ドキシミティ (DOCS) 2027年度第2四半期決算説明会: AI検索がガイダンス上方修正を牽引

要点

• 2027年度第2四半期の売上高は前年同期比4%増の1億7,450万ドルとなり、調整後EBITDAは8,900万ドルに達し、マージンは51%となりました。
• Doximityは2027年度通期の売上高ガイダンスを6億7,800万ドル〜6億8,300万ドルに、調整後EBITDAガイダンスを3億1,700万ドル〜3億2,500万ドルに引き上げました。
• 「AI Search」の受注額は8桁（1,000万ドル超）に達しました。製薬大手20社のうち16社がプログラムを購入済みで、さらに3社が契約手続き中です。
• 四半期のワークフローアクティブ処方医数は前年同期比34%増となり、過去最高を記録しました。米国の処方医180万人の約半数が、当四半期中にDoximityのワークフローツールを利用しました。
• Doximityは、医療機関向けAIの導入基盤を165施設から約190施設の顧客へと拡大し、その中には全米トップ20の病院のうち10施設が含まれています。
• AIインフラの効率が向上しました。売上原価の伸び率は、前四半期がプロンプト件数とほぼ同等の伸びであったのに対し、当四半期はプロンプト件数の伸び率の半分未満にとどまりました。

主要財務業績

年間支出額が50万ドルを超える顧客が売上高の82%を占めました。その顧客数は前年同期比3%増の124社となりました。

事業および運営パフォーマンス

AIの導入拡大がワークフロー全体のエンゲージメントを引き続き後押ししました。Doximityによると、四半期のワークフローアクティブ処方医数が34%増加した主な要因は、遠隔医療、スケジュール管理、およびAIでした。遠隔医療の通話量は過去最高に達し、コロナ禍の時期に記録された水準を上回りました。

同社は、決定論的な薬剤安全性検証ツール「DoseCheck」を追加しました。主要なAIモデルを対象にDoximityが実施した25万件以上の薬剤投与量クエリに関する調査では、2.3%のエラー率が判明し、そのエラーの40%が重篤または生命を脅かす可能性があるものと分類されました。また同社は、ウォルターズ・クルーワー（Wolters Kluwer）の「UpToDate」のコンテンツを自社のAI回答に統合しました。

「Patient Context」により、Doximity AIはカルテ記載、検査値、画像、疾患、保険適用範囲などの患者カルテ情報を活用できるようになります。経営陣によると、Patient Contextを利用している医師の間で利用頻度が約2倍に増加した一方、プロンプトの平均単語数は24語から12語に半減しました。

「AI Search」は新たな主要収益機会となりつつあります。受注額は8桁（1,000万ドル超）に達し、製薬会社の顧客は平均で2つ以上のプログラムを購入しています。顧客の需要に応えて対応可能な対象疾患も2倍以上に拡大しました。経営陣によると、収益化は主に製薬広告を通じて行われており、医療機関はより広範なワークフロー契約のもとでAIに対して名目的な金額を支払っています。

Doximityはまた、AI Searchにおいてオークション形式の入札型購入を導入することを計画しています。経営陣は、これにより中小規模の製薬顧客のアクセスが改善され、製品が有料検索型の購買モデルに近づく可能性があると考えています。

経営陣ガイダンス

経営陣は、2027年度下半期の売上高前年比の伸び率が上半期に比べて小幅に加速すると予想しています。第4四半期の成長率は、第3四半期のガイダンス水準と同程度になると見込まれています。

通期の売上高見通しの引き上げは、第2四半期の実績と商用AIパイプラインの見通し向上を反映したものです。ただし、新プログラムは開始前に製薬企業のメディカル・リーガルレビューを完了する必要があるため、経営陣はAI Searchの売上が2027年暦年を通じて段階的に拡大すると見込んでいます。

リスクと注視点

• 製薬企業のメディカル・リーガルレビューには数カ月かかる場合があり、AI Searchの契約締結から売上計上までに遅延が生じる可能性があります。
• 年次の製薬企業向け事前契約サイクルが完了するまで、第4四半期の見通しは限られたままとなります。
• AI利用の増加が売上原価を押し上げています。当四半期中にユニットエコノミクスは改善したものの、AI関連の増分コストの90%以上が臨床医の利用に関連しています。
• 全体NRRは103%に低下し、上位20の病院・製薬会社顧客のNRRは106%となりました。経営陣はこれらを底値圏の指標と位置づけており、通常は売上高の成長に追随するものと説明しています。
• 経営陣は、製薬業界のマーケティング環境について、1年前よりも安定しているものの、マクロ要因主導の大幅な加速は見られないと評しました。
• 医療機関は、患者データのセキュリティや賠償責任への懸念からAIガバナンスを強化しています。Doximityはこれを、承認済みのエンタープライズプラットフォームにとって追い風と捉えているものの、本格展開には依然としてセキュリティ審査、研修、ワークフローの統合が必要となります。

アナリスト質疑応答の要点

AI Searchの拡大とカニバリゼーション：経営陣は、検索予算は製薬マーケティングの別チームによって管理されることが多いため、AI Searchの需要はほぼ純増であると述べています。主力製品カテゴリーも当四半期中に引き続きプラス成長を記録しました。

長期的なマージンプロファイル：Doximityは現時点で、AI投資によってマージン構造が大幅に悪化するとは予想していません。経営陣は、短期間でのマージン最適化よりも投資を重視しているものの、2028年度以降にAI Searchを拡大することで魅力的な増分マージンを生み出す可能性があると述べています。

UpToDateとの提携：Doximityは、UpToDateの7,600人の医師執筆陣が提供する独自の臨床専門知識と、UpToDateの2,500の医療機関クライアントとDoximityのAI顧客基盤との重複を強調しました。両社は市場開拓（Go-to-Market）における協力の可能性について協議していますが、Doximityからの追加発表はありませんでした。

電子カルテ（EHR）の統合：経営陣は、電子カルテにAIボタンを追加するだけでは、大幅な導入拡大には自動的につながらないと述べました。研修やウェビナーが引き続き必要とされます。対照的に、Patient Contextは医師がカルテ情報を再入力する手間を削減することで、即座の利用増加につながっています。

エンタープライズAIガバナンス：Doximityは、病院が臨床AIの初期の「無法地帯（Wild West）」の段階を脱しつつあると述べました。同社は、未承認ツールや患者データの流出、プラットフォームのセキュリティに対する精査が強まることが、導入決定に影響を与えると予想しています。

決算説明会トランスクリプト全文

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決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to Doximity's Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Perry Gold. Perry, please go ahead.

