Doximity Fiscal 2025 Third Quarter Financial Results [Financial Highlights & Outlook](index=1&type=section&id=Financial%20Highlights%20%26%20Outlook) Doximity reported strong Q3 FY2025 financial results, including significant revenue and net income growth, and provided positive future guidance [Fiscal 2025 Third Quarter Financial Highlights](index=1&type=section&id=Fiscal%202025%20Third%20Quarter%20Financial%20Highlights) Doximity achieved significant Q3 FY2025 year-over-year growth in revenue, net income, Adjusted EBITDA, diluted EPS, and free cash flow | Financial Metric | Q3 FY2025 (in millions) | Q3 FY2024 (in millions) | % Change YoY | | :--- | :--- | :--- | :--- | | Revenue | $168.6M | $135.3M | 25% | | Net Income | $75.2M | $48.0M | 57% | | Adjusted EBITDA | $102.0M | $73.3M | 39% | | Diluted Net Income per Share | $0.37 | $0.24 | 54% | | Operating Cash Flow | $65.2M | $50.1M | 30% | | Free Cash Flow | $63.4M | $48.7M | 30% | - The company achieved record engagement in Q3, with over **610,000 unique providers** using its clinical workflow tools[2](index=2&type=chunk) - AI tools experienced the fastest growth, increasing **60% over the prior quarter**, while the newsfeed surpassed **one million unique providers**[2](index=2&type=chunk) [Financial Outlook](index=1&type=section&id=Financial%20Outlook) Doximity provided Q4 FY2025 and updated full fiscal year 2025 revenue and Adjusted EBITDA guidance | Guidance for Q4 FY2025 | Range (in millions) | | :--- | :--- | | Revenue | $132.5M - $133.5M | | Adjusted EBITDA | $62.5M - $63.5M | | Updated Guidance for Full Year FY2025 | Range (in millions) | | :--- | :--- | | Revenue | $564.6M - $565.6M | | Adjusted EBITDA | $306.6M - $307.6M | [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements reveal a robust financial position with increased assets, strong revenue and net income growth, and robust operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Doximity's balance sheet as of December 31, 2024, shows increased total assets, decreased liabilities, and a substantial rise in stockholders' equity | Balance Sheet Item | Dec 31, 2024 (in thousands) | Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $165,270 | $96,785 | | Total current assets | $1,012,703 | $912,941 | | Total assets | $1,172,157 | $1,079,374 | | Total liabilities | $141,037 | $177,977 | | Total stockholders' equity | $1,031,120 | $901,397 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three and nine months ended December 31, 2024, Doximity reported significant year-over-year increases in revenue and net income | Income Statement (Three Months Ended Dec 31) | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Revenue | $168,603 | $135,284 | | Gross Profit | $154,422 | $123,094 | | Income from operations | $79,925 | $58,551 | | Net income | $75,196 | $47,956 | | Diluted EPS | $0.37 | $0.24 | | Income Statement (Nine Months Ended Dec 31) | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Revenue | $432,111 | $357,365 | | Net income | $160,727 | $106,964 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended December 31, 2024, operating cash flow significantly increased, with financing activities primarily involving stock repurchases | Cash Flow (Nine Months Ended Dec 31) | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $174,778 | $120,152 | | Net cash provided by (used in) investing activities | $(4,825) | $107,356 | | Net cash used in financing activities | $(101,468) | $(262,446) | | Net increase (decrease) in cash | $68,485 | $(34,938) | [Non-GAAP Financial Measures & Key Metrics](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Key%20Metrics) Doximity uses non-GAAP financial measures and key business metrics to provide a comprehensive view of its operational performance [Explanation of Non-GAAP Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Doximity defines its key non-GAAP measures, including Adjusted EBITDA and free cash flow, to clarify their calculation and purpose - Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, and amortization, and further adjusted for stock-based compensation expense, change in fair value of contingent earn-out consideration liability, restructuring and impairment charges, and other income, net[16](index=16&type=chunk) - Free cash flow is calculated as cash flow from operating activities less purchases of property and equipment and internal-use software development costs[16](index=16&type=chunk) [Key Business Metrics](index=6&type=section&id=Key%20Business%20Metrics) Doximity tracks net revenue retention rate and high-value customer count as key business metrics to evaluate growth and scale - Net revenue retention rate is calculated using trailing 12-month (TTM) subscription-based revenue from customers who also had revenue in the prior TTM period, reflecting renewals, expansion, contraction, and churn[17](index=17&type=chunk) - The number of customers with TTM subscription revenue exceeding **$500,000** is a key indicator of the scale of the business[17](index=17&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) Q3 FY2025 reconciliation highlights Adjusted EBITDA and non-GAAP net income, with stock-based compensation as a primary adjustment | Reconciliation (Three Months Ended Dec 31, 2024) | Amount (in thousands) | | :--- | :--- | | **Net income (GAAP)** | **$75,196** | | Stock-based compensation | $19,368 | | Depreciation and amortization | $2,655 | | Provision for income taxes | $14,644 | | Other adjustments | $(9,825) | | **Adjusted EBITDA** | **$102,038** | | Reconciliation (Three Months Ended Dec 31, 2024) | Amount (in thousands) | | :--- | :--- | | **Net income (GAAP)** | **$75,196** | | Stock-based compensation | $19,368 | | Amortization of acquired intangibles | $1,061 | | Other adjustments & tax effect | $(4,219) | | **Non-GAAP net income** | **$91,406** | [Company Information](index=2&type=section&id=Company%20Information) Doximity, a leading digital platform for U.S. medical professionals, offers collaboration and practice management tools, with forward-looking statements subject to risks - Doximity's network includes more than **80% of U.S. physicians** across all specialties and practice areas[5](index=5&type=chunk) - The company's mission is to help doctors be more productive so they can provide better care for their patients by offering digital tools for collaboration, news, career management, and virtual visits[5](index=5&type=chunk) - The press release contains forward-looking statements that are subject to risks and uncertainties, including economic conditions, ability to retain members and customers, and security measures[6](index=6&type=chunk)

