DocGo Inc

Previous wording

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act regarding, among other things, the plans, strategies, outcomes and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of our management. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, outcomes, results or expectations. 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. Accordingly, you should not place undue reliance on such statements. All statements other than statements of historical fact are forward-looking. Forward-looking statements include, but are not limited to, statements concerning our possible or assumed future actions; business strategies, plans and goals; future events; future revenues or performance; financing needs; business trends; results of operations; objectives and intentions with respect to future operations, services and products, including our geographic expansion; new and existing contracts; M&A activity; workforce growth; leadership transitions; cash position; our share repurchase program; expected impacts of macroeconomic factors, including inflationary pressures, general economic slowdown or a recession, rising interest rates, foreign exchange rate volatility, changes in monetary pressure, financial institution instability or the prospect of a shutdown of the U.S. federal government; potential changes in federal, state or local government policies regarding immigration and asylum seekers; expected impacts of geopolitical instability, including the conflict in Ukraine, conflict in Israel and surrounding areas and rising tensions between mainland China and Taiwan; our competitive position and opportunities, including our ability to realize the benefits from our operating model; our ability to improve gross margins; cost-containment measures; legislative and regulatory actions; the impact of legal proceedings and compliance risk; the impact on our business and reputation in the event of information technology system failures, network disruptions, cybersecurity incidents or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data privacy and protection; and others. 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,” “woul…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the plans, strategies, outcomes and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of our management. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, outcomes, results or expectations. Accordingly, you should not place undue reliance on such statements. All statements other than statements of historical fact are forward-looking. Forward-looking statements include, but are not limited to, statements concerning our possible or assumed future actions; business strategies, plans and goals; future events; future results of operations, including revenues, expenses or performance; financing needs; business trends; results of operations; objectives and intentions with respect to future operations, services and products, including our geographic expansion; the provision of services under existing contracts, including winding down of migrant-related services; M&A activity; workforce growth; leadership transitions; cash position and liquidity; our share repurchase program; expected impacts of macroeconomic factors, including inflationary pressures and the interest rate environment; 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; cost-containment measures; legislative and regulatory actions; the impact of legal proceedings and compliance risk; the impact on our business and reputation in the event of information technology system failures, network disruptions, cybersecurity incidents or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data privacy and protection; and any statements or assumptions underlying the foregoing. 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.

Previous wording

For the three months ended June 30, 2024, the Company recorded net income of $5.8 million, compared to net income of $1.3 million in the three months ended June 30, 2023.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, the Company recorded net income of $16.5 million, compared to net loss of $2.6 million in the six months ended June 30, 2023.

Current wording

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.

Previous wording

Our operating results and financial performance are influenced by a variety of factors, including, among others, our ability to establish, maintain and grow customer relationships; our ability to execute projects to the satisfaction of our customers; conditions in the healthcare transportation and mobile health services markets; changes in government spending on healthcare and other social services; availability of healthcare professionals and other personnel; changes in the cost of labor; our competitive environment; overall macroeconomic and geopolitical conditions, including rising interest rates, 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; our ability to obtain or maintain operating licenses; and the success of our acquisition strategy. Some of these key factors are briefly discussed below. Future revenue growth and improvement in operating results will be largely contingent on our ability to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond our control.

Current wording

Our operating results and financial performance are influenced by a variety of factors, including, among others, our ability to establish, maintain and grow customer relationships; our ability to execute projects to the satisfaction of our customers; conditions in the healthcare transportation and mobile health services markets; changes in government spending on healthcare and other social services; availability of healthcare professionals and other personnel; changes in the cost of labor; our competitive environment; 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; our ability to obtain or maintain operating licenses; and the success of our acquisition strategy. Some of these key factors are briefly discussed below. Future revenue growth and improvement in operating results will be largely contingent on our ability to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond our control.

Previous wording

The Mobile Health Services market is dependent on several factors, including increased patient acceptance of services that are provided outside of traditional healthcare facilities, such as in homes, businesses or other designated locations; healthcare coverage of the various Mobile Health Services; 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 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.

Current wording

The Mobile Health Services market is dependent on several factors, including increased patient acceptance of services that are provided outside of traditional healthcare facilities, such as in homes, businesses or other designated locations; healthcare coverage of the various Mobile Health Services; 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.

