Summary
Docusign reported fiscal 2027 second quarter revenue of $875.75 million, up 9.4% from the prior-year quarter. Growth included an estimated 1.3% benefit from foreign exchange rates. Year-to-date revenue was $1.71 billion, up 9.1%. The company said Intelligent Agreement Management represented 15.1% of total annual recurring revenue as of July 31, 2026, up from 12.6% as of April 30, 2026. Management raised full fiscal year 2027 guidance for revenue, ARR and IAM as a percentage of total ARR.
Docusign's GAAP profitability improved sharply. Gross profit was $697.87 million, up 9.9%, and gross margin was 79.7%, up 0.4 percentage points. Operating income reached $117.62 million, up 80.3%, while operating margin was 13.4%, up 5.3 percentage points. Net income was $77.72 million, up 23.4%, and diluted earnings per share was $0.40, up $0.10, or 33.3%. On a year-to-date basis, operating income was $228.93 million, up 82.4%; net income was $155.91 million, up 15.4%; and diluted earnings per share was $0.80, up 25.0%. Non-GAAP diluted earnings per share was $1.16, compared with $0.92 in the prior-year quarter, and non-GAAP operating margin was 31.6%, compared with 29.8%. Non-GAAP gross margin was 81.7%, compared with 82.0%.
Cash generation remained a bright spot. Operating cash flow was $334.55 million, up 36.0%, and year-to-date operating cash flow was $656.23 million, up 31.9%. Capital expenditures were $38.79 million, up 36.5%, and year-to-date capital expenditures were $71.04 million, up 36.5%. Free cash flow, a non-GAAP measure, was $295.8 million, or a 34% margin, compared with $217.6 million, or a 27% margin. Deferred revenue (current portion) was $1.58 billion, up 9.7%, while remaining performance obligations were $2.30 billion, flat year over year. The company continued its stock repurchase program during the quarter.
Customer metrics showed expansion in larger accounts. Docusign ended the quarter with over 1.9 million total customers and approximately 289,000 direct customers, compared with over 1.7 million total customers and over 271,000 direct customers a year earlier. Customers with more than $300,000 in annualized contract value numbered 1,296, up from 1,137. International revenue represented 31% of total revenue in the three and six months ended July 31, 2026, compared with 29% in the same periods a year earlier, and international revenue increased 17% in the six months ended July 31, 2026.
Guidance points to steady growth. For the quarter ending October 31, 2026, Docusign expects revenue of $886 million to $890 million, a 9% year-over-year increase at the midpoint. Non-GAAP gross margin is guided to 81.5% to 81.9%, and non-GAAP operating margin to 31.3% to 31.7%. For the fiscal year ending January 31, 2027, revenue guidance is $3,499 million to $3,507 million, also up 9% at the midpoint. The company guided ARR growth of 8.50% to 9.00%, with a midpoint of 8.75%. Full-year non-GAAP gross margin is guided to 81.5% to 82.0%, and non-GAAP operating margin to 31.0% to 31.5%. Docusign expects IAM to represent approximately 18% to 19% of total ARR exiting the fourth quarter of fiscal 2027. Excluding foreign exchange effects, revenue guidance would be approximately 1.0 percentage point lower for the October quarter and 1.2 percentage points lower for the full fiscal year.
