By Daniel Shvartsman
Investing.com - Doximity Inc (NYSE:DOCS) shares rose 25% in Wednesday trading after the medical doctor digital platform posted strong earnings after-hours Tuesday and announced an acquisition.
Doximity reported revenue of $97.88M, a 67% increase from a year ago, and more than $10M ahead of guidance. The company also posted GAAP income of $.26/share and non-GAAP income of $.29/share, ahead of estimates for $.12/share.
The company also raised full-year guidance to $338.9-$339.9M, a more than $10M increase. Their Q1 guidance (the company's fiscal Q4 2022) was in-line with analyst expectations.
On top of that, the company announced the acquisition of Amion, which provides scheduling and messaging tools to nearly 200,000 physicians, for $53.5M plus up to $29M in earn-outs over the next four years. Doximity estimated that Amion had $5M of revenue in calendar year 2021.
“We had a strong Q3 led by our existing clients as our net revenue retention rate hit 171%,” said Jeff Tangney, co-founder & CEO at Doximity. “Our telehealth platform grew to 350,000 active providers and we agreed to acquire Amion which powers nearly 200,000 physician schedule. It’s our life’s work to build the physician cloud – a digital platform to help physicians save time, so they can provide better care for patients."
The company also provided initial FY 2023 guidance (for the year starting in April), which entailed 33% revenue growth and 40% Adjusted EBITDA margins before factoring in any Amion impact.
Analysts looked at the beat positively, even though two bullish analysts - Raymond James and Needham and Company - lowered price targets, perhaps in reflection of the subdued climate for growth companies. As reported by StreetInsider, Needham's analyst Scott Berg wrote, "Doximity reported its biggest revenue outperformance to date...Overall sales metrics remained positive including NRR of 171% (versus 173% in 2Q), $100k plus customers growing 50% Y/Y and spend at its top five customers up 90% Y/Y. While the (Amion) acquisition is primarily a product acquisition, we like the acquisition strategy as it continues to focus on expanding functionality to drive higher physician engagement which ultimately can drive higher marketing solutions revenues."
DOCS IPO'd last year at $26/share and saw its shares quickly double. The company is trading above that initial level, but over 40% off of 52-week highs.