Prepared remarks
Good day, and thank you for standing by. Welcome to the InnovAge 2026 Fiscal Third Quarter Earnings Call. Please be advised today's conference is being recorded. I would like to hand the conference over to your speaker today, Ryan Kubota. Please go ahead.
Thank you, operator. Good afternoon, and thank you all for joining the InnovAge 2026 Fiscal Third Quarter Earnings Call. With me today is Patrick Blair, CEO; and Ben Adams, CFO. Today, after the market closed, we issued an earnings press release containing detailed information on our fiscal third quarter results. You may access the release on the Investor Relations section of our company website, innovage.com. For those listening to the rebroadcast of this call, we remind you that the remarks made herein are as of today, Tuesday, May 5, 2026, and have not been updated subsequent to this call. During our call, we will refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings press release posted on our website. We will also make statements that are considered forward-looking, including those related to our 2026 fiscal year projections and guidance, future growth prospects and growth strategy, our clinical and operational value initiatives, the effects of recent legislation and federal budget cuts, including Medicare and Medicaid rate pressures, seasonality of cost trends, the status of current and future legal proceedings and regulatory actions and other expectations.
Listeners are cautioned that all of our forward-looking statements involve certain assumptions that are inherently subject to risks and uncertainties that can cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors and other discussions included in our annual report on Form 10-K for fiscal year 2025 and any subsequent reports filed with the SEC, including our most recent quarterly report on Form 10-Q. After the completion of our prepared remarks, we will open the call for questions. I will now turn the call over to our CEO, Patrick Blair. Patrick?
Thank you, Ryan, and good afternoon, everyone. I'd like to begin by thanking our InnovAge colleagues, our participants and their families, our government partners and our investor community for your continued trust and support. The work our teams do every day to care for a very complex and vulnerable population is what drives our performance, and I'm proud of the progress we're making and the consistency we're beginning to demonstrate as an organization. We delivered a solid third quarter and continue to see steady momentum across the business. These results reflect stronger operating execution and the benefits of the investments we've made over the past few years to strengthen the platform. For the quarter, we reported approximately $252 million in total revenue, center-level contribution margin of $61 million and adjusted EBITDA of $30 million. We ended the quarter serving approximately 8,050 participants in 6 states across 20 centers.
Based on our year-to-date operating trends and financial performance, we are once again raising our fiscal year 2026 guidance for revenue and adjusted EBITDA. We now expect revenue in the range of $950 million to $975 million and adjusted EBITDA in the range of $85 million to $90 million. Overall, our performance continues to show steady year-over-year improvement across key operational and clinical metrics. Our performance this year has been supported by several in-year factors that came in more favorably than we expected, including better-than-expected Medicaid rates and favorable Medicare risk scores and continued discipline across medical management. So as we think about our momentum, we believe it is real and increasingly durable, but we are also being thoughtful about our assumptions as we look ahead to fiscal 2027. Just as importantly, we view our improving financial performance as an enabler, not an endpoint.
The progress we're making is allowing us to reinvest in the business in ways that we believe directly benefit participants and strengthen the model over the long term. That includes continued investment in our clinical teams and interdisciplinary model, advancing our technology platform, including early and closely monitored applications of AI to improve care coordination and participant experience and strengthening how we measure and manage quality. We are also investing in growth, including our new centers in Florida, which are still maturing from an operations and financial perspective. Given the complexity of the PACE population we serve, these long-term investments are essential. Our goal is to deliver strong, sustainable performance while continuing to invest in the model and be a responsible partner to states and the federal government. In the PACE model, financial performance and quality are not separate.
They are directly linked. When we improve quality, we see better participant outcomes, more consistent engagement, lower unnecessary utilization and ultimately better fiscal management for our state and federal partners. We track a wide range of required quality and utilization metrics, and these remain an important part of how we manage the business day-to-day. But we also recognize that many of these measures, while necessary, don't fully capture what matters most to our participants or to the full value of the model. At its core, our focus is helping participants maintain their independence, remain in the community for as long as possible and receive care that is individualized and aligned with their goals. This includes supporting caregivers, coordinating care across the continuum and intervening early before issues escalate. Over the past several years, we have made meaningful investments in our clinical teams, our care model and our operational infrastructure to strengthen our ability to deliver on those outcomes.
