Financial Data and Key Metrics Changes - The company reported revenue of $169 million for Q2 2026, representing a 23% year-on-year growth and a 7% beat from the high end of guidance [6][11] - Adjusted EBITDA margin was 60%, amounting to $101 million, which was 15% above the high end of guidance [6][12] - Free cash flow increased by 37% year-on-year to $91.6 million [13] - Non-GAAP gross margin remained flat at 92% compared to the prior year [12] Business Line Data and Key Metrics Changes - The number of unique prescribers using workflow tools reached over 650,000, marking an all-time high [7] - AI tools saw a growth of over 50% in quarterly active prescribers from the previous quarter [7] - Integrated programs accounted for over 40% of bookings in Q2, a significant increase from less than 5% in the same quarter last year [15][39] Market Data and Key Metrics Changes - The company finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis [11] - The small-medium business segment saw a growth of approximately 100% year-on-year [45] Company Strategy and Development Direction - The company is focusing on AI-optimized integrated programs, which are expected to enhance client engagement and revenue predictability [16][39] - The integration of Pathway's medical data set and AI models into Docs GPT is seen as a significant advancement in medical AI [8][9] - The company aims to maintain a 55%+ adjusted EBITDA margin while investing in AI solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed some uncertainty regarding the 2026 budget discussions, indicating a cautious approach to revenue expectations [20][21] - Despite potential headwinds, management remains optimistic about client engagement and the growth of integrated programs [21][36] - The company expects revenue for Q3 2026 to be in the range of $180 million to $181 million, reflecting a 7% growth at the midpoint [14] Other Important Information - The company repurchased $21.9 million worth of shares during Q2, with $280 million remaining in the repurchase program [13] - The company has integrated a drug reference feature in Docs GPT, providing peer-reviewed answers to drug-related questions [8][62] Q&A Session Summary Question: Uncertainty around budget discussions - Management indicated that the uncertainty primarily relates to the 2026 budgets, which are expected to be finalized soon [20] Question: Future AI opportunities - Management expressed excitement about the potential for AI to add significant value for physicians and plans to continue investing in this area [22][23] Question: Changes in client budgeting allocations - Management noted that discussions with clients indicate some changes in budget allocations, particularly in light of recent policy changes [28][30] Question: Impact of direct-to-consumer advertising policies - Management acknowledged that it is early to assess the impact of new policies on direct-to-consumer advertising but sees potential opportunities [30] Question: Budget flush expectations - Management explained that the transition to integrated programs has led to a more even distribution of upsell dollars throughout the year, impacting budget flush dynamics [34][35] Question: AI strategy and revenue contribution - Management highlighted that AI-optimized programs are expected to significantly contribute to revenue growth in the future [39] Question: Market share in clinical reference - Management stated that they do not have a clear measure of market share in clinical reference but are focused on providing accurate, peer-reviewed answers [75][76] Question: Investment in AI tools - Management indicated that they are currently investing in AI tools and expect expenses to plateau as scale efficiencies are realized [82]

