Doximity’s Earnings Call Highlights Growth and AI Advances

Doximity, Inc. ((DOCS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Doximity’s recent earnings call conveyed a strong sense of optimism, underpinned by robust financial performance and strategic advancements in AI technology. The company showcased significant user engagement growth and introduced new AI-driven tools, despite facing some challenges like a slight decline in gross margin and policy uncertainties. Overall, the sentiment was positive, focusing on future growth and innovation.

Revenue and Growth Performance

Doximity reported impressive financial results for Q1 fiscal 2026, with revenue reaching $146 million, marking a 15% increase year-on-year. This figure not only surpassed the high end of their guidance range by 4% but also highlighted the company’s strong market position. The adjusted EBITDA margin stood at 55%, or $80 million, exceeding expectations by 11%, showcasing efficient operational management.

Network and User Engagement

The company experienced remarkable growth in user engagement, with unique active users hitting new highs across quarterly, monthly, and daily metrics. The news feed also achieved record numbers, boasting over 1 million quarterly active prescribers. This surge in user activity underscores Doximity’s growing influence and reach within the medical community.

AI Scribe and Pathway Acquisition

Doximity’s strategic focus on AI technology was evident with the launch of AI Scribe and the acquisition of Pathway. AI Scribe, tested by over 10,000 healthcare professionals, saw more than 75% of users returning weekly, indicating strong user retention. The acquisition of Pathway, known for its high-performing AI clinical reference model, further strengthens Doximity’s AI capabilities.

Financial Highlights and Share Repurchase

The company’s financial health remains robust, with a 52% year-on-year growth in free cash flow and an impressive $841 million in cash reserves. Additionally, Doximity repurchased $122.3 million worth of shares, reflecting confidence in its future prospects and commitment to returning value to shareholders.

Gross Margin Slight Decline

Despite the positive financial results, Doximity experienced a slight decline in its non-GAAP gross margin, which fell to 91% from 92% in the previous year. While minor, this decrease highlights the need for continued focus on cost management.

Policy Uncertainty

The company acknowledged ongoing policy uncertainties that impact their visibility and necessitate a cautious approach to guidance for the latter half of fiscal 2026. This cautious stance reflects the broader challenges faced by the industry in navigating regulatory environments.

Forward-Looking Guidance

Looking ahead, Doximity provided optimistic guidance for the second fiscal quarter, anticipating revenue between $157 million and $158 million, with an adjusted EBITDA margin of 56%. For the full fiscal year, revenue is expected to range from $628 million to $636 million, representing an 11% growth at the midpoint. The company remains confident in the long-term growth potential of its AI tools, including AI Scribe and Pathway, which align with their mission to enhance physician productivity.

In summary, Doximity’s earnings call painted a picture of a company on a strong growth trajectory, driven by strategic investments in AI and robust user engagement. While challenges such as policy uncertainties and a slight decline in gross margin exist, the overall sentiment remains positive, with a clear focus on innovation and future growth.