DocuSign (DOCU) Q2 2025 earnings summary

Executive summary

• Q2 revenue reached $736 million, up 7% year-over-year, with subscription revenue at $717.4 million, also up 7% year-over-year.

• Net income surged to $888.2 million from $7.4 million a year ago, primarily due to a $837.7 million discrete tax benefit from the release of a valuation allowance.

• Non-GAAP operating margin hit a record 32%, up from 24.7% last year, and free cash flow was $198 million, a 27% margin.

• Customer base grew to 1.6 million, with enterprise/commercial customers increasing to 253,000 and large customer count and bookings momentum increasing.

• The new Intelligent Agreement Management (IAM) platform launched, showing early strong adoption, larger deal sizes, and faster closes, with rollout to more geographies and customer segments planned.

Financial highlights

• Billings were $725 million, up 2% year-over-year, with Q2 billings growth expected to be the lowest for FY25.

• International revenue grew 15% year-over-year to $207 million, now 28% of total revenue.

• Non-GAAP gross margin was 82.2%, in line with last year; GAAP gross margin was 78.9%.

• Non-GAAP diluted EPS was $0.97, up from $0.72 last year; GAAP diluted EPS was $4.26, up from $0.04, reflecting the tax benefit.

• Ended Q2 with $1 billion in cash, cash equivalents, and investments, and no debt.

Outlook and guidance

• Q3 revenue expected at $743–$747 million; FY25 revenue guided to $2.94–$2.952 billion (7% growth midpoint).

• Q3 billings expected at $710–$720 million; FY25 billings at $2.99–$3.03 billion.

• Non-GAAP operating margin guidance: 28.5–29.5% for Q3, 29.0–29.5% for FY25.

• Non-GAAP gross margin guidance: 81–82% for Q3 and FY25.

• Dollar net retention rate expected to remain at 99% through FY25.