That would have been a great first start.
It sure would.
Are we good to go, guys? Okay, cool. Thanks for everyone for joining us in this next session of the 28th Annual Needham Growth Conference. I'm Ryan MacDonald. I lead our digital health research efforts here at the firm. And with me in this session, I'm pleased to be joined by DocGo CFO, Norm Rosenberg. Norm, thanks for joining us today.
Thanks, Ryan. Good to see you. It's good to be here.
Good to see you. So we've got about 35 minutes for this fireside chat conversation. We'll probably take 30 to go through some of the Q&A that I have. But then for those in the audience, if you have questions for Norm, we'll make sure to get those asked and answered in the last five minutes or so. But with that, Norm, why don't we, for those who are less familiar with DocGo, how about a brief overview of the business?
Sure. DocGo is a leading tech-driven provider of mobile health services. Our goal is to provide health care at any address. What that means is we have a core medical transportation business. So think of it as primarily a non-emergency ambulance business. We also do a variety of mobile health services. That includes everything from care gap closures, taking care of a patient's home. We have a mobile phlebotomy business. We have a remote patient monitoring business as well that mostly focuses on cardiac patients and everything in between. We are operating a fleet of about 900 vehicles. We have about 3,000 health care professionals working for us. We provide services now in 50 states and in the U.K. as well. And again, our goal is to be able to provide health care at any address, try to keep people out of the hospital.
We provide it through a variety of different business lines.
Awesome. Now, before talking about sort of the segmented growth initiatives for 2026 and deeper into the business, I'd like to get your perspective on the macro environment and the operating conditions in health care right now. There's potential looming regulatory shifts. I guess there is every year, you could say. But even more so now, heightened utilization trends and Medicare Advantage that's creating a lot of expenses. I'm just curious, as you have conversations with existing and prospective customers, what are the major concerns they're bringing up? And are they leaving you sort of more optimistic or cautious about the opportunity ahead for DocGo?
Sure. It's a great question. And it's so important, really, for us to continually be cognizant of what's going on in the macro environment, in the regulatory environment. We're so busy, it seems, every day with our heads down, focused on the real nitty-gritty details of the business that you can sometimes lose sight of the big macro factors that are going to have an impact on you. So I want to touch on a couple of those. Number one, obviously, there's discussions around what Medicaid is going to be like going forward in terms of who's eligible for it and what kind of things they're going to, how they're going to administer it. It could have an impact on our care gap closure business if fewer people are covered by Medicaid than would be otherwise.
On the other hand, if there is a shrinking roster of people who are covered by Medicaid, then I think you'll see more pressure put on the existing, the already over-pressured system. So some of the work that we do, whether it's on the transport side or being able to offer mobile health services outside of the ER would have increased demand. As far as general reimbursements, the CMS continues to reimburse for virtual care and for telehealth. So we think that that's a positive trend. We think that on balance, that will move in our direction. I should talk about the One Big Beautiful Bill Act, which for the most part, where that has an impact on us is that there's about a $50 billion bucket of rural health care spend. That was pretty vague to begin with.
Even now, the states are first getting their budgets for the first year of that. They're putting together a process for getting RFPs. We're probably not going to go out and look to get RFPs directly, but we're going to try to partner with those rural hospital systems or others to whom we can offer either transportation services or mobile health types of services. Finally, there's AI. You can't have this conversation without mentioning AI. Where it pertains to DocGo is we're already using it to make ourselves more efficient in terms of patient outreach, to allow our clinicians to do their jobs more efficiently. AI is going to be something that we all need to embrace and to figure out how to get more efficient.
Yeah, absolutely. It's interesting to call it the rural health care bucket. It is a very big opportunity that no one's been able to sort of do that really well at scale. And it seems like the problem is only getting worse as you're seeing more and more health systems closing locations in rural locations just because of the difficulty in operating that profitability. It seems like something ripe for a transport and mobile health business.
