DOCU earnings analysis
What we found in DOCU's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
DocuSign delivered strong second-quarter results, with revenue of $875.746 million, up 9% year over year, GAAP operating margin of 13.4% versus 8.1%, and diluted GAAP EPS of $0.40 versus $0.30. Free cash flow increased to $295.757 million and IAM reached 15.1% of ARR, supporting the positive operating trend. Liquidity remained substantial at $990.4 million of cash, cash equivalents, restricted cash and investments, although the company deployed $624.026 million on share repurchases during the first six months and faces rising AI, cloud, tax, and cybersecurity-related risks.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth remained 9%
- Second-quarter revenue was $875.746 million, up $75.110 million, or 9%, from $800.636 million in the prior-year quarter. Management attributed the increase primarily to commercial and enterprise accounts, the digital channel, and expanded customer use cases.
- Operating leverage accelerated
- GAAP gross margin increased to 79.7% from 79.3% year over year, while GAAP operating margin expanded to 13.4% from 8.1%. Operating income rose to $117.621 million from $65.227 million.
- GAAP EPS improved year over year
- Diluted GAAP EPS increased to $0.40 from $0.30, and net income increased to $77.715 million from $62.970 million. The quarter also exceeded the provided consensus EPS estimate of $0.96 with reported adjusted EPS of $1.16, although that adjusted measure is not a GAAP metric in the 10-Q financial statements.
- Free cash flow margin reached 34%
- Free cash flow was $295.757 million, up from $217.648 million in the prior-year quarter, with free-cash-flow margin expanding to 34% from 27%. Operating cash flow was $334.546 million, while property and equipment purchases were $38.789 million.
- IAM and enterprise penetration increased
- IAM represented 15.1% of total ARR as of July 31, 2026, versus 10.8% as of January 31, 2026. Customers with more than $300,000 of annualized contract value increased to 1,296 from 1,137 year over year.
- International growth outpaced total growth
- International revenue increased 17% for the six months ended July 31, 2026, to $526.121 million from $450.471 million, and represented 31% of quarterly revenue versus 29% in the prior-year quarter.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Agentic AI execution and control risk
- The filing newly emphasizes risks from agentic AI and autonomous agents, which may act with limited human intervention and create financial, data-security, contractual, or regulatory exposure. The company also capitalized $97.5 million of developed software in the six months, increasing the importance of successful AI and platform investment outcomes.
- New digital software tax exposure
- The filing identifies California Senate Bill 122, enacted June 29, 2026, as extending sales and use tax to digital prewritten software beginning January 1, 2027. Additional indirect-tax obligations could increase customer costs and administrative burden; DocuSign also reported $47.261 million of quarterly income-tax provision, up from $13.490 million.
- Cloud commitment and infrastructure costs
- Cloud and infrastructure commitments create fixed-cost exposure as IAM scales: the company has a remaining minimum commitment of $204.9 million to a public cloud provider through fiscal 2030, while cost of revenue increased 7% year over year to $177.872 million. Higher hosting and AI infrastructure costs could pressure margins if growth slows.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.4
- Gross margin
- 79.7%
- Operating margin
- 13.4%
- Segment
- One reportable operating segment: revenue of $875.746 million, up 9% year over year from $800.636 million.
- Segment
- U.S. revenue: $603.538 million, up from $567.611 million; international revenue: $272.208 million, up from $233.025 million.
What they said about what is next.
The 10-Q does not provide new or revised quantitative revenue or EPS guidance. Numeric outlook was provided in the September 3, 2026 earnings release: Q3 FY2027 revenue guidance of $886 million-$890 million and FY2027 revenue guidance of $3.499 billion-$3.507 billion.
The filing reads better than the one before it.
What came before.
- 10-Q · June 5, 2026
- DocuSign reported Q1 2026 revenue of $830.2 million, surpassing estimates by $5.5 million, while EPS of $1.09 exceeded the consensus estimate of $0.87. Revenue growth compared to Q1 2025 was a solid 9%, signaling strong…
- 10-K · March 18, 2026
- DocuSign, Inc. reported a total revenue of $3.22 billion for the fiscal year ended January 31, 2026, an increase from $2.98 billion the previous year. The company achieved a net income of $309 million, a return to…
- 10-Q · December 5, 2025
- DocuSign reported strong revenue and earnings for Q3 2026, with total revenue increasing by 8% YoY to $818.4 million, exceeding both analyst expectations and previous quarters. The gross margin remained stable at 79%,…
- 10-Q · September 5, 2025
- DocuSign reported strong second-quarter results with a revenue of $800.6 million, surpassing estimates and reflecting a 9% year-over-year growth. Significant operations led to a gross margin of 79% and an impressive EPS…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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