Doximity Raises Revenue Outlook, Cuts Profit Forecast
Fiscal first-quarter revenue reached $156.6 million, topping the prior forecast by as much as $5.6 million.
Doximity Inc. (DOCS), a digital platform for U.S. medical professionals, accelerated revenue growth in its fiscal first quarter while reporting sharply lower earnings and narrower margins. Revenue grew 7% from a year earlier, compared with 5% growth in the preceding quarter.
The quarter marked a modest rebound in sales after growth slowed from 23% to 15%, 10% and 5% over the previous four quarters. Revenue also increased about 8% sequentially, exceeding the company's earlier guidance range of $151 million to $152 million.
Net income dropped 54% to $24.3 million, and diluted earnings fell to $0.13 a share from $0.27 a share. Non-GAAP net income declined 24% to $55.0 million, while adjusted earnings decreased to $0.29 a share from $0.36 a share.
Higher costs weighed on profitability as operating expenses increased 31% to $99.3 million. Stock-based compensation climbed 68% to $36.8 million, including research-and-development stock compensation that more than doubled. Operating income fell 38%, and the operating margin narrowed to about 21.5% from 37.4%.
Adjusted EBITDA declined 6% to $74.8 million, with the margin contracting to 47.7% from 54.7%. The result nevertheless exceeded Doximity's prior adjusted EBITDA forecast by $5.3 million to $6.3 million and improved sequentially from $65.8 million.
Workflow active-prescriber growth exceeded 30% from a year earlier, extending adoption that had lifted quarterly workflow users from more than 630,000 to more than 800,000 over the previous fiscal year. AI Search queries increased more than 25% from the preceding quarter, and Doximity Ask is the top-performing U.S.-based model in the NOHARM benchmark.
Doximity now expects fiscal 2027 revenue of $671 million to $681 million, raising both ends of its previous range. Its adjusted EBITDA forecast fell to $309 million to $329 million from $323 million to $335 million, signaling continued pressure on profitability even as sales expectations improved.
Operating cash flow fell 32% to $42.0 million, while free cash flow declined 34% to $39.6 million, reversing growth in both measures during the preceding quarter. Doximity repurchased $91.6 million of shares, down from $122.4 million a year earlier, under a program authorizing up to $500 million in buybacks.