DocGo (DCGO) 7 Nov 242024 Q3 Earnings call transcript

Thank you, Operator.

Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements made in this conference call other than statements of historical fact are forward-looking statements. The words may, will, plan, potential, could, goal, outlook, design, anticipate, aim, believe, estimate, expect, intend, guidance, confidence, target, project and other similar expressions may be used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance, and we cannot assure you that we will achieve or realize our plans, intentions, outcomes, results or expectations.

outcomes subject are risks, which differ beyond our results inherently many and may materially are of actual which timing in of our or statements. from statements those to outcomes our uncertainties substantial assumptions, cause results contained Forward-looking or the forward-looking to or control and XX-Q annual discussed risk factors Form and These risks, but other include, reports our assumptions and Form are not quarterly in attention statements in DocGo DocGo's report directed. and uncertainties and limited on XX-K, to, to filed those the with reports elsewhere is which on by your SEC Actual outcomes may expressed outcomes what and or is or results or implied of forward-looking results materially these from timing differ by the statements.

which in to call this to unanticipated not Lee, CEO time, is of extent by later this date discussed please Bienstock, this required ahead. and non-GAAP our occurrence to this financial financial call current to call the these report of with it the our discussed. in should The the the contained Reconciliations included to assume In or on time. as over release, as reflect as of earnings financial information after provided well measures. pleasure relevant any my go law. docgo.com or measures or except or or events, that the the Form on includes Investors SEC. Lee a the GAAP comparable filed is update addition, to DocGo. of non-GAAP X-K statements to operative today's measures as earnings reflect directly information We are part Mr. information website, as at our now At only will in remain is release turn obligation most directly of undertake contains date no call the of call to that accurate call circumstances this posted new references events

recording for all $XX.X had in joining across revenue verticals you strong performance thank customer and Mike, million all adjusted a quarter, We and us you, Thank $XXX.X today. in third the EBITDA. million in

the multiple One from building with of the progress payers. quarter programs our highlights we made gap care closure tremendous the have major is

very the strong more now exceeds of on programs, a assigned We these figure basis patients. once to that are again, indicators than leading QX, with number seeing sequential from QX doubling and XXX,XXX lives

of year million. consolidated per we we By revenue to $XXX average adjustment number compared in effectively report. base XXXX, today, down million, demand have of to the of May, have million, to for programs an between with week. Today, from expected adjusted this Sacramento, while has from $XXX revenue million further decrease million Several to of preparing population lowers in want $XXX flow previous to XXXX, forecast expectation, is million XXXX, contract are by to up amount, non-migrant-related to fine-tuned $XXX to programs our health XXXX Angeles HPD, gap earnings on mobile a we to to San health transportation $XXX for In beyond which cash XX% to for forecast guidance underlying our which the have municipal from also to As equal hubs $XX expectation just consisting million Coast wound the expect for million care an in service $XX we in in up months, $XX of business non-migrant QX. largely last our and to our and project provide our $XXX from of breakdown of in Offsetting of revenues doubled that run year-end, by million. amount X,XXX the visits completed from million down at conclude visits $XXX $XXX million to our last migrant-related non-migrant exit our the original we $XXX $XXX that approximately $XXX now we Diego Northeast. million. down X rate extended to the million and our weekly built expectations our we revenues. and To be Los $XX this will increasing I example, specific our expected expansion EBITDA, when was and new just up West a million clear, late migrant to and our operations migrant-related to million forecast no previous impact million $XX in

in we to it Now end expect late December.

wind As resources of It plan apply matter is the timing. simply new we down, programs. a to to those programs migrant-related non-migrant-related

make during objectives with in XXXX, offerings In operational like customer that consolidated the behavioral quarter cash Once our migrant-related vertical progress Regarding during work vaccinations contribution health urgent pipeline. exceeding both guidance migrant-related strength $XX across $XXX infectious or our $XX execution includes revenue $XXX again, financial million, expected to care health sum, completely with consolidated emphasize the verticals service generating would are excited and of our and of operations cash million our an of population X from and I we today, we our about million period. cannot assessments, all collections, which we approximately issued continue our substantial XXXX meeting disease like be flow aligned care. health million. revenue and to screening, more to focused is the in

