DocGo Inc. (DCGO) Earnings

Management highlights

### Acquisition Strategy & Care Anywhere Vision - Signed a definitive agreement to acquire Acuity Health (HiQuity), a leading acute and critical care telemedicine provider, marking the company's second major virtual care acquisition in nine months. - The acquisition aligns with DOTCO's Care Anywhere strategy, creating a scaled, unified platform covering the full patient care continuum from hospital to home by combining HiQuity's health system-focused virtual care with DOTCO's in-home mobile care delivery. - Expected synergies include cross-selling opportunities to overlapping health system customers, operational cost efficiencies from integrating overlapping infrastructure, and expanded service offerings for payers and health systems. ### Financing Update - At closing, approximately $52 million in Acuity debt will be assumed, maturing in December 2029. - Perceptive Advisors has committed up to an additional $50 million in tiered financing, with the first $12.5 million to be funded during the pre-closing period. - The new financing will replace DOTCO's existing asset-backed line of credit, strengthening the balance sheet and providing flexibility for future growth plans. ### Operational Volume Growth - All core business lines achieved record Q2 volumes with strong year-over-year growth: U.S. medical transportation +15%, Health Care in the Home +26%, Mobile Phlebotomy +20%, Cardiac and Remote Patient Monitoring +13%, Virtual Care and Lab Orders +58%. - Signed a new major contract with a top national health plan to serve members in Pennsylvania; total assigned patients for care gap closure services grew to 1.7 million (up 100,000 from Q1). - Recently acquired SteadyMD maintained Q1-level volumes even during the typically slow summer telehealth season. ### Cost Efficiency & AI Initiatives - Sequential adjusted EBITDA loss improved nearly 40% quarter-over-quarter, falling from $10.3 million in Q1 to $6.3 million in Q2, driven by a Q2 corporate reduction in force that cut annual SG&A by approximately $4.5 million. - AI initiatives are driving meaningful operational efficiency: an AI communications tool now handles 60% of inbound patient calls and 100% of outbound appointment scheduling, processing over 1,000 calls daily without human intervention. AI data entry accounts for 65% of orders, with a target of 90% by end of 2026, projected to cut per-order processing cost from $2 to less than $0.10. - 10 active efficiency programs across business lines are expected to deliver $6 million in annualized savings when fully implemented; an additional 20 programs will launch in late 2026 and early 2027.

Guidance

- Full year 2026 revenue guidance is narrowed to a range of $305 million to $310 million, which remains within the prior $300 million to $315 million range shared in May, and is higher than earlier 2026 guidance ranges. This guidance excludes any revenue from the Acuity Health acquisition (to be updated after closing) and excludes all migrant-related project revenue, representing 21% to 23% year-over-year growth over 2025 base revenue. - Full year 2026 adjusted EBITDA loss guidance is revised to a range of $17 million to $22 million, wider than the prior guidance of $5 million to $10 million. The revision reflects a larger-than-anticipated adjusted EBITDA loss in the first half of 2026 and a current gross margin trajectory that remains lower than original projections, even though margins are trending upward. - Management expects continued sequential declines in SG&A through the remainder of 2026 as cost-cutting efforts and efficiency initiatives fully take effect.

Segment performance

1. Medical Transportation Services: Revenue increased to $52 million in Q2 2026 (from $49.6 million in Q2 2025), representing 70.8% of total Q2 2026 revenue. Adjusted gross margin was 32% in Q2 2026, up from 31.1% in Q2 2025. Growth was driven by broad gains across large and small U.S. markets, with strong performance in New York, Texas, and Tennessee. Gross margins were restrained by higher-than-planned field labor wages and increased fuel costs (up to $4.27 per gallon from $3.16 per gallon year-over-year), but the overtime rate declined to 8.1%, the lowest level since Q2 2024. 2. Mobile Health: Revenue was $21.4 million in Q2 2026 (down from $30.8 million in Q2 2025), representing 29.2% of total Q2 2026 revenue. The decline was entirely due to the wind-down of migrant-related projects; non-migrant mobile health revenue grew 78% year-over-year. Adjusted gross margin was 27% in Q2 2026, down from 32.5% in Q2 2025, driven by temporarily lower-than-normal margins at recently acquired SteadyMD from aggressive hiring to meet rising customer demand. Excluding migrant-related revenues, underlying gross margins for continuing mobile health business lines improved by more than 500 basis points year-over-year, driven by stronger contributions from higher-margin service lines including remote patient monitoring and mobile phlebotomy. Total consolidated Q2 2026 revenue was $73.4 million, down from $80.4 million in Q2 2025. Adjusted EBITDA was a loss of $6.3 million, compared to a $6.1 million loss in Q2 2025. Consolidated adjusted gross margin was 30.5% in Q2 2026, compared to 31.6% in Q2 2025.

