DocGo Inc. Q3 FY2024 earnings call

• Strong performance across all customer verticals in Q3, with $138.7 million in revenue and $17.9 million in adjusted EBITDA. • Made significant progress with care gap closure programs, doubling assigned lives to over 500,000 patients and expecting a 1,000 visits per week run rate by year-end. • Adjusted 2024 guidance: revenue $620–$630M, adjusted EBITDA $70–$75M, and cash flow from operations $90–$100M. Migrant-related revenues revised to $360–$390M, while non-migrant municipal programs are now $240–$260M. • 2025 guidance: consolidated revenue $410–$450M including $50M migrant-related revenue, focused on health care services aligned with population health. • In the payer and provider vertical, ramping up infrastructure, expecting 65,000 visits in 2025, enrolling PCP patients, and expanding with payers like L.A. Care. • Municipal population health vertical: preparing to expand mobile X-ray program, extended Street Health Outreach + Wellness contract, and expanded with New Mexico Department of Health. • Hospital vertical: signing small-to-medium contracts, expanding in the Northeast, and enhancing technology platform with proprietary SaaS potential. • Strong balance sheet: cash and cash equivalents over $108 million, generating $31 million in cash flow from operations in Q3.

Total revenue for the third quarter of 2024 was $138.7 million. Mobile Health revenue in Q3 2024 was $90.7 million, a 35% decrease from Q3 2023, driven by the wind-down of migrant-related work. Transportation services revenue rose to $48 million in Q3 2024, up ~2% from Q3 2023. Adjusted EBITDA for Q3 2024 was $17.9 million, an increase from $16.7 million in Q3 2023. Total GAAP gross margin in Q3 2024 was 33%, up from 27.2% in Q3 2023. Mobile Health adjusted gross margin was 38.8% in Q3 2024, up from 28.8% in Q3 2023. Transportation adjusted gross margin was 30.7% in Q3 2024, slightly down from Q3 2023 but improved from Q2 2024 levels.

• 2024 revenue guidance adjusted to $620–$630 million, adjusted EBITDA $70–$75 million, and cash flow from operations $90–$100 million, up from previous ranges. • 2025 consolidated revenue guidance $410–$450 million, including $50 million migrant-related revenue. • Migrant-related revenues for 2024 revised to $360–$390 million, up from previous $320–$350 million, with non-migrant municipal programs down to $240–$260 million. • Anticipate exiting 2024 at a 1,000 visits per week run rate for care gap closure programs and grow PCP patients to 10,000 in 2025.

• Uncertainties in the wind-down of migrant-related programs and their impact on revenue and margins. • Potential challenges in maintaining margins while investing in expansion and new programs. • Risks associated with the execution of growth initiatives and scaling into new markets.

Q: Congrats on the quarter. Can you give more color on what drove the strong EBITDA beat? And any concerns on expenses while growing?

A: Norm Rosenberg mentioned gross margin was a key driver, with blended gross margin at 36% in Q3, higher than historical averages. Lee Bienstock noted investments in rapid growth and expansion, particularly in payer programs, are reflected in the EBITDA margin guidance for 2025.

Q: Looking at 2025 guidance, last quarter's base business vs now. What changed?

A: Lee Bienstock explained that 2025 guidance includes migrant-related revenues and reflects investments in expansion into new markets for payer programs, with migrant work being medical-related and resources transitioning to base business growth.

Q: Clarification on non-migrant municipal population health business revision.

A: Lee Bienstock stated the base business for non-migrant municipal programs is now $240–$260 million, revised due to more accelerated wind-down of migrant-related revenues, with focus on population health programs for underserved communities.