Previous wording

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. Though the inflation rate declined to 4.1% in 2023 from 8.0% in 2022, it remains above historical averages. The increased 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. In a continued attempt to dampen inflation, the U.S. Federal Reserve implemented four interest rate hikes in 2023, raising its benchmark rate to the current level of 5.25%-5.50%, which remained unchanged as of the date of the filing of this Quarterly Report on Form 10-Q. Inflation has moderated in the first half of 2024, with a rate of 3.0% being recorded for June. Looking to the remainder of 2024, we anticipate a continued moderation of the inflation rate, with an interest rate cut now being viewed as a possibility before the end of the year. 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.

Current wording

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

Previous wording

During the six months ended June 30, 2024, the Company did not complete any acquisitions. During the six months ended June 30, 2023, the Company completed three acquisitions for an aggregate purchase price of $34.2 million.

Current wording

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.

Previous wording

In recent years, the Company’s government contract work has represented a substantial portion of its overall revenue, and maintaining and continuing to grow this revenues stream is an important part of the Company’s growth strategy. However, government contract work is subject to risks and uncertainties. For example, starting in the second quarter of 2023, the Company began providing services to the recent migrant population in New York City and in upstate New York. 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 specific timing and the rate of the wind-down of the remaining services is still uncertain, the Company expects that the revenues from these migrant-related projects will be lower in the second half of 2024 than in the first half of the year.

Current wording

In recent years, the Company’s government contract work has represented a substantial portion of its overall revenue, and maintaining and continuing to grow this revenues stream is an important part of the Company’s growth strategy. However, government contract work is subject to risks and uncertainties. For example, starting in the second quarter of 2023, the Company began providing services to the recent migrant population in New York City and in upstate New York. 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.

Previous wording

For the three months ended June 30, 2024, total revenues were $164.9 million, an increase of $39.4 million, or 31.4%, compared to the three months ended June 30, 2023.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, Mobile Health Services revenues were $260.7 million, an increase of $107.7 million, or 70.4%, compared to the six months ended June 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 first half 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 second half 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. While the specific timing and the rate of the wind-down of the remaining services is still uncertain, the Company expects that the revenues from these migrant-related projects will be lower in the second half of 2024 than in the first half of the year. As such, while we expect to launch new Mobile Health Services projects during the second half of the year, these will be outweighed by a decline in revenues from migrant-related projects and we expect that overall Mobile Health Services revenues will be lower in the second half of 2024 than in the first half of the year.

Current wording

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. 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. 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. 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.

Previous wording

For the three months ended June 30, 2024, Transportation Services revenues were $48.2 million, an increase of $2.8 million, or 6.1%, compared to the three months ended June 30, 2023. This increase was due to a 17.2% increase in trip volumes, to 73,722 trips in the three months ended June 30, 2024, from 62,907 trips for the three months ended June 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 increased to $393 in the three months ended June 30, 2024, from $390 in the three months ended June 30, 2023.

Current wording

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. 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.

Previous wording

Total cost of revenues in the six months ended June 30, 2024 increased by $69.1 million compared to the same period in 2023. This increase was primarily attributable to a $8.3 million increase in total compensation, due to higher headcount for both the Mobile Health Services and Transportation Services segments; a $33.9 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 $16.9 million increase in medical and related supplies; a $1.5 million increase in travel costs for field personnel and other clinicians who traveled out of their home regions to provide Mobile Health Services; a $2.8 million increase in lab fees; and a $5.7 million net increase in other cost of revenues categories, including insurance.

Current wording

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.

Previous wording

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the six months ended June 30, 2024 amounted to $167.7 million, up 59.9% from $104.9 million in the six months ended June 30, 2023. Cost of revenues as a percentage of revenues decreased to 64.3% from 68.5% in the prior year period, due to a significant 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.

Current wording

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.

Previous wording

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended June 30, 2024 amounted to $34.2 million, up 8.6% from $31.5 million in the three months ended June 30, 2023. Cost of revenues as a percentage of revenues increased to 71.0% from 69.3% in the prior year quarter, as the increase in cost of revenues outpaced the increase in revenues. Total compensation remained largely unchanged year-over-year, but there were higher costs for subcontractors and vehicles in the second quarter of 2024 due to a larger number of ambulance trips that were completed by subcontractors in instances where the Company did not have sufficient personnel capacity to provide the requested services, and due to an increase in the size of the vehicle fleet.

Current wording

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.

