Summary
Doximity reported fiscal 2023 first quarter revenue of $90.6 million, up 25% year-over-year. Gross profit reached $77.6 million, up 19.9%. The top line grew faster than gross profit, and operating income fell to $21.7 million, down 12.8%. Net income was $22.4 million, down 15.0%. Diluted EPS came in at $0.10, up $0.01. Gross margin was 85.6%, down 3.4 percentage points. Operating margin was 23.9%, down 10.3 percentage points. The margin decline reflects higher cost of revenue and operating expenses. Headcount growth and expenses tied to the U.S. News partnership weighed on gross margin. Stock-based compensation also rose. On a non-GAAP basis, adjusted EBITDA was $33.5 million, up 8% year-over-year, with a 37% margin versus 43%. Non-GAAP net income was $30.8 million, a 34% margin versus 42%. Non-GAAP diluted EPS was $0.14 versus $0.11. The gap between GAAP and non-GAAP results is largely due to stock-based compensation and amortization of acquired intangibles. Subscription revenue drove the increase, with expansion of existing customers and new customers contributing.
Cash generation remained a bright spot. Operating cash flow was $44.8 million, up 34.9% year-over-year. Free cash flow, a non-GAAP measure, was $42.6 million, up 32%. Capital expenditures were $0.7 million, up 1631.7%. Deferred revenue, current portion, was $93.9 million, up 13.7%. The company repurchased shares under its $70 million authorization and had $61.1 million remaining as of June 30, 2022. It also closed the AMiON acquisition on April 1, 2022. Management noted that the acquisition was immaterial to the periods presented for key metrics. The balance sheet remains liquid, with cash and marketable securities providing flexibility for strategic opportunities. The company believes existing cash and marketable securities will support working capital and capital expenditure requirements for at least the next 12 months.
Operational metrics showed mixed trends. The net revenue retention rate was 139%, down from 167% a year earlier. The company said a record number of physicians, NPs, and PAs used Doximity Dialer over 200,000 times per workday last quarter. Doximity also appointed Phoebe Yang to its board of directors. Management issued guidance for the fiscal second quarter ending September 30, 2022. Revenue is expected between $99.5 million and $100.5 million. Adjusted EBITDA is expected between $40.0 million and $41.0 million. For the full fiscal year ending March 31, 2023, the company revised revenue guidance to $424.0 million to $432.0 million and adjusted EBITDA guidance to $178.0 million to $186.0 million. The full-year guidance is for the fiscal year, not the quarter. The company said it expects gross margin to remain relatively steady over the near term, though quarterly gross margin is expected to fluctuate.
Risks remain familiar. The company cited the COVID-19 pandemic, its ability to retain existing members or add new members, and its ability to attract new customers or retain existing customers. Other risks include breaches in security measures or unauthorized access to member data, competition, and managing growth. The decline in net revenue retention rate and the margin pressure from headcount growth and the U.S. News partnership are worth watching. Doximity also faces integration risk from acquisitions such as AMiON. The forward-looking statements highlight a competitive and rapidly changing environment. The company's network members include over 80% of U.S. physicians across all specialties and practice areas. That scale supports the business, but the company must keep adding customers and expanding existing ones to sustain growth. The stock repurchase program and acquisition activity show management is deploying capital, but those moves also carry execution risk.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $90.6M | $93.7M | -3.2% | $72.7M | +24.7% |
| Gross profit | $77.6M | $81.9M | -5.3% | $64.7M | +19.9% |
| Gross margin | 85.6% | 87.4% | -1.9 pp | 89.0% | -3.4 pp |
| Research & development | $19.0M | $17.4M | +9.2% | $13.2M | +43.7% |
| Sales & marketing | $28.1M | $25.9M | +8.6% | $19.4M | +45.2% |
| General & administrative | $8.7M | $10.6M | -18.0% | $7.2M | +21.2% |
| Total operating expenses | $55.9M | $54.0M | +3.5% | $39.8M | +40.4% |
| Operating income (loss) | $21.7M | $27.9M | -22.3% | $24.9M | -12.8% |
| Operating margin | 23.9% | 29.8% | -5.9 pp | 34.2% | -10.3 pp |
| Net income (loss) | $22.4M | $36.7M | -39.1% | $26.3M | -15.0% |
| Net margin | 24.7% | 39.2% | -14.5 pp | 36.2% | -11.5 pp |
| Diluted EPS | $0.10 | $0.19 | -$0.09 | $0.09 | +$0.01 |
Risks
Doximity expects its revenue growth rate to decline and warns that heavy investment in growth may increase expenses and reduce margins. In FY2023 Q1, revenue rose 24.7% but operating margin fell 10.3 pp and net income fell 15.0% versus the prior-year quarter.
Gross margin decreased 3.4 pp in FY2023 Q1, driven by headcount growth and U.S. News partnership expenses, and management expects margins to decline as Telehealth Solutions grow and sales, marketing, and research spending increases. Adjusted EBITDA margin also fell to 37% from 43% in the three months ended June 30, 2022.
Management cites increased economic uncertainty and the potential for a global recession, which may cause pharmaceutical and health system customers to reduce, delay, or limit spending on Marketing, Hiring, and Telehealth Solutions. Net revenue retention rate decreased to 139% at June 30, 2022 from 167% at June 30, 2021.
Customers may seek extended billing terms, pricing discounts, or renegotiate contracts during renewals, and larger pharmaceutical customers often have brand-level budgets that may not expand across brands. The filing notes that customer spending reductions or delays could limit growth and negatively affect operating results.
Doximity faces increasing competition from large technology companies such as LinkedIn, Facebook, Google, and Twitter for members, from WebMD Medscape and offline marketing providers for Marketing Solutions, and from American Well, Teladoc Health, and Zoom for Telehealth Solutions. Increased competition could cause pricing pressure, loss of market share, or decreased member engagement.
Revenue is relatively concentrated within a small number of key customers, and some customers purchase indirectly through marketing agencies. For the three months ended June 30, 2022, no customer accounted for 10% or more of total revenue, but the loss or renegotiation of a largest customer could slow revenue growth or cause revenue to decline.
Doximity is subject to HIPAA as a Business Associate, the CCPA and CPRA, state medical privacy laws, FTC consumer protection scrutiny, and TCPA rules for communications made through its platform. Compliance failures could lead to significant fines, penalties, litigation, changes to solutions, or reputational harm.
The company depends on senior management and key personnel in a competitive labor market, especially in the San Francisco Bay Area. Full-time equivalent headcount grew from 887 as of March 31, 2022 to 930 as of June 30, 2022, increasing demands on integration, training, and culture maintenance.
Doximity completed the AMiON acquisition on April 1, 2022, and integration may require substantial financial costs and management attention. If integration is not timely or effective, or if acquired assets do not yield expected returns, business and financial results may suffer.
The telehealth market is relatively new and unproven, and increased demand during COVID-19 may decline. If states do not maintain reimbursement parity after the pandemic, usage of Doximity's network could be negatively impacted.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Free Cash Flow
Adjusted EBITDA
Net Revenue Retention
Non-GAAP Net Income Margin
Non-GAAP Net Income
Non-GAAP gross margin
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Doximity, Inc.'s SEC filings for Q1 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.