All right, it's 2:45 P.M., so thank you all for coming out. DocGo is the next company. This is a really good example of how we find companies to come present at the conference. We went and saw these guys in New York in, I think, February, and had to start a dialogue, got convinced them to come out, so this is your first conference with us.
Correct.
Yeah. So I'm excited to have him here. It's a really interesting story. One of their, I should say, the reason why we found them, one of their shareholders had referred that we meet with them, and then we did that. So, Norm Rosenberg, I'll turn it over to you, Norm.
Hey, thanks a lot. My name is Norm Rosenberg. I'm the Chief Financial Officer of DocGo. I'm joined here today by Mike Cole, sitting here in the front. Mike is our VP of Investor Relations. It's really nice to be here in Chicago. It's really great to be at this conference. I can tell you, it's been a good experience for us, good meetings.
Really like the opportunity to be able to talk to a little bit about our company, tell you a little bit about our company, DocGo. So DocGo is a technology-enabled healthcare company, and. Well, let me change that. Let me modify that a little bit, because everybody's technology-enabled. Anybody who uses technology in doing what they do on a day-to-day basis is technically technology-enabled. Let me change that.
So we are a technology-driven mobile healthcare company. What I mean by that is that something that'll flow through all of our business lines and all the work that we've done since our inception in twenty fifteen is trying to find ways to use technology to improve the delivery of healthcare. So that's one of our key platforms. We'll talk about some of our other key pillars of our business.
First of all, you know, everybody's favorite part of the presentation, the safe harbor. I'm not gonna read through this whole thing. Don't worry about it. But obviously a lot of my comments that I make today are going to qualify as forward-looking statements, especially anything about what we expect it to happen in the future.
Those forward-looking statements are subject to risks and uncertainties, including, but not limited to, the stuff that we put in our 10-Q and 10-K, and they could have a materially large impact on our results if they don't come to pass. Okay, so let's talk about who we are. Again, we like to look at ourselves as a leading provider of technology-driven mobile healthcare.
We initially started out as an ambulance company, going back to 2015, but now we're much more than that. We're a mobile healthcare company. We provide services in about 29 states in the U.S. and in a few places within the U.K. Our idea is, you know, one of our key platforms is, we want to keep people out of the hospital. We wanna provide preventative care.
We wanna provide the kind of care that people need so that they will be able to avoid going to the hospital. And the main thing is, we wanna provide care to our patients where they need it. So outside of the traditional brick-and-mortar areas where that healthcare is provided. We served about a million customers, or I should say patients, last year.
You can tell I'm a CFO 'cause I refer to people as customers as opposed to patients, but we're supposed to call them patients. So we served about a million patients last year. Since inception, we've interacted with close to seven million people in a variety of ways, whether it's transport or some of the other clinical things that we've provided.
Our latest quarter, the June quarter, we had about $165 million of revenues. We did about $6 million net income, so we are profitable. We are net income profitable, in addition to being a positive EBITDA company, about $17 million in EBITDA during that period. In terms of our guidance, we've guided towards a range of $600-$650 million in revenue.
We'll talk a little bit about what that means, 'cause it does include some revenue that's gonna ultimately be non-recurring. But the headline number should be in the $600-$650 million dollar range. We have kept that guidance pretty standard, or pretty stable for the last couple of quarters. Adjusted EBITDA in the $65-$75 million dollar range.
Just by way of explanation, when we talk about adjusted EBITDA as opposed to traditional EBITDA, all we're doing there is adding back non-cash stock comp. So that's the only gap in our case between adjusted EBITDA and traditional EBITDA, neither of which is a GAAP measure. And we actually increased our cash flow from operations guidance up to $80 million-$90 million. We had previously thought it would be about $70 million-$80 million.
A lot of that is being driven now by some improved working capital, as we'll talk about. As we wind down certain parts of our business, we collect those related revenues and those larger invoices, so that's helping to drive our balance sheet higher, it's helping to improve our operating cash flow.
