DOCS Healthcare Technology · AI software · Healthcare ads · Profitable growth · Thesis updated July 2, 2026

AI hope meets a slower ad market

Doximity reaches more than 85% of U.S. physicians, which gives it a rare healthcare audience.
Fiscal 2026 revenue grew 13%, down from 20% the year before, so growth is slowing.
The Clinical AI Suite has been adopted by more than 140 U.S. health systems, but revenue impact is still early.
Large customers matter a lot: 125 customers with over $500,000 in trailing revenue drove about 83% of fiscal 2026 revenue.
Net revenue retention fell to 109%, a sign that existing customer expansion is still positive but weaker.

01 Running thesis

The network is strong, growth is not

Doximity owns a valuable place in U.S. healthcare. It has over 3 million registered members and reaches more than 85% of U.S. physicians. That audience lets drug makers and health systems pay Doximity to reach doctors, hire doctors, and support doctor workflows.

The bull case is that this network can become more than a pharma marketing channel. Doximity has packaged Ask, Scribe, and Dialer into a Clinical AI Suite for health systems. More than 140 U.S. health systems have adopted it, which gives the company a real shot at selling into clinical workflow budgets, not only ad budgets.

The bear case is that the core market has cooled. Fiscal 2026 revenue grew 13%, down from 20% in fiscal 2025. Management also guided fiscal 2027 revenue to only about 4% growth at the midpoint, citing soft short-term demand in digital pharma ads, policy uncertainty, and higher macro risk.

This is now a proof story. Doximity is still profitable, with a 55% adjusted EBITDA margin in fiscal 2026, but the stock needs proof that AI can become a real revenue line before the marketing slowdown becomes the main story.

May 2026▼The fiscal 2026 10-K confirmed revenue growth slowed to 13% from 20%. It also showed real AI traction, with the Clinical AI Suite adopted by more than 140 U.S. health systems, but added a clear AI accuracy and liability risk.

May 2026▼Management guided fiscal 2027 revenue to about 4% growth at the midpoint. The company blamed soft digital pharma ad demand, policy uncertainty, and macro risk, shifting the thesis more toward early AI monetization.

Feb 2026▼Q3 updates showed the split story clearly: core pharma advertising slowed while AI usage rose fast. Over 300,000 prescribers used AI products in Q3, but near-term growth guidance stayed weak.

Feb 2026▼The Q3 10-Q showed revenue growth of 10% and net revenue retention of 112%, down from 117% a year earlier. Large customer count still improved, but the expansion trend weakened.

Nov 2025▲Q2 results raised fiscal 2026 revenue guidance to 13% growth at the midpoint. Management said integrated programs were smoothing spending patterns, and AI Scribe usage nearly tripled from Q1.

Nov 2025▲The Q2 10-Q showed 23% revenue growth, stronger large customer growth, and 118% net revenue retention. The Pathway Medical acquisition added medical data and AI models to the product set.

Aug 2025▲Q1 fiscal 2026 revenue grew 15%, ahead of the cautious full-year outlook at the time. Expansion within existing customers drove most of the subscription revenue increase.

May 2025→The fiscal 2025 10-K confirmed strong historical execution, including 20% revenue growth. The forward question stayed the same: whether guided deceleration was temporary or structural.

02 Business model

Doctors use it, customers pay

Doximity gives many tools to doctors for free or as part of a health system package. Those tools include medical news, professional profiles, secure communication, telehealth, on-call scheduling, AI search, and AI note taking. The free use matters because it keeps doctors active on the platform.

The money comes mostly from subscription customers. In fiscal 2026, about 94% of revenue came from subscription customers. These customers are mainly pharmaceutical manufacturers and health systems buying Marketing Solutions, Hiring Solutions, and Workflow Solutions.

The model works best when drug companies keep shifting marketing dollars to digital channels and health systems buy more workflow tools. It breaks if pharma clients shorten campaigns, slow budget approvals, or move spend to other doctor channels.

