Inovalon (INOV) 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Entity Registrant Name	Inovalon Holdings, Inc.
Entity Central Index Key	1,619,954
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Class A Common
Entity Common Stock, Shares Outstanding		63,056,269
Class B Common
Entity Common Stock, Shares Outstanding		83,970,518

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 214,386	$ 114,034
Short-term investments	498,935	614,130
Accounts receivable (net of allowances of $2,096 and $1,022 at September 30, 2016 and December 31, 2015, respectively)	79,894	81,305
Prepaid expenses and other current assets	8,767	16,162
Income tax receivable	11,806	18,377
Total current assets	813,788	844,008
Non-current assets:
Property, equipment and capitalized software, net	70,379	65,031
Goodwill	133,570	137,733
Intangible assets, net	56,429	61,855
Other assets	2,846	4,250
Total assets	1,077,012	1,112,877
Current liabilities:
Accounts payable	13,890	21,136
Accrued compensation	16,687	13,538
Other current liabilities	4,824	11,444
Deferred revenue	5,868	5,507
Deferred rent	977	797
Credit facilities	26,250	15,000
Capital lease obligation	112	109
Total current liabilities	68,608	67,531
Non-current liabilities:
Credit facilities, less current portion	243,750	266,250
Capital lease obligation, less current portion	242	296
Deferred rent	1,709	2,446
Deferred income taxes	34,084	37,198
Total liabilities	348,393	373,721
Commitments and contingencies (Note 5)
Stockholders' equity:
Common stock
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, zero shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
Additional paid-in-capital	505,550	493,197
Retained earnings	273,963	247,540
Other comprehensive income (loss)	223	(1,582)
Total stockholders' equity	728,619	739,156
Total liabilities and stockholders' equity	1,077,012	1,112,877
Class A Common
Stockholders' equity:
Common stock
Treasury stock, at cost, 3,364,531 and zero shares at September 30, 2016 and December 31, 2015, respectively	(51,118)
Class B Common
Stockholders' equity:
Common stock	$ 1	$ 1

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts receivable, allowances
Accounts receivable, allowances (in dollars)	$ 2,096	$ 1,022
Common stock
Common stock, par value (in dollars per share)	$ 0.000005	$ 0.000005
Common stock, authorized shares	900,000,000	900,000,000
Common stock, issued shares	0	0
Common stock, outstanding shares	0	0
Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, Authorized shares	100,000,000	100,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Class A Common
Common stock
Common stock, par value (in dollars per share)	$ 0.000005	$ 0.000005
Common stock, authorized shares	750,000,000	750,000,000
Common stock, issued shares	68,565,081	53,482,669
Common stock, outstanding shares	68,565,081	53,482,669
Treasury stock
Treasury stock shares	3,364,531	0
Class B Common
Common stock
Common stock, par value (in dollars per share)	$ 0.000005	$ 0.000005
Common stock, authorized shares	150,000,000	150,000,000
Common stock, issued shares	83,988,485	98,230,363
Common stock, outstanding shares	83,988,485	98,230,363

