DocGo 2026 Q3 Earnings Call

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.

We have a lot to cover on today's call. First, Norm and I will dive into the operational details, and then I'll discuss the CEO transition. Today, I'm pleased to report considerable progress on our path toward profitability. For the quarter, we generated revenue of $73.4 million and reported an adjusted EBITDA loss of $3.2 million, compared with losses of $6.3 million in the second quarter and $10.2 million in the first quarter, while revenues have remained relatively consistent. Today, we also reaffirmed our full year 2026 adjusted EBITDA guidance of a loss of $17 million-$22 million and revised our revenue guidance to approximately $300 million from $305 million-$310 million previously. The revenue revision reflects our ongoing efforts to optimize the business by restructuring or discontinuing unprofitable business lines.

We expect these efforts to continue in the fourth quarter and into next year as we prioritize profitability and cash flow. With profitability remaining a central priority, I would like to discuss the key drivers across revenue, gross margin, and SG&A. First, revenue of $73.4 million was relatively flat sequentially as growth in select areas offset the impact of eliminating unprofitable revenue streams and optimizing existing operations. We are currently winding down our medical transportation business in Upstate New York, which generates approximately $10 million in annual revenue. I will discuss the financial benefits shortly, but we believe this is an important step toward profitability. We have also discontinued or restructured certain care gap closure programs within our Care in the Home business, contributing to a modest revenue decline in the third quarter.

Although Care in the Home is on track to incur a loss of approximately $5 million in 2026, its profitability has improved significantly. We expect the business to achieve positive adjusted EBITDA on a contribution basis late this year or very early next year, alongside substantial revenue growth in 2027. We continue to view Care in the Home as a key aspect of our vertically integrated differentiated care delivery platform, a holistic offering that meets the needs of our healthcare partners and their patients by offering virtual care when it's efficient and in-person care when it's needed. We plan to continue expanding our model with a disciplined approach to growth and an emphasis on profitability. Second, gross margin improved to 33.3% in the third quarter, up from 30.5% just last quarter.

This improvement came despite continued elevated fuel costs driven by geopolitical events, which reduced consolidated gross margins by approximately 38 basis points compared with the year-ago period when fuel prices were lower. While we have been successful in most markets we have entered, some have not met our profitability thresholds, and we are winding down or restructuring those select business operations. As noted earlier, we are winding down our Upstate New York medical transportation business. Excluding that market, our consolidated gross margin would have been 140 basis points higher. In addition to the positive impact that discontinuing operations in that market will have on gross margin, it is also expected to contribute an approximate $3 million adjusted EBITDA loss this year that will not reoccur in 2027.

Third, adjusted SG&A improved to $28.7 million in the third quarter, compared with $29.7 million in the second quarter and $30.8 million in the first quarter. This improvement was driven in part by the significant corporate workforce reduction implemented in June. Additional reductions in September should support further improvement in the fourth quarter. We are also realizing the financial impact of vendor renegotiations completed earlier in the year and continue to leverage the benefits of AI to increase operating efficiencies across the business. One example is the launch of automated outreach via AI voice agents for our in-home visits, which has reduced cost per booking by over 50%. Turning to liquidity. Our cash burn is also improving. Unrestricted cash was $19.1 million as of September 30, compared to $25.2 million at the end of the second quarter.

At the beginning of the fourth quarter, we closed the first tranche of our debt facility with Perceptive Advisors totaling $12.5 million. An additional $12.5 million is available upon the closing of the Hicuity Health transaction later this year, with an additional $25 million available, subject to maintaining $130 million in Mobile Health revenue. For context, Mobile Health revenue, including Hicuity, currently stands at more than $150 million. Our goal is to minimize borrowings under this facility as we continue to advance towards profitability. In addition to reducing operating cash burn, we are making significant progress towards collecting longstanding receivables associated with our discontinued municipal population health business. Two major receivables total approximately $19 million, and we have made meaningful progress on both. The smaller receivable is approximately $6.7 million, the majority of which we expect to collect imminently.

The other receivable, totaling $12.6 million, will likely be resolved late this year or early in 2027. Taken together, these developments reflect substantial improvement in both liquidity and profitability, and I remain optimistic that these trends will continue. We remain firmly committed to our goal of exiting the year at a profitable run rate and continue to make meaningful progress towards that objective. At this time, I will hand it over to Norm to review the financial details.

Thank you, Lee, and good afternoon. Total revenue for the third quarter of 2026 was $73.4 million, up 4% from $70.8 million in the third quarter of 2025. This was our first year-over-year revenue increase since the second quarter of 2023, a meaningful milestone that we believe reflects our progress in repositioning the business for growth. To put that in context, last year's third quarter included $8.4 million in migrant-related revenue. Excluding that revenue from the 2025 comparison, third quarter revenue increased 18% year over year. That increase was largely driven by SteadyMD, which we acquired in October 2025 and which contributed $7.8 million in revenue in the third quarter of 2026. Excluding both migrant-related revenue in the 2025 period and SteadyMD revenue in the 2026 period, revenue still increased about 5% year over year.

Medical transportation services revenue reached $53.3 million in the third quarter of 2026, up 6.4% from $50.1 million in the third quarter of 2025. This surpassed the second quarter's transport revenue and set a new quarterly record for DocGo. Growth came from both large and small U.S. markets, with some of the strongest gains in the New York City market, in Delaware, Wisconsin, and Tennessee. We continue to see increasing demand across most of our markets. Mobile Health revenue was $20.2 million in the third quarter of 2026, which included no contribution from migrant-related revenue, compared to $20.7 million in the third quarter of 2025, which included $8.4 million of migrant-related revenue. Specifically, non-migrant Mobile Health revenue increased 64% year over year. That growth reflected increases in remote patient monitoring and mobile phlebotomy, as well as revenue from SteadyMD, which we acquired during the fourth quarter of 2025.