XXXX migrant-related this XXXX, programs. we cash to capital QX and million, the support up year. over very million outlay cash balance $XXX Throughout now from is quarter a substantial last working early had total Our in million in $XX $XX and equivalents of and

share of very additional cash repurchases, make and our on have continue trend relationships growth reversed, and sheet, has resources strong as and a With that we line to seeing our fund opportunities we are robust result, the strong that balance into credit. Now flow initiatives, should our support early strategic new our XXXX. trend in repay pipeline, execute

now analysts, hospital payer our I usually some spend X and would population vertical, customers. we and XX%. provider covering do, like a mind customer in on customer In its to ratings, key payers our verticals: every systems. time help demand health as I is mentioned care as as ramping the country, I topic have ratings Medicare in material meet for know is drop there. services. of and significant providers, by crucial and municipal our As plan a largest potentially financial month, and impact these reception We Advantage gap aggressively the to which the the in for according the closure country we are the we star believe announced just to strong one to payer XXXX solution In experiencing of the are are payers last our an improve much up reduce a infrastructure ideal EBITDA news, its our above, This that programs could positive

to laser-focused Now build-out support the we it. on are

previously X,XXX will As XXXX in to us exiting XX,XXX meet mentioned, or care exceed anticipate XXXX. up of visit we closure goal run program, our week per which at our rate set gap and visits

flight By goal in virtual continue our our also Additionally, partners we QX we started target monitoring grow care management position our enrolling the reaching patients payer to will PCP in in of that to and our with XXXX. have to expect agreements XX,XXX programs. of PCP of us end XX,XXX patients XXXX, in patients

fulfill patients from to the a star create delivery care care high-quality insurers the cycle and plan virtuous DocGo everyone our benefit where opportunity of bringing participates health healthier mobile ratings who partnerships convenient Our continues benefit HEDIS of patients home, to and all. increase program from high-quality their and benefits, in scores to mission

L.A. expand DocGo services just providing example over to to payer are mobile care of program give transitional municipal to coming a expansion care with complex number initiative been population readmission and high-risk XX% how program of position our time, populations. a for and saw we is hospitals QX. at L.A. in also on insurance hospital's our help L.A. indicators Importantly, care vision. positive to these Care a manages support emergency our arrangements to our a that plans delivery than of an programs closure vertical, lives. for Care, million to launch offer additional growth program Based In management value-based our we of California a provide health their hospital long-term which to management reduction management member key gap To X.X greater patients, reduction an deal our at department signed the Care care fruition, with most a successful some a partners we've of improve Southern for single members, health this transitional in

enable + unhoused York to us of We this populations mobile which our for are health city and a X-ray Outreach Wellness continue underserved the New program preparing the fall, program for Street this for fourth year, City. operating York mobile will in care New and award-winning we contract to extended expand Health

may to identify of our from we traditional medium-sized received New settings. us close we begin large clinical whose vaccinations, Within our leverage behavioral this estimates. expertise contractors initiative a XXX,XXX including progress at week, contracts signed, Health, of municipal In contract this benefit which our components provided reach existing to medical number expansion over been initiative expect continue being early their to treatment line population Mobile XXXX Prime sight vertical, considerable our generating health care also bring to which of to Project initial who good clinical subcontracting is are their Health have scope we care offices. from we of for XXXX. DocGo. this opportunity, of the just our an or work we public the approach Additionally, to in services give is health government Mexico with Collectively, with that broadened Department small- and substantial across encounters, health projects very more. growth to QX health people to goal believe hospital revenue this urgent outside and We depression x-rays, to screenings and a care have care, of made In have vertical, we alone, very signed customer and with

contracts, providers received customers within resources, our grow and which presence we build-out ability to expanded unique customer a encouraging in see health from exceptional believe great the in within dispatch also newly of also In enhancements combination market. major have medical our platform proprietary as now addition our we to that Dover, in and in we our technology to to a recently can have and with our that track significant contracts the network in is transportation feedback launched a We having market. We new Dallas industry. technology both Delaware, customer so addition the Northeast mobile to is made our continue

