Doximity’s third quarter results were marked by strong revenue and profit outperformance relative to Wall Street expectations, yet the market responded negatively. Management attributed the quarter’s performance to rapid adoption of AI-powered workflow products, integration of the Pathway acquisition, and a shift in customer upsell timing. CEO Jeffrey Tangney highlighted surging engagement with new features, particularly the AI scribe and DoxGPT tools, which saw user numbers rise sharply. CFO Anna Bryson emphasized that earlier and more evenly distributed upsells, driven by integrated programs, contributed to a higher portion of annual revenue being recognized in this quarter.
Is now the time to buy DOCS? Find out in our full research report (it’s free for active Edge members).
Doximity (DOCS) Q3 CY2025 Highlights:
- Revenue: $168.5 million vs analyst estimates of $157.1 million (23.2% year-on-year growth, 7.2% beat)
- Adjusted EPS: $0.45 vs analyst estimates of $0.38 (18.7% beat)
- Adjusted Operating Income: $98.99 million vs analyst estimates of $85.38 million (58.7% margin, 15.9% beat)
- The company lifted its revenue guidance for the full year to $643 million at the midpoint from $632 million, a 1.7% increase
- EBITDA guidance for the full year is $354 million at the midpoint, above analyst estimates of $348.5 million
- Operating Margin: 37.8%, down from 38.8% in the same quarter last year
- Billings: $151.3 million at quarter end, up 18.5% year on year
- Market Capitalization: $9.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Doximity’s Q3 Earnings Call
- Brian Peterson (Raymond James) asked how AI will continue to add value and where Doximity sees the biggest long-term opportunity. CEO Jeffrey Tangney responded that AI will be integrated across workflows, emphasizing rapid user growth and investments in features like Scribe and DoxGPT.
- Michael Cherny (Leerink Partners) questioned client budget allocation amid policy shifts in pharmaceutical advertising. VP Perry Gold noted early discussions with agency partners about shifting direct-to-consumer budgets to Doximity, but said outcomes remain uncertain.
- Allen Lutz (Bank of America) asked about changes in year-end “budget flush” patterns. CFO Anna Bryson explained that integrated programs have smoothed upsell timing, reducing late-year revenue spikes and making Q3 comparisons more challenging.
- Ryan Daniels (William Blair) focused on small and mid-sized business growth and agency partner impact. Gold highlighted the agency program’s role in bringing new clients and delivering added value through advanced ROI analytics.
- Stanislav Berenshteyn (Wells Fargo Securities) probed the sustainability of R&D spending on AI tools. Bryson said current expense growth is tied to product launches, with expectations for a plateau as efficiencies are realized over time.
Catalysts in Upcoming Quarters
Looking forward, our analysts will monitor (1) the pace of adoption and monetization for Doximity’s integrated AI programs, (2) clarity and trends in pharmaceutical client budget allocations as annual contracts are finalized, and (3) the impact of increased AI investment on operating margins. Developments in industry policy and client engagement with new workflow tools will also be key signposts.
Doximity currently trades at $50.86, down from $62.53 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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