Q3 2024 Doximity Inc Earnings Call

Operator: Thank you for standing by. My name is Aaron, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Doximity fiscal third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Aaron and I'll be your conference operator for today at this time I would like to welcome everyone to the Doximity fiscal third quarter 2024 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.

Operator: After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, simply press star followed by the number one on your telephone. If you would like to withdraw your question, please press star 1 again. Thank you. I would now like to turn the call over to Perry Gold, Vice President of Investor Relations. Please go ahead.

Session and if you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question. Please press star one again thank you.

I would now like to turn the call over to Perry Gold Vice President of Investor Relations. Please go ahead.

Thank you operator, Hello, and welcome to Doximity as fiscal 2024 third quarter earnings call with me on the call today are Jeff Cagny co founder and CEO of Doximity, Dr. Nathan <unk> co founder and CSO and antibodies and CFO a complete disclosure of our results can be found in our press release issued earlier today as well as in <unk>.

Perry Scott Gold: Thank you, operator. Hello, and welcome to Doximity's fiscal 2024 third quarter earnings call. With me on the call today are Jeff Tangny, co-founder and CEO of Doximity; Dr. Nate Gross, co-founder and CSO, and Anna Bryson, CFO.

Perry Scott Gold: A complete disclosure of our results can be found in our press release issued earlier today, as well as in our related Form 8K, all of which are available on our website at investors.doximity.com. Starting this quarter, we've published our prepared remarks in conjunction with the press release, and you can find them on the IART website. 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 outlooks.

Our related form 8-K, all of which are available on our website at investors <unk> Dot com.

This quarter, we published our prepared remarks in conjunction with the press release and you can find them on the IR website. 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.

They 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-K, any subsequent form 10, Qs and our other reports and filings with the SEC that may be filed from time to time, including our upcoming filing on Form 10-Q.

Perry Scott Gold: Please refer to the risk factors in our annual report on Form 10-K, any subsequent Form 10-Qs, and our other reports and filings with the SEC that may be filed from time to time, including our upcoming Form 10-Q. Our forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, February 8th, 2020. Of note, it is Doximity'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 8K.

Our forward looking statements are based on assumptions that we believe to be reasonable as of todays date February eight 2024 of note. It is <unk> 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.

Perry Scott Gold: Today, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. Historical Reconciliation to Comparable Gap Metrics can be found in today's earnings. Finally, during the call, we may offer incremental metrics to provide greater insight into the dynamics of our business. These details may be one-time in nature, and we may or may not provide updates on those metrics. I would now like to turn the call over to our CEO and co-founder, Jeff Tainey.

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 onetime in nature.

And we may or may not provide updates on those metrics in the future.

I would now like to turn the call over to our CEO and cofounder tiny.

Tiny Jeff.

Thanks, Perry and thank you everyone for joining our third quarter earnings call. We have three updates today, our financials product highlights and a new leadership higher first our topline I am pleased to report that we delivered $135 million in revenue for the third quarter of our fiscal 2024, 86% versus the.

Jeff Tangny: Thanks, Barry, and thank you everyone for joining our third quarter earnings call. We have three updates today, our financials, product highlights, and a new leadership hire. First, our top line. I'm pleased to report that we delivered $135 million in revenue for the third quarter of our fiscal 2024, a 6% beat versus the high end of our guidance, and 17% growth year-on-year. Our bottom line was also strong in Q3, with an adjusted EBITDA margin of 54%, or $73 million, which was 18% above the high end of our guidance.

High end of our guidance and 17% growth year on year.

Our bottom line was also strong in Q3 with an adjusted EBITDA margin of 54% or $73 million, which was 18% above the high end of our guidance looking ahead, we're raising our fiscal 2024 annual revenue guidance midpoint by $8 million.

Jeff Tangny: Looking ahead, we're raising our fiscal 2024 annual revenue guidance midpoint by $8 million, or 2%. We're also raising our EBITDA guidance midpoint by 6% to $225 million, or a 47% margin. So that's our Q3 financial highlight, a 6% beat, a 2% raise, and a 54% EBITDA margin. Okay, turning now to our physicians.

Or 2%.

We're also raising our EBITDA guidance mid point by 6% to $225 million or a 47% margins.

So that's our Q3 financial highlights a 6% deep a 2% raise and a 54% EBITDA margin.

Okay, turning now to our physician network, our Q3 engagement reached a new high watermark, our unique active users on a quarterly monthly weekly and daily basis were all up double digit percentages year on year as with last quarter. Our daily users grew the most underscoring how much.

Jeff Tangny: Our Q3 engagement reached a new high water mark. Our unique active users on a quarterly, monthly, weekly, and daily basis were all up double-digit percentages year-on-year. As with last quarter, our daily users grew the most, underscoring how much our EHR-integrated workflow tools continue to gain share and daily use among doctors. On that front, we're thrilled to announce that for the third year in a row, Doximity has been ranked the number one best-in-class telehealth video platform by health system CIOs and their staff, beating out Microsoft Teams, Zoom, and many others.

Our EHR integrated workflow tools continue to gain share in daily use among doctors.

On that front, we're thrilled to announce that for the third year in a row doximity as been ranked the number one best in class Telehealth video platform by health systems, and their staff, beating out Microsoft teams zoom and many others.

Jeff Tangny: This positive word of mouth allowed us to add several major new hospital clients in Q3. GoLives at these hospital systems contributed to a record 560,000 unique prescribers using our workflow software in Q3. We now count 17 of the top 22 U.S. hospitals as enterprise software clients, and all of them as marketing clients. Alongside our workflow products, our personalized physician news feed also hit new highs in Q3 with both record reach and use. We're proud to be the newsfeed of medicine, the place where doctors go when they have a few minutes. Check in on the latest news in their field. Our next phase of growth, we believe, will be AI-fueled. Our HIPAA-compliant GPT product has organically grown to thousands of uses each day, and we love all the ways it's already helping doctors cut this waste and reduce their administrative load.

This positive word of mouth allowed us to add several major new hospital clients. In Q3 go lives at these hospital systems contributed to a record 560000 unique prescribers using our workflow software in Q3, we now count 17 of the top 22 U S hospitals as enterprise.

Software clients and all of them as marketing clients.

Alongside our workflow products, our personalized physician newsfeed also hit new highs in Q3 with both record reach and usage, we're proud to be the news feed of medicine, the place where doctors go when they have a few minutes to check in on the latest news in their fields.

Our next phase of growth, we believe will be AI fueled our HIPAA compliant GPT product has organically grown to thousands of users each day and we love all the ways, it's already helping doctors cut the scotts and reduce their administrative load.

Jeff Tangny: To that end, we're excited to convene our 12th annual DocsTech Summit in San Francisco next month. It will be 150 of our nation's top digital doctors rolling up their sleeves alongside our engineers, designing software to save time and improve patient care. We also can't wait for our Pharmaceutical Client Summit in early May to unveil our new client portal. We've opened up the portal now to about 10% of our brand partners, and the early reviews have been great. Our portal's AI brainstorm bot is a hit, but it's our real-time engagement reports and seamless prescription sales data that keep them coming back. As one pharma brand manager put it, this is great. I can tweak it, run it, and tweak it again until we get the right content to the right doctor.

To that end, we're excited to convene our 12th annual Docs Tech summit in San Francisco next month it will.

150 of our nation's top digital doctors rolling up their sleeves, alongside our engineers designing software to save time and improve patient care.

We also can't wait for our pharmaceutical client summit in early may to unveil our new client portal.

<unk> opened up the portal now to about 10% of our brand partners and the early reviews have been great.

<unk> AI Brainstorm Bot is a hit but it's our real time engagement reports and seamless prescription sales data that keeps them coming back as one pharma brand manager put it. This is great I can tweak.

We could again until we get the right content to the right doctors.

Jeff Tangny: Portals Transparency and Ease of Use also get time. Another top client told us, "I love that I can see my results anytime, anywhere, without someone else touching them first." To be clear, we don't yet allow clients to actually purchase on the portal. But when we do, we think it could unlock the longer tail of small and mid-sized clients that we're not able to reach. It'll also make it easier for us to launch new modules that leverage our workflow. As our CFO Anna will share in a moment, our new point of care and other modules grew over 100% year-on-year last year. So we believe we're still in the early innings of monetizing our workflow platform. On that note, I'm pleased to announce the addition of Lisa Greenbaum as our new Chief Commercial Officer. Lisa joins us from Google, where she was Verily's Chief Commercial Officer. Prior to that, she spent 15 years scaling and leading Medscape's go-to-market as their Senior Vice President and General Manager. Lisa's husband is a pediatrician and longtime Doximity reader.

The portals transparency and ease of use also gets high marks another top client told us I loved it I can see my results anytime anywhere without someone else touching at first.

To be clear, we don't yet allow clients to actually purchase on the portal, but when we do we think it could unlock the longer tail of small and mid sized clients that were not able to reach today.

It will also make it easier for us to launch new modules that leverage our workflow engagement as our CFO and we will share in a moment, our new point of care and other modules grew over a 100% year on year last quarter. So we believe we're still in the early innings of monetizing our workflow platform.

On that note I'm pleased to announce the addition of Lisa Greenbaum as our new Chief Commercial Officer, Lisa joins us from Google, where she was verily as chief commercial officer prior to that she spent 15 years scaling and leading med Scapes go to market as their senior Vice President and general manager.

Leases husband, as a pediatrician and longtime doximity user so while she's only been here a month it feels like she has known us for years.

Jeff Tangny: So while she's only been here a month, it feels like she's known us for years. The team and I are excited to have her on board. We know our clients will appreciate Lisa's deep relationships and unique insights from being both a successful tech and healthcare executive at market-leading firms. Okay, I'd like to end by thanking my Doximity team, who continue to work incredibly hard to realize. I personally have never been more excited or more proud about what we're building together. And with that, I'll hand it over to our CFO, Anna Bryson, to discuss our financials. Anna

The team and I are excited to have her on board. We know our clients will appreciate leases deep relationships and unique insights from being both a successful tech and health care executive at market leading firms.

Okay I'd like to end by thanking my Doximity teammates, who continue to work incredibly hard to realize our mission.

I personally have never been more excited or more proud about what we're building together.

And with that I'll hand, it over to our CFO <unk> to discuss our financials and guidance.