Perry Gold

Thank you, operator. Hello, and welcome to Doximity's Fiscal 2027 Second Quarter Earnings Call. With me on the call today are Jeff Tangney, Co-Founder and CEO of Doximity; and Matt Sonefeldt, CFO. A complete disclosure of our results can be found in our press release issued earlier today as well as in our related Form 8-K, along with a copy of our prepared remarks, all available on our website at investors.doximity.com.

As a reminder, today's call is being recorded, and a replay will be available on our website. As part of our comments today, we will be making forward-looking statements. These statements are based on management's current views, expectations and assumptions and are subject to various risks and uncertainties. Actual results may differ materially, and we may disclaim any obligation to update any forward-looking statements or outlook.

Please refer to the risk factors in our annual report on Form 10-K, any subsequent Form 10-Qs and any other reports and filings with the SEC that may be filed from time to time, including our upcoming filing on Form 10-Q. Our forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, November 5, 2026.

Of note, it is Doximity's policy to neither reiterate nor adjust the financial guidance provided on today's call unless it is also done through a public disclosure such as a press release or through the filing of a Form 8-K. Today, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A historical reconciliation to comparable GAAP metrics can be found in today's earnings release.

Finally, during the call, we may offer incremental metrics to provide greater insights into the dynamics of our business. These details may be onetime in nature, and we may or may not provide updates on those metrics in the future.

I would now like to turn the call over to our CEO and Co-Founder, Jeff Tangney. Jeff?

Jeffrey Tangney

Thanks, Perry, and thanks, everyone, for joining our second quarter earnings call. Today, I'll cover 3 things: our financials, AI accuracy and engagement.

First, our financials. Revenue was $175 million in Q2, up 4% year-over-year and 2% above the high end of our guidance. Even with over 6x growth year-over-year in our AI spend, our Q2 adjusted EBITDA margin was 51% or $89 million and 9% above the high end of our guidance. So while this remains our AI investment year, we continue to have strong margins.

Okay. Now to AI accuracy. It's by far the #1 concern doctors have about AI. AI deals in probabilities. Patient care demands precision. All of us have had the experience of hitting refresh on an AI answer and getting a different response. Thankfully, accuracy is where we continue to lead the way. For starters, we launched DoseCheck, a deterministic verifier for medication safety. In a study of over 0.25 million AI drug dose queries across all major models, we found a 2.3% error rate. What's more, 40% of these errors are serious or even lethal. So from 1 million AI drug queries, 9,000 patients could get hurt. That's too many. Our DoseCheck catches these errors using our built-in drug data set. It's painstaking work, and we're proud to do it.

Second, we're excited to add UpToDate to our AI answers. Every clinical AI model has read the National Library of Medicine, which has all of the journals and guidelines, but Wolters Kluwer's UpToDate stands alone as the proprietary gold standard reference for point of care. Their 7,600 physician authors provide unique advice about what to do when there isn't an RCT or randomized controlled trial to answer the question. We think this real-world medical layer is really important. And now it's one tap away inside of Doximity.

Independent tests keep confirming our lead in accuracy and safety. In September, we joined other vertical AI leaders like Harvey in law and Sierra in customer service to create industry-specific benchmarks. When AI provider Fireworks AI created the results, Doximity ranked first among 16 leading models, echoing our Stand for No Harm study results in July.

Physician input is critical to getting AI in medicine right. This quarter, we convened our Medical AI Summit, 150 physicians, chiefs and chairs from our nation's best hospitals joined by 2 former U.S. Surgeons General, Dr. Vivek Murthy and Dr. Regina Benjamin, to work through how we build clinical AI responsibly together. As a physician-first company, this unique semiannual event is our North Star and guides our road map.

Finally, our engagement and client growth. Quarterly active workflow prescribers, which includes our AI users, grew 34% year-over-year to record highs, accelerating from last quarter. So for the first time, approximately half of all of the 1.8 million U.S. prescribers used us last quarter as part of their workflow. Our health system client footprint continued to grow as well, up over 190 on our AI suite from 165 last quarter, including 10 of the nation's top 20 hospitals.

New York-Presbyterian now provides access to Doximity AI directly from its EHR, giving New York-Presbyterian Columbia and Weill Cornell Medicine clinicians convenient access to AI-powered tools and the latest medical research within their existing workflows. Over the past 5 years working with New York-Presbyterian, we've seen firsthand why they're consistently ranked among the nation's best hospitals, and we're excited to grow our AI tool set with them.

UCSD Health, the #1 ranked hospital in San Diego, is another AI client and one of the first hospitals to adopt our new patient context feature. Directly from a patient's chart, our AI can read that patient's notes, labs, imaging, conditions and coverage to give patient-specific answers and guideline-based treatment plans. It's the difference between a doctor asking a general medical question and asking about the patient in front of them.

Our patient context feature is now available for thousands of doctors, and they're writing prompts half as long, 12 words versus our 24-word average, because they no longer have to retype the chart details into a search bar. Our AI already has the labs, notes and problem list, so we can find the pertinent clinical details deep in their record. To fit more workflows, we're opening API access to our clinical intelligence layer. If you're building time-saving tools for clinicians, we'd love to work with you. Just e-mail us at bd@doximity.com.

Last, on the pharma side, our AI search commercial offering has been well received. 16 of the top 20 pharma companies have already purchased with 3 more in contracting. And more than 100 clients attended our Pharma AI showcase last month, our biggest turnout ever.

To sum up, with DoseCheck and UpToDate, we lead on AI accuracy and trust. With 190 health system AI clients and patient context, we lead on distribution and integration. And with AI search now available to our pharma clients, we're growing into a much larger market. As always, I'd like to end by thanking my Doximity teammates who continue to work incredibly hard to care for those who care for us.

