Docusign Inc Earnings - Q2 2025 Analysis & Highlights
Key Takeaways
DocuSign's Q2 Fiscal Year 2026 earnings call highlighted strong financial performance, driven by platform innovation and go-to-market changes, particularly in the commercial and enterprise segments. The company is focused on long-term profitable growth, emphasizing its omnichannel strategy, innovation, and operational efficiency. DocuSign is also seeing positive momentum from its IAM platform and CLM.
Key Financial Results
Q2 revenue was $801 million, up 9% year-over-year.
Billings were $818 million, up 13% year-over-year.
Non-GAAP operating margins were 30%.
Free cash flow margins improved modestly year-over-year to 27%.
Share repurchases totaled $200 million this quarter.
Non-GAAP diluted EPS for Q2 was $0.92, compared to $0.97 last year.
Business Segment Results
eSignature showed improved fundamentals.
Docusign CLM delivered one of the strongest quarters in year-over-year quarterly bookings growth in the last several years.
IAM saw increased customer investment, especially from commercial SMB customers.
International growth continued to outpace domestic growth.
Digital revenue continued to grow faster than the overall business.
Capital Allocation
Share repurchases: $200 million in buybacks this quarter.
The company will continue to opportunistically repurchase shares.
Industry Trends and Dynamics
AI-driven agreement management solutions are a key area of focus.
Digital transformation continues to drive demand for eSignature and CLM solutions.
Competitive Landscape
Docusign is the leading provider of AI-driven agreement management solutions.
IAM is core to the Docusign strategy of replacing legacy and fragmented systems.
Docusign covers a broader range of agreement workflows than any other vendor.
Macroeconomic Environment
The company is not seeing any significant evidence of macro weakness in their numbers or the contract volumes or utilization numbers.
Growth Opportunities and Strategies
Omnichannel go-to-market strategy: Focus on direct sales, partners, and digital channels.
IAM platform: Drive adoption and expansion with AI-powered capabilities.
International expansion: Focus on high-growth regions like Asia Pacific.
Partnerships: Expand reach through partnerships like the Microsoft Azure marketplace and the US Federal Government's General Services Administration.
Product Innovation: Launch AI agents within IAM to enable new customer use cases.
Financial Guidance and Outlook
Q3 2026 revenue is expected to be between $804 million to $808 million, or a 7% year-over-year increase at the midpoint.
Fiscal year 2026 revenue is expected to be between $3.189 billion to $3.201 billion, or a 7% year-over-year increase at the midpoint.
Q3 billings are expected to be $785 million to $795 million, or a 5% year-over-year growth rate at the midpoint.
Fiscal year 2026 billings are expected to be $3.325 billion to $3.355 billion, or a 7% year-over-year growth rate at the midpoint.
Non-GAAP gross margin is expected to be 80.3% to 81.3% for Q3, and between 81.0% to 82.0% for fiscal year 2026.
Non-GAAP operating margin of 28.0% to 29.0% for Q3 and 28.6% to 29.6% for fiscal year 2026 is expected.
Non-GAAP fully diluted weighted average shares outstanding of 207 million to 212 million for both Q3 and fiscal year 2026 is expected.
