DocuSign (DOCU) Q2 2025 earnings summary

Executive summary

• Q2 revenue reached $736 million, up 7% year-over-year, with 28% from international markets and a customer base of 1.6 million.

• Launched the Intelligent Agreement Management (IAM) platform, now generally available in the U.S. and other select markets, driving early adoption and higher deal sizes.

• Non-GAAP operating margin hit a record 32%, up from 25% in Q2 FY24; GAAP net income surged to $888.2 million due to a $837.7 million tax benefit.

• Free cash flow was $198 million for the quarter, with a 27% margin; $200 million in shares were repurchased, returning all quarterly free cash flow to shareholders.

• Executive leadership was strengthened with new President/CRO and CTO appointments.

Financial highlights

• Subscription revenue was $717.4 million, up 7% year-over-year and accounting for 97% of total revenue.

• Billings totaled $725 million, up 2% year-over-year; non-GAAP gross margin was 82.2%.

• Non-GAAP diluted EPS was $0.97, up from $0.72; GAAP diluted EPS was $4.26, up from $0.04.

• Operating expenses decreased 2% to $522.8 million, with improved cost management.

• Cash, cash equivalents, and investments totaled $1.0 billion at quarter end.

Outlook and guidance

• Q3 FY25 revenue expected at $743–$747 million; FY25 revenue guidance raised to $2.940–$2.952 billion, a 7% year-over-year increase at midpoint.

• Q3 billings projected at $710–$720 million; FY25 billings at $2.990–$3.030 billion.

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

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

• Management expects eSignature to remain the majority revenue driver as IAM rollout continues.