Q1 2023 DocGo Inc Earnings Call
Greetings and welcome to the Docs go first quarter 2023 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mike Co director of Investor Relations. Please go ahead.
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 believe estimate expect intend guidance confidence target project and other similar.
<unk> 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 doctors business.
Condition and other operating results. These include but are not limited to the risk factors and other qualifications contained the doctors. The annual report on Form 10-K quarterly reports filed on Form 10-Q, and other reports and statements filed by a doctor or where do you see 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 contains references to non-GAAP financial measures reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided directly as part of this call or included in our earnings which is pose.
On our website <unk> dot com as well as in our filings with the Securities and Exchange Commission.
Information contained in this call is accurate as of only the date discussed investors should not assume the statements will remain relevant and operate up at a later time, we undertake no obligation to update any information discussed in this call in the future but at this time. It is now my pleasure to turn the call over to Mr. Anthony Capone CEO Dr. Anthony. Please go ahead.
Yeah.
Thank you Mike and thank you all very much for joining US today, we had an extremely busy first quarter as we launched multiple new projects late in the quarter. They came with challenging logistical timelines I'm pleased to report those launches have gone extremely well and we're ramping on or ahead of schedule.
Demand for Dark goes services has never been greater due primarily to the rapidly increasing need for population health services across the United States.
During the first quarter, we generated $113 million of revenue a decline year over year or 4%. However, if you include mass COVID-19 testing to exclude mass COVID-19 testing from that comparison, we grew revenues by 40% year over year.
We have put in place a great foundation for the future and we expect our recent project launches to drive significant sequential gains in both revenue and adjusted EBITDA in the coming quarters with the first quarter in hand, we are reiterating our guidance of 500 to 510 million in revenue.
And $45 million to $50 million and adjusted EBITDA for 2023.
At this time I'm going to hand, it over to Lee Bienstock, our president and COO to talk about some of our operational highlights during the quarter. Li. Please go ahead.
Thank you Anthony we continue to see substantial growth and new contract RFP opportunity, both in our mobile health and medical transportation segments.
Our last report on March 13, 2023, we have doubled the number of open RFP, which collectively cover a total contract value of approximately $1 5 billion.
The increase in Rfps is due to a larger number of opportunities in both existing and new geographies as well as our improved internal review and submission capabilities.
In particular, we continue to see a substantial amount of new RFP activity for mobile health services Dot Gov has successfully transitioned away from a mass COVID-19 testing centric business to a mobile health business covering a wide range of clinical services.
Our current backlog, which includes contracts that had been awarded but not yet fully rolled out currently totals approximately $205 million compared to $180 million that we announced on March 13th of this year.
The recent increase in backlog is largely due to a multi year municipal mobile health contract. In addition to several smaller ones.
In April we announced a partnership with Fresenius Medical Corporation, the largest kidney dialysis company in the U S to offer a more patient monitoring chronic care management and mobile urgent care services for Sirius and its affiliate nephrology practices manage a vast pool of 300000 patients.
We expect the initial enrollment to begin in may with several markets rolling out aggressively in Q3, we are very excited about the significant opportunity given the recurring nature of these revenue streams and ubiquitous application of these services to patients with chronic kidney disease.
Based on the eight current CPT codes, we estimate the revenue potential per patient per month to be approximately $250 100 of that amount is tied to RPM and the remaining 150 to Ccs.
In addition, this will become a self referring mechanism when monitored patients have abnormal vitals. We're are rapidly become the compensating that's all well respond onsite with a mobile health care provider when prudent.
We anticipate that gross margins for this RPM CCM offering when fully implemented will be above 50% with relatively low levels of associated SG&A and extremely low customer acquisition costs and a high customer lifetime value.
In the coming months, we will be working closely with Fresenius and its affiliate nephrology practices to identify and enroll qualified cohorts of patients into dock those rpms DCM program.
Revenues associated with our P. M. S. T. C. N are expected to become a significant contributing factor towards 2020 for revenue growth with the early impact felt late in 2023.
