Doximity (DOCS) Q4 2026 earnings show $145M in revenue, 5% YoY growth, and strong AI engagement. Explore financial performance and future outlook.

Key Takeaways

• Q4 revenue reached $145 million, up 5% year-over-year, exceeding the high end of guidance.
• Full fiscal year revenue was $645 million, reflecting a 13% increase year-over-year.
• Adjusted EBITDA margin stood at 45% for Q4 and 55% for the full year.
• Free cash flow for Q4 hit a record $107 million, contributing to an annual total of $317 million, a 19% increase from the prior year.
• Net revenue retention rate was 109%, with the top 20 customers seeing a retention rate of 114%.

Financial Performance

Doximity, Inc. reported robust financial results for its fourth quarter and full fiscal year ending March 31, 2026. The company achieved $145 million in revenue for Q4, marking a 5% increase compared to the same period last year. For the entire fiscal year, revenues rose to $645 million, reflecting a 13% growth year-over-year. This solid performance was underpinned by a net revenue retention rate of 109% on a trailing twelve-month basis, demonstrating the company's ability to maintain and grow existing customer relationships.

The adjusted EBITDA for Q4 was $66 million, resulting in a margin of 45%, while the full-year adjusted EBITDA reached $358 million with a consistent margin of 55%. Free cash flow also saw a significant boost, reaching $107 million in Q4 and totaling $317 million for the fiscal year, representing a 19% year-on-year increase.

Strategic Initiatives

Doximity's emphasis on artificial intelligence (AI) has marked the past year as an AI Investment Year. The company's AI tools have seen a dramatic increase in engagement, with nearly 800,000 unique quarterly active prescribers, a 30% growth from the previous year. This surge is attributed to the integration of AI tools into daily workflows, as almost half of these prescribers utilized AI features during the quarter.

Notably, Doximity announced partnerships with Aledade to provide value-based care AI agents to primary care organizations and introduced E-prescribing capabilities to streamline the prescription process for doctors. The company also highlighted its successful foray into AI monetization, launching its AI search product at a recent Pharma Client Summit, which garnered enthusiastic responses from leading pharmaceutical marketing executives.

The management expressed optimism about entering the AI search revenue market, anticipating significant potential despite initial minimal contributions to revenue in the current fiscal year. The CEO underscored the belief that AI search alone could represent a multi-billion-dollar market opportunity, enhancing the company's existing service offerings.

Future Outlook

Looking ahead, Doximity provided guidance for the first quarter of fiscal year 2027, expecting revenue between $151 to $152 million, which translates to approximately 4% growth year-over-year. The adjusted EBITDA is projected to be in the range of $68.5 to $69.5 million, maintaining a healthy adjusted EBITDA margin of 46%.

For the full fiscal year, management anticipates revenue between $664 to $676 million, reflecting modest growth due to a combination of market conditions and ongoing investments in AI. The company has indicated that stock-based compensation is expected to rise to the low 20s as a percentage of revenue in fiscal 2027, primarily due to the Pathway acquisition and performance-based grants for the expanding AI team.

Despite the challenging macroeconomic environment and regulatory uncertainties affecting the healthcare sector, Doximity remains committed to maintaining adjusted EBITDA margins in the high 40s. Management highlighted record engagement levels and product velocity as indicators of the company's solid foundation for long-term growth.

Closing Assessment

Overall, Doximity's latest earnings call reflects a strong financial position bolstered by strategic investments in AI capabilities and solid customer retention metrics. With a proactive approach to navigating market challenges and a clear vision for future growth, the company is well-positioned to capitalize on emerging opportunities within the healthcare AI landscape. Investors should watch for continued innovation and engagement increases in the upcoming quarters as Doximity expands its footprint in the digital healthcare ecosystem.

This analysis is based on public earnings call materials and is not investment advice.