Doximity (DOCS -11%) concluded FY25 with notable achievements in Q4, but investors were let down by the company's conservative revenue forecasts for Q1 and FY26.
Key Highlights:
- In Q4, Doximity set new records for unique active users across all timeframes, driven by its popular and monetized newsfeed product. Unique newsfeed users and article interactions surged over 30% year-over-year. Additionally, its workflow tools, including telehealth and AI, saw over 620,000 unique active prescribers.
- The strategic pivot to multi-module integrated offerings in FY25 boosted revenue, resulting in larger deal sizes and more annual program launches in January. The quarter ended with 116 customers each contributing at least $500,000 in subscription revenue, marking a 17% increase year-over-year.
- The new integrated offerings allowed for early program launches, benefiting FY25 revenue but creating a challenging comparison for FY26. Despite this, Doximity expects these early launches to enhance customer ROI and drive further investment.
- Currently, Doximity has nearly 70% of its initial subscription revenue guidance under contract, raising concerns about visibility.
- Although Doximity hasn't observed macroeconomic impacts, it cautiously anticipates market growth to be on the lower end of expectations.
Investors are clearly disappointed with the guidance. Changes to business models, like Doximity's shift to multi-module offerings, often involve a period of adjustment in financial expectations. The company's revenue largely comes from drug manufacturers and health systems. The recent executive order from President Trump might also be influencing guidance.
