Taxes as a percent of revenue was 5.2%, an increase 
      of 11.6 percentage points, compared to Loss Before Income Tax as a 
      percent of revenue of 6.4% in the second quarter of fiscal year 2025 
 
   -- Center-level Contribution Margin(1) of $52.8 million, increased 42.5% 
      compared to $37.1 million in the second quarter of fiscal year 2025 
 
   -- Center-level Contribution Margin(1) as a percent of revenue was 22.0%, an 
      increase of 4.3 percentage points compared to 17.7% in the second quarter 
      of fiscal year 2025 
 
   -- Net income of $11.8 million, compared to net loss of $13.5 million in the 
      second quarter of fiscal year 2025 
 
   -- Net income margin of 4.9%, an increase of 11.4 percentage points, 
      compared to a net loss margin of 6.5% in the second quarter of fiscal 
      year 2025 
 
   -- Net income attributable to InnovAge Holding Corp. of $10.6 million, or 
      earnings per share of $0.08, compared to net loss attributable to 
      InnovAge Holding Corp. of $13.2 million, or a loss per share of $0.10 in 
      the second quarter of fiscal year 2025 
 
   -- Adjusted EBITDA(1) of $22.2 million, an increase of $16.3 million, 
      compared to Adjusted EBITDA of $5.9 million in the second quarter of 
      fiscal year 2025 
 
   -- Adjusted EBITDA(1) margin of 9.2%, an increase of 6.4 percentage points, 
      compared to 2.8% in the second quarter of fiscal year 2025 
 
   -- Census of approximately 8,010 participants compared to 7,480 participants 
      in the second quarter of fiscal year 2025 
 
   -- Ended the second quarter of fiscal year 2026 with $83.2 million in cash 
      and cash equivalents plus $42.8 million in short-term investments, and 
      $69.9 million in debt on the balance sheet, representing debt under the 
      Company's senior secured term loan, revolving credit facility and finance 
      lease obligations 

(1) Center-level Contribution Margin and Center-level Contribution Margin as a percentage of revenue, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. For more details and for a definition and reconciliation of these non-GAAP measures to the most closely comparable GAAP measures for the periods indicated, see "Note Regarding Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Measures."

Full Fiscal Year 2026 Financial Guidance

Based on information as of today, February 3, 2026, InnovAge is raising full year fiscal 2026 financial guidance, except for ending census which remains unchanged, to the following:

 
                             Low          High 
                         ------------  ----------- 
                            dollars in millions 
Census                          7,900      8,100 
Total Member Months(1)         92,900     95,700 
 
Total revenues            $       925  $     950 
Adjusted EBITDA(2)        $        70  $      75 
 
 

Expected results and estimates may be impacted by factors outside the Company's control, and actual results may be materially different from this guidance. See "Forward-Looking Statements - Safe Harbor" included herein.

(1) We define Total Member Months as the total number of participants as of period end multiplied by the number of months within a year in which each participant was enrolled in our program. Management believes this is a useful metric as it more precisely tracks the number of participants the Company serves throughout the year.

(2) Adjusted EBITDA is a non-GAAP measure. See "Note Regarding Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Measures" for a definition of Adjusted EBITDA and a reconciliation to net income (loss), the most closely comparable GAAP measure. The Company is unable to provide guidance for net income (loss) or a reconciliation of the Company's Adjusted EBITDA guidance because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. The Company's inability to do so is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities and other one-time or exceptional items.

Conference Call

The Company will host a conference call this afternoon at 5:00 PM Eastern Time. A live audio webcast of the call will be available on the Company's website, https://investor.innovage.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for a limited time. To access the call by phone, please go to this link (registration link), for dialing instructions and a unique access pin. We encourage participants to dial into the call fifteen minutes ahead of the scheduled start time.

About InnovAge

InnovAge is a market leader in managing the care of high-cost, frail, and predominantly dual-eligible seniors through the Program of All-inclusive Care for the Elderly (PACE). With a mission of enabling older adults to age independently in their own homes for as long as safely possible, InnovAge's patient-centered care model is designed to improve the quality of care our participants receive while reducing over-utilization of high-cost care settings. InnovAge believes its PACE healthcare model is one in which all constituencies -- participants, their families, providers and government payors -- "win." As of December 31, 2025, InnovAge served approximately 8,010 participants across 20 centers in six states. https://www.innovage.com.

