InnovAge Holding Corp.

Good day, and thank you for standing by. Welcome to the InnoVAGE Third Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ryan Kubota, Director of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, and thank you all for joining the InnovAge 2025 Fiscal Third Quarter Earnings Call. With me today is Patrick Blair, CEO, and Ben Adams, CFO. Michael Scarborough, President and COO, will also be joining the Q&A portion of the call. Today, after the market closed, we issued an earnings press release containing detailed information on our fiscal third quarter results. You may access the release on the Investor Relations section of our company website, innovates.com. For those listening to the rebroadcast of this call, we remind you that the remarks made herein are as of today, Tuesday, May 6, 2025, and have not been updated subsequent to this call. During our call, we will refer to certain non-GAAP measures. Reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings press release posted on our website. We may also make statements that are considered forward-looking, including those related to our 2025 fiscal year projections and guidance, future growth prospects and growth strategy, our clinical and operational value initiatives, Medicare rate increases, census headwinds, the status of current and future regulatory actions, and other expectations. Listeners are cautioned that all of our forward-looking statements involve certain assumptions and are inherently subject to risks and uncertainties that can cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors discussed in our annual report on Form 10-K for fiscal year 2024 and any subsequent reports filed with the SEC. including our most recently quarterly report on Form 10-Q. After the completion of our prepared remarks, we will open the call for questions. I will now turn the call over to our CEO, Patrick Blair. Patrick?

Thank you, Ryan, and good afternoon, everyone. I'll begin by expressing my appreciation to our colleagues, our participants and their families, our government partners, and the investment community, each of whom plays a vital role in supporting InnovAge's mission. We delivered third quarter results that met our expectations and we are reaffirming our fiscal 2025 earnings guidance. Behind the numbers is a company operating with discipline, focus, and growing confidence. In a healthcare environment clouded by policy uncertainty, we know what we need to do, and we're doing it steadily and consistently. That focus is translating into meaningful operational gains and financial improvement. InnovAge cares for the nation's most vulnerable seniors. Individuals whose needs don't ebb and flow with economic cycles or shifting political priorities. Their care isn't optional. And as federal and state programs face growing scrutiny, we're not just participating in Medicare and Medicaid, we're helping make them stronger. We continue to see rising demand for care models that allow seniors to remain safely at home. And we believe PACE stands out as a proven, high-value solution for a population with the most complex needs. This quarter, we've stepped up our engagement with both state and federal policymakers to make clear PACE works for seniors, for the system, and for taxpayers. What sets InnovAge apart is who we serve, as well as how we deliver and coordinate care. Turning to our third quarter financials, we reported revenue of $218.1 million, an approximate 13% increase on a year-over-year basis. Center-level contribution was $40.7 million. representing an 18.7% margin, and an improvement of approximately 110 basis points year over year. Adjusted EBITDA was $10.8 million, or a 4.9% margin, which represents an improvement of more than 3.5 times over third quarter 2024 adjusted EBITDA of $3 million. Census grew to approximately 7,530 participants, an approximate 10% annual increase. These results reflect continued strength in top-line growth, disciplined cost management, and effective medical expense control. We're especially pleased with this progress given that the quarter coincided with Medicare annual enrollment, a period that intensifies competition across the senior care landscape. Despite these seasonal dynamics, we continue to build momentum. As we shared last quarter, InnovAge has shifted from operational stabilization to enterprise transformation. and this quarter marks early progress on that journey. The transformation we're undertaking is more ambitious and far-reaching than the improvement initiatives of the three previous years. It's a comprehensive effort to reimagine how we operate, how we create value, and how we deliver on our mission. Over the past 90 days, we've launched numerous cross-functional work streams focused on operational excellence and greater organizational efficiency. These initiatives are designed to not only improve how we serve participants today, but also to build the kind of scalable, tech-enabled platform that will allow us to grow sustainably, differentiate on quality, and operate efficiently. We are methodical in our approach, clear-eyed about the opportunity, and confident in our belief that the foundation we have laid will position us to drive meaningful performance and strong results in the quarter ahead and in fiscal 2026. Organically, we continue to grow this quarter. with census rising to approximately 7,530 participants, representing more than 10% year-over-year growth. While sequential growth was modest, as expected due to seasonal headwinds during Medicare's Annual Enrollment Period, or AEP, we're pleased with the results, which reflect both our proactive strategy and disciplined execution. We've previously noted the competitive dynamic PACE faces during AEP, particularly for Medicare Advantage special needs plans that offer cash equivalent supplemental benefits. This year, we took early and targeted action to educate both existing and prospective participants about the broader value proposition PACE offers, from comprehensive care to wraparound social support. We believe these efforts were effective in mitigating churn and reinforcing our differentiation in the market. In parallel, we also delivered on the