Docusign (NASDAQ:DOCU), a well-known player in digital agreements and eSignatures, reported its fiscal 2026 second-quarter earnings on Sept. 4, 2025. The details in the report suggest Docusign had one of its strongest quarters in recent years. Revenue for Q2 was $800.6 million, compared to management guidance of $777 million–$781 million, and billings reached $818 million, versus guidance of $757 million–$767 million. Adjusted EPS was $0.92, slightly down from $0.97 in the prior year.
Overall, performance this quarter reflected renewed sales momentum, strong customer uptake, and early returns from recent product innovation and go-to-market strategy changes.
| Metric | Q2 FY2026(Three Months Ended July 31, 2025) | Q2 FY2025(Three Months Ended July 31, 2024) | Y/Y Change |
|---|---|---|---|
| EPS (Non-GAAP) | $0.92 | $0.97 | (5.2%) |
| Revenue | $800.6 million | $736.0 million | 8.8 % |
| Billings | $818.0 million | $724.5 million | 12.9 % |
| Gross Margin (Non-GAAP) | 82.0 % | 82.2 % | (0.2) pp |
| Free Cash Flow (Non-GAAP) | $217.6 million | $197.9 million | 10.0 % |
Source: Docusign. Note: Fiscal 2026's second quarter ended on July 31, 2025. Fiscal 2025's Q2 ended July 31, 2024.
About Docusign: What It Does and Where It’s Focused
Docusign enables electronic signatures, digital contract management, and workflow automation for organizations of all sizes. Its core offerings include the eSignature platform, a widely used tool for signing documents electronically, along with Contract Lifecycle Management (CLM) software that lets customers create, negotiate, and store agreements in a secure cloud environment. Docusign also offers Intelligent Agreement Management (IAM), a new generation of software that uses artificial intelligence to streamline and analyze agreements at scale.
Recently, the company has focused its strategy on accelerating product innovation (especially AI features in IAM and CLM), refining its omnichannel sales approach, and improving operational efficiency through technology investments and go-to-market changes. Key business success factors include expanding subscription-based recurring revenue, ensuring continued adoption of its new platforms, and maintaining efficiency in how it delivers and supports these digital solutions.
Quarter in Review: Key Developments and Drivers
Revenue increased by 9% year over year in Q2. Billings, an indicator of future revenue, rose 13%. Management attributes these gains to a combination of product launches, especially in AI-powered Intelligent Agreement Management, and improvements in its go-to-market execution, when renewal timing complexity and internal sales changes temporarily impacted billings growth in Q1 FY2026.
Subscription revenue, which now comprises 98% of total revenue, climbed 9% year-over-year on a GAAP basis. On the other hand, professional services and other revenue fell 13% to $16.2 million. This segment continues to struggle with negative margins, Docusign’s non-GAAP gross margin slipped by 0.2 percentage points to 82.0%, reflecting some ongoing headwinds from cloud migration investments.
Docusign highlighted several product and feature launches during the period. Its AI‑enabled agreement management suite added new capabilities, such as tools that detect the type of contract automatically, generate templates, and extract key information at scale through "Navigator" (an AI-driven agreement information tool). Features like ID Verification with CLEAR (a digital identity verification platform) and new workflow automation with Maestro templates were introduced as ways to improve customer efficiency and compliance. Management also pointed to third-party recognition for these advances, including being named a leader in the 2025 IDC MarketScape for AI-enabled buy-side CLM applications.
On the go-to-market front, changes such as segmentation of the salesforce and expansion of self-serve and partner-assisted channels appear to be yielding results. Greater efficiency in sales and marketing, combined with higher free cash flow (non-GAAP), up 10.0% year-over-year in Q2 FY2026, underlines improvement in operational execution. The company continues to repurchase shares at a steady pace, with $201.5 million in Q2 FY2026.
Looking Ahead: Guidance and Important Signals
For Q3 FY2026, Docusign expects revenue between $804 million and $808 million. This represents a 7% year-over-year increase at the midpoint for the three months ended Oct. 31, 2025. Billings guidance is for $785 million to $795 million in Q3 FY2026, up 5% from a year ago. For FY2026, total revenue (GAAP) guidance has been raised to $3.189 billion to $3.201 billion. This is approximately $38 million above the midpoint of its previous guidance for the fiscal year ending Jan. 31, 2026. The company projects continued margin resilience, with non-GAAP operating margin forecast between 28.6% and 29.6% for FY2026. In the quarters ahead, investors are likely to focus on adoption of new product features in an increasingly AI-intensive agreement landscape.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
