What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 197 added, 262 removed, 299 unchanged (61% of the section changed)

1 unchanged sentence

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

The discussion and analysis below contain certain forward-looking statements about our business and operations that are subject to risks, uncertainties and other factors described in the sections entitled “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q.

The discussion and analysis below contain certain forward-looking statements about our business and operations that are subject to the risks, uncertainties and other factors described in the section entitled “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q.

These risks, uncertainties and other factors could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements.

Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements."

Unless the context requires otherwise, references to the “Company,” “we,” “us,” and “our” refer to the business and operations of DocGo Inc.

and its consolidated subsidiaries.

Certain figures included in this section, such as interest rates and other percentages, have been rounded for ease of presentation.

Percentage figures included in this section have, in some cases, been calculated on the basis of such rounded figures.

For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our unaudited Condensed Consolidated Financial Statements or in the accompanying notes.

Certain other amounts that appear in this section may similarly not sum due to rounding.

11 unchanged sentences

business trends;

results of operations;

objectives and intentions with respect to future operations, services and products, including our geographic expansion;

7 unchanged sentences

our competitive position and opportunities, including our ability to realize the benefits from our operating model and conditions in the healthcare services market;

our ability to improve gross margins;

our ability to control costs and maintain or improve gross margins and profitability;

cost-containment measures;

5 unchanged sentences

In some cases, these statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “might,” “will,” “should,” “could,” “can,” “would,” “design,” “potential,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or the negative of these terms or similar expressions.

Forward-looking statements are inherently subject to substantial risks, uncertainties and assumptions, many of which are beyond our control, and which may cause our actual results or outcomes, or the timing of our results or outcomes, to differ materially from those contained in our forward-looking statements.

including, but not limited to the following:

impacts related to accelerated wind down of migrant-related services;

3 unchanged sentences

our ability to execute projects to the satisfaction of our customers;

our ability to grow demand for our care gap closure programs and our cash balances;

our reliance on and ability to maintain our contractual relationships with our healthcare provider partners and clients;

our ability to grow demand for our care gap closure programs;

our ability to maintain or grow our cash balances;

our reliance on and ability to maintain our contractual relationships with our healthcare provider partners and other strategic partners;

our ability to compete effectively in a highly competitive industry, including conditions in the healthcare transportation and mobile health services markets;

6 unchanged sentences

our ability to expand geographically;

M&A activity and success of our acquisition strategy;

our M&A activity and success of our acquisition strategy;

our ability to retain our workforce and management personnel and successfully manage leadership transitions;

the availability of healthcare professionals and other personnel;

the availability of healthcare

professionals and other personnel;

changes in the cost of labor;

our ability to collect on customer receivables;

our ability to maintain our cash position;

risks associated with our share repurchase program;

overall macroeconomic and geopolitical conditions, including the interest rate environment, the inflationary environment, the potential recessionary environment, regional conflict and tensions, financial institution instability and the prospect of a shutdown of the U.S.

federal government;

production schedules of our suppliers;

the ability of our suppliers to meet our needs;

our ability to obtain or maintain operating licenses;

potential changes in federal, state or local government policies regarding immigration and asylum seekers;

potential changes in federal, state or local government policies or priorities;

expected impacts of geopolitical instability;

16 unchanged sentences

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

The Company is a mobile healthcare services company that uses proprietary dispatch and communication technology to help provide (i) quality mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations;

and (ii) medical transportation in major metropolitan cities in the United States and the United Kingdom.

The Company is a mobile healthcare services company that uses proprietary dispatch and communication technology to help provide quality mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations, as well as medical transportation in major metropolitan cities in the United States and the United Kingdom.

The Company derives revenue primarily from two operating segments:

1 unchanged sentence

The services offered by this segment include a wide variety of healthcare services performed at homes, offices and other locations and event services such as on-site healthcare support at sporting events and concerts.

This segment also provides total care management solutions to large, typically underserved population groups, primarily through arrangements with municipalities, which include healthcare services as well as ancillary services, such as shelter.

This segment also provides solutions to large, typically underserved population groups, typically through arrangements with municipalities, which include both physical and mental healthcare services.

• Transportation Services:

2 unchanged sentences

Net revenue from Transportation Services is derived from the transportation of patients based on billings to third party payors and healthcare facilities.

For the three months ended September 30, 2024, the Company recorded net income of $4.5 million, compared to net income of $4.6 million in the three months ended September 30, 2023.

For the nine months ended September 30, 2024, the Company recorded net income of $21.0 million, compared to net income of $2.1 million in the nine months ended September 30, 2023.

For the three months ended March 31, 2025, the Company recorded net loss of $11.1 million, compared to net income of $10.6 million in the three months ended March 31, 2024.

Factors Affecting Our Results of Operations

2 unchanged sentences

conditions in the healthcare transportation and mobile health services markets;

changes in government spending on healthcare and other social services;

changes in government spending on healthcare and other social services, including as a result of changes in the U.S.

administration and administrative priorities;

availability of healthcare professionals and other personnel;

1 unchanged sentence

our competitive environment;

federal government;

8 unchanged sentences

and continued desire on the part of government and municipal entities to fund programs to assist currently underserved patient segments via “population health” programs.

These programs have increased in number, scale and scope since the beginning of COVID-19.

While COVID-19 testing and vaccination programs have been dramatically scaled back from their levels at the pandemic’s peak, there have been expansions of these population health programs into other areas, such as the provision of healthcare and related services to recent migrants and asylum seekers.

In the aftermath of the COVID-19 pandemic, there have been expansions of these population health programs into areas outside of testing and vaccination, such as the provision of healthcare and related services to various underserved population segments.

However, in recent months, there has been emerging uncertainty around municipal budgets, including the health care segment, and this could have an impact on the public sector portion of the Mobile Health Services market.

The Transportation Services market is highly dependent on patients requiring transportation after surgeries and other medical procedures and treatments.

4 unchanged sentences

Economic changes both nationally and locally in our markets may impact our financial performance.

Unfavorable changes in demographics, healthcare coverage of Mobile Health Services and Transportation Services, interest rates, inflation rates or ambulance manufacturing;

Unfavorable changes in demographics, healthcare coverage of Mobile Health Services and Transportation Services, interest rates, inflation rates, the availability of trained and licensed healthcare professionals or ambulance manufacturing;

a weakening of the national economy or of any regional or local economy in which we operate;

7 unchanged sentences

This involves managing the mix of company-employed labor and subcontracted labor as well as full-time and part-time employees.

The inflation rate in the United States, as measured by the Consumer Price Index, has moderated in 2024, after trending up since early 2021.

The inflation rate in the United States, as measured by the Consumer Price Index, has generally trended up since early 2021.

This data is reported monthly, showing year-over-year changes in prices across a basket of goods and services.

Through the first nine months of 2024, the inflation rate has been 3.1%, lower than the 4.1% rate in 2023, 8.0% in 2022 and 4.7% in 2021.

As the inflation rate has moderated and there have been emerging signs of a pending economic

slowdown, the U.S.

Federal Reserve implemented an interest rate cut of 0.50%, lowering its benchmark rate to the current level of 4.75%-5.00%, after implementing four interest rate hikes in 2023.

The inflation rate has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies.

This has had the impact of compressing gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.

Looking to the remainder of 2024, we anticipate that the inflation rate will continue to be moderate, with additional interest rate cuts a possibility before the end of the year.

However, the inflation rate declined throughout most of 2024, and the annual inflation rate declined to 2.9% for the full year 2024 from 4.1% in 2023 and 8.0% in 2022.

For 2025 to date, the inflation rate has remained moderate, with readings

of 3.0% in January, 2.8% in February and 2.4% in March.

However, the introduction of new tariffs on imported goods has led to the prospect of increased inflation over the rest of 2025 and beyond.

The increased inflation rate witnessed between 2021 and 2024 has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies.

This has had the effect of compressing gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.

In addition, opportunities to mitigate the impact of inflation are limited, aside from potentially buying more medical supplies than are currently needed in an effort to reduce the volume of future purchases, in instances where supply prices are anticipated to rise.

If inflation is above the levels that the Company anticipates, gross margins could be below plan and our business, operating results and cash flows may be adversely affected.

8 unchanged sentences

Future acquisitions may also include companies that may help drive revenue, profitability, cash flow and stockholder value.

During the nine months ended September 30, 2024, the Company did not complete any acquisitions.

During the nine months ended September 30, 2023, the Company completed three acquisitions for an aggregate purchase price of $34.2 million.

During the three months ended March 31, 2025, the Company completed one acquisition, for $4.2 million.

The Company did not complete any acquisitions during the three months ended March 31, 2024.

Investing in R&D and Enhancing our Customer Experience

11 unchanged sentences

Some of these services were provided pursuant to a contract with an ending date during the second quarter of 2024.

A portion of that contract has been extended through December 31, 2024, while other services began to wind down in May 2024.

While the exact timing of the wind-down of the remaining services is still subject to change, the wind-down of sites in both New York City and in upstate New York is well underway and the Company expects that the revenues from these migrant-

related projects will be significantly lower in the final three months of 2024 than they were in any of the first three quarters of the year.

While a portion of that contract was extended through December 31, 2024, other services began to wind down in May 2024.

The wind-down of all services under such contract was completed in the fourth quarter of 2024.

While the Company continued to provide services under other contracts during the first and second quarters of 2025, the wind-down of those services is

nearly complete and the Company expects that the revenues from these migrant-related projects will be significantly lower in 2025 than they were in 2024 and in the second half of 2023.

In addition, government contract work subjects the Company to government audits, investigations and proceedings, which could lead to the Company to being barred from government work or subjected to fines if it is determined that a statute, rule, regulation, policy or contractual provision has been violated.

Audits can also lead to adjustments to the amount of contract costs that the Company believes are reimbursable or to the ultimate amount the Company may be paid under the agreement.

Furthermore, a loss of government contract work, if not offset by revenues from new or other existing customers, could have a material adverse effect on the Company’s business, financial condition and results of operations.

Furthermore, a shift in government policies or priorities, at either the federal, state or local level, surrounding the allocation of public spending to health care-related projects, could have a large impact on the Company’s revenues in this area.

A loss of government contract work, if not offset by revenues from new or other existing customers, could have a material adverse effect on the Company’s business, financial condition and results of operations.

Components of Results of Operations

Our business consists of three reportable segments — Mobile Health Services, Transportation Services and Corporate.

All revenues and cost of revenues are contained within the Mobile Health Services and Transportation Services segments.

All revenues and cost of goods sold are contained within the Mobile Health Services and Transportation Services segments.

Accordingly, revenues and cost of revenues are discussed below on a consolidated level and are also broken down between Mobile Health Services and Transportation Services.

16 unchanged sentences

Technology and Development Expenses

Technology and development expenses, net of capitalization, consist primarily of costs incurred in the design and development of the Company’s proprietary technology, third-party software and technologies.

Technology and development expenses, consist primarily of costs incurred in the design and development of the Company’s proprietary technology, third-party software and technologies.

We expect technology and development expenses to increase in future periods to support our growth, including our intent to continue investing in the optimization, accuracy and reliability of our dispatch and communication platform and driving efficiency in our operations.

5 unchanged sentences

Interest expense consists primarily of interest on our outstanding borrowings under our outstanding notes payable and financing obligations, including our Revolving Facility.

These expenses are determined by the amounts of debt that are outstanding, as well as market interest rates, which form the basis for the interest expenses relating to our Revolving Facility.

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

Three Months Ended September 30, Change

Comparison of the Three Months Ended March 31, 2025 and 2024

Three Months Ended March 31, Change

$ in Millions 2025 2024

9 unchanged sentences

Total expenses 110.0 114.6 % 176.2 91.7 % (66.2) (37.6) %

Income from operations 10.1 7.3 % 8.8 4.7 % 1.3 14.8 %

Other income (expense):

Interest (expense) income, net (0.5) (0.4) % 0.3 0.2 % (0.8) (266.7) %

(Loss) income from operations (14.0) (14.6) % 15.9 8.3 % (29.9) (188.1) %

Other expense:

Interest expense, net (0.4) (0.4) % (0.4) (0.2) % — — %

Change in fair value of contingent liability — — % — — % — — %

Loss on equity method investments (0.1) (0.1) % (0.1) (0.1) % — — %

(Loss) gain on remeasurement of operating and finance leases — — % — — % — — %

Loss on disposal of fixed assets — — % — — % — — %

Other income (expense) (0.4) (0.3) % — — % (0.4) (100.0) %

Total other income (expense) (1.0) (0.7) % 0.4 0.2 % (1.4) (350.0) %

Net income before income tax provision 9.0 6.5 % 9.2 4.9 % (0.2) (2.2) %

Provision for income taxes (4.5) (3.2) % (4.5) (2.4) % — — %

Net income 4.5 3.2 % 4.7 2.5 % (0.2) (4.3) %

Loss on remeasurement of operating and finance leases — — % — — % — — %

Gain on disposal of fixed assets — — % 0.1 0.1 % (0.1) (100.0) %

Other (expense) income (0.3) (0.3) % 0.2 0.1 % (0.5) (250.0) %

Total other expense (0.8) (0.8) % (0.2) (0.1) % (0.6) (300.0) %

Net (loss) income before income tax (expense) benefit (14.8) (15.4) % 15.7 8.2 % (30.5) (194.3) %

Benefit from (provision for) income taxes 3.7 3.9 % (5.1) (2.7) % 8.8 172.5 %

Net (loss) income (11.1) (11.6) % 10.6 5.5 % (21.7) (204.7) %

Net loss attributable to noncontrolling interests (1.7) (1.8) % (0.6) (0.3) % (1.1) (183.3) %

Net income attributable to stockholders of DocGo Inc.

Net (loss) income attributable to stockholders of DocGo Inc.

and Subsidiaries $ (9.4) (9.8) % $ 11.2 5.8 % $ (20.6) (183.9) %

For the three months ended September 30, 2024, total revenues were $138.7 million, a decrease of $47.9 million, or 25.7%, compared to the three months ended September 30, 2023.

For the three months ended March 31, 2025, total revenues were $96.0 million, a decrease of $96.1 million, or 50.0%, compared to the three months ended March 31, 2024.

Mobile Health Services

For the three months ended September 30, 2024, Mobile Health Services revenues were $90.7 million, a decrease of $48.6 million, or 34.9%, compared to the three months ended September 30, 2023.

For the three months ended March 31, 2025, Mobile Health Services revenues were $45.2 million, a decrease of $98.7 million, or 68.6%, compared to the three months ended March 31, 2024.

The decline in revenues was due to the ongoing wind-down of migrant-related services, which had ramped up sharply in the third quarter of 2023 and peaked in the first quarter of 2024.

2 unchanged sentences

However, some of these services were provided pursuant to a contract with an ending date during the second quarter of 2024.

A portion of that contract has been extended through December 31, 2024, while other services began to wind down in May 2024.

While the exact timing of the wind-down of the remaining services is still subject to change, this process is well underway and the Company expects that the revenues from these migrant-related projects will be lower in the final three months of 2024 than in the final three months of 2023.

As such, while we expect to launch new Mobile Health Services projects during the fourth quarter, these are expected be outweighed by a decline in revenues from migrant-related projects and we expect that overall Mobile Health Services revenues will be significantly lower in the fourth quarter of 2024 than in the fourth quarter of 2023.

A portion of that contract was extended through December 31, 2024, while other services began to wind down in May 2024.

The wind-down of all services under such contract was completed in the fourth quarter of 2024.

While the exact timing of the wind-down of the remaining migrant-related services under other contracts is still uncertain, this process is nearly complete and the Company expects that the revenues from any remaining migrant-related projects will be significantly lower in 2025 than in 2024 and the second half of 2023.

As such, while we expect to launch new Mobile Health Services projects in 2025 and to expand existing projects, we expect that overall Mobile Health Services revenues will be significantly lower in 2025 than they were in 2024.

Transportation Services

For the three months ended September 30, 2024, Transportation Services revenues were $48.0 million, an increase of $0.8 million, or 1.7%, compared to the three months ended September 30, 2023.

This increase was due to an 8.5% increase in trip volumes, to 69,776 trips in the three months ended September 30, 2024, from 64,321 trips for the three months ended September 30, 2023.

For the three months ended March 31, 2025, Transportation Services revenues were $50.8 million, an increase of $2.6 million, or 5.4%, compared to the three months ended March 31, 2024.

This increase was due to a 5.9% increase in trip volumes, to 74,130 trips in the three months ended March 31, 2025, from 69,977 trips for the three months ended March 31, 2024.

The increase in trip volumes was due to a combination of growth in the Company’s customer base in certain core markets and increased volumes with existing customers.

Our average trip price decreased to $404 in the three months ended September 30, 2024, from $409 in the three months ended September 30, 2023.

The decline in the average trip price in the 2024 period reflected a shift in mix toward lower-priced transports when compared to the same period in 2023.

However, the average trip price remains well above the levels of early 2022, reflecting a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity transports that earn higher prices per trip.

Our average trip price decreased to $378 in the three months ended March 31, 2025, from $400 in the three months ended March 31, 2024.

The decline in the average trip price in the 2025 period reflected a shift in mix toward lower-priced transports when compared to the same period in 2024 in some of the Company’s markets.

Cost of revenues

For the three months ended September 30, 2024, total cost of revenues (exclusive of depreciation and amortization) decreased by 32.5% compared to the three months ended September 30, 2023, while revenues decreased by approximately 25.7%.

Cost of revenues as a percentage of revenues decreased to 64.0% in the three months ended September 30, 2024 from 70.5% in the three months ended September 30, 2023.

Total cost of revenues in the three months ended September 30, 2024 decreased by $42.7 million compared to the same period in 2023.

This decrease was primarily attributable to an $8.2 million decrease in total compensation, a $21.1 million decline in subcontracted labor costs and a $10.7 million decline in medical and related supplies, all of which were driven by the Mobile Health Services segment, due to the ongoing wind-down of migrant-related projects during the quarter;

a $2.8 million decrease in lab fees;

and a $0.1 million net increase in other cost of revenues categories.

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended September 30, 2024 amounted to $55.5 million, down 44.1% from $99.3 million in the three months ended September 30, 2023.

Cost of revenues as a percentage of revenues decreased to 61.2% from 71.2% in the prior year period, despite the decline in Mobile Health Services revenues, due to the absence of certain project ramp-up costs in the form of higher overtime rates and a greater proportion of higher-cost subcontracted labor that were recorded in the prior year period.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended September 30, 2024 amounted to $33.3 million, up 3.4% from $32.2 million in the three months ended September 30, 2023.

Cost of revenues as a percentage of revenues increased to 69.4% from 68.3% in the prior year quarter,

as the increase in cost of revenues outpaced the small increase in revenues.

Total compensation increased by 4% year-over-year, reflecting increased field headcount, as the Company seeks to reduce its reliance on subcontractors.

Costs for subcontractors were essentially unchanged from the prior year period, but declined from the levels recorded in the second quarter of 2024, reflecting a planned reduction in the number of ambulance trips that were completed by subcontractors in instances where the Company previously did not have sufficient personnel capacity to provide the requested services.

For the three months ended March 31, 2025, total cost of revenues (exclusive of depreciation and amortization) decreased by 47.8% compared to the three months ended March 31, 2024, while revenues decreased by approximately 50.0%.

Cost of revenues as a percentage of revenues increased to 67.9% in the three months ended March 31, 2025 from 65.0% in the three months ended March 31, 2024.

Total cost of revenues in the three months ended March 31, 2025 decreased by $59.6 million compared to the same period in 2024.

This decrease was primarily attributable to a $7.1 million decrease in total compensation, a $31.5 million decline in subcontracted labor costs and a $13.7 million decline in medical and related supplies, all of which were driven by the Mobile Health Services segment, due to the ongoing wind-down of migrant-related projects during the quarter;

a $1.4 million decrease in vehicle costs;

a $1.2 million decline in travel-related costs for field employees;

and a $4.7 million net decrease in other cost of revenues categories.

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended March 31, 2025 amounted to $31.3 million, down 66.3% from $92.9 million in the three months ended March 31, 2024.

Cost of revenues as a percentage of revenues increased to 69.2% from 64.5% in the prior year period, due to the decline in Mobile Health Services revenues, driven by the wind-down of migrant-related projects and lower margins from the early-stage care gap closure business.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended March 31, 2025 amounted to $33.9 million, up 6.3% from $31.9 million in the three months ended March 31, 2024.

Cost of revenues as a percentage of revenues increased to 66.7% from 66.3% in the prior year quarter, as the increase in cost of revenues outpaced the increase in revenues.

Total compensation increased by 3.2% year-over-year, reflecting increased field headcount and temporary increases in the effective hourly wage for certain shifts in some of the Company’s

markets, as the Company aggressively expands its staff in order to reduce its reliance on subcontractors.

Costs for subcontractors declined by 33% when compared to last year’s first quarter, reflecting a planned reduction in the number of ambulance trips that were completed by subcontractors in instances where the Company previously did not have sufficient personnel capacity to provide the requested services.

Operating expenses

For the three months ended September 30, 2024, the Company recorded $39.8 million of operating expenses compared to $46.4 million for the three months ended September 30, 2023, a decrease of 14.2%.

As a percentage of revenue, operating expenses increased from 24.9% in the third quarter of 2023 to 28.7% in the third quarter of 2024, reflecting the decrease in revenues described above.

The decrease of $6.6 million of operating expenses related to a $2.7 million decline in total compensation, a $1.1 million decline in commissions, and a $4.7 million decrease in travel-related expenses, all due to the ongoing wind-down of the Mobile Health Services segment’s migrant-related projects.

These declines were partially offset by a net $1.9 million increase spread across a variety of other operating expense categories.

The Company anticipates that operating expenses will continue to fluctuate based upon the levels of revenues that are generated.

For the Mobile Health Services segment, operating expenses in the three months ended September 30, 2024 were $13.2 million, down from $19.0 million in the three months ended September 30, 2023.

Operating expenses as a percentage of revenues increased to 14.6% in the third quarter of 2024, from 13.4% in the third quarter of 2023, reflecting the drop in Mobile Health Services revenues in relation to the ongoing wind-down of migrant-related projects in New York.

For the Transportation Services segment, operating expenses in the three months ended September 30, 2024 were $14.8 million, compared to $14.5 million in the three months ended September 30, 2023.

Operating expenses as a percentage of revenues increased to 30.8% for the three months ended September 30, 2024 from 30.6% in the three months ended September 30, 2023, despite the increased revenues in the current year period, reflecting increases in non-field headcount, such as dispatch and back office departments, as well as higher insurance costs, due to a larger vehicle fleet.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the three months ended September 30, 2024 were $11.8 million, compared to $12.9 million in the three months ended September 30, 2023.

