Q1 2022 DocGo Inc Earnings Call

May 10, 2022

[music].

Operator: Greetings and welcome to DocGo Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Steven Halper of LifeSci Advisors. Please go ahead, sir.

Greetings and welcome to the golf first quarter 2022 earnings conference call.

Greetings and welcome to DOGGO First Quarter 2022 Earnings Conference Call.

At this time, all participants are in a listen-only mode.

At this time all participants are in a listen only mode.

A question and answer session followed the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Mr. Stevens Hustle of Life's advisors. Please go ahead Sir.

Steven Halper: Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are indeed forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect DocGo's business, financial condition, and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in DocGo's annual report on Form 10-K, quarterly reports filed on Forms 10-Q, and other reports and statements filed by DocGo with the SEC to which your attention is directed.

Thank you operator before turning the call over to management I would like to make the following remarks concerning forward looking statements.

All statements in this conference call other than historical facts are indeed forward looking statements. The words anticipate believe estimate expect intend guidance confidence target project and other similar expressions are used typically to identify such forward looking statements. These forward looking statements are not guarantees of future performance and may involve.

And are subject to certain risks and uncertainties and other factors that may affect dock goes business financial condition and other operating results. These include but are not limited to the risk factors and other qualifications contained in <unk> <unk>.

We will report on Form 10-K quarterly reports filed on forms 10-Q, and other reports and statements filed by Doctor or with the SEC to which your attention is directed actual outcomes and results may differ materially from what is expressed or implied by these forward looking statements don't go expressly disclaims any intent or obligation to update these forward looking.

Steven Halper: Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. DocGo expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is now my pleasure to turn the call over to Stan Vashovsky, CEO and Co-Founder of DocGo. Stan?

At this time it is now my pleasure to turn the call over to <unk>, CEO and co founder of Dacko Stan.

Stan Vashovsky: Thank you, Steve, and thank you to everyone for joining our Q1 2022 Results Conference Call. As is our practice, I'll make a few remarks about our business and then turn the call over to Andre to review the financials. We will then take your questions. During the first quarter of fiscal 2022, we were able to sustain the momentum with which we exited 2021. For the quarter, we generated total revenue of $118 million, representing growth of 137% over the first quarter a year ago. Approximately $38 million of our Q1 2022 revenue was related to COVID testing, which is down from approximately $60.1 million in Q4 of 2021.

Thank you, Steve and thank you to everyone for joining our first quarter 2022 results conference call as is our practice I'll make a few remarks about our business and then turn the call over to Andre to review the financials. We will then take your questions. During the first quarter of fiscal 2022, we were able to.

To sustain the momentum with which we exited 2021 for the quarter, we generated total revenue of $118 million representing growth of 137% over the first quarter a year ago.

<unk> $38 million of our Q1 'twenty two revenue was related to Covid testing, which is down from approximately $50 1 million in Q4 of 2021.

Stan Vashovsky: Revenue growth was again driven by our Mobile Health division, which generated revenue of $90.1 million, an increase of 193% over $30.7 million in Q1 2021. Of this $90 million of Mobile Health revenue, more than 90% came from customers with whom DocGo is operating under the terms of extended or expanded contracts. We have worked hard to cultivate our customer base to build broader, long-lasting relationships. Our Q1 2022 transport revenue was $27.8 million, an increase of 46% over $19 million in Q1 2021. We generated adjusted EBITDA of $13.9 million in Q1, representing solid profitability and a substantial improvement over adjusted EBITDA of $0.4 million that we generated in the first quarter of last year.

Revenue growth was again, driven by our mobile health Division, which generated revenue of $91 million, an increase of 193% over $30 7 million in the first quarter of 2021.

Of the $90 million of mobile health revenue more than 90% came from customers with whom <unk> is operating under the terms of extended or expanded contracts.

We have worked hard to cultivate our customer base to build broader long lasting relationships.

Our first quarter of 2022 transport revenue was 27 8 million an increase of 46% for the $19 million in the first quarter of 'twenty one.

We generated adjusted EBITDA of $13 9 million in Q1, representing solid profitability and a substantial improvement improvement over adjusted EBITDA of $4 million that we generated in the first quarter of last year.

Stan Vashovsky: Adjusted EBITDA margin was 11.8%, a significant improvement over the year-ago period. We continue to expect our Adjusted EBITDA margins to expand towards 20% over the next 3 to 5 years. Finally, net income for Q1 was $9.4 million, also a significant improvement as compared to a net loss of $2 million in Q1 of last year. DocGo continues to retain a leadership position as a provider of mobile medical services. During Q1, we began the transition of some COVID-related services to longer-term, non-COVID-related work with new and existing customers. Our goal is to make this transition as seamless as possible. While there are challenges, we are making great progress.

Adjusted EBITDA margin was 11, 8% a significant improvement over a year ago period.

Continue to expect our adjusted EBITDA margins to expand towards 20% over the next three to five years.

Finally, net income for the first quarter was $9 $4 million also a significant improvement as compared to a net loss of $2 million in the first quarter of last year.

Our goal continues to retain a leadership position as a provider of mobile medical services.

During the first quarter, we began the transition of some COVID-19 related services, so longer term non COVID-19 related work with new and existing customers. Our goal is to make this transition as seamless as possible. While there are challenges, we're making great progress.

Stan Vashovsky: Our robust growth in revenue was again driven by the extension of existing contracts, signing of new contracts, and the expansion of our services into new markets throughout 2022 that are now fully implemented and contributing revenue. As of 31 March 2022, we acquired licenses and assets to offer medical transportation services in Maryland and Delaware. Our clinicians interacted with 1.1 million patients in Q1, representing an 80% increase over the same period in 2021. Today, between our two business divisions, we have provided services in 29 states and the United Kingdom. We have significant opportunity in front of us to both further expand in existing states while entering new ones. Taken together, we estimate that our markets are less than 1% penetrated today.

Robust growth in revenue was again driven by the by the extension of existing contracts and signing of new contracts and the expansion of our services into new markets. Throughout 2022 that are now fully implemented and contributing revenue.

As of March 31, 2022, we acquired licenses in assets offer medical transportation services in Maryland, and Delaware.

Clinicians interacted with $1 1 million patients in Q1, representing an 80% increase over the same period in 2021.

Today between our two business divisions, we have provided services in 'twenty, United States and the United Kingdom, we have significant opportunity in front of us to both further expand in existing states, while entering new ones taken together, we estimate that our markets are less than 1% penetrated today.

Stan Vashovsky: Since this is only our second conference call as a public company, we thought it would be beneficial to take a few minutes and review the DocGo story for the benefit of anyone listening who may be new to the story. We are a leading provider of last mile healthcare delivery services, meaning that we deliver high quality, highly affordable healthcare services to patients where they are when they need it most. We operate in two distinct divisions, Mobile Health and medical transportation. Mobile Health, the most significant driver of our growth, brings in-person healthcare to patients where a visit to a doctor's office or hospital may not be necessary. Many companies provide patient care in non-traditional settings.

This is only our second conference call as a public company, we thought it would be beneficial to take a few minutes and review the darker story for the benefit of anyone listening who may be new to the story.

We are a leading provider of last mile health care delivery services, meaning do we deliver high quality highly affordable health care services to patients where they are when they need it most.

We operate in two distinct divisions mobile health and medical transportation.

Mobile health the most significant driver of alcohol drinks in person health care to patients where a visit to a doctor's office or hospital may not be necessary. Many companies to provide patient care and non traditional settings, what differentiates our mobile health business is not going to use and highly trained licensed practical.

Stan Vashovsky: What differentiates our Mobile Health business is DocGo's use of highly trained licensed practical nurses and paramedics who work under a physician's license in our network of medical practices across the United States. This allows our clinicians to perform a much broader scope of service at a lower cost to the overall healthcare system. This innovative model has enabled us to build a large cost-efficient labor workforce to facilitate a host of medical treatments that are traditionally provided by more expensive nurses, physician assistants, and medical doctors. This approach has enabled us to significantly scale up our medical workforce to facilitate a wide range of high quality medical treatments and interventions to patients at lower costs than the traditional model.

And paramedics who work under physician license.

Network of medical practices across the United States.

This allows our clinicians to perform a much broader scope of service at a lower cost to the overall health care system.

This innovative model has enabled us to build a large cost efficient labor workforce to facilitate a host of medical treatments that are traditionally provided by more expensive nurses physician assistance and medical doctors. This approach has enabled us to significantly scale up our medical workforce.

