Doximity Inc. (NYSE:DOCS) stock surged Friday after the digital healthcare company reported fiscal first-quarter results that topped revenue expectations and raised its full-year sales outlook, driven by strong adoption of its AI products. The rally was likely amplified by a short squeeze, with over 16% of the public float sold short.
During the earnings call, CEO Jeff Tangney said Doximity’s artificial intelligence strategy is opening larger commercial opportunities than the company initially expected.
He said AI Search is helping the company engage with senior executives at pharmaceutical companies and expanding its total addressable market in healthcare.
Tangney added that AI is “up-leveling our business across the board” and said the market opportunity unlocked by AI “has been a real surprise and upside for us.”
Revenue increased 7% year over year to $156.6 million, beating the analyst consensus estimate of $151.7 million. Adjusted EBITDA totaled $74.8 million, representing a 48% margin. Earnings came in at 29 cents per share, slightly below the consensus estimate of 30 cents.
AI Products Drive Growth
Tangney said the company’s clinical AI assistant, Doximity Ask, was the top-performing U.S.-based model in the NOHARM benchmark while helping deliver another quarter of record engagement.
Tangney said workflow active prescriber growth exceeded 30% year over year, while AI Search queries increased more than 25% sequentially.
During the earnings call, Tangney said Doximity Ask achieved the lowest clinical error rates and the highest safety ratings among tested U.S.-based models, citing a 4.8% error rate versus 13.6% for Anthropic’s leading model in the benchmark. He said the product’s performance has supported broader adoption across health systems.
The company said 165 health system clients now use its AI offerings.
CFO Signals Higher AI Spending
CFO Matt Sonefeldt said fiscal first-quarter results reflected stronger-than-expected AI adoption by clinicians, prompting Doximity to increase AI investments during fiscal 2027 to support long-term growth opportunities.
The company ended the quarter with 127 pharmaceutical and hospital customers generating more than $500,000 in annual subscription revenue on a trailing 12-month basis.
Doximity Outlook Raised
For the fiscal second quarter, Doximity expects revenue of $170 million to $171 million, compared with the analyst consensus estimate of $171.9 million.
The company raised its fiscal 2027 revenue guidance to a range of $671 million to $681 million from its prior outlook of $664 million to $676 million. The updated forecast is above the consensus estimate of about $670.3 million.
DOCS Price Action: Doximity shares were up 34.29% at $27.74 at the time of publication on Friday, according to Benzinga Pro data.
Photo courtesy of Doximity
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