DocGo Inc

Previous wording

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. 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."

Current wording

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 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."

Previous wording

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.

Current wording

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

Previous 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.

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; 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 control costs and maintain or improve gross margins and profitability; 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

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; 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; our ability to obtain or maintain operating licenses; potential changes in federal, state or local government policies regarding immigration and asylum seekers; expected impacts of geopolitical instability; our competitive position and opportunities, including our ability to realize the benefits from our operating model; our ability to improve gross margins; our ability to implement and deliver on cost-containment measures and ongoing cost rationalization initiatives; legislative and regulatory actions; the impact of legal proceedings and compliance risk; volatility of our stock price; the impact on our 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; our ability to comply with laws and regulations regarding data privacy and protection and other risk factors that are described herein, as well as the risks discussed in Item 1A “Risk Factors” of Part I in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and that are otherwise described or updated from time to time in our filings with the SEC.

Current wording

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; our ability to expand our programs with insurance partners, hospital systems, municipalities and other strategic partners; our ability to successfully implement our business strategy, including delivering value to shareholders via buybacks, funding new strategic relationships and potentially repaying our line of credit; our ability to establish, maintain and grow customer relationships; our ability to execute projects to the satisfaction of our customers; 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; our ability to maintain existing contracts; our 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; our ability to effectively manage our growth; our financial performance and future prospects; our ability to deliver on our business strategies or models, plans and goals; our ability to expand geographically; 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; changes in the cost of labor; our ability to collect on customer receivables; 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 any prospect of a shutdown of the U.S. federal government; 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 or priorities; expected impacts of geopolitical instability; our competitive position and opportunities, including our ability to realize the benefits from our operating model; our ability to improve gross margins; our ability to implement and deliver on cost-containment measures and ongoing cost rationalization initiatives; legislative and regulatory actions; the impact of legal proceedings and compliance risk; volatility of our stoc…

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Previous wording

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.

Current wording

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.

Previous wording

•Mobile Health Services: 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.

Current wording

•Mobile Health Services: 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 solutions to large, typically underserved population groups, typically through arrangements with municipalities, which include both physical and mental healthcare services.

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 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.

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, including as a result of changes in the U.S. administration and administrative priorities; 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 any 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 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.

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. 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.

Previous wording

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; a weakening of the national economy or of any regional or local economy in which we operate; and other factors beyond our control could adversely affect our business.

Current wording

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, 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; and other factors beyond our control could adversely affect our business.

Previous 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.

Current 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. 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.

Previous 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.

Current wording

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.

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 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.

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. 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.

Previous wording

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.

Current wording

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 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.

Previous wording

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. 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. Operating expenses are discussed on a consolidated level and broken down among all three segments. The Company evaluates the performance of each of its segments based primarily on its results of operations. Accordingly, other income and expenses not included in results of operations are only included in the discussion of consolidated results of operations.

Current wording

Our business consists of three reportable segments — Mobile Health Services, Transportation Services and Corporate. 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. Operating expenses are discussed on a consolidated level and broken down among all three segments. The Company evaluates the performance of each of its segments based primarily on its results of operations. Accordingly, other income and expenses not included in results of operations are only included in the discussion of consolidated results of operations.

Previous wording

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. 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. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, particularly when entering new business lines or customer sales channels.

Current wording

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. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, particularly when entering new business lines or customer sales channels.

Previous wording

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

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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. 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 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.

Previous 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.

Current wording

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 $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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

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 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.

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 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.

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Loss on disposal of fixed assets

Current wording

Gain on disposal of fixed assets

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Provision for income taxes

Current wording

Benefit from (provision for) income taxes

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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. 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. 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.

Current wording

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 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 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 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.

Previous wording

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. The Company’s future capital requirements depend on many factors, including potential acquisitions, the Company’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets. Capital requirements might also be affected by factors outside of the Company’s control, such as interest rates, rising inflation and other monetary and fiscal policy changes to the manner in which the Company currently operates. 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.

Current wording

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. The Company’s future capital requirements depend on many factors, including potential acquisitions, the Company’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets. Capital requirements might also be affected by factors outside of the Company’s control, such as interest rates, rising inflation and other monetary and fiscal policy changes to the manner in which the Company currently operates. 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 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.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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. These were partially offset by $5.2 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.

Current wording

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 $14.7 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.

Previous wording

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.

Current wording

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.