Doximity(DOCS) - 2026 Q1 - Quarterly Results

Executive Summary & Financial Outlook This section provides an overview of Doximity's strong Q1 FY26 financial performance, operational achievements, strategic acquisition, and future financial guidance Fiscal 2026 First Quarter Financial Highlights Doximity reported strong financial performance for Q1 FY26, with significant year-over-year growth in total revenues, net income, adjusted EBITDA, and cash flows, exceeding previous year's figures across key metrics Fiscal 2026 First Quarter Financial Performance (in millions, except per share data) | Metric | Q1 FY26 (June 30, 2025) | Q1 FY25 (June 30, 2024) | YoY Change | | :-------------------------------- | :---------------------- | :---------------------- | :--------- | | Total Revenues | $145.9 million | $126.7 million | +15% | | Net Income | $53.3 million | $41.4 million | +28.8% | | Net Income Margin | 36.5% | 32.7% | +3.8 pts | | Non-GAAP Net Income | $71.9 million | $55.9 million | +28.6% | | Non-GAAP Net Income Margin | 49.2% | 44.1% | +5.1 pts | | Adjusted EBITDA | $79.8 million | $65.9 million | +21% | | Adjusted EBITDA Margin | 54.7% | 52.0% | +2.7 pts | | Diluted Net Income Per Share | $0.27 | $0.21 | +$0.06 | | Non-GAAP Diluted Net Income Per Share | $0.36 | $0.28 | +$0.08 | | Operating Cash Flow | $62.1 million | $41.2 million | +51% | | Free Cash Flow | $60.1 million | $39.5 million | +52% | Operational Highlights & Strategic Initiatives The company achieved record engagement across its platform, with its AI suite experiencing substantial growth and workflow tools being widely adopted by prescribers. Doximity also completed the acquisition of Pathway Medical - Doximity's AI suite grew 5x year-over-year[3] - More than 630,000 prescribers utilized Doximity's workflow tools to enhance efficiency and patient care[3] - Doximity acquired Pathway Medical[3] Financial Outlook Doximity provided guidance for the fiscal second quarter ending September 30, 2025, and updated guidance for the full fiscal year ending March 31, 2026, projecting continued revenue and Adjusted EBITDA growth Fiscal 2026 Guidance (in millions) | Metric | Q2 FY26 Guidance (Sept 30, 2025) | FY26 Guidance (March 31, 2026) | | :---------------- | :------------------------------- | :----------------------------- | | Revenue | $157 million - $158 million | $628 million - $636 million | | Adjusted EBITDA | $87 million - $88 million | $341 million - $349 million | Company Information & Legal Disclosures This section provides details on the Q1 FY26 earnings call, an overview of Doximity's mission, important forward-looking statement disclaimers, and investor and media contact information Conference Call Information Doximity announced details for its Q1 FY26 earnings conference call and webcast, with prepared remarks available on its investor relations website - Doximity hosted a webcast on August 7, 2025, at 2:00 p.m. Pacific Time to discuss financial results[7] - Prepared remarks and archived webcast are available on the Company's Investor Relations page[7] About Doximity Doximity is the leading digital platform for U.S. medical professionals, founded in 2010, serving over 80% of U.S. physicians with tools for collaboration, news, career management, and virtual patient visits - Founded in 2010, Doximity is the leading digital platform for U.S. medical professionals[8] - Its network members include more than 80% of U.S. physicians across all specialties[8] - Doximity provides digital tools for collaboration, medical news, career management, documentation, and virtual patient visits[8] Forward-Looking Statements This section outlines the nature of forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties, and the company does not undertake to update them - Statements are forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act[9] - Actual results may differ materially due to risks and factors including economic uncertainty, ability to retain members/customers, security breaches, and growth management[9] - The company assumes no obligation to update publicly any forward-looking statements, except as required by law[9] Investor and Media Contacts Provides contact information for investor relations and media inquiries - Investor Relations Contact: Perry Gold, ir@doximity.com[10] - Media