DOCUSIGN Lifts FY27 Outlook as IAM Reaches 15.1% of ARR
Q2 revenue rose 9% to $875.7 million, free cash flow hit $295.8 million, and Docusign raised full-year revenue and ARR guidance on AI-driven IAM adoption.
Docusign (DOCU) reported second-quarter fiscal 2027 revenue of $875.7 million, up 9% year over year, and raised its full-year guidance for revenue, annual recurring revenue and the share of ARR coming from its Intelligent Agreement Management platform. The quarter ended July 31, 2026, and results were filed with the SEC on September 3, 2026.
IAM accounted for 15.1% of total ARR at the end of July, up from 12.6% three months earlier. The company now expects IAM to represent roughly 18% to 19% of total ARR exiting the fourth quarter of fiscal 2027.
GAAP net income came to $0.41 per basic share and $0.40 per diluted share, against $0.31 and $0.30 a year earlier. On a non-GAAP basis, diluted earnings per share were $1.16 versus $0.92, helped in part by a lower share count of 193 million against 211 million.
Cash generation improved sharply. Operating cash flow was $334.5 million compared with $246.1 million a year ago, and free cash flow reached $295.8 million, a 34% margin versus 27%. The company ended the quarter with $973.1 million in cash, equivalents and investments, and bought back $306.5 million of stock, up from $201.5 million.
GAAP gross margin edged up to 79.7% from 79.3%, while non-GAAP gross margin slipped to 81.7% from 82.0%. Revenue growth included roughly 1.3 percentage points of benefit from foreign exchange.
For the October quarter, Docusign guided to revenue of $886 million to $890 million, about 9% growth at the midpoint, with a non-GAAP operating margin of 31.3% to 31.7%. Full-year revenue is now seen at $3,499 million to $3,507 million, with ARR growth of 8.5% to 9.0%.
CEO Allan Thygesen said the company is raising its outlook as AI accelerates momentum across the business, adding that its AI agents are now securely executing contract workflows end-to-end. During the quarter Docusign shipped an agentic AI assistant, pre-built agents, an Agent Studio and a Model Context Protocol server, with integrations spanning Slack, Perplexity, Google's Gemini Enterprise, Anthropic, OpenAI and Microsoft Copilot.
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