Facilitate a wide range of high quality medical treatments and interventions to patients at lower cost than the traditional model.

Stan Vashovsky: In addition to our LPNs and paramedics, DocGo also employs hundreds of registered nurses, nurse practitioners, physician assistants, and medical doctors to provide a range of higher acuity services and procedures to our patients. By leveraging this workforce to provide care to patients in their homes, their offices, and in other non-traditional settings, we help avoid costly and unnecessary visits to hospitals or emergency rooms. Our services include bedside procedures, preventative care, medicine administration, monitoring, and various vaccinations, EKGs, ultrasounds, and much more. We contract directly with government agencies, corporations, insurers, and hospitals, and then provide services directly to their constituents. We rarely do fee for service. Most of our Mobile Health work is paid for on a clinician basis. This model gives us more opportunity to align our revenues with our costs, helps us mitigate volume risks, and better allows us to pass along cost increases to our customers.

In addition to our Lps and paramedics backlog also employs hundreds of registered nurses nurse practitioners physicians' assistants, and medical doctors to provide a range of higher acuity services and procedures to our patients die.

By leveraging this workforce to provide care to patients in their homes their offices and other non traditional setting we help avoid costly and unnecessary visits to hospitals or emergency rooms.

Our services include that side procedures preventative care Medicine administration monitoring and various vaccinations ekg's ultrasounds and much more we contract directly with government agencies corporations insurers and hospitals and then provide services directly to their constituents.

We rarely do FIFA service most of our mobile health work is paid for on a clinician basis. This model gives us more opportunity to align our revenues with our cost helps us mitigate volume risk and better allows us to pass along cost increases to our customers.

Stan Vashovsky: This model gives us more opportunity to align our revenues with our costs, helps us mitigate volume risks, and better allows us to pass along cost increases to our customers. It is worth reiterating that we employ the majority of our practitioners. They are not contractors. We believe this leads to more satisfied customers, and loyal employees, and ultimately, better care for our patients. A key metric that demonstrates our employee satisfaction is DocGo's stellar rating on leading internet employment portals. Hundreds of our employees have left ratings of their experience working for our company, and we enjoy a 4.2 rating on Glassdoor and 4.1 on Indeed, impressive scores for our industry. One of the new services we're most excited about is our DocGo On Demand direct-to-consumer offering.

Stan Vashovsky: It is worth reiterating that we employ the majority of our practitioners. They are not contractors. We believe this leads to more satisfied customers, and loyal employees, and ultimately, better care for our patients. A key metric that demonstrates our employee satisfaction is DocGo's stellar rating on leading internet employment portals. Hundreds of our employees have left ratings of their experience working for our company, and we enjoy a 4.2 rating on Glassdoor and 4.1 on Indeed, impressive scores for our industry. One of the new services we're most excited about is our DocGo On Demand direct-to-consumer offering. As medical co-pays and deductibles continue to increase, we see an opportunity to provide cost-effective treatment alternatives directly to patients and employees who are seeking medical treatment for non-emergency conditions.

It is worth reiterating that we employed the majority of our petition is they are not contractors. We believe this leads to more satisfied customers and loyal employees and ultimately better care for our patients a key metric that demonstrates our employee satisfaction is Dr. Costello rating, a leading internet employing.

This quarters.

Hundreds of our employees have left the ratings of the experience working for our company and we enjoy a full two rating on glass door and $4 one on indeed.

The scores for our industry.

One of the new services. We're most excited about is our taco on demand direct to consumer offering.

Stan Vashovsky: As medical co-pays and deductibles continue to increase, we see an opportunity to provide cost-effective treatment alternatives directly to patients and employees who are seeking medical treatment for non-emergency conditions. We are in the early stages of beta piloting this B2C offering and have plans to take the learnings from this pilot and expand these services to a number of markets in the future. The backbone of our Mobile Health service is our purpose-built technology platform that plugs seamlessly into the existing healthcare EMRs and other IT systems that provide better coordination of care. Designed to be used by patients and their families, care providers, and facilities, among its many core functions and benefits, it integrates into electronic health records from well-known leaders in the field, ensuring that all patient information is in a single repository.

As medical Copays and deductibles continue to increase we see an opportunity to provide cost effective treatment alternatives directly to patients and employees, who are seeking medical treatment for non emergency conditions. We are in the early stages of piloting this beta see offering and have plans to take the learnings from this pilot.

Stan Vashovsky: We are in the early stages of beta piloting this B2C offering and have plans to take the learnings from this pilot and expand these services to a number of markets in the future. The backbone of our Mobile Health service is our purpose-built technology platform that plugs seamlessly into the existing healthcare EMRs and other IT systems that provide better coordination of care. Designed to be used by patients and their families, care providers, and facilities, among its many core functions and benefits, it integrates into electronic health records from well-known leaders in the field, ensuring that all patient information is in a single repository. The ability to interface with these complex EMR systems provides DocGo with a significant, and we believe, a sustainable competitive advantage.

And expanding services to a number of markets in the future.

The backbone of our mobile health service.

Purpose built technology platform, the plugs seamlessly into the existing healthcare <unk> and other systems that provide better coordination of care designs.

Designed to be used by patients and their families care providers and facilities among its many core functions and benefits it integrates into electronic health records from well known leaders in the field ensuring that all patient information is in a single repository the.

Stan Vashovsky: The ability to interface with these complex EMR systems provides DocGo with a significant, and we believe, a sustainable competitive advantage. Our other offering is medical transportation, which basically refers to providing Uber-like prescheduled on-demand ambulance patient transfer solutions between clinical settings. While we have a small number of wheelchair vans and medical sedans, over 99% of our transportation revenue comes from high margin ambulance transports. We developed a CapEx-like model for our ambulances, where we lease vehicles through GE Capital for five-year terms with no money down. We maintain long-term multi-year partnerships with some of the largest and highly regarded healthcare providers in the industry, including Fresenius, Jefferson, UC Health, as well as Northwell and HCA.

The ability to interface with these complex EMR systems provides <unk> with a significant and we believe a sustainable competitive advantage.

Stan Vashovsky: Our other offering is medical transportation, which basically refers to providing Uber-like prescheduled on-demand ambulance patient transfer solutions between clinical settings. While we have a small number of wheelchair vans and medical sedans, over 99% of our transportation revenue comes from high margin ambulance transports. We developed a CapEx-like model for our ambulances, where we lease vehicles through GE Capital for five-year terms with no money down. We maintain long-term multi-year partnerships with some of the largest and highly regarded healthcare providers in the industry, including Fresenius, Jefferson, UC Health, as well as Northwell and HCA. Our customers are increasingly moving towards a leased hour model where we provide vehicles, equipment and staff for a daily fee away from the traditional fee for service model.

Our other offerings as medical transportation, which basically refers to providing Uber light pre scheduled on demand.

Demand ambulance patient transfer solutions between clinical settings, while we have a small number of wheelchair vans and medical sedans over 99% of our transportation revenue comes from high margin ambulance transports, we developed a capex light model far ambulances, where we lease vehicles through GE capital.

For five year terms with no money down.

We maintain long term multi year partnerships with some of the largest and highly regarded health care providers in the industry, including Fresenius Jefferson you see health as well as north well and HCA our customers are increasingly moving towards at least our model, where we provide vehicles equipment thats staffed for a daily fee.

Stan Vashovsky: Our customers are increasingly moving towards a leased hour model where we provide vehicles, equipment and staff for a daily fee away from the traditional fee for service model. Not only does this provide our customers with dedicated resources, but it creates recurring, predictable revenue and strong gross margin performance to our company. This is just one example how we think outside the box to develop solutions that are in the best interest of our customers and their patients while still creating value for DocGo. We currently provide medical transportation services in 11 states with additional licenses pending. Thus, with mobile health, we have significant untapped greenfield opportunity in front of us to further grow this business. At this point, I'd like to hit on a few key operational highlights from the quarter.

Stan Vashovsky: Not only does this provide our customers with dedicated resources, but it creates recurring, predictable revenue and strong gross margin performance to our company. This is just one example how we think outside the box to develop solutions that are in the best interest of our customers and their patients while still creating value for DocGo. We currently provide medical transportation services in 11 states with additional licenses pending. Thus, with mobile health, we have significant untapped greenfield opportunity in front of us to further grow this business. At this point, I'd like to hit on a few key operational highlights from the quarter. We touched upon this last quarter, but it is worth recapping. In January, we announced a multi-year contract to provide mobile at home healthcare services to Aetna commercial and Medicare Advantage members across New York and New Jersey.

