Doximity (DOCS) Q1 Revenue Rises 15%

Key Points

• GAAP revenue rose 15% year over year in Q1 FY2026 but missed expectations by 5.5%.

• Non-GAAP earnings per share outperformed estimates, reaching $0.36 versus the expected $0.34.

• Guidance for FY2026 revenue and adjusted EBITDA was raised, yet management remains cautious on upsell variability and macroeconomic trends.

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Doximity (NYSE:DOCS), a leading digital platform for medical professionals, released results for Q1 FY2026 on August 7, 2025. The company posted GAAP revenue of $145.9 million, missing analyst expectations of $154.4 million (GAAP) by about 5.5%. However, non-GAAP diluted earnings per share reached $0.36, beating the $0.34 non-GAAP estimate. Profitability continued to strengthen, with margins increasing year over year. Management raised full-year guidance for both revenue and adjusted EBITDA, but flagged continued caution around variability in mid-year upsell activity and overall market conditions. The period showcased reliable user engagement and accelerating interest in workflow and artificial intelligence (AI) tools.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.

About Doximity and Critical Business Drivers

Doximity operates as the largest digital professional network for the U.S. healthcare sector. It connects over two million healthcare professionals—including more than 80% of U.S. physicians—through its networking, collaboration, and workflow platform. The company's main services span three critical areas: marketing, hiring, and workflow solutions. Its aim is to make day-to-day tasks easier for medical professionals, with HIPAA-compliant tools designed to fit right into clinical routines.

The company’s recent strategic direction emphasizes deepening user engagement across workflow tools, such as telehealth, scheduling, fax, and now a rapidly evolving suite of AI-powered assistants for clinical documentation and analysis. Success depends on the platform’s ever-expanding network effects, ongoing adoption of workflow solutions, the depth of enterprise relationships with customers in the pharmaceutical and hospital sectors, and the maintenance of high regulatory compliance and security standards.

Quarter in Review: Financial and Product Highlights

Revenue increased 15% from the prior year period, but trailed analyst estimates by $8.5 million (GAAP). This marks a slowdown from previous year-over-year expansion rates. The shortfall comes as management acknowledged a tougher year-over-year comparison due to the benefit from a strategic transition in FY2025, which had temporarily accelerated growth. This effect has now normalized, leading to more modest growth expectations. Despite this revenue miss, profitability metrics remained robust. Non-GAAP diluted EPS outpaced expectations, and adjusted EBITDA margin stood at an elevated 54.7%. Free cash flow climbed 52% year-over-year, showing strong cash generation even during slower revenue growth.

Operational metrics shed more light on engagement trends. The platform counted over 630,000 unique prescribers using its workflow tools, a new record and an increase from over 620,000 in Q4 FY2025. Adoption of Doximity’s AI suite was particularly notable, increasing by a factor of five year-over-year. This “third act” of investment in AI is positioning the company for deeper integration into clinical workflows.

Noteworthy product milestones this quarter included the expansion of HIPAA-compliant workflow solutions and additions to AI-powered clinical tools. Leadership cited client feedback at industry summits, with customers praising the return on investment and transparency enabled by Doximity’s client portal and real-time reporting. Though detailed financial impact was not disclosed in the release, and stock repurchases continued, reflecting capital discipline and commitment to shareholder returns.

Looking Ahead: Guidance and Key Trends to Watch

Management raised full-year guidance. The revenue outlook is now $628–636 million, up from the previous range of $619–631 million. Adjusted EBITDA expectations also rose to $341–349 million, from prior guidance of $333–345 million. For the next quarter, Doximity anticipates revenue of $157–158 million and adjusted EBITDA of $87–88 million for the next quarter, signaling sequential growth.

Investors should monitor several ongoing trends. Key success factors going forward include maintaining high engagement with workflow tools, scaling the adoption of AI-powered solutions, and driving greater penetration in both pharma marketing and workflow client segments. The variability of upsell sales remains a risk, especially given unpredictable changes in healthcare spending and policy. DOCS does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Doximity. The Motley Fool has a disclosure policy.