Thank you for coming to the conference, everyone, and spending the afternoon with us. I'm Richard Close with Canaccord Genuity. Excited to have DocGo here. I think they've been with us three years now, virtual and in person. We have CEO Lee Bienstock and VP of Investor Relations, Mike Cole, in the audience. DocGo is a leading provider of medical transportation as well as increasingly mobile health business. During COVID, obviously, saw a lot of interest and demand, and that's continued since that.
So, it's been an eventful several years, needless to say, with COVID, as I mentioned, and exiting that and creating some negative optics on growth and, then obviously the migrant, New York City business that, we talked a lot about last year at this event. 'Cause there was a lot of movement going on at the time, with respect to that. But, you know, you've continued to evolve the business, and, it'd be nice to focus in on that in our conversation today. And expanding the customer relationships, from municipalities to now health plans, and obviously, you had the provider health system market with the medical transportation previously. So, you know, with that being said, you reported your second quarter last week, and provided a decent update.
So, you know, maybe spend a couple minutes, Lee, in terms of talking about what you think the biggest takeaways are from the, you know, second quarter report and looking forward.
Yeah, absolutely, and it's great to be here at the conference in person. It's been a great conference so far. Thanks for having us. So yeah, for those kind of newer to the story, DocGo is a mobile healthcare and medical transportation company, one of the largest in the country. Really, what we do in a nutshell is we bring care to where it's needed, when it's needed. We operate in 30 states today and the U.K. We've seen about 7.5 million patients since the company started, and we help serve, as Richard said, hospital systems, municipalities, and payers. Perfect timing. You called it a decent update. I think it was a great update for Q2, which we had our call last week, and basically on that call, we shared a couple of key highlights.
First off, we did over $165 million of revenue, which was up over 30% year-over-year. We did over $17 million of adjusted EBITDA, which was up also year-over-year, net income positive, and we also made significant progress on the cash balance. So we increased the cash balance from a little less than $60 million to over $85 million in cash. So a really great quarter for growth, a really great quarter for bolstering the balance sheet, which we can talk about, and I think we really checked a lot of the boxes that our investors were telling us they wanted to see from us. We were delivering on the cash collections, and then we really started to heavily emphasize growth outside of the migrant programs across the three customer segments, which we can talk about.
But really building a really wonderful and significant pipeline of opportunities for us to deliver medical transportation to hospital systems, for us to deliver mobile healthcare to hospital systems as well, as well as our municipal customers and our payer, customers. And really, our goal is to work with those three customer sets to bring care to their patients.
If we bring care and we meet patients where they are, we think we can help make people healthier, and the healthier patients are, the more cost-effective and the cheaper they are on the system, which then allows us to bring care to even more people and create this wonderful virtuous cycle where the payers are happy because they're paying out less, patients are happy 'cause they're healthier, the hospital systems are happier because we help them run efficiently, and the municipalities are happy because we help them care for their underserved populations. So, we really made great progress for that. We shared a lot of great examples on the call, which I'm sure we'll get into, but, growth year-over-year, profitability, and cash collections, I think, were the key headlines.
Good place to start. So you have, you know, two reporting businesses, medical transportation, you have the mobile health. That's how you report. Transportation's about 30%, mobile health, 70%, but if you X out, exclude the migrant business, it's about 50/50. You bring up the different channels that you have, the payers, providers, municipal. Can you break down the business by those channels for us a little bit? Just a little bit more detail there would be good.
Yeah, so our official segments, as you're alluding to, are medical transportation, which is basically about a $200 million run rate business right now. Essentially, the way to think about it is, we've built Uber for ambulances. Hospital systems can go in, in a click of a button, they can order medical transport, and they can see an exact ETA of when we're gonna arrive, which is convenient, but also critical for operations because they know when to get the patient ready to be discharged, and then that bed frees up for the next patient. So we help them run efficiently, and that business is about a $200 million business. It's about 25% of the-- It was about 25% of the revenue in Q2.
