#1Q4 & Full Year 2019 Earnings Supplement February 19, 2020 O 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 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 guidance for the first quarter and full year 2020, our ability to pay down outstanding indebtedness, expectations regarding interest payments and rates, tions regarding tax rates, and statements with respect to bility, revenue retention, and recu ing 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; 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, Script Med® Cloud, Clinical Data Extraction as a Service (CDEaaS), Natural Language Processing as a Service (NLPaaS), 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, 2019, filed with the SEC on February 19, 2020, 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 December 31, 2019 unless stated otherwise. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 2#3Contents This presentation serves as a supplement to the Inovalon announcement on February 19, 2020 pertaining to fourth quarter (Q4) and full year 2019 results and 2020 guidance. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 1 2 3 4 Overview 2019 Q4 & FY Financial Results 2020 Financial Guidance Appendix 1: Reconciliations 3#4inovalon® 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 60,000 acute, post-acute, and ambulatory provider sites with capabilities informed by the data of more than 314 million patients and more. than 53 billion medical events. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Payers Pharmacies Pharmaceuticals Devices +HOSPITAL H Acute Providers 010100 0101001 0101000 0101000 LIELS Massive Data Assets Home Care SNF Hospice Post-Acute Providers The Inovalon ONE® Platform 1010100 0010001 0011 001 2 Advanced Analytics Diagnostics Ambulatory Providers (KEE Intervention Toolsets MK Data Visualization Patients 4#5Empowering 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 314M+ Patients 76K+ Provider Sites INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Alaska FROM Hawaii KEY 100,000,000+ The MORE Registry modical events incidents = Connected Provider Client Sites Inovalon Headquarters = Office/Data Center Location Puerto Rico LO 5#6Executing on Strategy During 2019, Inovalon continued to execute on its three guideposts of its strategy. Lead in Innovation Bring to market the industry's most advanced, most differentiated, cloud- based software platforms, with the greatest breadth of connectivity, the deepest access to primary source data, and the most advanced analytics to empower the transformation of data- driven healthcare. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Inovalon Become the Enablement Layer Leverage the resulting capabilities of the Company's innovation to become the ubiquitous, independent "enablement layer" serving as the "Intel® Inside™" that empowers the healthcare ecosystem's innumerable transformation initiatives driving an increasingly accelerating network effect and virtuous cycle. Land and Expand Efficiently Provide capabilities in highly efficient, scalable, client-friendly, flexible ways that aligned with the growth and success of our clients resulting in strong growth and stickiness with strong operating leverage and resulting financial performance. 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 toolsets. 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. Clients/Partners = - Diagnosis, lab, procedure, and pharmacy claims Electronic Health Record (EHR) clinical data Interactive Connectivity Application Connectivity - Patient-reported data I. Demographic data - Socioeconomic data Data Exchange Eligibility and Enrollment data DME usage data Lab results data Provider data Facility census and staffing data + Cost data INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 泡 API Gateway na Lan Payer Applications Inovalon & Commercial Cloud Provider Applications Data Aggregation and Access Pharmacy Applications iPORT HD™ Customer-Specific Data Stores Data Analytics (Traditional Methodologies, Machine Learning. Artificial Intelligence, Deep Learning) TT Life Sciences Applications Shared Services # The MORE² Registry® 314M Unique Patients 53B Medical Events . 988,000 Physicians 552,000 Clinical Facilities 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 Q4 2019, the MORE2 Registry® dataset contained more than 314 million unique patient counts and 53 billion medical event counts, increases of 19% and 24%, respectively, compared with December 31, 2018. One of the industry's largest independent healthcare datasets, with more than 314M patients and more than 53B 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 Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Medical Event Count (billions) 科 理 50 8 54 2 0 38 35 34 32 30 25 25 24 22 20 18 5 4 12 0 54 52 48 46 44 42 40 36 28 26 16 14 10 8 6 4 0 MORE2 REGISTRY® DATASET GROWTH Patient Count Medical Event Count 59% Medical Event Count Expansion (4Q16-4Q19 CAGR) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 320 300 280 260 240 220 180 160 140 120 100 80 60 40 20 0 Patient Count (millions) 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 Q4 & FY 2019 Earnings Supplement (2.19.20) 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. ロロ 11010110 01101011 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. 