DocuSign (DOCU) Q2 2025 earnings summary

Executive summary

• Q2 FY25 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 available in the US, Canada, and Australia, driving higher win rates and larger deal sizes.

• Non-GAAP operating margin reached a record 32%, up from 25% in Q2 FY24; GAAP diluted EPS was $4.26, up from $0.04, driven by a large tax benefit.

• Free cash flow was $198 million (27% margin), and $200 million in shares were repurchased, returning all quarterly free cash flow to shareholders.

• Executive leadership was strengthened with new Chief Revenue Officer and Chief Technology Officer appointments.

Financial highlights

• Subscription revenue was $717 million, up 7% year-over-year, accounting for 97% of total revenue.

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

• Non-GAAP gross margin was 82.2%; non-GAAP operating income was $237 million, up 40% year-over-year.

• Free cash flow margin was 27% for Q2 FY25.

• Cash, cash equivalents, and investments totaled $1 billion at quarter end.

Outlook and guidance

• Q3 FY25 revenue expected at $743–$747 million; FY25 revenue guidance raised to $2.94–$2.95 billion, a 7% year-over-year increase at 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.

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

• Fully diluted weighted average shares outstanding revised to 206–211 million for Q3 and FY25.