Shares of Doximity (DOCS -0.95%) fell 10% on Wednesday after the digital networking platform for medical professionals delivered an earnings report on Tuesday, and forecast a revenue range for its current fiscal quarter that was below Wall Street's expectations.
In its fiscal 2022 fourth quarter, which ended on March 31, Doximity's revenue jumped 40% year over year to $93.7 million. The fledgling social media network is proving popular with doctors and nurses, and healthcare companies are shifting more of their ad budgets to it.
"We're proud to now serve over 2 million U.S. healthcare professionals, including over 80% of U.S. physicians and over 50% of physician assistants and nurse practitioners," CEO Jeff Tangney said in the earnings press release.
Doximity is also highly profitable, with a net margin of 39%. Its net income surged 71% to $36.7 million. And its adjusted earnings per share checked in at $0.21, far above analysts' consensus estimate of $0.15. It also continues to produce bountiful cash flow. It generated operating and free cash flow of $47 million and $44.9 million, respectively, in the quarter.
Investors, however, appeared to focus more on the company's somewhat tepid sales guidance for the first quarter of fiscal 2023. Management guided for revenue in the $88.6 million to $89.6 million range, which would amount to a sequential decline of roughly 5%.
During the earnings conference call with analysts, Chief Financial Officer Anna Bryson said that the expected decline was due to the normalization of its seasonal sales trends following abnormally strong results in the prior-year period.
"We are starting to see historical trends reemerge, in which Q1 is typically our lightest quarter due to the timing of program launches and expansion," Bryson said. "Consistent with prior years, we are confident we'll see year-over-year revenue growth accelerate in Q2."
Doximity actually raised its full-year sales outlook to a range of $454 million to $458 million, up from a prior estimate of approximately $450 million.