Doximity, Inc. (NYSE:DOCS) Q2 2026 Earnings Call Transcript

Doximity, Inc. (NYSE:DOCS) Q2 2026 Earnings Call Transcript November 6, 2025

Doximity, Inc. beats earnings expectations. Reported EPS is $0.45, expectations were $0.38.

Operator: Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome you to the Doximity Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I’d now like to turn the conference over to Perry Gold, Vice President of Investor Relations. Perry, you may begin.

Perry Gold: Thank you, operator. Hello, and welcome to Doximity’s fiscal 2026 second quarter earnings call. With me on the call today are Jeff Tangney, Co-Founder and CEO of Doximity; and Anna Bryson, CFO. A complete disclosure of our results can be found in our press release issued earlier today as well as in our related Form 8-K, along with a copy of our prepared remarks, all available on our website at investors.doximity.com. As a reminder, today’s call is being recorded, and a replay will be available on our website. As part of our comments today, we will be making forward-looking statements. These statements are based on management’s current views, expectations and assumptions and are subject to various risks and uncertainties.

Actual results may differ materially, and we disclaim any obligation to update any forward-looking statements or outlook. Please refer to the risk factors in our annual report on Form 10-K, any subsequent Form 10-Qs and our other reports and filings with the SEC that may be filed from time to time, including our upcoming filing on Form 10-Q. Our forward-looking statements are based on assumptions that we believe to be reasonable as of today’s date, November 6, 2025. Of note, it is Doximity’s policy to neither reiterate nor adjust the financial guidance provided on today’s call unless it is also done through a public disclosure such as a press release or through the filing of a Form 8-K. Today, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.

A historical reconciliation to compararable GAAP metrics can be found in today’s earnings release. Finally, during the call, we may offer incremental metrics to provide greater insights into the dynamics of our business. These details may be onetime in nature, and we may or may not provide updates on those metrics in the future. I would now like to turn the call over to our Co-Founder and CEO, Jeff Tangney. Jeff?

Jeffrey Tangney: Thanks, Perry, and thank you, everyone, for joining our second quarter earnings call. We have 3 updates today, our financials, network growth and AI products. First, our top line, we delivered $169 million of revenue for the second quarter of our fiscal 2026, which represents 23% year-on-year growth and a 7% beat from the high end of our guidance range. Our bottom line was also strong in Q2, with an adjusted EBITDA margin of 60% or $101 million, which was 15% above the high end of our guidance. Our adjusted EBITDA grew 32% year-on-year, while our free cash flow was up 37% year-on-year. In short, we had a better-than-expected first half led by our AI optimized integrated programs and our portal. Our CFO, Anna will provide more detail on that in just a minute.

Okay. Turning now to our network growth and engagement, which reached new highs in Q2. Our news feed led the way with an all-time record number of quarterly active prescribers and double-digit growth in the number of articles read or tapped. Physicians really liked our new “Ask DoxGPT feature, which allows them to ask follow-up questions and dive deeper into clinical topics directly from our newsfeed. On the workflow side, more than 650,000 unique prescribers used our workflow tools in Q2, which was also an all-time high. As a reminder, our workflow tools include our telehealth, scheduling, digital fax and AI tools for clinical reference and documentation. Our AI tools once again grew the fastest with quarterly active prescribers up more than 50% from the prior quarter.

We’re proud to be both the newsfeed of medicine and the go-to platform for AI-powered clinical workflows. Okay. Now for an update on our Pathway acquisition and AI scribe growth. Just 7 weeks after announcing our acquisition, we fully integrated Pathway’s entire medical data set and AI models into DoxGPT now live across both our web and mobile apps. We believe this integration gives us a couple of first in medical AI. Unlike others, DoxGPT has a fully integrated drug reference. And when a physician taps the mic and asks a drug-related question, peer-reviewed answers will appear instantly in under a second. Clinicians on the go can now just ask DoxGPT on their phone to check for dosing, side effects or interaction. We’re also the first medical AI to provide direct full text PDF access to over 2,000 medical journals, including all the top titles through a unique referral with Research Solutions’ software.

Doctors can now go from question to summary to the original peer-reviewed source in just a few clicks. No paywalls, proxies or library log-ins. I began my career over 20 years ago in clinical reference at Epocrates, and it’s gratifying to see how far this point-of-care technology has now come. With our recent upgrades, we believe we’re the fastest, best real-world AI medical reference in the market today. Our new AI scribe is also becoming a clinician favorite. As a reminder, Doximity Scribe is our HIPAA-compliant ambient notetaking tool. And in Q2, our number of quarterly active users nearly tripled versus Q1. This rapid uptake is a testament to the power of our platform, our market-leading telehealth tool, Doximity Dialer added Scribe integration last quarter.

So now for the over 300,000 voice and video visits we conduct on an average weekday, doctors can add our Scribe with 1 click and give full focus to their patients, not their keyboards. As one of our family medicine doctors put it, “I just love Scribe. I saw 22 patients today till 5 p.m. and was out of the office by 5:15.” Amen to that. AI that gets you home in time for dinner. We’re proud to help clinicians reduce their admin and cut down on pajama time. Okay. As always, I’d like to end by thanking my Doximity teammates who continue to work incredibly hard to care for those who care for us. From record engagement to major leaps in AI, we’re building tools that help doctors provide better care for their patients. I couldn’t be more proud of the work we’re doing or the team behind it.

