InnovAge Holding Corp.

As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Ryan Kubota, Director of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, and thank you all for joining the Innovate 2026 Fourth Quarter and Fiscal Year-End Earnings Call. With me today is Patrick Blair, CEO, and Ben Adams, CFO. Jen Brown, 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 2026 fiscal fourth quarter and year-end results. You may access the release on the investor relations section of our company website, innovH.com. For those listening to the rebroadcast of this call, we remind you that the remarks made herein are as of today, Tuesday, September 8th, 2026, and have not been updated subsequent to this call. During our call, we will refer to certain non-GAAP measures A reconciliation of these measures to the most directly comparable gap 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 2027 fiscal year projections and guidance, future growth prospects and growth strategy, our clinical and operational value initiatives, the impact of ongoing macroeconomic, geopolitical, and industry-related challenges, reductions in PACE reimbursement rates, and changes in risk adjustment methodologies, legal proceedings, enforcement actions and litigation and disputes, including civil investigative demands and other expectations. Listeners are cautioned that all of our forward-looking statements involve certain assumptions that are inherently subject to risks and uncertainties that can call 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 2026, and any subsequent reports filed with the FCC. After the completion of our prepared remarks, we'll 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'd like to begin by thanking our In of Age colleagues, our participants and their families, our government partners, and our shareholders for their continued trust and support. As we close fiscal 2026 and begin fiscal 2027, I want to spend a little more time than usual today putting our results and our outlook into a broader context. Fiscal 2026 was an exceptional year for Intervage and key milestone in the transformation of the company. We entered the year with clear objectives, deliver high quality care for our participants, grow synthesis, continue strengthening the operating foundation of the business, maintain a strong culture of compliance, and translate the investments we've made over the last several years into improved financial performance. We delivered against those objectives. Adjusted EBITDA increased approximately 175% compared with fiscal 2025. And we believe we are ahead of schedule to achieve our 10 plus percent long-term adjusted EBITDA margin target. Importantly, we would have generated strong net income for the year. which was ultimately impacted by one-time legal accruals. The rate environment also developed somewhat more favorably than we anticipated during the year, which contributed to our performance. But the larger story of fiscal 2026 is the continued improvement and growing durability in the underlying business. We're operating with stronger leadership, better technology and data, and substantially more discipline around how we manage medical costs, operating costs, and performance. I've said for some time that the best measure for the health of our company is when employee engagement, participant satisfaction, quality outcomes, census growth, and financial performance, our five pillars, all improve together. We believe they can, and fiscal 2026 provides evidence of that. I'm incredibly proud of what our team accomplished. but I'm even more focused on what the progress of the last several years now enables us to achieve. Internally, we have begun describing the evolution of the company in three chapters. InnovAge 1.0 was about building the platform. The organization transitioned from its not-for-profit roots to become a for-profit and ultimately a publicly traded company. We expanded geographically, opened and acquired centers, invested significant capital and established a national-paced platform capable of serving thousands of seniors. InnovAge 2.0 was about strengthening that platform. It began during a difficult period for the company when operational compliance needed to be strengthened. Over the last four years, we have worked to address those issues, executed operational improvement opportunities, improved relationships with our regulatory partners, Strengthened clinical and operational leadership. Implemented a pay-specific EPIC EMR across the enterprise. Standardized processes. Invested in our people and infrastructure. And developed substantially greater visibility into the performance of the business. At the same time, we returned to growth and significantly improved our financial performance. Much of that progress occurred faster and created more value in a shorter period We're now entering what we think of as InnovAge 3.0. If 1.0 was about building the platform, and 2.0 was about strengthening it, 3.0 is about scaling its capabilities and capitalizing on the opportunity in front of us. Our objective is to build an increasingly sophisticated, value-based care platform capable of serving meaningfully more seniors while delivering strong, sustainable performance that allows us to reinvest in the business and earn an appropriate return. This starts with our core PACE business. There remains considerable opportunity to grow census within our existing footprint, expand the capacity of our centers, and diversify the channels through which eligible seniors learn about and access PACE. But 3.0 also means looking across a longer time horizon. We're strengthening our capabilities as both a payer and a provider so that we can better manage quality, total cost of care, and participant outcomes. We're investing in technology and AI to improve clinical decision-making, productivity, and the participant experience. We're evaluating opportunities to increase the physical and operating capacity of our existing centers. We're beginning to more actively evaluate de novo markets, M&A opportunities, joint ventures, and other partnership models that could expand our reach over time. And we intend to remain energetically engaged with policymakers as they consider ways to expand PACE and potentially apply some of the capabilities of the model more broadly. Not every opportunity we evaluate will become part of our strategy and we will continue to be disciplined about where we invest our time and capital. What has changed is our ability to look further ahead at a broader set of opportunities while continuing to execute within the core business. There's an