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Hello, and welcome to Doximity, Inc.'s fiscal 2025 third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Perry Gold, Investor Relations. You may begin.

Thank you, operator. Hello, and welcome to Doximity, Inc.'s fiscal 2025 third quarter earnings call. With me on the call today are Jeff Tangney, cofounder and CEO of Doximity, Inc., Dr. Nate Gross, cofounder and CSO, 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-Ks. 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-Ks, any subsequent Form 10-Qs, and any 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, February 6th, 2025. Of note, it is Doximity, Inc.'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 comparable 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 one-time in nature, and we may or may not provide updates on these metrics in the future. I would now like to turn the call over to our CEO and cofounder, Jeff Tangney.

Thanks, Perry, and thank you everyone for joining our third quarter earnings call. We have three updates today, our financials, network growth, and commercial highlights. First, our top line. We delivered $169 million in revenue for the third quarter of our fiscal 2025, which represents 25% year-on-year growth and a 10% beat from the high end of our guidance range. Of note, our top twenty clients once again grew the fastest for us, up 122% on a trailing twelve-month basis. These clients are the largest, most sophisticated pharma companies who employ entire teams of analysts to measure their marketing effectiveness. We believe our continued growth with them is proof of our value to the broader marketplace. Our bottom line was also strong in Q3, with a record adjusted EBITDA margin of 61%, or $102 million, which was up 39% year-on-year and 21% above the high end of our guidance. So just two years after our first quarter with nine figures in revenue, we've now achieved nine figures in adjusted EBITDA. So that's our Q3 financial highlights. A 10% beat, a 5% raise, and 61% margins. Okay. Turning now to our network growth and engagement. Our unique active users on a quarterly, monthly, and weekly basis all hit fresh highs in Q3 with double-digit percent growth year-on-year. Our news feed usage continued to lead the way for us. For the first time ever in Q3, more than one million unique active prescribers scrolled our feed to stay current on the latest news in their fields. Our workflow tools also hit new highs in Q3, with over 610,000 unique active prescribers. As a reminder, our workflow tools include our telehealth, fax, scheduling, and AI tools. Our AI tools grew the fastest in Q3 with over 1.8 million prompts. Outperforming Microsoft Teams,

Thanks, Jeff, and thanks to everyone on the call today. Third quarter revenue grew to $168.6 million, up 25% 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 117% on a trailing twelve-month basis. Our top twenty customers remained our fastest growing, with a net revenue retention rate of 122%. We ended the quarter with 114 customers contributing at least $500,000 each in subscription-based revenue on a trailing twelve-month basis. This is a 21% increase from the 94 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 third quarter was 93%, flat versus the prior year period. Adjusted EBITDA for the third quarter was $102 million and adjusted EBITDA margin was 61%. Compared to $73.3 million and a 54% margin in the prior year period. This represents adjusted EBITDA growth of 39% year over year as we continue to run a very profitable business with high incremental margins. Now turning to our balance sheet, cash flow, and an update on our share repurchase program. We generated free cash flow in the third quarter of $63.4 million compared to $48.7 million in the prior year period, an increase of 30% year over year. We ended the quarter with $845 million of cash, cash equivalents, and marketable securities. During the third quarter, we repurchased $19.2 million worth of shares at an average price of $48.62. 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 December 31st, we had $451 million remaining in our existing repurchase program. Now I'll turn to a recap of our annual buying season. As a reminder, our December quarter represents our largest quarter by a significant amount. This is when our pharma customers sign on for next year's programs. Committing the majority of their annual marketing budgets in what are called upfront contracts. While we signed these contracts in Q3, we'll primarily recognize revenue over the next twelve months. Depending on the timing of program launches. This upfront season, our clients continue to expand their reach across our entire platform. Our modules that sit outside of the news feed point of care and formulary, grew by more than 100% year over year combined. We also sold a large number of programs on a multi-module integrated contributed to much larger deal sizes. Brands buying these integrated offerings grew more than twice as fast as brands buying our modules on a standalone basis. Finally, our upfront season demonstrated that there is still plenty of room for growth among our hundreds of pharma brand partners. We increased the number of $10 million plus brands to four and had our first ever $15 million plus brand. With record prescriber engagement and continued commercial product innovation, we see ample runway to further scale our partnerships over time. Now moving on to our outlook. For the fourth fiscal quarter of 2025, we expect revenue in the range of $132.5 to $133.5 million. Representing 13% growth at the midpoint. And we expect adjusted EBITDA in the range of $62.5 to $63.5 million, representing a 47% adjusted EBITDA margin. For the full fiscal year, we now expect revenue in the range of $564.6 to $565.6 million. Representing 19% growth at the midpoint. This is an increase of roughly 5% or $28 million at the midpoint. After outperforming our Q3 guidance by roughly $16 million. We now expect adjusted EBITDA in the range of $306.6 to $307.6 million representing a 54% adjusted EBITDA margin. This is an increase of roughly 11% or $31 million at the midpoint after outperforming our Q3 guidance by roughly $19 million. Our increased annual outlook is due to a variety of factors. First, our former year-end upsells materially outperformed driving stronger than anticipated Q3 revenue. Second, our annual buying cycle exceeded expectations, due primarily to new product traction and larger multi-module integrated programs. Finally, the structure of these integrated programs led to a higher percentage of January launches than prior years. These programs are contracted to start at the beginning of the year with the client's first content approved module. Well, we're excited to help our customers go live faster. This launch efficiency also means annual upfront sales, are converting to Q4 revenue at a faster pace. As a result, more of our upfront sales will be recognized as revenue in the current fiscal year than in years past. Looking ahead, we expect the pharma HCP digital market to continue to grow roughly 5 to 7%. While we will provide our fiscal 2026 guidance in May, our goal remains to grow ahead of the overall market. Given our strong competitive positioning and record engagement, we believe we are well positioned for another year of share gains. With that, I will turn it over to the operator for questions. Thank you. If you would like to ask a question, please press. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Thank you. Your first question comes from Brian Peterson with Raymond James. Your line is open.