And with that, I’ll hand it over to our CFO, Anna Bryson, to discuss our financials and guidance. Anna?

Anna Bryson: Thanks, Jeff, and thanks to everyone on the call today. Second quarter revenue grew to $168.5 million, up 23% year-over-year and exceeding the high end of our guidance range. Similar to prior quarters, our existing customers continued to lead our growth. We finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis. We ended the quarter with 121 customers contributing at least $500,000 each in subscription-based revenue on a trailing 12-month basis. This is a roughly 16% increase from the 104 customers we had in this cohort a year ago, and these customers accounted for 84% of our total revenue. Turning to our profitability. Non-GAAP gross margin in the second quarter was 92%, flat versus the prior year period.

Adjusted EBITDA for the second quarter was $100.8 million, and adjusted EBITDA margin was 60% compared to $76.1 million and a 56% margin in the prior year period. We are proud to continue to run a very profitable business with margin expansion. Now turning to our balance sheet, cash flow and an update on our share repurchase program. We generated free cash flow in the second quarter of $91.6 million compared to $66.8 million in the prior year period, an increase of 37% year-over-year. We ended the quarter with $878 million of cash, cash equivalents and marketable securities. During the second quarter, we repurchased $21.9 million worth of shares at an average price of $61.62. We believe repurchasing our shares is a valuable use of the incremental cash we generate, above what’s needed to reinvest in the business.

As of September 30, we had $280 million remaining in our existing repurchase program. Now moving on to our outlook. For the third fiscal quarter of 2026, we expect revenue in the range of $180 million to $181 million, representing 7% growth at the midpoint, and we expect adjusted EBITDA in the range of $103 million to $104 million, representing a 57% adjusted EBITDA margin. For the full fiscal year, we now expect revenue in the range of $640 million to $646 million, representing 13% growth at the midpoint. And we now expect adjusted EBITDA in the range of $351 million to $357 million, representing a 55% adjusted EBITDA margin. Our increased outlook is due primarily to the outperformance of our pharma business during the upsell season. We believe this is driven by a couple of factors.

First, our client portal continues to positively influence purchasing decisions. In particular, by leveraging the portal, our agency partners have helped broaden our reach amongst SMB customers, contributing to bookings growth in this cohort of roughly 100% year-over-year in Q2. Second, our multi-module integrated offerings have proven to be a strong fit for the upsell season, as our clients can seamlessly add on to these dynamic programs. These solutions represented over 40% of bookings in Q2, compared to less than 5% of bookings in the same quarter last year. As more clients adopt these integrated programs, we believe it’s led to a smoother and more strategic upsell cycle than in the past. Because these AI optimized programs typically launch in January, customers are able to evaluate results sooner and make incremental buying decisions earlier and more consistently throughout the year.

This has led to a stronger than typical Q2. And as a result, we do not expect as large of a step-up between Q2 and Q3 as we’ve seen in prior years, when upsells were more condensed and year-end weighted. This dynamic is also reflected in our Q3 growth rate. While quarterly revenue growth may fluctuate as we transition to more integrated programs, we believe these offerings are a meaningful step forward for both our clients and our business. We believe the longer time on channel, more strategic spending cadence and AI optimization will provide higher returns for our clients and better predictability for our business long-term. We’re entering the upfront season with strong client engagement and product momentum. At the same time, client discussions suggest some uncertainty over how recent policy changes may influence annual budgets, which are expected to be finalized over the next 2 months.

As a result, we will continue to take a measured approach to the revenue we have yet to book, which is reflected in our implied Q4 guidance. On the expense side, we will continue to invest in AI and expect costs related to developing and powering our AI solutions to increase in the back half of the year. We’re excited to be able to make these meaningful investments in growing our platform, while still maintaining a 55% plus adjusted EBITDA margin in fiscal 2026. We believe our AI suite represents a significant long-term growth opportunity for Doximity and we’re proud to keep building tools that help physicians save time and provide better care for their patients. With that, I will turn it over to the operator for questions.

Q&A Session

Operator: [Operator Instructions] And your first question comes from Brian Peterson with Raymond James.

Brian Peterson: Sorry, the mute button got me again. Congrats guys on the strong quarter. You mentioned some level of uncertainty around the budget discussions. I’m curious — is that specifically related to the budget flush end of the year? Or is that more related to budgets next year? And is there anything that you can say qualitatively about where people may be uncertain?

Anna Bryson: Yes. Thanks for the question, Brian. So as we’re talking about a little bit of uncertainty around budgets, we’re primarily talking about calendar 2026 budgets, which are going to be released in the next 2 months or so. I think the general environment has just slowed down some of these big decisions like the size of annual budgets, and it could be possible we see a little more caution in the upfront cycle because of this. I think one of the things that we’re talking to our clients about is, there are things in play that could be potential tailwinds for our business, but also things in play that could be potential headwinds. So regardless of where budgets end up, I’ll just reemphasize that client engagement with our platform remains very high and especially interest in our integrated programs continues to build really well.

So we feel great about our positioning and our ability to continue to outgrow the market regardless of where those budgets end up this upfront season.