commitment we made last quarter to work with our state partners and address state-driven enrollment processing delays, particularly in California. We're pleased to report that the backlog is returning to normalized levels, reducing the potential for payment variability and bad debt exposure. We appreciate the state's collaboration in resolving these issues, and we will continue to actively manage these relationships moving forward. Looking ahead, we remain focused on driving sustainable growth across the balanced geographic footprint this disciplined approach will remain a top priority in the quarters to come. This quarter, the strength of our integrated center-based care model was on full display. As many healthcare organizations faced financial pressure from higher than expected medical costs tied to seasonal illness, we've been able to maintain strong cost discipline while continuing to deliver quality outcomes for our participants. Despite what many are calling a quoddemic, flu, COVID, RSV, and norovirus, We kept external provider costs essentially flat quarter over quarter at $108 million. In fact, we improved on a per-participant basis with PMPM spending declining from $4,857 in Q2 to $4,786 in Q3. A key reason for this performance is our proactive clinical model. Since our participants visit our centers regularly and receive personalized wraparound care, we're in a better position to keep them healthy and engaged. Our flu vaccination rate this fiscal year is 77%, well above the national average of 47% for seniors. This is not just a number. It's a reflection of our hands-on approach with each participant and how our teams are able to act early to help prevent small issues from becoming costly ones. While other managed care organizations have flagged rising utilization as a headwind, our differentiated experience this quarter reinforces the value of our tightly integrated care model. in managing medical trend volatility. This ability to manage medical costs and quality simultaneously is exactly the kind of operational discipline we're continuing to instill across the organization. As we say internally, our employees have an owner's mindset and a caregiver's heart. Further, we continue to focus on areas of potential improvement from standardization across centers to increase rigor and performance management, as well as the process through which we identify and prioritize new value drivers. Our president and COO, Michael Scarborough, has jumped right in and is leading these efforts. We're pleased to see these improvements beginning to show up in our internal operational and financial metrics. As you'll recall, we track our operational performance using the five pillar framework, employee engagement, participant satisfaction, quality, compliance, and financial results. This quarter, we saw sequential improvement in nearly every pillar, with especially meaningful gains in employee sentiment and service level consistency. Our teams are energized, our focus is sharp, and we're executing with greater precision every day. Regarding our leadership team, as referenced in our press release, Dr. Rich Pfeiffer, InnovAge's Chief Medical Officer, has left the organization to pursue opportunities outside the organization. We have a transition plan in place to ensure continuity and leadership in clinical oversight. We thank him for his meaningful contributions over the last two and a half years, and we wish him well in his future pursuits. We have also made strategic progress on our pharmacy initiative. Last quarter, we announced the acquisition of a pharmacy in Colorado to bring key capabilities in-house. I'm pleased to report that the transition has been completed, and we successfully migrated almost all of our pharmacy distribution and management to the new organization. This initiative was driven by our belief that greater control over pharmaceutical fulfillment will allow us to improve medication adherence, enhance participant outcomes, reduce costs, and simplify logistics. While it's still early, we have strong confidence in this decision, and we're seeing tangible benefits. We believe there's a long-term value creation opportunity by further integrating pharmacy services into our clinical model. Looking ahead, our transformation efforts remain anchored in cost discipline, operational excellence, and our commitment to high-quality care. We're continuing to explore how best to balance insourcing and outsourcing to maximize the quality and efficiency across the organization. Ultimately, our vision is to build a best-in-class, scalable PACE platform, one that not only delivers consistent, high-quality care for today's participants, but also positions us as the partner of choice for future growth and strategic expansion. In an uncertain policy environment, our model can offer a level of resilience and operational predictability that we believe will distinguish InnovAge in the quarters and years ahead. In summary, we're proud of the steady progress we've made through the first three quarters of the year, and we're confident in the road ahead. Each quarter, we're executing more consistently, uncovering new opportunities to improve care, reduce cost, and scale smarter. Our model continues to prove its strength, especially in volatile environments, because it's built on proactive, personalized care and a disciplined operating foundation. In the face of policy uncertainty, our conviction in the long-term value of the PACE model remains strong. We believe InnovAge is well-positioned to thrive in this space. Our operational rigor is deepening, our teams are energized, and our strategy is coming to life in tangible ways, from clinical performance to cost control, to target investments like our pharmacy acquisition. This is more than incremental improvement. It's real transformation. We are working to build a next-generation PACE platform, one that delivers better outcomes for participants, meaningful savings for the healthcare system, and long-term value for our shareholders. We're focused, we're aligned, and we're just getting started. With that, I'll turn it over to Ben to walk through our financial performance for the quarter. Thank you, Patrick.