Investor Contact:

Ryan Kubota

rkubota@innovage.com

Media Contact:

Lara Hazenfield

lhazenfield@innovage.com

Forward-Looking Statements - Safe Harbor

This press release may contain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements may be identified by the fact that they do not relate strictly to historical or current facts. Examples of forward-looking statements include, among others, statements we may make regarding quarterly or annual guidance; financial outlook, including future revenues and future earnings; mid-term and long-term financial goals; the viability of our growth strategy including our ability or expectations to increase the number of participants we serve, build and/or open de novo centers, or to identify and execute tuck-in acquisitions, joint ventures and other strategic partnerships; the expected impact of government policies and the macroeconomic environment; our ability to control costs, mitigate the effects of elevated expenses or reduced healthcare budgets, expand our payer capabilities, implement clinical value and operational value initiatives and strengthen enterprise functions; and the effects of any of the foregoing on our future results of operations or financial conditions.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control and may cause our actual results and financial condition to differ materially. Important factors that could cause our actual results and financial condition to differ materially include, among others, the following: (i) the viability of our growth strategy, including our ability to find suitable geographies for new centers and to attract new participant and retain existing participants in new and existing centers and our ability to obtain licenses to open such centers; (ii) our ability to identify, successfully complete and integrate acquisitions, joint ventures another strategic partnerships; (iii) the impact on our business from ongoing macroeconomic related challenges, including labor shortages, labor competition, inflation, tariffs and trade disputes; (iv) inspections, reviews, audits and investigations under the federal and state government programs, including our ability to sufficiently cure any deficiencies identified; (v) legal proceedings, enforcement actions and litigation and disputes; (vi) under our PACE contracts, we assume all of the risk that the cost of providing services will exceed our compensation; (vii) the dependence of our revenues upon a limited number of government payors, including the risk of sudden loss of any of our government contracts; (viii) the impact of state and federal efforts to reduce healthcare spending, including recent legislation reducing the budget that funds Medicaid; (ix) the risk that our submissions to government payors may contain inaccurate or unsupportable information, including regarding risk adjustment scores of participants, subjecting us to repayment obligations or penalties; (x) and our ability to comply with the continued listing requirements of Nasdaq.

Forward-looking statements are based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. We advise you to not place undue reliance on forward-looking statements and to review our risk factors and other disclosures included in the reports we file or furnish with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Note Regarding Use of Non-GAAP Financial Measures

In addition to reporting financial information in accordance with generally accepted accounting principles ("GAAP"), the Company is also reporting Center-level Contribution Margin, Center-level Contribution Margin as a percent of revenue, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP measures are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to the most directly comparable GAAP measures. We believe that these non-GAAP measures are appropriate measures of operating performance because they allow us to more effectively evaluate our core operating performance and trends from period to period. Our definitions and calculations of non-GAAP measures may vary and not be comparable to similarly titled measures reported by other companies. We believe that these non-GAAP measures help investors and analysts in comparing our results across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

The Company's management uses Center-level Contribution Margin as the measure for assessing performance of its operating segments and allocating resources, predominantly in the annual budget and forecasting process. For the purpose of evaluating Center-level Contribution Margin on a center-by-center basis, we do not allocate our sales and marketing expense or corporate, general and administrative expenses across our centers. We define Center-level Contribution Margin as total revenues less external provider costs and cost of care, excluding depreciation and amortization, which includes all medical and pharmacy costs.

We define Adjusted EBITDA as net income (loss) adjusted for interest expense, net, other investment income, depreciation and amortization, and provision (benefit) for income tax as well as addbacks for non-recurring expenses or exceptional items, including charges relating to management equity compensation, litigation costs and settlement, M&A diligence, transaction and integration, business optimization, loss on assets held for sale, and loss (gain) on sale of assets. Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage of our total revenue.

