What happened
Shares of Doximity (DOCS 0.97%) were down more than 24% at noon on Wednesday after the healthcare company released fiscal 2024 first-quarter earnings. The stock is down 26% so far this year.
So what
Doximity operates a online platform for medical professionals and delivers online solutions for doctors. The company reported improved revenue and net income but also lowered its annual guidance, leading to the stock's slide. In the quarter, it said it had revenue of $108.5 million, up 20% year over year, and net income of $28.4 million, up from $22.4 million in the same period a year ago.
There were plenty of negative signs in the report, though. The company said it planned to trim its workforce by 10%, and it also lowered its fiscal 2024 guidance. It now says it expects revenue of between $452 and $468 million, compared to earlier estimates of between $500 million and $506 million. It also lowered its annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate to between $193 million and $209 million after earlier saying it would be between $216 million and $222 million.
Now what
Doximity has a strong early mover advantage and counts the top pharmaceutical companies among its customers, using Doximity's cloud-based platform advertising to reach physicians.
While the lowered guidance worried investors, the company's financials remain strong and its margins should rebound after it trims its workforce, though in the short term, the company will still have some restructuring charges from the cutbacks. It's likely the stock will bounce back unless the company has more negative news in the next few weeks.