Anna Bryson: Thanks, Jeff, and thanks to everyone on the call. Third quarter revenue grew to $135.3 million, up 17% year over year and exceeding the high end of our guidance. Similar to prior quarters, our existing customers continued to lead our growth. We finished the quarter with a net revenue retention rate of 115% on a trailing 12-month basis. For our top 20 customers, net revenue retention was higher, at 122%, so our biggest, most sophisticated customers remain our fastest growing. We ended the quarter with 289 customers contributing at least $100,000 each in subscription-based revenue on a trailing 12-month basis. This is a 2% increase from the 282 customers we had in this cohort a year ago, and these customers accounted for 89% of our total revenue. Turning to our profitability, non-cap gross margin in the third quarter was 93% versus 91% in the prior year period. Adjusted EBITDA for the third quarter was $73.3 million, and adjusted EBITDA margin was $54.3 million, compared to $55.5 million and a 48% margin in the prior year.

Thanks, Jeff and thanks to everyone on the call today third.

Third quarter revenue grew to $135 3 million up 17% year over year and exceeding the high end of our guidance range similar to prior quarters, our existing customers continue to lead our growth.

We finished the quarter with a net revenue retention rate of 115% on a trailing 12 month basis.

For our top 20 customers net revenue retention was higher at 122%. So our biggest most sophisticated customers remain our fastest growing brand.

Ended the quarter with 289 customers contributed at least $100000 each and subscription based revenue on a trailing 12 month basis.

This is a 2% increase from the 282 customers. We had in this cohort a year ago and these customers accounted for 89% of our total revenue.

Turning to our profitability non-GAAP gross margin in the third quarter with 93% versus 91% in the prior year period, adjusted EBITDA for the third quarter with $73 3 million and adjusted EBITDA margin was 54% compared to $55 5 million and a 48% margin in the prior year.

Period these.

Anna Bryson: These represent new highs for non-gap growth and adjusted EBITDA. This margin strength was driven by our Q3 revenue outperformance, continued optimization of our infrastructure costs and customer support engines, and a strategic application of AI across our R&D and GNA. Now turning to our cash flow balance sheet and an update of our share report. We generated free cash flow in the third quarter of $48.7 million, compared to $47.5 million in the prior year, an increase of 3% year-over-year. As a reminder, we've utilized our NOLs and are now paying cash taxes at a rate of roughly $25 to $30,000.

These represent new highs for non-GAAP gross and adjusted EBITDA margins.

This margin strength was driven by our Q3 revenue outperformance.

Continued optimization of our infrastructure costs and customer support engines, and a strategic application of AI across our R&D and G&A teams.

Now turning to our cash flow balance sheet and an update on our share repurchase program.

We generated free cash flow in the third quarter of $48 7 million compared to $47 5 million in the prior year period, an increase of 3% year over year.

As a reminder, we utilize our Nols and are now paying cash taxes at a rate of roughly 25% to 30%.

Anna Bryson: We ended the third quarter with $710 million of cash, cash equivalents, and marketable security. During the third quarter, we repurchased 3.2 million shares at an average price of $22.18, representing 71.7 million. Fiscal year to date, we have repurchased $262 million worth of shares at an average price of $22.89. These share repurchase efforts have decreased our fully diluted shares outstanding by roughly 6% from the quarter ending March 31, 2023 to the quarter ending December 31, 2020. We still have over $60 million of our most recent share repurchase authorization remaining. Share repurchases have been funded by our free cash flow.

Ended the third quarter was $710 million of cash cash equivalence and marketable securities.

During the third quarter, we repurchased three 2 million shares at an average price of $22 eight.

Representing $71 7 million.

Fiscal year to date, we have repurchased $262 million worth of shares at an average price of $22 89.

Share repurchase efforts have decreased our fully diluted shares outstanding by roughly 6% from the quarter ending March 31, 2023 to the quarter ending December 31 2023.

We still have over $60 million of our most recent share repurchase authorization remaining.

Share repurchases has been funded by our free cash flow and as a reminder, our IPO proceeds remain untouched and available to invest in the business and M&A.

Anna Bryson: And as a reminder, our IPO proceeds will remain untouched and available to invest in the business and MSNBC. Now I'll turn to a recap of our annual As a reminder, our December quarter represents our largest by a significant margin. This is what our formal customers sign on for next year's programs, committing the majority of their annual. While we signed these contracts in Q3, we will primarily recognize revenue over the next 12 months, depending on the time in a program. This upcoming season, we saw strong growth with our brand, particularly amongst the number of brands spending at least $1 million. This cohort grew to 75 brands of selling, an increase of roughly 30% year-over-year.

Now I will turn to a recap of our annual buying season.

As a reminder, our December quarter represents our largest sales quarter by a significant amount. This is what our pharma customers sign on for next year's programs committing the majority of their annual marketing budgets.

While we signed these contracts in Q3, we will primarily recognize revenue over the next 12 months, depending on the timing of program launches.

This upfront season, we saw strong growth with our brand partners, particularly amongst the number of brands spending at least $1 million with us.

This cohort grew to 75 brands is selling season, an increase of roughly 30% year over year.

Anna Bryson: Of these $1 million plus brands, we have three brands that spent at least $10 million, an increase from the $110 million plus brands we had last year. We also saw strength in our modules that often sit outside of traditional marketing, such as peer-to-peer, point of care, and formula. These modules combined grew by more than 100% year over year during our. We have benefitted from our increased focus on selling newer modules as a package as our customers continue to expand their reach across our entire platform. Now moving on to our outlook. For the fourth fiscal quarter of 2024, we expect revenue in the range of $115.9 to $116.9 million, representing 5% growth at the, and we expect adjusted EBITDA in the range of $50.5 to $51.5 million, representing a 44% adjusted EBITDA margin. For the full fiscal year, we are raising our revenue guidance to the range of $473.3 to $474.3 million, representing 13% growth at the mid-period. We are raising our adjusted EBIDTA guidance to the range of 224.5 to 225.5, representing a 47% adjusted EBIT.

This $1 million plus brands, we have three brands that spend at least $10 million each an increase from the $110 million plus brand we had last year.

We also saw strength in our modules that often sit outside of traditional marketing budgets, such as peer to peer point of care and formulary.

These modules combined grew by more than 100% year over year during our upfront season.

We have benefited from our increased focus on selling more modules on a package basis as our customers continue to expand their reach across our entire platform.

Now moving onto our outlook for the fourth fiscal quarter of 2024, we expect revenue in the range of $115 nine to $116 9 million, representing 5% growth at the midpoint.

And we expect adjusted EBITDA in the range of 55 to 51 5 million, representing a 44% adjusted EBITDA margin for the full fiscal year, we are raising our revenue guidance to the range of 473, three to $474 3 million, representing 13% growth at the midpoint.

We are raising our adjusted EBITDA guidance to the range of $224 five to $225 5 million, representing a 47% adjusted EBITDA margin.

Anna Bryson: The increased angle outlook reflects stronger than expected upsells at calendar year end. As mentioned previously, incremental budgets are a lot later than typical this past year. As those dollars became available, we are encouraged that Doximity remained a top choice for our customers, which is evident in the large step-up in our Q3 revenue. Looking ahead, we're excited that our upfront selling season saw deeper investment in our newer modules and the addition of several large new brands. In Fiscal Q4, we are focused on getting these new programs, which in many cases will require new content.

Great angle outlook reflects stronger than expected upsells at calendar year end as mentioned previously incremental budget a lot later than typical this past year.

As those dollars became available we are encouraged that so many remained a top choice for our customers, which is evident in the large step up in our Q3 revenue.

Looking ahead, we're excited that our upfront selling season and deeper investment in our newer modules and the addition of several large new brands and.

In fiscal Q4, we are focused on getting these new programs live which in many cases will require new content.

Operator: As a result, our Q4 Revenue Outlook reflects growth more indicative of program launches than underlying failure. We expect the overall pharma HCP digital market to grow roughly 5% to 7% in calendar year 2024. Based on our upfront selling season, we are confident our pharma business can once again outpace the market. We are encouraged by the level of investment our customers are making in Doximity and excited by the opportunity to continue delivering innovative solutions, real-time insights, and industry-leading ROI. With that, I will turn it over to the operator. Thank you. Our first question comes from the line of Brian Peterson with Raymond James. Your line is live.

As a result, our Q4 revenue outlook reflects growth more indicative of program launch timing then underlying sales growth.

We expect the overall pharma HCP digital market to grow roughly 5% to 7% in calendar year 2024.

Based on our upfront selling season, we are confident our pharma business can once again outpaced the market.

We are encouraged by the level of investment our customers are making and Doximity and are excited by the opportunity to continue delivering innovative solutions real time insights and industry, leading ROI with that I will turn it over to the operator for questions.

Thank you and at this time I would like to remind everyone that in order to ask a question. Please press star followed by the number one on your telephone keypad, we do ask that you limit yourself to one question followed by a single follow up.

Anna Bryson: Thanks for taking the question and congratulations on the strong quarter. So, Anna, it was great to hear the strength in the buying season. You know, I'd love to understand how some of the customers are looking at new products like peer-to-peer. Is that seen as a new budget category? We'd just love to understand kind of how they're looking at some of these new products. Yeah, thanks, Brian.

Our first question comes from the line of Brian Peterson with Raymond James Your line is live.

Thanks for taking my question and congrats on the strong quarter, so and it was great to hear the strength in the buying season.

Understand how some of the customers are looking at new products like peer to peer is that seen as a new budget category.

Just wanted to understand kind of how they are looking at some of these new products.

Yes, Thanks, Brian and thanks for the question. So we're really excited by the growth we saw amongst our newer modules. So as I mentioned in prepared remarks, the cohort of new modules that we're selling which includes peer to peer point of care and formulary was up over 100% during our buying season, and I think one of the things our clients.

Anna Bryson: And thanks for the question. We're really excited by the growth we see amongst our newer modules. So, as I mentioned in my prepared remarks, the cohort of new modules that we're selling, which includes peer-to-peer point of care and formulary, was up over 100% during our buying season. And I think one of the things our clients are really appreciating about the way we're selling these products now is that we're working on packaging these new modules together, which actually allows us to increase the scale of the overall program and reach across the different budget The other thing that the packaged product approach does is it allows us to maximize reach across our platform, which could, in turn, yield better results for our clients.

Really appreciating about the way we are selling these products now is we're working on packaging. These new modules together, which actually allows us to increase the scale of the overall program and reach across the different budget lines. The other thing that the packaged products approach does is it allows us to maximize their reach across our platform, which I believe.

We've in turn could yield better results for our clients. So we're really excited about what we're doing here and the strength, we're seeing amongst these new modules.

Anna Bryson: So we're really excited about what we're doing here and the strength we're seeing amongst these new modules. Oh, that's great to hear. And I know you mentioned kind of the budgets for next year tracking to five to 7%, but I know you guys have consistently grown faster than that.