Schedule 1

InnovAge

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES) (UNAUDITED)

 
                                             December 31,     June 30, 
                                                 2025           2025 
                                            --------------  ------------ 
Assets 
  Current Assets 
    Cash and cash equivalents                $     83,203   $  64,129 
    Short-term investments                         42,755      41,775 
    Restricted cash                                    10          11 
    Accounts receivable                            21,302      36,373 
    Prepaid expenses                               31,274      24,472 
    Income tax receivable                           3,310       3,310 
    Assets held for sale                               --       6,038 
                                                ---------    -------- 
      Total current assets                        181,854     176,108 
                                                ---------    -------- 
  Noncurrent Assets 
    Property and equipment, net                   164,589     168,044 
    Operating lease assets                         24,765      26,901 
    Deposits and other                             10,680       9,875 
    Goodwill                                      142,046     142,046 
    Other intangible assets, net                    3,548       3,877 
                                                ---------    -------- 
      Total noncurrent assets                     345,628     350,743 
                                                ---------    -------- 
      Total assets                           $    527,482   $ 526,851 
                                                =========    ======== 
Liabilities and Stockholders' Equity 
  Current Liabilities 
    Accounts payable and accrued expenses    $     55,899   $  76,750 
    Reported and estimated claims                  62,443      58,971 
    Due to Medicaid and Medicare                   14,042      14,382 
    Current portion of long-term debt               2,536       2,250 
    Current portion of finance lease 
     obligations                                    5,000       5,234 
    Current portion of operating lease 
     obligations                                    4,782       4,682 
    Liabilities held for sale                          --       2,538 
      Total current liabilities                   144,702     164,807 
                                                ---------    -------- 
  Noncurrent Liabilities 
    Deferred tax liability, net                     9,272       8,761 
    Finance lease obligations                       5,411       7,535 
    Operating lease obligations                    21,640      23,918 
    Other noncurrent liabilities                    1,704       1,458 
    Long-term debt, net of debt issuance 
     costs                                         55,990      57,464 
                                                ---------    -------- 
      Total liabilities                           238,719     263,943 
                                                ---------    -------- 
Commitments and Contingencies 
Redeemable Noncontrolling Interests                27,595      25,010 
Stockholders' Equity 
  Common stock, $0.001 par value; 
   500,000,000 authorized as of December 
   31, 2025 and June 30, 2025; 137,162,450 
   issued and 135,699,471 outstanding as 
   of December 31, 2025 and 136,903,271 
   issued and 135,440,292 outstanding as 
   of June 30, 2025                                   137         137 
  Treasury stock at cost, 1,462,979 shares 
   as of December 31, 2025 and June 30, 
   2025                                            (7,500)     (7,500) 
    Additional paid-in capital                    346,559     343,378 
    Retained deficit                              (82,410)   (101,047) 
                                                ---------    -------- 
      Total InnovAge Holding Corp.                256,786     234,968 
    Noncontrolling interests                        4,382       2,930 
                                                ---------    -------- 
      Total stockholders' equity                  261,168     237,898 
                                                ---------    -------- 
       Total liabilities and stockholders' 
        equity                               $    527,482   $ 526,851 
                                                =========    ======== 
 
 

Schedule 2

InnovAge

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA) (UNAUDITED)

 
                                      Three Months Ended December 31, 
                                   ------------------------------------- 
                                          2025               2024 
Revenues 
   Capitation revenue               $        239,620   $      208,674 
   Other service revenue                          88              325 
                                       -------------    ------------- 
      Total revenues                         239,708          208,999 
                                       -------------    ------------- 
Expenses 
   External provider costs                   111,999          107,873 
   Cost of care, excluding 
    depreciation and 
    amortization                              74,884           64,061 
   Sales and marketing                         8,078            7,704 
   Corporate, general and 
    administrative                            26,608           28,103 
   Depreciation and amortization               4,877            5,319 
   Impairments and loss on assets 
    held for sale                                 --            8,495 
                                       -------------    ------------- 
      Total expenses                         226,446          221,555 
                                       -------------    ------------- 
Operating Income (Loss)                       13,262          (12,556) 
                                       -------------    ------------- 
 
Other Income (Expense) 
   Interest expense, net                      (1,246)            (760) 
   Other income (expense)                        440             (157) 
   Gain on equity method 
    investment                                    --               16 
                                       -------------    ------------- 
      Total other expense                       (806)            (901) 
                                       -------------    ------------- 
Income (Loss) Before Income Taxes             12,456          (13,457) 
Provision for Income Taxes                       651               34 
                                       -------------    ------------- 
Net Income (Loss)                             11,805          (13,491) 
                                       -------------    ------------- 
      Less: net income (loss) 
       attributable to 
       noncontrolling interests                1,187             (270) 
                                       -------------    ------------- 
Net Income (Loss) Attributable to 
 InnovAge Holding Corp.             $         10,618   $      (13,221) 
                                       =============    ============= 
 
