InnovAge Holding Corp. (INNV): Business Model Canvas [Dec-2025 Updated]

You're digging into how InnovAge Holding Corp. (INNV) actually makes money managing care for frail seniors, and honestly, it's a fascinating, high-stakes model that few public companies run. Their entire operation hinges on the Program of All-inclusive Care for the Elderly (PACE), turning fixed monthly capitation payments from Medicare and Medicaid-which generated $853.7 million in total revenue for fiscal year 2025-into coordinated medical and social support, all while trying to keep those complex patients out of expensive nursing homes. It's a tightrope walk between managing high utilization risk and delivering that promised high-touch, age-in-place value proposition across their 20 centers; let's break down the nine blocks of this unique business engine below.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Key Partnerships

You're looking at how InnovAge Holding Corp. builds its value by working with other key players in the complex senior care ecosystem. The entire Program of All-Inclusive Care for the Elderly (PACE) model hinges on these relationships, especially with government payors and local health systems.

The core of InnovAge Holding Corp.'s operations relies on direct contracts with government agencies, which is a key differentiator from models that rely on third-party administrators. InnovAge Holding Corp. directly contracts with Medicare and Medicaid on a PMPM (Per Member Per Month) basis, receiving 100% of the pooled capitated payment to manage all healthcare needs for its participants. This structure aligns incentives for value-based care delivery.

InnovAge Holding Corp. is positioned as a market leader in PACE, serving approximately 7,890 participants across 20 centers in six states as of September 30, 2025. The company actively engages in rate discussions with these government partners, using empirical data to demonstrate the value delivered, which they believe results in meaningful savings for government partners.

Here's a quick look at the scale and financial assumptions tied to these government partnerships:

• Estimated average annual revenue opportunity per participant: $115,000.
• Estimated average monthly revenue per participant (PMPM): $9,600.
• Estimated cost savings for government partners compared to traditional care: 12% lower on average.
• Total revenue for the first quarter of fiscal year 2026 (ended September 30, 2025): $236.1 million.

The relationship with third-party medical specialists and hospitals is critical because the PACE model requires InnovAge Holding Corp. to coordinate and manage all aspects of a participant's health, including external care. While InnovAge Holding Corp. directly provides many services in-center and in-home, access to high-quality external specialists and hospital networks is necessary for comprehensive care management.

A significant example of this is the joint venture with Tampa General Hospital (TGH) to expand PACE access in the Tampa Bay region, covering Hillsborough, Pasco, and Hernando counties. This partnership unites InnovAge Holding Corp. with TGH, which is recognized as the #1 hospital in the Tampa Bay region for the 10th consecutive year and is the region's only academic health system. The InnovAge Florida PACE-Tampa center, part of this collaboration, is sized to serve approximately 1,300 seniors. Patrick Blair, CEO of InnovAge Holding Corp., noted that this integrated model helps reduce the burden on state and federal partners.

The following table summarizes key quantitative aspects of these primary external and governmental relationships:

Partner Type	Specific Entity/Program	Key Metric	Value/Data Point
Government Payor	Medicare & Medicaid (CMS)	Contracts Basis	PMPM (Pooled Capitated Payment)
Government Payor	Medicare & Medicaid (CMS)	Estimated Annual Revenue per Participant	$115,000 (or $9,600 PMPM)
Government Payor	Medicaid Comparison	Estimated Cost Savings vs. Traditional Care	12% lower
Hospital Partner	Tampa General Hospital (TGH)	Joint Venture Focus	Expanding PACE access in Tampa Bay
Hospital Partner	InnovAge Florida PACE-Tampa	Center Capacity	Approximately 1,300 seniors
Overall Scale	All Centers (as of 9/30/2025)	Total Participants Served	Approximately 7,890

For participant outreach and support, InnovAge Holding Corp. relies on local community organizations to help connect with seniors and integrate them into the care model, though specific financial or volume data on these local partnerships isn't detailed in recent public filings. Similarly, medication management is handled internally or through contracted services, often involving Pharmacy Benefit Managers (PBMs), which are integral to controlling the cost of care within the capitated payment structure, but specific PBM contracts or financial terms are not publicly disclosed.

The company's ability to manage medical costs effectively is a key component of its value proposition to these partners. For instance, the Center-level Contribution Margin for fiscal year 2025 reached 18% of revenue.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Key Activities

You're looking at the core engine of InnovAge Holding Corp., the activities they absolutely must nail to make this whole Program of All-inclusive Care for the Elderly (PACE) model work financially. It all comes down to managing that fixed, per-member payment against the actual cost of care.

