Earnings Call Transcript - DOCS Q2 2022

Operator, Operator

Good day, and thank you for joining us. Welcome to the Doximity Second Quarter 2022 Earnings Call. I would now like to turn the conference over to Perry Gold, Head of Investor Relations. Please proceed.

Perry Gold, Head of Investor Relations

Thank you, operator. Hello, and welcome to Doximity's Fiscal 2022 Second Quarter Earnings Call. With me on the call today are Jeff Tangney, Co-Founder and CEO of Doximity; Dr. Nate Gross, Co-Founder and CSO; and Anna Bryson, CFO. A complete disclosure of our results can be found in our press release issued earlier today as well as in our related Form 8-K, all of which are available on our website at investors.doximity.com. As a reminder, today's call is being recorded, and a replay will be available on our website. As part of our comments today, we will be making forward-looking statements. These statements are based on management's current views, expectations, and assumptions and are subject to various risks and uncertainties. Actual results may differ materially, and we disclaim any obligation to update any forward-looking statements or outlook. Please refer to the risk factors in our S-1, our last quarterly report on Form 10-Q, and our other reports and filings with the SEC that may be filed from time to time, including our upcoming filing on Form 10-Q. We would like to specifically caution investors that our future performance will be harder to predict for the foreseeable future given the COVID-19 pandemic. Our forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, November 9, 2021. Of note, it is Doximity's policy to neither reiterate nor adjust the financial guidance provided on today's call unless it is also done through a public disclosure such as a press release or through the filing of a Form 8-K. Today, we will discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A historical reconciliation to comparable GAAP metrics can be found in today's earnings release. Finally, during the call, we may offer other incremental metrics to provide greater insight into the dynamics of our business. These details may be onetime in nature, and we may or may not provide updates on those metrics in the future. I would now like to turn the call over to our CEO and Co-Founder, Jeff Tangney.