Brian Peterson: Got it. And Jeff, maybe a follow-up for you. Obviously, the product innovation is very clear on what you guys have launched. I’m just curious, as you think about AI and what the opportunity is for Doximity to add value for physicians, how far do you plan on taking that? And as we think about the applications that you may have maybe 5, 10 years from now, is that significantly bigger than what you guys have today?

Jeffrey Tangney: Thanks, Brian, Jeff here. I appreciate the question. The short answer is we’re going to take it all the way. The reality is — we’re really excited that we’ve grown our AI QAUs 50% this last quarter on quarter and that we tripled our number of scribe users. Scribe is a really sticky product and saves doctors a lot of time. And that whole workflow process of having to document a patient visit, ask questions during that visit, we just think it’s a really powerful opportunity that’s ahead of us here. I’ll remind you that we had over 1 million newsfeed users this past quarter, and a lot of them are using that as a jumping end point to come and use our DoxGPT to ask additional questions about what might be new in the news.

And I’ll just say this, we have done now hundreds of side-by-side or head-to-head studies where we’ve asked physicians on a blinded basis to go look at our product and other products out in the market in this AI venture capital-backed landscape. And we’re winning decisively on the quality of our answers and the depth of our answers. I’m particularly excited to announce on this call that we’ve added research solutions as a partner, which allows us to get full access for our doctors to virtually every medical journal over 2,000, not just 2 or 3, and I think that is something that doctors really appreciate, the ability to all on one side, without all the library log-ins and everything else to be able to get right to the source, papers and evidence.

So anyway, we’re really excited about it, and this is an area where I will personally continue to lean in. And again, the team has had great growth here. We’ve got roughly 100 people in our development shop working on this. And the team has just been doing really well. I’m very pleased.

Operator: Your next question comes from the line of Michael Cherny with Leerink Partners.

Michael Cherny: Congrats on a really nice quarter. Maybe if I can just dig in a little bit more on the budgeting question against maybe flip it the other way around. I understand that you’re trying to be reasonable relative to the fact that these budgets can’t be controlled. That being said, in terms of the budgeting process, are you hearing from the clients who you’re engaged with about any changes they’re thinking about making on allocation. I keep thinking back to every data point we seemingly see about a government that is very hostile towards direct-to-consumer advertising and what that could mean for your ability to further gain share above and beyond what you’re already doing. So can you just tell a little bit more about the strategic discussions you’re having, given how engaged you are relative to your clients as they go through their budgeting cycle and figure out where to allocate their dollars.

Perry Gold: Mike, it’s Perry. Just addressing the D2C piece specifically, it’s a little bit early in the process. I know the Trump admin has sent out a bunch of warning and cease and desist letters and some brands are making tweaks to their messaging or kind of revisiting their strategy altogether. I think the tough thing for us right now is this time of year, D2C ad dollars are usually controlled by completely different ad agencies than those that control the HCP dollars. It’s not always the case, but I understand it’s mostly the case. That said, we can share that we’ve had conversations with a few of our largest agency partners about how we can court large D2C ad brands about possibly moving some money our way. But it’s just too early to kind of understand what the ultimate success will be of that.

But I definitely think D2C is one of the many kind of policy uncertainty points that is leading to, I think, a delay in locking in final kind of total budgets for next year.

Operator: Your next question comes from the line of Allen Lutz with Bank of America.

Allen Lutz: I want to stay on the budget flush topic. As we think about the guide for the fiscal third quarter, this calendar fourth quarter and the budget flush expectations, can you talk about what you’re seeing so far? Are you seeing a slowdown in budget flush engagements? Is there something different this year versus last year? I know the direct-to-consumer is under some pressure, but is that impacting or bleeding into the HCP market?

Anna Bryson: Yes. Thanks for the question, Allen. And I just want to take a minute to explain how our transition to more integrated programs have actually helped our clients deploy more of their upsell dollars earlier in the year. So in prior years, when our clients started their annual programs in the spring, and they didn’t have the insights from the client portal, they took a lot more time with their upsell decisions. And that’s where we would see a large amount of incremental dollars deployed over the last 2 to 3 months of the calendar year, which you’re referring to here as budget flush. But this year, with our earlier integrated program starts and our client portal insights, we’ve actually seen our customers have much more conviction in adding on to their programs sooner.

So we instead have seen their upsell dollars more evenly deployed over the last 4 to 6 months of the year. So that’s what led to a much stronger than typical Q2, but it also makes Q3 a more challenging comparison since upsells that usually occurred later in the year historically were actually pulled forward and distributed more evenly across the back half of the calendar year. So because of this transition that we’re seeing in upsell timing, a better way to look at the health of our business for the upsell season, is to focus on the back half growth rate for calendar 2025, which is up about 14% year-over-year. And then just finally on that, I just want to add. Like this is a transition that we’re really excited about. We believe that by helping lead this change in buying behavior on our platform, it will deliver more consistent value to our customers and better predictability for our business long-term.

So the upsell cycle has been really strong for us is totally just a timing component given our newer integrated programs.

Allen Lutz: And then one for Jeff around the AI strategy more broadly. Can you talk about where you are in the process of building adoption? And how should we think about the timing of future revenue contribution from the AI strategy?