Financial Data and Key Metrics Changes - The company reported revenue of $169 million for Q2 2026, representing a 23% year-on-year growth and a 7% beat from the high end of guidance [4][9] - Adjusted EBITDA margin was 60%, amounting to $101 million, which was 15% above the high end of guidance [4][10] - Free cash flow increased by 37% year-on-year to $91.6 million [10] Business Line Data and Key Metrics Changes - The number of unique prescribers using workflow tools reached over 650,000, marking an all-time high [5] - AI tools saw quarterly active prescribers grow by more than 50% from the prior quarter [5] - Integrated programs accounted for over 40% of bookings in Q2, compared to less than 5% in the same quarter last year [12][13] Market Data and Key Metrics Changes - The company finished the quarter with a net revenue retention rate of 118% on a trailing 12-month basis [9] - The number of customers contributing at least $500,000 each in subscription-based revenue increased by roughly 16% year-on-year [9] Company Strategy and Development Direction - The company is focusing on AI-optimized integrated programs, which are expected to provide higher returns for clients and better predictability for the business long-term [15] - The integration of Pathway's medical data set and AI models into Docs GPT is seen as a significant advancement in medical AI [6][7] - The company aims to maintain a 55%+ adjusted EBITDA margin while investing in AI solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed some uncertainty regarding the 2026 budget discussions, indicating a cautious approach to revenue expectations [17][18] - Despite potential headwinds, management remains optimistic about client engagement and the performance of integrated programs [18] - The company expects revenue for Q3 2026 to be in the range of $180 million-$181 million, representing a 7% growth at the midpoint [11] Other Important Information - The company repurchased $21.9 million worth of shares during Q2, with $280 million remaining in the existing repurchase program [10] - The company has integrated a drug reference feature into Docs GPT, allowing for quick access to peer-reviewed answers [6][62] Q&A Session Summary Question: Uncertainty around budget discussions - Management indicated that the uncertainty primarily relates to the 2026 budgets, which are expected to be finalized soon, and noted high client engagement with their platform [17][18] Question: Future AI opportunities - Management expressed excitement about the potential for AI to add value for physicians and indicated plans to fully leverage AI capabilities [21] Question: Changes in client budgeting allocations - Management noted that it is too early to determine the impact of recent policy changes on client budgeting but acknowledged ongoing discussions with agency partners [25][28] Question: Impact of Pathway acquisition - Management highlighted the integration of Pathway as a key advancement, particularly in providing accurate drug-related information [57][62] Question: Market share and growth dynamics - Management confirmed that they are pacing ahead of last year in terms of new contract activity and expect to continue growing at a rate above the market average [81][83]

Core Insights - Doximity reported Q3 CY2025 revenue of $168.5 million, a 23.2% year-on-year increase, exceeding analyst estimates by 7.2% [1][7][8] - The company anticipates next quarter's revenue to be approximately $180.5 million, aligning closely with analyst expectations [1][8] - Non-GAAP profit per share was $0.45, surpassing consensus estimates by 18.7% [1][7] Company Overview - Doximity operates a digital platform with over 80% of U.S. physicians as members, facilitating collaboration, medical news updates, career management, and virtual patient visits [4] Revenue Growth - Doximity has achieved an annualized revenue growth of 32.8% over the past five years, outperforming the average software company [5] - The company reported a 17.7% annualized revenue growth over the last two years, indicating healthy demand despite being below the five-year trend [6] Financial Performance - Adjusted operating income was $98.99 million, with a margin of 58.7%, exceeding analyst estimates by 15.9% [7] - The company raised its full-year revenue guidance to $643 million from $632 million, reflecting a 1.7% increase [7] - EBITDA guidance for the full year is set at $354 million, above analyst estimates of $348.5 million [7] - Operating margin decreased to 37.8% from 38.8% year-on-year [7] - Free cash flow margin improved to 54.3%, up from 41.2% in the previous quarter [7] - Market capitalization stands at $11.99 billion [7] Future Outlook - Analysts project a 7% revenue growth over the next 12 months, indicating a deceleration compared to the previous two years [9]

