8-K: DocGo Q3 2025: Migrant Program Wind-Down Hits Revenue

DocGo reports a significant revenue decline in Q3 2025 due to migrant program wind-down, alongside record core business volumes and a net loss.

Summary

• Total revenue for the third quarter of 2025 was $70.8 million, a decrease from $138.7 million in the third quarter of 2024.
• The revenue decline was entirely attributed to the wind-down of migrant-related programs, which generated $8.4 million in Q3 2025 compared to $80.7 million in Q3 2024.
• Excluding migrant-related programs, revenue increased 8% to $62.4 million in Q3 2025 from $58.0 million in Q3 2024.
• GAAP gross margin for Q3 2025 was 20.0%, down from 33.0% in Q3 2024, while adjusted gross margin was 33.0%, down from 36.0%.
• A net loss of $29.7 million was reported for Q3 2025, contrasting with a net income of $4.5 million in Q3 2024, and included $16.7 million in non-cash impairments of intangible assets and goodwill.
• Adjusted EBITDA was a loss of $7.2 million for Q3 2025, compared to a positive adjusted EBITDA of $17.9 million for Q3 2024.
• Transportation Services revenue increased to $50.1 million in Q3 2025 from $48.0 million in Q3 2024.
• Mobile Health Services revenue was $20.7 million in Q3 2025, down from $90.7 million in Q3 2024 due to migrant program wind-down, but increased 23% excluding these programs.
• Cash and cash equivalents, including restricted cash and investments, totaled approximately $95.2 million as of September 30, 2025, a decrease from $128.7 million as of June 30, 2025, largely due to a $30 million line of credit repayment.
• The company generated $1.7 million of cash flow from operations during Q3 2025.
• Record volumes were achieved across all major business lines, with US medical transportation increasing 2.5%, care gap closure and transitions of care increasing 320%, mobile phlebotomy increasing 11%, and remote patient monitoring increasing 6% year-over-year.
• DocGo surpassed 1.3 million patients assigned for care gap closure services and acquired virtual care platform SteadyMD to expand telehealth services across all 50 states.

Sentiment

Score: 4

Explanation: While core business lines show promising growth and strategic initiatives like the SteadyMD acquisition expand capabilities, the significant decline in overall revenue, shift to a net loss, adjusted EBITDA loss, and asset impairments, coupled with continued projected losses for 2025 and 2026, indicate a challenging financial transition period. The positive underlying core business growth is overshadowed by the overall financial performance and outlook.

Positives

• Core mobile health and medical transportation businesses achieved record volumes in Q3 2025.
• US medical transportation volumes increased 2.5% when comparing Q3 2025 to Q3 2024.
• Care gap closure and transitions of care volumes increased 320% when comparing Q3 2025 to Q3 2024.
• Mobile phlebotomy volumes increased 11% when comparing Q3 2025 to Q3 2024.
• Remote patient monitoring volumes increased 6% when comparing Q3 2025 to Q3 2024.
• Excluding migrant-related programs, total revenue increased 8% to $62.4 million in Q3 2025.
• Excluding migrant-related programs, Mobile Health Services revenue increased 23% from Q3 2024.
• Secured a new multi-year contract with a major academic medical system in the New York metro area for dedicated ambulance services and discharge transportation.
• Launched a new mobile health vaccination program for the County of San Diego.
• Entered an agreement to provide medical transportation services to Albany Stratton VA Medical Center.
• Subsequent to quarter end, entered an agreement to launch a care gap closure program in New Mexico with a national insurance provider.
• Subsequent to quarter end, entered an agreement to provide longitudinal care services for a major health plan in California, targeting 10,000 plan members.
• Acquired virtual care platform SteadyMD, expanding telehealth services across all 50 states to drive revenue growth and achieve operational synergies.
• Generated $1.7 million of cash flow from operations in Q3 2025.
• Most service lines, with the exception of care gap closure and primary care offerings, are adjusted EBITDA positive on a contribution basis.

