Doximity (DOCS -3.34%), a digital platform for U.S. medical professionals, released its fiscal third-quarter earnings on Feb. 6, 2025. The company reported impressive results, surpassing both analyst forecasts and its own guidance. It achieved a non-GAAP earnings per share (EPS) of $0.45, well above the estimate of $0.34. Revenue reached $168.6 million, compared to expectations of $152 million. Overall, it was a strong quarter performance.
| Metric | Q3 2025 | Q3 Estimate | Q3 2024 | Y/Y Change |
|---|---|---|---|---|
| Non-GAAP EPS | $0.45 | $0.34 | $0.29 | +55.2% |
| Revenue ($M) | $168.6 | $152.0 | $135.3 | +25.0% |
| Net Income ($M) | $75.2 | - | $48.0 | +57.0% |
| Free Cash Flow ($M) | $63.4 | - | $48.7 | +30.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-11-07 earnings report.
Understanding Doximity's Business
Doximity is a prominent digital platform catering to medical professionals in the U.S., featuring comprehensive tools and solutions designed to enhance productivity and communication. This includes telehealth features and AI-driven tools that boost clinical efficiency. The platform excels by connecting doctors through various mediums, supporting them with innovative tools.
Recent focuses have centered around optimizing the user experience and scaling the engagement of its tools. With more than 2 million registered members, including a substantial number of U.S. physicians, Doximity leverages its network scale to drive growth. Critical success factors embody user engagement, streamlined workflows, and client partnerships, particularly impacting pharmaceutical and healthcare systems.
NYSE: DOCS
Key Data Points
Noteworthy Quarterly Highlights
Doximity's Q3 showed growth across multiple fronts. Revenue grew to $168.6 million, representing a 25% increase from last year and exceeding expectations by 10.5%. This growth was driven by enhanced user engagement and adoption of new AI-powered tools, as well as strategic client interactions. Notably, the platform's newsfeed saw significant activity with 1 million unique healthcare providers engaged, while usage of its AI tools rose 60% from the previous quarter.
The company's net income jumped to $75.2 million, marking a 57% year-over-year increase. Margins also improved, with the gross margin reaching 91.6% and an adjusted EBITDA margin of 60.5%, underscoring efficient scaling and operational expertise.
Strategic developments included bolstering its client portal, leading to increased subscriptions among pharmaceutical clients. Doximity’s client engagement strategies significantly influenced strong financial metrics—adjusted EBITDA amounted to $102 million, surpassing the prior guidance of $83 million to $84 million set by management.
Doximity did face industry challenges, such as fierce competition in healthcare technology, and economic pressures that have the potential to affect client spending on marketing and hiring solutions.
Looking Forward
For the future, Doximity’s management is optimistic, enhancing its fiscal year-end forecasts based on impressive Q3 outcomes. Updated guidance predicts revenue of $564.6 million to $565.6 million, along with an adjusted EBITDA ranging from $306.6 million to $307.6 million. This confidence stems from the continued positive trends in revenue diversification and operational efficiency.
