Financial Data and Key Metrics Changes - The company reported revenue of $169 million for Q2 2026, representing a 23% year-on-year growth and a 7% beat from the high end of guidance [6][11] - Adjusted EBITDA margin was 60%, amounting to $101 million, which was 15% above the high end of guidance [6][12] - Free cash flow increased by 37% year-on-year, reaching $91.6 million [13] Business Line Data and Key Metrics Changes - The company achieved an all-time record number of quarterly active subscribers for its Newsfeed, with double-digit growth in articles read [7] - Over 650,000 unique prescribers used the workflow tools in Q2, marking another all-time high [7] - AI tools saw the fastest growth, with quarterly active prescribers up more than 50% from the prior quarter [7] Market Data and Key Metrics Changes - The company finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis [11] - The number of customers contributing at least $500,000 each in subscription-based revenue increased by approximately 16% year-on-year [11] Company Strategy and Development Direction - The company is focusing on AI-optimized integrated programs, which represented over 40% of bookings in Q2, compared to less than 5% in the same quarter last year [15][39] - The integration of Pathway's medical data set and AI models into DoxGPT is expected to enhance the company's offerings in medical AI [8][60] - The company aims to maintain a 55%+ Adjusted EBITDA margin while investing in AI solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed some uncertainty regarding the 2026 budget discussions, indicating a cautious approach to revenue expectations [20][21] - Despite potential headwinds, management remains optimistic about client engagement and the performance of integrated programs [21] - The company expects revenue for Q3 2026 to be in the range of $180 million to $181 million, representing a 7% growth at the midpoint [14] Other Important Information - The company repurchased $21.9 million worth of shares during Q2, with $280 million remaining in the existing repurchase program [13] - The company is excited about the long-term growth opportunities presented by its AI suite [17] Q&A Session Summary Question: Uncertainty around budget discussions - Management indicated that the uncertainty primarily relates to calendar 2026 budgets, which are expected to be finalized soon [20] Question: Future AI opportunities - Management expressed excitement about the potential for AI to add significant value for physicians, with plans to continue expanding AI capabilities [22][23] Question: Budget allocation changes - Management noted that clients are considering potential changes in budget allocations, particularly in light of recent policy changes [28][30] Question: Impact of direct-to-consumer advertising - Management acknowledged that while there are discussions around D2C advertising, it is still early to assess the impact on budgets [29][30] Question: Integrated programs and visibility - Management clarified that integrated offerings represented 40% of upsell sales in Q2, which provides better visibility for future revenue [48][49] Question: Market share and growth - Management stated that the company has been growing at about two times the market growth rate, with a strong competitive position [88][89]

Financial Data and Key Metrics Changes - The company reported revenue of $169 million for Q2 2026, representing a 23% year-on-year growth and a 7% beat from the high end of guidance [6][11] - Adjusted EBITDA margin was 60%, amounting to $101 million, which was 15% above the high end of guidance [6][12] - Free cash flow increased by 37% year-on-year to $91.6 million [13] - Non-GAAP gross margin remained flat at 92% compared to the prior year [12] Business Line Data and Key Metrics Changes - The number of unique prescribers using workflow tools reached over 650,000, marking an all-time high [7] - AI tools saw a growth of over 50% in quarterly active prescribers from the previous quarter [7] - Integrated programs accounted for over 40% of bookings in Q2, a significant increase from less than 5% in the same quarter last year [15][39] Market Data and Key Metrics Changes - The company finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis [11] - The small-medium business segment saw a growth of approximately 100% year-on-year [45] Company Strategy and Development Direction - The company is focusing on AI-optimized integrated programs, which are expected to enhance client engagement and revenue predictability [16][39] - The integration of Pathway's medical data set and AI models into Docs GPT is seen as a significant advancement in medical AI [8][9] - The company aims to maintain a 55%+ adjusted EBITDA margin while investing in AI solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed some uncertainty regarding the 2026 budget discussions, indicating a cautious approach to revenue expectations [20][21] - Despite potential headwinds, management remains optimistic about client engagement and the growth of integrated programs [21][36] - The company expects revenue for Q3 2026 to be in the range of $180 million to $181 million, reflecting a 7% growth at the midpoint [14] Other Important Information - The company repurchased $21.9 million worth of shares during Q2, with $280 million remaining in the repurchase program [13] - The company has integrated a drug reference feature in Docs GPT, providing peer-reviewed answers to drug-related questions [8][62] Q&A Session Summary Question: Uncertainty around budget discussions - Management indicated that the uncertainty primarily relates to the 2026 budgets, which are expected to be finalized soon [20] Question: Future AI opportunities - Management expressed excitement about the potential for AI to add significant value for physicians and plans to continue investing in this area [22][23] Question: Changes in client budgeting allocations - Management noted that discussions with clients indicate some changes in budget allocations, particularly in light of recent policy changes [28][30] Question: Impact of direct-to-consumer advertising policies - Management acknowledged that it is early to assess the impact of new policies on direct-to-consumer advertising but sees potential opportunities [30] Question: Budget flush expectations - Management explained that the transition to integrated programs has led to a more even distribution of upsell dollars throughout the year, impacting budget flush dynamics [34][35] Question: AI strategy and revenue contribution - Management highlighted that AI-optimized programs are expected to significantly contribute to revenue growth in the future [39] Question: Market share in clinical reference - Management stated that they do not have a clear measure of market share in clinical reference but are focused on providing accurate, peer-reviewed answers [75][76] Question: Investment in AI tools - Management indicated that they are currently investing in AI tools and expect expenses to plateau as scale efficiencies are realized [82]

