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What changed in Doximity, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Doximity, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+353 added−366 removedSource: 10-K (2023-05-26) vs 10-K (2022-05-27)

Top changes in Doximity, Inc.'s 2023 10-K

353 paragraphs added · 366 removed · 283 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

89 edited+11 added−12 removed62 unchanged
Biggest changeOur technology platform provides most medical professionals with a pre-populated profile using publicly and commercially available third-party data which members can further supplement, update, and refine. Once verified, members gain access to our network, newsfeed, and—depending on their credentials—core features of our productivity tools, including telehealth. 3 Our Professional Network • Profile.
Biggest changeBecoming a member of Doximity is as simple as navigating to our homepage or downloading our mobile app, and completing our simple identity and credential verification process. Our platform provides most medical professionals with a pre-populated Doximity professional profile reflecting publicly and commercially available third-party data which members can further supplement, update, and refine.
Hiring Solutions We offer our Hiring Solutions to both health systems and medical recruiting firms, which pay for subscriptions that provide them with the ability to search and connect with medical professionals on Doximity.
Hiring Solutions We offer our Hiring Solutions to both health systems and medical recruiting firms, which pay for subscriptions that provide them the ability to search and connect with medical professionals on Doximity.
Some of these laws also prohibit unfair privacy and security practices and deceptive statements about privacy and security place specific requirements on certain types of activities, such as data security and texting. These laws may be similar to or even more protective than HIPAA and other federal privacy laws.
Some of these laws also prohibit unfair privacy and security practices and deceptive statements about privacy and security and place specific requirements on certain types of activities, such as data security and texting. These laws may be similar to or even more protective than HIPAA and other federal privacy laws.
Some of the major components include: • Aggregating and coupling disjointed datasets from numerous medical sources into a live database of physician information to perform descriptive, diagnostic, and prescriptive analysis. • Medical news tailored to a member’s specific specialty, clinical areas of interest, and viewing history, ensuring that each member’s news feed is personalized to them and that the digital marketing content of our pharmaceutical and health system customers will be served to members that are more likely to find it relevant and interesting based on their profile and viewing history. • Automatically matching top candidates with openings offered by recruiters and administrators based on job history, interests, and geography. 8 • Extensive, interactive database of U.S. medical residency and employment data: We collect and maintain a vast repository of residency and employment data from our members, which includes member reviews on their experience at hospitals and residency programs, detailed statistics on user experiences regarding program setting and training environment, and a salary map across different specialties and geographies across the country.
Some of the major components include: • Aggregating and coupling disjointed datasets from numerous medical sources into a live database of physician information to perform descriptive, diagnostic, and prescriptive analysis. • Medical news tailored to a member’s specific specialty, clinical areas of interest, and viewing history, ensuring that each member’s news feed is personalized to them and that the digital marketing content of our pharmaceutical and health system customers will be served to members that are more likely to find it relevant and interesting based on their profile and viewing history. • Automatically matching top candidates with openings offered by recruiters and administrators based on job history, interests, and geography. • Extensive, interactive database of U.S. medical residency and employment data: We collect and maintain a vast repository of residency and employment data from our members, which includes member reviews on their experience at hospitals and residency programs, detailed statistics on user experiences regarding program setting and training environment, and a salary map across different specialties and geographies across the country.
We also have a tech-enabled, higher-touch Hiring Solution called Curative, combining Doximity’s data science and intelligence with the service of Curative’s customer-focused recruiters. Our account managers at Curative work with health systems to source both locum tenens and permanent staffing, leveraging our platform and providing a higher level of support on an ongoing basis than our self-service Hiring Solutions.
We also have a tech-enabled, higher-touch Hiring Solution called Curative Talent, combining Doximity’s data science and intelligence with the service of Curative’s customer-focused recruiters. Our account managers at Curative work with health systems to source both locum tenens and permanent staffing, leveraging our platform and providing a higher level of support on an ongoing basis than our self-service Hiring Solutions.
Our AI and ML-supported platform enables customers to run highly targeted hiring campaigns across a range of medical specialties and sub-specialties, uncovering passive but eligible candidates for proactive outreach on any locum tenens or permanent position. Our modules for Hiring Solutions consist of the following: • Job posts.
Our AI and ML-supported platform enables customers to run highly targeted hiring campaigns across a range of medical specialties and sub-specialties, uncovering passive but eligible candidates for proactive outreach for any locum tenens or permanent position. Our modules for Hiring Solutions consist of the following: • Job posts.
Specifically, we compete for medical professionals as members, and for pharmaceutical and health system companies as customers for our Marketing, Hiring, and Telehealth Solutions. • Competing for members: We compete with large technology companies that have developed online networking and collaboration tools such as LinkedIn, Facebook, Google, and Twitter, in addition to smaller, emerging companies.
Specifically, we compete for medical professionals as platform members, and for pharmaceutical and health system companies as customers for our Marketing, Hiring, and Telehealth Solutions. • Competing for members: We compete with large technology companies that have developed online networking and collaboration tools such as LinkedIn, Facebook, Google, and Twitter, in addition to smaller, emerging companies.
At the core of our platform is the largest medical professional network in the nation, which creates proximity within our community of doctors and hundreds of thousands of other medical professionals. Our focus on clinician-centric product design and productivity has led to high levels of health professional adoption and endorsement.
At the core of our platform is the largest medical professional network in the nation, which creates proximity within our community of doctors and hundreds of thousands of other medical professionals. Our focus on clinician-centric product design and productivity has led to high levels of adoption and endorsement by health professionals.
These messages may or may not be for an opening that has been posted on our job posts. Both job posts and direct messages are sold as a subscription that entitles the customer to a certain number of job listings or messages on a self-serve basis throughout the contract period.
These messages may or may not be for an opening that has been posted on our job posts. Both job posts and direct messages are sold as a subscription that entitles the customer to a certain number of job listings or messages on a self-serve basis throughout the subscription period.
Our members have the broadest available range of professional connections and networking opportunities through our platform, and we believe we have become the primary physician-to-physician connectivity medium. The scale and strength of our network has made us a strategic collaborator of choice for pharmaceutical manufacturers and health systems.
Our members have the broadest available range of professional connections and networking opportunities through our platform, and we believe we have become the primary physician-to-physician connectivity medium. The scale and strength of our network have made us a strategic collaborator of choice for pharmaceutical manufacturers and health systems.
In addition, if we were to expand internationally, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as laws in the United States. We may be dependent on third- 12 party content, technology, and intellectual property in connection with our business.
In addition, if we were to expand internationally, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as laws in the United States. We may be dependent on third-party content, technology, and intellectual property in connection with our business.
Sales and Marketing We employ a direct sales organization composed of highly trained team members. The sales organization is segmented primarily by customer type. For example, there is one enterprise-focused team concentrating on pharmaceutical manufacturers and another concentrated on health systems.
Sales and Marketing We employ a direct sales organization composed of highly trained team members. The sales organization is segmented primarily by customer type. For example, there is one enterprise-focused team concentrating on pharmaceutical manufacturers and another concentrating on health systems.
Improving our existing capabilities, and innovating to add new tools and solutions, will make our platform more valuable to members, helping to attract new members and customers, while increasing the engagement of existing ones. 7 • Expand within customers of our solutions. Our existing customers represent a significant opportunity to grow our platform.
Improving our existing capabilities, and innovating to add new tools and solutions, will make our platform more valuable to members, helping to attract new members and customers, while increasing the engagement of existing ones. • Expand within existing customers of our solutions. Our existing customers represent a significant opportunity to grow our platform.
These outlets include health-related websites and mobile apps. 9 ◦ Hiring: We compete in the healthcare staffing industry with job boards, self-service recruiting tools, and medical recruiting firms in national, regional, and local markets.
These outlets include health-related websites and mobile apps. ◦ Hiring: We compete in the healthcare staffing industry with job boards, self-service recruiting tools, and medical recruiting firms in national, regional, and local markets.
Our Marketing Solutions deliver high engagement and high value and help those customers embrace the shift to digital marketing. We count the top pharmaceutical manufacturers and hospitals and health systems as our customers.
Our Marketing Solutions deliver high engagement and help those customers embrace the shift to digital marketing. We count the top pharmaceutical manufacturers, hospitals, and health systems as our customers.
Our respect for laws and regulations regarding the collection and processing of personal data underlies our strategy to improve our member experience and build trust in our network and platform.
Our respect for laws and regulations regarding the processing of personal data underlies our strategy to improve our member experience and build trust in our network and platform.
Further corporate governance information, including our corporate governance guidelines, composition of our board and its committees, and Code of Conduct, are also available on our investor relations website under the heading “Governance Documents.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 13
Further corporate governance information, including our corporate governance guidelines, composition of our board and its committees, and Code of Conduct, are also available on our investor relations website under the heading “Governance Documents.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 13 Table of Content s
Our members as well as certain of our enterprise customers are regulated as covered entities under HIPAA. As a service provider who creates, receives, maintains, or transmits PHI on behalf of these covered entities for certain of our services, Doximity is a “business associate” as defined under HIPAA.
Our members as well as many of our Dialer Enterprise customers are regulated as covered entities under HIPAA. As a service provider who creates, receives, maintains, or transmits PHI on behalf of these covered entities for certain of our services, Doximity is a “business associate” as defined under HIPAA.
Doximity members can stay abreast of and celebrate the professional updates and accomplishments of their peers and colleagues, from new jobs to awards, newly authored publications, and press mentions. • Clinical discussions . Members can comment on and react to posts directly in their newsfeed.
Doximity members can stay abreast of and celebrate the professional updates and accomplishments of their peers and colleagues, from new jobs to awards, newly authored publications, and press mentions. • Clinical discussions . Members can comment on and react to posts directly in their newsfeeds.
The content of these modules may include updates on how certain drugs perform in clinical trials, the opening of new hospitals or departments within a health system, or other information that is relevant to our members. • Interactivity : modules that enable digital activities such as conference attendance, connecting with a sales representative, booking an appointment, or ordering product samples. • Peer : modules that enable our members to connect and build professional relationships with thought-leaders, department chairs, and other experts within the Doximity network.
The content of these modules may include updates on how certain drugs perform in clinical trials, the opening of new hospitals or departments within a health system, or other information that is relevant to our members. 5 Table of Contents • Interactivity : sponsored modules that enable digital activities such as conference attendance, connecting with a sales representative, booking an appointment, or ordering product samples. • Peer : sponsored modules that enable our members to connect and build professional relationships with thought-leaders, department chairs, and other experts within the Doximity network.
We verify the identities and qualifications of our medical professionals through integration with third-party databases. In addition, our communications solutions are HIPAA compliant, providing medical professionals with a critical platform for protected communications. • We have the largest digital network of medical professionals.
We verify the identities and credentials of our medical professionals through integration with third-party databases. In addition, our communications solutions are HIPAA compliant, providing medical professionals with a critical platform for protected communications. • We have the largest digital network of medical professionals.
Health system customers also have the opportunity to brand the user and patient experience as well as leverage their own security and HIPAA requirements to create consistent 6 protocols for use. Our health system team can also integrate Dialer into our customer's electronic medical record system so that their users can access Dialer from directly within their existing clinical workflows.
Health system customers also have the opportunity to brand the user and patient experience as well as leverage their own security and HIPAA contractual requirements to create consistent protocols for use. Our health system team can also integrate Dialer into our customer's electronic medical record system so that their users can access Dialer directly within their existing clinical workflows.
Item 1. Business Overview We are the leading digital platform for U.S. medical professionals, as measured by the number of U.S. physician members, with over two million medical professional members as of March 31, 2022.
Item 1. Business Overview We are the leading digital platform for U.S. medical professionals, as measured by the number of U.S. physician members, with over two million medical professional members as of March 31, 2023.
Videos are designed to be brief, relevant and eye-catching to disseminate knowledge without wasting a physician’s time. • Continuing Medical Education, or CME, credit. Our platform automatically tracks the articles that our members read, logging eligible CME credit for them as they go. 4 • Peer and colleague updates.
Videos are designed to be brief, relevant and eye-catching to disseminate knowledge without wasting a physician’s time. • Continuing Medical Education, or CME, credit. Our platform automatically tracks the articles that our members read, logging eligible CME credit for them as they go. 4 Table of Contents • Peer and colleague updates.
We make this data available to all of our members in easily accessible portals which are automatically updated as our members provide additional data on the platform. • Proprietary productivity and telehealth tools: Our productivity and telehealth tools have been built to be physician-first with usability in mind at every step.
We make this data 8 Table of Contents available to all of our members in easily accessible portals which are automatically updated as our members provide additional data on the platform. • Proprietary productivity and telehealth tools: Our productivity and telehealth tools have been built to be physician-first with usability in mind at every step.
Our services that allow members and other platform users to leverage such telephonic communications may be subject to these laws and regulations. Other Healthcare Laws and Regulations and Health Reform There are many laws that govern the activities of healthcare professionals, some of which may be applied to us because of our relationships with them.
Our services that allow members and other platform users to leverage such telephonic communications may be subject to these laws and regulations. 11 Table of Contents Other Healthcare Laws and Regulations and Health Reform There are many laws that govern the activities of healthcare professionals, some of which may be applied to us because of our relationships with them.
The actual or perceived failure by us, our customers, partners, or vendors to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business.” Data Collection and Protection We collect and may use personal information to help run our business (including for analytical purposes) and to communicate and otherwise reach our network members.
The actual or perceived failure by us, our customers, partners, or vendors to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business..” 10 Table of Contents Data Collection and Protection We collect and may use personal information to help run our business (including for analytical purposes) and to communicate and otherwise reach our network members.
We provide our members with capabilities specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers.
We provide our members with capabilities specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, monitor their work schedules, and manage their careers.
In addition, though we rely in part upon these legal and contractual protections, we believe that factors such as the skills and ingenuity of our employees and the functionality and frequent enhancements to our platform are larger contributors to our success in the market. As of March 31, 2022, we have four provisional patent applications in the United States.
In addition, though we rely in part upon these legal and contractual protections, we believe that factors such as the skills and ingenuity of our employees and the functionality and frequent enhancements to our platform are larger contributors to our success in the market. As of March 31, 2023, we have five provisional patent applications in the United States.
Through having product leaders who are physicians, designers, and engineers familiar with healthcare services, and an extended team of medical professionals in our advisory committees, we are able to build solutions that enable physicians and act as an extension of their practice. • We are strategic to our customers .
Through having product leaders who are physicians, designers, and engineers familiar with healthcare services, and an extended team of medical professionals in our advisory committees, we are able to build solutions that enable physicians to better care for their patients and act as an extension of their practice. • We are strategic to our customers .
In some instances, we may use third-party service providers to assist us in these efforts. We endeavor to treat our members’ data with respect and maintain member trust.
In some instances, we may use third-party service providers to assist us in these efforts. We endeavor to treat our members’ personal information with respect and maintain member trust.
Our telehealth tools are used and trusted by hundreds of thousands of our members, and the rapid adoption by health systems of our commercial Telehealth Solution, Dialer Enterprise, reflects that professional trust. Our Dialer Enterprise solution is still in its early stages and we have significant whitespace ahead of us. • Grow our patient-facing tools.
Our telehealth tools are used and trusted by hundreds of thousands of our members, and the rapid adoption by health systems of our commercial Telehealth Solution, Dialer Enterprise, following its launch reflects that professional trust. Our Dialer Enterprise solution is still in its early stages and we have significant whitespace ahead of us.
Health systems enter into a contract with Curative on an hourly-fee or a placement-fee basis. Telehealth Solutions for Health Systems We provide Dialer Enterprise to health systems and hospitals seeking an accessible but powerful telehealth solution. The organic adoption of our direct-to-member offerings—Dialer Free and Dialer Pro— is an important factor driving our Enterprise offerings.
Health systems contract staffing placements directly with Curative on an hourly-fee or a placement-fee basis. Telehealth Solutions for Health Systems We provide Dialer Enterprise to health systems and hospitals seeking an accessible and powerful telehealth solution. The organic adoption of our direct-to-member offerings—Dialer Free and Dialer Pro— is an important factor driving our Enterprise offerings.
Members beginning their medical careers can discover and compare training programs across the country using Residency Navigator, a tool which provides a transparent look into U.S. medical residency programs, powered by peer nominations, ratings, and hand-written reviews, giving medical students the tools they need to navigate their future in medicine and to help choose the right program for their career goals.
Members beginning their medical careers can discover and compare training programs across the country using Residency Navigator, a tool that provides a transparent look into U.S. medical residency programs, powered by peer nominations, ratings, and firsthand reviews, giving medical students the information they need to navigate their future in medicine and to help choose the right program for their career goals.
For example, we had over 350,000 unique active providers use our telehealth tools in the quarter ended March 31, 2022. Our business model is designed to both respect and support physicians while driving value for our customers through our Marketing, Hiring, and Telehealth Solutions (see defined below).
For example, we had over 380,000 unique active providers use our telehealth tools in the quarter ended March 31, 2023. Our business model is designed to both respect and support physicians while driving value for our customers through our Marketing, Hiring, and Telehealth Solutions (as defined below).
As of March 31, 2022, we have a total of seven registered or applied-for trademarks in the United States and two registered trademarks in non-U.S. jurisdictions. We also have registered domain names for websites that we use in our business, such as www.doximity.com and other variations.
As of March 31, 2023, we have a total of eleven registered or applied-for trademarks in the United States and four registered trademarks in non-U.S. jurisdictions. We also have registered domain names for websites that we use in our business, such as www.doximity.com and other variations.
For example, in the fiscal year ended March 31, 2021, or fiscal 2021, we acquired Curative Talent, a medical recruiting agency, in order to augment our Hiring Solutions with a tech-enabled, higher-touch service, and on April 1, 2022 we closed our acquisition of the AMiON shift scheduling service to further expand our physician cloud platform.
For example, in fiscal 2021, we acquired Curative Talent, a medical recruiting agency, in order to augment our Hiring Solutions with a tech-enabled, higher-touch service, and on April 1, 2022, we acquired the AMiON shift scheduling service to further expand our physician cloud platform.
For example, the laws of the State of California, in which we operate, are more restrictive than HIPAA, including the provisions of the California Consumer Privacy Act, or CCPA, which went into effect January 1, 2020.
For example, the laws of the State of California, in which we operate, are more restrictive than HIPAA, including the provisions of the California Consumer Privacy Act, or CCPA, which went into effect January 1, 2020, and the California Privacy Act, or CPRA, which went into effect on January 1, 2023, and significantly modified the CCPA.
Members also have access to detailed job market data, such as our Salary Map, which provides a first-of-its-kind county-level look at physician compensation trends across specialties and geographies. ◦ For students and residents .
Members also have access to detailed job market data, such as our Salary Map, which provides an unparalleled county-level look at physician compensation trends across specialties and geographies. ◦ For students and residents .
Our AMiON shift scheduling tool helps health systems easily manage care coverage across their business units, by enabling administrators and staff to view work schedules, communicate with colleagues, swap and adjust shifts, and sync work shifts to personal calendars.
AMiON helps health systems easily manage care coverage across their service lines, by enabling administrators and staff to view work schedules, communicate with colleagues, swap and adjust shifts, and sync work shifts to personal calendars.
Our “Telehealth Solutions”, which are software tools that include voice and video Dialer, are designed to easily connect patients with care providers. Our Dialer tool has powered over 100 million virtual patient visits since launch. The ecosystem we have created in the medical community benefits from powerful network effects.
Our “Telehealth Solutions”, which are software tools that include voice and video Dialer, are designed to easily connect patients with care providers. The ecosystem we have created in the medical community benefits from powerful network effects.
In addition, our business is subject to extensive, complex, and rapidly changing federal and state laws and regulations governing data collection, healthcare regulation, financial services laws, regulations and rules, such as the Payment Card Industry Data Security Standards, and related matters.
In addition, our business is subject to extensive, complex, and rapidly changing federal and state laws and regulations governing data processing, healthcare regulation, financial services laws, regulations and rules, such as HIPAA, and related matters.
However, we believe we are the only professional network solely dedicated to medical professionals, with a purpose-built platform to address their networking, collaboration, content, educational, and career management needs. • Competing for customers: We compete across several categories to access spend in the healthcare category. We specifically compete for access to marketing, hiring, and telehealth budgets.
However, we believe we are the only professional network solely dedicated to medical professionals, with a purpose-built platform specifically designed to address a broad range of unique needs of today’s healthcare professionals. • Competing for customers: We compete across several categories to access spend in the healthcare category. We specifically compete for access to marketing, hiring, and telehealth budgets.
While any information we maintain in our role as a business associate may be exempt from the CCPA, 11 other records and information we maintain on our members may be subject to the CCPA.
While any information we process in our role as a business associate may be exempt from state privacy laws, other records and information we maintain on our members may be subject to these laws.
Our team can develop new content or fine-tune and reformat existing content for digital and feed-friendly marketing. We also provide ongoing support and reporting at the customer’s request. We have become a valued collaborator to our customers.
The team works directly with our customers to deeply understand a customer’s goals, priorities, and messaging before helping with content and media formats. Our team can develop new content or fine-tune and reformat existing content for digital and feed-friendly marketing. We also provide ongoing support and reporting at the customer’s request. We have become a valued collaborator to our customers.
Our solutions focus on win-wins for our customers and our members, containing useful and relevant information for the physician's particular area of practice and their patients’ needs, while being respectful of their time.
Our solutions benefit both our customers and our members, containing useful and relevant information for the member's particular area of practice and their patients’ needs, while being respectful of their time.
Dialer Enterprise is sold as a subscription, with pricing based on the size of the health system. Scheduling Capabilities for Health Systems On April 1, 2022, we closed our acquisition of the AMiON shift scheduling service to further expand our physician cloud platform.
Dialer Enterprise is sold as a subscription, with pricing based on the size of the health system. 6 Table of Contents Scheduling Capabilities for Health Systems We also offer a shift scheduling service to health systems through our acquisition of AMiON, which closed on April 1, 2022.
We provide our members with options designed to allow them to control their data, such as allowing our members to decide which profile contact information is viewable publicly and which is accessible to new connections. Members can also request deletion of their data under applicable privacy laws and procedures.
We provide our members with options designed to allow them to control their information, such as allowing our members to decide which profile contact information is viewable publicly and which is accessible to new connections.
More than 35% of our full-time equivalent employees work in R&D, including in product, engineering, and data. 10 Data Protection, Security, and Regulatory Compliance The data we collect and process is an integral part of our tools and solutions, allowing us to ensure our members are verified, the experience we provide is engaging and personalized, and the content we present is the most relevant.
Data Protection, Security, and Regulatory Compliance The data we collect and process is an integral part of our tools and solutions, allowing us to ensure our members are verified, the experience we provide is engaging and personalized, and the content we present is the most relevant.
Our Solutions for Healthcare Customers We offer Marketing, Hiring, and Telehealth Solutions to pharmaceutical manufacturers, health systems, medical recruiting firms, and certain other healthcare companies on a predominantly subscription basis. In fiscal 2022, we had 265 customers which contributed at least $100,000 of subscription revenue.
Our Solutions for Healthcare Customers We offer Marketing, Hiring, and Telehealth Solutions to pharmaceutical manufacturers, health systems, medical recruiting firms, and certain other healthcare companies on a predominantly subscription basis.
This streamlines patient care coordination and digital record keeping. • Secure Messaging. Enables members to collaborate securely regarding patient consultations, and coordinate care across multiple care team members, specialists, systems, or locations. • Dialer .
The Doximity messaging functionality enables members to collaborate securely regarding patient consultations and coordinate care across multiple care team members, specialists, systems, or locations. • Dialer .
When coupled with our customized algorithms and our team of analysts, engineers, and clinical experts, we believe this gives us unique, unparalleled insight into the specific needs of medical professionals in the United States that would be highly challenging and time consuming for any competitor to replicate.
When combined with our customized algorithms and our team of analysts, engineers, and clinical experts, we believe we have unique, unparalleled insight into the specific needs of U.S. medical professionals that would be highly challenging and time-consuming for any competitor to replicate. Our Tools for Medical Professionals The Doximity platform is free to join and use for U.S. medical professionals.
Competition Although we have built a scaled and highly differentiated platform, we face competition across different aspects of our business. We have experienced, and expect to continue to experience, intense competition from a number of companies, and we expect such competition to increase as our industry evolves.
We have experienced, and expect to continue to experience, intense competition from a number of companies, and we expect such competition to increase as our industry evolves.
Service lines in health systems refer to patient-centric clinical specialties, such as cardiology, oncology, neurology, and otolaryngology, among others. Our customers are able to specify a combination of audience attributes, such as specialty, credential, and location, and also choose modules. Modules are the core building blocks of the marketing plan and are additive to one another.
Pharmaceutical manufacturers purchase programs on a brand-by-brand basis, and health systems execute programs on a service line-by-service line basis. Service lines in health systems refer to patient-centric clinical specialties, such as cardiology, oncology, neurology, and otolaryngology, among others. Our customers are able to specify a combination of audience attributes, such as specialty, credential, and location, and also choose modules.
We seek to develop new modules in response to customer feedback and market trends and to address specific needs of our customers. For example, an Interactivity module may appear adjacent to articles about scientific congresses or professional meetings. Our goal is to make sponsored content useful, relevant, and informative for our members.
We continuously seek to develop new modules in response to customer feedback and market trends and to address specific needs of our customers. For example, an Interactivity module may appear adjacent to articles about scientific congresses or professional meetings. We take a rigorous approach to launching new modules, including internal and customer pilots.
In the past, we have selectively used mergers and acquisitions to accelerate our product roadmap to bring medical professionals and customers more complete solutions and increase demand for our products.
Consumers on the platform would also create a significant value opportunity for our customers. • Consider strategic acquisitions to expand our platform capabilities . In the past, we have selectively used mergers and acquisitions to accelerate our product roadmap to bring medical professionals and customers more complete solutions and increase demand for our products.
Members can browse permanent and locum tenens opportunities, set up job alerts to stay abreast of career opportunities matching their interests, and directly connect with our Hiring Solutions customers.
Our platform provides numerous tools that empower physicians to manage their careers effectively from training through retirement. ◦ For practicing physicians. Members can browse permanent and locum tenens opportunities, set up job alerts to stay abreast of career opportunities matching their interests, and directly connect with our Hiring Solutions customers.
Health systems have a similar track record of expanding their usage of our platform across different service lines. • Attract new customers. We have an opportunity to engage additional pharmaceutical manufacturers and health systems as we raise awareness of our offerings through our sales and marketing efforts and as we expand our offerings. • Further monetize our Telehealth Solutions.
We have an opportunity to engage additional pharmaceutical manufacturers and health systems and potential customers in other industries as we raise awareness of our offerings through our sales and marketing efforts and as we expand our offerings. • Further monetize our Telehealth Solutions.
Any third-party intellectual property claims against us could significantly increase our expenses and could have a significant and negative impact on our business, results of operations, and financial condition. Seasonality Historically, we have experienced some seasonality based on the timing of marketing programs, subscription launches on our platform and budgetary timing of purchases of additional modules.
Any third party intellectual property claims against us could significantly increase our expenses and could have a significant and negative impact on our business, results of operations, and financial condition.
Our network makes it easy for professionals to connect and stay in touch with the broader medical community. We regularly suggest new connections to members, such as co-residents, co-fellows, co-authors, colleagues from the same hospital or practice, and medical school classmates, enabling referrals, sharing of medical knowledge, and career opportunities. • Search.
We regularly suggest new connections to members, such as co-residents, co-fellows, co-authors, colleagues from the same hospital or practice, and medical school classmates, enabling referrals, and sharing of medical knowledge and career opportunities. • Search. Members can use our powerful search technology to find other medical professionals by name, specialty, expertise, affiliation, or location.
Our members can connect with their patients through our Dialer telehealth feature through Dialer Free, which is available for free to all members, through Dialer Pro, a paid version with some enhanced capacities, or Dialer Enterprise, which may be purchased by a hospital enterprise.
Our members can connect with their patients through our Dialer telehealth feature: Dialer Free is available for free to verified healthcare provider members, Dialer Pro is a paid version with some enhanced capabilities, and Dialer Enterprise is available for purchase by health systems and hospitals.
Additional convenient features are accessible during a video call, such as the ability to easily add an interpreter or family member, or hand off the call to another member of the care team with one click, all in a HIPAA-compliant manner.
Calls can be voice or video-based, and our service provides valuable features such as a preset Caller ID displaying the provider’s office number, the ability to easily add an interpreter or family member, or to hand off the call to another member of the care team with one click, all in a HIPAA-compliant manner.
We champion the following core values: • Get Stuff Done: We are doers. We solve problems everyday by treating obstacles like an adventure. • Straight Talk: We say what we think and every voice is heard and respected. Transparency makes us stronger. • Stretch Goals: Innovation requires risk taking.
We supplement our workforce with contractors and consultants in the United States and internationally. We champion the following core values: • Get Stuff Done: We are doers. We solve problems every day by treating obstacles like an adventure. • Straight Talk: We say what we think and every voice is heard and respected.
In addition, there have been several legislative and regulatory changes and proposed reforms of the healthcare system to contain costs, improve quality, and expand access to care. It is also possible that additional governmental action is taken in response to the COVID-19 pandemic.
In addition, there have been several legislative and regulatory changes and proposed reforms of the healthcare system to contain costs, improve quality, and expand access to care, as well as changes and proposed reforms relating to public health emergencies and pandemic responses.
We have a customer success team that ensures both that our customers receive tangible, measurable, and repeatable benefits from their marketing spend, and that our members have access to sponsored content that is relevant and informative. The team works directly with our customers to deeply understand a customer’s goals, priorities, and messaging before helping with content and media formats.
Our goal is to make sponsored content useful, relevant, and informative for our members. We have a customer success team that ensures both that our customers receive tangible, measurable, and repeatable benefits from their marketing spend, and that our members have access to sponsored content that is relevant, informative, and meets the high quality standards of our community.
We package them into programs to meet the needs of individual brands and service lines. Our modules can be categorized as Awareness, Interactivity, and Peer, as follows: 5 • Awareness: modules that generate awareness and build name recognition, such as text and video articles.