Away from the traditional fee for service model not only does this provide our customers with dedicated resources, but it creates a recurring predictable revenue and strong gross margin performance to our company. This is just one example, how we think outside the box to develop solutions that are in the best interest of our customers and their pay.

<unk>, while still creating value for that though we currently provide medical transportation services in 11 states with additional additional licenses pending.

Does with mobile health, we have significant untapped greenfield opportunity in front of us to further grow this business.

At this point I'd like to hit on a few key operational highlights from the quarter.

Stan Vashovsky: We touched upon this last quarter, but it is worth recapping. In January, we announced a multi-year contract to provide mobile at home healthcare services to Aetna commercial and Medicare Advantage members across New York and New Jersey. This gives us the opportunity to provide a range of at home healthcare services to 2.5 million lives, including episodic and emergency care. We bolstered our senior management ranks by hiring Lee Bienstock as DocGo's Chief Operating Officer. Lee has spent the last 10 years at various business units at Google and has a proven track record of scaling businesses for profitable growth. His experience and unique perspectives will help increase our market footprint, expand our Mobile Health initiatives, and introduce new technologies. We expanded our presence in the United Kingdom with 3 new contracts.

We touched upon this last quarter, but it is worth recapping in January we announced a multiyear contract to provide mobile at home health care services to Aetna commercial and Medicare advantage members of course, New York and New Jersey.

Stan Vashovsky: This gives us the opportunity to provide a range of at home healthcare services to 2.5 million lives, including episodic and emergency care. We bolstered our senior management ranks by hiring Lee Bienstock as DocGo's Chief Operating Officer. Lee has spent the last 10 years at various business units at Google and has a proven track record of scaling businesses for profitable growth. His experience and unique perspectives will help increase our market footprint, expand our Mobile Health initiatives, and introduce new technologies. We expanded our presence in the United Kingdom with 3 new contracts. These contracts enable us to introduce our services into new territories, including the East of England and Central England, while expanding our footprint in Greater Manchester.

This gives us the opportunity to provide a range of at home health care services to $2 5 million lives, including episodic and emergency care.

We bolstered our senior management ranks by hiring hiring leaping stock as Douglas Chief operating officer.

<unk> has spent the last 10 years at various business units at Google and has a proven track record of scaling businesses for profitable growth is experienced and unique perspective will help increase our market footprint expand our mobile health initiatives and introduce new technologies.

We expanded our presence in the United Kingdom with three new contracts. These contracts enable us to introduce our services into new territories, including the east of England in Central England, while expanding our footprint in greater Manchester.

Stan Vashovsky: These contracts enable us to introduce our services into new territories, including the East of England and Central England, while expanding our footprint in Greater Manchester. Additional international expansion will remain a key growth driver for our company this year and beyond, even while we pursue what is largely an untapped US market. We unveiled the first zero emissions all-electric ambulance in the United States, debuted at the New York International Auto Show, and completed our first patient transport in partnership with Jefferson Health in Pennsylvania. This vehicle marks the first step in our zero emission initiative as we work to convert to an all-electric fleet by 2032. We expanded our relationship with Carnival Corporation, adding 15 additional ships and launching services in Mobile, Alabama. This makes DocGo one of the largest providers of healthcare at sea.

Stan Vashovsky: Additional international expansion will remain a key growth driver for our company this year and beyond, even while we pursue what is largely an untapped US market. We unveiled the first zero emissions all-electric ambulance in the United States, debuted at the New York International Auto Show, and completed our first patient transport in partnership with Jefferson Health in Pennsylvania. This vehicle marks the first step in our zero emission initiative as we work to convert to an all-electric fleet by 2032. We expanded our relationship with Carnival Corporation, adding 15 additional ships and launching services in Mobile, Alabama. This makes DocGo one of the largest providers of healthcare at sea. We acquired new medical transportation licenses in Delaware and Maryland to service both Fresenius Medical Care patients and additional hospital customers in those areas. With this acquisition, we have expanded our US transportation footprint to 11 states.

Additional international expansion will remain a key growth driver for our company this year and beyond even while we pursue what is largely an untapped U S market.

We unveiled the first zero emissions all electric ambulance in the United States debuted at the New York International Auto show and completed our first patient transport and partnership with Jefferson Health in Pennsylvania. This.

This vehicle marks the first step in our zero emission initiative as we work to convert to an all electric fleet by 2032.

We expanded our relationship with Carnival Corporation, adding 15 additional ships and launching services in mobile Alabama. This makes <unk> one of the largest providers of healthcare at sea.

Stan Vashovsky: We acquired new medical transportation licenses in Delaware and Maryland to service both Fresenius Medical Care patients and additional hospital customers in those areas. With this acquisition, we have expanded our US transportation footprint to 11 states. We saw sizable growth in the new market of patients we treated across our Mobile Health and Medical Transportation businesses. In Q1 2022, we had a total of 1.1 million patient interactions, which represents an 88% increase over the same period in 2021. Now turning to the market opportunity. As we indicated last quarter, the US addressable market for our services is significant and largely untapped. A February 2022 report by McKinsey & Company concludes that up to $265 billion in medical care currently delivered in healthcare facilities will shift to home-based care by 2025.

We acquired new medical transportation licenses in Delaware, and Maryland to service folks with serious medical patients and additional hospital customers in those areas with this acquisition, we have expanded our U S transportation footprint to 11 states.

Stan Vashovsky: We saw sizable growth in the new market of patients we treated across our Mobile Health and Medical Transportation businesses. In Q1 2022, we had a total of 1.1 million patient interactions, which represents an 88% increase over the same period in 2021. Now turning to the market opportunity. As we indicated last quarter, the US addressable market for our services is significant and largely untapped. A February 2022 report by McKinsey & Company concludes that up to $265 billion in medical care currently delivered in healthcare facilities will shift to home-based care by 2025. I believe companies like DocGo are able to provide care in the home and other non-traditional settings stand to be among the biggest beneficiaries of this shift.

We saw sizeable growth in the new market of patients with treated across our mobile health and medical transportation businesses.

In Q1, 2022, we had a total of $1 1 million patient interactions, which represents an 88% increase over the same period in 2021.

Now turning to the market opportunity as we indicated last quarter. The U S addressable market for our services is significant and largely untapped.

A February 2020 to report by Mckinsey <unk> Company concludes that up to $265 billion in medical care currently delivered and health care facilities will shift to home based care by 2025, I believe companies like Dr. Though we're able to provide care in the home and other non traditional search.

Stan Vashovsky: I believe companies like DocGo are able to provide care in the home and other non-traditional settings stand to be among the biggest beneficiaries of this shift. Clearly, we have barely scratched the surface, but with the investments that we have made, particularly in our technology and people, we believe we have created a significant competitive advantage. At this point, I'd like to turn the call over to our CFO, Andre Oberholzer, to review our financials. Andre?

Things tend to be among the biggest beneficiaries of this shift.

Stan Vashovsky: Clearly, we have barely scratched the surface, but with the investments that we have made, particularly in our technology and people, we believe we have created a significant competitive advantage. At this point, I'd like to turn the call over to our CFO, Andre Oberholzer, to review our financials. Andre?

Clearly, we have barely scratched the surface, but with the investments that we have made particularly in our technology and people. We believe we have created a significant competitive advantage.

At this point I'd like to turn the call over to our CFO Andreas <unk>, who will review our financials.

Andre Oberholzer: Thank you, Stan. Good morning. Total revenue for Q1 2022 amounted to $117.9 million, representing growth of 137% as compared to the $49.7 million reported for Q1 2021. The year-over-year growth was driven mainly by the contribution of revenue from several new and extended key Mobile Health contracts. Mobile Health revenue for Q1 2022 amounted to $90.1 million, as compared to $30.7 million in Q1 2021, up approximately 193%. Medical Transportation revenue amounted to $27.8 million, up 26% from $19.1 million in Q1 2021.

Right.

Thank you Stan and good morning.

Total revenue for the first quarter of 2022 amounted $217 9 million.

Gaming growth.

Given the same as compared to 49 7 million for the quarter.

Order of 2021.

Year over year growth was driven mainly by the contribution of revenue from several new and expanded T mobile health contracts.

<unk> revenue for the first quarter of 2022 amounts of $2 $90 1 million compared to $30 7 million in Q1 of 'twenty one.

<unk>.

Thanks.