Oh, that's great to hear and I know you mentioned kind of the budget for next year tracking at 5% to 7% I know you guys have consistently grown faster than that if you had to think about the levers for share gains relative to budget.

Operator: If you had to think about the levers for share gains relative to budgets, what do you think those key swing factors would be? Thanks, guys. Yeah, sure, absolutely. As mentioned in the prepared remarks, we believe the market is going to grow roughly 5% to 7% in calendar year 2024. We've proven over the past several years that we can outperform the market, and we don't think this year will be any different. So, a couple of things that we're excited about are, you know, continuing to invest in these newer modules and sell these newer modules. We're also really excited about the client portal and having the client portal available over the summer to relaunch, to add targets, and to expand existing programs directly from the site. That's something that we've been spending a lot of time on internally, and we're really excited about delivering that for our clients next year. Thanks, Andrew, for your question. Our next question comes from the line of Scott Berg with Needham and, 911. Hi, this is Ryan McDonald on behalf of Scott Berg.

What do you think those key swing factors would be thanks, guys.

Yes, sure absolutely so yeah as I mentioned in the prepared remarks.

We believe the market is going to grow roughly 5% to 7% in calendar year 2024, we've proven over the past several years that we can outperform the market and we don't think this year will be any different. So a couple of things that we're excited by is continuing to invest in these newer modules and southeast nor modules and we're also really excited about.

The client portal and having the client portal available over the summer to relaunch to add targets and to expand existing programs directly from the site.

That we've been spending a lot of time on internally and we're really excited about delivering that for our clients for next year.

Thanks, Andrew your question.

Our next question comes from the line of Scott Berg with Needham and company. Your line is live.

Hi, This is Ryan Macdonald on for Scott, Thanks for taking my questions and congrats on a nice quarter.

Jeff Tangny: Thanks for taking my questions and congrats on a nice quarter. And you mentioned the summer portal or the portal is, you know, on track, it sounds like it will be available by the summer season selling. Can you just talk about, now that 10% of customers are sort of live and using it, sort of what you need to see in terms of progression in the usage to be comfortable in opening up the purchasing for the portal by this. Hey Ryan, this is Jeff.

And then you mentioned the summer portal or the portal is on track it sounds like to be available by this summer selling season.

Can you just talk about with now with 10% of our customers sort of live in using it.

What you need to see in order to in terms of progression on the usage to be comfortable and opening up the purchasing for the portal by by the summer season. Thanks.

Yes.

Jeff Tangny: I'll take that question since I've been working a lot on the portal. Yeah, we're really pleased that we've grown the aperture. We've added quite a few new clients to our portal, and the reactions have been uniformly positive. They appreciate the transparency. They appreciate the real-time data.

Hey, Ryan This is Jeff I'll take that question since I have been working a lot on the portal, yes, we're really pleased that we've grown the aperture we've added quite a few new clients onto our portal and the reactions have been uniformly positive. They appreciate the transparency. They appreciate the real time data at the end of the day, our clients spend a lot.

Jeff Tangny: You know, at the end of the day, our clients spend a lot of money with us and with others, and I think we're leading the pack in terms of our ability to show them real-time return on investment and data that they need to power their business to optimize their programs. The decision to focus on reporting first was really our own internal decision.

Money with us and with others and I think we're leading the pack in terms of our ability to show them.

Real time return on investment and in data that they need to power their business to optimize their programs.

The decision to focus on reporting first is really our own internal decision. We could have started with pricing and up sells but we really thought it best to take a step back and really try to use the portal as a way to improve our physician experience to make the content that they see more personalized and better and the AI tool as I am.

Jeff Tangny: We could have started with pricing and upsells, but we really thought it best to take a step back and really try to use the portal as a way to improve our physicians' experience, to make the content that they see more personalized and better. And the AI tool, as I mentioned in my prepared remarks, has been a real hit. We're helping our clients personalize, do better headlines. We're helping them do video content, which is really fun. The ability to take one of their detail aids and turn that into a short video more easily will be a big breakthrough for us in the coming years.

Mentioned in the prepared remarks, it's been a real hit we're helping our clients personalized do better headlines were helping them do video content, which is really fun the ability to take one of their detail AIDS and turned that into a short video more easily we think will be a big unlock for us in the coming years.

Jeff Tangny: But the long story short, it's really our decision to not focus on the pricing and the upsell motion first. It's really just us getting our features in a way that rolls us out to clients. I'll end by just saying, while we're very excited about the portal, we also appreciate the feedback that a lot of Wall Street and others have given us about, you know, the right way to do this sort of transition is over multiple quarters and even years. And that is our timeline for getting this done. But we're at a strong 10% today, and I think if we give us a year or two, we'll migrate the full business. Super helpful caller, Jeff, thanks.

But the long story short, it's really our in our decision to not focus on the pricing. The upsell motion first it's really just us dealing our features in a way that then rolls this out to clients I'll end by just saying well we're very excited about the portal. We also appreciate the feedback that a lot of wall Street, and others have given us about the right way to do.

Do this this service transition is over multiple quarters, and even years and that is our our timeline for getting this done but we're at a strong 10% today, but I think give us a year or two we will migrate the full business.

Super helpful color and Jeff Thanks.

Anna Bryson: And for a follow-up, you know, speaking on the budget environment, now that the company's a couple quarters into, say, this lower market growth, we think about sales and marketing spend going forward. I think for the year, spend will be roughly flat over fiscal 23 levels, suggesting maybe higher costs of customer activity. Thanks, everybody.

Then for a follow up speaking on the budget environment now that the companies a couple of quarters and to say this lower market growth rate, how should we think about sales and marketing spend going forward I think for the year spend will be roughly flat over fiscal 'twenty three levels, suggesting maybe higher cost of customer acquisition against the new growth rate are there any opportune.

These to drive additional efficiencies here or should we expect this similar level of spend is required to prepare for what we hope is a better growth environment into fiscal 'twenty six.

Operator: We're going to get started. Sure, I can take that one, Ryan. So, you know, we've been continuing to invest in our sales teams and, particularly, in the part of our R&D team that's focused on commercial. As we think ahead over the next few years, I think one of the things that we're really excited about, and Jeff just alluded to this, is how the client portal can help unlock the ability for us to capture more SMBs. And if we think about it in terms of sales and marketing spend needed for that, it should be a pretty high incremental leverage activity for us there. So I think when we think about sales and marketing spend as a percent of revenue, it should likely be pretty consistent just due to the fact we'll keep hiring the sales team but also not go higher because we think the client portal can be an unlock for us without needing to add too many more heads there. Thanks for doing my Next question comes from the line of Ryan Daniels with Blair and Linus Wise. Yeah, thank you for taking the questions. I'll add my congratulations on the strong performance. Jeff, maybe one for you.

Okay.

Sure I can take that one Ryan so yeah, we've been continuing to invest in our sales teams and particularly investing in the part of our R&D R&D team. That's focused on commercial as we think ahead over the next few years I think one of the things that we're really excited by and Jeff just alluded to this is how the client portal can help.

Unlocked the ability of us to capture more SMB and if we think about it in terms of sales and marketing spend needed for that it should be a pretty high incremental leverage association for US. There. So I think when we think about sales and marketing spend as a percent of revenue it should likely be pretty consistent just due to the tax will keep hiring the sales team.

But also not not go higher because we think the client portal can be an unlock for us without needing to add too many more heads there.

Great. Thanks for taking my questions.

Our next question comes from the line of Ryan Daniels with Blair.

Your line is live.

Yes. Thank you for taking the questions I'll add my congratulations on the strong performance, Jeff maybe one for you you've talked a lot about AI and I know in the past you've referenced how you're using it really personalized news feeds and I'm curious what that's done specifically for engagement. If that's something you can track I know youre seeing record engagement really across all your met.

Jeff Tangny: You've talked a lot about AI. And in the past, you've referenced how you're using it to really personalize news feeds. I'm curious what that does specifically for engagement, if that's something you can track.

Jeff Tangny: I know you're seeing record engagement across all your metrics, and number one, can you provide a little bit of color on that? And number two, is that providing an ROI lift to customers on the programs, given how active these users are? This is Jeff.

Tricks and number one can you provide a little bit of color on that and then number two is.

That providing an ROI lift to customers on the programs given how active these users are.

Jeff Tangny: Thanks, Ryan. Great question. Yeah, so our AI products really span all of what we do. So within our newsfeed, I think our newsfeed gets more and more relevant using machine learning, using AI, and that certainly has led to better program results for our clients, which is terrific. AI has also led to more usage. For example, doctors come in to write an insurance appeal letter or a service animal letter in our DocsGPT product, which, as I mentioned in the prepared remarks, continues to grow nicely and organically.

This is Jeff Thanks, Ryan Great question, Yes. So.

Hi products really spanned all of what we do so within our news feed I think or do you see it gets more and more relevant using machine learning using AI and that certainly has led to better program results for our clients.

Terrific AI has also led to more usage, so doctors come into writing insurance appeal letter or a <unk>.

Service animal letter in our dock CVT product, which as I mentioned in the prepared remarks continues to grow nicely.

And organically.

Jeff Tangny: And so we see a lot of future engagement and use there. But what's nice is that those sessions can also be monetized over time, and it does lead to breaks in the day. We're seeing a lot of midday use for doctors between telehealth calls, checking their newsfeed, staying up to date on what's the latest in medicine, again, which accrues directly to our clients. I'll just end by saying we're excited to get together with our top digital doctors, 150 of them here in San Francisco this month, because what we've got queued up for new products here, I think, is just very exciting. And while we're not going to speak specifically to our roadmap here, we've had some alpha tests that have gone very, very well. And suffice it to say, the average doctor spends two hours doing administrative work for every one hour they spend seeing patients, which is, you know, an incredible problem in this country.

And so we see a lot of future engagement news there, but whats nice is those those sessions can also be monetized over time and it does lead to breaks in the day, we're seeing a lot of mid day used for doctors between telehealth calls checking their news feed staying up to date on what's the latest in medicine, again, which accrues directly to our clients.

<unk>.

Ill just end by saying, we're excited to get together with our top digital Doctor was 150 of them here in San Francisco.

This month, because we've got queued.

New products here I think is just very exciting.

Well, we're not going to speak specifically to our roadmap here. We've had some alpha test that have gone very very well and suffice it to say the average doctor since two hours.

Doing administrative work for every one hour or at least been seeing patients switch.

As an incredible problem in this country and we're helping them take that two hours and really shrink it down theres a lot of mediocre writing that has to be done in health care and what is really good at is mediocre writing. It is really good at helping you get the administrative work done to fight with the insurance companies or others more quickly. So we're super excited about that.