essential point I want to emphasize as we talk about this next chapter. Our ambitions for InnovAge 3.0 do not change the foundation on which we operate. Quality of care and compliance remain non-negotiable. PACE participants are among the most medically and socially complex individuals in the healthcare system. Our participants, their families, CMS, and other state partners place extraordinary trust in us. We take this responsibility very seriously. The lessons of the last several years are deeply embedded in how we operate the company today. As we grow, we intend to continue investing in operations and clinical leadership, compliance infrastructure, data and monitoring, and the systems necessary to identify risk and variation earlier. We will not compromise those standards. An important part of preparing for this next chapter was strengthening the operating leadership of the company. Earlier this summer, Jen Brown joined us as President and Chief Operating Officer. Jen brings significant experience leading complex, multi-site healthcare and value-based care organizations, including senior leadership roles at Optum and Strive Health. She has experience across clinical operations, quality, growth, and performance improvement and understands what it takes to build scalable operating systems. Although Jen has only been with us for a few months, she has moved quickly to understand our centers, our people, our opportunities and the areas where we can continue to improve. Her addition gives us significantly greater leadership capacity at precisely the time we're asking the organization to take another step forward. Her immediate priorities include driving greater consistency across centers, strengthening center level accountability, Improving our use of Epic across the entire interdisciplinary care team, improving the participant experience, and building the operating and analytical capabilities necessary to support our next phase of growth. There are several investments underway in fiscal 2027 that illustrate how we're thinking about InnovAge 3.0. Let's start with participant experience. We're investing in a more connected participant experience across the entire journey. including how participants and families communicate with us, receive information, schedule care, and understand what to expect. Our Participant 360 and Voice of the Customer initiatives, along with investments in omnichannel communication technology, enhanced integration of inbound calls, scheduling and transportation, are aimed at creating a more consistent and seamless experience across our centers. Next, our technology and data infrastructure. Over the last few years, we've made substantial investments in systems including Epic, Oracle, and Salesforce. The opportunity is to make those systems work more effectively together and make the information they contain more useful to the people delivering care. At the center of the PACE model is the interdisciplinary care team. These teams continuously evaluate participants and identify opportunities for small, proactive interventions that can prevent much larger clinical events. We have an opportunity to surface better information and insights directly into their workflows so our teams can make more informed decisions earlier. We also have an opportunity to get significantly more value from Epic. During fiscal 2027, we're working to expand and standardize scheduling, visit types, and documentation across interdisciplinary teams. This should give us greater visibility into capacity, productivity, and care delivery patterns while also strengthening clinical and compliance oversight. The third area is artificial intelligence. We're approaching AI pragmatically and with discipline with appropriate human oversight and accountability built into how these tools are developed, tested, and used. Every use case must answer a basic question. Can it help us improve care, improve the participant experience, reduce administrative burden, or help operate our centers more efficiently? If it can, we test it, we measure it, and if the results justify it, we scale it. We're particularly encouraged about the potential for AI-enabled physician decision support. We recently completed pilots of two capabilities designed to give our clinicians better information and insights directly within their existing workflows, while keeping clinical judgment and decision-making firmly with the provider. The first is an AI-enabled consultation agent. Designed specifically around the complexities of frailty in geriatric care. It is intended to provide our primary care physicians with on-demand clinical information and specialist level perspectives to inform their evaluation of a participant. In our pilot, the tool helped physicians manage a broader range of clinical needs within the interdisciplinary care team. It was associated with fewer external specialist referrals. We also piloted a medication optimization agent that reviews a participant's medication regimen in the context of their broader clinical information and services potential opportunities for medication and dosing optimization for the clinician to consider. Both pilots demonstrated the concepts in a controlled environment. And we are now beginning to scale these capabilities more broadly across the organization. It's still too early to quantify their impact on quality, utilization, or economics. We also have several additional AI use cases in development that we expect to pilot over time. Scheduling and transportation are other good examples. Transportation is fundamental to PACE and extraordinarily complex operationally. We coordinate thousands of trips for participants with different clinical needs across large geographic areas while simultaneously coordinating center schedules, outside medical appointments, and care team capacity. We believe AI and better analytics can help us anticipate demand, improve routing and scheduling, reduce cancellations, and make better use of the capacity we already have. Taken together, we expect these investments to translate into measurable improvements in the performance of the business, not just new capabilities. A better and more consistent participant experience should improve satisfaction and retention, reduce voluntary disenrollment, and support stronger net census growth Better data, analytics, and clinical decision support should help our care teams intervene earlier, limit unnecessary utilization, and more effectively manage the total cost of care. There's also something occurring outside of InnovAge that I believe is valuable to the long-term story. The level of federal interest in