Q3 2022 DocGo Inc Earnings Call

November 7, 2022

Thank you for standing by this is the conference operator, welcome to adopt co third quarter 2022 earnings Conference call.

Operator 3: Thank you for standing by. This is the conference operator. Welcome to the DocGo Q3 2022 Earnings Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mike Cole, Vice President of Investor Relations. Please go ahead, sir.

Operator: Thank you for standing by. This is the conference operator. Welcome to the DocGo Q3 2022 Earnings Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mike Cole, Vice President of Investor Relations. Please go ahead, sir.

As a reminder, all participants are in listen only mode and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.

Should you need assistance during the conference call. He may signal, an operator by pressing star and zero.

I would now like to turn the conference over to Michael Vice President of Investor Relations. Please go ahead Sir.

Thank you operator before turning the call over to management I'd like to make the following remarks concerning forward looking statements. All statements in this conference call other than historical facts are forward looking statements. The words anticipate believe estimate expect intend guidance confidence target project and other similar expressions.

Mike Cole: 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 forward-looking statements. The words anticipate, aim, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used to typically 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 Form 10-Q, and other reports and statements filed by DocGo with the SEC to which your attention is directed.

Typically 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 dockers business financial condition and other operating results.

But are not limited to the risk factors and other qualifications contained in <unk> annual report on Form 10-K quarterly reports filed on Form 10-Q, and other reports and statements filed by <unk> 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. In addition, today's call contain.

Mike Cole: Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. In addition, today's call contains references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release, which is posted on our website, docgo.com, as well as in our filings with the Securities and Exchange Commission. The information contained in this call is accurate as of only the date discussed. Investors should not assume that statements will remain relevant and operative at a later time. We undertake no obligation to update any information discussed in this call in the future. At this time, it is now my pleasure to turn the call over to Mr. Stan Vashovsky, CEO, Chairman, and Co-founder of DocGo. Stan, please go ahead.

References to non-GAAP financial measures reconciliations of these non-GAAP financial measures are mostly most directly comparable GAAP financial measures are included in our earnings release, which is posted on our website Darko dotcom.

As well as in our filings with the Securities and Exchange Commission the.

The information contained in this call is accurate as of only the date discussed investors should not assume that statements will remain relevant and operative at a later time, we undertake no obligation to update any information discussed in this call in the future at this time. It is now my pleasure to turn the call over to Mr. Stan Machowski CEO , Chairman and co founder of Duck San Please go ahead.

Thank you Mike and thank you all for joining the call today.

Stan Vashovsky: Thank you, Mike, and thank you all for joining the call today. The Q3 represented another period of strong operational execution as revenues increased 22% year over year to $104.3 million. Continued sales momentum and acquisition-based contributions have supported an increase in our full year 2022 revenue guidance to a range of $430 to 440 million, up from a previous range of $425 to 435 million. We are also increasing our adjusted EBITDA 2022 guidance to a range of $41 to 46 million, up from a previous range of $40 to 45 million. Overall, we did an excellent job transitioning our mass COVID testing customers to various other long-term mobile health programs.

Quarter represented another period of strong operational execution as revenues increased 22% year over year to $104 $3 million.

Sales momentum and acquisition based contributions have supported an increase in our full year 2022 revenue guidance to a range of $430 million to $448 million up from our previous range of $425 million to $435 million. We are also increasing alright.

EBITDA 2022 guidance to a range of $41 million to $46 million up.

From a previous range of $40 million to $45 million.

Overall, we did an excellent job transitioning our mass COVID-19 testing customers to various other long term mobile health programs, we estimate that mask COVID-19 testing accounted for mid single digits.

Stan Vashovsky: We estimate that mass COVID testing accounted for mid-single digits on a percentage basis of total revenues during Q3, compared to approximately 35% of revenue in Q3 of 2021, and the last of these contracts concluded in September of this year. Many of these new programs are centered around population health, which has become a very hot topic with municipal, state, and federal programs. We are seeing substantial increased budgets in this segment, and DocGo's low cost health delivery model is ideally suited to meet this need going forward. At this time, I will turn the call over to our President, Anthony Capone, to discuss operational progress and our growth initiatives as we head into 2023. Anthony.

Satish basis total revenues during the third quarter compared to approximately 35% of revenue in Q3 of 2021 and the last of these contracts concluded in September of this year.

Many of these new programs are centered around population health, which has become a very hot topic with municipal state and federal programs.

We are seeing substantial increased budgets in this segment and tacos low cost health delivery model is ideally suited to meet this need going forward.

At this time I will turn the call over to our President Anthony come home to discuss operational progress and I both initiatives as we head into 2023.

Anthony.

Thank you Stan and thank you all for joining the call today on the operational front. This is an incredible exciting time at <unk> not only do we continue to grow our existing mobile health and medical transport businesses, but we were also developing new markets and we expect to contribute to our next leg of growth in 'twenty two.

Anthony Capone: Thank you, Stan, and thank you all for joining the call today. On the operational front, this is an incredible, exciting time at DocGo. Not only do we continue to grow our existing mobile health and medical transport businesses, but we are also developing new markets that we expect to contribute to our next leg of growth in 2023. DocGo has now solidified its offerings and gained sufficient experience in each service line to support a scalable growth strategy. It's important to understand at its essence why DocGo's mobile medical solution is a key part of society's future. In the past, doctors used to provide most care to patients in their home. This allowed for more comprehensive care which factored a patient's environment and family directly into their treatment plan. Society moved doctors into hospitals, not because it was better, but because it was more cost efficient.

'twenty three Doc go his now solidified its offerings and gain sufficient experience each service line to support our scalable growth strategy.

It is important to understand added essence, why dot goes mobile medical solution is a key part of society. The future in the past doctors used to provide most care to patients in their home. This allowed for more comprehensive care, which factored a patient's environment and family directly into their treatment plant society moved doctors into hospitals, not because it was better.

Well because it was more cost efficient it became untenable that highly paid clinician traveled to everyone's homes.

Anthony Capone: It became untenable that highly paid clinicians traveled to everyone's homes. DocGo's model solves this using well-trained, cost-effective clinicians who bring care to patients where they are when they need it, under direct video supervision of a remote advanced medical provider. This cost-effective, but high-quality care delivery model allows society to return to the days of comprehensive, holistic care at an affordable cost and is becoming increasingly recognized for its innovativeness. Another example of DocGo's innovation is our SHOW program with New York City, which was selected as a finalist for Fast Company's World Changing Ideas and is currently a finalist for the UCSF Digital Health Awards. DocGo's clinical innovation is going to accelerate even faster with the addition of Dr. James Powell, the new CEO of our Managed Clinical Practice Group. Dr.

That goes model solves this using well trained.

Cost effective clinicians, who bring care to patients where they are when they need it under direct video supervision of a remote advanced medical provider.

Cost effective but high quality care delivery model allows society to return to the days of comprehensive holistic care at an affordable cost it is becoming increasingly right.

Hey, nice for its innovative neck.

Another example of <unk> innovation is our show program with New York City, which was selected as a finalist for fast company's world changing ideas and is currently a finalist for the UCSF Digital Health Awards.

<unk> clinical innovation is going to accelerate even faster with the addition of Doctor Jim Powell, the new CEO of our managed clinical practice group. Dr. Powell is not only a renowned clinical innovator, but we believe is one of the best primary care doctors in the country are lead bienstock, who joined US as Chief operating officer from Google earlier this year has.

Anthony Capone: Powell is not only a renowned clinical innovator, but we believe he's one of the best primary care doctors in the country. Lee Bienstock, who joined us as Chief Operating Officer from Google earlier this year, has pushed our growth efforts into high gear. This past quarter, we saw some great organic growth within both our mobile health and transport divisions. In August, we launched a pilot with Dollar General in Tennessee to provide primary and urgent care services to their customers via a mobile health clinic parked in their store parking lots. While it is still early in the pilot phase, we are excited about the potential of this relationship, given Dollar General's massive national footprint. In September, we converted our last mass COVID testing contract into a community pharmacy program which dispenses medications such as Paxlovid.

Pushed our growth efforts into high gear. This past quarter, we saw some great organic growth within both our mobile health and transport divisions in August we launched a pilot with dollar general in Tennessee to provide primary and urgent care services to their customers via a mobile health clinic part in their store parking lot. While it is still early in the pilot phase.

We're excited about the potential of this relationship given dollar general's massive national footprint at September we converted our last mass COVID-19 testing contract into a community pharmacy program, which dispenses medications such as Pac fluid I'm pleased to announce that at this time. We currently have no active mass COVID-19 testing contracts.

Anthony Capone: I'm pleased to announce that at this time, we currently have no active mass COVID testing contracts. DocGo does have a number of standby mass COVID testing surge contracts which could be activated in the event of a COVID surge. However, this resurgence is not planned for and is not part of our financial forecast. In September, we also began providing health care to the arriving migrant population here in New York City that has been in the news lately. This migrant health program has since grown into a long-term contract where DocGo is managing a comprehensive set of services for asylum seekers within their shelters. It's important to note that all of these new projects come with initially higher expenses. The initial launch expense is primarily driven by temporarily higher labor rates, as well as costs associated with increased management oversight related to new project launches.

Darko does have a number of standby mass COVID-19 testing surge contracts, which could be activated in the event of a COVID-19 search. However, this resurgence is not planned for it and is not part of our financial forecast in September. We also began providing health care to the arriving migrant population here in New York City that has been in the news lately this migrant health progress.

It has since grown into them.

Long term contract with Doctor was managing a comprehensive set of services for asylum seekers within their shelters. It's important to note that all of these new projects come with initially higher expenses. The initial launch expenses, primarily driven by temporarily higher like higher labor rates as well as costs associated with increased management oversight related to new project launches.