Thank you. Congrats on a really, really strong quarter. So I'd love to get any perspective on the 50% of customers that you have on the portal today that aren't on the versus those that aren't on the portal. Is there anything that you could say about how their kind of mid-year and end-of-year buying patterns compared to those that aren't? Any commonality in terms of what you saw in terms of their buying into fiscal year 2026.

Hi, Brian. This is Jeff. Yeah. Great question. You know, as we said in our last quarterly earnings call, we have seen higher growth from our portal clients and continue. So, yeah, it's about half of our clients that we've trained on it today. Again, we expect to roll out to all of our clients this year. We've rolled out to our entire sales and service team just a couple weeks ago. So we're excited to have the portal out in the hands of more folks because it allows them to see our return on investment on a monthly basis. Right? We're pulling in this IQVIA data, that shows them their share lift and their results. And allows them to strategically look at what's working, what's not working, make more course corrections along the way. So hope that answers your question.

Well, I appreciate the color, Jeff. And maybe, Anna, one for you. Just the 60% I guess 61% EBITDA margins this quarter seem much higher than expected. Any way to help kind of balance with our models in terms of how you're thinking about generating incremental profitability versus investing in growth. Thanks, guys.

Yeah. Thanks for the question, Brian. So as you noted, we did a very strong quarter in Q3 with material upsell outperformance. And given the nature of our business model, almost all of that top line outperformance flows through to the bottom line. So I would not take that one quarter and think we're a 60% plus margin business now. And the similar to revenue, there are quarterly variations in EBITDA. So we encourage you to look at our annual EBITDA margin as the best representation of our business. Which is at 54% for this fiscal year.

The next question comes from Glenn Santangelo with Jefferies. Your line is open.

Yeah. Thanks for taking my question. Hey, Jeff. I think we're all trying to figure out what's really driving this momentum. And I think in your prepared remarks, you said that the new product drove 20% of your sales this quarter, if I heard that correctly. And what I'm I guess, what I'm kinda curious about is when you think about these new products and these multi-module integrated programs, is that really what's driving the strength or is it more the fact that you're rolling the portal out to these, you know, these your brand partners, obviously, these agencies and maybe that's where we're seeing the uptake. And I'm guessing it's kind of a combination of both. But if you could, in any way, sort of elaborate on those two dynamics and how they're contributing to your operating momentum, I think that'd be helpful.

Think no. It's a good question. And I think it is a it's a one-two punch. Think, that we have here where during the midyear where budgets are smaller and clients want efficient I think our portal really shines. It's easier to transact and do a $100,000 know, quick program with us through our portal. But at the end of the year, we've always done well because that's the one time a year that clients sit down and they have their half-day budget planning and partnership meetings, and they look at their return on investment. Which we traditionally have performed very well in, and they make their big longer-term commitment. But I think our integrated programs did particularly well during this past you know, year-end budget cycle. Because our clients realize that we have a lot of insights to doc and when they work from home and what types of content they prefer. Do they like, you know, acronyms referring to studies? Are they more nerdy, or do they just want, you know, a quick skim of the guidelines and the changes? So we did our pharma advisory board last May, and I remember the top voted item coming out of that advisory board with forty of our clients top clients there was to help them with these integrated programs and help them optimize, use our AI, our machine learning to go and optimize their programs for them. So short answer is think our portal's helping most during the upsell season and our inner integrated programs really helped a lot during this last upfront season.

Alright. Thanks for all the details, and congrats, Jeff. And team.

The next question comes from Ryan Daniels of William Blair. Your line is open.