Our sponsored modules can be categorized as Awareness, Interactivity, and Peer, as follows: • Awareness: sponsored modules that generate awareness and build name recognition, such as text and video articles.
Marketing Solutions We provide a digital marketing platform for pharmaceutical manufacturers and health systems to serve our members with tailored content that is highly relevant to their clinical practices. Pharmaceutical manufacturers purchase programs on a brand-by-brand basis, and health systems execute programs on a service line by service line basis.
Marketing Solutions We provide a digital marketing platform for pharmaceutical manufacturers and health systems to serve our members with tailored sponsored content that is highly relevant to their clinical practices, including information about medications, clinical trials, guidelines and resources, and trends in medical and patient care.
Our privacy and security teams are devoted to processing and fulfilling member requests regarding access to and deletion of their data. Physician information that is posted to profiles is protected with anti-scraping technologies such as a Web Application Firewall, Runtime Application Self-Protection, Bot Protection, Rate-Limiting, and our network employs DDoS mitigation technology to protect against attacks.
Physician information that is posted to profiles is protected with anti-scraping technologies such as a Web Application Firewall, Runtime Application Self-Protection, Bot Protection, Rate-Limiting, and our network employs DDoS mitigation technology to protect against attacks. All data is encrypted in transit and at rest using TLS 1.2, and personal health information is encrypted at rest using AES-256 encryption.
Patients can search for the right doctor or hospital for their needs through our collaboration with the Doctor Finder tool of U.S. News & World Report, which publicly displays summary physician profiles and hospital rankings powered by an integration with our Doximity network. We also collaborate with U.S.
News & World Report, which publicly displays summary physician profiles and hospital rankings powered by an integration with our Doximity network. We also collaborate with U.S. News & World Report to offer a direct-to-patient scheduling tool for health systems. We see opportunities to expand our offerings to patients in the future.
Smaller companies, including application developers, could also launch new products and services that compete with us and that could gain market acceptance quickly. We also expect our existing competitors in the markets for Marketing and Hiring Solutions to continue to focus on these areas.
Larger and more established companies may focus on our market and could directly compete with us. Smaller companies, including application developers, could also launch new products and services that compete with us and that could gain market acceptance quickly.
These companies may be able to invest more resources in research and development, strategic acquisitions, sales and marketing, patent prosecution, litigation, and financing capital equipment acquisitions for their customers. Our competitors may announce new products, services, or enhancements that better address changing industry standards or the needs of members and customers, such as mobile access.
As a result, many of these companies may respond more quickly to new or emerging technologies and standards and changes in customer requirements. These companies may be able to invest more resources in research and development, strategic acquisitions, sales and marketing, patent prosecution, litigation, and financing capital equipment acquisitions for their customers.
We align our goals with our customers and help them make the necessary leap to digital. Our Growth Strategies • Grow the Doximity Network.
Hiring Solutions customers, including health systems and medical recruiting firms, gain access to a comprehensive nationwide network and database of specialty and sub-specialty professionals. We align our goals with our customers and help them make the necessary leap to digital. Our Growth Strategies • Grow the Doximity Network.
Members have a personalized and validated professional profile on the Doximity network that acts as a digital curriculum vitae. Profile information includes education and training, hospital affiliations and practice contact as well as information, certifications and licenses, specialization and clinical expertise, links to published research reports and press mentions, clinical trial participation, and any awards conferred.
Profile information includes education and training, hospital affiliations, and practice contact information as well as certifications and licenses, specialization and clinical expertise, links to published research reports and press mentions, clinical trial participation, and any awards conferred. Our technology automatically searches for and updates profiles with new relevant information such as additional press mentions and awards.
We provide a unique, digital channel to connect with the most valuable professionals in healthcare. Pharmaceutical manufacturers and health systems gain access to a high value solution. Health systems and medical recruiting firms gain access to a comprehensive nationwide network and database of specialty and sub-specialty professionals.
We provide a unique, digital channel to connect our customers with the most valuable professionals in healthcare. Marketing Solutions customers, such as pharmaceutical manufacturers and health systems, gain access to a solution with a proven return on investment.
Corporate Information We were incorporated in the state of Delaware in April 2010 as 3MD Communications, Inc. and we subsequently changed the name to Doximity, Inc. in June 2010. Our principal executive offices are located at 500 3rd Street, Suite 510, San Francisco, California 94107, and our telephone number is (650) 549-4330.
Our principal executive offices are located at 500 3rd Street, Suite 510, San Francisco, California 94107, and our telephone number is (650) 549-4330.
Members can use our powerful search technology to find other medical professionals by name, specialty, expertise, affiliation, or location. For example, a physician may have a patient with a chronic condition that requires specialist care at another health system or in another state.
For example, a physician may have a patient with a chronic condition that requires specialist care at another health system or in another state. The physician can use our search tool to find the right expert for the specific chronic condition at the closest health system, and potentially leverage mutual connections for a warm introduction. • Careers.
We put the following critical digital tools in one easy-to-use app and website. • Digital Fax and eSignature. Allows physicians to send and receive HIPAA-compliant faxes through our mobile app or website. Members can electronically sign, edit, date, add attachments, and customize the cover page for their faxed documents, eliminating the need to print, manually sign, and re-scan documents.
We include the following critical digital tools in one easy-to-use app and website. • Digital Workflow: Fax and eSignature. The Doximity platform allows physicians to send and receive HIPAA-compliant faxes through our mobile app or website.
Our customer success team supports customer retention by working directly with customers to produce higher engagement with our solutions, which in turn expands their use of the platform in the future. We buy a limited amount of digital search and display advertising on Google and Facebook to encourage potential members to sign up for our platform.
Our customer success team supports customer retention by working directly with customers to produce higher engagement with our solutions, which in turn expands their use of the platform in the future. Competition Although we have built a scaled and highly differentiated platform, we face competition across different aspects of our business.
Many of our competitors and potential competitors have significantly greater financial, technological, and other resources than we do and greater name recognition and more established distribution networks and relationships with healthcare providers than us. As a result, many of these companies may respond more quickly to new or emerging technologies and standards and changes in customer requirements.
We also expect our existing competitors in the markets for Marketing, Hiring, and Telehealth Solutions to continue to focus on these areas. Many of our competitors and potential competitors have significantly greater financial, technological, and other resources than we do and greater name recognition and more established distribution networks and relationships with healthcare providers than us.
If this occurs, our ability to successfully market our services to customers may be harmed and our business results may suffer. Our People, Culture, Values, and Human Capital Resources At Doximity, we organize our teams into small, nimble groups that operate autonomously and are empowered to make decisions quickly and who aim to stay close to our members and customers.
Our People, Culture, Values, and Human Capital Resources At Doximity, we organize our teams into small, nimble groups that operate autonomously, are empowered to make decisions quickly, and aim to stay close to our members and customers. We prioritize diversity and inclusion, and regularly track our progress against quantifiable goals. We have always been a geographically distributed team.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlso, the financial impact of COVID-19 or another pandemic, epidemic, or outbreak of an infectious disease may lead to an overall decrease in healthcare spending due to a potential economic downturn and overall uncertainty causing healthcare expenditures to be concentrated in emergency care, which may cause a material impact to our business. 18 While the potential economic impact brought by and the duration of any pandemic, epidemic, or outbreak of an infectious disease, including COVID-19, may be difficult to assess or predict, the widespread COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.
Biggest changeWhile the potential economic impact and the duration of any pandemic, epidemic, or outbreak of an infectious disease, including COVID-19, may be difficult to assess or predict, the widespread COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.
As a result of our limited operating history and our rapid growth, our ability to forecast our future operating results, including revenue, cash flows, and profitability, is limited and subject to a number of uncertainties, including our ability to effectively plan for and model future growth.
As a result of our limited operating history and rapid growth, our ability to forecast our future operating results, including revenue, cash flows, and profitability, is limited and subject to a number of uncertainties, including our ability to effectively plan for and model future growth.
However, in the United States, government authorities, elected officials, and political candidates have called for amendments to Section 230 of the CDA that would purport to limit or remove protections afforded interactive computer service providers and our current protections from liability for third-party content in the United States could decrease or change.
However, in the United States, government authorities, elected officials, and political candidates have called for amendments to Section 230 of the CDA that would purport to limit or remove protections afforded to interactive computer service providers and our current protections from liability for third-party content in the United States could decrease or change.
Further, we may not have been and may not be able to detect unauthorized use of our technology or intellectual property, or to take appropriate steps to enforce our intellectual property rights. Any inability to meaningfully enforce our intellectual property rights could harm our ability to compete and could reduce demand for our solutions and services.
Further, we may not have been and may not be able to detect unauthorized use of our technology or intellectual property, or to take appropriate steps to enforce our intellectual property rights. Any inability to meaningfully enforce our intellectual property rights could harm our ability to compete and reduce demand for our solutions and services.
In view of applicable Data Protection Laws, Privacy Policies, and Data Protection Obligations imposing complex and burdensome obligations, and with substantial uncertainty in their interpretation and compliance, we have faced and may face 23 challenges in addressing and complying with them, and fundamentally changing our business activities, Privacy Policies, and practices, and may expend significant resources in an effort to do so, any of which could result in material harm to business, financial condition, results of operations, or other harm.
In view of applicable Data Protection Laws, Privacy Policies, and Data Protection Obligations imposing complex and burdensome obligations, and with substantial uncertainty in their interpretation and compliance, we have faced and may face challenges in addressing and complying with them, and fundamentally changing our business activities, Privacy Policies, and practices, and may expend significant resources in an effort to do so, any of which could result in material harm to business, financial condition, results of operations, or other harm.
A determination by a court or regulatory agency that any of these laws and regulations are applicable to or operate to prohibit or limit telephone, text message, and facsimile communications made by members or others using our platform could invalidate all or some portions of our customer contracts, could require us to change or terminate some portions of our business, could require us to refund portions of our service fees, and could have an adverse 25 effect on our business.
A determination by a court or regulatory agency that any of these laws and regulations are applicable to or operate to prohibit or limit telephone, text message, and facsimile communications made by members or others using our platform could invalidate all or some portions of our customer contracts, could require us to change or terminate some portions of our business, could require us to refund portions of our service fees, and could have an adverse effect on our business.
In fiscal 2021, we completed an acquisition of Curative Talent and on April 1, 2022 we completed the acquisition of the AMiON business, and we may in the future consider opportunities to acquire or make additional investments in new or 27 complementary businesses, technologies, offerings, tools, or solutions, or enter into strategic alliances, that may enhance our capabilities and platform in general, complement our current offerings, or expand the breadth of our markets.
In fiscal 2021, we completed an acquisition of Curative Talent and, on April 1, 2022 we completed the acquisition of the AMiON business, and we may in the future consider opportunities to acquire or make additional investments in new or complementary businesses, technologies, offerings, tools, or solutions, or enter into strategic alliances, that may enhance our capabilities and platform in general, complement our current offerings, or expand the breadth of our markets.
We maintain systems and procedures designed to ensure that our telephonic communications and telephonic communications made by members and others using our platform comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there were systems and procedures designed to ensure compliance in place at the time.
We maintain systems and procedures designed to ensure that our communications and the communications made by members and others using our platform comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there were systems and procedures designed to ensure compliance in place at the time.
Our ability to successfully grow through these types of strategic transactions depends upon our ability to identify, negotiate, complete, and integrate suitable target businesses, technologies, tools, and solutions and to obtain any necessary financing, and is subject to numerous risks, including: • failure to identify acquisition, investment, or other strategic alliance opportunities that we deem suitable or available on favorable terms; • problems integrating the acquired business, technologies, tools, or solutions, including issues maintaining uniform standards, procedures, controls, and policies; • integrating personnel from the acquired company; • unanticipated costs associated with acquisitions, investments, or strategic alliances; • adverse impacts on our overall margins; • diversion of management’s attention from our existing business; • risks associated with entering new markets in which we may have limited or no experience; • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
Our ability to successfully grow through these types of strategic transactions depends upon our ability to identify, negotiate, acquire, and integrate suitable target businesses, technologies, tools, and solutions and to obtain any necessary financing, and is subject to numerous risks, including: • failure to identify acquisition, investment, or other strategic alliance opportunities that we deem suitable or available on favorable terms; • problems integrating the acquired business, technologies, tools, or solutions, including issues maintaining uniform standards, procedures, controls, and policies; • integrating personnel from the acquired company; • unanticipated costs associated with acquisitions, investments, or strategic alliances; • adverse impacts on our overall margins; • diversion of management’s attention from our existing business; • risks associated with entering new markets in which we may have limited or no experience; • potential loss of key employees of acquired businesses; and • increased legal and accounting compliance costs.
These risks and challenges include our ability to: • maintain and increase our number of registered members for our platform; • maintain and increase our number of customers for our solutions; 15 • increase revenue from the solutions we provide; • successfully compete with other companies that are currently in, or may in the future enter, the online professional network space, telehealth, or productivity tools; • maintain and improve the infrastructure underlying our network, including Amazon Web Services and our apps and websites, including with respect to data protection and cybersecurity; • maintain and further develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased member usage, as well as the deployment of new features and tools; • successfully update our network, including expanding our network and offerings, develop and update our apps, features, offerings, and services to benefit our members’ experience; • responsibly use the data that our members share with us to provide solutions that make our members more successful and productive and that are critical to the hiring and marketing needs of enterprises and professional organizations; • comply with existing and new laws and regulations applicable to our business and our industry; • process, store, and use personal data in compliance with governmental regulation and other legal obligations related to privacy; • maintain and enhance the value of our reputation and brand; • continue to earn and preserve our members’ trust with respect to their professional reputation and information; • effectively manage our growth; and • hire, integrate, and retain talented people at all levels of our organization.
These risks and challenges include our ability to: • maintain and increase our number of registered members for our platform; • maintain and increase our number of customers for our solutions; • increase revenue from the solutions we provide; 15 Table of Content s • successfully compete with other companies that are currently in, or may in the future enter, the online professional network space, telehealth, or productivity tools; • maintain and improve the infrastructure underlying our network, including Amazon Web Services and our apps and websites, including with respect to data protection and cybersecurity; • maintain and further develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased member usage, as well as the deployment of new features and tools; • successfully update our network, including expanding our network and offerings, develop and update our apps, features, offerings, and services to benefit our members’ experience; • responsibly use the data that our members share with us to provide solutions that make our members more successful and productive and that are critical to the hiring and marketing needs of enterprises and professional organizations; • comply with existing and new laws and regulations applicable to our business and our industry; • process, store, and use personal data in compliance with governmental regulation and other legal obligations related to privacy; • maintain and enhance the value of our reputation and brand; • continue to earn and preserve our members’ trust with respect to their professional reputation and information; • effectively manage our growth; and • hire, integrate, and retain talented people at all levels of our organization.
While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring the size of our network and other metrics. For example, we face 20 challenges in accurately calculating the number of practicing doctors or other professionals in our network at a given time.
While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring the size of our network and other metrics. For example, we face challenges in accurately calculating the number of practicing doctors or other professionals in our network at a given time.
