Total revenues of $135.3 million, up 17%
year-over-year Net income margin of 35% and adjusted EBITDA margin
of 54% Net income growth of 43% and adjusted EBITDA growth of 32%
year-over-year
Doximity, Inc. (NYSE: DOCS), the leading digital platform for
U.S. medical professionals, today announced results of its fiscal
2024 third quarter ended December 31, 2023.
"We’re proud to deliver another quarter of double-digit
engagement growth across our entire platform, with a beat and raise
on both our top and bottom lines,” said Jeff Tangney, co-founder
and CEO of Doximity. “Our clinical workflow tools continue to drive
daily use among doctors, and we now count 17 of the top 22 U.S.
hospitals as enterprise software clients.”
Fiscal 2024 Third Quarter Financial Highlights
All comparisons, unless otherwise noted, are to the three months
ended December 31, 2022.
- Revenue: Revenue of $135.3 million, versus $115.3
million, an increase of 17% year-over-year.
- Net income and non-GAAP net income: Net income of $48.0
million, versus $33.5 million, representing a margin of 35.4%,
versus 29.0%. Non-GAAP net income of $58.5 million, versus $45.8
million, representing a margin of 43.2%, versus 39.7%.
- Adjusted EBITDA: Adjusted EBITDA of $73.3 million,
versus $55.5 million, an increase of 32% year-over-year,
representing adjusted EBITDA margins of 54.2%, versus 48.2%.
- Diluted net income per share and non-GAAP diluted net income
per share: Diluted net income per share was $0.24, versus
$0.16, while non-GAAP diluted net income per share was $0.29,
versus $0.22.
- Operating cash flow and free cash flow: Operating
cash flow of $50.1 million, versus $48.7 million, an increase of 3%
year-over-year, and free cash flow of $48.7 million, versus $47.5
million, an increase of 3% year-over-year.
Financial Outlook
Doximity is providing guidance for its fiscal fourth quarter
ending March 31, 2024 as follows:
- Revenue between $115.9 million and $116.9 million.
- Adjusted EBITDA between $50.5 million and $51.5 million.
Doximity is updating guidance for its fiscal year ending March
31, 2024 as follows:
- Revenue between $473.3 million and $474.3 million.
- Adjusted EBITDA between $224.5 million and $225.5 million.
Conference Call Information
Doximity posted prepared remarks on its investor relations
website at https://investors.doximity.com. Doximity will host a
webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to
discuss these financial results. To listen to a live audio webcast,
please visit the Company’s Investor Relations page at
https://investors.doximity.com. The archived webcast will be
available on the Company’s Investor Relations page shortly after
the call.
About Doximity
Founded in 2010, Doximity is the leading digital platform for
U.S. medical professionals. The Company's network members include
over 80% of U.S. physicians across all specialties and practice
areas. Doximity provides its verified clinical membership with
digital tools built for medicine, enabling them to collaborate with
colleagues, stay up to date with the latest medical news and
research, manage their careers and on-call schedules, and conduct
virtual patient visits. Doximity's mission is to help doctors be
more productive so they can provide better care for their patients.
For more information, visit www.doximity.com.