Obviously, it's a larger percentage of our base business once you take out the migrant revenues from the, you know, from the equation. For those just, the migrant revenues we're talking about is the company, my company, DocGo, has significant contracts that has been reported on to help with the asylum seeker crisis in New York City. The one that's been covered widely is with HPD, the Department of Housing Preservation and Development, and we helped respond to the influx of asylum seekers that were coming from the southern border in New York, and it was a large contract, and it's been, you know, reported on.
And so what we've been doing is we've been taking that migrant revenue, that municipal revenue on the migrant side, and just putting it off on the side, which we shared was gonna be about $300 million-$350 million of the revenues for this year. And so, you know, getting back to it, the hospital system side, we think, is about a $200 million business for this year, going to $250 million for next year. The municipal side, without the migrant revenue, is about $100 million for next year, and the payer side, which is our work with remote patient monitoring, care gap closure, working with the payers for bringing proactive care, is gonna be a $50 million business next year.
Okay. You mentioned the migrant revenue this year. You're putting it aside, but how should we think about, like, as that spills into... If it spills into 2025, and then just eventually goes away, I guess if you're providing healthcare, you talked a little bit about this on the call, if you're providing healthcare, it might continue to some extent. Just thoughts around that.
Yeah, so I think they're very likely, although we still don't know necessarily how much, I think it's possible for some migrant revenue to extend into next year, and that would be relating to the medical care that we're providing, the vaccinations, the infectious disease screening and control, the intensive case management and social work that we do, the depression screening that we do. That would be the type of work that potentially extends into next year, to help ameliorate some of that medical need and some of that, and address the medical needs of newly arriving asylum seekers. The parts of the work that, again, have been talked about in the press around food and security, and shuttles and things of that nature won't extend into next year.
That'll be wound down here over the next, call it 60-90 days.
Okay. So you were big into COVID, and, and you got into this migrant business, as well, and, you know, the fact of the matter is, you had a customer that came to you and said, "Hey, I need help," and you guys stepped up to the plate, to do that. How do you think about the business going forward in terms of, you know, what business you bid on or go after, or clients you try to help, and, and then balance that with, like, the investment community-
Yeah
... and controversy...
Yeah, so we, I think, you know, we have grown a lot, have learned a lot through some of these municipal programs. I think particularly we've realized that some of them could become polarizing, politicized in some way, and, you know, when we got into a lot of these municipal health programs, our goal, and it remains to this day, it was altruistic, it was in keeping with our mission to bring care to all those who need it, where they need it, and, you know, that's really the way we viewed these projects. And we had our customers coming to us, saying: Can you help us with this humanitarian crisis? And, you know, I always tell people, now, I guess hindsight is 2020, and we were criticized, perhaps, for taking some of this work from the investment community.
But you have to remember, at the start of the crisis, and even throughout, you know, I was standing in some of these humanitarian centers, and we were vaccinating children the same, you know, same age as my children, and they'd never been vaccinated for MMR and polio and things we take for granted. Children that needed eye exams, that clearly couldn't see the whiteboard, perhaps, at school or couldn't read because, you know, they needed glasses. You know, we were finding people, unfortunately, that were suffering from depression and suicidal ideation, and we were giving them counseling and therapy. And so, to us, we were really doing what we were meant to do, and we are doing what we're meant to do, which is to bring care to those who need it, where they need it. It's not us to comment on immigration policy.
It's not us to comment on how long asylum seekers do or don't get to stay for. Our goal has always been, and always will be, to just provide the medical care, and we'll let the politics, you know, sit outside the company. It's not really for us to opine on. And so that's the way we viewed it. And I think that medical care, you know, you'll see us take on, as long as things don't get politicized, the thing is, things are not highly charged and they're not politicized in nature, I think we wanna help those who need help, and I think we'll continue to do that.
