DocuSign (DOCU) Q2 2027 earnings summary

Executive summary

• Q2 FY27 revenue reached $876 million, up 9% year-over-year, with international revenue comprising 31% of total and IAM now 15.1% of ARR, up from 12.6% in Q1.

• Operating margin was 32%, and free cash flow was nearly $300 million, supporting over $300 million in share repurchases during the quarter.

• Customer base surpassed 1.9 million, with double-digit growth in large customers (>$300K ACV) to nearly 1,300.

• IAM platform innovation accelerated with new AI-native features, integrations, and agentic tools, driving customer value and efficiency.

• Fiscal year 2027 ARR guidance was raised, reflecting confidence in continued execution and IAM adoption.

Financial highlights

• Q2 revenue was $876 million, up 9% year-over-year, with a 1.3 percentage point FX benefit; international revenue was $272 million, up 17% year-over-year.

• Non-GAAP gross margin was 81.7% in Q2; non-GAAP operating margin was 31.6%; free cash flow margin was 34%.

• Non-GAAP diluted EPS was $1.16, up 26% year-over-year; GAAP diluted EPS was $0.40, up 33%.

• Stock-based compensation expense declined to 17% of revenue, a 3-point improvement year-over-year.

• Cash, cash equivalents, and investments totaled just under $1 billion at quarter end; no debt.

Outlook and guidance

• Q3 revenue expected between $886 million and $890 million, up 9% year-over-year at midpoint; non-GAAP gross margin 81.5%-81.9%, operating margin 31.3%-31.7%.

• FY27 revenue guidance raised to $3.499-$3.507 billion, up 9% year-over-year at midpoint; non-GAAP gross margin 81.5%-82.0%, operating margin 31.0%-31.5%.

• FY27 ARR growth expected at 8.5%-9.0%, up from 8.0% in FY26; IAM ARR projected to represent 18%-19% of total ARR by Q4 FY27.

• Share count expected to decline further due to ongoing buybacks; non-GAAP fully diluted shares outstanding expected at 190–195 million for FY27.

• Foreign exchange rates expected to provide a modest tailwind to FY27 revenue.