With that, I'll hand it over to our CFO, Matt Sonefeldt, to walk us through our financials and guidance. Matt?

Matthew Sonefeldt

Thanks, Jeff. Q2 was another strong quarter for Doximity with AI usage driving accelerated adoption of our broader workflow suite. This validates our decision to expand AI investment in FY '27. We also improved AI cost efficiency during the quarter, which helped drive higher-than-expected profitability.

Turning to our top line. Q2 revenue of $174.5 million outperformed our guidance with 4% year-over-year growth. This growth comes against a difficult year-over-year comparison versus Q2 '26 when we benefited from rapid adoption of our multi-module integrated offering. Revenue upside in Q2 was driven by solid performance across our product portfolio as well as growing interest in our AI search product. Positive AI search demand signals include pharma company customers purchasing on average more than 2 programs each and a doubling of available conditions driven by customer interest. We believe customer engagement with AI search continues to drive broader momentum across our entire pharma portfolio.

In terms of customer metrics, our top 20 hospital and pharma customers produced net revenue retention, or NRR, of 106% with overall NRR at 103%. Customers with greater than $500,000 in annual spend represented 82% of revenue and grew 3% year-over-year to 124. As a reminder, these are trailing 12-month metrics.

Turning to profitability. Adjusted EBITDA in Q2 '27 was $89 million and represented a 51% margin. Outperformance was split evenly between the flow-through of higher-than-expected revenue and better-than-anticipated AI efficiency. Non-GAAP gross margin was 88% versus 92% last quarter. As we shared last quarter, the majority of the increase in cost of revenue reflects scaling our AI investment to support rapidly growing engagement. As a reminder, over 90% of our incremental AI cost is for clinician usage.

Even with significant engagement increases, we realized AI cost leverage. Efficiency drivers include prebuying more capacity at favorable economics, greater multi-model usage and continued performance gains in our proprietary harness. We're encouraged by improving AI unit economics even as we increase the accuracy and value we deliver to clinicians.

On a GAAP basis, stock-based compensation, or SBC, was $41 million in the quarter or 23% of revenue. This is consistent with the low 20% SBC guidance provided last quarter. As a reminder, this year's SBC increase is primarily related to the FY '26 grant made to our AI-focused R&D team. Excluding the grant, SBC would have been approximately 19% of revenue in Q2. We expect the impact of the AI grant to ease in FY '28.

Our GAAP effective tax rate was approximately 31% in the second quarter compared to 15% in the prior year, driven by the tax treatment of equity compensation. Our non-GAAP effective tax rate remained at 21%. In Q2, GAAP diluted EPS was $0.18 per share and non-GAAP diluted EPS was $0.36 per share. Fully diluted shares declined by 13 million, down 6% year-over-year to 188 million shares outstanding.

Our balance sheet and cash flow generation remained strong. We ended Q2 '27 with $713 million in cash, cash equivalents and marketable securities, and we remain debt-free. We generated $91 million of free cash flow, outpacing adjusted EBITDA and up from $40 million in Q1. As expected from last quarter, collections activity normalized. During the quarter, we repurchased $54 million of shares. We believe share repurchases remain an attractive opportunistic use of capital. As of September 30, we had approximately $347 million remaining in our existing repurchase program.

Let's turn to our outlook. For revenue in Q3, we expect a range of $195 million to $196 million, representing 6% year-over-year growth at the midpoint. For FY '27, we've raised our revenue guidance range to $678 million to $683 million, also representing 6% growth at the midpoint. We expect slight acceleration in second half revenue growth versus first half on a year-over-year basis.

For FY '27, we are increasing the guidance midpoint by $4.5 million. This reflects the flow-through of our Q2 outperformance plus a modest incremental raise driven by growing visibility into the commercial AI pipeline. AI Search is now an 8-figure bookings product, and we started recognizing revenue from the product when the first program launched in July.

As a reminder, Q3 is our upfront season. This is when most pharma clients commit the majority of their marketing budgets for next year's programs and what are called upfront contracts. It is the largest bookings quarter of the year, and most contracts are signed by the end of December. We then typically recognize those commitments as revenue over the following 12 months, depending on the timing of program launches.

One key difference this year is the availability of our new AI search product. To date, we've seen early broad-based adoption with 16 of the top 20 pharma companies having purchased programs and 3 more are in our pipeline. We will provide an update about the upfronts and AI search progress in our February call.

In Q4, we expect year-over-year revenue growth to be similar to the Q3 guided growth rate. As with prior years, we have lower visibility into Q4 until we finish the upfront. In addition, new products like AI search have a steeper ramp in the first calendar quarter of a new year as we help new customers through the medical-legal review process. As a result, we expect a gradual ramp in AI search revenue throughout calendar '27.

For adjusted EBITDA, in Q3, we expect a range of $102.5 million to $103.5 million, representing a 53% adjusted EBITDA margin at the midpoint. For FY '27, we now expect the revised range of $317 million to $325 million, representing a 47% adjusted EBITDA margin at the midpoint. This outlook incorporates the continued investment required to support the stronger-than-expected AI engagement we've seen this year.

In the second half of FY '27, we'll continue to invest in growing clinician AI usage and expanding our moats. Key initiatives include increased safety and accuracy through programs like DoseCheck, greater clinical content through partners like UpToDate and growing distribution leadership with U.S. health systems.

In closing, our long-term approach remains unchanged. We will continue to deliver 1 platform for AI clinical decision support, documentation and patient communication. Improving efficiency in our AI investments allows us to continue playing offense in the midst of this generational technology shift and help our clinicians be more productive so they can provide better care for their patients. Lastly, as a reminder, you can find our modeling considerations appendix in our prepared remarks, where you can see more detailed financial commentary.

And with that, I will turn it over to the operator for questions.

Operator

[Operator Instructions] Your first question comes from the line of Brian Peterson with Raymond James.