Jeff Tangny: And we're helping them take that two hours and really shrink it down. There's a lot of mediocre writing that has to be done in healthcare, and what AI is really good at is mediocre writing.

Jeff Tangny: It's really good at helping you get the administrative work done to fight with the insurance companies or others more quickly. So we're super excited that that will drive a whole other wave of engagement for us, just like COVID did with our telehealth platform, that will, again, accrue to our clients in terms of increased newsfeed and workflow platform usage. And then as a follow-up, I just wanted to ask about the client service portal. I know it's only rolled out to 10% and you're not allowing purchases on it yet, but it seems like a great opportunity to kind of show real-time ROI and maybe have more touch points during the year than you've had in the past, emphasizing your value to clients.

We'll drive a whole another wave of engagement for us just like Toby did with our telehealth that will.

Again accrue to our clients in terms of increased news feed and workflow platform usage.

Perfect. That's very helpful color and then as a follow up just wanted to ask about the client service portal and I know, it's only rolled out to 10% you are not allowing purchases on it yet, but it seems like a great opportunity to kind of show real time, Roy and maybe have more touch points during the year than <unk> had in the past.

Emphasizing your value to clients I'm curious, if you've been able to look at those clients using it and if they are actually purchasing more from you again not on that platform, but just purchasing more doing more bundled solutions with you because of the value they're seeing real time with your services. Thanks.

Jeff Tangny: I'm curious if you've been able to look at those clients using it and if they are actually purchasing more from you, again, not on that platform, but just purchasing more, doing more bundled solutions with you because of the value they're seeing in real time with your services. The short answer is the end is pretty small, but we have seen some of the clients who have been early adopters of the portal become high growth clients for us, even in December and now in January. So I do think that they are leaning in. They see it as Doximity grabbing the mantle, being an industry leader here, and bringing this transparency and optimization to what they do. And it's received a lot of warm, warm reviews.

The short answer is pretty small, but we have seen some of the clients who have been early adopters of the portal become high growth clients for us even in December and now January so I do think that they are leaning and they see us doximity.

Grabbing the mantle of being an industry leader here in bringing this transparency and optimization to what they do.

It had a lot of warm warm reviews, I'd say the only criticism we've had on it so far.

Jeff Tangny: I think the only criticism we've had about it so far is that they fear that we'll lock them out of it if they don't renew right away or don't spend more. They're asking us how much it will cost just to get access to it, which is a good problem to have. All right, thank you. Our next question comes from the line of Richard Close with Canaccord Genuity. Your line is live. Yeah, thanks for the questions. Congratulations, Anna!

Is that they fear that will lock them out of it if they don't renew right away or don't spend more they are asking is how much it'll cost just to get access to it.

Which is a good problem to have.

Alright, thank you.

Yeah.

Our next question comes from the line of Richard close with Canaccord Genuity. Your line is live.

Alright, thanks for the questions congratulations.

Anna Bryson: I was wondering if you could maybe go into a little bit more detail on your commentary with respect to launch timing and the creation of new content. And maybe characterize it, you know, how it compares to last year. I know last year you had some of these new module modules for the first time, but any additional color there would be helpful.

I was wondering if you could maybe go into a little bit more detail on your commentary with respect the launch timing and the creation of new content.

And maybe characterize it.

How it compares to last year I know last year, you had some of these new module modules for the first time.

But any additional color there would be helpful.

Yes, sure Richard happy to take that one and once again as mentioned our Q4 revenue outlook does reflect growth that's more indicative of program launch timing then underlying sales growth. So I'll give you a couple of examples first is on the new module front. So during our upfront our new modules grew over 100% year over year as mentioned.

Anna Bryson: Yeah, sure, Richard, happy to take that one. And once again, as mentioned, our Q4 Revenue Outlook does reflect growth that's more indicative of program launch timing than underlying sales growth. So I'll give you a couple examples.

Anna Bryson: First, on the new module front. So during our upfront, our new modules grew by over 100% year over year, as mentioned, and these are new programs that require new content. So they're not contractually planned to launch until the spring.

These are new programs that require new content, so theyre not contractually planned to launch until the spring. We also saw strong growth in newer brands. So. Another example, I'll give you is one out of the $310 million plus brands that I mentioned.

Anna Bryson: We also saw strong growth in newer brands. So another example I'll give you is that one out of the three $10 million plus brands that I mentioned is actually a newer brand, and it's also not contractually planned to launch until the spring. So it's a lot more about some nuances here with newer brands and newer modules that are contributing to more spring launches than we might have seen prior. Okay, and then just any thoughts in terms of whether the new modules are cannibalizing all legacy modules. I know you said it expands the budget and whatnot, but just any feelings on that front would be good. Sure, this is Nate. I can take that one.

It's actually a newer brand and it's also not contractually planned to launch until the spring. So it's a lot more about some nuances here with newer brands in newer modules that is contributing to more more spring launches than we might have seen prior.

Okay.

And then just any thoughts in terms of.

Whether the new modules.

Are cannibalizing at all legacy.

Modules I know you said it expands the budget and whatnot, but just any feel on.

On that front would be a good.

Sure. This is Nate I can take that one.

Nate Gross: So two comments. First, one of the reasons why we're excited about these new modules is they do unlock new budgets. Within those new budgets, our products are often offering a digital versus analog approach, something that's often much more interactive than other solutions on the market, and a real potential for high-impact efficiency that hasn't been seen before. So it's a great entrance into those budgets.

So two comments first one of the reasons why we're excited about these new modules as they do unlock new budgets.

Within those new budgets are products are often offering digital versus analog approach.

Something thats often much more interactive than other solutions on the market and a real potential for high impact efficiency that hasn't been seen before so it's a great entrance to those budgets. These.

Nate Gross: These products are also typically multi-budget applicable, so we do see interest from our marketing clients in them too. It's understandable that they're exciting to our more classic marketing clients who haven't had access to products like these before. But one thing that we're seeing is that our clients are increasingly interested in buying Doximity rather than just buying a module. And that gives us a great opportunity to increase our role as a trusted partner and leverage some of our omni-channel, within Doximity, multi-modal development opportunities as we build out strategies with our partners to really leverage both the new and the old modules in ways that I think are both maximizing the growth opportunity and the healthy Thank you.

These products are also typically multi budget applicable so we do see interest from our marketing clients in them too. It's understandable that there are exciting to a more classic marketing clients, who haven't had access to products like these before.

But one thing that we're seeing is that our clients are increasingly interested in buying doximity.

Rather than buying just a module and that gives us a great opportunity to increase our role as a trusted partner and leverage some of our omnichannel within Doximity multimodal.

Development opportunities as we build out strategies with our partners to really leverage both the new and the old modules in ways that I think are both maximizing the growth opportunity.

The healthy reach to our end user, but also are delivering the maximum ROI for clients.

Okay. Thank you.

Yes.

Operator: Our next question is from the line of Stephanie Davis with Barclays. Thank you for taking my question. Glad to be back.

Our next question is from the line of Stephanie Davis with Barclays.

Your line is open.

Thank you for taking my questions guys back.

Jeff Tangny: Anna, you've talked in the repair remarks and in the Q&A about a strong Q selling season, healthy revenue retention, and expectations for above market growth. So I guess my big question is how do you bridge to the implied step down in the 4Q growth guide? Is there anything unique beyond timing to call out there, or is it reflective of finding religion in a more conservative guidance philosophy? Happy to have you back as well, Steph.

You talked and repaired remarks, and in the Q&A about a strong selling season healthy revenue retention expectations about market growth. So I guess my Big question is how do you how do you bridge to the implied step down in the core growth guidance is there anything unique beyond timing to call out there or is it.

Reflective of like.

Finding religion, and a more conservative guidance philosophy.

Happy to have you back as well as staff. So a couple of things I'll say there.

Anna Bryson: So, a couple of things I'll say there. You know, what we're seeing from a step-down perspective in Q4 is the result of two factors. So, first and foremost, we did see a stronger Q3 than typical due to a more condensed upsell season. And then second, you know, the mix of new products and brands can be different year to year, as can our customer strategies. So, we're definitely seeing a Q4 that's very dependent on launch timing. So, back to the answer I gave before with Richard, we just have a higher mix of new products and new brands, and we're also making sure that we have enough time to get those programs live. So, it's a little bit of both to answer your question directly. All right, very helpful. So maybe a little bit of a buffer there. And then Jeff.

What we're seeing from a step down perspective as in Q4 is the result of two factors. So first and foremost we did see a stronger Q3 than typical due to a more condensed up sell season, and then second the mix of new products and brands can be different year to year, asking our customer strategies. So we're definitely seeing a Q4 that.

Very dependent on launch timing so back to the answer I gave before with Richard.

Have a higher mix of new products and new brands and we're also making sure that we baked in enough time to get those programs lives. So it's a little bit of both to answer your question directly.

Alright Super helpful. If I may be a little bit tougher there and then Jeff.

Jeff Tangny: I know historically you haven't laid out a revenue strategy for the Dox GPT product, but it sounds like it's scaling, and it's really starting to echo that evolution of the dialer from that free, nice-to-have product into a four-charge product. Do you have any early thoughts on the evolution and maybe when it's going to be more game-time ready as something that you would sell as a standalone? Thanks, Jeff. Good to have you back.

I know historically, you havent laid out a revenue strategy for the Doc CEB product, but it sounds like it's scaling and really starting to echo that evolution of the dollar from that free nice to have product into a four charge product did you have any early thoughts on the evolution of maybe when it's going to be more.

Game time ready is something that you would sell standalone.

Thanks, Jeff did have you back.

Jeff Tangny: Yeah, you're right in the sense that I'm an engagement first, then monetization sort of person, and that's been our approach as well with a product that is really all about monetization, which is helping our clients purchase from us. We're the best product in the market. When our clients sit down at the end of the year to do their annual reviews of all the programs and all the partners that they work with, again, they tell us that we win in terms of ROI. We win in terms of our service.

Youre right in a sense that I'm an engagement first then monetization sort of person.

That's been our approach as well with a product that is really all about monetization, which is helping our clients purchased from us.

Best product in the market when our client sat down at the end of the year to sit down and do their annual reviews of all the programs and all the partners that they work with again theyre, telling us that we win in terms of ROI, we win in terms of our service.

Jeff Tangny: We, I think, clearly outgrew the rest of the market here this last quarter, but we're not the easiest to buy from. So we're the best product, but not the easiest to buy. And really, we want to fix that, and we want to fix that before this summer, which is, I think, the season where that dynamic is most important for us. Now, to be clear, again, two-thirds of the year have already happened in the upfront season, but our goal here is that this summer, we're going to have built the engagement to be able to add monetization. Thank you both.

