Doximity raises annual revenue forecast, shares fall 6.5%

Doximity (DOCS) reported fiscal second-quarter revenue of $174.5 million, up 4% from $168.5 million a year earlier, in line with the $174.23 million consensus.

Shares fell 6.5% at 9:36 a.m. ET, from a $33.18 close.

Here's how the company did:

• Revenue: $174.5 million vs. $168.5 million a year earlier
• Non-GAAP diluted EPS: 36 cents vs. 45 cents a year earlier, in line with the 36-cent consensus estimate
• Net income: $34.7 million vs. $62.1 million a year earlier
• Adjusted EBITDA: $88.9 million vs. $100.8 million a year earlier, a margin of 51%

CEO Jeff Tangney said the company is "investing heavily in AI" while keeping its adjusted EBITDA margin at 51%.

More than 190 health systems have now purchased the company's AI suite. Tangney also pointed to UpToDate and DoseCheck as parts of the company's distribution.

Fiscal 2027 guidance

For the fiscal third quarter ending Dec. 31, the company expects revenue of $195 million to $196 million and adjusted EBITDA of $102.5 million to $103.5 million.

For the fiscal year ending March 31, 2027, revenue is now forecast at $678 million to $683 million, up from $671 million to $681 million in August. Adjusted EBITDA for the full year is now forecast at $317 million to $325 million, from $309 million to $329 million in August.

Costs and cash flow

Stock-based compensation was $40.6 million, up from $29.5 million a year earlier.

Operating cash flow was $93.3 million, against $93.9 million a year earlier. Free cash flow was $91.3 million, against $91.6 million.

The company repurchased $54.2 million of its common stock in the quarter, up from $21.9 million a year earlier.