Executive Summary / Key Takeaways

• DocGo is undergoing a significant strategic pivot, shifting focus and resources away from volatile, crisis-response government contracts towards higher-growth, evergreen opportunities in the payer, provider, and hospital system verticals, leveraging its core mobile health and transportation capabilities.
• First quarter 2025 results reflected this transition, with total revenue declining significantly year-over-year due to the anticipated wind-down of migrant-related services, leading to a net loss and negative adjusted EBITDA for the quarter and full-year 2025 guidance.
• Despite near-term profitability pressure from investments in scaling new business lines and elevated SG&A as a percentage of lower revenue, the company anticipates positive cash flow from operations in 2025, driven by strong collections of past migrant-related receivables, and expects to exit the year debt-free.
• Key growth catalysts include rapid expansion in the payer and provider segment (care gap closure, PCP, mobile phlebotomy), continued steady growth in medical transportation, and leveraging existing hospital system relationships for mobile health services, supported by a robust pipeline and strategic acquisitions like PTI Health.
• While facing risks from government funding uncertainty and competitive pressures from both virtual-first and integrated healthcare giants, DocGo's differentiated technology and operational expertise in delivering "last mile" physical care at scale position it uniquely to capitalize on the growing demand for at-home healthcare.

The Foundation: Building a Mobile Healthcare Ecosystem

DocGo's journey began with Ambulnz, founded in 2015, establishing a foothold in the medical transportation sector. This foundation was significantly expanded through a business combination in 2021, transforming into DocGo Inc. and embarking on an acquisition strategy to broaden capabilities and geographic reach. Early acquisitions bolstered its medical transportation network, while more recent moves, such as the acquisition of a majority stake in Cardiac RMS (cardiac monitoring) and the recent purchase of PTI Health (mobile phlebotomy) in February 2025, signal a clear strategic evolution towards a more comprehensive mobile health offering.

At its core, DocGo operates through two primary segments: Mobile Health Services and Transportation Services. Mobile Health encompasses a wide array of on-site and in-home medical treatments, from vaccinations and screenings to urgent care and behavioral health support, often delivered through municipal or payer partnerships. Transportation provides emergency and non-emergency medical transport, a foundational service leveraging the company's logistical expertise. Supporting these is a Corporate segment providing shared services.

A critical differentiator for DocGo is its proprietary dispatch and communication technology. This platform is designed to optimize the deployment of mobile healthcare resources, integrating with systems like Epic EHRs to provide transparency for customers and patients. Management highlights this technology as a key enabler for securing new contracts and driving operational efficiency. While specific, publicly disclosed quantitative metrics on the technology's direct impact on performance compared to alternatives are not extensively detailed, the strategic intent is clear: to leverage technology to enhance service delivery, improve response times, and efficiently manage a growing network of field personnel and assets. The company is also exploring the potential for this technology as a stand-alone SaaS product, indicating confidence in its capabilities beyond internal use.

Navigating the Currents: A Strategic Pivot Underway

DocGo's recent history has been significantly shaped by large-scale municipal contracts, particularly those related to migrant services in New York. This work, which peaked in late 2023 and early 2024, provided a substantial revenue boost but also introduced volatility and significant working capital demands due to long payment cycles. As these programs began their anticipated wind-down in mid-2024 and continued into 2025, the company faced a strategic inflection point.

Recognizing the inherent uncertainty and potential for delays in the government RFP channel, exacerbated by policy changes and budget cuts in Washington, DocGo has made a decisive pivot. The company is actively shifting its focus and resources towards what it terms "evergreen" opportunities within the payer, provider, and hospital system verticals, alongside pursuing more stable, non-crisis municipal programs. This strategic response is central to the investment thesis today.

The first quarter of 2025 financial results starkly illustrate this transition. Total revenue plummeted to $96.03 million, a 50% decrease from $192.09 million in Q1 2024. This decline was almost entirely attributable to the Mobile Health segment, where revenues fell by 68.6% year-over-year, driven by the migrant program wind-down. Consequently, the company reported a net loss of $9.41 million attributable to stockholders in Q1 2025, compared to net income of $11.23 million in the prior-year period. Adjusted EBITDA also turned negative, reflecting the loss of revenue leverage and ongoing investments.