I think clearly outgrew the rest of the market here this last quarter, but we're not the easiest to buy from so we're the best product and not the easiest to buy and really we want to fix that and we want to fix that before this summer, which is I think the season where that that dynamic.

Most important for us now to be clear again, two thirds of the year still already happens.

The upfront season, but.

But our goal here is this summer that we're going to have built the engagement to be able to add the monetization.

Awesome. Thank you both.

Operator: Our next question is from the line of Elizabeth Anderson with Evercore ISI. Your line is live. Hi guys. Thanks so much for the question. You had a really nice step up in the gross margin. I was wondering if you could talk a little bit more about that. I think you mentioned customer support, sort of strategic AI. How do you think about the sustainability of that? And, obviously, the launching of new modules or something like that? How do you think about that on a going forward rate? Sure, I'm happy to take that one, Elizabeth.

Our next question is from the line of Elizabeth Anderson with Evercore ISI. Your line is live.

Hi, guys. Thanks, so much for the question.

You had a really nice step up in the gross margin I was wondering if you could talk a little bit more about that I think you mentioned you know customer support is that a strategic AI. How do you think about the sustainability of that and obviously ex the launching of new modules or something like that how how to think about that on a go forward.

Thanks.

Sure happy to take that one Elizabeth so youre, absolutely right, we didnt see a record non-GAAP gross margin. This last quarter at 93% I'll start by saying a large factor of that was due to the material revenue outperformance that we saw but on the other side, we are absolutely continuing to optimize our infrastructure costs.

Anna Bryson: So, you're absolutely right. We did see a record non-gap gross margin this last quarter of 93%. I'll start by saying a large factor of that was due to the material revenue outperformance that we saw. But on the other side, we are absolutely continuing to optimize our infrastructure costs and our customer support engines. We're also really leaning into AI to up-level the productivity of our existing team. So, I think that as we think about gross margin over time, due to the revenue outperformance we saw in Q3, we won't necessarily stay at this 93% level, but we feel pretty good about gross margins at 90% plus. I got it.

And our customer support engines or also really leaning into AI to up level the productivity of our existing team. So I think that as we think about gross margin over time due to the revenue outperformance. We saw in Q3, we don't think will necessarily stay at this 93% level, but we feel pretty good about gross margins at 90 per.

<unk> plus.

Got it and just in terms of the <unk> guidance.

Anna Bryson: And just in terms of the 4Q guidance, in terms of EBITDA in particular, how do we think about the cadence of some of the OPEX spending on there? Because obviously, you know, if you step up the gross margins a little bit, I guess, versus our prior expectations, you have to assume there's sort of a step up and sort of maybe R&D or maybe also sales and marketing to get back into your EBITDA range. I just wanted to understand if there's anything impacting the fourth quarter in particular.

In terms of the EBITDA in particular, how do we think about the cadence of some of the Opex spending on there because obviously you know if you step up the gross margins a little bit I guess versus our prior expectation you have to assume there sort of like a step up in sort of maybe R&D or maybe also sales and marketing to get them.

Back into your EBITDA range, So I just wanted to.

Understand if theres anything impacting the fourth quarter in particular that we should take into account.

Anna Bryson: Sure. On the expense side, you'll see that we're forecasting quarter-over-quarter growth that's actually very consistent with prior years. So I'll remind you that Q4 is our second-largest sales quarter, so we do see pretty significant commissions in Q4. It's also the new year, so we have new things that go into effect, like 409k match, benefits, etc. So the step-up that we're seeing between Q3 and Q4 expenses is very consistent with what we've seen in prior years. Thanks so much.

Sure on the expense side, you'll see that we're forecasting quarter over quarter growth, that's actually very consistent with prior years. So I'll remind you that Q4 is our second largest sales quarter. So we do see pretty significant commissions in Q4. It's also the new year. So we have new things that go into effect like four nine K match benefits et cetera. So the step up that we're.

Seen between Q3 and keep our expenses is very consistent with what we've seen in prior years.

Got it thanks, so much.

Operator: Our next question is from the line of Alan Lutes with B of A. Your line is live. Good afternoon, and thanks for taking the questions. One for Jeff or Anna.

Our next question is from the line of Allen Lutz with Bofa. Your line is live.

Good afternoon, and thanks for taking the questions one for Jeff.

Anna Bryson: Can you talk a little bit about the budget flush dynamic in the quarter? Is pharma accelerating spend? Was it all delayed spend that was unlocked in the fourth quarter? And do you think that the industry growth also slowed in the fourth quarter? Or did Doximity take incremental market share there? Daryl, I'm happy to take that one as well.

Can you talk a little bit about the budget flush dynamic in the quarter.

As pharma accelerating spend was it all delayed spend that was unlocked in the fourth quarter and do you think that the industry growth also inflected and four in the fourth quarter hoarded Doximity peak incremental market share there.

Sure I'm happy to take that one as well.

Anna Bryson: You know, listen, like we said last quarter, like many other industries in this environment, we definitely saw some elongated sales cycles this past year. So those incremental dollars that we might typically start seeing added to our platform in a normal year in the kind of May, June timeframe really didn't start coming in until August of this year. So we just have that much more condensed upsell season. I think the strength, though, that we saw at the end of the year is just a really strong indication of our competitive position in the market and that when those dollars do become available, Doximity remains one of the top choices because of our industry-leading ROI. So we're really pleased with how we were able to end the year.

Listen like like we said last quarter like many other industries in this environment, we definitely saw some elongated sales cycles. This past year. So those incremental dollars that we might typically start seeing added to our platform in a normal year in that kind of May June timeframe, I really didn't start coming in until August of this year. So we just have that much more <unk>.

<unk> upsell season, I think the strength that we saw at the end of the year is just a really strong indication of our competitive position in the market and that when those dollars do become available Doximity remains one of the top choices because of our industry, leading ROI. So we're really pleased with how we were able to end the year.

Anna Bryson: And then, Anna, you mentioned, I want to clarify, you mentioned, I think, a new launch of a $10 million customer is occurring in the spring. Is that a first-time Doximity brand that's launching for $10 million worth of spend? And then, you know, is it normal for a new brand to launch with so much spend as a first-time launch? Thanks.

Yes.

Great and then you mentioned I want to clarify you mentioned I think a new launch.

$10 million customer is occurring in the spring is that a first time Doximity brand that's launching for $10 million worth of spend and then is it normal for a new brand to launch.

With so much spend as a first time launch thanks.

Anna Bryson: Sure. Well, I'll start by saying this is a brand with one of our top five customers. So it's a customer that has worked with Doximity for a very long time and has realized the value of Doximity. Is that normal?

Sure I'll start by saying this brand as a brand with one of our top five customers. So it's a customer that has worked deductibility for a very long time and has realized the value of doximity.

Anna Bryson: I would say no, because we haven't seen it in the past. I wouldn't say it's typical.

Is it normal I would say no we haven't seen it in the past I wouldn't say, it's typical but one of the things that we're really excited by as newer brands launch is that they are launching with a digital first strategy in many categories and what that means is that they're able to invest more in digital upfront because they don't have salesforce or.

Anna Bryson: But one of the things that we're really excited about as newer brands launch is that they're launching with a digital first strategy in many categories. And what that means is that they're able to invest more in digital upfront because they don't have Salesforce or other investments that they've made prior. So we're really encouraged by what we saw with this brand, and we're hopeful that we can see more new brands start at higher spend levels. Great, thank you. Our next question is from the line of Glenn Santangelo with Jeffries. Your line is live. Yeah, good evening.

There are other investments that they've made prior so we're really encouraged by what we saw of this brand and we're hopeful that we can see more new brands start at higher spend levels.

Great. Thank you.

Our next question is from the line of Glen Santangelo with Jefferies. Your line is live.

Alright, yes. Good evening, thanks for taking my questions I, just got a couple of quick questions regarding fiscal 'twenty five at this point and I heard I read your comments, obviously that you believe the market sort of growing 5% to seven and you can grow faster than that but if I go back to last quarter. I think you said you characterized the market in.

Anna Bryson: Thanks for taking my questions. I just have a couple of quick questions regarding fiscal 25 at this point. And I read your comments, obviously, that you believe the market's sort of growing five to seven, and you can grow faster than that. But if I go back to last quarter, I think you characterized the market at 23 as mid to high percentage single digits. And ultimately, you suggested that 24 you expected it to grow at the same level. Are you seeing any change in the HCP marketing business at all? Or is the market moving at all? Happy to take that one, Glenn.

<unk> three <unk>.

Mid to high percentage single digits and it ultimately you suggested that 24, you expected it to grow at the same level are you seeing any change in the HCP marketing.

Business at all or is the market moving at all.

How do we take that one Glenn I'll say that the market growth.

Anna Bryson: You know, I'll say the market growth rate that we're seeing is pretty in line with our expectations 90 days ago, as we're still in an uncertain macro and we're still facing some cyclical headwinds in market budget growth. But what has changed in the last 90 days is that our upfront did come in ahead of expectations, in particular amongst these larger brands and newer modules. So we feel incrementally better about our ability to continue to gain share, but we are cognizant that there is still some macro uncertainty and that's affecting the pharma budget. But, Anna, maybe if I could just take that one step further.

That we're seeing is pretty in line with our expectations 90 days ago as we're still in a.

Uncertain macro and we're still facing some cyclical headwinds end market budget growth I will say what has changed in the last 90 days as our upfront did come in ahead of expectations in particular amongst these larger brands in newer modules. So we feel incrementally better about our ability to continue to gain share, but we are cognizant that there is still some.

Ground certainty and thats affecting pharma budgets.

And maybe if I could just take that one step further I mean, you talked about the selling season and what happened in the fiscal third quarter, how much visibility do you have on fiscal 'twenty five at this point I mean can you comment at all in and maybe the last part of that question is when you think about fiscal 'twenty four how much of it is is the year.

Anna Bryson: I mean, you talked about the selling season and what happened in the fiscal third quarter. How much visibility do you have on fiscal 25 at this point? I mean, can you comment at all? And maybe the last part of that question is, you know, when you think about fiscal 24, how much of the year is benefiting from new product launches that maybe will, you know, you get the full 12-month benefit from next year? So any sort of color you can give us around would be great.

Fitting from new product launches that maybe will you get the full 12 month benefit from next year. So any sort of color you can give us around that would be great. Thanks very much.