For Immediate ReleasesChicago, IL – January 23, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include, Doximity (DOCS) , Omnicell (OMCL) , Embecta Corp. (EMBC) , Cencora, Inc. (COR) and the Global Telemedicine & Digital Health ETF (EDOC) .Here are highlights from Thursday’s Analyst Blog:4 MedTech Stocks Poised to Thrive ...

Investment Analysis - The analyst recommended a hold rating for Doximity (NYSE: DOCS) on 2nd October last year, as the valuation was believed to have already priced in near-term upside [1] - An ideal investment is considered to be one that operates in a sector projected to experience structural (organic) growth exceeding GDP growth over the next 5-10 years [1] - The investment should also profit from sustainable competitive advantages that translate into attractive unit economics [1] - The company should be managed by competent, ethical, and long-term thinkers [1] - The valuation of the investment should be fair [1]

Company Performance - Doximity's shares have increased by 19.98% over the past month, outperforming the Medical sector's decline of 3.8% and the S&P 500's gain of 0.34% during the same period [1] - The company is expected to report earnings of $0.33 per share, reflecting a year-over-year growth of 13.79%, with revenue anticipated at $152.44 million, up 12.69% from the prior-year quarter [7] - For the entire fiscal year, earnings are projected at $1.14 per share and revenue at $539.15 million, indicating increases of +20% and +13.4% respectively from the previous year [2] Valuation Metrics - Doximity currently has a Forward P/E ratio of 50.78, significantly higher than the industry average of 16.87 [3] - The company has a PEG ratio of 3.54, compared to the Medical Services industry's average PEG ratio of 1.48 [9] Industry Context - The Medical Services industry, which includes Doximity, holds a Zacks Industry Rank of 130, placing it in the bottom 49% of over 250 industries [4] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [10] Analyst Sentiment - Recent changes in analyst estimates for Doximity indicate evolving short-term business trends, with positive revisions reflecting analysts' confidence in the company's performance [11] - Doximity currently holds a Zacks Rank of 1 (Strong Buy), with no changes in the consensus EPS estimate over the past month [12]

Industry Overview - The healthcare sector is experiencing significant changes driven by rising patient volumes, higher occupancy rates, escalating medical costs, inflationary pressures, and the resumption of elective procedures, particularly among seniors [1][3] - Key trends such as the increasing use of artificial intelligence (AI), an aging population, a rise in chronic diseases, and advancements in personalized medicine are expected to continue into 2025, driving further transformation [1][7] Investment Opportunities - Stocks tied to the healthcare industry with strong growth prospects, such as McKesson Corporation (MCK), Doximity, Inc. (DOCS), and Veracyte, Inc. (VCYT), present compelling opportunities for investors as the sector evolves [2] - The Zacks Medical Sector reported a 2.8% decline year to date, contrasting with the S&P 500 Index's robust 27.7% growth, indicating potential for recovery and investment opportunities [3] Technological Advancements - AI adoption is helping manage cost growth and improve efficiency, with expanded use in diagnostic accuracy, patient monitoring, and administrative task automation expected in the coming year [6] - The healthcare sector is witnessing increased demand for medical services, leading to a rise in the demand for medical equipment, devices, healthcare-related technologies, medications, and testing volumes [7] Capacity Expansion and M&A Activity - Healthcare providers are investing in capacity expansion through new bed additions, acquisitions, and de novo projects to meet surging inpatient and outpatient demand [8] - The sector has seen heightened merger and acquisition activity as companies seek to consolidate resources and achieve operational synergies, setting the stage for long-term growth [8] Stock Performance and Projections - McKesson's current-year earnings estimate is pegged at $32.73 per share, indicating a 19.3% year-over-year growth, with three upward estimate revisions in the past 30 days [15] - Doximity's current-year earnings estimate is $1.14 per share, reflecting a 20% year-over-year jump, with two upward estimate revisions recently [17] - Veracyte's current-year earnings estimate is 38 cents per share, a significant improvement from the previous year's loss of $1.02, with two upward estimate revisions [20] Market Dynamics - Pharmaceutical and medical device companies are increasingly adopting direct-to-consumer (DTC) models, which may improve patient accessibility but could impact the relationship between patients and their regular providers [9] - The rising demand for psychiatric care has led to a proliferation of behavioral health urgent care clinics, with companies in this space under scrutiny for billing practices and treatment durations [10] Cost Management Strategies - Despite stabilizing inflation rates, medical costs remain a critical challenge, prompting industry players to focus on cost-management strategies, leveraging technologies like AI, telemedicine, and automation [11] - Personalized medicine and digital health solutions are expected to gain traction, offering opportunities for companies that innovate and invest in these areas [11] Policy Considerations - Potential policy changes under the new administration could influence healthcare sector profitability, with concerns about government spending cuts and expiring insurance subsidies creating uncertainty [12]