These laws may not be preempted by HIPAA, may be more protective than HIPAA, and may be subject to varying interpretations by 22 the courts and government agencies, creating complex compliance issues for us and our customers and partners and potentially exposing us to additional expense, adverse publicity and liability, any of which could adversely affect our business.
These laws may not be preempted by HIPAA, may be more protective than HIPAA, and may be subject to varying interpretations by the courts and government agencies, creating complex compliance issues for us and our customers and partners and potentially exposing us to additional expense, adverse publicity and liability, any of which could adversely affect our business.
Our efforts to protect our proprietary rights and intellectual property may not have been and may not be adequate to prevent their misappropriation or misuse. Third parties, including our competitors, could be infringing, misappropriating, or otherwise violating our intellectual property rights. We may not be successful in stopping unauthorized use 34 of our content or other intellectual property or technology.
Our efforts to protect our proprietary rights and intellectual property may not have been and may not be adequate to prevent their misappropriation or misuse. Third parties, including our competitors, could be infringing, misappropriating, or otherwise violating our intellectual property rights. We may not be successful in stopping unauthorized use of our content or other intellectual property or technology.
In addition, we have limited control over the amount and timing of resources that our current collaborators or any future 28 collaborators devote to our collaborators’ or our future solutions. Disputes between us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of our management.
In addition, we have limited control over the amount and timing of resources that our current collaborators or any future collaborators devote to our collaborators’ or our future solutions. Disputes between us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of our management.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a 33 material adverse effect on the price of our Class A common stock.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our Class A common stock.
Additionally, for tax years beginning after December 31, 2020, the deductibility of U.S. federal net operating losses incurred in taxable years beginning after December 31, 2017, is limited to 80% of taxable income. Our net 26 operating losses may also be impaired or restricted under state law.
Additionally, for tax years beginning after December 31, 2020, the deductibility of U.S. federal net operating losses incurred in taxable years beginning after December 31, 2017, is limited to 80% of taxable income. Our net operating losses may also be impaired or restricted under state law.
In some cases, in particular with respect to content providers, these relationships are undocumented, or, if there are agreements in place, they may be easily terminable. Our competitors may be effective in 29 providing incentives to these parties to favor their solutions or may prevent us from developing strategic relationships with these parties.
In some cases, in particular with respect to content providers, these relationships are undocumented, or, if there are agreements in place, they may be easily terminable. Our competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing strategic relationships with these parties.
Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations. 30 Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, and financial condition or result of operations.
Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations. Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, and financial condition or result of operations.
In addition, companies that perceive us to be a 36 competitor may be unwilling to assign or license rights to us. Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our solutions and services.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our solutions and services.
Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws generally require the approval of at least 66 2/3% of the voting power of our outstanding capital stock; • our dual class common stock structure, which provides certain affiliates of Jeff Tangney, Emergence Capital Partners, InterWest X, L.P. or InterWest Partners, individually or together, with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock; • our staggered board of directors; • at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; • our amended and restated certificate of incorporation does not provide for cumulative voting; • vacancies on our board of directors are able to be filled only by our board of directors and not by stockholders, subject to the rights granted pursuant to the stockholders agreement; • a special meeting of our stockholders may only be called by the chairperson of our board of directors or our Chief Executive Officer, as applicable, or a majority of our board of directors; • restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable; • our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures apply for stockholders (other than the parties to our stockholders agreement) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws generally require the approval of at least 66 2/3% of the voting power of our outstanding capital stock; • our dual class common stock structure, which provides certain affiliates of Jeff Tangney and Emergence Capital Partners, individually or together, with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock; • our staggered board of directors; • at any time when the holders of our Class B common stock no longer beneficially own, in the aggregate, at least the majority of the voting power of our outstanding capital stock, our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; • our amended and restated certificate of incorporation does not provide for cumulative voting; • vacancies on our board of directors are able to be filled only by our board of directors and not by stockholders, subject to the rights granted pursuant to the stockholders agreement; • a special meeting of our stockholders may only be called by the chairperson of our board of directors or our Chief Executive Officer, as applicable, or a majority of our board of directors; • restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable; • our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures apply for stockholders (other than the parties to our stockholders agreement) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or Tax Act, and the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, significantly changed how the U.S. Department of Treasury imposes income taxes on U.S. corporations.
For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or Tax Act, and the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, of 2020 significantly changed how the U.S. Department of Treasury imposes income taxes on U.S. corporations.
Even if we are successful in attracting new customers and their agencies, it may take several months or years for them to meaningfully increase the amount that they spend with us.
Even if we are successful in attracting new customers and their agencies, it may take several months or years for them to meaningfully increase the amount they spend with us.
We depend on the use of information technologies and systems and our reputation and ability to acquire, retain, and serve our customers are dependent upon the reliable performance of our apps and websites and the underlying network infrastructure.
We depend on the use of information technologies and systems, developing technologies, and our reputation and ability to acquire, retain, and serve our customers are dependent upon the reliable performance of our apps and websites and the underlying network infrastructure.
The preparation of financial statements in conformity with GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes 21 and amounts reported in our key metrics.
The preparation of financial statements in conformity with GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics.
Any significant interruptions or delays in service on our apps or websites or any undetected errors or design faults could adversely affect our business, financial condition, and results of operations.
Any significant interruptions or delays in service in our products, on our apps or websites or any undetected errors or design faults could adversely affect our business, financial condition, and results of operations.
To the extent we experience this seasonality, it may cause fluctuations in our operating results and financial metrics and make forecasting out future operating results and financial metrics more difficult.
To the extent we experience this seasonality, it may cause fluctuations in our operating results and financial metrics and make forecasting our future operating results and financial metrics more difficult.
Content-related legislation may require us to change our solutions or business practices, increase our compliance costs, or otherwise impact our operations or our ability to provide services in certain geographies. In addition, we could incur significant costs investigating and defending claims for violating such requirements and, if we are found liable, significant damages.
Content-related legislation or judicial review may require us to change our solutions or business practices, increase our compliance costs, or otherwise impact our operations or our ability to provide services in certain geographies. In addition, we could incur significant costs investigating and defending claims for violating such requirements and, if we are found liable, significant damages.
Based on an assessment of our historical ownership changes through March 31, 2022, we do not anticipate a current limitation on the tax attributes. Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be subject to limitations as a result of ownership changes that may occur in the future.
Based on an assessment of our historical ownership changes through March 31, 2023, we do not anticipate a current limitation on the tax attributes. Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be subject to limitations as a result of ownership changes that may occur in the future.
Our revenue is relatively concentrated within a small number of key customers, and the loss of one or more of such key customers could slow the growth rate of our revenue or cause our revenue to decline. For the fiscal year ended March 31, 2022, no customers accounted for 10% or more of total revenue.
Our revenue is relatively concentrated within a small number of key customers, and the loss of one or more of such key customers could slow the growth rate of our revenue or cause our revenue to decline. For the fiscal year ended March 31, 2023 and 2022, no customer accounted for 10% or more of total revenue.
If we are unable to maintain and increase our member base and member engagement, our revenue, operating results, financial condition, business, and future growth potential may be adversely affected. 16 If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, it could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to maintain and increase our member base and member engagement, our revenue, operating results, financial condition, business, and future growth potential may be adversely affected. 16 Table of Content s If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, it could have a material adverse effect on our business, financial condition, and results of operations.
Since launching our platform in fiscal 2012, we have experienced rapid growth and we continue to rapidly and significantly expand our operations. While we have experienced significant revenue growth in prior periods, it is not indicative of our future revenue growth. We expect our revenue growth rate will decline.
Since launching our platform in fiscal 2012, we have experienced rapid growth and we continue to rapidly and significantly expand our operations. While we have experienced significant revenue growth in prior periods, it is not indicative of our future revenue growth. We expect our revenue growth rate may decline.
Additional risks, beyond those summarized below, set forth in this section, or discussed elsewhere in this Annual Report on Form 10-K, may apply to our business, activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. • If we fail to effectively manage our growth, we may be unable to execute our business plan, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition, and results of operations could be harmed; • We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and to predict our future operating results, and therefore increases the risk of investment; • If we fail to retain existing members or add new members, our revenue, operating results, financial condition, and business may be significantly harmed; • If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, it could have a material adverse effect on our business, financial condition, and results of operations; • Our revenue is relatively concentrated within a small number of key customers, and the loss of one or more of such key customers could slow the growth rate of our revenue or cause our revenue to decline; • We expect to face increasing competition in the market for our solutions; • The COVID-19 pandemic and any other future pandemic, epidemic, or outbreak of an infectious disease may adversely affect our business, financial condition, and results of operations; • If we are not able to maintain and enhance our reputation and brand recognition, our business, financial conditions, and results of operations will be harmed; • Making business decisions that prioritize the interests of our members may adversely impact our financial results; • We depend on our talent to grow and operate our business, and if we are unable to hire, integrate, develop, motivate, and retain our personnel, we may not be able to grow effectively; • Failure to maintain, protect, or enforce our intellectual property rights could harm our business and results of operations; and • The dual class structure of our common stock has the effect of concentrating voting control with our executive officers (including our Chief Executive Officer) and directors and their affiliates; this will limit or preclude your ability to influence corporate matters.
Additional risks, beyond those summarized below, set forth in this section, or discussed elsewhere in this Annual Report on Form 10-K, may apply to our business, activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. • If we fail to effectively manage our growth, we may be unable to execute our business plan, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition, and results of operations could be harmed; • We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and to predict our future operating results, and therefore increases the risk of investment; • If we fail to retain existing members or add new members, our revenue, operating results, financial condition, and business may be significantly harmed; • If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, it could have a material adverse effect on our business, financial condition, and results of operations; • Our revenue is relatively concentrated within a small number of key customers, and the loss of one or more of such key customers could slow the growth rate of our revenue or cause our revenue to decline; • We expect to face increasing competition in the market for our solutions; • If we are not able to maintain and enhance our reputation and brand recognition, our business, financial conditions, and results of operations will be harmed; • Making business decisions that prioritize the interests of our members may adversely impact our financial results; • We depend on our talent to grow and operate our business, and if we are unable to hire, integrate, develop, motivate, and retain our personnel, we may not be able to grow effectively; • Failure to maintain, protect, or enforce our intellectual property rights could harm our business and results of operations; and • The dual class structure of our common stock has the effect of concentrating voting control with our executive officers (including our Chief Executive Officer) and directors and their affiliates; this will limit or preclude your ability to influence corporate matters.
For the fiscal year ended March 31, 2021 and 2020, one of our customers accounted for 10% or more of total revenue. In addition, some of our customers purchase our services indirectly through marketing agencies, some of whom represent a number of customers.
For the fiscal year ended March 31, 2021, one of our customers accounted for 10% or more of total revenue. In addition, some of our customers purchase our services indirectly through marketing agencies, some of whom represent a number of customers.
Moreover, the detection, prevention, and remediation of known or unknown securities vulnerabilities, including those arising from third-parties, is becoming increasingly expensive and may cause us to incur significant costs in the future.
Moreover, the detection, prevention, and remediation of known or unknown security vulnerabilities, including those arising from third-parties, is becoming increasingly expensive and may cause us to incur significant costs in the future.
To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate our business effectively.
To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and most employees. These measures may not be enough to attract and retain the personnel we require to operate our business effectively.
Our business would be harmed if the providers discontinue or limit our access to their platforms or marketplaces; the platforms or marketplaces decline in popularity; the platforms modify their algorithms, communication channels available to developers, respective terms of service or other policies, including fees; the providers adopt changes or updates to their technology that impede integration with other software systems or otherwise require us to modify our technology or update our apps in order to ensure that consumers can continue to access and use our platform.
Our business would be harmed if the providers discontinue or limit our access to their platforms or marketplaces; the platforms or marketplaces decline in popularity; the platforms modify their algorithms, communication channels available to developers, respective terms of service or other policies, including fees; the providers adopt changes or updates to their technology that impede integration with 36 Table of Content s other software systems or otherwise require us to modify our technology or update our apps in order to ensure that consumers can continue to access and use our platform.
We may be subject to lawsuits that, even if unsuccessful, could divert our resources and our management’s attention and adversely affect our business and customer relationships, and our insurance coverage may not be sufficient to cover such claims against us. Evolving government regulations may require increased costs or adversely affect our results of operations.
We may be subject to lawsuits that, even if unsuccessful, could divert our resources and our management’s attention and adversely affect our business and customer relationships, and our insurance coverage may not be sufficient to cover such claims against us. Evolving government regulations may increase our costs or adversely affect our results of operations.
If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects may be harmed. 14 Risks Related to Our Business If we fail to effectively manage our growth, we may be unable to execute our business plan, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition, and results of operations could be harmed.
If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects may be harmed. 14 Table of Content s Risks Related to Our Business If we fail to effectively manage our growth, we may be unable to execute our business plan, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition, and results of operations could be harmed.
For example, many states have expanded Medicare and commercial reimbursement for telehealth, in many cases at parity with brick and mortar services and with $0 co-pay. However, if states do not maintain this reimbursement parity after the pandemic, this could lower usage of our network.
For example, many states have expanded Medicaid and commercial coverage for telehealth, in many cases at parity with brick and mortar services and with $0 co-pay. However, if states do not maintain this reimbursement parity after the pandemic, this could lower usage of our network.
Our effective tax rates could be affected by numerous factors, such as changes in tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations, the mix and level of earnings in a given taxing jurisdiction, or our ownership or capital structures. Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
Our effective tax rates could be affected by numerous factors, such as changes in tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations, the mix and level of earnings in a given taxing jurisdiction, or our ownership or capital structures. 25 Table of Content s Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
Also, while we employ several different methodologies to assess potential business opportunities, the new businesses may not meet or exceed our expectations. We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships with third-parties that may not result in the development of commercially viable solutions or the generation of significant future revenue.
Also, while we employ several different methodologies to assess potential business opportunities, the new businesses may not meet or exceed our expectations. 27 Table of Content s We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships with third-parties that may not result in the development of commercially viable solutions or the generation of significant future revenue.
The security measures that we and our third-party vendors and subcontractors have in place in an effort to ensure compliance with privacy and data protection laws may not protect our facilities and systems from security breaches, acts of vandalism or theft, computer viruses, misplaced or lost data, programming and human errors, or other similar events.
The security measures that we and our third-party vendors and subcontractors have in place in an effort to ensure compliance with privacy and data protection laws may not protect our facilities and systems from security breaches, acts of 21 Table of Content s vandalism or theft, computer viruses, misplaced or lost data, programming and human errors, or other similar events.
We may experience challenges with managing our growth related to our recent acquisition of AMiON or other future acquisitions. The operation and integration of the acquired technologies and business operations may require substantial financial costs and management attention. If we fail to manage such integration processes in a timely and effective manner, our business and financial results may suffer.
We may experience challenges with managing the integration and growth related to these acquisitions or other future acquisitions. The operation and integration of the acquired technologies and business operations may require substantial financial costs and management attention. If we fail to manage such integration processes in a timely and effective manner, our business and financial results may suffer.
Risks Related to Intellectual Property We may not be able to halt the operations of entities that copy our intellectual property or that aggregate our data as well as data from other companies, including social networks, or copycat online services that may misappropriate our data. These activities could harm our brand and our business.