Weighted-average number of common 
 shares outstanding - basic              135,686,130      135,439,668 
Weighted-average number of common 
 shares outstanding - diluted            136,351,004      135,439,668 
                                       -------------    ------------- 
 
Net income (loss) per share - 
 basic                              $           0.08   $        (0.10) 
Net income (loss) per share - 
 diluted                            $           0.08   $        (0.10) 
                                       -------------    ------------- 
 
 

Schedule 3

InnovAge

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS) (UNAUDITED)

 
                                         Six Months Ended December 31, 
                                     ------------------------------------- 
                                             2025               2024 
                                                           --------------- 
Operating Activities 
  Net income (loss)                   $        19,474      $    (19,201) 
  Adjustments to reconcile net 
  income (loss) to net cash 
  provided by (used in) operating 
  activities 
    (Gain) loss on disposal of 
     assets                                      (374)               15 
    Provision for uncollectible 
     accounts                                      --               524 
    Depreciation and amortization               9,962            10,730 
    Operating lease rentals                     3,078             3,107 
    Impairments and loss on assets 
     held for sale                                104             8,495 
    Amortization of deferred 
     financing costs                              405               215 
    Stock-based compensation                    3,524             4,035 
    Deferred income taxes                         511               437 
    Other, net                                  1,403               709 
  Changes in operating assets and 
  liabilities 
    Accounts receivable                        15,071            (2,176) 
    Prepaid expenses and other 
     current assets                            (6,795)           (9,084) 
    Deposits and other                         (1,498)             (629) 
    Accounts payable and accrued 
     expenses                                 (19,590)            2,717 
    Reported and estimated claims               3,472             3,864 
    Due to Medicaid and Medicare                 (341)           (1,340) 
    Operating lease liabilities                (3,121)           (3,181) 
      Net cash provided by (used 
       in) operating activities                25,285              (763) 
                                         ------------       ----------- 
Investing Activities 
  Purchases of property and 
   equipment                                   (6,440)           (3,543) 
  Purchases of short-term 
   investments                                   (995)           (1,147) 
  Proceeds from sale of assets held 
  for sale                                      3,716                -- 
  Proceeds from sale of short-term 
   investments                                     --             6,300 
      Net cash (used in) provided 
       by investing activities                 (3,719)            1,610 
                                         ------------       ----------- 
Financing Activities 
  Payments for finance lease 
   obligations                                 (2,714)           (3,130) 
  Principal payments on long-term 
   debt                                       (60,646)           (1,898) 
  Proceeds from the issuance of 
  long-term debt                               60,082                -- 
  Payments on financing costs                  (1,989)               -- 
  Repurchase of equity securities                  --            (5,912) 
  Contribution from joint venture 
  partner                                       3,200                -- 
  Taxes paid related to net 
   settlements of stock-based 
   compensation awards                           (344)             (776) 
                                         ------------       ----------- 
      Net cash used in financing 
       activities                              (2,411)          (11,716) 
Net change in cash, cash 
 equivalents and restricted cash 
 including cash of $0.08 million 
 reclassified to assets held for 
 sale                                          19,155           (10,869) 
Less: change in cash and restricted 
 cash reclassified to assets held 
 for sale                                         (82)               -- 
INCREASE (DECREASE) IN CASH, CASH 
 EQUIVALENTS & RESTRICTED CASH                 19,073           (10,869) 
CASH, CASH EQUIVALENTS & RESTRICTED 
 CASH, BEGINNING OF PERIOD                     64,140            56,960 
                                         ------------       ----------- 
CASH, CASH EQUIVALENTS & RESTRICTED 
 CASH, END OF PERIOD                  $        83,213      $     46,091 
                                         ============       =========== 
 
Supplemental Cash Flows Information 
  Interest paid                       $         2,311      $      2,305 
  Income taxes paid                   $           341      $          1 
  Property and equipment included 
   in accounts payable                $           922      $        161 
  Property and equipment purchased 
   under finance leases               $           358      $         -- 
 
 