Corporate expenses amounted to approximately 8.5% of total consolidated revenues in the third quarter of 2024, compared to 6.9% in the third quarter of 2023, reflecting the decline in total consolidated revenues, which outweighed the effect of corporate expense reduction programs implemented at the end of 2023 and in early 2024.

Interest (expense) income, net

For the three months ended September 30, 2024, the Company recorded $0.5 million of interest expense, net compared to $0.3 million of interest income, net in the three months ended September 30, 2023.

Interest expenses on borrowings under the Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in the three months ended September 30, 2024.

Change in fair value of contingent liability

During the three months ended September 30, 2024, the Company recorded a loss for the change in fair value of contingent consideration of $44,520 compared to a gain of $159,974 in the three months ended September 30, 2023.

For the three months ended March 31, 2025, the Company recorded $44.8 million of operating expenses compared to $51.4 million for the three months ended March 31, 2024, a decrease of 12.8%.

As a percentage of revenue, operating expenses increased from 26.8% in the first quarter of 2024 to 46.7% in the first quarter of 2025, reflecting the decrease in revenues described above.

The decrease of $6.6 million in operating expenses related to a $7.3 million decrease in travel-related expenses, all due to the ongoing wind-down of the Mobile Health Services segment’s migrant-related projects.

This decline was partially offset by a net $0.7 million increase spread across a variety of other operating expense categories.

The Company anticipates that operating expenses will continue to decline as certain ongoing cost-containment efforts take hold.

For the Mobile Health Services segment, operating expenses in the three months ended March 31, 2025 were $11.4 million, down 39.7% from $18.9 million in the three months ended March 31, 2024.

Operating expenses as a percentage of revenues increased to 25.2% in the first quarter of 2025, from 13.1% in the first quarter of 2024, reflecting the drop in Mobile Health Services revenues in relation to the ongoing wind-down of migrant-related projects in New York.

For the Transportation Services segment, operating expenses in the three months ended March 31, 2025 were $15.7 million, up 3.3% from $15.2 million in the three months ended March 31, 2024.

Operating expenses as a percentage of revenues decreased to 30.9% for the three months ended March 31, 2025 from 31.5% in the three months ended March 31, 2024, due to the increased revenues in the current year period.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the three months ended March 31, 2025 were $17.7 million, up 2.3% from $17.3 million in the three months ended March 31, 2024, as higher stock compensation costs outweighed a decline in subcontractor expenses and professional fees.

Corporate expenses amounted to approximately 18.4% of total consolidated revenues in the first quarter of 2025, compared to 9.0% in the first quarter of 2024, reflecting the decline in total consolidated revenues.

Interest expense, net

For the three months ended March 31, 2025, the Company recorded $0.4 million of interest expense, net compared to $0.4 million of interest expense, net in the three months ended March 31, 2024.

Interest expenses on borrowings under the Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in both of the three month periods ended March 31, 2025 and 2024.

Loss on equity method investments

During the three months ended September 30, 2024, the Company recorded a loss on equity method investments of $0.1 million, representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the three months ended September 30, 2023, the Company also recorded a loss on equity method investments of $0.1 million.

Loss on disposal of fixed assets

During the three months ended September 30, 2024, the Company recorded a loss on the disposal of fixed assets of $28,681, compared to a loss on the disposal of fixed assets of $9,983 during the three months ended September 30, 2023.

Other income (expense)

During the three months ended September 30, 2024, the Company recorded other expense of $0.4 million, compared to other income of $43,353 in the three months ended September 30, 2023.

Provision for income taxes

During the three months ended September 30, 2024, the Company recorded an income tax provision of $4.5 million, compared to an income tax provision of $4.5 million in the three months ended September 30, 2023.

The slightly lower tax expense in the 2024 period was due to a small decline in pretax income in the 2024 period.

During the three months ended March 31, 2025, the Company recorded a loss on equity method investments of $40,698, representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the three months ended March 31, 2024, the Company also recorded a loss on equity method investments of $83,167.

Gain on disposal of fixed assets

During the three months ended March 31, 2025, the Company recorded a gain on the disposal of fixed assets of $15,139, compared to a gain on the disposal of fixed assets of $52,835 during the three months ended March 31, 2024.

Other (expense) income

During the three months ended March 31, 2025, the Company recorded other expense of $0.3 million, compared to other income of $0.2 million in the three months ended March 31, 2024.

Benefit from (provision for) income taxes

During the three months ended March 31, 2025, the Company recorded an income tax benefit of $3.7 million, compared to an income tax provision of $5.1 million in the three months ended March 31, 2024.

The recording of a tax benefit in the current period compared to a tax provision in the prior year period is due to the recording of a pretax loss in the current period compared to pretax income in the prior year period.

Net loss attributable to noncontrolling interests

For the three months ended September 30, 2024, the Company had net loss attributable to noncontrolling interests of approximately $1.0 million, compared to net loss attributable to noncontrolling interests of approximately $0.1 million for the three months ended September 30, 2023.

Comparison of the Nine Months Ended September 30, 2024 and 2023

Nine Months Ended September 30, Change

$ in Millions 2024 2023

Actual Results % of Total Revenues Actual Results % of Total Revenues

Revenues, net $ 495.7 100.0 % $ 425.0 100.0 % $ 70.7 16.6 %

Cost of revenues (exclusive of depreciation and amortization, which is shown separately below) 322.6 65.1 % 296.3 69.7 % 26.3 8.9 %

Operating expenses:

General and administrative 103.7 20.9 % 93.6 22.0 % 10.1 10.8 %

Depreciation and amortization 12.6 2.5 % 11.8 2.8 % 0.8 6.8 %

Legal and regulatory 11.6 2.3 % 9.6 2.3 % 2.0 20.8 %

Technology and development 7.9 1.6 % 7.7 1.8 % 0.2 2.6 %

Sales, advertising and marketing 1.1 0.2 % 2.6 0.6 % (1.5) (57.7) %

Total expenses 459.5 92.7 % 421.6 99.2 % 37.9 9.0 %

Income from operations 36.2 7.3 % 3.4 0.8 % 32.8 964.7 %

Other income (expense):

Interest (expense) income, net (1.4) (0.3) % 1.7 0.4 % (3.1) (182.4) %

Change in fair value of contingent liability (0.4) (0.1) % 0.2 — % (0.6) (300.0) %

Loss on equity method investments (0.2) — % (0.3) (0.1) % 0.1 33.3 %

(Loss) gain on remeasurement of operating and finance leases — — % — — % — — %

Gain (loss) on disposal of fixed assets — — % (0.2) — % 0.2 100.0 %

Other income (expense) 0.1 — % (0.7) (0.2) % 0.8 114.3 %

Total other income (expense) (1.9) (0.4) % 0.7 0.2 % (2.6) (371.4) %

Net income before income tax provision 34.3 6.9 % 4.1 1.0 % 30.2 736.6 %

Provision for income taxes (13.3) (2.7) % (2.0) (0.5) % (11.3) (565.0) %

Net income 21.0 4.2 % 2.1 0.5 % 18.9 900.0 %

Net income (loss) attributable to noncontrolling interests (2.2) (0.4) % 2.8 0.7 % (5.0) (178.6) %

Net income (loss) attributable to stockholders of DocGo Inc.

and Subsidiaries $ 23.2 4.7 % $ (0.7) (0.2) % $ 23.9 3414.3 %

For the nine months ended September 30, 2024, total revenues were $495.7 million, an increase of $70.7 million, or 16.6%, compared to the nine months ended September 30, 2023.

