DocGo (US:DCGO)2024-11-07 21:34Financial Performance - For the three months ended September 30, 2024, the Company recorded net income of $4.5 million, compared to net income of $4.6 million in the same period of 2023[223]. - For the nine months ended September 30, 2024, the Company recorded net income of $21.0 million, compared to net income of $2.1 million in the same period of 2023[225]. - For the three months ended September 30, 2024, total revenues were $138.7 million, a decrease of $47.9 million, or 25.7%, compared to the same period in 2023[253]. - Mobile Health Services revenues were $90.7 million, a decrease of $48.6 million, or 34.9%, attributed to the wind-down of migrant-related services[254]. - Transportation Services revenues increased by $0.8 million, or 1.7%, to $48.0 million, driven by an 8.5% increase in trip volumes[255]. - For the nine months ended September 30, 2024, total revenues were $495.7 million, an increase of $70.7 million, or 16.6%, compared to the same period in 2023[270]. - Mobile Health Services revenues for the nine months ended September 30, 2024, were $351.3 million, an increase of $59.0 million, or 20.2%, compared to the same period in 2023[271]. - Transportation Services revenues for the nine months ended September 30, 2024, were $144.4 million, an increase of $11.7 million, or 8.8%, compared to the same period in 2023, driven by a 15.1% increase in trip volumes[273]. Cost and Expenses - Total cost of revenues decreased by 32.5% to $88.8 million, while revenues decreased by 25.7%, resulting in cost of revenues as a percentage of revenues decreasing to 64.0%[256]. - For Mobile Health Services, cost of revenues decreased by 44.1% to $55.5 million, with cost of revenues as a percentage of revenues decreasing to 61.2%[258]. - For Transportation Services, cost of revenues increased by 3.4% to $33.3 million, with cost of revenues as a percentage of revenues increasing to 69.4%[259]. - For the nine months ended September 30, 2024, total cost of revenues increased by 8.9% compared to the same period in 2023, while revenues increased by approximately 16.6%[274]. - Cost of revenues for the Mobile Health Services segment for the nine months ended September 30, 2024, amounted to $223.2 million, up 9.3% from $204.1 million in the same period of 2023[276]. - Cost of revenues for the Transportation Services segment for the nine months ended September 30, 2024, amounted to $99.4 million, up 7.8% from $92.2 million in the same period of 2023[277]. - For the nine months ended September 30, 2024, operating expenses increased by 9.3% to $136.9 million from $125.3 million in the same period of 2023, while as a percentage of revenue, they decreased from 29.5% to 27.6%[278]. - In the Mobile Health Services segment, operating expenses rose to $47.9 million, up from $36.1 million, with operating expenses as a percentage of revenues increasing to 13.6% from 12.3%[280]. - The Transportation Services segment reported operating expenses of $46.1 million, an increase from $39.6 million, with operating expenses as a percentage of revenues rising to 31.9% from 29.9%[281]. - The Corporate segment's operating expenses decreased to $42.9 million from $49.6 million, representing 8.7% of total consolidated revenues compared to 11.7% in the prior year[282]. Cash Flow and Working Capital - The company recorded a net cash provided by operating activities of $57.4 million for the nine months ended September 30, 2024, a significant increase of $115.7 million compared to a cash used of $58.3 million in the same period of 2023[294]. - As of September 30, 2024, working capital increased to $178.1 million, up by $9.3 million from $168.8 million at the end of 2023, with available cash totaling $89.5 million[293]. - Cash flows from operating activities were positively impacted by a $19.8 million decline in accounts receivable, reflecting collections from large municipal customers[295]. - Investing activities used $5.3 million of cash during the nine months ended September 30, 2024, compared to $26.9 million in the same period of 2023, indicating a significant reduction in cash outflow[298][299]. - Financing activities used $16.3 million of cash in the nine months ended September 30, 2024, primarily due to $11.1 million spent on share repurchase and $3.1 million in finance lease payments, compared to $11.9 million in the same period of 2023[300]. Acquisitions and Business Development - The Company completed three acquisitions for an aggregate purchase price of $34.2 million during the nine months ended September 30, 2023[237]. - The Company did not complete any acquisitions during the nine months ended September 30, 2024[237]. - The Company intends to develop and introduce innovative new software services and mobile applications to enhance customer experience[238]. Market Trends - The Mobile Health Services market is expanding due to increased patient acceptance of services provided outside traditional healthcare facilities[227]. - The Transportation Services market is driven by an increase in chronic conditions and the aging population, leading to higher demand for medical transportation[228]. Tax and Interest Rates - The company recorded an income tax provision of $13.3 million for the nine months ended September 30, 2024, compared to $2.0 million in the same period of 2023, due to significantly higher pretax income[286]. - The U.S. Federal Reserve implemented an interest rate cut of 0.50%, lowering the benchmark rate to 4.75%-5.00%[232]. - The Company is exposed to interest rate risk related to cash equivalents and borrowings under its Revolving Facility, which bear interest at a variable rate[323]. - A hypothetical 10% change in interest rates during the nine months ended September 30, 2024, would have had a neutral net impact on the financial statements[324]. - The Company has not utilized interest rate hedging strategies to mitigate interest rate risk[324]. Foreign Exchange and Customer Concentration - The foreign exchange gain for the three months ended September 30, 2024, was $934,774, compared to a loss of $(582,471) for the same period in 2023[325]. - For the nine months ended September 30, 2024, one customer accounted for approximately 36% of revenues and 34% of net accounts receivable[327]. - A hypothetical 10% change in foreign exchange rates would have resulted in a change in total revenues of approximately 0.9% for the three months ended September 30, 2024[325]. - The foreign exchange gain for the nine months ended September 30, 2024, was $828,613, compared to $66,965 for the same period in 2023[325]. - One customer accounted for approximately 41% of revenues and 34% of net accounts receivable for the three months ended September 30, 2024[327]. Variable Interest Entities (VIEs) - Total assets of the Company's Variable Interest Entities (VIEs) amounted to $11.84 billion as of September 30, 2024, up from $4.36 billion as of December 31, 2023[309]. - Total liabilities of the Company's VIEs were $12.72 billion as of September 30, 2024, compared to $4.81 billion as of December 31, 2023[309]. - The Company's VIEs reported a net loss of $(425,668) for the nine months ended September 30, 2024, compared to a net income of $16,839 in the same period of 2023[309].