I that has that where us a for not I quarter.  Before Dr. We revenues fourth the hand it our in as discuss long addition presence, generate Norm, the can and that we a begin to to potential take over believed wanted expect the a have Board. in product Chair Klasko proprietary technology our to do SaaS as have new markets moment stand-alone to also of of we Stephen physical

the vast experience and over to a pioneering go vocal at and General a care Jefferson vast now Klasko the off advocate Klasko increase potentially more help adviser As special at and for optimize start. in also to forward ahead. He his technologist of are board, former and Norm to please Health any a on that it Norm, We variety excited we be brings will Dr. operational could Catalyst, great, of venture I results. look Dr. care knowledge. a is guidance AI capital could health not address that firm financial hand extensive great care to industry benefiting cover and patient DocGo efficiency. And we from CEO a network to and can ways. health have

expectations, to began third from the good Total revenues in but quarter began the the decrease for of basis quarter migrant-related million, some revenues in higher gains we decline was wind-down with planned XXXX Lee, through transport discussed also go continue down Thank anticipated QX down sites million the Health New work. As and decline of about and we've annual services like third of some by our in of to strong quarter XX% rest a XXXX, QX, Mobile City, XXXX. third migrant-related revenues XXXX was our XX% earnings of smaller XX% have we've such XXXX. XXXX calls, X% line previous XX% from and the these quarter the through driven the year-to-date markets of by U.K. increased revenues saw you, quarter greater on in mid-May. Health of recorded we into Transportation the of to revenue the wind sequentially Tennessee X% as of to and transportation largest afternoon. the in On wind than $XX revenues XXXX. down of prior migrant-related were migrant-related X markets than that in increased These up expected in recently, months September, third had our in XXXX, a of in sequentially projects. XXXX more digesting Mobile from Delaware.  For were growth. York third first year periods Historically, the reflecting million, large target, the in we've the are for both while and the which revenue $XXX.X period. revenue as XXXX, driven $XX.X been We growth

margin of gross of were for adjusted the double-digit our consecutive of significantly health percentage strongly of XXXX quarter. adjusted projects of in compared XXXX. seen QX Net successfully third in offset quarter was fourth us revenue XXXX QX, our XXXX year's able with in was of confidence margins. subcontractor was We in from GAAP X.X% in $XX.X last many margin in $XX.X XX.X% annual This million The the XX%, XXXX maintaining of in third net EBITDA matured margin Total growth the decline third the gross improvements quarter in was third up was up million to from into quarter of third expectation income EBITDA the during margins. Adjusted revenue of was up third with gross compared quarter $X.X have third wins several that XX.X% The from XXXX. quarter throughout costs. quarter EBITDA in going we've mobile XXXX.  As of $X.X XXXX, income have the XX% the we million impact quarter XXXX. XX.X% solid to the XX% of recent adjusted contract in the give as improved million,

XX% During the fourth compared costs. labor labor the of the Subcontracted XXXX, sequentially quarter total XX% third third of as of year total of of XXXX. accounted in in at quarter subcontracted for XX% declined has peaking costs labor labor to quarter approximately since last

subcontractor to of quarter the have XX.X% segment, staffing down compared for quarters. In gross segment Still, X transportation was gross XXXX, hired Mobile improved the from in we field XX.X% of XXX but nearly our points in XXXX adjusted XX.X% margin Health the by XX.X% were to been had in margins were consecutive the fill came one quarter Health newly the Adjusted still their markets. a QX segment these eliminated XXXX, now the During margins Transportation gaps margins costs adjusted third they of basis XXXX. third personnel. levels.  However, in from for Mobile QX gross impacted XXXX, costs as subcontractor for to quarter by third improved of were able as residual close, QX via

