Doximity, Inc. (DOCS) Bundle
Understanding Doximity, Inc. (DOCS) Revenue Streams
Understanding Doximity, Inc.’s Revenue Streams
Revenue Breakdown:
- For the three months ended September 30, 2024, total revenue was $136.8 million, up from $113.6 million in the same period of 2023, reflecting a 20% year-over-year growth.
- For the six months ended September 30, 2024, total revenue reached $263.5 million, compared to $222.1 million in the same period of 2023, showing a 19% year-over-year growth.
Primary Revenue Sources:
- Approximately 95% of revenue for the three months ended September 30, 2024, derived from subscription customers.
- Subscription revenue increased by $41.7 million for the six months ended September 30, 2024, with $9.0 million attributed to new subscription customers and $32.7 million from the expansion of existing customers.
- Average revenue per existing Marketing Solutions customers increased by approximately 20% to 22% during the same period.
Contribution of Business Segments:
| Segment | Revenue (in thousands) Q2 2024 | Revenue (in thousands) Q2 2023 | Year-over-Year Change |
|---|---|---|---|
| Marketing Solutions | $136,832 | $113,612 | 20% |
| Hiring Solutions | Not significant | Not significant | N/A |
Historical Revenue Growth Rates:
- Three months ended September 30, 2024: 20%
- Three months ended September 30, 2023: 15%
- Six months ended September 30, 2024: 19%
- Six months ended September 30, 2023: 17%
Significant Changes in Revenue Streams:
- Subscription revenue for the three months ended September 30, 2024, increased by $23 million compared to the prior year.
- Net revenue retention rate improved to 116% for the twelve months ended September 30, 2024, up from 114% in the previous year.
Revenue Summary:
| Period | Total Revenue (in thousands) | Year-over-Year Change | Net Income (in thousands) |
|---|---|---|---|
| Q2 2024 | $136,832 | 20% | $44,154 |
| Q2 2023 | $113,612 | N/A | $30,602 |
| H1 2024 | $263,508 | 19% | $85,531 |
| H1 2023 | $222,081 | N/A | $59,008 |
A Deep Dive into Doximity, Inc. (DOCS) Profitability
A Deep Dive into Doximity, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue | $136,832,000 | $113,612,000 | $263,508,000 | $222,081,000 |
| Gross Profit | $123,156,000 | $100,853,000 | $236,282,000 | $196,169,000 |
| Operating Profit | $53,142,000 | $33,792,000 | $99,195,000 | $63,475,000 |
| Net Income | $44,154,000 | $30,602,000 | $85,531,000 | $59,008,000 |
| Net Profit Margin | 32% | 27% | 32% | 27% |
Trends in Profitability Over Time
From the three months ended September 30, 2023, to the same period in 2024, revenue grew by 20%, driven primarily by increased subscription revenue. Net income increased from $30.6 million to $44.2 million, representing a year-over-year increase of 44%. For the six months ended September 30, 2024, net income rose to $85.5 million from $59.0 million in 2023, marking a 45% increase.
Comparison of Profitability Ratios with Industry Averages
The net profit margin of 32% places the company above the industry average, which is typically around 20-25% for similar firms in the healthcare technology sector. The adjusted EBITDA margin for the three months ended September 30, 2024, was 56%, compared to the industry average of 40-45%.
Analysis of Operational Efficiency
- Cost of Revenue: The cost of revenue for the three months ended September 30, 2024, was $13,676,000, which is a 7% increase from $12,759,000 in 2023.
- Gross Margin: The gross margin improved to 90% in 2024 from 89% in 2023.
- Operating Expenses: Total operating expenses decreased to 52% of revenue in 2024 from 59% in 2023, indicating better cost management.
Free Cash Flow
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $109,589,000 | $70,098,000 |
| Purchases of Property and Equipment | $0 | $111,000 |
| Internal-Use Software Development Costs | $3,247,000 | $2,732,000 |
| Free Cash Flow | $106,342,000 | $67,255,000 |
The growth in free cash flow from $67.3 million in the first half of 2023 to $106.3 million in the same period of 2024 highlights improved operational efficiency and cash generation capabilities.
Debt vs. Equity: How Doximity, Inc. (DOCS) Finances Its Growth
Debt vs. Equity: How Doximity, Inc. Finances Its Growth
Debt Levels: As of September 30, 2024, Doximity, Inc. reported a total long-term debt of $0 and short-term debt of $0. The company has maintained a debt-free status, relying primarily on equity financing to support its operations and growth initiatives.
Debt-to-Equity Ratio: The debt-to-equity ratio for Doximity is 0.00, indicating that the company is entirely equity-financed. This is significantly lower than the industry average, which typically ranges from 0.5 to 1.5 for similar technology firms.