Forward-Looking Statements
Statements we make in this press release may include statements
which are not historical facts and are considered forward-looking
within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act, which are usually identified by
the use of words such as “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “seeks,”
“should,” “will,” and variations of such words or similar
expressions. We intend these forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act and are making this
statement for purposes of complying with those safe harbor
provisions. These forward-looking statements reflect our current
views about our plans, intentions, expectations, strategies and
prospects, which are based on the information currently available
to us and on assumptions we have made. Although we believe that our
plans, intentions, expectations, strategies and prospects as
reflected in or suggested by those forward-looking statements are
reasonable, we can give no assurance that the plans, intentions,
expectations, or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those
described in the forward-looking statements and will be affected by
a variety of risks and factors including (i) the timing and scope
of anticipated stock repurchases; (ii) the impact of uncertainty in
the current economic environment and macroeconomic uncertainty;
(iii) our ability to retain existing members or add new members to
our platform and maintain or grow their engagement with our
platform; (iv) our ability to attract new customers or retain
existing customers; (v) the impact of our prioritization of our
members’ interests; (vi) breaches in our security measures or
unauthorized access to members’ data; (vii) our ability to maintain
or manage our growth, and other risks and factors that are beyond
our control including, without limitation, those set forth in the
section entitled “Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended March 31, 2023 and as may be updated in
any subsequent Quarterly Reports on Form 10-Q. Moreover, we operate
in a very competitive and rapidly changing environment. New risks
and uncertainties emerge from time to time, and it is not possible
for us to predict all risks and uncertainties that could cause
actual results to differ materially from those contained in our
forward-looking statements. The forward-looking statements made in
this press release relate only to management’s beliefs and
assumptions as of this date. We assume no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
DOXIMITY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
December 31, 2023
March 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
123,089
$
158,027
Marketable securities
587,149
682,972
Accounts receivable, net
97,584
107,047
Prepaid expenses and other current
assets
27,191
22,289
Deferred contract costs, current
5,886
5,118
Total current assets
840,899
975,453
Property and equipment, net
11,839
11,279
Deferred income tax assets
37,204
34,907
Operating lease right-of-use assets
12,808
13,819
Intangible assets, net
28,379
31,836
Goodwill
67,940
67,940
Other assets
1,580
1,654
Total assets
$
1,000,649
$
1,136,888
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
1,880
$
1,272
Accrued expenses and other current
liabilities
34,079
31,245
Deferred revenue, current
66,694
105,238
Operating lease liabilities, current
2,109
1,752
Total current liabilities
104,762
139,507
Deferred revenue, non-current
166
198
Operating lease liabilities,
non-current
12,947
13,885
Contingent earn-out consideration
liability, non-current
10,787
15,942
Income taxes payable, non-current
6,532
99
Other liabilities, non-current
841
1,141
Total liabilities
136,035
170,772
Stockholders' Equity
Preferred stock
—
—
Common stock
186
194
Additional paid-in capital
808,078
762,150
Accumulated other comprehensive loss
(4,653
)
(14,083
)
Retained earnings
61,003
217,855
Total stockholders' equity
864,614
966,116
Total liabilities and stockholders’
equity
$
1,000,649
$
1,136,888
DOXIMITY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(unaudited)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
Revenue
$
135,284
$
115,262
$
357,365
$
308,086
Cost of revenue(1)
12,190
13,526
38,102
39,813
Gross profit
123,094
101,736
319,263
268,273
Operating expenses(1):
Research and development
19,946
20,519
61,835
58,645
Sales and marketing
34,956
33,220
99,612
90,375
General and administrative
9,641
9,513
27,854
26,986
Restructuring
—
—
7,936
—
Total operating expenses
64,543
63,252
197,237
176,006
Income from operations
58,551
38,484
122,026
92,267
Other income, net
4,481
2,461
15,223
4,173
Income before income taxes
63,032
40,945
137,249
96,440
Provision for income taxes
15,076
7,477
30,285
14,290
Net income
$
47,956
$
33,468
$
106,964
$
82,150
Net income per share attributable to Class
