As a social media platform for medical professionals, Doximity (DOCS -1.10%) has been a hit, with a reported 80% of current doctors, nurses, and pharmacists currently using its network -- along with 100% of medical students. In this episode of "The Health & Fitness Show" on Motley Fool Live, recorded on March 25, Fool.com contributors Brian Orelli and Rachel Warren discuss the company and its streams of revenue with Motley Fool analyst Sanmeet Deo.
Sanmeet Deo: So the majority of the revenues are really ad-based, you said subscription, so if I'm a pharma company, I sign up with Doximity for subscription and then pay whatever per month, and then I'm able to advertise as much as I want, is that how it works?
Rachel Warren: Yeah, that's my understanding. They work with these major, for example, drugmakers who then place ads on the platform, which will then of course marketing directly to large medical groups as well as individual practitioners. I was interested as well, but so much of their revenue comes from ad-based solutions, and then of course, there's also the telehealth side. But it makes sense, and also medical providers, they pay a fee to use the platform, I believe, in certain cases, and so that pricing structure can very much depend on, OK, is this a large health system that's using it or is it like a solo practitioner doctor's office. Super interesting company, and I like that they have so many different sources of revenue as well.
Brian Orelli: There's also the hospitals are paying to post advertisements so that they can ... It makes sense for both the hospitals and for the drugmakers because they're getting a lot higher percentage of users are doctors and I think nurses use it, too, and pharmacists use it, and so they're getting their ads in front of the right people by using Doximity versus the other things. I think I've heard that basically 100% of medical students use Doximity because they're more likely to use it than the older doctors. But they even have a fairly high percentage of older doctors as well.
Warren: Because I think there's like a whole job directory on there as well. I was trying to find out a little more about pricing because obviously that would very much vary. One thing I found was on a report on MyClinic.com, it was saying that Doximity software licensing, customization, and maintenance costs can run up to 12,000 per user, and then for example, let's say you use their electronic medical records functionality, subscription costs for that can run around 500 per month, and that's just one aspect. Just to give an idea, there's definitely a lot of different ways they generate revenue.
Orelli: I think their telehealth thing was basically just that they had it before the pandemic, but it wasn't really that big of a deal, and then of course the pandemic helped it to blow up. I think most of the doctors were just using it to hide their cell phone number, then you can call your patient and it shows [OVERLAPPING]
Warren: It hides the number, so if use your phone number, they're not going to see it as a patient.
Orelli: Right. I think that's what it was mainly used for before the pandemic was if they just needed to call somebody and they weren't in their office, they could call them through Doximity. But now it's also used a lot more for actual scheduled telehealth visits.
Deo: What I found interesting, too, when I was reading up on it with the telehealth aspect, it hides their number, but then they can just do right it from their phone, and it makes it very easy for doctors to just jump on a quick telehealth call. Doctors, I can say this because my wife is a doctor, but they're not always the most technically savvy when it comes to technology, so whenever it's too complicated, or too hard, it's a hurdle for them to use the technology. From what I've read, Doximity hurdle is much lower and is much easier, so the adoption can be much higher by physicians to use it because it's on your phone, it's an app. You just have them call you and you're not worried about them getting your number and then calling you at odd hours and texting you at odd hours at a time for all of your different, you can control your communication with your patients, and it's HIPAA compliant, so that makes it even more secure for them. That was interesting. I think the one thing that's really fascinating is you said 80% of physicians are using Doximity.
Warren: Yes.
Deo: That level, and then we're saying all the medical students and the early physicians, or physicians coming out of med school starting their careers, are using this platform. That engagement, it feels like it will lead to more things even than what they have now in terms of revenue growth and optionality and areas that they can delve into. If you have the engaged platform and the engaged audience, you can start doing stuff with that, you can start creating stuff for that.
Warren: That's why it's been called the LinkedIn for doctors because it very much has that aspect to it. You can network with your fellow medical professionals, but you can also post your resume on there. You can look through postings through various job directories, you can stay up to date on the latest medical news. I think it's interesting, there's so many different ways to invest in the healthcare space. We've talked about AI and healthcare, we talk about telehealth, we talk about biotech and pharmaceutical companies. But then you have a company like Doximity that's approaching it from this very different way of really focusing on the needs of those healthcare providers, the nurse practitioners, the nurses, the physicians across the U.S. I don't see a lot of other companies doing what Doximity is doing right now, and I think that makes it a really compelling company to at least look into more. It's one I definitely want to delve into a little further now that I've done a brief dive into it.
