Doximity Announces Fourth Quarter and Fiscal Year 2022 Financial Results

·17 min read

Q4 total revenues of $93.7 million, up 40% year-over-year
Q4 net income margin of 39% and adjusted EBITDA margin of 42%

Fiscal Year 2022 total revenues of $343.5 million, up 66% year-over-year
Fiscal year 2022 net income margin of 45% and adjusted EBITDA margin of 44%

SAN FRANCISCO, May 17, 2022 /PRNewswire/ -- Doximity, Inc. (NYSE: DOCS), the leading digital platform for U.S. medical professionals, today announced results for the fiscal 2022 fourth quarter and fiscal year ended March 31, 2022.

Doximity logo
Doximity logo

"We're proud to now serve over 2 million US healthcare professionals, including over 80% of US physicians and over 50% of Physician Assistants and Nurse Practitioners," said Jeff Tangney, co-founder & CEO at Doximity. "This quarter, we added scheduling to our product suite with the acquisition of Amion, and saw record use of our fax, e-signature, and telehealth tools."

Fiscal 2022 Fourth Quarter Financial Highlights

All comparisons, unless otherwise noted, are to the three months ended March 31, 2021.

  • Revenue: Revenue of $93.7 million, versus $66.7 million, an increase of 40% year-over-year.

  • Net income and non-GAAP net income: Net income of $36.7 million, versus $21.5 million, representing a 39% margin. Non-GAAP net income of $44.9 million, versus $24.0 million, representing a 48% margin.

  • Adjusted EBITDA: Adjusted EBITDA of $39.4 million, versus $26.7 million, an increase of 47% year-over-year, representing adjusted EBITDA margins of 42%, versus 40%.

  • Net income per share and non-GAAP net income per share: Diluted net income per share was $0.17, versus $0.07, while non-GAAP diluted net income per share was $0.21, versus $0.09.

  • Operating cash flow and free cash flow: Operating cash flow of $47.0 million, versus $37.6 million, and free cash flow of $44.9 million, versus $36.6 million.

Fiscal Year 2022 Financial Highlights

All comparisons, unless otherwise noted, are to the fiscal year ended March 31, 2021.

  • Revenue: Revenue of $343.5 million, versus $206.9 million, an increase of 66% year-over-year.

  • Net income and non-GAAP net income: Net income of $154.8 million, versus $50.2 million, representing a 45% margin. Non-GAAP net income of $180.6 million, versus $57.2 million, representing a 53% margin.

  • Adjusted EBITDA: Adjusted EBITDA of $150.3 million, versus $64.8 million, an increase of 132% year-over-year, representing adjusted EBITDA margins of 44%, versus 31%.

  • Net income per share and non-GAAP net income per share: Diluted net income per share was $0.70, versus $0.23, while non-GAAP diluted net income per share was $0.82, versus $0.26.

  • Operating cash flow and free cash flow: Operating cash flow of $126.6 million, versus $83.0 million, and free cash flow of $120.9 million, versus $78.4 million.

Financial Outlook

Doximity is providing guidance for its fiscal first quarter ending June 30, 2022 as follows:

  • Revenue between $88.6 million and $89.6 million.

  • Adjusted EBITDA between $28.6 million and $29.6 million.

Doximity is updating guidance for its fiscal year ending March 31, 2023 as follows:

  • Revenue between $454.0 million and $458.0 million.

  • Adjusted EBITDA between $192.0 million and $196.0 million.

Stock Repurchase Program

The board of directors of Doximity authorized a new stock repurchase program to acquire up to $70 million of the Company's Class A common stock, commencing in the first quarter of fiscal 2023. The repurchases are expected to be executed from time to time over the next 12 months, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.

Conference Call Information

Doximity will host a webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss these financial results. To listen to a live audio webcast, please visit the Company's Investor Relations page at https://investors.doximity.com. The archived webcast will be available on the Company's Investor Relations page shortly after the call.