Negatives

• Total revenue declined significantly to $70.8 million in Q3 2025 from $138.7 million in Q3 2024, primarily due to the wind-down of migrant-related programs.
• GAAP gross margin decreased to 20.0% in Q3 2025 from 33.0% in Q3 2024.
• Adjusted gross margin decreased to 33.0% in Q3 2025 from 36.0% in Q3 2024.
• Reported a net loss of $29.7 million in Q3 2025, a substantial shift from net income of $4.5 million in Q3 2024.
• The net loss included $16.7 million of non-cash impairments of intangible assets and goodwill.
• Adjusted EBITDA shifted to a loss of $7.2 million in Q3 2025 from a positive $17.9 million in Q3 2024.
• Mobile Health Services revenue declined from $90.7 million in Q3 2024 to $20.7 million in Q3 2025 due to the migrant program wind-down.
• Total cash and cash equivalents, including restricted cash and investments, decreased to $95.2 million as of September 30, 2025, from $128.7 million as of June 30, 2025.
• Full-year 2025 adjusted EBITDA guidance was updated to a larger loss range of $25-$28 million (from $20-$30 million loss).
• Full-year 2026 revenue is expected to be $280-$300 million, which includes no migrant-related revenue, indicating a continued overall revenue decline.
• Full-year 2026 adjusted EBITDA is expected to be a loss of $15-$25 million, with the majority of the loss anticipated in the first half of the year.
• Significant investment in care gap closure and primary care offerings is currently not adjusted EBITDA positive on a contribution basis.

Risks

• Impacts related to the recent and ongoing wind down of migrant-related services.
• Ability to expand programs with insurance partners, hospital systems, municipalities, and other strategic partners.
• Ability to successfully implement business strategy, including delivering value to shareholders via buybacks and funding new strategic relationships.
• Ability to establish, maintain, and grow customer relationships.
• Ability to execute projects to the satisfaction of customers.
• Ability to grow demand for care gap closure programs.
• Ability to maintain or grow cash balances.
• Reliance on and ability to maintain contractual relationships with healthcare provider partners and other strategic partners.
• Ability to compete effectively in a highly competitive industry, including conditions in the healthcare transportation and mobile health services markets.
• Ability to maintain existing contracts.
• Reliance on government contracts, including changes in government spending on healthcare and other social services.
• Recent revenue growth derived from a small number of large customers.
• Ability to effectively manage growth.
• Financial performance and future prospects.
• Ability to deliver on business strategies or models, plans, and goals.
• Ability to expand geographically.
• M&A activity and success of acquisition strategy.
• Ability to retain workforce and management personnel and successfully manage leadership transitions.
• Availability of healthcare professionals and other personnel.
• Changes in the cost of labor.
• Ability to collect on customer receivables.
• Risks associated with the 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 ongoing or any future shutdown of the U.S. federal government.
• Ability of suppliers to meet needs.
• Ability to obtain or maintain operating licenses.
• Potential changes in federal, state, or local government policies or priorities.
• Expected impacts of geopolitical instability.
• Competitive position and opportunities, including ability to realize the benefits from its operating model.
• Ability to improve gross margins.
• Ability to implement and deliver on cost-containment measures and ongoing cost rationalization initiatives.
• Legislative and regulatory actions.
• Impact of legal proceedings and compliance risk.
• Volatility of stock price.
• Impact on business and reputation in the event of information technology system failures, network disruptions, cyber incidents or losses or unauthorized access to, or release of, confidential information.
• Ability to comply with laws and regulations regarding data privacy and protection.

Future Outlook

Full-year 2025 revenue is expected to be $315-$320 million, including $68-$70 million from migrant-related revenue, a narrowing of the previous estimate. Full-year 2025 adjusted EBITDA is now projected as a loss of $25-$28 million, a slight worsening from the prior estimate. For full-year 2026, revenue is expected to be $280-$300 million, with no migrant-related revenue. Adjusted EBITDA for 2026 is anticipated to be a loss of $15-$25 million, with the majority of the loss in the first half. Management expects investment in care gap and primary care offerings to significantly decline in 2026 as early markets mature, and aims to exit 2026 on an adjusted EBITDA positive run rate at the top end of revenue guidance.

