#1Q2 2019 Earnings Supplement July 31, 2019 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," 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 guidance for the third quarter and full year 2019, expectations regarding tax rates, and statements with pect to visibili 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 (CDEaaSTM), 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 June 30, 2019 unless stated otherwise. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 2#3Contents This presentation serves as a supplement to the Inovalon announcement on July 31, 2019 pertaining to second quarter (Q2) of 2019 results and guidance. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 1 Overview 2 2019 Q2 and TTM Financial Results 3 2019 Financial Guidance 4) 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 50,000 acute, post-acute, and ambulatory provider sites with capabilities informed by the data of more than 278 million patients and nearly 46 billion medical events. Note: Patient and medical event counts do not yet fully include data from ABILITY. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Payers A +HOSPITAL Acute Providers Pharmacies Pharmaceuticals Devices 010100 10101001 0101000 0101009 BLOLLOH Massive Data Assets The Inovalon ONE® Platform Home Care SNF Hospice Post-Acute Providers 1010100 0010001 0011 001 Advanced Analytics Diagnostics Intervention Toolsets Ambulatory Providers ULLE MM Data Visualization 93 Patients#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 278M+ Patients* 50K+ Provider Sites Note: Patient count does not yet fully include data from ABILITY. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Alaska Hawaii KEY 100,000,000+ The MORE' Registry medical events incidents = Connected Provider Client Sites Inovalon Headquarters = Office/Data Center Location Puerto Rico 5#6MORE² RegistryⓇ Dataset Expansion Inovalon's primary-source datasets continue to expand rapidly. As of Q2 2019, the MORE² Registry dataset contains more than 278 million. unique patient counts and nearly 46 billion medical event counts. One of the industry's largest independent healthcare datasets, with more than 278M patients and nearly 46B medical events Primary-sourced, fully linkable, longitudinally- matched, data from all major U.S. healthcare programs Contains EHR, claims, scripts, labs, provider, demographic data & 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 Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Medical Event Count (billions) 46 45 44 43 42 41 40 39 38 37 36 35 188588888888NPP Pes 33 32 30 22 21 19 17 16 15 14 13 11 10 9 8 7 6 5 4 FANTO MORE² REGISTRY® DATASET GROWTH Patient Count Medical Event Count 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Data resulting from the integration with ABILITY Network is not yet reflected within the MORE? Registry" dataset and is therefore not reflected within the aforementioned data metrics as of this date 280 270 260 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 80 50 40 20 10 0 6 Patient Count (millions)#7Contents This presentation serves as a supplement to the Inovalon announcement on July 31, 2019 pertaining to second quarter (Q2) of 2019 results and guidance. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 1 2 3 Overview 2019 Q2 and TTM Financial Results 2019 Financial Guidance 4) Appendix 1: Reconciliations 7#8Q2 2019 Highlights Following an important period of meaningful transformation, Inovalon's cloud-based platform capabilities are increasingly being recognized for their market leadership and differentiation, driving strong value-delivery for clients, and resulting in significant sales expansion, revenue growth, operating leverage, and financial performance for the Company. 1. Continued Strong Annual Recurring Revenue Base: SaaS-enabled subscription-based revenue representing 80% of Q2 2019 revenue, up from 78% in Q2 2018. 2. Continued Strong Organic Sales ACV Metrics: Strong market adoption with Q2 2019 new and expanded contracts sales Annualized Contract Value (ACV), excluding Services, of $38.7 million, up 39% sequentially from Q1 2019, with Q2 2019 Trailing Twelve Months (TTM) new sales ACV of $156.3 million (up 69% YoY). 3. Continued Strong Margins: Strong Q2 2019 gross margin of 74%, and Adjusted EBITDA margin of 33.3% 4. Continued Strong Cash Flow: Strong Q2 2019 net cash from operating activities of $25.2 million (inclusive of $15.9 million in interest payments), a year-over-year increase of 90%. 5. Strong Q2 2019 TTM Results: "Inovalon 2.0" transformation initiatives continued to drive strong TTM financial performance with Q2 2019 TTM revenue of $584.6 million (up 23% from TTM Q2 2018), Adj. EBITDA of $188.0 million (up 61% from TTM Q2 2018), Non-GAAP net income per share of $0.39 (up 63% from TTM Q2 2018), and Free Cash Flow¹ of $58.9 million (up $62.2 million from TTM Q2 2018). Note: Please see slide 25 for definitions of the footnoted terms above. '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 Q2 2019 Earnings Supplement (7.31.19) v1.0.0 DO 8#9Continued Strong Sales Growth 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 increases in contract signings. New platform sales was $38.7 million in Annual Contract Value¹ (ACV), excluding Services, in Q2 2019 (up 39% sequentially) and was $156.3 million for the Q2 2019 trailing twelve months (TTM) (up 69% from Q2 2018 TTM). Total new sales ACV Q2 2019 was $54.8 million (up 14% sequentially) and $221.9 million for Q2 2019 TTM (up 40% from Q2 2018 TTM). Excluding Services ACV $27.8 Q1 2019 39% $38.7 Q2 2019 Note: Please see appendix for definitions of the footnoted terms above. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 $92.3 Q2 2018 TTM 69% $156.3 Q2 2019 TTM $47.9 Q1 2019 14% Total ACV $54.8 Q2 2019 $221.9 40% $158.1 ✓ Q2 2018 TTM Q2 2019 TTM 9#10Continued Strong Growth Inflection The transformation to the more modular cloud-based Inovalon ONE® Platform offering, its strong marketplace adoption and the transition from legacy to subscription-based platform contract structures has been driving increasing momentum and continued strong financial performance. The below graphics compare the resulting Q2 2019 TTM to Q2 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). Adj. EBITDA $476.0 Revenue 23% $584.6 $117.0 INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 61% Q2 2018 Q2 2019 TTM Q2 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. Q2 2018 TTM $188.0 Non-GAAP EPS $0.24 Q2 2018 TTM 63% $0.39 Q2 2019 TTM Free Cash Flow¹ $62.2M Q2 2018 TTM $58.9 Q2 2019 TTM 10#11Continued G&A Operating Leverage General and administrative expenses decreased $14.5M in Q2 2019 as compared to Q2 2018. Q2 2019 G&A as a percentage of revenue was 29.1% as compared to 39.4% in Q2 2018. The decrease was driven by a reduction of $11.2M in non-comparable or one-time expenses in Q2 2018, as well as a reduction of $1.6M in transaction and integration expenses and a reduction of $1.7M in employee-related & professional expenses in comparison to the year-ago-period. $60.2 39.4% As a Percentage of Revenue Q2 2018 Actual ($11.2) Non-Comparable Or One-Time Expenses All numbers in millions, subject to rounding INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 $49.0 32.1% As a Percentage of Revenue Normalized Q2 2018 Quarterly Expense ($1.6) Transaction & Integration Expenses ($1.7) Employee-Related & Professional Expenses $45.7 29.1% As a Percentage of Revenue Q2 2019 Actual 11#12Contents This presentation serves as a supplement to the Inovalon announcement on July 31, 2019 pertaining to second quarter (Q2) of 2019 results and guidance. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 1 2 3 Overview 2019 Q2 and TTM Financial Results 2019 Financial Guidance 4) Appendix 1: Reconciliations 12#132019 Revenue Guidance Bridge The combination of highly differentiated platform capabilities, an increased client success focus, and expanding scale and sophistication of the Company's sales capability is resulting in strong client retention and meaningful growth. As of July 31, 2019, the Company has narrowed its 2019 guidance for revenue to $638M to $648M, which reflects revenue expansion of 22% and organic growth of 14% at the midpoint. The graphic to the right is for illustrative purposes only. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Annual Revenue Retention expected to contribute -3 points in 2019 New client sales closed prior to 2019 expected to contribute ~3 points of growth in 2019 ABILITY acquisition expected to contribute -8 points of revenue growth in 2019 New client sales already closed during 2019 expected to contribute -6 points of growth in 2019 New client sales yet-to-be sold during 2019 expected to contribute -2 points of growth in 2019 $527.7 2018 Revenue Full Year 2018 vs. 2019 Guidance As-Reported Revenue Growth of 22% at the Midpoint Organic Revenue Growth of 14% at the Midpoint -3 pts -3 pts Coverage in place for 2019 as of November 7, 2018 Revenue Retention Contribution -8 pts Coverage already in place as of June 30, 2019 Signed Now Logo Contribution -6 pts As of June 30, 2019, the Company's revenue guidance has coverage of more than 98%, providing significant visibility into the full year. Inorganic ABILITY Contribution -2 pts New Sales Contribution (Closed) New Sales Contribution $648.0 $638.0 2019 Revenue Guidance 13#142019 Adjusted EBITDA Margin Bridge Inovalon continues to expect operating leverage, driven by high-value offerings driving further improvement in mix and pricing, benefit from technology-enabled efficiency initiatives, and contribution from ABILITY. As of July 31, 2019, the Company has raised its guidance for Adjusted EBITDA and Adjusted EBITDA margin for 2019. Inovalon now sees the above-mentioned factors driving -370 basis points of Adjusted EBITDA margin expansion in 2019, and increase of 80 basis points above prior guidance. The graphic to the right is for illustrative purposes only. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 The full gross margin benefit of an increasing mix of higher margin Platform offerings, coupled with continued technology-enabled efficiencies and the ABILITY acquisition, are seen driving continued operating leverage improvement in 2019. 