Summary
Doximity's fiscal 2026 third quarter revenue came in at $185.1 million, up 9.8% from $168.6 million in the prior-year quarter. Subscription revenue drove the increase, rising $13.1 million, with $7.1 million from new subscription customers and $6.0 million from expansion at existing accounts. Average revenue per existing Marketing Solutions customer climbed roughly 7% as customers added and grew brands and service lines. Subscriptions generated about 95% of total revenue in the quarter, which keeps the model concentrated but predictable.
Profit moved the other way. Net income was $61.6 million, down 18.1% from $75.2 million a year earlier, and diluted EPS fell to $0.31 from $0.37. Operating income declined 10.0% to $71.9 million from $79.9 million. Gross profit still rose 7.7% to $166.4 million, but gross margin slipped to 89.9%, down 1.7 percentage points. Operating margin fell to 38.9%, down 8.6 percentage points. The non-GAAP view is steadier: non-GAAP net income was $91.1 million and adjusted EBITDA was $111.4 million, up 9%, for an adjusted EBITDA margin of 60.2%. Non-GAAP diluted EPS was $0.46 against $0.45 a year earlier.
Excluded stock-based compensation explains most of the gap. It was $33.5 million in the quarter against $19.4 million a year earlier, and non-GAAP operating income was $109.3 million versus $100.4 million. The company also carried higher legal costs tied to non-ordinary course matters and booked acquisition-related expenses during the first nine months, both of which are excluded from its non-GAAP figures. Cash generation cooled slightly. Operating cash flow was $60.9 million in the quarter, down 6.6%, and free cash flow was $58.5 million, down 8%. Through the first nine months, operating cash flow reached $216.9 million, up 24.1%, while free cash flow was $210.2 million against $169.8 million a year earlier. Deferred revenue, current portion, was $66.3 million at December 31, 2025, down 4.2% year over year, reflecting the timing of billings and program launches.
Engagement hit records. Management said the newsfeed had more than 1 million quarterly active prescribers, workflow products reached 720,000, and AI products had over 300,000. The customer base is moving upmarket: 126 customers generated at least $500,000 in trailing 12-month subscription revenue, up from 115, and that cohort produced roughly 84% of revenue. Net revenue retention eased to 112% from 117%, which management ties directly to the revenue growth rate.
Guidance points to a slower fiscal fourth quarter. For the quarter ending March 31, 2026, the company guides revenue of $143 million to $144 million and adjusted EBITDA of $63.5 million to $64.5 million. For the full fiscal year ending March 31, 2026, it expects revenue of $642.5 million to $643.5 million and adjusted EBITDA of $355.5 million to $356.5 million. The board authorized another $500 million Class A repurchase program with no expiration date. Management expects gross margin to stay relatively steady over the near term, though it warns quarterly margin will fluctuate, and it says existing liquidity will support working capital and capital expenditure needs for at least the next 12 months. The main risks it flags are macroeconomic uncertainty, member and customer retention, data security, competition in a fast-changing market, and legal costs from the shareholder class action litigation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $185.1M | $168.5M | +9.8% | $168.6M | +9.8% |
| Gross profit | $166.4M | $152.1M | +9.4% | $154.4M | +7.7% |
| Gross margin | 89.9% | 90.3% | -0.4 pp | 91.6% | -1.7 pp |
| Research & development | $34.6M | $30.2M | +14.5% | $22.4M | +54.3% |
| Sales & marketing | $42.2M | $39.2M | +7.8% | $38.5M | +9.6% |
| General & administrative | $17.7M | $19.0M | -7.3% | $13.6M | +30.0% |
| Total operating expenses | $94.5M | $88.4M | +6.8% | $74.5M | +26.8% |
| Operating income (loss) | $71.9M | $63.7M | +12.9% | $79.9M | -10.0% |
| Operating margin | 38.9% | 37.8% | +1.1 pp | 47.4% | -8.5 pp |
| Net income (loss) | $61.6M | $62.1M | -0.8% | $75.2M | -18.1% |
| Net margin | 33.3% | 36.8% | -3.5 pp | 44.6% | -11.3 pp |
| Diluted EPS | $0.31 | $0.31 | ±$0.00 | $0.37 | -$0.06 |
Risks
New litigation risk factor states the company is currently subject to litigation and may face significant defense costs, judgments, or settlements; MD&A attributes part of the general and administrative expense increase to legal expenses and references shareholder class action litigation.
Operating margin declined to 38.9% in the quarter from 47.4% a year earlier, down 8.6 percentage points, and net income fell 18.1% to $61.6 million, while gross margin declined 1.7 percentage points to 89.9%.
Net revenue retention rate declined to 112% at December 31, 2025 from 117% at December 31, 2024, and MD&A states the metric is directly tied to revenue growth and reflects renewals, expansion, contraction, and churn.
New acquisition integration risk factor follows the July 2025 Pathway Medical acquisition and cites failure to integrate, unanticipated costs, adverse margin impacts, and potential goodwill impairment; MD&A reports acquisition-related expenses and cash paid for an acquisition in the year-to-date period.
Deferred revenue, current portion, decreased 4.2% to $66.3 million versus the prior-year quarter, and MD&A attributes the year-to-date decrease in deferred revenue to timing of customer billings and program launches.
Customers with at least $500,000 of trailing 12-month subscription revenue accounted for approximately 84% of revenue for the TTM ended December 31, 2025, and the count rose to 126 from 115, concentrating revenue in a limited set of large customers.
MD&A reports stock-based compensation expense increased in cost of revenue, research and development, sales and marketing, and general and administrative, driven by new service-based and performance-based awards, contributing to the quarter's operating margin decline.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Free Cash Flow
Adjusted EBITDA
Net Revenue Retention
Non-GAAP Net Income Margin
Non-GAAP Net Income
Summary, forecast, risks and KPIs are extracted from Doximity, Inc.'s SEC filings for Q3 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.