Financial Data and Key Metrics Changes - The company reported revenue of $169 million for Q2 2026, representing a 23% year-on-year growth and a 7% beat from the high end of guidance [4][9] - Adjusted EBITDA margin was 60%, amounting to $101 million, which was 15% above the high end of guidance [4][10] - Free cash flow increased by 37% year-on-year to $91.6 million [10] Business Line Data and Key Metrics Changes - The number of unique prescribers using workflow tools reached over 650,000, marking an all-time high [5] - AI tools saw quarterly active prescribers grow by more than 50% from the prior quarter [5] - Integrated programs accounted for over 40% of bookings in Q2, compared to less than 5% in the same quarter last year [12][13] Market Data and Key Metrics Changes - The company finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis [9] - The number of customers contributing at least $500,000 each in subscription-based revenue increased by roughly 16% year-on-year [9] Company Strategy and Development Direction - The company is focusing on AI-optimized integrated programs, which are expected to provide higher returns for clients and better predictability for the business long-term [15] - The integration of Pathway's medical data set and AI models into Docs GPT is seen as a significant advancement in medical AI [6][7] - The company aims to maintain a 55%+ adjusted EBITDA margin while investing in AI solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed some uncertainty regarding the 2026 budget discussions, indicating a cautious approach to revenue expectations [17][18] - Despite potential headwinds, management remains optimistic about client engagement and the performance of integrated programs [18] - The company expects revenue for Q3 2026 to be in the range of $180 million-$181 million, representing a 7% growth at the midpoint [11] Other Important Information - The company repurchased $21.9 million worth of shares during Q2, with $280 million remaining in the existing repurchase program [10] - The company has integrated a drug reference feature into Docs GPT, allowing for quick access to peer-reviewed answers [6][62] Q&A Session Summary Question: Uncertainty around budget discussions - Management indicated that the uncertainty primarily relates to the 2026 budgets, which are expected to be finalized soon, and noted high client engagement with their platform [17][18] Question: Future AI opportunities - Management expressed excitement about the potential for AI to add value for physicians and indicated plans to fully leverage AI capabilities [21] Question: Changes in client budgeting allocations - Management noted that it is too early to determine the impact of recent policy changes on client budgeting but acknowledged ongoing discussions with agency partners [25][28] Question: Impact of Pathway acquisition - Management highlighted the integration of Pathway as a key advancement, particularly in providing accurate drug-related information [57][62] Question: Market share and growth dynamics - Management confirmed that they are pacing ahead of last year in terms of new contract activity and expect to continue growing at a rate above the market average [81][83]

Core Insights - Doximity, Inc. is recognized as a leading healthcare technology stock, utilizing AI-driven tools and strategic acquisitions to enhance its market position [1] - The recent acquisition of Pathway Medical significantly improves Doximity's DoxGPT tool, providing instant access to verified medical data and AI responses [2] - Doximity has introduced Doximity Scribe, an AI tool that automates clinical documentation, thereby reducing administrative workload for clinicians [3] Financial Performance - In the last quarter ending June 30, 2025, Doximity reported a 15% year-over-year revenue increase, reaching $145.9 million, surpassing analyst expectations [4] - The company achieved non-GAAP earnings per share (EPS) of $0.36, indicating strong financial performance [4] - User engagement and product adoption have notably increased, particularly for new AI scribe and workflow tools [4]

Core Insights - The article discusses the 12 best healthcare stocks to buy and hold for five years, highlighting the role of AI in improving healthcare services and addressing insurance denials [1][4]. Group 1: AI in Healthcare - Dr. Warris Bokhari's platform utilizes AI to appeal health insurance denials for approximately 70 autoimmune diseases, addressing a significant issue where 850 million denials occur annually in the U.S. [2][3]. - The platform was launched on October 2, 2024, and aims to assist patients in navigating care denials by generating appeal letters based on healthcare plans [4]. Group 2: Stock Selection Methodology - The selection of the top healthcare stocks was based on criteria including EPS growth of over 10% in the past five years, an expected EPS growth rate of at least 20% over the next five years, and a forward PE ratio greater than 20 [6]. - The final ranking of stocks was influenced by the number of hedge fund holders as tracked by the Insider Monkey database as of Q2 2025 [6][7]. Group 3: Company Highlights - **Intuitive Surgical, Inc. (NASDAQ:ISRG)**: Pioneered robotic-assisted minimally invasive surgery with its da Vinci systems, which are used globally. The company introduced advanced software features for its da Vinci 5 system in September 2025, enhancing surgical capabilities [9][10]. - **Doximity, Inc. (NYSE:DOCS)**: A leading healthcare technology stock that completed the acquisition of Pathway Medical, enhancing its AI-driven tools. The company reported a 15% year-over-year revenue increase, reaching $145.9 million for the quarter ending June 30, 2025 [13][15]. - **Penumbra, Inc. (NYSE:PEN)**: A leader in thrombectomy and vascular intervention technologies, recently introduced the Ruby XL System and the Lightning Bolt 6X device, expanding its product offerings and market reach [16][18].