Managing the fully-capitated PACE (Program of All-inclusive Care for the Elderly) model

The entire financial structure rests on successfully managing the capitation payments. InnovAge Holding Corp. is the nation's largest provider by participants served, which means the scale of this activity is significant. For the fiscal year ended June 30, 2025, the company generated total revenue of $853.7 million, up approximately 11.8% from 2024, driven by these capitation rates and member months. The core financial metric reflecting this management is the Center-level Contribution Margin, which for the third quarter of fiscal year 2025 hit $40.7 million, representing an 18.7 percent margin of revenue. This margin is what's left after paying for all medical and pharmacy costs, excluding depreciation and amortization, so it's the direct measure of capitated care profitability.

Delivering integrated, interdisciplinary clinical and social care

Delivering this integrated care involves constant optimization of where services are delivered. A key operational shift noted in Q3 FY2025 was the transition of external hospice care services to internal clinical resources. This move is a direct activity aimed at capturing more of the revenue internally and controlling the cost structure associated with high-acuity services. InnovAge Holding Corp. serves seniors across six states and, as of September 30, 2025, was managing care for approximately 7,890 participants.

Controlling medical utilization and external provider costs

This is where the rubber meets the road for the capitated model. InnovAge Holding Corp. actively works to reduce the over-utilization of high-cost settings. For the third quarter of fiscal year 2025, the company incurred $107.9 million in external provider costs, which was kept essentially flat quarter-over-quarter at $108 million dollars despite seasonal illness pressures. The improvement in cost per participant was directly linked to a decrease in utilization for:

• Assisted living.
• Permanent nursing facilities.
• Short stay skilled nursing facilities.
• External hospice care.

Enrollment and eligibility management, including Medicaid redeterminations

The pipeline of new members is critical for census growth. InnovAge Holding Corp. has been focused on streamlining the front end of this process. During the second quarter of fiscal year 2025, the company specifically invested in technology to track and manage lead submissions in real time and developed new tools to improve the accuracy and efficiency of assessing financial eligibility. This focus helps ensure a steady flow of eligible participants into the model, supporting the reaffirmed fiscal year 2025 guidance for an ending census between 7,300 and 7,750 participants.

Operating and expanding the network of 20 PACE centers

The physical footprint is a major Key Resource that supports Key Activities. InnovAge Holding Corp. operates and expands its network of PACE centers, which are embedded in the communities they serve. As of the end of fiscal year 2025 (June 30, 2025), the network consisted of 20 centers across six states, serving approximately 7,740 participants. The company is focused on responsible growth, aiming to open new centers to meet growing demand.

Here are the key operational snapshots from the latest reported periods:

Metric	Period Ending March 31, 2025 (Q3 FY2025)	Fiscal Year Ended June 30, 2025 (FY2025)	Period Ending September 30, 2025 (Q1 FY2026)
Participants (Census)	Approximately 7,530	Approximately 7,740	Approximately 7,890
Number of Centers	20	20	20
States of Operation	Six	Six	Six
Total Revenue	$218.1 million	$853.7 million	Data not fully reported in search snippets
External Provider Costs	$107.9 million	Data not fully reported in search snippets	Data not fully reported in search snippets
Center-Level Contribution Margin	$40.7 million (18.7% margin)	Data not fully reported in search snippets	Data not fully reported in search snippets

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Key Resources

You're looking at the core assets that InnovAge Holding Corp. relies on to deliver its Program of All-inclusive Care for the Elderly (PACE) model. These aren't just line items; they are the physical, human, and contractual foundations of the business.

The physical footprint is significant, representing a commitment to a specific geographic footprint where the dual-eligible senior population is concentrated. This scale is a key differentiator in the PACE space.

The financial health, as of the most recent reporting, shows a solid liquidity position to support ongoing operations and growth initiatives.

Here's a breakdown of the tangible and intangible assets InnovAge Holding Corp. deploys:

• 20 vertically integrated PACE centers across six states.
• Proprietary technology, including the completed rollout of the Epic EMR system and the Oracle Financial Platform.
• Capitation contracts with Medicare and Medicaid payors, forming the primary revenue mechanism.
• A dedicated team of Clinical staff: physicians, nurses, therapists, and social workers.

The balance sheet strength as of the first quarter of fiscal year 2026 provides a cushion. Here's the quick math on the liquid assets reported for Q1 FY26:

Resource Category	Specific Item	Amount (as of Q1 FY26)
Financial Assets	Cash and Equivalents	$67.1 million
Financial Assets	Short-Term Investments	$42.3 million
Financial Assets	Total Cash and Short-Term Investments	$109.4 million
Operational Footprint	Total PACE Centers	20
Operational Footprint	States of Operation	Six

The contracts themselves are a critical resource. InnovAge Holding Corp. generates revenue based on fixed per-member, per-month payments (capitation rates) from Medicare and Medicaid, which is a direct reflection of the value of these payer relationships.

The clinical team is the engine of the value proposition. Their expertise in managing complex, frail senior populations directly impacts medical cost containment, which is key to margin performance under the capitation model. What this estimate hides is the specific headcount, but the roles themselves are non-negotiable resources for the model.

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Value Propositions

You're looking at the core reason why government payors and families choose InnovAge Holding Corp. The value proposition centers on delivering comprehensive, high-acuity care outside of expensive institutions. It's about making the Program of All-inclusive Care for the Elderly (PACE) work financially and clinically for everyone involved.

Enables frail seniors to age in place safely and independently. This is the mission driving the entire operation. As of September 30, 2025, InnovAge Holding Corp. was serving approximately 7,890 participants across 20 centers in six states, demonstrating their scale in keeping seniors home. Throughout its history, the company has served over 25,000 enrolled seniors.

All-inclusive, coordinated medical and social care under one roof. InnovAge Holding Corp. bundles all needed medical and ancillary services into one program. This includes primary care, physical therapy, dental, and behavioral health care services, plus 24/7 in-home support. For participants with Medicare and Medicaid coverage, all needed care comes at no cost, with no premiums, co-pays, or deductibles.

Reduces over-utilization of high-cost settings like nursing homes. This is where the clinical model translates directly into financial value for the payors. InnovAge Holding Corp. reported that external provider costs per participant fell by 7.6% in the first quarter of fiscal year 2026, a direct result of better clinical risk management and lower utilization of high-cost services like nursing facilities.

The operational success in managing utilization is reflected in the company's profitability metrics, showing the model is working as designed:

Metric	Value as of Late 2025	Reporting Period
Participants Served (Census)	7,890	September 30, 2025
Total Revenue	$853.7 million	Fiscal Year Ended June 30, 2025
Center-level Contribution Margin	$51.4 million	Q1 FY2026 (Ended Sept 30, 2025)
Center-level Margin Percentage	21.8%	Q1 FY2026 (Ended Sept 30, 2025)
External Provider Cost Reduction	7.6%	Q1 FY2026

Improved quality of life and health outcomes for complex needs. The focus on coordinated care is designed to improve participant quality of care. The financial evidence supporting this is the growing Center-level Contribution Margin, which reached 21.8% of revenue in the first quarter of fiscal year 2026, up from 16.8% in the third quarter of fiscal year 2025.

Predictable, fixed cost of care for government payors. InnovAge Holding Corp. receives capitation payments, meaning the government payors pay a fixed amount per participant, regardless of the actual services used, provided they are within the scope of the PACE program. This shifts the financial risk and rewards the company for keeping seniors healthy and out of the hospital. The company's total revenue for the fiscal year ended June 30, 2025, was $853.7 million, overwhelmingly driven by these capitation payments.

The value proposition is summarized by these key operational facts:

• The model is designed to improve quality while reducing high-cost settings.
• The company is the nation's largest provider of PACE based on participants served.
• Income Before Income Taxes for Q1 FY2026 was $7.9 million, a significant turnaround from a loss in the prior year period.
• The company's patient-centered care model is one where participants, families, providers, and government payors all "win".

Finance: draft Q2 FY2026 revenue forecast based on current census run-rate by next Tuesday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Customer Relationships

InnovAge Holding Corp. serves its customer segment, high-cost, frail, predominantly dual-eligible seniors, through a patient-centered care model known as the Program of All-inclusive Care for the Elderly (PACE). This model is designed to improve care quality while reducing the over-utilization of high-cost settings like hospitals and nursing homes.

The relationship is built on continuous, long-term engagement, aiming to enable older adults to age independently in their own homes for as long as safely possible. This integrated care includes skilled home care, in-center services, and robust care management programs that address both medical and social needs.

As of September 30, 2025, InnovAge Holding Corp. served approximately 7,890 participants across 20 centers in six states. This census reflected growth of 9.4% year-over-year and 1.9% sequentially as of that date.

The operational execution of this relationship model shows tangible results in cost management. For the first quarter of Fiscal Year 2026, which ended September 30, 2025, external provider costs per participant fell by 7.6%, driven by lower utilization of high-cost services. The Center-level Contribution Margin for that same period was $51.4 million, representing 21.8% of revenue.

The structure of the relationship involves:

• High-touch, personalized care management via an interdisciplinary team.
• Direct engagement through daily/weekly center visits and home care.
• Continuous, long-term relationship focused on holistic well-being.
• A dedicated care team for each of the 7,890 participants as of 9/30/25.