I think you'll see us focus less and less on emergency and disaster response, things of that nature, which the investment community is telling us is more episodic, it's case to case, it's episode to episode, and I think we're focusing, and we have focused, we're continuing to place heavy emphasis on population health programs that are bringing care to underserved communities, and that may be, caring for unsheltered homeless populations, bringing care, to communities, in mobile clinics that don't have access. They're in, perhaps, healthcare desert, type of, geographies, and we can bring care to them. Longitudinal care, care that they're gonna need today, care that they're gonna need tomorrow, next year and the year after. We're gonna focus on those types of RFPs, and there really should be nothing polarizing or politicizing about, those types of opportunities.
So how do you think about, let's say, hypothetically, a federal government contract and for whatever it is, that, you know, might have a term of four years, or it might be, you know, significant revenue? Would you maybe shy away from something like that, that, you know, potentially you could get a revenue cliff if it doesn't renew? Or, as you talk about municipal and population health, I'm curious, in terms of the type of contracts that are-
Yeah
... in the pipeline, are they just like singles?... or doubles, and, and just how you think about that as you go out and bid for business?
The way I think about it is, we wanna be an extension of the public health response. We wanna be additive to the public health response. We wanna be a value add to the population health needs of municipalities. And so the way I view it, even when we talk about New York City, we've been helping them for many years. I mean, you mentioned COVID, we didn't talk about the mpox work that we did. We did mobile vaccination work. We've been caring for the unsheltered homeless, and so to me, I think when we partner with municipalities, and we've proven that, that we can be a longitudinal partner for them, and depending on whatever the population health need is at the time, we're their preferred partner.
We've found that, and so I think, that's the reason why we see our municipalities continuing on with us. Let's say they're focused on one population health need, then they go to the next focus, there will always be population health and public health initiatives that will happen in our large cities, and we wanna be a part of that.
Okay. That's helpful. So when you think about the channels, the payers, providers, municipal clients, can you talk about the pipeline and how that, you know, divides between those groups and how to think about that going forward?
Yeah, so I'm really excited about the pipeline we have. I think we've placed heavy emphasis on this as we are winding down the migrant contracts with HPD. We are ramping up the pipeline, freeing up resources for us to engage with, as you said, hospital systems, payers, and other municipalities. We have a large number of varying stages opportunities, opportunities in varying stages, I should say, in the pipeline. There are initial conversations happening. There are things that are currently being signed for us to deploy. So I'll give you a few examples for each of them. So on the hospital system side, we're really focused- we're continuing to expand our medical transportation unit. We're signing new hospitals, and we're expanding with the hospitals we already have to do more and more medical transportation.
I think we'll look to expand to additional geographies on the medical transportation side, and usually, what that will mean is we'll sign and partner with a hospital system that will bring us to that geography, and so I think you'll see us look to do that in the coming months and next six months ahead. Then for hospital systems, in addition to medical transportation, we have opportunities for transitions of care, and what that means is, as a patient is leaving the hospital and transitioning to home, or let's say a nursing facility, we go, and we care for that patient post-discharge to make sure or to help ensure that they don't bounce back to the hospital. The hospitals are very incentivized for this.
Their quality scores are tied to this, and the insurers definitely don't want a patient to bounce back to the hospital, and so we have deals in the varying stages of the pipeline for that. We're doing programs like that today with L.A. Care. We're doing programs like that today with hospital systems, so that's kind of what that pipeline looks like. On the municipal side, we just shared that we launched a program with the state of New Mexico to do virtual nursing, behavioral healthcare. We just launched a program in Arizona to do radiology and X-ray type work for municipal customers, and we just launched the mobile X-ray deployment, so we can go and screen and do X-rays for different communities in New York, and so and other areas.