So here's the different types of services that we deliver. You know, we do things that relate to both episodic and to chronic care management. Again, our primary business as we started was as an ambulance company. Then we moved into doing some municipal based mobile healthcare business, and then we do other mobile healthcare business that relates to as opposed to the patient coming to us.
So let's just to show you a little bit of a breakdown of what we do. To date, two-thirds of our business, and this is gonna change, but two-thirds of our business to date is the government work. So most of our mobile healthcare work is done on behalf of municipality. We're not billing the underlying patient, but what we're doing is, we're billing a municipality.
So an example of this is, you know, we're still doing a lot of migrant care related care programs. As you might know, New York City has quite a few migrants, recent migrants that are now being housed in New York City or in upstate New York. We are providing a couple of things for them.
We're providing the healthcare needs, whether that's behavioral health or physical health, that's part of our bread and butter, but on top of that, we've also been providing the actual shelter and the food, and we've been obtaining the security that's needed as well. Not part of our core business, but that's something that we've been providing. We've been doing a lot of work around the homeless populations in New York.
That started in July of twenty twenty, when we were doing COVID testing. At the time, we were doing COVID testing that eventually became vaccination, which eventually became testing for other things that had nothing to do with COVID or vaccination for other things, or intake, or just the general periodic health checkups that we would do at the homeless shelters as part of the program that's being run by New York City.
So as you see it on the bottom left, the hospital business is primarily our traditional medical transportation business. So it's a hospital customer. The hospital is usually the requester. We will bill insurance in the case of a private insurer.
We will also bill the hospital in the case that, you know, they are the payer of last resort. And this is mostly non-emergency transport. So going from a hospital to the home, from the home to the hospital, where a transport by ambulance is medically necessary, or transport from one facility to the other, or to and from a skilled nursing facility, or from one facility within a hospital system to another.
So everything along those lines. And also, we do some readmission reduction program. A big thing for the hospitals, as you know, is to make sure that someone is not discharged, only to turn up back in the hospital within seventy-two hours, forty-eight or seventy-two hours.
And what we'll do is, we'll do more than just transport the patient from the hospital to his or her home or skilled facility, but we will also provide some post-operation services. In some cases, it's a single-digit piece of our business, but it's probably the area that gets the most focus, both from, at the moment, from the management standpoint, and probably is going to be our fastest-growing part of the business.
And this involves a lot of different things like chronic care management, care gap closures. So when you have an insurance company that has a patient or a participant in the plan who is not following up on the things that they need to do.
So think of a diabetic who, someone who's diabetic, who has not had a retinopathy done or hasn't had his or her A1Cs taken. You know, that's something that we can do, and we can do it by going to the patient's home to making sure that that gap is closed. And finally, a small part of the business that maybe gets some headlines internally, but really is a small part of the business, is the events business.
So we provide standby ambulance services and other first aid types of things at events. For example, back in New York City, we're the in-house provider of medical care at Citi Field, where the Mets play, at Barclays Center, where the Nets play, and we are also staffing for concerts and other types of events.
A relatively small part of the business, only about a couple million dollars a year. Everything that I had mentioned originally as far as how we're tech-driven, this is how we do it, so everything that we're doing is based on a tech platform that is proprietary, that we did build out.
And the ambulance business in particular, which is where we started, is a business that has been notoriously low tech. It used to be that if you were a nurse at a hospital or someone who was in charge of discharging a patient, and you needed to get him or her back to, you know, a skilled nursing facility or to their home, you...
It also allows us, think of it almost as an Uber-like platform, it allows us to make sure that we get the right equipment to the right place at the right time. So there are different types of ambulance transport that require different types of people, different types of equipment. And this is, think of it as a map.
Not sure you can see it in the picture, the upper picture, but it's a map that sort of shows you, you know, where each of the ambulances and other vehicles happen to be in a general area. It'll screen. It'll say, "Okay, you need a certain type of trip. Well, you know, half of these ambulances can't perform that kind of trip. This is who your universe is.
This is who can be there faster," taking into account, obviously, with the algorithm, taking into account the other trips that they have to do. The idea behind it is that when it works, and it does, it provides more certainty about on-time arrival, and in terms of making sure, again, that you have the right people in the right place at the right time. Now, as CFO, one of the things that interests me is making sure that we're doing this at the margin that works for us.
So the last thing that I want to see, for example, is if we have a relatively low acuity trip, we'll call it a basic life-saving trip, which should take a certain type of ambulance, and more importantly, it should take two EMTs to do it, and then because our scheduling is off, we end up sending a vehicle that has two paramedics on it, which is great, but it's overkill.
And it's me using two people who are earning $65-$70 an hour versus two people who are earning $35 an hour. That makes sense, and that adds up. So that's a benefit to the patient, it's a benefit to us and to our business model.
One of the things that we've done, as we've expanded our services from simply offering ambulance services and related, to offering more of the mobile healthcare, is to grow out the base of clinicians that we have working for us. And instead of just being a business that's about EMTs or paramedics, we have a lot of LPNs, we have a lot of PAs, we have very, very highly skilled people that are working for us.
And the goal for us is to make sure that we always have the right person, again, the same theme, the right place at the right time, and someone who is trained for what they're meant to be doing. One of the things that you'll hear about, I mean, we are very much a people business. Can't avoid that.
We're very much a people business. Total compensation, or I'll say, labor-related costs, are probably 70%-75% of our cost of goods sold. It's a big, big part of what we do. And managing that is a big part of it. But part of managing it means being able to have as many people W-2'd as you can, so people who are on your payroll, we don't have 1099s, people who are actual employees, as opposed to using subcontractors.
When we use subcontractors, it means we're paying, in some cases, 25%-35% more per hour for that particular employee. So making sure that we're properly staffed is a very big challenge for us, as with any company like us. So how do we go about doing this?
All right, we all know that it's not easy to get EMTs. These are or other types of clinicians, like nurses. There's a shortage. There's a tight labor market. So first of all, a couple points. Number one, the labor market is not as tight, or hasn't been the last couple of years, as people have made it out to be.
As certain competitors have come out of the business, we found that it's been actually a little bit easier for us to obtain the type of personnel that we need. But the other thing is, the stuff that we put here on the right side, right? Competitive base pay, we typically pay our people on an hourly basis at the high end of the range. We do a lot of investment in training.
You come in, and you think of it as a career. It's not just a stepping stone, not just a place that you'll be for 12, 18, or 24 months and then move on and do something else, maybe even in another industry. We want people to think of it as, you come in as an EMT, then you get more training, you become a paramedic, then maybe you go into some sort of a dispatch or management.
We were just telling someone earlier today, every single person who is running a transport market for us was someone who at one point spent his or her time on the ambulance, out in the field. So it's someone who came in sort of at the ground level and worked their way up.
Now, in some cases, it's someone who came in, was working at a different company at that level, but either way, there's career pathing that's going on, and obviously, as a publicly traded company, one of the things we've been able to take advantage of is our ability to give people stock.
The stock that is owned by the employees is not restricted to the Section 16 filers, to the general management. It is something that goes down to every level. Every EMT that's been with us for a certain period of time and has run a certain number of trips to qualify has some stock. All right, so we typically operate our business in...
If you're looking at 10-Q or 10-K, there are three segments, but that includes the corporate segment. There are two revenue segments that we have. That's broken down between Mobile Health and Transport. Mobile Health is about 70% of revenue currently.
Typically in that business, that includes some of the migrant work that we're doing that's gonna start to move away, so that'll be more of a 50/50 mix as we go. In this space, typically, we have a lot of our business with municipal customers, and we're not charging on a per interaction basis. We're typically charging on a per hour or per day basis.
So if we're gonna provide for a term-certain project, we're gonna provide X number of RNs, Y number of LPNs, and you know, a certain number of EMTs, we're charging the municipal customer, or they're paying us on a per hour basis for the use of those people, and also for whatever related equipment we have. Now, the reason that we do that is that one of the very important things for us has always been to mitigate the volume risk where we can.
So think of it in terms of setting up a mass vaccination type of program, where I need to know that I'm gonna get, 'cause I know my cost is gonna be the same, regardless of how many people show up.
I need to know that my revenue is gonna be the same, regardless of how many people show up, and this has been. We've been pretty successful with this scheme. The municipal payers are happy enough to do it, and they understand that the volume is on them.
So what I'm providing them is the ability for them to send underserved members of their population to somewhere, or I come to them, essentially, into their area, and they're able to come, and they're able to get their vaccination, they're able to get their test, whatever it might be, and they know that we're there to do it, and the onus then is on the municipality to make sure to drive people to that location.
Now, it's important for me to do that anyway because I wanna make sure that I get contracts renewed, I wanna continue to do the business. If a municipality or other customer looks at it and says, "Wait a second, I'm essentially paying $1,000 for every person who gets a shot," that's not a business that's gonna get renewed.
So there, it obviously behooves us to make sure that we're running the type of operation where we can see as many people as possible. But from an economic perspective, from a P&L perspective, I'm getting paid for the use of my people and the use of my vehicles and other related equipment. Most of these contracts are about one year in term, just the way they tend to be done, with auto-renew features.
Almost all of our municipal contracts right now are on their fourth, fifth, or sixth generation. So they've been renewed. Typically, when they get renewed, they add other services to it, so it's really been a very fruitful relationship, and I would say a mutually beneficial relationship. If you look at that second-to-last bullet point, we did some work in New York City.
I'm not a hundred percent sure of their math, but the way they put it is, they feel that the different programs that we have run have saved them over $167 million in 2023 alone in ER avoidance. I'll give you one example.
One of the programs that we run has the acronym SHOW, so Street Health Outreach and Wellness, where we go, and we treat unsheltered homeless, or the people that you see, unfortunately, on the streets of New York City or in any major city.
And we do it in New York City, where we take a vehicle, we go around, we find people who need certain things. For example, wound care is a big deal for the people, unfortunately, who are on the streets, and we treat them.
By treating them, you're keeping them from going to the hospital, and that's the kind of thing that would cost the city tens of thousands of dollars because ultimately, somebody like that, who doesn't have insurance, is gonna end up going to one of the many hospitals that New York City operates, and they have to treat that individual, of course, and the city is left holding the bill.
So that's what they talk about when they do the math, and they figure that, you know, of a certain number of people that you treat, the outcome would have been a certain decompensation. They would have ended up in our system. So it's something that has two general, very large benefits to the municipal customer. Number one is humanitarian. Obviously, that, that's a need, that's a societal need.
It's important for us to treat those who are least capable of getting care for themselves. That's a very important thing, but there's also an economic benefit to the municipality as well, a very large economic benefit to the municipality for us to treat people at a different stage, before they get to the hospital, then we have the medical transportation business.
Medical transportation business represents the other 30% of revenues during that quarter. It's primarily non-emergency medical transport. The reason I mention it, I refer to it as primarily non-emergency, is that things have changed a little bit in terms of the type of business that we're willing to go after. Traditionally, since inception, we have avoided the, you know, nine-one-one business, that you think of EMTs, you think of a nine-one-one emergency service.
We have avoided that, that particular business like the plague. Typically, what happens is, that if you're set up to provide nine-one-one service, you end up doing a lot of trips, you bill a lot of revenue, you collect very little revenue. You have to take every trip. A lot of people are uninsured, a lot of people don't have the right insurance. There's just a lot of pitfalls that are involved in that.
We've typically steered clear of that, let others take that part of the business. We wanted to be involved in the non-emergent medical care, medical transportation. However, in recent years, what we found is that there are municipalities that have changed the payment scheme in order to make it attractive for someone to provide that service.
We're paid a stipend, so think of it as a monthly fee that we are paid. And we're not. It's not a matter of billing. We can do the billing, but that's offset against what we're paid by the municipality. We're guaranteed, if you will, a certain monthly payment in order to be the ones who provide that transport service.
