What happened
Shares of healthcare company DocGo (DCGO 3.44%) were down 10% as of 2:15 p.m. Wednesday after news broke that shows one of the company's contracts with New York City may not be approved. The stock is down more than 22% so far this year.
So what
DocGo provides mobile health services, remote patient monitoring and ambulance services. On Wednesday, New York City Comptroller Brad Lander announced that he won't approve a $432 million migrant services contract with DocGo and was returning the contract to the city's Department of Housing and Preservation Development. In a letter, Lander cited concerns with DocGo's no-bid selection, as well as the company's responsibility, fiscal health, and subcontractor selection.
Now what
The impact of the potential loss of the contract is as much to DocGo's reputation as it is to its bottom line. In the second quarter, the company reported improved financials and raised yearly revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). In the report, DocGo said it had quarterly revenue of $125.5 million, up 11% sequentially and 14.6% year over year. It also said it had net income of $1.3 million, compared to a net loss of $3.9 million in the first quarter of 2023 and net income of $11.8 million in the same period a year ago.
DocGo has continued to add large contracts. In mid-August, it began a partnership with EmblemHealth to provide mobile healthcare to more than 3 million people in New York City and the tristate area.
In May, it signed a deal with Carnival Cruise Lines to provide on-ship health services at eight ports in the U.S., England, Canada, and Australia. The company's medical response teams now are responsible for passenger screenings upon boarding and for onboard medical care teams.
