Doximity — Fiscal 2027 Second Quarter Earnings Summary

Financial Performance:

• Total revenue was $174.5 million, an increase of 4% year-over-year compared to $168.5 million.
• Net income was $34.7 million, representing a margin of 19.9% (versus 36.8% in the prior year period).
• Non-GAAP net income was $68.3 million, representing a margin of 39.1% (versus 53.4% in the prior year period).
• Adjusted EBITDA was $88.9 million, a decrease of 12% year-over-year compared to $100.8 million, with a margin of 50.9% (versus 59.8%).
• Diluted net income per share was $0.18 (versus $0.31), while non-GAAP diluted net income per share was $0.36 (versus $0.45).
• Operating cash flow was $93.3 million, a decrease of 1% year-over-year compared to $93.9 million.
• Free cash flow was $91.3 million, a decrease of less than 1% year-over-year compared to $91.6 million.
• GAAP gross margin was 85.5% (versus 90.3%), while non-GAAP gross margin was 87.8% (versus 91.9%).
• Stock-based compensation expense totaled $40.6 million for the quarter, up from $29.5 million in the prior year period.

Guidance and Future Outlook:

• Fiscal Q3 2027 revenue guidance is set between $195 million and $196 million.
• Fiscal Q3 2027 Adjusted EBITDA guidance is set between $102.5 million and $103.5 million.
• Fiscal year 2027 revenue guidance is updated to between $678 million and $683 million.
• Fiscal year 2027 Adjusted EBITDA guidance is updated to between $317 million and $325 million.

Business Segments and Product Lines:

• More than 190 health systems have purchased the company's AI suite.
• The company is extending its lead in distribution and trust through its UpToDate and DoseCheck products.
• The company maintains a network of more than 85% of U.S. physicians.
• Workflow tools usage includes secure calls, voicemails, faxes, AI clinical research via Ask (formerly DoxGPT), prescription drug research, PeerCheck, Amion scheduling, and Scribe ambient note-taking.

Market and Competitive Landscape:

• Doximity operates in a very competitive and rapidly changing environment.
• The company notes that new risks and uncertainties emerge from time to time that could cause actual results to differ from forward-looking statements.

Risks and Challenges:

• Actual results may differ materially from forward-looking statements due to various risks and factors, including those detailed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
• The company faces risks related to legal matters, including shareholder class action litigation.
• Risks include the potential for new risks and uncertainties emerging in a rapidly changing environment.

Management Commentary and Tone:

• CEO Jeff Tangney stated the company delivered "another quarter of record engagement while investing heavily in AI and maintaining a 51% adjusted EBITDA margin."
• Management highlighted the extension of their lead in distribution and trust with UpToDate and DoseCheck.

Other Key Points:

• Cash and cash equivalents were $218.6 million as of September 30, 2026, down from $219.2 million at the beginning of the period.
• Marketable securities were $494.6 million as of September 30, 2026.
• Accounts receivable, net, increased to $166.1 million from $144.8 million in the prior period.
• Deferred revenue, current, decreased to $100.2 million from $106.1 million.
• The company repurchased common stock for $54.2 million during the quarter.
• The company paid $2.3 million in excise taxes on share repurchases during the quarter.
• No cash was paid for acquisitions during the quarter, compared to $26.5 million in the prior year period.
• Purchases of marketable securities were $168.5 million, with maturities of $86.4 million.
• Internal-use software development costs were $2.0 million for the quarter.