Risks Related to Intellectual Property 32 Table of Content s We may not be able to halt the operations of entities that copy our intellectual property or that aggregate our data as well as data from other companies, including social networks, or copycat online services that may misappropriate our data. These activities could harm our brand and our business.
Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology, and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs.
Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our 29 Table of Content s solutions, the diversion of our resources from development of our own proprietary technology, and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs.
As our customers’ businesses respond to market dynamics, financial pressures, and regulatory changes or delays impacting their businesses, and as our customers make strategic business decisions regarding how to market their offerings, our customers seek to, and we expect will continue to seek to, amend the terms of their arrangements with us.
As our customers’ businesses respond to market dynamics, financial pressures, and regulatory changes or delays impacting their businesses, and as our customers make strategic business decisions regarding how to market their offerings, our 17 Table of Content s customers seek to, and we expect will continue to seek to, amend the terms of their arrangements with us.
New or amended Data Protection Laws, and changes in the interpretation of existing Data Protection Laws and our Data Protection Obligations, could impair our, or our customers’, our partners’, or our vendors’ ability to Process personal information, which could have a material adverse effect on our business, financial condition, and results of operations.
New or amended Data Protection Laws, and changes in the interpretation of existing Data Protection Laws and our Data Protection Obligations, could impair our, our customers’, our partners’, or our vendors’ ability to Process personal information, 22 Table of Content s which could have a material adverse effect on our business, financial condition, and results of operations.
Our employees, executive officers, and directors also may buy or sell additional shares outside of a Rule 10b5-1 trading plan when they are not in possession of material, nonpublic information, subject to the Rule 144 requirements referred to above.
Our employees, executive officers, and directors also 40 Table of Content s may buy or sell additional shares outside of a Rule 10b5-1 trading plan when they are not in possession of material, nonpublic information, subject to the Rule 144 requirements referred to above.
In addition, if the third-party software we utilize has errors, security vulnerabilities, or otherwise malfunctions, the functionality of our solutions may be negatively impacted and our business may suffer. We rely on software-as-a-service, or SaaS, technologies from third parties.
In addition, if the third-party software we utilize has errors, security vulnerabilities, or otherwise malfunctions, the functionality of our solutions may be negatively impacted and our business may suffer. 28 Table of Content s We rely on software-as-a-service, or SaaS, technologies from third parties.
Our Class B common stock has ten votes per share, and our Class A common stock, has one vote per share. Stockholders who hold shares of Class B common stock, including our executive officers and directors and their affiliates, together hold approximately 88% of the voting power of our outstanding capital stock as of March 31, 2022.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of Class B common stock, including our executive officers and directors and their affiliates, together hold approximately 86% of the voting power of our outstanding capital stock as of March 31, 2023.
This could make it difficult for us to stop the infringement or misappropriation of our intellectual property rights. Proceedings to enforce our intellectual property in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.
This could make it difficult for us to stop the infringement or misappropriation of our intellectual property rights. Proceedings to enforce our intellectual property in foreign jurisdictions could result in 34 Table of Content s substantial costs and divert our efforts and attention from other aspects of our business.
Therefore, in the past, we have forgone, and may in the future forgo, certain expansion or revenue opportunities that we do not believe are in the best interests of our members, even if our decision negatively impacts our operating results.
Therefore, in the past, we have forgone, and may in the future forgo, certain expansion or revenue opportunities that we do not believe are in the best interests of our members, even if 18 Table of Content s our decision negatively impacts our operating results.
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide non-infringement warranties or warranties related to the performance or suitability of the software.
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide non-infringement warranties or warranties related to the 35 Table of Content s performance or suitability of the software.
There are numerous domestic and foreign laws, regulations, self-regulatory schemes, and standards regarding privacy, data protection, and information security and Processing, or Data Protection Laws, the number and scope of which is changing, subject to differing applications and interpretations, and which may be inconsistent among jurisdictions or in conflict with each other.
There are numerous domestic and foreign laws, regulations, self-regulatory schemes, and standards regarding privacy, data protection, and information security and Processing (collectively, “Data Protection Laws”), the number and scope of which is changing, subject to differing applications and interpretations, and which may be inconsistent across jurisdictions or in conflict with each other.
Department of Treasury, the Internal Revenue Service, or the IRS, and other standard-setting bodies may issue additional guidance on how the provisions of the Tax Act and CARES Act will be applied or otherwise administered, and additional accounting guidance or interpretations may be issued in the future that is different from our current interpretation. As another example, the U.S.
Department of Treasury, the Internal Revenue Service, or the IRS, and other standard-setting bodies may issue additional guidance on how the provisions of the Tax Act and CARES Act will be applied or otherwise administered, and additional accounting guidance or interpretations may be issued in the future that is different from our current interpretation.
The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations, or capital commitments; • changes in stock market valuations and operating performance of other healthcare and technology companies generally, or those in our industry in particular; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our Class A common stock, including sales by certain affiliates of Jeff Tangney, Emergence Capital Partners II, L.P., or Emergence Capital Partners, InterWest X, L.P. or InterWest Partners, or our executive officers and directors; • lawsuits threatened or filed against us; • anticipated or actual changes in laws, regulations, or government policies applicable to our business; • changes in our capital structure, such as future issuances of debt or equity securities; • short sales, hedging, and other derivative transactions involving our capital stock; • general economic conditions in the United States; • “flash crashes,” “freeze flashes,” or other glitches that disrupt trading on the securities exchange on which we are listed; • other events or factors, including those resulting from war (including the recent conflict in Ukraine), pandemics (including the COVID-19 pandemic), incidents of terrorism, or responses to these events; and • the other factors described in the sections of this Annual Report on Form 10-K titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” The stock market has recently experienced extreme price and volume fluctuations.
The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations, or capital commitments; • changes in stock market valuations and operating performance of other healthcare and technology companies generally, or those in our industry in particular; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our Class A common stock, including sales by certain affiliates of Jeff Tangney, Emergence Capital Partners II, L.P., or Emergence Capital Partners, or our executive officers and directors; • lawsuits threatened or filed against us; • anticipated or actual changes in laws, regulations, or government policies applicable to our business; • changes in our capital structure, such as future issuances of debt or equity securities; • short sales, hedging, and other derivative transactions involving our capital stock; • general economic conditions in the United States, including inflation and the interest rate environment and the impact of any U.S. federal government debt default due to a failure to increase the debt ceiling; • “flash crashes,” “freeze flashes,” or other glitches that disrupt trading on the securities exchange on which we are listed; • other global economic or political events or factors, including those resulting from war, pandemics, incidents of terrorism, or responses to these events; and • the other factors described in the sections of this Annual Report on Form 10-K titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” The stock market has recently experienced extreme price and volume fluctuations.
Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, the fair values of acquired intangible assets and goodwill, the useful lives of long-lived assets, the valuation of the Company’s common stock and stock-based awards, and deferred income taxes.
Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, the fair values of acquired intangible assets and goodwill, the useful lives of long-lived assets, the valuation of the Company’s common stock and stock-based awards, fair value of contingent earn-out consideration, and deferred income taxes.
However, regulatory authorities or other parties, including our providers, may assert that we are engaged in the corporate practice of medicine or that our contractual arrangements with our provider customers constitute unlawful fee splitting.
However, regulatory authorities or other parties, including our providers, may assert that we are engaged in the corporate practice of medicine or that our contractual 37 Table of Content s arrangements with our provider customers constitute unlawful fee splitting.
We face significant competition across different aspects of our business, and we expect such competition to increase. Our industry and the markets we serve are evolving rapidly and becoming increasingly competitive. Larger and more established companies may focus on our markets and could directly compete with us.
We expect to face increasing competition in the market for our solutions. We face significant competition across different aspects of our business, and we expect such competition to increase. Our industry and the markets we serve are evolving rapidly and becoming increasingly competitive. Larger and more established companies may focus on our markets and could directly compete with us.
All of the shares of Class A common stock issuable upon the exercise of stock options and the shares reserved for future issuance under our equity compensation plans have been registered for public resale under the Securities Act of 1933, as amended, or Securities Act.
All of the shares of Class A common stock issuable upon the exercise of stock options and the shares reserved for future issuance under our equity compensation plans have been registered for public resale under the Securities Act.
In addition to Data Protection Laws, we are or may be subject to the terms of our internal and external policies, representations, publications, frameworks, self-regulatory standards, and industry certification commitments (collectively, Privacy Policies), and contractual obligations to third parties related to privacy, data protection, and information security (collectively, Data Protection Obligations), including the Payment Card Industry Data Security Standards (PCI-DSS), the rules imposed by credit card brands (e.g., VISA and Mastercard), and Security Organization Control 2 certification commitments.
In addition to Data Protection Laws, we are or may be subject to the terms of our internal and external policies, representations, publications, frameworks, self-regulatory standards, and industry certification commitments (collectively, “Privacy Policies”), and contractual obligations to third parties related to privacy, data protection, and information security (collectively, “Data Protection Obligations”), including the Payment Card Industry Data Security Standards (“PCI-DSS”), the rules imposed by credit card brands (e.g., VISA and Mastercard), and Security Organization Control 2 certification commitments.
Moreover, any issued patents we obtain may not provide us with a competitive advantage and, as with any technology, competitors may be able to develop similar or superior technologies to our own, now or in the future. In addition, due to a recent U.S.
Moreover, any issued patents we obtain may not provide us with a competitive advantage and, as with any technology, competitors may be able to develop similar or superior technologies to our own, now or in the future.
Any of these factors could cause our revenue growth to decline and may adversely affect our margins and profitability. Failure to continue our revenue growth or margin improvement could have a material adverse effect on our business, financial condition, and results of operations.
Any of these factors could cause our revenue growth to decline and may adversely affect our margins and profitability. Failure to grow our revenue or improve our margins could have a material adverse effect on our business, financial condition, and results of operations.
Supreme Court case, it has become increasingly difficult to obtain and assert patents relating to software or business methods, as many such patents have been invalidated for being too abstract to constitute patent-eligible subject matter.
In addition, it has become increasingly difficult to obtain and assert patents relating to software or business methods, as many such patents have been invalidated for being too abstract to constitute patent-eligible subject matter.
There can also 24 be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. In addition, varying parts of our workforce are currently working remotely on a part or full time basis.
There can also be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. In addition, a substantial portion of our workforce is currently working remotely on a part- or full-time basis.
The sudden loss of any of our largest customers, or the renegotiation of any of our largest customer contracts could have a significant impact on our revenue, the growth rate of our revenue, our reputation, and our ability to obtain new customers.
The sudden loss of any of our largest customers or the renegotiation of any of our largest customer contracts, either directly or through marketing agencies, could have a significant impact on our revenue, the growth rate of our revenue, our reputation, and our ability to obtain new customers.
Because of the ten-to-one voting ratio between our Class B common stock and Class A common stock, the holders of our Class B common stock collectively will continue to control a substantial majority of the combined voting power of our common stock and therefore, assuming no material sales of such shares, will be able to control all matters submitted to our stockholders for approval until ten-years from the date of the Final Prospectus, filed on Form 424(B)(4) June 25, 2021, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction.
Because of the ten-to-one voting ratio between our Class B common stock and Class A common stock, the holders of our Class B common stock collectively will continue to control a substantial majority of the combined voting power of our common stock and therefore, assuming no material sales of such shares, will be able to control all matters submitted to our stockholders for approval until ten years from the date the Company filed its final prospectus with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, or the Securities Act, on June 25, 2021, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction.
We collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, and share (collectively, Process, or Processing) sensitive, confidential, and proprietary information (collectively, Sensitive Information) in connection with providing our services.
We collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, and share (collectively, “Process”, or “Processing”) sensitive, confidential, and proprietary information (collectively, “Sensitive Information”) in connection with providing our services.
This could increase our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions. Any of the foregoing could have a material adverse effect on us. We rely on network and mobile infrastructure and our ability to maintain and scale our business and maintain competitiveness.
This could increase our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions. Any of the foregoing could have a material adverse effect on us. We rely on evolving technologies, including network and mobile infrastructure, as well as our own capabilities, to maintain and scale our business and maintain competitiveness.
Further, we cannot predict the likelihood, nature, or extent of health reform initiatives that may arise from future legislation or administrative action, particularly as a result of the new Presidential administration. The introduction of new solutions may 39 require us to comply with additional, yet undetermined, laws and regulations.
Further, we cannot predict the likelihood, nature, or extent of health reform initiatives that may arise from future legislation or administrative action, particularly following any changes in the Presidential administration. The introduction of new solutions may require us to comply with additional, yet undetermined, laws and regulations.
Should one or more of our significant customers or agencies declare bankruptcy, be declared insolvent, or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, this could adversely affect our ongoing revenue, the collectability of our accounts receivable, and affect our bad debt reserves and net income. 17 We expect to face increasing competition in the market for our solutions.
Should one or more of our significant customers or agencies declare bankruptcy, be declared insolvent, or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, this could adversely affect our ongoing revenue, the collectability of our accounts receivable, and affect our bad debt reserves and net income.
Some of the important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include: • our ability to increase sales of our solutions to new customers and expand sales of additional solutions to our existing customers; • the extent to which existing customers renew their agreements with us and the timing and terms of those renewals; • the termination or renegotiation by our significant customers of their agreements with us; • the entrance of new competitors in our market whether by established companies or new companies; • changes in our pricing policies or those of our competitors; • the cost of investing in our technology infrastructure, which may be greater than we anticipate; • our ability to maintain or increase our member base and member engagement; • disruptions or outages in our website availability, actual or perceived breaches of privacy, and compromises of our member data; and • general industry and macroeconomic conditions including the impact of the COVID-19 pandemic on the global economy and the deterioration in labor markets, which would adversely impact sales of our Hiring Solutions, or economic growth that does not lead to job growth.
Some of the important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include: • our ability to increase sales of our solutions to new customers and expand sales of additional solutions to our existing customers; • the extent to which existing customers renew their agreements with us and the timing and terms of those renewals; • the termination or renegotiation by our significant customers of their agreements with us; • the entrance of new competitors in our market whether by established companies or new companies; • changes in our pricing policies or those of our competitors; 20 Table of Content s • the cost of investing in our technology infrastructure, which may be greater than we anticipate; • our ability to maintain or increase our member base and member engagement; • disruptions or outages in our website availability, actual or perceived breaches of privacy, and compromises of our member data; and • general industry and macroeconomic conditions which would adversely impact sales.
If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.
If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed. Our reputation and/or business could be negatively impacted by ESG matters and/or other reporting of such matters.
We calculate certain operational metrics using internal systems and tools and do not independently verify such metrics. Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We present certain operational metrics herein, including size of our network of medical professionals and other metrics.
Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We present certain operational metrics herein, including size of our network of medical professionals and other metrics.
In the event of a major earthquake, hurricane, fire, cyber-attack, war (including the recent conflict in Ukraine), terrorist attack, disease (including the COVID-19 pandemic), power loss, telecommunications failure, or other catastrophic events, we may be unable to continue our operations, in part or in whole, and may endure reputational harm, breaches of data security, and loss of critical data, all of which could harm our business, results of operations, and financial condition.
