DocuSign (DOCU) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue grew 7% year-over-year to $710 million, driven by subscription growth, new customer additions, and the launch of the Intelligent Agreement Management (IAM) platform.

• Net income was $33.8 million, up from $0.5 million in the prior year, with non-GAAP diluted EPS rising to $0.82 and GAAP diluted EPS to $0.16.

• Free cash flow rose 8% year-over-year to $232 million, with a 33% margin.

• Customer base expanded to 1.56 million, with international revenue now 28% of total revenue, up 17% year-over-year.

• Acquisition of Lexion enhanced AI capabilities and accelerated the IAM roadmap.

Financial highlights

• Subscription revenue was $691.5 million, up 8% year-over-year, accounting for 97% of total revenue.

• Billings increased 5% year-over-year to $710 million, driven by early renewals and strong retention.

• Non-GAAP operating income was $202 million, up 15% year-over-year, with a record 28.5% margin.

• Non-GAAP gross margin was 82.0%; GAAP gross margin was 78.9%.

• Free cash flow margin was 33%.

Outlook and guidance

• Q2 FY25 revenue expected at $725–$729 million; subscription revenue $705–$709 million.

• FY25 revenue guidance raised to $2.92–$2.93 billion; billings $2.98–$3.03 billion.

• Non-GAAP operating margin guidance for FY25 is 26.5–28.0%.

• Q2 is expected to be the trough for billings growth due to tough comps and early renewals in Q1.

• IAM platform rollout to occur gradually in FY25, with new pricing models and packages.