Executive Summary / Key Takeaways

• Doximity is the leading digital platform for U.S. medical professionals, leveraging a vast network and physician-first design to offer tailored Marketing, Hiring, and Workflow Solutions.
• The company demonstrated strong financial performance in fiscal year 2025, achieving 20% revenue growth to $570.4 million and expanding adjusted EBITDA margin to 55% ($313.8 million), alongside robust free cash flow generation.
• Technological differentiation, particularly in AI-powered tools like Doximity GPT and a personalized Newsfeed, is driving record member engagement and operational efficiency, positioning the company for future growth.
• Strategic initiatives like the Client Portal and integrated multi-module programs are enhancing customer ROI visibility, facilitating upsells, and improving revenue predictability, contributing to market share gains.
• While navigating a competitive landscape with larger tech players and specialized healthcare solutions, Doximity's unique network effects and focused product development provide a durable competitive moat.

The Pulse of Practice: Doximity's Physician-First Ecosystem

Doximity, Inc. (NYSE:DOCS) began its journey in 2010 with a clear mission: to empower U.S. medical professionals and enhance patient care through technology. Recognizing the unique workflows and communication needs within the healthcare industry, the company set out to build a digital platform specifically tailored for physicians and their colleagues. This physician-first approach, prioritizing trust and utility, has been foundational to Doximity's success, cultivating a network that now includes over 80% of U.S. physicians and more than two million registered members as of March 31, 2025.

At its core, Doximity functions as the nation's largest medical professional network, fostering collaboration and creating proximity among healthcare providers. This extensive network serves as the bedrock for its revenue-generating solutions, offered primarily to pharmaceutical manufacturers and health systems. These solutions span Marketing, Hiring, and Workflow categories, all designed to deliver value to customers by effectively engaging a highly targeted and otherwise difficult-to-reach audience of medical professionals. The ecosystem benefits from powerful network effects: as more medical professionals join and engage with the platform's expanding tools, its value as a communication and collaboration medium increases, which in turn attracts more members and makes the platform more attractive to customers seeking to interact with specific medical groups.

A key differentiator for Doximity lies in its deep understanding of clinical workflows and its commitment to building purpose-built digital tools. Unlike broad social networks or general collaboration platforms, Doximity's offerings are designed with the specific needs of healthcare professionals in mind. This includes HIPAA-compliant communication tools like secure messaging and digital fax, as well as workflow-enhancing features like on-call scheduling (AMiON) and telehealth capabilities (Dialer). This focus on clinical utility has led to high levels of adoption and daily use, with over 620,000 unique active providers utilizing Doximity's clinical workflow tools in the quarter ended March 31, 2025.

Technological Edge: Data, AI, and Workflow Innovation

Doximity's competitive strength is significantly underpinned by its technological capabilities, particularly its vast, interactive data set and its strategic application of artificial intelligence and machine learning. The company has intelligently combined proprietary information with previously-siloed public data, creating a unique repository of insights into the needs and behaviors of U.S. medical professionals. This data, coupled with customized algorithms and a team of experts, provides unparalleled insight that would be highly challenging for competitors to replicate.

AI and ML are leveraged across the platform for various critical functions. These include aggregating and coupling disjointed datasets, tailoring medical news content to individual member specialties and interests, automatically matching candidates with job openings, and enhancing customer marketing programs with AI-powered content generation tools. The company's Newsfeed, powered by AI, achieved record highs in Q4 FY25, with articles read or tapped up more than 30% year-on-year, demonstrating the effectiveness of personalized content delivery.

A standout technological development is Doximity GPT, the company's HIPAA-compliant generative AI writing assistant. Launched shortly after the debut of general-purpose generative AI, Doximity GPT is specifically designed to help physicians streamline administrative writing tasks. Doctors have reported significant time savings and improved outcomes using the tool for tasks like drafting insurance appeal letters. The tool integrates with Doximity's digital fax and texting services, enabling secure transmission of documents. Management views AI as a potential "third act" for the company, following the success of its Newsfeed ("first act") and workflow tools ("second act"), and plans to increase investments in this area in fiscal year 2026 to build better tools, smarter solutions, and drive efficiency.

Beyond AI, Doximity's proprietary workflow tools, such as Dialer for telehealth and AMiON for scheduling, are built on a modern software stack emphasizing scalability and reliability. Dialer Enterprise, the solution for health systems, benefits from the organic adoption of the direct-to-member Dialer Pro, streamlining implementation. These tools are designed with physician usability at the forefront, offering features like preset Caller ID and HIPAA-compliant messaging, deeply embedding Doximity into the daily clinical workflow.

Competitive Positioning in a Dynamic Market

Doximity operates within a competitive landscape that includes large technology companies, specialized healthcare software providers, and traditional marketing and staffing firms. While companies like Microsoft (MSFT), Zoom (ZM), and Teladoc Health (TDOC) offer overlapping solutions in collaboration and telehealth, Doximity differentiates itself through its exclusive focus on medical professionals and its deep integration into their specific workflows.

Compared to broad enterprise players like Microsoft, Doximity's strength lies in its highly curated, verified network and its purpose-built, HIPAA-compliant tools. While Microsoft boasts immense scale and R&D resources, Doximity's physician-first design and understanding of clinical needs provide a level of trust and utility that broader platforms may struggle to replicate. Similarly, while Zoom offers user-friendly video communication and Teladoc is a significant player in comprehensive telehealth services, Doximity's integrated platform combines communication, information, and workflow tools within a single, trusted environment, potentially offering greater efficiency in the clinical context. Doximity's profitability metrics, such as its high adjusted EBITDA margin (55% in FY25), also compare favorably to some competitors like Teladoc, which has faced profitability challenges.