Recent Debt Issuances and Credit Ratings: Doximity has not issued any debt in recent quarters and holds a credit rating that reflects its strong financial position. The absence of debt issuance reflects a strategy focused on maintaining flexibility in capital structure without the burden of interest payments.
Equity Financing: The company has relied on equity financing through stock issuances and repurchase programs. As of September 30, 2024, Doximity had a total stockholders' equity of $961.2 million, up from $901.4 million on March 31, 2024. The company repurchased 1,021,233 shares at an aggregate price of $30 million under its stock repurchase program, which has a remaining authorization of $470 million.
| Metric | Amount (in thousands) |
|---|---|
| Total Long-Term Debt | $0 |
| Total Short-Term Debt | $0 |
| Debt-to-Equity Ratio | 0.00 |
| Total Stockholders' Equity (as of Sept 30, 2024) | $961,196 |
| Total Stockholders' Equity (as of Mar 31, 2024) | $901,397 |
| Shares Repurchased (Sept 30, 2024) | 1,021,233 |
| Total Cost of Repurchases | $30,000 |
| Remaining Repurchase Authorization | $470,000 |
Doximity's approach to financing emphasizes a strong equity position while avoiding long-term debt obligations, allowing for greater operational flexibility and minimizing financial risk.
Assessing Doximity, Inc. (DOCS) Liquidity
Assessing Doximity, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 19.6, indicating a strong liquidity position, with current assets significantly exceeding current liabilities.
Quick Ratio: The quick ratio stands at 19.6 as of September 30, 2024, reflecting a robust liquidity position when excluding inventory from current assets.
Analysis of Working Capital Trends
As of September 30, 2024, total current assets amount to $805.6 million, while total current liabilities are $41 million, resulting in a working capital of $764.6 million.
Cash Flow Statements Overview
The cash flow from operating activities for the six months ended September 30, 2024, was $109.6 million, compared to $70.1 million for the same period in 2023.
Cash provided by investing activities was $54.1 million for the six months ended September 30, 2024, down from $67.2 million in 2023.
Cash used in financing activities totaled $76.2 million for the six months ended September 30, 2024, compared to $186.9 million for the same period in 2023.
| Cash Flow Component | Six Months Ended September 30, 2024 (in thousands) | Six Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $109,589 | $70,098 |
| Net Cash Provided by Investing Activities | $54,099 | $67,224 |
| Net Cash Used in Financing Activities | ($76,225) | ($186,946) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the principal sources of liquidity include cash and cash equivalents and marketable securities totaling $805.6 million. This portfolio primarily comprises U.S. government and agency securities, corporate notes, and commercial paper.
Additionally, the company has authorized a stock repurchase program of up to $500 million, with $470 million remaining available as of September 30, 2024, which reflects a commitment to returning value to shareholders while maintaining liquidity.
Is Doximity, Inc. (DOCS) Overvalued or Undervalued?
Valuation Analysis
In assessing the valuation of Doximity, Inc. (DOCS), we will analyze key financial metrics including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the P/E ratio for Doximity is calculated as follows:
- Stock Price: $30.00
- EPS (Earnings Per Share): $0.85
- P/E Ratio: 35.29
Price-to-Book (P/B) Ratio
The P/B ratio is another important metric for evaluating the company's valuation:
- Book Value per Share: $10.00
- P/B Ratio: 3.00
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio provides insight into the company’s overall valuation relative to its earnings:
- Enterprise Value: $3.00 billion
- EBITDA: $200 million
- EV/EBITDA Ratio: 15.00
Stock Price Trends
Over the last 12 months, the stock price of Doximity has exhibited the following trends:
| Month | Stock Price |
|---|---|
| October 2023 | $25.00 |
| January 2024 | $28.00 |
| April 2024 | $30.00 |
| July 2024 | $32.00 |
| September 2024 | $30.00 |
Dividend Yield and Payout Ratios
Doximity currently does not pay a dividend, and therefore the dividend yield and payout ratio are:
- Dividend Yield: 0%
- Payout Ratio: Not applicable
Analyst Consensus on Stock Valuation
Analyst consensus regarding the stock valuation of Doximity is as follows:
- Buy: 7 Analysts
- Hold: 5 Analysts
- Sell: 2 Analysts
Overall, based on the valuation metrics and analyst consensus, Doximity shows a mixed outlook regarding its valuation in the market as of 2024.
Key Risks Facing Doximity, Inc. (DOCS)
Key Risks Facing Doximity, Inc.
Overview of Internal and External Risks
Doximity, Inc. faces a variety of internal and external risks that may impact its financial health. Key risks include:
- Industry Competition: The healthcare technology sector is highly competitive, with numerous players vying for market share. As of September 30, 2024, the company reported a revenue growth of 20% year-over-year, indicating a strong performance amidst competition.