Risks & headwinds

- Proposed CMS rule changes may limit or eliminate Medicare reimbursement for general remote patient monitoring (RPM) starting in 2027, creating modest risk for DOTCO's small general RPM patient cohort of approximately 2,000 patients. - Timing of state regulatory approvals for the Acuity Health acquisition is unpredictable, though management does not expect approval itself to be a material barrier. - Timing of collection for remaining outstanding migrant-related accounts receivable from New York City HPD remains unpredictable. - Higher-than-expected fuel prices and field labor costs continue to pressure medical transportation segment gross margins. - SteadyMD's temporarily low gross margins from aggressive pre-demand hiring have pulled down overall mobile health segment margins in Q2 2026. - Forward-looking statements are inherently subject to uncertainties and assumptions outside of management's control that could cause actual results to differ materially from projections.

Analyst Q&A

• Q: What customer synergies exist between DOTCO and Acuity Health, how fast is Acuity growing, and what are the main hurdles to closing the acquisition by year-end?

  A: Acuity serves primarily hospital and health system customers, with significant overlap with DOTCO's existing medical transportation customer base, creating immediate cross-selling opportunities. Acuity has $65 million in trailing 12-month revenue, growing at a 10% to 12% annual low double-digit rate. The only potential hurdles are routine timing for state regulatory approvals and required customer consent for the transaction, neither of which management expects to pose a meaningful challenge.

• Q: What risk does the proposed CMS RPM reimbursement cut pose to DOTCO's RPM business, and does Acuity have exposure to this risk?

  A: Only ~2,000 of DOTCO's ~57,000 total monitored patients are in general RPM programs potentially impacted by the rule; the remaining 55,000 are implantable cardiac device monitoring patients, which are not part of the proposed changes. All of DOTCO and Acuity's monitoring services are tied to active chronic or transitional care management, which are not targeted for cuts, and management believes CMS ultimately will reward outcome-focused patient management over just data collection, aligning with the company's model.

• Q: What cross-selling interest have you seen from existing customers of both companies ahead of closing, and what cost synergies are expected from combining clinical operations?

  A: Early confidential conversations with existing customers of both firms have shown strong interest in expanded combined offerings, as existing hospital system customers already trust DOTCO's execution and have unmet demand for virtual staffing support that Acuity provides. Clinical synergies come from merging overlapping multi-state clinical practice infrastructure: DOTCO has 500-600 clinicians across the U.S. and Acuity has 400+ clinicians, which can be integrated into a single shared practice to eliminate redundant overhead. Additional synergies come from greater purchasing power with shared vendors and consolidated IT/cyber infrastructure.

• Q: How will DOTCO reach a break-even run rate by the end of 2026 after a larger-than-expected Q2 loss, and what is the size of your high-growth business lines?

  A: Break-even will come from three factors: incremental sequential revenue growth (including expected seasonal gains in SteadyMD and care gap closure in H2 2026), improving gross margins as temporary headwinds (high fuel prices and SteadyMD's hiring costs) abate, and continued sequential SG&A declines as severance rolls off and cost cuts take full effect. Current quarterly revenue for key growth lines: $4.5 million for cardiac RPM ($18M annualized), $8.9 million for SteadyMD virtual care, ~$1.4-1.5 million for mobile phlebotomy ($6M annualized), and $1-2 million for care gap closure.