Anna Bryson: Thanks very much. Sure, Glenn. I'll say it's a little bit too soon for us to start giving further color on Fiscal 25. We'll definitely give you the full update on that next quarter. What I can say to your original question is that we have seen a trend over the past several years where we do enter a given fiscal year with a higher percentage of revenue under contract. And we think that's a strong indication of the value customers find on our platform and their willingness to commit more up front. And as we look ahead to Fiscal 25, that's a trend that we believe will continue. But that's about all I can say about Fiscal 25 today. So. Thanks for your question. Once again, ladies and gentlemen, if you would like to ask a question, it's a star followed by the number one on your touchtone keypad.

Sure Glenn I'll say, it's a little bit too soon for us to start giving further color on fiscal 'twenty five we'll definitely give you the full update on that next quarter. What I can say to your original question is that we have seen a trend over the past several years, where we do enter a given fiscal year with a higher percentage of revenue under contract.

And we think Thats, a strong indication of the value of the customer signed on our platform and their willingness to commit more upfront and as we look ahead to fiscal 'twenty five.

And that we believe will continue but that's about all I can say on fiscal 'twenty five today.

Okay.

Thanks for your question once again, ladies and gentlemen, if you would like to ask a question at Star followed by the number one on your Touchtone keypad, we do request that you asking limit yourself to one question followed by a single follow up. Our next question is from the line of Jack Wallace with Guggenheim Securities. Your line is live.

Operator: We do request that you ask and limit yourself to one question followed by a single follow-up. Our next question is from the line of Jack Wallace with Guggenheim Securities. Your line is:

Anna Bryson: Thanks for taking my questions. You know, I want to ask the market growth question a slightly different way, which pertains strictly to Doximity: how did the upsell season this year compare to last year? And then if you were to get a similar amount of budget relief for the year as you did in what's called calendar 23, where does that kind of shake you out for a kind of growth? Hey, Jack.

Hey, Thanks for taking my questions.

Yes.

I wanted to ask the market.

The growth question, a slightly different way.

It pertains strictly to Doximity, how did the upsell season.

This year compare to last year, and then if you were to get a.

Similar amount of budget release.

Later in the year as you did in let's call. It calendar 'twenty, three where does that kind of shake you out for kind of a growth rate.

Hey, Jack So I'll start by saying that what we saw this past calendar year was definitely a little bit different than the prior calendar year. It was more condensed at yearend.

Anna Bryson: So I'll start by saying that what we saw this past calendar year was definitely a little bit different than the prior calendar year. It was more condensed at year end. There was a little bit less budget, I would say, to go around, and that certainly affected us. That's due to macro uncertainty and continued, as I said, Google headwinds and end market budget growth. What we're really excited about this next year for the upsell season is the ease of use that our client portal can bring. And so the ability to quickly relaunch, add targets, make buying on Doximity easier, even if budgets remain constrained, we think that could be an unlock for us. Thanks, that's very helpful.

Was a little bit less budget I would say to go around and that certainly affected us that's due to macro uncertainty and continued as I said cyclical headwinds in end market budget growth. What we're really excited about this next year for the upsell sealant is the ease of use that our client portal can bring and so the ability.

82 quickly relaunch and targets make buying on doximity easier, even if budgets remain constrained we think that that could be an unlock for us.

Got it thanks, that's helpful and then.

Nate Gross: And then the modular products, particularly those that are cross-budget, you know, what kind of TAM or, you know, this feels incremental, what kind of TAM should we be thinking about this year represents over the next few years? You know, if you're thinking about this being an extra, you know, layer on top of, you know, farmer spend, what kind of, again, I'm not asking you for a five-year target, but you know, is this a couple of points of growth? Is this You know, just a couple of incremental changes What you think we should think about the, Hey, Jack, this is Nate. I can take that one.

Modular products, particularly those that are cross budget.

What kind of you tamera.

It feels incremental what kind of Tam should we be thinking about this represents over the next few years.

If you're if you're thinking about.

This being an extra.

Layer on top of <unk>.

Pharma spend.

What kind of again, not asking you for a five year target but.

Is this a couple of points of growth as this.

Just a couple of incremental what how should we think about the opportunity.

Hey, Jack this is Nate I can take that one so we see a bunch of different benefit areas with the portal I think the first one is going to be faster launches and better alignment with some of the stakeholders in the process like some of the agencies that are involved.

Nate Gross: So we see a bunch of different benefit areas with the portal. I think the first one is going to be faster launches and better alignment with some of the stakeholders in the process, like some of the agencies that are involved in the process. I think that's going to be across things like list matching, analytics, and making sure that the content can be AI supported. I think there are also advantages in pricing and price discovery that come along with us to our benefit. Easier price increases in addition to discovery

From the process.

I think thats going to be across things like.

With matching analytics, making sure that.

The content can be AI supported.

I think there are also advantages and pricing and price discovery that come along with us towards towards our benefit easier price increases in addition to discovery.

Nate Gross: Upsells are certainly one that we're already starting to see some excitement around, whether that's relaunching or adding targets, adding modules, or expanding existing programs. And then really new sales, both with new clients who we haven't really been able to work with in the past because their budgets haven't been quite of the size and capacity to be a good fit for our current sales team, but also, actually, in entirely different categories of TAM and med devices and digital health and other markets that really haven't been a core part of our go-to-market motion today who are comfortable with these Your next question is from the line of Jessica Tassin with Piper Sandler. Your line is open.

Upsells.

Our certainly one that we're already starting to see some excitement around whether that's relaunching or adding targets, adding module was expanding existing programs and then really new sales both with new clients, who we haven't really been able to work with in the past because their budgets.

It hasn't been quite a bit the size and capacity to be a good fit for our current sales team, but also actually in entirely different categories of Tam.

Devices and digital health and.

Other markets that really haven't been a core part of our go to market motion today, who are are comfortable with these sorts of tools in the markets that they spend in and I think we'll see good ROI from our existing products.

Our next question is from the line of Jessica Thompson with Piper Sandler Your line is live.

Jeff Tangny: Hi. Thanks for taking my question. I was hoping you guys could provide some color on just how pharma is thinking about the media allocation in an election year. I'm curious if dollars shift to kind of more civilian social media channels and TV, or if dollars actually shift to Doximity as TV becomes more expensive. I'm just hoping for any perspective about whether pharma's posturing is different at all in an election. Hi Jess. This is Jeff.

Hi, Thanks for taking my question.

I was hoping you guys could provide some color on just how pharma is thinking about the media allocation in an election year and curious if dollar shift to kind of more civilians, social media channels, and TV or a $1 actually shipped to doximity as <unk> becomes more expensive.

Hoping for any perspective about whether farmers posturing is different at all in an election year.

Hi, Joe. This is Jeff you were certainly no experts on this but I would say that there hasn't been much change that we've noticed yet health care Hasnt made it that high in the ticket yet.

Jeff Tangny: You know, we're certainly no experts on this, but I would say that there hasn't been much change that we've noticed yet. Healthcare hasn't made it that high on the agenda yet. And, you know, this is a year where we have just a lot of innovation, a lot of new products that are pretty exciting, pretty large. So, you know, we're proud to have, you know, three $10 million new brands and our first ever launch brand at $10 million. So, so far, so good. But, you know, so far, I think the approach here, especially since we focus on physicians and not on broader consumers, which might see, I think, more election-oriented pressure. We haven't seen a lot there yet. I got it.

This is a year, where we have just a lot of innovation a lot of new products that are pretty exciting pretty large.

We're proud to have $310 million new brands in our first ever launch brand at $10 million. So so far so good.

So far I think the approach here, especially since we focus on physicians and not on broader consumer which might see I think more election oriented pressure.

We haven't seen a lot there yet.

Got it.

Anna Bryson: That's helpful. And then maybe for Anna, I just, on the sequential step down in 4Q24, I wanted to better understand that. So specifically, excluding the new products, would the sequential growth rate in 4Q24 look more like 4Q23, kind of down mid-single digits? And then as we think about the launches, given that you have one season of experience with Point of Care, should we just expect the full magnitude of those sales to come online by the fiscal 1Q of next year? And thanks. Sure, Jeff.

And then maybe for Anna.

On a sequential step down in <unk> 24.

I wanted to better understand that so specifically, excluding the new products with the sequential growth rate in <unk> 24 look more like <unk> 23 kind of down mid single digits.

And then as we think about the launches given that you have one season of experience with point of care and should we just expect the full magnitude of those sales to come online by the fiscal <unk> of next year and thanks again.

Sure, Jeff So what I'll say about seasonality is the way our customers purchase and launch their programs has evolved over the past several years and as a result, we've definitely seen some quarterly variations in revenue. So in any given year, there can be seasonality, depending on the market dynamics the economic condition.

Anna Bryson: So, what I'll say about seasonality is the way our customers purchase and launch their programs has evolved over the past several years, and as a result, we've definitely seen some quarterly variations in revenue. So, in any given year, there can be seasonality depending on the market dynamics, the economic conditions, or even our customer strategy, which is something we're seeing this year. But we really focus on measuring the success of our business on an annualized basis, which is consistent with how our customers think about their budgets, and it's consistent with how our sales team thinks about their goals. So, we're much more focused on that annual number, and as far as commentary on next quarter, we will give you that update next quarter. Hi, your line is live; go ahead. This is a question from Vikram Kasabalotha with BARD.

<unk> or even our customer strategy, which is something we're seeing this year, but we really focus on measuring success of our business on an annualized basis, which is consistent with how our customers think about their budgets and is consistent with how our sales team thinks about their goals. So we're much more focused on that annual number and as far as commentary on next quarter, we will.

Give you that update next quarter.

Okay.

Okay.

Okay.

Hi, Your line is <unk> go ahead.

This is a question from Vikram Kashyap <unk> with <unk>. Your line is live.

Anna Bryson: Your line is live. Okay, great. Thanks for taking the questions. Hey, my first question is on revenue growth. I guess when you talk about outperforming the market by 5 to 7% in 2024, do you expect the magnitude of outperformance to be similar to what you saw last year? Or is there any reason to think that your share gains will be particularly better or worse than what you experienced in 2023?

Okay, great. Thanks for taking the question Hey.

Hey, My first one is on revenue growth I guess, when you talk about outperforming the market up 5% to 7% in 2024 do you expect the magnitude of outperformance to be similar to what you saw last year or is there any reason to think that your share gains will be particularly better or worse than what you experienced in 2023, and then as a follow up to that you talked about some of the budget.

Anna Bryson: And then as a follow-up to that, you talked about some of the budgets being unlocked later than you initially expected last year. Do you think the cadence of purchasing decisions and behavior is going to be similar again in 2024? Or do you think it's going to revert closer to historical seasonality?

<unk> later than you initially expected last year do you think the cadence of purchasing decisions and behavior is going to be similar again in 2024 or do you think it's going to revert closer to the historical seasonality and I'll leave it there. Thanks.

Anna Bryson: And I'll leave it there. Thanks. Sure, Vikram.

Sure Vikram once again I'll say, it's too soon for us to comment on fiscal 2025, so I'm not going to go too in depth, there, but what I will say is that we're really excited about the scale of buying we saw on our platform. During the upfront season, we absolutely believe we can continue to outperform.

Anna Bryson: Once again, I'll say it's too soon for us to comment on fiscal 2025, so I'm not going to go too in-depth there. But what I will say is that we're really excited about the scale of buying we saw on our platform during the upfront season. We absolutely believe we can continue to outperform the market. To what extent, we will give you an update on that next quarter. We're really encouraged to have 75 brands at this point spending over $1 million with us, which is an increase of 30% year-over-year. I think that just speaks to the interest customers have in Doximity and the value they're receiving from our platform. And so we're really excited by the growth we're seeing, but we'll give further details on how big that is next quarter. Our next question is from the line of Scott Schoenhaus with KeyBank. The line is too wide.

The market to what magnitude we will give you an update on that next quarter, but were really encouraged to have.

75 brands at this point spending over $1 million with US, which is an increase of 30% year over year I think that just speaks to the interest of customers haven't always doximity and the value. They are receiving from our platform and so we're really excited by the growth we're seeing but we will give further details on how big that is next quarter.

Our next question is from the line of Scott Schonhaus with Keybanc. Your line is live.

Hi team Thanks for taking my question.

Jeff Tangny: Thank you. Thank you. Hi team.

Jeff Tangny: Thanks for taking my question. I guess first, on mid-year upsells this past year, is there a way to quantify, even if it's in a range, how much market share you lost during this past year's mid-year upsell because you didn't have the self-service portal? And then a follow-up question would be, you know, if you think about increasing your current client from 10% onward throughout the mid-year upsells that are using the portal, does that give you more visibility into revenue? Thanks. Hi. Yeah, this is Jeff. I'll take it.

Guess.

First on midyear Upsells. This past year is there a way to quantify even if it's within a range how much market share you lost during this past year's mid Europe sell because you didn't have the self service portal.

And then a follow up would be.

If you think about increasing the current client from 10% onward throughout the mid Europe cells that are using the quarter does that give you more visibility into revenue.

Hi, Yes. This is Jeff I'll take it we don't have an exact estimate of market share through through the mid year cycle. There's just not many data sources that break it out that that granularly.

Jeff Tangny: We don't have an exact estimate of market share through the mid-year cycle. There's just not many data sources that break it out that granularly. So, unfortunately, I don't have an exact answer for you on the number of points of share there. With regard to overall visibility, I think we, as Anna said, will begin this next year with more visibility, a greater percent under contract than we ever have before. And I think that's, again, a good sign long-term that our clients choose to partner with us over the longer term and are willing to commit and spend more up front with us. Again, we're not giving you any longer-term guidance here. Again, we're just being more cautious for longer.

So unfortunately don't have a exact answer for you on a number of points of share there.

With regard to overall visibility I mean, I think we as Ana said will begin this next year with more visibility greater percent under contract than we ever have before.

And I think that's again, a good sign long term and our clients.

Choose to partner with us over the longer term and are willing to commit and spent more upfront with us again, we're not giving longer term guidance here again, we're just being.

More caution longer.

Jeff Tangny: And this speaks to, I think, our change here in terms of just more conservatism in understanding that we are in a very uncertain market for a lot of reasons that are exogenous. Our next question is from the line of Craig Hettenbach with Morgan Stanley. Your line is live. Yes, thanks. I had a question about the video modules.

And this speaks to I think our change here in terms of.

Just more conservatism.

Understanding that we are in a very uncertain market for a lot of reasons that are exogenous to us.

Our next question is from the line of Craig Patent box with Morgan Stanley. Your line is live.

Yes, Thanks had a question on the video modules at.

Anna Bryson: At the analyst day, you had kind of framed it as potentially getting to like 15% of the mix, you know, five years out. I know you don't have long-term targets now, but is that a way to still think about it in terms of contribution over time and how you see these modules ramping? Sure, Craig.

At the Analyst day, you had kind of framed it as potentially getting to like 15% of the mix.

Five years out I know you don't have long term targets now, but is that a way to still think about it in terms of contribution over time and how you see these modules ramping.

Sure Craig So I had to give an update necessarily on the long term target there but.

Anna Bryson: So we're not going to give an update necessarily on the long-term target there, but we're really encouraged by the way they've ramped up, growing over 100% year-over-year, and this is really the second year we're selling them. One of the things I'll say about on a go-forward basis is, as we continue to focus on a packaged approach to selling modules, it's unlikely that we'll be breaking them out in quite as much detail because this packaged approach is really, as Nate mentioned, the client buying Doximity as a whole. So we're thinking about it that way, as opposed to on an a la carte module basis. And then, just as a follow-up on capital allocation, you know you use very strong cash flow and a good balance sheet to buy back stock. Just curious what the opportunity set is out there for potential tuck-in deals. Is that something that you would still evaluate in terms of adding capabilities to the platform? Hey Craig, This is Nate.

Really encouraged by the way they've ramped to growing over 100% year over year and really the second year, we're selling them one of the things I'll say about on a go forward basis is as we continue to focus on our packaged approach to selling modules. It's unlikely that we will be breaking them out quite as in quite as much detail. Because this packaged approach is really.

As Nate mentioned, the client buying doximity as a whole so we're thinking about it that way as opposed to on an individualized olive garden module basis.

Understood. Thanks, and then just as a follow up on capital allocation.

He has very strong cash flow and a good balance sheet to buy back stock just curious what the opportunity set is out there for potential tuck in deals is that something that you would still evaluate in terms of adding capabilities to the platform.

Hey, Greg This is Nate yeah. So we have great active exposure to opportunities in the market right now where we're going to be opportunistic.

Nate Gross: Yeah, so we have great active exposure to opportunities in the market right now. We're going to be opportunistic. But, you know, our culture, going back 14 years now, is as disciplined and value sensitive and really internal R&D forward as ever. So we're lucky to be able to make all these decisions with a high quality bar and a focus on platform fit, which we've done with acquisitions like, say, Am I On? But they are not really forced into inorganic revenue growth.

But yes, I think as you know our culture going back 14 years, now is disciplined and value sensitive and really internal R&D forward as ever. So we're lucky to be able to make all these decisions with a high quality bar and a focus on platform fit which we've done with acquisitions like say Amazon, but not really.

Person to inorganic revenue growth. So we're going to be real thoughtful about that use of cash I think the market has become more interesting in many ways lately.

Nate Gross: So we're going to be real thoughtful about that use of cash. I think the market's become more interesting in many ways lately. But it's always going to be with a mind toward building our flywheel to address our market opportunities and serve the doctor. Our next question is from Stan Berenstein with Wells Fargo Securities. Your line is live. Hi, thanks for taking my questions. Maybe a couple on the newer modules.

It's always going to be with the mind towards building, our flywheel to address our market opportunities and surface offers.

Our next question is from the line of Stan Bernstein with Wells Fargo Securities. Your line is live.

Hi, Thanks for taking my questions, maybe a couple on the newer modules. So so first if we just think about the year on year growth in the quarter about $20 million incremental how much of that was driven by the new module cells.

Anna Bryson: So first, if we just think about the year-on-year growth in the quarter, about $20 million incremental, how much of that was driven by the new module? Once again, we're selling our new modules on more of a package basis, so we do not intend on giving that breakout. As I mentioned, new modules grew nicely, but we also saw really nice growth amongst some of our larger brands and continued growth in that $10 million plus cohort, but we aren't going to give any further detail on new modules specifically there. Okay, that's fair. I guess then, in the prepared remarks, you indicated modules kind of fall outside of traditional marketing budgets, and I guess if it's not traditional marketer considerations, what considerations are driving the decisions to purchase these new modules, and just packaging these modules in kind of like this bundled solution now pushes them into a traditional budget consideration. Hi Stan.

Once again, we're selling a new module is on more of a package basis. So we do not intend on giving that breakout as I mentioned, new modules grew nicely, but we also saw really nice growth amongst some of our larger brands and continued growth in that $10 million plus cohort, but we arent going to.

Any further detail on new module specifically there.

Okay.

Fair I guess in the prepared remarks, you indicated modules kind of fall outside of the traditional marketing budgets and I guess, if it's not the traditional market or considerations what considerations are driving the decisions to purchase these new modules and this packaging these modules and kind of what this bundled solution now pushed.

Them into a traditional budget considerations.

Thanks.

Thanks, Dan This is Jeff I'll take that so just wondering if there is we are pulling from new budget lines with these new module. So it's a peer to peer Med affairs theaters, you know a lot of traditional things that form of done are thankfully, becoming more digital because not as many doctors are going to give up a whole evening to go to for our three hour dinner anymore. So.

Jeff Tangny: This is Jeff. I'll take that. So, the short answer is we are pulling from new budget lines with these new modules. So, it's peer-to-peer, Medifares, dinners, you know, a lot of traditional things that pharma has done that are thankfully becoming more digital because not as many doctors are going to give up a whole evening to go to a four-hour, three-hour dinner anymore. So, we are pulling from some of those other budgets outside our core marketing budgets.

So we are pulling from some of those other budgets outside of our core marketing budgets. The other thing I'll just say in regard to the new modules and so far they've been primarily sold to our top 20 clients. Our biggest best clients the ones, who have been working with us the longest.

Jeff Tangny: The other thing I'll just say in regard to the new modules is that so far, they've been primarily sold to our top 20 clients, our biggest, best clients, the ones who've been working with us the longest. And if you're following along on the net revenue retention rates, the NRRs, you can see that we did increase slightly this last quarter on these, which I think is a strong sign that we're doing a great job of landing and expanding, especially the latter. And we're just pleased that we have yet to, I think, really hit a glass ceiling inside any of these, you know, mega top five, top 10 pharmaceutical companies or other large players.

And if you're following along on the net revenue retention rates <unk>. So you can see that we did increase slightly this last quarter on these which I think is a strong sign that we are doing a great job of landing and expanding especially as you're expanding.

And we're just pleased that we have yet to I think really hit a glass ceiling inside any of these mega top five top 10 pharmaceutical companies or other large players and we think theres a real opportunity to again land more with the portal increase that long tail that SMB play.