質疑応答

Brian Peterson

So Jeff, I was encouraged by your comments on AI search, the 8-figure bookings, 16 of the top 20 with more on the way. Maybe you could talk about how that kind of built over the course of this year versus your expectations? And is there anything qualitative that you could share about what that could do for your positioning into 2027?

Jeffrey Tangney

Yes. Thanks, Brian. This is Jeff. I'll say qualitatively, search is exciting to our clients and to us. We've had more, what they call top-to-top meetings with pharma companies, Chief Marketing Officers, CEOs in the top 20. And they're going really well. It's an exciting time. We're getting real insight into the real problems that real patients and real doctors have without having to fly around and do lots of focus groups and rep rides and things that, frankly, aren't as efficient. So we're excited about that.

We think we're entering a whole new market here, which has historically been paid search. And I'll give a hat tip to Bank of America. They did a survey of 35 pharma marketers, fully independent survey. We had nothing to do with it. And they asked if you had more incremental budget, more to spend on marketing, who would you spend more with? And we hit an all-time high with 81% of the respondents saying they'd spend more with us. And I think that's because of the traction we're seeing with our 190 health system partners and AI search growth.

But interestingly, the group that fell the most there was paid search or Google, which fell to only 6% of the respondents saying that they would spend incrementally there. So I think that's proof that with AI search, we are entering search budgets, which is about $14 billion a year in the United States according to eMarketer just for pharma. So $14 billion a year spent on paid search. That is a much larger market than we have been in historically, and we're excited to enter it.

So as I think of the build over the course of this year, I think we'll continue to see a big upfront there. But starting early next year or late this year with a couple of pilot clients, we'll also offer a biddable or auction-based purchasing there, which does make things a lot easier for our clients and for us and again, brings us into an exciting whole new world that is more like paid search and less like endemic marketing.

Brian Peterson

I appreciate the color. And maybe just a follow-up. I wanted to hit on some of the AI compute things that you mentioned in terms of efficiency measures in terms of multimodal usage or some performance gains from your harness. Could you guys unpack that a bit? I know that's been a key topic of conversation with investors.

Jeffrey Tangney

Sure. Matt can speak to this a bit as well. I spoke at the Fireworks conference a couple of days ago. There's a lot going on in AI inference right now. And most of it is good for companies like us in that there are just more options and the platforms are getting more flexible to be able to handle, again, the security and medical needs that we have. We have a great team here. I will say I continue to be very pleased with the Pathway acquisition and the new hires. We've kept almost all of our AI teams, so no turnover. So from our end, we're really excited about, again, all the new software tools that are allowing us to do our jobs better and helping doctors make better decisions at the point of care.

Matthew Sonefeldt

Yes. And I can just pile on a little bit. I think, honestly, the most important AI investment metric we have is just accelerated engagement, right, speaks to us kind of rapidly engaging with clinicians through Ask, through Scribe through what is now the most accurate -- the most accurate clinical AI product in the market. And so I think that's a good place for us to be. The accelerated engagement is the proof point. I think we're also getting better at learning how to develop with the infrastructure.

And so all the things that we talked about in the prepared remarks, better performance on our proprietary harness, more multimodal deployments, buying more capacity and compute upfront, all of those things help. Maybe my favorite financial metric from the quarter was our cost of revenue grew at less than half of our overall prompt volume in Q2. And in Q1, those 2 things were pretty similar, right? Our cost of revenue grew at a much higher rate at a similar rate as prompt volume. So I think we've shown that we can be efficient as we deliver great results. I look forward to keeping that up.

Operator

Your next question comes from the line of Michael Cherny with Leerink Partners.

Michael Cherny

Great. Maybe just one, Jeff, here, if I can. I would love to get a little bit more detail on the UpToDate partnership. First time we've heard from you since that was announced, Wolters Kluwer, clearly a well-regarded partner in the market. But how did you settle on that being the right partner at this point in time as you build out your AI capabilities? And as you think about what your other opportunities were, what else was the range of outcomes that landed here and landed at this being the right and the best partner at this point in time in particular?

Jeffrey Tangney

Thanks, Michael. Yes, we're excited, super excited to work with UpToDate. And they're picky. They're the #1 player in the market, the most used, most trusted. I think Evercore ran a survey on this a little earlier this year. I mean, they're far and away, head and shoulders above anyone else. They're -- I like to joke IQVIA-like market share when it comes to being the clinical decision support point-of-care tool for doctors, most used, most trusted by far. And like I said, they're choosy. So they've chosen to work with Epic, Microsoft and us and frankly, not many others.

And I think what we're bringing Greg and his team is a lot of AI savvy when it comes to being able to pull in broader, faster-moving evidence segments. But what they bring us and uniquely in the market, just keep in mind, everyone has access to all of the journals that are paid for largely by government grants and are all in the National Library of Medicine. Everyone has access to all that, all the frontier models but very, very few. I mean, none of the frontier models have access to UpToDate. So we're excited about that.

We're just getting out in market with it now. It's been just a couple of weeks since our announcement, but the client reaction to it has been very positive. And I would just say the partnership and the people also have been very synergistic. It's -- UpToDate is a mission-driven company, similar values to us and our team. And again, it seems to be just a strong synergy of our AI evidence tools and their unique expert opinion and physician expertise in that medical layer of knowledge that, frankly, isn't in a randomly controlled trial or published area.

Final point note, we have significant customer overlap. They have 2,500 health systems as clients. We have 190. So we see a lot of overlap between our client base, and that also creates additional synergies for us. So anyway, very excited about UpToDate, and you'll see more from us with them over the coming quarters. We're just getting started.

Operator

Your next question comes from the line of Craig Hettenbach with Morgan Stanley.

Craig Hettenbach

Jeff, on the point of around half of prescribers now using the workflow tool, can you just touch on what's driving the acceleration there? And then what type of signal may that provide for growth in the coming quarters?

Jeffrey Tangney

Thanks, Craig. Yes, that's a real milestone for us as a company to have over half of all U.S. prescribers, and there are about 1.8 million U.S. prescribers, so about over 900,000 U.S. prescribers, and that's MD, DO, NP or PAs. So folks who can legally write prescriptions in the U.S. We have over half of them in the last quarter use our workflow tools is a big milestone. We've never been that big before. And again, as we said, that's up 34% year-over-year.