Yeah, I did look. There are some natural inefficiencies, obviously, with the rural system, just like there were. I come from the telecom space many years ago. Obviously, there are issues in the, and that's why it's subsidized. There are issues with just the geographic layout and the fact that everything is so far apart. I think there are going to be some natural issues that the rural health care systems have to deal with. So this is more something like a subsidy than anything else. But that's where telehealth comes in. Our recent acquisition of SteadyMD allows us to provide telehealth services across the United States and every one of the 50 states and our ability to actually get people into the home and to be able to provide care over there.
I think more so even than with a regular hospital system, a rural hospital system and a network needs to be bolstered by the ability to offer patients care in the home, and that's part of where we can come in.
Awesome. So moving into some of the segments of the business, while you segment the revenue stream by transportation services and mobile health, you're obviously really focusing the business around the end markets you serve, which are hospitals, municipalities, health insurance companies. What's the mix across transportation and mobile health? And where are you seeing the greatest opportunity for growth in those business segments over the next couple of years?
Sure. So as you point out, we do have two official reporting revenue segments. There's the medical transportation side, and then there's the mobile health side. But we talk about those three verticals. You have the government vertical, which really has been, I'll start with that, even though that's the one that traditionally has been the largest, but now that we're not doing that migrant work anymore, that has really been whittled down. And I think that's going to be maybe a single-digit percentage of our business in 2026 and beyond. There still will be a couple of municipal deals that we will manage if they come to us, but we're not really actively seeking out that type of business. The transportation business in third quarter was about 70% of our revenue. That is essentially the hospital vertical. We expect that to continue, obviously, to be a very robust vertical.
But the fastest growing part is going to be some of these mobile health lines, the care gap closure business that we're doing with the payers, and some of the mobile phlebotomy, which we're also doing with the payers, as well as directly with the patients and some of the remote monitoring. So I would expect that the medical transportation/hospital vertical will still be the largest vertical, probably 2026 and into 2027 as well. But it's going to be somewhat less than the 70% that it is today.
Yeah. Yeah. And so as we move into kind of the mobile health discussion and talking about that payer channel, it is really one of the most exciting sort of growth opportunities in the business, despite sort of being a smaller portion of the business. Can you talk about the current state of the care gap closure business? How many payers are you working with today? How many members? And sort of what's been the rate of sort of growth with those relationships as you've seen it?
Yeah. So we're working today, we're actively working today with six different payers. We have another two to four that are in the, I'll call it the contract redlining stage, with the caveat that there's a relatively long sales cycle and a relatively long contracting cycle. So those are things that we expect to happen, expect to have happened within, let's say, the first half of 2026. But currently, we're working with six of them. During 2025, we were assigned, I think it's 812,000 lives, which brings a cumulative number of lives that we have been assigned from these different payers to about 1.3 million. So we're working on those. In terms of the number of visits, that number was in the tens of thousands. On a revenue basis, the revenue has quadrupled, granted off a very small base, as you point out, between 2024 and 2025.
But the revenues are growing, obviously, at a very fast pace, along with, obviously, the number of visits. That is the fastest growing part of our business. It is also the part of our business that has the lowest margins, understandably, until we get the kind of intensity that we need in order to be able to have the right economics. The way we look at it is we have a lot of mobile health businesses that have margins that are above 50% or approaching 50%. This is a business that we think eventually we'll have at maturity, we'll have about a 40% margin, so a healthy margin, more robust margin than what we see on the transport side, for example. And that's the fastest growing part of the business and the one that we're investing not only money, but a lot of attention.
A lot of management time and attention is being focused on that business.
When you think about where you're seeing sort of the within the book of business on where you're getting those assigned lives, is it sort of traditional kind of commercial? Is it Medicare Advantage? Is it Medicaid populations? What's that, generally speaking, where are you seeing the most opportunity there?
It's a mix. I personally think the greatest opportunity is on the commercial side, just straight on the commercial. Obviously, commercial Medicare Advantage, the lines are a little bit blurred over there because that's who the end payer is. But I think on the commercial side, that's really something. Look, we're filling a need not only for the patients themselves, but for the payers. The payers have a group of people that they haven't been able to reach, people who are not taking care of the things they need to take care of. And that's leading to outcomes down the road that become much more expensive for the payers. So they've been able to see the benefit, the cost-benefit advantage to them pretty clearly.
