DOCS Doximity Inc

Total revenues of $126.7 million, up 17% year-over-year Net income growth of 46% and adjusted EBITDA growth of 42% year-over-year

Doximity, Inc. (NYSE: DOCS), the leading digital platform for U.S. medical professionals, today announced results of its fiscal 2025 first quarter ended June 30, 2024.

“We were pleased to deliver strong profits and record engagement last quarter, as we beat on both our top and bottom lines,” said Jeff Tangney, co-founder and CEO of Doximity. “Last quarter, a record 590,000 unique providers used our AI, telehealth, messaging, and scheduling workflow tools to save time and better serve their patients.”

Fiscal 2025 First Quarter Financial Highlights

All comparisons, unless otherwise noted, are to the three months ended June 30, 2023.

• Revenue: Revenue of $126.7 million, versus $108.5 million, an increase of 17% year-over-year.
• Net income and non-GAAP net income: Net income of $41.4 million, versus $28.4 million, representing a margin of 32.7%, versus 26.2%. Non-GAAP net income of $55.9 million, versus $40.6 million, representing a margin of 44.1%, versus 37.5%.
• Adjusted EBITDA: Adjusted EBITDA of $65.9 million, versus $46.6 million, an increase of 42% year-over-year, representing adjusted EBITDA margins of 52.0%, versus 42.9%.
• Diluted net income per share and non-GAAP diluted net income per share: Diluted net income per share was $0.21, versus $0.13, while non-GAAP diluted net income per share was $0.28, versus $0.19.
• Operating cash flow and free cash flow: Operating cash flow of $41.2 million, versus $57.2 million, a decrease of 28% year-over-year, and free cash flow of $39.5 million, versus $55.6 million, a decrease of 29% year-over-year.

Financial Outlook

Doximity is providing guidance for its fiscal second quarter ending September 30, 2024 as follows:

• Revenue between $126.5 million and $127.5 million.
• Adjusted EBITDA between $62.5 million and $63.5 million.

Doximity is providing guidance for its fiscal year ending March 31, 2025 as follows:

• Revenue between $514 million and $523 million.
• Adjusted EBITDA between $248.5 million and $257.5 million.

Conference Call Information

Doximity posted prepared remarks on its investor relations website at https://investors.doximity.com. Doximity will host a webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss these financial results. To listen to a live audio webcast, please visit the Company’s Investor Relations page at https://investors.doximity.com. The archived webcast will be available on the Company’s Investor Relations page shortly after the call.

About Doximity

Founded in 2010, Doximity is the leading digital platform for U.S. medical professionals. The company's network members include more than 80% of U.S. physicians across all specialties and practice areas. Doximity provides its verified clinical membership with digital tools built for medicine, enabling them to collaborate with colleagues, stay up to date with the latest medical news and research, manage their careers and on-call schedules, streamline documentation and administrative paperwork, and conduct virtual patient visits. Doximity's mission is to help doctors be more productive so they can provide better care for their patients.

Forward-Looking Statements

Statements we make in this press release may include statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including (i) the timing and scope of anticipated stock repurchases; (ii) the impact of uncertainty in the current economic environment and macroeconomic uncertainty; (iii) our ability to retain existing members or add new members to our platform and maintain or grow their engagement with our platform; (iv) our ability to attract new customers or retain existing customers; (v) the impact of our prioritization of our members’ interests; (vi) breaches in our security measures or unauthorized access to members’ data; (vii) our ability to maintain or manage our growth, and other risks and factors that are beyond our control including, without limitation, those set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and as may be updated in any subsequent Quarterly Reports on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. The forward-looking statements made in this press release relate only to management’s beliefs and assumptions as of this date. We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

DOXIMITY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

 

 

 

 

 

June 30, 2024

 

March 31, 2024

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

111,442

 

 

$

96,785

 

Marketable securities

 

639,046

 

 

 

666,115

 

Accounts receivable, net

 

120,910

 

 

 

101,332

 

Prepaid expenses and other current assets

 

37,068

 

 

 

48,709

 

Total current assets

 

908,466

 

 

 

912,941

 

Property and equipment, net

 

12,869

 

 

 

12,318

 

Deferred income tax assets

 

44,742

 

 

 

45,068

 

Operating lease right-of-use assets

 

