Shares of Doximity (DOCS -0.84%) were sinking 7.1% lower as of 10:49 a.m. ET on Friday. The decline came after the company, which operates the leading digital platform for medical professionals in the U.S., announced its fiscal 2023 first-quarter results following the market close on Thursday.
Doximity reported Q1 revenue of $90.6 million, up 25% year over year. The company posted earnings per share of $0.10, based on generally accepted accounting principles (GAAP), and the number was higher than GAAP earnings per share of $0.09 in the prior-year period. Its non-GAAP earnings per share in Q1 were $0.14, compared to $0.11 in the same quarter of 2021.
The company topped the consensus estimates for both revenue and earnings. So why did shares tumble today? Doximity slashed its full-year guidance.
It now expects that revenue for the fiscal year ending March 31, 2023 will be between $424 million and $432 million. The previous outlook was for revenue between $454 million and $458 million. Doximity also lowered its projected full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $178 million to $186 million from previous guidance of between $192 million and $196 million.
Investors are usually forward-looking -- as they should be. Doximity's reduced full-year guidance weighed more heavily in their minds than the company's quarterly revenue and earnings beats.
It's important to note, though, that Doximity still expects to grow significantly. The midpoint of the company's revised full-year guidance reflects a 33% year-over-year increase. However, this rate of growth is much slower than what investors would like.
Macroeconomic headwinds present the biggest challenge for Doximity over the near term. But when the economy rebounds, Doximity probably will, also. The long-term prospects for digital health appear to remain strong.