He says.

Anthony Capone: These initial launch expenses begin decreasing after the first 30 days and fully normalize after 90 to 120 days. In addition to organic growth, our acquisition strategy has proven to be quite successful. Under the leadership of Ben Sherman, our EVP of Corporate Development, we acquired 3 high potential companies in Q3. Our strategy and how we define synergy is that day one post-transaction, the acquired entity has the ability to derive significant revenue from DocGo's existing customer base. A perfect example of this is Exceptional Medical Transportation. Exceptional's largest customer is now Jefferson Health, with whom DocGo has had a strategic partnership for over 3 years. Another example is that one of Government Medical Services' largest customers is now NYC Health + Hospitals, with whom DocGo has built a robust relationship.

The initial launch expenses begin decreasing after the first 30 days and is fully normalized after 90 to 120 days. In addition to organic growth. Our acquisition strategy has proven to be quite successful under the leadership of Ben Sherman Our EVP of corporate development. We acquired we acquired three high potential companies in Q3 our strategy.

And how we define Saturday is a day one post transaction. The acquired entity has the ability to drive significant revenue from <unk> existing customer base. A perfect example of this is exceptional medical transports Exceptionals largest customer is now Jefferson health with whom Darko.

Just had a strategic partnership for over three years. Another example is that when a government medical services largest customers is now in New York City Health and hospitals, with whom <unk> has built a robust relationship.

Anthony Capone: Our team has proven that we can not only acquire licenses and capabilities at great value, but also execute against that potential value to capture an increasing portion of the addressable market. The foundation of our company, though, is technology. We have spent over $3 million this year and over $1 million in Q3 alone to build sophisticated proprietary technology that's used by our highly capable clinicians. Our world-class engineering team, under the direction of Hawk Newton, our Chief Technology Officer, and Aaron Severs, our Chief Product Officer, delivered some incredible tech this quarter. Not only did they get DocGo's B2C on-demand mobile healthcare app released into the iOS App Store, but they also got DocGo's B2B mobile health app released into the Epic App Orchard.

Our team has proven that we cannot only acquire licenses and capabilities a great value, but also actually execute against that potential value to capture an increasing portion of the addressable market.

<unk> Dacian of our company, though is technology, we have spent over $3 million this year and over $1 million in the third quarter alone to build sophisticated proprietary technology, that's used by our highly capable clinicians.

Our World Class engineering team under the direction of Hawk Newton, our Chief Technology Officer, and Aaron Sievers, Our Chief product Officer delivered some incredible tech this quarter not only did they get dock was b to C. On demand mobile health care App released into the iOS App store, but they also got Doctor was b to B mobile health App released into the epic App Orchard.

Yes.

Q4, and 2023 are going to be even more exciting as we enter in to moat patient monitoring or the R. P. M market in early October we announced that we launched our first pilot program associated with this effort with west pace out of San Diego West pace is a program focusing on persons.

Anthony Capone: Q4 2023 are going to be even more exciting as we enter into remote patient monitoring or the RPM market. In early October, we announced that we launched our first pilot program associated with this effort with West PACE out of San Diego. West PACE is a program focusing on person-centric care that reduces emergency room visits, unnecessary hospital admissions, and long-term nursing home placements, all while reducing the cost of care. Obviously, this aligns ideally with DocGo's model of care, and this is a relationship in an industry that we are tremendously excited about. What makes the RPM market especially attractive to DocGo is our ability to not only monitor these patients who often have chronic issues, but to also utilize DocGo's mobile clinicians to avoid costly and unnecessary hospital admissions by treating that patient in the comfort of their own home whenever possible.

Kara that reduces emergency room visits unnecessary hospital admissions and long term nursing home, claiming all while reducing the cost of care.

Obviously this aligns ideally with dock was model of care and this is a relationship in an industry that we were tremendously excited about what makes the RPM market, especially attractive to doctor was our ability to not only monitor these patients who often have chronic.

Issues, but to also utilize stock was mobile conditions to avoid costly and unnecessary hospital admissions I treating that patient comfort their own home whenever possible. Additionally, if medical transportation is required we can provide that service as well through our contracts with payers Taco has the opportunity to service over 10 million covered lives.

Anthony Capone: Additionally, if medical transportation is required, we can provide that service as well. Through our contract with payers, DocGo has the opportunity to service over 10 million covered lives. We plan to leverage these relationships to capture additional RPM customers. DocGo is uniquely positioned to provide end-to-end solutions in this industry, from monitoring to telehealth to home visits by over 4,000 clinicians to patient transportation when needed. We plan on making considerable investments in this space, both via M&A and also by leveraging more than 50 people on our product and engineering team to establish a significant presence in this market. Last quarter, under the direction of Lee, we undertook a significant push to compete for larger RFP opportunities. The length of time to work through these types of RFPs process varies, but on average, most tend to run about six months.

We plan, we plan to leverage these relationships to capture additional RPM customers Taco is uniquely positioned to provide end to end solution to this industry from monitoring to telehealth to home visits by over 4000 clinician to patient transportation when needed we plan on making considerable investments in this space.

Both via M&A and also by leveraging more than 50 people in our product and engineering team to establish a significant presence in this market.

Last quarter under the direction of Lee, we undertook a significant push to compete for a larger RFP opportunities. The length of time to work through these types of RFT PS process varies but and <unk>.

Average most tend to run about six months given our pace of activity in this channel increased greatly earlier. This summer we expect to see benefits of those activities in early 2023.

Anthony Capone: Given our pace of activity in this channel increased greatly earlier this summer, we expect to see benefits of those activities in early 2023. Some examples of the types of projects we are bidding on include providing mobile infectious disease response teams in a major metropolitan area, providing medical transportation services for a major national payer, and separately, a large hospital network in the Northeast. As always, no assurances can be made that our efforts will be successful, but we are excited about the potential contribution from this channel next year. The growing stable of payer relationships we have developed also has tremendous potential as we enter into 2023. In Q3, we announced a new agreement with Cigna to provide urgent care and annual physical type services to their member population in certain areas of New York and New Jersey.

Some examples of the types of projects, we were bidding on include providing mobile infectious disease.

Our response teams.

In a major metropolitan area, and providing medical transportation services for a major national payer and separately a large hospital network in the northeast as always no assurances can be made that our efforts will be successful, but we are excited about the potential contribution from this channel next year.

The growing stable of payer relationships. We have developed also has tremendous potential as we enter into 2023 in the third quarter, We announced a new agreement with Sigma to provide urgent care and annual physical type services to their member population and certain areas of New York and New Jersey.

Anthony Capone: If successful, these are the types of relationships which have the potential to expand rapidly. Our goal is to continue nurturing these relationships from the current pilot phase to become trusted vendors servicing their broad member populations across the US. Over time, DocGo has demonstrated a consistent ability to get our foot in the door with high-profile customers, deliver upon our goals, and grow these customers into significant revenue-generating relationships. As we approach 2023, this is exactly what we are working towards. Continue to grow our core business while planting the seeds for significant growth opportunities in a low-risk manner. In that regard, we are in a great position. At this time, I will hand this over to Andre to review the financials from this quarter. Andre?

Successful. These are the types of relationships, which have the potential to expand rapidly. Our goal is to continue nurturing. These relationships in the current pilot phase to become trusted vendor of servicing their broad member populations across the U S.

Over time <unk> has demonstrated a consistent ability to get our foot in the door with high profile customers deliver upon our goals and grow these customers into significant revenue generating relationships.

As we approach 2023. This is exactly what we are working towards continuing to grow our core business, while planting the seeds for significant growth opportunities in a low risk manner in that regard we are in a great position.

At this time I will hand, it over to Andre to review the financials from this quarter I'm sorry.

Thank you Anthony and good afternoon.

Andre Oberholzer: Thank you, Anthony, and good afternoon. Total revenue for Q3 2022 amounted to $104.3 million, representing growth of 22% as compared to the $85.8 million recorded for Q3 2021. The year-over-year revenue growth was driven by a combination of same-store sales, new customer additions, and inorganic growth through the acquisition of licenses and capabilities in various markets. Mobile health revenue for Q3 2022 amounted to $76.6 million, as compared to $67.9 million in Q3 2021, up approximately 13%. Mass COVID testing related revenues accounted for mid-single digits as a percentage of total revenue during the third quarter, compared to approximately 35% of revenue in Q3 2021.

Total revenue for the third quarter of 2022 amounted to $104 3 million representing growth of 22% as compared to the 85 8 million recorded for the third quarter of 'twenty one.

The aim of your revenue growth was driven by a combination of same store sales new customer additions and inorganic growth through the acquisition of licenses.

Capabilities in various markets.

Mobile health revenue for the third quarter of 2022.

Mounted to $76 6 million as compared to 67 9 million in the third quarter of 'twenty one of approximately 13%.

Let's go with just in their latest Navy's accounted for mid single digits. That's the semi soft total revenue during the third quarter compared to approximately 75% of revenue in Q2 'twenty one.

Medical transportation revenue amounted to 7.7 million compared to $17 9 million in Q3 of 'twenty one.

Andre Oberholzer: Medical transportation revenue amounted to $27.7 million, compared to $17.9 million in Q3 of 2021, up approximately 55%. Mobile health revenue amounts to 73% of total revenue during Q3 this year, versus 79% in the prior year, with transportation as the remainder. Revenue generated by the UK market grew by 15% to $3 million during Q3 of this year, representing approximately 3% of total revenue. Net income amounted to $2.5 million in Q3 of 2022, which represents a substantial improvement over net income of $800,000 recorded in Q3 of the prior year. Excluding a loss of $1.8 million on the remeasurement of warrant liabilities in Q3 of this year, net income would have been $4.3 million.