However, beneath the surface of the declining top line, elements of the core strategy show progress. Transportation Services revenue saw a modest 5.4% increase in Q1 2025, reaching $50.82 million, driven by a 5.9% increase in trip volumes. This segment is expected to continue its steady growth, with management projecting approximately $225 million in revenue in 2025 and aiming to approach 700,000 transports by the end of 2026, fueled by new wins and expansions in key markets.

The payer and provider segment is highlighted as a primary growth engine. Management reported exceeding 900,000 assigned lives for care gap closure programs as of Q1 2025, a significant increase from 700,000 just a quarter prior. Visit volumes are projected to quadruple over a 24-month period, from approximately 2,500 in Q4 2023 to over 11,500 in Q4 2025. The acquisition of PTI Health adds mobile phlebotomy, with projections of over 125,000 blood draws in 2025. The company is also ramping up its primary care physician (PCP) offering, targeting 10,000 PCP visits in 2025 and over 40,000 in 2026. These initiatives collectively aim to visit over 150,000 patients in their homes in 2025.

This aggressive expansion, particularly in the payer and provider vertical, requires significant investment in personnel, technology, and infrastructure. This is reflected in the elevated SG&A expenses as a percentage of revenue in Q1 2025 (46.7% vs. 26.8% in Q1 2024), contributing to the expected full-year adjusted EBITDA loss of $20 million to $30 million on revenues of $300 million to $330 million. Management acknowledges this near-term pressure but views it as necessary to build critical mass and capture long-term opportunities. They are implementing cost-cutting measures within SG&A and expect sequential declines in absolute dollar terms throughout 2025, aiming for positive adjusted EBITDA in 2026.

Competitive Landscape and Strategic Positioning

The healthcare services market, particularly mobile health and transportation, is highly competitive. DocGo faces rivals ranging from large, integrated healthcare conglomerates like UnitedHealth Group (UNH) to virtual-first telehealth providers such as Teladoc Health (TDOC) and Amwell (AMWL), as well as traditional ambulance services and emerging tech players.

Compared to virtual-only providers like Teladoc Health and Amwell, DocGo's core differentiation lies in its ability to provide "last mile" physical care. While Teladoc Health and Amwell excel in virtual consultations and digital platforms, DocGo's strength is its operational capability to deploy trained medical professionals and equipment directly to a patient's location. This is crucial for services requiring physical presence, such as medical transportation, on-site diagnostics (X-ray, phlebotomy), vaccinations, physical exams, and complex care gap closures. DocGo's proprietary technology, designed for dispatch and logistics in the physical world, is a key enabler here, offering potential advantages in response times and operational efficiency compared to competitors whose technology is primarily built for virtual interactions.

Against large, integrated players like UnitedHealth Group, DocGo competes by focusing on specialized, agile mobile service delivery. While UnitedHealth Group benefits from immense scale and broad market reach, DocGo can potentially offer more cost-effective and tailored solutions for specific mobile health and transportation needs, particularly in underserved or hard-to-reach populations.

Traditional ambulance services are direct competitors in the transportation segment. DocGo differentiates itself through its technology platform, which offers enhanced transparency and integration capabilities (e.g., with hospital systems' EHRs), and by bundling transportation with a broader suite of mobile health services, creating a more integrated offering.

DocGo's strategic positioning is to be the go-to partner for payers, providers, and municipalities seeking to deliver high-quality, in-person healthcare outside of traditional clinical settings. By demonstrating value through improved patient outcomes (e.g., reduced hospital readmissions) and cost savings (e.g., closing care gaps to prevent acute episodes), the company aims to build sticky relationships and capture a larger share of the value created, potentially moving towards value-based care arrangements over time. The positive Net Promoter Score (NPS) of 86 reported for its mobile health services in Q1 2025 suggests strong patient satisfaction, a critical factor in gaining traction with payers focused on member experience and quality ratings.

However, DocGo's smaller scale relative to healthcare giants poses vulnerabilities, potentially impacting purchasing power and the ability to absorb large-scale operational shocks. While its technology is a moat, maintaining a competitive edge requires ongoing investment in R&D to keep pace with the rapid technological advancements seen across the healthcare sector, including AI and digital health tools.

Financial Health and Outlook

Despite the Q1 2025 net loss and projected full-year adjusted EBITDA loss, DocGo's balance sheet remains a point of strength, largely due to significant cash flow generation from operations in 2024 and early 2025. The company generated $70.3 million in operating cash flow in 2024, a substantial improvement from a negative $64.2 million in 2023. This turnaround was primarily driven by the collection of large accounts receivable from the migrant programs.

