What drove DOCS' earnings growth in Q3 2025?

Doximity Inc. (DOCS) experienced significant earnings growth in Q3 2025 due to a combination of strategic expansions, strong revenue growth, and efficient cost management:

1. **Revenue Growth**: The company's revenue increased by 25% year-on-year, reaching $169 million in Q3 Fiscal 2025. This growth was driven by the expansion of its client portal, with over half of its brand clients now having access, and plans to include all clients by 2025. Additionally, new products such as point of care and formulary products grew over 100%, contributing to over 20% of pharmaceutical sales.
2. **Adjusted EBITDA Margin**: Doximity achieved a record adjusted EBITDA margin of 61%, translating to $102 million, marking a 39% increase year-on-year. This indicates effective cost management and operational efficiency.
3. **Net Revenue Retention Rate**: The company reported a net revenue retention rate of 117% on a trailing 12-month basis, highlighting strong customer loyalty and continued growth among existing clients. The top 20 customers grew by 22% on a trailing 12-month basis.
4. **New AI Tools and Products**: The introduction of new AI tools and products saw significant traction, with 1.8 million prompts, up 60% quarter-over-quarter. This innovation has likely contributed to the company's revenue growth and improved customer engagement.
5. **Market Position**: Doximity's strong market position and ability to capitalize on the growing digital healthcare market have been key drivers of its financial success. The company's gross profit margins remained strong at 93%, consistent with the prior year.

In summary, Doximity's earnings growth in Q3 2025 was driven by strong revenue growth, effective cost management, strategic expansions, and the introduction of new AI tools and products. These factors combined to deliver robust financial results and position the company for continued growth.