In the event of a major earthquake, hurricane, fire, cyber-attack, major political disruption, any U.S. federal government debt default due to a failure to increase the debt ceiling, war (including the ongoing conflict in Ukraine), terrorist attack, disease (including the COVID-19 pandemic or any other pandemic or epidemic), power loss, telecommunications failure, or other catastrophic events, we may be unable to continue our operations, in part or in whole, and may endure reputational harm, breaches of data security, and loss of critical data, all of which could harm our business, results of operations, and financial condition.
In the fiscal year ended March 31, 2022, or fiscal 2022, and fiscal 2021, our revenue grew by 66% and 78%, respectively, as compared to the revenue from the prior fiscal years. In addition, our full-time equivalent employee headcount has grown from 713 as of March 31, 2021 to 887 as of March 31, 2022.
In fiscal 2023 and 2022, our revenue grew by 22% and 66%, respectively, as compared to the prior years. In addition, our full-time equivalent employee headcount has grown from 887 as of March 31, 2022 to 977 as of March 31, 2023.
If we fail to successfully undertake these activities, our business and operating results could be adversely affected. 19 The telehealth market is immature and volatile, and if it does not develop, or if it develops more slowly than we expect, if it encounters negative publicity, or if we are not successful in demonstrating and promoting the benefits of our solutions, the growth of our business will be harmed.
The telehealth market is immature and volatile, and if it does not develop, or if it develops more slowly than we expect, if it encounters negative publicity, or if we are not successful in demonstrating and promoting the benefits of our solutions, the growth of our business will be harmed.
As of March 31, 2022, we accumulated $124.1 million and $97.1 million of federal and state net operating loss carryforwards, or NOLs to reduce future taxable income, portions of which will begin to expire in 2027.
As of March 31, 2023, we accumulated $15.3 million of state and no federal net operating loss carryforwards, or NOLs, to reduce future taxable income, portions of which will begin to expire in 2035.
As a public company, we will incur significant legal, accounting, insurance, and other expenses. Compliance with these reporting requirements and other rules of the SEC and the rules of the New York Stock Exchange will increase our legal and financial compliance costs and make some activities more time-consuming and costly.
As a public company, we will continue to incur significant legal, accounting, insurance, and other expenses, which we expect to further increase now that we are no longer an “emerging growth company.” Compliance with these reporting requirements and other rules of the SEC and the rules of the New York Stock Exchange have and will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly.
Our ability to limit our liabilities by contract or through insurance may be ineffective or insufficient to cover our future liabilities. We attempt to limit, by contract, our liability for damages arising from our negligence, errors, mistakes, or security breaches.
We are currently assessing the potential impact of these legislative changes on our business. Our ability to limit our liabilities by contract or through insurance may be ineffective or insufficient to cover our future liabilities. We attempt to limit, by contract, our liability for damages arising from our negligence, errors, mistakes, or security breaches.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in San Francisco, California and consists of approximately 9,197 square feet of space under a lease that expires on December 31, 2023. We also lease additional facilities in Dallas, Texas. We lease all of our facilities and do not own any real property.
Biggest changeItem 2. Properties Our corporate headquarters is located in San Francisco, California and consists of approximately 9,197 square feet of space under a lease that expires on December 31, 2023. We also lease office space in Irving, Texas. We lease all of our facilities and 42 Table of Content s do not own any real property.
Legal Proceedings For discussion around our legal proceedings, please refer to Note 13—Commitments and Contingencies included in Part II, Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. 44 PART II
Legal Proceedings For discussion around our legal proceedings, please refer to Note 14—Commitments and Contingencies included in Part II, Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. 43 Table of Content s PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe stock price performance shown in the graph represents past performance and should not be considered an indication of future stock price performance. Item 6. [Reserved] 46
Biggest changeThe stock price performance shown in the graph represents past performance and should not be considered an indication of future stock price performance. 45 Table of Content s Item 6. [Reserved] 46 Table of Content s
The graph below shows the cumulative total return to our stockholders between June 24, 2021 (the date that our Class A common stock commenced trading on the NYSE) through March 31, 2022 in comparison to the S&P 500 Index and the S&P 45 500 Information Technology Index.
The graph below shows the cumulative total return to our stockholders between June 24, 2021 (the date that our Class A common stock commenced trading on the NYSE) through March 31, 2023 in comparison to the S&P 500 Index and the S&P 500 Information Technology Index.
Securities Authorized for Issuance under Equity Compensation Plans Refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” included in Part III, Item 12 of this Annual Report on Form 10-K for more information regarding securities authorized for issuance.
Securities Authorized for Issuance under Equity Compensation Plans Refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” included in Part III, Item 12 of this Annual Report on Form 10-K for more information regarding securities authorized for issuance. Recent Sales of Unregistered Equity Securities None.
There is no established public trading market for our Class B common stock. Holders of Record As of May 20, 2022, there were 314 stockholders of record of our Class A common stock and 86 stockholders of record for our Class B common stock.
There is no established public trading market for our Class B common stock. Holders of Record As of May 23, 2023, there were 437 stockholders of record of our Class A common stock and 70 stockholders of record for our Class B common stock.
Removed
Recent Sales of Unregistered Equity Securities There were no unregistered sales of equity securities which have not been previously disclosed in a quarterly report on Form 10-Q and there have been no unregistered sales of equity securities since the filing of our last quarterly report on Form 10-Q filed with the SEC, February 9, 2022.
Added
There has been no material change in the planned use of proceeds from our IPO from those disclosed in the Final Prospectus. 44 Table of Content s Issuer Purchases of Equity Securities The following table presents information with respect to the repurchases of our Class A common stock during the three months ended March 31, 2023: Period Total Number of Shares Repurchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) January 1 - 31, 2023 — $ — — $ 70,000 February 1 - 28, 2023 — $ — — $ 70,000 March 1 - 31, 2023 523,647 $ 30.59 523,647 $ 53,981 Total 523,647 523,647 _______________ (1) On October 28, 2022, the Company’s board of directors authorized a program to repurchase up to $70.0 million of the Company’s Class A common stock.
Removed
There has been no material change in the planned use of proceeds from our IPO from those disclosed in the Final Prospectus. Issuer Purchases of Equity Securities None.
Added
The repurchases could be executed from time to time for a period of 12 months through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. As of March 31, 2023, $54.0 million remained available and authorized for repurchase.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdjusted EBITDA and adjusted EBITDA margin increased year-over-year primarily due to higher net income as a result of increased subscription revenue. 48 A reconciliation of net income to adjusted EBITDA and adjusted EBITDA margin is set forth below along with net income margin: Fiscal Year Ended March 31, 2022 2021 2020 (unaudited) (in thousands, except percentages) Net income $ 154,783 $ 50,210 $ 29,737 Adjusted to exclude the following: Acquisition and other related expenses 254 496 1,158 Stock-based compensation 31,442 7,252 2,353 Depreciation and amortization 5,040 3,702 900 Provision for (benefit from) income taxes (40,778) 7,559 (6,223) Other income, net (469) (4,466) (1,351) Adjusted EBITDA $ 150,272 $ 64,753 $ 26,574 Revenue $ 343,548 $ 206,897 $ 116,388 Net income margin 45 % 24 % 26 % Adjusted EBITDA margin 44 % 31 % 23 % Free Cash Flow Free cash flow is a key performance measure that our management uses to assess our overall performance.
Biggest changeOther companies, including other companies in our industry, may not use these measures or may calculate these measures differently than as presented in this Annual Report on Form 10-K, limiting their usefulness as comparative measures. 54 Table of Content s The following table presents a reconciliation of net income to adjusted EBITDA, adjusted EBITDA margin, and net income margin (in thousands, except percentages): Fiscal Year Ended March 31, 2023 2022 2021 Net income $ 112,818 $ 154,783 $ 50,210 Adjusted to exclude the following: Acquisition and other related expenses 30 254 496 Stock-based compensation 47,834 31,442 7,252 Depreciation and amortization 10,283 5,040 3,702 Provision for (benefit from) income taxes 20,338 (40,778) 7,559 Change in fair value of contingent earn-out consideration liability 728 — — Other income, net (8,048) (469) (4,466) Adjusted EBITDA $ 183,983 $ 150,272 $ 64,753 Revenue $ 419,052 $ 343,548 $ 206,897 Net income margin 27 % 45 % 24 % Adjusted EBITDA margin 44 % 44 % 31 % Free Cash Flow Free cash flow is a key performance measure that our management uses to assess our overall performance.
We expect our gross margin to remain relatively steady over the near term, although our quarterly gross margin is expected to fluctuate from period to period depending on the interplay of these and other factors. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses.
We expect our gross margin to remain relatively steady over the near term, although our quarterly gross margin is expected to fluctuate from period to period depending on the interplay of these and other factors. Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
Net cash provided by financing activities Cash provided by financing activities was $560.4 million for the fiscal year ended March 31, 2022, which primarily consisted of $553.9 million of proceeds from the issuance of common stock upon our initial public offering after deducting underwriting fees and commissions, $12.6 million of net proceeds from the exercise of stock options, and $1.4 million of proceeds from the issuance of common stock in connection with the employee stock purchase plan.
Cash provided by financing activities was $560.4 million for the fiscal year ended March 31, 2022, which primarily consisted of $553.9 million of proceeds from the issuance of common stock upon our initial public offering after deducting underwriting fees and commissions, $12.6 million of net proceeds from the exercise of stock options, and $1.4 million of proceeds from the issuance of common stock in connection with the employee stock purchase plan.
Accordingly, we believe the below policies are the most critical to aid in fully understanding and evaluating our consolidated financial statements. 55 Revenue Recognition Marketing Solutions customers may purchase a subscription for a specific module to be used over a defined period of time. These customers may purchase more than one module with either the same or different subscription periods.
Accordingly, we believe the below policies are the most critical to aid in fully understanding and evaluating our consolidated financial statements. Revenue Recognition Marketing Solutions customers may purchase a subscription for a specific module to be used over a defined period of time. These customers may purchase more than one module with either the same or different subscription periods.
Net cash used in investing activities Cash used in investing activities was $640.6 million for the fiscal year ended March 31, 2022, which primarily consisted of purchases of marketable securities of $1.3 billion, partially offset by proceeds from the sale of marketable securities of $633.8 million, proceeds from the maturities of marketable securities of $47.9 million, and capitalization of internal-use software development costs of $3.8 million.
Cash used in investing activities was $640.6 million for the fiscal year ended March 31, 2022, which primarily consisted of purchases of marketable securities of $1.3 billion, partially offset by proceeds from the sale of marketable securities of $633.8 million, proceeds from the maturities of marketable securities of $47.9 million, and capitalization of internal-use software development costs of $3.8 million.
These decreases were partially offset by an increase of $8.7 million in accounts payable, accrued expenses and other liabilities, which was primarily a result of increased accrued payroll, bonus, 54 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.
These decreases were partially offset by an increase of $8.7 million in accounts payable, accrued expenses and other liabilities, which was primarily a result of increased accrued payroll, bonus, 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.
Free cash flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as cash provided by operating activities.
Free cash flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities.
Gross profit and gross margin has been and will continue to be affected by a number of factors, including the timing of our acquisition of new customers and sa les of additional solutions to our existing customer s , the timing and extent of our investments in our operations, cloud hosting costs, growth in our customer success team, and the timing of amortization of internal-use software development costs.
Gross profit and gross margin has been and will continue to be affected by a number of factors, including the timing of our acquisition of new customers and sa les of additional solutions to existing customer s , the timing and extent of our investments in our operations, cloud hosting costs, growth in our customer success team, and the timing of amortization of internal-use software development costs and deferred contract costs.
We also support physicians in their day-to-day practice of medicine with mobile-friendly and easy-to-use clinical workflow tools such as voice and video dialer, secure messaging, and digital faxing. Our business model has delivered high revenue growth at scale, while increasing profitability.
We also support physicians in their day-to-day practice of medicine with mobile-friendly and easy-to-use clinical workflow tools such as voice and video dialer, secure messaging, and digital faxing. Our business model has delivered high revenue growth at scale with profitability.
General and Administrative General and administrative expense is primarily comprised of personnel-related expenses associated with our executive, finance, legal, human resources, information technology, and facilities employees. General and administrative expense includes fees for third-party legal and accounting services, recruitment fees, information technology and software-related costs, and allocated overhead.
General and Administrative General and administrative expense is primarily comprised of personnel-related expenses associated with our executive, finance, legal, human resources, information technology, and facilities employees. General and administrative expense includes fees for third-party legal and accounting services, insurance expense, information technology and software-related costs, and allocated overhead.
Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, and the timing and extent of spending to support research and development efforts.
Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, timing of share repurchases, and the timing and extent of spending to support research and development efforts.
This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, as described under the heading “Special Note About Forward-Looking Statements” in this Annual Report on Form 10-K.
This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, as described under the heading “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.
We expect that general and administrative expense will increase on an absolute dollar basis as we incur compliance costs associated with being a publicly-traded company, including legal, audit, and consulting fees. Other Income, Net Other income, net consists primarily of administrative fees and penalties and interest income earned on our cash equivalents and marketable securities.
We expect that general and administrative expense will increase on an absolute dollar basis as we incur compliance costs associated with being a publicly-traded company, including legal, audit, and consulting fees. Other Income, Net Other income, net consists primarily of investment income earned on our cash equivalents and marketable securities.
Our cloud-based platform provides our members with tools specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers. Doximity membership is free for physicians.
Our cloud-based platform provides our members with tools specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, monitor their work schedules, and manage their careers. Doximity membership is free for physicians.
These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business.
These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business.
Under the fair value recognition provisions of this guidance, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, net of estimated forfeitures, in the statement of operations over the requisite service period, which is generally the vesting period of the respective award.
Under the fair value recognition provisions of this guidance, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, net of estimated forfeitures, in the consolidated statements of operations over the requisite service period, which is generally the vesting period of the respective award.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 31, 2022 compared to the fiscal year ended March 31, 2021 is presented below.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 31, 2023 compared to the fiscal year ended March 31, 2022 is presented below.
For the fiscal years ended March 31, 2022, 2021 and 2020, we generated adjusted EBITDA of $150.3 million, $64.8 million, and $26.6 million, respectively. We have accomplished this while focusing on our core mission to help every physician be more productive and provide better care for their patients.
For the fiscal years ended March 31, 2023, 2022 and 2021, we generated adjusted EBITDA of $184.0 million, $150.3 million, and $64.8 million, respectively. We have accomplished this while focusing on our core mission to help every physician be more productive and provide better care for their patients.
We capitalize the sales commissions that are considered to be 50 incremental and recoverable costs of obtaining a contract with a customer. These sales commissions are amortized over the period of benefit. We expect sales and marketing expense to increase and to be our largest expense on an absolute basis.
We capitalize sales incentive compensation that is considered to be incremental and recoverable costs of obtaining a contract with a customer. These sales incentive compensation costs are amortized over the period of benefit. We expect sales and marketing expense to increase and to be our largest expense on an absolute basis.
