Doximity (NYSE:DOCS) reported “solid” fiscal third-quarter 2026 results, highlighting revenue and profitability that exceeded the company’s guidance, while also emphasizing continued expansion of its physician network and early traction for its medical AI products.
Leadership update and quarterly results
On the call, co-founder and CEO Jeff Tangney said CFO Anna Bryson is on medical leave. Audit Committee Chair Tim Cabral, a former CFO at Veeva Systems, stepped in to discuss financials and guidance.
Profitability also exceeded guidance. Adjusted EBITDA was $111.4 million, representing a 60% margin. Cabral noted non-GAAP gross margin was 91%, down from 93% a year earlier, which he attributed to increased AI infrastructure investment driven by higher usage.
Customer metrics and revenue concentration
Cabral said Doximity’s growth continued to be driven by existing customers, with net revenue retention of 112% on a trailing 12-month basis. For its top 20 customers, net revenue retention was 117%.
The company ended the quarter with 126 customers contributing at least $500,000 each in subscription-based revenue on a trailing 12-month basis, up from 115 a year ago. Cabral said those customers accounted for 84% of total revenue.
During Q&A, management also provided an update on multi-module offerings, saying DocDynamic represented about 45% of bookings in the quarter, compared with 18% a year earlier.
Network growth and workflow engagement
Tangney said Doximity surpassed 3 million registered members and now includes more than 85% of all U.S. physicians, as well as roughly two-thirds of nurse practitioners and physician assistants.
He said engagement reached record highs across quarterly, monthly, weekly, and daily measures, with increased usage of Newsfeed, workflow, and AI products. Workflow—defined as telehealth, scheduling, digital fax, and AI tools—reached a record 720,000 unique active prescribers in Q3, which Tangney described as the largest sequential gain the company has seen.
The company also reiterated momentum for Doximity Dialer, with Tangney noting that for the fifth consecutive year it was ranked the “number one best-in-class telehealth platform” by health system CIOs. He added that during recent snowstorms, Doximity served over 700,000 telehealth visits in a day.
AI adoption, “Peer Check,” and hospital traction
Doximity devoted a significant portion of the call to its push into medical AI following its Pathway AI acquisition in August. Tangney said more than 300,000 unique prescribers used Doximity’s AI products in Q3, adding that in January, “DocsGPT active prescribers queried us on average 4x a week.”
Tangney also cited a head-to-head trial the company published the same day, involving more than 1,300 high-prescribing physicians. He said doctors preferred DocsGPT at more than twice the rate of the company’s nearest competitor. He attributed Doximity’s performance to several factors, including a “built-in deterministic drug reference,” a licensing agreement with ASCO guidelines, and what he described as full PDF access to more than 2,000 medical journals.
On the enterprise side, Tangney said more than 100 top U.S. health systems have “reviewed, cleared privacy and AI committees, and ultimately bought” Doximity’s AI suite, which includes DocsGPT and the Doximity Scribe note-taking tool. He said those hospitals purchased access for more than 180,000 prescribers and that the agreements allow clinicians to put patient data into Doximity’s tools under hospital arrangements.
Management repeatedly stressed that Doximity is positioning trust and physician oversight as differentiators. Tangney referenced a Stanford-Harvard study he said found AI can cause clinical harm in up to 22% of real patient cases, arguing that “physician oversight is essential.” He said Doximity has more than 10,000 U.S. physician experts reviewing clinical answers through a program it calls “Peer Check,” co-headed by Dr. Eric Topol and former Surgeon General Regina Benjamin.
In response to questions about how users reach the AI tools, Tangney described AI as integrated into the platform’s workflow—such as moving from a telehealth visit into Scribe and then into DocsGPT to help double-check an assessment and plan—as well as from Newsfeed, where physicians may ask follow-up questions after reading an article.
Guidance, policy headwinds, and share repurchases
For fiscal Q4 2026, Doximity expects revenue of $143 million to $144 million, representing 4% growth at the midpoint, and adjusted EBITDA of $63.5 million to $64.5 million, representing a 45% margin. For the full fiscal year, the company expects revenue of $642.5 million to $643.5 million (13% growth at the midpoint) and adjusted EBITDA of $355.5 million to $356.5 million (55% margin).
Cabral said the midpoint of the annual outlook remained consistent with prior guidance despite Q3 outperformance, citing lower Q4 revenue expectations and higher AI infrastructure investment due to strong usage.
Management pointed to short-term industry policy uncertainty that impacted the upfront selling season. Cabral and investor relations VP Perry Gold said uncertainty around policy changes and “Most Favored Nation” agreements signed by 16 of the top 20 pharma companies in late December and early January contributed to customers deploying a lower percentage of annual budgets upfront and delaying deals that are typically signed by December 31 into fiscal Q4. Gold said January pharma bookings growth was the best the company has seen since going public, which he attributed to delayed decision-making, though the company declined to quantify the growth rate.
Gold said the company’s current operating assumption is that the healthcare and pharma digital advertising market will grow about 5% in calendar 2026, citing an eMarketer report. Despite a slower start, he said Doximity believes it can exit calendar 2026 as a double-digit grower, helped by potential release of previously withheld budgets and the company’s plans to introduce commercial AI products later in the year. Tangney and Gold emphasized that AI has not been included as a revenue upside in current guidance.
On capital returns, Cabral said Doximity generated free cash flow of $58.5 million in Q3 and ended the quarter with $735 million in cash, cash equivalents, and marketable securities. The company repurchased $196.8 million of shares during the quarter, had $83 million remaining under its existing authorization as of December 31, and received board approval for a new $500 million “open-ended” repurchase authorization.
About Doximity (NYSE:DOCS)
Doximity, trading as DOCS, operates a digital professional network and communications platform designed primarily for clinicians. Headquartered in San Francisco, the company connects physicians, nurse practitioners, physician assistants and other healthcare professionals, providing tools that streamline clinical communication, telehealth delivery and access to specialty-specific medical information. Its platform is positioned as a professional hub where clinicians manage their workflows, stay current with medical news and collaborate securely with peers.
The company’s offerings include secure messaging and video telehealth capabilities that enable clinicians to consult with patients and colleagues while protecting patient information.
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