Doximity Announces Fiscal 2022 Second Quarter Financial Results

11/09/2021
Total revenues of $79.4 million, up 76% year-over-year
Net income margin of 45% and adjusted EBITDA margin of 41%

SAN FRANCISCO, Nov. 9, 2021 /PRNewswire/ -- Doximity, Inc. (NYSE: DOCS), the leading digital platform for U.S. medical professionals, today announced results for the fiscal 2022 second quarter ended September 30, 2021.

"We're pleased to report another strong financial quarter as the shift to digital among our clients continues," said Jeff Tangney, co-founder & CEO at Doximity. "We're particularly proud that our existing clients generated a record 173% net revenue retention rate (for the trailing 12 months), and that our telehealth platform grew to a record of over 330,000 active providers."

Fiscal 2022 Second Quarter Financial Highlights:

All comparisons, unless otherwise noted, are to the three months ended September 30, 2020.

  • Revenue: Revenue of $79.4 million versus $45.1 million, an increase of 76% year-over-year.
  • Net income and non-GAAP net income: Net income of $36.1 million versus $10.0 million, representing a 45% margin. Non-GAAP net income of $41.6 million, versus $11.2 million, representing a 52% margin.
  • Adjusted EBITDA: Adjusted EBITDA of $32.8 million versus $12.6 million, an increase of 160% year-over-year, representing adjusted EBITDA margins of 41%, versus 28%.
  • Net income per share and non-GAAP net income per share: Diluted net income per share was $0.17, versus $0.02, while non-GAAP diluted net income per share was $0.19, versus $0.02.
  • Operating cash flow and free cash flow: Operating cash flow of $19.2 million, versus $12.7 million, and free cash flow of $18.1 million, versus $11.3 million.

Financial Outlook

Doximity is providing guidance for its fiscal third quarter ending December 31, 2021 as follows:

  • Revenue between $85.8 million and $86.8 million.
  • Adjusted EBITDA between $32.0 million and $33.0 million.

Doximity is updating guidance for its fiscal year ending March 31, 2022 as follows:

  • Revenue between $326.1 million and $328.1 million.
  • Adjusted EBITDA between $127.6 million and $129.6 million.

Lock-up Expiry on November 12, 2021

In connection with the Company's initial public offering of Class A common stock, its executive officers, directors, and substantially all of its stockholders were parties to lock-up agreements that restrict their ability to sell or transfer their Doximity shares. Pursuant to the terms of the lock-up agreements, the lock-up will expire at the opening of trading on November 12, 2021. Certain of the shares of the Company's common stock that become eligible for sale in the public market upon the lock-up expiration remain subject to volume and other restrictions of Rule 144 of the Securities Act of 1933, as amended, and restrictions on insider trading in accordance with Company policy.

Conference Call Information

Doximity will host a webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss these financial results. To listen to a live audio webcast, please visit the Company's Investor Relations page at https://investors.doximity.com. The archived webcast will be available on the Company's Investor Relations page shortly after the call.

About Doximity

Founded in 2010, Doximity is the leading digital platform for medical professionals. The company's network members include over 80% of U.S. physicians across all specialties and practice areas. Doximity provides its verified clinical membership with digital tools built for medicine, enabling them to collaborate with colleagues, stay up to date with the latest medical news and research, manage their careers, and conduct virtual patient visits. Doximity's mission is to help doctors be more productive so they can provide better care for their patients. For more information, please visit www.doximity.com.

Forward-Looking Statements

Statements we make in this press release may include statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, which are usually identified by the use of words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "seeks," "should," "will," and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made.  Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved.  Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including (i) the impact of the COVID-19 pandemic (including the impact to our industry or on our customers' industries, impact on general economic conditions, and government responses, restrictions, and actions related to the pandemic); (ii) our ability to retain existing members or add new members to our platform and maintain or grow their engagement with our platform; (iii) our ability to attract new customers or retain existing customers; (iv) the impact of our prioritization of our members' interests; (v) breaches in our security measures or unauthorized access to members' data; (vi) our ability to maintain or manage our growth, and other risks and factors that are beyond our control including, without limitation, those set forth in the section entitled "Risk Factors" in the prospectus for our recent offering of shares of Class A common stock shares that was filed with the SEC on June 25, 2021, and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, as such risk factors may be updated from time to time in our periodic filings with the SEC. Additional information will be provided in our Quarterly Report on Form 10-Q for the  quarterly period ended September 30, 2021. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. The forward-looking statements made in this press release relate only to management's beliefs and assumptions as of this date. We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:
Perry Gold
ir@doximity.com