Core Insights - Virtual healthcare and physician-focused digital platforms are transforming U.S. healthcare delivery, with Hims & Hers Health, Inc. and Doximity, Inc. leading the charge [1][2] - Hims & Hers focuses on consumer access and affordability, while Doximity leverages its physician network and enterprise solutions [2] Stock Performance & Valuation - Hims & Hers has increased by 208.8% over the past year, outperforming Doximity's 73.4% gain, although Doximity has outperformed Hims & Hers in the last three months with a 21.8% increase compared to Hims' 11.1% [3][6] - Hims & Hers has a forward price-to-sales (P/S) ratio of 4.6, while Doximity's is at 20.9, both above their respective three-year medians [5] - Hims & Hers has a Zacks Style Score with a Growth Score of A, while Doximity has a Growth Score of B [5] Growth Drivers for Hims & Hers - Hims & Hers is diversifying its offerings into areas like weight loss and chronic conditions, with the rollout of generic semaglutide presenting a significant opportunity [7] - The company is expanding internationally, with plans to enter Canada in 2026 and the acquisition of ZAVA enhancing its European presence [7] - Hims & Hers is investing in AI to improve diagnostics and treatment personalization, aiming for a technology-driven healthcare platform [8] Growth Drivers for Doximity - Doximity has over 80% of U.S. physicians active on its platform, with high engagement levels and a sticky ecosystem that supports recurring revenue growth [10] - The launch of Doximity Scribe, which automates clinical note-taking, has seen strong adoption, with over 75% of users returning weekly [11] - Doximity's growth is supported by strong adoption among pharmaceutical and health system clients, contributing to broad-based revenue growth [12] Earnings Projections - The Zacks Consensus Estimate for Hims & Hers suggests a 122.2% improvement in earnings per share (EPS) from 2024 to 2025 [15] - Doximity's fiscal 2026 EPS is projected to improve by 6.3% from fiscal 2025 [17] Price Targets - The average price target for Hims & Hers is $48.67, indicating a potential decline of 11.3% from the last close [20] - The average price target for Doximity is $68.83, suggesting a potential increase of 7.5% from the last close [23] Investment Considerations - Hims & Hers is viewed as a more stable investment opportunity with strong profitability and user engagement, while Doximity is rapidly expanding but may be trading at a higher valuation [24][25] - Both companies are ranked 3 (Hold) by Zacks, but Hims & Hers is considered to have a more capital-efficient model and better growth prospects [24][25]

Core Insights - The article discusses two telehealth stocks, Hims & Hers Health and Doximity, which have shown significant growth and potential for future returns in the healthcare sector [2]. Hims & Hers Health - Hims & Hers Health has experienced a stock price increase of over 200% in the past 12 months, significantly outperforming the S&P 500, which rose about 18% during the same period [3]. - The company's growth was driven by its ability to offer affordable compounded GLP-1 drugs for weight loss, although it can no longer mass-produce these drugs due to the FDA declaring the shortage resolved [5]. - Hims & Hers is diversifying its offerings beyond weight loss, focusing on sexual health, hair loss, dermatology, mental health, and primary care, with most revenue coming from recurring subscriptions [6]. - The acquisition of Zava, a European digital health platform, is expected to enhance investor confidence and expand Hims & Hers' market reach into the U.K., Ireland, France, and Germany, with plans to launch in Canada in 2026 [7][8]. - The company reported a 110% year-over-year revenue growth in Q1 and generated approximately $50 million in free cash flow [8]. Doximity - Doximity has seen its shares increase by over 100% in the past year, positioning itself as the largest digital platform for U.S. medical professionals [9]. - The platform serves as a professional network for healthcare professionals, offering tools for communication, news, and career management, including telehealth solutions [10]. - Doximity provides free access to its services for healthcare professionals, generating revenue through advertising and selling information to pharmaceutical manufacturers and healthcare systems [11][12]. - In fiscal 2025, Doximity reported a 20% revenue increase to $570.4 million, with net income rising 51% year-over-year to $223.2 million and free cash flow increasing by 50% to $266.7 million [13].