Doximity Shares Surge 30% on Revenue Beat, Rosy Guidance

Doximity, Inc. (NYSE: DOCS), the leading digital platform for U.S. medical professionals, saw its shares soar by 30% on February 6, 2025, following the company's fiscal 2025 third quarter earnings report. The stock price jumped from $44.63 to $58.26, reflecting investors' enthusiasm for the company's strong performance and optimistic outlook.

Doximity reported revenue of $169 million for the quarter, representing a 25% year-over-year increase and a 10% beat from the high end of its guidance range. The company's adjusted EBITDA margin reached 61%, or $102 million, up 39% year-over-year and 21% above the high end of its guidance. Doximity's earnings per share (EPS) of $0.45 beat analyst estimates by 32.0%, and the company's revenue was up $33.32 million from the same period last year.

Doximity's impressive performance can be attributed to several key factors:

1. Strong Client Engagement: Doximity reported record engagement in Q3, with over 610,000 unique active prescribers using its clinical workflow tools and over 1.8 million prompts generated by AI tools. This growth demonstrates the platform's appeal to medical professionals and its ability to drive revenue growth.
2. AI Tools Growth: Doximity's AI tools grew the fastest in Q3, outperforming competitors like Microsoft Teams and Zoom. This growth indicates that medical professionals are increasingly adopting AI-driven tools to enhance their workflows and patient care.
3. Telehealth Expansion: Doximity serves over 250 health systems and hospital clients, delivering telehealth care to their patients. This expansion reflects the growing demand for telehealth services and Doximity's ability to meet that demand.
4. Client Portal Rollout: Doximity's client portal rollout has been successful, with positive early adoption. This new product offering is driving revenue growth and contributing to the company's rosy guidance.

Doximity's strong growth is also reflected in its guidance for the fiscal fourth quarter ending March 31, 2025. The company expects revenue between $132.5 million and $133.5 million and adjusted EBITDA between $62.5 million and $63.5 million. Doximity is also updating its guidance for its fiscal year ending March 31, 2025, with revenue expected between $564.6 million and $565.6 million and adjusted EBITDA between $306.6 million and $307.6 million.

Doximity's recent performance compares favorably to its competitors in the digital platform for medical professionals space. The company's revenue growth and adjusted EBITDA margins are impressive, and its ability to attract and retain top clients sets it apart from competitors like Veeva Systems, HealthStream, Simulations Plus, and Masimo.

In conclusion, Doximity's strong revenue beat and rosy guidance have driven a 30% surge in the company's share price. The company's success can be attributed to its focus on providing valuable tools and services to medical professionals, driving strong client engagement, and expanding its telehealth offerings. As Doximity continues to innovate and adapt to the evolving needs of its users, investors can expect the company to maintain its strong performance and continue to drive growth in the digital platform for medical professionals space.