Okay.
During the quarter, we also acquired C RMS, which stands for cardiac remote monitoring solution.
Cardiac segment is one of the fastest growing sub specialties and rpms and this gives us access to a pool of approximately 400000 patients, which we can now enroll for RPM in CCM services.
Previously she RMS was focused on just the Cie D market, which is the cardiac implanted electronic device market now under the Doc on Brel up we can offer CCM services to this population as well.
This is a great example of how we can leverage that goes licensure technology, and mobile health workforce to improve patient outcomes and lower cost to payers, while expanding our revenue capture potential in the remote patient monitoring space.
That goes R. P. M. CCM strategy is intentionally focused on cardiology with CRE, Mezz and nephrology with Fresenius, and we anticipate announcing strategic partners and endocrinology and pulmonology in the near future.
Through both organic and inorganic means we expect to be providing RPM in CCM services to over 50000 patients by the end of 2023.
While we're on the topic of chronic care management, it's critical to understand the strategic value between municipal population health program and our CCM programs.
In the last 12 months, 75% of the patients we have seen across just two program approximately 600000 patients either did not have a primary care provider or did not know who their primary care provider was a large portion of these patients need someone to manage their care and this is where doctors.
Ms in managing care for the underserved population of America.
At this time I'll pass it back to Anthony.
Thanks Lee.
Before we hand, it over to norm I wanted to cover margins and a rapid normalization initiatives.
In January and February our major customer asked us to accelerate the rollout of a large project due to the incumbent winding down faster than contractually specified.
We were able to successfully launch on this accelerated timeline, which caused us to beat our revenue expectations, but it came at the expense of significantly depressed margins.
However, as of March and subsequent to quarter end, we experienced a significant rebound as the cost abated.
We are in a great position currently and our margin expectations for the year remain unchanged, we simply had a greater decline than we originally expected in January and February as a result of this accelerated rollout.
On a positive note the rebound with stronger than expected as well and margins are trending in the right direction.
With regard to our rapid normalization initiative. This is currently one of our most critical areas of focus.
While we are early on in this process as I mentioned above in March and subsequent to quarter end, we experienced considerable company wide cost reduction improvements, which we expect to support improved margins in Q2 and carries through the balance of the year.
Minimizing the impact of staffing agency labor constitutes a significant portion of this effort and in just the last 60 days, we have seen our agency labor utilization rate dropped from 52% to 41% with continued improvement expected over the coming months. We have also seen a 40% decline in the number of rental.
Vehicles utilized as we replace them with owned or leased units, which are about half the cost.
Lastly, the extremely high mobile health overtime rates, which we experienced in the fourth and early first quarter are abating as we institute controls, which are expected to drive that number towards a long term expectation of 5% overtime usage from the recent peak of 17%.
Currently that overtime number resides at approximately 7%.
Aside from our rapid normalization initiative. We are also seeing a loosening macro labor market, which is conducive to our growth and margin objectives as well.
Collectively we expect these measures to support our projected 37% gross margin exit rate for 2023.
I will now hand, it over to norm Rosenberg, our CFO to review the financials.
Thank you Anthony and good afternoon total revenue for the first quarter of 2023 was $113 million compared to $117 9 billion in the first quarter of 2020 to removing mass COVID-19 testing revenues from both periods recurring revenue increased by 40% year over year last year's first quarter included an estimated $38 million in mass.
Covid testing revenues, while testing revenues amounted to about a million dollars in this year's first quarter less than 1% of total revenues for the period.
Mobile health revenue for the first quarter of 2023 was $72 9 million as compared to $91 million in the first quarter of 2022 once again, excluding the estimated mass COVID-19 testing revenue in both periods mobile health revenues increased by 38% men.
Medical transportation revenue increased significantly to $40 $1 million in the first quarter of 2023, representing an increase of 44% from $27 $8 million in the first quarter of 2020 to nearly every core transportation market witnessed year over year and sequential revenue growth continuing the strong momentum in the second half of last year, we were.
