Doximity, Inc. (DOCS) shares plummeted 9.70% in pre-market trading on Friday, following the release of its fiscal 2026 second-quarter financial results. The significant drop comes despite the company reporting better-than-expected Q2 performance, as investors appear to be focusing on the company's forward guidance, which suggests a potential slowdown in growth.

The company's Q2 results were impressive, with revenue reaching $168.525 million, surpassing the estimated $156.8 million. Adjusted earnings per share (EPS) came in at $0.45, beating the consensus estimate of $0.38, while adjusted EBITDA hit $100.8 million, significantly higher than the expected $87.1 million. However, these strong figures were overshadowed by concerns about future growth prospects.

Doximity's outlook for the third quarter and full fiscal year seems to have disappointed investors. The company forecasts Q3 revenue between $180 million and $181 million, which is only in line with analyst expectations rather than exceeding them. For the full fiscal year, Doximity projects revenue in the range of $640-646 million, up from previous guidance but suggesting a potential deceleration in growth. This outlook has raised concerns about the company's ability to maintain its growth trajectory, leading to the significant sell-off in pre-market trading. Adding to the negative sentiment, Evercore ISI analyst Elizabeth Anderson lowered the firm's price target on Doximity to $70 from $81, although maintaining an Outperform rating on the shares.