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DocGo Inc. (DCGO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue fell to $120.8M, down 39% y/y on accelerated migrant program wind-down; adjusted EBITDA was $1.1M and GAAP net loss was $7.6M. Gross margin held at 30.8% (vs 31.2% y/y), showing resilience despite mix-shift and higher SG&A .
  • Management cut 2025 adjusted EBITDA margin guidance to ~5% from 8–10% prior, while maintaining revenue guidance at $410–$450M; gross margin expected “in line or slightly better” than 2024. This margin reset is the key stock-reaction catalyst near term .
  • Executing pivot to payer/provider mobile health: >700k lives assigned for care gap closure, NPS 86, expanding into PCP, mobile mammography, and VA subcontract work; acquired PTI Health to add mobile phlebotomy .
  • Near-term headwinds: Q4 adjusted EBITDA ~$10M below implied November guidance, including $9M revenue shortfall (migrant wind-down), $3.2M unexpected self-insured costs, and ~$1.5M incremental investments in care gap growth .
  • Cash collections tailwind: year-end migrant AR ~$150M with ~$30M related payables; CFO expects operating cash flow to be “significantly higher” in 2025 than $70.3M in 2024 as receivables convert .

What Went Well and What Went Wrong

What Went Well

  • Payer/provider momentum: >700k lives assigned and NPS 86; management highlighted strong demand and pipeline expansions (PCP, transition of care, mobile clinics), signaling durable growth vectors .
  • Segment margins: Mobile Health adjusted gross margin improved y/y to 35.9% in Q4; Transportation subcontractor cost issues abated exiting Q4, supporting margin recovery into 2025 .
  • Cash and liquidity: Year-end cash and restricted cash reached ~$107.3M; AR declined y/y to $210.9M with DSO improving to 125 days, setting up for stronger 2025 operating cash flow .

What Went Wrong

  • Guidance miss: Q4 adjusted EBITDA ~$10M below implied November guidance; $9M revenue shortfall tied to faster migrant wind-down, plus $3.2M unforeseen captive insurance costs and ~$1.5M growth investments compressed profitability .
  • SG&A deleverage: SG&A rose to 39.7% of revenue (from 27.6% y/y) amid revenue decline and deliberate investment to support next-leg growth, pausing prior sequential cost reductions .
  • Transportation margin pressure: Segment adjusted gross margin fell to 30.1% y/y (from 37.4%) due to residual subcontractor costs and lack of prior-year one-time benefits; mix normalization weighed on consolidated margins .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$199.2 $138.7 $120.8
Net Income ($USD Millions)$8.0 $4.5 $(7.6)
GAAP Gross Margin %31.2% 33.0% 30.8%
Adjusted EBITDA ($USD Millions)$22.6 $17.9 $1.1
Adjusted EBITDA Margin %11.3% 12.9% 0.9%
Net Margin %4.0% 3.2% -6.3%

Segment breakdown:

Segment MetricQ4 2023Q4 2024
Mobile Health Revenue ($USD Millions)$150.4 $71.8
Transportation Revenue ($USD Millions)$48.8 $49.1
Mobile Health Adjusted Gross Margin %32.2% 35.9%
Transportation Adjusted Gross Margin %37.4% 30.1%

KPIs:

KPIQ3 2024Q4 2024
Care Gap Assigned Lives>500,000 >700,000
Care Gap Visits per Week (run rate)Targeted 1,000 exit rate by year-end “Came very close” to 1,000 exit rate; automated patient engagement to boost bookings
Care Gap NPS85 86
Cash + Restricted Cash ($USD Millions)$108.6 $107.3
Net Accounts Receivable ($USD Millions)$233.7 $210.9

