DOXIMITY, INC. Management's Discussion and Analysis of Financial Condition and Resultsof Operations (form 10-K)
DOCS
Overview
Impact of COVID-19
Key Business and Financial Metrics
We monitor a number of key business and financial metrics to assess the health and success of our business, including:
Number of customers with at least $100,000 of revenue 265 200 141
We use adjusted EBITDA and free cash flow to measure our performance and identify trends, to formulate financial projections, and to make strategic decisions.
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA margin increased year-over-year primarily due to higher net income as a result of increased subscription revenue.
A reconciliation of net income to adjusted EBITDA and adjusted EBITDA margin is set forth below along with net income margin:
1,158
2,353
We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and internal-use software development costs.
Net cash provided by operating activities $ 126,575 $ 82,973
$ 26,199
(245) (285)
Internal-use software development costs (3,785) (4,365) (3,959)
$ 21,955
Other cash flow components:
Net cash used in investing activities $ (640,574) $ (70,417) $ (13,095)
Net cash provided by financing activities $ 560,415 $ 5,407
$ 1,719
Components of Results of Operations
Revenue
For these subscription-based contractual arrangements, we recognize revenue over time as control of the service is transferred to the customer.
Cost of Revenue
Gross Profit and Gross Margin
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses.
Research and Development
Sales and Marketing
General and Administrative
Other Income, Net
Other income, net consists primarily of administrative fees and penalties and interest income earned on our cash equivalents and marketable securities.
Provision for (Benefit from) Income Taxes
The following tables set forth our consolidated results of operations data and such data as a percentage of revenue for the periods presented.
_______________
(1)Costs and expenses include stock-based compensation expenses as follows:
1,975 710
1,998 847
2,679 623
Comparison of the Years Ended March 31, 2022 and 2021
Cost of revenue, gross profit and gross margin
Gross margin increased due to our revenue growth and continued efficiency as we scale.
1 We define new subscription customers as revenue generating subscription customers in the current fiscal period who did not contribute any revenue for the same period in the prior fiscal year.
Provision for (benefit from) income taxes
NM: Percentage not meaningful.
Liquidity and Capital Resources
In June 2021, we completed our IPO, in which we issued and sold 22,505,750 shares of our Class A common stock at $26.00 per share, including 3,495,000 shares issued upon the exercise of the underwriters' option to purchase additional shares. We received proceeds of $548.5 million after deducting underwriting discounts and commissions as well as deferred offering costs.
We believe that our existing cash and cash equivalents and marketable securities will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
$ 82,973
$ (70,417)
$ 5,407
Net cash provided by operating activities
and related expenses due to increased headcount and timing of payments and increased rebate liabilities due to higher sales combined with the timing of payments.
Net cash used in investing activities
Net cash provided by financing activities
Off Balance Sheet Arrangements
Critical Accounting Policies and Estimates
Revenue Recognition
Business Combinations
Recent Accounting Pronouncements
Refer to Note 2-Summary of Significant Accounting Policies included in Part II, Item 8 of this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
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