Jeffrey Tangney: Yes. So the first thing I’ll say about AI strategy more broadly is that we are using AI a lot in these integrated programs that Anna had mentioned. So now we’re able to just easily optimize the one line item for our clients in these integrated programs that we conduct. 40% of our sales, as Anna said in her prepared remarks, 40% of our sales were integrated programs. These AI optimized programs versus 5% just a year ago. So I could argue that the biggest financial impact on our business to date has been the ability to optimize on behalf of our clients and have this smoother, more consistent revenue flow for us, but also better ROI results for our clients. So I will share that our portal in terms of number of quarterly active client users is up 3x year-on-year.

So we’re having more clients logging in every day, every week, checking on how their programs are doing, comparing against their script lift as they call it, their sales results. And the number of ROI studies we’ve been able to show them as a result is up over 10x what it was pre portal. And that just allows them, again, to see the value of their investments with us on a monthly basis as opposed to only looking at it once a year in September, which has also led to this, I think, shift in behavior throughout the year because instead of just seeing the ROI in September, I’m able to see it in June, July and August as well, which has been great for us. All right. So to the end question about integrating our overall workflow suite. As we shared, we’re up over 300,000 voice and video calls a day.

That is the — our telehealth platform. That’s up from 200,000 last we had announced it. So we’re just seeing continued growth in our telehealth. And I will say that is the most natural place for AI integration because as a doctor doing one of those calls, I do want to use AI scribe to help me take notes on it, and it’s just literally one tap on the screen to go ahead and start taking notes. And then, of course, those notes lead to questions about writing the assessment and plan, which we’re able to help with DoxGPT. And so we’re just in the early innings of that. I think we’re proud that we’ve acquired Pathway. We’ve integrated and launched that, but we’re now just at the start line really in terms of marking that out to our user base. And there’s a lot of places in our platform where we see AI fully integrating.

Operator: Your next question comes from the line of Ryan Daniels with William Blair.

Ryan Daniels: Congrats on the quarter. One I wanted to ask, Anna, you mentioned, I think, the small medium business was up about 100% year-over-year. And I’m curious how you guys are targeting the agency partners to kind of effectively bring them onto the portal and get those smaller clients because it seems like a nice growth driver.

Perry Gold: Ryan, it’s Perry. Yes, so the agency partnership program is still going really well. We’re up over a dozen partners. They’re kind of — I think a big part of why SMB growth was up over 100%. We kind of gave a similar stat last quarter. They are definitely bringing us new clients, and they’re up leveling, I think the business we have with some existing smaller clients. So they’ve been great. And we’re now, I think, nearing something like high — we’re nearing high 7 figures in business that brought our way. I think where we just annualized kind of the launch of this program. And so we’re hoping to continue to scale this. And yes, I think one of the big things that the smaller kind of customers in pharma have found is that with lesser budgets, we basically are able to kind of provide probably tens of thousands of dollars of free value through some of this ROI data, some of this audience creation capabilities.

And so there’s almost, in certain cases, more value for them than maybe the average large customer that maybe has the funding to kind of do some of that stuff on their own, even though I’d argue what we have is much better than the kind of internal teams on some of that. So yes, the SMB growth coming from the agency partners has been tremendous, and we’re excited about where that program can go.

Ryan Daniels: Okay. Perfect. And then, Anna, a follow-up for you really quickly. I just want to make sure I fully understand this. You said the kind of integrated offerings, the multimodal offerings were 40% of bookings this quarter versus only 5% last year. And then I think you said most of those don’t start until 2026. Is that calendar year or — it must be calendar year because you’re in your fiscal year. And wouldn’t that effectively increase your visibility. I know you mentioned kind of some uncertainty in the market heading into 2026, but it seems like you’re actually having better visibility given that metric. So I’d love to hear any color on that.

Anna Bryson: Brian, thanks for the question. And just to clarify, when I said that our integrated offerings represented 40% of our bookings, I was referring to our upsell sales in Q2. So those dollars are impacting revenue in Q2 and Q3. It’s not actually yet impacting revenue for calendar 2026. Now I will add, though, we do believe our integrated will continue to lead our sales. So when it comes to the upfront, we theoretically believe integrated will represent a very similar portion of our upfront cycle, which does give us better visibility. It’s one of the things we’re the most excited about with these programs is they typically start in January. They’re often 12 months, and they’re just one line item. So it’s really easy for our customers to add on to them throughout the upsell season.

So all of those reasons, we believe these programs are better for our business and absolutely better for our clients because it will deliver more consistent returns over a longer period of time.

Operator: Your next question comes from the line of Elizabeth Anderson with Evercore ISI.

Elizabeth Anderson: Congrats on the quarter. Maybe following up on the multimodal question. Is there like — is there a tipping point that clients say, oh, the multimodal is sort of right for me that pushes — that sort of gets them over that hump? And then two, like where do you think that can go over the longer term? Like could 100% of your customers beyond that or 50% or 80% — obviously, more then 50%, but like what I’m saying like where do you see that going over the next couple of years?