XXXX, XX% third dollar XX.X% Looking than the absolute costs, at seen terms, third of quarter their in during quarter revenues half with part expenses higher XXXX. the operating of of targeted declined expenses first a force falling quarterly as to the levels operating XXXX, came the XX.X% to total lowest XXXX. However, due of since in in of quarter SG&A percentage first in in to operating reductions the year-over-year

to down. We the manage wind as migrant actively programs our expenses continue operating

total a is the adjusted as to revenues, over XXXX. us However, increase reflected for $XXX.X percentage forward.  As as lower sheet, The million third step restricted quarters, end September financial could where of SG&A cash biggest million took compared EBITDA of in $XX.X second balance the we given margin that expectation XX% which the the sequentially another of XXXX, cash of as was the expect include to for and next quarter highlight expectation quarter few we cash, which equivalents, our in revenues to of X% relates our our of XX, big XXXX. in

was both compared The a the of end quarter, of a various had end second year the in more the solid receivable our also end, during that than to it third accounts QX, decline resulted earlier. the to in programs $XXX cash those in million of cash collections accounts of which quarter programs when total approximately XXXX. At than As receivable was our in end at receivable accounts we driven compared quarter of was in of higher balance million increase the levels migrant by million from the as from various and of saw we $XXX migrant the the end the $XX QX.

over more outstanding, sales with AR this our older, levels.  As wind now the continue XXXX, project our continue as expect expenditures, DSO, programs $XXX our or and to migrant-related $XX collect as bring we balance invoices We collect with we line outflows see of we these in to generate closely a to days our down and decrease sheet from million line remainder expected historical balance. cash is benefit of As in larger to cash expect in flow to lower XXXX. cash in increase continued migrant to operations million

that operations quarter. in in second are through the from an in $XX flow operations another flow we've million we quarter cash $XX the cash X in the at million in purposes, year, in fourth generated looking flow operating comparison additional of and we to million million Given $XX generated $XX $XX quarter. For cash third from the the months first million

like Our back will to we opportunities some evaluating over to this to turn call increased briefly cash At currently balances business. our I'd us Lee. to invest are allow grow the the in of point,

Norm. you, Thank

turn I by the CEO that for to DocGo. the as anniversary I Before sharing wanted X-year QX my of marked close operator call back Q&A, to

call over care Bringing transporting care many incredible of and to clear fit.  We mobile market including accessible Our offering XXX,XXX company mobile by million our this and last facilitating has over a XX customers Score an powered company awards of is to foundation by relationships more than strong and high-quality, care manifestation positive the back like with we go will and things I interactions. quality for platform strong people operator providers best-in-class the through X.X expand this a Net I'd highly speaks the roster proprietary on know the to compassionate building excellence. our in and delivery accomplished ahead. XX have a of to as enjoy months a our workplace health evidenced DocGo's culture months, mission And to vertically incredible about all. service that an impact turn have employee-centric Promoter health continue Operator, patient Q&A. volumes for bring clinical technology our integrated has the care years ahead. enviable product of please to now patients

Instructions]. [Operator

comes first Cantor Your Sarah from question Fitzgerald. James of

And Gaby Congrats care And EBITDA for expansion plans off I you had strong is going wanted more you give well. a gap is it sounds can This really little progress quarter. just on like drove color of closure that the super on and that? on lot a have with Sarah. what beat. for you to start a bit the

we line business? there worry grow anything is while the that on So you should about expense

Norm. of it's take question. the part the first I'll Gaby, Sure.

So as in far gross as XX% the gross margin point We a the margin EBITDA blended beat, the yes, I quarter. generated to would line. of

we've blended you that, out that is said was the are of the part along fact sites spiked this be of wound done the and programs We've of up. expectation somewhere while the highest programs, look that couple the that in of down were had to for and of that XX%, things always gross There migrant margins that's XXXX of some Health when margin about in ordinary, lower other nonrecurring, revenue helped our number Mobile helped just XX.X% those by were Mobile the XX% first quarter, and things that the case a the range. There we margins. Now were which margin lower-margin before, quarter not like things ins that a fourth tended Health I'll were were talk are of were some that COVID first margin that since the sites. some it outs. had if we've us the the historically, as ones which at that