Yeah. How are the payers sort of measuring success within the care gap closure program today? Is it based on sort of a conversion rate on care gap closures, patient NPS, something else? How is that being judged?
This is where you might get a different answer from the CFO than if you would ask Lee, our CEO. I would tell you, look, I mean, the first headline number, obviously, is the conversion slash number of patient visits. That's the revenue item. That's what leads to, that's the billable item. NPS is really, really important. Meaning if we were going about our process with a focus solely on things like conversion rates and the number of patients we're able to see and how quickly we're able to see those patients for efficiency's sake, and we were forgetting about the patient NPS, we were forgetting about the customer service side of things, down the road, it might look good in the near term, but down the road, we would suffer for it.
Because if people don't want to work with us, then eventually our conversion rates will suffer. Eventually, there'll be some blowback to the payer. So that's clearly not going to work. So I would say, at the risk of sounding like I'm not answering your question, I would say it's a little bit of both.
Got it. Got it. And then you said in terms of incremental opportunities, sort of two to four payers sort of at that redline phase, and these can be sort of longer contracting cycles. Are those top 10 payers or what kind of, what's the sort of?
Yeah. So a couple of them are within, I believe, the top 10.
Top 10.
Recognizable names.
Nice. You also, see, we talked a little bit, or you touched on SteadyMD and sort of some of the opportunities there. Obviously, a recent acquisition. For investors that might not be aware of the deal, can you just provide a bit more color on the strategic rationale more broadly for the acquisition and how the addition of SteadyMD can support both your payer and your broader mobile health initiatives?
Sure. Yeah. And I'm really excited about that acquisition. Even though we're almost three months after the acquisition, it's always a good sign if you're still excited about the acquisition after the fact. SteadyMD was a company that we had been looking at for a very long time. We felt that they were such a clear and natural fit for us. And then you go through the usual process of making a bid and then them looking at somebody else and eventually circling back, and we were able to close that deal. SteadyMD provides what I would call white label type of telehealth services to some very blue-chip names. So they're doing work for very recognizable names that are out there that are focused primarily on the marketing, where they have someone like SteadyMD as their back end when they need a patient visit.
So for example, if you have someone taking a weight loss drug, and in order to be able to sell it to them, you need to have someone do a telehealth visit. So SteadyMD will step in and do that. And we looked at SteadyMD and said they have this wonderful telehealth platform and these capabilities, and they've got physicians in all 50 states, and they're licensed everywhere, and they have some big names. What they don't have is the last mile that we're able to offer.
And if we could get together with them, and this has already started to happen, where they can go back and they can pitch either their existing customers or new customers, and they can say, "Hey, look, we can offer you this end-to-end solution, this vertically integrated end-to-end solution, where not only can you provide the telehealth visits that you need to provide in order for you to be able to sell your service, but when needed, we could also actually send someone to the patient's home or to some other place in order to take care of what needs to get taken care of. We can take care of blood draws and things of that nature." So we saw that as being very interesting.
I happen to like their model in that they're looking at it from a. I look at it as what I would call a wholesale model. Essentially, they're not out there spending millions of dollars marketing, trying to get patients on board. They're there to provide the service. They're there to provide the back end. I kind of like that model because then there's going to be battles fought at the point of attack with millions of dollars thrown around. You can see them anytime you turn on TV. You see the ads for this kind of stuff. No matter who wins, SteadyMD can provide service to them. Now, they don't have a monopoly. Certainly, they're now providing it to everybody. But by being a white label provider of the back end, you kind of mitigate that competitive risk a little bit.
Yeah. Makes sense. How much time, or as you think about integrating the business, how much of their focus are you going to have sort of on sort of enhancing what you already have within your core business versus sort of continuing to let them and sort of giving them more resources to sort of continue to stay in their lane? Because DTC health care is obviously rapidly growing. It's not just weight loss. Now we're hearing about longevity and all these other different products out there. So it seems like there's a great opportunity within their business, but also to enhance yours.