Previous wording

For the three months ended June 30, 2024, the Company recorded $45.7 million of operating expenses compared to $40.3 million for the three months ended June 30, 2023, an increase of 13.4%. As a percentage of revenue, operating expenses decreased from 32.1% in the second quarter of 2023 to 27.7% in the second quarter of 2024, reflecting the increase in revenues described above. The increase of $5.4 million of operating expenses related primarily to a $0.5 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; a $0.1 million increase in IT infrastructure, driven by the Company’s business and headcount expansion and acquisitions; a $1.4 million increase in professional fees, including higher audit fees resulting from the growth of the business; a $0.5 million increase in bad debt expense, reflecting the growth of the business and related increase in accounts receivable; and a net $2.9 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.

Current wording

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.

Previous wording

For the Mobile Health Services segment, operating expenses in the three months ended June 30, 2024 were $15.8 million, up from $9.9 million in the three months ended June 30, 2023. Operating expenses as a percentage of revenues increased to 13.5% in the second quarter of 2024, from 12.3% in the second quarter of 2023, reflecting significant expenditures that have been made in recent quarters in the expansion of services, particularly in relation to the migrant-related projects in New York as well as the continued build out of the Mobile Health Services management infrastructure.

Current wording

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.

Previous wording

For the Transportation Services segment, operating expenses in the three months ended June 30, 2024 were $16.1 million, compared to $14.6 million in the three months ended June 30, 2023. Operating expenses as a percentage of revenues increased to 33.4% for the three months ended June 30, 2024 from 32.1% in the three months ended June 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.

Current wording

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.

Previous wording

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 June 30, 2024 were $13.8 million, compared to $15.9 million in the three months ended June 30, 2023. Corporate expenses amounted to approximately 8.4% of total consolidated revenues in the second quarter of 2024, compared to 12.6% in the second quarter of 2023, reflecting the significant increase in total consolidated revenues as well as some corporate expense reduction programs implemented at the end of 2023 and in early 2024.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, the Company recorded $0.9 million of interest expense, net compared to $1.3 million of interest income, net in the six months ended June 30, 2023. Interest expenses on borrowings under the Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in the six months ended June 30, 2024, while average cash balances in these accounts were also lower when compared to the six months ended June 30, 2024.

Current wording

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.

Previous wording

During the six months ended June 30, 2024, the Company recorded a loss for the change in fair value of contingent consideration of $0.3 million. There was no related change in fair value recorded in the six months ended June 30, 2023.

Current wording

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.

Previous wording

Gain (loss) on disposal of fixed assets

Current wording

Loss on disposal of fixed assets

Previous wording

During the three months ended June 30, 2024, the Company recorded a gain on the disposal of fixed assets of $12,563, compared to a loss on the disposal of fixed assets of $98,630 during the three months ended June 30, 2023.

Current wording

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.

Previous wording

During the three months ended June 30, 2024, the Company recorded an income tax provision of $3.7 million, compared to an income tax benefit of $0.4 million in the three months ended June 30, 2023. The increased tax expense in the 2024 period was due to the recording of higher pretax income in the 2024 period, as well as increased state and local taxes in the jurisdictions in which the Company did business in the 2024 period.

Current wording

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.

Previous wording

For the three months ended June 30, 2024, the Company had net loss attributable to noncontrolling interests of approximately $0.7 million, compared to net income attributable to noncontrolling interests of approximately $3.3 million for the three months ended June 30, 2023.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, total revenues were $357.0 million, an increase of $118.5 million, or 49.7%, compared to the six months ended June 30, 2023.

Current wording

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.

Previous wording

For the three months ended June 30, 2024, Mobile Health Services revenues were $116.7 million, an increase of $36.7 million, or 45.8%, compared to the three months ended June 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 second half 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. While the specific timing and the rate of the wind-down of the remaining services is still uncertain, the Company expects that the revenues from these migrant-related projects will be lower in the second half of 2024 than in the first half of the year. As such, while we expect to launch new Mobile Health Services projects during the second half of the year, these will be outweighed by a decline in revenues from migrant-related projects and we expect that overall Mobile Health Services revenues will be lower in the second half of 2024 than in the first half of the year.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, Transportation Services revenues were $96.4 million, an increase of $10.9 million, or 12.7%, compared to the six months ended June 30, 2023. This increase was due to a 18.7% increase in trip volumes, to 143,699 trips in the six months ended June 30, 2024, from 121,083 trips for the six months ended June 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 $396 in the six months ended June 30, 2024, from $402 in the six months ended June 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 first half of 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.

Current wording

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. 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.