So in a couple of counties up in New York, and we've done it in other places in Delaware, where a municipality might decide that they're not large enough to have their own ambulance service, so they obviously would look to contract with someone else, and those are some of the businesses that we're looking to go after.
It won't be a major part of what it won't be the largest part of what we do on the medical transport side, but it's always an element. The other thing here, the fourth bullet point that you'll see here is an important thing, because we've changed the manner in which we like to bill, and the way in which we like to engage with our customers on this basis.
And we're moving away from the traditional fee-for-service business, where we do make money, we are profitable. If you know, we've calculated that if you do three transports per 10-hour shift, and we're currently running above that rate, you will make money, by and large, on a fee-for-service basis, where you're paid for each trip.
But one thing that we wanna do to get ourselves some margin certainty, and to also promote, you know, the greater certainty of on-time arrival and things of that nature, and service levels to the customer, is to offer what we call our Leased Hour Program, where rather than get paid on a trip-by-trip basis, so a hospital system will engage the services of, you know, one, two, three, four ambulances and the related personnel and equipment, and they'll pay us on a per-day basis for that service, regardless of how many trips we run.
And what that ends up doing for us, is that it gives us more margin certainty. What it ends up doing for the hospital, is that they know they have... It's almost like the standby ambulance model.
I had mentioned the events revenue that we do, at sporting events or concerts. Small part of the business, but it's a big inspiration for the way, for the way in which we price the business. This is also, by the way, the way that our U.K. business, has typically, done their pricing.
You can see I'm not gonna go through all of these, but we like to throw up these, these logos are major customers that we have, whether on the municipal side, or the insurance company side, or the healthcare system side. We're doing business with a lot of the bold print names in the industry. We do our business, across, I mentioned 29 different states, and the U.K.
One of the things that represents a change in our strategy is when I first got to the company in January 2020, and we looked out and did our 3-year planning and 5-year planning, the idea was to always make sure that we're adding another two to three geographic regions every single year, but realistically,
what we found is that it was more profitable for us to make that investment in going deeper in the markets in which we are currently participating, before we just, you know, made sure that we were able to say that we're out there in 40-45 states, so we will add markets. What we will not do is show up in a market, hang out a shingle, and hope that we're gonna end up getting business.
We need to have an anchor tenant, so whether it's on a municipality on the mobile health side, or some other type of customer on the mobile health side, or an insurance company partner on the mobile health side, or a hospital system on the transportation and mobile health side, when we enter a market, it's going to be via a business that is anchored by a large customer.
Having said that, I think that we will be in more markets in 2025 than we are in 2024, the same thing in 2026, and so on and so forth, but geographic expansion is something that's more of a by-product of what we're doing. We're much more interested in expanding our customer set and going deeper with those customers that we're currently engaged with, so what sets us aside?
You know, what makes us any different? There are a lot of ambulance companies out there. There are over 10,000 ambulance companies across the U.S. It's an extremely fragmented business. There are a lot of companies that are also offering mobile health. So here's where we think we're different from the others that are doing it. It starts with the technology, the ability for us to.
We've invested over the years tens of millions of dollars in building out this technology that we talked about a little bit earlier. If you wanted to, if someone wanted to replicate what we are doing, they could do that, but they would have to make the same kind of investments in technology in order to get there. We have a rapidly deployable staff.
One of the things we pride ourselves on is our ability to get people to the places that they need to, that they need to be, and to, and to do it quickly. Now, that sounds very simple, but it's not, because very often, we've been able to take EMTs or other people who work on the transport side, we're able to quickly deploy them on the mobile health side as needed, depending on the markets in which they're needed.
And so, you know, we will, we will take people from a lower value project to a higher value project. That's the kind of thing that we're looking at. We also have a laboratory license. We're doing more laboratory-related business. We don't expect to be a lab, we expect to partner with a lab.