Jeff Tangney, CEO

Thanks, Perry, and thank you everyone for joining our second quarter earnings call. We'll begin with a few highlights. First, our top line. I'm pleased to report that we delivered $79.4 million in revenue for the second quarter of our fiscal 2022, an increase of 76% over the same quarter last year and 8% above the midpoint of our guidance. We're also raising our annual guidance by 10% to a midpoint of $327.1 million for fiscal 2022, which translates to 58% growth year-on-year. Turning to our bottom line, we posted an adjusted EBITDA margin of 41% last quarter or $32.8 million, which was 22% above the midpoint of our guidance. Our vertical sales model continues to deliver strong incremental margins, allowing us to scale efficiently as the strong ROI we deliver for our clients generates low friction upsells. More on this in a minute. Last but not least, our network continues to grow as hybrid home office work schedules become the new norm for many doctors, we're proud that our mobile workflow tools have been able to help. Our e-signature and fax product usage continued at our Q1 record highs, and we expanded our paid telehealth platform to an additional 50,000 physicians last quarter. Our active telehealth users reached a record high with over 330,000 unique physicians, NPs, PAs, and medical students completing a telehealth visit with us in the quarter. Okay, those are the highlights. I'd like to take a few minutes now to do a deeper dive on the drivers and sustainability of our top line growth. Then I'll close with a couple of partnership spotlights from the quarter. For the past decade, it's been our mission at Doximity to help physicians be more productive to provide the best care for their patients. Today, over 80% of all U.S. physicians are members of our platform, using it to video call their patients, sign important paperwork remotely and keep up with medical news. Our interactive platform allows top hospitals and pharmaceutical companies, the best brands in medicine, to connect efficiently with the right physicians about new treatments, clinical trials, and patient referrals. We then measure our clients' return on investment or ROI using third-party claims and prescription data. At a high level, there were 2 primary drivers of our growth this past quarter. The first is ROI-fueled expansion with our existing clients. We completed 23 third-party ROI studies last quarter. Our pharma clients saw a median return of 17:1, while hospitals saw a median of 14:1. Keck Medicine at the University of Southern California, for example, netted an 18:1 ROI from increased new patient referrals leveraging our peer connection and awareness modules. Of note, this quarter's ROI results were up from our historical median of 10:1 for pharma and 13:1 for hospitals as reported in our S-1. Our clients generally target a 2 to 3x return on their marketing investment, so they're pretty pleased with us at a 14 to 17x return. These existing clients then reinvest with us by adding new brands, modules, audience, months of coverage, or all of the above. This land-and-expand upsell motion grew our net revenue retention rate or NRR to a record high 173% over the trailing 12 months. That's up from 167% in the prior quarter and 139% in the prior year period. The second key driver of our growth is health care's belated but burgeoning shift to digital. As a reminder, U.S. health care spent just 28% of its 2020 advertising budgets on digital channels according to IDC. That's less than half the 63% share other U.S. industries spent on digital over the same period, pre-pandemic. So, healthcare digital marketing could double and still be a laggard. But that's changing. For a recent Accenture study, only 10% of U.S. physicians want to return to the pre-pandemic methods of marketing. More and more, they're closing their doors to sales reps and, in industry parlance, say, 'No see doctor.' Back in 2008, roughly 1/4 or 23% of all U.S. oncologists were 'no see.' Today, that's grown to 79% or nearly 4 out of 5 oncologists as 'no see.' And it's not just oncologists. Across all U.S. physicians, 3 out of 5 are now 'no see' per ZS-Access monitor, an industry report. We believe digital will become the primary channel for industry dialogue, but you'd be amazed at how much is still spent on mail and magazines to these doctors today. Finally, since a few of you have asked us about iOS 14, I'd like to clarify that 0% of our revenue is or ever was based on cookie technologies. As a physician-first company, we've always drawn a hard line when it comes to protecting our physicians' privacy. In terms of revenue sustainability, we believe we're in the early innings of a decade-long secular shift to digital. Physicians have fundamentally changed the ways that they interact with the industry, and we're leading the way in digitizing these workflows. Okay. I'd like to close now with a couple of partner spotlights. First, U.S. News. This quarter, we signed a 6-year extension and expansion of our U.S. News partnership. After a statistical review of our coverage, U.S. News decided to end their traditional mail-in voting this year. So, Doximity's now the only place where physicians can verify and vote for the U.S. News Best Hospitals rankings. We're proud to help patients and physicians alike make better decisions in seeking care. Second, we're pleased to announce a new partnership with Press Ganey. As many of you know, Press Ganey is the market leader in measuring patient experience, working with over 41,000 health care facilities to complete over 26 million patient surveys so far this year. Our collaboration began with us wanting to measure the patient impact of our new telehealth features. For example, we found that when doctors used our professional name badge in their video visits, which is a bottom screen overlay that shows the doctor's name, credentials, specialty, and logo, a bit like a TV news anchor, their patient quality scores went up by, on average, half a star on a 5-star scale. Patients appreciated seeing the doctor's preferred name and their bona fides. For doctors and hospitals, a half-star increase is a pretty meaningful result. Hospitals need to conduct a minimum number of patient surveys to maintain their reimbursement levels. So, they do lots of expensive phone calls and postal campaigns to get responses. Our real-time surveys not only improve the quality and recency of the patient feedback but also lower the cost of collection. As a company, we'll continue to develop partnerships, which create win-wins for our physicians and clients. We believe we've become the partner of choice for digital doctoring, and that creates value for both our doctors and partners. Alongside existing partners like UpToDate, Epic, and U.S. News, we're pleased to add Press Ganey this quarter. Okay. I'd like to end by thanking the entire Doximity team who worked incredibly hard to deliver a spectacular quarter. And with that, I'll hand it over to our CFO, Anna Bryson, to discuss our financials and revised guidance.