Contact: Amanda Cox, pr@doximity.com[10] Condensed Consolidated Financial Statements This section presents Doximity's condensed consolidated balance sheets, statements of operations, and cash flows, detailing the company's financial position and performance Condensed Consolidated Balance Sheets The balance sheet shows a decrease in total assets from $1,264.3 million at March 31, 2025, to $1,204.4 million at June 30, 2025, primarily driven by a reduction in cash and cash equivalents. Total liabilities also decreased slightly, while stockholders' equity saw a reduction Condensed Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Cash and cash equivalents | $137,261 | $209,614 | $(72,353) | | Marketable securities | $703,712 | $706,050 | $(2,338) | | Accounts receivable, net | $141,663 | $128,354 | $13,309 | | Total current assets | $1,034,231 | $1,088,620 | $(54,389) | | Total assets | $1,204,447 | $1,264,309 | $(59,862) | | Total current liabilities | $159,912 | $156,257 | $3,655 | | Total liabilities | $178,852 | $181,684 | $(2,832) | | Total stockholders' equity | $1,025,595 | $1,082,625 | $(57,030) | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, Doximity reported a 15% increase in revenue year-over-year, with net income growing by 28.8%. Gross profit and operating income also showed healthy increases Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | YoY Change (in thousands) | YoY % Change | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------ | :----------- | | Revenue | $145,913 | $126,676 | $19,237 | 15.2% | | Cost of revenue | $15,793 | $13,550 | $2,243 | 16.6% | | Gross profit | $130,120 | $113,126 | $16,994 | 15.0% | | Research and development | $26,799 | $22,574 | $4,225 | 18.7% | | Sales and marketing | $36,365 | $35,244 | $1,121 | 3.2% | | General and administrative | $12,439 | $9,255 | $3,184 | 34.4% | | Total operating expenses | $75,603 | $67,073 | $8,530 | 12.7% | | Income from operations | $54,517 | $46,053 | $8,464 | 18.4% | | Net income | $53,320 | $41,377 | $11,943 | 28.9% | | Basic Net income per share | $0.28 | $0.22 | $0.06 | 27.3% | | Diluted Net income per share | $0.27 | $0.21 | $0.06 | 28.6% | Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | YoY Change (in thousands) | | :------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------ | | Cost of revenue | $2,980 | $2,894 | $86 | | Research and development | $6,649 | $4,684 | $1,965 | | Sales and marketing | $7,710 | $6,586 | $1,124 | | General and administrative | $4,526 | $2,926 | $1,600 | | Total stock-based compensation expense | $21,865 | $17,090 | $4,775 | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased by 51% year-over-year to $62.1 million. Investing activities provided cash, while financing activities used a substantial amount, primarily due to common stock repurchases Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | YoY Change (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------ | | Net cash provided by operating activities | $62,101 | $41,243 | $20,858 | | Net cash provided by investing activities | $2,679 | $29,941 | $(27,262) | | Net cash used in financing activities | $(137,133) | $(56,527) | $(80,606) | | Net increase (decrease) in cash and cash equivalents | $(72,353) | $14,657 | $(87,010) | | Cash and cash equivalents, end of period | $137,261 | $111,442 | $25,819 | - Operating cash flow increased by 51% year-over-year to $62.1 million[2][6][16] - Repurchase of common stock amounted to $122.4 million in Q1 FY26, significantly higher than $51.2 million in Q1 FY25[16] Non-GAAP Measures and Reconciliations This section explains Doximity's use of non-GAAP financial measures, defines key metrics, and provides detailed reconciliations from GAAP to non-GAAP figures Non-GAAP Financial Measures Overview Doximity uses non-GAAP financial measures to supplement its GAAP statements, providing additional insights for internal decision-making and period-to-period comparisons, while cautioning that these measures should not be considered in isolation - Non-GAAP financial measures are used internally for financial and operational decision-making and to evaluate period-to-period comparisons[17] - Non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and may not be comparable to similar measures used by other