SAN FRANCISCO - Doximity, Inc. (NYSE: DOCS) saw its stock price surge 44% in premarket trading Friday after the digital platform for medical professionals reported fiscal second-quarter earnings that beat analyst expectations and provided strong forward guidance.
The company reported adjusted earnings per share of $0.30 for the quarter ended September 30, surpassing the analyst consensus estimate of $0.26. Revenue came in at $136.8 million, up 20% YoY and well above Wall Street's forecast of $127.13 million.
"Our clinical workflow tools saw record use in Q2 with over 600,000 unique active prescribers," said Jeff Tangney, co-founder and CEO of Doximity. "We're proud to help physicians save time, so they can provide better care for their patients."
For the fiscal third quarter, Doximity expects revenue between $152 million and $153 million, significantly higher than the $140.6 million analysts were projecting. The company also raised its full-year fiscal 2025 revenue guidance to a range of $535 million to $540 million, up from the previous consensus of $520.2 million.
Following the report's release, KeyBanc Capital Markets analysts upgraded DOCS stock to Overweight from Sector Weight, citing a "healthier" setup for year-end and the 2026 fiscal year.
"We are upgrading shares of DOCS to Overweight after a very healthy F2Q report and forward-looking outlook, which suggests to us momentum building into the years ahead," analysts led by Scott Schoenhaus said.
"With consensus estimates that have largely been reset in the out-years, combined with a year-end outlook suggestive of a better upsell/budget flush environment than feared, this should make the setup for next year more achievable, particularly given its Client Portal, which should continue to drive incremental revenues and provide better visibility."
Separately, Morgan Stanley (NYSE:MS) analysts said the Q2 print showed that Doximity's "turnaround took an important step in the right direction."
Doximity reported net income of $44.2 million for the quarter, up 44% from $30.6 million in the same period last year. Adjusted EBITDA grew 41% YoY to $76.1 million, representing a robust margin of 55.7%.
The company's free cash flow saw a substantial increase, rising 475% YoY to $66.8 million. This strong cash generation gives Doximity additional financial flexibility to invest in growth initiatives and potentially return capital to shareholders.
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