Doximity Inc [DOCS]
0.26%
$
69.52 Exchange: NYSE Sector: Healthcare Industry: Medical Healthcare Information Services
Q4 2025 ReportPublished: May 20, 2025
Earnings Highlights
Revenue of $138.29M up 17.1% year-over-year
EPS of $0.31 increased by 50% from previous year
Gross margin of 89.5%
Net income of 62.46M
"We delivered $138 million of revenue for the fourth quarter of our fiscal 2025, 4% above the high-end of our guidance range." - Jeff Tangney
Doximity Inc (DOCS) QQ4 2025 Results Analysis: Record Revenue, AI-Driven Growth, and Healthy Margin Expansion with Strong Cash Generation
Executive Summary
Doximity reported a strong close to its fiscal year 2025, underscored by revenue of $138.3 million for Q4, up 17% year over year, and full-year revenue of $570.4 million, up 20% YoY. The company continues to benefit from a shift to multi-module integrated offerings, driving larger deals and earlier program launches in January, which contributed to upside in fiscal 2025 guidance. Management highlighted robust retention metrics, with trailing twelve-month net revenue retention at 119% and a top-20 customer NRR at 123%, signaling deepening client relationships and stickiness across its platform. Doximity also reported strong profitability and cash generation, with non-GAAP gross margin of 91% in Q4 and an annual non-GAAP gross margin of 92%, adjusted EBITDA margins of 50% in Q4 and 55% for the full year, and free cash flow of $97 million in Q4 and $266.7 million for the year. The balance sheet remains exceptionally strong, with approximately $916 million in cash, cash equivalents and marketable securities, and a remaining $424 million in the share repurchase program. Management reaffirmed optimism on AI as a growth lever, noting accelerated adoption of Doximity GPT tools, expanded portal capabilities, and a strategic shift toward AI-enabled integrated programs. Looking ahead, the company guided for fiscal Q1 2026 revenue of $139–$140 million (about 10% growth) and full-year revenue of $619–$631 million (about 10% growth), with Adj. EBITDA of $333–$345 million (approx. 54% margin). The guidance reflects a prudent stance on macro uncertainty and the expectation of continued acceleration in AI investments and share gains through high-ROI programs.
Key Performance Indicators
Revenue
138.29M
QoQ: -17.98% | YoY:17.14%
Gross Profit
123.82M
89.54% margin
QoQ: -19.82% | YoY:17.38%
Operating Income
48.68M
QoQ: -39.09% | YoY:16.31%
Net Income
62.46M
QoQ: -16.94% | YoY:53.77%
EPS
0.33
QoQ: -17.50% | YoY:50.00%
Revenue Trend
Margin Analysis
Key Insights
Q4 2025 revenue: $138.3 million, up 17% year over year; full-year 2025 revenue: $570.4 million, up 20% YoY. This reflects the strategic shift to multi-module integrated offerings that expand deal sizes and enable earlier January launches.
QoQ revenue progression: prior-quarter growth represented by the 17% YoY figure; management notes a transition year dynamic in 2025 and a more predictable cadence in 2026 due to January start launches.
Gross profit and margins
Non-GAAP gross margin: Q4 2025 at 91%; full-year non-GAAP gross margin at 92% vs 91% prior year, reflecting scale benefits from the integrated offerings.
EBITDA and margins: Q4 2025 adjusted EBITDA of $69.7 million, margin 50%; full-year adjusted EBITDA of $313.8 million, margin 55%.
Profitability and cash flow
Free cash flow (FCF): Q4 2025 FCF of $97 million, up 56% YoY; full-year FCF of $266.7 million, up 50% YoY.
Financial Highlights
Revenue and growth
- Q4 2025 revenue: $138.3 million, up 17% year over year; full-year 2025 revenue: $570.4 million, up 20% YoY. This reflects the strategic shift to multi-module integrated offerings that expand deal sizes and enable earlier January launches.
- QoQ revenue progression: prior-quarter growth represented by the 17% YoY figure; management notes a transition year dynamic in 2025 and a more predictable cadence in 2026 due to January start launches.
Gross profit and margins
- Non-GAAP gross margin: Q4 2025 at 91%; full-year non-GAAP gross margin at 92% vs 91% prior year, reflecting scale benefits from the integrated offerings.
- EBITDA and margins: Q4 2025 adjusted EBITDA of $69.7 million, margin 50%; full-year adjusted EBITDA of $313.8 million, margin 55%.
Profitability and cash flow
- Free cash flow (FCF): Q4 2025 FCF of $97 million, up 56% YoY; full-year FCF of $266.7 million, up 50% YoY.
- Net income and earnings per share: Q4 2025 net income $62.5 million; basic EPS $0.33; diluted EPS $0.31.