More recently, we have begun to invest more intentionally in how we measure them. We are in the early stages of developing a more comprehensive set of outcome-oriented measures focused on areas like functional trajectory, the ability of participants to remain in the community and further aligning care with participant goals. These are areas where we believe the PACE model delivers meaningful value. Our initial focus is on building the data, processes and operational consistency required to measure these outcomes reliably. As the capabilities mature, we expect to incorporate them more formally into how we manage the business. We believe this is an important step, not only in demonstrating the full value of the PACE model, but also in ensuring that our continued financial progress is clearly aligned with better outcomes for the participants we serve and the partners we support. AI is another area in which we are investing more heavily.
When we think about the objectives we share with our regulators, improving participant experience, enhancing outcomes for a complex population and doing so in a cost-effective way, we believe AI with the appropriate oversight has the potential to be a meaningful enabler. While still early, the work we've done over the past several months increases our confidence that these capabilities can have a real impact on both the quality and efficiency of our model. Much of our clinical AI work is being led by Dr. Paul Taheri. Although Paul has only been with us a short time, he has quickly stepped in to help shape our approach, bring a strong focus on practical application, clinical rigor and ensuring these tools are designed to support, not replace clinical judgment. We're piloting a range of use cases designed to support our clinicians and to streamline operations. In our clinical workflows, we're piloting AI tools to help synthesize information across the participant record to support care planning and to identify potential risks such as medication interactions or avoidable acute events.
The goal is to increase the quality of the care we provide for our participants and enable our teams to operate more effectively at the top of their license. We are also applying these capabilities to operational areas such as scheduling, transportation and care coordination, where we see meaningful opportunity to reduce friction, improve the participant experience and better utilize our existing capacity. One area we are particularly focused on is how we schedule and deliver services across our centers. Today, there are structural inefficiencies that can lead to cancellations, unused capacity and administrative burden. We believe AI-enabled scheduling and coordination can help address these challenges, allowing us to improve the experience, to serve more participants within our existing footprint and to increase capacity over time. Importantly, we're approaching this work with discipline.
We're testing, learning and measuring impact before scaling. And we're focused on use cases where we see clear alignment between improved outcomes, better participant experience and more efficient operations. Over time, we believe these investments will further strengthen our platform and expand our ability to deliver high-quality coordinated care at scale. Stepping back, one of the things these results and the progress we've made over the past several years now allow us to do is to take a more forward-looking view on growth. Over the last 4 years, our focus has been on stabilizing and strengthening the platform. And as a result of that work, we're now beginning to generate more consistent earnings and cash flow, which gives us greater strategic flexibility as we look ahead. That flexibility allows us to take a more proactive and thoughtful approach to growth. First, we continue to see meaningful opportunity within our existing footprint by filling our current centers, strengthening our sales capabilities and expanding our reach through new channels and partnerships.
At the same time, we're beginning to evaluate a broader set of potential growth alternatives that could allow us to expand our model to more seniors over time. These may include acquisitions, joint ventures, partnerships or participation in new programs and demonstration models that align with our capabilities. Overall, we're entering the next phase as an organization, one that positions us well to expand access to our model and to serve more seniors who can benefit from it. Before I conclude, I'd like to spend a few minutes on the rate environment. As we know, this is an important area of focus for everyone. Ben will provide more detailed visibility into our fiscal 2027 outlook, including rates on our fourth quarter and fiscal year earnings call in early September. But given where we sit today, we thought it would be helpful to share some early perspective on how we're thinking about the environment, recognizing that our visibility is still evolving.
Starting with Medicare. The final 2027 rate notice came in more favorable than initially proposed, particularly for Medicare Advantage plans. That improvement was driven in part by deferred changes to the V28 risk model transition, which had a more meaningful impact on MA than on PACE. For PACE, our rate setting framework and transition timeline are different. And given the complexity of the population we serve, the benefit from the deferred changes to V28 is more limited. The net result is that we expect Medicare rates to increase approximately 1.5% to 2% in fiscal year 2027, which is a more modest increase than what will likely be experienced by MA plans. On the Medicaid side, we're beginning to see early indications from our state partners that budget pressures are increasing. That said, it's important to step back and view Medicaid rates in PACE over a longer horizon. This has always been a program with some degree of year-to-year variability.