Anna Bryson, CFO

Thanks, Jeff, and thanks to everyone on the call today. We continue to deliver strong results in our second fiscal quarter and are encouraged by the broad-based strength in our business. Second quarter revenue grew 76% year-over-year to $79.4 million, solidly exceeding the high end of our guidance range. This top line result was driven primarily by expansion within our existing customers as they continue to deepen their digital partnerships with us, exemplified by strong upsell success and quicker program launches throughout the quarter. There are several core drivers underpinning this growth. First, we continue to see expansion in the average number of brands and modules per existing customer, which grew 19% and 18%, respectively, versus the prior year period. Second, these customers are also growing their spend through additional upsell vectors, such as increasing audience sizes and extending their programs. As a result of these factors, our net revenue retention rate continued to climb in Q2, reaching a record 173% on a trailing 12-month basis. Another way to look at our growth is through the lens of the number of customers spending 6 figures or more on our platform. We ended the quarter with 235 customers contributing at least $100,000 in subscription-based revenue on a trailing 12-month basis, a 53% increase from the 154 customers we had in this cohort a year ago. Similar to last quarter, this increase was split fairly evenly between existing customers that we upsold and new customers to our platform. Also of note, for the first time ever, the average spend per customer in this cohort surpassed $1 million on a trailing 12-month basis. While the majority of our top line growth came from expansion within existing customers, we are also encouraged by the new adoption of our solutions amongst longer-tail pharmaceutical manufacturers and health systems. In addition, we are continuing to attract other customer types like medical device and diagnostic companies, and notably added another 7-figure customer in these newer markets in Q2. Just as we improved with our current customers, we anticipate we'll be able to deliver significant value for these new customers over time, which will lead to future cross-sell and upsell opportunities. Turning to our profitability, non-GAAP gross margin in the second quarter was 90% compared to 84% in the prior year period. This result was driven by our revenue outperformance. Going forward, we will continue to invest heavily in our customer success teams, which make up the largest line item in our cost of revenue and have been a key facilitator of this top line strength. Adjusted EBITDA for the second quarter was $32.8 million, and adjusted EBITDA margin was 41% compared to $12.6 million and a 28% margin in the second quarter last year. Our adjusted EBITDA exceeded the high end of our guidance range due entirely to our top line outperformance. Turning to our balance sheet and cash flow. We ended the second quarter with $742.7 million of cash, cash equivalents, and marketable securities. We generated free cash flow for the second quarter of $18.1 million compared to $11.3 million in the second quarter last year. As you consider our free cash flow for this quarter, one thing to note is, historically, the summer months have been the slowest for us from a cash collection perspective as our customers take time off. And we saw that again this year. However, as expected, our collections have picked back up to normal levels in October. And now moving on to our outlook. For the third fiscal quarter of 2022, we expect revenue in the range of $85.8 million to $86.8 million, representing 47% growth at the midpoint. And we expect adjusted EBITDA in the range of $32 million to $33 million, representing a 38% adjusted EBITDA margin. For the full fiscal year 2022, we now expect revenue in the range of $326.1 million to $328.1 million, representing 58% growth at the midpoint. We now expect adjusted EBITDA in the range of $127.6 million to $129.6 million, representing a 39% adjusted EBITDA margin. With regards to our revenue outlook, we are raising our guidance meaningfully due to several factors. First, despite some return to in-person marketing activities, the level at which our customers are spending on our high ROI digital platform remains elevated compared with what we initially anticipated at this point in the year. In addition, our customers continue to launch new programs at a faster pace while also adding on to existing programs, which is yielding quicker revenue conversion for us. In summary, we're excited by the momentum in our business, led by the rapid growth amongst our existing customer base. Although we have achieved success to date, there is still considerable white space for our offerings, and we believe we are just scratching the surface of our market potential. If we look at our largest opportunity and take the top brands at our existing pharmaceutical customers, we estimate that we remain less than 5% penetrated into their U.S. medical professional marketing budgets, and we believe we are uniquely advantaged to gain market share as these budgets continue to shift digital over time.

Operator, Operator

Our first question comes from Ryan Daniels with Blair.