For those looking to find strong Medical stocks, it is prudent to search for companies in the group that are outperforming their peers. Doximity (DOCS) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Doximity is a member of the Medical sector. This group includes 1022 individual stocks and currently holds a Zacks Sector Rank of #3. The Zacks S ...

Market Overview - The U.S. equity markets have experienced significant volatility recently, with a postelection rally losing momentum due to concerns over potential policy changes under the new administration [1] - Apprehensions regarding the pace of interest rate cuts have also weighed on the markets, despite healthy economic growth providing some leeway for slower monetary easing [1] - Solid earnings from blue-chip technology stocks have contributed to a partial recovery in the markets [1] Momentum Investing Strategy - Investors are looking towards momentum stocks, such as Doximity, Inc. (DOCS), Impinj, Inc. (PI), and Innodata Inc. (INOD), as a strategy to generate sustained profits amid market uncertainty [2] - Momentum investing is based on the principle of "buying high and selling higher," capitalizing on established trends that are likely to continue due to existing momentum [3] - This strategy has been shown to generate alpha over long periods and across various market conditions, although it requires skill to detect trends effectively [4] Screening Parameters for Momentum Stocks - The screening process identifies the top 50 stocks with the best percentage price change over the last 52 weeks to ensure steady appreciation [5] - From these, the bottom 10 performers over the past week are selected to identify those experiencing short-term pullbacks [6] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of A or B are prioritized, as they have a proven history of outperformance [7] Selected Stocks - Doximity has seen a price increase of 113.8% over the past year but has declined by 14.8% in the past week, with a Momentum Score of A [9] - Impinj's stock has rallied 112.9% in the past year but has decreased by 11.7% in the past week, holding a Momentum Score of B [10] - Innodata has experienced a remarkable 380.2% increase in the past year, with a recent decline of 9.7% in the past week, and it has a Momentum Score of A [11]

Core Viewpoint - Doximity (DOCS) is positioned as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook and potential for continued stock price appreciation [1][2]. Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.31 per share, reflecting a year-over-year increase of +6.9% - Over the past 30 days, the Zacks Consensus Estimate for Doximity has risen by 11.56%, with four estimates moving higher and no negative revisions [4]. Current-Year Estimate Revisions - For the full year, Doximity is projected to earn $1.10 per share, representing a year-over-year change of +15.79% - The consensus estimate has increased by 5.65% over the past month, with five estimates moving higher and no negative revisions [5]. Favorable Zacks Rank - Doximity currently holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts regarding positive earnings revisions - Stocks with Zacks Rank 1 and 2 have historically outperformed the S&P 500 [6]. Stock Performance - Doximity shares have increased by 21.4% over the past four weeks, suggesting investor confidence in the company's earnings growth prospects [7].

Company Overview - Doximity positions itself as a digital platform for doctors, offering an integrated suite of tools for marketing, staffing, and workflow management, which includes telehealth, scheduling, and document management [1] Key Personnel - Michael (Mike) Dion is highlighted as an expert in FP&A, Corporate Finance, and Small Business, with 12 years of experience in Fortune 100 companies and a background in various industries such as Telecom, Media and Entertainment, Hospitality, and Construction [1] Investment Approach - The investment strategy focuses on identifying value opportunities where investors may overreact to negative news or underreact to positive news, emphasizing strong fundamentals and a preference for dividend-paying stocks [1]

Core Insights - Doximity shares surged nearly 40% in premarket trading following strong second quarter results and an optimistic outlook for the fiscal year [2][5] - The company reported $136.8 million in revenue for Q2 2025, a 20% increase year-over-year, surpassing analyst expectations of $128.4 million [3] - Doximity's profit for the quarter was $44.2 million, exceeding the projected $37.9 million [3] Revenue and User Metrics - Over 600,000 medical professionals utilized Doximity's networking and productivity tools in the quarter, indicating strong engagement [3] - The company projected third quarter revenue between $152 million to $153 million, above the analyst consensus of $142.7 million [4] - Doximity raised its full-year revenue guidance to a range of $535 million to $540 million, up from the previous range of $514 million to $523 million [5] Market Reaction - Following the earnings report, Doximity shares rose 38.6% to $60.19, marking the highest opening price since March 2022 [5]