Doximity Inc (DOCS)

How it makes money

Almost all revenue is subscription-based: $608.4 million of the $644.9 million of fiscal 2026 revenue came from subscriptions, with $36.5 million classified as other. Pharmaceutical manufacturers and health systems buy annual subscription modules to place sponsored clinical content in front of targeted specialties; health systems and recruiting firms subscribe to the hiring tools (which also include Curative Talent, a staffing firm); workflow tools are sold to individual clinicians and to health-system enterprises, and are free for most members. Contracts are invoiced ahead of delivery — deferred revenue was $106.5 million at 31 March 2026 — and the company measures how much existing customers expand: the net revenue retention rate was 109% in fiscal 2026, against 119% in 2025 and 114% in 2024.

The filing describes a self-reinforcing loop: more members make the network more useful to doctors, which makes the audience more valuable to pharmaceutical and health-system customers, whose spending funds more tools. Reaching more than 85% of U.S. physicians on a verified, credential-checked basis is hard to replicate, and the proprietary data set built from member activity adds to it. The advantage looks narrow rather than wide because the company competes for the same marketing, hiring and health-system IT budgets against Medscape, newer entrants such as OpenEvidence, staffing firms, and general-purpose vendors including Zoom, Microsoft Teams, Teladoc, Abridge, OpenAI and Anthropic — and because net revenue retention fell from 119% to 109% in one year.

Demand rests on pharmaceutical marketing budgets, drug launch calendars and health-system hiring and IT spending. The filing says macroeconomic events and policy uncertainty may slow decision-making and budget allocation and reduce discretionary marketing spend at pharmaceutical companies, and that this could affect revenue, receivables and cash flow. Subscription contracts and a member base that uses the free clinical tools daily soften the swings, but the paying side is discretionary marketing money, so it is neither defensive nor deeply cyclical. The company also reports some seasonality tied to the timing of marketing programmes, subscription launches on the platform and customers' budget cycles for additional modules.

Key risks

• Revenue concentrated in few customers — The company states that its revenue is relatively concentrated within a small number of key customers, and that losing one or more of them could slow revenue growth or cause revenue to decline. One customer accounted for 10% or more of total revenue in fiscal 2026 (11%), whereas no customer crossed that threshold in fiscal 2025 or 2024. Some customers also buy indirectly through marketing agencies that represent several of them at once.
• Renewals and expansion may not continue — Doximity warns that if it does not keep attracting new customers, or if existing customers fail to renew, renew on less favourable terms, or stop buying additional solutions, the effect on business, financial condition and results could be material. Revenue growth is explicitly tied to the net revenue retention rate, which the company says fluctuates with the growth rate.
• Growth rate already decelerating — The filing states that past growth is not indicative of future growth and that the growth rate may decline, citing its own figures: revenue grew 13% in fiscal 2026 after 20% in fiscal 2025. Management adds that investment in the business, including AI, may raise expenses and push net income and adjusted EBITDA margins down.
• Dependence on member retention and engagement — If Doximity fails to retain existing members or add new ones, revenue, results and financial condition may be significantly harmed — the commercial solutions are only worth what the physician audience is worth. The company also flags that decisions taken to protect members' interests may hurt its own financial results.
• Increasing competition — The company expects to face increasing competition, noting that many competitors and potential competitors have far greater financial and technological resources, wider name recognition and more established distribution. It names Medscape and OpenEvidence in marketing, staffing firms and job boards in hiring, and Zoom, Microsoft Teams, Teladoc, American Well, QGenda, Abridge, OpenAI and Anthropic around health-system IT budgets.
• Artificial intelligence may not deliver — Doximity discloses that developing, deploying and using AI may not achieve the expected benefits and may create operational, reputational, competitive, regulatory, legal and liability risks. It also depends on evolving technology and network infrastructure, where interruptions, undetected errors or design faults could hurt the business.
• Dual-class shares concentrate voting power — The dual class structure concentrates voting control with executive officers, including the CEO, directors and their affiliates, which the company says will limit or preclude an outside shareholder's ability to influence corporate matters.

Top customers account for 11% of revenue

In fiscal 2026 one customer (labelled Customer B in the concentration note) accounted for 11% of revenue; no customer reached 10% in fiscal 2025 or 2024, and a different customer represented 12% of accounts receivable at 31 March 2025. Concentration is broader than that single name: the 125 customers with trailing-12-month subscription revenue above $500,000 accounted for approximately 83% of fiscal 2026 revenue, up from 118 such customers a year earlier. The company counts as one customer an entity buying directly or indirectly through a marketing agency.