Customer concentration is a key part of the model. Customers with more than $500,000 in trailing 12-month revenue accounted for about 83% of fiscal 2026 revenue. That helps sales efficiency, but it also means a small group of large buyers can move the results.

03 Product portfolio

Ads fund the AI push

Cash cow

Marketing Solutions

Drug makers use Doximity to share targeted content with doctors. This is the core money maker, but demand has softened as pharma clients make shorter commitments.

Steady

Hiring Solutions

Health systems and other customers use Doximity to find and recruit medical professionals. It benefits from the physician network, but it is not the main growth debate.

Growth engine

Workflow Solutions

These products help doctors call patients, manage schedules, document visits, and use AI tools. The health system sale is becoming more important as Doximity moves beyond ads.

Growth engine

Clinical AI Suite

This bundles Ask, Scribe, and Dialer into one enterprise product. More than 140 U.S. health systems have adopted it, but average contract value and margins are still open questions.

Option

Ask

Ask is Doximity's AI clinical search and writing tool. It includes a drug reference and PeerCheck layer, which is meant to reduce the risk of weak medical answers.

Option

Scribe

Scribe is an AI documentation tool for notes. It could save doctors time, but heavier use also brings AI infrastructure costs and accuracy risk.

Steady

Dialer

Dialer supports voice and video patient calls. It helps keep providers active in the workflow tools, which reached 0.81 million quarterly unique active providers as of March 31, 2026.

04 Business segments

Mostly subscription revenue

Subscription customers94%modest

Other revenue6%flat

Fiscal 2026 mix uses the company's disclosed revenue type, not product lines. Doximity says about 94% of revenue came from subscription customers and does not split Marketing, Hiring, and Workflow revenue.

05 Risk factors

What could go wrong

Pharma ad budgets stay soft

High impact · High odds

Management said short-term demand in the digital pharma ad market is soft. If drug makers keep delaying campaigns or signing smaller deals, Marketing Solutions may not reaccelerate.

We watchWatch quarterly revenue growth, management comments on pharma demand, and whether fiscal 2027 guidance moves above the 4% midpoint.

AI adoption does not become revenue

High impact · Medium odds

The Clinical AI Suite has been adopted by more than 140 U.S. health systems, but Doximity has not disclosed average contract value or margins. Usage can look exciting while revenue stays small.

We watchWatch for disclosed Clinical AI Suite revenue, health system customer additions beyond 140, and comments on deal size.

Existing customer expansion weakens

High impact · Medium odds

Net revenue retention fell to 109% from 112% in the prior quarter and 119% in fiscal 2025. That still means existing customers are spending more, but the pace is slowing.

We watchWatch net revenue retention and the count of customers above $500,000 in trailing 12-month revenue.

AI errors damage trust

High impact · Medium odds

Doximity added a detailed AI risk factor tied to inaccurate, biased, or misleading outputs. In medicine, a bad AI answer can cause legal, reputation, or adoption problems faster than in many other software markets.

We watchWatch for AI-related lawsuits, product safety disclosures, customer delays tied to AI governance, and changes to liability language in contracts.

Investment spending outruns payoff

Medium impact · Medium odds

Research and development expense rose 40% year over year in fiscal 2026 as Doximity invested in AI. The company remains very profitable, but higher AI costs could pressure margins if revenue ramps slowly.

We watchWatch R&D growth, cost of revenue tied to AI usage, gross margin, and adjusted EBITDA margin.

06 Quick answers

In one breath

How does Doximity make money?

Doximity mostly sells subscriptions to pharmaceutical companies and health systems. Customers pay for Marketing Solutions, Hiring Solutions, and Workflow Solutions.

Why does Doximity have an AI story?

Doctors already use Doximity tools during their workday, so the company is adding AI into those workflows. Its Clinical AI Suite bundles Ask, Scribe, and Dialer for enterprise health systems.

What is the biggest debate for DOCS stock?

The debate is whether AI can become a second growth engine before the pharma marketing slowdown gets worse. Fiscal 2026 growth slowed to 13%, and fiscal 2027 guidance points to much slower growth.