#1Inovalon JPMorgan Healthcare Conference 2020 January 14, 2020 inovalon#2Cautionary Note Regarding Forward-Looking Statement Certain statements contained in this presentation constitute forward-looking statements within the meaning of, and are intended to be covered by the safe harbor provisions of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this presentation other than statements of historical fact, including but not limited to statements regarding the roll-out of any product or capability, the timing, performance characteristics and utility of any such product or capability, and the impact of any such product or capability on the healthcare industry, future results of operations and financial position, business strategy and plans, market growth, and objectives for future operations, are forward- looking statements. The words "believe," "may," "see," "will," "estimate," "continue," "anticipate," "assume," "intend," "expect," "project," "look forward," "promise" and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this presentation include, but are not limited to, statements regarding the expected benefits and impact of the combination of Inovalon and ABILITY, including the expected accretive effect of the merger on Inovalon's financial results, expectations about future business plans, prospective performance and opportunities, strategies and business plans, expectations regarding future results, expectations regarding the size of our datasets, expectations regarding implementation timeframes, our ability to meet financial uidance for the fourth quarter 2019 and full years 2019 and 2020, our ability to pay down outstanding indebtedness, expectations regarding tax rates, and statements with respect to visib revenue retention, and recurring revenue, including ACV. Inovalon has based these forward-looking statements largely on current expectations and projections about future events and trends that may affect financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs as of the date of this presentation. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, which could cause the future events and trends discussed in this presentation not to occur and could cause actual results to differ materially and adversely from those anticipated or implied in the forward-looking statements. These risks, uncertainties, and assumptions include, among others: the Company's ability to continue and manage growth, including successfully integrating acquisitions, including ABILITY; ability to grow the client base, retain and renew the existing client base and maintain or increase the fees and activity with existing clients; the effect of the concentration of revenue among top clients; the ability to innovate new services and adapt platforms and toolsets; the ability to successfully implement growth strategies, including the ability to expand into adjacent verticals, such as direct to consumer, growing channel partnerships, expanding internationally and successfully pursuing acquisitions; the ability to successfully integrate our acquisitions and the ability of the acquired business to perform as expected; the successful implementation and adoption of new platforms and solutions, including the Inovalon ONE® Platform, ScriptMed® Cloud, Clinical Data Extraction as a Service (CDEaaS™M), Natural Language Processing as a Service (NLPaaSTM), and Elastic Container Technology (ECT™M); the possibility of technical, logistical or planning issues in connection with the Company's investment in and successful deployment of the Company's products, services and technological advancements; the ability to enter into new agreements with existing or new platforms, products and solutions in the timeframes expected, or at all; the impact of pending M&A activity in the managed care industry, including potential positive or negative impact on existing contracts or the demand for new contracts; the effects of and costs associated with compliance with regulations applicable to the Company, including regulations relating to data protection and data privacy; the effects of changes in tax laws in the jurisdictions in which we operate; the ability to protect the privacy of clients' data and prevent security breaches; the effect of competition on the business; the timing, size and effect of business realignment and restructuring charges; and the efficacy of the Company's platforms and toolsets. Additional information is also set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 20, 2019, included under the heading Item 1A, "Risk Factors," and in subsequent filings with the SEC. In addition, graphics, images or illustrations pertaining to or demonstrating our products, data, services and/or technology that may be used herein are intended for illustrative purposes only unless otherwise noted. The Company is under no duty to, and disclaims any obligation to, update any of these forward-looking statements after the date of this presentation or conform these statements to actual results or revised expectations, except as required by law. Non-GAAP Financial Measures This presentation contains certain non-GAAP measures. These non-GAAP measures are in addition to, not a substitute for or necessarily superior to, measures of financial performance in accordance with U.S. GAAP. The GAAP measure most closely comparable to each non-GAAP measure used or discussed, and a reconciliation of the differences between each non-GAAP measure and the comparable GAAP measure, is available herein and within our public filings with the SEC. All data provided is as of September 30, 2019 unless stated otherwise. INOV Investor Presentation (1.14.20) v1.0.0 2#3Contents JPMorgan Healthcare Conference 2020 INOV Investor Presentation (1.14.20) v1.0.0 1 Overview 2 Financials 3 Conclusion 4) Appendix 3#4Strong Performance In 2019... With Strong Momentum Continuing In 2020... * All numbers refer to year-over-year change to 2019 guidance as provided by the Company on October 30, 2019, unless otherwise stated. INOV Investor Presentation (1.14.20) v1.0.0 59% Primary-Source Datasets Growth to 48 Billion Medical Events, compounded annually from Q3 2016 to Q3 2019 Adj EBITDA Growth of 38% to 42% to $209M to $215M Representing a 33% Adjusted EBITDA Margin Revenue Growth of 21% to 22% On an as reported basis, with Organic Revenue Growth of 13% to 14% Operating Cash Flow increase of 44% to 60% to $130M to $145M#5inovalon® Inovalon is a leading provider of cloud- based platforms empowering data-driven healthcare. Inovalon provides cloud-based, real-time connectivity, analytics, intervention, and data visualization solutions for hundreds of the nation's leading health plans, pharmacy organizations, life sciences companies, and more than 50,000 acute, post-acute, and ambulatory provider sites with capabilities informed by the data of more than 287 million patients and more than 48 billion medical events. Note: Patient and medical event counts do not yet fully include data from ABILITY. INOV Investor Presentation (1.14.20) v1.0.0 Payers +HOSPITAL Acute Providers Pharmacies Pharmaceuticals Devices 010100 0101001 0101000 0101000 BLOLLOW Massive Data Assets Home Care SNF Hospice Post-Acute Providers The Inovalon ONE® Platform 1010100 0010001 0011 001 8 Advanced Analytics Diagnostics Intervention Toolsets Ambulatory Providers MK Data Visualization 93 Patients 5#6Empowering Data-Driven Healthcare In Scale The reach of Inovalon's platform has grown to touch the vast majority of the United States, able to empower the market's largest data-driven healthcare initiatives. 