Jeffrey Tangney: Elizabeth, this is Jeff. I’ll take that. In short, we think it could grow to be the majority — the vast majority of our business. If you look at Google PMax and what they’re doing, this AI optimization really works. I mean, the results that we’re seeing in the return on investment that we’re able to show our clients each month are meaningful. And the great news is they don’t have to log in every day and make all sorts of little tweaks. The AI is doing that for them and able to do it at just a much more individual level that no human honestly could do on their own. So we’re excited. We think this integrated program or AI optimized programs will become the vast majority of our business, as you’ve seen happen in consumer Internet as well.

Elizabeth Anderson: Got it. And maybe just as a quick follow-up. Sort of how do you think about some of the engagement tools and sort of the ability to — on the AI side and the ability to sell them more on sort of like an enterprise level to the hospital system sort of like you’ve done on dialer and some of that. We’re sort of early in that — I assume we’re early in that evolution, but could you talk a little bit more about that and sort of your early planning there?

Jeffrey Tangney: Yes. Thanks, Elizabeth. I’ll take that, Jeff here. Yes. So as you know, we work with over 300 health systems on our scheduling and telehealth tools. They represent 45% of all U.S. physicians and our programs with them are for all of their physicians at every hospital. And again, this includes all the top names in medicine. And yes, a bunch of them have already signed on to our AI suite. We’re going through that renewal cycle here this quarter. And we expect to have more to speak about this in terms of numbers, I think, in a quarter or 2. But the short answer is they really like our AI tool set. And again, we’re a trusted partner of theirs for many years now. And we have shown them that we know how to handle HIPAA security, their data well and how to be there managing their privacy of their users.

So more on this front as we move ahead, but I will say we do already have top 20 health systems hospitals who purchased our AI suite, and that’s something that they wouldn’t do if they weren’t comfortable with our handling of what they call PHI, their protected health information as they ask these questions and record these visits.

Operator: Your next question comes from the line of Ryan MacDonald with Needham & Company.

Ryan MacDonald: Congrats on a great quarter. Just curious if the Trump Rx and sort of most favored nation pricing topics are starting to come up in conversations with your pharma customers. On one end, we kind of look at it as, obviously, pricing comes down, maybe that pressures margins, but it also greatly expands access to more potential customers and consumers over time. So curious if that’s having any impact in the conversations around budgets as you’re heading into next year?

Perry Gold: Yes. Ryan, it’s Perry. I’m happy to take this one. So right now, this is — it’s really new. The details are kind of limited. The news just hit today. I mean I think on the surface, it appears to be definitely a net positive for our industry and our business. Access to these GLP-1s are extended to Medicare and Medicaid patients funded by the government. I think taking a step back, it’s great for health care in general, cutting out more of the middlemen and all the markups, it’s kind of a hard win for health care. And there’s some downstream positive impacts for American patients to the extent that it helps reduce the downstream health disorders associated with obesity. But in terms of how it’s going to affect upfronts right now, it’s just — it’s really, really recent. So not much we can comment on right there.

Ryan MacDonald: Okay. And then maybe just as a follow-up as you’re getting into upfront season. It’s great to see sort of the continued growth in users on your workflow tools I’m just curious what sort of magnitude of impact you’ve seen from specifically Pathway as it’s been integrated in? And how leverageable is that in your view as you kind of go into those discussions on upfront ahead of next year?

Jeffrey Tangney: This is Jeff. I’ll take that. So Pathway, we are not trying to actively sell or monetize in the marketplace yet. I think that’s the benefit that we have with $91 million in operating cash flow this quarter that we can afford to invest for the longer term and make sure we focus on the physician experience here first. So nothing really meaningful to report on that front yet. But I can tell you there is a lot of client interest. I will say I’m surprised that how a lot of VC cash can create buzz for banner ads again, even though our clients, of course, know that banner ads generally don’t work since doctors don’t pay much attention to them and they’re, frankly, somewhat bearish. But from our end, I will say the thing that we’re most excited about with the Pathway acquisition is that integrated drug reference, which is a really key thing, I think, for physicians using AI.

And as we said in our remarks, we believe we’re unique in the market and having this natural language way of asking drug-related questions that doesn’t require any LLM that allows you to make sure you have peer-reviewed fact-checked answers because others out there do have issues with that. And anyone who tells you they don’t have any hallucinations, well, they’re hallucinating themselves. The reality is that it’s just not how LLMs work. And from our end, we’re really proud to be able to use the Pathway acquisition to provide accurate fast answers to drug questions, which are the most frequent questions that doctors have.

Operator: Your next question comes from the line of Steven Valiquette with Mizuho Securities.

Steven Valiquette: Congrats on the strong results. One of the questions I had, you just sort of half answered, but I’ll — I really just got kind of a multipronged question. First, just on the Doximity litigation with Open Evidence. My sense is you’re probably not too worried about it, otherwise, it would not have really made sense to acquire Pathway since they were also being sued at the same time with your deal back in August. Really, my question is, first of all, did this ongoing litigation have any impact on your purchase price of pathway, which still seems like a very attractive price from the Doximity perspective. And then also with Open Evidence, this is the part you kind of half answered, but they — in their own press releases, they talk — they tout their kind of lock on the historical medical information and content from New England Journal of Medicine and from JAMA.

I’m wondering if that’s a competitive disadvantage for your offering? Or is that something you think you may be able to circumnavigate in some way?