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Revenue		$ 105,013	$ 105,459	$ 331,495	$ 316,710
Expenses:
Cost of revenue	[1]	35,433	38,394	120,570	103,847
Sales and marketing	[1]	7,037	3,946	19,712	8,173
Research and development	[1]	7,404	6,283	21,047	17,198
General and administrative	[1]	37,209	32,437	105,222	82,022
Depreciation and amortization		8,904	5,526	25,794	15,253
Total operating expenses		95,987	86,586	292,345	226,493
Income from operations		9,026	18,873	39,150	90,217
Other income and (expenses):
Realized gains (losses) on short-term investments		9	(329)	4	(329)
Gain on disposal of equipment				534
Interest income		1,450	1,184	4,424	1,807
Interest expense		(1,302)	(1,110)	(3,806)	(3,318)
Income before taxes		9,183	18,618	40,306	88,377
Provision for income taxes		1,376	8,498	13,883	38,362
Net income		7,807	10,120	26,423	50,015
Net income attributable to common stockholders, basic and diluted		$ 7,771	$ 10,115	$ 26,308	$ 50,003
Net income per share attributable to common stockholders, basic and diluted:
Basic net income per share (in dollars per share)		$ 0.05	$ 0.07	$ 0.17	$ 0.35
Diluted net income per share (in dollars per share)		$ 0.05	$ 0.07	$ 0.17	$ 0.34
Weighted average shares of common stock outstanding:
Basic (in shares)		150,732	148,871	151,240	144,000
Diluted (in shares)		151,562	151,835	152,122	147,409
[1]	Includes stock-based compensation expense as follows: Three months ended September 30, 2016: Cost of revenue 94; Sales and marketing 140; Research and development 186; General and administrative 1,704; Total stock-based compensation expense 2,124. Three months ended September 30, 2015: Cost of revenue 28; Sales and marketing 66; Research and development 2,928; General and administrative 1,619; Total stock-based compensation expense 2,005. Nine months ended September 30, 2016: Cost of revenue 334; Sales and marketing 446; Research and development 927; General and administrative 4,645; Total stock-based compensation expense 6.352. Nine months ended September 30, 2015: Cost of revenue 85; Sales and marketing 122; Research and development 952; General and administrative 4,540; Total stock-based compensation expense 5,699.

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Includes stock-based compensation expense as follows:
Total stock-based compensation expense	$ 2,124	$ 2,005	$ 6,352	$ 5,699
Cost of revenue
Includes stock-based compensation expense as follows:
Total stock-based compensation expense	94	28	334	85
Sales and marketing
Includes stock-based compensation expense as follows:
Total stock-based compensation expense	140	66	446	122
Research and development
Includes stock-based compensation expense as follows:
Total stock-based compensation expense	186	292	927	952
General and administrative
Includes stock-based compensation expense as follows:
Total stock-based compensation expense	$ 1,704	$ 1,619	$ 4,645	$ 4,540

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 7,807	$ 10,120	$ 26,423	$ 50,015
Other comprehensive income:
Realized losses on short-term investments reclassified from accumulated other comprehensive income, net of tax of $5, $0, $3, and $0, respectively	(10)	(329)	(7)	(329)
Net change in unrealized gains and (losses) on available-for-sale investments, net of tax of ($380), $0, ($2,182) and $0, respectively	832	849	3,350	(803)
Comprehensive income	$ 8,629	$ 10,640	$ 29,766	$ 48,883

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Realized losses on short-term investments reclassified from accumulated other comprehensive income, tax	$ 5	$ 0	$ 3	$ 0
Net change in unrealized gains and (losses) on available-for-sale investments, tax	$ (380)	$ 0	$ (2,182)	$ 0