Schedule 4

InnovAge

RECONCILIATION OF GAAP AND NON-GAAP MEASURES

(IN THOUSANDS) (UNAUDITED)

Adjusted EBITDA

 
                                       Three months ended December 31, 
                                   --------------------------------------- 
                                           2025                2024 
                                   --------------------  ----------------- 
 
Net income (loss)                   $      11,805        $    (13,491) 
Interest expense, net                       1,246                 760 
Other investment income(a)                   (483)                141 
Depreciation and amortization               4,877               5,319 
Provision for income tax                      651                  34 
Stock-based compensation                    1,216               1,873 
Litigation costs and 
 settlement(b)                              1,279               1,405 
M&A diligence, transaction and 
 integration(c)                                --               1,275 
Business optimization(d)                    1,560                  58 
Impairments and loss on assets 
 held for sale(e)                              --               8,495 
    Adjusted EBITDA                 $      22,151        $      5,869 
                                       ==========  ====   ===========  === 
 
Net income (loss) margin                      4.9%               (6.5)% 
Adjusted EBITDA margin                        9.2%                2.8% 
 

_______________________

 
(a)  Reflects investment income related to short-term investments 
      included in our consolidated statement of operations. 
(b)  Reflects charges/(credits) related to litigation by 
      stockholders, civil investigative demands, and arbitration 
      with our former pharmacy provider. Refer to Note 9, 
      "Commitments and Contingencies" to our condensed consolidated 
      financial statements for more information regarding 
      litigation by stockholders and civil investigative 
      demands. Costs reflected consist of litigation costs 
      considered one-time in nature and outside of the ordinary 
      course of business based on the following considerations 
      which we assess regularly: (i) the frequency of similar 
      cases that have been brought to date, or are expected 
      to be brought within two years, (ii) complexity of 
      the case, (iii) nature of the remedies sought, (iv) 
      litigation posture of the Company, (v) counterparty 
      involved, and (vi) the Company's overall litigation 
      strategy. 
(c)  Reflects charges related to M&A diligence, transactions 
      and integrations. 
(d)  Reflects charges related to business optimization 
      initiatives. Such charges relate to one-time investments 
      in projects designed to enhance our technology and 
      compliance systems and improve and support the efficiency 
      and effectiveness of our operations. For the three 
      months ended December 31, 2025, this consists of costs 
      related to organizational restructure. For the three 
      months ended December 31, 2024, this primarily includes 
      costs related to other non-recurring projects aimed 
      at reducing costs and improving efficiencies. 
(e)  For the three months ended December 31, 2024, reflects 
      impairment charges related to ROU asset and construction 
      in progress related to halting developments to a previously 
      planned de novo center in Louisville, Kentucky that 
      the Company is no longer pursuing. 
 
 
 
                                       Three months ended September 30, 
                                     ------------------------------------ 
                                                     2025 
                                     ------------------------------------ 
 
Net income                              $                  7,669 
Interest expense, net                                      1,251 
Other investment income(a)                                  (499) 
Depreciation and amortization                              5,085 
Provision for income tax                                     247 
Stock-based compensation                                   2,308 
Litigation costs and settlement(b)                           979 
Business optimization(c)                                     879 
Loss on assets held for sale(d)                              104 
Gain on sale of assets(e)                                   (381) 
                                     ----  --------------------- ------ 
    Adjusted EBITDA                     $                 17,642 
                                     ====  =====================  ======= 
 
Net income margin                                            3.2% 
Adjusted EBITDA margin                                       7.5% 
 

_______________________

 
(a)  Reflects investment income related to short-term investments 
      included in our consolidated statement of operations. 
(b)  Reflects charges/(credits) related to litigation by 
      stockholders, civil investigative demands, and arbitration 
      with our former pharmacy provider. Refer to Note 9, 
      "Commitments and Contingencies" to our condensed consolidated 
      financial statements for more information regarding 
      litigation by stockholders and civil investigative 
      demands. Costs reflected consist of litigation costs 
      considered one-time in nature and outside of the ordinary 
      course of business based on the following considerations 
      which we assess regularly: (i) the frequency of similar 
      cases that have been brought to date, or are expected 
      to be brought within two years, (ii) complexity of 
      the case, (iii) nature of the remedies sought, (iv) 
      litigation posture of the Company, (v) counterparty 
      involved, and (vi) the Company's overall litigation 
      strategy. 
(c)  Reflects charges related to business optimization 
      initiatives. Such charges relate to one-time investments 
      in projects designed to enhance our technology and 
      compliance systems and improve and support the efficiency 
      and effectiveness of our operations. For the three 
      months ended September 30, 2025, this consists of 
      costs related to organizational restructure and executive 
      severance. 
(d)  Reflects additional loss related to the Company's 
      sale of its managing member interest in SH1 and the 
      adjacent vacant land. 
(e)  Reflects gain on sale of center equipment that was 
      originally purchased for the center in Louisville, 
      Kentucky. 
 
