Doximity(DOCS) - 2026 Q1 - Quarterly Report

Part I—Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) Doximity, Inc. presents its unaudited condensed consolidated financial statements for Q1 FY2026, including balance sheets, statements of operations, cash flows, and explanatory notes Condensed Consolidated Balance Sheets Total assets decreased to $1.20 billion by June 30, 2025, from $1.26 billion, primarily due to reduced cash and stock repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $137,261 | $209,614 | | Marketable securities | $703,712 | $706,050 | | Total current assets | $1,034,231 | $1,088,620 | | Total assets | $1,204,447 | $1,264,309 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $159,912 | $156,257 | | Total liabilities | $178,852 | $181,684 | | Total stockholders' equity | $1,025,595 | $1,082,625 | | Total liabilities and stockholders' equity | $1,204,447 | $1,264,309 | Condensed Consolidated Statements of Operations Q1 FY2026 revenue increased 15.2% to $145.9 million, with net income rising 28.9% to $53.3 million and diluted EPS at $0.27 Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 FY2026 (ended June 30, 2025) | Q1 FY2025 (ended June 30, 2024) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $145,913 | $126,676 | +15.2% | | Gross Profit | $130,120 | $113,126 | +15.0% | | Income from Operations | $54,517 | $46,053 | +18.4% | | Net Income | $53,320 | $41,377 | +28.9% | | Diluted EPS | $0.27 | $0.21 | +28.6% | Condensed Consolidated Statements of Cash Flows Operating cash flow rose to $62.1 million, while financing activities used $137.1 million due to $122.4 million in stock repurchases, leading to a $72.4 million net cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,101 | $41,243 | | Net cash provided by investing activities | $2,679 | $29,941 | | Net cash used in financing activities | $(137,133) | $(56,527) | | Net (decrease) increase in cash | $(72,353) | $14,657 | - The significant increase in cash used for financing activities was driven by a substantial rise in common stock repurchases, which amounted to $122.4 million in Q1 FY2026 compared to $51.2 million in Q1 FY2025[24] Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, revenue recognition, investments, and legal contingencies, highlighting Marketing, Hiring, and Workflow Solutions and a securities lawsuit - The company's primary customers are pharmaceutical companies and health systems that utilize its digital Marketing, Hiring, and Workflow Solutions to connect with healthcare professionals[26] Revenue Disaggregation (in thousands) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Subscription | $137,876 | $119,968 | | Other | $8,037 | $6,708 | | Total revenue | $145,913 | $126,676 | - The company is involved in a securities class action lawsuit and several shareholder derivative lawsuits filed in April 2024, related to disclosures of user count and engagement rates. The company intends to defend vigorously against these actions[108] - In July 2025, subsequent to the quarter's end, Doximity acquired Pathway Medical Inc., an AI-based medical knowledge platform, for $26 million in cash and issued approximately $37 million in RSUs to certain individuals joining the company[121] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 FY2026 financial performance, highlighting 15% revenue growth to $145.9 million, key metrics, non-GAAP measures, and liquidity, including stock repurchases - Doximity is the leading digital platform for U.S. medical professionals, with over 80% of U.S. physicians as members[126] Key Financial Highlights (Q1 FY2026 vs Q1 FY2025) | Metric | Q1 FY2026 | Q1 FY2025 | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | $145.9 million | $126.7 million | 15% | | Net Income | $53.3 million | $41.4 million | 29% | | Adjusted EBITDA | $79.8 million | $65.9 million | 21% | Key Business and Financial Metrics Key metrics show growth, with customers exceeding $500k TTM revenue increasing to 120 and net revenue retention improving to 118% Key Metrics Comparison | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Customers with >$500k TTM Revenue | 120 | 103 | | Net Revenue Retention Rate | 118% | 114% | Results of Operations Q1 FY2026 revenue grew 15% to $145.9 million, primarily from subscription revenue, while operating expenses increased due to higher stock-based compensation and personnel costs - The $17.9 million increase in subscription revenue was driven by $4.8 million from new customers and $13.1 million from the expansion of existing customers[160] - Research and development expense increased by 19% YoY, driven by higher stock-based compensation, personnel costs, and contractor costs[162] - General and administrative expense rose 34% YoY, primarily due to increased stock-based compensation and higher legal and accounting fees[166] Liquidity and Capital Resources Doximity held $841.0 million in liquid assets and repurchased $198.3 million in stock under a $500 million program, with $301.7 million remaining - On May 1, 2024, the board authorized a new stock repurchase program of up to $500 million with no expiration date[171] - As of June 30, 2025, the company had repurchased shares for $198.3 million under the new program, with $301.7 million remaining authorized for repurchase[171] Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,101 | $41,243 | | Net cash provided by investing activities | $2,679 | $29,941 | | Net cash used in financing activities | $(137,133) | $(56,527) | Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces interest rate risk on its $841.0 million investment portfolio, with a 100 basis point rate increase potentially reducing market value by $5.0 million - The company's primary market risk is interest rate risk affecting its $841.0 million portfolio of cash, cash equivalents, and marketable securities[188][169] - A hypothetical 100 basis point increase in interest rates would result in a $5.0 million decrease in the market value of the company's investment portfolio as of June 30, 2025[189] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective at the reasonable assurance level[192] - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[193] Part II—Other Information Item 1. Legal Proceedings The company faces a securities class action and five shareholder derivative lawsuits from April 2024 regarding user count and engagement rate disclosures - The company is facing a securities class action lawsuit and five shareholder derivative lawsuits filed in April 2024 concerning disclosures about user count and engagement rates[195] Item 1A. Risk Factors No material changes to risk factors were reported since the Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - There have been no material changes to the risk factors disclosed in the company's most recent Annual Report on Form 10-K[197] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 2,266,003 shares under its program during Q1 FY2026 and issued 28,667 Class A common shares from a warrant exercise Share Repurchases (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 1,073,195 | $53.24 | | May 2025 | 701,871 | $53.66 | | June 2025 | 490,937 | $56.08 | | Total | 2,266,003 | N/A | - As of June 30, 2025, approximately $301.7 million remained available for repurchase under the authorized program[199] Item 5. Other Information CFO Anna Bryson terminated a Rule 10b5-1 trading plan and adopted a new one on May 27, 2025, for the sale of 160,000 shares - CFO Anna Bryson terminated a Rule 10b5-1 trading plan from November 2024 and adopted a new plan on May 27, 2025, for the sale of 160,000 shares over the next year[204]