So we're gonna continue to expand those. So those are programs you can imagine, things like virtual nursing, behavioral healthcare, X-rays, those are evergreen-type programs that we're gonna expand. Those are the types of programs we have in the pipeline for the municipal side. Then, on the payer side, we have a large number of payers that we're now contracting for, to do care gap closure in the home, and what that means is the payers say to us, "We have a set of patients that have care gaps that need to be closed. Perhaps they need a bone density scan, a diabetic retinal exam, their meds titrated. Maybe they need a colon cancer screening, vaccinations." We do 45 different clinical offerings in the home, and they give us those patients that are chronically ill.
We engage those patients, and instead of, instead of engaging them and say, "Hey, we need you to come into the clinic in a month from now," we call them and say, "Hey, we're gonna be in your neighborhood next week. Would you like us to stop by and get that bone density scan done?" Totally fundamental different patient experience, so the insurers are really benefiting from that, and hopefully, if we can catch colon cancer and osteoporosis and other bone density issues, perhaps vision impairment from diabetes with our diabetic retinal exams, perhaps if we can vaccinate patients that need vaccinations and don't have access to it, depression screens, all sorts of annual wellness visits that we can do in the home, hopefully, we can help make those patients healthier.
Healthier patients, obviously, are happier patients, but they're also much more cost-effective for the insurer.
So, just to follow up on this, maybe go a little bit deeper. You know, there's been a couple negative articles in The Wall Street Journal-
Yeah
... on home visits and payers just sending someone out to check a box, and no care is being provided. How is this different than that? It's a similar question I asked a company earlier, but just curious because it sounds similar, but-
Yeah, I could tell you, we don't just check a box. So for us, I mean, look, not a week goes by where we don't find a patient that perhaps is at severe risk for vision impairment. Where we go is, we're going and closing out care gaps, so we know the patient is chronically ill. We know the patient has a gap in care. They haven't been able to access the care they need to get any of the interventions or the proactive care I just mentioned, and we go in the home and specifically close that care gap. And so I suppose you could say we check the box after we close that care gap, and we indeed deliver that care. And so that's really our focus.
We don't get paid unless we close that care gap. We're charting it back to the payer so that they know what's the latest with the patient, and that member. I think, you know, a number of these articles are pointing out that a lot of the care is going to the home. That's the first piece of the article, which is this huge trend where patients actually wanna receive care at home. I think it's gonna be up to companies like ours to be delivering exceptional quality care in the home, you know, as quality, if not better, than what they could get in a brick-and-mortar facility, and to do it responsibly in a way where we're actually going in and adding to the system, and we're benefiting patients and their outcomes.
And for me, we have the data, right? So we ran a ED readmission avoidance program with one of our large payer partners, and they gave us the at most highest at-risk patient. There's something called the LACE score, which is basically, you know, acuity, length of stay, acuity, chronic condition, and it's a range from 0 to 10, 1 to 10. They gave us the 8, 9s, and 10s, and right, these are patients that, you know, have been in the hospital three-four times already this year, and we were able, for our cohort of patients, to reduce hospital readmissions by 50%-60%. So we know what we're doing is working, we're not just checking a box. We know that it's keeping patients out of the hospital, and we know that's saving the system a lot of money.
If anybody's ever been in the hospital or had a loved one in the hospital, there's nothing more you think about than getting out of the hospital and hopefully never going back, and we know that that's what we're, you know, impacting.
Okay, good. So you've given out some core, you know, setting that migrant aside, some core revenue targets for this year in your guidance. I think it's $280-$300 million, and then you've given some higher level for next year, $400 million, I think?
Exactly.
So, can you talk about how you're tracking? Because, you know, the mobile health was sort of flat quarter-over-quarter through the first half, at first-
Ex-migrant without the-
Yeah, ex-migrant. Ex-migrant. And you're talking about all these payer contracts and care gap. So, like, what's the confidence level in achieving the mobile side of the target for this year?