11,852

 

 

 

12,332

 

Intangible assets, net

 

26,256

 

 

 

27,317

 

Goodwill

 

67,940

 

 

 

67,940

 

Other assets

 

1,333

 

 

 

1,458

 

Total assets

$

1,073,458

 

 

$

1,079,374

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

1,656

 

 

$

2,253

 

Accrued expenses and other current liabilities

 

28,488

 

 

 

43,703

 

Deferred revenue, current

 

102,943

 

 

 

99,145

 

Operating lease liabilities, current

 

2,190

 

 

 

2,149

 

Total current liabilities

 

135,277

 

 

 

147,250

 

Deferred revenue, non-current

 

116

 

 

 

211

 

Operating lease liabilities, non-current

 

11,841

 

 

 

12,397

 

Contingent earn-out consideration liability, non-current

 

5,349

 

 

 

10,895

 

Other liabilities, non-current

 

7,295

 

 

 

7,224

 

Total liabilities

 

159,878

 

 

 

177,977

 

Stockholders' Equity

 

 

 

Preferred stock

 

—

 

 

 

—

 

Common stock

 

186

 

 

 

187

 

Additional paid-in capital

 

841,470

 

 

 

823,885

 

Accumulated other comprehensive loss

 

(1,008

)

 

 

(2,664

)

Retained earnings

 

72,932

 

 

 

79,989

 

Total stockholders’ equity

 

913,580

 

 

 

901,397

 

Total liabilities and stockholders’ equity

$

1,073,458

 

 

$

1,079,374

 

DOXIMITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

Three Months Ended June 30,

 

 

2024

 

2023

Revenue

$

126,676

 

$

108,469

Cost of revenue(1)

 

13,550

 

 

13,153

Gross profit

 

113,126

 

 

95,316

Operating expenses(1):

 

 

 

Research and development

 

22,574

 

 

21,931

Sales and marketing

 

35,244

 

 

34,455

General and administrative

 

9,255

 

 

9,247

Total operating expenses

 

67,073

 

 

65,633

Income from operations

 

46,053

 

 

29,683

Other income, net

 

7,116

 

 

4,839

Income before income taxes

 

53,169

 

 

34,522

Provision for income taxes

 

11,792

 

 

6,116

Net income

$

41,377

 

$

28,406

Net income per share attributable to Class A and Class B common stockholders:

 

 

 

Basic

$

0.22

 

$

0.15

Diluted

$

0.21

 

$

0.13

Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:

 

 

 

Basic

 

185,610

 

 

194,521

Diluted

 

199,224

 

 

212,355

(1) Costs and expenses include stock-based compensation expense as follows (in thousands):

 

Three Months Ended June 30,

 

2024

 

2023

Cost of revenue

$

2,894

 

$

2,461

Research and development

 

4,684

 

 

3,256

Sales and marketing

 

6,586

 

 

5,995

General and administrative

 

2,926

 

 

2,289

Total stock-based compensation expense

$

17,090

 

$

14,001

DOXIMITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended June 30,

 

 

2024

 

2023

Cash flows from operating activities

 

 

 

Net income

$

41,377

 

 

$

28,406

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

2,562

 

 

 

2,604

 

Stock-based compensation, net of amounts capitalized

 

17,090

 

 

 

14,001

 

Non-cash lease expense

 

481

 

 

 

537

 

Accretion of discount on marketable securities, net

 

(2,360

)

 

 

(299

)

Net loss on sale of marketable securities

 

—

 

 

 

273

 

Amortization of deferred contract costs

 

2,726

 

 

 

2,667

 

Change in fair value of contingent earn-out consideration liability

 

202

 

 

 

269

 

Other

 

(738

)

 

 

(421

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(19,372

)

 

 

14,032

 

Prepaid expenses and other assets

 

10,460

 

 

 

2,589

 

Deferred contract costs

 

(1,431

)

 

 

(1,210

)

Accounts payable, accrued expenses and other liabilities

 

(12,942

)

 

 

677

 

Deferred revenue

 

3,704

 

 

 

(6,922

)

Operating lease liabilities

 

(516

)

 

 

(3

)

Net cash provided by operating activities

 

41,243

 

 

 

57,200

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

—

 

 

 

(70

)