Now that the that's by wasn't necessarily out. that of sort design, but way played

had had more then good in within pretty a mix general, in general. within we So migraine favorable mobile program.  And we a mix health the

some was where that say higher than controlled. of And lot We've expect. the of would doing a well. I mentioned, from Otherwise, year-over-year. to we came SG&A part well as bit margins big were been we we of was a as reasonably of it. a XX% gross little maybe and cutting, benefited was So a cost lot down would That fruition that rationalization,

touch year next as I'll Lee. on question. part it's of Gaby, your

patient partners a product think partners shared, quality And So to We're And hospital across our municipal going I we're always our expansion year to great payer absolutely experience. towards programs. particularly and our we're and the to and rapid out investing in and services, next as be that. very our in be West incredible to our with we I on great delighted happy investing to going the we're are that and going investing that. and going growth continue customers, invest and payer our focused incredibly and putting in and systems we're Coast. and always rapid expanding, customers ensuring index mentioned, that a our

well. year percentage EBITDA reflected our in reflected was investments that as range there. next guidance Those for So are

comes of Deutsche Pito question Chickering next from Your Bank.

you guidance, XX% at XXXX I last the to, quarter, revenues at think, of base business million Looking margin. base $XXX guided

I migrant think I which that implies growing Now then think the now X% lower. in guidance, base of believe, the to it's guidance, a million XX%, floor margin an was you is of the and XX% range. And of $XX business I sort revenues added

the commentary the quarter from question So what, anything, call? last I guidance from guess I of, the if guess, changed sort is

question. I'll you for Absolutely. that Lee. it. take Thank It's

really can be. that, so give want what is related. contribution also going It's to all to in medical encompassed and will include guidance I emphasize also migrant next we population wanted health direction that next really for So year work. where that on expect year, go our put to we work is out we the

of We HPD that wound some year. the of this That sites end ancillary the down are winding down included will by all the be services.

related So we're to focus going and the providing, health behavioral to into screening, screenings, depression care, really disease next that to we to that then essentially, base work continues we transition resources share year.  And going it and what wanted growth. services that's really as that also control continues next infectious over for next business resources year, vaccinations, that be the will on focused into urgent utilize year, work it's is on eventually to going other to

And migrant-related transitioning so as resources on the business and right over to base growth the that's what transition the there all you that's going now. work, see on the to that are payer opportunities continue we're and away expanding to from all programs the

some So reflects that's as on particularly to will the investments essentially hospital be a well her that the Gaby as PCP to also that on expansion, lot encompasses we're I year mentioned service. expansion going again, in well EBITDA system look and of we're rapid also the like. making as program payer the And great that and quality to investments of range And that be our question, what programs, on of next municipal side. making the on that going

adjusted percentage range. incorporated EBITDA we so that And into our

Okay.

that's lower therefore, a just this, resources lower -- I margin. EBITDA. we at taking migrant sort divert basically those $XXX of is the because So the I sure that away, revenue a margin until sort a as it's drag now make last of XX% and year's so on next but million, away that on understand That's higher quarter, is

into you're of us partners. That's national we're scaling mind as see for again, scale year have And multiple additional new keep next into of then expansion a well. also number And to correct. we that, markets the opportunities, payer investing some that program markets opportunities into going in our

Yes. And this is Norm.

SG&A I to about of keep it's to We where a cost-cutting sure programs talked little the trying right-size our a at we're make revenues. percentage bit that business think certain nuanced. more we

might to it out costs so place some very some we talks grow. we additional and mean structure Lee means we're when through go are we doesn't that part continue this As cost about keep finding In want to bottom-up spending our place on in cases, leaving granular just in that it of going money. investment, there can so way, that a

organization programs So but and the are them out over the represents then cost to help or other redeployed. stuff for that's very other good sticking people working already and people that parts of very, who the example, who here migrant we're programs to payer it's being on around, very are some build taking the talented doing. So technically moving that a of that's

So we build that, it of projecting, bottom-up granular as the at EBITDA little we our as we margin do a we look where like should think around looks be. in bit conservatism will

a then And Great. Okay. quick follow-up.

be the care a growing as margins on margins keeps is going contracts business, the that and that are closure gap in that's at growing? averages? being to rapidly, signed Looking drag invest how those versus corporate And -- you as

Absolutely.

in the historical closure the do our with gap all margins. contracts we programs, So we're On price negotiating custom line rates. care

it do doing making at with we margin previous will We're us those we've then experience people. opening patient a some then are And a previous when meaningful deliver ensure to gross new it resources level we're to in And for very it the to also that rapid as up we large out are cost exceptional investment has on we results up. making expansion, national seen sure preserving needs all time, take us costs. money absolute We're to spectacular payers. does years over cost that we expansion, overstaffed to training margins are so some in the the but successful very be we endeavoring cases and ramping that of that bases. we're We're essentially like sure for optimize deliver quality it and these the payers.  So we want projects the and

baked granularity the in the we that that's the to that call. wanted guidance. of of share into on kind is So all and

Your MacDonald next Ryan question comes from of Needham.