314M+ Patients INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 980K+ Providers mm 201 D 53B+ 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. 1111111111 100001000011 1011111119 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. 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#11Cloud-Based Healthcare Data Lake Offering On January 13, 2020, Inovalon announced the newest addition to its cloud-based solution offerings, a cloud-based healthcare data lake, with a five-year contract with a leading healthcare organization executed during Q4 2019. The cloud-based Healthcare Data Lake solution provides clients with an industry-leading single-source-of- truth data "superset" that aids clients in supporting advanced reporting, analytics initiatives, and other use cases that benefit from best practices data architecture, data comprehensiveness, and data hygiene, while also eliminating costs of traditional enterprise warehouse solutions and healthcare organization processes suffering from incomplete, untimely, or erroneous data. Payer Applications Inovalon & Commercial Cloud Provider Applications Shared Services W Data Analytics (Traditional Methodologies, Machine Learning, Artificial Intelligence, Deep Learning) The MORE² Registry® 314M Unique Patients 53B Medical Events Pharmacy Applications 988,000 Physicians 552,000 Clinical Facilities Life Sciences Applications Data Aggregation and Access 99 iPORT HD™ Custom-Specific Data Stores INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Client-Specific Cloud-Based Data Lake EHR Connectivity Data Enrichment Normalization & Curation Data Analysis & Visualization Clinical encounter data (EHR/HIE) Demographic Socioeconomic data data Medical and lab claims data . Enrollment data Diagnoses data Procedure data I Pharmacy data | Laboratory results data Predictive population data = = Client Interactive Connectivity Application Connectivity Data exchange 11#12Contents This presentation serves as a supplement to the Inovalon announcement on February 19, 2020 pertaining to fourth quarter (Q4) and full year 2019 results and 2020 guidance. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 1) Overview 2 3 4 2019 Q4 & FY Financial Results 2020 Financial Guidance Appendix 1: Reconciliations 12#13Q4 2019 Financial Highlights Inovalon's Q4 2019 execution and financial performance was strong. Inovalon signed new and expanded contracts, resulting in a record new sales ACV of $73.5 million, and delivered $173.5 million in organic revenue, or 27% year-over-year. Strong revenue delivery resulted in strong operational leverage. Adjusted EBITDA increased 48% year-over-year, and Non- GAAP EPS increased 200% year-over- year. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 60% YOY Growth in New Sales Annual Contract Value (ACV) to a Record $73.5M Adj EBITDA Growth of 48% to $57.6M Representing a 33% Adjusted EBITDA Margin Record Quarterly Revenue $173.5M Representing Organic Revenue Growth of 27% of Non-GAAP EPS Growth of 200% year-over-year to $0.15 per share 13#14Adjacent 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. Payer INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 32% 2018 18% Provider 50% Pharmacy/Life Sciences 35% 2019 17% 48% 14#15Continued Strong Sales Performance The combination of strong demand for the Company's cloud-based platform capabilities and significant increases in the Company's sophistication and scale of sales capabilities is resulting in significant contract signings. Q4 2019 total new sales Annual Contract Value¹ (ACV) was a record $73.5 million, or an increase of 60% year-over-year, and platform new sales, excluding Services, ACV was $52.7 million, or an increase of 96% year-over-year. Total Quarterly New Sales ACV $33.0 $21.6 $39.0 $32.9 $27.3 $58.9 $73.3 $45.9$47.9 $54.8 $44.1 $73.5 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 Note: Please see appendix for definitions of the footnoted terms above. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 $13.2 Total Quarterly Platform New Sales ACV (Excluding Services) $62.8 $11.3 $26.0 $13.7 $6.2 $46.4 $26.9 $27.8 $38.7 $28.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 $52.7 Q4 2019 15#16Continued Strong Growth The strong market demand for Inovalon's cloud-based platforms and data-empowered capabilities, together with the growing sophistication of sales and the increasing operating leverage of the Company's technologies and business model, is driving both meaningful momentum and strong financial performance. Demonstrating this, the below graphics compare the resulting 2018 to 2019 for revenue, Adjusted EBITDA, Non-GAAP net income per share (EPS) and Free Cash Flow generation (inclusive of cash interest, transaction and integration spend, and CAPEX outflows). $527.7 2018 Revenue 22% $642.4 2019 Adjusted EBITDA $210.7 $151.9 2018 39% 2019 *Free Cash Flow is defined as net cash provided by operating activities less purchases of property and equipment and less investment in capitalized software INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Non-GAAP EPS $0.27 2018 $0.52 1 93% 2019 Free Cash Flow¹ $25.4 2018 87% $47.5 