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Healthcare professional network Doximity (NYSE:DOCS) announced better-than-expected results in Q1 CY2024, with revenue up 6.4% year on year to $118.1 million. The company expects next quarter's revenue to be around $120 million, in line with analysts' estimates. It made a non-GAAP profit of $0.25 per share, improving from its profit of $0.14 per share in the same quarter last year.
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Doximity (DOCS) Q1 CY2024 Highlights:
- Revenue: $118.1 million vs analyst estimates of $116.4 million (1.4% beat)
- Adjusted EBITDA: $56.4 million handily beat expectations of $51.1 million (10.4% beat)
- EPS (non-GAAP): $0.25 vs analyst estimates of $0.20 ($0.05 beat)
- Revenue Guidance for Q2 CY2024 is $120 million at the midpoint, roughly in line with what analysts were expecting (adjusted EBITDA guidance also ahead)
- Management raised revenue guidance for the upcoming financial year 2025 to $512 million at the midpoint, below analysts' estimates; however, full year adjusted EBITDA guidance was also raised and is ahead of expectations
- Gross Margin (GAAP): 89.4%, up from 87.7% in the same quarter last year
- Free Cash Flow of $62.31 million, up 27.9% from the previous quarter
- Market Capitalization: $4.45 billion
Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.
Healthcare And Life Sciences SoftwareThe coronavirus pandemic has underscored the importance of high-quality health infrastructure in times of crisis. Coupled with intense competition between drugmakers and the growing volume of data in the health care sector, demand for data management solutions in the healthcare space is expected to remain strong in the years ahead.
Sales GrowthAs you can see below, Doximity's revenue growth has been very strong over the last three years, growing from $66.69 million in Q4 2021 to $118.1 million this quarter.
Doximity's quarterly revenue was only up 6.4% year on year, which might disappoint some shareholders. On top of that, the company's revenue actually decreased by $17.23 million in Q1 compared to the $21.67 million increase in Q4 CY2023. Regardless, we aren't too concerned because Doximity's sales seem to follow a seasonal pattern and management is guiding for revenue to rebound in the coming quarter.
Next quarter's guidance suggests that Doximity is expecting revenue to grow 10.6% year on year to $120 million, slowing down from the 19.7% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $512 million at the midpoint, growing 7.7% year on year compared to the 13.5% increase in FY2024.
Cash Is KingIf you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Doximity's free cash flow came in at $62.31 million in Q1, up 36.6% year on year.
Doximity has generated $178.3 million in free cash flow over the last 12 months, an eye-popping 37.5% of revenue. This robust FCF margin stems from its asset-lite business model, scale advantages, and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a healthy cash balance.
Key Takeaways from Doximity's Q1 Results This was a beat and raise quarter. The company beat on revenue, adjusted EBITDA, and EPS in the quarter. Next quarter's revenue and adjusted EBITDA guidance both came in higher than Wall Street's estimates. Furthermore, the company raised its full year revenue and adjusted EBITDA guidance. Overall, this was a solid quarter for Doximity. The stock is flat after reporting and currently trades at $23.99 per share.