Mobile Health Services

For the nine months ended September 30, 2024, Mobile Health Services revenues were $351.3 million, an increase of $59.0 million, or 20.2%, compared to the nine months ended September 30, 2023.

The increase in revenues was primarily

due to an expansion in services offered by the Mobile Health Services segment, particularly in the government customer sector.

Specifically, starting in the second quarter of 2023, the Company began providing services to the recently arrived migrant population in New York City and in upstate New York.

These projects, which included both medical and non-medical services, such as shelter and security, expanded throughout the third and fourth quarters of 2023 and into the first quarter of 2024.

However, some of these services were provided pursuant to a contract with an ending date during the second quarter of 2024.

A portion of that contract has been extended through December 31, 2024, while other services began to wind down in May 2024, with the wind-down accelerating, as expected, during the third quarter of 2024.

While the exact timing of the wind-down of the remaining services is still subject to change, the process is well underway and the Company expects that the revenues from these migrant-related projects will be significantly lower in the fourth quarter of 2024 than in any of the first three quarters of the year.

As such, while we expect to launch new Mobile Health Services projects during the last quarter of the year, these are expected to be outweighed by a decline in revenues from migrant-related projects and we expect that overall Mobile Health Services revenues will be significantly lower in the fourth quarter of 2024 than in the fourth quarter of 2023.

Transportation Services

For the nine months ended September 30, 2024, Transportation Services revenues were $144.4 million, an increase of $11.7 million, or 8.8%, compared to the nine months ended September 30, 2023.

This increase was due to a 15.1% increase in trip volumes, to 213,475 trips in the nine months ended September 30, 2024, from 185,404 trips for the nine months ended September 30, 2023.

The increase in trip volumes was due to a combination of growth in the Company’s customer base in certain core markets and increased volumes with existing customers.

Our average trip price declined to $399 in the nine months ended September 30, 2024, from $405 in the nine months ended September 30, 2023.

The decline in the average trip price in the 2024 period reflected a small shift in mix toward lower-priced transports when compared to the first nine months of 2023.

Cost of revenues

For the nine months ended September 30, 2024, total cost of revenues (exclusive of depreciation and amortization) increased by 8.9% compared to the nine months ended September 30, 2023, while revenues increased by approximately 16.6%.

Cost of revenues as a percentage of revenues decreased to 65.1% in the nine months ended September 30, 2024 from 69.7% in the nine months ended September 30, 2023.

Total cost of revenues in the nine months ended September 30, 2024 increased by $26.3 million compared to the same period in 2023.

This increase was primarily attributable to a $12.8 million increase in subcontracted labor costs, primarily driven by projects in both segments that required more personnel than the Company was able to initially provide through its existing staff;

a $6.3 million increase in medical and related supplies, also related to an increase in projects, particularly in the first six months of 2024;

and a $7.2 million net increase in other cost of revenues categories, including insurance.

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the nine months ended September 30, 2024 amounted to $223.2 million, up 9.3% from $204.1 million in the nine months ended September 30, 2023.

Cost of revenues as a percentage of revenues decreased to 63.5% from 69.8% in the prior year period, due to an increase in revenues and the absence of certain project ramp-up costs in the form of higher overtime rates and a greater proportion of subcontracted labor that were recorded in the prior year period.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the nine months ended September 30, 2024 amounted to $99.4 million, up 7.8% from $92.2 million in the nine months ended September 30, 2023.

Cost of revenues as a percentage of revenues decreased to 68.8% from 69.5% in the prior year quarter, reflecting the impact of increased revenues from standby contracts (for which we are paid a daily or hourly rate) and the overall increase in revenue.

Operating expenses

For the nine months ended September 30, 2024, the Company recorded $136.9 million of operating expenses compared to $125.3 million for the nine months ended September 30, 2023, an increase of 9.3%.

As a percentage of revenue, operating expenses decreased from 29.5% in the first nine months of 2023 to 27.6% in the first nine months of 2024, reflecting the increase in revenues described above.

The increase of $11.6 million of operating expenses related primarily to a $0.9 million increase in depreciation and amortization due to an increase in assets to support revenue growth, capitalized software amortization and assets that were added as part of acquisitions that the Company completed during 2023;

million increase in IT infrastructure, driven by the Company’s business and headcount expansion and acquisitions;

a $1.9 million increase in professional fees, including higher audit fees resulting from the growth of the business;

a $3.5 million increase in bad debt expense, reflecting the growth of the business and related increase in accounts receivable;

and a net $4.7 million increase spread across a variety of other operating expense categories.

The Company anticipates that operating expenses will continue to fluctuate based upon the levels of revenues that are generated.

For the Mobile Health Services segment, operating expenses in the nine months ended September 30, 2024 were $47.9 million, up from $36.1 million in the nine months ended September 30, 2023.

Operating expenses as a percentage of revenues increased to 13.6% in the first nine months of 2024, from 12.3% in the first nine months of 2023, reflecting significant expenditures that were made in the second half of 2023 and the early part of 2024 in the expansion of services, particular in relation to the migrant-related projects in New York;

as well as the continued buildout of the Mobile Health Services management infrastructure.

For the Transportation Services segment, operating expenses in the nine months ended September 30, 2024 were $46.1 million, compared to $39.6 million in the nine months ended September 30, 2023.

Operating expenses as a percentage of revenues increased to 31.9% for the nine months ended September 30, 2024 from 29.9% in the nine months ended September 30, 2023, despite the increased revenues in the current year period, reflecting increases in non-field headcount, such as dispatch and back office departments, as well as higher insurance costs, due to a larger vehicle fleet during 2024 to date.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the nine months ended September 30, 2024 were $42.9 million, compared to $49.6 million in the nine months ended September 30, 2023.

Corporate expenses amounted to approximately 8.7% of total consolidated revenues in the first nine months of 2024, compared to 11.7% in the first nine months of 2023, reflecting the increase in total consolidated revenues as well as some corporate expense reduction programs implemented at the end of 2023 and in early 2024.

Interest (expense) income, net

For the nine months ended September 30, 2024, the Company recorded $1.4 million of interest expense, net compared to $1.7 million of interest income, net in the nine months ended September 30, 2023.

Interest expenses on borrowings under the Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in the nine months ended September 30, 2024, while average cash balances in these accounts were also lower when compared to the nine months ended September 30, 2024.

Change in fair value of contingent liability

During the nine months ended September 30, 2024, the Company recorded a loss for the change in fair value of contingent consideration of $0.4 million compared to a $0.2 million gain related to a change in fair value recorded in the nine months ended September 30, 2023.

Loss on equity method investments

During the nine months ended September 30, 2024, the Company recorded a loss on equity method investments of $0.2 million, representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the nine months ended September 30, 2023, the Company recorded a loss on equity method investments of $0.3 million.

Gain (loss) on disposal of fixed assets

During the nine months ended September 30, 2024, the Company recorded a gain on the disposal of fixed assets of $36,717 compared to a loss on the disposal of fixed assets of $163,452 during the nine months ended September 30, 2023.

Other income (expense)

During the nine months ended September 30, 2024, the Company recorded other income of $0.1 million, compared to other expense of $0.7 million in the nine months ended September 30, 2023.

Provision for income taxes

During the nine months ended September 30, 2024, the Company recorded an income tax provision of $13.3 million, compared to an income tax provision of $2.0 million in the nine months ended September 30, 2023.

The increased tax

expense in the 2024 period was due to the recording of significantly higher pretax income in the 2024 period, as compared to the 2023 period.

Net income (loss) attributable to noncontrolling interests

For the nine months ended September 30, 2024, the Company had a net loss attributable to noncontrolling interests of approximately $2.2 million, compared to net income attributable to noncontrolling interests of approximately $2.8 million for the nine months ended September 30, 2023.