A and Class B common stockholders:
Basic
$
0.26
$
0.17
$
0.56
$
0.43
Diluted
$
0.24
$
0.16
$
0.52
$
0.38
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
186,309
192,805
191,302
192,963
Diluted
200,463
212,065
207,265
213,656
(1) Costs and expenses include stock-based
compensation expense as follows (in thousands):
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
Cost of revenue
$
2,466
$
2,695
$
7,205
$
7,209
Research and development
3,080
4,002
8,874
9,416
Sales and marketing
4,060
4,856
12,752
11,912
General and administrative
2,165
2,431
6,742
6,306
Restructuring
—
—
3,646
—
Total stock-based compensation expense
$
11,771
$
13,984
$
39,219
$
34,843
DOXIMITY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
Cash flows from operating
activities
Net income
$
47,956
$
33,468
$
106,964
$
82,150
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,509
2,616
7,717
7,575
Deferred income taxes
—
9,287
—
9,392
Stock-based compensation, net of amounts
capitalized
11,771
13,984
39,219
34,843
Non-cash lease expense
522
538
1,599
1,490
Amortization of premium (accretion of
discount) on marketable securities, net
(1,683
)
471
(3,477
)
3,144
Loss on sale of marketable securities
260
593
402
1,093
Amortization of deferred contract
costs
1,548
1,518
6,278
6,357
Change in fair value of contingent
earn-out consideration liability
452
417
768
323
Other
788
373
457
474
Changes in operating assets and
liabilities, net of effect of acquisition:
Accounts receivable
(1,135
)
3,997
8,509
6,191
Prepaid expenses and other assets
6,523
(1,727
)
(3,981
)
1,924
Deferred contract costs
(4,477
)
(4,067
)
(6,925
)
(6,409
)
Accounts payable, accrued expenses and
other liabilities
10,429
7,197
2,366
2,723
Deferred revenue
(24,823
)
(19,970
)
(38,576
)
(18,098
)
Operating lease liabilities
(586
)
2
(1,168
)
(209
)
Net cash provided by operating
activities
50,054
48,697
120,152
132,963
Cash flows from investing
activities
Cash paid for acquisition
—
—
—
(53,500
)
Purchases of property and equipment
(36
)
(204
)
(147
)
(1,680
)
Internal-use software development
costs
(1,288
)
(1,012
)
(4,020
)
(3,478
)
Purchases of marketable securities
(101,112
)
(39,080
)
(281,338
)
(130,257
)
Maturities of marketable securities
105,418
10,576
318,186
35,014
Sales of marketable securities
37,150
43,024
74,675
107,182
Net cash provided by (used in)
investing activities
40,132
13,304
107,356
(46,719
)
Cash flows from financing
activities
Proceeds from issuance of common stock
upon exercise of stock options and common stock warrants
2,540
1,871
9,758
7,455
Proceeds from issuance of common stock in
connection with the employee stock purchase plan
—
—
1,494
2,341
Taxes paid related to net share settlement
of equity awards
(1,248
)
(1,092
)
(5,332
)
(2,353
)
Repurchase of common stock
(76,792
)
—
(262,976
)
(70,042
)
Payment of contingent consideration
related to a business combination
—
—
(5,390
)
—
Net cash provided by (used in)
financing activities
(75,500
)
779
(262,446
)
(62,599
)
Net increase (decrease) in cash and cash
equivalents
14,686
62,780
(34,938
)
23,645
Cash and cash equivalents, beginning of
period
108,403
73,674
158,027
112,809
Cash and cash equivalents, end of
period
$
123,089
$
136,454
$
123,089
$
136,454
Supplemental disclosures of cash flow
information
Cash paid for taxes, net of refunds
$
8,925
$
2,381
$
38,363
$
2,504
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with accounting principles
generally accepted in the United States (“GAAP”), the Company uses
the following non-GAAP measures of financial performance:
- Non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating income, non-GAAP net income, non-GAAP net income margin,
and non-GAAP basic and diluted net income per common share: We
exclude the effect of stock-based compensation expense,
amortization of acquired intangible assets, restructuring expense,
change in fair value of contingent earn-out consideration
liability, and acquisition and other related expenses from non-GAAP
gross profit, non-GAAP gross margin and non-GAAP operating income.
Non-GAAP net income and non-GAAP net income margin are further
adjusted for estimated income tax on such adjustments. We calculate
income taxes on the adjustments by applying an estimated annual
effective tax rate to the adjustments. Non-GAAP basic and diluted
net income per common share is non-GAAP net income attributable to
common stockholders divided by the weighted average number of
shares. For both basic and diluted non-GAAP net income per share,
the weighted average shares we use in computing non-GAAP net income
per share is equal to our GAAP weighted average shares. Non-GAAP
gross margin represents non-GAAP gross profit as a percentage of
revenue and non-GAAP net income margin represents non-GAAP net
income as a percentage of revenue.
