DocGo (US:DCGO)2025-11-10 21:39Financial Performance - For the three months ended September 30, 2025, the Company recorded a net loss of $29.7 million, compared to net income of $4.5 million for the same period in 2024[290]. - For the nine months ended September 30, 2025, the Company recorded a net loss of $54.0 million, compared to net income of $21.0 million for the same period in 2024[290]. - For the three months ended September 30, 2025, total revenues were $70.8 million, a decrease of $67.9 million, or 49.0%, compared to the same period in 2024[318]. - For the nine months ended September 30, 2025, total revenues were $247.3 million, a decrease of $248.4 million, or 50.1%, compared to the same period in 2024[338]. - Net loss attributable to stockholders of DocGo Inc. for the nine months ended September 30, 2025, was $48.3 million, compared to a net income of $23.2 million in the same period of 2024[337]. Revenue Breakdown - Mobile Health Services revenues for the same period were $20.7 million, a decrease of $70.0 million, or 77.2%, attributed to the wind-down of migrant-related services[319]. - Mobile Health Services revenues for the nine months ended September 30, 2025, were $96.7 million, a decrease of $254.6 million, or 72.5%, due to the wind-down of migrant-related services[339]. - Transportation Services revenues increased by $2.1 million, or 4.4%, to $50.1 million, driven by a 2.5% increase in U.S. trip volumes[320]. - Transportation Services revenues increased by $6.2 million, or 4.3%, to $150.6 million for the nine months ended September 30, 2025, driven by a 2.2% increase in U.S. trip volumes[340]. Cost and Expenses - Total cost of revenues (exclusive of depreciation and amortization) decreased by 40.7% compared to the same period in 2024, while revenues decreased by approximately 49.0%[321]. - Cost of revenues as a percentage of revenues increased to 74.4% in Q3 2025 from 64.0% in Q3 2024[321]. - For Mobile Health Services, cost of revenues amounted to $17.1 million, down 69.2% from $55.5 million in the prior year, with a cost of revenues percentage of 82.6%[323]. - For Transportation Services, cost of revenues increased by 6.9% to $35.6 million, with a cost of revenues percentage of 71.1%[324]. - Total operating expenses for the nine months ended September 30, 2025, were $147.9 million, an increase of 8.0% from $136.9 million in the same period of 2024[346]. - Operating expenses as a percentage of revenue increased from 27.6% in the first nine months of 2024 to 59.8% in the first nine months of 2025[346]. Operating Results - The Company recorded $60.1 million of operating expenses for the three months ended September 30, 2025, an increase of 51.0% from $39.8 million in the same period of 2024[326]. - Mobile Health Services segment operating expenses were $26.2 million for the three months ended September 30, 2025, up 98.5% from $13.2 million in the same period of 2024[327]. - Mobile Health Services segment operating expenses increased by 0.8% to $48.3 million, with operating expenses as a percentage of revenues rising to 49.9% from 13.6% due to declining revenues[347]. - Transportation Services segment operating expenses rose by 3.0% to $47.5 million, while operating expenses as a percentage of revenues decreased to 31.5% from 31.9% due to increased revenues[348]. - Corporate segment operating expenses surged by 21.4% to $52.1 million, with expenses representing 21.1% of total consolidated revenues, up from 8.7%[349]. Tax and Interest - The Company recorded an income tax benefit of $13.5 million for the three months ended September 30, 2025, compared to an income tax provision of $4.5 million in the same period of 2024[335]. - An income tax benefit of $21.9 million was recorded for the nine months ended September 30, 2025, compared to a provision of $13.3 million in the prior year[354]. - The company recorded a net interest expense of $1.1 million for the nine months ended September 30, 2025, down from $1.4 million in the same period of 2024[350]. Cash Flow and Working Capital - Working capital decreased by 36.2% to $116.6 million as of September 30, 2025, primarily due to a significant drop in accounts receivable and cash[362]. - Net cash provided by operating activities was $44.9 million for the nine months ended September 30, 2025, a decrease of 21.8% from $57.4 million in 2024[363]. - Investing activities used $26.0 million in cash, primarily for the purchase of restricted