Internal-use software development costs

 

(1,704

)

 

 

(1,494

)

Purchases of marketable securities

 

(170,413

)

 

 

(35,284

)

Maturities of marketable securities

 

202,058

 

 

 

116,649

 

Sales of marketable securities

 

—

 

 

 

37,525

 

Net cash provided by investing activities

 

29,941

 

 

 

117,326

 

Cash flows from financing activities

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

 

2,551

 

 

 

3,285

 

Taxes paid related to net share settlement of equity awards

 

(2,394

)

 

 

(1,964

)

Repurchase of common stock

 

(51,214

)

 

 

(21,755

)

Payment of contingent consideration related to a business combination

 

(5,470

)

 

 

(5,390

)

Net cash used in financing activities

 

(56,527

)

 

 

(25,824

)

Net increase in cash and cash equivalents

 

14,657

 

 

 

148,702

 

Cash and cash equivalents, beginning of period

 

96,785

 

 

 

158,027

 

Cash and cash equivalents, end of period

$

111,442

 

 

$

306,729

 

Supplemental disclosures of cash flow information

 

 

 

Cash paid for taxes, net of refunds

$

12,907

 

 

$

—

 

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses the following non-GAAP measures of financial performance:

• Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income margin, and non-GAAP basic and diluted net income per common share: We exclude the effect of stock-based compensation expense, amortization of acquired intangible assets, and change in fair value of contingent earn-out consideration liability from non-GAAP gross profit, non-GAAP gross margin and non-GAAP operating income. Non-GAAP net income and non-GAAP net income margin are further adjusted for estimated income tax on such adjustments. We calculate income taxes on the adjustments by applying an estimated annual effective tax rate to the adjustments. Non-GAAP basic and diluted net income per common share is non-GAAP net income attributable to common stockholders divided by the weighted average number of shares. For both basic and diluted non-GAAP net income per share, the weighted average shares we use in computing non-GAAP net income per share is equal to our GAAP weighted average shares. Non-GAAP gross margin represents non-GAAP gross profit as a percentage of revenue and non-GAAP net income margin represents non-GAAP net income as a percentage of revenue.
• Adjusted EBITDA and adjusted EBITDA margin: We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization, and as further adjusted for stock-based compensation expense, change in fair value of contingent earn-out consideration liability, and other income, net. Net income margin represents net income as a percentage of revenue and adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.
• Free cash flow: We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and internal-use software development costs.

We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP results.

Key Business Metrics

• Net revenue retention rate: Net revenue retention rate is calculated by taking the trailing 12-month (“TTM”) subscription-based revenue from our customers that had revenue in the prior TTM period and dividing that by the total subscription-based revenue for the prior TTM period. For the purposes of this calculation, subscription revenue excludes subscriptions for individuals and small practices and other non-recurring items. Our net revenue retention rate compares our subscription revenue from the same set of customers across comparable periods, and reflects customer renewals, expansion, contraction, and churn. Our net revenue retention rate is directly tied to our revenue growth rate and thus fluctuates as that growth rate fluctuates.
• Customers with trailing 12-month subscription revenue greater than $500,000: The number of customers with TTM subscription revenue greater than $500,000 is a key indicator of the scale of our business, and is calculated by counting the number of customers that contributed more than $500,000 in subscription revenue in the TTM period. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total customer count for historical periods reflecting these adjustments.

Reconciliation of GAAP to Non-GAAP Financial Measures

The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

 

 

Three Months Ended June 30,

 

 

2024

 

2023

 

 

(unaudited)

 

 

(in thousands, except percentages)

Net income

$

41,377

 

 

$

28,406

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

17,090

 

 

 

14,001

 

Depreciation and amortization

 

2,562

 

 

 

2,604

 

Provision for income taxes

 

11,792

 

 

 

6,116

 

Change in fair value of contingent earn-out consideration liability

 

202

 

 

 

269

 

Other income, net

 

(7,116

)

 

 

(4,839

)

Adjusted EBITDA

$

65,907

 

 

$

46,557

 

 

 

 

 

Revenue

$

126,676

 

 

$

108,469

 

Net income margin

 

32.7

%

 

 

26.2

%

Adjusted EBITDA margin

 

52.0

%

 

 

42.9

%

 

