DocGo Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; filed May 10, 2022. DocGo provides ambulance and medical transportation and mobile health services in the U.S. and U.K. The November 2021 business combination was accounted for as a reverse recapitalization, so pre-combination results reflect Ambulnz; share counts were retroactively adjusted.
Financial performance
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $117.9 million | $49.7 million |
| Operating income (loss) | $10.1 million | $(1.9) million |
| Net income (loss) | $9.4 million | $(2.0) million |
| Net income (loss) attributable to DocGo shareholders | $10.6 million | $(1.7) million |
| Diluted EPS | $0.09 | $(0.03) |
| Cash from (used in) operating activities | $18.3 million | $(1.4) million |
- Revenue grew 137% year over year. Mobile Health revenue rose 194% to $90.1 million; Transportation Services revenue increased 46% to $27.8 million.
- Management estimated Q1 COVID-19 testing revenue at approximately $38 million. Transportation revenue growth reflected higher trip volume (48,110 versus 46,012), a higher average trip price ($353 versus $283), and increased standby-program revenue.
- Cost of revenue was $78.0 million, or 66.2% of revenue, versus $35.9 million, or 72.2%. Gross profit was approximately $39.9 million, a 33.8% gross margin, compared with approximately $13.8 million and 27.8% in Q1 2021.
- Operating expenses were $29.8 million, up 90%, but declined to 25.3% of revenue from 31.6%. Operating margin was approximately 8.6%, versus approximately negative 3.8%.
- Cash and cash equivalents were $188.4 million at quarter-end; restricted cash was $10.4 million. Working capital was $207.2 million. Current assets were $268.2 million and current liabilities $61.0 million.
- Total liabilities were $84.9 million. Borrowings included $1.0 million drawn on a revolving facility and $1.8 million of notes payable. Finance lease liabilities were $9.7 million and operating lease liabilities $4.2 million.
- Operating cash flow benefited from net income, noncash expenses, and collections of large receivables billed in Q4 2021. Investing activities used $1.1 million; financing activities provided $2.5 million. Cash and restricted cash increased $19.6 million.
Changes and management commentary
- Compared with Q1 2021, the company moved from an operating and net loss to profit, while revenue more than doubled. Growth was led by Mobile Health, alongside expanded services, customers, and geographic reach.
- Management attributed higher costs to staffing, subcontracted labor, medical supplies, vehicle costs, fuel, and maintenance. Subcontracted labor rose particularly as Mobile Health demand temporarily exceeded internal capacity.
- Inflation—including higher wages, fuel, and supply costs—was compressing margins because cost increases could not always be passed through promptly. Management expected inflation to moderate from Q1 levels but remain elevated; higher-than-anticipated inflation could adversely affect margins, results, and cash flows.
- COVID-19 had mixed effects: transportation volumes had been affected by postponed procedures and event cancellations, while testing and other Mobile Health demand supported growth. Management said transportation volumes in most markets had begun returning toward historical levels, but future pandemic effects remained uncertain.
- No formal numerical earnings or revenue guidance is provided. Management expected cash, future operating cash flows, and an available credit line to fund requirements for at least the next 12 months, while noting that working-capital timing and faster-than-expected growth could increase capital needs.
Risks, contingencies, and unusual items
- Two customers represented approximately 34% and 19% of Q1 sales, respectively, creating meaningful customer concentration. Management said it expected to maintain those relationships.
- Accounts receivable, net, were $76.2 million; the allowance for doubtful accounts was $8.0 million. Q1 bad debt expense was $1.2 million.
- A $1.0 million liability was recorded for an agreed settlement of class-based claims under a memorandum of understanding; court approval remained pending.
- Medicare accelerated-payment liabilities were $0.3 million at March 31, 2022, with repayment expected by December 31, 2022. The filing reports approximately $2.2 million of the original $2.4 million advance had been recouped through March 31, 2022.
- A separate bank revolving facility had a $12 million commitment and May 12, 2022 maturity, with no balance outstanding at March 31. A different revolving arrangement had a $1 million balance at quarter-end; the filing describes its maturity as the first anniversary of its December 2021 agreement.
- Q1 included a $58,749 loss from warrant-liability remeasurement and an $83,341 loss from equity-method investments. Management reported no material changes to previously disclosed risk factors other than inflation risk.
Important facts for investors to verify
- Whether Mobile Health growth—especially COVID-19 testing—and related customer contracts remain durable as pandemic-related demand changes.
- Customer concentration, receivable aging and collections, and the sustainability of Q1 operating cash flow.
- Whether inflation, labor availability, subcontracting, fuel, and supply costs continue to pressure margins.
- How the revolving facilities were handled after their stated maturity dates, including availability and covenant compliance.
- Whether the class-claims settlement received court approval and the timing of remaining Medicare advance repayment.