Yeah. Thanks for taking the questions and congrats on the outstanding quarter. Anna, maybe one for you. You talked about the larger multi-modal integrated programs launching near the start of the calendar year. I'm curious how that might change the seasonality of revenue recognition. I guess I don't wanna get too far ahead of ourselves in our models as it seems like this could change the cadence of quarterly sales a bit versus what we've seen in the past. So any color there.

Yeah. Thanks for the question, Ryan. And, you know, I'll take the opportunity. I'll also here to talk a little bit more about how these programs work Jeff just hit on it a little bit, but as he said, you know, our clients expressed an interest in a more flexible and dynamic offering to their across our multiple formats and channels. And so we just search trialing some of these multi-module integrated programs last season, which we talked about about a year ago, but this year, we rolled out these offerings to a much larger number of our top clients. And we saw really great traction. And so as far as, like, visibility is concerned, these programs are typically twelve months in length. They're contracted to start in January. They're contracted to start with whichever module has the first available content. So for example, if a client is buying an integrated program with news, video, and point of care in it, and both the news and video modules have preapproved content. But the point of care does not, we'll start their program by launching and optimizing the news and video module while we work on that point of care content in the background. Our customers love the speed to launch. They love the multi-module flexibility this provides. And then for us, we obviously love the larger and longer deals. The better revenue predictability, it really is a win-win across the board. As far as seasonality, I think as we move more customers into these programs, we could certainly see a more consistent revenue curve year to year. Than we've seen over the past few years. And that's definitely our aim as we continue to sell these programs over time.

Okay. Super helpful color. And then as a follow-up maybe for Jeff or Nate, we've seen a lot of data recently about NPs and PAs really starting to write as many as if not more scripts than physicians. So I'm curious if you can talk a little bit about how you target that market. I know you launched a NP navigator in October, but just more broadly, how do you target NPs and PAs? And is that a big growth opportunity, or are you already capitalizing there? Thanks.

Thanks, Ryan. Yeah. This is Jeff. I'll answer that question. So, you know, we've announced we're over 60% of all nurse practitioners in the country as members. And we're proud of our growth there. In fact, it is one of our internal growth goals this year to keep growing that percentage. We just hosted out here our first ever nurse practitioner advisory board where we had over a hundred NPs in to come in and tell us about what they want from our product. I won't bore you with all of it, but I will say they love our workload tool. The ability to call patients from their cell phones from wherever they are, the ability to handle faxes with the pharmacies, the ability to use our GPT to write patient prior off letters, all those things they are really strong users of and we've done very well with them. Interestingly, they're a little less proud of their resumes, the CVs. So the more LinkedIn style functionality, I think, is up not as frequently used by them. But, again, our workflow tools have been really popular, and we look forward to more growth there.

Great. Thank you so much.

The next question comes from Ryan MacDonald with Needham. Your line is open.

Thanks for taking my questions. Ryan on for Scott. You've now had consecutive quarters of 100% plus year over year growth on point of care and formulary. You just talk about sort of the runway here for these products and maybe what the penetration looks like after the most recent couple of strong quarters here within the overall customer base? Thanks.

Sure. Thanks for the question, Ryan. And, yeah, you know, as Jeff mentioned, from new products in the quarter. So we really are starting to see very strong traction there with consecutive quarters of over 100% year on year growth. Even with that, I do think we are in the early innings of this opportunity. Between the engagement we see in our workflow channel, and the unmonetized white space we firmly believe that our workflow modules could become on par with our news feed over the next three to five years and definitely a key driver of our incremental growth.

Excellent. And then maybe as a follow-up, you see noted ten new agency partners that have been signed up and the training for those is just going to start here in the next few weeks. How should we think about the continuing of the ramping process not only of sort of getting those agency partners trained and sort of kind of more actively using the portal, but then the sort of the magnitude of the ramp of adding an incremental agency partners as we look ahead into fiscal 2026. Thanks.

Yeah. This is Jeff. I'll take that. Yeah. I look forward to our summit coming up in New York City to go through this with our agency partners. And, yeah, they're excited to come too because we make them look smart. Mean, all else equal, we're giving them insights that really do help inform their strategies and be more strategic with their end client. Which is a win-win really all around. I can share, you know, on the last call we shared that we had had referrals already with six-figure, new clients. That continues and our SMB growth over this past quarter was also stronger than it had been previously. So some of that we do credit to these agency partners, and in fact, it's a couple weeks ago, we had one of these agency partners bring us a new half a million dollar client, which is great to see. Again, from our point of view, this is just us helping our agency partners look smart, helping them be more creative, develop better creative, and today, most of our content is being created in the portal and so we're really creating, I think, a more seamless, less email-centric way of working with our partners. So we're excited to do more of that, and I think you know, down the road, you're right. There are you know, there's the big seven, now it's the big six, major agencies out there. There's lots of smaller agencies that serve the medical space well. I don't know exactly how many we will have in our portal partner program in a year, but will certainly be more than the ten we have today.

