DocGo (DCGO) - 2025 Q1 - Quarterly Results

Overall Performance and Outlook Q1 2025 Performance Summary In the first quarter of 2025, DocGo's performance was significantly impacted by policy changes and uncertainty in its Government Population Health vertical, leading to a strategic decision to remove non-migrant government revenue from its 2025 forecast, resulting in a sharp year-over-year decline in total revenue and a shift from net income to a net loss, though core Medical Transportation and Payer & Provider businesses performed in line with expectations, with management now focused on aggressive cost-cutting, anticipating positive cash flow for the remainder of the year, and leveraging its strong balance sheet for growth opportunities | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $96.0 million | $192.1 million | | Net (Loss) Income | ($11.1 million) | $10.6 million | | Adjusted EBITDA | ($3.9 million) | $24.1 million | | GAAP Gross Margin | 28.2% | 32.8% | - The company has decided to remove all non-migrant Government Population Health revenue from its 2025 guidance due to substantial uncertainty created by policy changes and adjustments in public spending[1] - Management plans to aggressively cut SG&A expenses and anticipates positive cash flow through the rest of the year, driven by collections of outstanding migrant-related receivables[2] | Revenue Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Mobile Health Services | $45.2 million | $143.9 million | | Transportation Services | $50.8 million | $48.2 million | Full-Year 2025 Guidance DocGo has significantly revised its full-year 2025 guidance downwards, a direct result of the company's decision to exclude projections for non-migrant municipal population health revenue due to market uncertainty, while revenue expectations for Medical Transportation, Payer & Provider businesses, and remaining migrant services work are unchanged | Guidance Metric | New 2025 Estimate | Previous 2025 Estimate | | :--- | :--- | :--- | | Full-Year Revenue | $300 - $330 million | $410 - $450 million | | Full-Year Adjusted EBITDA | ($20) - ($30) million loss | 5% margin | - The guidance revision is explicitly driven by the removal of non-migrant Government Population Health revenue; other business verticals continue to perform in line with expectations[1][4] Business & Operational Highlights Despite financial headwinds from its government services segment, DocGo achieved several operational successes in Q1 2025, including a record quarter for medical transportation revenue and trip volume, alongside expanded service contracts with a major New York health plan, a national health system in Texas, and a California cardiology group - The company's medical transportation segment experienced a record quarter in terms of both revenue and trip volume[9] - Key contract wins include: - A major New York health plan for in-home DocGo Primary Care services - A two-year contract with a national health system's North Texas division for medical transportation - An expanded one-year contract with a California-based cardiology group for virtual care management[9] - The company surpassed 900,000 patients assigned by payer and provider partners for care gap closure services, with visit volumes approaching three times the rate of the previous year[1][9] Financial Statements Consolidated Statements of Operations For the first quarter of 2025, DocGo reported total revenues of $96.0 million, a 50% decrease from $192.1 million in the same period of 2024, primarily due to the wind-down of migrant-related programs, leading to an operating loss of $14.0 million and a net loss of $11.1 million, compared to an operating income of $15.9 million and net income of $10.6 million in Q1 2024, with diluted loss per share at $(0.09), a reversal from $0.10 in the prior year | Line Item (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $96.0 | $192.1 | | (Loss) income from operations | ($14.0) | $15.9 | | Net (loss) income | ($11.1) | $10.6 | | Diluted (loss) income per share | ($0.09) | $0.10 | Consolidated Balance Sheets As of March 31, 2025, DocGo's balance sheet showed total assets of $430.8 million and total liabilities of $128.9 million, with cash and cash equivalents at $79.0 million and restricted cash at $24.1 million, while total stockholders' equity decreased to $301.9 million from $315.2 million at the end of 2024, partly due to share repurchases and the net loss for the quarter | Balance Sheet Item (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $79.0 | $89.2 | | Total current assets | $262.5 | $304.5 | | Total assets | $430.8 | $455.6 | | Total current liabilities | $107.6 | $121.8 | | Total liabilities | $128.9 | $140.4 | | Total stockholders' equity | $301.9 | $315.2 | - During Q1 2025, the company repurchased 1.95 million shares of common stock for a total cost of approximately $5.8 million[9] Consolidated Statements of Cash Flows In Q1 2025, DocGo generated $9.7 million in net cash from operating activities, a significant turnaround from the $10.6 million used in operations in Q1 2024, largely driven by a $31.4 million positive change from accounts receivable, with net cash used in investing activities at $5.7 million and financing activities at $8.5 million, mainly for share repurchases, resulting in a $4.3 million decrease in total cash and restricted cash to $103.1 million at quarter-end | Cash Flow Activity (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9.7 | ($10.6) | | Net cash used in investing activities | ($5.7) | ($1.7) | | Net cash used in financing activities | ($8.5) | ($0.9) | | Net decrease in cash and restricted cash | ($4.3) | ($13.3) | - The positive operating cash flow was primarily driven by a significant inflow from the collection of accounts receivable[23] Non-GAAP Financial Measures & Reconciliations Explanation of Non-GAAP Measures DocGo utilizes non-GAAP financial measures, including Adjusted Gross Margin and Adjusted EBITDA, to provide investors with a view of what management considers its core operating performance, with Adjusted Gross Margin excluding non-cash depreciation and amortization from the cost of revenue, and Adjusted EBITDA calculated by adjusting net income for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring expenses - Adjusted Gross Margin is used to evaluate operating performance by excluding non-cash depreciation and amortization charges from the cost of revenue[26][27] - Adjusted EBITDA is used to assess core operating performance by generally eliminating the effects of financing, income taxes, capital spending, acquisitions, and other non-recurring or non-cash items[29][30][31] Reconciliation of GAAP to Non-GAAP Measures For Q1 2025, DocGo's Adjusted Gross Margin was 32.1%, down from 35.0% in Q1 2024, and the company reported an Adjusted EBITDA loss of $3.9 million, a stark contrast to the $24.1 million in positive Adjusted EBITDA from the prior-year quarter, with the reconciliation showing that the GAAP net loss of $11.1 million was adjusted for items including income tax benefit, D&A, and non-cash stock compensation to arrive at the Adjusted EBITDA figure | Margin Reconciliation | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP gross margin | 28.2% | 32.8% | | Adjusted gross margin | 32.1% | 35.0% | | EBITDA Reconciliation (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income (GAAP) | ($11.1) | $10.6 | | (+) Depreciation and amortization | $3.8 | $4.2 | | (+) Non-cash stock compensation | $4.8 | $4.0 | | Adjusted EBITDA | ($3.9) | $24.1 |