DocGo Inc. Q4 FY2024 earnings call

• The fourth quarter saw aggressive investment in care gap closure and operational structure despite near-term profitability impact. - Key operational highlights include over 15 million estimated arrival times via DocGo's tech platform, 8.8 million miles traveled by clinicians, over 1.5 million patient interactions, and expansions in payer verticals (e.g., major payers expanding relationships), government population health (e.g., secured VA contracts, acquired PTI Health), and hospital transportation (e.g., new contracts with healthcare systems). - Migrant-related revenues wound down, with associated receivables expected to be paid by mid-2025, creating cash flow tailwind. - Maintained gross margins year-over-year but SG&A as a percentage of revenues increased in Q4 due to investments in infrastructure and new business lines.

Mobile Health: In the fourth quarter of 2024, Mobile Health revenue was $71.8 million, a 52% decrease from the same period in 2023. For the full year 2024, Mobile Health revenues were $423.1 million, a 4% decrease from 2023. The adjusted gross margin for Mobile Health in Q4 2024 was 35.9%, up from 32.2% in Q4 2023. Medical Transportation: Q4 2024 revenue for Medical Transportation was $49.1 million, a 1% increase from Q4 2023. For the full year 2024, Transportation revenues were 7% higher than 2023, with a 32% compound annual growth rate over the past three years. Adjusted gross margins for Transportation in Q4 2024 were 30.1%, down from 37.4% in Q4 2023 due to residual subcontractor costs.

• Full year 2025 revenue guidance ranges from $410 million to $450 million. - Expect gross margins to remain in line with or slightly better than those of 2024. - Anticipate EBITDA margins to be in the mid-single digits. - Cash flow from operations expected to be significantly higher in 2025 than the $70.3 million generated in 2024.

• Uncertainty in self-insured insurance costs leading to potential fluctuations in EBITDA. - Timing of migrant-related revenue collections impacting cash flow. - Dependence on successful execution of growth initiatives, including contract conversions and seamless transition from migrant-related work to new business lines.

Q: On the 2025 revenue guidance, specifically regarding migrant vs base business.

A: Lee Bienstock stated the migrant situation is fluid, revenue guidance remains the same, and base business growth is expected to replace migrant-related revenues.

Q: About insurance expenses and prevention.

A: Norman Rosenberg discussed self-insured insurance cost uncertainties and the use of captive insurance to smooth out costs.

Q: On transportation growth rate.

A: Lee Bienstock and Norman Rosenberg discussed transportation growth projections, including a 15% annual growth target and stepwise growth from signing new health system contracts.

Q: On payer business targets.

A: Lee Bienstock mentioned care gap visit targets still stand, with progress expected throughout the year, including expansion via PTI Health acquisition.

Q: On municipal business and federal policy impact.

A: Lee Bienstock discussed Project Prime initiative progress and the alignment of municipal programs with bipartisan goals for cost-effective care delivery.