Media Contact:
pr@doximity.com

 

DOXIMITY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)



September 30, 2021


March 31, 2021

Assets




Current assets:




Cash and cash equivalents

$

79,521



$

66,393


Marketable securities

663,140



76,141


Accounts receivable, net

55,681



50,319


Prepaid expenses and other current assets

28,159



10,692


Deferred contract costs, current

3,107



5,856


Total current assets

829,608



209,401


Property and equipment, net

8,004



7,598


Deferred income tax assets

2,112



2,112


Operating lease right-of-use assets

770



1,339


Intangible assets, net

9,067



9,596


Goodwill

18,915



18,915


Other assets

779



2,758


Total assets

$

869,255



$

251,719


Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity




Current liabilities:




Accounts payable

$

781



$

1,515


Accrued expenses

15,664



16,285


Deferred revenue, current

78,681



83,272


Operating lease liabilities, current

498



970


Total current liabilities

95,624



102,042


Deferred revenue, non-current

49



220


Operating lease liabilities, non-current

118



284


Other liabilities, non-current

904



972


Total liabilities

96,695



103,518






Redeemable Convertible Preferred Stock




Redeemable convertible preferred stock



81,458


Stockholders' Equity




Preferred stock




Common stock

187



83


Additional paid-in capital

674,414



30,357


Accumulated other comprehensive loss

(775)



(21)


Retained earnings

98,734



36,324


Total stockholders' equity

772,560



66,743


Total liabilities, redeemable convertible preferred stock, and stockholders' equity

$

869,255



$

251,719


 

DOXIMITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Revenue

$

79,350



$

45,113



$

152,019



$

81,501


Cost of revenue(1)

8,951



7,456



16,937



15,331


Gross profit

70,399



37,657



135,082



66,170


Operating expenses(1):








Research and development

15,460



9,866



28,701



19,909


Sales and marketing

21,161



14,145



40,532



27,430


General and administrative

8,827



3,209



16,023



6,311


Total operating expenses

45,448



27,220



85,256



53,650


Income from operations

24,951



10,437



49,826



12,520


Interest income

440



73



516



210


Other expense, net

(20)



(93)



(51)



(383)


Income before income taxes

25,371



10,417



50,291



12,347


Provision for (benefit from) income taxes

(10,717)



380



(12,119)



851


Net income

$

36,088



$

10,037



$

62,410



$

11,496


Undistributed earnings attributable to participating securities



(8,354)



(18,326)



(9,122)


Net income attributable to Class A and Class B common stockholders, basic and diluted

$

36,088



$

1,683



$

44,084



$

2,374


Net income per share attributable to Class A and Class B common stockholders:








Basic

$

0.19



$

0.02



$

0.32



$

0.03


Diluted

$

0.17



$

0.02



$

0.27



$

0.03


Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:








Basic

186,171



70,591



137,154



69,988


Diluted

216,672



91,830



166,066



88,498



(1) Costs and expenses include share-based compensation expenses as follows:



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Cost of revenue

$

793



$

99



$

1,061



$

189


Research and development

1,859



281



2,829



545


Sales and marketing

1,866



376



2,894



671


General and administrative

2,154



423



5,015



757


Total stock-based compensation expense

$

6,672



$

1,179



$

11,799



$

2,162


 

DOXIMITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Cash flows from operating activities








Net income

$

36,088



$

10,037



$

62,410



$

11,496


Adjustments to reconcile net income to net cash provided by operating activities








Depreciation and amortization

1,158



928



2,311



1,696


Deferred income taxes



260





623


Stock-based compensation, net of amounts capitalized

6,672



1,179



11,799



2,162


Other

(72)



44



(70)



105


Non-cash lease expense

286



643



569



1,294


Bad debt expense (recovery)

288



(84)



195



4


Amortization of premium on marketable securities, net

1,264



9



1,561



14


Amortization of prepaid partner fees

231





799




Amortization of deferred contract costs

2,452



1,593



5,656



3,140


Changes in operating assets and liabilities, net of effect of acquisition:








Accounts receivable

(9,978)



(4,028)



(5,556)



(14,890)


Prepaid expenses and other assets

(14,867)



(2,707)



(18,191)



763


Deferred contract costs

(1,483)



(1,275)



(2,975)



(2,755)


Accounts payable

(420)



89



(292)



(275)


Accrued expenses

1,958



181



(419)



(643)


Deferred revenue

(4,198)



6,496



(4,763)



18,543


Operating lease liabilities

(167)



(650)



(638)



(1,310)


Other liabilities

(60)



(14)



