Doximity had a strong fiscal fourth quarter in 2025, reporting adjusted earnings per share (EPS) of 38 cents, which exceeded expectations by 40.7%. This is a significant improvement from the previous year’s earnings of 25 cents per share. For fiscal 2025, adjusted EPS reached $1.42, a 49.5% increase compared to last year. The GAAP net income per share rose to 31 cents, up from 20 cents from the same quarter a year ago.

Strong Revenue Growth In Fiscal 2025

Revenues increased by 17% year-over-year to $138.3 million, mainly driven by subscription revenues that totaled $131.9 million. Overall, Doximity’s annual revenue for fiscal 2025 was $570.4 million, up 20%, with subscription revenues rising 21% to $543.8 million. Despite these positive results, DOCS shares fell by 20.7% after the earnings release and are down 9.5% for the year. The S&P 500 Index only dipped 0.3% in the same timeframe. Adjusted gross profits were $126.5 million, resulting in a high gross margin of 91.4%. However, the company saw a significant rise in research, development, sales, and marketing expenses year-over-year. At the end of the quarter, Doximity’s cash and cash equivalents stood at $915.7 million, with total assets of $1.26 billion. For fiscal 2026, the revenue forecast is between $619 million and $631 million, which is slightly below what analysts had expected.

Future Guidance And Market Reaction

Doximity’s fourth-quarter results for fiscal 2025 were much better than many analysts had predicted, especially regarding earnings. The adjusted EPS of 38 cents was a big jump from last year’s 25 cents and beat estimates by over 40%. Throughout the year, adjusted EPS reached $1.42, up nearly 50% from the previous year. Net income per share on a GAAP basis also increased to 31 cents, signaling strong profitability. Revenue saw solid growth, with the recent quarter achieving $138.3 million, a 17% increase from last year. Most of this came from subscription services, contributing $131.9 million. For the year, total revenue grew 20% to $570.4 million, again primarily due to subscriptions, which saw a 21% rise. The company maintained strong profitability with an adjusted gross profit of $126.5 million, translating to a 91.4% gross margin. This demonstrates Doximity’s efficiency, but there are concerns. Research and development expenses, along with sales and marketing costs, increased significantly compared to the previous year. While this reflects efforts to expand the platform, it could impact net margins if not managed well. Despite these achievements, the stock price took a hit. Since the earnings report, shares dropped over 20%, adding to a 9.5% decline this year. In comparison, the S&P 500 only fell 0.3% during this time, indicating that the market reacted negatively more than it warranted. This reaction may stem from the lower future guidance. Looking ahead, Doximity’s management expects revenue to range between $619 million and $631 million for the next fiscal year. While this shows growth, it falls short of analyst projections. Investors seem to be focusing more on future growth potential rather than past successes. This change in attitude occurs when high-growth companies slow down amid increased competition. Considering all this, the high valuations associated with Doximity’s subscription model may be facing a test. Recent price movements suggest expectations have adjusted downward. We advise positioning for potential shifts in market sentiment based on short-term volatility readings, especially as they settle after the earnings report. Recent spikes provide a chance to refine strike options and expiration times. While we used to focus on long positions during predictable earnings beats, the surprise now is how quickly investor sentiment can change, even with solid performance. Currently, options pricing reflects a reassessment of risk rather than the stability of the business model. This distinction matters, especially since implied volatility might stay high even if actual price movements don’t. In practical terms, we should consider neutral to slightly bearish strategies in the short term, with tight hedging. The long-term outlook is improving, offering chances for calendar or diagonal spreads if new positions are needed. Keeping an eye on further updates, particularly during the next earnings cycle, will be crucial. Create your live VT Markets account and start trading now.

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