Doximity (NYSE:DOCS) shares surged 66% in premarket trading after the digital healthcare platform reported fiscal first-quarter 2027 results that exceeded revenue expectations and prompted management to raise its outlook for the full financial year.
The strong performance, combined with growing momentum in the company’s artificial intelligence offerings, helped reverse negative sentiment that had weighed on the stock following the previous quarter’s disappointing update.
Revenue Tops Estimates Despite Slight EPS Miss
Doximity generated first-quarter revenue of $156.6 million, up 7% from the same period last year and ahead of analysts’ consensus estimate of $151.7 million.
Adjusted EBITDA reached $75 million, representing a margin of 48% and exceeding the upper end of the company’s own guidance by eight percentage points.
Adjusted earnings per share came in at $0.29, narrowly missing Wall Street expectations of $0.30. However, investors largely overlooked the minor earnings shortfall in light of the stronger revenue performance and improved profitability.
AI Products Continue to Gain Traction
Management highlighted increasing commercial adoption of its artificial intelligence products as a key driver of future growth.
Chief Executive Jeff Tangney said Doximity’s AI clinical assistant, Doximity Ask, achieved the highest ranking among US-based models on the NOHARM benchmark.
The company also reported growing interest in its AI Search platform for pharmaceutical customers, with management expecting the product to become a more meaningful contributor to revenue as the financial year progresses.
Company Raises Annual Guidance
Reflecting the stronger start to the year, Doximity increased its full-year revenue forecast by $6 million to a range of $671 million to $681 million.
The upgraded outlook suggests management expects continued demand for its AI-powered products and services, marking a notable shift from the more cautious tone that followed the previous quarter’s earnings release.
Investors Reassess Growth Prospects
The broader US market was modestly higher, with the S&P 500 rising around 0.1% and the Nasdaq gaining approximately 0.5%. However, Doximity’s outsized rally was driven almost entirely by company-specific developments.
The sharp move was also amplified by the stock’s depressed valuation. Shares had been trading close to their 52-week low of $17.15 after falling sharply following the previous quarter’s earnings miss and lower guidance.
The combination of stronger-than-expected revenue, higher full-year guidance and early evidence that the company’s AI investments are beginning to translate into commercial growth prompted investors to reassess Doximity’s longer-term outlook, driving one of the strongest premarket gains in the digital healthcare sector.
Doximity stock price