So it's a good question. What's the biggest drivers? The 2 biggest areas there are telehealth and scheduling. So telehealth continues to grow in this country. It's very popular, especially in disease categories like diabetes and let's face it, doctors are finding it's more efficient and patients, of course, appreciate the no commute of being able to see your doctor virtually during the day. We're seeing a lot of doctors now have a half day or full day a week that is just dedicated to work-from-home telehealth. And we think that's better for doctors and their overall work-life balance and sanity. It's better for patients. We're really proud to help power it. And again, we've never done as many telehealth calls as we did this last quarter. We're, again, seeing continued growth there kind of quietly. During COVID, we talked about telehealth a lot and then it sort of receded, but we're well above the call volumes that we were doing during COVID now. And so we're just seeing continued growth here in '23, '24, '25, '26.

Scheduling also is a growth area for us. Doctors, of course, need to have their schedule all their shifts. We make it easy to call each other, secure message to them. So that's a continued growth area for us. Those are the 2 I'd point to.

The third, of course, is AI, which we've already been talking about a lot. But the reality is that's a whole new category of usage and growth for us. And I am particularly excited about the thousands of doctors we have now using the full patient context. So don't -- people -- doctors don't want to go type the full patient history into a search bar. They want a suite, not a search bar. And that's what we offer them. We offer them a suite, not a search bar. That suite allows them to do the telehealth visit to have notes taken on that visit, what we call Scribe, and then to ask questions about that visit with the patient context. Again, that's the most efficient way to get the best care in this country.

And we're seeing that with that full patient context, there are already cases of tough diagnoses that probably would have taken a lot longer, right? Specialist visits and lots of follow-ups. And AI is really very good at finding that rare fascinoma on Page 89 and triangulating that into a patient that has a 1 in 100,000 disease. So it's just so fulfilling for me that my eyes get wide and frankly, it's right to the core of our mission to help doctors, again, provide better care. That patient context in that suite and that AI growth, which is over half of our workflow users, those are the 3 big growth areas: telehealth, scheduling and AI search.

Matthew Sonefeldt

And Craig, I think you asked a little bit as well about how that leads into a monetization opportunity. I think I draw upon some of my experience in consumer web, in particular at LinkedIn. And like I think in those models and the same kind of business model that we have, your engagement growth leads your monetization opportunity. I like that we're building our engagement growth the right way based on workflow, based on the value that we're adding for our clinician users. And I'd be remiss if I didn't point out that a year ago, our workflow active user growth was in the single digits. Today, it's 34%. So it's accelerated dramatically. I think that just gives us a pretty incredible opportunity over the next couple of years to grow our business as well. So we're really excited about that.

Craig Hettenbach

That's helpful context. And then just as a follow-up, Matt, nice to see the upside to margins in the quarter and the guide. You pointed to some things in terms of efficiencies. As you kind of play this out, like is there anything else you would point to in terms of perhaps building confidence of operating leverage in the business?

Matthew Sonefeldt

Yes. I mean I think we talked a little bit about this in the last quarter earnings call, where the -- this is a matter of time sequencing, right? In order to drive that network engagement, the value for our users, that happens before you drive the monetization that follows it. And there is nothing about any of the AI investments and the early monetization we're seeing with AI search that would suggest that our margin profile would be dramatically different. Potentially, it could even be better over time, although it's not necessarily kind of what we're over optimizing for. But I think more than anything else, we're really encouraged about the incremental margins that we'll see in the business as we really start to scale AI search in FY '28 and beyond. Nothing gives us pause there, and revenue is going to be the ultimate thing that gives us the most leverage. I think some of the efficiency on the cost side just gives us more encouragement in that direction from this past quarter.

Operator

Your next question comes from the line of Ryan Daniels with William Blair.

Ryan Daniels

Jeff, one for you, and you talked a little bit about this, but I want to dive a little bit deeper into it. With 16 of the top 20 pharma clients buying AI search solutions, are you able to tell if that's at all cannibalizing any of your other sales with them? Or is it really all proving to be incremental at this point?

Jeffrey Tangney

Yes, it's a good question, Ryan. I'd say it's mostly incremental. Of course, it's impossible to know that exactly. But I think we will know that exactly when we offer it as a biddable solution where they're purchasing it usually out of a separate team that is more of a search team because it's more of a keyword-driven approach to marketing. And that typically is a separate marketing team within our clients. So it's mostly incremental. I can't promise you it's 100% incremental, but I will say, going back to that survey of pharma marketers that was done, we're proud to be at an all-time high, 81% incremental spend. And I think that's mostly that paid search bucket that we are now entering $14 billion a year spent on Google by pharma per year. And it is interesting in that same survey that Google is at an all-time low at 6%. So again, mostly incremental and the excitement to be able to really be in those highly relevant contextual places is something that we're excited about.

Matthew Sonefeldt

Ryan, the only other thing I'll add, there was some of the language in the prepared remarks that you'll see around Q2, we saw positive growth in Q2 across all of our major product categories. And that's really encouraging. And while I think the doc -- I'm sorry, why the AI search pipeline is continuing to grow, it's still early days and pretty nascent. Most of what we're kind of seeing in the upfront cycle so far, again, early in the cycle, is demand for our core products, whether it's in the news feed or it's video around Dialer and telehealth, I think we're in a good place with a solid foundation to build AI search on top of. So I think that's encouraging for us, too, as we go throughout the year.

Ryan Daniels

Yes. Super helpful color. And then, Jeff, as my follow-up, it seems like we're seeing a lot tighter governance among health systems, especially bigger ones or academics about how doctors use AI. So early on, maybe just download a free tool, but now they're getting a lot more concerned about liability and patient care. And I'm curious how that plays into your advantage given the outcomes you've been able to present like you talked about earlier, plus the massive channel distribution you have with your Dialer asset into those enterprise accounts.

