You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and accompanying notes that are included elsewhere 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 About Forward-Looking Statements" in this Annual Report on Form 10-K. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled "Risk Factors" or in other parts of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. A discussion regarding our financial condition and results of operations for the fiscal year endedMarch 31, 2022 compared to the fiscal year endedMarch 31, 2021 is presented below. A discussion regarding our financial condition and results of operations for the fiscal year endedMarch 31, 2021 compared to the fiscal year endedMarch 31, 2020 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Final Prospectus datedJune 23, 2021 , filed with theSEC pursuant to Rule 424(b) under the Securities Act onJune 25, 2021 .
Overview
We are the leading digital platform forU.S. medical professionals, as measured by the number ofU.S. physician members. Our members include more than 80% of physicians across all 50 states and every medical specialty. Our mission is to help every physician be more productive and provide better care for their patients. We are physicians-first, putting technology to work for doctors instead of the other way around. That guiding principle has enabledDoximity to become an essential and trusted professional platform 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, and manage their careers.Doximity membership is free for physicians. Our revenue-generating customers, primarily pharmaceutical manufacturers and healthcare systems, have access to a suite of commercial solutions that benefit from broad physician usage. 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. Verified members can search and connect with colleagues and specialists, which allows them to better coordinate patient care and streamline referrals. Our newsfeed addresses the ever increasing sub-specialization of medical expertise and volume of medical research by delivering news and information that is relevant to each physician's clinical practice. 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. For the fiscal years endedMarch 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 endedMarch 31, 2022 , 2021, and 2020, respectively. For the fiscal years endedMarch 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.
Impact of COVID-19
The COVID-19 pandemic has had, and continues to have, a significant impact on theU.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. 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. We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business. 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 . 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. 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. March 31, 2022 2021 2020
Number of customers with at least
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. 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. 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.
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 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. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to the financial information presented in accordance with GAAP. 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. Other 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.
Adjusted EBITDA and adjusted EBITDA margin increased year-over-year primarily due to higher net income as a result of increased subscription revenue.
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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. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening our financial position.
We calculate free cash flow as cash flow from operating activities less purchases of property and equipment and internal-use software development costs.
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
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
Other cash flow components:
Net cash used in investing activities
Net cash provided by financing activities
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. 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. 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. 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 customers purchase a subscription to Marketing Solutions, either directly or through marketing agencies, for the ability to share tailored content on theDoximity platform via a variety of modules for defined time 49 -------------------------------------------------------------------------------- periods. 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. Subscriptions to Marketing Solutions include the following contractual arrangements: •Subscriptions for specific modules delivered on a monthly basis to a consistent number of targetedDoximity members during the subscription period. Pricing is based on the number and composition of the targetedDoximity members and on the specific modules purchased. •Integrated subscriptions for a fixed subscription fee that are not tied to a single module, allowing customers to utilize any combination of modules during the subscription period.
For these subscription-based contractual arrangements, we recognize revenue over time as control of the service is transferred to the customer.
Hiring Solutions. We provide customers access to our platform which enables them to post job openings or deliver a fixed number of monthly messages to our network of medical professionals. 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. Revenue for temporary placement services is recognized net of third-party contractor fees. For the fiscal year endedMarch 31, 2022 , the revenue from temporary and permanent medical recruiting services was not significant to our total revenue.
Cost of Revenue
Cost of revenue is primarily comprised of expenses related to cloud hosting, personnel-related expenses for our customer success team, costs for third-party platform access, software services and contractors, and other services used in connection with the delivery and support of our platform. 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. We intend to continue to invest additional resources in our cloud infrastructure and our customer support organizations to support the growth of our business and expect these expenses to increase on an absolute dollar basis.
Gross Profit and Gross Margin
Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. 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 sales of additional solutions to our existing customers, 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. 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.