Proximately, 55%.

Mobile L favorite new amounts to 70% of total revenue during Q3 this year.

79, assuming that probably year with transportation Este Minder.

Revenue generated by the U K market grew by 15% to 3 million during Q3 of this year.

Representing approximately 6% of total revenue.

Net income amounted to $2 5 million in the third quarter of 22.

Since a substantial improvement over the net income of $800000 recorded in the third quarter of the prior year.

Excluding a loss of $1 8 million on the re measurement of what insight, but at least its third quarter of this year.

Net income would have been $4 3 million.

Andre Oberholzer: The net income improvement resulted from strong increase in revenues during the quarter, coupled with improved total gross margin, while certain overhead costs related to infrastructure provided leverage as it did not increase in the same proportion as the revenue growth. Total gross margin percentage during Q3 2022 amounted to 31.7% as compared to 30.1% for the same period of 2021. 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, including fuel and medical supplies. The 1.6% increase in the total gross margin percentage was driven by the transportation segment, where gross margins increased from 7.1% during Q3 last year to 23.2% during our Q3 this year.

The net income improvement resulted from strong increase in revenues during the quarter, coupled with improved total gross margin well certain overhead costs related to infrastructure provided leverage she did increase in the same proportion yesterday and your growth.

Total gross margin percentage during the third quarter of 'twenty two amounted to 31, 7%.

Compared to city point want the same for the same period of 'twenty one.

It is important to note that doctor, who was able to drive year over year gross margin improvement.

Spike the negative feedback from inflation on the cost of flavor and other cost of sales items, including field and medical supplies.

The one 6% increase in the total gross margin percentage was driven by the transportation segment.

Gross margins.

From seven 1% here in Q2 last year.

Six 2% during the third quarter this year.

Andre Oberholzer: The improvement was due to increased volumes and higher average trip prices, combined with lower average hourly wages as recent market wage pressures began to subside and as the company more effectively managed its staff to reduce overtime hours for field employees. These factors more than offset higher average fuel costs. Gross margins from the mobile health segment were 34.8% in Q3 of this year compared to 36.1% for Q3 2022. The modest decrease was due to higher startup costs associated with some of the company's new projects this year. As of 30 September 2022, our total cash and cash equivalents, including restricted cash, totaled $179.4 million, as compared to $179.1 million as of the end of fiscal 2021.

The improvement was due to increased volumes and higher average prices combined with slower.

Agents.

Mark It's Mike just began to subside and as a company more effective suite makes it staff to reduce overtime hours fulfilled employees.

These factors more than offset higher.

Costs.

Gross margins from the mobile health six minutes with 34, 8% in Q3 of this year compared to 36, 1% for the third quarter of 'twenty two.

The modest decrease was due to startup costs associated with some of the company's new projects. This year.

As of September 32, 22.

Total cash and cash equivalents, including restricted cash totaled $79 4 million as compared to $279 1 million of fiscal 'twenty one.

Andre Oberholzer: The cash balance remained basically flat despite investing approximately $35.5 million in acquiring licenses and new service offerings in new markets. During the first nine months of 2022, +$31.3 million in net cash provided by operating activities versus $6.9 million in cash provided by operations during the prior year period. Excluding vehicle finance leases of $9 million, outstanding debt amounted to $2.1 million at the end of Q2 versus $1.9 million at the end of last year. In terms of the impact of inflation, as previously discussed, we have two major expense categories where inflation may significantly impact our results.

Cash balance is basically flat, despite investing approximately $35 $5 million in acquiring licenses and new service offerings and new markets.

During the first nine months was 22 positive cash provided the operational activities amounted to $31 3 million versus $6 9 million in cash provided by operations during the prior year period.

Excluding vehicle financing consists of $9 million outstanding amounted to $2 1 million at the end of Q2 versus $1 9 million at the end of last year.

So something that's inflation as previously discussed we have two major expense categories with inflation may significantly impact our results our 'twenty to 'twenty two guidance provided the eating after a year.

Andre Oberholzer: Our 2022 guidance, provided at the beginning of the year, assumes that the average cost per hour of labor would increase by approximately 7% versus the already inflated 2021 labor rates, and that the average cost of gas would be $4.03 per gallon. During Q3 2022, the actual average hourly labor rate was higher than last year's actual rate, but lower than our assumptions. While the average fuel cost per gallon, which moderated from the Q2 level, was significantly higher versus the prior year, but very close to our forecasted rates. During Q3 of this year, the negative impact of the increased gas costs was approximately 30 basis points on gross margin compared to Q3 2021, with a negative impact of only 2 basis points versus our assumptions for 2022.

Seems that the average Costco little flavor increased by approximately NIS feeling the same way.

Oh really insight at 21 labor rates and that's the average cost of gas for dollar since and since forgotten.

During the third quarter of 22, the actual average hourly labor rate was higher than last year is actually lower than our assumptions, while the average flu cost together, it's moderated from the Q2 level.

Let's just probably a year, that's very close to our forecasted rates.

Yeah.

So I think you'll see us this year the negative impact of the E six cash cost.

City by city basis points on gross margin.

The third quarter up 21, with a negative impact of only two basis points versus our assumptions for 2022.

Andre Oberholzer: As for the cost of labor, the year-over-year increase in average hourly rate was less than 2%, resulting in a negative impact of 36 basis points on margin during Q3 of this year. However, the actual average hourly rate was lower versus our 2022 assumptions, which resulted in a positive impact against our gross margin forecast of approximately 163 basis points. Adjusted EBITDA during Q3 2022 amounted to $8.4 million, just over 8% of revenue, as compared to adjusted EBITDA of $4 million or 4.7% of revenue in the prior year. As a reminder, adjusted EBITDA is a non-GAAP measure representing earnings before interest, tax, depreciation, amortization, stock-based compensation, warrant and finance lease liability revaluations, and other non-recurring expenses. Please refer to our earnings release for a reconciliation of adjusted EBITDA to net income.

That's what I've got a flavor.

The increase in average element rate was less than 2%.

And then they go to an impact of 36 basis points on margin students yourself this year.

The actual average hourly rate was slowly with yourself 2022 assumptions.

This resulted in a positive impact okay. So gross margin forecast.

Proximately 66 basis points.

Adjusted EBITDA during the third quarter of 2022 amounted to $8 4 million just over 8% of revenue as compared to adjusted EBITDA of 4 million or four 7% of revenue in the prior year.

So do you mind it adjusted EBITDA, a non-GAAP measure.

Presenting earnings before interest tax depreciation and amortization.

<unk> based compensation and financing lease liability evaluations.

Recurring expenses.

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

For the nine months ended September 32022, total and when you net all of that.

Andre Oberholzer: For the nine months ended 30 September 2022, total revenue amounted to $331.7 million, representing 68% growth over total revenue of $197.4 million for the nine months ended 30 September 2021. Adjusted EBITDA for the nine months ended 30 September 2022 amounted to $34.5 million, representing a substantial improvement versus the adjusted EBITDA of $7.8 million for the comparable period last year. Net income for the nine months ended 30 September 2022 amounted to $23.6 million, representing a substantial improvement versus the net loss of $1.1 million for the comparable period last year. In terms of our 2022 outlook, we anticipate continued strong demand from our customers for both mobile health and transportation services.

Sydney, one 7 million.

<unk> growth of 68% of the total revenue of $97 4 million for the nine months ended September 21.

Adjusted EBITDA for nine months ended September 30, 22.

Amounted to Citi for one 5 million representing a substantial improvement was.

Was this the adjusted EBITDA of $7 8 million fully comparable period last year.

Net income for the nine months ended September 22 amounted to $23 6 million, representing a substantial improvement versus the net loss of $1 1 million fully compatible period last year.

And so that's about 22 outlook, we anticipate continued strong demand from our customers.

Mobile health and transportation services.

Andre Oberholzer: Given our strong year-to-date performance, as Stan mentioned earlier, we are increasing our revenue guidance to a range of $430 to 440 million, up from our prior guidance of $425 to 435 million. We are also increasing our adjusted EBITDA guidance to the range of $41 to 46 million, up from our prior guidance of $40 to 45 million. This guidance increase is due to a combination of organic growth and incremental acquisition activities. This represents revenue growth of 35% to 38% year over year, while adjusted EBITDA is expected to show improvement as a percentage of revenue to nearly 10% this year versus 7.9% during fiscal 2021. In terms of segment revenues, we expect that the Mobile Health segment will continue to contribute approximately 75% of revenues, with Medical Transportation as the remainder. That concludes my remarks.

Given our strong year to date performance that Stan mentioned earlier.

We are increasing our revenue guidance to a range of 430 to 40 million.

From our prior guidance of 425 to 475 million.

We are also increasing our adjusted EBITDA guidance to a range of 41 to 46 million.

That's from our prior guidance of 40 to 45 million.

This guidance increase is due to a combination of organic growth.

Tomato acquisition activities.

This represents revenue growth of 35% to 38% year over year, while the adjusted EBITDA is expected to show improvement as a percentage of revenue.

10% this year versus seven 9% during fiscal 'twenty one.

In terms of statement revenues slipped mobile health segment will continue to contribute approximately seven 5% of revenues with.

With medical transportation is the remainder.

That concludes my remarks at this time I would like turn it back to Stan for closing remarks.

Andre Oberholzer: At this time, I would like to hand it back to Stan for closing remarks. Thank you. Stan?

Stan.

Thank you Andre.

Stan Vashovsky: Thank you, Andre. Before opening the call for questions, I would like to comment on the planned chief executive officer transition that we announced in today's earnings results press release. Effective December 31, I will be retiring, stepping down as CEO and chairman of the board of directors. Our current president, Anthony Capone, will assume the CEO role at that time, and I have agreed to assist the company through the end of 2023 to ensure a seamless transition. Long-serving board member and co-founder, Ira Smedra, will assume the role of chairman of the board. I am incredibly proud of what we have accomplished in the last seven years, and I firmly believe our best days are ahead. Many of us expected that Anthony would one day succeed to the CEO role, and his contributions as president have been a significant factor in our success to date.

For opening the call for questions I would like to comment on the plans Chief Executive Officer transition.

We announced in today's earnings results press release effective December 31, I will be retiring and stepping down as CEO and chairman of the board of directors. Our current President Anthony Capone will assume the CEO role at that time and I have agreed to assist the company through the end of 2023 to ensure.

For a seamless transition.

<unk>, serving board member and cofounder Iris merger will assume the role of chairman of the board.

I am incredibly proud of what we have accomplished in the last seven years and I firmly believe our best days are ahead many of US expected the Anthony with one day succeed to the CEO role and his contributions as president has been a significant factor in our success to date.

Stan Vashovsky: Anthony has been instrumental in integrating cutting-edge technology into our solutions that truly sets us apart and creates a sustainable advantage for us in the market. I have every confidence in the continued growth and success of this company. With that, let's now open the call for questions. Operator?

And then he has been instrumental in integrating cutting edge technology into our solutions. It truly sets us apart and create a sustainable advantage for us in the market.

I have every confidence in the continued growth and success of this company.

With that let's now open up call for questions.

Operator.

Thank you.

Operator 3: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your headset before pressing any key. To withdraw your question, press star then two. First question comes from Richard Close, Canaccord Genuity. Please go ahead. Richard Close, your microphone is open, sir. Please go ahead. Our next question is from Ryan MacDonald of Needham. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your headset before pressing any key. To withdraw your question, press star then two. First question comes from Richard Close, Canaccord Genuity. Please go ahead. Richard Close, your microphone is open, sir. Please go ahead. Our next question is from Ryan MacDonald of Needham. Please go ahead.

We will now begin the question.

Okay.

That's fine.

Okay.

Right.

Our first question.

Okay.

Please go ahead.

Yeah.

Richard.

Please go ahead.

Yeah.

Our next question is from Ryan Macdonald.

Go ahead.

Hey can you guys hear me all right.

Matt Shea: Hey, can you guys hear me all right?

Hey, perfect.

Stan Vashovsky: Hey, perfect.

Matt Shea: Okay, great. Yeah, this is Matt Shea for Ryan MacDonald. Appreciate you guys taking the question and congrats on a great quarter and, you know, best wishes to Stan on whatever is next.

Okay, Great. Yeah. This is Matt.

Mcdonald appreciate you guys, taking the question and congrats on a great quarter and.

Best of wishes stands.

Whatever is next but you know specific to the quarter. It was specific to the quarter. It was great to hear about some of the RPM updates was curious with that Gary and Mary West pays relationship.

Stan Vashovsky: Thank you, Matt.

Matt Shea: You know, specific to the quarter, it was great to hear about some of the RPM updates. Was curious with that Gary and Mary West PACE relationship, would you be able to provide some color maybe on what services you're providing, maybe how you're getting reimbursed for those services, and then how do you expect to kinda use the data and maybe, you know, any other insights developed from the relationship to guide your future RPM strategy or even any M&A in the space?

Would you be able to provide some color maybe on what services, you're providing maybe how you're getting reimbursed for those services and then how do you expect to kind of use the data and maybe you know.

Any other insights developed from the relationship to guide your future Rpms strategy or even any M&A in the space.

Yeah, Anthony you want to take that question.

Stan Vashovsky: Yeah. Anthony, you wanna take that question?

Anthony Capone: Sure. Absolutely. It's a great question indeed. Thank you Matt for joining us. The relationship that we have with Gary and Mary West PACE, which is primarily in the Southern California area, is focused initially on urgent care services. This is where you're trying to prevent their capitated population from being either readmitted or admitted to the hospital. We do that by, you know, responding on scene, and we treat individuals on scene. That's following with our traditional model, where we have that lower level provider on site and that higher level provider remote. That's the same model that we use there, which is consistent throughout the whole country. Similarly, the Gary and Mary West PACE contract that we have as well follows. Nearly majority of our contracts follow the same model on the pricing structure. That's where we bill at an hourly rate for our services.

Sure absolutely.

Question. Indeed, thank you mats for joining us so the relationship that we have with west pace, which is.

I'm only in southern California area is focused initially on urgent care services. This is where you're trying to prevent their capitation population from being either readmitted or admitted to the hospital.

And we do that by you know responding on scene and we treat.

Individuals' on seats and that's following with our traditional model, where we have that lower level provider I'm, sorry from that higher level provider remote that's the same model that we use there was consistent throughout the whole country. Similarly, the west based contract that we have as well follows are nearly majority of our contracts are the same model on the <unk>.

<unk> structure, that's real we bill at a hourly rate for our services. So they say I want one you know one mobile health units in this area. One in this area one in that area and they pay us a fixed hourly rate, which kind of helps us to protect our margin in addition to that.

Anthony Capone: They say, "I want one, you know, one mobile health unit in this area, one in this area, one in that area," and they pay us a fixed hourly rate, which kind of helps us to protect our margin. In addition to that, we also get, in this case and in many cases, a bonus payment in the event that we can deliver successful patient outcomes. In this case, a successful patient outcome is actually reducing the readmissions or reducing the admissions to the emergency room versus the baseline. Actually we announced in our last quarter, we haven't actually got all the data completed for Q3, but for Q2 we actually did get that bonus payment. We were actually able to reduce or equally reduce the rates of admissions or readmissions against the baseline.

We also get in this case in many cases, we also get a bonus payments in the event that we can deliver a successful patient outcomes. In this case and successful patient outcome is actually reducing the readmissions or reducing the admissions to the emergency room versus the baseline.

And actually we announced.

In our last quarter.

We haven't actually got the all the data completed for Q3, but for Q2, we actually did get that bonus payment, we were actually able to reduce their you're feeling reduced.

The rates of admissions readmissions.

Against the baseline now that all that data has been super valuable and it's actually what a lot of what motivated us earlier in the year to get into R. P. M.

Anthony Capone: Now all that data has been super valuable, and it's actually what a lot of what motivated us earlier in the year to get into RPM and the data which we received from that, we then took, packaged up into a white paper, and West PACE actually just presented that at their national PACE conference. PACE, as many of you know, is one of the largest semi-public, semi-private, healthcare organizations in the United States. The opportunity here is to take the exact same program we have with West PACE in Southern California and get that launched at all the PACE locations throughout the entire country. Now, the RPM data sits on top of that urgent care services, and it fits hand in hand in glove with those.

And the.

The data, which the data, which we received from that we then took packaged up until white paper and west pace actually just presented that at their national paced conference. So pace as many of you know is one of the largest semi public semi private Oregon health.

Care organizations in the United States and so the opportunity here is to take the exact same program, we have with west pace in Southern California.

And get the so you get that Oh launched at all the pace locations throughout the entire country.

Now that the RPM data sits on top of that urgency or services.

And in hand in hand in glove with those now rather than waiting traditionally you would wait for a patient to be able to trigger to you and say, okay. I need your urgent care services now because we're monitoring them. We know we can see elevated vitals and we have the ability ourself to be into initiating their telehealth.

Anthony Capone: Now, rather than waiting, traditionally, you would wait for a patient to be able to trigger to you and say, "Okay, I need your urgent care services." Now, because we're monitoring them, we know. We can see elevated vitals, and we have the ability ourselves to begin to initiate either a telehealth visit and then subsequently, if necessary, we can respond rapidly on scene. RPM has really become the foundation by which we can be in the kinda control seat of healthcare as opposed to sitting back and waiting for it to come to us. Hope that answers your question.

Visit and then subsequently if necessary we can respond rapidly unseen. So RPM has really become the foundation by which we can be in the kind of control seat.

Health care as opposed to sitting back and waiting for it to come to us I hope that answers your question.

Got it okay. So it sounds like it's a little bit more about helping create value based care contract.

Matt Shea: Got it. Okay. It sounds like it's a little bit more about helping create value-based care contract constructs rather than just billing Medicare for CPT codes, so that makes sense. Maybe changing gears, I think one of the other exciting updates was the Epic integration allowing for now mobile health integration building on the transport stuff. Seems like a nice add-on. We've heard from our checks that health systems are looking to build around their EHR. It seems like kind of a nice Trojan horse way to get in there. Wondering if this is increasing your ability to add on mobile health services to transportation contracts with existing health systems. Then maybe with that in mind, is there any way to think about the percentage of health systems today that are transport customers that are also using mobile health services?

<unk>, rather than just billing Medicare for CPT code. So that makes sense, maybe changing gears I think one of the other exciting updates so as the epic integration, allowing for now mobile health integration building on the transport stuff.

It seems like a nice add on we've heard from our checks that that health systems are looking to build around their EHR. So it seems like kind of a nice a trojan horse way to get in there wondering if this is increasing your ability to add on mobile health services to transportation contracts with existing health systems, and then maybe with that in mind is there any way to think about the percentage of health systems.

Today that our transport customers that are also using mobile health services, just trying to get a sense of kind of what that opportunity looks like for you guys. Thanks.

Matt Shea: Just trying to get a sense of kinda what that opportunity looks like for you guys. Thanks.

Yeah. Thank you Stan you want me to take that as well.

Anthony Capone: Yeah. Thank you, Stan. You want me to take that as well?

Stan Vashovsky: Hey, as former CTO, who better to answer that question than you? Go ahead.

He is a former CTO, who better to answer that question in here.

Go ahead.