Excellent. Thanks. Congrats again.

The next question comes from Elizabeth Anderson with Evercore ISI. Your line is open. Hey, guys. Congrats on the nice quarter and thanks for the question. Maybe just a follow-up to the last one, like, how do you kind of see that sort of agency, non-agency direct client split evolving over time. I mean, honestly obviously, it's still fairly early days, but just sort of any early learnings you can help us point to that direction to kind of understand the longer-term opportunity there.

Yeah. Thanks, Elizabeth. Yeah. So to be clear, none of these agencies are resellers. We're not letting them do any principal buying or some of the other things you might hear of with others. You know, we still maintain a direct relationship. With the end client. And, again, we have earned a seat at that, you know, strategic table as they're thinking about their they call their HCP, their health care professional strategy and message. But I do think there's a lot of data that we can use to help inform, again, their they're creative folks who are experts in their clinical areas. Again have this symbiosis where I think they look to us to provide them data insights, and we look to them to provide us new intros maybe to that longer tail of clients that are frankly hard for us to reach on our own.

That's very helpful. Thank you.

The next question comes from Richard Close of Canaccord Genuity. Your line is open.

Yes. Thanks for the questions. Congratulations on a great great quarter. Jeff, I was wondering if you could give us any updates. Obviously, we got the point of care in the formulary here. These new products. But any thoughts on future road map of products? And then I had a follow-up for Anna. If you could talk about AI internally, how that's driving margins.

Sure. Thanks, Richard. This is Jeff. I'll answer by saying AI as well. So we're really proud of that 1.8 million prompts we did last quarter, up 60% quarter on quarter. And you know, we're about to host our 150 physician medical advisory board here in a few weeks. And as I look at the docket of the new product ideas we're going over with our physicians, there's a lot of excitement about what AI can do to help doctors save time, provide better care, so we're really leaning on that, and I think that's an area where today we have zero monetization and a lot of opportunity. Anna?

Hey, Richard. Thanks for the question on AI. Yeah. You know, we do believe AI has helped facilitate margin expansion for us at Doximity, Inc. We've definitely been leaning into it internally. For a year or two now. Just for some examples, like, for G&A, we're utilizing AI for sales forecasting, your data entry, getting contracts, etcetera. You know, R&D team uses AI turbocharged programming, they use it for knowledge sharing, data analysis, and all in all, we think about AI as very additive to our overall team, and we're very fortunate that our team is really embracing it. So it definitely has been a factor in the margin expansion we've seen over the last year to 54%.

Okay. Thank you.

The next question comes from Scott Schoenhaus with KeyBanc. Your line is open. Scott, perhaps your line is on mute.

Sorry about that. Congrats on the momentum, and thanks for taking my question. Anna, I believe you noticed ten million plus brands to four. Million plus brand I'm a module integrated program side. So how should we think of the revenue opportunities on your platform going forward? From these launches. I mean, you should be seeing larger budget unlocks throughout the year calling revenues versus year past. Thanks.

Hi, Scott. I apologize. You were cutting out a little bit. Do you mind just quickly repeating the question? Sorry. Yeah.

My question, basically, is you have now all these larger and larger multimillion dollar brands. You just announced another first ever $15 million plus brand. How should we think about the revenue opportunities throughout the year and the budget unlocks both in the midyear and at the year-end versus years past. Thanks.

Sure. I'm happy to talk a little bit more about our larger brands. Just to put this in context to you as a reminder, we had our first ever $10 million plus brand only two years ago. And so now today, we have four $10 million plus brands it's ever $15 million plus grand. So we certainly, every year, continue to reach new milestones with our brand partners and we see no limit yet to how much a brand is willing to invest in Doximity, Inc. As far as what this means for upsell season and the rest of the year, I think it's just way too soon for us to tell. We certainly had strong upfront we had strong upfront commitment, especially with regards to our integrated program. But it's just too soon for us to comment further as to what this could mean for the upsell season.

The next question comes from Allen Lutz of Bank of America. Your line is open.

Good afternoon, and thanks for taking the questions. One for Jeff or Nate. You talked about the 1.8 million AI prompts that was up 60% quarter over quarter. Could you just walk through an example or two of kinda what these AI prompts are doing, how doctors are using the tools? And then is there any way you can quantify maybe how much this is adding time to how much time doctors are spending on the platform. Thanks.

