DocGo Inc.

Previous 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…

Excerpt shortened here; the source contains the full paragraph.

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 the recent and ongoing 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 …

Excerpt shortened here; the source contains the full paragraph.

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. 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.

Current wording

The inflation rate in the United States, as measured by the Consumer Price Index, moderated in 2024 after trending well above historical levels in the period from the second quarter of 2021 through the second quarter of 2024. This data is reported monthly, showing year-over-year changes in prices across a basket of goods and services. The inflation rate declined during the second half 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, 2.4% in March, 2.3% in April, 2.4% in May and 2.7% in June. However, the introduction of new tariffs on imported goods has led to the prospect of increased inflation over the second half of 2025 and beyond. The increased inflation rate witnessed between 2021 and 2024 had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies. This 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 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.

Current wording

During the six months ended June 30, 2025, the Company completed one acquisition, for $4.2 million. The Company did not complete any acquisitions during the six months ended June 30, 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. 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.

Current wording

In recent years, the Company’s government contract work has represented a substantial portion of its overall revenue. While the Company expects government contract work to decline, both in absolute dollar terms and as a percentage of overall consolidated revenue, due primarily to the ending of large migrant-related projects in New York, the Company continues to bid on government contracts and expects some revenue from this sector in the future. 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 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.

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 or a decline in 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 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.

Current 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.

Previous wording

General and administrative expenses consist primarily of salaries, bad debt expense, insurance expense, consultant fees and professional fees for accounting services. We expect our general and administrative expenses to increase as we continue to scale our business and grow headcount and as a result of operating as a public company, including our compliance with SEC rules and regulations, audit activities, additional insurance expenses, investor relations activities and other administrative and professional services.

Current wording

General and administrative expenses consist primarily of salaries, bad debt expense, insurance expense, consultant fees and professional fees for accounting services. We incur additional general and administrative expenses as a result of operating as a public company, including our compliance with SEC rules and regulations, audit activities, additional insurance expenses, investor relations activities and other administrative and professional services. In dollar terms, our general and administrative expenses have declined in recent quarters, along with the decline in our overall revenues, due to the wind-down of the Company’s migrant-related projects. However, these costs have increased when measured as a percentage of total revenue, as the decline in general and administrative costs has been smaller than has been the decline in total revenue. Over the remainder of 2025, we expect this trend to continue, with general and administrative costs declining sequentially in absolute dollar terms, while increasing as a percentage of revenues. Over the longer term, we expect that general and administrative expenses will increase along with headcount as the Company’s overall business activity increases, including higher sales and marketing fees.

Previous 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.

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. Technology and development expenses will also be driven by investments made into new areas, such as artificial intelligence (AI).

Previous wording

Our sales, advertising and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows and promotional materials and general branding. We expect our sales, advertising and marketing expenses to continue to increase over time as we increase our marketing activities, grow our domestic and international operations and continue to build brand awareness.

Current wording

Our sales, advertising and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows and promotional materials and general branding. We expect our sales, advertising and marketing expenses to continue to increase over time as we increase our marketing activities, expand into new geographic markets and customer verticals, particularly in the Mobile Health segment; and continue to build brand awareness.

Previous 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.

Current wording

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

Previous 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.

Current wording

For the three months ended June 30, 2025, total revenues were $80.4 million, a decrease of $84.5 million, or 51.2%, compared to the three months ended June 30, 2024.

Previous 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.

Current wording

For the three months ended June 30, 2025, Mobile Health Services revenues were $30.8 million, a decrease of $85.9 million, or 73.6%, compared to the three months ended June 30, 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 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.

Current wording

For the three months ended June 30, 2025, total cost of revenues (exclusive of depreciation and amortization) decreased by 49.6% compared to the three months ended June 30, 2024, while revenues decreased by approximately 51.2%. Cost of revenues as a percentage of revenues increased to 68.4% in the three months ended June 30, 2025 from 66.2% in the three months ended June 30, 2024.

Previous wording

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended March 31, 2025 amounted to $31.3 million, down 66.3% from $92.9 million in the three months ended March 31, 2024. Cost of revenues as a percentage of revenues increased to 69.2% from 64.5% in the prior year period, due to the decline in Mobile Health Services revenues, driven by the wind-down of migrant-related projects and lower margins from the early-stage care gap closure business.

