Summary
DocuSign's FY2022 second quarter revenue rose 49.6% to $511.8 million from $342.2 million in the prior-year quarter. Gross margin expanded to 77.8% from 73.5%. The operating loss narrowed to $22.6 million from $58.6 million. Net loss narrowed to $25.5 million from $64.6 million. Diluted EPS improved to -$0.13 from -$0.35. For the six months ended July 31, 2021, revenue was $980.9 million, up 53.5% from $639.2 million. Year-to-date net loss was $33.9 million, compared with $112.4 million. Year-to-date diluted EPS was -$0.17 versus -$0.61.
Cash generation improved. Operating cash flow was $177.7 million in the quarter, up from $118.1 million. Capital expenditures were $15.9 million, down from $18.4 million. Free cash flow, a non-GAAP measure, was $161.7 million versus $99.8 million. Billings, a non-GAAP measure, were $595.4 million, an increase of 47% year-over-year. For the six months, operating cash flow was $313.3 million, up from $177.3 million, and capital expenditures were $28.5 million, down from $44.8 million. Deferred revenue was $914.6 million, up 46.6% from $624.0 million. Remaining performance obligations were $1.30 billion, up 53.1% from $849.0 million.
Operational metrics show scale. DocuSign had over 1,053,000 customers as of July 31, 2021, including over 148,000 enterprise and commercial customers, compared with almost 750,000 total customers and over 95,000 enterprise and commercial customers a year earlier. Customers with more than $300,000 in annual contract value reached 714 as of July 31, 2021. International revenue represented 22% and 19% of total revenue in the three and six months ended July 31, 2021 and 2020. For the quarter ending October 31, 2021, guidance calls for billings of $585 million to $597 million, non-GAAP gross margin of 79% to 81%, and non-GAAP operating margin of 17% to 19%. For the full fiscal year ending January 31, 2022, guidance is billings of $2,409 million to $2,429 million, non-GAAP gross margin of 79% to 81%, and non-GAAP operating margin of 16% to 18%.
The company said it has continued to stay in front of the evolving COVID business environment, helping over one million customers and over one billion users. DocuSign announced new product capabilities in its Agreement Cloud 2020 Product Release 2, including enhancements to ID Verification, DocuSign Click, and DocuSign Monitor, plus a new SAP Ariba connector for CLM.
Risks remain. The company continues to face uncertainty from the COVID-19 pandemic. Management warns that as vaccinations become widely available and the pandemic wanes, paying customers could decline once individuals are no longer working or attending school from home. DocuSign also cites risks related to competition, sustaining growth, expanding internationally, and integrating acquisitions. The company may not achieve profitability in the foreseeable future. Operating expenses increased across sales and marketing, research and development, and general and administrative.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $511.8M | $469.1M | +9.1% | $342.2M | +49.6% |
| Gross profit | $398.1M | $363.8M | +9.4% | $251.6M | +58.2% |
| Gross margin | 77.8% | 77.6% | +0.2 pp | 73.5% | +4.3 pp |
| Research & development | $94.7M | $85.4M | +10.8% | $63.8M | +48.4% |
| Sales & marketing | $262.4M | $239.1M | +9.7% | $195.0M | +34.6% |
| General & administrative | $63.7M | $50.0M | +27.2% | $51.4M | +23.7% |
| Total operating expenses | $420.7M | $374.6M | +12.3% | $310.2M | +35.6% |
| Operating income (loss) | -$22.6M | -$10.7M | -110.6% | -$58.6M | +61.4% |
| Operating margin | -4.4% | -2.3% | -2.1 pp | -17.1% | +12.7 pp |
| Net income (loss) | -$25.5M | -$8.4M | -205.3% | -$64.6M | +60.5% |
| Net margin | -5.0% | -1.8% | -3.2 pp | -18.9% | +13.9 pp |
| Diluted EPS | -$0.13 | -$0.04 | -$0.09 | — | — |
| Customers | 30 | 980,000 | -100.0% | 750,000 | -100.0% |
Risks
The company cannot predict the full impact of the COVID-19 pandemic, and MD&A warns that the substantial demand increase from remote work may reverse as vaccinations become widely available and the pandemic wanes, potentially causing a decline in paying customers. Revenue was up 49.6% in FY2022 Q2 versus the prior-year quarter, but future period-over-period growth may fail expectations against pandemic-accelerated periods.
Recent rapid growth may not be indicative of future growth; revenue grew from $974.0 million in FY2020 to $1.5 billion in FY2021, and the company expects its revenue growth rate to decline as scale increases. MD&A notes future period-over-period comparisons against pandemic-accelerated quarters may fail to meet investor expectations.
Substantially all subscription revenue and professional services revenue depend on e-signature solutions, and slower adoption without corresponding growth in other Agreement Cloud products could harm operating results. Subscription revenue was up 52% in the three months ended July 31, 2021, but the company remains dependent on eSignature.
The company has faced security incidents, including a March 2017 phishing attack and an April 2020 brute force attack that exfiltrated a portion of source code, and remote work during COVID-19 increases cybersecurity risk. Any future breach could harm reputation, cause customer loss, and lead to regulatory actions or litigation.
The market is highly competitive, with Adobe as the primary global e-signature competitor and specialized vendors in contract lifecycle management, payments, and identity verification. Competitors may have greater resources and could reduce prices or develop superior products, impairing the company's ability to add and retain customers.
The sales cycle for enterprise and commercial customers is long and unpredictable, generally three to nine months and longer for DocuSign CLM, requiring significant upfront sales and marketing expense before any sale. This makes the timing of revenue recognition difficult to predict.
As of July 31, 2021, the company had $53.3 million principal amount outstanding under its 2023 Notes, $690.0 million under its 2024 Notes, and $500.0 million available under its credit facility. This indebtedness may limit business flexibility, access to capital, and increase borrowing costs.
The company is subject to e-signature, privacy, data protection, and information security laws, including the GDPR and CCPA, and customers rely on FedRAMP and eIDAS certifications. Failure to comply could result in fines, bans on processing EU personal data, or documents being rendered unenforceable.
SaaS KPIs
All quarters →Total Customers
Free Cash Flow
Non-GAAP Operating Margin
Billings
Non-GAAP Gross Margin
Enterprise and Commercial Customers
Non-GAAP Subscription Gross Margin
Summary, forecast, risks and KPIs are extracted from DOCUSIGN, INC.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.