2019 16#17Continued Salesforce Expansion Through 2019, Inovalon continued to significantly increase the scale and sophistication of its salesforce. Furthermore, unlike previously when the Company would lead with healthcare subject matter expertise with support from technology personnel, the Company now leads with technology sales personnel (and a technology sale approach) with support from healthcare personnel. The combined result has been a significantly greater scale of sales operations with a higher overall sales velocity and success rate. = Technology Sales Leads = Healthcare Subject Matter Experts Sales Leads - Sales Support Q1 2015 FTES = 15 – Q1 2017 FTES = 79 ❀❀❀❀❀❀❀❀❀ ❀❀❀❀❀❀❀❀❀❀İ ❀❀❀❀❀❀❀❀❀❀İ iiii Q4 2018 FTES = 210+ 2015 2016 2017 Driven by Healthcare Subject Matter Experts Sales Leads Note: Figure intended to be illustrative INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Q4 2019 FTES = 255+ ❀❀❀❀❀❀❀❀❀❀❀❀❀❀❀ÎÒÎÎ ❀❀❀❀❀❀❀❀❀❀❀❀❀❀❀❀✿✿✿✿†† 2018 2019 Driven by Technology Sales Leads 2020 17#18Increasing Headcount 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 year-end 2019 decreased by over 1,400, and TTM Adjusted EBITDA per headcount increased by 73% during the period. 3,323 2015 Adjusted EBITDA Per Headcount of $45,628 Note: Acquisition of Avalere Health occurred prior to year-end 2015 Q4 2015 INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 20% Total Headcount Decrease From Year-End 2015 to Year-End 2019 774 Headcount Acquired 1,435 Headcount Efficiency 73% Increase in 2019 Adjusted EBITDA Per Headcount of $79,140 2,662 Q4 2019 * Total net decrease in headcount includes a gross increase of 774 headcount from acquisitions during the period, and gross headcount efficiency reductions of 1,435. 18#19Contents This presentation serves as a supplement to the Inovalon announcement on February 19, 2020 pertaining to fourth quarter (Q4) and full year 2019 results and 2020 guidance. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 1) Overview 2 3 2019 Q4 & FY Financial Results 2020 Financial Guidance 4 Appendix 1: Reconciliations 19#20Strong Subscription-Based Platform Adoption The graphic below illustrates the revenue offering mix, which includes the Company's reaffirmed 2020 guidance range as of February 19, 2020. 2016-2020G 27% Subscription-Based CAGR All numbers in millions. $427.6 12% 34% 54% $449.4 15% 2016 19% 2017 Subscription-Based Platform Offerings INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 66% $527.7 11% 9% 80% 2018 Legacy Solutions $642.4 11% 6% 83% 2019 Services $698-$718 ~10% -6% ~84% 2020G 20#21Revenue The following 2020 revenue guidance is being reaffirmed as of February 19, 2020. 13% CAGR 2016-2020G $428 2016 $449 2017 $528 2018 Note: CAGR calculations undertaken to the mid-point of 2020 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance ange. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 $642 2019 $698 - $718 2020G 21#22Expected 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. Q1 2019 Q2 2019 Q3 2019 9% to 12% YoY Organic Quarterly Revenue Growth Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 *Cadence reflects the expected Q4/Q1 transition dynamics of customer open enrollment and patient chum 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 Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 22#23Adjusted EBITDA The following 2020 Adjusted EBITDA guidance is being reaffirmed as of February 19, 2020. 24% CAGR 2016-2020G $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 guidancerange. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 $211 33% 2019 $231 - $241 33% 2020G 23#24Cash Flow From Operations The following 2020 Cash Flow from Operations guidance is being reaffirmed as of February 19, 2020. $170-$185 18% CAGR 2016-2020G $93 22% $98 22% $1041 $90 17% 2018 % of Revenue $106 17% 2016 2017 Note: CAGR calculations undertaken to the mid-point of 2020 Guidance All numbers in millions. Graphic drawn at midpoint of guidancerange. * 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 onetime items, the non-GAAP cash flow from operations would have been $104 million as represented by the green dotted line. 2 2019 cash flow from operations was impacted by timing of certain account receivable collections, which occurred after December 31, 2019. Accordingly, the Company increased its 2020 cash flow from operations guidance by $25 million to reflect the collection of these receivable balances. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 25% 2019 2020G 24#25CAPEX 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 complete and is increasingly being harvested through the successful engagement of clients for highly-differentiated platform offerings. As a result, the Company has been seeing the capital investments of the Company returning back towards historical levels (as a percentage of revenue), and continues to see this occurring in 2020. $18.8 6% $13.2 $5.6 2013 $22.7 6% $20.2 2014 Maintenance Capital Expenditure $26.4 6% $25.2 $1.2 2015 $39.1 $7.8 9% $23.2 INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 $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. $65.0 $6.4 $45.8 12% $12.8 2018 $58.9 $44.8 9% $14.1 2019 Inovalon ONE® Platform Buildout Capital Expenditure $52- $58 $39 - $44 7% -8% $13- $14 2020G % Of Revenue 25#26Covenant-Lite Debt Leverage On April 2, 2018, the Company put in place a $980M seven-year term debt facility and $100M five-year revolving debt facility. Proceeds were used, among other things, 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 term 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 76.5%, 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. 2.83x Current Senior Secured Net Debt Leverage Ratio Debt Maturity Profile ¹.2 $9.8 2021 No Standing Financial Covenants $9.8 2022 4 $100.0* $9.8* 2023 $868.7 $9.8 2024 Interest Rate 2025 76.5% of the term debt interest rate is fixed $0.0 $7.4 2019 Term Facility 2020 Revolving Facility *All numbers in millions. ' As of February 13, 2020. 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 February 19, 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 2023.5 As of December 31, 2019. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 $915.3 $215.3 Floating $700.0 5.55% Weighted Average Interest Rate Term Facility Net Debt' $822.3 Current 26#27Full Year 2020 Financial Guidance The Company is updating its full-year 2020 guidance to raise its expected net income range, raise its diluted net income per share range, raise its non-GAAP net income range, raise its non-GAAP diluted net income per share range, and net cash provided by operating activities range. Additionally, the Company is reiterating its previously provided full-year 2020 guidance for revenue, Adjusted EBITDA, and capital expenditures. 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 Previous 2020 Financial Guidance Originally Provided October 30, 2019 $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 (1) The Company is assuming 150 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2020, INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Updated 2020 Financial Guidance Provided February 19, 2020 $698 million to $718 million $25 million to $31 million $89 million to $94 million $231 million to $241 million $170 million to $185 million $52 million to $58 million $0.17 to $0.21 $0.59 to $0.63 YoY Change 9% to 12% 221% to 297% 15% to 21% 10% to 14% 60% to 74% 240% to 320% 13% to 21% 27#28Q1 2020 Financial Guidance Inovalon is providing Q1 2020 guidance as provided below, indicating 9% to 12% year-over-year organic revenue growth. Financial Metric Revenue Net Income ¹ Non-GAAP net income¹ Adjusted EBITDA Diluted Net Income Per Share¹ Non-GAAP diluted net income per share¹ (The Company is assuming 150 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2020. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Q1 2019 Financial Guidance $158.5 million to $163 million $0 million to $2 million $17 million to $19 million $48 million to $51 million $0.00 to $0.01 $0.11 to $0.13 YOY Change 9% to 12% 16% to 29% 8% to 15% 10% to 30% 28#29Contents This presentation serves as a supplement to the Inovalon announcement on February 19, 2020 pertaining to fourth quarter (Q4) and full year 2019 results and 2020 guidance. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 1) Overview 2 3 4 2019 Q4 & FY Financial Results 2020 Financial Guidance Appendix 1: Reconciliations 29#30Reconciliation 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 income to Adjusted EBITDA: Net income Depreciation and amortization Interest expense Interest income Provision for income taxes (¹) EBITDA Stock-based compensation Other non-comparable items Adjusted EBITDA Adjusted EBITDA margin INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Three Months Ending March 31, 2020 Low 27 14 (1) 40 Guidance Range 48 30.3% High 2 S 27 14 2 51 31.3% S Year Ending December 31, 2020 Low High 25 108 59 (2) 10 200 27 231 33.1% $ 31 108 60 (2) 12 209 28 241 33.6% A 28% statutory tax rate is assumed in order to approximate the Company's effective corporate tax rate. (2) 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. 30#31Reconciliation Non-GAAP Net Income 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: of Forward-Looking Guidance (In millions, except per share amounts) Reconciliation of Forward-Looking Guidance Net income to Non-GAAP net income: Net income Stock-based compensation 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 S INOV Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 Three Months Ending March 31, 2020 Low 13 1 2 (5) 17 Guidance Range 0.11 150 High 263 1 2 (5) 19 339 0.01 0.13 150 6.9 Year Ending December 31, 2020 Low High AARNA 27 52 4 (23) 119 0.17 0.59 $ 150 31 28 52 (25) 94 0.21 0.63 150 (1) 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. 31#32Definitions 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). New sales ACV refers to the sum of the first 12 months of revenue expected from new sales 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 Q4 & FY 2019 Earnings Supplement (2.19.20) v1.0.0 32#33ACV, 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 new sales Annual Contract Value (ACV) data, 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 32. INOV Q4 & FY 2019 Earnings Supplement (2.19.20) 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 33#34inovalon® Healthcare Empowered Ⓒ2020 by Inovalon. All rights reserved.