Ryan Daniels, Analyst

Congrats on the strong performance and outlook. Jeff, maybe one for you. I thought it was quite impressive the data on the ROI studies and the increasing ROI for both of your key customer bases. So can you dive into a little bit more detail there on what you think is driving that uptick specifically with pharma, which was a very significant uptick in the ROI from where you've been trending?

Jeff Tangney, CEO

Yes. Thanks, Ryan. Good to hear from you. And yes, it's a great question. I think so just to recap for folks, back in the roadshow for our IPO a few months back, we were very proud to have a 10x return on investment for pharmaceutical clients as a median. And now that's grown to 17x this past quarter in dozens of studies that we've done. So we're pleased to see that going up. I can tell you what it's not. It's not us increasing the ad load or the amount of sponsorship on the network. I can tell you that if you look at our various programs, they monetize in different ways. So you can argue that having more pharmaceutical clients in our sample closet to order samples is better or more appointments at our booking engine is better. But when it comes to our news feed, we don't want to have too many of the cards be sponsored even though we write all the sponsored cards ourselves. And so this trailing 12 months, it's still only at 1 in 14 of those cards that sponsored. So we think we still have a lot of room to grow there before anything becomes noticeable or annoying or in any way, harms, I'd say, the overall health of the network. So I think our pharma clients are just seeing the doctors are paying more attention to us, especially in a world where they're getting together maybe at fewer live conferences and dinners. And this is the place where they're learning from their colleagues and staying up to date on the latest science which is changing faster than ever. The final note I'd just say is that our engagement with our news feed has never been higher. It's grown to levels much, much higher than our pre-pandemic levels. And so we're just really pleased to see that physicians are relying on us to stay up to date on the latest research and science.

Ryan Daniels, Analyst

That's great. And then one quick follow-up. If we think of maybe one megatrend, we're hearing from all our provider groups as we go across the earnings season, it's workforce burnout, it's turnover, it's challenges in recruiting. And it seems like your platform is well-positioned to help with all of those, whether it's workforce improvements in the productivity front, certainly, you have a recruiting platform for hospitals. And I'm curious what you're doing as an organization and specifically a provider-centric organization to help with this kind of workforce burnout and turnover we're seeing in the market.

Jeff Tangney, CEO

Yes, that's a great question, Ryan. I'll start by discussing burnout and then move on to recruiting. Regarding burnout, we've had meaningful discussions with health systems, and as a physician-centric organization, this is a matter we take seriously. Our health care professionals have been asked to perform heroically for a long time, and it's tough for everyone. We have some ideas we plan to test. For example, Mayo Clinic has implemented initiatives where physicians reconnect with peers they haven't seen for a while, such as enjoying a dinner together, which can be quite revitalizing for doctors. We're exploring some straightforward yet potentially impactful ways to help doctors recharge during this challenging time. Now, on recruiting, I'm glad you asked. You've brought this up before. About a year ago, at the onset of the pandemic, we opted to enhance our service to clients by not only providing our talent finder software but also offering services to aid in credentialing and scheduling physicians. We acquired a firm in Dallas called Curative, which generates our only non-subscription revenue based on actual doctor placements. This will be detailed in our upcoming 10-Q report, where you'll note that this business grew 31% year-over-year in the last quarter, marking accelerated growth for us. We're enthusiastic about the opportunity to further digitize what has traditionally been a paper-heavy industry. For instance, one of the leading cruise lines chose us to locate their ship doctors as they begin to reopen. This sector is undergoing a complete transformation, and as they reboot, they prefer to streamline processes and eliminate cumbersome paperwork. Instead of dealing with outdated back-office methods, they want to engage directly with us for online scheduling and credentialing with doctors. We're eager to discuss more growth in this area in the quarters ahead. We believe recruiting presents a significant opportunity for us.

Operator, Operator

Your next question comes from Stephanie Davis with SVB Leerink.