Yeah, absolutely. So the way that we enhance their business, which I touched on a little bit earlier, is they can now go in with a more robust bid, right, when they're either trying to extend and retain a customer or they're trying to get new customers, where they can offer something that their competitors are not able to offer in terms of being able to have somebody go into the patient's home. That's really been helpful even in the early going as far as the pitch. As far as where they can help us, I mean, we have a medical practice. They have a medical practice. One of the big cornerstones of our ability to offer care gap closure is that we send, and our economic model is that our operating model is that we send a relatively low-level, lower-cost clinician into the home.
And then we have the physician's assistant or doctor who is remote and is able to oversee that as they need to. Well, they have all of that. So we have some of it. We have to build it out. As we're dealing with more of those lives, I mentioned the 1.3 million lives that we've been assigned and we're trying to convert into patient visits, we need to make sure we have our infrastructure built out. We can rely on their infrastructure to provide that type of service. So that's where it's a sort of a two-way integration that we're working on now.
Nice. And what do you think SteadyMD can do from the gross margin profile of the business? I know you mentioned care gap closures you see as sort of a 40% growth margin over time.
Over time?
Over time, how much of a role is SteadyMD needing to execute to contribute to hit those targets versus maybe potential upside to that target?
Yeah, so where SteadyMD fits in and where they slot in, I mean, their gross margins are, give or take, about a 40% number, which is a pretty robust number. Now, it's all relative. Compared to the kinds of margins we're getting today on the mobile phlebotomy business or on the remote patient monitoring business, that's actually a relatively low gross margin. But they are at 40% today, whereas the care gap closure business obviously is much below that and is only going to work its way up, and by changing their operating model a little bit to incorporate some of what SteadyMD can do, that'll probably accelerate that timeline for getting them to a more mature run rate type of margin.
Awesome. Maybe a shift to the med transport side of the business. You've continued to see some pretty good momentum there. You had record volumes through the end of third quarter of 2025 to the point where you had to actually outsource 26,000 transports, as you talked about.
It's a sole point.
Yeah, due to staffing challenges. I guess, how much of an impact did that have to revenue, and how do you think about being able to better solve this sort of supply-demand imbalance in 2026?
Sure. And it's a good question. It's something that we spend most of our day on. One of the things that, and I'd say it's a little bit of a sore point, where we had to, we sort of had to let about 26,000 calls over the course of the entire 2025. We had to sort of let them go. We just couldn't take them because we didn't have the capacity to take them. We estimate, and I say estimate, and I'll explain why I say estimate, we estimate that that might have been an opportunity cost of $8 million-$9 million of revenue. The reason I say estimate is that you're never going to take every single call that you can get. You also have to consider that if you did take that call, maybe there's another call that you don't take. But essentially, that's what it meant.
Now, the good news is, if you will, that what that means to us is that when we look at the marketplace, when we look at our potential for growth, the demand is there. There's not a big demand question. Typically, you look at a market and you say, "Well, what is demand like?" Beyond looking at just the overall TAM, which is a little bit too out there and too top level, too high level, but what is the actual demand? So we know that demand is there, which is great. Demand is there to support the growth that we're looking to see in that business. It's a supply-side issue, right? Do we have enough capacity to make the widgets in our factory? And that obviously would be the EMTs. We're doing a lot of work around both getting better at bringing people in and also retention.
Retention is a part that we have a meeting that we refer to as a recruiting and retention meeting. It includes myself, it includes the CEO, it includes everybody at the company top down pretty much from a leadership standpoint. And it's something that we have to figure out. The most scarce and therefore the most important resource that we have are those EMTs and paramedics. And we have to do a better job of making sure that we not only attract, but also that we retain. So we made some good gains in the fourth quarter in a couple of our larger markets in New York and in Pennsylvania and New Jersey market as well. We have been able to add to staff, so we've been able to take more calls.
