InnovAge Q2 Revenue Jumps 14.7% to $239.7M with $0.08 EPS, Raises FY Guidance
InnovAge’s fiscal Q2 revenue rose 14.7% year-over-year to $239.7 million, delivering net income of $11.8 million (EPS $0.08) versus a $13.5 million loss in the prior period. Adjusted EBITDA increased to $22.2 million (9.2% margin) and full-year guidance was lifted to $925–$950 million revenue and $70–$75 million EBITDA.
1. Zacks Rank Upgrade Signals Growing Optimism
Analysts at Zacks Investment Research raised InnovAge (INNV) to a Rank #1 (Strong Buy) this week, citing an improving earnings outlook driven by expanding enrollment and operating leverage in its PACE centers. The upgrade reflects a consensus expectation for INNV to sustain net income per share of $0.08 or higher over the next two quarters, reversing a $0.10 loss per share reported a year ago. Zacks models project revenue growth north of 15% year-over-year, fueled by contributions from four new centers opened since January 2025 and a 7.2% uptick in average per-participant revenue across existing sites.
2. Fiscal Q2 Performance Demonstrates Scalability
For the fiscal second quarter ended December 31, 2025, InnovAge generated $239.7 million in revenues, a 14.7% increase from $209.0 million in the prior year period. Income before income taxes turned positive at $12.5 million, compared with a $13.5 million loss in Q2 2025, representing a 5.2% operating margin. Center-level contribution margin climbed 42.5% to $52.8 million, or 22.0% of revenues, versus 17.7% a year prior. Adjusted EBITDA surged to $22.2 million, up from $5.9 million, lifting the adjusted EBITDA margin to 9.2%. The company closed the quarter with approximately 8,010 participants—up 7.1% year-over-year—and held $83.2 million in cash and cash equivalents plus $42.8 million in short-term investments.
3. Advocacy at the Colorado State Capitol
On February 5, InnovAge executives and six PACE center participants met with Colorado lawmakers to reinforce the value proposition of its all-inclusive care model. Attendees presented hard data showing 25% lower hospitalization rates and a 30% reduction in nursing home admissions among InnovAge enrollees versus state averages. Senior Vice President Don Nelson highlighted the program’s cost-efficiency, noting that per-participant Medicaid expenditures under PACE run approximately 12% below traditional fee-for-service benchmarks. Legislative leaders, including Lt. Gov. Dianne Primavera and House Majority Leader Monica Duran, pledged to safeguard Medicaid allocations and accelerate provider outreach to underserved rural counties.