Current wording

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended June 30, 2025 amounted to $20.8 million, down 72.2% from $74.9 million in the three months ended June 30, 2024. Cost of revenues as a percentage of revenues increased to 67.5% from 64.2% in the prior year period, due to the decline in Mobile Health Services revenues, driven by the wind-down of migrant-related projects and lower margins from the early-stage care gap closure business.

Previous 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.

Current wording

For the three months ended June 30, 2025, the Company recorded $42.9 million of operating expenses compared to $45.7 million for the three months ended June 30, 2024, a decrease of 6.1%. As a percentage of revenue, operating expenses increased from 27.7% in the second quarter of 2024 to 53.4% in the second quarter of 2025, reflecting the decrease in revenues described above. The decrease of $2.8 million in operating expenses related to a $5.1 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 an increase of $1.8 million in total compensation as well as a net $0.5 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 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.

Current wording

For the Mobile Health Services segment, operating expenses in the three months ended June 30, 2025 were $10.6 million, down 32.9% from $15.8 million in the three months ended June 30, 2024. Operating expenses as a percentage of revenues increased to 34.4% in the second quarter of 2025, from 13.5% in the second 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 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.

Current wording

For both the three months ended June 30, 2025 and 2024, the Company recorded $0.5 million of interest expense, net. Interest expenses on borrowings under the Prior Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in both of the three month periods ended June 30, 2025 and 2024.

Previous 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.

Current wording

During the three months ended June 30, 2025, the Company recorded a loss on equity method investments of $38,817, representing its share of the losses incurred by an entity in which the Company has a minority interest. During the three months ended June 30, 2024, the Company recorded a loss on equity method investments of $64,014.

Previous 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.

Current wording

During the three months ended June 30, 2025, the Company recorded other income of $0.1 million, compared to other income of $0.3 million in the three months ended June 30, 2024.

Previous 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.

Current wording

For the three months ended June 30, 2025, the Company had net loss attributable to noncontrolling interests of approximately $2.1 million, compared to net loss attributable to noncontrolling interests of approximately $0.7 million for the three months ended June 30, 2024.

Previous 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.

Current wording

For the six months ended June 30, 2025, Transportation Services revenues were $100.5 million, an increase of $4.1 million, or 4.3%, compared to the six months ended June 30, 2024. This increase was due to a 2.1% increase in U.S. trip volumes, to 146,728 trips in the six months ended June 30, 2025, from 143,699 trips for the six months ended June 30, 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 slightly, to $394 in the six months ended June 30, 2025, from $396 in the six months ended June 30, 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, particularly in the first quarter of the year.

Previous 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.

Current wording

Total cost of revenues in the six months ended June 30, 2025 decreased by $113.7 million compared to the same period in 2024. This decrease was primarily attributable to a $16.5 million decrease in total compensation, a $62.4 million decline in subcontracted labor costs and a $23.3 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 $2.7 million decrease in vehicle costs; a $2.0 million decline in travel-related costs for field employees; and a $6.8 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 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.

Current wording

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the six months ended June 30, 2025 amounted to $68.1 million, up 3.0% from $66.1 million in the six months ended June 30, 2024. Cost of revenues as a percentage of revenues decreased to 67.8% from 68.6% in the prior year quarter, as the increase in revenues outpaced the increase in cost of revenues. Total compensation increased by 14.8% 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 39.3% when compared to last year’s first half, 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 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.

Current wording

For the Transportation Services segment, operating expenses in the six months ended June 30, 2025 were $31.8 million, up 1.6% from $31.3 million in the six months ended June 30, 2024. Operating expenses as a percentage of revenues decreased to 31.6% for the six months ended June 30, 2025 from 32.5% in the six months ended June 30, 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 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.

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 six months ended June 30, 2025 were $33.9 million, up 9.0% from $31.1 million in the six months ended June 30, 2024, as higher stock compensation costs outweighed a decline in subcontractor expenses and professional fees. Corporate expenses amounted to approximately 19.2% of total consolidated revenues in the first half of 2025, compared to 8.7% in the first half of 2024, reflecting the decline in total consolidated revenues.