Medical transportation revenue amounted to $27 8 million up 20 sustained from $19 $1 million in Q1 of 2021.

Andre Oberholzer: It is important to note that excluding COVID testing-related revenue from Q1 of both years, total Q1 revenues still increased approximately 2.7 times year-over-year, increasing from approximately $29 million in Q1 2021 to approximately $80 million in Q1 2022. This reflects strong momentum in our core Mobile Health business and consistent growth in our transportation segment. Mobile Health revenue, which includes COVID testing, amounted to 76% of total revenue during Q1 this year, versus 62% in the prior year, with transportation as the remainder. Revenue generated by the UK market grew by 40% to $2.8 million during Q1 of this year, representing approximately 2% of total revenue. Net income amounted to $9.4 million in Q1 2022, which represents a substantial improvement over the net loss of $2 million recorded in the first quarter of the prior year.

It's important to note that excluding COVID-19 testing related revenue from Q1 of both years total.

Q1 revenues.

Approximately two seven times year over year.

Increasing from approximately.

<unk> 9 million in Q1 'twenty one.

Approximately $80 million in Q1 2022.

This reflects strong momentum in our core mobile health business and consistent growth in our transportation segment.

Mobile health revenue.

Foods correct Christine amounted to 72% of total revenue during Q1 this year.

Lucas.

With transportation absent minded.

Revenue generated by the UK market grew about 40% to $2 8 million in Q1 of this year.

Representing approximately 2% of total revenue.

Net income amounted to $9 4 million in the first quarter of 2022.

Represents a substantial improvement over the net loss of $2 million.

Andre Oberholzer: The net income improvement resulted from a strong increase in revenues during the quarter, while certain overhead costs related to infrastructure provided leverage as it did not increase in the same proportion as the revenue growth. Adjusted EBITDA grew to $13.6 million in Q1 2022, even with additional investments made in regional expansion and infrastructure, versus adjusted EBITDA of $0.4 million in the prior year period. As a reminder, adjusted EBITDA is a non-GAAP measure representing earnings before interest, taxes, depreciation, amortization, stock compensation, warrant liability revaluation, and non-recurring expenses incurred in connection with our public listing. Please refer to our earnings release for a reconciliation of adjusted EBITDA to net income. Total gross margin percentage during Q1 2021 amounted to 33.8% as compared to 28.2% during the prior year.

In the first quarter of the prior year.

Net income improvement.

Resulted from a strong increase in revenues during the quarter.

Fifth and overhead costs.

It's infrastructure provided low rates.

This increase in the same proportion.

Growth.

Adjusted EBITDA grew to $13 6 million in the first quarter of 2022.

He has been with additional investments might be regional expansion and infrastructure.

Versus adjusted EBITDA of <unk> 4 million in the prior year period.

As a reminder, adjusted EBITDA is a non-GAAP measure representing earnings before interest taxes, depreciation amortization stock compensation warrant liability revaluation and nonrecurring expenses incurred in connection with a public listing.

Please refer to our earnings release for a reconciliation of adjusted EBITDA to net income.

Total gross margin percentage during Q1, 'twenty, one amounted to three 8%.

As compared to eight 2% during the prior year.

Andre Oberholzer: The 5.7% increase in the total gross margin was driven by the mobile health segment, where gross margins increased from 30.9% during Q1 last year to 37.3% during our Q1 this year. The mobile health gross margin improvement was driven by a combination of factors, including an increased number of higher margin hourly-based contracts and a reduction in our average per test lab fees. These positive improvements were reduced somewhat by higher subcontracted labor costs and certain medical supplies. Margins from the transportation segment were constant at 22.7% during both quarters. Transportation gross margin improvements generated by increases in the number of hourly or daily-based contracts and higher per trip prices were offset by the impact of higher hourly wages in certain markets, increased overtime and increased cost of fuel.

The five 7% increase in the total gross margin was driven by the mobile health segment.

Gross margins increased from 39% in Q1 last year.

37 <unk>.

3% occupancy quarter this year.

The mobile health gross margin improvement.

Driven by a combination of factors, including an increased number of.

Higher margin based contracts and a reduction in Vicksburg taste piece.

This positive improvements with reduced somewhat.

Subcontract with labor costs and certain medical supplies.

Margins from the transportation segment.

At 22, 7% during both quarters.

Transportation gross margin improvements generated button pieces, and the number of hourly or daily based contracts.

The truck prices were offset by the impact of higher hourly wages in certain markets piece over time.

Andre Oberholzer: It is important to note that DocGo was able to drive year-over-year gross margin improvement despite the negative impact of inflation on the cost of labor and other cost of sales items. As of 31 March 2022, our cash and cash equivalents totaled $188.4 million, as compared to $175.5 million as of 31 December 2021. It is important to note that during Q1 2022, +$18.3 million net cash provided by operating activities versus -$1.4 million use of cash for operations in the prior period. In terms of the impact of inflation, we have two major expense categories where inflation may significantly impact our results. Our guidance provided at the beginning of this year included certain assumptions regarding the impact of inflation on labor and the cost of fuel.

Got a few.

It is important to note that <unk> was able to drive year over year gross margin improvement.

Despite the negative impact of inflation on our customers' labor cost of sales items.

As of March 31, 2002, our cash cash equivalents totaled $88 4 million.

Compared to <unk> $75 5 million.

At March 31 21.

It's important to note that during the first quarter of 'twenty two.

Positive net cash provided by operational activities amounted to $18 3 million versus a 1 million use of cash for operations in the prior year period.

In terms of the impact of inflation.

We have two major expense categories with inflation may significantly impact our results.

I didn't provide at the beginning of this year.

Certain assumptions regarding the impact of inflation on labor and the cost of fuel during.

Andre Oberholzer: During Q1 2022, the actual increase in average hourly labor rate was below our guidance assumptions, while the average fuel cost per gallon was approximately at our forecasted rates. During the fiscal year 2021 earnings call, we discussed the impact of the warrant valuation, which resulted in the $5 million gain during Q4 2021. The revaluation of these outstanding warrants amounted to a loss of approximately $50,000 during Q1 of this year. Now turning to our 2022 outlook. Consistent with the guidance that we introduced during our Q4 2021 conference call, we anticipate strong demand from our customers for both Mobile Health and transportation services. We confirm the guidance we provided and anticipate 2022 revenue to be approximately $400 to $420 million, representing growth of 27% to 32% over 2021.

During the first quarter of 2022, the actual increase in hourly labor rate whats the guidance assumptions.

Average fuel cost per gallon was approximately at a forecasted rates.

During the fiscal year 'twenty, one earnings call, we discussed the impact of the warrant revaluation, which resulted in the 5 million gain in the fourth quarter of 'twenty one.

And your evaluation of lease up to anyone amounted to a loss of approximately.

One of this year.

Now turning to our 2002 outlook.

Consistent with the guidance that introduced during our fourth quarter 21 conference call.

Anticipate strong demand from our customers for both mobile health and transportation services.

We confirm the guidance.

You could provide it and anticipate 2022 revenue to be approximately 400 to 400.

$20 million.

Representing growth of 27% to 32% over two one.

Andre Oberholzer: Adjusted EBITDA is anticipated to be approximately $35 to 41 million or 9.2% of revenues at the midpoint. As discussed in the past, we are only providing annual guidance and not providing quarterly guidance. Although we are comfortable with our annual guidance, it is difficult to predict with accuracy the quarterly new contract wins and the related operational execution of new contracts. In addition, H1 of this year is a transition period as we wind down revenue from COVID testing activities and transition to new other mobile health services. At the midpoint of the annual revenue guidance range, that is $410 million, the average quarterly revenue calculates at $102.5 million. We expected that Q1 would be above this average, which was the case with actual Q1 revenue of $117.9 million.

Adjusted EBITDA is anticipated to be approximately $35 million to $41 million or nine 2% at the midpoint.

As discussed in the past.

Providing annual guidance and not providing quarterly guidance.

No we are comfortable with our annual guidance, because it's difficult to predict with accuracy quarterly new contract wins.

And the related operational execution of new contracts.

In addition, the first half of this year as a transition to asking bond downgrades in the clinic.

Commodities and transition to new.

On the mobile health services.

Yeah.

At the midpoint of revenue guidance range that is $410 million the average quarterly revenue telcos calculates.

$2 5 million.

Expected that Q1 would be above the Savage, which was the case with actual Q1 revenue of 107.

