DocuSign, Inc.

Q2 revenue was $876 million, up 9% year over year, including a 1.3 percentage point FX benefit. Non-GAAP gross margin was 81.7%, non-GAAP operating margin was 31.6% (up 180 bps year over year), non-GAAP EPS was $1.16, and GAAP EPS was $0.40. Free cash flow was $296 million, up over 35% year over year, and the company repurchased $307 million of stock. For Q3, DocuSign guided to revenue of $886 million to $890 million, non-GAAP gross margin of 81.5% to 81.9%, and non-GAAP operating margin of 31.3% to 31.7%. For fiscal 2027, it raised revenue guidance to $3.499 billion to $3.507 billion, ARR growth guidance to 8.5% to 9.0%, and expects IAM to represent 18% to 19% of total ARR exiting Q4.

Allan Thygesen framed the quarter as validation that DocuSign’s platform strategy is working, highlighting faster innovation in IAM, deeper customer value, and better efficiency at scale. He emphasized that IAM is moving beyond managing agreements to acting on them across workflows, with AI assistant, agentic capabilities, Slack/Perplexity/Google integrations, and CLM integration broadening use cases. His tone was confident and optimistic, especially around the 300 million documents ingested and the expanding role of connectors and MCP.

Blake Grayson focused on disciplined execution, margin expansion, and capital returns. He cited Q2 non-GAAP gross margin of 81.7%, operating income of $277 million, operating margin of 31.6%, EPS of $1.16, and free cash flow of $296 million, plus $307 million of buybacks and nearly $1 billion of cash and investments with no debt. He also noted stock-based compensation declined to 17% of revenue and that the cloud migration is still expected to pressure gross margin slightly in fiscal 2027 before being largely complete by year-end.

Analysts pressed on what is driving the stronger results, with management saying IAM was the main growth driver while expansion is contributing more to DNR improvement than before. Questions also focused on whether AI-platform connectors like Slack, Gemini, and ChatGPT could become a distribution or discovery channel; management said that is still early, but they expect DocuSign to be available wherever customers work, and customers must have an IAM license to use those capabilities. Analysts also asked about the gap between ARR growth and revenue growth, and management explained it reflects revenue items not in ARR, such as early renewals and digital add-ons, plus timing and subscription transitions.