Doximity Stock Down Despite Q2 Earnings Beat, Revenues Up Y/Y

Core Insights - Doximity, Inc. reported adjusted earnings per share (EPS) of 45 cents for Q2 fiscal 2026, a 50% increase year over year, exceeding the Zacks Consensus Estimate by 18.4% [1][8] - The company's revenues reached $168.5 million in Q2, reflecting a year-over-year growth of 23.2% and surpassing the Zacks Consensus Estimate by 6.8% [2][8] Revenue Breakdown - Subscription revenues amounted to $159.5 million, up 23% year over year, driven by increased spending from existing customers and a net revenue retention rate of 118% [3] - Other revenues totaled $9.1 million, marking a 25.9% increase year over year [3] Margin Analysis - Gross profit increased by 23.5% year over year to $152.1 million, with a gross margin expansion of 30 basis points to 90.3% [4][8] - Operating profit was $63.7 million, a 19.8% increase from the prior year, although the operating margin contracted by 100 basis points to 37.8% [5][8] Financial Position - Doximity ended Q2 fiscal 2026 with cash and cash equivalents of $169.2 million, up from $137.3 million at the end of Q1 [6] - Cumulative net cash from operating activities was $156 million, compared to $109.6 million a year ago [6] Future Guidance - For Q3 fiscal 2026, Doximity expects revenues between $180 million and $181 million, exceeding the Zacks Consensus Estimate of $178.2 million [7] - The full fiscal year revenue outlook has been raised to between $640 million and $646 million, up from the previous estimate of $628 million to $636 million [9] Product and Engagement Highlights - The company introduced multiple product updates focused on AI and workflow expansion, including the integration of Pathway's medical dataset into DoxGPT [11] - Record engagement was noted with over 650,000 unique prescribers utilizing various digital tools, and AI-optimized program adoption accounted for 40% of bookings [12]