Previous wording

For the three months ended June 30, 2024, total cost of revenues (exclusive of depreciation and amortization) increased by 30.5% compared to the three months ended June 30, 2023, while revenues increased by approximately 31.4%. Cost of revenues as a percentage of revenues decreased to 66.2% in the three months ended June 30, 2024 from 66.6% in the three months ended June 30, 2023.

Current wording

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.

Previous wording

Total cost of revenues in the three months ended June 30, 2024 increased by $25.5 million compared to the same period in 2023. This increase was primarily attributable to a $0.7 million increase in total compensation, due to higher headcount for both the Mobile Health Services and Transportation Services segments; a $13.4 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 $4.9 million increase in medical and related supplies; a $2.8 million increase in lab fees; a $2.2 million increase in vehicle costs; and a $1.5 million net increase in other cost of revenues categories.

Current wording

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.

Previous wording

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended June 30, 2024 amounted to $74.9 million, up 43.8% from $52.1 million in the three months ended June 30, 2023. Cost of revenues as a percentage of revenues decreased to 64.2% from 65.1% in the prior year period, due to a significant 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.

Current wording

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.

Previous wording

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the six months ended June 30, 2024 amounted to $66.1 million, up 10.4% from $59.9 million in the six months ended June 30, 2023. Cost of revenues as a percentage of revenues decreased to 68.6% from 70.2% 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.

Current wording

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.

Previous wording

For the six months ended June 30, 2024, the Company recorded $97.1 million of operating expenses compared to $78.9 million for the six months ended June 30, 2023, an increase of 23.1%. As a percentage of revenue, operating expenses decreased from 33.1% in the first six months of 2023 to 27.2% in the first six months of 2024, reflecting the increase in revenues described above. The increase of $18.2 million of operating expenses related primarily to a $1.1 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; a $0.7 million increase in IT infrastructure, driven by the Company’s business and headcount expansion and acquisitions; a $2.2 million increase in professional fees, including higher audit fees resulting from the growth of the business; a $3.7 million increase in bad debt expense, reflecting the growth of the business and related increase in accounts receivable; and a net $10.5 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.

Current wording

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; a $0.6 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.

Previous wording

For the Mobile Health Services segment, operating expenses in the six months ended June 30, 2024 were $34.7 million, up from $17.2 million in the six months ended June 30, 2023. Operating expenses as a percentage of revenues increased to 13.3% in the first six months of 2024, from 11.2% in the first six months of 2023, reflecting significant expenditures that have been made in recent quarters 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.

Current wording

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.

Previous wording

For the Transportation Services segment, operating expenses in the six months ended June 30, 2024 were $31.3 million, compared to $25.2 million in the six months ended June 30, 2023. Operating expenses as a percentage of revenues increased to 32.5% for the six months ended June 30, 2024 from 29.4% in the six months ended June 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.

Current wording

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.

Previous wording

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 six months ended June 30, 2024 were $31.1 million, compared to $36.6 million in the six months ended June 30, 2023. Corporate expenses amounted to approximately 8.7% of total consolidated revenues in the first half of 2024, compared to 15.4% in the first half of 2023, reflecting the significant increase in total consolidated revenues as well as some corporate expense reduction programs implemented at the end of 2023 and in early 2024.

Current wording

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.

Previous wording

For the three months ended June 30, 2024, the Company recorded $0.5 million of interest expense, net compared to $0.5 million of interest income, net in the three months ended June 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 June 30, 2024, while average cash balances in these accounts were also lower when compared to the three months ended June 30, 2024.

Current wording

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.

Previous wording

During the three months ended June 30, 2024, the Company recorded a loss for the change in fair value of contingent consideration of $0.3 million. There was no related change in fair value recorded in the three months ended June 30, 2023.

Current wording

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.

Previous wording

During the six months ended June 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 six months ended June 30, 2023, the Company recorded a loss on equity method investments of $0.2 million.

Current wording

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.

Previous wording

During the six months ended June 30, 2024, the Company recorded a gain on the disposal of fixed assets of $0.1 million, compared to a loss on the disposal of fixed assets of $0.2 million during the six months ended June 30, 2023.

Current wording

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.

Previous wording

During the six months ended June 30, 2024, the Company recorded an income tax provision of $8.8 million, compared to an income tax benefit of $2.5 million in the six months ended June 30, 2023. The increased tax expense in the 2024 period was due to the recording of pretax income in the 2024 period, as compared to a pretax loss in the 2023 period.

Current wording

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.