DocuSign (DOCU) Q2 2027 earnings summary

Executive summary

• Q2 FY27 revenue grew 9% year-over-year to $876M, with international revenue comprising 31% of total and growing 17% year-over-year.

• IAM platform adoption accelerated, now representing 15.1% of total ARR, up from 12.6% in Q1.

• Free cash flow reached nearly $300M, supporting over $300M in share repurchases during the quarter.

• Customer base grew to over 1.9M, with 1,296 customers exceeding $300K in annual contract value and double-digit growth in large customers.

• Recognized as a market leader in e-signature and IAM, with new AI-driven contract workflow tools and integrations launched.

Financial highlights

• Q2 revenue: $876M (+9% YoY), with international revenue at $272M (31% of total, +17% YoY).

• Non-GAAP operating income: $277M (+16% YoY); operating margin: 31.6% (+180 bps YoY); GAAP operating margin: 13%.

• Non-GAAP gross margin: 81.7%, slightly down due to cloud migration; GAAP gross margin: 79.7–80%.

• Non-GAAP diluted EPS: $1.16 (+26% YoY); GAAP diluted EPS: $0.40 (+33% YoY).

• Ended Q2 with just under $1B in cash/investments, no debt, and $2.1B remaining for share repurchases.

Outlook and guidance

• Q3 revenue expected at $886M–$890M (+9% YoY); non-GAAP gross margin: 81.5–81.9%; operating margin: 31.3–31.7%.

• FY27 revenue guidance raised to $3.499B–$3.507B (+9% YoY); non-GAAP gross margin: 81.5–82.0%; operating margin: 31.0–31.5%.

• FY27 ARR growth expected at 8.5–9.0%; IAM ARR to reach 18–19% of total ARR by Q4 FY27.

• Non-GAAP fully diluted shares outstanding expected at 190–195M for FY27.

• Foreign exchange rates expected to provide a 1.2–1.3% tailwind to FY27 revenue.