As of March 31, 2025, cash and cash equivalents stood at $79.01 million, with total cash and restricted cash at $103.06 million. While cash balances saw a sequential decrease from year-end 2024, operating activities provided $9.66 million in cash in Q1 2025, primarily due to a $31.44 million decrease in accounts receivable, reflecting continued collections from municipal customers. Approximately $120 million in migrant-related AR remained at the end of Q1 2025, representing about two-thirds of total AR, down from $150 million at year-end 2024. Continued collection of this AR is expected to drive positive operating cash flow throughout 2025.

The company anticipates exiting 2025 with over $110 million in cash, even after accounting for share repurchases ($5.75 million in Q1 2025, with $16.3 million remaining under the repurchase program), the PTI acquisition ($3.60 million cash), and repayment of the $30 million outstanding balance on its revolving line of credit. This would position the company to be debt-free at the end of 2025, providing significant financial flexibility to fund organic growth initiatives, pursue strategic acquisitions, and potentially continue share repurchases.

The revised 2025 guidance reflects the strategic decision to exclude uncertain non-migrant government population health revenue, focusing the core guidance on the expected performance of the transportation, payer/provider, and remaining migrant healthcare work. The projected adjusted EBITDA loss signals the investment phase the company is in, prioritizing scaling the high-growth payer/provider business and enhancing its operational and technological capabilities. Management's expectation of positive adjusted EBITDA in 2026 indicates confidence in the long-term profitability potential of the core evergreen businesses as they achieve greater scale and operational efficiency.

Risks and Challenges

Despite the strategic pivot and growth initiatives, DocGo faces notable risks. The primary near-term challenge is the uncertainty surrounding government contracts. Delays in RFP awards and contract launches, as highlighted by management, could impact the timing and realization of potential upside revenue from the municipal vertical. While the company is focusing on evergreen opportunities, a significant portion of its historical revenue has come from government sources, and shifts in policy or funding priorities remain a risk.

Inflationary pressures, particularly on labor (EMTs, clinicians), fuel, and medical supplies, could continue to impact gross margins if cost increases cannot be fully passed on to customers. The tight labor market for healthcare professionals is a persistent challenge that could affect staffing levels and wage costs.

Operational risks include the successful integration of acquired businesses like PTI Health and the efficient scaling of new programs, particularly the complex logistics of coordinating a high volume of in-home visits across multiple geographies for the payer segment. Litigation risks, including ongoing labor actions and a securities class action lawsuit, while potentially mitigated by insurance or settlements, could still incur costs and divert management attention.

The competitive landscape is dynamic. While DocGo's mobile capabilities are a strength, virtual-first competitors continue to innovate on the digital front, and large integrated systems can leverage their existing patient bases and payer relationships. DocGo must effectively articulate and demonstrate the unique value proposition and ROI of its in-person mobile health services to secure and expand contracts against these diverse rivals.

Conclusion

DocGo is at a critical juncture, executing a strategic pivot away from the volatility of crisis-response government contracts towards building a sustainable, high-growth business centered on mobile health and transportation services for payers, providers, and hospitals. The first quarter of 2025 results underscore the transitional nature of this period, with declining revenues and near-term profitability pressure reflecting the wind-down of past large-scale programs and necessary investments in future growth engines.

The core investment thesis hinges on DocGo's ability to successfully scale its payer and provider business, leveraging its differentiated technology platform and operational expertise in delivering "last mile" care. The rapid growth in assigned lives, increasing visit volumes, and strategic acquisitions like PTI Health provide tangible indicators of progress in this key area. Coupled with steady growth in its foundational transportation segment and a strong balance sheet bolstered by recent AR collections, the company appears well-positioned to fund its growth initiatives and navigate the transition.

While the uncertainty in the government vertical and competitive pressures present challenges, DocGo's focus on evergreen opportunities, investment in technology and personnel, and demonstrated ability to deliver value and positive patient experiences offer a compelling path forward. Investors should closely monitor the execution of the growth strategy in the payer/provider segment, the management of SG&A costs, and the continued collection of outstanding receivables as key indicators of the company's progress towards achieving its targets for positive cash flow in 2025 and positive adjusted EBITDA in 2026. The success of this strategic pivot will ultimately determine DocGo's ability to capitalize on the growing demand for accessible, at-home healthcare and solidify its position in the evolving healthcare ecosystem.