About Doximity

Founded in 2010, Doximity is the leading digital platform for medical professionals. The company's network members include over 80% of U.S. physicians across all specialties and practice areas. Doximity provides its verified clinical membership with digital tools built for medicine, enabling them to collaborate with colleagues, stay up to date with the latest medical news and research, manage their careers, and conduct virtual patient visits. Doximity's mission is to help doctors be more productive so they can provide better care for their patients. For more information, please visit www.doximity.com.

Forward-Looking Statements

Statements we make in this press release may include statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, which are usually identified by the use of words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "seeks," "should," "will," and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including (i) the timing and scope of anticipated stock repurchases; (ii) the impact of the COVID-19 pandemic (including the impact to our industry or on our customers' industries, impact on general economic conditions, and government responses, restrictions, and actions related to the pandemic); (iii) our ability to retain existing members or add new members to our platform and maintain or grow their engagement with our platform; (iv) our ability to attract new customers or retain existing customers; (v) the impact of our prioritization of our members' interests; (vi) breaches in our security measures or unauthorized access to members' data; (vii) our ability to maintain or manage our growth, and other risks and factors that are beyond our control including, without limitation, those set forth in the section entitled "Risk Factors" in the prospectus for our offering of shares of Class A common stock shares that was filed with the SEC on June 25, 2021, and in our Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2021, as such risk factors may be updated from time to time in our periodic filings with the SEC. Additional information will be provided in our Annual Report on Form 10-K for the annual period ended March 31, 2022. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. The forward-looking statements made in this press release relate only to management's beliefs and assumptions as of this date. We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:
Perry Gold
ir@doximity.com

Media Contact:
pr@doximity.com

DOXIMITY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)

(unaudited)



As of March 31,


2022


2021

Assets




Current assets:




Cash and cash equivalents

$ 112,809


$ 66,393

Marketable securities

685,304


76,141

Accounts receivable, net

81,073


50,319

Prepaid expenses and other current assets

19,439


10,692

Deferred contract costs, current

5,512


5,856

Total current assets

904,137


209,401

Property and equipment, net

8,488


7,598

Deferred income tax assets

48,558


2,112

Operating lease right-of-use assets

1,087


1,339

Intangible assets, net

7,909


9,596

Goodwill

18,915


18,915

Other assets

2,263


2,758

Total assets

$ 991,357


$ 251,719

Liabilities, Redeemable Convertible Preferred Stock, and Stockholders'
Equity




Current liabilities:




Accounts payable

$ 463


$ 1,515

Accrued expenses and other current liabilities

25,270


16,285

Deferred revenue, current

84,907


83,272

Operating lease liabilities, current

642


970

Total current liabilities

111,282


102,042

Deferred revenue, non-current

78


220

Operating lease liabilities, non-current

447


284

Other liabilities, non-current

956


972

Total liabilities

112,763


103,518





Redeemable Convertible Preferred Stock




Redeemable convertible preferred stock


81,458

Stockholders' Equity




Preferred stock


Common stock

192


83

Additional paid-in capital

702,589


30,357

Accumulated other comprehensive loss

(15,294)


(21)

Retained earnings

191,107


36,324

Total stockholders' equity

878,594


66,743

Total liabilities, redeemable convertible preferred stock, and stockholders'
equity

$ 991,357


$ 251,719

DOXIMITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)



Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021

Revenue

$ 93,653


$ 66,687


$ 343,548


$ 206,897

Cost of revenue(1)

11,765


7,993


39,787


31,196

Gross profit

81,888


58,694


303,761


175,701

Operating expenses(1):








Research and development

17,424


12,558


62,350


43,873

Sales and marketing

25,899


17,586


92,129


62,033

General and administrative

10,644


5,703


35,746


16,492

Total operating expenses

53,967


35,847


190,225


122,398

Income from operations

27,921


22,847


113,536


53,303

Other income (expense), net

(16)


38


469


4,466

Income before income taxes

27,905


22,885


114,005


57,769

Provision for (benefit from) income taxes

(8,821)


1,402


(40,778)


7,559

Net income

$ 36,726


$ 21,483


$ 154,783


$ 50,210

Undistributed earnings attributable to participating securities


(13,846)


(21,526)


(28,654)

