Core Insights - Doximity (DOCS) experienced strong revenue growth in fiscal 2025, with total revenues for Q4 reaching $138.3 million, a 17% year-over-year increase driven by subscription revenues [1][6] - The demand for telehealth services is expected to continue rising into fiscal 2026, supported by a record number of unique active users and a significant increase in sales to top clients [1][6] - The company's strategic focus is shifting towards clinical AI products, which aligns with the growing demand for productivity-enhancing tools among physicians [2] Company Performance - Doximity's subscription revenue for Q4 was $131.9 million, also reflecting a 17% year-over-year growth [1][6] - Unique active prescribers exceeded 620,000 in Q4, indicating robust engagement with the platform [1] - Sales to the top 20 clients surged by 23% during fiscal 2025, suggesting strong future growth potential [1][6] Product and Service Demand - The newsfeed product saw a 30% year-over-year increase in articles accessed, contributing to record engagement levels [2] - AI tools, including Doximity GPT, were the fastest-growing segment, increasing over 5 times year-over-year [2] - The company is transitioning its focus from client portals to clinical AI products to address physician burnout and enhance monetization opportunities [2] Industry Context - Competitors like HealthEquity (HQY) and Teladoc Health (TDOC) are also experiencing growth, with HQY reporting a 15% increase in sales to $330.8 million in Q1 of fiscal 2026 [3] - Teladoc Health, despite a decline in operational revenues, reported better-than-expected results due to growth in international revenues and an expanding membership base [4] Valuation and Earnings Estimates - Doximity's shares have gained 0.2% year-to-date, contrasting with a 4.3% decline in the industry [5] - The company trades at a forward price-to-earnings ratio of 36.05, above the industry average but lower than its five-year median of 52.54 [8] - The Zacks Consensus Estimate for Doximity's 2025 earnings suggests a 2.8% increase from the previous year [9]

Core Insights - Doximity, Inc. reported better-than-expected earnings for Q4, with earnings of 38 cents per share, surpassing the analyst consensus estimate of 27 cents per share [1] - The company achieved quarterly sales of $138.29 million, exceeding the analyst consensus estimate of $133.73 million [1] Financial Performance - Doximity closed fiscal 2025 with record engagement, strong profits, and 20% annual revenue growth [2] - The company guided for fiscal Q1 revenue of $139 million to $140 million, below estimates of $143.34 million [2] - Full-year 2026 revenue is forecasted to be between $619 million to $631 million, compared to estimates of $634.6 million [2] Stock Performance - Following the earnings announcement, Doximity shares fell by 9.8%, trading at $52.72 [3] - Analysts adjusted their price targets for Doximity after the earnings report [3] Analyst Ratings - Needham analyst Scott Berg maintained a Buy rating but lowered the price target from $82 to $67 [8] - Canaccord Genuity analyst Richard Close maintained a Hold rating and reduced the price target from $71 to $50 [8] - Raymond James analyst Brian Peterson maintained an Outperform rating, lowering the price target from $83 to $65 [8] - Truist Securities analyst Jailendra Singh maintained a Hold rating and slashed the price target from $58 to $52 [8]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $138 million, which is 4% above the high end of guidance and represents a 17% year-over-year increase [7][17] - For the full fiscal year, revenue reached $570 million, growing 20% year-over-year [7][17] - Adjusted EBITDA for Q4 was $70 million, with a margin of 50%, exceeding guidance by 10% [8][19] - Free cash flow for Q4 was $97 million, up 56% year-over-year, and for the full year, it was $267 million, an increase of 50% year-over-year [8][20] Business Line Data and Key Metrics Changes - The top 20 clients grew revenue by 23% in fiscal 2025, indicating strong performance from the largest customers [7][18] - The company ended the quarter with 116 customers contributing at least $500,000 each in subscription-based revenue, a 17% increase from the previous year [18] - Non-GAAP gross margin for Q4 was 91%, flat year-over-year, while for the full year, it was 92% compared to 91% last year [19] Market Data and Key Metrics Changes - The company expects the Pharma HCP digital market to grow at approximately 5% to 7% in the upcoming year, with the company anticipating to grow at roughly twice the market rate [24] - The company has under 70% of its initial subscription-based revenue guidance under contract, reflecting a cautious approach to macroeconomic uncertainties [24][111] Company Strategy and Development Direction - The company is focusing on multi-module integrated offerings, which have led to larger deal sizes and more efficient launch timelines [17][23] - There is a strong emphasis on AI investments to enhance tools for members and clients, with expectations of significant long-term benefits [25] - The company aims to maintain its competitive position in the Pharma business, which is expected to remain the fastest-growing segment [24] Management's Comments on Operating Environment and Future Outlook - Management has not observed any signs of market slowdown but acknowledges the potential for macroeconomic uncertainties to impact client