• Revenue: $137 million for Q2 fiscal 2025, 20% year-on-year growth.

• Adjusted EBITDA Margin: 56%, representing 41% year-on-year growth.

• Net Revenue Retention Rate: 116% on a trailing 12-month basis.

• Top 20 Customers Net Revenue Retention Rate: 124% on a trailing 12-month basis.

• Non-GAAP Gross Margin: 92% for Q2 fiscal 2025.

• Free Cash Flow: $66.8 million for Q2 fiscal 2025, a 475% increase year over year.

• Cash and Equivalents: $806 million at the end of Q2 fiscal 2025.

• Share Repurchase: $22.1 million worth of shares repurchased at an average price of $29.85.

• Q3 Fiscal 2025 Revenue Guidance: $152 million to $153 million.

• Q3 Fiscal 2025 Adjusted EBITDA Guidance: $83 million to $84 million, 55% margin.

• Full Fiscal Year Revenue Guidance: $535 million to $540 million, 13% growth at midpoint.

• Full Fiscal Year Adjusted EBITDA Guidance: $274 million to $279 million, 51% margin.

• Warning! GuruFocus has detected 3 Warning Sign with OLO.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Doximity Inc (NYSE:DOCS) reported $137 million in revenue for Q2 fiscal 2025, marking a 20% year-on-year growth and exceeding the high end of their guidance range by 7%.

• The company achieved a record adjusted EBITDA margin of 56%, representing a 41% year-on-year growth and 20% above the high end of their guidance.

• Doximity Inc (NYSE:DOCS) saw record engagement levels, with unique active users increasing double-digit percentages across quarterly, monthly, weekly, and daily metrics.

• The company's workflow tools, including telehealth and AI assistance, set new records with over 600,000 unique active prescribers, and AI tools grew the fastest with over 1 million Doximity GPT prompts in Q2.

• The new client portal has been well-received, with over 40% of pharma brand clients using it, leading to strong sales growth and easier upsells, particularly with nurse practitioner audience extensions.

Negative Points

• Despite strong performance, Doximity Inc (NYSE:DOCS) anticipates potential longer launch timelines for new workflow products, which could impact Q4 revenue.

• The company is experiencing evolving industry dynamics, leading to quarterly variations in revenue growth and changes in the shape of the fiscal year.

• There is uncertainty regarding the long-term growth rate of the pharma digital market, which affects the company's ability to provide updated long-term financial targets.

• Doximity Inc (NYSE:DOCS) is still in the early stages of understanding how AI and the client portal could impact incremental margins, making it difficult to predict medium to long-term margin outcomes.

• The company faces challenges in maintaining pricing power, as pricing is not the primary growth lever and the market environment remains competitive.