Research and Development
Research and development expense is primarily comprised of personnel-related expenses associated with our engineering and product teams who are responsible for building new products and improving existing products. Research and development expense also includes costs for third-party services and contractors, information technology and software-related costs, and allocated overhead. Other than internal-use software development costs that qualify for capitalization, research and development costs are expensed as incurred. We expect research and development expenses will increase on an absolute dollar basis as we continue to grow our platform and product offerings.
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. 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.
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. 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.
Provision for (Benefit from) Income Taxes
Provision for (benefit from) income taxes consists primarily of income taxes inU.S federal, state, and local jurisdictions in which we conduct business. 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 includesCalifornia research and development credits and capital loss carryforwards. 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.
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
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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
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 endedMarch 31, 2022 increased$136.7 million as compared to the fiscal year ended 2021. 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 customers1 and$109.0 million was due to the expansion of existing customers. 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. Approximately 93% of our revenue for the fiscal year endedMarch 31, 2022 was derived from subscription customers. The remaining increase in revenue was driven by an increase in medical recruiting services.
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 endedMarch 31, 2022 increased$8.6 million as compared to the fiscal year ended 2021. 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 theU.S. News warrant granted inOctober 2021 , and a$1.8 million increase in stock-based compensation expense due to headcount growth and an increase in the weighted-average grant date fair values of our equity grants. In addition, there was a$1.2 million increase in consulting services and a$1.3 million increase in amortization of internal-use software development costs. These increases were partially offset by a$3.0 million decrease in third-party software as a result of renegotiating pricing terms with vendors combined with a lower volume of virtual visits as compared to the prior period, when our Dialer tool was available to all members for free.
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.
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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 endedMarch 31, 2022 increased$18.5 million as compared to the fiscal year ended 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 was also due to a$2.3 million increase in third-party software subscription and license costs as a result of headcount growth as well as a$1.1 million increase in employee events and travel-related expenses as we resumed certain in-person events. 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 endedMarch 31, 2022 increased$30.1 million as compared to the fiscal year ended 2021. 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 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. Additionally, there was a$2.5 million increase in deferred contract costs amortization due to higher sales volume, a$2.2 million increase for in-person trade shows and conferences, advertising and other marketing expenses, and a$1.4 million increase in employee events and travel-related expenses as we resumed certain in-person events. 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 endedMarch 31, 2022 increased$19.3 million as compared to the fiscal year ended 2021. The increase in general and administrative expense was primarily driven by an$8.6 million increase in stock-based compensation, of which$5.3 million related to the increase in headcount and the weighted-average grant date fair values of our equity awards and$3.3 million was due to performance grants where the performance conditions were met or became probable of achievement during fiscal 2022. 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. 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 endedMarch 31, 2022 decreased$4.0 million compared to the fiscal year ended 2021. The decrease was primarily driven by a$4.7 million non-recurring gain that was recognized inOctober 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 endedMarch 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. This change was primarily driven by excess tax benefit on stock option exercise and disqualifying disposition activities following our initial public offering inJune 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. As ofMarch 31, 2022 , our principal sources of liquidity were cash and cash equivalents and marketable securities of$798.1 million . Our marketable securities consist ofU.S. government and agency securities, corporate notes and bonds, commercial paper, asset-backed securities, and sovereign bonds.
In
We believe that our existing cash and cash equivalents and marketable securities will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, and the timing and extent of spending to support research and development efforts. Further, we may in the future enter into arrangements to acquire or invest in businesses and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected. For further details regarding our cash requirements from noncancelable operating lease obligations and other contractual commitments, see Note 13-Commitments and Contingencies included in Part II, Item 8 of this Annual Report on Form 10-K. Cash Flows Fiscal Year Ended March 31, 2022 2021 (in thousands) Net cash provided by operating activities$ 126,575
Net cash used in investing activities$ (640,574)
Net cash provided by financing activities$ 560,415
Net cash provided by operating activities
Cash provided by operating activities was$126.6 million for the fiscal year endedMarch 31, 2022 . 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 . Non-cash items primarily consisted of stock-based compensation expense of$31.4 million , amortization of deferred contract costs of$9.8 million , depreciation and amortization expense of$5.0 million , amortization of the premium on marketable securities of$4.3 million , offset by a negative non-cash adjustment for deferred tax benefit of$41.2 million . The net decrease in operating assets and liabilities was driven by a$31.0 million increase in accounts receivable due to the growth of our business and the timing of collections, a$9.6 million increase in deferred contract costs due to increased sales activity, and a$9.1 million increase in prepaid expenses and other assets. 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.