There are periods where rates run ahead of cost trend and margins expand and periods like the one we're planning for where cost trends may outpace rate growth and margins can tighten without other offsetting improvements. Over time, these dynamics tend to balance out. Rates have kept pace with the underlying cost of caring for this population and have supported appropriate and sustainable margins for operators who execute well at scale. We believe we're seeing normal cycle variability, not a change in the underlying economics of the model. Importantly, this is where the strength of our model matters because we are fully accountable for both the clinical and cost side of the equation, we can manage through periods like this and protect performance over time. So while we have benefited from a more favorable rate environment in fiscal 2026 and are planning for a more tempered environment in fiscal 2027, we remain confident in the durability of the model and our ability to execute through the cycle.
As we approach the end of the fiscal year, we believe InnovAge is operating from a position of strength. The work we've done over the past several years is translating into more consistent performance and a more disciplined integrated operating model. We're focused on continuing to deliver strong, sustainable performance while investing in the model, supporting our participants and being a responsible partner to the states and the federal government. With that, I'll turn it over to Ben to walk through our financial performance in more detail.
Thank you, Patrick. Today, I will provide some highlights from our third quarter fiscal year 2026 financial performance and insight into some of the trends we saw during the fiscal third quarter. Starting with census. We served approximately 8,050 participants across 20 centers as of March 31, 2026, which represents growth of 6.9% compared to the third quarter of fiscal year 2025 and sequential quarter growth of 0.5%. We reported 24,060 member months in the third quarter, an increase of approximately 6.7% compared to the third quarter of fiscal year 2025 and an increase of approximately 0.4% over the second quarter of fiscal year 2026. Our third quarter census increase reflects normal seasonal growth resulting from the Medicare Advantage open enrollment period. Total revenues of $251.9 million increased 15.5% compared to $218.1 million in the third quarter of fiscal year 2025, driven by higher capitation rates and growth in member months.
The capitation rate increase reflects annual Medicaid and Medicare rate increases and a lower revenue reserve, while member month growth was driven by enrollment expansion across our California, Colorado and Florida centers. Compared to the second quarter of fiscal year 2026, total revenues increased 5.1%, primarily due to higher capitation rates driven by annual rate increases in California and Medicare, both effective January 1, 2026. We incurred $113.2 million of external provider costs in the third quarter of fiscal year 2026, representing an increase of 5% compared to the third quarter of fiscal year 2025. The year-over-year increase was driven by growth in member months, partially offset by a reduction in cost per participant. Lower cost per participant was primarily attributable to reduced permanent nursing facility utilization and lower pharmacy expense following the transition to in-house pharmacy services.
These improvements were partially offset by annual rate increases for assisted living and permanent nursing facility services as well as higher assisted living utilization. Compared to the second quarter of fiscal year 2026, external provider costs increased 1.1%, driven by modest growth in member months and a slight increase in cost per participant related to seasonal growth in the volume and cost of inpatient admissions. Cost of care, excluding depreciation and amortization, was $77.7 million in the third quarter, an increase of 11.8% compared to the third quarter of fiscal year 2025. The year-over-year increase reflects growth in member months and higher cost per participant. The increase was primarily driven by a net increase in salaries, wages and benefits due to higher wage rates, partially offset by reduced headcount, higher third-party fees and shipping costs associated with in-house pharmacy services and higher contract services and fleet costs, inclusive of contract transportation.
Cost of care, excluding depreciation and amortization, increased 3.7% compared to the second quarter of fiscal year 2026, driven by higher salaries, wages and benefits associated with the annual reset of employee benefits and payroll taxes as well as an increase in consulting expense, partially offset by lower contract transportation. Center-level contribution margin, which we define as total revenues less external provider costs and cost of care, excluding depreciation and amortization, which includes all medical and pharmacy costs was $61 million for the quarter compared to $40.7 million for the third quarter of fiscal year 2025. As a percentage of revenue, center level contribution margin of 24.2% increased by approximately 550 basis points in the quarter compared to 18.7% in the third quarter of fiscal year 2025. Compared to the second quarter of fiscal year 2026, center level contribution margin increased 15.5% from $52.8 million and as a percentage of revenue increased 220 basis points compared to 22% over the same period.