investments and business acquisitions[366]. - The company anticipates that existing cash balances and future expected cash flows will be sufficient to meet operating requirements for at least the next twelve months[361]. - As of September 30, 2025, available cash totaled $73.4 million, a decrease of $15.9 million compared to December 31, 2024[362]. - Financing activities used $48.9 million of cash during the nine months ended September 30, 2025, primarily for repayment of the Prior Revolving Facility and share repurchase program[368]. Acquisitions and Investments - The Company completed one acquisition for $4.2 million during the nine months ended September 30, 2025, with no acquisitions completed in the same period of 2024[302]. - The Company spent approximately $10.8 million on its share repurchase program during the nine months ended September 30, 2025[368]. Market Conditions - The Company’s financial performance is affected by macroeconomic conditions, including interest rates and inflation rates, which could adversely impact business operations[295]. - The annual inflation rate declined to 2.9% for the full year 2024 from 4.1% in 2023 and 8.0% in 2022[298]. - The Mobile Health Services market is influenced by patient acceptance of services outside traditional healthcare facilities and government funding for underserved populations[293]. - The Transportation Services market is driven by the increase in chronic conditions and the aging population, with a focus on non-emergency medical transport[294]. Future Outlook - The company expects overall Mobile Health Services revenues to be lower in 2026 than in 2025 due to the absence of migrant-related project revenues[306]. - The Company intends to develop and introduce innovative new software services and mobile applications to enhance customer experience and market position[303]. - The company plans to continue investing in technology and development, particularly in areas such as artificial intelligence (AI) to support growth[314]. Accounting and Revenue Recognition - The Company adopted ASC 606 for revenue recognition on January 1, 2019, following a five-step model for determining revenue[394]. - The Company generates revenues from Mobile Health Services and Transportation Services, recognizing revenue immediately upon fulfilling performance obligations[396]. - The transaction price for contracts is based on fixed and variable considerations, with revenues recorded net of estimated contractual allowances[397]. - The Company estimates variable consideration based on historical collections and reevaluates it at each reporting period[397]. Foreign Exchange and Credit Risk - For the three months ended September 30, 2025, foreign exchange loss was $(319,851), compared to a gain of $934,774 for the same period in 2024[402]. - A hypothetical 10% change in foreign exchange rates would have resulted in a 1.8% change in total revenues for the three months ended September 30, 2025[402]. - Two customers accounted for approximately 21% and 19% of net accounts receivable as of September 30, 2025[404]. - For the nine months ended September 30, 2025, one customer accounted for approximately 37% of revenues[404]. - The Company has not utilized interest rate hedging strategies to mitigate interest rate risk[401]. Assets and Liabilities - The Company recorded a $1,052,394 loss on the change in fair value of contingent consideration for the three months ended September 30, 2025, compared to a loss of $44,520 in the same period of 2024[331]. - Total assets of the Company's VIEs amounted to $6,985,326 as of September 30, 2025, up from $3,122,209 as of December 31, 2024[376]. - The allowance for credit losses on accounts receivable was $5,698,547 as of September 30, 2025, after recognizing an additional provision of $1,255,945 for the three months ended September 30, 2025[387]. - Future minimum lease payments under finance leases total $18.2 million, with a present value of $16.4 million as of September 30, 2025[371]. - The Company has future minimum annual maturities of notes payable totaling $249.9 million, with a long-term portion of $195.7 million[371]. - The Company recognized a total stockholders' deficit of $6,895,553 for its VIEs as of September 30, 2025, compared to $679,535 as of December 31, 2024[376]. - The Company evaluates the recoverability of long-lived assets whenever events indicate that the recorded amount may not be fully recoverable[391].