Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Doximity Inc (DOCS, Financial) reported a strong financial performance with Q4 revenue of $118 million, surpassing the high end of guidance.
- The company experienced significant network growth, adding over 400,000 registered healthcare professionals in fiscal 2024.
- Doximity Inc (DOCS) announced a new $500 million share buyback program, reflecting confidence in the company's financial health and future prospects.
- Adjusted EBITDA for the fiscal year grew by 25% year-over-year, demonstrating improved profitability and efficient operations.
- The company's engagement metrics reached new highs, with significant increases in daily, weekly, monthly, and quarterly active users.
Negative Points
- Despite overall growth, the health system segment faces challenges with hospitals focusing on post-COVID profitability, impacting expansion and new business.
- The company's reliance on top clients continues to increase, with significant revenue concentration in a small number of high-value customers.
- Doximity Inc (DOCS) faces ongoing macroeconomic uncertainties which could impact client spending and business stability.
- The company is still in the early stages of rolling out its client portal, with full capabilities and potential revenue impacts not yet realized.
- There is a need for further product development to address specific challenges faced by health systems, such as recruitment and operational efficiencies.
Q & A Highlights
Q: Congrats on a strong quarter. So I wanted to ask on the cohorts. I agree with you that the $500,000, it's probably a better metric as it covers 81% of the revenue. But if we look at the, call it, 200 or so customers that are paying more than $100,000 but less than $500,000, how much of the -- or how many of them do you think would be a good fit to spend over $500,000 eventually? Any color on that?
A: (Anna Bryson - CFO) Sure. Thanks for the question, Brian. And yes, I think to the point you just made, listen, we're in a phase of growth today that's mostly led by scaling our larger existing customers. I think one of the trends that we've seen over time is that, that cohort of customers -- the cohort of customers are spending more than $500,000 with us continues to represent a growing percentage of our overall business.
Q: Jeff, you had given a number of adoption metrics from nonphysicians on the platform in the quarter and the progress that you're making there. I guess the question there is kind of 2 parts. One, do you think you can get those usage and adoption rates over time to be similar to what you see with physicians today? And then two, how do you think about your ability to monetize these additional people that are on the platform? Is that opportunity? I guess does it differ at all from kind of the historical viewpoint of the platform.
A: (Jeffrey A. Tangney - CEO) Thanks, Scott. Yes, this is Jeff. I'll reply. Yes, we're probably over 60% of NPs and PAs in the U.S. In terms of our ability to monetize NPs and PAs, frankly, they're substantially similar to physicians, right? They have prescription rights in nearly every state. And in terms of our biggest clients, they're actually, in many ways, topping their target list. So we're excited to be over 60% of NPs and PAs.
Q: Anna, I was wondering on the first quarter and the year revenue growth guidance. I know you addressed the first quarter in terms of timing of launches. But curious why doesn't the 11% growth carry over into the remaining quarters for the year? If you could just provide some details on what went into the, I guess, the rest of the year?
A: (Anna Bryson - CFO) Yes. Richard, thanks for the question. So as I said in my prepared remarks, we are entering the year with the strongest backlog we've ever had with over 70% of our subscription-based revenue already under contract. And we're really happy, as we said before, with how the upfront was in our Pharma business and the fact that we're guiding to this 11% growth in Q1, where we have strong visibility into.
Q: Maybe I'll just ask a follow-up to kind of put a finer point on that health system commentary. I'd be curious how you're thinking about any opportunities from a product development perspective, given the sort of margin challenges that, that industry is facing, thinking about solutions to actually help address those issues, right, whether it's through better revenue capture, helping those health systems lower cost or drive operating efficiencies. Anything like that, that sort of improved -- informing your product development initiatives to kind of be a solution to their problems.
A: (Jeffrey A. Tangney - CEO) Thanks, Jared. This is Jeff. I'll take that. Yes, we remain very vested long term in serving hospitals in the hospital market. Listen, as Anna just said, we think their return to profitability will be swift. And they're the great clients, loyal clients, long term for us. So we want to continue to help them.
Q: Just two quick ones for me. Jeff, first, I was hoping that we could unpack a little bit this market growth rate and get your assessment on sort of how the industry growth is evolving. Because, if I remember correctly, I think last year, you sort of characterized the market as mid- to high single. This year, you all have been pretty consistent saying 5% to 7% growth. And sort of based on the guidance that Anna gave it, it still seems like you're taking some share in the pharma segment, and I'm not really sure how I should think about the health systems segment.
A: (Jeffrey A. Tangney - CEO) Great. Glen, this is Jeff. I'll take your first question here first. So yes, we have said that we think the market is growing 5% to 7% this year. I mean, if you look -- [zoom way back promote]. If you just look at the Internet Advertising Bureau and U.S. digital advertising through 2022, we basically had 20 years of 20% growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