Anna Bryson: Yes. Thanks for the question, Steven. We’re not going to necessarily comment on ongoing litigation. But what I will say from the Pathway acquisition perspective is we did a ton of benchmarking, and we feel as though we got a very reasonable valuation there. And we paid for the best people in the industry, it’s a 6-person team and they have built a corpus of medical knowledge that was second to none. And so we’re really happy with the way the acquisition has nicely folded in with Doximity as well. The speed to be able to integrate Pathway into DoxGPT and have it up and running, working for physicians and having all of these medical journals and licensing has been a game changer for us. So we’re super excited by the acquisition of Pathway, and we think it’s propelled us forward in the AI space.

Jeffrey Tangney: Yes. This is Jeff. I’ll just chime in. Doctors want to be able to access all of the journals, right, not just 2 or 3 of them. So we’re excited about our research solutions partnership and the ability to give doctors exactly that, all the top generals, full PDF access, again, over 2,000.

Operator: Your next question comes from the line of Craig Hettenbach with Morgan Stanley.

Craig Hettenbach: So with AI evolving at such a fast pace, it’s great to see that, that quick integration of Pathway. Jeff, how are you thinking about just organic investment here as well as other tuck-ins as you continue to expand capabilities on the platform?

Jeffrey Tangney: Short answer is we’ll continue to look at both. Again, I’m proud of our team here and what we’ve built, but of course, we’re happy with the Pathway acquisition as well. So we’ll continue to keep eyes open for both. And in the end, our goal is to deliver the best end product for physicians, which I think our 50% growth in quarterly active users in AI is showing we’re doing well.

Craig Hettenbach: Got it. And then just switching gears on the video module front. How are you thinking about kind of additional video content and just the runway for growth that you’re seeing for those products?

Jeffrey Tangney: That’s a part of the AI question because, of course, the ability to create AI short-form videos is something we hope will be a real unlock for our clients because we do have a lot of video inventory in our newsfeed and in our telehealth workflow services. And we do see that it does perform very well. I mean all else equal, the ability to show molecular diagram, a chart, it really is a faster, easier way to learn. So we’re excited to get more video content on our platform, and it’s continued to perform very well for us.

Operator: Your next question comes from the line of Jessica Tassan with Piper Sandler.

Derek Gross: This is actually Derek Gross on for Jess Tassan. Could you tell us what your market share is in clinical reference? And would you characterize DoxGPT as focused on any particular specialty or type of medicine, for example, focus on drug interaction, physical medicine or oncology? Or is it more broad-based? And then what are the input sources that Pathway can ingest? Does it have the ability to review patient-specific records or cases?

Jeffrey Tangney: Yes, this is Jeff, I’ll take that. We don’t know our market share in clinical reference. I’m not certain anyone really does I can tell you the leader by far is a publisher that’s been in the market for over 25 years. And we have a lot of respect for that player. And candidly, I think we are taking appropriate cautions again to make sure that we have active answers as we come here. And again, we’re very proud that our integrated drug reference gives fully accurate peer-reviewed, physician-reviewed answers to really the most important questions in medicine. Of course, this does harken back to my Epocrates background, which was a company I founded back in my dorm room in 2000 and worked at for 10 years. I can tell you the clinical reference base is an important space for us, but it’s one we’re fairly new in, but we’re excited to lean into it and as I said in response to one of our earlier questions, our plan is to win this one, and lean in all the way.

We’re excited about what AI really enables doctors to do, which it didn’t do before, which is the ability to just pull up their phone where they already have our app and ask national language questions and get peer-reviewed answers.

Operator: Your next question comes from the line of Brian Tanquilut with Jefferies.

Brian Tanquilut: Congrats on the quarter. Just as I think of your current suite of tools that you offer to physicians, how much runway left do you think is there in terms of monetizing that physician attention? Or maybe ask differently, is the battle now just still winning contracts? Or is it to fill up that space in pharma ads? I mean, how should we be thinking about kind of like what inning we’re in here?

Jeffrey Tangney: Yes, this is Jeff. I’ll take that. So first, I’ll say that we’re pacing ahead of last year in terms of our new contract activity in the month of October. So we continue to see good growth in the business. And at the end of the day, as we said in our S-1 a few years back, it all comes back to what is the return on investment for our clients. And as I said a moment ago, we’re excited that we were able to show over 10x as many ROI studies for our clients. And let’s just say that they’re getting many times their money back in what they invest with us. The good news for us is we don’t need to go get that many brand-new clients to continue to grow with an NRR of 118%, right? So obviously, our clients are still coming — spending more with us, right? Our same-store sales are up 18% year-on-year. And again, with the ROIs that we’re showing our clients, we still believe we’re in the early innings here.

Operator: Your next question comes from the line of Stan Berenshteyn with Wells Fargo Securities.

Stanislav Berenshteyn: You called out increasing investment in the back half of the year. How should we think about R&D expenses I guess beyond this year? Do you expect a more meaningful acceleration as you’re working on these AI tools?