spending [27][41] - The mood among pharma clients is described as cautiously optimistic, with excitement around AI tools [31][41] - The company is preparing for a tougher year-over-year comparison due to the transition to earlier program launches [23] Other Important Information - The company repurchased $26.8 million worth of shares in Q4 and $116.2 million for the full fiscal year [20] - The company is excited about the potential of AI to improve efficiency and drive growth, viewing it as a critical component of future strategy [25][91] Q&A Session Summary Question: How are customer conversations regarding spending in the current macro environment? - Management has not seen signs of a market slowdown yet, but there is cautious optimism among clients regarding AI tools [27][28] Question: What is the expected payback period for AI investments? - The company is still in early stages of understanding AI's impact on efficiency and margins, but they are already seeing positive results from AI investments [32][34] Question: How does the company view the impact of potential drug pricing constraints? - There has been no direct feedback from clients regarding the No Handouts for Drug Advertisements Act, but the company is focused on transparency and accessibility [56] Question: What is the outlook for the point of care solutions? - The company sees point of care as a diversified channel with significant growth potential, and clients are increasingly leaning into this area [90] Question: How does the company view the revenue cadence throughout the year? - The company expects a more stable revenue growth cadence due to integrated programs and anticipates Q3 to be the highest quarter due to upselling [101][102]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $138 million, which is 4% above the high end of guidance and represents a 17% year-over-year increase [5][15] - For the full fiscal year, revenue reached $570 million, growing 20% year-over-year [6][15] - Adjusted EBITDA for Q4 was $70 million, with a margin of 50%, exceeding guidance by 10% [6][17] - Free cash flow for Q4 was $97 million, up 56% year-over-year, and for the full year, it was $267 million, an increase of 50% [6][18] - The adjusted EBITDA margin for the full fiscal year was 55%, up from 48% the previous year [6][18] Business Line Data and Key Metrics Changes - The top 20 clients grew revenue by 23% in fiscal 2025, indicating strong performance among the largest customers [6][16] - The company ended the quarter with 116 customers contributing at least $500,000 each in subscription-based revenue, a 17% increase from the previous year [16] - Unique active users across various engagement metrics reached record highs, particularly driven by the newsfeed product [7] Market Data and Key Metrics Changes - The company expects the Pharma HCP digital market to grow at approximately 5% to 7% in the upcoming year, with the company anticipating to grow at roughly twice the market rate [22] - The net revenue retention rate was 119% on a trailing twelve-month basis, with the top 20 customers at 123% [16] Company Strategy and Development Direction - The company is focusing on multi-module integrated offerings, which have led to larger deal sizes and more efficient launch timelines [15][21] - There is a strong emphasis on AI investments to enhance tools for members and clients, with expectations of significant long-term benefits [23] - The company aims to maintain a competitive position in the Pharma sector, which is projected to be the fastest-growing business segment [22] Management's Comments on Operating Environment and Future Outlook - Management has not observed any signs of market slowdown but is cautious due to macroeconomic uncertainties [25][30] - The mood among pharma clients is described as cautiously optimistic, with excitement around AI tools [30] - The company is preparing for potential impacts from policy uncertainties while maintaining a positive outlook on growth [40][41] Other Important Information - The company repurchased $26.8 million worth of shares in Q4 and $116.2 million for the full fiscal year [18] - The company ended the year with $916 million in cash, cash equivalents, and marketable securities [18] Q&A Session Summary Question: How are customer conversations regarding spending in the current macro environment? - Management noted that there have been no signs of a market slowdown yet, but they are assuming some material policy uncertainty [25][30] Question: What is the expected payback period for AI investments? - Management indicated that it is still early to determine the exact impact of AI on long-term margins, but they are already seeing benefits from AI investments [31][33] Question: How does the company view the impact of potential drug pricing constraints? - Management acknowledged discussions around drug pricing but noted that clients typically have separate teams for direct-to-consumer marketing, making immediate impacts less likely [52][54] Question: What is the outlook for revenue growth and seasonality? - Management expects a more predictable revenue curve due to integrated programs and anticipates Q3 to be the highest quarter due to upselling [97][98] Question: How is the company addressing the allocation of budgets across digital channels? - Management reported that clients are leaning more into endemic channels, with no signs of slowing growth for their offerings [62][63]