Yeah, so we're very confident, and really that's a confluence of one, the contracts we've already signed and currently mobilizing and the projects that we're expanding and ramping, and part of it is placing a high level of confidence on what we have in the pipeline. And we know not everything in the pipeline is gonna come to fruition, some will, some won't, but we've taken a very scientific and methodical approach to our pipeline, and basically, you know, there's two ways to do it, we do it the latter. One is, you know, our business development folks and our business leaders say they have a really good feeling about the deals that are gonna happen, and the projects are gonna come to fruition, and that has a little bit of subjectivity around it.
The way we've been approaching the pipeline is to say: We're gonna place a probability on each of the opportunities, depending on where they are in the pipeline, right? So perhaps we've exchanged contracts with a potential partner. That may be 50%-60%. If it's out for signature, then it's 90%. You know, if we've had an initial meeting, maybe it's 10% or 20%. So we've assigned probabilities to everything we have, and we've built a bottoms-up model, which says we have good visibility into the probabilities and the opportunities that we have in the pipeline, and that gives us the confidence going into next year.
Okay. You mentioned you highlighted cash collections earlier, and you know, maybe if you can provide an update in terms of what that improvement has been and how you're expecting the rest of the year to sort of play out?
Yeah, so one of the big byproducts of the migrant projects was the heavy use of working capital, right? We, we were outlaying a tremendous amount to be able to expand the programs. It's frankly, something we're quite proud of. We think that that was a very unique ability for a company of our size and our resources, that perhaps, you know, maybe nonprofits and other CBOs wouldn't be able to handle on their own. That's where we kind of fit in the mosaic of an emergency type response. That's what's also lost sometimes in some of the, in some of the articles.
I think we had our role to play, which was the ability to scale very rapidly, and we had the resources and the financial resources to be able to do that, but it came with a lot of stress on the working capital of the business. And so, I think as we're exiting these projects and as we're receiving payment for all of our hard work, then that will increase the cash balance of the company, and that will, you know, essentially add to the balance sheet of the company. And so in the second quarter, we shared that we basically increased cash flow from operations by $25 million.
At the onset of the year, we gave guidance that we expected cash flow from operations to be in the $70-$80 million range, and we updated on our last call to increase it to $80-$90 million, based on what we're projecting and what we've been able to collect and what we're owed and due to collect, you know, in the coming months ahead.
How do you think about share buyback? You've been active this year on that. Thought process going forward?
Yes, we get a lot of feedback on that, by the way. I get asked about that by a lot of investors. And so yeah, we have been active. So we at the start of the year, we had a $36 million authorization for stock repurchase. We did repurchase $10 million worth of stock so far throughout the year. And so we issued an update to that authorization for $26 million between basically last week until the end of the year to do additional share repurchases. I think the way we're thinking about it, and we certainly hear from investors, that they believe that our company right now is undervalued, and we certainly have a lot of growth, growth to come. I think the balance is gonna be for us is funding the growth and the oppor...
All the opportunities that we have to scale. Clearly being opportunistic in the market, doing share repurchases, and paying the small amount of an outstanding line of credit that we have. We have a $90 million line of credit with Citibank, and we drew down a little bit of that. And I think it's gonna be a confluence of the three where you'll see us use our cash. The other thing is, building the balance sheet so that we have the cash on the balance sheet to show to prospective large partners that indeed we do have the resources to scale and meet the demands, no matter what the project is.
I think, you know, we wanna show at least $100 million on the balance sheet, sitting in cash, to be able to show our hospital partners, our municipal partners, even our payer partners, that we have the significant resources to be able to scale to meet the need that they have to care for the patients in their municipality, to care for the patients in their care. And so we wanna be able to show, like we always have, that we have the resources to be able to meet that need and to be able to scale to the levels that they need to really make an impact in population health or, for their member population on the payer side, or for the big need that perhaps some of our hospital systems will see, you know, in the coming months and years ahead.
Okay, great. Well, we're at zeros here. So, we'll wrap it up there. Lee, thank you so much for joining us. It's a interesting story. It's had some noise, but, obviously a lot of growth potential going forward. Thank you.
Absolutely, appreciate it. Thank you so much.