 

Three Months Ended June 30,

 

 

2024

 

2023

 

 

(unaudited)

 

 

(in thousands)

Net cash provided by operating activities

$

41,243

 

 

$

57,200

 

Purchases of property and equipment

 

—

 

 

 

(70

)

Internal-use software development costs

 

(1,704

)

 

 

(1,494

)

Free cash flow

$

39,539

 

 

$

55,636

 

Other cash flow components:

 

 

 

Net cash provided by investing activities

$

29,941

 

 

$

117,326

 

Net cash used in financing activities

$

(56,527

)

 

$

(25,824 

) 

 

Three Months Ended June 30,

 

2024

 

2023

 

(unaudited)

 

(in thousands, except per share data and percentages)

GAAP cost of revenue

$

13,550

 

 

$

13,153

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

(2,894

)

 

 

(2,461

)

Amortization of acquired intangibles

 

—

 

 

 

(137

)

Non-GAAP cost of revenue

$

10,656

 

 

$

10,555

 

 

 

 

 

GAAP gross profit

$

113,126

 

 

$

95,316

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

2,894

 

 

 

2,461

 

Amortization of acquired intangibles

 

—

 

 

 

137

 

Non-GAAP gross profit

$

116,020

 

 

$

97,914

 

 

 

 

 

GAAP gross margin

 

89.3

%

 

 

87.9

%

Non-GAAP gross margin

 

91.6

%

 

 

90.3

%

 

 

 

 

GAAP research and development expense

$

22,574

 

 

$

21,931

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

(4,684

)

 

 

(3,256

)

Non-GAAP research and development expense

$

17,890

 

 

$

18,675

 

 

 

 

 

GAAP sales and marketing expense

$

35,244

 

 

$

34,455

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

(6,586

)

 

 

(5,995

)

Amortization of acquired intangibles

 

(1,061

)

 

 

(1,061

)

Change in fair value of contingent earn-out consideration liability

 

(202

)

 

 

(269

)

Non-GAAP sales and marketing expense

$

27,395

 

 

$

27,130

 

 

 

 

 

GAAP general and administrative expense

$

9,255

 

 

$

9,247

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

(2,926

)

 

 

(2,289

)

Non-GAAP general and administrative expense

$

6,329

 

 

$

6,958

 

 

 

 

 

GAAP operating expense

$

67,073

 

 

$

65,633

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

(14,196

)

 

 

(11,540

)

Amortization of acquired intangibles

 

(1,061

)

 

 

(1,061

)

Change in fair value of contingent earn-out consideration liability

 

(202

)

 

 

(269

)

Non-GAAP operating expense

$

51,614

 

 

$

52,763

 

GAAP operating income

$

46,053

 

 

$

29,683

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

17,090

 

 

 

14,001

 

Amortization of acquired intangibles

 

1,061

 

 

 

1,198

 

Change in fair value of contingent earn-out consideration liability

 

202

 

 

 

269

 

Non-GAAP operating income

$

64,406

 

 

$

45,151

 

 

 

 

 

GAAP net income

$

41,377

 

 

$

28,406

 

Adjusted to exclude the following:

 

 

 

Stock-based compensation

 

17,090

 

 

 

14,001

 

Amortization of acquired intangibles

 

1,061

 

 

 

1,198

 

Change in fair value of contingent earn-out consideration liability

 

202

 

 

 

269

 

Income tax effect of non-GAAP adjustments (1)

 

(3,854

)

 

 

(3,248

)

Non-GAAP net income

$

55,876

 

 

$

40,626

 

Non-GAAP net income margin

 

44.1

%

 

 

37.5

%

 

 

 

 

Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:

 

 

 

Basic

 

185,610

 

 

 

194,521

 

Diluted

 

199,224

 

 

 

212,355

 

 

 

 

 

Non-GAAP net income per share attributable to Class A and Class B stockholders:

 

 

 

Basic

$

0.30

 

 

$

0.21

 

Diluted

$

0.28

 

 

$

0.19

 

(1)

For the three months ended June 30, 2024 and 2023, management used an estimated annual effective non-GAAP tax rate of 21.0%.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808776516/en/

Investor Relations Contact: Perry Gold ir@doximity.com

Media Contact: Amanda Cox pr@doximity.com