All right, hello and good afternoon. Thank you for joining us for the InnovAge Presentation. My name is Matthew Gillmor, and I cover healthcare services for KeyBanc. Joining me on screen is InnovAge's CEO, Patrick Blair, CFO, Ben Adams, and Director of Investor Relations, Ryan Kubota. InnovAge is a leading operator within the PACE market, serving dually eligible seniors in a comprehensive value-based care model. The company serves approximately 7,500 patients across 20 centers in six states. This will be a fireside chat presentation, so I'll lead the Q&A. If you have questions, there's a box to submit it, and we'd welcome your questions at any time. With that, Patrick, Ben, and Ryan, welcome, and thank you for joining us. Thank you. We're excited to be here. I have been attempting to start these conversations at a higher level before I torture you with some financial and policy questions. I really did want to start off sort of at the highest level in terms of explaining PACE. I think it's a really interesting and important subsector, but it's still somewhat new to the investment community. I know you've been public for several years, but just given that it's historically been nonprofit and that's changed, I thought we might start there. Patrick, would you mind just starting off with just an overview of the PACE market? What is the value add to the patient and to the healthcare system? Then sort of what is the day in the life of a PACE patient? Sure, sure. In terms of what PACE is, I like to think about it as a comprehensive healthcare program that's made up of both medical and social services that's provided to dual eligibles, but they're, in essence, frail elderly seniors who are nursing home eligible. They have had an assessment, and it's been determined that they meet the qualifications to live in an institution to be paid for by the state. PACE then functions as an alternative. You can think of us both as a provider of care, a care delivery model, as well as a payer of care. In many ways, we look a lot like a value-based care primary care provider with a much broader scope of services than most PACE programs offer. We are also very similar to any other Medicare Advantage plan when we're taking full risk for that care financially. We have to maintain a network of providers that we refer to, hospitals and physician specialists, etc. It is an integrated and comprehensive program that is very personalized to someone's needs. We cover about a third of the total healthcare costs right in our centers. That is much more than a typical value-based care model. Our value proposition really is we provide a personalized scope of services that allow people to stay in their homes or possibly, if they are in an assisted living facility, to stay in that assisted living facility where they prefer rather than to go into an institution. We save the state money from doing that. We do not only support the participants, as we call them, but we also support their family members. That is a big part of what we do, support the family as well. When you think about what we do for a state, I sort of think, what's the value of PACE? First, I think about it as we take better care of people than the government is generally able to do. We save our state partners and the federal government money. We do this by better coordination of services, by promoting continuity of care, tackling high-cost diseases, and all those things allow them to live independently. Because we're taking capitation, we're providing states with budget certainty. We accept that risk-based premium and provide that care. We lower the rate of inflation of medical costs. The compounded value of that lower healthcare cost and lower inflation allows our state partners to finance other services that are important to their constituents. PACE is a really terrific program. It really is a program that you can do well as a business and do good for the community. It really functions as this hub of care for these frail seniors. That is kind of, I think, their value proposition as well as sort of what PACE is. Just to follow up, I'd love for you to describe for the audience the day in the life of a PACE patient, if you would. I think that may kind of really bring it home for folks. Yeah. It can vary depending on their needs, but let's just say it's sort of not uncommon and common that we may have a home care worker be at the home of that individual in the morning. A bus will come to their home. That home care worker could help that individual get out of bed, could help that individual get dressed, could help that individual sort of prepare themselves for the day, and then help that individual out of their home and onto the bus. We bring that individual into the center. Generally, that individual is scheduled to meet with their physician, their social worker, their therapist. Sometimes there's rehab work. Sometimes there's just physical kind of wellness work. Maybe they need to see the dentist. All of that is done once they get to the center. Usually the day kicks off. They'll have a cup of coffee. They'll have breakfast. They'll spend some time with their friends who are also there on that day. They'll be called into their physician's appointment. The physician will be working with them on a care plan and ensuring that all aspects of the plan of care that they agreed to are going well and there aren't any significant changes of condition. They just, in some ways, move through each of