DocGo Inc. Q2 FY2025 earnings call

• Cash balance: Strong cash flow from operations during the quarter, totaling over $30 million. Total cash, including cash and restricted cash and investments, was $128.7 million as of end of Q2, up from $103.1 million last quarter. - SG&A reduction: Undertook a substantial reduction in force, eliminating dozens of roles and resulting in an estimated $10 million annualized savings. - Operational metrics: Completed over 176,000 medical transports, over 6,000 gap closure and transitional care management visits, and over 28,000 mobile phlebotomy visits. - Payer and provider vertical: Launched new care gap closure program in Southern California, expanding with existing customers and anticipating adding services in over a dozen states by end of 2026. Saw strong interest in transition to care program. Collected over 1.2 million assigned lives for care gap closure, with 50% increase in patient conversions in Q2. Expanded care gap closure relationship with major insurance company in Northeast to include primary care services. - Medical transportation business: Completed over 176,000 transports, prepared for major new customer launch in New York, signed multiyear deal with Albany Stratton VA Medical Center, renewed contracts, and continued growth in Dallas. - Population health vertical: Wound down migrant-related programs, launched project with Mescalero Apache Tribe and New Mexico Department of Health, announced new contract for mobile health vaccination services for San Diego County.

Total revenue for the second quarter of 2025 was $80.4 million. Mobile Health revenue was $30.8 million (38% of total consolidated revenue) with an adjusted gross margin of 32.5% in Q2 2025. Medical Transportation Services revenue was $49.6 million (62% of total consolidated revenue) with an adjusted gross margin of 31.1% in Q2 2025. Adjusted EBITDA for Q2 2025 was a loss of $6.1 million compared to adjusted EBITDA of $17.2 million in Q2 2024.

• Expect to reach positive adjusted EBITDA in the back half of next year, requiring quarterly revenues in $80 million to $85 million range, gross margins between 33% and 35%, and adjusted SG&A 5% to 10% lower than Q2 2025. - Continue to expect total net cash of more than $110 million at year-end. - Stock buyback program extended until December 31, with approximately $11 million remaining under the program.

• Risks include those discussed in risk factors and elsewhere in DocGo's annual report on Form 10-K, quarterly reports on Form 10-Q, etc. For example, risks related to execution of new customer launches in medical transportation, scaling of care gap closure operations, and progress of population health projects.

Q: It looks like the patients under the care gap closure services went from 900,000 last quarter to $1.2 million this quarter but revenue and EBITDA guidance for the year is left unchanged. How adding 30,000 patients in care gap coverage doesn't change guidance for the year.

A: Absolutely, and thank you for the question. This increase in patients is from contracts that we've already signed that we started the year out with. These have been communicated to us. The key right now is ramping the operations to meet the demand, focusing on ramping the teams in the field and ensuring high-quality service.

Q: On the medical transport, revenue stepped down a little bit sequentially. Bridge the moving pieces of the Colorado exit and sequential revenue change.

A: So it's Norm. As far as Colorado is concerned, there really wasn't much in the way of revenue in Q1. It was more of a year-over-year comp. In terms of the step back between Q1 and Q2, it was mostly a matter of seasonality. We had higher revenues than we had expected in the first quarter in a couple of our larger markets, so it's simply a matter of that settling in.

Q: Give some color on what was the EBITDA margin on your medical transport business and what do you think it would be on a long-term target basis.

A: So I'll go out of order there. We've talked about how we want to drive a double-digit EBITDA margin on that business. During the quarter that would not have been the case. I would say it was probably in the mid-single digits during the quarter, somewhere on the 5% to 6% area. We talked about how gross margins were probably close to 2 points lower than we would have expected. Most of that was driven by what we did in New York, where we launched with a large hospital system and had a mismatch in timing between cost of goods sold and revenue kicking in. But otherwise, we continue to feel that a 10% EBITDA margin on an underlying basis for the transport business is very much doable.