DocuSign's Q2 Fiscal 2026 Earnings: A Strong Performance Across the Board
Highlights
- Revenue: $801 million (+9% YoY)
- Billings: $818 million (+13% YoY)
- Non-GAAP Operating Margin: 30%
- Free Cash Flow Margin: 27%
- Non-GAAP Operating Income: $239 million
- Non-GAAP Gross Margin: 82%
- Dollar Net Retention Rate: 102%
- International Revenue Growth: 13% YoY, representing 29% of total revenue
DocuSign has delivered a robust second quarter for fiscal year 2026, showcasing significant growth and strong financial discipline. The company's ability to innovate and strategically refine its operations has been a key driver of its performance this quarter.
Revenue and Billings Surge
DocuSign reported an impressive revenue of $801 million, marking a 9% year-over-year increase. This uptick in revenue was propelled by substantial growth in the company's direct sales channels, particularly within its eSignature business. Furthermore, billings surged to $818 million, achieving a 13% increase year over year, and exceeding expectations. This growth reflects DocuSign's ongoing commitment to enhancing its customer retention and expansion strategies.
Profitability and Cash Flow Resilience
The company's efforts in maintaining cost efficiency have yielded a non-GAAP operating margin of 30%, accompanied by a modest improvement in free cash flow margins at 27%. Non-GAAP operating income reached $239 million, demonstrating the company's effective operational management and dedication to preserving profitability amidst business expansion.
Retention and International Gains
DocuSign's dollar net retention rate rose to 102%, an improvement from the previous quarter, indicating strengthened customer loyalty and enhanced contract utilization. International operations contributed significantly, with revenue growth continuing to outpace the domestic market at 13% year-over-year, accounting for roughly 29% of total revenue. This reflects the success of DocuSign's global strategy.
Expansion and Innovation
Key to DocuSign's success has been the development and adoption of its Intelligent Agreement Management (IAM) platform. Despite being relatively new, it is steadily becoming a notable part of the company's revenue stream. Additionally, DocuSign's partnership initiatives, such as the significant collaboration with Microsoft Azure and new federal contracts, highlight the company's strategic approach to leveraging market opportunities.
In summary, DocuSign's second quarter stands as a testament to its strategic investments in innovation and operational efficiency, ensuring robust financial performance and market expansion.