(69)



1,494


Net cash provided by operating activities

19,152



12,701



52,327



21,461


Cash flows from investing activities








Purchases of property and equipment

(200)



(67)



(241)



(92)


Capitalized internal-use software

(900)



(1,379)



(1,671)



(2,530)


Purchases of marketable securities

(1,088,768)





(1,156,143)




Maturities of marketable securities

24,787



16,000



35,551



34,000


Sales of marketable securities

531,076





531,076




Cash paid for acquisition, net of cash acquired







(31,634)


Other



(25)





(25)


Net cash provided by (used in) investing activities

(534,005)



14,529



(591,428)



(281)


Cash flows from financing activities








Proceeds from issuance of common stock upon initial public offering after deducting underwriting discounts and commissions





553,905




Payments of deferred offering costs

(2,214)





(3,982)




Proceeds from issuance of common stock upon exercise of stock options

2,323



1,124



5,060



1,347


Taxes paid related to net share settlement of equity awards

(56)





(56)




Repurchase and retirement of common stock





(2,698)




Net cash provided by financing activities

53



1,124



552,229



1,347


Net increase (decrease) in cash and cash equivalents

(514,800)



28,354



13,128



22,527


Cash and cash equivalents, beginning of period

594,321



42,603



66,393



48,430


Cash and cash equivalents, end of period 

$

79,521



$

70,957



$

79,521



$

70,957



Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses the following non-GAAP measures of financial performance:

  • Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income margin, and non-GAAP basic and diluted net income per common share: We exclude the effect of stock-based compensation expense-related charges, amortization of acquired intangible assets, and expenses associated with acquisitions from non-GAAP gross profit, non-GAAP gross margin and non-GAAP operating income. Non-GAAP net income and non-GAAP net income margin are further adjusted for estimated income tax on such adjustments. We calculate income taxes on the adjustments by applying an estimated annual effective tax rate to the adjustments. Non-GAAP basic and diluted net income per common share is non-GAAP net income attributable to common stockholders divided by the weighted average number of shares. For both basic and diluted non-GAAP net income per share, the weighted average shares we use in computing non-GAAP net income per share is equal to our GAAP weighted average shares. Non-GAAP gross margin represents non-GAAP gross profit as a percentage of revenue and non-GAAP net income margin represents non-GAAP net income as a percentage of revenue.
  • Adjusted EBITDA and adjusted EBITDA margin: We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization, and as further adjusted for acquisition and other related expenses, stock-based compensation expense, and other (income) expense, net. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.
  • Free cash flow: We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and capitalized internal-use software development cost.

We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP results.

Key Business Metrics

  • Net revenue retention rate: We calculate net revenue retention rate by taking the trailing 12-month ("TTM") subscription-based revenue from our customers that had revenue in the prior TTM period and dividing that by the total subscription-based revenue for the prior TTM period. Our net revenue retention rate compares our subscription revenue from the same set of customers across comparable periods, and reflects customer renewals, expansion, contraction, and churn.
  • Customers with trailing 12-month subscription revenue greater than $100,000: We calculate the number of customers with trailing 12-month ("TTM") product revenue greater than $100,000 by counting the number of customers that contributed more than $100,000 in subscription revenue in the TTM period. The number of customers with TTM subscription-based revenue of at least $100,000 is a key indicator of the scale of our business.

Reconciliation of GAAP to Non-GAAP Financial Measures

The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:


Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020


(unaudited)


(unaudited)


(in thousands)


(in thousands)

Net income

$

36,088



$

10,037



$

62,410



$

11,496


Adjusted to exclude the following:








Acquisition and other related expenses



65





144


Stock-based compensation

6,672



1,179



11,799



2,162


Depreciation and amortization

1,158



928



2,311



1,696


Interest income

(440)



(73)



(516)



(210)


Provision for (benefit from) income taxes

(10,717)



380



(12,119)



851


Other expense, net

20



93



51



383


Adjusted EBITDA

$

32,781



$

12,609



$

63,936



$

16,522










Revenue

$

79,350



$

45,113



$

152,019



$

81,501


Net income margin

45

%


22

%


41

%


14

%

Adjusted EBITDA margin

41

%


28

%


42

%


20

%




Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020


(unaudited)


(unaudited)


(in thousands)


(in thousands)

Net cash provided by operating activities

$

19,152



$

12,701



$

52,327



$

21,461


Purchases of property and equipment

(200)



(67)



(241)



(92)


Capitalized internal-use software

(900)



(1,379)



(1,671)



(2,530)


Free cash flow

$

18,052



$

11,255



$

50,415



$

18,839


Other cash flow components:








Net cash provided by (used in) investing activities

$

(534,005)



$

14,529



$

(591,428)



$

(281)


Net cash provided by financing activities

$

53



$

1,124



$

552,229



$

1,347





Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020


(unaudited)


(unaudited)


(in thousands)


(in thousands)

GAAP cost of revenue

$

8,951



$

7,456



$

16,937



$

15,331


Adjusted to exclude the following:








Stock-based compensation

(793)



(99)



(1,061)



(189)


Non-GAAP cost of revenue

$

8,158



$

7,357



$

15,876



$

15,142










GAAP gross profit

$

70,399



$

37,657



$

135,082



$

66,170


Adjusted to exclude the following:








Stock-based compensation

793



99



1,061



189


Non-GAAP gross profit

$

71,192



$

37,756



$

136,143



$

66,359










GAAP gross margin

89

%


83

%


89

%


81

%

Non-GAAP gross margin

90

%


84

%


90

%


81

%









GAAP research and development expense

$

15,460



$

9,866



$

28,701



$

19,909


Adjusted to exclude the following:








Stock-based compensation

(1,859)



(281)



(2,829)



(545)


Non-GAAP research and development expense

$

13,601



$

9,585



$

25,872



$

19,364










GAAP sales and marketing expense

$

21,161



$

14,145



$

40,532



$

27,430


Adjusted to exclude the following:








Stock-based compensation

(1,866)



(376)



(2,894)



(671)


Amortization of acquired intangibles

(265)



(257)



(530)



(514)


Non-GAAP sales and marketing expense

$

19,030



$

13,512



$

37,108



$

26,245










GAAP general and administrative expense

$

8,827



$

3,209



$

16,023



$

6,311


Adjusted to exclude the following:








Acquisition and other related expenses



(65)





(144)


Stock-based compensation

(2,154)



(423)



(5,015)



(757)


Non-GAAP general and administrative expense

$

6,673



$

2,721



$

11,008



$

5,410










GAAP operating expense

$

45,448



$

27,220



$

85,256



$

53,650


Adjusted to exclude the following:








Acquisition and other related expenses



(65)





(144)


Stock-based compensation

(5,879)



(1,080)



(10,738)



(1,973)


Amortization of acquired intangibles

(265)



(257)



(530)



(514)


Non-GAAP operating expense

$

39,304



$

25,818



$

73,988



$

51,019










GAAP operating income

$

24,951



$

10,437



$

49,826



$

12,520


Adjusted to exclude the following:








Acquisition and other related expenses



65





144


Stock-based compensation

6,672



1,179



11,799



2,162


Amortization of acquired intangibles

265



257



530



514


Non-GAAP operating income

$

31,888



$

11,938



$

62,155



$

15,340





Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020


(unaudited)


(unaudited)


(in thousands, except per
share data)


(in thousands, except per
share data)

GAAP net income

$

36,088



$

10,037



$

62,410



$

11,496


Adjusted to exclude the following:








Acquisition and other related expenses



65





144


Stock-based compensation

6,672



1,179



11,799



2,162


Amortization of acquired intangibles

265



257



530



514


Income tax effect of non-GAAP adjustments (1)

(1,457)



(315)



(2,589)



(592)


Non-GAAP net income

$

41,568



$

11,223



$

72,150



$

13,724


Non-GAAP net income margin

52

%


25

%


47

%


17

%









GAAP undistributed earnings attributable to participating securities

$



$

(8,354)



$

(18,326)



$

(9,122)


Impact on undistributed earnings attributable to participating securities due to non-GAAP adjustments



(616)



(2,055)



(1,162)


Non-GAAP undistributed earnings attributable to participating securities

$



$

(8,970)



$

(20,381)



$

(10,284)










Non-GAAP net income

$

41,568



$

11,223



$

72,150



$

13,724


Non-GAAP undistributed earnings attributable to participating securities



(8,970)



(20,381)



(10,284)


Non-GAAP net income attributable to Class A and Class B stockholders, basic and diluted

$

41,568



$

2,253



$

51,769



$

3,440










Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:








Basic

186,171



70,591



137,154



69,988


Diluted

216,672



91,830



166,066



88,498










Non-GAAP net income per share attributable to Class A and Class B stockholders:








Basic

$

0.22



$

0.03



$

0.38



$

0.05


Diluted

$

0.19



$

0.02



$

0.31



$

0.04



(1) For the three and six months ended September 30, 2021 and 2020, management used an estimated annual effective non-GAAP tax rate of 21.0%.

 

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SOURCE Doximity