Hey, Alan. This is Nate. Yeah. We had 1.8 million prompts submitted in the last quarter by doctors, which is a number we're excited about as it continues to grow. And we've become a leader in the applied AI in the clinical setting space. And as we continue to invest, we're excited by what's possible. So when we've surveyed and interviewed our doctors, they told us that they think they can save around thirteen hours a week using AI tools. And that's a pretty massive unlock or really salvation their workloads only continue to increase. So what exactly are they doing? Well, so far, our tools are already assisting with things like answering common questions, that patients might have, letters for patients, insurance companies has been a big hit having letters and proof processes like prior authorization appeals. Colleague communications, even at certain times of year, first drafts of letters of recommendation for trainees. And when we ask doctors what they wanna prioritize, it's no surprise that their top interests are around things that have to do with reducing administrative burden because there's a lot of time-consuming tasks that these doctors have to do. Let's today, it's just paperwork and faxing. And those are the kind of things that not only can we them generate, but we can then connect into our existing workflow efficiency tools like faxing, so that it can involve to entirely new use cases as our member is still with us.

Thank you for that. And then one for Anna. In the prepared remarks, you talked about the digital market still growing 5 to 7%. As we think about the results that you've put out over the past two or three quarters. Has the end market improved at all, or is Doximity, Inc. just taking more share here? Really trying to understand if the market even modestly is improving and just kinda can you talk about what you're seeing there at kind of the market level? Thanks.

Sure. Thanks for the question, Alan. Yeah. You know, as we've looked at market growth over the past few years, we've definitely seen a lot more stability. When we think about that 5 to 7% range, that we gave for calendar year 2024, it's likely probably in the higher end of that range. We certainly did see a little bit of marginal improvement. But the majority of our outperformance was due to share gains. So we were able to take quite a bit of share. I think there was a little bit of a slight to quality this year, and we were able to really provide our clients with better insights on ROI, and audience analysis through our portal, and our new products really started to take off. So I would say the majority of our growth this year was led by share gains. In fact, you know, we outperformed the market likely by about 3x this year, which if you look at historically, where we've seen outperformance, it's typically been closer to 2x. As we look ahead, you know, the level of outperformance we saw this past year is not something we necessarily expect to continue. You know, a lot of things would really write for us this year, but we think it's a little bit more of an outlier as opposed to the norm. We think it's probably more likely that going forward, we'll see something more like our historical norm of 2x the market growth rate.

Great. Thanks, Anna.

The next question comes from Michael Cherny with Leerink Partners. Your line is open. Maybe if I can build on Alan's question a bit and ask the forward-looking question without actually asking for 2026 guidance. You know, when you think about what you saw in 2024 in the flight to quality dynamic. How much of that do you think was also macro-oriented by the volatility in certain channels changing. And as you think about where we sit right now with the potential for a head of HHS that is anti-DTC advertising, some of the other macro elements moving around on you how does that factor into where you see the puts and takes both on market growth and your positioning within the market.

Hey. This is Nate. So what I can say about B2C effects is it's still early. You know, there's a lot of things that have been said, but priorities with a clear path to implementation have yet to be set. So know, some of the talk that is bubbled up on D2C or TV advertising could the less likely is in terms of a full band because there'd be a lot of hurdles to overcome along. Middle ground regulations thus far seem like they could be more feasible, such as conversations around pricing disclosures and transparency around pricing and D2C advertisements. Right. In general, I think a lot of what's being discussed will whole well look with doctors. Doctors don't like being on the receiving end of a lot of requests that have come from commercials. That said, I think from administration strategies, again, it's just too early to make calls, and we're not basing our strategies on hopes of administrative change. We're just focused on what we do best today with our clients.

The next question comes from Ann Samuel with JPMorgan. Your line is open.

Hi. Thanks so much for taking my question and congrats on the outstanding quarter. Maybe just one kind of, you know, thinking, you know, longer term. As you look at the white space for monetization across your platform, are you able to penetrate that with the resources that you have today? Or will it require, you know, kind of any incremental investment just thinking about the, you know, the massive incremental margins in the model that you're seeing lately.

I'll take them. This is Jeff. Well, as Anna has already said, you know, we're very proud of the opportunity we've opened up with our workflow products, and we think that that opportunity is you know, as big as our core news feed product. So we do think that that's still a lot of white space, as you say, for us to go after. Can we do it with the team and relationships that we have? Yeah. Absolutely. I, you know, I think we work with all the top twenty pharma. We work with all the top twenty hospitals. And, you know, we continue to, you know, show good growth within them. I do wanna make one clarification about my comments in the prerecord, which was we said we had an NRR or net revenue retention rate of 120% with our top twenty clients. That is 22% growth over last year, not 122%. That's growth over last year. So I just wanna make sure I clarify that. I think it's clear from Anna's comments, but wanna make sure we clarify that. But no. I think we are well positioned to be you know, the partner of choice for reaching health care professionals. And that's a very large market that we still think we're in the very early innings of.

That's really helpful. Thanks. And if I could just squeak in one more. Was hoping you could give us an update on the health of the provider business. How that's trended.

