Doximity (DOCS) Q1 2027 earnings summary

Executive summary

• Revenue for Q1 2027 reached $157 million, up 7% year-over-year, with adjusted EBITDA of $75 million and a 48% margin, both exceeding guidance.

• Net income was $24.3 million, down from $53.3 million in the prior year quarter, reflecting higher operating expenses and a higher effective tax rate.

• AI investment is a strategic focus, with record usage, strong clinical validation, and rapid adoption of AI-powered workflow tools among clinicians.

• AI Search and Scribe products are driving new business and deeper client engagement, expanding opportunities in pharma and hospital segments.

• Unique active providers using workflow tools increased over 30% year-over-year, indicating strong engagement.

Financial highlights

• Q1 2027 revenue of $157 million beat the high end of guidance, with 7% year-over-year growth.

• Adjusted EBITDA was $75 million (48% margin); non-GAAP gross margin was 88%, down from 91% last year due to increased AI compute spend.

• Net income was $24.3 million (15.5% margin), down from $53.3 million (36.5% margin) year-over-year.

• Free cash flow was $40 million, down from $60.1 million in the prior year quarter.

• Ended Q1 with $688 million in cash and equivalents, debt-free, and repurchased $92 million in shares.

Outlook and guidance

• Q2 2027 revenue expected at $170–$171 million; full-year guidance raised by $6 million to $671–$681 million.

• Adjusted EBITDA for Q2 expected at $80.5–$81.5 million; full-year adjusted EBITDA guidance is $309–$329 million.

• Majority of AI Search revenue to be recognized in Q3; Q2 growth impacted by tough prior-year comparison.

• Existing liquidity of $687.8 million in cash and marketable securities is expected to support operations and capital needs for at least the next 12 months.