Jeffrey Tangney

Yes. Thanks, Ryan. Yes, I think on last quarter's call, we had made some comments about AI accountability. That's the next age or next phase for our health system clients, which we did grow from 165 to 190 -- so 25 new clients in the last quarter. And we are going to keep growing there. We have over 300 enterprise clients overall on our telehealth and other products. And we have privacy agreements in place with all of them, but we don't have the AI review with all of them. But that 300 enterprise clients that we have are nearly half of all U.S. physicians. So we cover all the largest health systems. And again, that's where we really see this AI growth and TAM.

One specific case that came out this last week was Johns Hopkins. They had 3,000 patients that they had to send an e-mail out to, which isn't fun for anyone to do, telling them that an employee had uploaded some of their data to an unapproved AI. So when we see things like that happen, and we've seen a bunch of other health systems put in IP-level blocks. I think we're just going to see more of that happen because the reality is people should be concerned about the security of their patient data being put into AI that may leak out in various places.

So I think we're moving beyond the Wild West phase of AI in health systems. We're proud to announce NYP this quarter as a new AI logo. We're proud to announce UCSD, both top 20 hospitals as a new logo. But I do think you're right. I think we're entering this new phase here where hospitals, I think, will rightfully start to say, okay, what kind of data might we be leaking and what sites, frankly, do we need to block. They've done that for years and years. It's not a new thing for them. I think they've just been catching up on how much that AI leakage might be happening.

Operator

Your next question comes from the line of Elizabeth Anderson with Evercore ISI.

Elizabeth Anderson

Obviously you talked about the 16 of the top 20 customers or pharma customers in terms of 3 in the pipeline. Can you talk to us about the smaller -- are they also kind of in the same? Are they a little bit more reticent or they're just smaller? And sort of how do we think about the typical ramp of some of these buying? Are they kind of trying it out first and then sort of with future expansion plans in '27, if that goes well, are they jumping right in? Just a little bit more color on how you see those 2 segments progressing over the next few quarters to year would be very helpful.

Jeffrey Tangney

Great. Liz, this is Jeff. I'll take a first crack and then hand to Matt here. The short answer is we know that the medical-legal review processes of the top 20 pharma are intensive, and we wanted to start there. So we started at the top, if you will, at the most difficult place. And that's been going well. It does take time. Obviously, we have to go through and understand suppression keywords and keywords and where things appear and there's a lot of testing and all that, but it's all part of the process. And again, we proudly work with -- this will be 19 of the top 20 pharma with the 3 we have in contracting.

In terms of smaller accounts, actually, things move faster there. But generally speaking, we haven't focused as much on selling to that audience because we think they're going to be the perfect clients for our new auction or biddable tool. And that will be less a more efficient go-to-market motion for those smaller accounts. We started with our more strategic bigger accounts, which is what we typically do. Again, our best new products go to our best or biggest clients first. Matt...

Matthew Sonefeldt

I actually don't know if I have that much more to add. I think probably one of the things that signals well is one of the data points in the prepared remarks, which is that based on customer demand, we've made available kind of more than double what we started with in terms of available conditions. And that really just speaks to, I think, in a broad set of places that pharma customers are interested in conditions, drug areas, different types of treatments, you'll see that there's just a lot of interest here. And to Jeff's point, AI search is going to become a lot more accessible as we move into FY '28. So we're excited. We're encouraged. I think the demand is there as we just continue to ramp it up.

Operator

Your next question comes from the line of Ryan MacDonald with Needham & Company.

Ryan MacDonald

On the quarter. Jeff, as we think about the example you provided with New York-Presbyterian now providing access to the AI solution directly through the EHR, once that occurs within their health system clients, what impact do you see or what kind of uplift do you see on usage? And then how important has that sort of uplift for that EHR integration been as you've been going to market with the AI search product?

Jeffrey Tangney

Great, Ryan. Yes, thanks. I will say that with our patient context doctors or clients, we've seen roughly a doubling in the amount of usage, even though they're able to type less themselves because they have more patient contexts coming in, there's a big time savings there. And again, I think that's really the future is your doctor will be sitting there with you in a visit and the AI will be there with him or her, and it will have, again, your history there so that nothing gets missed. And that's really a very exciting future.

With regard to just turning on within an EHR, we've done that in lots of places. I got to be honest, the truth is just putting a button inside an EHR does not in and of itself immediate usage. You actually have to do a bit of training and webinars. Maybe this is a sad statement on electronic health records, but a lot of doctors are trained not to click a button if they haven't been trained on it. And there's just a lot of that sort of tested behavior around trying out new features or new things inside some of these systems, which have lots of cul-de-sacs and strange behaviors.

So we're good at that. Again, we've been working with them for years usually as a partner on telehealth and scheduling. And it's actually been fun for our team to have our monthly Zoom call be about a whole new series of features and products. And I think we've got many months of good Zoom calls there with our clients to help them see all the things they can do with it. But the short answer is patient context does lead to an immediate lift, but just being inside an EHR, less than you might think.

Ryan MacDonald

That's helpful color. I appreciate that. And maybe just as a follow-up. As you think about sort of expanding that top-down penetration within the health systems, how valuable do you think the UpToDate partnership can be? And is there any sort of go-to-market sort of relationship there where they can help bring you into, obviously, that very large customer base that they have?

Jeffrey Tangney

Thanks, Ryan. You're absolutely right. UpToDate is virtually everywhere in the U.S. health system. And as I said, our teams have been getting along great. We think that, again, they're just a very high integrity real boon for the overall health system. So we're proud to work with them, and we hope and expect to keep expanding our relationships. I don't have anything to announce today on go-to-market with them, but that's some of the things that have been discussed. But let's just say that I think it's the beginning of what we think will be a very strategic, very -- it's a long-term partnership, multiyear. We're excited to keep growing with them.

Operator

Your next question comes from the line of Scott Schoenhaus with KeyBanc.

Scott Schoenhaus

I just wanted to follow up on Elizabeth's question. Just wanted to make sure I understood how long does the typical medical-legal review process take? And how should we think about that ramp in AI search revenues after you clear that process? Is it very back half weighted in calendar '27?

