Doximity, a digital platform for medical professionals, brought in $98 million in revenue in the third quarter, a 67% jump from a year ago. The health tech company also boasted a record profit of $56 million during the quarter, up from $17.2 million just one year ago.
Doximity, which went public in June, operates like a LinkedIn for doctors and provides a digital platform for U.S. medical professionals, including telehealth and scheduling tools. The company has over 1.8 million medical professional members as of March 31, 2021, and claims to have more than 80% of doctors on its network.
The company's non-GAAP net income for the quarter came to $64 million, versus $20 million a year ago, representing a 65% margin, Doximity reported in its fiscal 2022 third-quarter earnings results. The company's third quarter ended Dec. 31.
“Our growth was once again led by our existing clients, which include all of the top 20 hospitals and all of the top 20 pharmaceutical companies. Our interactive platform allows them to connect efficiently with the right physicians about new treatments, clinical trials and patient referrals," Jeff Tangney, co-founder and CEO at Doximity, said during the company's earnings call this week.
The company also reported that its telehealth platform, added in 2020 during the pandemic, grew to 350,000 active providers, as 23,000 clinicians joined its virtual care platform in the third quarter.
Also this week, Doximity announced it picked up Amion, an on-call physician scheduling site for $53.5 million in cash plus up to $29 million in earnouts and equity compensation over four years. Amion manages nearly 200,000 physician schedules at thousands of hospitals including 18 of the top 20.
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“Strategically Amion adds a key piece to our physician cloud by integrating scheduling alongside our secure messaging, CVs, referrals and telehealth tools. Doximity's mission is to build software to make physicians more productive so that they can provide the best care for their patients. We're thrilled to add another critical day-to-day physician workflow tool, and we're excited to explore the optionality it will unlock across all of our major businesses,” Tangney said.
The deal is expected to close in April 2022. Doximity had worked with Amion for nearly a decade via an API partnership.
Doximity’s blockbuster debut on the stock market a year ago, which raised $606 million, gave the company the dry powder to acquire the company, Nate Gross, M.D., co-founder and chief strategy officer at Doximity, told Fierce Healthcare in an interview.
“Thanks to the IPO and some of the growth that we had this year, we finally had the bandwidth and capacity to be able to take that partnership to the next level,” he said.
The company is investing long-term to grow its physician cloud of network communication and daily workflow tools, Gross said.
“We're continuing to invest in tighter integrations with our partners and offering capabilities to make sure that doctors can deliver care digitally in the way that they want,” he said.
Doximity provides physicians with tools that help them to collaborate with their colleagues, coordinate patient care, conduct virtual patient visits and stay up to date with the latest medical news and research, according to the company.
As doctors shift to a hybrid work model that combines digital communication and in-person interactions, Doximity is in a strong position to capitalize on this evolution.
“We're in a unique position to be more like the way medicine used to be, with doctors getting together in the real-life lounge, which doesn't happen anymore, but still tuning into the news of the day,” Tangney said during the earnings call. “I do think the collegial aspect in what we do is probably our defining characteristic. And I think we've applied some terrific leading-edge technology to make that professional and relevant and something that isn't just another email hitting a doctor.”
The company's paying customers include pharmaceutical manufacturers, health systems and medical recruiting firms. These organizations purchase subscriptions for Doximity's marketing solutions, hiring solutions and telehealth services.
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The company’s hiring solutions business grew 90% in the third quarter as the “Great Resignation” hits medicine and physicians weigh their postpandemic job options, executives said.
Doximity also is benefiting from the pharma industry’s shift to digital marketing. Pharma companies use Doximity’s marketing solutions to get their brands in front of medical professionals.
“It's not hard to see just a real seismic shift here as dollars move towards higher ROI, digital strategies that have been tested and really forced upon the industry in the last couple of years,” Doximity’s chief financial officer Anna Bryson said during the earnings call.
Quarterly results beat Wall Street forecasts
On a per-share basis, the San Francisco-based company said it had net income of 26 cents. Earnings, adjusted for one-time gains and costs, came to 29 cents per share. The results beat Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 13 cents per share.
The company’s quarterly revenue of $97.9 million in the period, also topped Street forecasts. Seven analysts surveyed by Zacks expected $86.3 million.
Doximity reported adjusted EBITDA of $47 million during the quarter, versus $21.5 million a year ago, an increase of 119% year-over-year, representing adjusted EBITDA margins of 48%, versus 37%.
The company ended the quarter with $766 million of cash, cash equivalents and marketable securities and generated free cash flow for the third quarter of $26 million compared to $23 million in the third quarter last year.
For the current quarter ending in March, Doximity said it expects revenue in the range of $89 million to $90 million.
The company expects full-year revenue in the range of $338.9 million to $339.9 million and adjusted EBITDA between $144.9 million and $145.9 million.
Executives said they expect Doximity’s revenue to grow 33% to approximately $450 million next year (the fiscal year ending March 2023).