DOCS Q1 Earnings Call: Revenue Miss Offset by Growth in AI Tools and Client Portal Adoption

Healthcare professional network Doximity (NYSE:DOCS) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 17.1% year on year to $138.3 million. Its non-GAAP EPS of $0.38 per share was 39.3% above analysts’ consensus estimates.

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StockStory’s Take

Doximity’s first quarter results were shaped by rising adoption of its workflow tools and continued engagement through its newsfeed platform, which management described as hitting fresh highs in active users. CEO Jeff Tangney credited the company’s growth to “AI tools [that] grew the fastest again last quarter, up more than 5x year-on-year,” and highlighted the company’s specialty-specific artificial intelligence offerings as a differentiator in the physician community. Additionally, CFO Anna Bryson pointed to the impact of multi-module integrated offerings, which allowed for larger deal sizes and more efficient program launches, particularly in January. These operational shifts, coupled with high customer retention rates among Doximity’s largest clients, supported the company’s year-on-year revenue growth and sustained profitability.

Looking ahead, Doximity’s guidance reflects a cautious approach, with management citing macroeconomic and policy uncertainties as factors influencing client budget growth assumptions. Anna Bryson stated, “the biggest factor here as we look ahead over the next 12 months will be what our clients’ budgets look like,” and noted that upsell variability remains a consideration. The company expects its pharma business to remain the fastest-growing segment, driven by integrated offerings and AI-powered client solutions, but acknowledges tougher comparisons due to the pull-forward of revenue from earlier program launches in the prior year. Investments in AI and the expansion of the client portal are expected to enhance operational efficiency and drive long-term growth, though management emphasized prudence in its outlook.

Key Insights from Management’s Remarks

Management attributed quarterly performance to rapid growth in AI-enabled workflow tools, strong engagement with core newsfeed products, and expanded adoption of integrated offerings among pharmaceutical clients.

• AI tool adoption accelerates: Doximity’s specialty-specific AI tools, particularly those allowing secure document uploads and analysis, saw usage increase more than fivefold year-on-year. Management believes these tools are helping reduce physician burnout and information overload, and expects further traction as features mature.
• Client portal drives ROI focus: The rollout of Doximity’s client portal enabled pharmaceutical clients to track program effectiveness and return on investment in real time. This transparency is fueling greater interest in AI-powered automation of marketing programs, with clients granting Doximity more latitude to optimize content delivery.
• Integrated offerings shift revenue timing: The transition to multi-module integrated offerings allowed many clients to launch annual programs earlier, pulling forward revenue and creating a tougher year-over-year comparison for the upcoming quarters. Management expects this new launch pattern to support more predictable and stable revenue cycles in the future.
• Newsfeed engagement at record highs: Unique users and article engagement on the newsfeed platform reached all-time highs, with articles read or tapped up over 30% compared to last year. This trend was attributed to the platform’s ability to deliver relevant clinical news and foster user loyalty.
• Point-of-care and workflow module expansion: Doximity’s point-of-care and formulary modules continued to grow, with management noting these channels remain underpenetrated in the client base. The company sees significant room for future expansion as these modules prove their return on investment.

Drivers of Future Performance

Doximity’s forward outlook is shaped by integrated program adoption, cautious client budget assumptions, and ongoing investments in AI and workflow tools.

• Integrated programs to stabilize revenue: Management expects that the continued rollout of multi-module integrated offerings will lead to steadier and more predictable revenue patterns, as more clients transition to January program launches and year-round campaigns. This shift is seen as a long-term positive for revenue visibility but creates tougher comparisons for the upcoming year due to prior pull-forward.
• AI investments to enhance efficiency: Increased spending on artificial intelligence is expected to drive both operational efficiency and improved client outcomes. Management noted early benefits from AI in reducing manual workload and scaling business without significant headcount increases, but cautioned that the payback period for new investments remains uncertain.
• Macro and budget variability as headwinds: The company is factoring in the potential for slower client budget growth amid ongoing policy and economic uncertainty. Management considers upsell variability and cautious client spending as key risks, with guidance assuming growth at the lower end of the historical market range for pharma digital programs.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) the rate of adoption and upsell activity in integrated multi-module programs, (2) continued expansion and monetization of AI-powered workflow tools among physicians, and (3) the stability of client budgets amid macro policy uncertainty. Progress in client portal capabilities and point-of-care module penetration will also be important indicators of execution.

Doximity currently trades at a forward price-to-sales ratio of 17.4×. Should you double down or take your chips? See for yourself in our full research report (it’s free).

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