Anthony Capone: Thank you. Yeah. Congratulations to our tech team for really pushing through and getting that, you know, finally and fully deployed inside of the Epic App Orchard. It is a pretty big differentiator. I was just on a call where I was going through that with a large health system and the Epic App Orchard because it's just such an ease of use, it's simply one more click to order that transition of care post-acute service as it is the transport. It's just physically very easy to do so. We're now structuring all of our contracts such that they include mobile health services in them. Doesn't mean that it's all guaranteed, but there's already a construct by which the financial component, the ordering component, the clinical component is already built in there.

<unk>.

Thank you yeah, congratulations to our tech team to really pushing through and getting that you know finally fully deployed inside of the epic's App Orchard and it is a pretty big differentiator I was just on a call where I was going through that with a large health system and the debt.

The epic's App orchard, because it's just such an ease of use it's simply one more click to order that transition of care post acute service as it is the transport. It's just physically very very easy to do so where now structuring all of our contracts such that they include.

<unk> mobile health services in that doesn't mean that it's all guaranteed but there's already a construct by which that the financial component. The ordering component that clinical component is already built in there. It's our new contracts. All include that include that going forward. It is a very big differentiator and part of the way that we do that is because we.

Anthony Capone: Our new contracts all include that going forward. It is a very big differentiator, and part of the way that we do that is because we use this leased hour model with the hospital. We basically make sure the hospitals understand that they have leased clinicians. Now, those leased clinicians can do anything that you want them to do. Now, sure, they can transport, that's their main function, but those leased clinicians that all happen to be in vehicles, ambulances, they can do anything else. They can do transition of care. They could do post-surgery services. And they're yours because they're dedicated to you. We're leasing them to you. Get creative in all the areas that they could benefit your health system.

Use this leased.

Because our model with the hospital, we basically make sure the hospitals understand that they have leased clinician now those least clinicians can do anything that you want them to do it and I'm sure. They can transport that's their main function, but those least clinicians that are happened to be in vehicles ambulances. They can do anything else. They can do transition of care. They can be they can do.

Post.

Post surgery services, and and they're yours, because theyre dedicated you were leasing them to you so get creative in all the areas that they could benefit your health system and and so going forward. It's really we haven't I haven't found any health systems that don't want to also have that capability are bundled in and now most people are moving to epic.

Anthony Capone: Going forward, I haven't found any health systems that don't want to also have that capability, bundled in. Now, since most people are moving to Epic, they can do that with just one simple additional click.

You can do that with just one simple additional click.

The next question comes from Sarah James of Barclays. Please go ahead.

Operator 3: The next question comes from Sarah James of Barclays. Please go ahead.

Operator: The next question comes from Sarah James of Barclays. Please go ahead.

Congratulations on another great quarter, and I'll be really sorry to see you guys at.

Sarah James: Congratulations on another great quarter. Dan, I'll be really sorry to see you go, but Anthony very clearly, you guys have had an impressive amount of new contracts coming online. How do you think about the strategy of pacing new contract adds? Are there any bottlenecks or balancing points to the pace of top-line growth? What is the implied ramp from the recently announced contracts annualizing, as we think about a bridge from 2022 to 2023?

Okay.

Hmm.

You guys have had one pass of the model I mean contracts kind of online how do you think about the strategy.

New contract adds are there any bottlenecks or balancing points to the pace of topline growth and what it's been.

Got it.

We announced contracts annualized thing.

Think about a bridge from 'twenty two to 'twenty three.

I'll I'll start with that question.

Stan Vashovsky: I'll start with that question and, you know, Anthony, maybe you can finish it. We've navigated through lots of challenges over the last three, four years. You know, something that we've gotten quite proficient at is scaling large projects quickly. I think we're a go-to for lots of municipalities, lots of large hospital systems throughout the country that need to launch a program, and they like to do it in a big scale, and they wanna do it quickly. From a hiring standpoint, we have processes in place that allow us to hire, allow us to use third-party agencies if we need to.

Question, Anthony maybe you can finish it.

So we've.

We've navigated through lots of challenges over the last three four years and <unk>.

Something that we've gotten quite proficient at is scaling large projects quickly.

I think where it goes to four lots of municipalities a lot of lots of large hospital systems throughout the country.

I need to launch a program and they like to do it in a big scale and they wanted to quickly from.

From a hiring standpoint.

We have processes in place that allow us to hire or allow us to use third party agencies, if we need to.

Stan Vashovsky: We have on multiple occasions started projects up in weeks where our competitors would take months, and they very often include hundreds of medical personnel. That's part of a little bit of our secret recipe. You know, we share tidbits of it with people, but nevertheless, you know, it is somewhat proprietary. I think we've demonstrated over the last, I guess 8 quarters now that we've been reporting, our ability to scale and scale nicely in the most difficult of times. You know, you first had during the COVID period where people didn't wanna go to work, and then you had the mass resignation period, and you have all these different cycles that we've lived through over the last several years.

But we have multiple locations have started projects up.

In weeks, what our competitors would take months and they very often include hundreds of <unk>.

Medical personnel.

That's part of a little bit of our secret recipe.

Yeah, we sure tidbits with it with people, but nevertheless, Ah yes.

It is somewhat proprietary.

I think we've demonstrated over the last I guess eight quarters now that we've been reporting.

Our ability to scale.

And scale nicely in the most difficult of times firsthand during the Covid period, where people could go to work.

It'd be the master designation theory.

I have all these different cycles that we've lived through over the last several years and we've been very fortunate with.

Stan Vashovsky: We've been very fortunate with the dedication of our leadership to navigate through those challenges. Anthony, anything else you wanna go ahead and add to that?

With the dedication of our leadership and navigate through those challenges.

Anthony anything else you want to go ahead and after that.

Yeah, just the you know right now we don't have guidance yet for 2023. So I can tell you you know exactly where the ramp will go to but what I can tell you is that we have become as Dan was saying very proficient at taking a contract that is oftentimes relatively small and growing into something that is very large we have a lot of our historical press.

Anthony Capone: Yeah, just that, you know, right now we don't have guidance yet for 2023. I can tell you know, exactly where the ramp will go to, but what I can tell you is that we have become, as Dan was saying, very proficient at taking a contract that is oftentimes relatively small and growing it to something that is very large. We have a lot of historical precedent for that, and that's just based on the simple concept that we over-deliver, and we are always rapidly available for whatever our customers' needs.

And for that and that's just based on the simple concept that we over deliver and we are always rapidly available or whatever whatever our customers' needs.

Great.

Operator 2: Great. I guess on that topic, you guys mentioned the pilot that you're doing with Cigna. How do you think about what a typical evaluation period is before we could discuss expansion, and what types of benchmarks are your partners looking for, to show performance and wanna engage in expansion conversations?

Sarah James: Great. I guess on that topic, you guys mentioned the pilot that you're doing with Cigna. How do you think about what a typical evaluation period is before we could discuss expansion, and what types of benchmarks are your partners looking for, to show performance and wanna engage in expansion conversations?

You guys mentioned the pilot.

How do you think about.

What a typical evaluation.

And what types of benchmarks.

Partners looking for.

Sure.

We want to engage.

Conversation.

Well all of this year is really part of that evaluation for us.

Stan Vashovsky: Well, you know, all of this here is really part of the evaluations for us. We're slowly dipping our toes in the water and really figuring out exactly how we want our B2C program to work. You know, as you know, almost all companies that went into B2C, they lose money, and then they end up pivoting and becoming B2B organizations. We don't wanna make those mistakes. We have a pretty healthy company that is B2B today. We're very intrigued in a B2C future and a strategy, but we're gonna do it very carefully where we are, you know, keeping a really close eye on the biggest factor, which is the customer acquisition cost.

We are slowly dipping our toes in the water and really figuring out exactly.

How we want our D to C program to work.

Yeah as you know almost all companies that when it's a BDC they lose money.

And then they end up pivoting and becoming B to B organization.

We don't want to make those mistakes.

We have a pretty healthy company that is PDP today, we're very intrigued in AEP to see future.

Future and our strategy, but we're going to do it very carefully where we are.

We're keeping a really close eye on the biggest factor, which is the customer acquisition cost.

Stan Vashovsky: I think our payer relationships like Cigna and several others in 2022 are really gonna be there for the purpose of validating business processes and concepts, and financial models. Only when we're happy with those results will we go all in, and we are preparing for that, you know, going all in, because we're very satisfied with some of the results that we've seen year to date, and you'll see that sometime in hopefully 2023.

So I think our payer relationships like Cigna and several others. In 2022 are are really going to be there for the purpose of validating business processes and concepts.

And financial models and.

And only when we're happy with those results will we go all in and we are preparing for that you know growing all in because we are very satisfied with some of the results that we've seen to date.

And you'll see that some time and hopefully 2023.

The next question comes from Richard close of Canaccord Genuity. Please go ahead.

Operator 3: The next question comes from Richard Close of Canaccord Genuity. Please go ahead.

Operator: The next question comes from Richard Close of Canaccord Genuity. Please go ahead.

Stan Vashovsky: Richard, welcome back.

Yeah.

Richard Close: Yes, thanks for the question, Paulo. Yeah, sorry about that. Thanks for the question. So we've you know had a lot of discussions with investors and, you know, there's some confusion, I guess, about the DocGo story. I thought it would be good maybe if you could talk a little bit about utilization. You know, there's soft utilization trends that many companies have called out. There's labor headwinds, shortages, retention, wage pressure, people have called out. So, you know, some investors ask me why, you know, why doesn't DocGo see any of this? Can you talk a little bit about your business in terms of, you know, softer utilization trends and the labor headwinds and, you know, maybe why you're insulated?

Yes, sorry about that thanks for the question. So we've you know have had a lot of discussions with investors and.