Andre Oberholzer: It should be evident that there is an expectation that there would be a quarter when revenue will track below the above-mentioned average of $202.5 million. As previously discussed, we expect Q2 COVID testing revenues to continue to decline to approximately $20 million compared to the $38 million generated in Q1. As a result, Q2 is expected to be a transition quarter to replace the declining testing-related contracts with new Mobile Health contracts or expansion of existing Mobile Health contracts. After Q2, the company will no longer track COVID testing revenue as a separate number since it is becoming a much smaller percentage of revenues, and COVID testing services are embedded within Mobile Health contracts as just another service.

$17 9 million.

It should be evident adjacent expectation that we would see a quarter when the renewal track.

You mentioned, adding some clinical $2 5 million.

As previously discussed we expect Q.

To cope with custom revenues to continue to decline to approximately $20 million compared to the 38 million generated in Q1.

The result is expected to be a transition quarter can you place the deployment related contracts with new mobile health contracts or expansion of existing mobile health contracts.

At 52, the company will no longer track Covid testing revenue at the circuit number two.

Since it is becoming a much more sustaining cap revenues and Cobra, placing services are embedded with the mobile health contracts.

Andre Oberholzer: In terms of segment revenues, we expect that the Mobile Health segment will continue to contribute approximately 70% to 75% of revenues, with medical transportation as the remainder. That concludes our prepared remarks. At this point, we will ask the operator to open the call to questions. Back to the operator.

Another service.

In terms of statement revenues, we expect that the mobile health segment will continue to contribute approximately 70 plus revenues.

Medical transportation Thats the remainder.

That concludes our prepared remarks at this point, we will ask the operator to open the call for questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from the line of Rich Close with Canaccord. Please go ahead.

Can be upgraded.

Thank you.

At this time, we'll be conducting a question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the stockings.

One moment, please while the floor for questions.

Our first question is from the line of rich close with Canaccord. Please go ahead.

Richard Close: Great, thank you. Congratulations on the continued success. Andre, I was wondering if we could just go over the COVID testing, just so, from a housekeeping perspective, our models are correct for 2021. I guess first, is $110 million still the COVID testing revenue for 2021?

Great. Thank you congratulations on the continued success.

Andre I was wondering if we could just go over the Covid testing.

Just so from a housekeeping perspective, our models are.

Correct for 2021.

So I guess first is 110 million still the Covid testing revenue for 2021.

Andre Oberholzer: Yes, that's the number that we disclosed. It's $110 million. It's an estimate. You know, I think we discussed in the past that, you know, there's a lot of commingling of our contracts. That was the estimate we came up with, $110 million.

Yes, that's the number.

Yes.

Close.

So 110 and $10 million estimate I think we discussed in the past.

There's a lot of co mingling of our contracts Trabecular Scott Smith, we came up with the 110 billion.

Richard Close: Well.

Andre Oberholzer: Let me just.

Richard Close: Okay.

Andre Oberholzer: You know, just let me clarify. The $110 million was for 2021, and we anticipate $55 million in 2022 between Q1 and Q2. Just for clarification.

Jeff Let me just clarify the $110 million was for 2021, and we anticipate $55 million in 2022 between the first and second quarter. So just for clarification.

Richard Close: Yeah. Yeah. Now that we have the Q1 and Q4 for 2021, can you just give us the breakout in terms of what Q2 and Q3 is just so, you know, we're on an apples to apples basis?

Yes, and then so now that we have the first quarter in the fourth quarter 2021 can you just give us the breakout in terms of what second and third quarter is just so we're on an apples to apples basis.

Stan Vashovsky: For COVID testing, we estimated that Q2 should be around $20 million. Then, you know, the guidance that was given, we said starting 1 July, we assume COVID testing will be zero.

Andre Oberholzer: For COVID testing, we estimated that Q2 should be around $20 million. Then, you know, the guidance that was given, we said starting 1 July, we assume COVID testing will be zero.

The Covid testing.

Q2 should be around $20 million.

The guidance that we've given you state starting July one extreme COVID-19 testing will be Diego.

Richard Close: Yeah. No, I'm talk-

Stan Vashovsky: There will probably be some. I'm sorry.

Andre Oberholzer: There will probably be some. I'm sorry.

Yes, no problem.

Richard Close: Yeah. Q2 and Q3 of 2021, what is the breakout of COVID testing?

Tom.

I'm, sorry, yes, yes.

So second quarter and third quarter of 2021, what is the breakout of Covid testing.

Stan Vashovsky: We have not provided that in the past. You know, the second quarter last year, and third quarter last year basically are no longer relevant. The guidance was given for Q2 is $20 million. Starting July, we assume no zero COVID testing in the guidance.

Andre Oberholzer: We have not provided that in the past. You know, the second quarter last year, and third quarter last year basically are no longer relevant. The guidance was given for Q2 is $20 million. Starting July, we assume no zero COVID testing in the guidance.

We have not provided that in the past in the second quarter last year third quarter last year basically are no longer relevant so the guidance, we've given for Q2 was $20 million.

Starting in July we assume zero.

Richard Close: Okay. I just wanted to make sure I had the ex-COVID Mobile Health growth correct. I'll move on. Can you guys talk a little bit about the conversion of the COVID contracts to long-term work? Stan, you know, mentioned, you know, you guys are definitely having some progress there, but then you also said that, you know, it does present some challenges. I'm just curious, you know, with respect to that COVID book, you know, maybe how much you still have to convert and any type of success metrics, like a percentage of the book that has been converted, if you could provide anything like that. And just then talk about, you know, the discussions and the challenges.

Covid testing in the guidance.

Okay I just wanted to make sure I had the ex Covid mobile health growth.

Correct. So.

I'll move on.

Can you guys talk a little bit about the conversion of the Covid our contracts to long term work.

Dan you.

You mentioned.

You guys are definitely having some progress there, but then you also said.

It does.

<unk> some challenges.

Just curious with respect to that Covid book May.

Maybe how much you still have to convert any type of success metrics like a percentage of the book that has been converted if you can provide anything like that and then talk about the discussions and the challenges.

Stan Vashovsky: Well, the challenges is really just about timing. We have people that are working on COVID contracts. We are a people business. We wanna make sure we time it well, where COVID contracts end, people come back into a classroom, get the additional training they need, and then get assigned to new contracts. I mean, that's the challenge. We're fortunate we have a good healthy book of business. We have customers that have already executed agreements. We have new customers that we're working towards executing agreements. It's really just about the timing. It's about timing of, you know, making sure that we take a group of people that are finishing one project and getting them ready for the next project.

Well the challenges is really just about timing.

We have people that are working on COVID-19 contracts.

Our people business, we want to make sure we timed it well where corporate contracts and people come back it's a class where we'll get the additional training they need anything get assigned to new contracts I mean thats. The challenge. We're fortunate we have a good healthy book of business.

We have customers.

It's kind of already executed agreements, we have new new customers that we're working towards executing agreements and it's really just about the timing.

It's about timing of.

Making sure that we take a group of people that are finishing one project and getting them ready for the next project.

Stan Vashovsky: What we don't wanna do, what we wanna avoid is starting new contracts, hiring new people, training new people, and then while COVID contracts end, having to lay off that group of personnel. We've done a great job in Q1. We know how to do it. We've demonstrated that, you know, in Q1, and we're gonna follow those exact same processes in Q2. In addition to that, a lot of our contracts actually are for the same municipalities or same customers that we did COVID testing for. As COVID testing winds down, we have new programs that are with the same customers that start up.

What we don't want to do what we want to avoid is starting new contracts hiring new people training new people and then while corporate contracts and having to lay off that group of personnel.

We've done a great job in the first quarter, we know how to do it.

We've demonstrated that in the first quarter.

And that we're going to follow those exact same processes.

In in the second quarter.

In addition to that a lot of our contracts actually are.

For the same municipalities are same customers that we did COVID-19 testing for so as Covid testing wind down.

We have new programs that are with the same customers that start up.

Stan Vashovsky: It's just a matter of wrapping up one project, getting the people back into a classroom, 5, 10, 15 days in a classroom, and then getting them assigned to a new project.

So it's just a matter of us wrapping up one project getting people back into a classroom 510 15 days in the classroom and then getting them assigned to a new project.

Operator: Thank you. Our next question is from Mike Latimore with Northland Capital. Please go ahead.

Thank you our next.

Next question is from Mike Latimore with Northland Capital. Please go ahead.

Mike Latimore: Great. Thanks. Yeah. Nice quarter there. What was the final provider headcount at quarter end?

