DocGo, Inc. ((DCGO)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for DocGo, Inc. revealed a mixed sentiment among stakeholders. While the company demonstrated promising growth in its medical transportation and payer/provider verticals, it also faced significant challenges, particularly within its government population health vertical. This has led to a substantial downward revision in revenue guidance and an adjusted EBITDA loss, highlighting a complex financial landscape for the company.
Growth in Medical Transportation
The medical transportation segment of DocGo, Inc. is poised for significant growth, with expectations to generate $225 million in revenue by 2025. The company recorded a remarkable trip volume in the first quarter and projects to reach 575,000 transports by the end of 2025, further increasing to 700,000 by the end of 2026.
Expansion in Payer and Provider Vertical
DocGo’s payer and provider vertical is on a growth trajectory, with anticipated revenue of $50 million for 2025. The Care Gap closure program has seen notable expansion, with assigned lives rising from 700,000 to 900,000 within a single quarter, signaling robust demand and operational success.
Positive Cash Flow and Strong Balance Sheet
Despite forecasting an adjusted EBITDA loss, DocGo expects to maintain positive cash flow from operations. The company aims to end 2025 with over $110 million in cash and is targeting a debt-free status, underscoring its commitment to financial stability.
High Net Promoter Score
DocGo, Inc. boasts a mobile health net promoter score of 86, significantly surpassing the industry average of 58. This high score reflects strong customer satisfaction and loyalty, which are crucial for sustaining long-term growth.
Government Population Health Vertical Challenges
The company faces substantial challenges in its government population health vertical due to policy changes and budget cuts. These issues have led to the exclusion of non-migrant government population health revenue from the 2025 guidance, resulting in a revised revenue forecast of $300-330 million, down from $410-450 million.
Decline in Overall Revenue
DocGo reported a total revenue of $96 million for the first quarter of 2025, a significant decline from $192.1 million in the same period of 2024. This decrease is primarily attributed to the wind-down of migrant-related projects, impacting the company’s overall financial performance.
Adjusted EBITDA Loss
The adjusted EBITDA for the first quarter of 2025 was a loss of $3.9 million, compared to a positive $24.1 million in the first quarter of 2024. This decline is largely due to challenges in the government vertical and increased SG&A costs as a percentage of revenue.
Increased SG&A Costs
SG&A costs have risen to 46.7% of total revenues in the first quarter of 2025, up from 26.8% in the same quarter of 2024. This increase reflects higher costs relative to declining revenues, posing a challenge for the company’s cost management strategies.
Forward-Looking Guidance
During the earnings call, CEO Lee Bienstock provided revised guidance for 2025, reflecting the removal of government population health vertical revenues due to contract uncertainties. The new revenue projection stands at $300 million to $330 million, with an expected adjusted EBITDA loss of $20 million to $30 million. Despite these challenges, DocGo anticipates significant revenue from medical transportation, payer and provider services, and migrant healthcare services, with plans to achieve positive adjusted EBITDA by 2026 through strategic measures.
In conclusion, DocGo, Inc.’s earnings call painted a picture of both opportunities and challenges. While the company is experiencing growth in certain verticals and maintains a strong balance sheet, it faces hurdles in the government population health sector that have impacted its financial outlook. Stakeholders will be keenly watching how DocGo navigates these challenges and capitalizes on its growth opportunities in the coming years.