For the three months ended March 31, 2025, the Company had net loss attributable to noncontrolling interests of approximately $1.7 million, compared to net loss attributable to noncontrolling interests of approximately $0.6 million for the three months ended March 31, 2024.

Liquidity and Capital Resources

Between the inception of the Company’s wholly owned subsidiary Ambulnz and the Business Combination, Ambulnz completed three equity financing transactions as its principal source of liquidity.

In November 2021, upon the completion of the Business Combination and the PIPE Financing, the Company received proceeds of approximately $158.1 million, net of transaction expenses.

In November 2021, upon the completion of the Business Combination and the private placement of Common Stock that closed concurrently with the Business Combination, the Company received proceeds of approximately $158.1 million, net of transaction expenses.

Generally, the Company has utilized proceeds from the equity financing transactions and the Business Combination to finance operations, invest in assets, make acquisitions and fund accounts receivable.

The Company has also funded these activities through operating cash flows.

Despite the fact that the Company generated net income and operating cash flow for the nine months ended September 30, 2024, operating cash flows are not always sufficient to meet immediate obligations arising from current operations.

Despite the fact that the Company generated operating cash flow for the three months ended March 31, 2025, operating cash flows are not always sufficient to meet immediate obligations arising from current operations.

For example, as the business has grown, the Company’s expenditures for human capital and supplies have expanded accordingly, and the timing of the payments for payroll and to associated vendors, compared to the timing of receipts of cash from customers, frequently results in the need to use existing cash balances to fund working capital needs.

During the nine months ended September 30, 2024, as a greater proportion of the Company’s overall revenues were generated through services provided to municipal customers with long payment cycles, and expenditures made by the Company to allow for the provision of these services were substantial, near-term operating cash flows were not always sufficient to meet these demands for working capital, leading to fluctuations in the Company’s cash balances.

As these invoices are collected, the Company expects cash flows to be sufficient for near term working capital needs.

During the second half of 2023 and during the year ended December 31, 2024, as a greater proportion of the Company’s overall revenues were generated through services provided to municipal customers with long payment cycles, and expenditures made by the Company to allow for the provision of these services were substantial, operating cash flows were not sufficient to meet these demands for working capital, leading to a marked decline in the Company’s cash balances, which improved in the second half of 2024, as invoices were collected.

As more of these invoices are collected, the Company expects cash flows to be sufficient for near term working capital needs.

The Company’s future working capital needs depend on many factors, including the overall growth of the Company and the various payment terms that are negotiated with customers and vendors.

2 unchanged sentences

If the Company’s growth rate is higher than is currently anticipated, resulting in greater-than-anticipated capital requirements, the Company might need to, or choose to, raise additional capital through debt or equity financings.

This last factor has been evident at different times during the second half of 2023 and during the first quarter of 2024, leading to a draw down in the Company’s credit line during the fourth quarter of 2023 and during the first quarter of 2024, as described below.

This last factor has been evident at different times during 2023 and 2024, leading to a draw down in the Company’s credit line during the fourth quarter of 2023 and during the first quarter of 2024, as described below.

On November 1, 2022, the Company entered into the Credit Agreement, which provides for the Revolving Facility in the initial aggregate principal amount of $90.0 million.

10 unchanged sentences

Considering the foregoing, the Company anticipates that its existing balances of cash and cash equivalents, future expected cash flows generated from its operations and amounts available under the Revolving Facility will be sufficient to satisfy operating requirements for at least the next twelve months.

Looking beyond the next twelve months, the Company

anticipates that expected future cash flows, amounts available under the Revolving Facility and proceeds from potential additional financings will be sufficient to satisfy any operating and potential investing requirements.

Looking beyond the next twelve months, the Company anticipates that expected future cash flows, amounts available under the Revolving Facility and proceeds from potential additional financings will be sufficient to satisfy any operating and potential investing requirements.

Capital Resources

Working capital as of September 30, 2024 and December 31, 2023 was as follows:

September 30 December 31 Change

Working capital as of March 31, 2025 and December 31, 2024 was as follows:

March 31 December 31 Change

$ in Millions 2025 2024

3 unchanged sentences

Total working capital $ 154.9 $ 182.7 $ (27.8) (15.2) %

As of September 30, 2024, available cash totaled $89.5 million, which represented an increase of $30.2 million compared to December 31, 2023, reflecting a decline in accounts receivable during the nine months ended September 30, 2024, as the Company collected some of its larger invoices.

As of September 30, 2024, working capital amounted to $178.1 million, which represented an increase of $9.3 million compared to December 31, 2023, as an increase in cash and a decline in accrued liabilities outweighed a decline in accounts receivable.

Current assets declined by $10.6 million, due to a drop in prepaid expenses.

However, this was outweighed by the decline in current liabilities in the nine months ended September 30, 2024, due to lower accrued liabilities, reflecting lower invoices and accrued liabilities in the current period for certain expenses, such as subcontracted labor, and as the Company paid down a significant amount of its accrued liabilities during the year-to-date period.

Cash flows as of the nine months ended September 30, 2024 and 2023 were as follows:

Nine Months Ended September 30, Change

As of March 31, 2025, available cash totaled $79.0 million, which represented a decrease of $10.2 million compared to December 31, 2024, despite a decline in accounts receivable during the three months ended March 31, 2025, as the Company generated a net loss and used cash for share repurchases and an acquisition.

As of March 31, 2025, working capital amounted to $154.9 million, which represented a decrease of $27.8 million compared to December 31, 2024, as declines in cash and accounts receivable outweighed a decline in accounts payable and accrued liabilities.

Current assets declined by $42.0 million, due to a drop in cash and accounts receivable, which outweighed a decline in current liabilities in the three months ended March 31, 2025, due to lower accounts payable and a reduction in accrued liabilities, reflecting lower invoices and accrued liabilities in the current period for certain expenses, such as subcontracted labor.

Cash flows as of the three months ended March 31, 2025 and 2024 were as follows:

Three Months Ended

March 31, Change

$ in Millions 2025 2024

4 unchanged sentences

Effect of exchange rate changes 0.3 (0.1) 0.4 400.0 %

Net increase (decrease) in cash $ 36.3 $ (96.9) $ 133.2 137.5 %

Net decrease in cash $ (4.3) $ (13.3) $ 9.0 67.7 %

Operating Activities

During the nine months ended September 30, 2024, operating activities provided $57.4 million of cash, aided by net income of $21.0 million.

Non-cash charges amounted to $21.5 million and included $7.7 million in depreciation of property and equipment and right-of-use assets, $4.9 million from amortization of intangible assets, $9.7 million of stock compensation expense, bad debt expense of $3.8 million, a loss of $0.2 million from an investment that is accounted for under the equity method and a change in the fair value of contingent consideration of $0.4 million.

During the three months ended March 31, 2025, operating activities provided $9.6 million of cash, despite a net loss of $11.1 million.

Non-cash charges amounted to $6.0 million and included $4.8 million of stock compensation expense, $2.5 million in depreciation of property and equipment and right-of-use assets, $1.3 million from amortization of intangible assets, bad debt expense of $1.2 million, and a loss of $40,698 from an investment that is accounted for under the equity method.

These were partially offset by $3.9 million in deferred taxes.

Changes in assets and liabilities resulted in approximately $14.9 million in positive operating cash flow, as a $19.8 million decline in accounts receivable, reflecting collections of invoices from large municipal customers, a $12.3 million decrease in prepaid expenses and other current assets and a $15.3 million increase in accounts payable outweighed a $31.5 million decline in accrued liabilities and a $1.0 million increase in other assets.