Great. Thanks, Yeah nice quarter there.

How many what was the final.

Provider head count at quarter end.

Stan Vashovsky: Hey, Mike. Good to hear from you again. We're somewhere over 4,000 full-time personnel. I mean, the overwhelming majority are clinical providers. These are our employees. We still use the help of agencies, you know, and probably a couple hundred more from agencies that are in the process of being converted to employees. I anticipate, you know, somewhere total headcount of about 5,000 by end of the year.

Where hey, Mike.

Good to hear from you again with.

With somewhere over 4000 full time personnel I mean, the overwhelming majority are clinical providers.

These are our employees.

We still use the help of agencies.

And probably a couple of hundred more from agencies that are in the process of being converted to employees.

I anticipate somewhere total head count of about 5000 by end of the year.

Mike Latimore: Okay. Got it. You talk about, you know, transitioning customers from COVID testing to new mobile health services. What's been the initial kind of revenue transition? Is it, you know, as you transition to a new service, is the total amount contracted about the same? Does it shrink? Does it grow?

Okay got it and then on the you talked about transitioning customers from.

Covid testing to new mobile health services, what's been the initial.

Kind of revenue transition as it as you transition to a new service is the total amount contracted about the same as that strength is it growth.

Stan Vashovsky: You know, I'd like to say we run a fairly simple business model. Depending on the clinical professional that you need, we have a daily rate, plus a nominal per procedure or per test fee above that. You really don't see much variation between, call it, COVID testing as they transition out of testing and they get involved in doing other services. The fees are very similar. You know, you may have small variations depending on supplies, but it's very insignificant, for the most part. If it's the same practitioner and that practitioner on Monday was doing COVID testing, but on Friday they're now doing vital signs and maybe blood work or EKGs, the revenue model pretty much is, I would say 95% identical.

I'd like to say, we run a fairly simple business model.

Depending on the clinical professional that you need.

Have a daily rate.

A nominal per procedure of protests fee above that.

So you really don't see much variation between call. It COVID-19 testing as they transitioned out of testing and they get involved in doing other services.

The fees are very similar.

You may have.

<unk> variation depending on supplies.

But it's very insignificant for the most part.

So if it's the same practitioner that practitioner on Monday was doing COVID-19 testing, but.

On Friday, they're now doing vital signs and they'd be bloodwork or ekg's.

The revenue model pretty much is I would say 95% identical.

Mike Latimore: In terms of the absolute dollar amount that the customer is contracting for, does it shrink or does it expand relative to the COVID testing, what you've seen so far?

They've been in terms of the absolute dollar amount.

Customer is contracting for or is it does it shrink or does it expand relative to the COVID-19 testing, what you've seen so far.

Stan Vashovsky: You know, for the most part, pretty consistent, pretty flat, you know, almost the same. I mean, it's a daily amount to a clinician. If they have an RN doing COVID testing, that same RN doing other clinical services, the model doesn't change much.

For the most part pretty pretty consistent pretty flat almost the same I mean, its a daily amounts for a clinician.

So if they have an RN doing COVID-19 testing that same Iran doing other clinical services.

Model doesn't change much.

Mike Latimore: Yeah. This is last on medical transport, medical mobility. You know, nice sequential growth in the quarter there. Should we think of that as sort of a new baseline upon which you can build going forward?

And then just last on.

Medical transport medical mobility.

This sequential growth in the quarter, there should we think of that as sort of a new baseline upon which you can build going forward.

Andre Oberholzer: You know.

Stan Vashovsky: On that one. Sorry, Andre.

You know that.

<unk>.

Mike Latimore: No, you go ahead.

Andre Oberholzer: No, you go ahead.

Stan Vashovsky: I was just gonna say, it's not totally sequential. You know, we had some special projects in upstate New York. We launched some new markets like Delaware. In upstate New York, we added some additional services, 911 as an example. It's not basically indicative of a new run rate. There's some extra revenue from those special projects in Q4. In the past, you know, the average payer for transportation was around 35%. You know, guidance, that's still more or less the same payer that we assume on an annual basis.

Great.

It's just going to say.

It's not totally sequential we had some special cost chips in upstate New York.

And also we launched some new markets like Delaware.

And also in upstate New York, we added some additional services by bundle and that's an example.

So it's not basically indicated of your run rate.

Yes.

Revenue from those special projects in Q4.

So in the past.

<unk> transportation with around 45%.

And our guidance that's cool.

At the same cadence this year on annual basis.

Operator: Thank you. Our next question is from the line of Sarah James with Barclays. Please go ahead. Go ahead.

Yeah.

Thank you.

Next question is from the line of Sarah James with Barclays. Please go ahead go ahead.

Sarah James [Director and Equity Analyst: Thank you, and congrats on another great quarter.

Sarah James: Thank you, and congrats on another great quarter.

Thank you and congrats on another great quarter.

Stan Vashovsky: Thank you, Sarah. Good morning.

Andre Oberholzer: Thank you, Sarah. Good morning.

Thank you Sarah.

Sarah James [Director and Equity Analyst: Good morning. EBITDA and revenue for Q1 came in a good amount above consensus. I'm wondering, how it compared to your internal expectations and how we should think about seasonality playing out for the rest of the year.

Sarah James: Good morning. EBITDA and revenue for Q1 came in a good amount above consensus. I'm wondering, how it compared to your internal expectations and how we should think about seasonality playing out for the rest of the year.

Morning, Good morning, EBITDA and revenue for the first quarter came in a good amount above consensus I'm wondering how it compared to your internal expectations.

Should think about seasonality playing out.

The rest of the year.

Stan Vashovsky: Well, I mean, as you can expect, Sarah, we were happy internally. Team worked really hard to make sure the timing is, you know, proper when we make conversions and as we implement new accounts. Yes, it was a good quarter. You know, can't say we're, you know, shocked. We have a good, strong record of beating expectations, and I would like to, you know, hope that we can maintain that going forward. Especially on EBITDA, where our operations team is doing a wonderful job getting things fine-tuned and making sure our profitability is maximized. In terms of seasonality, a little bit hard to say right now.

Well I mean I think.

So we are happy.

Internally team worked really hard to make sure the timing is proppant when we make conversions.

As we implement new accounts so yes it was.

It was a good quarter.

I can't say, we're shocked.

Have a good strong record of.

Beating expectations and I would like to hope that we can maintain that going forward.

And especially on an EBITA.

Our operations team is doing a wonderful job.

Getting thanks, fine tuned and making sure our profitability is maximized.

In terms of seasonality a little bit hard to say right now I mean mobile health, which is just such a fast and rapid growing part of our business.

Stan Vashovsky: I mean, Mobile Health, which is just such a fast and rapid growing part of our business, is quite new to us. I mean, we're only doing this for about three years now. It's growing, you know, at a very good, healthy pace. It's just a little bit early for us to predict seasonality. In addition to that, we are converting accounts from traditional, what I would call COVID testing to non-COVID testing. We're doing an excellent job at that right now, and it's working out really well. We expect that trend to continue into Q2 and for the rest of the year. I don't think we have enough experience at the moment to really be definitive in our seasonality estimates.

Is quite new to us I mean, we're only doing this for about three years now.

And it's growing.

At a very good healthy pace.

So it's just a little bit early for us to predict seasonality.

Additionally to that we are.

Converting accounts from traditional what I would call COVID-19 testing to non Covid testing.

We're doing an excellent job at that right now and it's working out really well.

Can we expect that trend to continue into Q2 and for the rest of the year.

But I don't think we have enough experience at the moment to really ERP definitive in our seasonality estimates.

Sarah James [Director and Equity Analyst: Got it. On the Aetna contract, you guys have been live for a couple of months now. Can you talk about what engagement or uptake has been on those services and how you think about the adoption curve there?

Sarah James: Got it. On the Aetna contract, you guys have been live for a couple of months now. Can you talk about what engagement or uptake has been on those services and how you think about the adoption curve there?

Got it and then on the Aetna contract you guys have been live for a couple of months now can you talk about what engagement or uptake has been on those services.

How you think about the adoption curve there.

Stan Vashovsky: Yeah. We've signed with Aetna, but we've also signed with several other companies. Those are ancillary agreements with healthcare providers to provide at-home urgent care services. That is all towards what we call our B2C business offering. You know, the development of that program, headed by Aaron Severs at our company, is coming along really nicely. We still have tremendous amount to learn and perfect in that business model. As we mentioned last quarter, we do not have any direct-to-consumer revenue built into our models for 2022. Everything we're doing on that front is really in preparation for 2023. We do expect our direct-to-consumer offering to be really successful.