That in the short term could, from one quarter to the next, might put a little bit of pressure on margin where you have somebody on payroll, but they haven't started to run trips. But that's really a short-term lag, so that's not a big deal. So we're seeing some, we're definitely seeing some gains, but it's the kind of thing that we're going to have to be vigilant about on an ongoing basis to make sure that we can do that.
As you think about making the hires to sort of build the workforce there, is the intention to try to do as much of that sort of directly on your own versus outsourcing to the staffing agencies? Because I know in the past, when you get to see a lot of strong demand, you've got to kind of hire quickly, scale quickly. It can be a little bit more margin diluted than if you hire direct, right?
Yeah. Our plan is to hire direct. We know that we have the demand for it. We want people on board with us. That way, you end up paying a lower effective hourly rate over time. And just to put a number on it, Ryan, as well, just from the standpoint of some of the KPI that we look at, we like to look at our capacity utilization. And essentially, the way we measure capacity utilization is by looking at either. It's really the same number, but either looking at how many trips we're able to take over a 10-hour shift or how many trips per hour. So our number, which typically you want it to run somewhere between a 0.3 and a 0.4 or three to four trips per 10-hour shift. Our overall company-wide blended rate got to about 0.37 in the third quarter's highs that we've seen.
And we have markets that are over that 0.4, so we're over that four number. So on the one hand, I was like, "Hey, that's pretty great." But the reality is that once you get over that number, then that's when you'll see more overtime. You'll see more trips that you have to drop. So there is a natural level where you sort of max out on the capacity. So that's something that we're going to track. We want to make sure that we stay in that healthy range, but that we don't have any particular market that is really overheated where we know that they're going to have a higher overtime rate. We've lowered our overtime rate, which had been in the mid-teens or 16%-17% if you go back a couple of years. That number now is running in terms of dollars. Overtime is about 11%.
In terms of hours, it's about 9.5%. Still not ideal. Our goal is to get to 5%. I think you're never going to completely eliminate overtime. If you do, that means that you probably are overcapacity, but we should be able to drop another couple of points in terms of our overtime rate, and that actually manifests itself in your margin improvement.
Got it. So if I just make sure I heard that right, trying to get down closer to a 5% overtime rate from 11% overtime, and then that sort of trips per hour, you want the blended average to try to get closer to that three trips per hour level versus like you had.
Yeah. I'd love like a 0.35 if I want to be really specific about it, taking it out another decimal place. But that's really where it is. And it's not only about the blended rate because what it really is about is in each individual market. So I might have some markets that have plenty of capacity and they're doing fine. And then I might have a couple of markets where it's overheated and where I'm leaving a lot of revenue on the floor.
Yeah. And just to clarify, any similar dynamics on the mobile health side of the business, or is this just sort of a transport problem?
So it's never easy to bring in clinicians and skilled workers. But I will say this is really a transport thing in particular. There's a specific issue in the world of EMTs and paramedics. EMTs in particular, it's the kind of job that a lot of people, and this is part of what we're dealing with, it's the kind of job that a lot of people see as a stepping stone to something else. It's temporary in nature. And what we've tried to do, especially here at DocGo, and for years, is to try to get EMTs to think of it as a career path. You start out as an EMT, maybe you continue your training, you become a paramedic, or you start out working on an ambulance, and then you end up doing a mobile health engagement. We've had that happen hundreds and hundreds of times over the years.
And that's something that we're trying to get people to think about. Some of our people started out on an ambulance. They ended up going into dispatch. They went into management. So it's that kind of thing. But it's really breaking that conventional wisdom. People go into that business thinking of it as something that they're going to do for a year or two. And we want to change the mindset around that.
Makes sense. And then just maybe last on the, I mean, on this sort of medical transport, sort of on the profitability side, I think you've talked about trying to get that business to over 10% and you've hit down margins over time. You're about 6%-7% today. What do we need to do to get there? Obviously, some of that is what we just talked about on balancing out the overtime, getting a little more balanced with trips per hour and all that type of stuff. But how do we think about the other levers?