Net income attributable to Class A and Class B common
stockholders, basic and diluted

$ 36,726


$ 7,637


$ 133,257


$ 21,556

Net income per share attributable to Class A and Class B common
stockholders:








Basic

$ 0.19


$ 0.10


$ 0.82


$ 0.29

Diluted

$ 0.17


$ 0.07


$ 0.70


$ 0.23

Weighted-average shares used in computing net income per share
attributable to Class A and Class B common stockholders:








Basic

191,579


79,672


163,484


74,342

Diluted

215,862


103,644


191,017


95,134


(1) Costs and expenses include share-based compensation expenses as follows:



Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021

Cost of revenue

$ 2,006


$ 232


$ 4,979


$ 600

Research and development

2,201


796


7,065


1,975

Sales and marketing

2,533


694


8,108


1,998

General and administrative

3,069


1,148


11,290


2,679

Total stock-based compensation expense

$ 9,809


$ 2,870


$ 31,442


$ 7,252

DOXIMITY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

(unaudited)



Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021

Cash flows from operating activities








Net income

$ 36,726


$ 21,483


$ 154,783


$ 50,210

Adjustments to reconcile net income to net cash provided by operating
activities:








Depreciation and amortization

1,368


991


5,040


3,702

Deferred income taxes

(9,275)


914


(41,247)


4,987

Stock-based compensation, net of amounts capitalized

9,809


2,870


31,442


7,252

Non-cash lease expense

302


421


1,159


2,433

Amortization of premium on marketable securities, net

1,469


139


4,332


197

Loss on sale of marketable securities

708



1,231


Amortization of deferred contract costs

2,389


2,186


9,755


6,883

Gain on sale of business




(4,698)

Other

288


631


410


403

Changes in operating assets and liabilities, net of effect of acquisition:








Accounts receivable

(11,439)


(5,965)


(31,017)


(20,452)

Prepaid expenses and other assets

(2,086)


(2,003)


(9,089)


(1,833)

Deferred contract costs

(2,937)


(3,414)


(9,609)


(9,384)

Accounts payable, accrued expenses and other liabilities

571


644


8,664


7,285

Deferred revenue

19,367


19,198


1,828


38,571

Operating lease liabilities

(296)


(544)


(1,107)


(2,583)

Net cash provided by operating activities

46,964


37,551


126,575


82,973

Cash flows from investing activities








Purchases of property and equipment

(1,060)


(147)


(1,912)


(245)

Internal-use software development costs

(1,049)


(766)


(3,785)


(4,365)

Purchases of marketable securities

(45,278)


(44,481)


(1,317,193)


(78,880)

Maturities of marketable securities

6,302


2,537


47,919


40,537

Sales of marketable securities

16,864



633,802


Cash paid for acquisition, net of cash acquired




(31,682)

Proceeds from sale of business




4,230

Other

595


(12)


595


(12)

Net cash used in investing activities

(23,626)


(42,869)


(640,574)


(70,417)

Cash flows from financing activities








Proceeds from issuance of common stock upon initial public offering after
deducting underwriting discounts and commissions



553,905


Proceeds from issuance of common stock upon exercise of stock options

3,378


4,475


12,612


8,897

Proceeds from issuance of common stock in connection with the employee
stock purchase plan

1,395



1,395


Taxes paid related to net share settlement of equity awards

(381)



(817)


Repurchase of common stock


(1,652)


(2,698)


(2,022)

Payments for deferred offering costs


(1,087)


(3,982)


(1,468)

Net cash provided by financing activities

4,392


1,736


560,415


5,407

Net increase (decrease) in cash and cash equivalents

27,730


(3,582)


46,416


17,963

Cash and cash equivalents, beginning of period

85,079


69,975


66,393


48,430

Cash and cash equivalents, end of period

$ 112,809


$ 66,393


$ 112,809


$ 66,393

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses the following non-GAAP measures of financial performance:

  • Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income margin, and non-GAAP basic and diluted net income per common share: We exclude the effect of stock-based compensation expense, amortization of acquired intangible assets, and expenses associated with acquisitions from non-GAAP gross profit, non-GAAP gross margin and non-GAAP operating income. Non-GAAP net income and non-GAAP net income margin are further adjusted for estimated income tax on such adjustments. We calculate income taxes on the adjustments by applying an estimated annual effective tax rate to the adjustments. Non-GAAP basic and diluted net income per common share is non-GAAP net income attributable to common stockholders divided by the weighted average number of shares. For both basic and diluted non-GAAP net income per share, the weighted average shares we use in computing non-GAAP net income per share is equal to our GAAP weighted average shares. Non-GAAP gross margin represents non-GAAP gross profit as a percentage of revenue and non-GAAP net income margin represents non-GAAP net income as a percentage of revenue.

  • Adjusted EBITDA and adjusted EBITDA margin: We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization, and as further adjusted for acquisition and other related expenses, stock-based compensation expense, and other income, net. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.

  • Free cash flow: We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and capitalized internal-use software development cost.

We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP results.

Key Business Metrics

  • Net revenue retention rate: We calculate net revenue retention rate by taking the trailing 12-month, or TTM, subscription-based revenue from our customers that had revenue in the prior TTM period and dividing that by the total subscription-based revenue for the prior TTM period. Our net revenue retention rate compares our subscription revenue from the same set of customers across comparable periods, and reflects customer renewals, expansion, contraction, and churn.

  • Customers with trailing 12-month subscription revenue greater than $100,000 and $1 million: We calculate the number of customers with TTM product revenue greater than $100,000 and $1 million by counting the number of customers that contributed more than $100,000 and $1 million in subscription revenue in the TTM period. The number of customers with TTM subscription-based revenue of at least $100,000 and $1 million is a key indicator of the scale of our business. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity.

Reconciliation of GAAP to Non-GAAP Financial Measures

The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:


Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021


(unaudited)


(in thousands)

Net income

$ 36,726


$ 21,483


$ 154,783


$ 50,210

Adjusted to exclude the following:








Acquisition and other related expenses

254


26


254


496

Stock-based compensation

9,809


2,870


31,442


7,252

Depreciation and amortization

1,368


991


5,040


3,702

Provision for (benefit from) income taxes

(8,821)


1,402


(40,778)


7,559

Other income (expense), net

16


(38)


(469)


(4,466)

Adjusted EBITDA

$ 39,352


$ 26,734


$ 150,272


$ 64,753









Revenue

$ 93,653


$ 66,687


$ 343,548


$ 206,897

Net income margin

39 %


32 %


45 %


24 %

Adjusted EBITDA margin

42 %


40 %


44 %


31 %




Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021


(unaudited)


(in thousands)

Net cash provided by operating activities

$ 46,964


$ 37,551


$ 126,575


$ 82,973

Purchases of property and equipment

(1,060)


(147)


(1,912)


(245)

Internal-use software development costs

(1,049)


(766)


(3,785)


(4,365)

Free cash flow

$ 44,855


$ 36,638


$ 120,878


$ 78,363

Other cash flow components:








Net cash used in investing activities

$ (23,626)


$ (42,869)


$ (640,574)


$ (70,417)

Net cash provided by financing activities

$ 4,392


$ 1,736


$ 560,415


$ 5,407


Three Months Ended
March 31,


Fiscal Year Ended March
31,


2022


2021


2022


2021


(unaudited)


(in thousands, except percentages)

GAAP cost of revenue

$ 11,765


$ 7,993


$ 39,787


$ 31,196

Adjusted to exclude the following:








Stock-based compensation

(2,006)


(232)


(4,979)


(600)

Non-GAAP cost of revenue

$ 9,759


$ 7,761


$ 34,808


$ 30,596









GAAP gross profit

$ 81,888


$ 58,694


$ 303,761


$ 175,701

Adjusted to exclude the following:








Stock-based compensation

2,006


232


4,979


600

Non-GAAP gross profit

$ 83,894


$ 58,926


$ 308,740


$ 176,301









GAAP gross margin

87 %


88 %


88 %


85 %

Non-GAAP gross margin

90 %


88 %


90 %


85 %









GAAP research and development expense

$ 17,424


$ 12,558


$ 62,350


$ 43,873

Adjusted to exclude the following:








Stock-based compensation

(2,201)


(796)


(7,065)


(1,975)

Non-GAAP research and development expense

$ 15,223


$ 11,762


$ 55,285


$ 41,898









GAAP sales and marketing expense

$ 25,899


$ 17,586


$ 92,129


$ 62,033

Adjusted to exclude the following:








Stock-based compensation

(2,533)


(694)


(8,108)


(1,998)

Amortization of acquired intangibles

(252)


(264)


(1,046)


(1,081)

Non-GAAP sales and marketing expense

$ 23,114


$ 16,628


$ 82,975


$ 58,954









GAAP general and administrative expense

$ 10,644


$ 5,703


$ 35,746


$ 16,492

Adjusted to exclude the following:








Acquisition and other related expenses

(254)


(26)


(254)


(496)

Stock-based compensation

(3,069)


(1,148)


(11,290)


(2,679)

Non-GAAP general and administrative expense

$ 7,321


$ 4,529


$ 24,202


$ 13,317









GAAP operating expense

$ 53,967


$ 35,847


$ 190,225


$ 122,398

Adjusted to exclude the following:








Acquisition and other related expenses

(254)


(26)


(254)


(496)

Stock-based compensation

(7,803)


(2,638)


(26,463)


(6,652)

Amortization of acquired intangibles

(252)


(264)


(1,046)


(1,081)

Non-GAAP operating expense

$ 45,658


$ 32,919


$ 162,462


$ 114,169









GAAP operating income

$ 27,921


$ 22,847


$ 113,536


$ 53,303

Adjusted to exclude the following:








Acquisition and other related expenses

254


26


254


496

Stock-based compensation

9,809


2,870


31,442


7,252

Amortization of acquired intangibles

252


264


1,046


1,081

Non-GAAP operating income

$ 38,236


$ 26,007


$ 146,278


$ 62,132


Three Months Ended
March 31,


Fiscal Year Ended
March 31,


2022


2021


2022


2021


(unaudited)


(in thousands, except per share data and
percentages)

GAAP net income

$ 36,726


$ 21,483


$ 154,783


$ 50,210

Adjusted to exclude the following:








Acquisition and other related expenses

254


26


254


496

Stock-based compensation

9,809


2,870


31,442


7,252

Amortization of acquired intangibles

252


264


1,046


1,081

Income tax effect of non-GAAP adjustments (1)

(2,166)


(664)


(6,876)


(1,854)

Non-GAAP net income

$ 44,875


$ 23,979


$ 180,649


$ 57,185

Non-GAAP net income margin

48 %


36 %


53 %


28 %









GAAP undistributed earnings attributable to participating securities

$ —


$ (13,846)


$ (21,526)


$ (28,654)

Impact on undistributed earnings attributable to participating
securities due to non-GAAP adjustments


(1,221)


(2,616)


(3,533)

Non-GAAP undistributed earnings attributable to participating
securities

$ —


$ (15,067)


$ (24,142)


$ (32,187)









Non-GAAP net income

$ 44,875


$ 23,979


$ 180,649


$ 57,185

Non-GAAP undistributed earnings attributable to participating
securities


(15,067)


(24,142)


(32,187)

Non-GAAP net income attributable to Class A and Class B
stockholders, basic and diluted

$ 44,875


$ 8,912


$ 156,507


$ 24,998









Weighted-average shares used in computing net income per share
attributable to Class A and Class B common stockholders:








Basic

191,579


79,672


163,484


74,342

Diluted

215,862


103,644


191,017


95,134









Non-GAAP net income per share attributable to Class A and Class B
stockholders:








Basic

$ 0.23


$ 0.11


$ 0.96


$ 0.34

Diluted

$ 0.21


$ 0.09


$ 0.82


$ 0.26


(1) For the three months and fiscal years ended March 31, 2022 and 2021, management used an estimated annual effective non-GAAP tax rate of 21.0%.

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SOURCE Doximity, Inc.