Doximity Inc. (NYSE: DOCS) shares surged 34% on Friday after the company beat fiscal first-quarter revenue estimates and raised its full-year guidance, driven by AI product adoption that CEO Jeff Tangney said is opening larger commercial opportunities than expected. The rally was amplified by a short squeeze, with more than 16% of the public float sold short.
Revenue rose 7% year over year to $156.6 million, beating the analyst consensus estimate of $151.7 million. Adjusted EBITDA reached $74.8 million, a 48% margin. Earnings came in at 29 cents per share, slightly below the consensus estimate of 30 cents.
AI products drive growth
Tangney said AI Search is helping the company engage with senior executives at pharmaceutical companies and broadening its total addressable market in healthcare. AI for Executives & Strategy professionals will find this shift from clinical tools to executive engagement particularly relevant.
"AI is up-leveling our business across the board," Tangney said, adding that the market opportunity unlocked by AI "has been a real surprise and upside for us."
Doximity Ask, the company's clinical AI assistant, was the top-performing U.S.-based model in the NOHARM benchmark, with a 4.8% error rate versus 13.6% for Anthropic's leading model. Tangney said the product achieved the lowest clinical error rates and highest safety ratings among tested U.S.-based models.
Workflow active prescriber growth exceeded 30% year over year, and AI Search queries rose more than 25% sequentially. The company said 165 health system clients now use its AI offerings, a milestone for AI for Healthcare adoption in clinical settings.
CFO signals higher AI spending
CFO Matt Sonefeldt said first-quarter results reflected stronger-than-expected AI adoption by clinicians, prompting Doximity to increase AI investments during fiscal 2027 to support long-term growth opportunities. The company ended the quarter with 127 pharmaceutical and hospital customers generating more than $500,000 in annual subscription revenue on a trailing 12-month basis.
Outlook raised
For the fiscal second quarter, Doximity expects revenue of $170 million to $171 million, compared with the analyst consensus estimate of $171.9 million. The company raised its fiscal 2027 revenue guidance to $671 million to $681 million, up from its prior range of $664 million to $676 million and above the consensus estimate of about $670.3 million.
Why this matters for executives and strategy
Doximity's results show AI products can directly broaden a company's addressable market and deepen engagement with high-value customers. Tangney said AI Search is helping the company reach senior pharmaceutical executives - a strategic shift that goes beyond the company's traditional clinical user base. For leaders evaluating AI investments, the question isn't just whether AI tools work, but whether they open new commercial channels that weren't previously accessible.
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