Doximity is boosting artificial intelligence spending, viewing it as a significant catalyst for growth, and CEO Jeff Tangney is bullish that hospital adoption of enterprise AI platforms will ramp up.
Doximity is a digital platform for U.S. medical professionals that offers workflow tools such as a telehealth solution, a clinician-to-patient dialer tool and digital faxing capabilities. Its paying customers include pharmaceutical manufacturers, health systems and medical recruiting firms.
The company aims to become a leading AI platform for doctors with plans to scale its clinical AI suite, including its ambient notetaking tool Scribe and clinical AI assistant and medical search engine Ask. A year ago, Doximity acquired clinical AI company Pathway and then integrated Pathway's datasets and its AI into its free Doximity GPT product to offer DoxGPT (now Ask).
Healthcare AI will increasingly be purchased by hospitals rather than individual physicians with companies winning on accuracy and trust of the AI, Doximity executives assert.
"We saw a shift somewhere early this year where it wasn't just individual decisions to go choose whatever AI I want to use. It became an enterprise decision and we think the same thing will happen here in the healthcare space as more of these studies start to point the enterprise to the right direction. But also as these enterprises get, I think, rightfully concerned about the leakage of patient data and what's called PHI, protected health information, out to the broader internet," Tangney told investors and analysts on the company's fiscal 2027 first-quarter earnings call on Thursday.
Doximity has now signed 165 health systems as AI clients, including eight of the nation's top Honor Roll hospitals, Tangney said. Recent "wins" include Northwestern, Penn Medicine and the University of Michigan.
"As this market migrates from AI "Wild West" to privacy and risk management, we're well-positioned to win as we did in telehealth," he said.
Wall Street was buoyed by the company's strong early returns on its AI investments as the company's shares more than doubled at one point in overnight trading on Friday, CNBC reported. Doximity shares were up more than 130% in premarket trading and finished up Friday up 33%.
Doximity reported total revenues of $156.6 million in its fiscal 2027 Q1, up 7% year-over-year from $146 million in Q1 2026. The company brought in net income of $24 million, versus $53 million the same quarter a year ago. Doximity reported adjusted EBITDA of $75 million, versus $80 million a year ago, a decrease of 6% year-over-year. The company reported adjusted earnings per share of 29 cents, versus 36 cents a year ago.
The company's Q1 revenue beat Wall Street consensus estimates of $151.3 million to $151.8 million, while the company missed Wall Street expectations on earnings with a consensus of 30 cents per share.
The company ended Q1 '27 with $688 million in cash, cash equivalents and marketable securities and generated free cash flow of $40 million.
Doximity raised its full-year 2027 outlook based on strong clinical AI adoption. The company now expects full-year revenue between $671 million and $681 million, up from $664 million to $676 million previously. It now projects adjusted EBITDA between $309 million and $329 million.
The company now has 127 pharma and hospital customers who generate more than $500,000 in annual subscription revenue on a trailing 12-month basis, representing 7% growth year-over-year, Matthew Sonefeldt, Doximity's chief financial officer, said.
Doximity launched its AI search product for pharma customers in April, which didn't contribute to revenue in Q1 but the company has onboarded its first cohort of AI search customers across more than two dozen programs, Sonefeldt said. The company expects the majority of AI search revenue contracted to date to be recognized during the third quarter and then stronger year-over-year growth as AI search revenue builds.
2027 is Doximity's "AI investment year," Tangney said during the call. "We're proving you can still post best-in-class software margins while investing heavily in clinical AI. We're leaning in as we see a once-in-a-generation opportunity to build the new AI age of medicine."
The company is ramping up spending on AI technology this year with "faster-than-expected" adoption of its AI tools among clinicians, Sonefeldt told investors, noting that it's a "good problem for Doximity." That AI investment creates near-term margin pressure, but Wall Street analysts are confident that the company's spending on AI will create long-term margins.
Ryan Daniels, Healthcare Services and Technology Analyst at William Blair, wrote it an analyst note, "We continue to believe monetization of AI offerings in 2026 should unlock a new multibillion addressable paid search market over time, and we view this as a key drive of a return to stronger organic growth going forward."