Balance sheet and liquidity
- Cash and marketable securities: year-end cash, cash equivalents and marketable securities of approximately $916 million.
- Share repurchase: $26.8 million of shares repurchased in Q4; $116.2 million for the full year; $424 million remaining under the repurchase program.
Customer engagement and retention
- Net Revenue Retention (NRR): 119% trailing twelve months; top 20 customers NRR at 123%; 116 customers each contributing at least $500k in subscription revenue (TTM), up ~17% from a year ago and representing 84% of total revenue.
Product and user metrics
- Newsfeed and engagement: unique active users and articles read/tapped reached record highs; more than 1 million unique prescribers used the newsfeed in the period; AI tools growth accelerated more than 5x year over year; 620k unique active prescribers using workflow tools.
Guidance highlights
- Q1 FY2026: revenue guidance $139–$140 million (midpoint +10%), adjusted EBITDA $71–$72 million (about 51% margin).
- Full-year FY2026: revenue guidance $619–$631 million (midpoint +10%), adjusted EBITDA $333–$345 million (about 54% margin).
Strategic implications
- Management emphasized a durable advantage from AI-enabled, integrated programs that deliver ROI and higher customer lifetime value, supported by an expanding client portal that tracks ROI and informs upsell decisions.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
138.29M
17.14%
-17.98%
Gross Profit
123.82M
17.38%
-19.82%
Operating Income
48.68M
16.31%
-39.09%
Net Income
62.46M
53.77%
-16.94%
EPS
0.33
50.00%
-17.50%
Key Financial Ratios
currentRatio
6.97
grossProfitMargin
89.5%
operatingProfitMargin
35.2%
netProfitMargin
45.2%
returnOnAssets
4.94%
returnOnEquity
5.77%
debtEquityRatio
0.01
operatingCashFlowPerShare
$0.52
freeCashFlowPerShare
$0.52
priceToBookRatio
10.1
priceEarningsRatio
43.75
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategy and AI focus: Doximity emphasizes AI as a core growth engine. Jeff Tangney noted that AI tools grew the fastest in Q4, up more than 5x year over year, and described a shift to clinical AI products as a strategic priority. Anna Bryson highlighted ongoing investments in AI and the expectation of higher ROI as integrated programs mature. The company views AI as a multi-year driver of efficiency and value for both members and clients.
Product momentum and ROI visibility: The CFO stressed the rapid expansion of multi-module integrated offerings, with January launches enabling uninterrupted program presence and improved ROI tracking via the client portal. Jeff Tangney described the portal as a friction-reducing instrument that makes upsell opportunities more visible and actionable. Management cited the portal as a catalyst for greater client ROI transparency and AI-enabled offerings.
Customer retention and share gains: Anna Bryson highlighted a persistent strength in retention (NRR 119%; top-20 NRR 123%) and a growing cohort of $500k+ subscribers (116 customers, up from 99 a year ago, representing 84% of revenue). Jeff Tangney and Anna also noted that share gains are driven by the expanding use of workflow tools (point-of-care, formulary) and the ROI-driven buying decisions enabled by the client portal.
Macro and guidance: Management acknowledged macro uncertainty but said no slowdown had been observed yet. They assume some impact later in FY2026 and framed guidance accordingly, with revenue growth target at ~10% for both Q1 2026 and FY2026 and continued strong adjusted EBITDA margins. They also signaled a cautious stance on upsell timing given variable spend in macro cycles.
We delivered $138 million of revenue for the fourth quarter of our fiscal 2025, 4% above the high-end of our guidance range.
— Jeff Tangney
For the first fiscal quarter of 2026, we expect revenue in the range of $139 million to $140 million, representing 10% growth at the midpoint.
