DocGo Inc. (DCGO)·Q2 2025 Earnings Summary

Executive Summary

• Q2 revenue of $80.4M fell 51% YoY on planned migrant program wind-down but was modestly above S&P consensus; diluted EPS was $(0.11) and adjusted EBITDA loss was $(6.1)M, with GAAP gross margin at 26.7% and adjusted gross margin at 31.6% . Revenue came in above S&P consensus ($77.4M*) while EBITDA missed (“EBITDA Consensus Mean” −$7.0M* vs. EBITDA −$13.5M), reflecting pre-launch staffing for a major NY health system transport contract .
• Management reiterated FY25 revenue guidance of $300–$330M and adjusted EBITDA loss of $20–$30M; YE cash/net cash is still expected to exceed $110M, supported by migrant AR collections (AR down to ~$54M) .
• Cash strengthened to ~$128.7M (cash + restricted cash + restricted investments) vs. $103.1M in Q1 as collections accelerated; subsequent to quarter-end, the company repaid the $30M revolver to zero, enhancing balance-sheet flexibility .
• Strategic pipeline and execution: payer/provider assigned lives rose to 1.2M (from 0.9M in Q1), early AI tooling is improving patient engagement operations, and a large NY transport contract went live on July 1, expected to drive record H2 transport volumes and revenue .

What Went Well and What Went Wrong

• What Went Well

  • Transport resilience and growth catalysts: Transportation revenue grew YoY to $49.6M (from $48.2M) on strength in several states; 176k transports completed in Q2; the NY academic health system contract launched July 1 is expected to drive record H2 transport volumes .
  • Cash collections and balance sheet: Total cash (incl. restricted and investments) rose to ~$128.7M; migrant-related AR declined sharply to ~$54M, supporting the plan for >$110M YE net cash .
  • Payer/provider momentum: Assigned lives reached 1.2M (from 0.9M in Q1), with a 50% increase in patient conversions QoQ and entry into additional primary care services; management expects expansion into 6+ new states in this vertical by end of 2026 .

• What Went Wrong

  • Margin pressure from pre-launch staffing: Transport margins were restrained by hiring/training for the July 1 NY launch, creating a timing mismatch between costs and revenue; transport EBITDA margin ran mid–single digits vs. long-term 10% target .
  • Mobile Health reset post-migrant: Mobile Health revenue fell to $30.8M (from $116.7M YoY) as migrant work wound down; adjusted gross margin compressed YoY to 32.5% (from 35.9%), still early-stage mix-heavy with suboptimal utilization .
  • SG&A elevated vs. revenue mix: While absolute SG&A fell YoY and sequentially, the percentage of revenue remains high during the transition; management executed a RIF and identified ~$10M annual savings to right-size costs .

Financial Results

Quarterly performance – consolidated

Segment breakdown (revenue and adjusted gross margins)

Key performance indicators (Q2 2025 unless noted)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We surpassed 1.2 million patients assigned for care gap closure services and completed more in-home visits in the first half of 2025 than we did in the entirety of 2024… we anticipate entering more than a half dozen new states in this vertical by the end of 2026.” — CEO Lee Bienstock .
• “We launched services for a major new medical transportation customer in the New York market on July 1st, which we expect will help drive our highest-ever revenues and trip volumes in this vertical during the second half of the year.” — CEO .
• “Our total cash balance increased substantially to $128.7 million… Our combined outstanding migrant-related receivables now total approximately $54 million… cuts to corporate overhead… will result in an estimated $10 million in annual savings.” — CFO Norm Rosenberg .
• “We generated $33.6 million in positive cash flow from operations… Last week, we used our enhanced cash balances to pay the outstanding amounts under our line of credit, removing $30,000,000 in debt.” — CFO .
• “Our engineering team built a text-based AI agent… confirmed over 3,000 appointments and rescheduled another ~350, saving roughly 10% of our live operators’ time.” — CEO .

Q&A Highlights

• Why guidance unchanged despite +300k assigned lives: scaling field teams and improving engagement/fulfillment capacity are the gating factors; focus is on execution ramp vs. headline assigned lives .
• Transport sequential step-down: seasonality and capacity management; Q1 operated near utilization ceilings; pre-hiring in NY market elevated COGS ahead of July 1 revenue .
• Transport profitability: long-term EBITDA margin goal ~10%; Q2 transport EBITDA mid–single digits given pre-launch timing .
• Mix & quarterly cadence: with migrant revenue falling off, Q3 likely lower than Q2, with a “blip up” in Q4 but still below Q2 levels under the revised guide framework .
• Payer/provider margins: early-stage mix suboptimal; utilization key lever; management sees Mobile Health payer/provider approaching ~40% gross margin next year as density builds .

Estimates Context

Q2 2025 actual vs. S&P Global consensus

• Revenue beat consensus; EPS on “Primary EPS” basis beat consensus; EBITDA lagged consensus given pre-launch staffing costs in New York transport .
• S&P Global values marked with an asterisk (*) are from SPGI/Capital IQ (“Primary EPS Consensus Mean,” “Revenue Consensus Mean,” “EBITDA Consensus Mean”). Values retrieved from S&P Global.

Key Takeaways for Investors

• Revenue resilience is anchored by Transportation; the July 1 NY health system contract plus a strong transport pipeline positions H2 for sequential improvement in transport volumes, though near-term margins reflect pre-hiring timing .
• Payer/provider vertical shows robust demand with 1.2M assigned lives and improving conversion/utilization; this becomes a structurally higher-margin business as density scales, a key medium-term mix tailwind .
• Balance sheet strength (cash ~$128.7M; revolver repaid) provides optionality for continued buybacks, selective M&A, and scaling operations while navigating the post-migrant transition .
• FY25 guide held ($300–$330M revenue; $(20)–$(30)M adj. EBITDA), with cadence reflecting migrant wind-down; YE net cash >$110M remains the target, underpinned by AR collections .
• Watch for: transport margin recovery as NY ramps; payer/provider margin expansion via clinician utilization; incremental municipal population health wins reported as upside to guide; and continued cash conversion .
• Risks: government vertical uncertainty; execution risk in scaling payer/provider and transport launches; labor and inflation dynamics affecting fleet/personnel costs (partly offset by lower fuel) .

Appendix: Additional relevant press releases in Q2 window

• Digital Transportation Management Platform for major NY academic health system (services commenced July; EHR integration; centralized discharge coordination) .
• San Diego County vaccination program contract expanding mobile health access in underserved communities .