Lee, on clarification on a maybe 'XX. just first

the $XXX forecast in just business, think non-migrant a $XXX of million there? million talked sort previous a expectation in to about what clarify were sort municipal Can population to range your about you prepared you $XXX million versus $XXX lower million. I you of that remarks, talking health of of

Right.

great with it's to Ryan, you. So speak

in So shared is sunset we we of the from of had end reflecting going calls, revenues the to what whereas it some this revised year, again, base range. previous migrant-related million the we the be the was million in QX $XXX range, sticking going in shared to to until business in more thought which $XXX was

with that related bring wellness health services mobile health scaling additional space system, as a year. underserved vaccinations, next health all been particularly into are the infectious populations are In doing with to programs state partnering bringing x-ray, really into like looking bringing population uninsured right company, bring a solution to we're Indian disease same we're now lot our line the care in of of behavioral that those care that and partners, programs screening, are care, visits our municipal annual systems the to programs, we've communities. Those to health to for a to municipal the underserved with veterans, out what again, along population municipal populations, services, in services the terms health, rolling now

Got it.

Okay.

what in wind than accelerated 'XX. expected you're more of it's So 'XX maybe in down, more less you of going that initially because just collect to the and

the about $XXX you that million. $XXX was no, Are talking to in 'XX, -- million

our to $XXX Our that company shared working the range million. is revenue million on. the programs $XXX is Encompassing for all next we year, expectation

Okay. That's helpful.

since expanded talk Northeast. an the sort you update? the to seems with in fruit comment low-hanging scale following obviously payers to issues or of future. their how you gotten improve could response grown for rating and ratings pipeline think, be closures, -- of in made in of opportunity business creating for I a of sort with care the sort of plans up we've the that then, the ratings I In And about Can But has you news? of it payers some gap the star terms from what more about about kind these and you ask rapidly payer sort the sort help wanted have health direct prospective to got that Star the

right. Ryan, that's exactly

calls have. earnings essentially access flurry gaps. as to of weighing addressed. be conditions can which gaps care of sicker. And weighing members the a of in patients becomes obviously get increasing for payers essentially the their they're close get lot They're obviously, Their are update, that horrible expensive care and also a happens, as on that since health that payers patients QX Otherwise, chronic really, need the to financials, more patients acute. the need their it's So payers the came worse, their getting And that we that as through that but get sicker, utilization their patients. these on their have more health plan, for outcomes the can learned the

care So working impairment a vision modality, our or example, or for care to or not we're cancer the or follow-up go risk we'll cases, sure colon sure find working the that home, at And And at making that blindness. into proactive, a the is go to many is our homes make or and diabetic bone there.  So do to on is care be plans in whole condition exam a patient's patient we as break those again, screening. program with and the does density as well, an gaps. close a follow-up for patient patients' those is into fall a precipitate. the scan retinal we risk indeed, obviously,

what that decrease those close seen X increase. financially happen, to will ultimately with need of the is things. improve payers right utilization, them, really we've now, is that increase their which payers All care will be outcomes, different better Since for perfectly traction our seen which health aligned gaps. profitability. We've with

signing we have already more work with don't address. patients send to we're newer partners we seeing that we're into the or the pipeline. newer So us today And payers payer adding

heavily why So the we're that we're investing into both. acceleration. We're very seeing seeing That's now. right

ahead. and you, session. back our remarks. for over Thank Please closing ladies conference to now the Beanstock, Lee gentlemen. That CEO, concludes turn I question-and-answer will go

well. us to to Thank look you. the Thank you so Thank much. you forward one. for Be everyone joining and the on we next call,

conference. for attending. Thank today's you concludes This

may your disconnect lines. now You