Previous wording

Gain on disposal of fixed assets

Current wording

(Loss) gain on disposal of fixed assets

Previous 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.

Current wording

During the six months ended June 30, 2025, the Company recorded a loss on the disposal of fixed assets of $33,215, compared to a gain on the disposal of fixed assets of $65,398 during the six months ended June 30, 2024.

Previous 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.

Current wording

During the six months ended June 30, 2025, the Company recorded an income tax benefit of $8.4 million, compared to an income tax provision of $8.8 million in the six months ended June 30, 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

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.

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 six months ended June 30, 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 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.

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 was 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

On November 1, 2022, the Company entered into the Credit Agreement, which provides for the Revolving Facility in the initial aggregate principal amount of $90.0 million. The Revolving Facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $50.0 million, though no lender (nor the lenders collectively) is obligated to increase its respective commitments. Borrowings under the Revolving Facility bear interest at a per annum rate equal to (i) at the Company’s option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. The applicable margins are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis. The initial applicable margins were 1.25% for an adjusted term SOFR loan and 0.25% for a base rate loan and are updated based on the Company’s consolidated net leverage ratio. The Revolving Facility matures on November 1, 2027 and is secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets. The Revolving Facility is subject to certain financial covenants, such as a net leverage ratio and interest coverage ratio, as defined in the Credit Agreement. On October 19, 2023, the Company drew down $25.0 million under the Revolving Facility. On February 8, 2024, the Company drew down an additional $15.0 million. On February 27, 2024, the Company repaid all amounts then outstanding under the Revolving Facility. However, in March 2024, the Company once again drew down under the Revolving Facility, and there was a total of $30.0 million outstanding as of the date of this Quarterly Report on Form 10-Q.

Current wording

On November 1, 2022, the Company entered into the Prior Credit Agreement, which provided for the Prior Revolving Facility in the initial aggregate principal amount of $90.0 million. The Prior Revolving Facility included the ability for the Company to request an increase to the commitment by an additional amount of up to $50.0 million, though no lender (nor the lenders collectively) was obligated to increase its respective commitments. Borrowings under the Prior Revolving Facility bore interest at a per annum rate equal to (i) at the Company’s option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. The applicable margins were based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis. The initial applicable margins were 1.25% for an adjusted term SOFR loan and 0.25% for a base rate loan and were updated based on the Company’s consolidated net leverage ratio. The Prior Revolving Facility was scheduled to mature on November 1, 2027 and was secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets. The Prior Revolving Facility was subject to certain financial covenants, such as a net leverage ratio and interest coverage ratio, as defined in the Prior Credit Agreement. There was a total of $30.0 million outstanding under the Prior Revolving Facility as of June 30, 2025. On August 1, 2025, the

Previous 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.

Current wording

As of June 30, 2025, available cash totaled $104.2 million, which represented an increase of $14.9 million compared to December 31, 2024, as increased collections leading to a decline in accounts receivable during the six months ended June 30, 2025, which outweighed a net loss and cash used for share repurchases and an acquisition. As of June 30, 2025, working capital amounted to $136.5 million, which represented a decrease of $46.2 million compared to December 31, 2024, as a large decline in accounts receivable outweighed an increase in cash and a decline in accounts payable and accrued liabilities. Current assets declined by $67.9 million, due to the large drop in accounts receivable, which outweighed a decline in current liabilities in the six months ended June 30, 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 three months ended March 31, 2025 and 2024 were as follows:

Current wording

Cash flows as of the six months ended June 30, 2025 and 2024 were as follows:

Previous 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.

Current wording

During the six months ended June 30, 2025, operating activities provided $43.2 million of cash, despite a net loss of $24.3 million. Non-cash charges amounted to $11.0 million and included $9.7 million of stock compensation expense, $5.0 million in depreciation of property and equipment and right-of-use assets, $2.7 million from amortization of intangible assets and bad debt expense of $2.5 million. These were partially offset by $8.8 million in deferred taxes and $0.1 million in accretion of discount related to restricted investments. Changes in assets and liabilities resulted in approximately $56.5 million in positive operating cash flow, as an $86.2 million decrease in accounts receivable, reflecting collections of invoices from large municipal customers, a $1.0 million decrease in other assets and a $0.3 increase in operating lease liabilities and right-of-use assets were partially offset by a $7.5 million decrease in accrued liabilities, a $18.2 million decrease in accounts payable and a $5.3 million increase in prepaid expenses and other current assets.

Previous 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.

Current wording

During the six months ended June 30, 2024, operating activities provided $26.2 million of cash, aided by net income of $16.5 million. Non-cash charges amounted to $16.2 million and included $5.1 million in depreciation of property and equipment and right-of-use assets, $3.3 million from amortization of intangible assets, $6.6 million of stock compensation expense, bad debt expense of $2.8 million, a loss of $0.1 million from an investment that is accounted for under the equity method and a change in the fair value of contingent consideration of $0.3 million. These were partially offset by $2.0 million in deferred taxes. Changes in assets and liabilities resulted in approximately $6.5 million in negative operating cash flow, as a $1.6 million increase in accounts receivable, primarily driven by an increased amount of business with municipalities, which tend to have longer payment cycles, and a $28.0 million decrease in accrued liabilities due to payment of certain payables were partially offset by a $10.8 million increase in accounts payable and a $12.3 million decrease in prepaid expenses and other current assets.

Previous wording

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

Current wording

During the six months ended June 30, 2025, investing activities used $27.1 million of cash and restricted cash and consisted of the purchase of restricted investments of $22.2 million, the acquisition of a business of $3.6 million, the purchase of property and equipment totaling approximately $2.2 million, and the acquisition of intangibles of $1.6 million, partially offset by $2.3 million in proceeds from the sale of restricted investments and $0.2 million in cash proceeds from the disposal of property and equipment.

Previous wording

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

Current wording

During the six months ended June 30, 2024, investing activities used $3.6 million of cash and consisted of the acquisition of property and equipment totaling approximately $2.0 million and the acquisition of intangibles in the amount of $1.6 million.

Previous wording

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

Current wording

During the six months ended June 30, 2025, financing activities used $15.9 million of cash, as the Company spent approximately $10.8 million on its share repurchase program, made $2.7 million in payments under the terms of a finance lease, paid $1.3 million in taxes related to shares withheld for employee taxes, made $0.8 million in payments due to seller and made $0.3 million in earnout payments on contingent liabilities.

Previous wording

During the three months ended March 31, 2024, financing activities used $0.9 million of cash, as $45.0 million in proceeds from the Company’s Revolving Facility were mostly offset by $40.0 million in repayments of the Revolving Facility. In addition, the Company spent approximately $4.9 million on its share repurchase program and $1.0 million in payments under the terms of a finance lease.

Current wording

During the six months ended June 30, 2024, financing activities used $8.9 million of cash, as $45.0 million in proceeds from the Prior Revolving Facility were mostly offset by $40.0 million in repayments of the Prior Revolving Facility. In addition, the Company spent approximately $9.8 million on its share repurchase program, $2.0 million in payments under the terms of a finance lease, $1.6 million in earnout payments on contingent liabilities, $0.2 million in dividends paid to a noncontrolling interest and $0.3 million in taxes related to shares withheld for employee taxes.

Previous wording

Net loss for the Company’s VIEs was $1,711,511 and $275,905 for the three months ended March 31, 2025 and 2024, respectively. Total assets amounted to $34,921,206 and $20,837,325 as of March 31, 2025 and December 31, 2024, respectively. Total liabilities were $37,312,253 and $21,516,860 as of March 31, 2025 and December 31, 2024, respectively. The Company’s VIEs’ total stockholders’ deficit was $2,391,046 and $679,535 as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Net loss for the Company’s VIEs was $2,392,937 and $81,978 for the three months ended June 30, 2025 and 2024, respectively, and $4,104,448 and $357,883 for the six months ended June 30, 2025 and 2024, respectively. Total assets, exclusive of intercompany assets, amounted to $6,759,053 and $3,122,209 as of June 30, 2025 and December 31, 2024, respectively. Total liabilities, exclusive of intercompany liabilities, were $11,543,036 and $3,801,744 as of June 30, 2025 and December 31, 2024, respectively. The Company’s VIEs’ total stockholders’ deficit was $4,783,983 and $679,535 as of June 30, 2025 and December 31, 2024, respectively.