You have a lot of lab companies out there that have a lot of business, but at the same time, they don't necessarily have a way to reach the particular customers that they wanna reach. Our ability to be mobile, our ability to go to directly to the customer is something that can help as well. We have a clinical practice group that helps us oversee what we're doing.
A lot of the interactions that you do have to be overseen by a clinician, by a doctor. It doesn't have to be at the site, but it's someone who has to oversee it, and that's a big part of our model as well. In fact, that's how our mobile health model works in terms of providing service in someone's home.
We're not gonna send a doctor or a highly paid clinician who's making over $100 an hour to somebody's home, where they can do maybe one trip per hour, but what we'll do is, we'll have that individual somewhere remote, so that they can oversee it via tablet, via you know, your typical. Think of it as a telehealth visit, that also has an element of an in-person visit.
Because as we like to say, you cannot, you cannot draw somebody's blood over the internet. They still haven't figured that part of it out yet, so what we can do is, we can send a relatively low-level clinician or relatively low-paid clinician, like an EMT, into somebody's house.
They can end up doing, you know, five or six trips, or one or two trips per hour, while you can have someone who's much higher paid, who would have to be able to oversee it and direct those people remotely, who is higher paid, but can see six or seven people in the course of an hour. Let's talk about the numbers.
You know, I'm usually not called upon to do all the vision stuff, that's something we usually leave to our CEO or to one of my colleagues to talk about. So let's talk about our numbers, I'm a little bit more comfortable with that. So we had a very good Q2. Our revenues were about $165 million. That was an increase of about 30% year over year.
A lot of that was driven by the migrant business. Our GAAP, just this last quarter, we were told by the SEC that they would prefer that when we refer to gross margin, which we refer to as gross margin, not taking into account depreciation, 'cause that's the way I was classically trained back when we were doing the CFA stuff in the late '90s.
I'm dating myself, but you know, they said, "Look, now you have what we call a GAAP gross margin, which takes your depreciation out of cost of goods sold," meaning it includes it, and the cost of goods sold takes it out of your number. As opposed to adjusted gross margin, which is simply your gross margin, adding back the depreciation. That's the only difference between the two, and we disclosed both of those.
Both of those were up year over year. Net income was a positive number, it was about $6 million in net income. Mobile health services revenue increased quite a bit year over year. Transportation also has a growing top line as well. We expect that to grow at more of a 15% rate, it's been about 13% for the first half of the year.
Adjusted EBITDA was about $17 million, compared to $9 million, so the EBITDA margin was a little bit more than 10%. We have talked about trying to be in the 12%-15% area on EBITDA. I think that that's something that's attainable, something we did in the first quarter.
I would say that that's likely over the next year or two to continue. I don't think that we're... I was asked about this earlier today. We're not a 25% EBITDA company. If that happened, that means that something would have changed pretty dramatically with our model.
We're a company that's gonna run our margins in a low- to mid-30% range, and then SG&A as a percentage of revenue will be in the low 20s%, and we'll be left with a, you know, let's call it a mid-teens% EBITDA. That's kind of the model and the way it's been built out. Obviously, some good business highlights for the year as well.
One of the things that we talk about are the number of patients that are assigned to us for the care gap closures and the other things that we're doing. As you remember from the earlier slide, that's a relatively small part of the operation, but it's something that it's growing. And obviously, a bunch of little wins as well. So let's... You know, we're running a little short on time.
I wanna talk a bit about the growth drivers and some of the key elements here. We wanna expand with our existing customers. We wanna run more mobile health pilots, we wanna do more of the types of interactions.
And all of which are gonna have a focus on keeping people from going to the hospital or going back to the hospital. More virtual care, and obviously, we get there by strengthening our RFP channel. M&A is always something that's gonna be on our radar. We did about six small deals between the second half of 2022 and the beginning of 2023. I don't think we're gonna do a lot of M&A going forward.
We continue to look at things. I think it'll be more a formation of joint ventures into which we invest. We have an experienced leadership team. I don't need to go through this with you guys, but we have a mix of people who come from different parts of the world.