Cash provided by operating activities was$83.0 million for the fiscal year endedMarch 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 . 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. The net increase in operating assets and liabilities was primarily driven by an increase of$38.6 million in deferred revenue due to the addition of new customers and expansion from existing customers combined with the timing of customer billings and an increase of$7.3 million in accounts payable, accrued expenses and other liabilities, which was primarily a result of increased accrued incentive compensation due to higher sales and timing of payments and increased accrued payroll, bonus, and related expenses due to increased headcount and timing of payments. 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.
Net cash used in investing activities
Cash used in investing activities was$640.6 million for the fiscal year endedMarch 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$70.4 million for the fiscal year endedMarch 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 provided by financing activities
Cash provided by financing activities was$560.4 million for the fiscal year endedMarch 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. 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. Cash provided by financing activities was$5.4 million for the fiscal year endedMarch 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.
Off Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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. 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. 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. We believe that of our significant accounting policies, which are described in Note 2-Summary of Significant Accounting Policies included in Part II, Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity. 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. Each module targets a consistent number ofDoximity members per month for the duration of the subscription period. The Company treats each subscription to a specific module as a distinct performance obligation because each module is capable of being distinct as the customer can benefit from the subscription to each module on their own and each subscription can be sold standalone. The subscription to each module is treated as a series of distinct performance obligations because it is distinct and substantially the same, satisfied over time, and has the same measure of progress. The total transaction price is allocated to the individual module subscriptions, which represent separate performance obligations, based on the relative standalone selling price. We commence revenue recognition when the first content for the specific module is launched on the platform for the initial monthly period and revenue is recognized over time as each subsequent content period is delivered. Marketing Solutions customers may also purchase integrated subscriptions for a fixed subscription fee that are not tied to a single module but allow customers to utilize any combination of modules during the subscription period subject to limits on the total number of modules launched in a given period of time, active at any given time, and members targeted. These represent stand-ready obligations in that the delivery of the underlying sponsored content is within the control of the customer and the extent of use in any given period does not diminish the remaining services. For these integrated campaign subscriptions, we record revenue ratably over the subscription period commencing with the beginning of the subscription term. Stock-Based Compensation We account for stock-based compensation in accordance with the authoritative guidance on stock compensation. 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. 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. 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. These assumptions include the expected term of the award, the expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award, and expected dividends. Prior to the IPO, when there was no public market for our common stock, significant judgment was involved in determining the fair value of our common stock and the expected stock price volatility. Our board of directors considered numerous objective and subjective factors to determine the fair value of our common stock at each meeting during which awards were approved. These factors included, but were not limited to (i) contemporaneous third-party valuations of common stock; (ii) the rights and preferences of our preferred stock relative to common stock; (iii) the lack of marketability of common stock; (iv) developments in the business; and (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions. The expected volatility was determined using the historical volatilities of several publicly listed peer companies over a period equivalent to the expected term of the awards. We have not granted stock options to employees subsequent to the IPO.
Business Combinations
We allocate the purchase price of acquired companies to tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions with respect to the valuation of intangible assets. 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. These factors are also considered in determining the useful life of the acquired intangible assets. These estimates are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain.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.
Jumpstart Our Business Startups Act of 2012
We are an emerging growth company, as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act for the adoption of certain accounting standards until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
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