Financial Performance - For the three months ended September 30, 2025, the company recognized revenue of $168.5 million, a year-over-year growth rate of 23% compared to $136.8 million in 2024[138]. - The net income for the three months ended September 30, 2025, was $62.1 million, up from $44.2 million in the same period of 2024, representing a net income margin of 37%[138][148]. - The adjusted EBITDA for the three months ended September 30, 2025, was $100.8 million, compared to $76.1 million in 2024, resulting in an adjusted EBITDA margin of 60%[138][148]. - Revenue for the three months ended September 30, 2025, increased by $31.7 million (23%) compared to the same period in 2024, primarily driven by a $29.8 million increase in subscription revenue[171]. - Gross profit for the three months ended September 30, 2025, was $152.1 million, representing a 24% increase compared to the same period in 2024[171]. - Other income, net for the three months ended September 30, 2025 was $9.0 million, a decrease of 3% compared to $9.3 million in the same period of 2024[182]. - Provision for income taxes decreased by $7.1 million (40%) for the three months ended September 30, 2025, and by $8.1 million (27%) for the six months ended September 30, 2025 compared to the same periods in 2024[184]. Customer Metrics - The number of customers with trailing 12-month subscription revenue greater than $500,000 increased to 121 in 2025 from 104 in 2024, accounting for approximately 84% of total revenue[141][142]. - The net revenue retention rate improved to 118% for the trailing 12 months ended September 30, 2025, compared to 116% in 2024[143]. - Approximately 95% of revenue for the three and six months ended September 30, 2025, was derived from subscription customers[171]. Cash Flow and Investments - Free cash flow for the six months ended September 30, 2025, was $151.7 million, up from $106.3 million in 2024[152]. - Cash provided by operating activities was $156.0 million for the six months ended September 30, 2025, compared to $109.6 million for the same period in 2024[192]. - Cash used in investing activities was $29.0 million for the six months ended September 30, 2025, primarily due to $268.2 million in marketable securities purchases[193]. - Cash used in financing activities was $167.4 million for the six months ended September 30, 2025, mainly from common stock repurchases of $144.2 million[195]. - As of September 30, 2025, the company had cash and cash equivalents and marketable securities totaling $878.4 million[185]. - The company had cash and cash equivalents of $169.2 million and marketable securities of $709.1 million as of September 30, 2025[201]. Expenses - Research and development expenses for the three months ended September 30, 2025, increased by $6.9 million (30%) compared to the same period in 2024, driven by stock-based compensation and contractor costs[173]. - Sales and marketing expenses for the three months ended September 30, 2025, increased by $4.8 million (14%) compared to the same period in 2024, primarily due to stock-based compensation and marketing activities[177]. - General and administrative expenses for the three months ended September 30, 2025, increased by $8.9 million (89%) compared to the same period in 2024, driven by legal expenses and stock-based compensation[179]. - Research and development expenses are expected to increase as the company continues to grow its platform and product offerings[161]. Strategic Initiatives - The company plans to continue investing in cloud infrastructure and customer support to support business growth[157]. - The business model is designed to drive value for customers, primarily pharmaceutical manufacturers and health systems, through marketing, hiring, and workflow solutions[137]. - The company serves over 80% of U.S. physicians, making it the leading digital platform for medical professionals in the U.S.[135]. Shareholder Actions - The company repurchased 4,496,467 shares of Class A common stock for $220.2 million under a $500 million repurchase program authorized on May 1, 2024[186].

