DocGo (US:DCGO)2025-05-08 22:02Financial 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 [20][21] - 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, reflecting the drop in revenues [21] - Adjusted EBITDA for Q1 2025 was a loss of $3.9 million, down from an adjusted EBITDA of $24.1 million in Q1 2024 [22] 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 [21] - 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 [21] - The medical transportation business is expected to have adjusted EBITDA of greater than $15 million in 2025, with a projected total of approximately 575,000 transports by the end of 2025 [11][19] 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 [12] - The number of care gap closure and transitional care management visits is projected to grow from over 4,400 in Q4 2024 to over 11,500 in Q4 2025, indicating a significant expansion [13] 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 [7][9] - The focus is on building the company around innovative solutions for payers, providers, and health systems, particularly in mobile health and medical transportation [10] - Cost-cutting measures have been initiated, with SG&A reduced by approximately $3.1 million sequentially in Q1 2025, while still investing in growth areas [17][18] 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 [10][19] - 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 [18][27] Other Important Information - The company has initiated a stock buyback program, repurchasing nearly 2 million shares for approximately $5.8 million in Q1 2025 [28] - The balance sheet remains healthy, with expectations for improved cash flow from operations as accounts receivable from migrant programs are collected [27] 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 [32][33] Question: How is the company balancing SG&A cuts with staffing for future government engagements? - Management is restructuring shared services for savings while reinvesting in growing parts of the business to ensure readiness for future growth [34][35] Question: What is the margin profile of the migrant-related revenue compared to core business? - The margins on the migrant program were about 34%, while the non-migrant mobile health segment had a gross margin of 35.9% in Q4 2024 [80] Question: Are there any risks from tariffs on medical equipment? - Management indicated that tariffs could impact the cost of maintaining the fleet and procuring new vehicles, but they are in a good position to manage these costs [81][82]