Anna Bryson: Yes. Thanks for the question, Stan. I’ll say it’s too soon to give longer-term guidance on expenses and investments. Like right now, we’re still learning how much investment we’ll need to build and power AI solutions. But at the same time, we’re also learning how much savings we’ll have as a company associated with our own internal AI initiatives. And the other comment I’ll make on the back half investments, the ramp we’re seeing today pertains to being in the launch phase for a lot of these AI products. So we’re spending on getting the solutions built and powered and marketed. And so I’d imagine the spend curve here plateaus as scale efficiencies kick in over time. So I would not necessarily look at the expense growth that we’ve seen in the back half of the year and carry that forward.

I think like many other parts of our business like we will first launch telehealth, we do see an expense boost at first. And then over time, that will plateau and we’ll continue to have savings on the AI side. So when it comes to margins, there’s no reason for us to believe even with these investments, margins will look materially different from where they are today at over 55% for the year.

Stanislav Berenshteyn: Got it. Helpful. And then one quick one. On the modules that represented 40% of bookings. Can you just remind us specifically what these modules are?

Jeffrey Tangney: This is Jeff. It’s really not the modules that are 40% of bookings. It’s the integrated programs, which are the AI optimized programs, which allows us to go and optimize which modules are used for each client, for each product. So being able to seamlessly transition between a news article and a video card or in our scheduling channel versus our telehealth channel versus our newsfeed channel. So again, being able to optimize that on our end, it’s sort of like Google PMax, if you’ve heard of that. It’s the ability to have our clients have to do less of that sort of shifting and optimization ourselves, we’re able to orchestrate it for them. And again, we’ve seen that we’re able to deliver really strong results by having that greater level of trust and control from our clients.

Operator: Your next question comes from the line of Scott Schoenhaus with KeyBanc.

Scott Schoenhaus: Congrats on the quarter, and I apologize if this was already asked. But it seems like you took more market share this quarter than the industry. Typically, you say you can take double the market share, but it seems you outperform that stat. Is that true? What was driving that? Was it more on the self-service portal you see outsized growth? And then in the context of your back half guidance, how are you contemplating the market share dynamics versus the industry?

Anna Bryson: Yes. Thanks for the question, Scott. I mean when it comes to our business, because our clients think about their budgets from an annual perspective, the best way to think about the health of our business is on an annual basis. So if we look at calendar year 2025 growth rate, we grew about 15%, which is a little over 2x the market growth rate. Our best estimate to start the year was that the market would grow about 5% to 7%. We think things have been marginally better, so maybe closer to that 7%. So we have continued to grow at 2x the market growth rate for the year. I wouldn’t take any one quarter and make an assumption based on that quarter, especially as we’re seeing this transition towards more integrated programs, which have smoothed out our upsell cycle quite a bit.

As we look out to next year, we have no reason to believe that market growth rate isn’t somewhat similar. But one of the great things over the last 2 years is we’ve seen a lot of stability in our customers’ budget growth. Like it comes in within a range, and there are certainly puts and takes on that range. As we’ve talked about, there’s certainly potential tailwinds and some potential headwinds. But we feel great about our competitive position. And as Jeff mentioned, we’re already pacing ahead of last year’s upfront. So we believe that we can continue to grow at that 2x market rate as we’ve shown over the last 5 to 7 years or so.

Operator: Your next question comes from the line of David Roman with Goldman Sachs.

David Roman: You answered in a prior question on the diversification of growth drivers on AI within the provider space. But could you maybe go into a little bit more detail about the contribution that health systems are having to the growth rate and how you see that opportunity unfolding on a go-forward basis?

Anna Bryson: Yes. Thanks for the question, David. And so while our pharma business does continue to lead our growth, we’ve definitely seen some strength in our health system business, particularly in 2 areas, one being our enterprise offering and the other being our recruiting solution. So our enterprise business is actually one of our fastest-growing businesses at Doximity, and we’re seeing a lot of really strong paid adoption of our on-call scheduling tool. And as Jeff mentioned earlier, we have a whole another vector here to add on our AI tools as well and package that with our on-call scheduling and our telehealth tools and sell them to enterprises. So we believe we have a long room for growth there. On the recruiting business, we’ve had a strong year so far.

You can see that in other revenue broken out in our 10-Q. It’s primarily curative. That’s about 25% year-over-year in Q2. So we’re also seeing strength on the recruiting side. So we’re really encouraged that despite the budget challenges that these health systems are facing in this environment, they continue to come to Doximity. And we think that health systems can absolutely be a long-term growth driver for us.

David Roman: And maybe even thinking beyond health systems. I mean, I think we all appreciate why there’s such a significant focus on the biopharma side. But as we’re starting to see companies in the medical device industry, for example, starting to focus a lot more on direct-to-consumer advertising and bridging more into the PCP channel. To what extent does that become an incremental growth driver as you look forward that may help offset some of the volatility that may continue to occur on policy-related changes in pharma budgets.

Perry Gold: David, it’s Perry. Yes, medical devices is an interesting one. It’s one where we’ve always had some focus. It’s on a relative basis, a lot smaller than pharma and some of these health system opportunities. But we do have a consistent presence there. That is a space that is kind of hard to believe is probably even further behind in terms of adoption of digital and pharma. We have some significant clients there. We are focused on it, but I wouldn’t say that it’s the type of opportunity that right now is going to be a significant contributor to growth, but definitely one that we’re focused on and have a consistent presence in.