Accordingly, net loss of $3 $9 million in Q1, 2023, compared with net income of $9 $4 million in the first quarter of 2022 net loss was partially driven by a large increase in noncash stock compensation, which was about $7 million higher than in the prior year period and more than the total for all of 2022 as well as an increase of more than one.
And our insurance loss reserves and approximately $400000 in nonrecurring legal costs relating to exiting the California transportation market as we discussed in our previous earnings release adjust.
Adjusted EBITDA for the first quarter of 2023 was a positive $5 $6 million as compared to adjusted EBITDA of $13 6 million in Q1 of 'twenty two as usual a reconciliation of net income to adjusted EBITDA has been included as a table in the earnings release.
Total gross margin percentage during the first quarter of 2023 amounted to 28, 1% as compared to 33, 9% for the same period of 2022 with stronger transportation segment gross margins outweighed by temporary weakness in mobile health gross margins during the first quarter of 2023 gross margins from the mobile health segment with <unk>.
Seven 7% compared to 37, 3% for the first quarter of 2022 margins were restrained by ongoing start up costs for projects that were launched late in 2022 and early in 2023 as we discussed on our last earnings call with a margin dampening effects continuing to provide an impact in January and February while last year's first quarter.
Gross margins were aided by the spike in Covid testing, we witnessed in the first few weeks of the year mobile health gross margins in March improved nicely due in part to the rapid normalization project is Anthony just discussed the key performance indicators that we track on a daily basis are all pointing in a positive direction over the past 60 days, serving as a leading indicator for the gross margin improvement.
We are expecting in the second quarter.
In the transportation segment gross margins decreased to 28, 9% in Q1 2023 up from 22, 7% in Q1 of 2022. This segment's margins continue to improve aided by higher price realizations on trips the ongoing shift towards higher margin leased our business and some easing of fuel prices.
Looking ahead to our gross margin trend we've continued to build on our progress in March with improved metrics through April and into me. This trend certainly bolsters our confidence that we're on track to achieve sequential gross margin improvement through the year.
We continue to make progress progress on integrating the six acquisitions. We have made since mid 2022 as we do so we expect to realize the margin improvements that we have targeted for each of these entities.
Looking at operating costs operating expenses as a percentage of total revenues amounted to 34% in the first quarter of 2023 compared with 25% in the first quarter of 2022. The key drivers of the increase in SG&A were depreciation and amortization and stock compensation expense, which are both noncash items noncash stock compensation expense, which we add back that.
The purposes of calculating adjusted EBITDA was approximately $8 $5 million in the first quarter. This year compared to $1 4 million in the first quarter of 2022 going forward, we expect that the quarterly stock compensation expense will track much more closely to the levels recorded in prior quarters, and we would expect that overall operating expenses as a percentage of revenue will be.
Low 30% going forward backing out depreciation of $3 6 million and the aforementioned stock compensation expense and SG&A amounted to 24% of total revenues in the first quarter of 2023 up a bit from 22% of total revenues on the same basis in last year's first quarter over the remainder of 2023, we would expect SG&A expense.
To decline as a percentage of revenues as we witness sequential revenue growth, while holding the line on or in some cases decreasing our SG&A expenses in absolute dollar terms.
Turning now to the balance sheet as of March 31, 2023, our total cash and cash equivalents, including restricted cash was $127 5 billion as compared to $164 $1 million as of the end of 2022 the reduction in cash during the first quarter was due almost entirely to working capital factors as accounts.
We will increase by $24 $7 million due to several factors, including the timing the timing of payments from high credit quality customers.
Also approximately $11 $5 million in acquisition related payments and about $2 million and capital expenditures looking.
Looking at cash flow from operations, our negative operating cash flow for the quarter of $23 million was entirely due to changes in operating assets and liabilities also known as the working capital categories, primarily driven by a longer payment cycle from some of our larger municipal customers. This is purely timing related and these are some of our highest quality receivables we would gladly.
