Inovalon Results Presentation Deck
Evolution of
Inovalon I
When Inovalon went public in 2015, it
was soon after impacted by several
concurrent forces that negatively
impacted performance.
INOV Q3 2018 Earnings Supplement (11.7.18) v1.0.0
1. Information Made Newly Available By Going Publieled A
Period of Competition & Downward Market Pricing Pro
The first-time disclosure of the Company's strong profitability (approximately
35% Adjusted EBITDA margins) and customer list resulted in:
a) Existing clients (which, at the time, were concentrated in the top ten
customers representing 76% of revenues in 2014) exerted downward
pricing pressure on the Company's solutions; and
b) Armed with the newly available information (customer lists, product
details, and clarity of business model success), Private Equity financed
competitors' efforts to "copycat" the Inovalon model and attempt to
poach Inovalon's newly revealed customers.
2. The Launch of Affordable Care Act Health Plans Brought With
It Volatility
As the ACA launched across the country in 2014, health plans and ACA-
legislated COOPS turned to Inovalon to support multiple data-driven
elements of their business models. After a period of initial growth, ACA plans
and COOPS began facing political uncertainty resulting in a period of market
instability (not unlike Medicare Advantage's initial three years);
3. Inovalon had Under-Invested in Sales & Marketing
Prior to going public, Inovalon had grown for more than a decade with only
approximately 2% of revenue spent on Sales & Marketing. This low amount
(and the scale of Sales & Marketing operations within the Company
represented by such an amount) was inadequate to counter the
aforementioned headwinds experienced in the aftermath of going public.
30View entire presentation