Notes: Quarterly EPS per share was not disclosed in the Q4 press release/8‑K; we attempted to retrieve via S&P Global but could not due to API limits. See Estimates Context.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$410–$450M $410–$450M Maintained
Adjusted EBITDA MarginFY 20258%–10% ~5% Lowered
Gross MarginFY 2025n/aIn line or slightly better than 2024 New qualitative
Cash Flow from OperationsFY 2024$90–$100M Actual $70.3M Below prior guidance (collections delayed)
RevenueFY 2024$620–$630M Actual $616.6M Slight miss
Transportation RevenueFY 2025n/a~$225M expectation (call) New disclosure (management expectation)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Payer care gap expansionDoubled assigned lives sequentially; building West Coast/Northeast hubs; 2025 targets: 65k visits, 10k PCP, 70k VCM patients >700k lives; NPS 86; automating patient engagement; expanding into PCP, mobile mammography, transition of care Accelerating
Migrant program wind-downWind-down underway; mix helped Mobile Health margins; migrant revenues expected into late 2024 Faster-than-expected wind-down hit Q4 revenue by ~$9M; year-end migrant AR ~$150M, wind-down largely by mid-2025 Accelerated exit; collections tailwind
SG&A and cost structureSequential SG&A declines through Q3; caution on percentage as revenue falls SG&A rose to 39.7% of revenue (deliberate investments); plan for resumed sequential declines in Q1 2025 Near-term higher; expected to ease
Transportation contracts/marginsCAGR ~15%; U.K./Tennessee/Delaware growth; margins improving vs Q2 New TX & TN expansions; subcontractor costs waning; linear ramp through 2025; ~$225M 2025 revenue expectation Improving ramp; margin recovery
Municipal/VA “Project Prime”Expected early-2025 revenue from subcontracting with large primes Two VA subcontract wins; evergreen focus (veterans, screenings) Converting pipeline
TechnologyPlatform supports transport and mobile health; potential SaaS revenues Automated patient engagement; 9% booking-time reduction; 15M ETA calculations in 2024 Enhancing ops at scale
Policy/Star ratingsPayer star rating pressure boosting demand for care gap closure Payers “laser-focused” on quality measures; broader inbound interest Tailwind to demand

Management Commentary

  • “We are thrilled with both the progress and the results of these programs… but these investments also come with a near-term impact on profitability.” – CEO Lee Bienstock .
  • “Total revenue for the fourth quarter… was $120.8 million… The entirety of the year-over-year revenue decline related to migrant projects.” – CFO Norman Rosenberg .
  • “Adjusted EBITDA… fell short by about $10 million… Revenues were about $9 million… shortfall entirely attributable to migrant-related revenues… $3.2 million of unanticipated [self-insured] expenses.” – CFO .
  • “We continue to expect full year revenues in the range of $410 million to $450 million… [and] EBITDA margins… mid-single digits [in 2025].” – CFO .
  • “A major payer… wants to expand into PCP services… another [West Coast] customer… expand transition of care… chronic care… A major payer in New York… expanding assigned patient list to 40–50k unengaged members.” – CEO .

Q&A Highlights

  • Base vs migrant mix: Management kept FY25 revenue guidance, but indicated migrant revenues could be below $50M, offset by base business growth; 27 municipal deals, 29 health systems, >120 payer/provider deals in pipeline; ~10% more deals closed vs November .
  • Margin reset rationale: Investments in tech stack, LPN training, and business development; measured approach to cost-cutting retaining growth-critical overhead; captive insurance savings carry variability .
  • Segment and pipeline conversion: Transportation expected to ramp sequentially through 2025 with new hospital systems; municipal “Project Prime” producing VA subcontract wins and smoothing RFP lumpiness .
  • Quant specifics: Migrant revenue ~$55M in Q4; FY migrant ~$370M; base business achieved $240–$260M range in FY24 .
  • Subcontractor cost trajectory: From >40% at peak to ~24% company-wide; expected <20% in Q1 2025 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and FY 2024 EPS/revenue were unavailable at time of analysis due to API rate limits; we attempted retrieval via GetEstimates but could not complete. As a result, consensus beat/miss comparisons are not included. Values would ordinarily be retrieved from S&P Global.
  • Results fell materially below the company’s own implied November guidance (adjusted EBITDA ~-$10M vs prior implication), driven by accelerated migrant wind-down and unexpected self-insured costs .

Key Takeaways for Investors

  • The quarter reflects a deliberate investment phase as DCGO pivots from migrant work to scalable payer/provider mobile health; expect near-term margin pressure but improving unit economics with automation and clinician training .
  • Bold: 2025 EBITDA margin guidance cut to ~5% (from 8–10%) is the key negative surprise; stock may reset on profitability expectations even as revenue guide holds .
  • Pipeline credibility: Multi-vertical backlog (municipal/payer/hospital) with new VA subcontract wins and regional transport expansions underpins FY25 revenue maintenance and medium-term growth trajectory .
  • Segment mix: Mobile Health adjusted gross margin improved y/y; Transportation margin headwinds easing as subcontractors roll off, supporting margin normalization in 2025 .
  • Liquidity and cash dynamics: Year-end cash ~$107M; improved DSO and ~$150M migrant AR (net ~$120M when offsetting payables) suggest a meaningful operating cash flow tailwind in 2025 .
  • Execution watch items: SG&A trajectory (management expects dollar declines to resume in Q1 2025), pace of care gap closures (run-rate scaling to >2,000/week exit-2025), and transport contract ramps .
  • With consensus estimates unavailable, anchor trading decisions on margin guidance reset, cash collection cadence, and evidence of pipeline conversion (press releases on contract wins and VA/program expansions) .