 

Center-Level Contribution Margin

 
                                                             Three Months Ended December 31, 
                    Three Months Ended December 31, 2025                  2024 
                                                                        All 
(In thousands)        PACE    All other(a)     Totals        PACE     other(a)      Totals 
                    --------  ------------  -------------  --------  ----------  ------------- 
   Capitation 
    revenue         $239,620   $    --      $239,620       $208,674    $     --  $208,674 
   Other service 
    revenue               88        --            88             77         248       325 
                     -------      ----       -------  ---   -------  ---  -----   -------  --- 
Total revenues       239,708        --       239,708        208,751         248   208,999 
   External 
    provider 
    costs            111,999        --       111,999        107,873          --   107,873 
   Cost of care, 
    excluding 
    depreciation 
    and 
    amortization      74,902       (18)       74,884         63,916         145    64,061 
                     -------      ----       -------  ---   -------  ---  -----   -------  --- 
Center-Level 
 Contribution 
 Margin               52,807        18        52,825         36,962         103    37,065 
                     -------      ----       -------  ---   -------  ---  -----   -------  --- 
 
   Sales and 
    marketing                                  8,078                                7,704 
   Corporate, 
    general and 
    administrative                            26,608                               28,103 
   Depreciation 
    and 
    amortization                               4,877                                5,319 
   Impairments and 
    loss on assets 
    held for sale                                 --                                8,495 
                                             -------  ---                         -------  --- 
   Operating 
    income (loss)                             13,262                              (12,556) 
   Other expense                                (806)                                (901) 
Income (Loss) 
 Before Income 
 Taxes                                      $ 12,456                             $(13,457) 
                                             =======  ===                         ======= 
Income (Loss) 
 Before Income 
 Taxes as a 
 percent of 
 revenue                                         5.2%                                (6.4)% 
Center- Level 
 Contribution 
 Margin as a % of 
 revenue                                        22.0%                                17.7% 
 
 
 
                                      September 30, 2025 
                            -------------------------------------- 
(In thousands)                PACE     All other(1)      Totals 
   Capitation revenue       $235,751    $         --  $235,751 
   Other service revenue          97             257       354 
                             -------  ---  ---------   ------- 
Total revenues               235,848             257   236,105 
   External provider costs   108,863              --   108,863 
   Cost of care, excluding 
    depreciation and 
    amortization              75,735             151    75,886 
                             -------  ---  ---------   ------- 
Center-Level Contribution 
 Margin                       51,250             106    51,356 
                             -------  ---  ---------   ------- 
 
   Sales and marketing                                   7,605 
   Corporate, general and 
    administrative                                      30,273 
   Depreciation and 
    amortization                                         5,085 
   Loss on assets held for 
    sale                                                   104 
   Operating income (loss)                               8,289 
                                                       ------- 
   Other expense                                          (373) 
Income Before Income Taxes                            $  7,916 
                                                       ======= 
Income Before Income Taxes 
 as a % of revenue                                         3.4% 
Center- Level Contribution 
 Margin as a % of revenue                                 21.8% 
 

_________________________________

 
(a)  Center-level Contribution Margin from segments below 
      the quantitative thresholds are primarily attributable 
      to the Senior Housing operating segment of the Company. 
      This segment has never met any of the quantitative 
      thresholds for determining reportable segments. As 
      of September 2025, the Company no longer operates 
      Senior Housing as the remaining Senior Housing assets 
      were sold. 
 
 

This press release was published by a CLEAR$(R)$ Verified individual.

(END) Dow Jones Newswires

February 03, 2026 16:05 ET (21:05 GMT)

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