Yeah. So I mean, let's go back to that thing that we did talk about already and start from there. So margin expansion on the gross margin side, which will happen with lower overtime rates. Even lower, I would say a lower effective hourly rate because we've gotten that whole recruiting thing down. And we're not paying these massive, well, we're never massive, but we're not paying these very large sign-on bonuses or other things like that or shift differentials. So those are things that come with being able to expand our capacity. So there's the gross margin expansion. And then in terms of operating leverage, then it becomes a matter of looking at the scale, right?
So if we continue to scale the business, one thing we've seen that every time we've been scaling the business, we do have SG&A that is somewhat variable, but for the most part, it's not. So for example, I'm not adding another base immediately as I grow my volumes in a certain market. And as I get to sort of spread that cost over a larger revenue base, that's where I pick up a couple of points of operating leverage.
Nice. And then on the top line, what's the biggest challenge to getting to like a $250 million-$300 million run rate in that business over time?
So I would say, I mean, especially getting to that next level of $230 million, $250 million as opposed to like the $300 million, $ 400 million that we've modeled out for far down the road, getting to that next level, it's going to be about all the stuff we've talked about in terms of making sure that we have the headcount. One thing that we've done in the past, if you think about the way, when I think about the way that we've done our budgeting and our forecasting, is we've typically looked at it from what I had referred to as the demand side. So I'll go customer by customer, either for potential new customers, the existing hospital systems, and I'm saying, "Okay, this was their volume last year. What do we think the volume can be next year and why?" Right? And how do we do that bottom-up build?
Then what ends up happening is we do that model, and then in certain markets, we'll fall short. We'll fall short because we can't take all those calls. What we've shifted to doing as well is a sort of a top-down look at it from a headcount standpoint. We've asked all of our general managers, the market leaders, to forecast for us what their headcount would be. By the end of March of 2026, how many EMTs you're going to have, how many paramedics are you going to have, and how does that translate into a number of trips? You're looking at it from both the demand and the supply side. That's how we get there.
Yeah. Excellent. We discussed to the MD a little bit earlier, but as you think about your top line sort of growth goals, how instrumental do you think M&A is going to be sort of in kind of continuing to drive growth in the business? How much do you think you can achieve just organically, and how much do you feel like you need to supplement with M&A, and maybe in what areas?
So let's start with our guidance for next year, which we've already provided a first stab at. We talked about being in the area of $280 million-$300 million in revenue. And that compares to a headline number of maybe $320 million this year, but understanding that that $320 million would include about $70 million-$75 million from that migrant work . So apples to apples, you're talking about going from about $250 million -$300 million, something on that order. So you're talking about a little bit under $250 million to something in the area of $300 million. So you're talking about a growth of maybe a 20% growth. So that's purely organic. That's based on incremental gains in terms of the headcount on the transport side. It doesn't include winning new contracts, doesn't include any M&A.
Now, where M&A comes in, really for us, it's not as much about being able to add revenue inorganically. It's a matter of being able to, on the mobile health side, to be able to add certain skill sets that we don't currently have, certain capabilities that we don't currently have, certain business lines that we think are fast-growing that we don't currently have that could benefit from our tech stack, that could benefit from our ability to provide the last mile. On the transport side, we've always looked at the potential for paying some pretty good prices for relatively small, what we like to call tuck-in acquisitions on the transport side that we can add, that we can bolster, we can use them to bolster our operations in existing markets for the most part. So those are out there. We've got plenty of them going on.
We like to say that if you look out there, healthcare is on sale right now, and it's not only the public companies, it's the private companies. A lot of these companies are at certain inflection points within their models where they're trying to figure out the next level of financing or they're trying to figure out the next strategic shift that they need to take, and meanwhile, you've got some really good assets that are out there, some really good people out there, some really visionary people who are out there who need to do some sort of a transaction in order to get to that next step.
Yeah. Especially given some of the valuations and how deals were structured back in 2021 and 2022 to an extent, that's put a lot of companies that weren't able to scale out of it sort of in tough positions. So that kind of makes it more fruitful from an M&A perspective.
