Heading into earnings, analysts had forecast DocuSign would earn $0.40 per share (pro forma) on sales of $487.5 million in the second quarter of 2021. As it turned out, DocuSign actually earned $0.47 per share, and on sales of $511.8 million.
Those sales, by the way, were up 50% year over year, and recurring subscription revenue grew even faster -- up 52%. Gross profit margin on that revenue increased 4 full percentage points to 78%.
With stronger gross profit margins and rising sales, DocuSign managed to cut its loss per share according to generally accepted accounting principles (GAAP) to just $0.13, down from a $0.35-per-share loss in the year-ago quarter -- still not as good as the $0.47 management claimed for its adjusted income but definitely an improvement.
And finally, the best news of all: Free cash flow at the company surged ahead 62% in comparison to last year. These actual cash profits for the company totaled $161.7 million.
And the news could get even better. In laying out new guidance for the coming quarter and for the full year, DocuSign said it expects revenue to rise to between $526 million and $532 million in the third quarter (Wall Street was only expecting $521 million), and to approximately $2.08 billion for the full fiscal year (Wall Street says $2.05 billion).
Management did not say what it expects to earn, either for the quarter or the year. But with revenue looking very likely to exceed expectations all year long, it's a good bet that earnings will look pretty strong as well.