Doximity's stock plunged 23% following Q4 results as investors were spooked by cautious near-term AI revenue guidance and margin pressure linked to elevated AI-related investments, despite solid engagement growth.
- Q4 revenue grew 5% year-over-year to $145 million; full-year revenue advanced 13% to $645 million.
- Adjusted EBITDA margins compressed to 45% in Q4 from 55% in the full year; management flagged increased R&D, compute, and marketing expenses tied to AI initiatives.
- Free cash flow hit a record $107 million in Q4, contributing to a 19% year-over-year increase in annual free cash flow to $317 million.
- AI engagement accelerated significantly with 800,000 unique quarterly active prescribers (+30% YoY), half of whom used AI tools, but monetization remains nascent with minimal AI revenue anticipated this fiscal year.
- Management emphasized an AI investment year strategy, increasing spending to build long-term AI capabilities and product offerings, but market reaction reflects concern over near-term profitability and cautious AI revenue outlook.
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