DocGo Inc. Common Stock 2026 Q2 Earnings Call

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 made in this conference call, other than statements of historical fact, are forward-looking statements. The words may, will, plan, potential, could, goal, outlook, design, anticipate, aim, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions may be used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance, and we cannot assure you that we will achieve or realize our plans, intentions, outcomes, results, or expectations. Forward-looking statements are inherently subject to substantial risks, uncertainties, and assumptions, many of which are beyond our control and which may cause our actual results or outcomes or the timing of results or outcomes to differ materially from those contained in our forward-looking statements.

These risks, uncertainties, and assumptions include, but are not limited to those discussed in risk factors and elsewhere in DocGo's annual report on Form 10-K, quarterly reports on Form 10-Q, our earnings release for this quarter, and other reports and statements filed by DocGo with the SEC to which your attention is directed. Actual outcomes and results, or the timing of results or outcomes, 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 and the current report on Form 8-K that includes our earnings release, which is posted on our website, docgo.com, as well as filed with the SEC. 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 to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events, except as to the extent required by law. At this time, it is now my pleasure to turn the call over to Mr. Lee Bienstock, CEO of DocGo.

Lee, please go ahead. Thank you, Mike, and thank you all for joining us today.

The second quarter was a transformational period for our company, and the recent weeks marked a number of key milestones. Today, I'd like to share four significant updates with you. Number one, we signed a definitive agreement to make our largest acquisition to date. Number two, in connection with the acquisition, we received a commitment for a major new source of funding. Three, we achieved record volumes across our key business verticals. Four, we advanced our vision of integrating DocGo's technology and care delivery offerings to create one of the most innovative healthcare delivery platforms in the industry. A holistic tech-powered offering that enables us to match the right clinician with the right patient at the right time in the right setting.

A uniquely differentiated platform that improves patient access across the entire healthcare continuum, from the hospital to the home. I have never been more excited or more optimistic about the future of our expanded offering than I am today. Let's get into it. First and foremost, we formally announced in March that the company had undertaken an exploration of strategic alternatives to enhance shareholder value. Today, we're announcing that we've signed a definitive agreement to acquire virtual care provider, Hicuity Health. This marks our second major acquisition in the virtual care space in the last nine months. While we plan to host a webinar in the coming weeks to share a deep dive on Hicuity Health and the powerful growth and cost synergies of this acquisition, I wanted to share an overview with you today.

St. Louis-based Hicuity Health is a leading provider of acute and critical care telemedicine services, with an impressive roster of long-term relationships and a diverse portfolio of hospitals and health systems across the U.S. Hicuity's 400-plus clinical staff provide high acuity virtual care services that include Tele-ICU, virtual nursing, and telemetry monitoring, which are all managed by Hicuity's proprietary clinical monitoring and patient management platform called The Hub. DocGo and Hicuity have shared DNA. Both companies have developed proprietary technology platforms that help optimize scarce clinical resources, whether it be an advanced practice provider delivering critical care in an ICU or a mobile health clinician bringing preventative care to a patient in the home. Merging the Hicuity Hub into DocGo's existing proprietary health tech stack will enable us to better match the right provider with the right patient at the right time in the right setting.

Combining Hicuity's strength in providing care in health system settings with DocGo's technology-enabled mobile model that delivers care in the home, it differentiates our offering far beyond a single-point solution on the patient journey and positions DocGo to support patients across the entire care continuum from the hospital to the home. The combination strengthens DocGo's technology-enabled care delivery model, expands our presence within health systems where we already have entrenched relationships and creates additional opportunities to expand and cross-sell our robust suite of virtual services, care in the home, and remote monitoring. Much like we are experiencing with our SteadyMD acquisition, we expect to realize significant operational efficiencies while leveraging our expanded platform to support future revenue growth. A dedicated cross-functional integration team has already begun planning integration and cost-cutting initiatives across operations, technology, finance, legal, human resources, and clinical operations.

Some specific areas we have identified include combining shared corporate functions and reducing duplicative administrative costs, leveraging a common technology infrastructure and operational platform, optimizing third-party vendor relationships and procurement, streamlining clinical operations across both organizations, and expanding cross-selling opportunities by offering a broader suite of virtual, mobile, and in-home healthcare services to customers. In sum, we expect our acquisition of Hicuity Health to create a scaled, unified mobile and virtual care delivery platform that powers health systems, health plans, and digital health companies and represents an important step in advancing our care-anywhere strategy. Second, I'd like to share the details around the Hicuity Health transaction and our new funding. Hicuity Health brings an established revenue base and proven operating platform. On a trailing 12-month basis, Hicuity Health generated approximately $65 million in revenue and $4.5 million in adjusted EBITDA.

Under terms of the agreement, DocGo will acquire 100% of Hicuity Health on a cash-free basis while assuming the company's existing indebtedness held by Perceptive Advisors. At closing, the debt is estimated to be approximately $52 million and will now mature in December 2029. In addition to assuming the existing Hicuity Health debt, Perceptive Advisors has also committed to provide up to an additional $50 million of financing to DocGo in multiple tranches, the first $12.5 million of which will be funded with the execution of a services agreement through which we will provide management-related services to Hicuity Health during the pre-closing period. We expect to finalize this agreement in the near term.

As part of the overall consideration, DocGo will issue new equity representing 2% of DocGo's fully diluted outstanding common stock at closing, all of which is going to Hicuity Health's preferred equity holder, who may receive an additional 3.5% equity interest if DocGo achieves a market capitalization of $250 million within three years of closing. Perceptive Advisors and Hicuity Health's preferred equity holder both have strong roots in healthcare and deep connections across the industry. We believe our strategic relationships with both of these partners have the potential to create additional value for DocGo in the months and years ahead. Third, our business performance remains strong. Across all business lines, we achieved record volumes during the quarter, with U.S. medical transportation increasing 15%, healthcare in the home increasing 26%, mobile phlebotomy increasing 20%, cardiac and remote patient monitoring increasing 13%, and virtual care and lab orders increasing 58% when comparing year-over-year results.

On the business development front, we signed a new contract with one of the largest national health plans to offer services to their members in Pennsylvania. Additionally, we grew the total number of patients assigned for our care gap closure services to 1.7 million since inception, up 100,000 from last quarter. We continue to be extremely pleased with the performance of our virtual care provider, SteadyMD. Despite the summer months typically being the slowest for telehealth services of this nature, SteadyMD saw volumes similar to those of Q1. The large enterprise deal we completed with a leading online pharmacy in early Q2 is expected to be a key growth driver in the second half of the year as it scales. We continue to make progress with our efficiency initiatives.