To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
To the extent that there are 55 Table of Content s differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
Our cost of revenue also includes the amortization of internal-use software development costs and deferred contract costs, editorial and other content-related expenses, and allocated overhead. Cost of revenue is also driven by the growth of our member network and utilization of our telehealth tools.
Our cost of revenue also includes the amortization of internal-use software development costs, editorial and other content-related expenses, and allocated overhead. Cost of revenue is driven by the 48 Table of Content s growth of our member network and utilization of our telehealth tools.
Our customers purchase a subscription to Marketing Solutions, either directly or through marketing agencies, for the ability to share tailored content on the Doximity platform via a variety of modules for defined time 49 periods.
Components of Results of Operations Revenue Marketing Solutions. Our customers purchase a subscription to Marketing Solutions, either directly or through marketing agencies, for the ability to share tailored content on the Doximity platform via a variety of modules for defined time periods.
Our free cash flow may not be comparable to similarly titled measures of other companies because they may not calculate free cash flow in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Components of Results of Operations Revenue Marketing Solutions.
Our free cash flow may not be comparable to similarly titled measures of other companies because they may not calculate free cash flow in the same manner as we calculate the measure, limiting its usefulness as a comparative measure.
The number of customers with trailing 12-month, or TTM, product revenue greater than $100,000 is calculated by counting the number of customers that contributed more than $100,000 in subscription revenue in the TTM period. The number of customers with TTM subscription-based revenue of at least $100,000 is a key indicator of the scale of our business.
The number of customers with trailing 12-month (“TTM”) subscription revenue greater than $100,000 is a key indicator of the scale of our business, and is calculated by counting the number of customers that contributed more than $100,000 in subscription revenue in the TTM period.
This consisted of net income of $154.8 million, adjusted for non-cash items of $12.1 million and a net decrease in operating assets and liabilities of $40.3 million.
This consisted of net income of $154.8 million, adjusted for non-cash items of $12.1 million and a net outflow in operating assets and liabilities of 53 Table of Content s $40.3 million.
We generally bill customers a portion of the contract upon contract execution and then bill throughout the remainder of the contract based on various time-based milestones. Generally, we bill in advance of revenue recognition and record unbilled revenue on the consolidated balance sheets within prepaid expenses and other current assets when revenue is recognized in advance of billings.
We generally bill customers a portion of the contract upon contract execution and then bill throughout the remainder of the contract based on various time-based milestones. Generally, we bill in advance of revenue recognition. When revenue is recognized in advance of billings, we record unbilled revenue.
Some of the limitations of free cash flow are that it may not properly reflect capital commitments to creators that need to be paid in the future or future contractual commitments that have not been realized in the current period.
Some of the limitations of free cash flow are that it may not properly reflect future contractual commitments that have not been realized in the current period.
For the fiscal years ended March 31, 2022, 2021 and 2020, we recognized revenue of $343.5 million, $206.9 million, and $116.4 million, respectively, representing year-over-year growth rates of 66% and 78%, respectively. Our net income was $154.8 million, $50.2 million, and $29.7 million for the fiscal years ended March 31, 2022, 2021, and 2020, respectively.
For the fiscal years ended March 31, 2023, 2022 and 2021, we recognized revenue of $419.1 million, $343.5 million, and $206.9 million, respectively, representing year-over-year growth rates of 22% and 66%, respectively. Our net income was $112.8 million, $154.8 million, and $50.2 million for the fiscal years ended March 31, 2023, 2022, and 2021, respectively.
Adjusted EBITDA is a key measure we use to assess our financial performance and is also used for internal planning and forecasting purposes. We believe adjusted EBITDA is helpful to investors, analysts, and other interested parties because it can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.
We believe adjusted EBITDA is helpful to investors, analysts, and other interested parties because it can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.
Our net revenue retention rate compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction, and churn.
Our net revenue retention rate compares our subscription revenue from the same set of customers across comparable periods, and reflects customer renewals, expansion, contraction, and churn. Our net revenue retention rate is directly tied to our revenue growth rate and thus fluctuates as that growth rate fluctuates.
As of March 31, 2022, our principal sources of liquidity were cash and cash equivalents and marketable securities of $798.1 million. Our marketable securities consist of U.S. government and agency securities, corporate notes and bonds, commercial paper, asset-backed securities, and sovereign bonds.
As of March 31, 2023, our principal sources of liquidity were cash and cash equivalents 52 Table of Content s and marketable securities of $841.0 million. Our marketable securities consist of U.S. government and agency securities, corporate notes and bonds, commercial paper, certificates of deposit, asset-backed securities, and sovereign bonds.
Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. The number of customers with at least $100,000 of revenue has grown steadily in recent years as we have engaged new customers and expanded within existing ones. This cohort of customers accounted for approximately 88% of our revenue in fiscal 2022.
Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity, and we present our total customer count for historical periods reflecting these adjustments. 47 Table of Content s The number of customers with at least $100,000 of revenue has grown steadily in recent years as we have engaged new customers and expanded within existing ones.
Forfeitures are estimated based upon our historical experience and we revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Determining the grant-date fair value of stock options requires judgment. We estimate the fair value of restricted stock units, or RSUs, at our stock price on the grant date.
Forfeitures are estimated based upon our historical experience and we revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Determining the grant-date fair value of stock options, warrants, and purchase rights under the employee stock purchase plan, or ESPP, requires judgment.
Fiscal Year Ended March 31, 2022 2021 2020 (in thousands) Revenue $ 343,548 $ 206,897 $ 116,388 Cost of revenue (1) 39,787 31,196 14,900 Gross profit 303,761 175,701 101,488 Operating expenses: Research and development (1) 62,350 43,873 32,435 Sales and marketing (1) 92,129 62,033 39,448 General and administrative (1) 35,746 16,492 7,442 Total operating expenses 190,225 122,398 79,325 Income from operations 113,536 53,303 22,163 Other income, net 469 4,466 1,351 Income before income taxes 114,005 57,769 23,514 Provision for (benefit from) income taxes (40,778) 7,559 (6,223) Net income $ 154,783 $ 50,210 $ 29,737 _______________ (1) Costs and expenses include stock-based compensation expenses as follows: Fiscal Year Ended March 31, 2022 2021 2020 (in thousands) Cost of revenue $ 4,979 $ 600 $ 173 Research and development 7,065 1,975 710 Sales and marketing 8,108 1,998 847 General and administrative 11,290 2,679 623 Total stock-based compensation expense $ 31,442 $ 7,252 $ 2,353 51 Fiscal Year Ended March 31, 2022 2021 2020 (percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 12 15 13 Gross profit 88 85 87 Operating expenses: Research and development 18 21 28 Sales and marketing 27 30 34 General and administrative 10 8 6 Total operating expenses 55 59 68 Income from operations 33 26 19 Other income, net — 2 1 Income before income taxes 33 28 20 Provision for (benefit from) income taxes (12) 4 (6) Net income 45 % 24 % 26 % Comparison of the Years Ended March 31, 2022 and 2021 Revenue Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Revenue $ 343,548 $ 206,897 $ 136,651 66 % Revenue for the fiscal year ended March 31, 2022 increased $136.7 million as compared to the fiscal year ended 2021.
Fiscal Year Ended March 31, 2023 2022 2021 (in thousands) Revenue $ 419,052 $ 343,548 $ 206,897 Cost of revenue (1) 53,490 39,787 31,196 Gross profit 365,562 303,761 175,701 Operating expenses: Research and development (1) 80,186 62,350 43,873 Sales and marketing (1) 123,523 92,129 62,033 General and administrative (1) 36,745 35,746 16,492 Total operating expenses 240,454 190,225 122,398 Income from operations 125,108 113,536 53,303 Other income, net 8,048 469 4,466 Income before income taxes 133,156 114,005 57,769 Provision for (benefit from) income taxes 20,338 (40,778) 7,559 Net income $ 112,818 $ 154,783 $ 50,210 _______________ (1) Costs and expenses include stock-based compensation expense as follows: Fiscal Year Ended March 31, 2023 2022 2021 (in thousands) Cost of revenue $ 9,634 $ 4,979 $ 600 Research and development 12,583 7,065 1,975 Sales and marketing 16,939 8,108 1,998 General and administrative 8,678 11,290 2,679 Total stock-based compensation expense $ 47,834 $ 31,442 $ 7,252 Fiscal Year Ended March 31, 2023 2022 2021 (percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 13 12 15 Gross profit 87 88 85 Operating expenses: Research and development 19 18 21 Sales and marketing 29 27 30 General and administrative 9 10 8 Total operating expenses 57 55 59 Income from operations 30 33 26 Other income, net 2 — 2 Income before income taxes 32 33 28 Provision for (benefit from) income taxes 5 (12) 4 Net income 27 % 45 % 24 % 50 Table of Content s Comparison of the Fiscal Years Ended March 31, 2023 and 2022 Revenue Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Revenue $ 419,052 $ 343,548 $ 75,504 22 % Revenue for the fiscal year ended March 31, 2023 increased $75.5 million as compared to the fiscal year ended 2022.
The increase was primarily driven by a $127.0 million increase in subscription revenue. Of the increase in subscription revenue, $16.8 million was driven by the addition of new subscription customers 1 and $109.0 million was due to the expansion of existing customers.
The increase was primarily driven by a $70.4 million increase in subscription revenue. Of the increase in subscription revenue, $15.3 million was driven by the addition of new subscription customers 1 and $55.1 million was due to the expansion of existing customers.
General and administrative Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) General and administrative $ 35,746 $ 16,492 $ 19,254 117 % General and administrative expense for the fiscal year ended March 31, 2022 increased $19.3 million as compared to the fiscal year ended 2021.
General and administrative Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) General and administrative $ 36,745 $ 35,746 $ 999 3 % General and administrative expense for the fiscal year ended March 31, 2023 increased $1.0 million as compared to the fiscal year ended 2022.
Cash Flows Fiscal Year Ended March 31, 2022 2021 (in thousands) Net cash provided by operating activities $ 126,575 $ 82,973 Net cash used in investing activities $ (640,574) $ (70,417) Net cash provided by financing activities $ 560,415 $ 5,407 Net cash provided by operating activities Cash provided by operating activities was $126.6 million for the fiscal year ended March 31, 2022.
Cash Flows Fiscal Year Ended March 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 179,602 $ 126,575 Net cash used in investing activities $ (59,923) $ (640,574) Net cash provided by (used in) financing activities $ (74,461) $ 560,415 Net cash provided by operating activities Cash provided by operating activities was $179.6 million for the fiscal year ended March 31, 2023.
This change was primarily driven by excess tax benefit on stock option exercise and disqualifying disposition activities following our initial public offering in June 2021. ___________________ NM: Percentage not meaningful. Liquidity and Capital Resources Since inception, we have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers.
This change was primarily driven by a decrease in stock option activities resulting in a decrease in tax deductions and research and development tax credits. ___________________ NM: Percentage not meaningful. Liquidity and Capital Resources Since inception, we have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers.
Subscriptions to Marketing Solutions include the following contractual arrangements: • Subscriptions for specific modules delivered on a monthly basis to a consistent number of targeted Doximity members during the subscription period.
Unbilled revenue is recorded on the consolidated balance sheets within prepaid expenses and other current assets. Subscriptions to Marketing Solutions include the following contractual arrangements: • Subscriptions for specific modules delivered on a monthly basis to a consistent number of targeted Doximity members during the subscription period.
Sales and Marketing Sales and marketing expense is primarily comprised of personnel-related expenses , sales commissions, travel, and other event expenses. Sales and marketing expense also includes costs for third-party services and contractors, information technology and software-related costs, and allocated overhead.
Sales and Marketing Sales and marketing expense is primarily comprised of personnel-related expenses , sales incentive compensation, travel, and other event expenses. Sales and marketing expense also includes costs for third-party services and contractors, information technology and software-related costs, allocated overhead, amortization of intangible assets, and change in fair value of contingent earn-out consideration liability.
We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ significantly from the estimates made by management.
The preparation of our financial statements also requires us to make estimates and assumptions that affect the amounts stated in the consolidated financial statements and accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ significantly from the estimates made by management.
We use the Black-Scholes option-pricing model to determine the fair value of stock options, warrants, purchase rights under the employee stock purchase plan, or ESPP. The determination of the grant-date fair value using the Black-Scholes model is affected by the fair value of our common stock and assumptions regarding a number of other complex and subjective variables.
The determination of the grant-date fair value using the Black-Scholes model is affected by the fair value of our common stock and assumptions regarding a number of other complex and subjective variables.
Adjusted EBITDA We define adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, and as further adjusted for acquisition and other related expenses, stock-based compensation expense, and other income, net. Net income margin represents net income as a percentage of revenue and adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.
Adjusted EBITDA We define adjusted EBITDA as net income before interest, income taxes, depreciation, and amortization, and as further adjusted for acquisition and other related expenses, stock-based compensation expense, change in fair value of contingent earn-out consideration liability, and other income, net.
Revenue for temporary placement services is recognized net of third-party contractor fees. For the fiscal year ended March 31, 2022, the revenue from temporary and permanent medical recruiting services was not significant to our total revenue.
For the fiscal years ended March 31, 2023, 2022, and 2021, the revenue from temporary and permanent medical recruiting services was not significant to our total revenue.
March 31, 2022 2021 2020 Number of customers with at least $100,000 of revenue 265 200 141 Net Revenue Retention Rate. Net revenue retention rate is calculated by taking the TTM subscription-based revenue from our customers that had revenue in the prior TTM period and dividing that by the total subscription-based revenue for the prior TTM period.
Net Revenue Retention Rate. Net revenue retention rate is calculated by taking the TTM subscription-based revenue from our customers that had revenue in the prior TTM period and dividing that by the total subscription-based revenue for the prior TTM period.
The increase in cost of revenue was primarily driven by a $4.2 million increase in personnel-related costs as a result of headcount growth of 36%, $2.6 million increase in expense from the U.S.
The increase in cost of revenue was primarily driven by a $5.4 million increase in personnel-related costs as a result of headcount growth of 24%, and a $5.2 million increase in expense related to the U.S. News partnership, of which $2.8 million related to the U.S. News Warrant granted in October 2021.
The increase in research and development expense was primarily driven by a $9.8 million increase in personnel-related costs as a result of headcount growth of approximately 26%. The increase was also driven by a $5.1 million increase in stock-based compensation primarily attributable to headcount growth and an increase in the weighted-average grant date fair values of our equity grants.
The increase in research and development expense was primarily driven by a $9.6 million increase in personnel-related costs as a result of headcount growth of approximately 12%. The increase was also driven by a $5.5 million increase in stock-based compensation primarily attributable to headcount growth and awards granted to existing employees.
We continue to maintain a valuation allowance related to specific net deferred tax assets where it is not more likely than not that the deferred tax assets will be realized, which includes California research and development credits and capital loss carryforwards.
We continue to maintain a valuation allowance related to specific net deferred tax assets where it is not more likely than not that the deferred tax assets will be realized, which includes California research and development credits, California alternative minimum tax credits, and capital loss carryforwards. 49 Table of Content s Results of Operations The following tables set forth our consolidated results of operations data and such data as a percentage of revenue for the periods presented.
Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recorded. 56 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.
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.
