A securities class action has been filed in the USDC – N.D.CA. against Doximity, Inc. (DOCS) (“Doximity” or the “Company”), on behalf of all persons and entities that purchased or otherwise acquired Doximity common stock between February 9, 2022 and April 1, 2024, both dates inclusive (the “Class Period”).
Doximity, a Delaware corporation with its principal executive offices in San Francisco, California, operates a digital platform that provides connections between, medical information to, and patient scheduling tools for medical professionals. Doximity serves more than 2 million registered members, including over 80% of U.S. physicians and over 50% of nurse practitioners and physician assistants. Doximity frequently is referred to as the LinkedIn for doctors. The platform is free to its medical professional members (with a few small exceptions) and generates revenue largely from “customers” such as pharmaceutical companies and health systems, by allowing them to promote their services and products to platform users. Doximity charges a subscription fee for its services and offers multiple “modules” to allow its customers to advertise their products. The Company also offers hiring services to its customers.
The complaint alleges, throughout the Class Period, Defendants continued to tout the sustainability of the Company’s business prospects while also downplaying the importance of customer upsell rates on the Company’s financial performance. Notwithstanding Defendants’ repeated claims regarding the sustainability of Doximity’s growth and profitability, investors began to learn the truth about the Company on August 8, 2023, when, after the market closed, Doximity reported its financial results for the first quarter of fiscal year 2024, which ended June 30, 2023. While the Company exceeded its quarterly revenue and adjusted EBITDA guidance for the first quarter, the Company provided disappointing guidance for the second quarter of fiscal year 2024 and slashed its guidance for the full fiscal year 2024. In conjunction with the disappointing guidance, Doximity announced that it would reduce its workforce by approximately 10%. The Company further noted that the workforce reduction is expected to cost approximately $8 million to $10 million.
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