Trade longer payment terms for greater assurance of being painful as we have up until now from these customers. Secondly, we feel that this becomes an actual competitive advantage for us when bidding on these large municipal deals. Unlike many of the providers with whom we are competing for these contracts we have the balance sheet and the capital to undertake large scale projects that require significant startup costs before we receive are.
First payments for services rendered we have liquidity to withstand temporarily negative cash cycle situation.
The situation on the projects in fact over the second half of April and into May we have experienced significant collections and cash inflows as our largest aged invoices are being paid most encouragingly. These recent collections and included primarily our most age receivables, which will result in a better day sales outstanding or DSO for our portfolio as we can.
Come to the end of the second quarter.
While this cycle leads to some large fluctuations in our cash balances from quarter to quarter. The balance sheet remained strong throughout the cash cycle given the collections, we have seen over the past 20 days or so we expect that we will return to generating positive operating cash flow in the second quarter as we have in each quarter. Since we went public up until this first quarter of 2023 combined with our.
$90 million line of credit, which could potentially be expanded by an additional $50 million, we havent financial wherewithal to execute stock buybacks acquisitions and to invest in new business lines and projects without the need to raise any new capital.
Turning to guidance, we are reiterating our revenue guidance for the year in the range of $500 to $510 million. We are encouraged by the first quarter's revenue performance, which was slightly higher than our internal forecast and by the increase in our backlog to $205 million from $180 million in just the last seven weeks the guidance revenue range would represent year over year top line growth of about.
14% to 16% on a gross reported basis, but excluding the impact of mass COVID-19 testing the revenue growth rate is really in the 36% to 40%, 40% annual range. We continue to expect that adjusted EBITDA will be in the range of $45 million $50 million with EBITDA margin acceleration expected as we go through the year.
This concludes my remarks at this time I'd like to hand, it back to you.
Thanks norm.
Before we jump into Q&A I, just wanted to briefly remind everybody that we will be having our investor day on June 20th at the NASDAQ market site in New York.
Interested parties. Please reference our recent press release on this event and followed the registration link our.
Operator, Please go ahead and open it up for Q&A.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Your first question comes from Mike Latimore with Northland Capital markets. Please go ahead.
Great. Thanks, Yeah good afternoon.
Hum.
Yes.
Interestingly the RF P value doubled since March 13.
Fairly significantly can you talk a little bit more about that are there.
Yes, a couple a couple of federal deals in there or is that mostly municipalities. You know maybe a little more color on that would be great.
Sure Hi, Mike its Lee.
So the number of RFP submissions outstanding is has actually doubled since we last reported that number or the total contract value has increased from $1 1 billion to $1 5 billion. So just to clarify that we're seeing really an increase across the board from federal deals to local municipal deals we continue to evaluate our RSP.
Opportunities across the spectrum on the government side.
So really it has included representation from the federal opportunities as well as the local and state municipal opportunities and I can add on with what we just said there is a certainly a macro trend across the country and more and more mobile health contracts existing rfps being.
Posted RFID are accused or more or less the same thing, but there is a much larger growing need for population health, especially for the underserved communities not just underserved communities and more of the classical sense of like a local homeless population, but also be a Indian health service, maybe even niche communities that once.
Arent as apparent there's a growing need for those.
Yeah.
And then the.
Mobile transport did very well again this quarter is that.
With the current revenue level and mobile transport.
Baseline that you can build off of or was there some sort of added you know used to be in there or something.
Yeah. So a couple of things something that we noted at the beginning of the quarters that we still had a percentage.
Of our I think at the beginning of year is closer to 40% of our ambulance contracts that were on a fee for service basis, where we took a risk on demand and we've been very successful in converting an increasing percentage of our revenue on the transport side to that at least our model by which we have downside margin protection.