CONDENSED CONSOLIDATED STATEME8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 26,423	$ 50,015
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	6,352	5,699
Depreciation	20,368	13,683
Amortization of intangibles	5,426	1,570
Amortization of premiums on short-term investments	2,502	1,315
Realized losses on short-term investments	(4)	329
Tax payments for equity award issuances	95	582
Deferred income taxes	(3,110)	(714)
Excess tax benefits from stock-based compensation	(1,135)	(16,039)
Loss on disposal of long-lived assets		116
Gain on disposal of equipment	(534)
Bad debt expense	79
Changes in assets and liabilities:
Accounts receivable	1,332	(36,581)
Prepaid expenses and other current assets	(3,604)	(1,628)
Income taxes receivable	7,677	4,663
Other assets	4,189	(1,895)
Accounts payable	(5,903)	4,890
Accrued compensation	2,090	18,691
Other liabilities	6,572	796
Deferred rent	(557)	(398)
Deferred revenue	361	(938)
Net cash provided by operating activities	68,619	44,156
Cash flows from investing activities:
Sales and maturities of short-term investments	280,547	233,130
Purchases of short-term investments	(164,737)	(783,485)
Purchases of property and equipment	(11,267)	(4,539)
Investment in capitalized software	(14,220)	(14,557)
Acquisition, net of cash acquired of $4,037		(114,015)
Escrow funding associated with acquisition		(7,875)
Proceeds from sale of property and equipment		(24)
Net cash provided by (used in) investing activities	90,323	(691,365)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of underwriters' discount		362,082
Proceeds from issuance of treasury stock, net of underwriters' discount		282,172
Payment of offering costs		(5,182)
Repurchase of common stock	(51,118)
Repayment of credit facility borrowings	(11,250)	(15,000)
Proceeds from exercise of stock options	5,111	11,702
Acquisition-related contingent consideration	(2,300)
Capital lease obligations paid	(31)	(82)
Tax payments for equity award issuances	(137)	(582)
Excess tax benefits from stock-based compensation	1,135	16,039
Net cash (used in) provided by financing activities	(58,590)	651,149
Increase in cash and cash equivalents	100,352	3,940
Cash and cash equivalents, beginning of period	114,034	162,567
Cash and cash equivalents, end of period	214,386	166,507
Supplementary cash flow disclosure:
Cash paid during the period for: Income taxes, net of refunds	10,014	34,705
Cash paid during the period for: Interest	3,600	3,304
Non-cash investing activities:
Capital lease obligations incurred		175
Accounts payable for purchases of and investment in property, equipment and capitalized software	816	2,089
Accrued compensation for investment in capitalized software	$ 492	$ 910

CONDENSED CONSOLIDATED STATEME9

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Cash flows from investing activities:
Acquisition, cash acquired	$ 4,037

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2016
BASIS OF PRESENTATION
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by Inovalon Holdings, Inc. (the "Company") in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2015 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company's financial position as of September 30, 2016, and the results of operations, and comprehensive income for the three and nine month periods ended September 30, 2016 and 2015, and cash flows for the nine months ended September 30, 2016 and 2015. The results of operations for the three and nine month periods ended September 30, 2016 and 2015 are not necessarily indicative of the results to be expected for the full year. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenue and expenses reported during the period. Actual results could differ from estimates. The information contained herein should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying unaudited condensed consolidated financial statements include the accounts of Inovalon Holdings, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. Recently Issued Accounting Standards There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's consolidated financial statements and note disclosures, from those disclosed in the Company's 2015 Annual Report on Form 10-K, that would be expected to impact the Company except for the following: In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. In general, for lease arrangements exceeding a twelve month term, these arrangements will be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 will be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718) ("ASU 2016-09"). This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. The adoption of this new accounting standard could have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.

NET INCOME PER SHARE

NET INCOME PER SHARE	9 Months Ended
	Sep. 30, 2016
NET INCOME PER SHARE
NET INCOME PER SHARE	2. NET INCOME PER SHARE(in thousands, except per share amounts) Holders of all outstanding classes of common stock participate ratably in earnings on an identical per share basis as if all shares were a single class. Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock, (Class A common stock and Class B common stock), outstanding during the period. Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding and potentially dilutive securities outstanding during the period under the treasury stock method. Potentially dilutive securities include stock options and restricted stock units ("RSUs") and restricted stock awards ("RSAs"). Under the treasury stock method, dilutive securities are assumed to be exercised at the beginning of the periods and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive to EPS. The Company has issued RSAs under the 2015 Omnibus Incentive Plan. The Company considers issued and unvested RSAs to be participating securities as the holders of these RSAs have a non-forfeitable right to dividends in the event of the Company's declaration of a dividend on shares of Class A and Class B common stock. Subsequent to the issuance of the participating securities, the Company applied the two-class method required in calculating net income per share of Class A and Class B common stock. Under the two-class method, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income, less earnings attributable to participating securities. The net income per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the period has been distributed. As the liquidation and dividend rights are identical for both classes of common stock, the net income attributable to common stockholders is allocated on a proportionate basis. The following table reconciles the weighted average shares outstanding for basic and diluted EPS for the periods indicated: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Basic Numerator: Net income $ $ $ $ Undistributed earnings allocated to participating securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common stockholders—basic $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average shares used in computing net income per share attributable to common stockholders—basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share attributable to common stockholders—Basic $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted Numerator: Net income attributable to common stockholders—diluted $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Number of shares used for basic EPS computation Effect of dilutive securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing net income per share attributable to common stockholders—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share attributable to common stockholders—Diluted $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The computation of diluted EPS does not include certain unvested awards, on a weighted average basis, for the three and nine months ended September 30, 2016 and 2015, respectively, because their inclusion would have an anti-dilutive effect on EPS. The awards excluded because of their anti-dilutive effect are as follows: Three Months Nine Months 2016 2015 2016 2015 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive

SHORT-TERM INVESTMENTS

SHORT-TERM INVESTMENTS	9 Months Ended
	Sep. 30, 2016
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS	3. SHORT-TERM INVESTMENTS(in thousands) As of September 30, 2016, short-term investments consisted of the following: Amortized Gross Gross Estimated Available-for-sale securities: Corporate notes and bonds $ $ $ ) $ U.S. agency obligations ) U.S. treasury securities — Commercial paper ) Certificates of deposit — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total available-for-sale securities $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2015, short-term investments consisted of the following: Amortized Gross Gross Estimated Available-for-sale securities: Corporate notes and bonds $ $ $ ) $ U.S. agency obligations ) U.S. treasury securities ) Commercial paper — ) Certificates of deposit — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total available-for-sale securities $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown: September 30, December 31, Due in one year or less $ $ Due after one year through three years ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company has certain available-for-sale securities in a gross unrealized loss position. The Company reviews its debt securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial position and near-term prospects of the issuer and the Company's intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment's amortized-cost basis. If the Company determines that an other-than-temporary decline exists, or if write downs related to credit losses are necessary, in one of these securities, the unrealized losses attributable to the respective investment would be reclassified to realized losses on short-term investments within the statement of operations. There were no impairments considered other-than-temporary as of September 30, 2016. The following table shows the fair values and the gross unrealized losses of available-for-sale securities that were in a gross unrealized loss position, as of September 30, 2016, aggregated by investment category: Estimated Gross Corporate notes and bonds $ $ ) U.S. agency obligations ) Commercial paper ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2016
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	4. FAIR VALUE MEASUREMENTS (in thousands) The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016: Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ $ — $ — $ Short-term investments: Corporate notes and bonds — — U.S. agency obligations — — U.S. treasury securities — — Commercial paper — — Certificates of deposit — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ $ — $ — $ Short-term investments: Corporate notes and bonds — — U.S. agency obligations — — U.S. treasury securities — — Commercial paper — — Certificates of deposit — — Other Current Liabilities: Contingent consideration — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company determines the fair value of its security holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). The Company performs procedures to ensure that appropriate fair values are recorded such as comparing prices obtained from other sources. The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the three and nine months ended September 30, 2016: Fair Value Measurements Three Months Nine Months Balance, beginning of period $ ) $ ) Accretion expense (recognized in general and Administrative expenses) ) ) Settlement (payment) of liability ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	5. COMMITMENTS AND CONTINGENCIES(in thousands) Legal Proceedings —From time to time the Company is involved in various litigation matters arising out of the normal course of business. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on the Company's business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. The Company's management does not presently expect any litigation matters to have a material adverse impact on the condensed consolidated financial statements of the Company. On June 24, 2016, a purported securities class action complaint (Xiang v. Inovalon Holdings, Inc., et.al., No. 1:16-cv-04923) was filed in the United States District Court for the Southern District of New York against the Company, certain officers, directors and underwriters in the Company's initial public offering. The complaint is brought on behalf of a purported class consisting of all persons or entities who purchased shares of the Company's Class A common stock pursuant or traceable to the Registration Statement issued in connection with the Company's initial public offering on February 18, 2015. The complaint asserts violations of Sections 11 and 15 of the Securities Act based on allegedly false or misleading statements and omissions with respect to, among other things, the Company's revenues from sales in the city and state of New York and the Company's effective tax rate. The complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys' fees. On June 28, 2016, an identical complaint to the Xiang complaint (Patel v. Inovalon Holdings, Inc., et. al., No. 1:16-cv-05065) was filed in the same court. On July 5, 2016, the court consolidated the Xiang and Patel actions. On August 23, 2016, two potential plaintiffs, Roofers Local No. 149 Pension Fund and Christopher Peoples, an individual, moved for appointment as lead plaintiff in the litigation. A lead plaintiff has not yet been appointed. The Company believes that the claims against it and its officers and directors are without merit, and the Company and the named officers and directors intend to defend themselves vigorously. In light of, among other things, the early stage of the litigation, the Company is unable to predict the outcome of these consolidated actions and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome.