Sales and marketing expenses of approximately $8.7 million increased 26.3% compared to the third quarter of fiscal year 2025, primarily driven by higher wage rates and increased marketing spend to support growth. Sales and marketing expenses increased by approximately 8.2% compared to the second quarter of fiscal year 2026, driven by sales compensation and marketing spend timing. Corporate general and administrative expenses of $76.5 million increased 98.3% compared to the third quarter of fiscal year 2025, primarily driven by an increase in litigation liability. Corporate general and administrative expenses increased 187.6% compared to the second quarter of fiscal year 2026, primarily due to the litigation liability. Net loss was $29.9 million for the quarter compared to net loss of $11.1 million in the third quarter of fiscal year 2025. We reported a net loss of $0.22 per share, and our weighted average share count was approximately 135.7 million shares for the quarter on a fully diluted basis.
Adjusted EBITDA was $30.5 million for the quarter compared to $10.8 million in the third quarter of fiscal year 2025 and $22.2 million in the second quarter of 2026. Our adjusted EBITDA margin was 12.1% for the quarter compared to 4.9% in the third quarter of fiscal year 2025 and 9.2% in the second quarter of fiscal year 2026. We do not add back losses incurred by our de novo centers in the calculation of adjusted EBITDA. De novo center losses are defined as net losses related to preopening and start-up ramp through the first 24 months of de novo operations. Accordingly, this quarter's de novo losses do not include our Tampa and Crenshaw centers as both have progressed beyond the initial 24-month de novo period. For the third quarter, de novo losses were $1.8 million, primarily related to our Orlando, Florida center. This compares to $3.5 million of de novo losses in the third quarter of fiscal year 2025 and $4.7 million of de novo losses in the second quarter of fiscal year 2026.
Turning to our balance sheet. We ended the quarter with $95.5 million in cash and cash equivalents, plus $43.1 million in short-term investments. We had $69.4 million in total debt on the balance sheet, representing debt under our senior secured term loan, revolving credit facility and finance leases. For the third quarter, we recorded positive cash flow from operations of $18.1 million and had $3.6 million of capital expenditures. Building on the strong performance we delivered through the first 9 months of fiscal 2026 and based on information available today, we are updating our full year revenue and adjusted EBITDA outlook. All other guidance metrics remained unchanged. We expect our ending census for fiscal year 2026 to be between 7,900 and 8,100 participants and member months to be in the range of 92,900 to 95,700. We are now projecting total revenue for fiscal 2026 in the range of $950 million to $975 million.
Adjusted EBITDA is now projected to be in the range of $85 million to $90 million, and we anticipate that de novo losses for fiscal year 2026 will be in the $11.5 million to $13.5 million range. As we enter the final quarter of fiscal 2026 and begin planning for fiscal 2027, I'd like to share a few observations on where we stand today and how we're thinking about the year ahead. First, the business is performing well overall. Our sustained focus on quality, compliance and operational discipline has created a stronger and more resilient foundation. Over the past several years, we have meaningfully improved the consistency and predictability of the business, and we now have better data and insight to inform care delivery and operational decision-making. Second, as Patrick mentioned, we are beginning to see rate pressures emerge as we engage with our state Medicaid partners. While it remains early in the rate setting process, initial indications suggest rate increases in fiscal 2027 may be lower than what we have experienced historically.
If this persists and when combined with a more modest Medicare rate environment, it could create top line pressure in fiscal 2027. That said, we view this as a near-term dynamic rather than as a structural shift. Currently, we do not believe these conditions represent a new long-term run rate, and we expect the rate environment to normalize over time. Importantly, our improved cost discipline, operating visibility and focus on execution position us to manage through this period. In closing, we are pleased with the strong performance we delivered this quarter and year-to-date. The business is operating from a position of strength, and our updated guidance reflects both our execution to date and our current assessment of the operating environment. As we continue to refine our operations, we are placing greater emphasis on the full participant experience and evaluating opportunities to enhance care, delivery, efficiency and outcomes over time.
We remain committed to disciplined execution as we close out fiscal 2026, and we believe we are positioned to manage near-term headwinds and to build long-term value. Operator, that concludes our prepared remarks. Please open the line for questions.
Questions and answers
Our first question comes from Matthew Gillmor with KeyBanc.