There's somewhat or some confusion I guess about the Doc story and I thought it would be good maybe if you could talk a little bit about.

Utilization, you know there're soft utilization trends that many companies have called out there's labor headwind shortages retention a wage pressure people have called out and and so some investors asked me why.

Why doesn't that go see any of this and.

Can you talk a little bit about your business in terms of softer utilization trends and the labor headwinds and you know.

Maybe why you're insulated.

Yeah.

Stan Vashovsky: Yeah. I'll start and then I'll transition it to Anthony, Richard. You know, fundamentally, we have a very different business model than our competitors. I mean, keep in mind, I've been in healthcare 30 years, and this is not my first rodeo. When starting mobile health, you know, we knew from the very beginning that if you go into traditional fee for service, where you're taking reimbursement from Medicare, Medicaid, commercial MA plans, you're gonna be limited in exactly what you can collect and how you collect it. That is not a business model that we wanted to get into. We developed this concept of a lease, what we call our leased labor plan. What we do is we put together a full clinical program. We charge a daily amount per clinician.

I'll I'll start and then I'll transition to.

Anthony Richard.

Yeah fundamentally.

We have a very different business models and our competitors I mean keep in mind I've been in health care 30 years.

And this is not my first rodeo when.

Starting mobile health, we knew from the very beginning that if you go into the traditional fee for service.

Where you are taking a reimbursement from Medicare Medicaid commercial latinate plans.

Youre going to be limited in exactly what you can collect and how you collect it.

That is not a business model that we wanted to get into and we developed this concept of a lease what we call our least labor plan and what we do is we put together a full clinical program.

Charge, a daily amount per clinician. These are all dedicated staff trained for a specific project.

Stan Vashovsky: These are all dedicated staff trained for a specific project. When we're out in the field, we then also have nominal upcharges with different, call it procedures or tests that we do. Very often based on outcomes, we'll also get a bonus payment, like Anthony mentioned earlier. We're not a traditional fee-for-service business. We are just our call it leased hour headcount on a monthly or a quarterly basis based on the contract. These are dedicated staff, and we put the responsibility of utilization on our customer, not on us. If we have 15 physician assistants doing pre-op services in patients' homes on behalf of a hospital, the hospital is the one that loads up their schedule using our tech platform.

We were out in the field. We then also have nominal charges with different procedures or tests that we do and then very often based on outcomes. We'll also get a bonus payment like Anthony mentioned earlier. So we're not a traditional fee for service business, we I just I'll call it at least.

Our head count.

On a quarter.

Quarter basis based on the contract.

But these are dedicated staff and then we put the responsibility of <unk>.

Utilization on our customer not all enough. So if we have.

15 physician assistants.

Do wing Preop services in patients' homes on behalf of a hospital.

The hospital is the one that loads up their schedule using our tech platform.

Stan Vashovsky: The hospital is one that dictates who gets priority and who doesn't get priority. If we feel that we need to add staff, we'll add staff. We'll make a recommendation to add. If we see that the demand is lower, we'll make a recommendation to reduce that headcount in the following quarter. The entire business plan is very, very different. We're not a traditional fee for service. We also have the ability to renegotiate our rates much more frequently. If I'm a traditional fee for service company and I accept reimbursements from United or Aetna, you know, if my labor costs and my fuel costs go up, I have very limited ability to go to Aetna, United and renegotiate that reimbursement.

The hospital is one that dictates, who gets pretty hardy and who doesn't get priority.

If we feel that we need to add staff will add staff will make a recommendation to add if we see that.

The demand is lower will make a recommendation to reduce that head count in.

In the following quarter for the entire business plan is very very different we're not a traditional fee for service. We also have the ability to renegotiate our rates.

Much more frequently.

And if all the traditional fee for service company, and I accept reimbursement from United or Aetna.

Labor costs in my fuel costs go up I have very limited ability to go to Aetna, United and renegotiate that reimbursement.

Stan Vashovsky: Very different if I have a hospital that I work with, where I could go to them at the end of the year and I could adjust my pricing, you know, based on inflationary pressures. From the fundamental of the business, it's very different. We practically do no fee for service. We have a very different business model, one that is based on lease hour with additional up charges for different procedures that we do. It's a dedicated staff model, and the hospitals, our municipalities, our commercial accounts that we work for, they really see us as an extension of their team, not as just a vendor. I think that's another reason why we have very high customer renewal rates, and success rates. That, you know, I hope answers the question.

Very different if I have a hospital that I work with.

I could go to them at the end of the year and I could adjust my pricing.

Based on inflationary pressures so from that from the fundamental of the business. It's very different we practically do no fee for service, we have a very different business model. One that is based on lease hour with additional charges for different procedures that we do it's a dedicated staff.

Model.

And the hospitals are municipalities are commercial accounts that we work for.

They really see us as an extension of their team not as just a vendor and I think that's another reason why we have very high customer renewal rates.

And and and success rates.

So so that I hope I answered the question.

Stan Vashovsky: Anthony, do you wanna add to that?

Do you want to add.

To do that.

Anthony Capone: The only point I would just simply add is the quality that comes from it, which Stan alluded to. I can't really overemphasize how important that is. It is surely easier in a traditional model of fee-for-service to potentially get for like the end healthcare organization that you're contracting with, maybe a cheaper rate if they just try and play a bunch of people against each other and do fee-for-service. The quality of care that you get is so much lower. That causes all sorts of problems down the line.

The only point I would just simply add is the quality of that come from it which Stan alluded to I can't really over S. Over exaggerate how important that is it is sure it easier in a traditional model of fee for service to potentially get for like the end health care organization that you're contracting with maybe a cheaper rate.

If they just try and play a bunch of people against each other and do fee for service, but the quality of care that you get so much lower and so the and that causes all sorts of problems down the line. When you give people the dedicated resources wherever those resources are doing whatever you do whatever those resources are that is.

Anthony Capone: When you give people this dedicated resources, whatever those resources are doing, whatever you do, whatever those resources are, that is, the end result, the quality of care that gets delivered is so much higher, and the customers see that, the retention is higher, and obviously, our margins are also protected.

The annual result, the quality of care that gets delivered is so much higher and the customers see that our retention is higher and obviously our margins are also protected.

And Richard we debated this program a couple of years ago, and we now have over 4000 employees and the majority of those employees operate on this program.

Stan Vashovsky: Richard, we innovated this program a couple of years ago, and we now have over 4,000 employees, and the majority of those employees operate on this program.

Can you talk a little bit about you know.

Richard Close: Can you talk a little bit about, you know, retention of employees? You know, I know like on the home health, you know, they've been impacted by, you know, essentially people leaving the workforce. Can you talk a little bit about your ability, from a labor perspective and, you know, maybe what your retention is? You know, 'cause there's some questions out there with people wondering why you're not seeing the same, situation on labor as others.

Retention of employees.

I know like on the home health.

Then impacted by.

Yeah, essentially people, leaving the workforce can you talk a little bit about your ability from a labor perspective, and you know maybe what your retention is and yeah, because theres some questions out there with people wondering why you're not seeing the same.

Situation on labor as others.

Yeah.

Stan Vashovsky: Yeah. I'll, you know, once again, I'll take the first crack at the answer, and then I'll pass it over to Anthony. Especially about when it comes to the retention metric. You know, first of all, when it comes to employees, I'd like to think we take good care of our staff. You know, for one, we pay about 10% to 15% hourly. Our hourly wage is about 10% to 15% higher than street. We also incentivize employees to do their best in the field, and then based on the customer satisfaction scores, we then can give them bonuses. You know, just about every full-time employee in the company gets to participate in the company equity plan. We invest considerable amount into employee education.

And once again I'll take a first crack at being at send out pass it over to Anthony, especially about when it comes to the retention metric.

First of all.

When it comes to employees.

I think we take good care of our staff.

For one we pay about 10, 15%.

Our hourly wage.

About 50% higher than street.

We are we also incentivize employees to do their best in the field and then based on the customer satisfaction scores.

We then can give them bonuses.

Just about every full time employee in the company gets to participate in the company equity plan.

We invest considerable amount into employee education.

Stan Vashovsky: When you take all of these different factors and you put them together, we're a little bit different than a traditional company. I think our Glassdoor and Indeed ratings speak for themselves. We have the highest Glassdoor rating in the industry, hovering at about 4.2, 4.3. When employees are happy, you know, we find that they do a better job in the field, and they also refer us to their friends. That helps us in terms of recruiting. In terms of, you know, employee retention, you know, we go about looking at it from a very different metric than many other employers. I'll go ahead and pass that over to Anthony to talk a little bit about, you know, what we look at.

So when you take all of these different factors when you put them together.

We're a little bit different than a traditional company I think our glassdoor and that you'd need ratings speak for themselves. We have the highest glassdoor rating in the industry hovering at about 4243 and when employees are happy we find that they do a better job in the field and they also refer us to their friends.

And that helps us in terms of recruiting.

In terms of.

An employee retention and the.

We go about looking at it from a very different metric.

Than many other employees and I'll go ahead and pass it over to Anthony to talk a little bit about what we look at.

Yeah real quick so traditional companies look at retention and in AR days or months years, but in a timeframe that that doesn't make any sense to us we look at it in dollar figures. So how much revenue does the average employee bringing it at various different categories relative to what the cost was to bring them on.

Anthony Capone: Yeah, real quick. Traditional companies look at retention in days or, you know, months, years, but in a time frame. That doesn't make any sense to us. We look at it in dollar figures. How much revenue does the average employee bring in in various different categories relative to what the cost was to bring them on, and kind of what is the return on the initial hire value? That's how we assess, and we monitor everything in our company, and we are getting better, not worse in that category. We have a very unique model which allows us to increase revenue per employee relative to what the onboarding, the initial expense is for every single one of those employees.