Stephanie Davis, Analyst

Congrats on another quarter. So this first one might be best for Jeff. I was hoping you can walk us through how you think about daily active users and how often this comes up in your conversations with your key customers and they're factoring in for their internal ROI calculations.

Jeff Tangney, CEO

We don't discuss daily active users with our clients as our primary focus is on providing them with a return on investment. Our role is to serve as a marketing partner in their year-long subscription programs, helping them achieve growth. We do analyze their target audiences and the engagement levels linked to the modules they use. Daily active users are more of an impression-based metric since we only display a specific sponsored news card once to each doctor. It’s more about making connections and referrals. However, I acknowledge the circulating reports about our overall usage being flat compared to pre-pandemic levels. I want to clarify that our user engagement has actually increased significantly, with mid-double-digit percentage growth since before the pandemic, and any conflicting third-party data is inaccurate. We've thoroughly examined this from various angles, splitting our product teams into three distinct groups that we measure: news, network, and communications. Our telehealth segment has experienced the most rapid growth during the pandemic, increasing over threefold from fewer than 100,000 quarterly active physician callers pre-pandemic to a record 330,000 healthcare providers last quarter. We focus on this metric because frequent telehealth users tend to be high prescribers and referrers, often in specialty areas such as oncology, endocrinology, and cardiology, which are well-suited for telehealth interactions and quick follow-ups for medication management. Thus, we have identified active telehealth doctors as our key metric and plan to report on it quarterly. The telehealth space is highly competitive right now, and we are proud to have added 50,000 new physicians to our paid telehealth platform in the last quarter. We will continue to strive for growth in market share and expand our telehealth platform, which reached new record levels last quarter.

Stephanie Davis, Analyst

Very good work at getting at the subtext I'm hinting at. Now Anna, I can't forget you either. I do want to call it the guidance does imply a pretty meaningful slowdown as we get to the back half of the year. I get that you're being prudent about reopen assumptions, something you can give us more granularity around just puts and takes of the detail and what's factored in, what's not.

Anna Bryson, CFO

Yes. Sure. Steph, good to hear your voice. So I'll start by saying that the shift to digital that we're seeing is certainly a fluid situation, and the market landscape is constantly evolving. And our guidance really reflects our best estimate at this time of what the shift to digital will really look like over the next few quarters. Now that said, our pipeline remains robust, and that's reflected in our second half guidance. We're guiding to 40% growth in the back half of the year after a year where we saw an unprecedented revenue acceleration. So I'd say we're really pleased with this momentum. And then more importantly, what I would focus on and what I would turn your attention to is that we're focusing on building a company that yields long-term sustainable growth. And we think we can achieve that just given how underpenetrated we are into our customers' budgets and that high ROI that Jeff was just talking about.

Operator, Operator

Your next question comes from Alex Sklar with Raymond James.

Alexander Sklar, Analyst

Jeff, on your extension and expansion with U.S. News, now that you're the only source of voting for physicians, what are your expectations around kind of the health system spend as it relates to improving their own standing within those ratings?

Jeff Tangney, CEO

Yes, thank you, Alex. That's a great question. We are happy to be collaborating with U.S. News and enhancing our partnership to assist patients in finding specialized care. They have been growing significantly, transitioning from national rankings to regional and state evaluations, and now even local-level rankings. This development is increasingly beneficial for patients seeking the best local care. Consequently, more hospitals and health systems are paying attention to these rankings, not just the top 20 in the nation, but now several hundred, which is fantastic. Regarding our collaboration, hospitals certainly value physician opinions about them. We are proud to provide the statistical data needed for their thorough analysis, which influences public perception across various regions and specialties. Health systems have become our fastest-growing sector, as reflected in our overall revenue growth. I believe that partnerships like this one will support continued growth.

Alexander Sklar, Analyst

Got it. And then one follow-up. Could you discuss the pricing dynamics with your life sciences customers as you've expanded your user base? You mentioned some pressure related to legacy sales and marketing tactics. How much have you been able to increase unit pricing? Is that a current focus, or should we consider it a potential lever for the long term?

Jeff Tangney, CEO

It's a great question. And the no-see doctors, I'm pleased to hear you following some of these tactics at the mail and magazine's legacy. I wish they were more legacy than they actually are. When we look at how much is actually still spent there, you'd be surprised. We mainly look at our pricing through an ROI lens. It's our job to be your marketing partner to deliver your results, not through other lenses. That all said, our prices are going up, but frankly, modestly, reasonably. And it's not the main lever we're pulling right now. We're in this for the long haul. We're playing the long game. From our point of view, these are partnerships that we expect to have for decades to come. And we understand that delivering good ROI means that they should be willing to pay us more, but it's part of our ongoing partnership.

Operator, Operator

Your next question comes from Richard Close with Canaccord Genuity.

Richard Close, Analyst

I was wondering, Jeff, can you go into the Press Ganey partnership a little bit more in terms of how you're working with them? Is that a revenue generator for you guys in the future? Just exactly how that relationship works would be helpful.

Jeff Tangney, CEO

Thanks, Richard. Yes. So Press Ganey, I think, as folks know, works with almost every hospital in the country. You're required to have a certain number of patient feedback surveys as part of reimbursement dynamics. So we're pleased to be working with them. They have a footprint everywhere. And I will tell you, as we try to grow our telehealth platform, we're looking for more partners, right? We need places where we have existing client relationships, and Press Ganey has them again, almost everywhere. So we're excited to cross-sell, frankly, with Press Ganey's access and get more health systems moving on to our telehealth platform. Because we're helping them up their tech game a little bit. We've got strong, strong engineering and tech DNA in the company. And making it very easy to take this process today that takes usually a couple of days for Press Ganey to call out to the patient and do a survey afterwards, sometimes a little longer and really make that real-time. Right after the telehealth visit, they get a text message, you see it right there on your screen. And to have that be real-time is obviously better quality input for that health system and also much lower cost than paying lots of people in a call center in Indiana to call all these patients. So I think it's a win-win. We're bringing the tech side. They're bringing a lot of customer relationships. And yes, that will help us grow our health system footprint with our telehealth business. Now that all said, our telehealth business is a small single-digit percentage of our overall revenue right now. So while we expect that can be much, much larger in the future, it's not like we're leaning on this Press Ganey partnership to deliver cross-sells that we need to make our next quarter.

Richard Close, Analyst

Okay. That's helpful. And just to dive in, maybe on the med device and diagnostics. That's two quarters in a row, it's sort of been called out as a new initiative, and making some progress there. Can you go into a little bit more detail in terms of do you have a dedicated sales force towards those customers? Just how are you thinking about expanding in that subsegment?

Anna Bryson, CFO

Sure, I'll take that question, Richard. So first, I just do want to start by saying and reiterating that our message here remains the same as last quarter. So we still believe our largest opportunity is the markets we address today. And I think the example I gave where we remain less than 5% penetrated into our pharma customers' medical professional marketing budget is really the perfect proof point for why. Now that said, as you just mentioned, there's also a shift to digital underway in other under-indexed industries, such as med device and diagnostics. And we're encouraged by our ability to capitalize upon that. With regards to your question specifically around the separate sales force, as of right now, we're able to really utilize our existing sales force and utilize also our existing modules, which I think is pretty unique to cross-sell to this new industry. So we're really excited about the traction we're seeing there. But I do want to just reemphasize once again, we don't really expect these newer markets to represent more than a single-digit percentage of our revenue. And so in the near term, we're much more focused on really penetrating our core pharma and health system clients.

Jeff Tangney, CEO

And I'll just add quickly, Richard. This is Jeff. Yes, we are considering a separate sales force there. I have to say I've been surprised that historically, medical devices and specifically have been incredibly sales-force focused. And the marketing budget is relatively small and the digital marketing, even smaller still. And to see them stepping up and paying 7 figures, and coming to us in some cases, it's been gratifying. Maybe it's a sign that this IPO marketing bump really does exist that they're thinking of us and coming to us. But it's also a sign that things have really changed and how doctors communicate with the industry. And we're excited to see that kind of momentum in a space that historically hasn't really done much in digital marketing.

