Total revenues of $108.5 million, up 20%
year-over-year
Operating cash flow of $57.2 million, up 28%
year-over-year
Free cash flow of $55.6 million, up 31%
year-over-year
Doximity, Inc. (NYSE: DOCS), the leading digital platform for
U.S. medical professionals, today announced results of its fiscal
2024 first quarter ended June 30, 2023.
“We’re pleased to report another quarter of record engagement
across our entire platform, with over 525,000 unique providers
using our workflow tools in Q1,” said Jeff Tangney, co-founder and
CEO at Doximity. “Looking ahead, we are focused on streamlining our
client workflows, so we can fully capitalize on our long-term
potential.”
Fiscal 2024 First Quarter Financial Highlights
All comparisons, unless otherwise noted, are to the three months
ended June 30, 2022.
- Revenue: Revenue of $108.5 million, versus $90.6
million, an increase of 20% year-over-year.
- Net income and non-GAAP net income: Net income of $28.4
million, versus $22.4 million, representing a margin of 26.2%,
versus 24.7%. Non-GAAP net income of $40.6 million, versus $30.8
million, representing a margin of 37.5%, versus 34.0%.
- Adjusted EBITDA: Adjusted EBITDA of $46.6 million,
versus $33.5 million, an increase of 39% year-over-year,
representing adjusted EBITDA margins of 42.9%, versus 37.0%.
- Diluted net income per share and non-GAAP diluted net income
per share: Diluted net income per share was $0.13, versus
$0.10, while non-GAAP diluted net income per share was $0.19,
versus $0.14.
- Operating cash flow and free cash flow: Operating cash
flow of $57.2 million, versus $44.8 million, an increase of 28%
year-over-year, and free cash flow of $55.6 million, versus $42.6
million, an increase of 31% year-over-year.
Financial Outlook
Doximity is providing guidance for its fiscal second quarter
ending September 30, 2023 as follows:
- Revenue between $108.5 million and $109.5 million.
- Adjusted EBITDA between $44 million and $45 million.
Doximity is revising guidance for its fiscal year ending March
31, 2024 as follows:
- Revenue between $452 million and $468 million.
- Adjusted EBITDA between $193 million and $209 million.
Workforce Reduction
On August 8, 2023, Doximity announced a plan to reduce its
current workforce by approximately 100 employees, representing 10%
of its workforce, to simplify its operations and better align its
resources with its priorities. The Company expects the
restructuring charge to be $8 - 10 million, the majority of which
will be incurred in the second quarter of fiscal year 2024, and
that the reduction in force will be substantially complete by the
third quarter of fiscal year 2024.
Conference Call Information
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,
including the resurgence or resolution of the COVID-19 pandemic or
other pandemics, epidemics or infectious diseases; (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.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
June 30, 2023
March 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
306,729
$
158,027
Marketable securities
566,444
682,972
Accounts receivable, net
92,922
107,047
Prepaid expenses and other current
assets
19,832
22,289
Deferred contract costs, current
3,729
5,118
Total current assets
989,656
975,453
Property and equipment, net
11,639
11,279
Deferred income tax assets
38,895
34,907
Operating lease right-of-use assets
13,282
13,819
Intangible assets, net
30,638
31,836
Goodwill
67,940
67,940
Other assets
1,459
1,654
Total assets
$
1,153,509
$
1,136,888
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
582
$
1,272
Accrued expenses and other current
liabilities
31,741
31,245
Deferred revenue, current
98,323
105,238
Operating lease liabilities, current
2,048
1,752
Total current liabilities
132,694
139,507
Deferred revenue, non-current
191
198
Operating lease liabilities,
non-current
13,585
13,885
Contingent earn-out consideration
