Doximity Stock Down Despite Q2 Earnings Beat, Revenues Up Y/Y

Doximity, Inc. DOCS delivered adjusted earnings per share (EPS) of 45 cents in the second quarter of fiscal 2026, which increased 50% year over year. The figure surpassed the Zacks Consensus Estimate by 18.4%.GAAP EPS for the quarter was 31 cents, reflecting an uptick of 40.9% from the year-ago figure.DOCS’ Revenues in DetailDoximity registered revenues of $168.5 million in the fiscal second quarter, up 23.2% year over year. The figure surpassed the Zacks Consensus Estimate by 6.8%.Shares of this company lost 8.9% in today’s pre-market trading.Doximity’s Segment DetailsDoximity derives revenues from two sources: Subscription and Other.In the second quarter of fiscal 2026, Subscription revenues totaled $159.5 million, up 23% year over year. This was driven by stronger spend from existing customers, reflected in a 118% net revenue retention rate and growth in large accounts, with 121 customers contributing over $500,000 and representing 84% of revenues.The Other revenues totaled $9.1 million, up 25.9% year over year.Doximity, Inc. Price, Consensus and EPS Surprise Doximity, Inc. price-consensus-eps-surprise-chart | Doximity, Inc. QuoteDOCS’ Margin TrendIn the quarter under review, Doximity’sgross profit rose 23.5% year over year to $152.1 million. However, the gross margin expanded 30 basis points (bps) to 90.3%.Sales and marketing expenses increased 13.9% year over year to $39.2 million, while research and development expenses increased 29.9% year over year to $30.2 million. General and administrative expenses increased 88.5% year over year to $19 million. Total operating expenses of $88.4 million rose 26.3% year over year.The operating profit totaled $63.7 million, reflecting a 19.8% uptick from the prior-year quarter. The operating margin in the fiscal second quarter contracted 100 bps to 37.8%.Doximity’s Financial PositionDoximityexited second-quarter fiscal 2026 with cash and cash equivalents of $169.2 million compared with $137.3 million at the fiscal first-quarter end.Cumulative net cash provided by operating activities at the end of second-quarter fiscal 2026 was $156 million compared with $109.6 million a year ago.DOCS’ GuidanceDoximityhas provided its financial outlook for the third quarter of fiscal 2026 and upped its outlook for the full fiscal year.For the fiscal third quarter, the company expects revenues in the range of $180 million-$181 million. The Zacks Consensus Estimate is pegged at $178.2 million.DOCS now projects its full fiscal year revenues between $640 million and $646 million, up from the prior outlook of $628 million-$636 million. The Zacks Consensus Estimate is pegged at $633.9 million.Our Take on DoximityDoximity exited the second quarter of fiscal 2026 with better-than-expected results and solid top and bottom-line results. Robust performances by both its revenue sources were encouraging. The gross margin expansion also bodes well.Per the earnings call, during the fiscal second quarter, Doximity delivered multiple product updates centered on AI and workflow expansion, including full integration of Pathway’s medical dataset into DoxGPT, enabling instant peer-reviewed drug reference responses and direct full-text access to 2,000+ medical journals; the AI Scribe continued rapid adoption, with quarterly active users nearly tripling as physicians added it seamlessly to telehealth visits.The company saw record engagement across its newsfeed and workflow tools, with more than 650,000 unique prescribers using telehealth, scheduling, digital fax, and clinical reference products. Integrated, AI-optimized program adoption also scaled significantly, representing 40% of bookings and improving campaign performance by dynamically allocating spend across channels.However, the operating margin contraction during the quarter was disappointing.DOCS’ Zacks Rank and Other Key PicksDoximity currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation BSX, West Pharmaceutical Services, Inc. WST and Exact Sciences Corporation EXAS.Boston Scientific, carrying a Zacks Rank of 2, reported third-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outpaced the consensus mark by 1.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Boston Scientific has a long-term estimated growth rate of 16.4%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.4%.West Pharmaceutical reported third-quarter 2025 adjusted EPS of $1.96, beating the Zacks Consensus Estimate by 17.4%. Revenues of $804.6 million surpassed the Zacks Consensus Estimate by 2.4%. It currently carries a Zacks Rank #2.West Pharmaceutical has a long-term estimated growth rate of 9.8%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.5%.Exact Sciences reported third-quarter 2025 adjusted EPS of 24 cents, beating the Zacks Consensus Estimate by 84.6%. Revenues of $850.7 million surpassed the Zacks Consensus Estimate by 4.9%. It currently sports a Zacks Rank #1.Exact Sciences has a long-term estimated growth rate of 30.1%. EXAS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 352.3%.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report Exact Sciences Corporation (EXAS): Free Stock Analysis Report Doximity, Inc. (DOCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks