#1196 5100101 001010011001010 inovalon 1801010011001 1001100101000 BTOOTTOON (01001010010 TOOTOTOO 10011001010010 101001019011001 010010010 17 Third Quarter 2017 November 1, 2017 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," "see", "will," "target," "estimate," "continue," "anticipate," "assume," "intend," "expect," "project" "look forward" 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 or 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, including, but not limited to, the timing of and investment in technological advancements and developments, as well as Inovalon's ability to enter into new agreements with existing or new platforms, products and solutions in the timeframes expected, or at all, 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 and provides no assurance that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, certain information included in this presentation is presented strictly for illustrative or educational purposes, and such information should not be viewed as a representation regarding management's expectations or actual results. Management's expectations and actual results could differ materially from information presented solely for illustrative or educational purposes. 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 herein and within our public filings with the Securities and Exchange Commission, available on the Company's investor website at http://investors.inovalon.com. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 2 Ⓒ2017 by Inovalon. All rights reserved.#3Contents inovalon This deck is provided as a supplement to the Q3 2017 Earnings Results release announced by Inovalon on November 1, 2017. The following outlines the content of this supplemental presentation: • Q3 2017 - Continued Sequential Improvement • The Inovalon ONETM Platform and Platform Storyboard • MORE2 Registry® Dataset Expansion Updated 2017 Revenue Guidance Bridge Updated 2017 Adjusted EBITDA Margin Expansion Updated 2017 Financial Guidance Summary Appendix INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 3 Ⓒ2017 by Inovalon. All rights reserved.#4Q3 2017 - Continued Sequential Improvement inovalon Revenue (M) Growth Operating Leverage Continued Investment & Efficiency $108.3 64.7% $110.6 Q1 2017 Q2 2017 Q3 2017 Gross Margin $17.7 66.4% $115.9 Q1 2017 Q2 2017 Q3 2017 66.8% Investment in Innovation $21.9 $19.9 Q1 2017 Q2 2017 Q3 2017 Adj. EBITDA Margin² 23.0% Q1 2017 Q2 2017 33.1% Q1 2017 25.1% 1: Gross Margin defined as Revenue less Cost of Revenue, as a percentage of Revenue. 2: Adj. EBITDA Margin and G&A represent profit/expense as a percentage of Revenue. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 G&AⓇ 32.4% Q2 2017 26.6% Q3 2017 4 31.3% Q3 2017 H (@ # Strong market adoption of the Inovalon ONE™ Platform, evidenced by multi-year engagements with four national health plans, in addition to multiple state and regional players, driving 10.3% year-over-year growth Continued transition to subscription-based model contributing to strong Q3 sequential growth of 4.8%, accelerating from Q2 Further sequential gross margin expansion of 40 bps, driven by continued product mix improvement and technology-enabled efficiency initiatives Further sequential Adjusted EBITDA margin expansion of 150 bps while maintaining increased investments in innovation and sales & marketing Focus on overhead efficiency enabled G&A decrease of 110 bps sequentially (and 410 bps YoY) as a percent of revenue Continuing to invest in platform innovation including modularity, connectivity, compute power, and data visualization - to drive growth and differentiation Ⓒ2017 by Inovalon. All rights reserved.#5The Inovalon ONETM Platform inovalon The Inovalon ONETM Platform brings to the marketplace highly extensible, national-scale capabilities to interconnect with the healthcare ecosystem on massive scale, aggregate and analyze data in petabyte volumes, arrive at sophisticated insights in real-time, and drive impact wherever it is analytically identified best to intervene. jakartamenty PORTL PORT HOT P m THE DHE TË PË இந்தன்னார் Financial Performa May Fred Ga (FOT M bạn thanh Co To Hantart Designer Q PE FUNTSE A Stable Health Settings C M Come Empre C berghe Call Demet C L INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 CH The Inovalon ONE™ Platform Architecture Analyt THE INOVALON ONE PLATFORM Ambulatory / Cutpatதார் Care Settings Point-of-Care Venue Coordination Master Platform Data Warehouse Real World Intervention/Point-Of-Care Solutions Portat Comparatiak: Arayan Aratn/ ingatient Care llettl P === Cen S100 Anaya (PCN| M Makanan lakatt Une Far Mala 5 Post-Acute Care Semings Tensk Bi for Any Data Visualization Reporting ting Management & Administration Consoles Gy Esportny Stre Ring Regulatory Shama Master Comparative Data Warehouse m ping SUPPORT SERVICES P De Hus ogram Fan PARTICIPATING ORGANIZATION PORTFOLIO SUPPORT Ⓒ2017 by Inovalon. All rights reserved.#6Platform Storyboard inovalon The Inovalon ONETM Platform is an integrated, cloud-based platform of more than 80 individual proprietary toolsets able to be rapidly configured to empower the operationalization of large-scale, data-driven and value- based care initiatives. Each toolset is referred to as a "Component," each supporting critical healthcare ecosystem functionalization needs. Components are grouped into "Modules." Following client implementation, activation of additional Components allows for rapid cross selling, time to impact, and value expansion for clients. Pred C ga letom POS ... ... ... NU pada pada The Inovalon ONE™ Platform Storyboard Had 104 kipeket” Kempre Pute mb 888 "mm"high" www Storyboard is provided for illustrative purposes only and does not represent a specific configuration of the Inovalon ONE™ Platform. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 6 Baba Drives for Bulego ding Hod Tema Dalam Kara Pattany Satelit ant kakaknas utan damaian === inovalon CHUR Ⓒ2017 by Inovalon. All rights reserved.#7Expanded Proprietary Datasets Through extensive healthcare industry connectivity, integration technologies and an expanding client base, Inovalon maintains one of the industry's largest proprietary datasets, pertaining to 231 million unique patients and more than 34 billion medical events, empowering highly differentiated capabilities and value creation for our clients. Patient Count (millions) 240 230 210 200 150 180 170 160 150 130 120 110 100 90 80 70 60 50 40 30 D MORE REGISTRY GROWTH Patient Count 2000 2001 2002 2003. 2004 Medical Event Count 2005 -2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 inovalon Q3 2017 Year Please see the Company's fillings with the Securities and Exchange Commission (SEC), including the Form 8-K filed on August 2, 2017, for further information on this and other key metrics. 7 INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 33 31 30 27 26 25 24 23 22 20 19 18 17 16 15 14 13 11 10 9 8 7 6 5 4 3 2 1 0 Medical Event Count (billions) Ⓒ2017 by Inovalon. All rights reserved.#8Updated 2017 Revenue Guidance Bridge inovalon The combination of previously-discussed factors in 2017 yields full year revenue guidance of $447.1M to $459.3M, or expected revenue growth between 5% and 7% on a reported basis. $427.6 2016 Actual Revenue Full Year 2016 vs. 2017 Guidance Revenue Growth Range 5% to 7% -(6 pts) Client Chum -(7 pts) CARA Transition Wrap-up 5 pts - 6 pts Account Growth The above table is for illustrative purposes only. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 5 pts - 6 pts Now Client 7 pts - 8 pls Crechan & Acquisitions $459.3 $447.1 2017 Revenue Guidance 8 Client revenue churn of approximately 6 pts in 2017 is consistent with historical norms The impact of transitioning the CARA offering to a more flexible and modular platform substantially resolved at the end of Q2 2017 Revenue growth from up-sell, cross- sell and new clients (signed in 2016 and seen continuing in 2017), spurred by the introduction of new platform offerings and added sales capacity Ⓒ2017 by Inovalon. All rights reserved.#9Updated 2017 Adjusted EBITDA Margin Expansion inovalon Inovalon's investments in innovation are driving increased Platform efficiencies, while also enabling the introduction of new Inovalon ONETM Platform offerings with higher margins. These forces are enabling an expected 100 to 200 basis point expansion in annual Adjusted EBITDA margin in 2017 before the impact of the acquisition of CCS. 100 to 200 Basis Point Year-to-Year Improvement 23.4% FY2016 Adj EBITDA Margin % (200- 400 bps) Investment Initiatives 200 - 100 bps 400 - 200 bps Represents -450 bps of Gross Margin Expansion YtY Platform Mix & Price Changes Platform Efficiencies The above table is for illustrative purposes only. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 25.4% 24.4% FY 2017E Adj EBITDA Margin % Excl. CCS Acquisition (90 bps) Acquisition 24.5% 9 23.5% FY 2017 E Adj. EBITDA Margin Incl. CCS Acquisition Continued commitment to investments in innovation, sales capacity expansion and technology-enabled efficiency initiatives Increasing mix of higher margin Platform offerings Technology-enabled efficiency initiatives spanning connectivity, automation and integration driving strong operating leverage yielding Gross Margin expansion of 450 bps YtY Over the 2H 2017 integration period, the acquisition of CCS expected to be a -90 bp headwind to Adjusted EBITDA margin Ⓒ2017 by Inovalon. All rights reserved.#10Updated 2017 Financial Guidance Summary inovalon Inovalon is updating full-year 2017 guidance previously provided by the Company on August 2, 2017, increasing net income, diluted net income per share, and Non-GAAP diluted net income per share. Financial Metric Revenue Net Income Adjusted EBITDA Non-GAAP net income Diluted net income per share Non-GAAP diluted net income per share Updated Guidance Range Provided November 1, 2017 $447.1 million to $459.3 million $20.0 million to $24.0 million $105.2 million to $112.5 million $42.2 million to $46.6 million $0.14 to $0.17 $0.30 to $0.33 Previous Guidance Range Provided August 2, 2017 10 $447.1 million to $459.3 million $18.0 million to $22.5 million $105.2 million to $112.5 million $42.2 million to $46.6 million $0.13 to $0.16 $0.29 to $0.32 The Company is assuming 142.7 million shares for the full year 2017, down from 143.5 million shares assumed in guidance previously. Additionally, the Company's guidance assumes an effective tax rate of approximately 39.0 % for the full year 2017. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 Ⓒ2017 by Inovalon. All rights reserved.#11inovalon DOTOTOO healthcare empowered FE 77 2010 LOLA 19 EBS Appendix#12Reconciliation of Forward-Looking Guidance Adjusted EBITDA inovalon Inovalon defines Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) as net income calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, realized losses on short-term investments, loss (gain) on disposal of equipment, interest expense, interest income, provision for income taxes, stock-based compensation, acquisition costs, 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 forward-looking net income to Adjusted EBITDA guidance follows: Guidance Range 11 G (In millions) Reconciliation of Forward-Looking Guidance Net Income to Adjusted EBITDA: Net income Depreciation and amortization Loss (gain) on disposal of equipment Interest income Interest expense Provision for income taxes (1) EBITDA Stock-based compensation Acquisition costs: Transaction costs Integration costs Contingent consideration accretion Compensatory contingent consideration Other non-comparable items (2) Adjusted EBITDA Adjusted EBITDA Margin 69 12 Twelve Months Ending December 31, 2017 High Low 20 52 (6) 6 13 85 17 2 2 105 23.5% 24 52 (6) 6 15 91 17 (2) 5W A 39% lax 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. Non-comparable items are excluded from Adjusted EBITDA in order to more effectively assess the Company's period over period and on going operating performance. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 113 24.6% Ⓒ2017 by Inovalon. All rights reserved.#13Reconciliation of Forward-Looking Guidance Non-GAAP Net Income inovalon Inovalon defines Non-GAAP net income as net income calculated in accordance with GAAP, adjusted to exclude tax-affected stock-based compensation expense, acquisition costs, amortization of acquired intangible assets, tax on equity exercises and other non-comparable items. A reconciliation of net income to Non-GAAP net income follows: (In millions, except per share amounts) Reconciliation of Forward-Looking Guidance Net Income to Non-GAAP net income: Net income Stock-based compensation Acquisition costs: Transaction costs Integration costs Contingent consideration accretion Con ensatory contingent consideration Amortization of acquired intangible assets Other non-comparable items (1) Tax impact of add-back items (2) 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 $ 13 Guidance Range Twelve Months Ending December 31, 2017 High Low 20 17 NGN @N (3) 15 (13) 42 0.14 0.30 142.700 24 17 2 (2) 2 15 (14) 47 0.17 0.33 142,700 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. Non-comparable items are excluded from Non-GAAP net income in order to more effectively assess the Company's period over period and on going operating performance. A 39% tax rate is assumed in order to approximate the Company's effective corporate tax rate. INOV Q3 2017 Earnings Presentation Supplement (11.1.17) v1.0.0 Ⓒ2017 by Inovalon. All rights reserved.#14Inovalon healthcare empowered Ⓡ