And kind of what is the return on the initial higher value. So that's how we assess and we monitor everything in our company and we are we are getting better not worse in that category.

And we have a very unique model, which allows us to increase revenue per employee relative to what the onboarding. The initial expense is for every single one of those employees are part of the reason why in partners and were able to pay better than most in the industry is related to your previous question. When you have a dedicated staff that are paid on an hourly basis.

Anthony Capone: Now, part of the reason why and part of the reason we're able to pay better than most in the industry is related to your previous question. When you have dedicated staff that are paid on an hourly basis and we can control our margins, we then can pay a higher rate than people who are traditionally on a fee-for-service concept. Like the home health agencies that you made an example of, they're usually almost 100% fee for service, and so they have lots of volatility in demand, and idle time, and thus their margins are compressed, and they can pay relatively little. When you have our model where you have a dedicated healthcare resource, you can simply pay more because your margins are protected.

We can control our margins. We then can pay a higher rate than people, who are traditionally on a fee per service concepts or like the home health agencies that you've made him. An example of they're usually almost 100% fee for service and so they have lots of volatility in demand.

And idle time, and thus they are margins are compressed and they can pay with relatively little when you have a model where you have a dedicated a health care resource you can simply pay more because your margins are protected it's a very different model, which goes all the way down to your compensation for your employees.

Anthony Capone: It's a very different model, which goes all the way down to your compensation for your employees.

And the important thing is that it's not just hey, it's several different things that we look at when it comes to our employees our staff.

Stan Vashovsky: The important thing is that it's not just pay. It's several different things that we look at when it comes to our employees, our staff, that we take into consideration. We have teams of people within human resources that focus on employee satisfaction, and it's something that we look at very, very closely. When you take several different factors and you put them together, hopefully you have a satisfied workforce that wants to stay with the organization, and then hopefully they also want to refer people to our organization.

We take into consideration we have teams of people with a human resources that focus on employee satisfaction and it's something that we look at very very closely and when you take several different factors you can put them together hopefully you have a satisfied workforce that wants to stay with the organization and then hopefully they also wanted to refer people to our organization.

The next question comes from Peter Chickering with Deutsche Bank. Please go ahead.

Operator 3: The next question comes from Pito Chickering of Deutsche Bank. Please go ahead.

Operator: The next question comes from Pito Chickering of Deutsche Bank. Please go ahead.

Hi, there this is Kieran Ryan on for Peter Thanks for taking the question.

Kieran Ryan: Hi there. This is Kieran Ryan in for Peter. Thanks for taking the question. Looking at margins in Q3, you know, came in pretty strong, a little above 8%. Given the upside to revenues, thought maybe there could be even a little bit more upside there. Based on what you said around fuel and labor costs tracking in line with your expectations, is it fair to think about these new contract upstart costs as being kind of the main gross margin swing factor for Q3 and then also for the step up into Q4?

I'm looking at margins and three Q, you know came in pretty strong a little above 8%.

Given the upside to revenues, maybe there could be even a little bit more upside there.

Based on what you said around fuel and labor costs tracking in line with your expectations is it fair to think about these new contract upstart costs as being kind of the mean gross margin swing factor stricter EQ and then also for the step up in <unk>.

Yeah.

Stan Vashovsky: Yeah. That's exactly what we'd be looking at. You know, as we said in our release, mass COVID testing revenue same time last year was about 35% of revenue, and now it's in mid-single digits. That basically means a lot of new contracts were implemented during the course of Q3. Three particular contracts, two hospitals and one municipality, were very sizable, and what I would call long-term agreements that have initiated. There is a startup cost associated with contracts of that type. It's something that usually, you know, we would see for about 60, sometimes 90 days, but then we have multiple years returns from that initial investment.

Exactly yeah.

Looking at.

We as we said in our in our release.

Mass Covid testing revenue same time last year was about 35% of revenue and now it's in let's say mid single digits.

That basically means a lot of new contracts were implemented during the course of third quarter.

The particular contracts two hospitals in one municipality.

Very sizable.

I would call long term agreements that have initiated and there is a startup cost associated.

Associated with contracts of that type.

And it's something that usually you we would feel for about 60, sometimes 90 days, but then we have multiple years of rewards from that initial investment.

Stan Vashovsky: If I, you know, excluding those initial startup costs that we had for the three large customers, EBITDA margins would have been considerably higher. I look at that actually as a good expense. I'd be happy to, you know, see that on a quarterly basis. That means we're signing more long-term profitable contracts.

So if.

Excluding those initial startup costs that we had for the three large customers.

EBITDA margins would have been considerably higher.

But I look at that actually as a good expense.

And I'd be happy to.

You see that on a quarterly basis that means we're signing more long term profitable contracts.

That's helpful. Thank you and then just a quick follow up I think you've said in the past that you've seen L P and tracking.

Kieran Ryan: That's helpful. Thank you. Just quick follow-up.

Stan Vashovsky: Sure.

Kieran Ryan: I think you've said in the past that you've seen LPNs tracking at about 65% to 70% of the cost of RNs, just broadly speaking. Obviously, that's gonna vary a lot across regions, I would think. Is that generally still the right level, and is there any changes in that hiring environment you can call out over the last three months? Thank you.

<unk>, 65% to 70% of the cost of our ends just broadly speaking obviously, that's going to vary a lot across regions I would think but is that generally still the right level and is there any changes in that hiring environment you can call out over the last three months.

Thank you, yeah, I'll I'll I'll, let Anthony.

Stan Vashovsky: Yeah. I'll let Anthony or Norm or Andre speak to, you know, the actual percentage for up to the cost of LPNs. In reality, we have hundreds of physician assistants, nurse practitioners, registered nurses, and LPNs. You know, Andre or Anthony, are you familiar with where the LPNs are tracking compared to RNs? Is that something that you're at liberty to talk about?

Arm or Andre I speak to the actual percentage for the cost of the Lps, but in reality, we have hundreds of physician assistance and nurse practitioners registered nurses and L. P. Yet.

Yeah, Andre or Anthony.

Familiar with where the Lps are tracking compared to our brand.

Something that you are you at Liberty to talk about.

Yeah, I think that the number that you gave at 65% is as close that's close I don't know that precise percentage, but I think.

Anthony Capone: Yeah, I think that the number that you gave at 65% is close. That's close. I don't know the precise percentage, but I think it's quite close.

That's quite close.

And I would probably also a guest that is somewhat geographical base as well.

Stan Vashovsky: I would probably also guess that it is somewhat geographical based as well.

Certainly there is differences you know, it's a big difference between say, New York City, or and you know Nashville, Tennessee.

Anthony Capone: Certainly there is differences, you know, a big difference between, say, New York City or in, you know, Nashville, Tennessee, in the labor rates, but usually they're relatively, the same on a relative basis. I think the key thing and part of the reason why our model, I believe, has been more successful is there's just so many more LPNs than there are RNs, and so many more RNs than there are, you know, APPs, you know, independent licensed practitioners.

And the labor rates, but usually they're relatively the same on a relative basis.

And I think that the key thing and part of the reason why our model I believe has been more successful is theres just so many more L. P. M and there are a R. R N and so many more are and then there are you know a P. P S.

Independent licensed practitioners.

Operator 3: The next question comes from Mike Latimore of Northland Capital Markets. Please go ahead.

Operator: The next question comes from Mike Latimore of Northland Capital Markets. Please go ahead.

The next question comes from Mike Latimore of Northland Capital markets. Please go ahead.

Yes. Thank you.

Mike Latimore: Yeah, thank you.

Stan Vashovsky: Hi, Mike.

Mike Latimore: Congrats, Stan, and hello. Congrats on your both on your new roles. Sounds exciting.

Congrats Dan and Hello, Hello, Congrats on your both on your new roles I'm, just glad that thank you.

Stan Vashovsky: Thank you.

Mike Latimore: On the mobile transport segment, that was up nice sequentially in the quarter. Can you talk a little bit about what drove that and then, you know, just kind of a new baseline to think about?

Yes, so on the mobile transport segment that was up nice sequentially in the quarter can you talk a little bit about what drove that and then just kind of a new baseline to think about.

Yeah, Anthony you want to jump on that.

Stan Vashovsky: Yeah. Anthony, you wanna jump on that?

Yeah, there's been a combination of our ability to acquire licenses and then capitalize on those licenses. So as an example, I gave you. The example of acquiring a FCT license, which is specialty care transport license in New Jersey with a company called exceptional medical transport, we were immediately able to you know.

Anthony Capone: Yeah. There's been a combination of our ability to acquire licenses and then capitalize on those licenses. So as the example I gave you, acquiring a SCT license, which is Specialty Care Transport license in New Jersey with a company called Exceptional Medical Transportation. We were immediately able to take that Exceptional Medical Transportation and service our existing Jefferson Health customer. Those kind of models are a lot of what we've seen. We've seen the growth where we look at our existing customer base, and we say, "Listen, there's revenue that we're not able to capture because we don't have either a competency, capability, or licensure or maybe all of the above." We go out there and find a value buy to service that.

Take that exceptional medical transport and service, our existing Jefferson health customer and so those kind of models are a lot of what we've seen we've seen the growth where we look at our existing customer base and we say listen there's revenue that we're not able to capture because we don't have either a competency capability, our licensure or maybe all of the above.

And we go out there and find the value by to service that but that's generally speaking our at least tuck in acquisition strategy follows follows that marks kind of across the board and I would say that.

Anthony Capone: That's generally speaking, our at least tuck-in acquisition strategy follows that marks kind of across the board. I would say that, yeah, I think, Andre, you can speak more into if this is the baseline going forward, but, you know, the revenue that we have on transport is recurring and is all part of, you know, long-standing multi-year contracts.

