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Doximity: Doximity Delivers Strong Q1, Driven by AI and Upselling

Doximity exceeded expectations in Q1 fiscal 2026, reporting revenue of $145.9 million, a 15% year-over-year increase, and adjusted EBITDA of $79.8 million, representing a 55% margin. This strong financial performance was fueled by a net revenue retention rate of 118% on a trailing 12-month basis and a 17% increase in customers contributing at least $500,000 in subscription revenue. Earnings per share came in at $0.36, exceeding analyst estimates of $0.31.

DOCS

USD 43.475

-0.54%

A-Score: 5.1/10

Publication date: August 7, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Surge: Q1 2026 revenue hit $145.9M, up 15% YoY, surpassing guidance and driven by a 17% increase in $500K+ customers to 120.
  • Profitability Strength: Adjusted EBITDA reached $79.8M (55% margin), up 11% YoY, with free cash flow rising 52% to $60.1M.
  • AI Product Traction: HIPAA-compliant AI scribe "Scribe" achieved 75% weekly user retention, and Pathway acquisition ($26M cash + $37M equity) boosted clinical AI capabilities.
  • SMB Upsell Momentum: SMB customer bookings grew over 100% YoY, fueled by the agency portal program generating $5M in new business since launch.
  • Guidance Resilience: FY 2026 revenue forecast of $628–$636M (11% growth) and 55% EBITDA margin ($341–$349M) maintained despite AI investments and market caution.

AI Momentum

Doximity's strategic focus on AI is clearly paying off. The company's HIPAA-compliant AI scribe, "Scribe," achieved significant traction with over 75% weekly user return. The acquisition of Pathway, a clinical reference AI company, further strengthens Doximity's AI capabilities and expands its offerings in this rapidly growing market.

Upselling Success

Doximity is experiencing promising success in its upsell efforts. The company launched several new commercial products and enhanced its client portal to provide insights into program performance. This has resulted in strong growth, particularly in the SMB segment, where bookings increased more than 100% year-over-year in Q1.

Looking Ahead

Doximity's guidance for Q2 and FY 2026 reflects continued strong growth, with revenue expected to reach $628 million to $636 million, representing an 11% year-over-year increase. Adjusted EBITDA is projected to be between $341 million and $349 million, maintaining a healthy 55% margin.

Valuation Considerations

Despite the strong growth prospects, Doximity trades at a premium valuation. Its P/E ratio of 56.19, P/S ratio of 21.88, and EV/EBITDA multiple of 51.01 suggest the market is factoring in significant future earnings growth. However, investors should carefully consider the company’s ability to sustain this growth rate and the potential for competition in the AI-powered healthcare space.

Doximity's A-Score