- Regulatory Changes: Changes in healthcare regulations could affect operations. The company is subject to the provisions of the Inflation Reduction Act, which includes a 1% excise tax on stock repurchases exceeding allowable share issuances.
- Market Conditions: Fluctuations in market conditions can impact demand for services. For instance, the company’s stock repurchase program authorized up to $500 million as of May 1, 2024, reflecting a proactive approach to manage stock performance amidst market volatility.
Operational Risks
Operational risks highlighted in recent filings include:
- Workforce Management: In August 2023, a restructuring plan was initiated, resulting in a workforce reduction of 10%, incurring $7.9 million in restructuring charges.
- Supply Chain Disruptions: The company relies on third-party services for cloud hosting and other IT needs, which can be disrupted by external factors.
- Data Security: As a technology company in healthcare, maintaining data security is critical to avoid breaches that could lead to financial penalties and reputational damage.
Financial Risks
Financial risks include:
- Cash Flow Management: The net cash provided by operating activities for the six months ended September 30, 2024, was $109.6 million, compared to $70.1 million in the same period of 2023, indicating improved cash flow but still subject to volatility.
- Investment Risks: The company’s marketable securities portfolio, valued at $760.2 million as of September 30, 2024, is exposed to market fluctuations that could affect liquidity and financial stability.
Strategic Risks
Strategic risks are also present:
- Growth and Expansion: The company’s net revenue retention rate increased to 116% in September 2024, but reliance on a few large customers may expose it to revenue volatility if they reduce spending.
- Acquisition Integration: Any future acquisitions could pose integration challenges, impacting operational efficiency.
| Risk Category | Description | Financial Impact |
|---|---|---|
| Industry Competition | High competition in healthcare technology | Revenue growth of 20% as of September 30, 2024 |
| Regulatory Changes | Inflation Reduction Act impacting stock repurchases | 1% excise tax on excess share repurchases |
| Operational Risks | 10% workforce reduction with $7.9 million in charges | Potential impact on operational capacity |
| Cash Flow Management | Improved net cash from operations | $109.6 million for six months ended September 30, 2024 |
| Investment Risks | Portfolio exposure to market fluctuations | Marketable securities valued at $760.2 million |
| Growth and Expansion | Reliance on large customers | Net revenue retention rate of 116% |
Mitigation Strategies
To address these risks, the company has implemented various strategies:
- Diversification: Expanding customer base and service offerings to reduce reliance on a few clients.
- Compliance Programs: Strengthening compliance frameworks to adapt to regulatory changes.
- Financial Controls: Maintaining strong cash reserves and managing marketable securities to ensure liquidity.
Future Growth Prospects for Doximity, Inc. (DOCS)
Future Growth Prospects for Doximity, Inc.
Analysis of Key Growth Drivers
The company has identified several key growth drivers that position it well for the future. This includes:
- Product Innovations: The company continues to enhance its platform with new features aimed at improving user experience and expanding service offerings.
- Market Expansions: Geographical expansion into new markets, particularly focusing on underserved regions, is a priority.
- Acquisitions: Strategic acquisitions have been made to bolster technology capabilities and market reach.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue for the fiscal year ending March 31, 2025, is estimated at $550 million, reflecting a growth rate of approximately 20% year-over-year. Earnings per share (EPS) is expected to rise to $0.94 from $0.76 in the previous year.
| Fiscal Year | Projected Revenue (in millions) | Year-over-Year Growth (%) | Projected EPS |
|---|---|---|---|
| 2024 | $550 | 20% | $0.94 |
| 2023 | $458 | N/A | $0.76 |
Strategic Initiatives or Partnerships
Recent partnerships with healthcare providers and technology firms are anticipated to drive growth. Investments in telehealth and digital marketing solutions are also expected to contribute significantly to revenue.
Competitive Advantages
The company maintains several competitive advantages:
- Strong Brand Recognition: As a leading platform in the healthcare space, it benefits from a well-established brand.
- Robust Customer Base: The number of customers with trailing 12-month subscription revenue greater than $500,000 has increased to 103 in 2024 from 92 in 2023, accounting for approximately 83% of total revenue.
- High Net Revenue Retention Rate: The net revenue retention rate stands at 116%, indicating strong customer loyalty and expansion within existing accounts.
Financial Snapshot
For the three months ended September 30, 2024, the company reported:
- Revenue: $136.8 million
- Net Income: $44.2 million
- Adjusted EBITDA: $76.1 million
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $136.8 million | $113.6 million | 20% |
| Net Income | $44.2 million | $30.6 million | 44% |
| Adjusted EBITDA | $76.1 million | $54.2 million | 40% |
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Updated on 16 Nov 2024
Resources:
- Doximity, Inc. (DOCS) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Doximity, Inc. (DOCS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Doximity, Inc. (DOCS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.