Healthcare professional network Doximity (NYSE: DOCS) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 15.2% year on year to $145.9 million. On top of that, next quarter’s revenue guidance ($157.5 million at the midpoint) was surprisingly good and 5% above what analysts were expecting. Its non-GAAP profit of $0.36 per share was 17.2% above analysts’ consensus estimates.

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StockStory’s Take

Doximity’s second quarter results were met with strong market approval, reflecting the company’s ability to surpass Wall Street revenue and profit expectations. Management attributed this outperformance to robust adoption across its physician network, with unique active users and prescribers reaching new highs. CEO Jeffrey Tangney highlighted that both workflow and newsfeed tools saw double-digit growth, while new AI-powered offerings—especially the Scribe ambient notetaking tool—drove engagement. The company’s successful upsell season, supported by an expanding product suite and a widely adopted client portal for healthcare customers, was central to its quarterly momentum.

Management’s guidance for the upcoming quarters is underpinned by optimism around the continued rollout of AI-driven tools and sustained demand from pharmaceutical and health system clients. CFO Anna Bryson explained that recent investments in artificial intelligence, including the integration of the Pathway acquisition, are expected to improve long-term productivity and operational efficiency. While the company remains cautious given broader policy uncertainties, leadership is confident that its diversified product offerings and strong customer retention will support growth. Tangney stated, “AI will be our next act, and we believe our physician-focused solutions are just beginning to shape the future of clinical practice.”

Key Insights from Management’s Remarks

Management credited the quarter’s growth to rapid physician adoption of new workflow tools, successful AI product launches, and broader client engagement through its commercial portal.

• AI tools drive engagement: The launch of Doximity Scribe, an ambient notetaking tool, saw over 10,000 healthcare professionals participate in beta testing, with more than 75% returning weekly. Management highlighted that its AI suite, including Scribe and GPT-based products, experienced over 5x user growth compared to the previous year.

• Broadened customer base: The company’s upsell season was fueled by strong adoption from both large pharmaceutical firms and small-to-medium business (SMB) clients. The client portal played a significant role, enabling agency partners to expand Doximity’s reach and more than doubling SMB bookings year-over-year.

• Health system traction: Doximity’s telehealth and workflow solutions continued to gain ground, with the Doximity Dialer platform now used by roughly 45% of U.S. physicians. The company reported notable paid adoption among health systems and highlighted the stickiness of its scheduling and workflow tools.

• Pathway AI acquisition: The acquisition of Pathway brought advanced clinical reference capabilities, integrating a large, structured medical dataset for fast, accurate answers to physician questions. This move accelerates Doximity’s AI product roadmap and positions the company to address key clinical workflows.

• Operational leverage from AI: Management emphasized that internal use of AI has kept headcount flat while boosting productivity, contributing to margin expansion even as the company invests heavily in new product development.

Drivers of Future Performance

Doximity’s outlook centers on the expansion of its AI suite, deeper customer integration, and the ability to navigate ongoing policy uncertainties.

• AI suite expansion: The rollout of Scribe, GPT-based writing tools, and the integration of Pathway’s clinical reference are expected to increase platform stickiness and user engagement. Management believes these tools could eventually become major revenue contributors, following a model similar to the successful transition of the telehealth Dialer from free to enterprise product.

• Broad-based customer momentum: Pharmaceutical and health system clients continue to drive growth, with management citing digital-first drug launches and strong SMB recovery as tailwinds. Leadership is closely watching customer budget stability and renewal rates as signposts for future performance.

• Policy and market uncertainty: Despite current strength, management remains measured in its guidance due to persistent policy risks affecting healthcare marketing budgets. CFO Anna Bryson noted that guidance assumes a cautious approach to unbooked revenue, reflecting awareness of potential headwinds.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts are watching (1) the adoption rate and monetization of new AI-driven workflow and clinical reference tools, (2) continued expansion among SMB and enterprise customers through the client portal, and (3) margin trends as AI investments scale. Progress integrating Pathway’s technology and evidence that new digital-first drug launches translate into sustained bookings will also be key signposts for Doximity’s execution.

Doximity currently trades at $61.90, up from $58.71 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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