So that's a significant part of it as well as trying to keep the SG&A on the transport segment, mostly mostly flat. So it's amortized over a greater revenue base norm do you have anything to add on that.
I would say the same thing it's always been as we've said, it's a little bit of a mix of organic and inorganic growth, but really it's a continuation of a trend that we've seen really since early 2022.
You know a lot of it is a matter of a little bit more focus some other customers coming online I think it is a pretty good base to build off of.
It's not much nonrecurring and then I guess.
Okay.
This class.
The comment about a goal of getting to 50000 patients in RPM.
I mean, just sort of a back of the envelope calculation I would suggest that's probably well over $100 million of business. Then if you hit that number I guess one is that a is that right.
If you get to that 50000, how are you thinking about organic versus inorganic.
Yeah.
Yeah, I mean, it's really you know all of the remote patient and remote device monitoring, which then leads to chronic care management comes from what we're planning on them from two main areas. The bulk of it is going to come from patients that are part of the cardiology practices that are already customers of.
Sierra Mass company that we mentioned that we acquired very late.
At the end of Q1, and so they basically already provide what's called Cie D, which is implantable devices apps and we are going to be able to offer to those cardiology practices RPM, which is kind of a non implantable device and then for the existing ones both on CIB and R. P M be able to.
To give them a chronic care management solutions, which is actually a larger reimbursement in both of those so that's it and then a smaller but still significant portion is going to come from the deal with Fresenius that we announced them. So those are kind of our main focuses on cardiology and then secondary focuses on.
<unk>.
Next question Ryan Macdonald with Needham. Please go ahead.
Hey, this is Matt Shea on for Brian Thanks for taking the question.
I wanted to follow up on the RPM commentary. So when we think about the 50000 patient goal to partners that you guys have announced or I suppose the one you acquired them that when you've announced with Fresenius, what kind of percentage of the population. There's 50000 patients represent and assuming this is a small part of the population today, how do you kind of see.
That opportunity today.
Today versus how can you scale to reach a bigger part of that population like what is what is that total population with those partners look like in your mind.
When we look at it very much is a.
When you look at the provider like the cardiologists and the Nephrologist what percentage of their patients that they see a meet medical need for these services. So for a cardiology practice on average its between 30 and 50% of the patients had already cardiology practice will receive value and meet the medical necessity for.
For a for.
For an RPM solution and then up though is you have a chronic care management or PCM both of those youre going to have about half of that Amit medical necessity for the management services that kind of goes up and levels of complexity.
On the nephrology side.
Nearly all of the patients, it's very close to a 100% of the patients.
Have you know medical need to meet medical necessity for RPM in the vast majority for CCM because the patient.
And in nephrology practice or patients being dialyzed, usually doesn't just have kidney.
Disease. They also have diabetes hypertension, and so their poly chronic and thus you know management is really critical so that's why the nephrology practice to have such a high percentage of the patients. There. So when we look at it and you want to look at what's the Trustable market you could look at the stats on.
Ah patients with cardiovascular issues as well as patients with with kidney issues and kind of the conversion percentages. I gave you is what we see for each one of the kind of clinics and providers.
Got it that's helpful. And then when we think about scaling that RPM solution into other specialty areas that you're not and you mentioned that a chronology and pulmonology.
You look at that as an organic expansion or would that'd be something that you would need to partner with or acquire in that space or how do you look at adding other specialties to your RPM offering.
Yeah, I think those two are going to come on the partnership side.
We have some some exciting partnerships that will be announced but in general Darko a strategy of growth is one that we don't we try to find synergies with other companies. So that we can eliminate the customer acquisition cost. So we'll find a partner in this case, we already have the two partners.
And those partners already have access to patients that have these diseases.
Multiple diseases and they don't currently offer RPM, PCM or CCM or mobile urgent care services to this population to say, okay. You already have a relationship with a patient who has a very close intimate relationship with the patient can we now offer in these increased value added services to them.
So both of those will be launched in partnership with two existing large players.
