Doximity Revenue Rises 4% to $174.5 Million Despite Margin Contraction
Key Facts
Doximity reported results on Nov. 5, 2026, for the second quarter of its fiscal 2027, ended Sept. 30, with revenue of $174.5 million, up 4% year over year. The results showed a divergence between revenue growth and declines in profitability measures compared with the same period a year earlier. Net income was $34.7 million, versus $62.1 million, while net income margin fell to 19.9% from 36.8%. Adjusted EBITDA also declined to $88.9 million from $100.8 million, down 12%. The announcement came after the market closed on Thursday, according to the company statement published via Business Wire.
Revenue topped analysts’ estimate of $170.82 million, according to Investing.com data, and rose from $168.5 million in the year-earlier quarter. Adjusted diluted non-GAAP earnings per share were $0.36, compared with an estimate of $0.35. But adjusted earnings per share fell from $0.45 in the year-earlier period. GAAP diluted earnings per share were $0.18, versus $0.31 a year earlier. The distinction between the two measures shows that the adjusted figure beat estimates even as it declined year over year, while earnings under the stated accounting standard also fell.
Adjusted EBITDA declined to $88.9 million from $100.8 million a year earlier, while its margin was 50.9%, compared with 59.8%. The company statement said the 12% year-over-year drop in adjusted EBITDA came alongside a roughly 17-percentage-point decline in net income margin, from 36.8% to 19.9%. Chief Executive Jeff Tangney said the company recorded record engagement during the quarter while investing heavily in AI. He added that the company maintained an adjusted EBITDA margin of 51%. Tangney said: "We delivered another quarter of record engagement, while investing heavily in AI and maintaining an adjusted EBITDA margin of 51%."
Doximity said more than 190 health systems had purchased its AI package as of Nov. 5, 2026. The figure indicates the package’s reach among the health systems the company disclosed as purchasers, but the statement did not specify the associated sales value. Tangney linked the AI investment to the company’s record engagement, while citing the maintenance of a 51% margin. The quarter’s figures, meanwhile, showed declines in net income and adjusted earnings compared with the same period a year earlier. The statement did not provide a quantitative breakdown of the AI package’s contribution to revenue or profitability. The company’s quarterly financial results show what it reported for revenue, margins and income in the quarter ended Sept. 30.
Operating cash flow was $93.3 million in the quarter, compared with $93.9 million in the year-earlier period, down 1% year over year. Free cash flow was $91.3 million, compared with $91.6 million a year earlier, a decline of less than 1%. These figures show limited declines in both cash flow measures compared with the drops in net income and adjusted earnings. The company reported free and operating cash flow as part of its second-quarter fiscal 2027 results. The statement did not provide, among the figures cited, further detail explaining the divergence between cash flow and net income trends. Both measures are compared with the corresponding quarter of the prior fiscal year.
For the near-term outlook, Doximity set revenue for its fiscal third quarter, ending Dec. 31, 2026, at between $195 million and $196 million. It forecast adjusted EBITDA of between $102.5 million and $103.5 million for the quarter. The company also raised its fiscal-year revenue guidance for the year ending March 31, 2027, to $678–683 million. It set its full-year adjusted EBITDA range at $317 million to $325 million. Investing.com said the midpoint of the new annual revenue range is $680.5 million, above analysts’ consensus of $675.6 million. The guidance puts third-quarter and fiscal-year performance at the center of the update the company issued after its second-quarter results.
In after-hours trading on Thursday, Nov. 5, Doximity shares fell 6.6%, according to Investing.com, amid a reaction to margin contraction despite the company beating estimates for revenue and adjusted earnings per share. DOCS closed at $34.67 on Nov. 5, according to EL7 data. The EL7 data available did not include the stock’s trading range during the session. Investing.com reported that investors reacted to the sharp margin contraction, while Benzinga’s coverage said the stock moved lower in extended trading after the results were announced. The stock’s post-announcement move combines the decline in extended trading with the close recorded in the same session, without the available source specifying the closing price change.