Financial Performance - Total revenues for Q2 fiscal 2026 reached $168.5 million, representing a 23% increase year-over-year[2] - Operating cash flow was $93.9 million, up 37% year-over-year, while free cash flow also increased by 37% to $91.6 million[2][4] - Net income for the quarter was $62.1 million, compared to $44.2 million in the prior year, resulting in a net income margin of 36.8%[4] - Non-GAAP net income was $90.0 million, up from $61.1 million, with a margin of 53.4%[4] - Adjusted EBITDA for the quarter was $100.8 million, a 32% increase year-over-year, with adjusted EBITDA margins of 59.8%[4] - Total revenue for Q3 2025 was $168,525,000, an increase from $136,832,000 in Q3 2024, marking a growth of 24.1%[19] - Non-GAAP net income for the six months ended September 30, 2025, was $161.8 million, compared to $117.0 million for the same period in 2024, reflecting a 38.2% growth[21] - GAAP net income for the six months ended September 30, 2025, was $115.4 million, compared to $85.5 million in the same period of 2024, a growth of 35.0%[21] Cash Flow and Expenses - Free cash flow for the six months ended September 30, 2025, was $151,710,000, compared to $106,342,000 for the same period in 2024, reflecting a 42.5% increase[19] - Cash and cash equivalents at the end of Q3 2025 were $169,249,000, down from $184,248,000 at the end of Q3 2024[14] - Cash paid for taxes in Q3 2025 was $14,369,000, compared to $9,078,000 in Q3 2024, reflecting a higher tax burden[14] - The company made a cash payment of $26,528,000 for an acquisition during the period[14] - Research and development expenses for Q3 2025 were $30.2 million, up from $23.2 million in Q3 2024, indicating a 29.0% increase[20] Guidance and Projections - Guidance for Q3 fiscal 2026 projects revenue between $180 million and $181 million[4] - Full fiscal year 2026 revenue guidance is set between $640 million and $646 million[4] User Engagement and Product Development - The number of prescribers using Doximity's workflow tools reached a record 650,000, with AI Scribe and DoxGPT users growing over 50% from the previous quarter[3] - Doximity's platform includes over 80% of U.S. physicians, enhancing collaboration and access to medical information[6] - The company continues to invest in AI tools to improve efficiency for medical professionals[3] Profitability Metrics - Non-GAAP gross profit for Q3 2025 was $100,830,000, representing a 32.4% increase from $76,148,000 in Q3 2024[19] - Adjusted EBITDA margin for Q3 2025 was 59.8%, compared to 55.7% in Q3 2024, indicating improved operational efficiency[19] - Non-GAAP operating income for Q3 2025 was $99.0 million, compared to $74.6 million in Q3 2024, reflecting a 32.7% increase[21] - The company reported a non-GAAP net income margin of 53.4% for Q3 2025, up from 44.7% in Q3 2024[21] - GAAP gross profit for Q3 2025 was $152.1 million, up from $123.2 million in Q3 2024, representing a 23.5% increase[20] - Total GAAP cost of revenue for Q3 2025 was $16.4 million, compared to $13.7 million in Q3 2024, a 19.9% increase[20] Stock and Shareholder Information - Stock-based compensation for Q3 2025 was $29,474,000, up from $17,868,000 in Q3 2024, indicating increased employee incentives[19] - The weighted-average diluted shares used in computing net income per share increased to 200,745 for Q3 2025 from 200,407 in Q3 2024[21]

Company Overview - Doximity is the largest online network for medical clinicians in the US, with 80% of US physicians and 50% of nurse practitioners and physician assistants as verified members [2] - The platform facilitates communication among healthcare professionals and allows for secure patient interactions via video calls, enhancing collaboration and information dissemination [3] Recent Developments - Doximity acquired Pathway Medical for $36 million, a Canadian company specializing in medical AI and clinical reference systems, which will enhance Doximity's offerings [8] - In fiscal 1Q26, Doximity reported revenue of $145.9 million, a 15% year-over-year increase, exceeding estimates by $6.36 million [9] Financial Performance - The company achieved a non-GAAP EPS of 36 cents, up from 28 cents year-over-year, and reported a 52% increase in free cash flow to $60.1 million [9] - Analysts expect Doximity's revenue growth to potentially accelerate in CY26, with a three-year revenue/EBITDA CAGR forecasted at 11%/12% [10] Analyst Ratings - Bank of America analyst Allen Lutz maintains a Buy rating on Doximity, with a price target of $82, suggesting a potential gain of approximately 24.5% [11] - The overall consensus rating for Doximity shares is Moderate Buy, based on 17 reviews, including 10 Buy, 5 Hold, and 2 Sell [11]

Core Viewpoint - Doximity (DOCS) is positioned to potentially continue its earnings-beat streak, having shown a strong history of exceeding earnings estimates, particularly in the last two quarters with an average surprise of 28.43% [1][5]. Earnings Performance - In the last reported quarter, Doximity achieved earnings of $0.36 per share, surpassing the Zacks Consensus Estimate of $0.31 per share, resulting in a surprise of 16.13% [2]. - In the previous quarter, the company was expected to report earnings of $0.27 per share but delivered $0.38 per share, leading to a surprise of 40.74% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Doximity, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat, especially given its solid Zacks Rank [5][8]. - The current Earnings ESP for Doximity is +1.32%, suggesting that analysts are optimistic about its near-term earnings potential [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]. Upcoming Earnings Report - Doximity's next earnings report is anticipated to be released on November 6, 2025, which could further clarify its earnings trajectory [8].

