Doximity, Inc. (NYSE: DOCS) saw its shares plummet approximately 19% in after-hours trading on Wednesday after the digital health platform issued a fiscal 2027 revenue outlook that came in significantly below analyst expectations. The disappointing forecast overshadowed the company's efforts to highlight the growing adoption of its artificial intelligence features among healthcare professionals.
For the fiscal year ending March 31, 2027, Doximity projects revenue in the range of $664 million to $676 million, falling well short of the consensus estimate of $697.6 million. The midpoint of the guidance implies roughly 4% growth, a marked slowdown from the 13% increase recorded in fiscal 2026. The company also provided a softer-than-expected first-quarter forecast, with revenue expected between $151 million and $152 million, below the $153.7 million consensus.
The stock, which had already declined 11.6% during the regular trading session to close at $23.39, extended its losses after hours, trading at $18.94, according to data from Investing.com. The steep selloff reflects investor skepticism about whether Doximity's physician network can translate AI-driven engagement into meaningful revenue acceleration.
For the fiscal fourth quarter ended March 31, 2026, Doximity reported revenue of $145.4 million, a 5% increase year-over-year and slightly above the $144.08 million analyst estimate. However, adjusted earnings per share came in at $0.26, missing consensus by $0.02. Adjusted EBITDA declined 6% to $65.8 million, while net income fell sharply to $19.1 million from $62.5 million in the same period a year earlier. Full-year revenue reached $644.9 million, and free cash flow rose 19% to $317.5 million.
Despite the financial headwinds, Doximity highlighted record user engagement during the quarter. CEO Jeff Tangney noted that more than 800,000 active prescribers utilized the company's workflow tools, with nearly half of them also using its clinical AI features. The company reported that prompts per user nearly doubled between January and April, underscoring growing physician reliance on AI-powered tools.
In a move to bolster its value proposition, Doximity announced a partnership with Aledade, a physician-led company focused on value-based care. Under the agreement, Doximity's Scribe note-taking tool and Ask clinical AI assistant will be integrated into Aledade Assist, the company's electronic health record overlay. Tangney said the collaboration aims to help independent doctors "save time and money," while Aledade CEO Farzad Mostashari emphasized the strategic importance of the partnership's reach across primary care networks.
Doximity also strengthened its leadership team, appointing Matt Sonefeldt as chief financial officer and Dr. Steve Zatz as president. Tangney cited their "experience and relationships" as key assets for the company's next growth phase, signaling a focus on operational execution as it seeks to prove that clinical AI can drive top-line gains, not just user engagement.
However, the company cautioned that monetizing AI could take longer than anticipated, particularly from health systems, life-sciences clients, and advertisers. Doximity flagged potential risks including macroeconomic uncertainty, member retention and engagement challenges, customer demand variability, and intense competition in the rapidly evolving space. These factors contributed to the cautious outlook that rattled investors.
The broader healthcare technology sector showed mixed reactions, with Teladoc Health Inc. (NYSE: TDOC) edging higher during the session, GoodRx Holdings Inc. (NASDAQ: GDRX) slipping about 3%, and Veeva Systems Inc. (NYSE: VEEV) declining roughly 2.3%. Doximity's sharp after-hours decline, however, stood out as a stark reminder of the market's impatience with growth stories that fail to deliver on revenue expectations.
