Doximity Slashes FY23 Outlook After Q1 Beat, Shares Plunge

Doximity Inc DOCS reported first-quarter FY23 sales of $90.6million, an increase of 24.7% year-over-year, beating the consensus of $89.3 million. The adjusted EPS of $0.14 beat the consensus of $0.10.

The gross margin contracted by 344 bps to 85.6%. The operating income declined by 12.8% Y/Y to $21.68 million, and the margin fell to 23.9% from 34.2% in 1Q22.

Adjusted EBITDA of $33.5 million grew 8% Y/Y, representing adjusted EBITDA margins of 37% versus 43% a year ago.

Doximity generated an operating cash flow of $44.8 million versus $33.2 million, and a free cash flow of $42.6 million, versus $32.4 million.

"We had a strong Q3 led by our existing clients as our net revenue retention rate hit 171%," said Jeff Tangney, co-founder & CEO. "Our telehealth platform grew to 350,000 active providers."

2Q23 Outlook: Doximity expects revenue of $99.5 million - $100.5 million vs. a consensus of $105.26 million, compared to the consensus of $89.26 million. It expects an adjusted EBITDA of $40 million - $41 million.

FY23 Outlook: The Company forecasts revenue of $424 million- $432 million (prior expectations of $454 million - $458 million), versus the consensus of $455.23 million, with adjusted EBITDA of $178 million and $186 million (prior $192 million and $196 million).

Price Action: DOCS shares are trading lower by 16.27% at $33.75 during the post-market session on Thursday.