DocuSign raises fiscal 2027 ARR guidance after Q2 results
DocuSign reported Q2 revenue of $876 million, up 9% year over year, with a 32% operating margin and about $300 million in free cash flow. It also raised fiscal 2027 ARR guidance and said IAM now accounts for 15.1% of total ARR.
On Thursday, DocuSign (NASDAQ: DOCU ) discussed second-quarter financial results during its earnings call.
The full transcript is provided below.
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View the webcast at Summary DocuSign Inc reported Q2 revenue of $876 million, up 9% year-over-year, with a 32% operating margin and approximately $300 million in free cash flow.
The company's Intelligent Agreement Management (IAM) platform now accounts for 15.1% of total ARR, up from 12.6% in Q1, indicating strong customer adoption.
DocuSign repurchased over $300 million in shares during Q2 and raised its fiscal year 2027 ARR guidance, reflecting confidence in sustaining growth.
New product innovations include AI Assistant and agentic capabilities within IAM, enhancing contract analysis and workflow automation.
Strategic integrations with platforms like Slack, Google Cloud's Gemini, and others aim to expand IAM's functionality and customer reach.
Total customer growth accelerated to nearly 10% year-over-year, with notable increases in the number of customers spending over $300,000 in ACV.
Non-GAAP gross margins were slightly down at 81.7% due to cloud migration investments, but operating margins improved to 31.6%.
The company highlighted strong deal activity, particularly among large enterprise customers, and expressed optimism about future growth driven by IAM adoption.
Guidance for Q3 includes revenue between $886 million and $890 million, with a non-GAAP operating margin expected to be between 31.3% and 31.7%.
Full Transcript OPERATOR Good afternoon, ladies and gentlemen.
Thank you for joining DocuSign's second quarter of fiscal year 2027 earnings conference call.
At this time, all participants are in a listen-only mode.
After the speaker's presentation, there will be a question-and-answer session.
As a reminder, this call is being recorded and will be available for replay from the Investor Relations section of the website following the call.
If anyone should require operator assistance during the conference, please press Star 0 on your telephone keypad.
I'll now pass the call over to Gary Fugis, Vice President of Investor Relations.
Please go ahead.
Gary Fugis, Vice President of Investor Relations Thank you, operator.
Good afternoon and welcome to DocuSign's second quarter of fiscal year 2027 earnings conference call.
Joining me on today's call are DocuSign CEO Allan Thygesen and CFO Blake Grayson.
The press release announcing our second quarter of fiscal 2027 results was issued earlier today and is posted on our Investor Relations website along with a published version of our prepared remarks.
Before we begin, let me remind everyone that some of our statements on today's call are forward-looking, including any statements regarding future performance.
We believe our assumptions and expectations related to these forward-looking statements are reasonable, but they are subject to known and unknown risks and uncertainties that may cause our actual results or performance to be materially different.
In particular, our expectations regarding factors affecting our pace of innovation and customer adoption are based on our best estimates at this time and are therefore subject to change.
Please read and consider the risk factors in our filings with the SEC together with the content of this call.
Any forward-looking statements are based on our assumptions and expectations to date and, except as required by law, we assume no obligation to update these statements in light of future events or new information.
During this call we will present GAAP and non-GAAP financial measures.
In addition, we provide non-GAAP weighted average share counts and information regarding free cash flow and ARR.
These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.
We encourage you to consider all measures when analyzing our performance.
For information regarding our non-GAAP financial information, the most directly comparable GAAP measures, and a quantitative reconciliation of those figures, please refer to today's earnings press release, which can be found on our website at investor.docusign.com.
And with that, I'd like to turn the call over to Allan.