I guess I wanted to first follow up on the comments around 2027. Could you maybe first help frame up sort of the change in the Medicaid rate increases that you've seen on a go-forward basis versus maybe the rearview just so we get a sense for the change in that dynamic? And then as a follow-up to that, one of the things we've been particularly encouraged by has been your ability to keep cost growth sort of almost flat for the last 2 years. So as you're thinking about the go forward, I was just curious about your confidence in able to maintain your cost growth at those levels, which presumably would help the dynamic for 2027 and maybe what you're doing to prepare the organization for what you think may be a more challenging rate environment next year?
Matt, it's Patrick. Thanks for the question. Overall, we don't have rates for fiscal year '27 yet. We're navigating along with the states what is a pretty complex fiscal backdrop. States are seeing a combination of factors with post-pandemic funding and broader budget pressures and they're having to rebalance across various health care priorities. So we are being transparent that it's going to be a different environment for rates than we have seen in the past. This is typical of operating in a state partnered model. It's not new or unexpected. Our approach as we head into the '27 rate setting is to stay very closely aligned with our state partners and continue to focus on delivering high-quality care and outcomes and operate as efficiently as we can. One of the things we hear consistently with every state is the belief in the PACE value proposition and how well aligned it is to what the states are trying to achieve.
Caring for this high needs population is something they take very seriously. We still know very little about '27, so I wanted to make that clear. Regarding our ability to manage cost trends in an inflationary environment, we're still feeling very confident. As I shared in my remarks, we have a lot of work underway that's AI-supported. We believe there is opportunity across our care model to empower our providers with better information to help them avoid unnecessary specialist referrals, avoid ER visits and unnecessary services, and provide as much care as possible in our centers. Scheduling is another area where we're using AI to understand throughput of our centers and the impact cancellations have on transportation and staffing. We're learning a lot about our business and the drivers, and AI supports that. We believe there's capacity, manual workflows we can streamline, and augmentations to our staffing models that will make us more efficient and deliver a better participant experience.
In summary, the rate environment is one we're used to navigating. We'll do that successfully, and we're defining next year's operational value initiatives and clinical value initiatives to take clinical variation out of the system. We see real opportunity to operate more efficiently, improve the participant experience, deliver better clinical outcomes and do so within a complex fiscal backdrop for states. Ben, anything to add?
I actually don't have anything to add. I think that was exactly where we think of it.
Okay. Great. That was really helpful. I appreciate it. And then as a follow-up, I did want to ask about revenue performance on the quarter. It's obviously a very strong quarter overall. But on the top line, you had mentioned better Medicaid rates and also some favorability with RAF. I was hoping you could discuss the details of that a little bit better. And one point I wanted to get at or one thing I wanted to ask about was just the sustainability of the revenue upside you saw in the quarter. I guess I normally would think of RAF and Medicaid rates as sustainable in future quarters, but I just wanted to get your perspective on that dynamic.
You're right, we did start seeing in the back half of the year a step-up in rates on the Medicaid side and a step-up in risk scores. Both of those things were positive starting in January, and they rolled through the second half of the year. If you think about which states kick in with their rates on January 1, California is an important one for us. We had a pretty good rate environment in California this year following some difficult years there. So that benefited us in the second half of the year. Regarding risk scores, assuming we don't have a change in the mix of enrollment or some other mix in our population, that improvement in risk scores ought to be durable going forward. But you have to watch it over time because they can change a little. We're hoping for some durability there. Patrick commented on the rate outlook for Medicaid; you can factor those comments into how we're thinking about California for next year, which would be the next time it would renew in January.
Our next question comes from Jared Haase with William Blair.
I appreciate all the color thus far. Patrick, I think you talked a little bit about sort of emphasizing the flexibility that you have now just based on the stable profile that you've reached here with the model in terms of the go-forward growth strategy, and I think you outlined a couple of different levers, whether that's M&A, joint ventures, partnerships. And then I think you even alluded to potentially some new programs or demonstrations. So I was wondering if we could dig into your thinking there a bit further, maybe force rank some of those different options that you have available to you as to what might be more realistic over the next handful of quarters. And I'd also love to press on the new programs or demonstration models, how you guys are thinking about that and what programs seem interesting to you?