During the nine months ended September 30, 2023, operating activities used $58.3 million of cash, despite net income of $2.1 million.

Non-cash charges amounted to $28.1 million and included $7.5 million in depreciation of property and equipment and right-of-use assets, $4.3 million from amortization of intangible assets, $15.2 million of stock compensation expense, a $0.2 million loss on the disposal of assets, a loss of $0.3 million from an investment that is accounted for under the equity method, and $1.0 million in deferred taxes.

These were partially offset by a $0.3 million reduction in bad debt

expense and a non-cash gain of $0.2 million resulting from a reduction in the fair value of contingent consideration.

Changes in assets and liabilities resulted in approximately $88.4 million in negative operating cash flow, as a $103.5 million increase in accounts receivable, reflecting the growth of the business and primarily driven by an increased amount of business with municipalities, which tend to have longer payment cycles, a $12.6 million decrease in accounts payable, and a $0.3 million increase in prepaid expenses and other current assets were partially offset by a $27.3 million increase in accrued liabilities and a $0.7 million decline in other assets.

Changes in assets and liabilities resulted in approximately $14.7 million in positive operating cash flow, as a $31.4 million decrease in accounts receivable, reflecting collections of invoices from large municipal customers, and a $0.5 million decrease in other assets were partially offset by a $9.1 million decrease in accrued liabilities, a $7.7 million decrease in accounts payable and a $0.4 million increase in prepaid expenses.

During the three months ended March 31, 2024, operating activities used $10.6 million of cash, despite net income of $10.6 million.

Non-cash charges amounted to $9.5 million and included $2.5 million in depreciation of property and equipment and right-of-use assets, $1.7 million from amortization of intangible assets, $4.0 million of stock compensation expense, bad debt expense of $1.4 million, and a loss of $0.1 million from an investment that is accounted for under the equity method.

These were partially offset by a $0.1 million gain on the disposal of assets and $0.1 million in deferred taxes.

Changes in assets and liabilities resulted in approximately $30.7 million in negative operating cash flow, as a $22.4 million increase in accounts receivable, primarily driven by an increased amount of business with municipalities, which tend to have longer payment cycles, a $20.7 million decrease in accrued liabilities, due to payment of certain payables, and

a $0.1 million increase in other assets were partially offset by a $5.8 million increase in accounts payable and a $6.7 million decrease in prepaid expenses and other current assets.

Investing Activities

During the nine months ended September 30, 2024, investing activities used $5.3 million of cash and consisted of the acquisition of property and equipment totaling approximately $2.9 million, the acquisition of intangibles in the amount of $2.2 million and an equity method investment in the amount of $0.3 million, partially offset by $0.1 million in cash proceeds from the disposal of property and equipment.

During the nine months ended September 30, 2023, investing activities used $26.9 million of cash and consisted of the acquisition of property and equipment totaling approximately $4.4 million, the acquisition of intangibles in the amount of $2.5 million, the acquisition of businesses in the amount of $20.2 million, and an equity method investment in the amount of $0.2 million, partially offset by $0.3 million in cash proceeds from the disposal of property and equipment.

During the three months ended March 31, 2025, investing activities used $5.7 million of cash and consisted of the acquisition of a business of $3.6 million, the acquisition of property and equipment totaling approximately $1.5 million, and the acquisition of intangibles of $0.7 million, partially offset by $0.1 million in cash proceeds from the disposal of property and equipment.

During the three months ended March 31, 2024, investing activities used $1.7 million of cash and consisted of the acquisition of property and equipment totaling approximately $1.0 million and the acquisition of intangibles in the amount of $0.8 million, slightly offset by $25,000 in proceeds from the disposal of property and equipment.

Financing Activities

During the nine months ended September 30, 2024, financing activities used $16.3 million of cash, as $45.0 million in proceeds from the Revolving Facility were mostly offset by $40.0 million in repayments of the Revolving Facility.

In addition, the Company spent approximately $11.1 million on its share repurchase program, $3.1 million in payments under the terms of a finance lease, $3.0 million in payments of amounts due to seller, $1.8 million in the acquisition of noncontrolling interest , $1.6 million in earnout payments on contingent liabilities, $0.3 million in dividends paid to a noncontrolling interest and $0.4 million in taxes related to shares withheld for employee taxes.

During the nine months ended September 30, 2023, financing activities used $11.9 million of cash, primarily due to a $8.4 million decrease in amounts due to seller, relating to payments made for acquisitions that were completed in the second half of 2022 and second quarter of 2023;

$2.3 million in payments on obligations under the terms of finance leases;

$2.2 million in payments for taxes related to shares withheld for employee taxes;

and $0.5 million in repayments of notes payable.

These amounts were partially offset by $1.5 million in proceeds from the exercise of stock options.

Future minimum annual maturities of notes payable as of September 30, 2024 are as follows (in thousands):

During the three months ended March 31, 2025, financing activities used $8.5 million of cash, as the Company spent approximately $5.7 million on its share repurchase program, made $1.3 million in payments under the terms of a finance lease, paid $1.2 million in taxes related to shares withheld for employee taxes, and made $0.3 million in earnout payments on contingent liabilities.

During the three months ended March 31, 2024, financing activities used $0.9 million of cash, as $45.0 million in proceeds from the Company’s Revolving Facility were mostly offset by $40.0 million in repayments of the Revolving Facility.

In addition, the Company spent approximately $4.9 million on its share repurchase program and $1.0 million in payments under the terms of a finance lease.

Future minimum annual maturities of notes payable as of March 31, 2025 are as follows (in thousands):

Notes Payable

3 unchanged sentences

Long-term portion of notes payable $ 2.2

Future minimum lease payments under finance leases as of September 30, 2024 are as follows (in millions):

Future minimum lease payments under finance leases as of March 31, 2025 are as follows (in millions):

Finance Leases

2025, remaining $ 4.5

Thereafter 0.4

Total future minimum lease payments 18.3

1 unchanged sentence

Present value of future minimum lease payments $ 16.5

Future minimum lease payments under operating leases as of September 30, 2024 are as follows (in millions):

Future minimum lease payments under operating leases as of March 31, 2025 are as follows (in millions):

2025, remaining $ 3.9

3 unchanged sentences

Present value of future minimum lease payments $ 14.3

Critical Accounting Estimates

Critical Accounting Policies

Basis of Presentation

4 unchanged sentences

Noncontrolling interests in the unaudited Condensed Consolidated Financial Statements represent the portion of consolidated joint ventures and VIEs in which the Company does not have direct equity ownership.

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, the Company was treated as the “acquired” company for financial reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Ambulnz stock for the net assets of the Company, accompanied by a recapitalization.

The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded.

The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Ambulnz.

The shares and corresponding capital amounts and earnings per share available for common stockholders prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio (645.1452 to 1) established in the Business Combination.

Further, Ambulnz was determined to be the accounting acquirer in the Business Combination, and as such, the Business Combination is considered a business combination under ASC 805 and was accounted for using the acquisition method of accounting.

Principles of Consolidation

The Company’s unaudited Condensed Consolidated Financial Statements include the accounts of DocGo Inc.

and its subsidiaries.

All significant intercompany transactions and balances have been eliminated in these unaudited Condensed Consolidated Financial Statements.

The Company holds variable interests in legal entities that contract with physicians and other health professionals that provide services on behalf of the Company.

These entities are considered VIEs since they do not have sufficient equity to finance their activities without additional subordinated financial support.

An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it is the primary beneficiary, meaning it has (1) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).

The Company has the power and rights to control all activities of its VIEs and funds and absorbs all losses of its VIEs.

The Company has determined that it is the primary beneficiary of its VIEs and therefore appropriately consolidates its VIEs.

