• Patient Volumes: Growth was driven by higher patient volumes. Canadian visits increased 23% YoY to 46k. U.S. visits surged to 3.9k, up 197% QoQ, compared with negligible activity in Q2-2025.
  • U.S. Expansion: U.S. in-network reach expanded to ~24M covered lives, up from ~21M in Q1, across California, New York and Maryland. The company also expanded its provider network, with active U.S. clinicians increasing from 19 to 30 during Q2.
  • Higher Costs: Operating expenses (G&A + R&D) were flat QoQ, but 18% above our estimate. Selling expenses increased 228% QoQ, and were 125% above our estimate, primarily reflecting higher marketing costs.
  • Balance Sheet: Ended Q2 with $0.95M in cash, and $1.20M in debt. Subsequent to Q1, the company raised $3.26M through convertible debentures. We estimate the company will require ~$6.5M in additional funding this year. In-the-money options could generate up to $2.3M, implying a minimum equity raise of ~$4M, with associated share dilution.
  • Competition: The virtual healthcare space is highly competitive, with Zocdoc’s recent partnership with Google’s Gemini adding to the competitive landscape by enabling patients to find physicians with real-time availability, and book appointments. We do not currently view Zocdoc as a direct competitor. While Zocdoc primarily connects patients with physicians, RD provides physicians with the technology and infrastructure to deliver and manage virtual care, including patient, practice, and billing tools. That said, we believe Zocdoc could become a greater threat if it expands into broader virtual-care infrastructure and delivery.
  • Valuation: RD trades at a 56% discount to peers on forward revenue (1.0x vs. 2.3x), and a 54% discount on forward EBITDA (8.7x vs. 18.9x).

Price and Volume (1-year)

  YTD 12M
AIDR -30% -21%
CSE 4% 15%

* Rocket Doctor AI has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$ unless otherwise specified.

Company Overview

B2C: Physician-Funded Model (Primary Revenue Driver)
B2B: Institutions license AI tools for training and care

The Rocket Doctor Process

Source: FRC

Offers a streamlined virtual care experience from patient intake to payment

Generates revenue from doctors through monthly subscriptions and per-appointment platform fees

Target Markets

Operating in Canada since 2020; currently focused on U.S. expansion
RD’s current target pool includes ~49M people across its target regions in the U.S. and Canada 
Primarily targets patients using government-funded health insurance (provincial in Canada and Medicaid / Medicare in the U.S.)

Source: FRC / Company

Partnerships with ~23 insurers in the U.S.

Financials 

H1-2025 and H1-2026 results are not comparable, as material revenue commenced only after the Rocket Doctor acquisition in April 2025.

1.Excluding stock-based compensation (SBC) / 2.Excluding unusual items + SBC

Q2 revenue rose 43% YoY to $0.73M, but 16% below our estimate as the ramp-up was slower than expected
Growth was driven by higher patient volumes
Canadian visits up 23% YoY to 46k 

Source: FRC / Company

U.S. visits were 3.9k, up 197% QoQ vs negligible activity in Q2-2025

Gross margins declined primarily due to the growing contribution of U.S. operations, not a structural change in the business model. U.S. gross margins are ~15–20%, as RD records full patient revenue and physician fees as direct costs. In Canada, revenue is reported net of physician payments, resulting in ~85–90% gross margins.

The difference reflects the payment flow: U.S. insurers pay RD, which then pays physicians; in Canada, provincial plans reimburse physicians directly, who then pay RD a service fee.

Operating expenses (G&A + R&D) were flat QoQ, but 18% above our estimate
Selling expenses increased 228% QoQ, 125% above our estimate, primarily driven by ramping digital ads and marketing partnerships

As a result, adjusted EBITDA and EPS weakened QoQ
Ended Q1 with $0.95M cash, with $1.20M in debt

Subsequent to Q1, the company raised $3.26M through convertible debentures

Source: FRC / Company

We estimate the company will require ~$6.5M in additional funding this year. In-the-money options could generate up to $2.3M, implying a minimum equity raise of ~$4M

FRC Valuation and Rating

Given higher-than-expected Q2 expenses, we are lowering our 2026 and 2027 EPS forecasts; we are lowering our revenue estimates as well

Source: FRC

As a result, our DCF valuation declined from $1.82 to $1.40/share

Comparables Valuation

*We use the present value of our 20 30 EBITDA estimate for RD in this calculation.

Source: FRC / S&P Capital IQ

RD is trading at 1.0x forward revenue vs the sector average of 2.3x, a 56% discount
RD is trading at 8.7x forward EBITDA vs the sector average of 18.9x, a 54% discount
Our comparables valuation declined from $1.41/share to $1.19/share, primarily due to our lower revenue and EBITDA forecasts

Source: FRC

We reiterate our BUY rating, and adjust our fair value estimate from $1.55 to $1.26/share (the average of our DCF and comparables valuations). RD is gaining meaningful traction in the U.S., with rapidly growing patient volumes, coverage, and provider capacity supporting its virtual care platform. However, the slower-than-expected revenue ramp, rising marketing costs, funding requirements, and potential dilution remain key risks despite the stock’s significant valuation discount to peers.

Risks

We believe the company is exposed to the following key risks (not exhaustive): 

  • Competition from established telehealth providers
  • Regulatory changes
  • Early-stage operations; not yet profitable
  • New entrant in the U.S.; high customer acquisition costs and uncertain adoption
  • Cybersecurity and data privacy risks, including patient data breaches
  • Scaling challenges in building doctor and patient networks
  • Need to raise equity to fund marketing and growth, with potential for share dilution

We are maintaining a risk rating of 4 (Speculative)

APPENDIX