28.8% FY 2018 Adj. EBITDA Margin % -370 Basis Point Year-to-Year Improvement -60 bps Investment Initiatives / Overhead Efficiencies -90 bps Platform Mix & Price Changes -80 bps Platform Efficiencies -140 bps Inorganic ABILITY Contribution 32.5% FY 2019G Adj. EBITDA Margin % 14#15Strong Subscription-Based Platform Adoption The Company is seeing strong revenue retention and growth of its subscription-based cloud-based platform offerings, providing significant Coverage and resulting revenue visibility of more than 98% towards 2019 guidance. All numbers in millions. $437.3 4% 43% 53% 2015 $427.6 12% INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 34% 54% 2016 Subscription-Based Platform Offerings $449.4 15% 19% 66% 2017 Legacy Solutions $527.7 11% 9% 80% 2018 Services $638-$648 -10% -7% -83% 2019G >98% 2019G Revenue Coverage Already in Place as of June 30, 2019 15#16Revenue The following full-year 2019 revenue guidance is being provided as of July 31, 2019. 14% $296 2013 2013 - 2019G CAGR $362 2014 $437 INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 2015 $428 2016 Note: CAGR calculations undertaken to the mid-point of 2019 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance range. $449 2017 $528 2018 $638 - $648 2019G 16#17Adjusted EBITDA The following full-year 2019 Adjusted EBITDA guidance is being provided as of July 31, 2019. 19% CAGR $72 24% 2013 2013-2019G $134 37% 2014 $152 INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 35% 2015 $100 23% 2016 % of Revenue Note: CAGR calculations undertaken to the mid-point of 2019 Guidance. All numbers in millions. Graphic drawn at midpoint of guidance range, $109 24% 2017 $152 29% 2018 $205 - $214 33% 2019G 17#18Cash Flow From Operations The following full-year 2019 Cash Flow from Operations guidance is being reaffirmed as of July 31, 2019. 13% $66 22% 2013 2013 - 2019G CAGR $86 24% 2014 $68 15% 2015 $93 22% $98 22% 2017 $1041 $90 17% 2018' $130 - $145 -22% 2016 % of Revenue Note: CAGR calculations undertaken to the mid-point of 2019 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 Q2 2019 Earnings Supplement (7.31.19) v1.0.0 -20% 2019G 18#19CAPEX 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 2019. $18.8 6% $13.2 $5.6 2013 $22.7 6% $20.2 $2.5 2014 Maintenance Capital Expenditure $26.4 INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 6% $25.2 $1.2 2015 $39.1 $7.8 9% $23.2 $8.1 2016 Innovation Capital Expenditure (incl. Cap. Software) Capital Expenditure (CAPEX) is defined as the sum of Purchases of property and equipment and Investment in capitalized software. All numbers in millions. $65.5 $28.1 15% $28.5 $8.9 2017 $65.0 $6.4 $45.8 12% $12.8 2018 Inovalon ONE® Platform Buildout Capital Expenditure $52- $58 $39 - $44 8% -9% $13- $14 2019G % Of Revenue 19#20Full Year 2019 Financial Guidance The Company is updating its full-year 2019 guidance to narrow its expected revenue range, raise its expected net income range, raise its diluted net income per share range, raise its Adjusted EBITDA range, raise its non-GAAP net income range, and raise its non-GAAP diluted net income per share range. Additionally, the Company is reiterating its previously provided full-year 2019 guidance originally provided ranges on May 1, 2019 for net cash provided by operating activities and capital expenditures. Financial Metric Revenue¹ Net Income² Non-GAAP net income² Adjusted EBITDA Net Cash Provided By Operating Activities Capital Expenditure Diluted Net Income Per Share² Non-GAAP diluted net income per share² Previous 2019 Financial Guidance Originally Provided May 1, 2019 $637 million to $657 million $2 million to $6 million $63 million to $71 million $200 million to $210 million $130 million to $145 million $52 million to $58 million $0.01 to $0.04 $0.42 to $0.48 (1) Organic revenue growth expected to be 13% to 15%. 121 The Company is assuming 149 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2019. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Updated 2019 Financial Guidance Updated July 31, 2019 $638 million to $648 million $4 million to $9 million $67 million to $73 million $205 million to $214 million $130 million to $145 million $52 million to $58 million $0.03 to $0.05 $0.45 to $0.49 03-9762 YoY Change 21% to 23% 70% to 86% 35% to 41% 44% to 60% 67% to 81% 20#21Q3 2019 Financial Guidance In the setting of a now predominantly subscription-based contract portfolio, significantly increased client Annual Revenue Retention performance, expanded Annual Recurring Revenue base, and strong YTD new ACV sales, Inovalon is providing for Q3 2019 guidance as provided below, indicating 11% to 15% 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 149 million weighted average diluted shares and an effective tax rate of approximately 28% for the full year 2019, INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 Q3 2019 Financial Guidance $162.5 million to $167.5 million $3 million to $4 million $17 million to $19 million $53 million to $57 million $0.02 to $0.03 $0.11 to $0.13 21#22Contents This presentation serves as a supplement to the Inovalon announcement on July 31, 2019 pertaining to second quarter (Q2) of 2019 results and guidance. INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 1 2 3 4 Overview 2019 Q2 and TTM Financial Results 2019 Financial Guidance Appendix 1: Reconciliations 22#23Reconciliation 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: Guidance Range (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 Three Months Ending September 30, 2019 Low High INOV Q2 2019 Earnings Supplement (7.31.19) v1.0.0 3 27 17 (1) 47 6 53 32.6% GA $ 27 17 (1) 48 6 57 34.0% 69 $ Year Ending December 31, 2019 Low High 107 66 (2) 176 20 1 3 4 205 32.1% GA 69 $ 9 107 (2) 3 183 20 1 42 214 33.0% 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. 23