companies[17] Definitions of Non-GAAP Measures and Key Business Metrics This section defines key non-GAAP financial metrics such as non-GAAP gross profit, adjusted EBITDA, and free cash flow, along with operational metrics like net revenue retention rate and customer count for large accounts - Non-GAAP Gross Profit, Operating Income, Net Income: Excludes acquisition and other related expenses, stock-based compensation expense, amortization of acquired intangible assets, and change in fair value of contingent earn-out consideration liability. Non-GAAP net income is further adjusted for estimated income tax on such adjustments[18] - Adjusted EBITDA: Defined as net income before interest, income taxes, depreciation, and amortization, further adjusted for acquisition and other related expenses, stock-based compensation expense, change in fair value of contingent earn-out consideration liability, and other income, net[18] - Free Cash Flow: Calculated as cash flow from operating activities less purchases of property and equipment and internal-use software development costs[18] - Net Revenue Retention Rate: Calculated by taking the trailing 12-month (TTM) subscription-based revenue from existing customers and dividing it by the total subscription-based revenue for the prior TTM period, reflecting renewals, expansion, contraction, and churn[19] - Customers with TTM subscription revenue greater than $500,000: Counts customers that contributed more than $500,000 in subscription revenue in the TTM period, serving as a key indicator of business scale[19] Reconciliation of GAAP to Non-GAAP Financial Measures Detailed tables are provided to reconcile GAAP net income to Adjusted EBITDA, GAAP cash flow from operating activities to Free Cash Flow, and various GAAP operating expenses and income metrics to their non-GAAP counterparts, highlighting the adjustments made Reconciliation of GAAP Net Income to Adjusted EBITDA (in thousands) | Metric | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | GAAP Net income | $53,320 | $41,377 | | Adjustments: | | | | Acquisition and other related expenses | $428 | $0 | | Stock-based compensation | $21,865 | $17,090 | | Depreciation and amortization | $2,794 | $2,562 | | Provision for income taxes | $10,827 | $11,792 | | Change in fair value of contingent earn-out consideration liability | $168 | $202 | | Other income, net | $(9,630) | $(7,116) | | Adjusted EBITDA | $79,772 | $65,907 | | Revenue | $145,913 | $126,676 | | Net income margin | 36.5% | 32.7% | | Adjusted EBITDA margin | 54.7% | 52.0% | Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow (in thousands) | Metric | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by operating activities | $62,101 | $41,243 | | Internal-use software development costs | $(1,966) | $(1,704) | | Free cash flow | $60,135 | $39,539 | Reconciliation of GAAP to Non-GAAP Operating Expenses and Income (in thousands) | Metric | Q1 FY26 (June 30, 2025) (in thousands) | Q1 FY25 (June 30, 2024) (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | GAAP cost of revenue | $15,793 | $13,550 | | Stock-based compensation adjustment | $(2,980) | $(2,894) | | Non-GAAP cost of revenue | $12,813 | $10,656 | | GAAP gross profit | $130,120 | $113,126 | | Stock-based compensation adjustment | $2,980 | $2,894 | | Non-GAAP gross profit | $133,100 | $116,020 | | GAAP gross margin | 89.2% | 89.3% | | Non-GAAP gross margin | 91.2% | 91.6% | | GAAP operating income | $54,517 | $46,053 | | Adjustments: | | | | Acquisition and other related expenses | $428 | $0 | | Stock-based compensation | $21,865 | $17,090 | | Amortization of acquired intangibles | $1,002 | $1,061 | | Change in fair value of contingent earn-out consideration liability | $168 | $202 | | Non-GAAP operating income | $77,980 | $64,406 | | GAAP net income | $53,320 | $41,377 | | Adjustments: | | | | Acquisition and other related expenses | $428 | $0 | | Stock-based compensation | $21,865 | $17,090 | | Amortization of acquired intangibles | $1,002 | $1,061 | | Change in fair value of contingent earn-out consideration liability | $168 | $202 | | Income tax effect of non-GAAP adjustments | $(4,927) | $(3,854) | | Non-GAAP net income | $71,856 | $55,876 | | Non-GAAP net income margin | 49.2% | 44.1% | | Non-GAAP diluted net income per share | $0.36 | $0.28 |