DocGo's VA Contract Win: A Strategic Play on Aging Veterans and Tech-Driven Healthcare

The U.S. Department of Veterans Affairs (VA) serves over 9 million veterans annually, a population projected to grow as Baby Boomers age into eligibility. Against this backdrop, DocGo (DCGO) has secured a $3.4 million multi-year contract with the Albany Stratton VA Medical Center—a move that underscores its strategic pivot toward sustainable revenue streams in government healthcare. Pair this with its Q1 2025 financial adjustments, partnerships outside the VA, and a Net Promoter Score (NPS) of 86 in its care gap programs, and the picture becomes clear: DCGO is positioning itself as a critical player in tech-enabled healthcare accessibility for aging populations. Here's why investors should take notice.

The VA Contract: A Catalyst for Diversification

The $3.4M VA contract, effective July 1, 2025, marks DCGO's entry into serving veterans in Upstate New York. This deal is significant for two reasons:
1. Market Expansion: The Albany VA serves over 50,000 veterans annually, with 450,000 outpatient visits per year. By addressing transportation barriers—a key gap in veteran care—DCGO's Ambulnz subsidiary gains a foothold in a high-demand, government-backed sector.
2. Risk Mitigation: With migrant-related revenue declining (down 68.6% YoY in Q1 2025), diversification into VA contracts reduces reliance on volatile programs. The VA's multi-year terms also provide stability, even if the exact duration remains undisclosed.

The contract aligns with DCGO's broader mission to integrate technology into healthcare logistics. Its proprietary platform, which reduced booking times by 9% in 2024, positions the company to optimize VA transport operations efficiently.

Financial Resilience Amid Near-Term Challenges

DCGO's Q1 2025 results show a deliberate shift toward profitability. While total revenue dropped to $96M (vs. $192M in Q1 2024) due to the migrant program wind-down, its core Medical Transportation segment hit $50.8M, a 5.4% YoY increase. Even more telling:
- Care gap closure programs now serve 900,000+ patients, up from 700,000 in Q4 2024.
- Adjusted EBITDA loss narrowed to $3.9M, improving from a $24.1M positive in Q1 2024 (due to higher migrant-related margins).

Management has slashed SG&A expenses aggressively and prioritized cash flow, with $103M in reserves as of March 2025. CEO Lee Bienstock emphasized: “We're focused on scaling our most profitable verticals—medical transportation and payer/provider partnerships.”

Why the “Strong NPS” Matters

DCGO's NPS of 86 in care gap programs (Q4 2024) is a world-class metric in healthcare, where scores above 70 are rare. This reflects high patient satisfaction with services like in-home primary care and virtual care management. For instance:
- A California cardiology group expanded its partnership to include 1,000+ patients, leveraging DCGO's tech to manage cardiac implantable devices remotely.
- A North Texas health system contract adds 1.2 million residents in Dallas/Fort Worth to DCGO's transportation network.

These partnerships validate DCGO's ability to deliver scalable, high-quality solutions—a prerequisite for winning larger government contracts.

David Shulkin: The X-Factor in Federal Contracting

In April 2025, DCGO hired David Shulkin, former VA Secretary and CEO of the Department of Veterans Affairs (2017–2019). Shulkin's expertise in federal healthcare systems is a game-changer:
- He understands the VA's procurement process and can fast-track approvals for contracts like the Albany deal.
- His influence may open doors to larger opportunities, such as subcontracting with major government contractors or securing Medicare/Medicaid partnerships.

Shulkin's appointment signals DCGO's seriousness about dominating federal healthcare logistics—a market worth $150B+ annually for veterans alone.

The Investment Thesis

Bull Case: DCGO's pivot to VA and payer/provider contracts creates a moat in tech-driven healthcare accessibility. By 2026:
- The Albany VA contract could contribute ~$1.5M annually (assuming a 3-year term).
- Care gap programs, with their 86 NPS, may expand to 1.5M+ patients, driving recurring revenue.
- Shulkin's network could unlock $10–$20M in federal contracts annually.

Bear Case: Near-term cash burn remains a risk. DCGO's Q1 2025 net loss of $11M and revised EBITDA guidance ($20–$30M loss) suggest 2025 will be a “transition year.” However, its $103M cash pile and aggressive cost-cutting mitigate liquidity concerns.

Final Take: Buy the Dip, Hold for the Long Game

DocGo's shares have underperformed due to short-term pain from migrant program exits. But this creates an entry point for investors willing to look beyond 2025. Key catalysts ahead include:
1. Q2 2025 results: Confirming VA contract revenue recognition and margin improvements.
2. Shulkin's federal contract wins: Watch for announcements in H2 2025.
3. Care gap program expansion: Targeting 1M+ patients by year-end.

While DCGO isn't a “set it and forget it” investment, its alignment with aging veteran demographics, tech-driven care, and federal healthcare tailwinds make it a compelling speculative buy. For aggressive investors, DCGO offers asymmetric upside—especially if the company meets its $330M revenue target and turns EBITDA positive by .

Risk Factors: Overreliance on federal contracts, policy changes, and execution risks in scaling care gap programs.

Actionable Insight: Consider a 5% position in DCGO with a 12–18-month horizon. Use dips below $5/share (as of June 2025) to average into the stock.

In the coming years, DCGO's ability to blend veteran healthcare logistics with tech-enabled care will define its success. With the Albany VA contract as its first major step, the company is primed to capitalize on a $150B+ opportunity—one ambulance ride at a time.