Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• DocGo Inc (NASDAQ:DCGO) has made significant investments in its care gap closure programs, which have shown strong demand and potential for growth.
• The company has expanded its operations across 31 states in the US and the UK, indicating a broad geographic reach.
• DocGo Inc (NASDAQ:DCGO) has been recognized as one of the top innovators and places to work in healthcare, attracting a large number of job applications.
• The company has a robust pipeline with numerous deals in municipal contracts, health systems, and payer and provider deals, indicating strong future growth potential.
• DocGo Inc (NASDAQ:DCGO) has successfully maintained its gross margins year over year, demonstrating operational efficiency despite revenue fluctuations.

Negative Points

• The company's fourth-quarter results fell short of guidance, particularly in adjusted EBITDA, due to a revenue shortfall and unanticipated expenses.
• DocGo Inc (NASDAQ:DCGO) experienced a significant decline in revenue from migrant-related projects, impacting overall financial performance.
• SG&A expenses as a percentage of revenue increased substantially in the fourth quarter, affecting profitability.
• The company faces challenges in transitioning personnel and operations from winding down migrant-related projects to new business opportunities.
• There are uncertainties related to self-insured lines of insurance, which have led to unexpected expenses and could impact future financial performance.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with DCGO.

Q: On the 2025 revenue guidance, are you assuming that the base business is growing faster than 25%, or do you still think you have $50 million for the migrants in 2025? A: Hi Peter. The migrant situation is quite fluid and dynamic. We're keeping our revenue guidance the same for this year, but it's possible that migrant-related revenues could be below $50 million. Any shortfall would be replaced by base business revenues as we transition operations and personnel to the growing base business.

Q: Do you think the base business can really pick up an extra $25-$40 million beyond what was guided in November? A: We're very excited about where the base business is right now. We have a robust pipeline with 27 municipal contracts, 29 health system deals, and over 120 payer and provider deals. Our goal is to transition corporate personnel and field staff to these growing base business revenues.

Q: What exactly are the $17 million of investments going towards in order to grow? A: We are investing in our tech stack, automating patient engagement processes, and increasing bookings for care GAAP closure programs. We're also bringing on well-trained field personnel and investing in business development personnel to drive the pipeline and move deals forward.

Q: Can you talk about the $3.2 million of unanticipated expenses and the visibility that it won't repeat in 2025? A: Being self-insured, there's uncertainty about costs. However, we are saving millions by having workers' comp, auto, and health insurance as part of our captive insurance company. We accept some fluctuation in costs, but overall, it's lower than it would have been.

Q: What are your targets for the payer business, and do those targets still stand? A: Yes, those targets still stand. We aim for 65,000 care GAAP closures in 2025, 10,000 primary care patients, and 70,000 patients on virtual care management. We are currently at a 400-500 visit per week run rate and expect to exceed 2,000 visits per week by year-end.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.