- Adjusted EBITDA and adjusted EBITDA margin: We define
adjusted EBITDA as net income before interest, income taxes,
depreciation, and amortization, and as further adjusted for
acquisition and other related expenses, stock-based compensation
expense, restructuring expense, change in fair value of contingent
earn-out consideration liability, and other income, net. Net income
margin represents net income as a percentage of revenue and
adjusted EBITDA margin represents adjusted EBITDA as a percentage
of revenue.
- Free cash flow: We calculate free cash flow as cash flow
from operating activities less purchases of property and equipment
and internal-use software development costs.
We use these non-GAAP financial measures internally for
financial and operational decision-making purposes and as a means
to evaluate period-to-period comparisons. Non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP financial measures and should be
read only in conjunction with our condensed consolidated financial
statements prepared in accordance with GAAP. Our presentation of
non-GAAP financial measures may not be comparable to similar
measures used by other companies. We encourage investors to
carefully consider our results under GAAP, as well as our
supplemental non-GAAP information and the reconciliation between
these presentations, to more fully understand our business. Please
see the tables included at the end of this release for the
reconciliation of GAAP to non-GAAP results.
Key Business Metrics
- Net revenue retention rate: Net revenue retention rate
is calculated by taking the trailing 12-month (“TTM”)
subscription-based revenue from our customers that had revenue in
the prior TTM period and dividing that by the total
subscription-based revenue for the prior TTM period. For the
purposes of this calculation, subscription revenue excludes
subscriptions for individuals and small practices and other
non-recurring items. Our net revenue retention rate compares our
subscription revenue from the same set of customers across
comparable periods, and reflects customer renewals, expansion,
contraction, and churn. Our net revenue retention rate is directly
tied to our revenue growth rate and thus fluctuates as that growth
rate fluctuates.
- Customers with trailing 12-month subscription revenue
greater than $100,000 and $1 million: The number of customers
with TTM subscription revenue greater than $100,000 and $1 million
is a key indicator of the scale of our business, and is calculated
by counting the number of customers that contributed more than
$100,000 and $1 million in subscription revenue in the TTM period.
Our customer count is subject to adjustments for acquisitions,
consolidations, spin-offs, and other market activity, and we
present our total customer count for historical periods reflecting
these adjustments.
Reconciliation of GAAP to Non-GAAP Financial Measures
The following tables reconcile the specific items excluded from
GAAP metrics in the calculation of non-GAAP metrics for the periods
shown below:
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(in thousands, except
percentages)
Net income
$
47,956
$
33,468
$
106,964
$
82,150
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
11,771
13,984
35,573
34,843
Depreciation and amortization
2,509
2,616
7,717
7,575
Provision for income taxes
15,076
7,477
30,285
14,290
Restructuring expense
—
—
7,936
—
Change in fair value of contingent
earn-out consideration liability
452
417
768
323
Other income, net
(4,481
)
(2,461
)
(15,223
)
(4,173
)
Adjusted EBITDA
$
73,283
$
55,501
$
174,020
$
135,038
Revenue
$
135,284
$
115,262
$
357,365
$
308,086
Net income margin
35.4
%
29.0
%
29.9
%
26.7
%
Adjusted EBITDA margin
54.2
%
48.2
%
48.7
%
43.8
%
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(in thousands)
Net cash provided by operating
activities
$
50,054
$
48,697
$
120,152
$
132,963
Purchases of property and equipment
(36
)
(204
)
(147
)
(1,680
)
