Doximity: Strong Quarter Overshadowed By Policy-Driven Budget Uncertainty

2025-12-08 08:46:52 ET

Thesis

Doximity, Inc. ( DOCS ) reported a 2Q26 non-GAAP EPS of $0.45. It's a figure that beat estimates by about $0.07. Revenue also came in above expectations, beating consensus by $10.91 with a figure of $168.5 million. Revenue was also up 23.2% year-over-year. The company provided a pretty tight guidance for the next quarter at $180 to $181 million in revenue, roughly in line with the $180.67 million consensus. FY26 revenue is expected to fall somewhere between $640 and $646 million, which was about $635 million above consensus. Elsewhere, adjusted EBITDA is projected to be between $351 million and $357 million. The stock has gone through quite a bit of turbulence, and despite the AI momentum in the healthcare space, shares are down about 33% over the past 3 months. What also didn't help was the 13% sell-off after the last earnings in early October. Managed to forecast a bit of downside in terms of client renewals, with some upcoming policy changes possibly causing some hesitation in subscriber momentum. With such uncertainty, I feel it's best to hold this quarter until we can get a clearer look at client growth next earnings....

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