Next question, Richard close with Canaccord Genuity. Please go ahead.
Hi, This is John pending on for Richard Thanks for the question. So you're at the backlog at a $25 million I'm sorry, since last quarter and is any of that factored into guidance now or is that more of a 'twenty 'twenty four start sorry.
Yeah. It's a good question Lee why don't you take that one yeah, absolutely hi, Jon So the vast majority of those projects will launch towards the back half of this year and will ramp those significantly heading into 2024. So some of that revenue will come on line, but the vast majority of that will be starting and ramping in 2010.
Three as we head into 2024.
Worth noting that also those that those revenue streams also have kind of a similar.
<unk> line on them. So most of the revenue we have is kind of it's a three youre looking at that at that 200 plus million dollars over a three year period.
So short answer is that it's not baked into guidance right.
Okay, great. Thanks.
Also like do you have any insight as far as that backlog or anything you can provide us as far as what the breakdown would be for like mobile health first transportation revenue.
Yeah. So the vast majority of the increase in the backlog or mobile health, New mobile health contracts.
Hum.
Almost all of the increase that you noted is our mobile health contracts.
Okay, great. Thanks.
And then just one more one more question for the rapid normalization you say here that that phase one is coming to a complete like completion at the end of July that's what you're saying in the press release.
That's sort of implies like a phase two is there any detail you can provide there or is there something that's going to be like additional in that initiative coming in after July .
There will the phase two will get the additional 300 basis points I'll give more detail as to the very detailed how that's achieved and we already have a quite planned out but yes, there will be a phase two to get the entirety of that 600 basis points.
Margin that we with some degree we'd give up.
And where we're actually ahead of track on phase one right now.
Okay, great. Thanks, so much.
Next question, Craig Jones with Stifel. Please go ahead.
Alright, thank you.
I wanted to ask on the margin side. So one as you think about sort of the ramp through the year for the margin expansion will that be fairly linear.
So.
And Hey, Craig how are you doing I think that when we first planned it out when we first started talking about it obviously, we modeled out in a pretty linear fashion.
That's sort of not the way, it's playing out right I think that youre going to get the steeper piece of the curve.
On the in the earlier phases from here on out like we had talked about how we saw some good rebound in March we saw some pretty dramatic change in some of those kpis.
Leading indicators for us on the margin.
As we head into Q2, so I would say that.
As far as as far as the margin expansion that relates to the rapid normalization I think that that's become a little bit more I guess at this point front end loaded in the next couple of quarters, and then backend loaded the curve the curves a little steeper.
Which is a good thing when you're not when you're talking about.
Okay.
Yeah, absolutely, okay thats good to hear.
Yeah.
It's also a purely linear in the sense that you know.
If we were to look at our daily margin from here.
End of the year, it's not it's not when we get it up in one direction or are you just going to it's going to fluctuate a little bit based on different things that are going on.
Based on many many different factors, that's why even though we look at this stuff on a daily basis.
Sometimes we need to take a wider angle look at it and go out to a week a month or a quarter.
But the direction on accounting basis should be to be linearly increasing.
Okay got it and then so it looks like you know as the mass Covid testing revenue has.
Fallen off that the margins are.
Come down at the same time is there any way to size what the headwind to margins why is that is that revenue show at all.
So you know we've talked about this a little bit in the past is a little bit tricky because when we look at the projects on a project by project basis or project category by project category basis.
In the mobile health projects that we're undertaking now have really the same margin profile, albeit broken into different pieces, but they have the same kind of margin profile as would those projects. When we were doing a year ago or more I think where you get where you get the impact is when we had those spikes in the mask Covid testing. So we saw that in Q4 of 2021.
Thought at the beginning of Q1 of 2022, where you had a project where you're primarily getting paid on the basis of hourly wage.
Getting paid by the hour for the employees that youre dedicating to the projected for the vehicles or wherever it might be and when you have a a site that used to do 100 Covid tests in a day and then all of a sudden that same site is doing three or 400 Covid test in a day that incremental piece comes at a very very high margin. So it was sort of a difficult comp for us both in Q4 and.