Yeah. Thanks for the question, Annie. So as we've said before, you know, our pharma business does remain our fastest growing business. And is responsible for most of the upside that we've seen this year. But know, our health system business is performing a little bit better than initially expected to start the year. So we do believe we've seen a marginal improvement in that market over the past nine months. We've seen a little bit of a pickup as well in our new business sales. But that industry still isn't really out of the macro uncertainty. So we aren't expecting a material change in growth from this cohort in the near future. We are still expecting our pharma business to remain our fastest growing.

The next question comes from Craig Hettenbach with Morgan Stanley. Your line is open.

Thanks. We have been hearing positive feedback on the video module front. So, Jeff, just taking a step back, I mean, the product initially got off to a slow start and appears to be accelerating nicely now. Can you just touch on just things that you've refined and what's resonating that's driving the momentum? On the video side.

Yeah. Thanks, Craig. It's a good question too. You know, as I step back and look at it, within a highly regulated industry like pharmaceuticals, it's not uncommon to see sort of an S-shaped adoption curve for new products. Right? Where you have you have five trialists who will stick their necks out and go through the legal review and try something out. Then everyone else sort of sits on the sidelines, and they wait for a year, and they wait to see what their ROI looks like and whether or not what they did you know, actually worked. And candidly, I think that's what happened with our point of care modules, in our formulary modules, which are great products. Right? It's I think, really helpful to tell a doctor right as they're waiting for the patient to join a visit whether or not their formulary, their, basically, insurance coverage will cover your client drug. Right? That's a really actionable moment. And, again, we've seen really strong ROIs from the moment and also a strong watch rates there. So well, it's taken a little while, I think, for us to get to that second company S curve where people are comfortable with it from a legal perspective. That we launched a couple years ago, I think is really having its moment. And again, as Anna said earlier, we think this could be as big when we look at the return on investment for our clients as our core news feed business.

Helpful color. Thank you.

The next question comes from David Larsen with BTIG. Your line is open.

Hi. Congratulations on the very good quarter. When we look at, like, the CROs, like IQVIA reported this morning, they are talking about a 50% year over year increase in cancellations of clinical trials look at some of, like, the large biopharma companies. They're talking about reducing costs. Reprioritizing different clinical trials. They're facing challenges because of the inflation reduction act. And also changes in part D reimbursement. That's putting pressure on them. So it seems like across the CRO space, like, that whole sector or parts of it seem to be under a lot of pressure. We look at your results and they're fantastic, can you just explain what is going on? I mean, is it the pressure throat they're under that's causing them to invest more in commercial efforts? Is there any thoughts there would be very helpful. Thank you.

Hi, David. Yeah. This is Nate. So one thing I'll note is that the iShares US Pharma ETF, which is sort of a barometer for the US pharma company. This is it's up around 7% year to date. So, you know, pretty some optimism in the market there. We typically work with brands that are at the launch stage or the early stages post-launch, maybe we start those strategic conversation prelaunch, but we're not typically involved in helping these businesses at their phase one or phase two stages of trials. And so businesses that help run trials in the very early stages would be definitely seeing different types of effects in different macros than we would. So with regards to the Inflation Reduction Act, again, it's still early with regards to the new administration's priorities around it. I think some experts feel that any sort of repeal seems unlikely because it is a path to free up a few hundred billion dollars. But if you look at the scheduled IRA cut. A lot of the drugs affected, and this is calendar 2026, mind you, are already in a pretty late stage. So when we went and analyzed the first ten drugs announced, we found that the affected brands were really just a low single-digit percentage of our revenue. Because, again, we work with launch and growth drugs more than late stage. And even while pipelines continue to shift with different science and regulatory changes, there's still a lot of exciting medicines in the pipeline. That will be potential launch and growth partners for us.

Okay. Great. Thanks very much. And then without you know, sharing trade secrets or anything like that, it seems like your ability to develop new products and modules is contributing to your growth. Can you size how much revenue is coming from formulary and point of care? And then just any sense for how many sort of new products are in your pipeline? Like, will you introduce maybe one or two per year? Just any color or thoughts around that would be helpful. Thank you.

Yeah. Just yeah. I'll answer that. We've said that our point of care is 20%. So I think you could size against our overall revenue for that. And our AI products, again, which we have not monetized at all, think are a similar-sized opportunity eventually and perhaps even bigger down the road. And we're excited in our medical advisory board to get together with our 150 doctors here and work on those more. They are trade secrets. We don't like to talk about our new physician products because, of course, we think we've got some better shot on gold there than others have, and we've got a team that I think has consistently shown that we can innovate in ways that doctors really appreciate. So we hold that close to our best.

So much. You're welcome. A good quarter.

The next question comes from Vikram Kesavabhotla with Baird. Your line is open.

