#1Innovation, Growth & Increasing Profitability 5001010011001 ASETA USHOTOS inovalon™ TOOTUL TEOTSTOO110010100101 01001010011001010 1001010011886 1001100101001 1018010810 T 0100110010100 110011001010USTE BOTY CHO 010 FOURTH QUARTER & FULL YEAR 2015 February 25, 2016 Earnings Presentation Supplement#2Note Regarding Forward-Looking Statements inovalon This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including, but not limited to, statements regarding future results of the operations and financial position of Inovalon Holdings, Inc. ("Inovalon"), and its financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "target," "estimate," "continue," "anticipate," "intend," "expect," "5 year view", "growth" and variations of these words or similar expressions are intended to identify forward-looking statements. . Inovalon has based these forward-looking statements on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its 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 significant business, economic, regulatory and competitive risks, uncertainties and contingencies, many of which are beyond the control of Inovalon and its management, and are based upon assumptions with respect to future events or decisions, which are subject to change. Moreover, because Inovalon operates in a very competitive and rapidly changing environment, new risks emerge from time to time. It is not possible for Inovalon's management to predict all risks, nor can Inovalon assess the impact of all factors on its business the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. For a discussion of the risks and uncertainties that may cause Inovalon's actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements, you should read Inovalon's most recent Annual Report on Form 10-K, including the sections entitled "Risk Factors" and "Special Note Regarding Forward Looking Statements," as well as the other documents that Inovalon may file from time to time in the future with the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. Although Inovalon believes that the expectations reflected in the forward- looking statements are reasonable, Inovalon cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, Inovalon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this presentation, to conform these statements to actual results or to changes in Inovalon's expectations, and nothing in this presentation should be regarded as a representation by any person that any financial targets, business strategy or plans and objectives for future operations suggested by any forward-looking statements will be achieved or realized. In addition, this presentation may include certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or necessarily superior to, measures of financial performance prepared in accordance with U.S. GAAP. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, is available within this presentation and within our public filings with the Securities and Exchange Commission, available on the Company's investor website at http://investors.inovalon.com. This presentation includes market data and forecasts with respect to the healthcare industry. Slides within this presentation utilize certain numbers which include estimates for 2016. In such cases, the midpoint of the Company's guidance provided on February 25th, 2016 is utilized for such estimated mathematics. The Company may ultimately achieve performance which may be above or below such guidance midpoint and, as such, the numbers on such pages of the presentation would thus be impacted accordingly. In some cases we rely on and refer to market data and certain industry forecasts that were obtained from third party surveys, market research, consultant surveys, publicly available information and industry publications and surveys that we believe to be reliable. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 2 © 2016 by Inovalon. All rights reserved.#3Our Balance INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 Growth Innovation Profitability 3 inovalon © 2016 by Inovalon. All rights reserved.#4Our 5-Year View 1 Growth at a rate of more than 2x that of our market, achieving revenue of more than $1 billion by 2020 inovalon 2 Margin expansion at a rate of more than 100 bp per year, achieving EBITDA margins of more than 40% by 2020 3 Diversifying client base achieving customer de-concentration by 2020 Innovation to empower healthcare's data-driven transformation from volume to value by 2020 INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 4 © 2016 by Inovalon. All rights reserved.#5Expanding Proprietary Datasets Inovalon's proprietary datasets contain data pertaining to more than: 130 million unique patients 11.0 billion medical events Patient Count (millions) 140 130 MORE2 Registry® Growth: 120 110 100 90 80 70 40 30 20 10 • 0 • 784,000 physicians 269,000 clinical facilities 2000 2001 Patient Count 2002 Medical Event Count H 2006 2003 2004 2005 INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 2007 2008 2009 5 2010 2011 Year Bar chart reflects annual data as of December 31" of each year, Numbers are increasing at a rate of 2.9% compounding monthly, or 40.9% annually, since 2000. 2012 2013 2014 inovalon 2015 12 11 10 1 0 Medical Event Count (billions) © 2016 by Inovalon. All rights reserved.#6Revenue Growth 20% $240 2011 2010 - 2016G CAGR $300 2012 $296 2013 $362 6 2014 $437 2015 inovalon $510 - $520 2016 Guidance All dollars shown in milions. 2016 Guidance is per the Company's Q4 2015 earnings release and conference call held on February 25, 2016. CAGR calculations undertaken to the mid-point of 2016 Guidance. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 © 2016 by Inovalon. All rights reserved.#7Adjusted EBITDA Growth 28% 2010 - 2016G CAGR $58 24% 2011 $108 36% 2012 $72 24% 2013 $134 7 37% 2014 $152 35% 2015 inovalon $182 - $188 36% 2016 Guidance % of Revenue All dollars shown in millions. 2016 Guidance is per the Company's 04 2015 earnings release and conference call held on February 25, 2016. CAGR calculations undertaken to the mid-point of 2016 Guidance. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 © 2016 by Inovalon. All rights reserved.#8Non-GAAP Net Income Growth 29% $30 13% 2011 2010 - 2016G CAGR $59 20% 2012 $37 13% 2013 $70 8 19% 2014 $75 17% 2015 inovalon $88 - $92 17% 2016 Guidance % of Revenue All dollars shown in millions. 2016 Guidance is per the Company's Q4 2015 earnings release and conference call held on February 25, 2016. CAGR calculations undertaken to the mid-point of 2016 Guidance. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 © 2016 by Inovalon. All rights reserved.#9Cash Flow From Operations 43% 2010 - 2016E CAGR $46 19% 2011 $54 18% 2012 $66 INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 22% 2013 — $86 9 24% 2014 $68 15% 2015(1) inovalon $130 - $140 % of Revenue (¹) 2015 cash flow from operations was effected by revenue seasonality pushing cash collections to early 2016, and an increase in income tax receivables as a result of tax deductible share-based stock option exercise activities and a lower effective tax rate. (2) The 2016 Estimate shown represents a range of internal estimates. CAGR calculations undertaken to midpoint of estimates. 26% 2016 Estimate(2) © 2016 by Inovalon. All rights reserved.#10Investment in Innovation 22% $21 9% 2011 2010 - 2016E CAGR $27 9% 2012 $35 12% 2013 $45 12% 2014 % of Revenue $48 11% 2015 inovalon $54 - $58 11% 2016 Estimate All dollars shown in millions. Investment in Innovation includes research and development expense, capitalized software development costs and research and development infrastructure investments. The 2016 Estimate shown represents a range of internal estimates. CAGR calculations undertaken to midpoint of estimates. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 10 © 2016 by Inovalon. All rights reserved.#11Seasonality inovalon The nature of Inovalon's customers' end-market results in seasonality reflected in both revenue and margin differences during the year. 1 Regulatory impact of data submission deadlines in March, June, September, and January drive predictable timing of analytics and data processing activity variances from quarter to quarter 2 3 4 Regulatory clinical encounter deadlines of June 30th and December 31st drive predictable intervention concentrations variances from quarter to quarter The timing of factors #1 and #2 above result in analytical and intervention activity mix variances which predictably impact margin performance from quarter to quarter The trend of higher client focus on "watchful waiting" increasingly shifts intervention platform usage to later in year INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 11 © 2016 by Inovalon. All rights reserved.#12Seasonality Trends Revenue Seasonality of Inovalon revenue has been evolving over recent years. 25.4% 23.4% 21.4% 19.0% Q1 27.5% INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 27.9% 26.9% 24.8% 2013 -2014 Q2 26.6% 12 25.3% 24.1% 23.8% -2015 -2016E Q3 inovalon 29.6% 27.6% 24.9% 21.8% Percentages represent the portions of actual or projected revenue in each quarter. All figures are shown inclusive of Avalere contribution. 2016 Estimate, is provided for illustrative purposes only to depict a shift from 01 to 04, consistent with historical trends-actual results may vary. Q4 © 2016 by Inovalon. All rights reserved.#13Revenue Components Inovalon® Inovalon's business model is a value-based model with a strong linkage between analytical solutions and client value creation. In this paradigm, the Company's revenue is materially composed of two components: 1) Data Analytics Subscription Fees, and 2) Data-Driven Intervention Platform Service Fees. 1 2 3 5 Revenue Components Driven By Data Analytics Subscription Fees Fixed Subscription Fees Description: Fees charged as a base subscription component. Frequency: Ranges from monthly to annually Monthly Analytics Fees Description: Fees charged for analytical processing based on the number of persons (Patients) being analyzed. Frequency: Typically monthly Identified Gap Analytics Fees Description: Fees charged for each "gap" identified (data phenomena beings sought within a targeted search cohort). Frequency: Per processing run Revenue Components Driven By Data-Driven Intervention Platform Service Fees Data-Driven Intervention Platform Fees Description: Fees charged for each use or application of Inovalon's data-driven intervention platform service. Frequency: Per gap meeting threshold Avalere and Other Revenue Streams 13 There is a relationship between incidence of gaps identified through Inovalon's analytics and the incidence of data-driven intervention services for which a client may wish to utilize Inovalon's intervention platform services. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 © 2016 by Inovalon. All rights reserved.#14Financial Modeling For each revenue component described previously, Inovalon is providing the following metrics which convey a high-level description of how total revenue has built in 2015. 1 2 3 Client SOW Count: Each client enters into unique statements of work (SOWS) for each services that Inovalon provides. Note a statement of work will often cover multiple populations, so this metric will differ from "Client Population SOW Count" as communicated in our previous annual financial reporting Average Revenue per Client SOW: The mathematical average for 2015 is provided, with information regarding the distribution of contracts at, above, and below the average Avalere and Other Revenues: A small amount of ancillary revenue not associated with Inovalon's core revenue components is shown in a "Other" category. Further, revenue contributed from Avalere's core business is separately presented inovalon INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 14 © 2016 by Inovalon. All rights reserved.#15Fixed Subscription Fees Avg. Fixed Subscription Fee per Client SOW $151,151 As updated from December 7, 2015 Investor Day for actual full year 2015 results. 5 SOWS $841 72 SOWS INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 $17,655 Graph reflects a skewed bell curve centered around the mathematical mean for 2015. 152 SOWS $151,151 Average Annual Fixed Subscription Fee 5 SOWS 15 $692,257 inovalon 5 SOWS $1,650,738 © 2016 by Inovalon. All rights reserved.#16Monthly Analytics Fees Avg. Monthly Analytics Fee per Client SOW $719,397 As updated from December 7, 2015 Investor Day for actual full year 2015 results. 4 SOWS $2,063 59 SOWS INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 Graph reflects a skewed bell curve centered around the mathematical mean for 2015. 86 SOWS $38,781 $719,397 $3,869,135 Average Annual Total of Monthly Analytics Fee 4 SOWS 16 inovalon 4 SOWS $8,238,738 © 2016 by Inovalon. All rights reserved.#17Identified Gap Analytics Fee Avg. Identified Gap Analytics Fee per Client SOW $2,192,092 As updated from December 7, 2015 Investor Day for actual full year 2015 results. 1 SOW $17,401 14 SOWS INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 Graph reflects a skewed bell curve centered around the mathematical mean for 2015. 17 SOWS $130,699 $2,192,092 $12,192,380 Average Annual Identified Gap Analytics Fee 2 SOW 17 inovalon 1 SOW $13,375,526 © 2016 by Inovalon. All rights reserved.#18Data-Driven Intervention Platform Fees $2,326,922 As updated from December 7, 2015 Investor Day for actual full year 2015 results. 2 SOWS $16,168 Avg. Data-Driven Intervention Platform Fee per Client SOW 28 SOWS INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 Graph reflects a skewed bell curve centered around the mathematical mean for 2015. 47 SOWS $2,326,922 $90,775 $14,680,361 Average Annual Data-Driven Intervention Platform Fee 3 SOWS 18 inovalon 2 SOWS $17,550,785 © 2016 by Inovalon. All rights reserved.#19Summary Revenue Model Fixed Subscription Fees Monthly Analytics Fees Gap Analytics Fees Intervention Platform Fees Other Fees Avalere Revenue 2015 Revenue INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 PX Q Revenue Per SOW $ 151,151 $ 719,397 $2,192,092 $2,326,922 19 Varies N/A = Client SOW Count 239 157 35 82 Varies N/A inovalon R Revenue $36.1 $ 112.9 $ 76.7 $ 190.8 $ 69 3.3 $ 17.5 $ 437.3 © 2016 by Inovalon. All rights reserved.#20Balance Sheet Strength The strong balance sheet position positions Inovalon well for strategic expansion. Cash, Cash Equivalents and Short-Term Investments Other Current Assets Other Assets Total Assets Current Liabilities, Excluding Current Portion of Long-Term Debt Long-Term Debt Other Liabilities Stockholders' Equity Total Liabilities and Stockholders' Equity All dollars shown in milions. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 20 inovalon December 31, 2015 $728.2 115.8 268.9 $1,112.9 $ 52.4 281.7 39.6 739.2 $1,112.9 © 2016 by Inovalon. All rights reserved.#21Acquisition Focus The following presents Inovalon's view towards acquisition prioritization: Priority 1 2 3 ليا 4 Description Customers: Opportunities which have a strong client base, into which Inovalon's data and technologies can rapidly be deployed Technologies: Opportunities which have strong technologies, which can be rapidly applied to Inovalon's client base Scale: Opportunities which accelerate Inovalon's expansion in similar or adjacent healthcare verticals Geography: Opportunities enabling the seeding for expansion outside of the United States Strategic tuck-in acquisitions are generally considered to be part of the Company's growth model. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 21 inovalon Impact Strategic Tuck-In Strategic Tuck-In Incremental Revenue Strategic Tuck-In © 2016 by Inovalon. All rights reserved.#22Summary Highlights 1 2 3 Highly differentiated technology leader serving large and growing end- market in a transformative period Long track record of strong growth and material profitability at scale Multiple business tailwinds with significant runways for continued growth and margin expansion INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 inovalon Ň © 2016 by Inovalon. All rights reserved.#23Our 5-Year View 1 Growth at a rate of more than 2x that of our market, achieving revenue of more than $1 billion by 2020 inovalon 2 Margin expansion at a rate of more than 100 bp per year, achieving EBITDA margins of more than 40% by 2020 3 Diversifying client base achieving customer de-concentration by 2020 Innovation to empower healthcare's data-driven transformation from volume to value by 2020 INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 23 © 2016 by Inovalon. All rights reserved.#24inovalon VOTOTOU healthcare empowered # 78 FOJ Appendix#25Reconciliation of Net Income to Adjusted EBITDA Reconciliation of Net Income to Adjusted EBITDA: Net income Depreciation and amortization.. Realized losses on short-term investments Interest expense Interest (income).. Provision for income taxes. EBITDA Stock-based compensation. Acquisition costs: Transaction costs. Contingent consideration.. Tax on equity exercises. Other non-comparable items(a) Professional service fees(b). Adjusted EBITDA.. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 25 2015 Year Ended December 31, 2014 2013 (in thousands) 1,483 2,938 697 2012 1,336 inovalon $65,352 $32,718 $55,155 $24,927 19,880 15,517 12,899 11,229 $66,063 22,633 328 4,420 (3,003) 79 (9) (10) 48,648 43.379 19,657 35,962 15,991 $139,089 $129,941 $67,962 $104,134 $52,199 7,415 2,894 1,842 2,560 3,767 2011 129 1,411 1,560 1,565 478 813 $151,622 $133,648 $71,847 $108,105 $57,526 © 2016 by Inovalon. All rights reserved.#26Reconciliation of Net Income to Non-GAAP net income Reconciliation of Net Income to Non-GAAP net income: Net income Stock-based compensation. Acquisition costs: Transaction costs Contingent consideration. Amortization of acquired intangible assets.. Tax on equity exercises. Other non-comparable items(a). Professional service fees(b). Tax impact of add-back items(c). Non-GAAP net income. INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 26 2015 Year Ended December 31, 2014 2013 (in thousands) 1,483 2,938 3,412 697 2012 inovalon 2011 $66,063 $65,352 $32,718 $55,155 $24,927 7,415 2,894 1,842 2,560 3,767 3,599 3,122 3,250 1,411 1,560 1,565 478 813 (6,656) (3,222) (2,809) (2,799) (3,352) $75,352 $70,205 $37,393 $59,449 $30,152 © 2016 by Inovalon. All rights reserved.#27inovalon INOV Q4 & FY 2015 Supplement (2.25.16) v1.0.0 healthcare empowered Ⓡ