Total revenues of $113.6 million, up 11%
year-over-year Net income margin of 27% and adjusted EBITDA margin
of 48% Net income growth of 16% and adjusted EBITDA growth of 18%
year-over-year
Doximity, Inc. (NYSE: DOCS), the leading digital platform for
U.S. medical professionals, today announced results of its fiscal
2024 second quarter ended September 30, 2023.
“We’re proud to make medicine mobile, with another quarter of
record engagement across our entire platform,” said Jeff Tangney,
co-founder and CEO of Doximity. “Over 550,000 unique providers used
our generative AI, telehealth, messaging, and scheduling workflow
tools in Q2 to provide better care for their patients.”
Fiscal 2024 Second Quarter Financial Highlights
All comparisons, unless otherwise noted, are to the three months
ended September 30, 2022.
- Revenue: Revenue of $113.6 million, versus $102.2
million, an increase of 11% year-over-year.
- Net income and non-GAAP net income: Net income of $30.6
million, versus $26.3 million, representing a margin of 26.9%,
versus 25.7%. Included in net income was restructuring expense of
$7.9 million, which consisted primarily of severance, benefits and
stock-based compensation for equity award modification for
terminated employees. Non-GAAP net income of $45.6 million, versus
$36.2 million, representing a margin of 40.1%, versus 35.4%.
- Adjusted EBITDA: Adjusted EBITDA of $54.2 million,
versus $46.0 million, an increase of 18% year-over-year,
representing adjusted EBITDA margins of 47.7%, versus 45.0%.
- Diluted net income per share and non-GAAP diluted net income
per share: Diluted net income per share was $0.15, versus
$0.12, while non-GAAP diluted net income per share was $0.22,
versus $0.17.
- Operating cash flow and free cash flow: Operating cash
flow of $12.9 million, versus $39.5 million, a decrease of 67%
year-over-year, and free cash flow of $11.6 million, versus $37.7
million, a decrease of 69% year-over-year.
Financial Outlook
Doximity is providing guidance for its fiscal third quarter
ending December 31, 2023 as follows:
- Revenue between $127 million and $128 million.
- Adjusted EBITDA between $61 million and $62 million.
Doximity is updating guidance for its fiscal year ending March
31, 2024 as follows:
- Revenue between $460 million and $472 million.
- Adjusted EBITDA between $207 million and $219 million.
Stock Repurchase Program
Doximity’s board of directors authorized another program to
repurchase up to $70 million of the Company’s Class A common stock.
The repurchases are expected to be executed from time to time over
the next 12 months, subject to general business and market
conditions and other investment opportunities, through open market
purchases or privately negotiated transactions, including through
Rule 10b5-1 plans. All prior repurchase programs were completed as
of October 2023.
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;
(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)
September 30, 2023
March 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
108,403
$
158,027
Marketable securities
621,451
682,972
Accounts receivable, net
97,217
107,047
Prepaid expenses and other current
assets
32,789
22,289
Deferred contract costs, current
2,960
5,118
Total current assets
862,820
975,453
Property and equipment, net
11,780
11,279
Deferred income tax assets
39,289
34,907
Operating lease right-of-use assets
12,743
13,819
Intangible assets, net
29,440
31,836
Goodwill
67,940
67,940
Other assets
1,559
1,654
Total assets
$
1,025,571
$
1,136,888
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
714
$
1,272
Accrued expenses and other current
liabilities
29,086
31,245
Deferred revenue, current
91,446
105,238
Operating lease liabilities, current
1,935
1,752
Total current liabilities
123,181
139,507
Deferred revenue, non-current
237
198
Operating lease liabilities,
non-current
13,119
13,885
Contingent earn-out consideration
liability, non-current
10,448
15,942
Other liabilities, non-current
7,119
1,240
Total liabilities
154,104
170,772
Stockholders' Equity
Preferred stock
—
—
Common stock
188
194
Additional paid-in capital
794,804
762,150
Accumulated other comprehensive loss
(8,928
)
(14,083
)
Retained earnings
85,403
217,855
Total stockholders' equity
871,467
966,116
Total liabilities and stockholders’
equity
$
1,025,571
$
1,136,888
DOXIMITY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(unaudited)
Three Months Ended September
30,
Six Months Ended September
30,
2023
2022
2023
2022
Revenue
$
113,612
$
102,185
$
222,081
$
192,824