Yes.

Signed with Aetna, but we've also signed with several other companies those are ancillary agreements with health care providers to provide at home urgent care services.

That is all towards what we call our D to C business offering.

The the development of that program headed by.

Aaron Sievers at our company is coming along really nicely.

We still have tremendous amount to learn and perfect in that business model.

As we mentioned last quarter, we do not have any direct to consumer revenue built into our models for 2022. So everything we're doing on that front is really in preparation for 2023.

We do expect our direct to consumer offering to be really successful.

Stan Vashovsky: You know, preliminary testing of those services have been very positive, but we still have a long ways to go and a lot of learning to do.

Preliminary testing of those services have been very positive.

But we still have a long ways to go and a lot of learning to do.

Operator: Thank you. Our next question is from Pito Chickering with Deutsche Bank. Please go ahead.

Thank you our.

Next question is from beetle Chickering with Deutsche Bank. Please go ahead.

Kieran Ryan: Hi there, guys. This is Kieran Ryan on for Pito. Thanks for taking my question. First, I just wanted to ask about guidance. I see the $400 to $420 was maintained, but it seems like there was a slight change in the language, and on the growth rates. I think the bottom end moved a little bit. I just wanted to make sure there was nothing to call out there, whether that's around the COVID revenue estimates or something else.

Hi, there guys. This is Kieran Ryan on for Peter Thanks for taken taking my question.

Firstly I just wanted to ask about about guidance I see the 400 to 420 was maintained but it seemed like there was a slight change in the language.

On the growth rates I think the bottom and moved a little bit. So I just wanted to make sure. There was nothing to call out there whether that's around the COVID-19 revenue estimates or something else.

Stan Vashovsky: The range is unchanged. It's still-

Andre Oberholzer: The range is unchanged. It's still-

Andre Oberholzer: You wanna take that?

Stan Vashovsky: You wanna take that?

Stan Vashovsky: Yeah, the range is unchanged. It's still $400 to 420 million. We are-

Andre Oberholzer: Yeah, the range is unchanged. It's still $400 to 420 million. We are-

Good morning.

That changed.

Yes, the range is unchanged.

$120 million.

Kieran Ryan: Oh, yeah. I meant the growth range moved from 25 to 32, or from 27 to 32 to 25 to 32.

Stan Vashovsky: Oh, yeah. I meant the growth range moved from 25 to 32, or from 27 to 32 to 25 to 32.

So yes.

The growth range moves from 25 to 32 from 27% to $32 25 to 32.

Stan Vashovsky: That's just the rounding when we did the calculation. We're still-

Andre Oberholzer: That's just the rounding when we did the calculation. We're still-

That just the rounding when we did the calculation. So we are still at 400.

Kieran Ryan: Okay.

Stan Vashovsky: At $400 to 420 million for the year.

Andre Oberholzer: At $400 to 420 million for the year.

22 million.

Kieran Ryan: Got it. Thank you. I guess a couple of mine have already been hit on. Just to, just about your discussions with municipalities, I just wanted to see if you have any updated views on, you know, kind of replicating that success in New York City. You talked about a couple of special projects on the, on the transportation side this quarter that helped, but just any discussions you're having with any other municipalities and how that's continuing to play out would be helpful. Thank you.

For the year.

Got it got it thank you and then.

And then I guess a couple of mine have already been hit on so just to just about your discussions with municipalities and I. Just wanted to see if you have any updated views on kind of replicating that success in New York City, you talked about a couple of special projects on the on the transportation side this quarter that helped.

But just any discussions youre, having with any other municipalities and how thats, how thats continuing to play out would be would be helpful.

Stan Vashovsky: Yeah, I mean, without going into a lot of detail, we continue to have discussions with municipalities about, specifically, in areas of homelessness services, and medical services for public schools. We've gotten good engagement from several new markets. And if all goes well, and if we time it properly, we should be able to transition COVID testing work that we're doing in those municipalities to other municipal clinical services in that same market. As one goes off, the other one will come on. But the two areas that we really have a good niche on is homeless services and the work that we're doing in public schools. And I also should add, you know, another niche that we've really grown in is the healthcare at sea.

Yes.

Without going into a lot of detail, we continue to have discussions with municipalities about specifically in areas of homelessness services.

And the medical services for public schools.

We've gotten good engagement from several new markets.

And if all goes well if we time it properly we should be able to transition COVID-19 testing work that we're doing in those municipalities to other municipal clinical services in that same market.

As one goes off the other one will come on.

The two areas that were Rob that we really have a good niche on is homeless services and the work that we're doing.

And public schools.

And I also should add.

Another niche that we've really grown I mean is the healthcare at sea.

Stan Vashovsky: You know, we have really developed a wonderful program for Carnival Cruise Line, and that relationship continues to expand at a very, very rapid pace. We're now in conversation with several other significant cruise providers to do a similar program. Good growth on multiple fronts. We've closed some deals. We've got to close additional deals, and then it's all about execution for the rest of the year for us.

We have really developed a wonderful program.

For Carnival cruise line and that relationship continues to expand at a very very rapid pace and that we're now in conversations with several other significant crews provide us to do a similar program. So good growth.

Multiple fronts sand.

We've closed some deals we got to close additional deals in that and then it's all about execution for the rest of the year for us.

Okay.

Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Ryan MacDonald with Needham. Please go ahead.

Thank you.

Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.

Our next question is from Ryan Macdonald with Needham. Please go ahead.

Ryan MacDonald: Thanks for taking my questions.

Stan Vashovsky: Hello, Ryan.

Ryan MacDonald: Stan and Andre, congrats on a great quarter. Good morning.

Hi, Thanks for taking my questions understanding Andre congrats on a great quarter good morning.

Stan Vashovsky: Thank you, Ryan.

Ryan MacDonald: You know, I just want to start with a clarifying question on the COVID revenue. So it sounds like that right now the balancing act is more of a maybe a supply issue, if you will, of making sure that you're not over-investing in headcount as you transition versus a more of a demand problem of finding ways to replace that COVID revenue from interested customers. Is that the right way to think about sort of what's kind of going on during this COVID transition?

Just wanted to start with a clarifying question on the on the covered revenues. So it sounds like that right now the balancing act as more of a maybe a supply issue. If you will making sure that you're not over investing in head count to as you transition versus more of a demand problem of finding ways to.

<unk>.

Replace that Covid revenue from interested customers does that is that the right way to think about sort of what's kind of going on during this company in transition.

Stan Vashovsky: Yeah, Ryan, I think you definitely articulate it correctly. Demand for services are very strong with existing and several new customers. Now it's just a matter of working out the timing of these new projects to make sure that, as a group of medical personnel become available by concluding their COVID testing contract, we can quickly prepare them and then get them assigned to new work. It's a balancing act.

Yeah, Ryan I think you're definitely articulated correctly demand for services are very strong with existing and several new customers and now it's just a matter of working out the timing of these new projects to make sure that.

As a group of.

Medical personnel become available by concluding their COVID-19 testing contract. We can quickly prepare them and then get them assigned to new work, it's a balancing act.

Stan Vashovsky: We've gotten pretty good at it as demonstrated in Q1, and it actually should be a little bit easier for us in Q2 because we're just dealing with a smaller bucket of business, COVID testing in Q2, kinda going from, you know, $37-38 million down to about $20 million of conversion that we need to do. But we've got good customers that are patient. They're working with us on starting these new programs, and we feel confident we can make that transition pretty seamlessly.

We got pretty good at it as demonstrated in Q1.

It actually should be a little bit easier for us in Q2, because we are just dealing with that.

With a smaller bucket of business Covid testing in Q2 kind of going from.

3700, $38 million down to about $20 million of conversion that we need to do.

But we're we've.

We've got good customers that a patient that they are.

Working with us on starting these new programs.

And that and we feel confident we can we can make that transition.

Ryan MacDonald: All right, cool. That's a really helpful color. Thanks. You know, as a follow-up, you know, I wanted to touch more on the recent success you've had with payers. Obviously, you already talked about Aetna, but you also recently announced a win with Empire in New York and New Jersey. Can you just give a

Seamlessly.

That's really helpful color. Thanks.

As a follow up I wanted to touch more on this recent success you've had with payers. Obviously you already talked about Aetna, but you also recently announced a win with Empire and New York, New York and New Jersey can you just give a provide a little more color on sort of how this deal is structured is what do we think of this as more of a traditional <unk> structure and then.

