DocGo (US:DCGO)2023-03-14 07:17Financial Data and Key Metrics Changes - In 2022, the company generated revenues of $440.5 million, up from $318.7 million in 2021, representing a growth rate of 38% [35] - Adjusted EBITDA for 2022 amounted to $41.3 million, up more than 60% from $25.1 million in 2021 [56] - Net income for 2022 was $30.7 million, up nearly 60% from $19.2 million in 2021 [56] - The company expects 2023 revenue guidance in the range of $500 million to $510 million, representing year-over-year growth of about 14% to 16% [62] Business Line Data and Key Metrics Changes - Mobile health revenue amounted to $325.8 million in 2022, up 39% from $234.4 million in 2021 [54] - Medical transportation revenue was $114.7 million in 2022, up 36% from 2021, driven by higher trip counts and average price per trip [83] - The gross margin for mobile health improved to 38.9% in 2022 compared to 38.1% in 2021, while transportation gross margins were 24.5%, virtually unchanged from 24.7% in 2021 [84] Market Data and Key Metrics Changes - The company has 34 active RFP submissions pending award totaling over $1 billion in aggregate contract value [48] - The current backlog stands at $180 million over three years, expected to be fully rolled out by the end of Q3 2023 [36] Company Strategy and Development Direction - The company is transitioning its medical transportation business to a leased hour model, which provides downside margin protection and greater visibility to revenues [12][41] - The focus is on maximizing profitability and reducing costs, with initiatives like rapid normalization to cut startup costs [50][79] - The company plans to exit lower profitability markets while repositioning assets to service more lucrative contracts [80] Management's Comments on Operating Environment and Future Outlook - Management has prepared for the expiration of the Federal public health emergency on May 11, 2023, and this is fully considered in the 2023 guidance [52] - The company anticipates continued strong demand from customers in both mobile health and transportation services [62] - Management expressed confidence in achieving a gross margin of approximately 37% by the end of 2023 [46] Other Important Information - The company plans to continue its stock buyback program, with approximately $36 million remaining in the approved program [61] - The company has been successful in securing a $94 million medical transportation contract, which is a 100% leased hour contract [37] Q&A Session Summary Question: Confirmation on leased hour contracts in transportation business KPIs - Management acknowledged the suggestion and indicated they would consider how to report those KPIs moving forward [8][9] Question: Impact of public health emergency roll-off on business - Management explained that they have planned for this and structured contracts to mitigate impacts, as they do not operate on a fee-for-service basis [15][13] Question: Startup expenses composition and reduction timeline - Management detailed that labor costs, particularly from staffing agencies and overtime, are significant contributors to startup expenses, and they expect to reduce these costs over time [94][19] Question: Transition to leased hour model and customer retention - Management indicated that customer retention during the transition is expected to be strong, as hospitals are well-informed about the changes [99][73] Question: Revenue recognition from the $180 million backlog - Management clarified that the revenue from the backlog will be recognized in a linear fashion, with full run rate expected by Q4 2023 [108][105]