If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected. For further details regarding our cash requirements from noncancelable operating lease obligations and other contractual commitments, see Note 13—Commitments and Contingencies included in Part II, Item 8 of this Annual Report on Form 10-K.
For further details regarding our cash requirements from noncancelable operating lease obligations and other contractual commitments, see Note 14—Commitments and Contingencies and Note 15—Leases included in Part II, Item 8 of this Annual Report on Form 10-K.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 31, 2021 compared to the fiscal year ended March 31, 2020 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Final Prospectus dated June 23, 2021, filed with the SEC pursuant to Rule 424(b) under the Securities Act on June 25, 2021.
A discussion regarding our financial condition and results of operations for the fiscal year ended March 31, 2022 compared to the fiscal year ended March 31, 2021 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and filed with the SEC on May 27, 2022.
The overall increase in sales and marketing expense was due to the growth in our business, specifically driven by a $10.7 million increase in personnel-related costs due to headcount growth of 23% as well as a $5.4 million increase in incentive compensation due to increased sales activity.
The increase in sales and marketing expense was primarily driven by a $9.5 million increase in personnel-related costs due to headcount growth of 17%.
The following table presents a reconciliation of our free cash flow to the most comparable GAAP measure, net cash provided by operating activities, for each of the periods indicated: Fiscal Year Ended March 31, 2022 2021 2020 (in thousands) Net cash provided by operating activities $ 126,575 $ 82,973 $ 26,199 Purchases of property and equipment (1,912) (245) (285) Internal-use software development costs (3,785) (4,365) (3,959) Free cash flow $ 120,878 $ 78,363 $ 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 Although we believe free cash flow is a useful indicator of business performance, free cash flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.
The following table presents a reconciliation of our free cash flow to the most comparable GAAP measure, net cash provided by operating activities, for each of the periods indicated (in thousands): Fiscal Year Ended March 31, 2023 2022 2021 Net cash provided by operating activities $ 179,602 $ 126,575 $ 82,973 Purchases of property and equipment (1,701) (1,912) (245) Internal-use software development costs (4,483) (3,785) (4,365) Free cash flow $ 173,418 $ 120,878 $ 78,363 Other cash flow components: Net cash used in investing activities $ (59,923) $ (640,574) $ (70,417) Net cash provided by (used in) financing activities $ (74,461) $ 560,415 $ 5,407 Critical Accounting Policies and Estimates Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP.
Cost of revenue, gross profit and gross margin Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Cost of revenue $ 39,787 $ 31,196 $ 8,591 28 % Gross profit $ 303,761 $ 175,701 $ 128,060 73 % Gross margin 88 % 85 % Cost of revenue for the fiscal year ended March 31, 2022 increased $8.6 million as compared to the fiscal year ended 2021.
Cost of revenue, gross profit and gross margin Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Cost of revenue $ 53,490 $ 39,787 $ 13,703 34 % Gross profit $ 365,562 $ 303,761 $ 61,801 20 % Gross margin 87 % 88 % Cost of revenue for the fiscal year ended March 31, 2023 increased $13.7 million as compared to the fiscal year ended 2022.
We bill annually or quarterly ahead of the service period, or at the beginning of each month of service, and recognize revenue ratably over the contractual term. Through our acquisition of Curative Talent, completed in fiscal 2021, we also generate revenue from temporary and permanent medical recruiting services which we charge on an hourly-fee and placement-fee basis, respectively.
Through our acquisition of Curative Talent, completed in fiscal 2021, we also generate revenue from temporary and permanent medical recruiting services which we charge on an hourly-fee, and retainer and placement-fee basis, respectively. Revenue for temporary placement services is recognized net of third-party contractor fees.
These proceeds were partially offset by $4.0 million in payments for deferred offering costs and $2.7 million in payments from the repurchase and retirement of common stock.
These proceeds were partially offset by $4.0 million in payments for deferred offering costs and $2.7 million in payments from the repurchase and retirement of common stock. Non-GAAP Financial Measures We use adjusted EBITDA and free cash flow to measure our performance, identify trends, formulate financial projections, and make strategic decisions.
These increases were partially offset by an increase of $20.5 million in accounts receivable due to the growth of our business and the timing of collections and an increase of $9.4 million in deferred contract costs due to increased sales activity.
The net outflow from operating assets and liabilities was driven by a $26.2 million increase in accounts receivable due to the growth of our business and the timing of collections, an $8.5 million increase in deferred contract costs due to increased sales activity, and a $3.4 million increase in prepaid expenses and other assets.
Cash used in investing activities was $70.4 million for the fiscal year ended March 31, 2021, which primarily consisted of purchases of marketable securities of $78.9 million and cash paid for the acquisition of Curative Talent of $31.7 million, partially offset by proceeds from the maturities of marketable securities of $40.5 million.
Net cash used in investing activities Cash used in investing activities was $59.9 million for the fiscal year ended March 31, 2023, which primarily consisted of $190.6 million of marketable securities purchases, $53.5 million paid for the acquisition of AMiON, $4.5 million for internal-use software development costs, and $1.7 million for purchases of property and equipment.
The expansion of existing customers was primarily driven by average revenue per existing Marketing Solutions customer increasing by 60% as a result of adding new brands and service lines, growing existing brands and service lines, and upselling additional modules. The remaining change in subscription revenue was generated from Dialer Pro subscriptions for individuals and small practices and other non-recurring items.
The expansion of existing customers was primarily driven by average revenue per existing Marketing Solutions customer increasing by 21% as a result of adding new and growing existing brands and service lines. Approximately 93% of our revenue for the fiscal year ended March 31, 2023 was derived from subscription customers.
Sales and marketing Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Sales and marketing $ 92,129 $ 62,033 $ 30,096 49 % Sales and marketing expense for the fiscal year ended March 31, 2022 increased $30.1 million as compared to the fiscal year ended 2021.
Operating Expenses Research and development Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Research and development $ 80,186 $ 62,350 $ 17,836 29 % Research and development expense for the fiscal year ended March 31, 2023 increased $17.8 million as compared to the fiscal year ended 2022.
We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and internal-use software development costs.
We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and internal-use software development costs. Although we believe free cash flow is a useful indicator of business performance, free cash flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.
Approximately 93% of our revenue for the fiscal year ended March 31, 2022 was derived from subscription customers. The remaining increase in revenue was driven by an increase in medical recruiting services.
The remaining increase in revenue was driven by an increase in medical recruiting services.
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. 52 Operating Expenses Research and development Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Research and development $ 62,350 $ 43,873 $ 18,477 42 % Research and development expense for the fiscal year ended March 31, 2022 increased $18.5 million as compared to the fiscal year ended 2021.
In addition, there was a $1.9 million increase in third-party software costs as a result of increased research and development activities and a $1.1 million increase in employee events and travel-related expenses as compared to the prior period. 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. 51 Table of Content s Sales and marketing Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Sales and marketing $ 123,523 $ 92,129 $ 31,394 34 % Sales and marketing expense for the fiscal year ended March 31, 2023 increased $31.4 million as compared to the fiscal year ended 2022.
Cash provided by operating activities was $83.0 million for the fiscal year ended March 31, 2021. This consisted of net income of $50.2 million, adjusted for non-cash items of $21.2 million and a net increase in operating assets and liabilities of $11.6 million.
This consisted of net income of $112.8 million, adjusted for non-cash items of $87.8 million and a net outflow from operating assets and liabilities of $21.0 million.
Cash provided by financing activities was $5.4 million for the fiscal year ended March 31, 2021, which primarily consisted of $8.9 million of net proceeds from the exercise of stock options, partially offset by $1.5 million in payments for deferred offering costs and $2.0 million from the repurchase and retirement of common stock.
Net cash provided by (used in) financing activities Cash used in financing activities was $74.5 million for the fiscal year ended March 31, 2023, which primarily consisted of common stock repurchases of $85.3 million and $3.8 million of taxes paid related to the net share settlement of equity awards.
The decrease was primarily driven by a $4.7 million non-recurring gain that was recognized in October 2020 upon the sale of a portion of the Curative Talent business, offset by a $0.6 million increase in interest income due to our increased investment in marketable securities. 53 Provision for (benefit from) income taxes Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Provision for (benefit from) income taxes $ (40,778) $ 7,559 $ (48,337) NM For the fiscal year ended March 31, 2022, we had an income tax benefit of $40.8 million compared to a provision of $7.6 million for the fiscal year ended 2021.
Provision for (benefit from) income taxes Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Provision for (benefit from) income taxes $ 20,338 $ (40,778) $ 61,116 NM For the fiscal year ended March 31, 2023, we had income tax expense of $20.3 million compared to an income tax benefit of $40.8 million for the fiscal year ended 2022.
Non-cash items primarily consisted of stock-based compensation expense of $7.3 million, amortization of deferred contract costs of $6.9 million, deferred income tax expense of $5.0 million, and depreciation and amortization expense of $3.7 million, partially offset by a $4.7 million gain due to the sale of a portion of the Curative Talent business.
Non-cash items primarily consisted of stock-based compensation expense of $47.8 million, deferred income taxes of $13.2 million, depreciation and amortization expense of $10.3 million, amortization of deferred contract costs of $8.8 million, and amortization of the premium on marketable securities of $3.1 million.
Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to future expected cash flows, future revenue growth, margins, customer retention rates, technology life, royalty rates, expected use of acquired assets, and discount rates.
The purchase price allocation process requires management to make significant judgment 56 Table of Content s and estimates, including the selection of valuation methodologies, estimates of future expected cash flows, future revenue growth, margins, customer retention rates, technology life, royalty rates, expected use of acquired assets, and discount rates.
In addition, there was a $2.8 million increase in personnel-related costs due to headcount growth of approximately 48%, a $3.1 million increase in insurance expense, and a $3.1 million increase in accounting, legal, and other services as we incurred additional expenses as a result of becoming a public company.
The increase in general and administrative expense was primarily driven by a $2.2 million increase in personnel-related costs due to headcount growth of 23%.
The increase was also driven by a $6.1 million increase in stock-based compensation mainly due to headcount growth and an increase in the weighted-average grant date fair values of our equity grants.
The increase was also driven by an $8.8 million increase in stock-based compensation expense, primarily due to headcount growth and awards granted to existing employees and a $4.9 million increase in costs related to employee events, travel, trade shows, conferences, and other marketing activities.
Other income, net Fiscal Year Ended March 31, Change 2022 2021 $ % (in thousands, except percentages) Other income, net $ 469 $ 4,466 $ (3,997) (89) % Other income, net for the fiscal year ended March 31, 2022 decreased $4.0 million compared to the fiscal year ended 2021.
Other income, net Fiscal Year Ended March 31, Change 2023 2022 $ % (in thousands, except percentages) Other income, net $ 8,048 $ 469 $ 7,579 1616 % Other income, net for the fiscal year ended March 31, 2023 increased $7.6 million as compared to the fiscal year ended 2022, primarily driven by increases in interest income due to higher yields earned on our cash equivalents and marketable securities portfolio and a higher average portfolio balance in fiscal 2023 as compared to fiscal 2022.
Removed
Impact of COVID-19 The COVID-19 pandemic has had, and continues to have, a significant impact on the U.S. economy and the markets in which we operate. Doximity has been privileged to play an important role in supporting physicians, medical professionals, and health systems nationwide during this time.
Added
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: Customers with Trailing 12-Month Subscription Revenue Greater than $100,000.
Removed
Our business has performed strongly, demonstrating the value and effectiveness of our platform to both our members and customers. While certain of the COVID-19 pandemic-related trends underlying our positive performance may not continue after the pandemic eases, we believe that certain key underlying trends have been accelerated and will persist long after the pandemic ends.
Added
This cohort of customers accounted for approximately 87% of our revenue in fiscal 2023.
Removed
We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business.
Added
March 31, 2023 2022 2021 Number of customers with at least $100,000 of revenue 294 1 254 188 _________________________ 1 The metric excludes the impact of the AMiON acquisition, which closed on April 1, 2022, including customers of, and subscription revenue generated from, the AMiON on-call scheduling and messaging application, and the impact of such acquisition was immaterial to the periods presented.
Removed
While the COVID-19 pandemic has not had a material adverse impact on our financial condition and results of operations to date, the extent to which the outbreak of the COVID-19 pandemic or any other pandemic, epidemic, or infectious diseases will impact our business, results of operations and financial condition in the future is still unknown and will depend on future developments, which are highly uncertain and cannot be predicted. 47 For additional information, see “Risk Factors—Risks Related to Our Business—The COVID-19 pandemic and any other future pandemic, epidemic, or outbreak of an infectious disease may adversely affect our business, financial condition, and results of operations.” 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: Customers with Trailing 12-Month Subscription Revenue Greater than $100,000.
Added
March 31, 2023 2022 2021 Net revenue retention rate 117 % 1 157 % 153 % _________________________ 1 The metric excludes the impact of the AMiON acquisition, which closed on April 1, 2022, including customers of, and subscription revenue generated from, the AMiON on-call scheduling and messaging application, and the impact of such acquisition was immaterial to the periods presented.
Removed
March 31, 2022 2021 2020 Net revenue retention rate 157 % 153 % 130 % Non-GAAP Financial Measures We use adjusted EBITDA and free cash flow to measure our performance and identify trends, to formulate financial projections, and to make strategic decisions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $10.6 million in the market value of our cash equivalents and marketable securities as of March 31, 2022.
Biggest changeA hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $5.0 million and $10.6 million, respectively, in the market value of our cash equivalents and marketable securities as of March 31, 2023 and March 31, 2022.
Fluctuations in the value of our investments caused by a change in interest rates are recorded in other comprehensive income and are realized only if we sell the underlying securities. Impact of Inflation We do not believe that inflation has had a material effect on our business, results of operations, or financial condition.
Fluctuations in the value of our investments caused by a change in interest rates are recorded in other comprehensive income and are realized in net income only if we sell the underlying securities. Impact of Inflation We do not believe that inflation has had a material effect on our business, results of operations, or financial condition.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, financial condition, and results of operations. 57 DOXIMITY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, financial condition, and results of operations. 57 Table of Contents DOXIMITY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Interest Rate Risk Our cash and cash equivalents and marketable securities primarily consist of cash on hand and highly liquid investments in money market funds, corporate notes and bonds, asset-backed securities, commercial paper, U.S. government and agency securities, and sovereign bonds.
Interest Rate Risk Our cash and cash equivalents and marketable securities primarily consist of cash on hand and highly liquid investments in money market funds, corporate notes and bonds, asset-backed securities, commercial paper, certificates of deposit, U.S. government and agency securities, and sovereign bonds.
As of March 31, 2022 and 2021, we had cash and cash equivalents of $112.8 million and $66.4 million and marketable securities of $685.3 million and $76.1 million, respectively. We do not enter into investments for trading or speculative purposes.
As of March 31, 2023 and 2022, we had cash and cash equivalents of $158.0 million and $112.8 million and marketable securities of $683.0 million and $685.3 million, respectively. We do not enter into investments for trading or speculative purposes.
Removed
A hypothetical 100 basis point increase in interest rates did not have a material impact on the market value of our cash equivalents and marketable securities as of March 31, 2021.

Other DOCS 10-K year-over-year comparisons