PACE feels as strong as it has been at any point in recent years. We see this developing along two parallel tracks. The first is the existing PACE program. There is meaningful work underway with CMS, CMMI, the National PACE Association, and PACE organizations to better understand the barriers that have historically limited the growth and adoption of PACE and could responsibly allow the existing program to serve more seniors. We believe this is an important conversation. PACE has demonstrated that a fully integrated, full-risk model can produce strong outcomes for highly complex seniors while helping them remain safe in their homes and communities. Yet PACE continues to serve only a small portion of the population that could potentially benefit from the program. So understanding barriers to growth, whether they involve awareness, enrollment, eligibility, program requirements, development timelines, or other structural issues, is essential if the country wants more seniors to have access to the model. The second track is more exploratory. There are productive conversations occurring with CMS and CMMI both directly with individual PACE organizations and through the National PACE Association about whether some of the capabilities and attributes that make PACE successful could potentially be applied to additional senior populations. These conversations are still early. We don't know where they will lead, whether they will result in a new model, or on what timeline. We're therefore being appropriately measured about it, but we're honored to be a part of the dialogue and to provide our experience, ideas and feedback. And I think the two tracks should be considered together. The first question is how we strengthen the existing PACE program and responsibly remove barriers that prevent it from serving more eligible seniors today. The second question is whether elements of PACE's core model could extend to other populations. Both reflect a broader question facing the US healthcare system. How do we care for a rapidly growing senior population with increasingly complex medical and social needs in a way that produces better outcomes and allows more people to remain in their homes and communities? Our view is that PACE organizations have an important role to play in that conversation. Earlier this year, HHS's Office of the Assistant Secretary for Planning and Evaluation released a study examining outcomes across integrated care models for individuals eligible for both Medicare and Medicaid. Among its findings, PACE participants experienced fewer hospitalizations and emergency department visits and lower mortality than comparable beneficiaries in non-integrated Medicare Advantage plans. We also had the privilege of hosting HHS Secretary Robert F. Kennedy, Jr. at our Thornton, Colorado center. where he was able to see firsthand how an interdisciplinary team brings medical care, long-term services and supports, transportation, nutrition, and social services together around the participants. We don't know where any policy discussions may lead, and our outlook does not assume any changes to the PACE program or future opportunities. But the combination of growing evidence supporting the model, an aging population, increasing pressure on institutional care, and a high level of engagement from federal policymakers makes this a key moment for PACE. Let me now turn to fiscal 2027. We're targeting ending census of approximately 8,625 to 8,850 participants, representing census growth of approximately five to 7.5%, total revenue of approximately 1.05 billion to 1.085 billion, and adjusted EBITDA of approximately $105 million to $115 million. I think it's important to put this guidance in context. On our last call, we discussed our expectation that the fiscal 2027 rate environment would be more tempered than we experienced during fiscal 2026. We now have better visibility and overall the rate environment has continued to trend better than we expected when we gave initial guidance. This provides some additional support to our top line out. Like many states across the country, some of our state government partners are navigating meaningful fiscal pressures, and the implications of our rates are not yet fully known. California and Colorado are two markets where we have worked with our state partners in the pace rate setting processes, which have yet to conclude. We've incorporated what we believe are responsible assumptions into our fiscal 2027 outlook based on the information available to us today, while recognizing that the ultimate rate outcomes are not yet final. Together, California and Colorado represent approximately 70% of our census. On Medicare, we currently expect our accounting rate increases adjusted for the continuing transition of the V-28 risk adjustment model to result in a net rate increase of approximately 1.5 to 2.0%. Ben will provide more detail on the components of our guidance. From my perspective, the main point is that fiscal 2027 gives us an opportunity to demonstrate the increasing durability of the business. We will not have all the same rate increases that contributed to fiscal 2026. Our ability to continue growing earnings in fiscal 2027 will therefore depend increasingly on execution. That means growing enrollment and improving retention, tightening our management of utilization and total cost of care, reducing variation across our centers, and using technology and AI with the goal of operating the company more efficiently and effectively. Before I turn the call over to Ben, I want to recognize the approximately 2,500 Inn of Age colleagues who made fiscal 2026 possible. Behind every metric we report is a participant whose life is affected by the care we provide. It's a senior who can remain living in his or her home and community. It's a family with greater peace of mind. It's a caregiver who knows there's an interdisciplinary team managing the complexity of their loved one's care. That is our purpose. Today, we're operating from a very different position than we were four years ago. We have a stronger organization, a stronger leadership team, a more capable operating platform, greater financial capacity, and considerably better visibility into the business. We have demonstrated an ability to execute consistently over several years. And throughout it all, quality, compliance, and the well-being of our participants remain the foundation of everything we do. We're excited about fiscal 2027 and increasingly confident in the longer-term opportunity ahead of the company. With that, I'll turn it over to Ben for more detail on the financials. Thank you, Patrick.