GOODWILL

GOODWILL	9 Months Ended
	Sep. 30, 2016
GOODWILL
GOODWILL	6. GOODWILL(in thousands) The following table summarizes the activity related to the carrying value of our goodwill during the nine months ended September 30, 2016: Goodwill as of January 1, 2016 $ Goodwill adjustments in connection with the acquisition of Avalere Health, Inc ) ​ ​ ​ ​ ​ Goodwill as of September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During the third quarter of 2016, the Company adjusted certain assets and liabilities related to the finalization of tax returns for Avalere Health, Inc. ("Avalere") and prefunded escrow-related amounts related to the settlement of a contingent consideration earn-out that was successfully achieved by Avalere. The adjustments had no impact on the Company's revenues or expenses. Based on our assessments of qualitative and quantitative factors, the adjustments were not considered to be material to our consolidated financial statements, individually or in the aggregate, to any previously issued consolidated financial statements.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2016
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	7. STOCKHOLDERS' EQUITY(in thousands, except share amounts and share price) Treasury Stock —On May 4, 2016, the Company announced that its Board of Directors authorized a program to repurchase up to $100 million of Inovalon's Class A common stock through December 31, 2016. Repurchases under the Company's share repurchase program have been made in open-market or privately negotiated transactions in compliance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other relevant factors. The number of shares to be purchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. During the three months ended September 30, 2016, there were 3,364,531 Class A common shares repurchased for $51,118 at an average cost of $15.19 per share, excluding commissions. At September 30, 2016, $48,882 remained available to commit to repurchase shares under the share repurchase program. The Company has no obligation to repurchase common stock under the share repurchase program. Shares that are repurchased under the repurchase program were recorded as treasury stock, based on the stock trading dates, and are available for future issuance, until retired.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	8. SUBSEQUENT EVENTS(in thousands, except share amounts) Business Combination —On October 1, 2016, the Company completed its acquisition of Creehan Holding Co., Inc. ("Creehan"). Creehan, through its subsidiary Creehan & Company Corporation, is a leading provider of specialty pharmacy software solutions to the pharmaceutical industry. Pursuant to the terms of the Stock Purchase Agreement, dated as of October 1, 2016 (the "Stock Purchase Agreement"), Creehan became a wholly owned subsidiary of Inovalon. Pursuant to the terms of the Stock Purchase Agreement, Inovalon acquired all of the issued and outstanding capital stock of Creehan for an aggregate purchase price of $130 million, which was comprised of $120 million in cash and $10 million in shares of Class A common stock of the Company. The Company completed the acquisition of Creehan through the use of cash on hand and the issuance of 651,355 shares, subject to sale restrictions, of Class A common stock. Certain components of the aggregate purchase price are subject to the achievement of financial performance objectives. The Company acquired Creehan for the assembled workforce, technology platform, client base, and to accelerate entry into the specialty pharmacy software market. Transaction costs in connection with the acquisition are expensed as incurred and are included in general and administrative expenses. The results of operations related to Creehan will be included in our consolidated statements of operations beginning from the date of acquisition. Additional information, to the extent required by Accounting Standards Codification 805- Business Combinations , including revenue and earnings contributions from Creehan and pro forma financial information effecting the business acquisition as of January 1, 2016, to the extent material, will be provided in the Company's Annual Report on Form 10-K for the year ending December 31, 2016, upon completion of the initial accounting of the acquisition.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2016
BASIS OF PRESENTATION
Basis of Presentation	BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by Inovalon Holdings, Inc. (the "Company") in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2015 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company's financial position as of September 30, 2016, and the results of operations, and comprehensive income for the three and nine month periods ended September 30, 2016 and 2015, and cash flows for the nine months ended September 30, 2016 and 2015. The results of operations for the three and nine month periods ended September 30, 2016 and 2015 are not necessarily indicative of the results to be expected for the full year. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenue and expenses reported during the period. Actual results could differ from estimates. The information contained herein should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying unaudited condensed consolidated financial statements include the accounts of Inovalon Holdings, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements.
Recently Issued Accounting Standards	Recently Issued Accounting Standards There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's consolidated financial statements and note disclosures, from those disclosed in the Company's 2015 Annual Report on Form 10-K, that would be expected to impact the Company except for the following: In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. In general, for lease arrangements exceeding a twelve month term, these arrangements will be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 will be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718) ("ASU 2016-09"). This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and note disclosures. The adoption of this new accounting standard could have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.

