Doximity, Inc. 10-Q Summary: Fiscal Q2 2026 (Ended Sept 30, 2025)
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025 (Fiscal Q2 2026). Doximity, Inc. operates the leading digital platform for U.S. medical professionals, serving over 80% of U.S. physicians. The company generates revenue primarily through Marketing, Hiring, and Workflow Solutions sold to pharmaceutical companies and health systems. The company operates as a single reportable segment.
Key Financial Metrics
| Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) |
|---|---|---|---|---|
| Revenue | $168.5 million | $136.8 million | $314.4 million | $263.5 million |
| Gross Profit | $152.1 million | $123.2 million | $282.2 million | $236.3 million |
| Gross Margin | 90% | 90% | 90% | 90% |
| Net Income | $62.1 million | $44.2 million | $115.4 million | $85.5 million |
| Net Income Margin | 37% | 32% | 37% | 32% |
| Adjusted EBITDA | $100.8 million | $76.1 million | $180.6 million | $142.1 million |
| Adjusted EBITDA Margin | 60% | 56% | 57% | 54% |
| Operating Cash Flow (6mo) | $156.0 million (2025) vs $109.6 million (2024) | |||
| Free Cash Flow (6mo) | $151.7 million (2025) vs $106.3 million (2024) | |||
| Cash & Marketable Securities | $878.4 million (as of Sept 30, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 23% year-over-year for the quarter and 19% for the six-month period. Growth was driven by a $29.8 million increase in subscription revenue, split between new customer additions ($9.3 million) and expansion of existing customers ($20.5 million).
- Operating Expenses: General and Administrative (G&A) expenses surged 89% year-over-year ($19.0 million vs $10.1 million), primarily due to a $3.9 million increase in legal expenses related to ongoing litigation and a $3.3 million increase in stock-based compensation. R&D expenses rose 30% due to increased headcount and stock-based compensation.
- Acquisition Activity: On July 29, 2025, Doximity acquired Pathway Medical Inc. for $36.3 million (cash and equity) to enhance its AI capabilities. This resulted in $17.0 million of new goodwill and $18.7 million of developed technology intangible assets.
- Share Repurchases: The company repurchased $144.2 million of common stock during the six months ended September 30, 2025. Approximately $279.8 million remains available under the $500 million authorization.
- Tax Rate: The effective tax rate decreased to 14.9% for the quarter (from 29.0% in the prior year) due to stock-based compensation tax benefits and R&D tax credits.
Guidance, Outlook, Risks, and Unusual Items
- Outlook: Management expects gross margins to remain relatively steady. R&D and G&A expenses are expected to increase in absolute dollars due to continued investment in product development and compliance costs associated with being a public company.
- Legal Proceedings (Material Risk):
- Securities Litigation: A class action lawsuit filed in April 2024 regarding disclosures of user counts and engagement rates is in the discovery phase. Five shareholder derivative lawsuits have also been filed.
- IP/Cyber Claims: In June 2025, OpenEvidence Inc. sued Doximity and its subsidiary Pathway Medical, alleging unauthorized access and cyberattacks against their AI platform. Doximity has filed counterclaims for false advertising and defamation.
- Unusual Items: The prior year period included a $2.3 million impairment charge related to a sublease of office space, which did not recur in the current period. The current period includes significant legal fees ($2.9 million) excluded from Adjusted EBITDA.
Investor Verification Checklist
- Legal Exposure: Verify the status and potential financial impact of the securities class action and the OpenEvidence IP litigation, as management states they cannot currently estimate the range of loss.
- Customer Concentration: Review Note 2 for customer concentration risks; specific customers represented 10-12% of revenue or accounts receivable in the period.
- Acquisition Integration: Monitor the integration of Pathway Medical and the realization of synergies from the $36.3 million investment.
- Stock-Based Compensation: Note the significant increase in stock-based compensation ($51.3 million YTD 2025 vs $35.0 million YTD 2024) and its impact on future cash burn if equity grants continue at this pace.
- Share Repurchase Pace: Assess the sustainability of the current repurchase rate ($144 million in 6 months) relative to free cash flow generation.