liability, non-current
10,454
15,942
Other liabilities, non-current
5,798
1,240
Total liabilities
162,722
170,772
Stockholders' Equity
Preferred stock
—
—
Common stock
195
194
Additional paid-in capital
777,772
762,150
Accumulated other comprehensive loss
(12,336
)
(14,083
)
Retained earnings
225,156
217,855
Total stockholders' equity
990,787
966,116
Total liabilities and stockholders’
equity
$
1,153,509
$
1,136,888
DOXIMITY, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
(unaudited)
Three Months Ended June
30,
2023
2022
Revenue
$ 108,469
$ 90,639
Cost of revenue(1)
13,153
13,077
Gross profit
95,316
77,562
Operating expenses(1):
Research and development
21,931
19,022
Sales and marketing
34,455
28,134
General and administrative
9,247
8,724
Total operating expenses
65,633
55,880
Income from operations
29,683
21,682
Other income, net
4,839
804
Income before income taxes
34,522
22,486
Provision for income taxes
6,116
103
Net income
$ 28,406
$ 22,383
Net income per share attributable to Class
A and Class B common stockholders:
Basic
$ 0.15
$ 0.12
Diluted
$ 0.13
$ 0.10
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
194,521
192,947
Diluted
212,355
214,954
(1) Costs and expenses include stock-based compensation expense
as follows (in thousands):
Three Months Ended June
30,
2023
2022
Cost of revenue
$ 2,461
$ 2,122
Research and development
3,256
2,552
Sales and marketing
5,995
3,074
General and administrative
2,289
1,758
Total stock-based compensation expense
$ 14,001
$ 9,506
DOXIMITY, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended June
30,
2023
2022
Cash flows from operating
activities
Net income
$
28,406
$
22,383
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,604
2,370
Deferred income taxes
—
105
Stock-based compensation, net of amounts
capitalized
14,001
9,506
Non-cash lease expense
537
401
Amortization of premium (accretion of
discount) on marketable securities, net
(299
)
1,455
Loss on sale of marketable securities
273
37
Amortization of deferred contract
costs
2,667
2,767
Other
(152
)
(30
)
Changes in operating assets and
liabilities, net of effect of acquisition:
Accounts receivable
14,032
5,533
Prepaid expenses and other assets
2,589
1,246
Deferred contract costs
(1,210
)
(866
)
Accounts payable, accrued expenses and
other liabilities
677
(6,109
)
Deferred revenue
(6,922
)
6,152
Operating lease liabilities
(3
)
(198
)
Net cash provided by operating
activities
57,200
44,752
Cash flows from investing
activities
Cash paid for acquisition
—
(53,500
)
Purchases of property and equipment
(70
)
(710
)
Internal-use software development
costs
(1,494
)
(1,415
)
Purchases of marketable securities
(35,284
)
(8,870
)
Maturities of marketable securities
116,649
8,271
Sales of marketable securities
37,525
14,724
Net cash provided by (used in)
investing activities
117,326
(41,500
)
Cash flows from financing
activities
Proceeds from issuance of common stock
upon exercise of stock options and common stock warrants
3,285
3,014
Taxes paid related to net share settlement
of equity awards
(1,964
)
(109
)
Repurchase of common stock
(21,755
)
(8,874
)
Payment of contingent consideration
related to a business combination
(5,390
)
—
Net cash used in financing
activities
(25,824
)
(5,969
)
Net increase (decrease) in cash and cash
equivalents
148,702
(2,717
)
Cash and cash equivalents, beginning of
period
158,027
112,809
Cash and cash equivalents, end of
period
$
306,729
$
110,092
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, change in fair value of
contingent earn-out consideration liability, and expenses
associated with acquisitions 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, 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 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: The number of customers with TTM
subscription revenue greater than $100,000 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 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 June