NET INCOME PER SHARE (Tables)

NET INCOME PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2016
NET INCOME PER SHARE
Schedule of numerators and denominators of the basic and diluted EPS	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Basic Numerator: Net income $ $ $ $ Undistributed earnings allocated to participating securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common stockholders—basic $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted average shares used in computing net income per share attributable to common stockholders—basic ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share attributable to common stockholders—Basic $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted Numerator: Net income attributable to common stockholders—diluted $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Number of shares used for basic EPS computation Effect of dilutive securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing net income per share attributable to common stockholders—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share attributable to common stockholders—Diluted $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule of antidilutive securities excluded from computation of earnings per share	Three Months Nine Months 2016 2015 2016 2015 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive

SHORT-TERM INVESTMENTS (Tables)

SHORT-TERM INVESTMENTS (Tables)	9 Months Ended
	Sep. 30, 2016
SHORT-TERM INVESTMENTS
Schedule of short-term investments	As of September 30, 2016, short-term investments consisted of the following: Amortized Gross Gross Estimated Available-for-sale securities: Corporate notes and bonds $ $ $ ) $ U.S. agency obligations ) U.S. treasury securities — Commercial paper ) Certificates of deposit — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total available-for-sale securities $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2015, short-term investments consisted of the following: Amortized Gross Gross Estimated Available-for-sale securities: Corporate notes and bonds $ $ $ ) $ U.S. agency obligations ) U.S. treasury securities ) Commercial paper — ) Certificates of deposit — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total available-for-sale securities $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Summary of estimated fair value of short-term investments, designated as available-for-sale and classified by the contractual maturity	September 30, December 31, Due in one year or less $ $ Due after one year through three years ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule of fair values and gross unrealized losses of available-for-sale securities aggregated by investment category	The following table shows the fair values and the gross unrealized losses of available-for-sale securities that were in a gross unrealized loss position, as of September 30, 2016, aggregated by investment category: Estimated Gross Corporate notes and bonds $ $ ) U.S. agency obligations ) Commercial paper ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2016
FAIR VALUE MEASUREMENTS
Schedule of fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis	The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016: Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ $ — $ — $ Short-term investments: Corporate notes and bonds — — U.S. agency obligations — — U.S. treasury securities — — Commercial paper — — Certificates of deposit — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ $ — $ — $ Short-term investments: Corporate notes and bonds — — U.S. agency obligations — — U.S. treasury securities — — Commercial paper — — Certificates of deposit — — Other Current Liabilities: Contingent consideration — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule of financial instruments measured at fair value using unobservable inputs (Level 3)	Fair Value Measurements Three Months Nine Months Balance, beginning of period $ ) $ ) Accretion expense (recognized in general and Administrative expenses) ) ) Settlement (payment) of liability ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

GOODWILL (Tables)

