Doximity, Inc. 10-Q Summary: Quarter Ended December 31, 2025
Business Context and Reporting Period
This report covers the quarterly period ended December 31, 2025, representing the third quarter of Doximity's fiscal year 2026 (which ends March 31). Doximity operates as the leading digital platform for U.S. medical professionals, generating revenue primarily through Marketing, Hiring, and Workflow Solutions sold to pharmaceutical companies and health systems.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Revenue | $185.1 million | $168.6 million | $499.5 million | $432.1 million |
| Net Income | $61.6 million | $75.2 million | $176.9 million | $160.7 million |
| Adjusted EBITDA | $111.4 million | $102.0 million | $292.0 million | $244.1 million |
| Net Income Margin | 33% | 45% | 35% | 37% |
| Adjusted EBITDA Margin | 60% | 61% | 58% | 56% |
| Operating Cash Flow (9M) | $216.9 million (2025) vs $174.8 million (2024) | |||
| Free Cash Flow (9M) | $210.2 million (2025) vs $169.8 million (2024) | |||
| Cash & Marketable Securities | $735.1 million (as of Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 10% year-over-year (YoY) in Q3 and 16% YoY for the nine-month period. Growth was driven by a 7% increase in average revenue per existing Marketing Solutions customer and the addition of new subscription customers.
- Expense Increases: Operating expenses rose significantly due to increased stock-based compensation (SBC). R&D expenses increased 54% YoY in Q3, and G&A expenses increased 30% YoY, largely driven by legal fees and SBC.
- Profitability: While revenue grew, Net Income decreased 18% in Q3 ($61.6M vs $75.2M) due to higher operating expenses and a higher effective tax rate (23.8% vs 16.3%). However, Adjusted EBITDA increased 9% YoY in Q3.
- Acquisition: The company completed the acquisition of Pathway Medical Inc. in July 2025 for $36.3 million, adding AI-based medical knowledge capabilities.
- Share Repurchases: The company repurchased $341.1 million of common stock during the nine months ended Dec 31, 2025. As of period end, $83.0 million remained available under the existing $500 million program.
Guidance, Outlook, and Risks
- Legal Settlement: On December 24, 2025, the company entered into a settlement agreement to resolve a securities class action lawsuit regarding user count disclosures. The settlement amount is $31 million, which is expected to be covered by insurance. A corresponding liability and receivable were recorded.
- Ongoing Litigation: The company is defending against shareholder derivative lawsuits and a lawsuit filed by OpenEvidence Inc. alleging unauthorized access to an AI platform. The company cannot currently estimate the potential loss from these matters.
- Tax Legislation: The "One Big Beautiful Bill Act" signed in July 2025 restored Section 174 expensing for R&D. Management elected to accelerate the deduction of unamortized R&D expenses, decreasing deferred tax assets by approximately $39.6 million.
- Capital Allocation: On February 3, 2026 (subsequent to the reporting period), the Board authorized a new $500 million share repurchase program.
Key Facts for Investor Verification
- Insurance Coverage: Verify the status of the $31 million securities lawsuit settlement and confirm the extent to which insurance carriers will cover the liability.
- Legal Exposure: Monitor the progress of the OpenEvidence Inc. lawsuit and shareholder derivative suits, as outcomes could impact reputation and financial results.
- Stock-Based Compensation: Review the trajectory of SBC expenses, which increased significantly ($84.9M for 9M 2025 vs $54.3M for 9M 2024) and are a primary driver of operating expense growth.
- Customer Concentration: Note that three customers represented 10% or more of revenue in the nine months ended Dec 31, 2025 (Customer A, B, and C).
- Share Count: Confirm the impact of the aggressive share repurchase program on diluted share count and future earnings per share.