30,
2023
2022
(unaudited)
(in thousands, except
percentages)
Net income
$
28,406
$
22,383
Adjusted to exclude the following:
Acquisition and other related expenses
—
30
Stock-based compensation
14,001
9,506
Depreciation and amortization
2,604
2,370
Provision for income taxes
6,116
103
Change in fair value of contingent
earn-out consideration liability
269
(54
)
Other income, net
(4,839
)
(804
)
Adjusted EBITDA
$
46,557
$
33,534
Revenue
$
108,469
$
90,639
Net income margin
26.2
%
24.7
%
Adjusted EBITDA margin
42.9
%
37.0
%
Three Months Ended June
30,
2023
2022
(unaudited)
(in thousands)
Net cash provided by operating
activities
$
57,200
$
44,752
Purchases of property and equipment
(70
)
(710
)
Internal-use software development
costs
(1,494
)
(1,415
)
Free cash flow
$
55,636
$
42,627
Other cash flow components:
Net cash provided by (used in) investing
activities
$
117,326
$
(41,500
)
Net cash used in financing activities
$
(25,824
)
$
(5,969
)
Three Months Ended June
30,
2023
2022
(unaudited)
(in thousands, except per
share data and percentages)
GAAP cost of revenue
$
13,153
$
13,077
Adjusted to exclude the following:
Stock-based compensation
(2,461
)
(2,122
)
Amortization of acquired intangibles
(137
)
(137
)
Non-GAAP cost of revenue
$
10,555
$
10,818
GAAP gross profit
$
95,316
$
77,562
Adjusted to exclude the following:
Stock-based compensation
2,461
2,122
Amortization of acquired intangibles
137
137
Non-GAAP gross profit
$
97,914
$
79,821
GAAP gross margin
87.9
%
85.6
%
Non-GAAP gross margin
90.3
%
88.1
%
GAAP research and development expense
$
21,931
$
19,022
Adjusted to exclude the following:
Stock-based compensation
(3,256
)
(2,552
)
Non-GAAP research and development
expense
$
18,675
$
16,470
GAAP sales and marketing expense
$
34,455
$
28,134
Adjusted to exclude the following:
Stock-based compensation
(5,995
)
(3,074
)
Amortization of acquired intangibles
(1,061
)
(1,063
)
Change in fair value of contingent
earn-out consideration liability
(269
)
54
Non-GAAP sales and marketing expense
$
27,130
$
24,051
GAAP general and administrative
expense
$
9,247
$
8,724
Adjusted to exclude the following:
Acquisition and other related expenses
—
(30
)
Stock-based compensation
(2,289
)
(1,758
)
Non-GAAP general and administrative
expense
$
6,958
$
6,936
GAAP operating expense
$
65,633
$
55,880
Adjusted to exclude the following:
Acquisition and other related expenses
—
(30
)
Stock-based compensation
(11,540
)
(7,384
)
Amortization of acquired intangibles
(1,061
)
(1,063
)
Change in fair value of contingent
earn-out consideration liability
(269
)
54
Non-GAAP operating expense
$
52,763
$
47,457
GAAP operating income
$
29,683
$
21,682
Adjusted to exclude the following:
Acquisition and other related expenses
—
30
Stock-based compensation
14,001
9,506
Amortization of acquired intangibles
1,198
1,200
Change in fair value of contingent
earn-out consideration liability
269
(54
)
Non-GAAP operating income
$
45,151
$
32,364
GAAP net income
$
28,406
$
22,383
Adjusted to exclude the following:
Acquisition and other related expenses
—
30
Stock-based compensation
14,001
9,506
Amortization of acquired intangibles
1,198
1,200
Change in fair value of contingent
earn-out consideration liability
269
(54
)
Income tax effect of non-GAAP adjustments
(1)
(3,248
)
(2,243
)
Non-GAAP net income
$
40,626
$
30,822
Non-GAAP net income margin
37.5
%
34.0
%
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
194,521
192,947
Diluted
212,355
214,954
Non-GAAP net income per share attributable
to Class A and Class B stockholders:
Basic
$
0.21
$
0.16
Diluted
$
0.19
$
0.14
(1)
For the three months ended June 30, 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/20230808088346/en/
Investor Relations Contact: Perry Gold ir@doximity.com
Media Contact: Amanda Cox pr@doximity.com
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