GOODWILL (Tables)	9 Months Ended
	Sep. 30, 2016
GOODWILL
Summary of the activity related to the carrying value of goodwill	Goodwill as of January 1, 2016 $ Goodwill adjustments in connection with the acquisition of Avalere Health, Inc ) ​ ​ ​ ​ ​ Goodwill as of September 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

NET INCOME PER SHARE - Tabular

NET INCOME PER SHARE - Tabular Disclosure (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Basic
Net income	$ 7,807	$ 10,120	$ 26,423	$ 50,015
Undistributed earnings allocated to participating securities	36	5	115	12
Net income attributable to common stockholders - basic	$ 7,771	$ 10,115	$ 26,308	$ 50,003
Weighted average shares used in computing net income per share attributable to common stockholders - basic	150,732	148,871	151,240	144,000
Net income per share attributable to common stockholders - Basic	$ 0.05	$ 0.07	$ 0.17	$ 0.35
Diluted
Net income attributable to common stockholders - diluted	$ 7,771	$ 10,115	$ 26,308	$ 50,003
Weighted average shares used in computing net income per share attributable to common stockholders - basic	150,732	148,871	151,240	144,000
Effect of dilutive securities	830	2,964	882	3,409
Weighted average shares used in computing net income per share attributable to common stockholders - diluted	151,562	151,835	152,122	147,409
Net income per share attributable to common stockholders - Diluted	$ 0.05	$ 0.07	$ 0.17	$ 0.34

NET INCOME PER SHARE - Anti-dil

NET INCOME PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Equity awards
NET INCOME PER SHARE
Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive	240	137	138	92

SHORT-TERM INVESTMENTS - Availa

SHORT-TERM INVESTMENTS - Available-for-sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available-for-sale securities:
Amortized Cost	$ 498,536	$ 616,845
Gross Unrealized Gains	760	25
Gross Unrealized Losses	(361)	(2,740)
Estimated Fair Value	498,935	614,130
Corporate notes and bonds
Available-for-sale securities:
Amortized Cost	381,098	390,185
Gross Unrealized Gains	624	12
Gross Unrealized Losses	(347)	(2,321)
Estimated Fair Value	381,375	387,876
U.S. agency obligations
Available-for-sale securities:
Amortized Cost	52,456	121,521
Gross Unrealized Gains	49	11
Gross Unrealized Losses	(10)	(203)
Estimated Fair Value	52,495	121,329
U.S. treasury securities
Available-for-sale securities:
Amortized Cost	54,362	60,362
Gross Unrealized Gains	81	2
Gross Unrealized Losses		(179)
Estimated Fair Value	54,443	60,185
Commercial paper
Available-for-sale securities:
Amortized Cost	6,294	36,849
Gross Unrealized Gains	2
Gross Unrealized Losses	(4)	(28)
Estimated Fair Value	6,292	36,821
Certificates of deposit
Available-for-sale securities:
Amortized Cost	4,326	7,928
Gross Unrealized Gains	4
Gross Unrealized Losses		(9)
Estimated Fair Value	$ 4,330	$ 7,919

SHORT-TERM INVESTMENTS - Estima

SHORT-TERM INVESTMENTS - Estimated Fair Value by Contractual Maturity Date (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
SHORT-TERM INVESTMENTS
Due in one year or less	$ 189,839	$ 206,679
Due after one year through three years	309,096	407,451
Total	$ 498,935	$ 614,130

SHORT-TERM INVESTMENTS - Other-

SHORT-TERM INVESTMENTS - Other-than-temporary Impairments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
SHORT-TERM INVESTMENTS
Other-than-temporary impairments	$ 0

SHORT-TERM INVESTMENTS - Fair V

SHORT-TERM INVESTMENTS - Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position
Estimated Fair Value	$ 239,133
Gross Unrealized Losses	(361)
Corporate notes and bonds
Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position
Estimated Fair Value	209,305
Gross Unrealized Losses	(347)
U.S. agency obligations
Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position
Estimated Fair Value	24,857
Gross Unrealized Losses	(10)
Commercial paper
Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position
Estimated Fair Value	4,971
Gross Unrealized Losses	$ (4)