Yeah. It's almost like back in the day when people would buy a home and they would take a certain type of mortgage that they knew they really couldn't afford, but they figured they would get a chance to refinance in a couple of years. So it's the same kind of thing. You have a lot of these companies that are financed in ways that they know that they either have to hit a certain scale really, really quickly, which is very, very difficult to do, or they're going to have to come out and find some sort of alternative financing or transaction. So you've got a lot of sellers out there.
Yeah. And so in terms of it, it clearly seems like that M&A is going to continue to be a target. You're obviously looking at a potentially buyer's market, you could call it. Can you talk about just sort of your ability and flexibility you have from a capital perspective, the balance sheet, to be able to fund some of this?
Yeah. And it's getting tougher and it's changing, right? We paid for the SteadyMD acquisition off our balance sheet. So that was a $25 million acquisition, but $12.5 million upfront, potentially another $12.5 million earn-out. That money, that first tranche of money that we paid was done right off our balance sheet. As we go, that's going to get a little bit tougher. So by process of elimination, we're not going to use our equity right now as a currency. That wouldn't make a lot of sense to us. We have the cash capacity. We have the balance sheet to do maybe a handful of these smaller acquisitions that we currently have on our list. But if we're going to do anything more than that, that would require us to be able to put together more of a war chest to be able to pay for it.
Got it. Yeah. And maybe just as we're talking about the balance sheet, where do things stand in terms of cash collections from some of that wind down on the migrant-related work?
Yep. Yep. Something we talk about all the time. We're getting close to the goal line there, which is helpful. So we have, I would say at year end, there's two buckets. You have the Department of Housing Preservation and Development, HPD, which was one migrant program, and the other one was New York City Health and Hospitals. New York City Health and Hospitals migrant work is, and the HPD business, just to refresh everybody's memory, the HPD project essentially ended at the end of 2024. The H&H stuff ended here in the last couple of weeks at the end of 2025. For the H&H migrant-related work, our entire AR is in the single-digit millions. It's only maybe a month or two worth of AR. We're going to collect that here in the short term.
There's still about $20 million outstanding from the Department of Housing Preservation and Development. We expect to get that within, I guess, about a month or so. We've talked about maybe late February or early March, but sometime within the first quarter. So that should be in there. And hopefully by that point, that part of it is behind us. On the other hand, the nice thing about it, if you will, is that it does help provide working capital. So we're able to make those large collections on those relatively old invoices, use them to fund our operations going forward. So that's another part of our balance sheet that we feel is going to be very important is being able to grow, whether it's a SteadyMD business, whether it's a care gap closure business, or things that we want to do, even on the transport side, right?
Hiring people and then being able to do more volume, but then obviously it takes 60, 90 days or whatever before you get the cash, so that's going to require. Any growth business requires some working capital, so working capital is a big part of what we do, but speaking of the balance sheet and capital allocation and things of that nature, so we paid down the $30 million outstanding balance on a line of credit. We still have a line of credit. Currently, we have not drawn down on it, again, since we paid it down, so the balance there is zero. There's always the potential for stock buybacks, which we've done from time to time. Right now, we do have a lot of projects, whether it's organic or inorganic, that would use the cash that we have.
Yeah. Makes sense. Maybe just touching on sort of your broader relationships with City of New York and other contracts that weren't migrant-related. Obviously, we have a new administration in here. That's quite different from the last. How do these situations tend to, what have you seen historically as you see sort of administration changes like this? Does it create more opportunity, less opportunity, and then maybe just broader in the government vertical as you think about state and federal opportunities? What's that looking like today?
So the first thing that we wanted to figure out once we saw how the election went was with our counterparts at the city was to figure out who we're going to. I mean, the way we asked the question was, if we have a meeting with this group in mid-January, who is going to be on that call? And the answers by and large were, it'll be the same people. A lot of people that we're dealing with at the city agencies, they're very quick to point out, they've been there through, this will be their fourth mayoral administration that they've been here for. So a lot of those people are lifers and they've been there through that process.