Jeffrey Tangney

This is Jeff. I'll chime in first. I mean, for new products, MLR review can be months and months. And we learned this candidly, the hard way back with our vertical video product, as you may recall, a few years ago. And we had a lot of signed contracts, but we didn't have the revenue coming in for a many month gap because video, honestly, is difficult for lawyers to review well, and there's lots of tools and processes that need to be put in place to be able to comment on Frame 68 or 25 seconds in. I think we're being appropriately cautious here in our time frames, and we're assuming that it will also take many months to get live with these contracts. So that does lead to, again, I think, again, a cautiously optimistic approach to the rest of this fiscal year.

Matthew Sonefeldt

I'll add a couple of points. I think one is that I think you see that assumption on that gradual ramp, especially kind of from a calendar year '27 standpoint in our guidance, right? Our growth rate in Q4 is very similar to our growth rate in Q3. And part of that is because we know that especially for customers that are buying AI search for the first time, like there will be that ramp-up that Jeff described in terms of the MLR process. I would say in terms of some of our early upfront activity, a lot of the AI search contracts kind of assume that, too, right? It will be a ramp-up throughout the next calendar year. So that's a dynamic that we're seeing as well. I don't think any of that is surprising based on what Jeff described about some of our past product cycles, but that's kind of what the assumptions are that we're making for our business.

Scott Schoenhaus

Perfect. And just as a follow-up, so that 6% growth rate for 3Q and then for 4Q and which we start into the next calendar year, typically, people read that as a reflection of your view of what maybe the market can grow at or what you can grow at. How should we view that in context of what you're viewing the market growth at as you've outlined 6% growth into the calendar year?

Matthew Sonefeldt

Yes. I think it reflects the beginnings of reacceleration in our business, right? I provided the comment that our second half -- our fiscal second half outlook has slight acceleration versus our first half. I think that's where you see the beginnings of optimism for us as we look into next year. At the same time, it's early. We're not through our upfront cycle yet. And so I think we want to be thoughtful, especially as we think about kind of fiscal Q4 and calendar Q1. See how the upfront lands, also know that some of the AI search demand, in particular, will ramp throughout the year. But I think we're pretty encouraged and optimistic as we sit here today in November for future growth.

Perry Gold

And Scott, I'll just add on the market itself. I think there's some cautious optimism that hopefully next year is better than this year. This year was a perfect storm of a lot of different things not going in the market's way. And so I think there's some reasons to be a little more optimistic for next year.

Operator

Your next question comes from the line of Richard Close with Canaccord Genuity.

Richard Close

Congratulations on the report and the AI progress. So Jeff, or Matt, just given the comments that AI may be additive and a different buyer, I'm curious, do you have separate sales force going after this? Or is it the same account teams as the other products? And then with respect to the upfront contracts that you're working on now, is AI bundled in? Or is that completely separate since it's a different budget possibly?

Jeffrey Tangney

Richard, this is Jeff. Right now, we have an overlay, we call it, but basically a team approach where we have some new experts we have in the AI search who join our sales team in meeting with some of these search budget holders. And right now, the contracting, I mean, we typically have these master service agreements and then we have these statements of work they are called. Sometimes they're together on the same statement of work. Usually, I think it's a separate statement of work. But again, this is the advantage of being a reference client, someone who's already vertically working with all of the top 20 pharma. It's been relatively low overhead for us to add on this search AI business to existing clients.

Operator

Your next question comes from the line of Jessica Tassan with Piper Sandler.

Jessica Tassan

On New York-Presbyterian and the 25-plus new AI hospital wins. So as you guys have started to deploy AI search, including patient context in these enterprise contracts and commercialize the AI search offering via pharma bookings, can you just -- can you help us understand how you're monetizing this product? Basically, what the 8-digit bookings consist of? Are those enterprise subscriptions or pharma bookings or both? What I'm trying to get at is just in these enterprise contracts, is AI search exclusively monetized via subscription revenue, so ostensibly for those 190 clients, it might hit at day 1. And then is pharma revenue kind of exclusively generated from independent physicians or physician practices using Doximity Ask? Any color there on just how exactly these AI products are being monetized would be super helpful.

Matthew Sonefeldt

Jeff, this is Matt. Thank you for the question. It's a good one. I would say the primary way we're monetizing and when we talk about 8-figure bookings, it's primarily with our pharma customers and selling AI search as an advertising product. We do sell AI as a separate enterprise agreement to health systems customers. We charge a nominal amount as part of our broader workflow suite. And so I think as we think about this going forward, we see the primary monetization engine being on the pharma side of our business, specifically through the ad products that we sell.

Jessica Tassan

Okay. That's great. That's extremely helpful. And then just any early thoughts on ROI for the pharma educational content displayed in AI search relative to Doximity's core business? I think, Matt, you mentioned most of the early upfront bookings are core Doximity. So does that imply kind of parity ROI? Just interested in any early thoughts on ROI for the educational content in AI search.

Perry Gold

Jess, I think the answer is it's just too early. A lot of these programs just launched in the last few months. That being said, this is the most contextually relevant product we have. And so I think the working thesis is give us a few more months, we'll have more kind of results in, but this should be just as, I would say, ROI is strong as the other products, if not better. And the nice thing is it's also making all of our product portfolio better. There's AI signal now in other products. When you buy AI search, you're not just buying media. You're buying insights, you're buying retargeting to other parts of the platform. And so everything gets better, everything gets I think better education at the right time to the right docs. So I think the long-term is it's a little too early right now, but the thought is it will be just as good, if not better.

Operator

Your next question comes from the line of Alexei Gogolev with JPMorgan.

Destiny Ann Jackson

This is Destiny Jackson on for Alexei Gogolev. I wanted to touch on NRR. I saw that it moved down for overall to 103% and to 106% for top 20. Can you touch on what's driving that trend down? And what are the levers to reaccelerate expansion?

Matthew Sonefeldt

Destiny, thanks for the question. The -- I would say those metrics tend to follow our revenue growth. And I think we see that as being at a trough level. Like we said, we're expecting the beginning of the reacceleration in the second half. Usually, those metrics follow the rate of revenue growth. The -- also, I would say, as we move forward and something I kind of -- I'm thinking about as a newer person in my seat, I think these metrics may not be the right set of metrics to measure our growth going forward.