Industry Overview - Health and fitness companies are experiencing consistent demand due to increasing global awareness of health issues and the significance of physical fitness, driven by rising lifestyle-related diseases and a focus on preventive healthcare [1][10] - The industry's growth is supported by diverse revenue streams, including subscriptions, product sales, and services, making it appealing to long-term investors [2] Company Highlights Doximity Inc. (DOCS) - Doximity is a cloud-based digital platform for medical professionals in the U.S., covering over 80% of U.S. doctors and 60% of advanced practitioners, with a 95% subscription-based revenue model [7] - The company is expanding in a total addressable market of $18.55 billion and has integrated generative AI, enhancing product stickiness and physician utility [8] - Doximity's AI tools have seen a 5x usage growth year-over-year, supporting physicians in managing clinical documentation [9] - Expected revenue and earnings growth rates are 11.2% and 7%, respectively, for the current year [11] Planet Fitness Inc. (PLNT) - Planet Fitness is a leading franchisor and operator of fitness centers in the U.S., benefiting from higher royalties, new club openings, and member acquisitions [12] - The company ended Q2 with approximately 20.8 million members and over 2,762 clubs, achieving an 8.2% year-over-year increase in same-club sales [13] - Expected revenue and earnings growth rates are 10.2% and 13.1%, respectively, for the current year [14] United Natural Foods Inc. (UNFI) - United Natural Foods has shown strong growth supported by wholesale momentum and demand for natural and organic products, with strategic initiatives driving efficiency and cost savings [15][16] - The company has an expected revenue growth rate of 2.5% and earnings growth rate of over 100% for the current year [17] Peloton Interactive Inc. (PTON) - Peloton is evolving from a connected fitness brand to a broader wellness platform, leveraging commercial partnerships to drive growth [18] - The company has seen momentum in its Peloton for Business segment, with partnerships enhancing brand visibility [19] - Expected revenue and earnings growth rates are -1.1% and over 100%, respectively, for the current year [21] Performance Food Group Co. (PFGC) - Performance Food Group markets and distributes a wide range of food products, serving various sectors including restaurants and healthcare facilities [23][24] - The company has an expected revenue growth rate of 6.4% and earnings growth rate of 11.2% for the current year [25]

Company Performance - Doximity (DOCS) closed at $68.50, marking a +2.48% move from the prior day, outperforming the S&P 500 which gained 1.23% [1] - The stock has dropped by 10.16% in the past month, underperforming the Medical sector's gain of 4.41% and the S&P 500's gain of 2.45% [1] Upcoming Earnings - Doximity's earnings report is set to be released on November 6, 2025, with projected EPS of $0.38, indicating a 26.67% increase year-over-year [2] - Revenue is expected to be $157.79 million, reflecting a 15.32% increase compared to the same quarter last year [2] Full Year Estimates - For the full year, earnings are projected at $1.52 per share and revenue at $633.98 million, showing changes of +7.04% and +11.15% respectively from the previous year [3] - Recent revisions in analyst estimates suggest confidence in Doximity's business performance and profit potential [3] Zacks Rank and Valuation - Doximity currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on estimate revisions [5] - The company is trading at a Forward P/E ratio of 44.12, which is above the industry average of 40.8, suggesting a premium valuation [6] - Doximity has a PEG ratio of 3.21, compared to the industry average PEG ratio of 3.3 [6] Industry Context - The Medical Info Systems industry, part of the Medical sector, has a Zacks Industry Rank of 55, placing it in the top 23% of over 250 industries [7] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1, indicating a strong industry performance [7]

Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by officers and directors of Doximity Inc. (NYSE: DOCS), urging shareholders to contact the firm to discuss their rights and possible legal actions [1][2]. Summary by Relevant Sections Shareholder Rights - Shareholders who acquired Doximity stock on or before June 24, 2021, may seek corporate governance reforms, return of funds, court-approved financial incentives, or other benefits [2]. Importance of Participation - Shareholder involvement is crucial for improving company policies and practices, enhancing transparency, accountability, and overall shareholder value [3]. Legal Representation - Halper Sadeh LLC represents global investors affected by securities fraud and corporate misconduct, having successfully implemented corporate reforms and recovered millions for defrauded investors [4].