The main purpose of this paper is to investigate the relationship between innovation based on (product innovation, process innovation, organizational innovation, and marketing innovation) as a recovery strategy adapted to overcome the threats posed by the COVID-19 pandemic and the financial performances of companies within the theoretical framework that guides this paper. To study these goals, the research hypotheses are designed to fill the gap in the literature. Research data were collected using the survey questionnaire to obtain a fast and high response rate. The research sample is SMEs located in South Upper Egypt and the sample was selected using the stratified random sampling technique to select 327 respondents for the analysis. Medium and small enterprises in South Upper Egypt are chosen as the research target population due to the presence of a large number of such projects and the fact that citizens of Egypt's southern governorates (Aswan, Qena, Luxor, and Sohag) rely heavily on these types of enterprises to create job opportunities. The findings demonstrate that innovation types—organizational, marketing, process, and product— have a statistically significant and positive impact on the firm financial performance.