I'll take the customer count 1 as an example. It's very focused on our largest customers that we've landed and had in place for a long time. This is our small and medium growth segment, which has been one of the faster-growing segments for several quarters now within our pharma business. So I think we'll see and evolve the right metrics for our next chapter of growth, but it's not something I'm particularly worried about as we consider the opportunities that are sitting in front of us over the next several quarters.

Perry Gold

Destiny, I'd just add on the reacceleration point, I think there's 3 things you can look at. One of them is just AI search, new incremental. We're getting deeper, better breadth at all of our customers, even the existing ones in particular. The core of the other products have higher value because of the search signal. There's more excitement around just the whole portfolio than we've seen in a while. And then my earlier comment, cautious optimism in the market itself will be a little bit better, at least a little bit better next year than this year. So I think all 3 of those could contribute to improving NRR as we go forward.

Destiny Ann Jackson

And then as a follow-up, the customer count for the customers over 500,000 that came down for 2Q. Can you touch on what drove that deceleration?

Matthew Sonefeldt

Destiny, I'm going to have you repeat the question again. It just sounded a little garbled on our end.

Destiny Ann Jackson

Sorry, it was on the customer count for $500,000 customers came down this quarter. So I just wanted any color there.

Matthew Sonefeldt

Right. So Q2 is actually usually one of the weaker quarters for that metric just from an expand standpoint. We just see less kind of incremental upsell activity. That's basically what I would point to. If you look at past quarters and past Q2s and past years, you see a kind of similar pattern of relative seasonal weakness. That's the primary explanation for that.

Operator

Your next question comes from the line of Allen Lutz with Bank of America.

Allen Lutz

First, Jeff, thanks for the shout out on the survey. Really appreciate that. Can you talk a little bit about the evolution of the competitive landscape here in AI search? You're looking at really 2 very different markets in your traditional pharma customer and then the health system customer. Would love to get a sense of how the competitive landscape in each is evolving over time.

Jeffrey Tangney

Thanks, Allen, and I appreciate you listening to the shout out. I'd say I've reluctantly come to like your survey because it is 35 pharmaceutical marketers, which is good coverage given the top 20 is most of the market. And you do a good job of adding in all the various companies or partners that they work with. Your chart there pointed it out, I think, pretty clearly. We're at the highest level there of interest in incremental dollars we've ever had. Paid search or Google is at the lowest level it's ever been. And some of the new search players there have also dipped as I think, again, there are ups and downs in the market and some folks are pleased with their partnerships and some are not.

So I guess my short answer to your question is that I think you are pointing us to the fact that these really are 2 different markets. One is search and one is media. And -- the good news is we're really expanding as a year ago, we were a pure media company. Now we are a media and a search company. And as Perry pointed out a few moments ago, there's a lot of synergy between the 2 because the reality is Google knowing that you search X here means that they're better able to target you on YouTube there. And those 2 things go together very well, and that's what we see with our business, our telehealth, which again, is at all-time highs, our scheduling, our other workflow tools in addition to AI search.

Allen Lutz

Appreciate that color. And then one for Matt. The margins in the quarter were really strong, and you talked a little bit in the Q&A around some of the operating leverage you could see in the business. Would love to get a sense of -- are there opportunities to invest where it would be a high ROI investment? And how do you think about investing more in things like AI search versus maintaining these margins north of 50%.

Matthew Sonefeldt

Yes. And I think you see us making that concerted investment in our EBITDA margin for the full year. I think we have what we feel like is the right firepower to be able to make some of these incremental investments. We literally look at things that we can do differently on a week in and week out basis, especially right now and given it's such a dynamic time, and that's led us to kind of, I think, continue to iterate on the infrastructure that we're using, begin to make investments like in the auction biddable product that Jeff was describing earlier, kind of play offense through some of these partnerships. We'll continue to do that.

I think what you also see is that we have a really great business model as a company. It generates really incredible incremental margins, especially when we outperform from a revenue standpoint. And we have a really great team who excels at executing. And I think you saw that this quarter again, I'll share -- the metric I shared earlier in the Q&A, which is this quarter, our cost of revenue, that is highly AI focused right now, grew at half of the rate of our prompt volume in our AI products, whereas last quarter, those things were 1:1. So we saw from that measure kind of a 50% efficiency on our incremental spend. And that is just a huge, huge kudos and credit to our team who continues to innovate on AI infrastructure. So we'll continue to play offense very much so, but I'm also pretty confident in our ability to generate great incremental margins as we're doing it.

Operator

Your last question comes from the line of Ryan Halsted with RBC Capital Markets.

Ryan Halsted

Any perspectives you can offer on just the general health of HCP marketing budgets going into the upfront season. Just seeing a lot of biopharma activity, lots of new drug approvals. Just curious if -- how you're seeing HCP marketing budgets so far?

Matthew Sonefeldt

I can take a first crack at it. This is kind of my first go around in this seat here at Doximity and kind of thinking through the upfront. And my -- as I go through it and I compare it to a lot of the team's experience last year, I think it feels like a more stable environment. I wouldn't say it's world beating or having a massive growth uplift. I think there are some dynamics in terms of pharma approval pipelines that are improving. And whereas last year, there was a lot of policy uncertainty and friction. I think that is stabilizing, although I wouldn't say it's kind of up and to the right. And so I think it feels like a more stable, a more comfortable environment to do business in, but not necessarily one that's dramatically reaccelerating from a macro standpoint.

Jeffrey Tangney

Yes. This is Jeff. I'll just add. If you look at the iShares pharma ETF, it's up about 40% year-over-year. And you think about where we were a year ago compared to today, again, there are a lot of negotiations around price and tariffs, and there's just a lot of things in the mix that I think we look at this year as a more stable environment for us to grow and do our jobs.

Operator

There are no further questions at this time. I will now turn the call back to CEO, Jeff Tangney, for closing remarks.

Jeffrey Tangney

I'd like to end by thanking the entire Doximity team for their hard work serving more doctors every day than ever before. So thank you, everyone, for joining.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.