Cost of revenue(1)
12,759
13,210
25,912
26,287
Gross profit
100,853
88,975
196,169
166,537
Operating expenses(1):
Research and development
19,958
19,104
41,889
38,126
Sales and marketing
30,201
29,021
64,656
57,155
General and administrative
8,966
8,749
18,213
17,473
Restructuring
7,936
—
7,936
—
Total operating expenses
67,061
56,874
132,694
112,754
Income from operations
33,792
32,101
63,475
53,783
Other income, net
5,903
908
10,742
1,712
Income before income taxes
39,695
33,009
74,217
55,495
Provision for income taxes
9,093
6,710
15,209
6,813
Net income
$
30,602
$
26,299
$
59,008
$
48,682
Net income per share attributable to Class
A and Class B common stockholders:
Basic
$
0.16
$
0.14
$
0.30
$
0.25
Diluted
$
0.15
$
0.12
$
0.28
$
0.23
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
193,112
193,137
193,813
193,042
Diluted
209,014
213,949
210,681
214,452
(1) Costs and expenses include stock-based compensation expense
as follows (in thousands):
Three Months Ended September
30,
Six Months Ended September
30,
2023
2022
2023
2022
Cost of revenue
$
2,278
$
2,392
$
4,739
$
4,514
Research and development
2,538
2,862
5,794
5,414
Sales and marketing
2,697
3,982
8,692
7,056
General and administrative
2,288
2,117
4,577
3,875
Restructuring
3,646
—
3,646
—
Total stock-based compensation expense
$
13,447
$
11,353
$
27,448
$
20,859
DOXIMITY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended September
30,
Six Months Ended September
30,
2023
2022
2023
2022
Cash flows from operating
activities
Net income
$
30,602
$
26,299
$
59,008
$
48,682
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,604
2,589
5,208
4,959
Deferred income taxes
—
—
—
105
Stock-based compensation, net of amounts
capitalized
13,447
11,353
27,448
20,859
Non-cash lease expense
540
551
1,077
952
Amortization of premium (accretion of
discount) on marketable securities, net
(1,495
)
1,218
(1,794
)
2,673
Loss (gain) on sale of marketable
securities
(131
)
463
142
500
Amortization of deferred contract
costs
2,063
2,072
4,730
4,839
Other
137
37
(15
)
7
Changes in operating assets and
liabilities, net of effect of acquisition:
Accounts receivable
(4,388
)
(3,339
)
9,644
2,194
Prepaid expenses and other assets
(13,093
)
2,405
(10,504
)
3,651
Deferred contract costs
(1,238
)
(1,476
)
(2,448
)
(2,342
)
Accounts payable, accrued expenses and
other liabilities
(8,740
)
1,635
(8,063
)
(4,474
)
Deferred revenue
(6,831
)
(4,280
)
(13,753
)
1,872
Operating lease liabilities
(579
)
(13
)
(582
)
(211
)
Net cash provided by operating
activities
12,898
39,514
70,098
84,266
Cash flows from investing
activities
Cash paid for acquisition
—
—
—
(53,500
)
Purchases of property and equipment
(41
)
(766
)
(111
)
(1,476
)
Internal-use software development
costs
(1,238
)
(1,051
)
(2,732
)
(2,466
)
Purchases of marketable securities
(144,942
)
(82,307
)
(180,226
)
(91,177
)
Maturities of marketable securities
96,119
16,167
212,768
24,438
Sales of marketable securities
—
49,434
37,525
64,158
Net cash provided by (used in)
investing activities
(50,102
)
(18,523
)
67,224
(60,023
)
Cash flows from financing
activities
Proceeds from issuance of common stock
upon exercise of stock options and common stock warrants
3,933
2,570
7,218
5,584
Proceeds from issuance of common stock in
connection with the employee stock purchase plan
1,494
2,341
1,494
2,341
Taxes paid related to net share settlement
of equity awards
(2,120
)
(1,152
)
(4,084
)
(1,261
)
Repurchase of common stock
(164,429
)
(61,168
)
(186,184
)
(70,042
)
Payment of contingent consideration
related to a business combination
—
—
(5,390
)
—
Net cash used in financing
activities
(161,122
)
(57,409
)
(186,946
)
(63,378
)
Net decrease in cash and cash
equivalents
(198,326
)
(36,418
)
(49,624
)
(39,135
)
Cash and cash equivalents, beginning of
period
306,729
110,092
158,027
112,809
Cash and cash equivalents, end of
period
$
108,403
$
73,674
$
108,403
$
73,674
Supplemental disclosures of cash flow
information
Cash paid for taxes, net of refunds
$
29,438
$
123
$
29,438
$
123
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 September
30,
Six Months Ended September
30,
2023
2022
2023
2022
(unaudited)
(in thousands, except
percentages)
Net income
$
30,602
$
26,299
$
59,008
$
48,682
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
9,801
11,353
23,802
20,859
Depreciation and amortization
2,604
2,589
5,208
4,959
Provision for income taxes
9,093
6,710
15,209
6,813
Restructuring expense
7,936
—
7,936
—
Change in fair value of contingent
earn-out consideration liability
47
(40
)
316
(94