We have some people who are with a healthcare background, others with a general corporate background. So let's talk about the key takeaways really quickly, or what I would call the investment thesis. We have a base business, and base business is important to talk about, because a lot of what you see here in our numbers includes the migrant revenue. Migrant revenue will be over $300 million in 2023, and that's started to move away.
That's non-core. It's also the thing that the street is not giving us necessarily credit for, because they look at it as being as being somewhat non-recurring. But the base business is expected to grow by greater than 30%, to about $400 million next year.
This is not guidance, this is not to say that we're gonna do $400 million in revenue next year. We expect to do $400 million in our base business, upon which we might layer on a little bit of the residual migrant-related business that we do in New York City and New York State. This year, for example, we talked about $600 million to $650 million of revenue. Of that amount, about $280 million is gonna be the base, or $280 million to $300 million.
So we're talking about going in the base business, the base mobile health and transport, and patient program revenues going from about $280 million-$300 million in 2024, to about $400 million in 2025, and that's based on the pipeline that we currently have in place. We believe we have a defendable competitive technology advantage, vertical integration. We also expect. I skipped that very important second bullet point.
We expect to generate quite a bit of cash flow. This is really the back end or the other side of the working capital pressure that we've been under as we've grown that migrant business, but now we're collecting on those revenues. And that's the other thing that we have going, the other things we have going for us.
So if I had to lay out our investment thesis, it's not on this slide, but if I had to lay out the investment thesis, it would be these items. Number one, we're participating in the fastest growing part of the healthcare industry, which is preventative care. Care that is designed to keep people from decompensating, from going to the hospital.
Number two, we have a lot of use cases for our capabilities. What I mean by that, and I'll give an example, is we have a mobile X-ray program that we're now rolling out with New York City, and we're gonna roll out across the country. And that's simply a matter of taking things that we know how to do.
We have, we have radiologists on staff, we have obviously the mobility, we have the vehicles to do it, we have the equipment that we need to do it, and then we can take our capabilities and apply it to a problem, and we can fix that problem.
We also have a very strong balance sheet. We expect to have, I'll say about $100 million in net cash by the end of the year. So currently, we have $30 million that is drawn down on a $90 million credit line. We would expect to most likely pay down that credit line by the end of the year and have $100 million, or we would not pay down the credit line and have $130 million.
But that's based on our expectation of cash flow. So we're generating cash flow, and we have a solid balance sheet. And obviously, the valuation I'll leave up to those observers who wanna see whether, you know. You all have your own methodologies for doing that, but we feel like we're pretty compelling.
And, you know, again, we're building a recurring revenue base, very attractive customer base, a very nice, diverse customer base, and that's what our business is today. I'll leave a couple minutes, so we can open up for a little bit of Q&A. I think I used up too much of the time, but we have a little bit of time.
Can you talk a little bit about the migrant business, that the part that's going away? Is that a certainty? Is there a certain date that it's going away? Is all of it's going away, and then the margin that is going to be-
Yeah, sure. So the question was about the migrant business that we have and, I guess, the timing of when it's going away and the certainty and the margins related to those businesses. So the migrant-related. They've got a lot of news over there. You break it up into two categories. There's the work that we're doing, the downstate work, which means New York City.
That has already started to transition away since mid-May. That's gonna be gone pretty soon here, you know, as we get towards the end of the quarter. That was the expectation. There's also stuff that we're doing in upstate New York. Our model indicates that we'll be out of that business by the end of the year, with very little of that business in Q4.
So between now and the end of Q3, a lot of that should go away, realistically. They're behind schedule in transitioning it away or in shutting it down, so I think we're gonna have some residual business that goes into 2025. And I'll get to the margins there in a second. On the New York City Health and Hospitals side, that business continues.
That business is different from the business that we do for HPD because the business we do for H+H is pure healthcare-related business. So we're not providing lodging, we're not providing food, we're not providing anything like that. We're just providing physical and behavioral behavioral health, physical health health checkups, those kinds of things.