Operator, Operator

Your next question comes from Jackson Ader with JPMorgan.

Jackson Ader, Analyst

Could I follow up on the point about medical devices that you just mentioned, Jeff? Do doctors have the same purchasing decision power for medical devices and diagnostics as they do for prescriptions?

Jeff Tangney, CEO

Short answer is yes. I mean, if you're an orthopedic surgeon and you're deciding what devices you choose to use. So the short answer is yes. And what's interesting actually is that our surgeons have always been among our more active users. They were actually the first ones to get on the platform because they care about referrals, right? And they want to be connected in their local markets to other physicians. But in terms of having ways to monetize them, it's been a little harder because again, the medical device firms weren't really into digital marketing. And now that they are, I think that opens up a whole new avenue for us to leverage some of these surgeon relationships that we have that are among our strongest.

Jackson Ader, Analyst

Okay. All right. That makes sense. And then as the author of some of these spooky engagement reports, I'm curious if the data from third-party providers is erroneous, unfounded, inaccurate or whatever, then where would you suggest investors or analysts go to source some of the engagement statistics that might not matter on a short-term basis, but certainly might matter in terms of the health of the network in the long term.

Jeff Tangney, CEO

That's a great question, and your report certainly sparked a productive discussion on our end. The main issue is that many third-party trackers rely on free VPN software, which hospitals and doctors typically do not use. The one you referenced seems to focus more on app tracking, and Apple has made it quite challenging to track other apps. While Android is somewhat more accessible, our research shows that about 85% of doctors use iOS or iPhones, leaving only around 15% on Android, so it doesn't accurately reflect that market. Interestingly, some of the data we've reviewed indicates it may be capturing some health care workers we reached out to at the beginning of the pandemic. You might remember that we offered a free year of telehealth services to all health care workers in the U.S. as a way to help during that time. We were thrilled that many could use our services to connect with their patients and their families, and a lot of receptionists and back-office hospital staff also adopted our platform. However, we’ve been phasing out that product to concentrate on serving clinical users. This may explain some of what those third-party data sources are detecting as potential Android users. Additionally, they are missing a significant portion of web users, which is a crucial part of our business as well. Unfortunately, I don't have a specific recommendation on where to look for those reports. Within the pharmaceutical industry, there are some reports provided by IQVIA and others that are primarily survey-based, which our clients often utilize alongside our own reports that we deliver to clients after each program. Sadly, there's no equivalent to a Nielsen-style service in this space.

Operator, Operator

Your next question comes from Craig Hettenbach with Morgan Stanley.

Craig Hettenbach, Analyst

It's Craig on for Ricky. Just following up on the comments of 40% year-on-year growth in the back half. The implied growth for the March quarter is around 33%, which suggests it's getting closer to kind of your more normalized view of 30% net revenue retention. So can you just talk about perhaps just the potential puts and takes around kind of the return to normal?

Anna Bryson, CFO

Sure, Craig. So here's what I'll say here around our Q4 growth. So when we talk about our net revenue retention, I want to kind of think about that a little bit separately than we think about quarter's year-over-year growth. So now net revenue retention is a trailing 12-month metric. So it's a direct function of our trailing 12-month revenue growth. So if you think about the lens of, it was 85% this past quarter. Now as our TTM growth rate normalizes, which we are predicting to happen in the future, our net revenue retention rate will normalize as well. But I do want to add that we certainly anticipate existing customers will continue to lead our growth here for many reasons. So there's the deep relationships we've built. There's the high ROI that they've become accustomed to in our platform. There's the multiple cross-sell and upsell vectors that we have. And then there's finally the large budgets that they have that are very under indexed in digital. And so while we once again are kind of not guiding to what this NRR metric will be, we do think it will track pretty closely with our overall trailing 12-month growth rate. And in the medium term, we believe our baseline, which is where we landed in the pre-pandemic years of that range of 130%-plus is likely what we'll see. And once again, that's still very strong NRR. We're very, very pleased with that.