William Blair analysts are "optimistic" regarding Doximity’s competitive position, with robust growth in utilization metrics and novel AI offerings launching to pharma partners. "Ultimately, we believe continued development of AI-based workflow solutions should support Doximity’s ability to remain a share gainer in healthcare professional (HCP) marketing, thus supporting long-term growth above market averages," Daniels wrote.
Competition in the clinical AI market is intensifying with new startups going head-to-head with legacy players like Wolters Kluwer's UpToDate, a clinical evidence solution that's been on the market for 30 years. Last fall, Wolters Kluwer launched UpToDate Expert AI, a gen-AI-powered version of its clinical decision support solution. Doximity is also competing with OpenEvidence in the AI-driven clinical reference space, and the two companies are also engaged in dueling federal lawsuits, as Business Insider reported.
During the call with investors, Doximity executives touted the results of a study, conducted by ARISE, a clinical AI research team led by physicians from Stanford and Harvard Medical Schools, that evaluated how AI models perform when researchers prompted them with simulated patient cases. The study measured the frequency and severity of potentially harmful errors from LLM-generated medical consultation recommendations. Tangney described it as the "first-ever independent study of 24 clinical AI models and how they perform in 1,100 real-world patient cases." The study looked at 20 notable LLMs and 4 widely used retrieval-augmented generation (RAG) clinical AI tools.
The study found that direct adherence to unchecked LLM recommendations posed a potential for severe clinical harm in up to 24.6% of cases, and specialized medical clinical AI tools systematically outperformed general-purpose frontier LLMs on medical safety. AMBOSS AI Mode ranked as the top API performer and Doximity Ask, its AI assistant built for clinical workflows, ranked second, demonstrating a 4.8% error rate.
"It's the kind of rigorous independent physician-led research that we need more of. Our Doximity Ask product led among U.S. models with the lowest clinical error rates and the highest safety ratings," Tangney told investors.
Tangney credited Doximity Ask's "outperformance" to its unique built-in drug reference and the company's 12,000-physician PeerCheck editors who review and refine the tool's AI outputs.
"These safeguards and quality checks are critical for hospital AI steering committees who could be held liable for their outputs and, therefore, care deeply about their accuracy," Tangney said.
Doximity executives aim to position Doximity at the intersection of clinical AI safety and physician trust and contend this will be a competitive advantage as hospitals and health systems increasingly adopt enterprise AI platforms.
"As the year progresses here, we're moving from this kind of age of AI adoption to AI accountability. I think by this time next year, we'll definitely be looking at a place where the enterprise will be saying, 'no, this should be the AI you use.' I liken this back to coding assistance and Anthropic and OpenAI. A year ago, it was really try out whatever helps you, Cursor and Claude Code and Codex and all of them. And then really somewhere around the beginning of this calendar year, you started to see enterprises saying, 'no, this is the one we prefer, and this is the one we're going to have a security agreement with and volume pricing with.' I think you'll see that similar shift to the enterprise happen as healthcare AI use becomes more than norm," Tangney said.
Doximity is seeing strong uptake of its AI tools among physicians. Quarterly active workflow prescribers grew more than 30% year-on-year to "record highs" with nearly half of those prescribers using the company's AI tools in Q1, executives said. AI prompt volume was up more than 25% quarter-on-quarter, while Doximity's AI Scribe note-taking users grew 10x this July over last July.
"With these gains, we believe we're now the only clinical AI company who is in the top three in both the AI search and scribe markets," Tangney said.
Doximity executives contend that it is building a comprehensive digital AI assistant for doctors, including telehealth tools, that gives the company a distinct competitive advantage. "I believe five years from now, every physician will have, in effect, a doctor's digital assistant, and the core of that doctor's digital assistant will be us, and it will be the combination of Scribe and Ask, our note-taking tool that then leads to a lit search or a clinical decision support tool," Tangney said. "If you look at the leaders in the scribe market today, it's Microsoft. If you look at the leaders in clinical decision support, it's UpToDate. Again, I think telehealth is the biggest connector between the two of those. I think we're in a strong position here to be that combined doctor's digital system."
The company also sees contract momentum with AI search-related marketing solutions among its pharma clients.
"Today, we believe we're the No. 1 most-used clinical service in at least five categories: networking, news, scheduling, fax and telehealth. We're the doctor's digital platform and AI is just the next chapter in our growth," Tangney said.