Risks remain. The outlook depends on renewals, seasonality, changes to the sales force and go-to-market strategy, and the cloud migration transition. Macroeconomic conditions, inflation, volatile interest rates and foreign exchange rates, and market volatility could affect results. Competition is intense, and the company faces execution risk as it integrates AI into existing products and develops and sells IAM solutions. Cybersecurity incidents, data breaches, or interruptions to technical infrastructure could harm the business. The company also cited risks around hiring and retention, litigation, intellectual property, acquisitions, and the timing of share repurchases. Docusign reported a larger income tax provision and lower interest income and other income, net, compared with the prior-year periods.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2027 | Q1 FY2027 | QoQ | Q2 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $875.7M | $830.2M | +5.5% | $800.6M | +9.4% |
| Gross profit | $697.9M | $659.0M | +5.9% | $635.2M | +9.9% |
| Gross margin | 79.7% | 79.4% | +0.3 pp | 79.3% | +0.4 pp |
| Research & development | $163.6M | $159.6M | +2.5% | $169.6M | -3.6% |
| Sales & marketing | $314.0M | $296.2M | +6.0% | $305.4M | +2.8% |
| General & administrative | $102.7M | $91.9M | +11.8% | $94.9M | +8.3% |
| Total operating expenses | $580.3M | $547.7M | +6.0% | $569.9M | +1.8% |
| Operating income (loss) | $117.6M | $111.3M | +5.7% | $65.2M | +80.3% |
| Operating margin | 13.4% | 13.4% | +0.0 pp | 8.2% | +5.3 pp |
| Net income (loss) | $77.7M | $78.2M | -0.6% | $63.0M | +23.4% |
| Net margin | 8.9% | 9.4% | -0.6 pp | 7.9% | +1.0 pp |
| Diluted EPS | $0.40 | $0.40 | ±$0.00 | $0.30 | +$0.10 |
| Customers | 1,296 | 1,258 | +3.0% | 1,137 | +14.0% |
Risks
Advances in AI have made foundational agreement capabilities such as analyzing, summarizing and comparing text cheaper and easier to replicate, enabling LLMs, hyperscalers, data platform and enterprise software companies to offer competing functionality at lower cost, and may lower software development costs enough for customers to build homegrown agents. The MD&A frames expanding the AI data and innovation advantage through IAM as a core long-term priority, underscoring the competitive stakes.
Subscriptions to the eSignature product account for the substantial majority of subscription and professional services revenue, and the company expects to remain substantially dependent on eSignature for the foreseeable future. The filing states it has experienced, and may continue to experience, declines and fluctuations in demand for eSignature due to changing customer adoption and retention and shifts in customer spending.
The IAM platform, launched in April 2024, must achieve high levels of market acceptance to justify the significant research, development, marketing and sales investment, and the company began rolling out a user-based subscription with transaction-based add-ons for IAM in the second quarter of fiscal 2025. IAM represented 15.1% of total ARR as of July 31, 2026, up from 10.8% of total ARR as of January 31, 2026, so the platform remains a minority of the book of business.
The company is increasingly developing and deploying agentic AI workflows and autonomous agents that may act unpredictably, exceed intended authorization, or fail to align with corporate policies, and could be subject to prompt injection and other attacks. The filing also notes potential allegations of AI washing if disclosures about AI capabilities or governance are deemed exaggerated or misleading.
The sales cycle for enterprise and commercial customers is generally three to nine months but varies substantially, and longer evaluation and qualification processes for CLM and other advanced offerings often result in longer sales cycles than for eSignature, with IAM sales cycles also potentially affected. The company expends significant time and money on sales and marketing and contract negotiation that may not result in a sale.
The company states it is a frequent target of cyberattacks and has faced security incidents in the past that did not have a material impact, and that threat actors are using AI to create increasingly automated, targeted and coordinated attacks including phishing, credential stuffing, account takeover, prompt injection and deepfakes. Bad actors have also misused the platform and brand to defraud others.
Competition for employees with AI expertise and at the principal U.S. locations in the San Francisco Bay Area and Seattle is intense, and the company may face increased compensation-related expenses to remain competitive. The filing also cites risk from executive leadership transitions, and R&D personnel costs including stock-based compensation decreased in the three and six months ended July 31, 2026 partly due to a decrease in stock-based compensation related to executive transitions that occurred in fiscal 2027.
The EU Artificial Intelligence Act prohibits certain AI applications and imposes additional requirements on high-risk or limited-risk AI systems, and U.S. states including California and Colorado have proposed or enacted laws on automated decision-making, algorithmic discrimination and high-risk AI. The company also faces heightened regulatory focus on dark patterns, data minimization and transparency, and scrutiny of AI-related statements.
Unfavorable industry or global economic conditions and reductions in information technology spending could limit growth, with the filing citing inflation, changes in interest rates or foreign exchange rates, tariffs and changes in trade policies, and geopolitical conflict. Interest income and other income, net decreased 34% in the three months and 43% in the six months ended July 31, 2026, partly on lower interest rates and higher foreign currency exchange losses.
The provision for income taxes increased 250% in the three months and 471% in the six months ended July 31, 2026, primarily attributable to higher profit before taxes and an increase in tax expense related to shortfalls from stock-based compensation in fiscal 2027 compared to windfalls in fiscal 2026. The company also notes OECD global minimum tax legislation could increase its effective tax rate and cash tax payments in future years.
SaaS KPIs
All quarters →Total Customers
Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from DOCUSIGN, INC.'s SEC filings for Q2 FY2027 (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.