Yeah, I think Andrea you can speak more to this new baseline going forward, but the revenue that we have on transport.

Reoccurring and is all part of you know longstanding multiyear contracts.

Yeah, I'll just add to it and can you say on the.

Stan Vashovsky: Yeah. I'll just add to what Anthony said. You know, on the highest level of transportation, like SCT, that created to increase our average price per trip for those contracts that are not in the leased out program of about 20%, you know, this year versus last year. Roughly speaking, you know, and I think it's in the Q when you get that tomorrow. In 2021, the average cost per trip was about $303, and this year it's about $374. It's about a 23% increase just based on the fact that we have this higher level of transport that we can do with those tuck-in acquisitions.

Andre Oberholzer: Yeah. I'll just add to what Anthony said. You know, on the highest level of transportation, like SCT, that created to increase our average price per trip for those contracts that are not in the leased out program of about 20%, you know, this year versus last year. Roughly speaking, you know, and I think it's in the Q when you get that tomorrow. In 2021, the average cost per trip was about $303, and this year it's about $374. It's about a 23% increase just based on the fact that we have this higher level of transport that we can do with those tuck-in acquisitions.

The highest level of transportation like S E T.

That's created to increase our average price per trip. So those contracts are not in the least out program.

So about 20%.

This year versus last year roughly speaking.

It's in the Q when you get that tomorrow in 'twenty, one the average cost per trip was about $300 and this year. It's about <unk> 74. So it's about a 26% increase just based on the fact that we have this high level of transport if he can do with those tuck in acquisitions.

Okay.

Okay, that's great.

Mike Latimore: Okay, that's great. In terms of just the spending environment among municipalities, it sounds like it's pretty healthy overall, but can you just kinda characterize kind of the what you're hearing from municipal governments in terms of, you know, interest in new programs or expanding programs and, you know, kind of their view on what maybe the next year might look like?

And then in terms of just the spending environment.

Environment among municipalities.

It sounds like it's pretty healthy overall, but can you just kind of characterize kind of the what's.

Well, what's you're hearing from municipal governments in terms of you know.

Interest in new programs are expanding programs and you know kind of their view on what next year might look like.

Stan Vashovsky: Yeah. You know, this tremendous focus nationally today surrounding population health. I think the country is finally at a state where they're realizing in order to keep Medicaid and Medicare costs down, you have to be proactive in terms of making healthcare accessible to everyone. We play a large role in that. We have a program that is extremely cost-effective and has documented, proven results. We think population health, government-based type programs will continue to increase. We have not seen any signs of slowdown, just the opposite. We have some new contracts that we're planning on for the next quarter. You know, I'm really excited about it.

Yeah.

This tremendous focus nationally today surrounding population health.

I think the country is finally out of state where they are realizing in order to keep Medicaid and Medicare costs down you have to be proactive.

In terms of making health care accessible to everyone.

We play a large role in that we have a program that is extremely cost effective and has documented proven results.

So we think population health government based type programs will continue to increase.

We have not seen any signs of slowdown just the opposite we got we have some new contracts that were planning on for the next quarter.

And.

I'm really excited about it.

Stan Vashovsky: I think the country is finally taking some proactive measures in getting in front of the problem versus just simply reacting to the problem. I'm also very proud of the fact that we have a program that caters to those specific needs. A program that is very affordable, a program that simply makes sense because we leverage medical clinicians that are appropriately trained using the absolute state-of-the-art equipment. Then combine that with telemedicine. You really have, you know, something that's very different, a huge differentiator. You're combining the best of medicine with the best of technology to ultimately help drive good, positive outcomes. That's what we build our business on.

I think the country is finally, taking some proactive measures and getting in front of the problem versus just simply reacting to the problem.

And I'm also very proud of the fact that we have a program that caters to.

To that to those specific needs.

A program that is very affordable a program that simply makes sense, because we leverage medical clinicians that are appropriately trained using the absolute state of the art equipment.

And then combine that with telemedicine you really have.

Something that's very different a huge differentiator.

Combining the best of Medicine, where the best technology to ultimately help drive good positive outcomes.

And Thats, what we built our business on.

The next question comes from David Grossman of Stifel.

Operator 3: The next question comes from David Grossman of Stifel. Please go ahead.

Operator: The next question comes from David Grossman of Stifel. Please go ahead.

Go ahead.

Hi, Thank you good afternoon.

David Grossman: Thank you. Good afternoon.

Stan Vashovsky: Hi, David.

David Grossman: It came up a couple times in your, you know, I think both you and Anthony have mentioned, you know, the idea of landing and expanding within your customer base. Can you give us any insight into, you know, what the same-store sales growth is trending in terms of percentages, you know, just to help us dimension, you know, kind of your ability to successfully expand within the base?

So a couple of times in your life.

You know I think both you and Anthony you had mentioned you know the idea of landing and expanding within your customer base.

Can you give us any insight into what the same store sales growth is trending in terms of percentages you know just to give us help US dimension, you know kind of your ability to successfully.

Expand within the base.

Stan Vashovsky: Yeah, I don't know if we've published actual numbers, David, but I will tell you I've always found it much more difficult to secure same-store sales than go out there and just keep selling and keep turning customers over. You know, I'm not really aware of any, what I call material programs that we've lost in the last couple of years. You know, our programs are very sticky. A lot of that is based on the technology that we integrate. You know, we're a very integrated organization. We integrate with, you know, most of the major EMR products that are out there. You know, once you go through that effort, you tend to be a long-term partner of that institution.

Yeah, I I don't know if we've published actual numbers, David but I will tell you I've I've always found it much more difficult.

Secure same store sales and then go out and they just keep selling and keeps turning customers Oliver.

And.

Yeah, I'm, not really aware of any what I'd call material programs that we've lost.

The last couple of years.

Our programs are very sticky.

A lot of that is based on the technology that we integrate.

We're very integrated organization, we integrate with.

Most of the major EMR products that are out there.

Once you go through that effort.

To be a long term partner of that institution.

Stan Vashovsky: You know, I would say a very large number. I don't think we disclose the actual percentage of our growth is from same-store sales throughout the country. You know, we continue to sign up new customers, but I'm really most proud of the fact that we don't lose existing customers, and our existing customers come back to us with new ideas that they wanna implement. You know, we're very often their go-to organization when they have those new ideas. We float around some concepts of accomplishing those tasks. We turn that into a proposal. A lot of times, you know, in our business model, I think we do something unique that a lot of people don't, which is that we'll launch a program.

And I would say a very large number I don't think we've disclosed the actual percentage.

Our growth is from same store sales throughout the country.

Got it.

And.

We continue to sign up new customers, but I'm really I'm. Most proud of the fact that we don't lose existing customers and our existing customers come back to us with new ideas.

That they want to implement very often the go to organization when they have those new ideas we.

We float around some concepts of accomplishing those tasks, we turned that into a proposal.

A lot of times.

In our business model I think we do something unique.

That a lot of <unk>.

Don which is that we will launch a program.

Stan Vashovsky: As long as compliance signs off on it, you know, we won't charge anything or we'll just charge cost for 30, 60 days, so the customer can see the results. If they like the results, we'll then engage into a more long-term contract. We don't do the, you know, high pressure sign 3, 5-year contract and take risk type of a sale. It's a soft sale. Hey, try it, you know, 30 days, 60 days. See if you like the results. If you like the results, you know, let's go ahead and then engage into a more longer relationship. But I would, you know, once again reiterate that, you know, the overwhelming majority of our growth has been through same-store sales.

And as long as compliance signs off on it.

We won't charge anything or were just charged cost.

For 30 60 days.

Customer can see the results and if they like the results will then engage into a more of a long term contract, but we don't do the high pressure signed three five year contract and take risk type of a sale.

Salt sale.

Try it.

30 days 60 days, if you like the results that you liked the results.

Let's go ahead and indications of more longer relationship.

But I would once again reiterate that the overwhelming majority of our growth hasn't been through same store sales.

Stan Vashovsky: At the same time, ever since Lee Bienstock joined our organization, from Google, you know, we have been doing a great job getting new leads in through the door, responding to new RFPs, getting new contracts signed as well.

But at the same time ever since we've been stock joined our organization.

From Google, we have been doing a great job getting new needs in through the door responding to new rfps getting new contracts signs as well.

This concludes the question and answer session I would like to turn the conference back over to Mr. Stan Michelle Qi for closing remarks.

Operator 3: This concludes the question and answer session. I would like to turn the conference back over to Mr. Stan Vashovsky for any concluding remarks.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Mr. Stan Vashovsky for any concluding remarks.

Mike.

Stan Vashovsky: That is really it. I really wanna thank everyone for joining this evening. I know it's late. It has been truly an honor to, you know, work with so many of these wonderful analysts and, you know, financial people from the financial community. I really do believe DocGo is doing something wonderful. We're doing it differently, and I think our results are speaking for themselves. I've always said, you know, judge us by our results, not our PowerPoint. I hope, you know, one day we'll get there. Just wanna, you know, express my appreciation for everyone's support. Thank you all for joining this evening, and this will conclude this phone call. Thank you, everybody.

That is really it I really wanted to thank everyone for joining this evening I know, it's late and Ah.

It's been truly a.

You know an honor to work with so many of these entre.

Wonderful analysts and financial people come to the financial community.

And I really do believe VAALCO is doing something wonderful we're doing it differently and I think our results are speaking for themselves I've always said you know judge us by our results.

Our Powerpoint and I hope.

They will get there.

And.

Just wanted to express my appreciation for everyone's support.

Thank you all for joining this evening and this will conclude.

Well, thank you everybody.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Operator 3: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Yes.

[music].

Yeah.

Okay.

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