Stan Vashovsky: Mm-hmm.

Ryan MacDonald: Provide a little more color on sort of how this deal is structured? Would we think of this as more of a traditional PMPM structure? Then, you know, how do you start to penetrate that 4.5 million member opportunity, you know, across the three groups, as we look throughout the remainder of 2022 and beyond? Thanks.

How do you start to penetrate that $4 5 million member opportunity across the three groups as we look throughout the remainder of 'twenty two and beyond thanks.

Stan Vashovsky: Yeah, Ryan. I mean, it's actually more than just Aetna and Empire. There are other companies that we've negotiated agreements with. Those are fee for service visits that we have a contract to perform. Just basically think of urgent care at home services. Reimbursement is very similar to what an urgent care center receives when someone walks into their building. We've negotiated various very similar fee structures when we send someone to the home and conduct a similar medical test or medical procedure. The testing of those services, the technology, the processes are taking place as we speak.

Youre right I mean, it's it's actually more than just admire Aetna Empire. There are other companies that were.

We've negotiated agreements with those.

Those are fee for service visits.

We have a contract to perform.

Just basically think of urgent care at home services.

<unk> is very similar to what an urgent care center receives when someone walks into their building. We've negotiated very very similar fee structures. When we sent some months to the home and conduct a similar medical tests medical procedure.

And.

The testing of those services the technology the processes are taking place as we speak they will continue to get ramped up during the course of the year with the intent of 2023 are really making a strong marketing and operational push.

Stan Vashovsky: They will continue to get ramped up during the course of the year with the intent of 2023 of really making a strong marketing and operational push into that program. Overall, we feel very bullish on a direct to consumer offering side by side with our business to business offering that we currently conduct. There's just a lot of opportunity for us in the way we provide clinical services. You know, we're off to a good start. We are signing these contracts now to have them in place so we can test the billing system integration, so we can test the EMR integration, you know, kinda going through all the operational flows and testing in 2022. When 2023 arrives, you know, we're off to the races in a very productive manner.

To that program.

Well, we feel very bullish on a direct to consumer offering.

Side by side with our business to business offering that we currently conduct.

And there's just a lot of opportunity for us in the way, we provide clinical services and.

We're off to a good start.

We are signing these contracts now to have them in place. So we can test the billing system integration. So we can test the EMR integration.

Kind of going through all the operational.

Flows and testing in 2022, so in 2023.

Arise we're off to the races, and a very productive manner.

Ryan MacDonald: Helpful color. Thanks a lot for taking my questions. Thank you, Ryan.

Ryan MacDonald: Helpful color. Thanks a lot for taking my questions.

Helpful color. Thanks, a lot for taking my questions.

Stan Vashovsky: Thank you, Ryan.

Thank you Mike.

Operator: Thank you. Our next question is from Richard Close with Canaccord. Please go ahead.

Operator: Thank you. Our next question is from Rich Close with Canaccord. Please go ahead.

Thank you.

Our next question is from rich flows with Canaccord. Please go ahead.

Richard Close: Yeah, thanks for the follow-up. Andre, I was wondering if you could just go over the gross margins again in the quarter. On my side, it broke up a little bit. Can you talk a little bit, just remind us, of the gross margin targets for both Mobile Health and transportation longer term?

Yes, thanks for the follow up Andrea I was wondering if you could just go over the gross margins again in the quarter.

Right.

On my side it broke up a little bit and then can you talk a little bit just remind us.

Of the gross margin targets for both mobile health and transportation longer term.

Andre Oberholzer: Sure. Total gross margin during Q1 2021 was about 33.8%. Actually, Q1 of this year was 33.8% versus last year at 28.2%. There was a 5.7% increase in our gross margin, and most of that was driven by the Mobile Health segment of the business. In the Mobile Health segment of the business, we were able to, you know, sign up, you know, more contracts at higher hourly day rates. Some of those improvements were offset by, you know, higher costs of labor, but we did plan on that, you know, in our guidance. Plus, we also had some savings in the average per case lapses that we historically paid for. Q1 last year was fairly expensive.

Sure.

So total gross margin in Q1.

<unk>.

21%, it's about quality.

Three 8%.

Q1 of this year was 38, 8% versus last year of 2008.

So the five 7% increase in our gross margin.

Most of that was driven by the mobile segment of the business.

So in the mobile health segment of the business, we were able to sign up more contract for the higher quality base rate.

So some of those improvements were offset by.

Of course.

Labor.

We did plan on that guidance.

Guidance plus we also had some savings.

Rich.

It's less seats.

Historically Q1 last year was pretty expensive.

Andre Oberholzer: In transportation, we did 22.7% last year as well as this year. We were able to drive some, you know, top line improvement in transportation with increase in hourly or daily base contracts as well as higher per trip prices. But those improvements were offset by higher labor costs and the cost of fuel. Both those, obviously, we also plan on, you know, on inflation. But overall, you know, 5.7% improvement, you know, in the total business in terms of gross margin. In terms of 2022, we have not really given guidance on gross margins. We gave, you know, revenue and EBITDA. Part of that is the same thing as with the quarterly, the lack of quarterly guidance because, you know, 2022, there are a lot of moving parts, new contracts, transition.

In transportation.

$22 seven and sustain that.

SGA as well as this year.

We were able to drive some top line improvement in transportation with increasing our New York City based contracts as well as holiday approaches.

But those improvement to offset the higher labor costs.

Both of those obviously you also plan on <unk>.

Inflation.

But overall <unk> improvement the total business in terms of gross margin.

In terms of 2022, we have not really given guidance on gross margins.

Revenue and EBITDA.

Part of that it's the same thing as with the quarterly.

Quarterly guidance because 22.

We have a lot of moving parts new contracts transition.

Andre Oberholzer: We internally do track the gross margin by market and by segment, so we know exactly the margins, you know, in each one of our markets. But it's, you know, it's kind of a moving target, the same as, you know, with the quarterly guidance that I said earlier. We are not planning on giving that at this point in time. There's a lot of transition this year. We feel comfortable with the EBITDA guidance. It's a combination obviously of gross margin that we manage as well as the SG&A costs that we manage.

Internally do track gross margin by market and by segment.

Exactly the margins.

One of our market.

When you.

Kind of a moving target sustainable wood coatings items that I think earlier.

We are not planning on keeping that at this point in time.

The transition this year.

Feel comfortable with the EBITDA guidance, it's a combination of the gross margin that demands as well as the SG&A cost estimates.

Richard Close: Okay. On the Mobile Health, I think in the past you said something about a 50% gross margin. Is that still a long-term target?

Okay.

On the mobile health I think in the past you said something about a 50% gross margin is that still a long term target.

Andre Oberholzer: Yeah. Sorry, I missed that one. In terms of future guidance, we have stated that, you know, the long-term margin is 50% to 53% on Mobile Health. That's still our target margin. Then on transportation side, we also, you know, have guided that we are aiming for 40% to 42% margin.

Yes, so sorry, I missed that one so in terms of future guidance, we have dataset.

The long term margin.

243% on mobile health, that's called our target margins and then our transportation side also.

Got it.

And then for 40% to 42% margin.

Okay.

Richard Close: Thank you.

Yeah.

Thank you.

Operator: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Stan Vashovsky for closing remarks.

Thank you Lee.

Ladies and gentlemen, we have reached the end of the question and answer session.

And I would like to turn the call back to San Michele ski for closing remarks.

Stan Vashovsky: Thank you. Well, that concludes our call this morning. Clearly, we started 2022 with significant momentum across our businesses. We expanded our direct to consumer testing. The lockup, the majority of the lockup has expired. We've executed new contracts. We've expanded into Canada. Overall, the business looks healthy, and we feel very confident about the guidance for the rest of the year. I'm optimistic that we have set the stage for a very successful year, and I look forward to our next quarterly update in August. Thank you everybody for joining.

Thank you.

Well that concludes our call. This morning, clearly we started 2022 with significant momentum across our businesses.

We got we expanded our direct to consumer testing.

The lockup.

Charity of the lockup has expired.

Executed new contracts.

We've expanded into Canada.

And overall the business.

It looks looks healthy and we feel very confident about the guidance for the rest of the year.

Im optimistic that we have set the stage for a very successful year and I look forward to our next quarterly update in August . Thank you everybody for joining.

Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Yeah.

Thank you this.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Q1 2022 DocGo Inc Earnings Call

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