So at least there's a little bit of comfort there in that you're dealing, the people who are making the decisions to use your company or not are a lot of the same people. As far as what this administration is going to do vis-à-vis population health programs or things of that nature, so first thing I'll say is that like everything else about the administration, it's somewhat unpredictable. But I will say there has definitely been a desire to do more public spending on population health programs. It's definitely the way that they want to go, whether that's on mental health programs that we can assist with. We've provided social work type programs for the city for quite some time and a bunch of different other projects. So that makes me feel pretty good about it.
But again, I don't, and maybe this is the CFO speaking. I don't love the government programs, right? There's a working capital need. There's much less working capital intensity for every incremental dollar of revenue outside of the government space, right? So if I bring on another transport company partner, if I bring on another customer for SteadyMD, there's some working capital element to it, but it's not as intense as when you're doing a contract with the city and then you got to wait till it gets registered and you got to wait till they pay you. And even under a best case scenario, you're out quite a bit of money before you start to get paid. Even if over the entire cycle you get a pretty good margin, but you do have to take into account the pressure that that puts on your working capital.
So this is not to say that we're not going to do business with the city anymore, but it would have to be something that's like right down the middle of what we do. It has to be healthcare related and transport related, mobile health related, along the lines of what we're already providing as opposed to these broad technically non-medical things we've offered in the past. Those days are over. We're not going to be doing that kind of thing anymore.
Nice. And then maybe just one last one before I kick it to the audience to see if they have any questions. You kind of touched on it a little bit earlier that the 2026 guide is to an extent not fully de-risked, but you've not included any sort of net new deals that are in the pipeline that have sort of yet to close or are yet to sign. Why take that approach kind of going into this year and sort of what's your level of confidence sort of in some of these things kind of getting over the line or some potential upside here?
Sure. So the first thing I'll say is just as a disclaimer, there's no such thing as something as de-risked.
Yeah. Yeah. Exactly.
Anytime you talk about the future, there's risk, but the approach that we took is I think that we have been, I think we wanted to sort of reset the dialogue a little bit, and in the past, when we've given guidance, I think that we've, it's not so much a matter of being optimistic, but the kinds of things that we're living and we're breathing and we have this weekly growth meeting where we're hearing about the hospital system XYZ, where our salesperson is telling us it's like an 80% probability of happening, and then one of two things happens. Either 80% isn't 80% or the 20% bad stuff occurs or it was not as big as what people thought it would be, so we just wanted to be a little bit more prudent in terms of it's sort of a matter, I call it like a horizon effect.
The stuff that I can see, the stuff that I can really accurately predict is the stuff that I want to put into my guidance, and that involved not only just the contracts, but even the hiring, right? I know I have 700 open positions across the country for EMTs. Do I assume that I'm going to fill those right away? Do I assume that I'm going to, well, I'm just saying magically, but do I assume that I'm going to have suddenly much better retention so that my net headcount will be much higher? I could, or I could look at it and say, what has my headcount trend been in the past few months and sort of plot that out going forward. So by de-risking it, to use that term, I think we feel a lot better about where we are.
Now, obviously, we're not going to play games with it. If we were to get another contract that wasn't part of the initial guidance, then we would obviously adjust guidance because we want to be as honest about that as we can. But that's kind of the way we felt it was best to go in there. I didn't want to go into a year where a lot of things have to go right for me to hit guidance. Yeah. Yeah. I like to, again, it's maybe my conservative nature. Either way, I look at it personally as I like to have a guidance where as long as not a lot of things go wrong, we'll be able to hit that guidance.
Yeah. Makes sense. See, I think the Wall Street answer is that your guidance assumes that you hire all 700 open spots tomorrow, but then no revenue.
Nobody leaves.
And then no incremental revenue contract. Right? Yeah. Exactly. No, I'm just kidding. All right. Before we let Norm go, anybody in the audience have questions? All right. Awesome. Norm, thanks for taking the time.
Yeah. Yeah. Thanks, everybody, for coming out.
Thanks, everyone.
Good to see you.
See you.
Thanks.
Thanks.