Doximity Inc DOCS reported better-than-expected earnings for the first quarter on Thursday.The company posted quarterly earnings of 36 cents per share which beat the analyst consensus estimate of 30 cents per share. The company reported quarterly sales of $145.913 million which beat the analyst consensus estimate of $139.705 million.Doximity raised its FY2026 sales guidance from $619.000 million-$631.000 million to $628.000 million-$636.000 million.“We began our year with strong profit growth and record eng ...

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]