Doximity is rapidly expanding its clinical AI footprint with health systems, with more than 190 organizations having now purchased its AI suite, up from 165 organizations last quarter.
Those health system customers include 10 of the nation's top 20 hospitals, Doximity executives said during the company's fiscal 2027 second-quarter earnings call on Thursday.
NewYork-Presbyterian has integrated Doximity’s AI tools directly into its electronic health record (EHR) workflow. The partnership grants clinicians across NewYork-Presbyterian, Columbia University Irving Medical Center and Weill Cornell Medicine frictionless access to AI tools, including Doximity Scribe and Doximity Ask, the company's AI-powered clinical decision support tool.
NewYork-Presbyterian rolled out Doximity’s AI suite to clinicians across 10 hospitals and hundreds of locations. The deployment builds on NYP’s use of Doximity for video and phone visits since 2021.
UCSD Health is one of the first hospitals to adopt Doximity's new patient context feature, which allows AI to ingest EHR charts, labs, and patient history directly to give patient-specific answers and guideline-based treatment plans, Jeff Tangney, Doximity CEO, said during the earnings call.
"Our patient context feature is now available for thousands of doctors, and they're writing prompts half as long, 12 words versus our 24-word average, because they no longer have to retype the chart details into a search bar. Our AI already has the labs, notes, and problem list, so it can find the pertinent clinical details deep in their record," Tangney said.
The company is also opening API access to its clinical intelligence layer to expand to more workflows.
Tangney stressed that Doximity is focused on offering clinicians a full clinical AI suite across workflows including telehealth, AI documentation, scheduling, clinical questions, patient context and clinical evidence.
"We offer them a suite, not a search bar," Tangney said. "That suite allows them to do the telehealth visit, to have notes taken on that visit, what we call Scribe, and then to ask questions about that visit with the patient context."
Larger health systems are beginning to tighten AI governance amid growing concerns about protecting patient data, liability and security, and that trend works in Doximity's favor, Tangney said. Hospitals will start to consolidate around approved applications with enterprise privacy and security controls, he noted.
"We have over 300 enterprise clients overall on our telehealth and other products, and we have privacy agreements in place with all of them, but we do not have the AI review with all of them. But those 300 enterprise clients that we have are nearly half of all U.S. physicians, so we cover all the largest health systems. That is where we really see this AI growth and TAM [total addressable market]," he said. "The reality is people should be concerned about the security of their patient data being put into AI that may leak out in various places. I think we are moving beyond the Wild West phase of AI in health systems."
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. The company aims to become a leading AI platform for doctors with plans to scale its clinical AI suite, including its ambient note-taking 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).
Doximity is leaning hard into AI accuracy and safety as AI adoption rapidly grows. AI accuracy "is the number one concern doctors have about AI," Tangney told investors and analysts on the call. "AI deals in probabilities. Patient care demands precision," he said.
The company is making clinical reliability a major part of its competitive positioning. Doximity recently launched DoseCheck, a deterministic verifier for medication safety. Through a partnership with Wolters Kluwer Health, the company embedded UpToDate's evidence-based clinical content directly within Doximity Ask.
"Every clinical AI model has read the National Library of Medicine, which has all of the journals and guidelines, but Wolters Kluwer's UpToDate stands alone as the proprietary gold standard reference for point of care. Their 7,600 physician authors provide unique advice about what to do when there is not an RCT, or randomized controlled trial, to answer the question," Tangney said.
The partnership with UpToDate represents a "strong synergy of Doximity's AI evidence tools and [UpToDate's] unique expert opinion and physician expertise," he noted.
UpToDate has 2,500 health systems as clients, compared to Doximity's 190, and that creates "additional synergies" for the company, Tangney said. Doximity plans to expand its relationship with UpToDate, he noted: "It's the beginning of what we think will be a very strategic, long-term partnership," he added.
Physician AI engagement is growing quickly, according to the company. Doximity said quarterly active workflow prescribers increased 34% year over year, accelerating from the prior quarter. Approximately half of the 1.8 million U.S. prescribers, roughly 900,000 clinicians, used Doximity workflow products during the quarter. The company sees continued growth in telehealth and scheduling alongside rapidly expanding use of AI and patient-specific clinical tools, Tangney said.
A year ago, the company's workflow active-user growth was in the single digits versus 34% now, Matt Sonefeldt, Doximity's chief financial officer, said during the call. Doximity is investing heavily in AI. Rapid growth in clinician engagement, particularly with the company's workflow tools, is laying the groundwork for greater monetization and business growth over the next several years, Sonefeldt said.
Doximity reported $174.5 million in revenue during the quarter ending September 30, up 4% year over year, beating guidance. Adjusted EBITDA was $89 million, or a 51% margin, despite AI spending growing more than sixfold year over year.
The company reported net income of $34.7 million, versus $62.1 million a year ago, representing a margin of 19.9%, versus 36.8%. And the company reported adjusted EPS of 36 cents per share.
The company's Q2 results beat Wall Street analysts' estimates as analysts expected revenue of $170.8 million, adjusted EBITDA of $81 million and adjusted EPS of 35 cents per share.
Doximity raised its full-year revenue outlook to $678 million to $683 million, about 6% growth at the midpoint. For the full year, the company expects adjusted EBITDA between $317 million and $325 million.
The company launched its commercial AI Search product for pharmaceutical companies in late April, and it's gaining traction with pharmaceutical advertisers, executives said. Sixteen of the top 20 companies have purchased it, with three more in contracting, and bookings have reached eight figures, Sonefeldt said. AI Search revenue will ramp up gradually through calendar 2027, he noted.
AI monetization is coming from the pharma side and selling AI Search as an advertising product, Sonefeldt noted. "We do sell AI as a separate enterprise agreement to health systems customers. We charge a nominal amount as part of our broader workflow suite. As we think about this going forward, we see the primary monetization engine being on the pharma side of our business, specifically through the ad products that we sell," he told analysts during a Q&A on the call.
On the clinical side, Doximity aims to build a trusted AI workflow layer that physicians use for documentation, clinical questions, patient-specific decision support, telehealth and communication. On the commercial side, the company sees opportunities to turn that engagement and clinical intent into a new advertising and search business serving pharma.
"With AI Search now available to our pharma clients, we're growing into a much larger market," Tangney told analysts and investors. "We think we're entering a whole new market here, which has historically been paid search."
Doximity is trying to capture marketing dollars that historically went to Google and other search channels. Tangney cited an estimated $14 billion spent annually by pharma on paid search in the U.S.
The company also plans to introduce biddable or auction-based purchasing, which would make the product look much more like conventional paid search.
Shares of Doximity slumped following its Thursday evening earnings report as investors reacted to significant margin compression, Yahoo Finance reported. Doximity's stock is down nearly 25% this year.
"On the stock, while shares have shed roughly a quarter of value year-to-date due to lingering questions about AI threats and the uncertain backdrop for pharma marketing spend, solid results such as these, along with positive commentary around macro factors should continue to power the recovery that has been ongoing since the fiscal first-quarter earnings print," Ryan Daniels, group head of healthcare technology and services at William Blair, wrote in an analyst note.
"We continue to be optimistic on Doximity's competitive position, with robust growth in utilization metrics and novel AI offerings launching to pharma partners. Continued development of AI-based workflow solutions should support Doximity’s ability to remain a share gainer in healthcare professional (HCP) marketing, supporting long-term growth above market averages," Daniels wrote.