Operator: Your next question comes from the line of Eric Percher with Nephron Research.

Eric Percher: I appreciate you’ve been talking about the change in purchasing patterns for over a year. And I think you’ve trained us to expect that budgets are more disciplined. I wanted to ask, as you saw that change, has it been over what we heard a lot about last year, has it been over multiple years? And is it uniform at this point across your 121 accounts above $500,000? Or are we seeing that there are some that are getting discipline versus flush this year and that weighs on Q4, but maybe helps next year.

Anna Bryson: Yes. Thanks for the question, Eric. So we have started selling these integrated programs at scale, I would say, last Q3, so our last annual upfront buying season. And we definitely saw a lot of traction and we’ve now seen continued traction. We started at first with more of our largest clients. So it’s a great fit last upfront season for our top 20 clients because they’re already buying a lot on Doximity and they’re comfortable committing to longer on channel and more consistent spend. Now though we are seeing more interest in mid-tier and SMB to get into these programs, which we think is a great indication that the health of our business is broad-based. As we mentioned on the prepared remarks, we had 100% growth in our SMB business.

And so we’re seeing a lot more customers lean into these integrated programs and be willing to commit to longer on channel and more even spending cadence because the optimization provides stronger returns. The customers love that they’re just buying one line item of Doximity, and we’re optimizing for them across the newsfeed and across workflow and maybe one day across AI, and our customers love that we’re doing the work there, and we’re giving them stronger returns because of it. So we definitely believe we’re going to continue to see that traction there even amongst the smaller customers.

Eric Percher: And what follows is the portal side of things? Is there an acceleration from the portal that slows? Or are you still ramping on that benefit?

Perry Gold: Yes, Eric, it’s Perry. So the portal is doing great. I think Jeff alluded to it earlier. But — when you look at the number of brand and agency users and how that compares with last year, it’s more than tripled. So not only do we have all the brands on — or the vast majority of the brands on now, but they’re kind of coming in more and more often and getting, I think, a lot of value out of the solution. So I think there’s still room to go there. The portal continues to increase sales productivity, improved conversion rates lead to faster upsells. And it improves our ability to respond to pricing push faster. And all brands continue to benefit from seeing ROI much more often and Jeff alluded to that as well. But when you’re talking about more than 10x increase in the amount of these studies we’re putting out.

So more and more brands seeing data points more and more often. That is a big influence, I think, on the proclivity to kind of come back and give us more money and to kind of get us that money back faster. So I think even though we don’t talk about the portal as much in the prepared remarks anymore, there’s still a lot of work going on there. There’s still a lot of opportunity. So we’re very happy with the progress we’ve made to date.

Operator: Your next question comes from the line of David Larsen with BTIG.

Jenny Shen: This is Jenny Shen on for David. Congrats on the quarter. I was wondering if you could just speak more about your relationship and your technologies relationship with some of the large pharma CRMs like Veeva and Salesforce IQVIA. Does the new portal and your solutions kind of integrate into them? Do they complement each other? Or are you more competitors?

Jeffrey Tangney: This is Jeff. I’ll take that. I think it’s complementary. We’ve worked with Veeva for years and have a good relationship with them and continue to work with them a lot. We don’t work with Salesforce as much. Frankly, they just don’t have many clients in this space. But yes, we continue to work well with Veeva. And no, I think what we’re doing is really completely different. We’re in our portal able to show what happens on the digital marketing side. And of course, Veeva has historically focused more on in-person sales. And increasingly, those are 2 kind of separate groups as more and more doctors become what they call no-see physicians or don’t see reps.

Operator: Your next question comes from the line of Jailendra Singh with Truist Securities.

Jenny Cao: This is Jenny Cao on for Jailendra. I just wanted to build on the competitive landscape conversation earlier. So as we’re seeing more players enter the HCP engagement space, not just open evidence, but others each with their own base of physicians and their way of engaging. At the same time, we know pharma shift to DTC from DTC to HCP could expand the pie, but it just feels like a lot of competition for physician mind share is intensified. Just curious how you see the competitive landscape evolving as more platforms target HCP marketing budgets?

Anna Bryson: Yes. Thanks for the question. I think I’ll just point back to our results. As our results clearly show, we continue to gain share nicely within the digital HCP market. We’ve had another year of growing at about 2x the market growth rate. I think what’s unique about Doximity is we do offer a unique suite of native solutions to our customers, that’s delivering industry-leading ROI. We’ve seen clients experiment with alternatives in the past like programmatic or display media. History has shown that over time, our clients consistently lean into where the ROI is, and given Doximity’s large feature-rich platform, the record engagement levels that we’re seeing, and the exciting advancements in our own AI suite, which we believe we’re really well positioned to continue to deliver best-in-class ROI for our customers, and that’s going to, in turn, allow us to continue to outgrow the market rate.

Operator: Ladies and gentlemen, that does conclude our question-and-answer session. I will now turn the conference back over to Jeff for closing comments.

Jeffrey Tangney: I’d like to thank — I’d like to end by again thanking the entire Doximity team for working so hard and so efficiently to serve more doctors than ever before. Thank you, everyone, for joining.

Operator: Ladies and gentlemen, that does conclude today’s conference call. Thank you for your participation. You may now disconnect.