Okay. Great. Hey. Thanks for taking the question. Just wanted to follow-up on some of the previous questions around the industry trends now that you're through another upfront cycle. Do you think that 5 to 7% growth rate is the new normal for this industry long term, or do you still think that can accelerate at some point? And based on the feedback that you're getting from customers, what do they need to see in order for that growth rate to move higher over time? Thanks.

Thanks for the question, Vikram. And, you know, it's something we talk about a ton internally and with our agency and client partners. You know, the 5 to 7% we're seeing today I think, is a little bit of an effect of the macro circumstances that we're in. And the place that pharma is in their shift to digital. So we just kinda take a massive step back, pharma's still only spending about 30 to 35% of their budgets digitally. You compare that to other industries. Other industries are at 70% plus. So pharma's certainly still very under-indexed. So we could see a world in which that growth rate does increase. I think for right now, just given the generalized uncertainty, we're not seeing it today. But given how under-indexed format is on digital, I do believe we could see a world where that growth rate does go up. We just don't know when that's gonna happen yet.

Okay. Great. Thank you.

The next question comes from Jeff Garro with Stephens. Your line is open.

Good afternoon. Thanks for taking the question. Maybe going back to the topic of more launches in January and that kind quick turnaround from the upfront selling season, that implies that that medical and legal review is becoming less of a challenge. So I wanted to ask if anything's changed from a compliance perspective, or are we just witnessing strong execution and the flexible approach of those integrated solutions serving as a workaround to MLR carriers. Thanks.

Yeah. Thanks for the question, Jeff. And absolutely right. We did see a large increase in January launches compared to prior years, which we're really excited about. Our goal is always to help our customers get on channel as quickly as possible to maximize their ROI, and we're really pleased in which our integrated programs are allowing them to do that by starting with whatever module has content preapproved. Most of our brands that we've worked with for a while will have at least one module with preapproved content. So that's been really a game changer for us in getting our clients' lives faster. However, though, I do wanna make sure to note, when we do see changes like this in launch timeline, we also see changes in revenue growth. So this higher percentage of January launches are contributing to a couple points of growth upside in fiscal 2025 for us which theoretically could lead to some tougher comps as we move ahead to fiscal 2026.

The next question comes from Steven Veliquette with Mizuho Securities. Your line is open. Steven, perhaps your line is on mute. Your next question comes from David Roman of Goldman Sachs. Your line is open.

Thank you. Good evening, everybody. I wanted just to come back to the net retention revenue growth, which obviously continues to track at 20% and has been at this level for a fairly sustainable period of time. But we're seeing total top line growth at a pace that is exceeding that and accelerating. So can you maybe help us understand some of the drivers outside of those top customer customers? What is contributing to some of that incremental performance between the NRR and the largest customers and then the total top line growth and how we should think about sustainability of those drivers on a go forward basis?

Thanks for the question, David. And, yeah, we've certainly seen stability in our NRR over the past twelve months. And particularly the last two quarters, we did see a slight reacceleration in our overall NRR which we think is a really good sign that we continue to find additional ways for our existing customers to expand their program such as adding on point of care modules, or adding on NPs through our portal. And we're really encouraged that we're able to continue to grow within our existing customers. Now as far as what Jeff had mentioned earlier, we're also seeing a little bit more growth come from SMB. Than we had seen historically. And what's great about that is, you know, our continuing to grow at all angles of the funnel here. Top of the funnel and the bottom funnel with some of these customers. And I think we'll likely continue to see that over time, especially with our client portal. So as far as future of NRR, just between a couple moving pieces here with continued growth amongst our top customers, but then also SMB traction. Just too soon for us to give a specific number, but we don't really expect a material change kinda what we're seeing here today.

And I wish this is not a question about kind of comps going forward. This is more trying to get at some of the underlying drivers that are supporting the accelerator performance here in this fiscal year. Where would you say we are in the life cycle of some of those drivers? I know, Jeff, you talked a little bit about the S curve or some of these things, but maybe you could just go into a little bit more detail on how you think about the improved growth you're seeing this year. And as you think about those factors, where are we in kind of the evolution of each of those drivers?

Hey, David. This is Jeff. I'll speak to that. Yes. Where are we? The short answer is we're doing really well. I think this past year, if we really boil it all down, we've demonstrated to our clients that context matters. Right? That being in a clinical context where doctors are making clinical decisions really does matter in the ways that you reach them. And folks who are, you know, finding ways to put ads on video games and doctor's households or whatever else aren't doing as well. Aren't having the results. And I think there was a lot of trialless behavior maybe in the last couple years around some of those newer technologies. But, you know, candidly, they don't work. Right? At the end of the day, context does matter. I think we will continue to deliver a highly credible, high integrity clinical context. For our physicians.

Thanks so much.

The next question comes from Jailendra Singh with Truist Securities. Your line is open.

