How did DOCS manage to grow subscription revenue in Q3 2025 despite rising expenses?

Doximity Inc. (DOCS) demonstrated robust growth in subscription revenue during Q3 2025, achieving $169 million in revenue, marking a 25% year-on-year increase. This growth outpaced the high end of their guidance range, indicating strong operational performance. Despite rising expenses, DOCS managed to maintain a robust bottom line, with a record adjusted EBITDA margin of 61% or $102 million, reflecting efficient cost management and a strong market positioning. 1. **Strategic Focus on Early-Stage Drugs and Innovative Products**: DOCS's focus on early-stage "launch and growth drugs" has minimized the impact of the Inflation Reduction Act's effects on Medicare-covered drugs. Additionally, the introduction of new products like "Formulary" and "Point of Care" has contributed significantly to revenue growth. These innovative offerings have performed strongly, suggesting a network effect and potential for further monetization. 2. **Strong Network Engagement and User Growth**: The platform's unique active users, including prescribers and health professionals, reached new highs in Q3, driven by increased usage of the news feed and workflow tools. This growth in user engagement has translated into higher revenue, with over 1 million unique active prescribers scrolling the news feed in Q3. 3. **Upsell and Cross-Sell Success**: DOCS experienced material upsell outperformance, with new products contributing 20% to sales in Q3. The company's multimodal integrated offerings have driven improved visibility and stronger revenue recognition, particularly in the upcoming fiscal year. 4. **Effective Financial Management**: Despite rising expenses, DOCS maintained a strong financial position with a net revenue retention rate of 117% on a trailing 12-month basis. The company's top 20 customers, who are its fastest-growing contributors, demonstrated a net revenue retention rate of 122%. This retention rate highlights the stickiness of DOCS's customer relationships and the effectiveness of its financial management in maintaining revenue growth. In summary, DOCS's growth in subscription revenue in Q3 2025 can be attributed to strategic product innovation, strong network effects, effective upsell and cross-sell strategies, and robust financial management. These factors have enabled the company to maintain a strong market position and revenue growth despite rising expenses.