You can see the scale of the participant base and the resulting financial contribution in the table below:

Metric	Value	Date/Period
Total Participants (Census)	7,890	As of 9/30/2025
Year-over-Year Census Growth	9.4%	As of 9/30/2025
Sequential Quarter Census Growth	1.9%	As of 9/30/2025
Number of Centers	20	As of 9/30/2025
Center-level Contribution Margin	$51.4 million	Q1 FY2026 (ended 9/30/2025)
Center-level Contribution Margin as % of Revenue	21.8%	Q1 FY2026 (ended 9/30/2025)
External Provider Costs per Participant Change	Fell by 7.6%	Q1 FY2026 (ended 9/30/2025)

The company's mission centers on maximizing participant independence, which is the core of the relationship. This patient-centered approach is how InnovAge Holding Corp. gets paid-through capitation payments-and it's a defintely strong model for cost control.

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Channels

You're looking at how InnovAge Holding Corp. gets its high-touch, integrated care model directly to its frail, dual-eligible seniors. The channels are all about access and proximity, which is everything when you're dealing with a population that can't easily navigate traditional healthcare.

The physical infrastructure is the backbone. InnovAge Holding Corp. relies on its dedicated Program of All-inclusive Care for the Elderly (PACE) centers. As of the end of the first quarter of fiscal 2026, specifically September 30, 2025, the company was operating 20 centers across six states.

Here's a quick look at the scale of their physical footprint and participant base as of that latest reporting date:

Metric	Value as of September 30, 2025
Number of PACE Centers	20
Number of States Operating In	6
Total Participants Served (Approximate)	7,890
Participants Served (As of June 30, 2025)	Approximately 7,740

The physical center is the primary hub, but getting participants there is a key channel component. InnovAge Holding Corp. uses its own transportation resources to manage participant travel to and from these centers. This isn't just a bus ride; the service is described as 'door-through-door,' meaning drivers escort the participant from their home, ensure they are safely seated on the transportation buses, and then deliver them into the hands of the InnovAge center team members. Also, these drivers are integrated into the care loop, often delivering medications and medical supplies.

Beyond the fixed centers, the model extends into the community to find and enroll eligible seniors. This involves several outreach mechanisms that act as crucial access points:

• Community-based outreach programs targeting potential members.
• Established referral networks with hospitals, long-term care facilities, and social service agencies.
• Direct engagement with government payors and local advocacy groups.

Finally, for those participants who are truly homebound and cannot travel to a center, the channel shifts entirely to the home. InnovAge Holding Corp. integrates in-home care services as a core part of the service delivery. This ensures that the 'All-inclusive' promise is met, even when the participant cannot physically reach the center for day services. This often involves the interdisciplinary team coordinating 24-hour care support, including after-hours nursing care, which is delivered directly to the participant's residence.

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Customer Segments

You're looking at the core group InnovAge Holding Corp. serves, which is the foundation of their Program of All-inclusive Care for the Elderly (PACE) model. This segment is defined by high need and specific payer characteristics.

• Frail seniors, aged 55 and older, requiring nursing home-level care, as the PACE model serves as an alternative to institutional settings.
• Individuals who are predominantly dual-eligible, meaning they qualify for both Medicare and Medicaid benefits.
• Seniors residing within the defined service areas of InnovAge Holding Corp.'s operational footprint.

As of the close of the first quarter of fiscal year 2026, on September 30, 2025, InnovAge Holding Corp. was serving approximately 7,890 participants. This population is concentrated across their network of centers.

Metric	Value as of September 30, 2025
Total Participants (Census)	Approximately 7,890
Number of Centers	20
Number of States Served	Six

The geographic concentration of these customer segments is spread across the states where InnovAge Holding Corp. operates its centers. The model is designed to keep these high-cost, frail individuals safely in their homes and communities.

• Service areas include:
  • California
  • Colorado
  • Florida
  • New Mexico
  • Pennsylvania
  • Virginia
• The company is noted as the nation's largest provider of PACE based on participants served.

For context on the scale of care provided in the most recent reported quarter (Q1 FY2026), total revenues were $236.1 million, reflecting the capitation-based revenue model tied directly to this specific customer segment's enrollment.

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Cost Structure

You're looking at the core expenses InnovAge Holding Corp. incurs to deliver its PACE (Program of All-Inclusive Care for the Elderly) services. These costs are heavily weighted toward direct care delivery, which is typical for a healthcare provider taking on full financial risk for its members.

