What They Do
Doximity operates the largest professional network for healthcare professionals in the US, connecting 85% of US physicians and two-thirds of nurse practitioners/PAs through its platform. The company monetizes this network by helping pharmaceutical companies reach and engage with healthcare providers through targeted digital marketing, telehealth solutions, and increasingly, AI-powered tools. Think "LinkedIn for doctors" with a business model focused on pharma advertising dollars.
Investment Thesis
**Dominant network effect** — 3M+ registered members representing 85% of US physicians creates an unmatched moat for pharma companies seeking physician engagement**High-margin, sticky revenue model** — 90.2% gross margins with 112% net revenue retention and 84% of revenue from customers spending $500K+ annually**AI monetization opportunity** — 300K+ unique prescribers already using AI products, with commercial AI launch planned for 2026 to tap into pharma's $55B+ digital marketing spendKey Risks
**Pharma budget concentration** — Heavy dependence on pharmaceutical advertising spend makes the business vulnerable to industry budget cuts and policy changes like MFN agreements**AI competitive threat** — While building AI capabilities, the company faces intense competition from well-funded AI startups and tech giants in healthcareGrowth Story
Revenue growth has decelerated from double-digits to mid-single digits, with FY26 guidance calling for 13% growth to $643M after a strong Q3 beat. The company expects to return to double-digit growth by exiting 2026, driven by AI product commercialization and outpacing the ~5% healthcare digital marketing market growth. January 2026 bookings showed the highest growth rate since going public after pharma budget delays cleared.
Profitability Profile
Doximity maintains best-in-class profitability with 90%+ gross margins and 55-60% adjusted EBITDA margins, generating strong free cash flow ($58.5M in Q3 alone). Management has committed to maintaining 50%+ EBITDA margins as a "floor" even while investing heavily in AI infrastructure and development, demonstrating the underlying strength of their high-margin advertising model.
Competitive Position
Doximity has built an almost insurmountable network effect moat with 85% physician penetration in the US, making it indispensable for pharma companies' digital marketing strategies. While facing competition from emerging AI healthcare platforms, the company's physician-first approach and peer validation system for AI answers differentiates it from pure-play AI competitors who lack established physician relationships and trust.
Recent Momentum
Q3 delivered strong execution with 10% revenue growth, 28% revenue beat, and 60% EBITDA margins exceeding guidance by 700 basis points. However, pharma budget delays due to MFN policy uncertainty pushed typical Q4 bookings into Q1 2026, creating near-term growth lumpiness despite underlying business strength. The delayed bookings materialized in January with record growth rates.
What Wall Street Thinks
Analysts remain cautiously optimistic about the long-term AI opportunity while concerned about near-term pharma budget headwinds and policy uncertainty. There's strong interest in the AI monetization timeline and competitive positioning, with consensus expecting steady but unspectacular growth until AI products fully launch. The consistent earnings beats and margin expansion have maintained analyst confidence in execution.
The Bottom Line
Doximity is a profitable, cash-generating monopoly on US physician networks that's successfully navigating the transition from a pure advertising platform to an AI-powered healthcare infrastructure company, though investors must weather pharma budget volatility in the near term.
