Inovalon Results Presentation Deck slide image

Inovalon Results Presentation Deck

ACV, TCV and Bookings Inovalon's sales have significantly expanded and accelerated, supporting strong growth going forward. The Company started reporting its sales performance in 2018 by providing Annual Contract Value (ACV) data for new sales, a metric reflecting the sum of the first 12 months of revenue expected from new contracts signed during a specific period (such as a quarter or year). Inovalon first reported this metric with the release of Inovalon's Q3 2018 results on November 7, 2018. Of note, due to the fact that the bulk of the Company's contracts (also referred to as a "Statements of Work" or "SOWS") are multi-year in their contracted term (or contracted duration), the "bookings" or "Total Contract Value" (TCV) pertaining to the ACV is significantly larger than the ACV. For example, if the ACV for a period was $X, the corresponding total Bookings or TCV of the underlying sales would be perhaps $2X to $3X, depending on the average contract term signed within the group of underlying sales in the period. Importantly, while the Company is providing ACV sales data to provide insight into the accelerated nature of the Company's sales in a comparable (e.g., year-over-year) fashion, the corresponding total sales, bookings, or TCV is even more significant. Executed SOWS ACV 12 Months Illustrative only. Please see definitions on slide 28. INOV Q3 2019 Earnings Supplement (10.30.19) v1.0.2 24 Months Initial Contract / SOW Term 36 Months * Contracts depicted are Illustrative only to support discussion of ACV Etc. Illustrative Dollar Equivalency 30
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