Thanks for the question. I'd start by reminding folks that we've come out of the turnaround and are now in a place where we're seeing stronger operational, financial and compliance performance. We're beginning to devote more time to evaluating a range of options. M&A is clearly one of them. There are many PACE programs across the country; some are very successful, some are not. We've learned from an acquisition we did in California about 18 months ago that we can bolt on smaller PACE programs that were struggling to grow by putting them on our platform and sales model. That can allow us to pursue a de-risked de novo without the longer return on capital of a pure de novo. Understanding where those opportunities exist is something we're spending time on, but it's early and state environments vary. Partnerships are another option. You've seen some partnerships we've done in Florida and in California with hospitals.
We think there are opportunities for hospital joint ventures that help extend our place in the community, though calibration is required to ensure both entities and participants benefit appropriately. Regarding policy modernization, there are practical evolutions that could allow us to expand faster—things like simplifying enrollment to make it easier for seniors and families to choose PACE. We're working with industry peers and our association to articulate those policy modernization opportunities, and we see interest and curiosity from CMS and CMMI. Finally, on PACE-inspired adjacencies, we believe the PACE model can be adapted to serve seniors who are not eligible for PACE today. Opportunities exist via demonstration or adjacent new product development. Our focus remains on growing our core PACE business, but as we achieve better operating performance, we believe PACE can serve a broader segment of the population. We're working with peers to make that case, and over time we expect opportunities inspired by our core business to present themselves.
Okay. That's really helpful. And then as a follow-up, I really appreciate all the details you provided regarding rate development and your current view for 2027. If I take a step back from a strategic perspective, if we do find ourselves in an environment where rates are lagging medical cost trend, do you have a bias as it relates to striking the balance between maintaining your current growth levels versus maintaining profitability? I realize from your comments, there are a number of initiatives in place that can drive efficiencies. So maybe there isn't really a trade-off that way. But if you do have a year like this with a more muted rate environment, how do you think about the balance between growth and profitability?
It's an interesting question. Patrick talked a lot about quality in his prepared remarks. Right now, we've achieved nice margins and are generating cash flow. One of the best things we can do in a market that begins to slow is invest heavily in quality in our business and centers. We believe strongly that the better experience we give participants, the more likely it is to drive growth and good financial outcomes. So going into the coming year, we will spend a lot of time improving the participant experience and efficiencies in our centers to be intentional in our strategies. Aside from growth metrics, this reinvestment into the business and quality is important for the coming year. There are other specific areas we'll look at in terms of operational value initiatives and clinical value initiatives, but the mindset is quality-driven as a driver of growth.
I might add that we still have opportunity to enhance our sales and marketing model. Under Matt Huray, our sales and marketing leader, we're testing and learning and trying new things. We're adding members to the team and exploring new channel partnerships. Setting aside rate, we are focused on as much gross enrollment growth as we can attract. We're also spending time to understand why people leave us and whether there are specific encounters or friction points that cause dissatisfaction. Reducing voluntary and involuntary disenrollment and increasing tenure are opportunities to drive growth. We've pulled forward into two years what we expected to take three years from a margin perspective. Now that we're achieving what we set out to, investing in growth while maintaining consistent margins is more of a priority than expanding margins at this point.
Our next question comes from Benjamin Rossi with JPMorgan.
So following up on your 2027 commentary, I appreciate that you're planning to provide more details next quarter. But as you think about initial enrollment growth, what are your initial thoughts on your aggregate patient risk scores and new member acuity mix? It sounds as though based on your Medicare rate assumptions, you're assuming acuity may decline somewhat year-over-year. Is that a fair read?
I wouldn't read too much into it. We're in the budgeting process now; our fiscal year ends June 30, so we're getting into the details. We don't expect a material change in mix shift, either in terms of population in independent assisted living or folks in nursing facilities, nor a significant change in risk score mix. We're getting into the process and will have more to talk about after the budget process and when we issue guidance in September.
Okay. Understood on that. And as a follow-up on your updated outlook implies 4Q top line growth will decelerate a bit sequentially, while EBIT growth will remain elevated. What do you assume gets better quarter-over-quarter as we go into the next quarter, either across PMPM trend or cost design? And is there anything discrete across revenue or cost that you'd call out within your progression during fiscal 4Q?
I don't think there's anything discrete to call out. We've benefited from better rates in the back half of the year and better risk scores, and I would expect those trends to continue into Q4. If you look at the pattern of gross enrollment over the last couple of years, we usually have a steady Q4 in terms of gross enrollment growth. I would expect something not too different from prior years.
And I'm not showing any further questions at this time. As such, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.