Doximity, Inc. Q2 FY2026 earnings

Doximity's fiscal 2026 second quarter revenue was $168.5 million, up 23.2% from $136.8 million in the prior-year quarter. Gross profit rose 23.5% to $152.1 million. Gross margin was 90.3%, up 0.2 percentage points from 90.0%. Operating income increased 19.8% to $63.7 million. Net income climbed 40.6% to $62.1 million. Diluted EPS was $0.31, up from $0.22. Operating margin was 37.8%, down 1.1 percentage points from 38.8%. For the first six months, revenue was $314.4 million, up 19.3%, and net income was $115.4 million, up 34.9%. Year-to-date diluted EPS was $0.57, up from $0.43. Year-to-date gross margin was 89.8%, flat versus 89.7%. Year-to-date operating margin was 37.6%, flat versus 37.6%. Year-to-date gross profit was $282.2 million, up 19.4%, and year-to-date operating income was $118.2 million, up 19.2%.

The company's operational momentum continued. Net revenue retention rate was 118%, up from 116%. Customers with at least $500,000 in trailing 12-month subscription revenue grew to 121 from 104. CEO Jeff Tangney said a record 650,000 prescribers used Doximity's workflow tools in the quarter. AI Scribe and DoxGPT users grew over 50% from the prior quarter. Doximity's network includes more than 80% of U.S. physicians. Operating cash flow was $93.9 million, up 37.5% from $68.3 million. Free cash flow was $91.6 million, up 37% from $66.8 million. For the six months, operating cash flow was $156.0 million, up 42.4%, and free cash flow was $151.7 million. Deferred revenue, current portion, was $100.0 million, up 6.7% from $93.8 million a year earlier.

Non-GAAP results showed similar strength. Adjusted EBITDA was $100.8 million, up 32% from $76.1 million, with a 59.8% margin versus 55.7%. Non-GAAP net income was $90.0 million, up from $61.1 million, and non-GAAP diluted EPS was $0.45 versus $0.30. Management guided adjusted EBITDA for the fiscal third quarter ending December 31, 2025 to between $103 million and $104 million. For the full fiscal year ending March 31, 2026, adjusted EBITDA guidance is between $351 million and $357 million. The company also updated its full-year revenue outlook and its fiscal third quarter revenue outlook, without changing the shape of the story: growth is expected to continue at a healthy clip into the December quarter and through the March year end.

Risks remain. The company cites macroeconomic uncertainty, its ability to retain existing members or add new members, its ability to attract new customers or retain existing customers, security breaches, competition, and legal matters including shareholder class action litigation. It also flags the timing and scope of anticipated stock repurchases. The business depends on continued engagement with its platform and on maintaining its relationships with pharmaceutical manufacturers and health systems. While revenue growth and cash generation were strong, operating margin slipped in the quarter, and the company faces cost pressures from stock-based compensation and legal expenses. Execution on new AI tools and customer expansion will be key.

The quarter's cash generation was a highlight. Operating cash flow of $93.9 million and free cash flow of $91.6 million both rose 37% year over year. Deferred revenue, current portion, increased 6.7% to $100.0 million. The company's net revenue retention rate of 118% and its 121 customers with at least $500,000 in trailing 12-month subscription revenue show a sticky, expanding customer base. Management's full-year adjusted EBITDA guidance of $351 million to $357 million suggests confidence in the second half. Still, the operating margin decline and rising costs warrant attention.