Internal-use software development
costs
(1,288
)
(1,012
)
(4,020
)
(3,478
)
Free cash flow
$
48,730
$
47,481
$
115,985
$
127,805
Other cash flow components:
Net cash provided by (used in) investing
activities
$
40,132
$
13,304
$
107,356
$
(46,719
)
Net cash provided by (used in) financing
activities
$
(75,500
)
$
779
$
(262,446
)
$
(62,599
)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
(unaudited)
(in thousands, except per
share data and percentages)
GAAP cost of revenue
$
12,190
$
13,526
$
38,102
$
39,813
Adjusted to exclude the following:
Stock-based compensation
(2,466
)
(2,695
)
(7,205
)
(7,209
)
Amortization of acquired intangibles
—
(137
)
(274
)
(410
)
Non-GAAP cost of revenue
$
9,724
$
10,694
$
30,623
$
32,194
GAAP gross profit
$
123,094
$
101,736
$
319,263
$
268,273
Adjusted to exclude the following:
Stock-based compensation
2,466
2,695
7,205
7,209
Amortization of acquired intangibles
—
137
274
410
Non-GAAP gross profit
$
125,560
$
104,568
$
326,742
$
275,892
GAAP gross margin
91.0
%
88.3
%
89.3
%
87.1
%
Non-GAAP gross margin
92.8
%
90.7
%
91.4
%
89.6
%
GAAP research and development expense
$
19,946
$
20,519
$
61,835
$
58,645
Adjusted to exclude the following:
Stock-based compensation
(3,080
)
(4,002
)
(8,874
)
(9,416
)
Non-GAAP research and development
expense
$
16,866
$
16,517
$
52,961
$
49,229
GAAP sales and marketing expense
$
34,956
$
33,220
$
99,612
$
90,375
Adjusted to exclude the following:
Stock-based compensation
(4,060
)
(4,856
)
(12,752
)
(11,912
)
Amortization of acquired intangibles
(1,061
)
(1,061
)
(3,183
)
(3,185
)
Change in fair value of contingent
earn-out consideration liability
(452
)
(417
)
(768
)
(323
)
Non-GAAP sales and marketing expense
$
29,383
$
26,886
$
82,909
$
74,955
GAAP general and administrative
expense
$
9,641
$
9,513
$
27,854
$
26,986
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
(30
)
Stock-based compensation
(2,165
)
(2,431
)
(6,742
)
(6,306
)
Non-GAAP general and administrative
expense
$
7,476
$
7,082
$
21,112
$
20,650
GAAP operating expense
$
64,543
$
63,252
$
197,237
$
176,006
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
(30
)
Stock-based compensation
(9,305
)
(11,289
)
(28,368
)
(27,634
)
Amortization of acquired intangibles
(1,061
)
(1,061
)
(3,183
)
(3,185
)
Change in fair value of contingent
earn-out consideration liability
(452
)
(417
)
(768
)
(323
)
Restructuring
—
—
(7,936
)
—
Non-GAAP operating expense
$
53,725
$
50,485
$
156,982
$
144,834
GAAP operating income
$
58,551
$
38,484
$
122,026
$
92,267
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
11,771
13,984
35,573
34,843
Amortization of acquired intangibles
1,061
1,198
3,457
3,595
Change in fair value of contingent
earn-out consideration liability
452
417
768
323
Restructuring
—
—
7,936
—
Non-GAAP operating income
$
71,835
$
54,083
$
169,760
$
131,058
GAAP net income
$
47,956
$
33,468
$
106,964
$
82,150
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
11,771
13,984
35,573
34,843
Amortization of acquired intangibles
1,061
1,198
3,457
3,595
Change in fair value of contingent
earn-out consideration liability
452
417
768
323
Restructuring
—
—
7,936
—
Income tax effect of non-GAAP adjustments
(1)
(2,790
)
(3,276
)
(10,024
)
(8,146
)
Non-GAAP net income
$
58,450
$
45,791
$
144,674
$
112,795
Non-GAAP net income margin
43.2
%
39.7
%
40.5
%
36.6
%
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
186,309
192,805
191,302
192,963
Diluted
200,463
212,065
207,265
213,656
Non-GAAP net income per share attributable
to Class A and Class B stockholders:
Basic
$
0.31
$
0.24
$
0.76
$
0.58
Diluted
$
0.29
$
0.22
$
0.70
$
0.53
(1) For the three and nine months ended
December 31, 2023 and 2022, management used an estimated annual
effective non-GAAP tax rate of 21.0%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208473408/en/
Investor Relations Contact: Perry Gold
ir@doximity.com
Media Contact: Amanda Cox pr@doximity.com
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