Doximity, Inc. (DOCS) - The "LinkedIn for Doctors" Faces Slowing Growth

Want to know how Doximity performed this past year? We analyzed their latest annual report ending March 31, 2026, to help you decide if it fits your portfolio. Here is the breakdown of their profits, customer growth, and expensive new AI tools.

1. What is Doximity?

Think of Doximity as LinkedIn, Zoom, and an AI assistant combined for healthcare. It is free for doctors. Over 85% of U.S. doctors—more than 3 million members—use it. Doximity makes money by charging drug companies and hospitals to advertise, recruit, and use secure digital tools. This gives advertisers direct access to a highly valuable audience.

2. The Good News: AI, Steady Expansion, and Huge Buybacks

Doximity is going all-in on artificial intelligence, and doctors love it.

• Workflow Tools are Booming: Active users of Doximity's digital tools jumped 30% to 810,000. Doctors rely on them daily, making the platform hard to abandon.
• AI Adoption: Over 140 top U.S. health systems adopted their new Clinical AI Suite, including Scribe, which drafts medical notes. Doximity bought Pathway Medical in July 2025 to add medical knowledge tools.
• Returning Cash to Investors: Instead of paying dividends, Doximity focuses on buying back its own stock. They recently bought back $500 million of their own shares to boost remaining share value and authorized another $500 million buyback in February 2026, showing strong cash flow.

3. The Reality Check: Dropping Profits & Key Risks

While Doximity has a great niche, their final numbers highlight major warning signs.

• Slowing Sales and Dropping Profits: Sales grew 13% to $644.9 million, down from 20% growth last year. Worse, actual profit fell 12% to $196.1 million. Profit margins shrank from 39.1% to 30.4%.
• The High Cost of AI: Running AI is expensive. Doximity spends heavily on computing power to process AI queries. Unlike traditional software, these ongoing costs eat into profit margins.
• Existing Customers are Cooling Off: Existing customer spending growth dropped from 119% to 109%. Clients still spend 9% more year-over-year, but they scaled back upgrades compared to last year's 19% growth.
• Reliance on Few Big Customers: Just 125 clients generate 83% of Doximity's revenue, averaging $4.28 million each. Losing a few of these big spenders would severely hurt profits.
• Lawsuit Drama: Doximity settled a $31 million investor lawsuit using insurance. However, competitor OpenEvidence is now suing them for allegedly stealing data to train AI tools, risking reputation and damages.
• You Have No Say: Founders and executives hold special shares giving them 79% of the voting power. Regular shareholders have almost no say in company decisions.
• No Patents and Tech Risks: Doximity has zero patents, relying on trade secrets that competitors can copy. They also rely on Google Cloud, which can cancel service with 15 days' notice.

The Investor's Verdict

Doximity has an irreplaceable doctor network but faces a critical transition. They are shifting users to AI tools, but high computing costs eat into profits. Watch if they can turn AI growth into higher-margin sales, or if rising costs will drag down profits.