Doximity Inc-Class A (NYSE:DOCS) reported financial results for its fiscal third quarter that narrowly surpassed analyst expectations on the top and bottom lines. However, the digital platform for U.S. medical professionals saw its shares plummet in after-hours trading, driven by a revenue outlook for the coming quarter that fell short of Wall Street's forecasts.
Quarterly Performance Versus Estimates
For the quarter ended December 31, 2025, Doximity posted revenue of $185.1 million, a 9.8% increase year-over-year. This figure slightly exceeded the analyst consensus estimate of approximately $185.8 million. The company's profitability, as measured by non-GAAP earnings per share (EPS), also came in ahead of expectations.
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Reported Revenue: $185.1 million
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Analyst Estimate: ~$185.8 million
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Verdict: Slight beat
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Reported Non-GAAP EPS: $0.46
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Analyst Estimate: $0.45
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Verdict: Slight beat
Despite these modest beats, investor attention quickly shifted to the company's forward guidance, which painted a less optimistic picture for the immediate future.
Guidance Disappoints, Sparking Sell-Off
The primary catalyst for the negative market reaction appears to be Doximity's financial outlook. For the fiscal fourth quarter ending March 31, 2026, the company provided revenue guidance in a range of $143 million to $144 million. The midpoint of this range, $143.5 million, sits meaningfully below the analyst consensus estimate of $151.5 million for the period.
This guidance miss suggests a potential slowdown in growth momentum or other headwinds not fully anticipated by the market. Following the release, the stock fell sharply, reflecting investor disappointment and a reassessment of near-term growth prospects.
Press Release Highlights
Beyond the headline numbers, Doximity's earnings report highlighted several operational strengths and strategic moves:
- User Engagement: CEO Jeff Tangney emphasized record platform engagement, noting over 1 million quarterly active prescribers on its newsfeed and a record jump to 720,000 users for its workflow products.
- AI Product Adoption: The company reported that its nascent AI products have attracted over 300,000 users, indicating early traction for its artificial intelligence initiatives.
- Capital Return: Doximity's board authorized a new stock repurchase program of up to $500 million, signaling confidence in the company's long-term value and a commitment to returning capital to shareholders.
- Profitability Metrics: The company maintained robust profitability, with an adjusted EBITDA margin of 60.2% for the quarter.
Market Reaction and Context
The stock's dramatic decline of over 30% in after-hours trading underscores the market's heavy focus on future guidance relative to backward-looking results. While Doximity delivered a solid quarter, the lower-than-expected forecast for the next quarter raised concerns about its growth trajectory in a competitive digital health landscape.
This reaction occurred amidst a broader sell-off in certain software and tech stocks, as noted in recent news, though Doximity's specific guidance appears to be the dominant driver for its own sharp decline.
Looking Ahead
Investors will now scrutinize Doximity's ability to navigate the challenges implied in its Q4 guidance. Key areas of focus will be the company's execution in monetizing its engaged user base, the scaling of its AI products, and its performance in the next fiscal year. The significant share repurchase authorization may provide some support to the stock price, but the path to regaining investor confidence will likely require a return to meeting or exceeding growth expectations.
For a detailed breakdown of upcoming earnings estimates and historical performance, you can review Doximity's earnings data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation to buy or sell any security, or an endorsement of any investment strategy. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
