Doximity stock surged roughly 70% in after-hours trading on August 6 after the healthcare software platform reported stronger-than-expected first-quarter fiscal 2027 earnings and raised its full-year revenue guidance, signaling accelerating momentum in its new AI products.
The company reported revenue of $156.6 million, up 7% year-over-year and beating analyst forecasts of $151.7 million. Adjusted EBITDA reached $75 million with a 48% margin, exceeding the high end of the company’s guidance by 8 percentage points.
Doximity raised its full fiscal 2027 revenue guidance to $671 million to $681 million, up $6 million from prior expectations. The company also guided for second-quarter revenue between $170 million and $171 million. Management attributed the stronger outlook to early traction in its AI Search product, which it launched in late April and has already begun monetizing with pharma and hospital customers.
CEO Jeff Tangney described the moment as a “once-in-a-generation opportunity to build the new AI age of medicine.” He highlighted that the company is earning more than 10 times per search in revenue compared to the cost of running the AI Search product, underscoring the unit economics of the new business line. The company onboarded its first cohort of AI Search customers across more than two dozen programs and expects the majority of AI Search revenue contracted to date to be recognized during the third quarter.
Usage metrics reinforced the AI momentum. Quarterly active workflow prescribers grew more than 30% year-over-year to record highs, with nearly half using Doximity’s AI tools in the quarter. AI prompt volume increased 25% quarter-over-quarter, while AI Scribe note-taking users surged 10-fold in July. The company now claims to be the only clinical AI vendor in the top three for both AI Search and Scribe markets.
The expansion into AI-powered tools comes as Doximity invests heavily in clinical AI compute infrastructure. Non-GAAP gross margin declined to 88% from 91% a year earlier due to increased AI spending, but management signaled this is intentional and temporary. The company expects margin expansion over time as AI Search scales and model efficiency improves. Fiscal 2027 is being positioned as an “AI investment year,” with the company betting that strong profitability can coexist with aggressive AI spending.
Doximity’s clinical AI credibility received a boost from independent validation. In a study published by researchers from Stanford and Harvard, Doximity’s Ask product led among U.S. clinical AI models with the lowest error rates and highest safety ratings in head-to-head testing of 24 clinical AI vendors. The company attributed its outperformance to a built-in drug reference verified by experts and a network of over 12,000 physician editors continuously reviewing AI outputs—features designed to appeal to hospital AI committees focused on accuracy and liability.
The company expanded its enterprise health system footprint to 165 signed AI clients, including recent wins at Northwestern Medicine, Penn Medicine, and the University of Michigan. Its largest 20 customers posted net revenue retention of 112%, while overall net revenue retention stood at 107%, indicating strong expansion within existing accounts. The company now counts 127 pharma and hospital customers generating more than $500,000 in annual subscription revenue, representing 7% growth year-over-year and accounting for 83% of total revenue.
The after-hours surge reflected investor enthusiasm for both the revenue beat and the guidance raise, as well as early evidence that the company can monetize its AI platform while maintaining best-in-class software margins. The stock closed the regular session at $20.66 before jumping to $37.49 in after-hours trading. Similar AI-focused companies have seen sharp rallies on earnings beats and raised guidance, though Doximity’s move was particularly pronounced given the scale of its AI investment and the independent validation of its clinical AI safety.
Sources
- Investing.com — Earnings call transcript with full financial details, guidance raise, AI product metrics, and management commentary from CEO Jeff Tangney and CFO Matt Sonnefeld
- Robinhood — Real-time stock price movement on August 6, 2026, showing intraday range and after-hours surge
- Yahoo Finance — Stock price quotes and analyst commentary on Doximity valuation
