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After Doximity reported its November results, we updated our fair value and cut our quality score to 3.9. We now rate the strength of its competitive protections and the track record of its management lower. We have added the cost of stock-based compensation and its impact on net profit to the factors we track. We also added the legal risks and costs associated with new class action litigation to our thesis.
Doximity brought in $174.5 million in revenue this quarter, meeting expectations and growing 4 percent from last year. Earnings per share of $0.36 came in slightly ahead of the $0.35 analysts expected. While net income fell compared to last year, the company maintained an adjusted EBITDA margin of 51 percent, which measures its core operating profit before certain costs like taxes and interest.
The real focus for the company is its shift into artificial intelligence. Management noted that more than 190 health systems are now paying for its AI suite, which helps doctors with tasks like medical summaries. As long as Doximity keeps doctors using these workflow tools, it maintains its hold on the audience that pharmaceutical companies pay to reach. The stock fell about 2 percent today, but that was a strong result on a day when the broader market dropped more than 4 percent.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Doximity is scheduled to report its quarterly performance today. Analysts are looking for revenue of about 170 million dollars and earnings of roughly 35 cents per share. For a business that relies on being the digital home for doctors, the most important numbers to watch will be how many physicians are using its workflow tools and whether pharmaceutical companies are continuing to shift their marketing budgets onto the platform. These high-margin digital ads are what drive the company's strong cash flow.
Doximity launched DoseCheck, a safety feature for its AI assistant that cross-references medication advice with a verified drug database. Because AI models work by predicting the most likely next word, they can sometimes make up facts or provide incorrect medical doses, a problem often called hallucination.
This is a smart move to protect the trust Doximity has built with doctors. By adding a layer of verification, the company makes its AI tools safer for daily clinical use. If these tools become a standard part of how doctors work, it keeps them logged into the platform longer, which is exactly what the pharmaceutical companies paying for ads want to see.
Source: Business Wire
Doximity will share its latest quarterly results on Thursday, November 5. Analysts expect the company to report earnings of about $0.35 per share on revenue of roughly $170 million. Beyond the headline numbers, the focus will be on how many doctors are using its workflow tools. This engagement is what attracts pharmaceutical companies to spend their marketing budgets on the platform. We will also be watching for updates on the adoption of its new AI tools, which are designed to help doctors automate their clinical paperwork.
Management has a long history of clearing its own bars, but recent misses suggest the business is becoming harder to forecast as it shifts focus toward new AI tools.
| Expectation | |
|---|---|
| EPS | $0.40 |
| Revenue | $195M |