That's expected to continue by and large through the end of the year and into probably into 2025 as well. As far as the margins are concerned, when I look at the overall migrant business, I would say that the margins on that business are by and large, you know, right around 34%-36%. And if you look at the overall margins for mobile health, they're, I think, 35.9% in the latest quarter.
So it's really right down the middle there, and it's not a coincidence. That's kind of how we priced out those services to have margins that are very similar to the rest of our business.
So it won't be. It'll be really neither accretive nor dilutive to our margins to see that business move away, except for the fact that as transport becomes a larger part of the business, transport has a little bit of a lower margin. So on a blended basis, that would have an impact on margin, but there are other mitigating factors that I think would allow our gross margins to be pretty flat. I think we're at time unless we have... We can take another one. Yep.
I think from a market perception or evaluation perspective, I guess, do you think you're a misunderstood company, and is the migrant part of the business the only part that's sort of misunderstood or?
Okay, so the question is, are we a misunderstood company and market perception, and is that why we're not getting valuation? The first thing is, you know, the last thing that I can that I'm allowed to do is, you know, get up here and tell you that I you know, pound the lectern and tell you that I think my stock is undervalued.
Factors. One factor is just the general noise and the political noise around the migrant-related revenues. People don't wanna touch it. It's a little bit of a third rail type of business. No matter if you're on the right side of the spectrum or the left side of the political spectrum, if you're on the right side of the political spectrum, you don't like the idea that municipalities are spending billions of dollars on migrants.
If you're on the other side of it, you don't like it, that money is being spent on business with for-profit companies, so you kinda can't win. That's part of it. The second part of it is the collectibility of those revenues. We have large receivables.
Our receivables, since the migrant business spiked, our receivables went from, I'll say, I think it was about $118 million in AR as of June 30th of 2023, and on June 30th of 2024, those receivables were our overall receivables were $260 million. So people are concerned about the collectibility of it, especially those invoices that are long in the tooth. So first things first, we fully expect to collect 100% of those revenues. Those payments have started to flow.
The invoices from 2023 have been paid, 99.something% of them. We've gotten paid for January, for February, for March, working on April. We're gonna catch up. And as that happens, then you're gonna see some beneficial working capital changes as we go. So that part of it is okay.
And the third part of it is just in general that people look at that revenue as being non-recurring, which technically it is, and that's why when we report our earnings for Q1 back in March, back in May, we talked about how the business. That's where that $400 million number comes from. We started to break out the base business versus the migrant business, so people can have an idea of what this business looks like post that particular migrant revenue.
Can I ask you another follow-up question quickly?
Okay.
Is there any chance that long term you can view the migrant and the homeless work to be kind of recurring?
So, yeah, it's a great question. Yeah, the question is whether the migrant or the homeless work will be recurring. So I'll answer that in a couple of ways. Number one, the homeless work is and has been recurring, and we've gone from program to program. We've been working with Department of Homeless Services or with the other Department of Social Services for over four years now, and it's taken a lot of different forms.
The migrant work reasons why, you know, that that's not worth it for me. But we will continue to provide core healthcare businesses to those or services to those populations. The other benefit is, you can look at it as migrant work, or you can look at it much more broadly, which is what we could talk about as population health.
We're serving the underserved populations. There are underserved populations in every large municipality. It's not just New York. Right here in Cook County, we had a deal that we had signed with them as well, that's been a little bit slow to roll out. But these are the things that every large municipality is working on. And on a macro level, to talk about a macro factor for a few seconds, a larger and larger proportion of, you know, large municipalities' budgets are going towards this public health care.
Because what they've found out, and probably, you know, through COVID, what they found out is that there is a real dichotomy between a real gap between the type of payment that you know, people in different socioeconomic strata have access to and those that other less fortunate people have access to.
And ultimately, because of the fact that they're the payer of last resort, down the road, when those people end up in the hospital, more and more municipalities are coming around to the idea that they need to dedicate a larger proportion of their budgets towards these kinds of programs. So yes, those services are recurring. Okay, I think we're out of time, but you know, Mike and I are here for a little while longer today, and.