FAIR VALUE MEASUREMENTS - Fair

FAIR VALUE MEASUREMENTS - Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Short-term investments:
Short-term investments	$ 498,935	$ 614,130
Corporate notes and bonds
Short-term investments:
Short-term investments	381,375	387,876
U.S. agency obligations
Short-term investments:
Short-term investments	52,495	121,329
U.S. treasury securities
Short-term investments:
Short-term investments	54,443	60,185
Commercial paper
Short-term investments:
Short-term investments	6,292	36,821
Certificates of deposit
Short-term investments:
Short-term investments	4,330	7,919
Recurring
Total
Total	514,036	614,351
Recurring | Money market funds
Cash Equivalents:
Cash equivalents	15,101	2,521
Recurring | Level 1
Total
Total	15,101	2,521
Recurring | Level 1 | Money market funds
Cash Equivalents:
Cash equivalents	15,101	2,521
Recurring | Level 2
Total
Total	498,935	614,130
Recurring | Level 3
Total
Total		(2,300)
Recurring | Contingent consideration
Other Current Liabilities:
Contingent consideration		(2,300)
Recurring | Contingent consideration | Level 3
Other Current Liabilities:
Contingent consideration		(2,300)
Recurring | Corporate notes and bonds
Short-term investments:
Short-term investments	381,375	387,876
Recurring | Corporate notes and bonds | Level 2
Short-term investments:
Short-term investments	381,375	387,876
Recurring | U.S. agency obligations
Short-term investments:
Short-term investments	52,495	121,329
Recurring | U.S. agency obligations | Level 2
Short-term investments:
Short-term investments	52,495	121,329
Recurring | U.S. treasury securities
Short-term investments:
Short-term investments	54,443	60,185
Recurring | U.S. treasury securities | Level 2
Short-term investments:
Short-term investments	54,443	60,185
Recurring | Commercial paper
Short-term investments:
Short-term investments	6,292	36,821
Recurring | Commercial paper | Level 2
Short-term investments:
Short-term investments	6,292	36,821
Recurring | Certificates of deposit
Short-term investments:
Short-term investments	4,330	7,919
Recurring | Certificates of deposit | Level 2
Short-term investments:
Short-term investments	$ 4,330	$ 7,919

FAIR VALUE MEASUREMENTS - Unobs

FAIR VALUE MEASUREMENTS - Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Fair Value Measurements Using Unobservable Inputs (Level 3)
Balance, beginning of period	$ (2,889)	$ (2,300)
Accretion expense (recognized in general and Administrative expenses)	(117)	(706)
Settlement (payment) of liability	3,006	3,006
Total	$ 0	$ 0

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details)	Aug. 23, 2016plaintiff
Consolidated securities class action complaints, Xiang v. Inovalon Holdings And Patel v. Inovalon Holdings
Legal Proceedings
Number of potential plaintiffs that moved for appointment to lead plaintiff	2

GOODWILL (Details)

GOODWILL (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Summary of the activity related to the carrying value of goodwill
Goodwill at beginning of period	$ 137,733
Goodwill adjustments in connection with the acquisition of Avalere Health, Inc	(4,163)
Goodwill at end of period	$ 133,570

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - Class A Common - USD ($)	3 Months Ended
	Sep. 30, 2016	May 04, 2016
STOCKHOLDERS' EQUITY
Share repurchase authorized amount (in shares)		$ 100,000,000
Number of shares repurchased (in shares)	3,364,531
Amount of shares repurchased	$ 51,118,000
Average cost of shares repurchased (in dollars per shares)	$ 15.19
Share repurchase remaining authorized amount	$ 48,882,000

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event - Creehan Holding Co., Inc. $ in Millions	Oct. 01, 2016USD ($)shares
Business Combination
Aggregate purchase price	$ 130
Consideration paid in cash	120
Issuance of Class A common stock	$ 10
Issuance of Class A common stock (in shares) | shares	651,355