Jeff Tangny: And we think there's a real opportunity to, again, land more with the portal, increase that long tail, that S&B play where we do have a lower market share today because, you know, we do have a high minimum to work with us that is above what many folks will do. And frankly, we don't have as strong a sales force to go meet with all of those medical device and digital health and other companies that Native mentioned. Our next question is from David Larson with BTIG. Your line is live.

Where we do have a lower market share today, because we do have a high minimum to work with us that is above what many folks will do and frankly, we don't have as strong a sales motion to go meet with all of those medical device and digital health and other companies that Nate mentioned.

Thanks. Our next question. Thank you. Our next question is from the line of David Larsen with <unk>. Your line is live.

Jeff Tangny: Hi, congrats on a good quarter. With regard to the patient portal and the real-time ROI analysis, can you maybe talk a little bit more about that? Like, how many of your million plus or 10 million plus brands are actually using that? It seems like it's very important. And then with the IQVIA data, IQVIA obviously has a very sophisticated advanced CRM platform where they can actually identify which doctors would benefit from the products, who the patients are, where they are. I mean, are you somehow linked in with IQVIA to basically, you know, line up meetings and sell the brands? So thanks very much. Thanks, David. This is Jeff.

Congrats on a good quarter with regards to the patient portal and the real time ROI analysis.

Can you maybe talk a little bit more about that like how many of your million plus or $10 million plus brands are actually using that it seems like it's very important and then with the <unk> data <unk>, obviously has a very sophisticated advanced CRM platform, where they can actually identify okay, which doctors would benefit from the.

<unk>, who the patients are where they are.

Are you are you somehow linked in with <unk> to basically.

Lineup meetings and sell the brand products.

Thanks very much.

Well. Thanks, David This is Jeff, yes, so I will say I'm very excited about.

Jeff Tangny: Yeah. So, I'll say I'm very excited about the ROI portion of the portal. So, a few things. First, it's not a patient portal. There's no patient-level data in it.

The ROI portion of the portal. So a few things first it's not a patient portal there is no patient level data in it but we do license in prescription level data that is that a physician level from the companies that are leaders in the space that you've mentioned.

Jeff Tangny: But we do license prescription-level data that is at the physician level from the companies that are leaders in the space that you've mentioned. And that's a big unlock for our clients because, you know, they would usually wait months to be able to have some custom project to put that data together and to try to optimize their marketing and understand where they're doing well and where they're not doing as well. And that's one of the quotes I called out in my prepared remarks, that it's really exciting to be able to look at this on a week-to-week, month-to-month basis. And, of course, we could add a whole new level of insight to it because we know what words are being used by which physicians and what subcategories or subsegments may make more sense. So, it's really helping get the most relevant message to the right doctors, for example, what payers or formularies they may deal with.

And Thats, a big unlock for our clients because they would usually wait months to go be able to have some custom project to put that data together and to try to optimize their marketing and understanding where they are doing well and where theyre doing not doing as well and thats one of the quotes I called out in my prepared remarks that it's really exciting to be able to look at this.

Week to week month to month basis and of course, we could add a whole new level of insight to it because we know what what.

Words are being used with which physicians what sub categories or sub segments may make more sense, so really helping getting the most relevant message to the right doctors for example, what payers are formularies. They may deal with so many with for all these reasons, we think that the level of insight that our portal.

Jeff Tangny: So, anyway, for all these reasons, we think that the level of insight that our portal is providing to our clients is something that is market-leading and will, again, be another reason for them to spend more with us. Okay, and then, since you mentioned it, formulary, that's obviously another very, very important area because doctors wanna know where they're gonna get paid, especially with many of these high-cost drugs. You could be talking tens or even hundreds of thousands of dollars for certain medications. So can you maybe just talk a little bit more about where that formulary product stands now? What does it do?

<unk> is providing to our clients.

Is something that is market, leading and we will again be another reason for them to spend more with us.

Okay, and then and then since you mentioned the formulary. That's obviously another very very important area because the doctors want to know where they're going to get paid especially with many of these high cost drugs can be talking tens or even hundreds of thousands of dollars for certain medications. So can you maybe just talk a little bit more about where that formulary product stands now what does it do.

Jeff Tangny: And then going forward, like what would your vision be for that? Like in an ideal world, would you be able to say, okay, this drug is on formulary. This one isn't. Use that one, you know. Just any thoughts here would be very helpful.

And then going forward like what would your vision b for that like in an ideal world would you be able to say okay. This drug is on formulary. This one isn't use that one you know.

Just any thoughts here would be very helpful.

Jeff Tangny: Well, thanks, David. Yeah, you're hitting my hot button here because the formulary product is done very well. And I think it's an area where we have invested over the past year in making it more turnkey, easier for our clients to work with us. We've essentially gone out and licensed in the two leading data sets here. So we know which plans are covered by which doctors and which brands are covered by which plans so that we can recommend to an individual physician that their patient doesn't have a high copay on this medication.

Well, thanks, David Yes.

Hitting my hop on here, because the formulary product has done very well.

I think it's an area, where we have invested over the past year and making it more turnkey easier for clients to work with US we have essentially gone out and licensed in the two leading datasets here.

So we know which plans are covered by which doctors and which brands are covered by which plans. So that we can serve up for an individual position that the patient doesn't have a high co pay on this medication and of course, that's great news for our clients Great News from the Doctor is great news for the patients who.

Jeff Tangny: And, of course, that's great news for our clients, great news for the doctors, and great news for the patients who need that medication. And we're able to do that, again, on a personalized level, doctor by doctor. And it used to be when we tried to sell this originally, that the clients, the pharma companies, would have to give us all the data, that they would have to tell us which plans they had coverage on and not. And that ended up slowing things down.

Need that medication and were able to do that again on a personalized level doctor by Doctor and it used to be when we're trying to sell this originally that the clients. The pharma companies would have to give us all the data that they would have to tell us which plans that they had coverage on and not and that ended up slowing things down it took longer to launch and wasn't as turnkey.

Jeff Tangny: It took longer to launch and wasn't as turnkey for them, so I do think this is an example of us using technology and doing some smart licensing to be able to deliver a more personalized, more effective message more quickly for our clients, and it's the type of thing that the portal will do more of. Thank you, and we have a final question today from the line of Eric Purcher with Nefron Research. Your line is live.

For them. So I do think this is an example of us using technology doing some smart licensing to be able to do.

Deliver a more personalized more effective message more quickly for our clients.

And Thats the type of thing that the portal will do more of.

Thank you and we have a final question today from the line of Eric Percher with Nephron Research. Your line is live.

Jeff Tangny: Thank you. Jeff and Nate, we'd like to ask you to connect the dots a bit on the approach to the portal from early in the year to the phased approach we're hearing today, and specifically for the larger core clients, not the tail or med tech. How have your thoughts evolved on the sales relationship and how it changes as the portal comes into play? Thanks, Eric. Welcome to the call. You know, I don't think our plan here has changed much from when we spoke about it last August, where our plan was to continue to be both high tech and high touch. We work with very large organizations who do expect, I think, a certain level of white-glove consulting strategic services. And I think it's great that we'll be able to continue to do that, but for the more, I'd say, mundane things, like the refresh of last week's reports, they don't need to schedule a separate video call and email us five times and so forth. So I'd say we've evolved very little here, but we've built quite a lot.

Thank you.

Jeff and they would like to ask you to connect the dots a bit on the approach to the portal from early in the year to the phased approach we are hearing today and specifically for the larger core clients not the Taylor Med Tech how does.

Is your thoughts how have your thoughts evolved on the sales relationship and how it changes as the portal comes into play.

Thanks, Eric.

Come to the call.

Yes, I don't think our plan here has changed much from when we spoke about it last August where our plan is to continue to be both high Tech high Tech and high touch.

A very large organizations, who do expect I think a certain level of white glove consulting strategic services and I think it's great that we.

We'll be able to continue to do that but for the more I would say mundane things like the refresh of last week's reports they don't need to schedule a separate video call and E Mail is five times and so forth. So.

So I'd say, we've evolved very little here, when we built quite a lot.

Jeff Tangny: And what we've built is the ability, again, for our clients to see all this. We've got it rolled out to 10% of them now, and the early reviews have been very strong.

And what we built is the ability again for our clients to see all this we've got it rolled up to 10% of them now the early reviews again have been very strong. So we're excited to get this out to more of them. This year, but again, we're doing it carefully because at the end of the day if it.

Jeff Tangny: So we're excited to get this out to more of them this year. But again, we're doing it carefully because, at the end of the day, if a client wants to do all this the way they've been doing it the last five years, we'll continue to do that. We want to make sure that we again have a high tech and a high touch relationship. Has there been any change to what you thought you were missing back then or the missed sales relative to how you're approaching that? That's a good question.

Wants to do all this the way they've been doing it the last five years, we will continue to do that we want to make sure that we again have a high tech and a high touch relationship.

Has there been any change to what you thought you were missing.

Back then or the missed sales relative to how youre approaching that today.

That's a good question.

Jeff Tangny: Probably my best analogy, sadly, was that one of our clients compared us to being like an airline that I had to call to make every sort of booking and change with, right, as opposed to someone that has a website or a brokerage that doesn't have a website where I can see, you know, how my programs are doing, how my holdings, and portfolios are doing day to day. So again, I think we've really addressed that by providing them with that place that they can go to look at whenever they want. And again, that gives a lot of comfort around the quality of the ROI of the data and the ability to optimize when they have time, as opposed to on fixed schedules.

Probably the best analogy.

Sadly it was that.

One of our clients compared us to being like an airline that I had to call to make every so.

Booking and change with right as opposed to something that has a website or a brokerage that doesn't have a website, where I can see how my programs are doing wrong. My holdings portfolio is doing day to day.

Again, I think we've really addressed that by providing them that place that they can go look whenever they want it.

Again that gives a lot of comfort around the quality of the ROI of the data and the ability to go optimize when they have time.

Those two on fixed schedules.

Eric R. Percher: Thanks for your question, and that will do it for today's question and answer session. I would like to turn the call back over to Jeff Tangny for any closing comments. I want to thank the entire Doximity team for all their hard work in serving more doctors every day than we ever have before, and I want to thank everyone for all their questions and for joining. Thanks so much. Thank you, and ladies and gentlemen, this will conclude today's conference call. You may now disconnect. Have a great rest of your day.

Thanks for your question and that will do it for today's question and answer session I would like to turn the call back over to Jeff Hang me for any closing comments.

I want to thank the entire Doximity team for all their hard work in serving more doctors every day than we ever have before and I want to thank everyone for all your questions and for joining thanks. So much.

Thank you and ladies and gentlemen, this will conclude today's conference call. You may now disconnect have a great rest of your day.

Yeah.

Okay.

Yeah.

Yeah.