And again here in Q1.
But overall, that's that's not it's not necessarily the case I mean, we have not.
As we've replaced margin I'm, sorry, I was going to place that COVID-19 revenue over the long run that that revenue really should be coming in at about the same kind of margin that we had seen in the past correct. When we bid on those new Rfps, which is that that same backlog, we really have not changed the margin profile that we put into those new contracts.
Okay got it thanks, that's all for me.
Once again, if you would like to ask a question. Please press star one on your telephone keypad.
Your next question comes from Sarah James with Cantor Fitzgerald. Please go ahead.
Hi, Thank you.
Talk a little bit the comment about.
Startup costs, which impacted gross margin.
Was that the large new York contractor should we think about that as being like a second wave of startup costs that we should model in for later on this year.
Yes, due to kind of the nature of the contentious relationship with the incumbent we can't disclose the actual contracting question, but.
To your general question, Yes, it was a.
It was to some degree unexpected because it was an accelerated launch timelines so more than just the normal start up costs, which we tend to plan for and we've talked about that 600 basis points. In this case, we had to accelerate many months faster than we had anticipated purely because the incumbent of that contract.
Decided to basically pull out and and kind of avoid some of their contractual obligations and of course has been customer first company. We stepped in and we over delivered for that customer, which is why you see that our revenue actually and have beat some of our expectations, but it did come at a.
With margin contraction.
Okay.
And then I think.
Hi.
Got.
Explorer and Chi the RPM.
That's about <unk>.
That might affect efficiency or patients per day that.
Okay.
He might be able to handle them given that theres going to be some more interaction or maybe longer visits at the helm.
I don't think we haven't seen that the visits will necessarily be longer.
But we plan to you in our Investor day in June to give some really specifics around the average amount of at home visits per patient per kind of period of time.
So you know in that will try and help to build the model to say if I have a patient who's a cardiology patient what is the frequency by which they're going to need a primary care intervention per year or a urgent care intervention per year or maybe an ambulance transport per year, what percentage of them are going to get more.
Managed versus just monitored so we're well in the into the thick of it you know we have a fair number of patients on right now so in that June meeting, we plan to kind of package it together and disclose as much data as we have to help you build a model where else can look at it here from a from a unit economic standpoint, so not only is it.
Anthony talked about what our estimated lifetime value or annual value of a patient would be but also on an interaction by interaction basis like what are the unit economics of.
Of that kind of thing and also comparing it to the unit economics that we've seen out there.
Are not comparable to ours.
Alright, and then last question if I could on the <unk>.
General.
Jamie is there any update you can give us on how does locations are ramping up to be.
Hum that you expected or that dollar general is hoping to see.
Sure Hi, Sara Lee So the volume continues to increase with the volume continues to increase which which we're excited about I definitely think we are working on getting our marketing mix correct and our promotional mix correct and in addition, as Anthony mentioned I believe on the last call. We're looking at other public private partnership.
Opportunities as well so you'll notice in our release, we talked a bit about how some of the dollar general locations will be serving as public health a population health locations were underserved populations can receive services as well. So we believe that those opportunities together will bring more access to people at dollar general locations.
<unk> is a great location for that access and we'll continue to look for opportunities to expand there as well.
And it's worth noting the current.
Pilot that we have with dollar general is a pilot.
With dollar general, but its also supported.
With funding from the state of Tennessee, and so it was already proving out what I said on the last earnings call, which was trying to bring together the municipal with the private to the public and the private partnership to solve this rural health care need which allows for don't go to have more.
<unk> side margin protection that was the barrier that I mentioned, where I said, you know obviously everybody wants us to scale rapidly with us it's been a I think a quite a success, but dacko doesn't do fee first so we don't take risk on fee for service medicine. So we needed a model by which allowed us to protect our downside margin and so now that we have that with you.
With the dollar general pilot their main purpose right now or the current phase of Dow General is to prove out the relationship determined can we scale. This model by which we have a public private partnership that has high demand and gives <unk> downside margin protection, that's where we're at right now.
Very helpful. Thank you.
Next question Jeb Terry with Aberdeen investment management. Please go ahead.
Good afternoon, Matt.
Oh, yeah, very very very exciting growth, so and I was very excited to see the activation with the state of Tennessee can you give us a little clarity on on the your bullet regarding the 911 telemedicine program, but the F T N y.
Yeah. The 91 program they have with F. D N Y 10 minutes and program to basically.
It goes into the realm called pre hospital work, so pre hospital work to try and lessen the amount of unnecessary visits that need to be transported to a hospital. So it was an RFP that was put out through all of New York City with a lot of people bidding on it.
And it's been its something that will really help the community. So imagine that don't go as the ability to respond partnership with F. D N Y with our mobile health providers under the supervision of a hospital's based telehealth system.
And that that that you know kind of Paris together the municipality the health system, and then doctor with the private provider in order to try and reduce the amount of E. R admissions.
Yeah.
And then just kind of have an idea.
Alright.
And all of the World.
It is yes, it's across the <unk>.
[noise] tier city do you mean idea of size and don't quote me because I'm not an expert on these stats, but Afghan why does millions of transports a year.
Okay.
Well that's really.
Really good.
Yeah. The goal is really can we help triage and address these calls that are coming in to make sure that it is indeed, an emergency and someone doesn't do you need to go to the to the E D.
If they don't then helping provide services for them outside of the E D.
Got it.
So this could be a material bump to the transportation business at least in addition to.
Telemedicine services that you'd have actual.
People.
On the calls.
I don't know on the transportation side, because if they do need to get transported fdny will be the one who will likely transport them. This is really a mobile health opportunity, but a considerable one.
Okay I understand.
So perhaps a question for Lee.
Given all the Rfps and the growth in those Rfps and you had a considerable number going into that I guess, there would be quite a few that are reaching some degree of a culmination.
Kim is it.
Should it be expected that there may be kind of a bulge, if you will and awards or at least some outcome.
Hmm here.
Here in the next number of weeks I guess as we go through the end of this quarter.
Yeah. The the team is certainly looking forward to hearing back I can tell you that on a lot of these a lot of these opportunities absolutely and we have heard back on a number of them are the.
The way the the way the process works as usually we will get provided with what's called an intent to award. This is when the process culminated in them, reaching out to us and notifying us whether or not we are intended to award and then we will enter into the contracting phase. So in cases, we have heard back.
Unintended to award for strategic purposes, we don't announce every single contract we win for competitive reasons. We don't announce every contract we win that being said we have been notified on on some of them are.
And we look forward to hearing back on others and once they culminate in that contract being finalized not just an intent to award a contract in place, you'll probably be hearing more and more about those.
And just so that you have some Mexican Jeremy we did win a large population health contract. The <unk> contract you mentioned large employee health contract on the West coast as well as numerous.
Significant federal government contracts among many others. So we have heard back we just there's no.
Cases, when we feel we can announce it without hurting the contract itself or are kind of strategic IP.
Or.
So, but there have been a fair number we've heard back on and our win rate has remained fairly consistent.
So therefore in addition to the 50000 R. P. M. C. C M patience that you feel like you'd be.
Serving by the end of this year relative to Fresenius and the cardiac side.
Could these these awards would be additive to all that.
No.
It sounds like 2024 could be.
Significant.
Step function kind of growth from where we are today.
Yes.
The ones that.
I, just mentioned and the ones that we've been awarded or not and you know any guidance.
Understood.
Perfect.
Thank you very much man.
Thanks Jeb.
Thank you we've come to the end of the Q&A session. This does conclude today's teleconference. You may disconnect. Your lines at this time and thank you for your participation.
Okay.
Yeah.
Okay.