Thank you, and thanks for taking my question. So just following up on the last last response. I'm trying to put a final point on your comment earlier your likely growing at a two times the market growth rate going forward and three times you grew this fiscal year. Does that mean that for you to feel comfortable about being back to like, sustainable high teens twenty percent top line growth, you need market growth to accelerate from current levels, but do you think you have enough products and tools in pipeline to keep driving engagement and deepening your pharma partnership which would get you to that sustainable high teens twenty percent growth going forward.

Yeah. Thanks for the question, Jailendra. And as I mentioned before, you know, if we do look back historically, say, the taking out this year, if we look back over the past four years, we do typically outperform the market growth rate by somewhere closer to two times. And as of right now, our best estimate is that's a better proxy going forward for our current business. I think this year, we had an opportunity accelerate share gains after a softer fiscal 2024. And we'll really encourage that we saw that happen. But going forward, we're just at a place where we believe we'll see more of steady, consistent share gains. As far as if we have the tools in place to continue to grow faster in the overall market, we absolutely believe we do. I think we still have a ton of opportunity within point of care. And within our portal but we just don't know if we're gonna see growth quite as accelerated as we saw this last year. It's not what we're assuming for next year.

Okay. And then for my follow-up, I want to go back to the difference between what you are seeing from your pharma partners who are on your self-serve client portal versus who are not on the portal. Any data or color you can share around engagement ROI, or new prop programs or upsells between these two set of former clients just trying to understand the incremental opportunity you guys might see after you roll out portal across all your clients and also, like, related to that, can you confirm if your four $10 million plus brands in first $15 million plus brand. Are those five pharma customers all on your self-serve portal?

Thanks, Shiloh. This is Jeff. So, yeah, I should clarify one thing about the portal. People refer to it as self-serve. The reality is that it's still know, our clients are able to self-serve and go and see reports and whatnot. But to protect the end user experience, I've requested, and we will hold the line. We will not have new clients who just show up on our website with their credit card from somewhere we don't know. We are still going to vet every client, and we are still going to review every program that they put out there again to protect the physician experience, we don't want things that are frankly not clinical, not garish. We are very native in our approach. In terms of talking about clients who are in the portal out of the portal, I don't know offhand for those top four. I think they're all on the portal, but I'm not positive. You know, I can tell you that again, it's our plan to roll this out to all of our clients this year. It really is a training process, and we need to show them and it takes time for us to walk them through the different parts of it and make sure they understand all the data definitions and the IQVIA data. And there's a little bit of tweaking because the way they define their IQVIA market might be different in every case. So we wanna make sure that aligns with their internal definition. So it does take some time for us to get new clients onto the portal. But, again, it's our goal to get really all of them there this year.

Thanks. Talk to you soon. You're welcome.

The next question comes from Eric Percher with Nephron. Your line is open.

Thank you. On the question on visibility into the financial model, I think over the last year, you talked about customer discipline around budget flush is a factor, and then we thought workflow might drive longer launch multi-modal seems to drive improved visibility for next year. But let me ask you, you know, you put all of these items together. How do you feel around the visibility you have now looking forward relative to a year ago, then as we get into a new year, it that you've gained a lot more visibility on the first three quarters, but there may be even more dependence on where you ultimately end up in Q4.

Yeah. Thanks for the question, Eric. So just as a reminder, when we started last year with our initial guidance, we had over 70% of our subscription-based revenue under contract. When we give our guidance in May, we don't expect visibility to look materially different than how it looked when we started last year. Because there's a bit of a push and pull effect at play with these integrated offerings. So they certainly led to larger deal sizes, which would imply more booked upfront and thus stronger visibility into next year, but they also launched in January, which led to a little more revenue recognition in the current fiscal year versus the next fiscal year. Because of those two kind of factors, the push and pull there, as of now, we feel visibility is looking pretty sort of last year. And just given this past year's performance, I think we feel very comfortable with the strength of our visibility into this business.

Appreciate it.

The next question comes from Stan Berenshteyn with Wells Fargo Securities. Your line is open.

Hi. Thanks for squeezing me in here. Just two quick ones for me. First, on the $15 million brand, what is the anticipated time frame for the campaign go live on that one? And then on the share gains that you called out, do you have sense of who's on the other side of the share gains that you're experiencing? Thanks.

Hey, Stan. Thanks for the question. So that $15 million plus brand that we mentioned, did buy one of our integrated packages. So that brand is already live on our channel. As far as where we are seeing the share gains, you know, it's not something that we typically talk too much about when it comes to competitors. I think, we are really pleased to have the platform that we have and the interest of our clients. And I think our results just show that we're the place that our clients want to spend their incremental dollars.

Great. Thanks so much.

That is all the time we have for questions. I'll turn the call to CEO, Jeff Tangney, for closing remarks.

I like them by thinking the entire Doximity, Inc. team for working so hard and efficiently to serve more doctors every day than ever before. So thank you, and thanks everyone for joining.