In the digital marketing space, Doximity competes with health-related websites and traditional advertising channels. Its competitive advantage here stems from its unparalleled access to and engagement with a verified network of medical professionals, enabling highly targeted and effective marketing campaigns. The company's ability to demonstrate measurable ROI through tools like the Client Portal further strengthens its position against competitors. In hiring, Doximity competes with traditional staffing firms and job boards, leveraging its network and data science to identify and connect with both active and passive candidates.

Despite facing competitors with significantly greater financial and technological resources, Doximity's focused strategy, strong network effects, and continuous innovation in physician-centric tools enable it to gain market share. Management believes the company outperformed the market growth rate in fiscal 2025, likely by about 3x, compared to a historical norm closer to 2x, indicating its strong competitive standing.

Financial Performance and Strategic Momentum

Doximity delivered a strong financial performance in the fiscal year ended March 31, 2025. Revenue grew by 20% year-over-year to $570.4 million, primarily driven by a $93.7 million increase in subscription revenue. The expansion of existing customers was a significant contributor to this growth, with average revenue per existing Marketing Solutions customer increasing by 22%. Approximately 95% of the company's revenue in FY25 was derived from subscription customers, highlighting the recurring nature of its business model.

Profitability remained robust, with the adjusted EBITDA margin expanding to 55% in FY25, up from 48% in the prior year. Adjusted EBITDA reached $313.8 million, representing 36% year-over-year growth. This margin expansion reflects the company's ability to scale its revenue faster than its costs, benefiting from operational efficiencies, including leveraging AI internally. Net income for FY25 was $223.2 million.

The company also demonstrated strong free cash flow generation, reaching $266.7 million in FY25, a 50% increase year-over-year. This strong cash flow supports continued investment in the business and capital return to shareholders.

As of March 31, 2025, Doximity held $915.7 million in cash, cash equivalents, and marketable securities, providing ample liquidity. The company actively utilizes a share repurchase program, authorizing up to $500 million, with $424 million remaining as of the end of FY25, reflecting management's confidence and commitment to returning value to shareholders.

Strategic initiatives have been key drivers of recent performance. The rollout of the Client Portal has been particularly impactful, providing customers with daily insights, seamless sales data integration, and actionable recommendations. This transparency has facilitated upsells, with brands having portal access growing faster than the overall pharma business. New products, such as the point-of-care and formulary modules, have seen significant traction, growing over 100% year-over-year in Q3 FY25 and contributing meaningfully to pharmaceutical sales. The shift to multi-module integrated programs has led to larger deal sizes and improved revenue predictability, with a higher percentage of annual programs launching earlier in the calendar year.

Outlook and Risks

Looking ahead, Doximity's management has provided guidance for fiscal year 2026. For the full fiscal year, the company expects revenue in the range of $619 million to $631 million, representing 10% growth at the midpoint. Adjusted EBITDA is projected to be between $333 million and $345 million, implying a 54% adjusted EBITDA margin at the midpoint. This guidance reflects a measured approach, acknowledging the tougher year-over-year comparison due to the timing benefits in FY25 and assuming the pharma HCP digital market growth might be on the lower end of the 5-7% range due to macro and policy uncertainty.

Despite potential headwinds, the company is confident in its ability to continue gaining market share, expecting its pharma business to grow at roughly twice the market rate in FY26. This confidence is supported by record member engagement, the ongoing benefits of the Client Portal, and planned increased investments in AI. The strategic focus on integrated programs is expected to improve long-term revenue predictability, even as quarterly variations may persist due to the timing of upsells and product mix.

However, investors should consider several risks. The company operates in a rapidly evolving and competitive environment, facing larger, well-resourced competitors that could exert pricing pressure or gain market share. The healthcare regulatory and political framework is uncertain and subject to change, potentially impacting telehealth adoption, data privacy requirements (HIPAA, state laws), and pharmaceutical marketing practices. Macroeconomic uncertainty could lead customers to reduce spending or delay purchasing decisions. The company's ability to effectively manage its rapid growth, integrate future acquisitions, and maintain its corporate culture are also critical factors. Furthermore, reliance on third-party platforms (app stores, cloud providers) and licensed technology presents potential dependencies and risks. The company is also currently involved in securities litigation, the outcome of which is uncertain.

Conclusion

Doximity has established itself as the leading digital platform for U.S. medical professionals by prioritizing their needs and building tailored, HIPAA-compliant tools. Its physician-first approach has fostered a powerful network effect, creating a valuable ecosystem for both members and customers. The company's strategic investments in AI, particularly Doximity GPT and AI-powered newsfeed personalization, are driving record engagement and offering tangible productivity benefits to clinicians. Initiatives like the Client Portal and integrated marketing programs are enhancing customer relationships, improving ROI visibility, and contributing to robust financial performance.

While operating in a competitive and uncertain macro environment, Doximity's unique market position, technological differentiation, and strong financial health, evidenced by 20% revenue growth, expanding 55% adjusted EBITDA margins, and significant free cash flow in fiscal 2025, underpin its investment thesis. The outlook for fiscal 2026, projecting continued growth and strong profitability despite challenging comparisons, reflects confidence in the company's ability to gain market share by leveraging its core strengths and strategic initiatives. For investors, Doximity represents a profitable growth story positioned to benefit from the ongoing digital transformation and increasing adoption of AI in healthcare, supported by a strong balance sheet and a commitment to shareholder returns.