High variable costs are the most significant component of the cost structure, directly scaling with the number of participants (census) and the acuity of care required. These are broken down into two main categories:

• High variable costs: External provider costs, which were $107.9 million during the third quarter of fiscal year 2025 (Q3 FY25).
• High variable costs: Cost of care, excluding depreciation and amortization, which totaled $69.5 million in Q3 FY25.

The cost of care figure includes expenses like salaries, wages, and benefits for Interdisciplinary Team (IDT) and other center-level staff, participant transportation, medical supplies, and occupancy costs.

To give you a clearer picture of these major cost drivers for Q3 FY25, here is a quick look at the key figures:

Cost Category	Amount (Q3 FY25)	Notes
External Provider Costs	$107.9 million	Costs for medical care provided by non-InnovAge providers.
Cost of Care (excl. D&A)	$69.5 million	Includes IDT staff costs, transportation, medical supplies, etc..
Corporate, General & Administrative (G&A) Expenses	$38.6 million	Overhead costs not directly allocated to centers.
De Novo Center Losses (Q3 FY25)	$3.5 million	Net losses from pre-opening and start-up ramp for new centers.

Fixed costs relate to maintaining the infrastructure and corporate functions necessary to support operations. InnovAge Holding Corp. operated 20 PACE centers as of March 31, 2025. The administrative overhead supporting these centers is captured in the Corporate, General, and Administrative expenses (G&A). For Q3 FY25, these G&A expenses were $38.6 million. This G&A figure was notably higher year-over-year due to a $10.7 million accrual related to an anticipated stockholder lawsuit settlement recorded in the quarter.

Investment costs are tied to expansion efforts. InnovAge Holding Corp. anticipates de novo losses for the full fiscal year 2025 to be in the $18 million to $20 million range. These losses cover the initial pre-opening and start-up ramp period for new centers. For context, the loss incurred specifically in Q3 FY25 from these de novo centers was $3.5 million.

The final category, Corporate, General, and Administrative expenses (G&A), represents the fixed corporate costs. As noted, these hit $38.6 million in Q3 FY25. These costs are generally not allocated to the centers when calculating Center-level Contribution Margin, which is a key internal metric for InnovAge Holding Corp..

Finance: draft 13-week cash view by Friday.

InnovAge Holding Corp. (INNV) - Canvas Business Model: Revenue Streams

You're looking at the core of how InnovAge Holding Corp. brings in money, which is heavily concentrated in government-backed healthcare programs. For InnovAge, the revenue engine is almost entirely driven by managing care for frail seniors under specific payment models.

The primary source for InnovAge Holding Corp. (INNV) revenue is capitation payments from Medicare and Medicaid. This is the foundation of their Program of All-inclusive Care for the Elderly (PACE) model.

The total revenue for the fiscal year 2025, which ended June 30, 2025, was reported at $853.7 million. More precisely, the reported total revenues were $853,699 thousand.

The structure of this income is key: revenue is fixed per member per month (PMPM), meaning InnovAge Holding Corp. receives a set amount for each participant each month, regardless of how much healthcare the member actually uses. This creates a strong incentive for excellent preventative care and utilization management.

The outline specifies that the capitation revenue for the nine months ended March 31, 2025, was $631.3 million.

To give you a clearer picture of the revenue composition around that time, here is a breakdown of the most recent quarterly and annual figures available:

Revenue Metric	Amount (in thousands)	Period End Date
Total Revenues (Fiscal Year)	$853,699	June 30, 2025
Capitation Revenue (Fiscal Year)	$852,353	June 30, 2025
Total Revenues (Quarter)	$236,105	September 30, 2025
Capitation Revenue (Quarter)	$235,751	September 30, 2025
Total Revenues (Quarter)	$218,100	March 31, 2025

Also, InnovAge Holding Corp. generates minor revenue from Veterans Administration (VA) and private pay sources, though the vast majority is government-sourced capitation.

You can see the dominance of the capitation model in the quarterly results:

• Capitation revenue for the three months ended September 30, 2025, was $235.8 million.
• This represented a 15.1% increase year-over-year for that quarter.
• The increase was driven by a 4.7% increase in capitation rates and a 9.9% increase in member months.
• Capitation rates for that period included a 7.9% annual increase in Medicaid rates and a 3.7% increase in Medicare rates.

The reliance on government payors means that changes in Medicaid and Medicare reimbursement rates, which are often set annually effective January 1st, directly impact the top line. For instance, the increase in capitation rates for the quarter ending March 31, 2025, was driven by annual rate increases in California and Pennsylvania, plus a Medicare rate increase, all effective January 1, 2025.

Finance: draft 13-week cash view by Friday.