Doximity, Inc. Q2 FY2025 earnings call

• Financials: Delivered $137 million in revenue for 2Q '25, 20% Y/Y growth, 7% above guidance high. Adjusted EBITDA $76.1M, 56% margin, 41% Y/Y growth.
• Network growth: Record engagement with unique active users up, news feed and workflow tools (AI, telehealth) at record levels.
• Client portal: Hosted pharma client showcase, new portal open to over 40% of pharma brand clients, plans to roll out to all pharma clients early next year, agency partners program launched with referrals to new clients.
• New products: Point-of-care and formulary products up over 100% Y/Y in 2Q, showing traction.

In the second quarter of fiscal 2025, Doximity generated $137 million in revenue, representing 20% year-on-year growth and a 7% beat from the high end of the guidance range. The top 20 clients grew the fastest, up 24% on a trailing 12-month basis. Non-GAAP gross margin in the second quarter was 92% versus 91% in the prior year period. Adjusted EBITDA for the second quarter was $76.1 million, and adjusted EBITDA margin was 56%, compared to $54.2 million and a 48% margin in the prior year period. In terms of network growth, Q2 was a record engagement quarter with unique active users up double-digit percentages year-over-year. The news feed set a new record for articles read, workflow tools (including telehealth, fax, scheduling, and AI) set records with over 600,000 unique active prescribers, and AI tools had over 1 million Doximity GPT prompts. Pharma sales in Q2 had 20% coming from workflow-related modules.

• 3Q '25 revenue expected in range of $152M to $153M (13% growth midpoint), adjusted EBITDA $83M to $84M (55% margin).
• Full year '25 revenue expected in range of $535M to $540M (13% growth midpoint), adjusted EBITDA $274M to $279M (51% margin).
• Q4 guidance influenced by customers completing annual programs by year-end and longer launch times for new workflow products.

• Market uncertainties and competitive landscape.
• Potential impact of M&A on client relationships.
• Pricing environment challenges for pharma companies.

Q: Well, good day, everyone, and welcome to the Doximity Fiscal 2Q '25 Earnings Call. At this time, I would like to hand the call over to Mr. Perry Gold. Please go ahead, sir.

A: Thank you, operator. Hello, and welcome to Doximity fiscal 2025 second quarter earnings call. With me on the call today are Jeff Tangney, Co-Founder and CEO of Doximity; Dr. Nate Gross, Co-Founder and CSO; and Anna Bryson, CFO. ...

Q: Thanks for taking my question. Jeff, obviously, the results were great. And I think what everyone is trying to really basically figure out is, how much of the upside is coming from maybe the market stabilizing, where the market getting better, maybe as Anna, you just suggested versus maybe some of these new product revenues really starting to contribute versus maybe share gains.

A: Hi, Glen, this is Jeff. I appreciate your question. I'll hand to Anna for the Q4 question. But to your first question, yes, we're pleased with our results. And we did see, as Anna said in her prepared remarks, over 100% growth from our new products, which was terrific. We have seen the market stabilize as well. And of course, we think we are gaining share in our core product suites as well. So the short answer is really all of the above. Candidly, we don't know yet. I think how much of it really is market stabilization. But we can tell you, we feel really strong about how we're doing, again, relative to our competition and in terms of our user growth, which, again, at record levels on a daily, weekly, monthly, quarterly basis. Anna?

Q: Yes, hi Glen, thanks for the question. So with regards to Q4 specifically, I'll just reiterate the two dynamics I mentioned in my prepared remarks. So first, digital HCP has become a bigger line item for our customers. They have set up more guardrails around how annual budgets can be deployed. And what that means is that we're seeing less revenue dollars from calendar 2024 programs flow into our fiscal Q4. And then the second dynamic is that while we are excited by the potential for another strong annual buying cycle, it is just too soon for us to know what the mix is going to look like in new brands and new products and what those launch time lines for next calendar year might look like. Especially given the way new products are resonating with clients, it's likely we could see a stronger mix of sales come from those products, and those products typically do have longer launch time lines. So I'll just like close it all together here and reiterate that this is a good example of how evolving industry dynamics or the product mix can lead to quarterly variations in revenue growth and changes in the shape of the year. And that's why we think it's critical to focus on our annual growth rate, as the best metric to measure the success for our business. And we've seen strong momentum there over the past six months that we're really encouraged by.