Doximity, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2026 (Q1 of Fiscal Year 2027). Doximity, Inc. operates the leading digital platform for U.S. medical professionals, serving over 3 million registered members (representing >85% of U.S. physicians). The company generates revenue primarily through Marketing, Hiring, and Workflow Solutions, including its Clinical AI Suite.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $156.6 million | $145.9 million |
| Net Income | $24.3 million | $53.3 million |
| Net Income Margin | 16% | 37% |
| Adjusted EBITDA | $74.8 million | $79.8 million |
| Adjusted EBITDA Margin | 48% | 55% |
| Free Cash Flow | $39.6 million | $60.1 million |
| Cash & Marketable Securities | $687.8 million | $646.7 million |
| Stock Repurchases | $99.1 million | $122.4 million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 7% year-over-year (YoY), driven by an $8.4 million increase in subscription revenue. This included $7.1 million from new customers and $1.3 million from existing customer expansion.
- Profitability Decline: Net income decreased 54% YoY to $24.3 million. This was primarily due to a significant increase in operating expenses and a higher effective tax rate (39.8% vs. 16.9% in Q1 2025).
- Expense Increases:
- R&D: Increased 44% YoY ($11.7 million), driven by a $9.6 million increase in stock-based compensation and higher hosting/software costs for AI initiatives.
- Sales & Marketing: Increased 24% YoY ($8.7 million), driven by stock-based compensation and increased marketing activities.
- Cost of Revenue: Increased 50% YoY ($7.9 million), largely due to $4.9 million in higher hosting/software costs and amortization related to AI initiatives.
- Interest Income: Other income, net, decreased 30% YoY due to lower yields on the cash portfolio.
Outlook, Risks, and Unusual Items
- Legal Settlement: The company settled a securities class action lawsuit regarding user count disclosures for $31 million (paid by insurance carriers). The case was terminated in June 2026. Seven shareholder derivative lawsuits remain pending with no estimated loss range.
- AI Litigation: The company is defending against a lawsuit filed by OpenEvidence Inc. alleging unauthorized access to their AI platform. The case is currently stayed pending mediation.
- Acquisition: Completed the acquisition of Pathway Medical Inc. in July 2025 for $36.3 million to enhance AI capabilities. Results are included in the current period.
- Leadership Transition: The company appointed Matt Sonefeldt as Chief Financial Officer in May 2026, succeeding the interim CFO.
- Share Repurchases: Under a new $500 million program authorized in February 2026, the company repurchased $99.1 million of stock in Q1 2026. Approximately $400.9 million remains available.
Investor Verification Checklist
- AI Cost Sustainability: Verify if the 50% increase in Cost of Revenue and 44% increase in R&D driven by AI initiatives are one-time investments or recurring operational cost increases.
- Tax Rate Volatility: Confirm the drivers of the effective tax rate jump from 16.9% to 39.8% and whether this is sustainable for future quarters.
- Derivative Litigation Exposure: Monitor the status of the seven pending shareholder derivative lawsuits and potential liability exposure beyond the settled class action.
- Revenue Retention: Review the Net Revenue Retention Rate, which declined from 118% in Q1 2025 to 107% in Q1 2026, to assess customer expansion trends.
- OpenEvidence Lawsuit: Track the outcome of the mediation regarding the OpenEvidence Inc. lawsuit and potential impacts on the Pathway acquisition integration.