Net income (loss) for the Company’s VIEs was $(67,785) and $(103,378) for the three months ended September 30, 2024 and 2023, respectively, and $(425,668) and $16,839 for the nine months ended September 30, 2024 and 2023, respectively.

Total assets amounted to $11,844,062 and $4,364,274 as of September 30, 2024 and December 31, 2023, respectively.

Total liabilities were $12,717,312 and $4,811,857 as of September 30, 2024 and December 31, 2023, respectively.

The Company’s VIEs’ total stockholders’ deficit was $873,250 and $447,583 as of September 30, 2024 and December 31, 2023, respectively.

In accordance with ASC 810, the Company assesses whether it has a variable interest in legal entities with which it has a financial relationship and, if so, whether or not those entities are VIEs.

For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.

The Company has entered into MSAs with PCs that employ or contract with physicians and other health professionals in order to provide healthcare services to the public.

Each such PC is established and operated pursuant to the requirements of its respective domestic jurisdiction governing the practice of medicine.

The Company provides each PC with everything the PC needs to operate except for clinicians, for which the PC is responsible.

Without the administrative services, software, intellectual property and administrative personnel (among other things) provided by the Company, the PCs could not carry out their businesses.

Moreover, the PCs do not have sufficient equity to finance their activities without additional subordinated financial support.

Based on the foregoing, these entities are considered VIEs, and an enterprise having a controlling financial interest in a VIE must consolidate the VIE if it is the primary beneficiary, meaning it has (1) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).

In accordance with corporate practice of medicine restrictions, all clinical treatment decisions are made solely by licensed healthcare professionals engaged by the PCs.

Nevertheless, the PCs cannot operate without the Company through the MSAs;

therefore, the Company significantly impacts the economic performance of the PCs and funds and absorbs all losses of its PCs.

The Company has therefore determined that it is the primary economic beneficiary of the PCs and appropriately consolidates them as VIEs.

Net loss for the Company’s VIEs was $1,711,511 and $275,905 for the three months ended March 31, 2025 and 2024, respectively.

Total assets amounted to $34,921,206 and $20,837,325 as of March 31, 2025 and December 31, 2024, respectively.

Total liabilities were $37,312,253 and $21,516,860 as of March 31, 2025 and December 31, 2024, respectively.

The Company’s VIEs’ total stockholders’ deficit was $2,391,046 and $679,535 as of March 31, 2025 and December 31, 2024, respectively.

Self-Insurance Reserves

The Company self-insures a number of risks, including, but not limited to, workers’ compensation, general liability, auto liability and certain employee-related healthcare benefits.

Standard actuarial procedures and data analysis are used to estimate the liabilities associated with these risks on an undiscounted basis.

The recorded liabilities reflect the ultimate cost for claims incurred but not paid and any estimable administrative run-out expenses related to the processing of these outstanding claim payments.

On a regular basis, the liabilities are evaluated for appropriateness with claims reserve valuations.

To limit exposure to some risks, the Company maintains insurance coverage with varying limits and retentions, including stop-loss insurance coverage for workers’ compensation, general liability and auto liability.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements , provides guidance on the development and disclosure of fair value measurements.

Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Quoted prices in active markets for identical assets or liabilities.

Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2025 and December 31, 2024.

For certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses, and due to seller, the carrying amounts approximate their fair values as it is short term in nature.

The notes payable are presented at their carrying value, which, based on borrowing rates currently available to the Company for loans with similar terms, approximates its fair values.

Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value.

Future changes in fair value of the contingent consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income and Condensed Consolidated Balance Sheets in the period of the change.

Accounts Receivable

The Company contracts with hospitals, healthcare facilities, businesses, state and local government entities, and insurance providers to provide Mobile Health Services and Transportation Services at specified rates.

These rates are either on a per procedure or per transport basis, or on an hourly or daily basis.

Accounts receivable consist of billings for healthcare and transportation services provided to patients.

Billings typically are either paid or settled on the patient’s behalf by health insurance providers, managed care organizations, treatment facilities, government sponsored programs or businesses or patients directly.

The Company generally does not require collateral for accounts receivable.

Accounts receivable are net of insurance provider contractual allowances, which are estimated at the time of billing based on contractual terms or other arrangements.

The Company maintains an allowance for credit losses for accounts receivable, net which is recorded as an offset to accounts receivable, net and changes in this allowance are recorded within general and administrative expenses in the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

The carrying amount of accounts receivable represents the maximum credit risk exposure of these assets.

On a quarterly basis, in accordance with Federal Accounting Standards Board ASC 326, Measurement of Credit Losses on Financial Instruments , the Company evaluates the collectability of outstanding accounts receivable balances to determine

an allowance for credit loss that reflects its best estimate of the lifetime expected credit losses.

Individual uncollectible accounts are written off against the allowance when collection of the individual account does not appear probable.

Under the current expected credit loss impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on a single portfolio segment.

The Company assesses collectability by aggregating and reviewing accounts receivable on a collective basis for customers that share similar risk characteristics.

Additionally, when accounts receivable do not share risk characteristics with other accounts receivable, management will evaluate such accounts receivable for expected credit loss on an individual specific identification basis when the Company identifies specific customers with known disputes or collectability issues.

Due to the short-term nature of the Company’s accounts receivable, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends.

In determining the amount of the allowance for credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns.

As of January 1, 2025, the Company held a beginning balance in its allowance for credit losses on accounts receivable of $5,873,942.

The Company recognized an additional provision for credit losses of $1,266,216 and write offs of $(1,357,926) during the three months ended March 31, 2025.

The Company’s balance in its allowance for credit losses amounted to $5,782,232 as of March 31, 2025.

Business Combination

11 unchanged sentences

These assumptions may vary based on future events, perceptions of different market participants and other factors outside the control of management, and such variations may be significant to estimated values.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of the recorded amount of long-lived assets, primarily property and equipment and finite-lived intangible assets, whenever events or changes in circumstance indicate that the recorded amount of an asset may not be fully recoverable.

An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount.

If an asset is determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value.

Assets targeted for disposal are reported at the lower of the carrying amount or fair value less cost to sell.

Goodwill and Indefinite-Lived Intangible Assets

3 unchanged sentences

(i) severe adverse industry or economic trends;

(ii) significant company-specific actions, including exiting an activity in conjunction with restructuring of operations;

(ii) significant company-specific

actions, including exiting an activity in conjunction with restructuring of operations;

(iii) current, historical or projected deterioration of our financial performance;

or (iv) a sustained decrease in our market capitalization, as indicated by our publicly quoted share price, below our net book value.

On February 3, 2023, Health commenced an ABC pursuant to California law.

An ABC is a liquidation process governed by state law (California law in this instance) that is an alternative to a bankruptcy case under federal law.

Prior to commencing the ABC, Health ceased business operations and all of its employees were terminated and treated in accordance with California law.

In the ABC, all of Health’s assets were transferred to the Assignee, who acts as a fiduciary for creditors and in a capacity equivalent to that of a bankruptcy trustee.

The Assignee is responsible for liquidating the assets.

Similar to a bankruptcy case, there was a claims process.

Creditors of Health received notice of the ABC and a proof of claim form and were required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee.

Based on such filing for Health, the Company impaired the goodwill assigned to that reporting unit as of December 31, 2022 by approximately $5.1 million.

Revenue Recognition

6 unchanged sentences

and (5) recognize revenue when (or as) the relevant performance obligation is satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will be able to collect the consideration it is entitled to in exchange for the goods or services the Company provides to the customer.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services the Company provides to the customer.

The Company generates revenues from the provision of (1) Mobile Health Services and (2) Transportation Services.

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis