DocGo (US:DCGO)2025-05-08 22:00Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $96 million, down from $192.1 million in Q1 2024, primarily due to the decline in the government vertical, especially in migrant-related projects [19] - The company recorded a net loss of $11.1 million in Q1 2025 compared to a net income of $10.6 million in Q1 2024 [20] - Adjusted EBITDA for Q1 2025 was a loss of $3.9 million, down from an adjusted EBITDA of $24.1 million in Q1 2024 [21] - The adjusted gross margin for Q1 2025 was 32.1%, compared to 35% in Q1 2024 [21] Business Line Data and Key Metrics Changes - Mobile health revenue for Q1 2025 was $45.2 million, down from $143.9 million in Q1 2024, driven by the anticipated wind down of migrant revenues [20] - Medical transportation services revenue increased to $50.8 million in Q1 2025 from $48.2 million in Q1 2024, supported by growth in several markets [20] - The medical transportation business is expected to have an adjusted EBITDA of greater than $15 million in 2025, with projected total transports reaching approximately 575,000 by the end of 2025 [10] Market Data and Key Metrics Changes - The company has seen substantial growth in its payer and provider vertical, exceeding 900,000 assigned lives, up from 700,000 just a quarter ago [11] - The number of care gap closure and transitional care management visits is projected to grow from approximately 4,400 in Q4 2024 to over 11,500 in Q4 2025 [12] Company Strategy and Development Direction - The company has removed its government population health vertical from its 2025 guidance due to ongoing policy changes and budget cuts, leading to substantial uncertainty [6] - The focus is on building the company around innovative solutions for payers, providers, and health systems, particularly in mobile health and medical transportation [9] - Cost-cutting measures have been initiated, with SG&A reduced by approximately $3.1 million sequentially in Q1 2025, while the company plans to aggressively cut SG&A over the next several quarters [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of the medical transportation and payer/provider verticals despite the challenges in the government sector [9] - The company anticipates positive cash flow from operations and expects to exit the year with over $110 million in cash, despite projecting a consolidated adjusted EBITDA loss for the year [17] - Management highlighted the importance of their technology platform in securing new contracts and improving patient outcomes [11] Other Important Information - The company has initiated a stock buyback program, repurchasing nearly 2 million shares for approximately $5.8 million in Q1 2025 [27] - The balance sheet remains healthy, with expectations for improved cash flow from operations as accounts receivable from migrant programs are collected [26] Q&A Session Summary Question: What is the expected government revenue for the remainder of the year? - Management clarified that government population health revenues have been removed from guidance, and any new deployments will be reported separately as upside [31][32] Question: How is the company balancing SG&A cuts with staffing for future government engagements? - Management indicated they are restructuring shared services for savings while reinvesting in growing parts of the business to prepare for future growth [33][34] Question: What is the demand outlook for the payer business? - Management noted healthy demand in the payer segment, with proactive healthcare services aimed at reducing medical loss ratios and improving quality metrics [39][41] Question: What caused the revenue miss in Q1? - The revenue miss was attributed to the government vertical, with delays in contract launches and RFP responses impacting expected revenues [48][55] Question: What is the margin profile of the migrant-related revenue? - The margins on the migrant program were about 34%, consistent with previous quarters, while the non-migrant mobile health segment had higher margins [78] Question: Are there risks from tariffs on medical equipment? - Management acknowledged potential tariff impacts on fleet procurement and maintenance but expressed confidence in their fleet management capabilities [80]