those services while they're at the center. Likely, they have lunch at the center as well after all their appointments and after some social time. They get back on the bus at the end of the day. We take them home. We walk them inside. We get them situated. We make sure they're prepared for their evening and have everything they need to ensure their safety at home and know that they need to take their medications, which are very common. It starts again the next day. This happens for all of our participants sometimes two or three days a week. That's our goal. That's great. If you could talk to us about how InnovAge is positioned within this market. I think investors, one of the analogies that they look at is, at least to my knowledge, the last subsector that went from being nonprofit to for-profit was hospice. They draw some parallels to that in terms of the PACE market. Without going through your history of converting, maybe just talk to us about how InnovAge is positioned within the market relative to the competitive set and what are some of the advantages that your scaled business have relative to the average PACE competitor. No, it's a great question. You're right. I mean, there was a conversion from a not-for-profit to a for-profit back in 2016, I believe. Most operators of PACE programs are not-for-profit. If you think about the size of the market, I think there's about 180 PACE programs in 33 states and D.C., but less than 82,000 participants receiving services. We are the largest PACE provider based on the number of participants we serve in our 20 centers across six states. It's very highly fragmented. Most of the operators are not-for-profit. PACE is starting to see a lot of investor interest, even more regulator interest because of the access it provided during the pandemic and the fact that it kept people safe and out of nursing homes during that period of time. PACE is really starting to see some growth. I think the NPA, National PACE Association, is anticipating that over the next three to five years you could see the number of program participants reach 200,000. That is sort of a target that they have worked on. We feel like we are well positioned to get our fair share of that growth in terms of greater awareness of the program. Advantages of our scale, in some ways, I think, if I think it through an investor lens, the advantages of our scale is that we have had to develop a repeatable kind of blueprint that we apply to growing our existing centers, but also integrating in acquisitions and de novo market entries. There really is a blueprint for how to operate effectively in each of those vectors. Because of our size and our capital position, we've been able to make the investments in clinical and operational and financial tools and technology that, frankly, on a unit basis are just too costly for really small PACE programs. A lot of those systems, whether it be Epic for our electronic medical record or Oracle for our financial systems, these are tools that allow us to grow and scale effectively. I think that we're now to the point where we're able to attract some of the best talent in the healthcare industry, regardless of whether they come from a PACE background or not. We're competing for talent in the same places that the large managed care companies are or the large diversified provider organizations are. We're able to really attract industry-leading talent, I think, now. I think that comes from our scale. Our capital structure, I think, also affords us the ability to do things that we think could lead to the company's growth and strategic position going forward. Patrick, I wanted to ask sort of a little bit of a retrospective in terms of your tenure as CEO. You became CEO in the midst of some regulatory scrutiny on the business. My reading of that was a lot of it was about sort of just proper documentation. There have been some admissions holds on some facilities that I think have mostly been lifted at this point. I was hoping you could take a minute to talk about some of the things that you implemented just to kind of clean things up and put the business on a proper footing going forward. If you could just take a minute to talk about that and kind of what you and your team have accomplished the last two years. Sure, sure. If I look back, I kind of divide the last three years ending in calendar year 2024. I divide it up into kind of 18-month periods. That first 18 months was really focused on addressing these audit deficiencies that were identified. There were some fairly significant compliance gaps that we had to address. Certainly, documentation was one of those gaps. We were also at a period where the company had a lot of growth. We brought on a lot of new patients. There were probably more manual processes than you'd like to see in a fast-growing organization. For that first 18 months, we were really focused on looking at all of the business processes and identifying opportunities for automation, process redesign. In some cases, we had individuals with maybe more responsibility than was appropriate at the time. We invested a lot in talent and ensuring that we had the right people and sort of the right jobs. Epic became a big part of how we used that software platform to redesign business process and, in essence, try to take some of the human risk of error in a complex program, remove that, and allow the system to kind of guide us to more compliant and more automated record-keeping and reducing human error. That was a big part of what we did. We also needed just to strengthen our relationships with state officials, with CMS. I think that over time, there were either changes at the states or changes within the company, and maybe some of those relationships were not as strong as they needed to be. I personally spent a lot of time with that. I would say this last 18 months has really been about rebuilding confidence, demonstrating that we are operationally strong and compliant, addressing suboptimal processes. Thanks to the hard work and dedication of the team, I think we find ourselves in a place now, in some ways, really having earned the right to set higher targets for ourselves. We are moving beyond focusing on what was identified as a deficiency in an audit. Now we are really in a position where we are trying to reimagine the work that we do and begin to tackle how we go from good to great. That really gets at this notion of building a stronger PACE platform that can take on a lot of growth and development over the next couple of years. One of the areas where we've seen some strength in the business is just your census growth in terms of the acceleration. I think maybe last quarter for the year was up 10%, which is a great number. Maybe underneath the surface, you've got some newer facilities ramping. I think you also mentioned some investments you've made, there has been some on the sales and marketing as well. Would you mind just taking a couple of minutes and updating us on sort of the drivers of the improvement in your census growth? If you could kind of layer on your kind of capacity utilization today versus where it could be across the portfolio. Yes, yes, definitely. Yes. Sort of the growth engine is something we put a lot of time into. Frankly, there's more work to be done there. One of the things that we first did was really try to increase the awareness of our centers in each of our markets and really to pursue that with a more digital-first kind of marketing strategy. We ultimately began working with some new digital advertising agencies that allowed us to get a lot smarter about targeting potential prospects for our program. We started developing a very robust digital marketing campaign across all the various social channels. We have seen the funnel really increase. The number of people that are expressing an interest in PACE and InnovAge PACE is really increasing. We built an inside kind of small inside sales team because we saw an opportunity to differentiate between the people in the field and what was most important to be doing face-to-face in the field versus what could be done through an inside sort of marketing function. We built an inside sales team that did a really great job. We started building partnerships, stronger partnerships, I think, with referral channels like hospitals and other community-based organizations. I think you've probably seen we recently completed a joint venture with Orlando Health. That has really been an important contributor to the growth in that market and really sets us up for success in the future. We've invested in our CRM tools, customer relationship management, that essentially allow us to track interest in our program from the point of how they might respond to a digital ad all the way through the point that we're doing a financial eligibility assessment on. We're now in a position we can track people all the way through our funnel and try to optimize how quickly people move through the funnel, how much we spend on each sort of layer of the funnel. While we're certainly not at the level of the best Medicare Advantage organizations in this regard, I think we're probably, I'd be hard-pressed to think of any PACE organization that's doing a better job managing their marketing campaigns, managing their acquisition cost, managing their funnel. I think the key for us really, though, is how do we continue to build awareness of PACE? It's still a program that really isn't widely known in the communities. I'm optimistic that as part of the administration's policy work, we are hearing there's a lot of interest in PACE. Whether it becomes a priority, time will tell because they have some very aspirational goals for cost savings. We are a big believer that PACE could be a real tool and attribute to states as they have to deal with a tougher economic environment. Is there a way for us to think about sort of the term I would use is occupancy? I think you guys have the term capacity utilization. Just how does that look across the portfolio and what's sort of the runway to optimize the current set of 20 centers that you have? Yeah, I'll let Ben weigh in on this one as well. What I would say is just generally speaking, across our footprint, think of us as having about 50% capacity. We could more than double our business in the capacity that exists without opening another center. That capacity obviously can vary by center. We have some large new centers that contribute to that capacity in Florida. Overall, we could double the business with our existing capacity. That is why it's a difficult decision for us to think about all the different ways we can grow when we think the most cost-effective thing we could do right now is fill the centers we have because we have capacity. That has really been our focus and probably will remain our focus for the next year or so. We continue to see a lot of opportunity to grow the business in our existing footprint. Coming back to a comment you made earlier, which I think is just so interesting about the company and in the industry broadly, the fact that you directly administer about 35% of the patient cost that you are controlling, those are your employees. The other 65%, because you are sort of a pay-vider model, you have some influence on that. You also have the ability to say, "What does it make sense for us to insource that really matters?" I thought it might be a good idea just to talk a little bit about the areas that you have insourced and what are the benefits to the patients and ultimately InnovAge when you are able to insource something like hospice. Yes. This is an area where we're starting to spend more and more time on it. It won't surprise any of our listeners that as companies are growing quickly, there's generally a bias to speed and a bias to outsourcing, focusing on what you're great at, but then letting others who are great at a particular capability be an outsourced partner to you. That was clearly part of InnovAge's strategy in the past. I think as we started building a stronger platform, started adding more experienced talent, we'd have people join the company and the question would be, "Well, I know how to do hospice. I came from a hospice management company." Or, "I really understand the pharmacy business. We could do more of this ourselves. I really understand the logistics of transportation. We're way too reliant on third parties. I know how to build a home care organization. We're using way too many third parties for home care. Ultimately, we started just building, in some ways, business plans around each of those areas that we outsource. In some cases, the strategy isn't just to insource or outsource. It could be a recalibration of the services that a third party is offering. We absorbed some of what was their scope of services. We absorbed that in-house. With hospice, one of the things that our physicians and nursing teams quickly realized is that so much of hospice is about palliative care. We started building a stronger palliative care capability internally. We had redundancy with an outside partner. We said, "Well, listen, if you want to continue to work with us, we're going to cut back your scope of services." We took on the palliative care elements of a lot of that hospice care. The same was true from pharmacy. Think of us as having to administer the Part D program just like any other Medicare Advantage organization. How we bid and how we're paid is slightly different, but conceptually, we're administering a Part D benefit. We had a combination of three organizations performing some aspect of that. We had an organization that was performing certain PBM functions. We had an organization that was performing certain packaging and distribution functions. We had an organization that was helping us with some of the reporting and the analytics on all of that. Over time, we've really consolidated that. We mentioned in our last earnings call that we purchased a pharmacy in Boulder, a small packaging and distribution pharmacy. That has really become a platform that allows us to take far more control over pharmacy packaging and distribution than we ever had, to do it at a lower unit cost than we were paying for someone else to do for us. We were not giving away, in some ways, our margin to a third party, which is always the case when you are using third parties. Whether it is hospice, home care, transportation, durable medical equipment, or pharmacy, in all of these, we have seen our compliance improve. We have seen our patient outcomes improve. We have seen our patient satisfaction improve. We have reduced costs. We are kind of in a crawl, walk, run mentality. We have just started these things. They are starting to create value for the company. We think there's a lot more value to be created going forward. Yeah. It seems like it's just a really interesting area. Last call, you talked about sort of network management as well. It's just really interesting. We hit on a little bit of growth. We hit on a little bit of the sort of operational strategies. I was going to try to bring some of this home and talk about sort of the margin trajectory and your objectives. I think you're sort of in the 3% margin range today, at least for fiscal 2025, which is our estimate. I think that your targets are 8%-9% over the next two to four years and then 10% four years out, which that'd be really, really great progress. Maybe just help us understand sort of some of the building blocks in terms of if there are sort of chunky opportunities to help sort of spike out what gets you from here to the medium term to the longer term. That would be great. Let me get us started again. If Ben would like to weigh in here, please, Ben, do. What I would say is if you think about the work we've been doing for the last three years, I think it's important just to acknowledge we were in a very intense turnaround period. In some ways, the roadmap of what needed to be done was prescribed for us because we were trying to resolve third-party regulator concerns about the business. We feel very confident that we've done a great job at that. As we look forward, we're thinking more in terms of what are some of the more quantum improvements in our business performance that we can pursue that would allow us to maintain, in some ways, sort of the earnings trajectory of the last 18 months and take that forward into the next couple of years. Some of the things that you can think about there, one is we've made a lot of investments in tools and technology that we invested in them because they would help us with better compliance and better quality of care, but also because there should be a value dividend that they create. We should be able to do the same amount of work or more work with the same number of people or fewer people. I think this notion of, as we grow, not having to add the same level of resources that we had to add as we were sort of fixing or optimizing processes in the company, now we're at a place where we feel like we can start benefiting from some of those investments. I think we're going to spend a lot more time ensuring that we've optimized our human resource investments against the investments we've made to drive better compliance and better efficiency. We also have, like all companies, we've got a lot of variation among our centers. We have centers that are performing orders of magnitude more efficiently than others. The notion of bringing all of our centers up to an internal benchmark, really targeting that over time, can create real value for us. I think that there's a lot of opportunity in some of the outsourcing to insourcing strategies that we've talked about. There's real margin expansion there. The notion of growing within our existing centers as a primary strategy, the sort of marginal profitability of growing in those centers builds and is greater over time. In some ways, the margin profile that we have in fiscal year 2026, I think in Investor Day, we gave a thoughtful kind of projection of how we see that evolving over the next few years. I think we still feel very confident that we can get there over time. I do feel like the tools and technologies that we've made investments in are going to allow us to be more efficient as a company. We're going to start pursuing those efficiencies without the risk of quality or compliance concerns because we've built a solid foundation. Ben, anything you would want to add there? No, I don't think so. I think you've hit most of them. I guess the one thing I'd probably say is we've got a pretty good view of what the roadmap of actions needs to be like over the next couple of years. For us, when we look ahead, it's really more of an issue of timing. When are these initiatives going to hit as opposed to if they're going to hit? We have a very good sense of what will happen to the business. I can't always tell you if it's going to be in Q2 of this year or Q1 of the following year, but we have a lot of visibility in the roadmap. One other I might add, Matt, is this notion of building and maturing our payer capabilities. As I said, we spend a lot of time improving our business as a provider of care. We are starting to spend more time, especially with Michael Scarbrough's arrival as our new President and COO, he's really looking at our business through the lens of a payer. If you think about all the payer functions that can really contribute to margin expansion over time, there's everything from being more effective in state rate setting. You've got, let's just call it sort of risk adjustment, but in many ways, I think of that as just good revenue management, maximizing, make sure that we're paid appropriately for every person we serve, better network management, which allows us to get at lower unit costs where possible, how we engage with providers, contract renegotiations, paying claims accurately and ensuring that we're not paying for any services we shouldn't pay for. There's just a variety of capabilities that the larger managed care organizations leverage each year to bend medical trend. We're just beginning to be thinking about how do we execute on a similar strategy. You bring all those things together, they give us confidence that over the next three years, we're going to see significant improvement in our margins. To Ben's point, knowing how much and what quarter, that's a tough one because we're a small business in many ways still, and the denominator is small. You are just going to see some fluctuations quarter to quarter, but year to year, I think we're on a really great track. This will take us a minute over. I apologize. Hopefully, this is okay. Would you mind just saying a comment or two on policy? It did not seem like there was a lot of focus on PACE, but anything kind of you are paying attention to that is worthy to call out? I don't think there is. We're not hearing any specific risk to PACE. I think our biggest risk at this point is related to any broad FMAP reductions across the board. I think across the board, reductions appear to be off the table, but maybe reducing FMAP for expansion populations is an example. Which you don't have any exposure to. We do not have any exposure to that. At the same time, the House and the Senate, I think, are still a long way from agreement on the method of the cuts that they want to make. We have to be prepared that as states have to tighten their belts, it could have a knock-on effect to us through rates. At the same time, we know that the federal and the state really love PACE and really want to preserve PACE and ensure it is a viable, well-funded program. We will manage things as they come, but nothing right now that is too targeted that we are concerned about. That's great. I think we need to leave it there before they take the hook out and move us on. Team, I really appreciate you being here. Thanks for your time. It was a great update. Thank you. Thanks, Matt.