)
Other income, net
(5,903
)
(908
)
(10,742
)
(1,712
)
Adjusted EBITDA
$
54,180
$
46,003
$
100,737
$
79,537
Revenue
$
113,612
$
102,185
$
222,081
$
192,824
Net income margin
26.9
%
25.7
%
26.6
%
25.2
%
Adjusted EBITDA margin
47.7
%
45.0
%
45.4
%
41.2
%
Three Months Ended September
30,
Six Months Ended September
30,
2023
2022
2023
2022
(unaudited)
(in thousands)
Net cash provided by operating
activities
$
12,898
$
39,514
$
70,098
$
84,266
Purchases of property and equipment
(41
)
(766
)
(111
)
(1,476
)
Internal-use software development
costs
(1,238
)
(1,051
)
(2,732
)
(2,466
)
Free cash flow
$
11,619
$
37,697
$
67,255
$
80,324
Other cash flow components:
Net cash provided by (used in) investing
activities
$
(50,102
)
$
(18,523
)
$
67,224
$
(60,023
)
Net cash used in financing activities
$
(161,122
)
$
(57,409
)
$
(186,946
)
$
(63,378
)
Three Months Ended September
30,
Six Months Ended September
30,
2023
2022
2023
2022
(unaudited)
(in thousands, except per
share data and percentages)
GAAP cost of revenue
$
12,759
$
13,210
$
25,912
$
26,287
Adjusted to exclude the following:
Stock-based compensation
(2,278
)
(2,392
)
(4,739
)
(4,514
)
Amortization of acquired intangibles
(137
)
(137
)
(274
)
(273
)
Non-GAAP cost of revenue
$
10,344
$
10,681
$
20,899
$
21,500
GAAP gross profit
$
100,853
$
88,975
$
196,169
$
166,537
Adjusted to exclude the following:
Stock-based compensation
2,278
2,392
4,739
4,514
Amortization of acquired intangibles
137
137
274
273
Non-GAAP gross profit
$
103,268
$
91,504
$
201,182
$
171,324
GAAP gross margin
88.8
%
87.1
%
88.3
%
86.4
%
Non-GAAP gross margin
90.9
%
89.5
%
90.6
%
88.8
%
GAAP research and development expense
$
19,958
$
19,104
$
41,889
$
38,126
Adjusted to exclude the following:
Stock-based compensation
(2,538
)
(2,862
)
(5,794
)
(5,414
)
Non-GAAP research and development
expense
$
17,420
$
16,242
$
36,095
$
32,712
GAAP sales and marketing expense
$
30,201
$
29,021
$
64,656
$
57,155
Adjusted to exclude the following:
Stock-based compensation
(2,697
)
(3,982
)
(8,692
)
(7,056
)
Amortization of acquired intangibles
(1,061
)
(1,061
)
(2,122
)
(2,124
)
Change in fair value of contingent
earn-out consideration liability
(47
)
40
(316
)
94
Non-GAAP sales and marketing expense
$
26,396
$
24,018
$
53,526
$
48,069
GAAP general and administrative
expense
$
8,966
$
8,749
$
18,213
$
17,473
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
(30
)
Stock-based compensation
(2,288
)
(2,117
)
(4,577
)
(3,875
)
Non-GAAP general and administrative
expense
$
6,678
$
6,632
$
13,636
$
13,568
GAAP operating expense
$
67,061
$
56,874
$
132,694
$
112,754
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
(30
)
Stock-based compensation
(7,523
)
(8,961
)
(19,063
)
(16,345
)
Amortization of acquired intangibles
(1,061
)
(1,061
)
(2,122
)
(2,124
)
Change in fair value of contingent
earn-out consideration liability
(47
)
40
(316
)
94
Restructuring
(7,936
)
—
(7,936
)
—
Non-GAAP operating expense
$
50,494
$
46,892
$
103,257
$
94,349
GAAP operating income
$
33,792
$
32,101
$
63,475
$
53,783
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
9,801
11,353
23,802
20,859
Amortization of acquired intangibles
1,198
1,198
2,396
2,397
Change in fair value of contingent
earn-out consideration liability
47
(40
)
316
(94
)
Restructuring
7,936
—
7,936
—
Non-GAAP operating income
$
52,774
$
44,612
$
97,925
$
76,975
GAAP net income
$
30,602
$
26,299
$
59,008
$
48,682
Adjusted to exclude the following:
Acquisition and other related expenses
—
—
—
30
Stock-based compensation
9,801
11,353
23,802
20,859
Amortization of acquired intangibles
1,198
1,198
2,396
2,397
Change in fair value of contingent
earn-out consideration liability
47
(40
)
316
(94
)
Restructuring
7,936
—
7,936
—
Income tax effect of non-GAAP adjustments
(1)
(3,986
)
(2,627
)
(7,235
)
(4,870
)
Non-GAAP net income
$
45,598
$
36,183
$
86,223
$
67,004
Non-GAAP net income margin
40.1
%
35.4
%
38.8
%
34.7
%
Weighted-average shares used in computing
net income per share attributable to Class A and Class B common
stockholders:
Basic
193,112
193,137
193,813
193,042
Diluted
209,014
213,949
210,681
214,452
Non-GAAP net income per share attributable
to Class A and Class B stockholders:
Basic
$
0.24
$
0.19
$
0.44
$
0.35
Diluted
$
0.22
$
0.17
$
0.41
$
0.31
(1)
For the three and six months ended
September 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/20231109485823/en/
Investor Relations Contact: Perry Gold
ir@doximity.com
Media Contact: Amanda Cox pr@doximity.com
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