Doximity, Inc. (NYSE:DOCS) Q4 2025 Earnings Call Transcript

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Overview

Doximity shows strong financial performance with significant revenue and EBITDA growth, a robust client retention rate, and successful AI tool adoption. Despite some uncertainties in AI investment payback and macroeconomic impacts, the company's strategic initiatives and share repurchase program indicate confidence. The Q&A highlights strong client interest in AI and no signs of market slowdown. The positive guidance and financial results, along with a proactive shareholder return plan, suggest a positive stock price movement in the short term.

Key Financial Performance

Revenue (Q4 2025) $138 million, up 17% year-over-year, exceeding guidance due to strategic shift to multi-module integrated offerings.

Full Year Revenue (FY 2025) $570 million, up 20% year-over-year, driven by larger deal sizes and efficient launch timelines.

Adjusted EBITDA (Q4 2025) $69.7 million, up from $56.4 million (23% increase), with an adjusted EBITDA margin of 50%, up from 48% in the prior year.

Full Year Adjusted EBITDA (FY 2025) $313.8 million, up 36% year-over-year, with an adjusted EBITDA margin of 55%, up from 48% last year.

Free Cash Flow (Q4 2025) $97 million, up 56% year-over-year, reflecting strong operational performance.

Full Year Free Cash Flow (FY 2025) $266.7 million, up 50% year-over-year, indicating improved cash generation.

Non-GAAP Gross Margin (Q4 2025) 91%, flat year-over-year, maintaining strong profitability.

Full Year Non-GAAP Gross Margin (FY 2025) 92%, up from 91% last year, indicating improved efficiency.

Net Revenue Retention Rate (Q4 2025) 119% on a trailing 12-month basis, with top 20 customers at 123%, showing strong customer loyalty and growth.

Customers contributing at least $500,000 in revenue (Q4 2025) 116 customers, up 17% from 99 customers a year ago, indicating growth in high-value clients.

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Operating Highlights

AI Tools Growth: Our AI tools grew the fastest again last quarter, up more than 5x year-on-year.

Doximity GPT Products: Physicians love our specialty specific AI tools and HIPAA-secure environment, and we’re learning a lot from their real-world use.

New Feature Launch: A popular new feature is our ability to upload and securely analyze documents, which helps specialists treat new patients more efficiently.

Revenue Growth: For our full fiscal year ended March 31, we had $570 million in revenue and grew 20% year-on-year.

Client Retention Rate: We finished the quarter with a net revenue retention rate of 119% on a trailing 12-month basis.

Customer Growth: We ended the quarter with 116 customers contributing at least $500,000 each in subscription-based revenue, a 17% increase from the previous year.

Free Cash Flow: Our free cash flow was stronger at $97 million, up 56% year-on-year.

Adjusted EBITDA Margin: Our adjusted EBITDA margin was 55% for the year, up from 48% the prior year.

Shift to Multi-Module Offerings: Fiscal 2025 revenue benefited from our strategic shift to more multi-module integrated offerings.

AI Investment: We are excited to increase our investments in AI this year to build better tools and drive greater efficiency.

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Risk or Challenges

Market Growth Rate: The company anticipates the pharma HCP digital market to grow at roughly 5% to 7% this year, but acknowledges potential macroeconomic uncertainties that could push growth towards the lower end of this range.

Competitive Position: Despite potential market slowdowns, Doximity believes its pharma business will maintain a strong competitive position and grow at roughly twice the market rate.

Revenue Growth Comparison: Fiscal 2026 presents a tougher year-over-year comparison due to the strategic shift to earlier program launches in fiscal 2025, which may impact revenue growth.

Regulatory Issues: The company operates in a highly regulated environment, and any changes in regulations could pose risks to its business model.

Client Retention: While the company has a strong net revenue retention rate of 119%, any loss of major clients could significantly impact revenue.

AI Investment Risks: Increased investments in AI are expected to drive efficiency, but there are inherent risks in technology adoption and integration that could affect outcomes.

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Guidance & Outlook

Revenue Growth: Doximity reported $138 million in revenue for Q4 2025, exceeding guidance by 4%. Full fiscal year revenue reached $570 million, growing 20% year-on-year.

Adjusted EBITDA: Adjusted EBITDA for Q4 was $70 million, with a margin of 50%, exceeding guidance by 10%. Full year adjusted EBITDA grew 36% to $314 million.

Client Engagement: Doximity's unique active users and newsfeed engagement reached record highs, with AI tools growing over 5x year-on-year.

Client Retention: Net revenue retention rate was 119%, with top 20 clients growing at 23%.

AI Investments: Doximity plans to increase investments in AI to enhance tools for members and clients.

Q1 2026 Revenue Guidance: Expected revenue in the range of $139 million to $140 million, representing 10% growth at the midpoint.

FY 2026 Revenue Guidance: Expected revenue in the range of $619 million to $631 million, representing 10% growth at the midpoint.

Q1 2026 Adjusted EBITDA Guidance: Expected adjusted EBITDA in the range of $71 million to $72 million, with a 51% margin.

FY 2026 Adjusted EBITDA Guidance: Expected adjusted EBITDA in the range of $333 million to $345 million, with a 54% margin.

Market Growth Rate: Pharma HCP digital market expected to grow at 5% to 7%, with Doximity projected to grow at twice the market rate.

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Shareholder Return Plan

Share Repurchase Program: During the fourth quarter, Doximity repurchased $26.8 million worth of shares. For the full fiscal year, the total repurchased amount was $116.2 million at an average price of $33.73. As of March 31, there was $424 million remaining in the existing repurchase program.

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Key Q&A

Q:How are your customer conversations in terms of their willingness to spend this year?

A:We have not seen any signs of a market slowdown yet. There’s a lot of excitement about AI among our clients, and those that buy our AI optimization are growing at double the rate of other clients.

Q:What can you add about the payback period on AI investments?

A:We’re still in the early stages of learning how AI could make our business more efficient. It’s too soon to know exactly what medium to long-term margins could look like, but we feel good about guiding to two years in a row of 50% plus adjusted EBITDA margins.

Q:Is there anything we can look back on during times of uncertainty that could help us understand potential impacts?

A:We’ve gone through many evolutions, including COVID, which was a tailwind for our business. Our upsells can be more variable, and we’re being prudent in our guidance.

Q:Can you talk about the strength in your physician recruitment and point-of-care formulary?

A:Our pharma business has led our growth, and we’re excited to see continued traction in our integrated offerings.

Q:Are you seeing any changes in how budgets are being allocated across digital channels?

A:We’ve seen no signs of market growth slowing down, and clients are leaning more into what they call endemic channels.

Q:What is the status of ad load across the newsfeed?

A:We’ve seen a 30% increase in articles tapped in our newsfeed, and our ad load hasn’t increased but has spread across more channels.

Q:Are clients buying on the portal now?

A:Yes, we present recommendations in our portal, which allows clients to see pricing and make upsell motions more friction-free.

Q:What is your updated view on the 10:1 ROI for pharma clients?

A:We’re showing clients their ROI on a more frequent basis, which has increased trust and transparency.

Q:What are your thoughts on cash approaching $1 billion and potential investments?

A:We’re actively studying the market for opportunities and are disciplined in our approach to investments.

Q:Review of Unclear Management Responses

A:Management appeared to avoid giving a direct answer when asked about the specifics of the payback period on AI investments, stating it was too soon to know exactly what medium to long-term margins could look like. Additionally, there was a lack of clarity regarding the impact of macroeconomic factors on guidance, with management being cautious but not providing specific data.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

DOCS Transcript

Doximity, Inc. (DOCS) Q2 2026 Earnings Call Transcript

Positive11-6

The earnings call reveals strong financial performance with a 56% EBITDA margin and 15% revenue growth guidance. Product development is promising with AI investments and Pathway acquisition. Market strategy is robust, focusing on AI and health systems. Expenses are controlled with margins expected to remain stable. Shareholder return is not explicitly mentioned, but positive cash flow is anticipated. Q&A insights show optimism in AI and integrated programs, despite some uncertainties in policy impacts. Overall, the sentiment is positive, likely leading to a stock price increase of 2% to 8%.

Doximity, Inc. (DOCS) Q1 2026 Earnings Call Transcript

Positive8-7

Doximity's earnings call summary and Q&A section indicate strong financial performance, with revenue and EBITDA exceeding guidance, and promising AI investments. Despite cautious guidance due to policy uncertainty, the company's robust client engagement, strategic AI integration, and successful product portfolio suggest a positive outlook. The Pathway acquisition's minimal cost impact and high engagement metrics further support this view. Overall, the company's strategic initiatives and market growth potential outweigh any uncertainties, leading to a positive sentiment.

Doximity, Inc. (NYSE:DOCS) Q4 2025 Earnings Call Transcript

Positive5-17

Earnings call transcript: Doximity’s Q4 2025 results beat EPS expectations

Positive5-15

The earnings call reflects strong financial performance with record revenue and EBITDA growth, surpassing guidance. Despite cautious client spending due to macroeconomic factors, AI tools are driving double growth rates among adopters. The company's robust share repurchase program and stable margins further strengthen its position. While guidance is conservative, the overall sentiment remains positive due to strong client loyalty and operational efficiency. The Q&A session highlighted enthusiasm for AI and strategic investments, suggesting potential for future growth.

DOCS Report

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