DocGo Inc. Q3 FY2025 earnings call

2025 was a year of transition for DocGo. Record volumes were seen across all base business offerings. The balance sheet was strong with cash to fund growth. The acquisition of SteadyMD was exciting, and it was announced that DocGo would have 2026 revenue guidance of $280 million to $300 million and an adjusted EBITDA loss of $15 million to $25 million for the full year. The medical transportation business achieved record volumes in the third quarter, driven by long-term contracts. The payer and provider vertical was expected to generate $50 million in 2025 (including $5 million from the SteadyMD acquisition) and grow to $85 million in 2026. Remote patient monitoring in the payer and provider vertical had an annual run rate of approximately $15 million with over 10% adjusted EBITDA contribution. The acquisition of SteadyMD provided a 50-state virtual care footprint, expanded clinical capacity, and could pair with DocGo's mobile health clinicians.

Total revenue in 2025 was $70.8 million, down from $138.7 million in 2024 due to the sunset of migrant-related projects. Excluding migrant-related programs, revenue rose 8% to $62.4 million. Medical transportation services revenue increased to $50.1 million in 2025 from $48 million in 2024, driven by growth in nearly all U.S. markets. Mobile health revenue in 2025 was $20.7 million, down from $90.7 million in the third quarter of 2024 because of the wind-down of migrant services, but non-migrant mobile health revenues grew over 20% year-over-year. Adjusted EBITDA in 2025 was a loss of $7.1 million. The adjusted gross margin was 33% in 2025 compared to 36% in 2024. The medical transportation segment's adjusted gross margin was 31.7% in 2025 versus 30.7% in 2024. The mobile health segment's adjusted gross margin was 36.2% in 2025 vs. 38.8% in 2024 but up from 32.5% in 2025.

For 2025, the full-year revenue is expected to be in the range of $315 million to $320 million, with an adjusted EBITDA loss in the range of $25 million to $28 million. In 2026, revenue is projected to be between $280 million and $300 million, representing a 12%-20% growth over 2025's base revenues. The full-year 2026 adjusted EBITDA loss is anticipated to be between $15 million and $5 million, and the high end of the revenue guidance is expected to result in an adjusted EBITDA positive run rate by the end of the year.

Forward-looking statements are not guarantees of future performance. Actual results may differ significantly from forward-looking statements due to substantial risks, uncertainties, and assumptions beyond control, including those in risk factors and reports filed with the SEC. Risks are also associated with non-GAAP financial measures and the obligation to update information as required by law.

Q: Looking at the implied margins for the fourth quarter, I think it looks like negative 13%. Can you just help bridge us versus margins we saw in the third quarter of down 10%? How much came from the SteadyMD acquisition services core ops just bridging 3Q to 4Q margins?

A: So there wasn't anything in Q3 on SteadyMD. SteadyMD showed up in October, so you're gonna get most of the quarter of SteadyMD. We think that number should be somewhere around $5 million in revenue for the quarter. And it would be slightly EBITDA negative for that period. It shouldn't have a material impact but will affect the margin percentage. We will have little to no revenue from migrant-related sources, which will also impact the margin.

Q: For 2026 EBITDA guidance, you know, the implied margins there for next year are negative 7% yet reciting quarter at sort of negative 13% margin. Can you just walk us through kind of how that improves throughout the year? And what should we be modeling in the first half of your EBITDA versus the back half of your EBITDA?

A: There are areas where we think we'll do better. The Q3 adjusted gross margin was about 33%, which is a proxy for future quarters. Projects on the transport side may raise gross margin, but more impact will be in the second, third, and fourth quarters of 2026. We continue to work on reducing SG&A, which will help in the back half of next year. The expectation is that Q1 will be the low point of 2026 in terms of revenue, and EBITDA loss will improve each quarter from Q1 to Q4, with the bulk of the negative EBITDA number coming in the first half and improvement in the second half.

Q: Looking at for 2026 revenue guidance, how much do you assume, from migrants, for next year? How should we be modeling, transport versus mobile health? Next year?

A: In terms of migrant-related revenues for 2026, there will be no migrant-related revenues. The 2026 guidance is based on the current business baseline. Any new contract wins or M&A will be additional. The breakdown is about two-thirds transport and one-third mobile health.

Q: Wanted to dig a little bit more into the payer provider revenue growth. So you guys obviously have a very strong pipeline there. Sounds like when you step up from $50 million in '25 to $85 million in '26, am I right in annualizing the SteadyMD impact to be $15 million of that, and then you'd have $20 million from organic growth? Then what kind of deal closure assumptions does that for the pipeline that you talked about with possibly expanding your existing two national payers or adding in two others?

A: The $85 million for payer and provider in 2026 includes about $25 million from the SteadyMD acquisition. The remaining $60 million is from the current payer and provider baseline business. Our guidance for 2026 is based on the current contracts we have, not including deal closures or additional M&A from the pipeline. We are working with existing customers and expanding relationships, with new contract wins or M&A being additional to the guidance.

Q: Hi. Thanks for taking my questions. Maybe to start on the transportation side. So it's great to hear about the heightened levels of utilization and sort of that being a signal for incremental investment scale the team. But how do you balance sort of supply demand in terms of what you're seeing so that as you continue to scale the team that, you have enough demands to sort of utilize those teams in an optimal way so we're, you know, it's not becoming margin dilutive?

A: We mentioned that we've outsourced about 26,000 trips over the last twelve months, which is the embedded demand from contracts. We use this number to determine the staff and supply needed. We've made progress in hiring, and we're ramping up efforts to retain and attract staff. The hiring is based on the number of trips we're outsourcing from the embedded demand of our contracts.

Q: Helpful color there. Thanks, Lee. And then maybe as a follow-up, you know, obviously, great to hear about the continued scaling and growth in the remote patient monitoring business. You have 13 contracts this year, eight more proposals. Can you just talk about what some of the core areas and point sort of care areas that you're focused in with remote and really genesis of the question is a bit is, obviously, the recent news about United rolling back, you know, RPM except for any chronic heart failure and hyper during pregnancy. Just kind of curious what you're hearing in the market of does that sort of create a knock-on effect at all for other payers in the market?

A: Our core offering in remote patient monitoring is in the cardiology space. Insurance companies rolling back coverage for cardiology and heart disease benefits us as we have expertise in cardiology and implantable cardiac devices like loop recorders and pacemakers. Our focus is on devices transmitting data for heart failure and other cardiology-related chronic conditions, and we're expanding into other specialties like diabetes but with cardiology as the core focus.

Q: Hi. This is Jenny Shen on for David. Thanks for taking my question. First, I just wanted to ask about your current view of the hospital and hospital spending environment as a whole. We've spoken to some hospital executives who've said some of the uncertainty in the market, including around things like ACA and Medicaid have caused them to be more cautious with their budget. And they're expecting there could be pressure on volumes and spending. Have you had or heard any of that sentiment with your customers so far? But it looks like volumes are strong. Just any thoughts on hospital customer sentiment on spending?

A: It's early to tell the impact of new legislation. There are concerns about underinsured or uninsured Americans ending up in emergency rooms, straining hospital capacity. We focus on helping hospitals save money and be more efficient by managing patient flow. Our platform is designed for this, and we've seen receptivity from hospital systems. On the payer and provider side, we aim to lower costs and utilization, and our transitional care management program helps keep patients out of the hospital, benefiting hospitals and payers.

Q: And how much cash do you expect to have at the end of the year?

A: Using the end of Q3 as a baseline, we had $95 million in cash including restricted cash or $73 million in unrestricted cash. We expect the number to increase by a few million dollars by the end of Q4 as we collect remaining migrant-related invoices. The number is expected to decrease in Q1 and Q2 but pick up in the back half of the year, and we expect to exit 2026 with about $65 million or higher.