Management Comments

• Lee Bienstock, CEO: "I'm proud of what we have accomplished during this year of transition, with our core mobile health and medical transportation businesses all achieving record volumes in the third quarter."
• Lee Bienstock, CEO: "I want to emphasize that each of our service lines, with the exception of our care gap closure and primary care offerings, is adjusted EBITDA positive on a contribution basis."
• Lee Bienstock, CEO: "We continue to believe that the substantial investment we made this year into our care gap and primary care offerings, which bring the capabilities of a doctor's office into the patient's living room, offers significant strategic value, and we are seeing notable expansions with our major payer customers to support that view."
• Lee Bienstock, CEO: "We expect our level of investment [in care gap and primary care] to decline significantly in 2026 as our early markets mature and become more self-sustaining."
• Norm Rosenberg, CFO: "Today, we issued 2026 guidance, which calls for a base business revenue increase of 12%-20%."
• Norm Rosenberg, CFO: "I'd like to point out that this should be viewed as our baseline forecast, which represents already contracted revenues that we can support with our current capacity. It does not assume any acquisitions or new contract wins from our robust pipeline."
• Norm Rosenberg, CFO: "At the top end of our revenue guidance range for 2026, we would expect to exit the year on an adjusted EBITDA positive run rate."

Industry Context

The company operates in the rapidly evolving mobile health and medical transportation sectors, which are seeing increased demand for accessible, in-home care and efficient patient transport. The significant wind-down of large, temporary government contracts (migrant-related programs) highlights the volatility of such revenue streams, while the growth in core business lines and strategic acquisitions (SteadyMD) indicate a focus on long-term, diversified service offerings aligned with broader trends towards proactive, patient-centric healthcare and telehealth expansion. The company's strategic investments in care gap closure and primary care offerings align with the industry's shift towards preventative and longitudinal care models.

Stakeholder Impact

• Shareholders: Negative impact due to significant revenue decline, net loss, adjusted EBITDA loss, and asset impairments. Potential for future growth in core business lines and strategic acquisitions offers long-term upside, but near-term financial performance is challenging.
• Employees: Continued operations and expansion in core services (e.g., SteadyMD acquisition) suggest stability and potential growth opportunities, but cost rationalization initiatives mentioned as a risk could imply workforce adjustments.
• Customers: New contracts and expanded services (e.g., San Diego, Albany VA, New Mexico, California health plan) indicate continued and growing service delivery.
• Creditors: Repayment of a $30 million line of credit reduces debt, but ongoing adjusted EBITDA losses and cash burn could be a concern if not managed effectively.

Next Steps

• Continue ramping services under a multi-year contract with a major academic medical system in the New York metro area.
• Implement the new mobile health vaccination program for the County of San Diego.
• Provide medical transportation services to Albany Stratton VA Medical Center.
• Launch a care gap closure program in New Mexico with a national insurance provider (subsequent to quarter end).
• Provide longitudinal care services for a major health plan in California (subsequent to quarter end).
• Integrate the SteadyMD virtual care platform to expand telehealth services and achieve operational synergies.
• Decline in investment level for care gap and primary care offerings in 2026 as early markets mature.
• Aim to exit 2026 on an adjusted EBITDA positive run rate at the top end of revenue guidance.

Key Dates

Recommendation

The company is undergoing a significant transition with the wind-down of high-revenue migrant programs, leading to substantial revenue decline and net losses. While core business lines show promising organic growth and strategic acquisitions like SteadyMD expand capabilities, the near-term financial outlook includes continued adjusted EBITDA losses through 2026. The stock is likely to experience volatility as the market digests the transition and assesses the pace of core business growth offsetting the lost revenue. A 'Hold' recommendation allows investors to observe the execution of the new strategy and the company's progress towards profitability without exiting positions prematurely given the underlying growth in core segments.

Keywords

mobile health, medical transportation, telehealth, care gap closure, remote patient monitoring, adjusted EBITDA, Q3 2025 earnings, DocGo, DCGO, healthcare technology, virtual care, migrant programs, financial results, SEC filing