100s Health Plans, Providers, Life Sciences, Pharmacy, and Diagnostics Organizations 287M+ Patients* 60K+ Provider Sites INOV Investor Presentation (1.14.20) v1.0.0 Alaska Hawaii KEY 10 100,000,000+ The MORE¹ Registry medical events incidents = Connected Provider Client Sites Inovalon Headquarters = Office/Data Center Location Puerto Rico LO 6#7Cloud-Based Platform Approach Inovalon provides its solutions to the marketplace through the Inovalon ONE® Platform: an integrated, real-time cloud native platform which brings together the capabilities of extensive healthcare ecosystem connectivity, massive scale datasets, advanced analytics, and data-driven intervention tools. Together, the capabilities of the platform enable both the efficient determination of highly meaningful insights and the reliable achievement of meaningful impact in the quality and economics of healthcare. I B Clients/Partners T = Diagnosis, lab, procedure, and pharmacy claims Electronic Health Record (EHR) clinical data . Patient-reported data Demographic data Socioeconomic data Interactive Connectivity Application Connectivity Data Exchange Eligibility and Enrollment data DME usage data Lab results data Provider data Facility census and staffing data Cost data INOV Investor Presentation (1.14.20) v1.0.0 API Gateway Payer Applications Inovalon & Commercial Cloud R TO Provider Pharmacy Applications Applications Data Analytics (Traditional Methodologies, Machine Learning, Artificial Intelligence, Deep Learning) Data Aggregation and Access ... Life Sciences Applications iPORT HD™ Customer-Specific Data Stores Shared Services The MORE² Registry® 287M Unique Patients 48B Medical Events 980,000 Physicians 546,000 Clinical Facilities 1 I 1 1 1 1 7#8Massive Data Assets Inovalon leverages massive datasets to deliver differentiated capabilities to its clients. These datasets are expanding rapidly. As of the end of Q3 2019, the MORE2 Registry® dataset contained more than 287 million unique patient counts and 48 billion medical event counts, increases of 10% and 20%, respectively, compared with September 30, 2018. One of the industry's largest independent healthcare datasets, with more than 287M patients and more than 48B medical events ✓Primary-sourced, fully linkable, longitudinally-matched. data from all major U.S. healthcare programs Contains EHR, claims, scripts, labs, provider, demographic data and more Qualified Entity (QE) containing CMS' Fee for Service Medicare Data Empowers and informs our industry-leading analytics and artificial intelligence, creating meaningful differentiation and client value INOV Investor Presentation (1.14.20) v1.0.0 Medical Event Count (billions) 49 48 47 46 45 44 43 42 41. 40 39 38 5 76 35 3 2 31 30887825423 22 10198765号32109876543210 36 34 32 26 MORE2 REGISTRY® DATASET GROWTH Patient Count Medical Event Count 59% Medical Event Count Expansion (3Q16-3Q19 CAGR) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3019 290 280 270 260 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 82889882 80 70 60 50 Patient Count (millions) Data resulting from the integration with ABILITY Network is not yet fully reflected within the MORE? Registry dataset and is therefore not fully reflected within the aforementioned data metrics as of this date. 8#9Benefits of Inovalon's Massive Primary-Source Dataset The significant size, extensive breadth of data types, historical duration, recency timeliness, and fully linkable primary-sourced nature of Inovalon's datasets provides a uniquely rich, longitudinally matched real-world dataset able to empower highly differentiated and highly valued capabilities. Training Advanced Artificial Intelligence Algorithms Key to the development, training, and improvement of AI, ML, and DL algorithms is the depth, breadth, timeline duration, and timeliness of training datasets. As a result of Inovalon's unique datasets, the Company is able to apply a wide array of advanced machine learning, artificial intelligence, and deep learning algorithms to achieve highly differentiated, high-value impact within the Company's applications. Enabling Outcomes-Based and Relative-Performance Analytics All value-based engagements, outcomes-based contracts, risk-based payment models, and all quality incentive programs are based on relative performance - graded on a dynamic curve. Without knowing how the relevant comparative population is performing today, healthcare organizations are shooting in the dark, potentially wasting critical resources on the wrong issues. #Healthcare Organization INOV Investor Presentation (1.14.20) v1.0.0 Informing Patient-Specific & Consumer Solutions Healthcare is moving in a direction of increasing patient-specific engagements and consumerism focused offerings. The breadth, depth, and primary source nature of Inovalon's datasets is highly valuable and uniquely able to empower and deliver highly granular patient-specific consumer-focused insights, details, and empowerment, bringing to life what is believed to be the largest transformation segment of healthcare in the years ahead. Further, patient-specific data eliminates time-delays and operational costs otherwise caused today within the market when additional or confirmatory information is needed with respect to a specific patient or case. Supporting Large-Scale Real World Evidence (RWE) Research and Insights Inovalon's very-large scale RWE datasets empowers the Company to deliver solutions of great value to the pharmaceutical, device manufacturer, and research marketplace. RWE enables the healthcare ecosystem to make highly informed models, algorithms and decisions for numerous use cases including diagnosis and treatment protocol determination tools, clinical trial design and execution, medication formulary optimization, outcomes-based contract structuring and honing, payment model design, and many other use cases. ? D 11010110 01101011 GDD 9#10Highly Differentiated Within the Market A leader in providing cloud-based tools to support data-driven healthcare, Inovalon empowers clients to achieve their clinical quality and financial goals by bringing highly differentiated capabilities to bear - unavailable from any other platform provider. Market's Largest Primary-Source Dataset Enabling Meaningful Insight and Impact: Deep data informs the most advanced algorithms and translates into highly differentiated insights that help to achieve the most advanced impact. Availability of data further reduces time- to-care, operational costs, and human error rates. 287M+ Patients INOV Investor Presentation (1.14.20) v1.0.0 980K+ Providers Satak 0000 1000 1007 48B+ Medical Events Industry-Leading Analytics: The extensive array of highly data-trained and time- tested algorithms developed and honed by Inovalon provide for many steps within the inherently complex processes of real-world healthcare operations to be improved - thus achieving a superior, multi-faced approach to improve care outcomes and economics. The ongoing flow of data and access to outcomes feedback inherent to Inovalon's platform further translates into a cycle of continuous improvement that has meaningfully demonstrated substantive differentiation of Inovalon's analytics versus alternatives. 7111 02 100001000011 1011111110 Breadth of Connectivity: Inovalon has achieved wide connectivity with hundreds of thousands of physicians, payers, EHRS, HIES and the data pertaining to hundreds of millions of patients. This connectivity allows for real-time data capture, real-time application of resulting insights - driving real-time impact and achievement of value. WEB Tetýř sekitar Inc Scale, Speed & The Power of Compute: Sophisticated proprietary cloud architectures and massive cloud-based compute environments allow for highly advanced analyses of large datasets in real time, allowing clients to garner and apply the most advanced insights quickly - to impact strategy, clinical care, and financial performance - allowing clients to win within their highly competitive environments. 10#11Large Growing Market Opportunity The market for data-driven healthcare solutions continues to expand, now estimated to be approximately $161Bn in 2020. The expansion of Inovalon's capabilities over the same period has resulted in a near tripling of the portion that the Company's capabilities can serve today from approximately $10.6Bn to $27Bn over these four years. Payers $15.6Bn Current Payer Products $14.7Bn Pharmacy/Life Sciences $46.6Bn Current Pharmacy Life Sciences Products 55.88m 2016 Providers $36.2Bn Current Providers Products $5.1Bn Consumer $18.7Bn Independent industry top-down market spend on software and information technology services in healthcare Bottoms-up application of existing Inovalon capabilities to respective market segment opportunity (note: 2020 removes legacy solutions) Notes: Gartner, IDC, Research and Markets and Inovalon INOV Investor Presentation (1.14.20) v1.0.0 Payers $17.3Bn Current Payer Products $16.3Bn Pharmacy/Life Sciences $51.4Bn Current Pharmacy/Life Sciences Products $7.0Bn 2018 Providers $40.1Bn Current Providers Products $6.8Bn Consumer $33.2Bn Payers $18,7Bn Current Payer Products $11.9Bn Pharmacy/Life Sciences $63.5Bn Current Pharmacy/Life Sciences Products $8.5Bn 2020 Providers $40.6Bn Current Providers Products $6.5Bn Consumer $37.9Bn 11#12Adjacent Market Expansion & Diversification Demand for Inovalon's cloud-based platforms and data-driven capabilities is driving expansion not only in the Company's original area of focus, the payer landscape, but also in the pharmacy/life sciences and provider landscapes, resulting in greater diversification of revenue and an expanding number and scale of cross-adjacency opportunities. 2017 15% 16% 69% Note: Graphics do not depict category 'other', which is de minimis. INOV Investor Presentation (1.14.20) v1.0.0 Payer 32% 2018 18% Provider 50% Pharmacy/Life Sciences 35% 2019E 16% 49% 12#13Leading Client Presence Across Verticals Reflecting Inovalon's differentiated capabilities, the Company's significant client base includes 24 of the Top 25 health plans by size in the nation, 22 of the Top 25 global pharma companies, 19 of the Top 25 healthcare provider systems, and more than 50,000 U.S. provider sites. Top 25 U.S. Health Plans 24 of 25 Anthem. BlueCross BlueShield Total U.S. Health Plans 103 of 490² Top 25 U.S. Healthcare Provider Systems MOLINA Horizon HEALTHCARE e Chien thar Micht of New Jers INOV Investor Presentation (1.14.20) v1.0.0 19 of 25³ Humana. HCSC HealthSpring KAISER PERMANENTE. HCR Manor Care Health Care Service Corption WellCare PREMERA HIGHMARK. aetna Independence BLUE CROSS CIPHP CENTENE blue of california healthfirst BlueCross BlueShield of North Carolina Corporation Capital BLUE Top-25 Global Pharma Companies 22 of 25* Pharma / Life Sciences Companies JOHNS HOPKINS CVS AstraZeneca 130 of 1,8425 Bristol-Myers Squibb Walgreens Pfizer Abbott gsk Medtronic hp Boehringer Ingelheim CardinalHealth Lilly Otsuka Gateway Health. 1) Top 25 health plans based on AIS 2018 directory and CMS data; 2) Total U.S. health plans based on AIS 2018 directory: 3) Sites of care as of September 2018 based on CMS data; combined Inovalon and ABILITY site count of >50,000; 4) Top 25 pharma companies based on PharmExec's Top 50 Companies 2018; 5) Avalere client database. ABILITY Network data is not yet fully included in the metrics above. MERCK Be well 13#14Growing Network Effect of Business Model Inovalon's business model is comprised predominantly (83%) of cloud-based subscription-based engagements with healthcare enterprises. Fees are charged predominantly in a Per Member Per Month (PMPM) manner or other monthly manner related to patient volume, use, and activity on the Platform. The more Modules of the Inovalon ONE® Platform engaged, generally the higher the fee charged across the relevant patient base. Once an organization starts using the Platform, it is easy to expand to additional capability Modules (raising the "P") or to additional patient memberships (raising the "Q"). Additionally, there is a cross-entity synergy and network effect. The more health plans that are engaged, the more appealing certain Modules are to pharmacy organizations, for example. This virtuous cycle of client value expansion drives a network effect of value to clients and to Inovalon. Number of Solutions Utilizing Modules in the Inovalon ONE® Platform Payer Clients Provider Clients Pharmacy Clients INOV Investor Presentation (1.14.20) v1.0.0 Life Sciences Clients Denotes Inter-Client Network Effect Synergy of connectivity into and utilization of the Inovalon ONE® Platform begetting greater value for clients and incremental business expansion for Inovalon 14#15Continued Innovation & Market Leadership Through 2019, Inovalon continued to expand its arsenal of cloud-based offerings through expanded capabilities within existing offerings, new Modules offered within the Inovalon ONE® Platform, and new configurations of the Platform to service the growing needs of the marketplace. Cloud-Based Pharmacy Platform 808 Cloud-native-based enterprise platform supporting end-to- end pharmacy operations with advanced analytics, extensive connectivity, and multi-stakeholder coordination, reducing time-to-fill, improving patient care, and enhancing financial performance Real-Time Data Supplementation 1010100 0010001 0011 001 a A ground-breaking real-time capability initiative that provides for patient-specific data supplementation to reduces time and costs otherwise required to gather disparate data allowing faster diagnosis, treatment, and service and lowering operating costs. INOV Investor Presentation (1.14.20) v1.0.0 Cloud-Based Natural Language Processing H₂₂: Automated ability to ingest, convert, analyze, and clearly present structured and unstructured medical record data content in near real time Elastic Container Technology (ECT™M) 1010100 0010001 0011001 0010000 Elastic Capacity [TIT Multi-tenancy cloud native compute architecture that enables high density leveraging of aggregated cloud environment infrastructure, enabling significant increases in speed, resiliency, and operating cost efficiency Cloud-Based Clinical Data Extraction as a Service Automated ability to identify and aggregate clinical record data from Electronic Medical Record (EMR) and Health Information Exchange (HIE) systems in near real time Cloud-Based Healthcare Data Lakes ||||||| DIGI haibit Provides clients with an industry-leading single-source-of- truth aggregation of the client's otherwise disparate datasets, supporting translation of structured and unstructured data, and data supplementation from the industry's largest healthcare dataset, the MORE2 Registry, empowering clients to unlock the value of their own data assets. 15#16Continued Investment in Go-To-Market Processes Through 2019, Inovalon continued to significantly improved its go-to-market processes: investing in streamlining sales processes, improving account profiling, revamping digital marketing materials and content, and focusing on the client and their success. Revamping of Digital Marketing Materials Streamlining of Sales Processes (Project "Simplify") Product Value Messaging Proposal Contracts Marketing & Sales Enablement Configure, Price, Quote (CPO) Improved Account Profiling Channels Top 40% A(10) B(6) C (17) D (33) E (27) SHARE OF WALLET XXXX: Redacted numbers for the purpose of confidentiality 35% 5% 34% 20% 6% . HEE Implementation DESCRIPTION A: Accounts with combined MA and ACA enrollments >=XXXXXXX B: Accounts with combined MA and ACA enrollments >=XXXXXXXX C: Accounts with combined MA and ACA enrollments >XXXXXX D: Accounts with combined MA and ACA enrollments > XXXX E Accounts with no combined MA and ACA INOV Investor Presentation (1.14.20) v1.0.0 Pipeline Velocity Client Experience Faster Revenue Recognition - Client Retention and Expansion Opportunities Market Understanding of Brand FY 19 GTM FOCUS - Dedicated and Aligned Rep Coverage Protect and Grow Install Base: * Work Closely with CS + Win New Contracts while growing existing Look for cross-sell (Avalere) Created focused territories aligned around T2/3 Aligned comp model for seliers Aggressive Product Positioning Leverage CDEaaS, NLPaaS™, IHA anovalon M inovation DATA HAS A STORITO TELL WE GIVE IT A VOICE. INNOVATION: THE INOVALON ONE PLATFORM The avalan ONE" Plutar Focus on the Client Client Advisory Board inovalon In late 2017, Inovalon launched its Client Advisory Board, a group of the Company's leading clients Members are regularly asked for their input, feedback, and recommendations Results include greater value and impact from existing solutions, as well as potential new offerings M IN Enhanced Client Services Over the past year, Inovalon has significantly enhanced the tools, processes, and integration of its Client Services teams Results include improved standardization, scalability, and client focus, as well as greater understanding by clients of the value-impact achieved NATURAL LANGUAGE PROCE SERVICE SPEED TO VALUE HOW DATA DRIVES CLINICAL INSIGHTS Implementation of Net Promoter Score (NPS) Initiative NPS is a leading tool measuring the willingness of clients to recommend Inovalon's platform solutions to others During 2018, Inovalon launched a widespread NPS initiative, part of putting the client at the center of all Company process success definitions. 16#17Continued Salesforce Expansion Through 2018 and 2019, Inovalon has significantly increased the scale and sophistication of its salesforce. Key to the transition has been not only the increase in personnel count, but also the personnel types and the nature of approach. Now, instead of leading sales from a healthcare subject matter-led mindset, sales are driven by technology sales leads, supported by healthcare subject matter expert support personnel. = Technology Sales Leads Healthcare Subject Matter Experts Sales Leads = Sales Support Q1 2015 FTES = 15 # Q1 2017 FTES = 79 ❀❀❀❀❀❀❀❀❀ ❀❀❀❀❀❀❀❀❀❀İ ❀❀❀❀❀❀❀❀❀❀ Î Q4 2018 FTES = 210+ 2015 2016 2017 Driven by Healthcare Subject Matter Experts Sales Leads Note: Figure intended to be illustrative INOV Investor Presentation (1.14.20) v1.0.0 ††† Q3 2019 FTES = 251+ 2018 2019 Driven by Technology Sales Leads 2020 li 17#18Strong Growth Market demand for the capabilities empowered by the Inovalon ONE® Platform, in combination with the continued expansion and growing sophistication of the Company's go-to-market capabilities and operational efficiencies of Inovalon's business model, have translated into strong financial performance. The graphics below compare the resulting Q3 2019 TTM to Q3 2018 TTM for revenue, Adjusted EBITDA, Non-GAAP net income per share (EPS) and Free Cash Flow generation (inclusive of cash interest, ABILITY transaction and integration spend, and CAPEX outflows). $506.0 Revenue 20% $605.2 Adjusted EBITDA INOV Investor Presentation (1.14.20) v1.0.0 $138.6 38% Q3 2018 TTM Q3 2018 Q3 2019 TTM Q3 2019 TTM TTM *Free Cash Flow is defined as net cash provided by operating activities less purchases of property and equipment and less investment in capitalized software. $191.9 Non-GAAP EPS $0.26 Q3 2018 TTM 65% $0.43 Q3 2019 TTM Free Cash Flow¹ $45.0 $3.2 1,304% Q3 2018 TTM Q3 2019 TTM 18#19Multifaceted Growth Drivers Inovalon's growth is supported by five significant drivers. INOV Investor Presentation (1.14.20) v1.0.0 Inovalon continues to introduce new platform capabilities for existing clients and an expanding array of adjacent markets. Inovalon has a strong history of up-selling and cross-selling into the company's existing client base. Strategic/Tuck- In M&A New Technologies and Adjacent Markets New Clients Cross-Selling and Up-Selling Within Existing Client Base The Expansion of Patient Populations Under Contract Strategic/Tuck-in acquisitions of customers, technologies and geographic expansion opportunities further support growth. Inovalon continues to pursue new logos including payers, providers, pharmacy organizations, and life sciences companies. Underlying demographic and societal trends growing organic covered patient lives by approximately 5% per year. 19#20Contents JPMorgan Healthcare Conference 2020 INOV Investor Presentation (1.14.20) v1.0.0 1 Overview 2 Financials 3 Conclusion 4) Appendix 20#21Revenue The following full-year revenue actual and guidance through 2020 was provided as of October 30, 2019, and reiterated today, January 14, 2020. 11% 2016-2020G CAGR $428 2016 $449 INOV Investor Presentation (1.14.20) v1.0.0 2017 $528 2018 Note: CAGR calculations undertaken to the mid-point of 2020 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance range. $638-$643 2019G $698 - $718 2020G 21#22Strong Subscription-Based Platform Adoption The graphic below illustrates the revenue offering mix, which is expanded to include the Company's 2020 guidance range as of October 30, 2019, and reiterated today, January 14, 2020. 2016-2020G 27% Subscription-Based CAGR All numbers in millions. $427.6 12% 34% 54% 2016 $449.4 15% INOV Investor Presentation (1.14.20) v1.0.0 19% 2017 Subscription-Based Platform Offerings 66% $527.7 11% 9% 80% 2018 $638-$643 -10% -7% Legacy Solutions -83% 2019G Services $698 - $718 -10% -6% -84% 2020G 22#23Increasing Efficiency The Company's transition to higher-valued cloud-based offerings leveraging increased connectivity, software automation, SaaS- based, and subscription-based offerings has witnessed a substantial corresponding decrease in headcount while concurrently expanding revenue and profitability. Reflecting this, headcount for the period year-end 2015 through Q3 2019 decreased by over 1,300, and TTM Adjusted EBITDA per headcount increased by 52% during the period. 3,323 TTM Adjusted EBITDA Per Headcount of $45,628 Q4 2015 Note: Acquisition of Avalere Health occurred prior to year-end 2015 INOV Investor Presentation (1.14.20) v1.0.0 16% Total Headcount Decrease From Year-End 2015 to Q3 2019 774 Headcount Acquired 1,322 Headcount Efficiency 52% Increase in TTM Adjusted EBITDA Per Headcount of $69,142 2,775 Q3 2019 Total net decrease in headcount includes a gross increase of 774 headcount from acquisitions during the period, and gross headcount efficiency reductions of 1,322. 23#24Adjusted EBITDA The following full-year Adjusted EBITDA actual and guidance through 2020 was provided as of October 30, 2019, and reiterated today, January 14, 2020. 19% 2016-2020G CAGR $100 23% 2016 $109 24% 2017 $152 29% 2018 % of Revenue Note: CAGR calculations undertaken to the mid-point of 2020 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance range. INOV Investor Presentation (1.14.20) v1.0.0 $209-$215 33% 2019G $231 - $241 33% 2020G 24#25Cash Flow From Operations The following full-year Cash Flow From Operations actual and guidance through 2020 was provided as of October 30, 2019, and reiterated today, January 14, 2020. 11% 2016-2020G CAGR $93 22% 2016 $98 22% 2017 $104¹ $90 17% 2018 % of Revenue $130-$145 21% 2019G $145 - $160 22% 2020G Note: CAGR calculations undertaken to the mid-point of 2020 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance range. ¹ Net cash provided by operating activities was $90.4M in 2018. Incorporated within this number was the negative impact of acquisition-related transaction cash outflows of $6.6M and integration cash outflows of $6.8M. Normalizing for these one-time items, the non-GAAP cash flow from operations would have been $104 million as represented by the green dotted line. INOV Investor Presentation (1.14.20) v1.0.0 25#26CAPEX Returning Towards Historical Levels During the period Q3 2016 through Q1 2018, the Company elected to invest more than $40M into incremental development towards the launch of the Inovalon ONE® Platform. The period of this disproportional investment is now substantially complete and is increasingly being harvested through the successful engagement of clients for highly-differentiated platform offerings. As a result, the Company sees the capital investments of the Company returning towards historical levels (as a percentage of revenue) in 2020. $18.8 6% $13.2 $5.6 2013 $22.7 6% $20.2 M 2014 Maintenance Capital Expenditure $26.4 6% $25.2 $1.2 2015 $39.1 $7.8 9% $23.2 $8.1 2016 Innovation Capital Expenditure (incl. Cap. Software) $65.5 $28.1 15% $28.5 $8.9 2017 Capital Expenditure (CAPEX) is defined as the sum of Purchases of property and equipment and Investment in capitalized software. All numbers in millions. INOV Investor Presentation (1.14.20) v1.0.0 $65.0 $6.4 $45.8 12% $12.8 2018 $52- $58 $39 - $44 8% -9% $13-$14 2019G Inovalon ONE® Platform Buildout Capital Expenditure $52- $58 $39 - $44 7% -8% $13- $14 2020G % Of Revenue 26#27Covenant-Lite Debt Leverage On April 2, 2018, the Company put in place a $980M seven-year term debt facility and $100M revolving debt facility. Proceeds were used to pay off all of the Company's existing debt obligations of $225M as well as to provide the financing necessary to fund a portion of the consideration paid for the ABILITY Network acquisition. Following the ABILITY acquisition, the Company's financial position remains strong, with significant liquidity, strong cash flow, and balance sheet flexibility. The debt facility's maturity schedule provides financial flexibility with 93.7% of principal due in 2025, and the Term Loan does not contain any standing financial covenants. Additionally, the Company's interest rate swaps fix $700M, or 76.3%, of the debt facility's principal amount. The Company expects to apply its strong cash flow to pay down its debt to achieve a Net Debt Leverage Ratio of less than 3.00x. 4.23x Current Senior Secured Net Debt Leverage Ratio* $0.0 2019 $9.8 2020 Debt Maturity Profile ¹.2 $9.8 2021 $9.8 No Standing Financial Covenants 2022 $100.0 $9.8 2023 4 $9.8 2024 $868.8 2025 Interest Rate 76.3% of the term debt interest rate is fixed $917.8 $218.8 Floating $700.0 Term Facility 6.05% Weighted Average Interest Rate Net Debt $824.7 Current Revolving Facility Term Facility *All numbers in millions. As of December 31, 2019. ² Debt maturity includes all mandatory and fixed principal payments. In 2018, the Company entered into four interest rate swaps, each of which mature in March 2025. The interest rate swaps fix the LIBOR rate component of interest on $700.0 million of the 2018 debt facility at a weighted average rate of approximately 2.8%. As of January 14, 2020, the Company has not drawn any amount under its available $100 million revolver. If the Company draws on the revolver, a maximum senior secured net leverage ratio of 7-to-1 (or better) is required to be maintained across the senior secured debt and revolver. The revolver, if drawn, must be repaid by 2023. * As of September 30, 2019. INOV Investor Presentation (1.14.20) v1.0.0 27#28Financial Guidance The Company's full-year 2019 and 2020 guidance was provided as of October 30, 2019, and is being reiterated today, January 14, 2020. Financial Metric Revenue Net Income¹ Non-GAAP net income¹ Adjusted EBITDA Net Cash Provided By Operating Activities Capital Expenditures Diluted Net Income Per Share¹ Non-GAAP diluted net income per share¹ 2019 Financial Guidance $638 million to $643 million $9 million to $13 million $74 million to $78 million $209 million to $215 million $130 million to $145 million $52 million to $58 million $0.06 to $0.09 $0.50 to $0.52 2020 Financial Guidance $698 million to $718 million $22 million to $28 million $86 million to $91 million $231 million to $241 million $145 million to $160 million $52 million to $58 million $0.15 to $0.19 $0.57 to $0.61 YOY Change² 9% to 12% 100% to 155% 13% to 20% 9% to 14% 5% to 16% 100% to 153% 12% to 20% !!! The Company is assuming 149 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2019, and 150 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2020. 121YOY Change is presented as the percentage increase of the low-end and high-end range of 2020 Guidance from the mid-point of the corresponding 2019 Guidance. INOV Investor Presentation (1.14.20) v1.0.0 28#29Expected Quarterly Revenue Cadence The following illustration outlines the Company's expected 2020 quarterly revenue cadence, which reflects 9% to 12% year-over-year organic revenue growth. TI Q2 2019 Q1 2019 9% to 12% YoY Organic Quarterly Revenue Growth Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 * Cadence reflects the expected Q4/Q1 transition dynamics of customer open enrollment and patient churn at the beginning of each calendar year, impact from contract renewal dynamics, and seasonality of Service revenue offerings Note: Illustrative. Graphic drawn at midpoint of guidance range INOV Investor Presentation (1.14.20) v1.0.0 29#30Contents JPMorgan Healthcare Conference 2020 INOV Investor Presentation (1.14.20) v1.0.0 1 Overview 2 Financials 3 Conclusion 4) Appendix 30#31Continued Strength in 2020 The Company is pleased with its continued expansion in scale, reach, and sophistication of its connectivity, analytics, and value-impact, resulting in what is being seen as a strong continued market differentiation, very positive sales growth, client retention rates, revenue and profitability expansion. *All numbers refer to 2020 guidance provided by the Company on October 30, 2019, or numbers as of September 30, 2019. INOV Investor Presentation (1.14.20) v1.0.0 Market Leadership as the industry's largest cloud- based provider of data-driven solutions to the healthcare ecosystem with primary-source datasets of >287M Patients Significant Profitability of $231M to $241M Adjusted EBITDA, or a 33% Adjusted EBITDA Margin for 2020 Strong Continuing Organic Revenue Growth 9% to 12% for 2020 Strong Operating Cash Flow of $145M to $160M Representing 21% to 22% of Projected 2020 Revenue 31#32Comparable Valuations The following is provided for comparable valuation consideration purposes. 14.3x Veeva Systems VEEV 95 2x Teladoc Health TDOC 12.3x ServiceNow NOW 47.8x 8.7x Teladoc Health TDOC INOV Investor Presentation (1.14.20) v1.0.0 43.0x Splunk ServiceNow SPLK NOW 8.2x Splunk SPLK 38.9x Veeva Systems VEEV 7.7x 7.1x IHS Markt Livongo INFO Health LVGO 30.1x 24.5x 5.7x Benefitfocus Tabula Rasa BNFT TRHC Health Catalyst HCAT 5.2x 18.8x Inovalon INOV Revenue Multiple FY20 16.4x 4.0x IHS Markit Healthstream INFO HSTM Cerner CERN 15.6x IQVIA IQV EBITDA Multiple FY20 NMF: Not Meaningful Source: NASDAQ IR Insight as of January 3, 2020 Business model peers have been selected based upon having similar SaaS and subscription-based business models similar to that of Inovalon. 3.8x HMS HMSY 15.6x Inovalon INOV 3.5x Tabula Rasa TRHC 13.1x HMS HMSY 3.4x IQVIA IQV 12.6x Cerner CERN 2.8x Health Stream Benefitfocus HSTM BNFT 6.4x 2.4x Change Healthcare CHNG NMF Health Catalyst HCAT 2.0x Change Healthcare CHNG NMF Livongo Health LVGO 32#33Contents JPMorgan Healthcare Conference 2020 INOV Investor Presentation (1.14.20) v1.0.0 1 Overview 2 Financials 3 Conclusion 4 Appendix · Case Study Examples Reconciliations and Definitions 33#34Case Study Examples INOV Investor Presentation (1.14.20) v1.0.0 34#35Providing Cloud-Based Tools That Empower Data-Driven Healthcare For Payers... Operational Clinical Quality Transparency Metrics Risk Score Accuracy Patient Outcomes Patient Engagement €9 Financial Performance INOV Investor Presentation (1.14.20) v1.0.0 For Providers... 10 Quality of Care Administrative Improvement Patient Outcomes Point-of-Care Analytics 9 Clinical Operational Efficiency Provider Engagement For Pharmacy Organizations... Automate Referrals Streamline Order Workflow Medical Claims Processing $ Reduce Operational Costs Improve Patient Care Patient Outcomes For Life Sciences Companies... 41 Health Economics Optimal Treatment and Outcomes Protocols Research 010101 101010 010101 101010 Commercialization Outcomes-Based Strategies Contracting S Payer Operations Market Access 35#36The Inovalon ONE® Platform Within the Inovalon ONE® Platform, there are nearly 100 individual proprietary application toolsets, or "Modules", able to be rapidly configured to empower the operationalization of very large-scale data-driven healthcare initiatives that are highly differentiated, efficient, modular, and flexible. The graphic below depicts some of these application toolsets. Point-of-Care Venue....... Coordination · Connectivity & Integration Data Warehouse Interconnectivity Toolset EHR & HIE Interoperability Toolset Enterprise Interface & Streaming Toolset IPORT™ & IPORT-HDTM Integration Toolset Remote Data Monitoring Toolset Unstructured Data Conversion (DCD) Toolset · Employer Settings Analytical Algorithms & Engines Clinical Care Protocol Analytics Clinical Care Venue Determination Analytics Clinical Quality Outcomes Analytics Data Foundation Comparative Benchmarking Analytics Cost & Utilization Analytics Data Integrity Analysis De-Identification/Anonymization Algorithm Disease Burden & Risk Score Analytics Master Platform Data Warehouse Master Care & Case Management Data Master Claims Data Master Clinical Data ■ Stable Health Settings Master Device & Monitoring Data Master Diagnostics Data Master Employer Data Master Facilities Data INOV Investor Presentation (1.14.20) v1.0.0 ■ ■ • Real World Intervention/Point-Of-Care Solutions Authorization Coordination & Validation Solution Call & Fulfillment Center Solution (ITCC™M) Clinical Encounter Coordination Solution Clinical Encounter Support Solution (ePASS) EHR Interfacing Solution Medical Record Abstraction Solution (SAFHIRE™M) Mobile/SMS/eMall Interaction Solution + Ambulatory / Outpatient Care Settings Financial Performance Analytics Medication Compliance/Persistence Analytics NLP/ML Toolset Operational Logistical Coordination Analytics Patient & Provider Behavior Analytics Patient Identification Analytics Predictive Clinical Analytics (PCIS™M) Toolset Master Financial Data Master Operations Data Master Patient Data Master Payer Data Master Pharmacy Data Master Provider Data Master Referential Data # . W ■ MORE² Registry Data Socioeconomic (SES) Data · . - Master Comparative Data Warehouse Acute/Inpatient Care Settings HOSPITA H Patient & Provider Enrollment Solution Patient Portal Solution Provider Portal Solution Real-Time Data Monitoring & Surveillance Solution Real-Time On-Demand Insights Solution (DDx™M) Telemedicine Solution Support Services Post-Acute Care Settings Predictive Quality Analytics (PQIS™M) Toolset Quality Spectrum Flowchart Designer (QSFD³) Toolset Quality Spectrum Insight Compute Engine (QSI* & QSI-XLTM) Toolset Regulatory Data Generation Toolset Scenario Modeling & Comparative Analysis Treatment Effectiveness Analytics Unique Identifier Determination Analytics (MPI/MDM) Management & Administration Consoles Analytic Protocol Editor Clinical Template Editor ■ · · ■ ☐ Data Visualization & Reporting Care Reporting n In-Home Care Settings Data Integration Client Cloud Access Interface Intervention Planning Interface Scenario Configuration Editor Specialty Pharmacy Interface Contract Administration. Reporting Demographic Reporting Disease & Risk Reporting Platform Clinical Support Help Desk Platform Program Client Support Platform Program Continuous Improvement Processes Platform Program Discovery Processes Platform Program Performance Evaluation Processes Platform Technical Support Help Desk i . . . Financial Reporting Operational Reporting Outreach Strategy Quality Reporting Regulatory Reporting Utilization Reporting Participating Organization Portfolio Support Contract Performance Monitoring & Administration Organization-Specific Data Warehouse Connectivity Organization-Specific Reporting Support 36#37Payer Platform Offering Example I For payer clients utilizing Inovalon's clinical quality analysis and improvement solutions, sophisticated analytics identify patients with meaningful quality gaps, while connectivity into EHRs, decision support platforms, and data-driven intervention platforms empower their improvement. The result is greater quality scores and significant incentive payment benefits with strong ROIS. Regional Health Plan 140K Members Year 1 | Year 2 | Year 3 | Year 4 Inovalon Engagement ÎÎÎÎÎ 1 QBP Equation: 140K members x incremental $44.64 per patient per month quality bonus payment for 12 months INOV Investor Presentation (1.14.20) v1.0.0 $75M Quality Bonus Payment Recieved¹ Quality bonuses received by the health plan equates to an incremental payment to the plan * $10M Inovalon Cost ROI = 7.5:1 37#38Payer Platform Offering Example II More than 50% of the nation's payment models are risk adjusted. For payer clients utilizing Inovalon's risk score accuracy improvement solutions, sophisticated analytics identify patients with meaningful disease progression and gaps in diagnosis documentation or submission, while connectivity into EHRS, NLP analysis of medical record data, decision support platforms, and data-driven intervention platforms empower the proper identification, clinical assessment, documentation and improvement of this important information and its submission to state and federal programs. The result is greater patient disease awareness, risk score data precision, and meaningful improvements into financial transparency and payment accuracy with strong ROIS. Millions $600 $500 $400 $300 $200 $100 $0 Year 1 Actual Cost Medicare ROI referenced to Year 9 Payment Year Combined Medicare & Medicaid Risk Score Accuracy Improvement Impact, Cost, and ROI Year 2 Actual Cost Medicaid INOV Investor Presentation (1.14.20) v1.0.0 Year 3 ………………. Year 7 Year 4 Projected Cost Year 5 Risk Score Accuracy Improvement Impact Medicare Year 6 Risk Score Accuracy Improvement Impact Medicaid Year 8 Year 9 Projected Risk Score Accuracy Improvement Impact Medicare Year 10 ROI = 9.7: 1¹ Projected Risk Score Accuracy Improvement Impact Medicaid He com 38#39Provider Platform Offering Example Over 41,000 provider sites utilize Inovalon's myABILITY® Platform to improve the quality of care, workforce efficiency, and many elements of financial performance within their acute, post-acute, and ambulatory facilities. Through the utilization of a portfolio of toolsets, providers improve their operational efficiency, reimbursement accuracy, and strength of cash flow, positioning them for success in this challenging environment. Small to Mid-Sized Hospital² Post-Acute Facility Per Physician Increased Improved Revenue Monthly Cash Capture Flow $144,031 $1,188,287 $139,564 $17,210 $373 $3,080 1 Based on MGMA denial benchmarks, April 2018 2 Based on Definitive Health, Average Annual Revenue Hospitals 25-238 Beds * Results based on the utilization of the myABILITY EASE AIl-Payer portfolio solution INOV Investor Presentation (1.14.20) v1.0.0 1 5.0% Increased Revenue Capture¹ 2.44 DSO Improvement Delivering 99.0% First Pass Approval Claims Rate ROI = 8.9: 1 39#40Pharmacy Platform Offering Example Inovalon's ScriptMed® Cloud empowers a 15% to 17% reduction in cost to serve per script versus current industry-standard enterprise platform solutions supporting the Specialty Pharmacy marketplace. Applied to an industry benchmark of $60.15 per specialty pharmacy script, this reduction translates into approximately $9.02 to $10.21 in savings per fill. In the setting of a specialty pharmacy processing 1 million scripts per year, this accumulates to approximately $9.0 to $10.2 million in savings per year. Cost to Serve Referral Clinical Order Fulfillment Revenue Cycle Contracts Inventory Overhead INOV Investor Presentation (1.14.20) v1.0.0 Referral cost reduction of 9.7% from: Auto data prefilling reducing time and costs vs. manual entry Improved data accuracy reducing error correction time and process delays Automation reducing labor Electronic connections replacing phone and fax time and costs Clinical cost reduction of 4.9% from: Expanded data-driven clinical capabilities Direct-connect with EHRS Improved patient adherence Order cost reduction of 0.5% from: Lowered re-work rates Improved processing of order exceptions Fulfillment cost reduction of 0.5% from: Lowered re-work and return rates Optimization of shipping and routing RCM cost reduction of 0.5% from: Reduced labor and improved medical claims and payment processing 4 Overhead cost reduction of 1.0% from: Operational & performance visibility tools Simplified training, skill requirements, and job aids Reduced Cost to Serve by 15% to 17% 15% to 17% Reduction in Cost to Serve 40#41Pharmaceutical Platform Offering Example For clients utilizing Inovalon's Outcomes-Based Contracting (OBC) Platform: payers benefit from reductions in overall costs; patients benefit from improved outcomes; providers benefit from support for their patients; and pharmaceutical manufacturers benefit from greater unit sales of their medications. While the cost of a medication by itself may be more expensive than an alternative or predecessor in the market, deep analysis of optimal patient identification and data-driven enablement of patient-specific monitoring and intervention support can result in significant overall cost reductions while also achieving superior clinical quality outcomes. Medication Cost Additional Medical Costs Market Standard State Total Healthcare Cost Reduction Achieved with Inovalon's OBC Platform Inovalon OBC Platform State 32.3% Total Healthcare Cost Reduction¹ 1 Study performed by Inovalon pharmaceutical manufacturer client. 134,599 patients on standard care vs. 2,122 patients on specified medication showing opportunity for PPPY improvement in setting of specific medication and adherence. Illustrative. INOV Investor Presentation (1.14.20) v1.0.0 41#42Differentiated Capabilities for Life Sciences Leveraging Inovalon's massive data assets, deep subject matter expertise, and the advanced technologies of the Inovalon ONE® Platform, life sciences clients benefit from not only data empowered advisory services able to inform strategy and commercialization, but also inform the configuration of Inovalon ONE® Platform configurations that support outcomes-based contracting, improved compliance and persistence, and advanced business models. INOV Investor Presentation (1.14.20) v1.0.0 Life Sciences Strategy Clinical Analytics Health Plan Operations 287 Million Patients 10100 10101001 0101000 0101000 2010 Subject Matter Expertise Massive Data Assets Outcomes Research Clinical Decision Support Healthcare Economics 48 Billion Clinical Events Large-Scale Real-World MORE² Registry® Data Registry Reimbursement & Revenue Cycle Q Clinical Interoperability Pharmacy Advanced Analytics Advanced Technologies Platform 1010100 0010001 0011 001 980,000 Physicians Market Access Intervention Toolsets Predictive Analytics Technical Architecture 546,000 Clinical Facilities MⒸ Data Visualization 42#43Reconciliations and Definitions INOV Investor Presentation (1.14.20) v1.0.0 43#44Reconciliation of Forward-Looking Guidance Adjusted EBITDA Inovalon defines Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) as net income or loss calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, other expense, net, interest income, interest expense, provision for income taxes, stock-based compensation, acquisition costs, restructuring expense, tax on equity exercises, and other non-comparable items. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. A reconciliation of net income to Adjusted EBITDA follows: (In millions) Reconciliation of Forward-Looking Guidance Net (loss) income to Adjusted EBITDA: Net (loss) income Depreciation and amortization Interest expense Interest income Provision for income taxes (1) EBITDA Stock-based compensation Acquisition costs: Transaction costs Integration costs Contingent consideration Other non-comparable items (2) Adjusted EBITDA Adjusted EBITDA margin 69 INOV Investor Presentation (1.14.20) v1.0.0 Three Months Ending December 31, 2019 Low High 6 27 16 (1) 2 50 6 56 33,1% 69 $ 10 27 16 (1) 3 6 35,6% 69 Guidance Range Year Ending December 31, 2019 Low High 9 108 66 (3) 179 20 5 4 209 32.8% 69 13 108 66 184 20 1 5 5 215 33.4% +A Year Ending December 31, 2020 Low High 22 109 63 (3) 200 27 231 33.1% $ 109 64 (3) 11 209 241 33.6% A 28% statutory tax rate is assumed in order to approximate the Company's effective corporate tax rate. Other "non-comparable items include items that are not comparable across reporting periods or items that do not otherwise relate to the Company's ongoing financial results, such as certain employee related expenses attributable to advancements in automation and operational efficiencies, and legal expenses beyond those in the normal course of business. Non-comparable items are excluded from Adjusted EBITDA in order to more effectively assess the Company's period over period and ongoing operating performance. 44#45Reconciliation Non-GAAP Net Income of Forward-Looking Guidance Inovalon defines Non-GAAP net income as net income or loss calculated in accordance with GAAP, adjusted to exclude tax-affected stock-based compensation expense, acquisition costs, restructuring expense, amortization of acquired intangible assets, amortization of debt issuance costs and debt discount, tax on equity exercises, and other non-comparable items. The Company defines Non-GAAP diluted net income per share as Non-GAAP net income divided by diluted weighted average shares outstanding. A reconciliation of net income to Non-GAAP net income follows: (In millions, except per share amounts) Reconciliation of Forward-Looking Guidance Net (loss) income to Non-GAAP net income: Net (loss) income Stock-based compensation Acquisition costs: Transaction costs Integration costs Contingent consideration Amortization of acquired intangible assets Amortization of debt issuance costs and debt discount Other non-comparable items (¹) (2) Tax impact of add-back items Non-GAAP net income GAAP diluted net income per share Non-GAAP diluted net income per share Weighted average shares of common stock outstanding - diluted 60 Three Months Ending December 31, 2019 Low High 6 6 1111 13 18 0.04 0.12 149 LA $ 10 6 13 1 1 22 0.07 0.15 149 $ $ Guidance Range Year Ending December 31, 2019 Low High 9 20 1 5 52 4 (21) 74 0.06 0.50 149 09 $ 13 $ 20 1 сл 5 52 4 5 (22) 78 0.09 0.52 149 $ $ Year Ending December 31, 2020 Low High 22 27 52 4 4 (23) 86 0.15 0.57 150 40 $ 28 28 4 (25) 91 0.19 0.61 150 it Other "non-comparable items include items that are not comparable across reporting periods or items that do not otherwise relate to the Company's ongoing financial results, such as certain employee related expenses attributable to advancements in automation and operational efficiencies, and legal expenses beyond those in the normal course of business. Non-comparable items are excluded from Non-GAAP net income in order to more effectively assess the Company's period over period and ongoing operating performance. 28% statutory tax rate is assumed in order to approximate the Company's effective corporate tax rate. INOV Investor Presentation (1.14.20) v1.0.0 45#46Balance Sheet Detail In the setting of continued strong cash flows from operations in excess of the operating needs of the business, on October 4, 2019, the Company voluntarily initiated an accelerated pay-down of its outstanding debt under the 2018 Term Facility with a $50 million cash payment. The payment was made from excess cash flow from operations, which exceeded the Company's working capital needs, and was in addition to the Company's existing repayment obligation of $2.5 million per quarter. The Company continues to maintain significant liquidity and credit capacity. Cash, Cash Equivalents and Short-Term Investments Accounts Receivable Other Current Assets Other Assets Total Assets Current Liabilities (excl. Debt and Finance Leases) Total Debt (incl. Finance Leases) Other Liabilities Stockholders' Equity Total Liabilities and Stockholders' Equity Sept 30, 2019 $ 133.6 127.4 26.0 INOV Investor Presentation (1.14.20) v1.0.0 1,656.2 $1,943.2 $ 107.3 966.7 195.2 674.0 $1,943.2 All dollars shown in millions. Amounts may not add exactly due to rounding. Current liabilities exclude the current portion of Long-Term Debt and Finance Lease Obligations, which were $9.8 million and $2.4 million, respectively, as of September 30, 2019. Debt reflected on the balance sheet as of September 30, 2019 is net of issuance discounts and deferred financing fees and does not reflect the accelerated pay down of debt initiated with $50 million cash payment made October 4, 2019. 46#47Definitions 1 Annual Recurring Revenue is defined as subscription-based revenue from existing clients plus outstanding intra-year renewals valued at an amount agreed upon in principal. 2 Annual Revenue Retention is defined as the percentage of revenue from engagements with existing clients in the prior year present in the current year. For example, Annual Revenue Retention would be less than 100% if there was a net loss of revenue from existing clients who either downsized or exited existing engagements, and would be more than 100% if on a net basis existing clients expanded existing engagements. 3 Annualized Contract Value (ACV) is defined as a metric reflecting the sum of the first 12 months of revenue expected from contracts signed during a specific period (such as a quarter or year). 4 Coverage is defined as the sum of Annual Recurring Revenue, Legacy revenue under contract, and expected Services revenue, divided by the specified year's revenue guidance. INOV Investor Presentation (1.14.20) v1.0.0 47#48ACV, TCV and Bookings Inovalon's sales have significantly expanded and accelerated, supporting strong growth going forward. The Company started reporting its sales performance in 2018 by providing Annual Contract Value (ACV) data for new sales, a metric reflecting the sum of the first 12 months of revenue expected from new contracts signed during a specific period (such as a quarter or year). Inovalon first reported this metric with the release of Inovalon's Q3 2018 results on November 7, 2018. Of note, due to the fact that the bulk of the Company's contracts (also referred to as a "Statements of Work" or "SOWS") are multi-year in their contracted term (or contracted duration), the "bookings" or "Total Contract Value" (TCV) pertaining to the ACV is significantly larger than the ACV. For example, if the ACV for a period was $X, the corresponding total Bookings or TCV of the underlying sales would be perhaps $2X to $3X, depending on the average contract term signed within the group of underlying sales in the period. Importantly, while the Company is providing ACV sales data to provide insight into the accelerated nature of the Company's sales in a comparable (e.g., year-over-year) fashion, the corresponding total sales, bookings, or TCV is even more significant. Executed SOWS ACV 12 Months Illustrative only. Please see definitions on slide 48. INOV Investor Presentation (1.14.20) v1.0.0 24 Months Initial Contract / SOW Term 36 Months * Contracts depicted are Illustrative only to support discussion of ACV Etc. Illustrative Dollar Equivalency 48#49inovalon Healthcare Empowered © 2018 by Inovalon. All rights reserved.