Craig Hettenbach, Analyst

Got it. Appreciate the color. And then just a follow-up in terms of the strong growth you're seeing. Given the tight labor market, are you seeing any constraints in terms of looking for to reinvest in the business?

Anna Bryson, CFO

No, not necessarily at all. There is a tight labor market, but our hiring remains robust. If you look at our recent quarter, the EBITDA beat was entirely driven by our revenue outperformance. We spent exactly what we planned in our operating expenses, so we're on track with our hiring plan. We're continuing to invest heavily in our R&D teams and our sales and marketing teams to maintain our growth in revenue.

Jeff Tangney, CEO

I'd just add this is Jeff, that adding RSUs or the recruiting package has been a big bonus. It certainly made things a lot easier. And yes, we have been doing well. We were three quarters remote or distributed as a company before the pandemic hit. I think we've earned good stripes as a company that knows how to manage that hybrid work lifestyle well, and that's allowed us to recruit from a pretty broad base.

Operator, Operator

Your next question comes from Sean Wieland with Piper.

Sean Wieland, Analyst

So on the telehealth business, what can you share with us about any metrics on either utilization or some details of monetization strategy? And maybe even how much did it contribute in the quarter?

Jeff Tangney, CEO

I’ll start. I think Anna can provide insight into the contribution, which was around 3% or 4% of our revenue. However, it’s growing nicely as a subscription model. Regarding utilization, we saw a record number of doctors using our service. The word is spreading within the enterprises that have adopted us, and we are becoming the preferred option for initiating visits. Overall call volume is down, as the previous year was peak shutdown time. However, our model is not dependent on the number of visits; we’re not a telehealth service provider in the traditional sense. We operate more like Zoom, charging per user per month. From our perspective, fluctuations in call volume are manageable. I’d like to highlight, Sean, that there’s an interesting discussion happening in telehealth regarding what constitutes appropriate care. There’s a debate about whether telehealth is suitable for certain types of urgent care visits, especially when the patient presents with various issues, and whether they receive the highest quality of care without a full understanding of their condition. Many of our clients argue that having an established client relationship is key for effective telehealth. We see strong patient and doctor satisfaction scores for follow-up visits, especially for diabetic patients who would otherwise spend significant time traveling and waiting for a brief consultation. Telehealth excels in facilitating those quick follow-up visits, and our product is well-suited for that purpose.

Nate Gross, CSO

Sean, this is Nate. I'll touch on monetization. So the enterprise business that we have today in telehealth is growing nicely. Again, we expanded the paid telehealth offering by 50,000 physician licenses in the last quarter. And the primary driver of those is purchasing decisions with a combination of remaining the favorite among physicians for ease of use. I think as evidenced by our user metrics among clinicians, over 330,000 in the last quarter. And also being a leader in the class IT department ratings to integrate easily produce no shows. There's a great network effect here with the rest of our platform, such as checking the news feed between visits. And so we want to keep the price of the basic offering competitive as we seek to gain share and leverage those engagement benefits. In the long run, we believe that we can upsell additional capabilities here over time. But when we do that, a win-win for us is something that helps doctors be more efficient. And there's a lot of adjacencies that fit that mold. And I think you can see some good examples in terms of helping improve referrals to the right specialists or just the progress that we've already made that I'm encouraged by in optimizing the post telehealth call experiences with those trusted brands UpToDate and Press Ganey.

Operator, Operator

That concludes the Q&A session. I will now turn it over to Jeff Tangney for closing remarks.

Jeff Tangney, CEO

All right. Well, thank you, everybody, for joining us today. We really appreciate it. And again, I'd like to thank the entire Doximity team for their incredible dedication and results this past quarter. Thank you for joining.

Operator, Operator

This concludes today's conference call. Thank you for joining. You may now disconnect.