— Anna Bryson
Forward Guidance
Outlook and strategic execution: Doximity projects continued demand in the pharma HCP digital market, targeting 5-7% market growth, with Doximity expected to grow at roughly twice the market rate in FY2026. The company reaffirmed that integrated programs and AI investments are intended to drive higher ROI, longer-duration contracts, and greater revenue visibility. Management expects January launches to become the norm, contributing to a more predictable revenue curve over time. Visibility remains a priority, with just under 70% of initial subscription-based revenue under contract as of the reporting date. Key monitorables for investors include: (1) adoption and monetization of AI-powered offerings within the client portal; (2) uptake of point-of-care and formulary modules; (3) retention and expansion within top customers and SMB clients; (4) progression of macro conditions and potential impact on upsell timing; (5) ROI delivered by integrated programs and its effect on renewal rates and contract lengths.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
DOCS Focus
89.54%
35.20%
5.77%
43.75%
TDOC
70.50%
-7.53%
-3.25%
-8.11%
SDGR
72.60%
-23.50%
-9.54%
-8.71%
TXG
67.20%
-30.20%
-6.90%
-8.90%
PGNY
21.30%
5.29%
2.50%
37.46%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Long-term investment thesis remains favorable on Doximity given a large and growing TAM for AI-enabled physician engagement platforms, and a high-ROE flywheel driven by retention and cross-sell across Newsfeed, Workflow, and Formulary/POC. The company benefits from a top-quartile gross margin profile and strong cash generation, enabling continued AI investments and share repurchases. Near-term attention should be paid to macro-driven variability in upsells and the pace of AI ROI realization across broader customer cohorts. If AI investments translate into sustained 50%+ EBITDA margins and continued share gains, the stock could re-rate as visibility improves and the platform expands into SMB brands and additional pharma programs. Key monitors for investors include unit economics of the integrated programs, the pace of formulary/POC adoption, the ROI momentum from the client portal, and any changes in policy that affect digital pharma marketing budgets.
Key Investment Factors
Growth Potential
Doximity sits at the intersection of professional networking, clinical information, and AI-enhanced care workflows. The four-channel growth model—Newsfeed (core), Workflow tools (second act, including telehealth, scheduling, and AI-assisted analysis), Formulary and Point-of-Care (expanded ROIs and monetization), and AI-based products (potential third act)—offers substantial expansion potential. The company guided to 10% top-line growth in FY2026 with continued expansion of higher-margin, multi-module contracts and robust retention metrics (NRR 119%, top-tier customers at 123%), indicating a healthy platform flywheel. The cash hoard (~$916M) provides flexibility for strategic investments and potential acquisitions in software, AI, or healthcare data platforms, as noted by management intent to increase AI investments in 2026.
Profitability Risk
Macro policy uncertainty remains a meaningful headline risk, with management modeling a potential slowdown at the lower end of market growth. Upsell variability is another risk, given the concentrated revenue base among large customers and the longer sales cycles for integrated programs. Competitive dynamics in digital marketing for pharma and medical channels, regulatory scrutiny around DTC advertising, and reliance on AI-driven tools could dampen near-term ROI if adoption lags. Execution risk exists in scaling AI investments while preserving high-margin economics if headcount or capex grows disproportionately.
Financial Position
Doximity maintains a fortress balance sheet: cash and equivalents plus marketable securities of about $916 million, with negligible debt and a net cash position implied by a net debt figure of approximately -$197 million. The company generated $97 million in free cash flow in Q4 and $266.7 million for the full year, supporting a substantial buyback program ($424 million remaining) and ongoing AI investments. This liquidity supports aggressive R&D, potential acquisitions, and continued margin expansion (FY2025 non-GAAP gross margin of 92% and FY2025 adjusted EBITDA margin of 55%).
SWOT Analysis
Strengths
High gross margins and strong EBITDA margins: Q4 non-GAAP gross margin at 91%, full-year 92%; Q4 adjusted EBITDA margin at 50%, full-year 55%.
Sticky revenue base evidenced by NRR of 119% and top-20 customer NRR of 123%, with 116 customers contributing at least $500k in ARR.
Robust balance sheet and capital return: ~$916M cash; ongoing buybacks with $424M remaining; strong free cash flow generation ($97M in Q4, ~$267M for FY).
Scale and leadership in AI-enabled physician tools: AI tools grew >5x YoY; leadership position in AI-rich workflows (formulary, point-of-care) and a growing clinical AI ecosystem (Doximity GPT).
Weaknesses
High valuation relative to traditional SaaS peers (as implied by ratios such as P/S ~79x and EV/Revenue in the DOCS set), which can temper upside sensitivity to slower macro expansion.
Upsell concentration risk in a relatively small group of large customers; macro-driven variability could impact mid-year revenue progression.
Reliance on enterprise sales cycles for integrated programs; execution risk if January launch cadence shifts or ROI realization slows.
Opportunities
Expand AI-enabled integrated programs across pharma and healthcare systems; increase penetration of point-of-care and formulary modules.
SMB and agency-led customer acquisitions beyond the largest brands, leveraging the agency partner program to capture a broader addressable market.
Greater monetization of the client portal and daily ROI insights to drive more frequent upsells and longer contract durations.
Threats
Regulatory and policy uncertainty around healthcare advertising and digital marketing spend (DTC influences) that could alter pharma budgeting and channel mix.
Macro volatility could compress customers’ willingness to spend, particularly in non-core modules or slower macro cycles.
Competitive pressure from other digital health marketing platforms and EHR-integrated solutions that could erode share gains if ROI advantages diminish.