DOCU

- DocuSign recently expanded its more than 20 year Salesforce relationship by embedding its Intelligent Agreement Management platform into Salesforce, Agentforce, and Slack, and also launched DocuSign PDF Editor to connect desktop document preparation directly into its IAM and eSignature workflows. - Together, the deeper Salesforce integration and new PDF Editor suggest DocuSign is trying to pull more of the agreement lifecycle into its own ecosystem. This can matter for customer stickiness, workflow efficiency, and how much value large enterprises place on its IAM platform. - We will now see how DocuSign's broader IAM footprint inside Salesforce and new PDF Editor could influence the existing investment narrative. Capture this agreement-automation momentum by scanning a curated set of SaaS and workflow platforms with resilient unit economics in the 21 high quality undiscovered gems. For DocuSign, the core belief is that agreement management keeps shifting from simple e signatures to full lifecycle automation, where IAM, AI agents, and deep ecosystem hooks become everyday tools for large enterprises. The Salesforce, Agentforce, and Slack integrations point to that direction, but the key near term catalyst still sits in whether IAM mix gains start to show up clearly against today's high single digit revenue growth. The biggest operational risk stays the same. If large deal activity and international expansion do not justify the investment in complex IAM deployments, and if cloud migration and hosting costs keep non GAAP gross margins around the low 80% range for longer, investors could keep treating DocuSign as a slower growth productivity vendor rather than a higher value workflow platform. The Salesforce partnership update is the most relevant development right now. IAM embedded inside Salesforce, Agentforce, and Slack means sales, legal, and operations teams can move from draft to renewal inside the CRM and collaboration stack, with contract data feeding AI agents for term tracking, renewal alerts, and risk surfacing. That connects tightly to the thesis that IAM needs to justify a much larger share of ARR over time. Execution is where this either reinforces or undercuts the current catalyst. If users actually run more of the agreement lifecycle inside Salesforce and Slackforce using DocuSign, that supports larger deal sizes and more durable workflows, which the existing narrative already flags as important. If adoption is slower or complexity causes friction, the risk around large enterprise focus and cautious guidance remains front and center. DocuSign's narrative projects US$4.2b revenue and US$624.4m earnings by 2029. Analysts are assuming 7.9% yearly revenue growth and this implies an earnings increase of about US$294.5m from US$329.9m today. Uncover why DocuSign's fair value indicates a 14% potential downside to its current price, leaving little room for error. One bullish twist you might explore is how some analysts already expected DocuSign to reach about US$4.4b revenue and US$695.3m earnings by 2029, before this Salesforce and PDF Editor news landed. That camp sees IAM as a bigger agreement layer story. If you disagree, that is exactly why comparing multiple narratives can help. Explore 6 other DocuSign fair value estimates, including one that suggests as much as 96% upside from the current price. Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your DocuSign research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. - See our latest analysis for DocuSign. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate DocuSign's overall financial health at a glance. Once you have a view on DocuSign, it can help to compare it with other businesses that share similar quality traits or risk profiles. The Simply Wall St Screener lets you scan the market quickly using fundamentals, so you can build a shortlist that fits your own style and risk tolerance. - If you care most about protection on the downside and steadier fundamentals, start with a basket of 31 resilient stocks with low risk scores that have historically kept risk scores in check. - If balance sheet strength matters to you, focus on companies from the list of solid balance sheet and fundamentals (25 results) where financial resilience and underlying fundamentals are front and center. - If you want ideas that are less crowded but still grounded in strong metrics, broaden your search with a 21 high quality undiscovered gems that filters for quality first. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DOCU. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

The company increased customer count to more than 6,000, acquired Fravity (now RiskOS_Agents), raised strategic funding at a $5.2B valuation, shipped DocV Omega and Global RiskScores and entered Q4 tracking toward its ARR objective of $450M as AI fraud accelerates. INCLINE VILLAGE, Nev., October 15, 2026--(BUSINESS WIRE)--Socure, the leading AI-native trust infrastructure for global identity and risk intelligence, today announced Q3 2026 results. During the quarter, Summit Partners led a growth investment valuing Socure at $5.2 billion, with participation from Goldman Sachs Alternatives, Wells Fargo, Docusign and others. Socure recorded $42.7 million in new bookings, renewed $34.2 million across 75 customers and entered Q4 tracking toward its total annual recurring revenue (ARR) objective of approximately $450 million by year-end. Q3 2026 at a glance - Valuation: $5.2 billion, set by a growth investment led by Summit Partners - New bookings: $42.7 million - Logo churn: 0.4% - Total ARR: On track to approximately $450 million by end of year - Customer growth: Doubled customer count to more than 6,000 - M&A: Fravity, now delivering first-party FinCrime Agentic Operations via RiskOS_Agents This quarter Socure added 3,000+ customers with channel partner expansion while growing existing customer relationships, reflecting continued demand for identity verification and fraud prevention across the customer lifecycle. An INTERPOL report estimates $442 billion was lost to fraud worldwide in 2025 and expects the scale of fraud to escalate over the next three to five years as AI lowers the barrier to entry. Companies are turning to Socure to rebuild trust and operate with confidence in the AI era. Socure now serves 6,000+ customers globally across 190+ countries. Socure's Q3 momentum was driven by both direct customer and channel growth, led by crypto and digital assets, payments and remittance, AI, workforce verification, fintech, and financial services. New and expanded customers in the quarter included Binance.US, SoFi, Circle, Stellar, a top three investment management company, three of the top four payments platforms, and a top two prediction market platform. Socure also moved on agentic AI from multiple directions in Q3, defending against accelerating fraud that AI enables, and using AI to run the defense. The company acquired Fravity, an agentic operations platform, now delivered as RiskOS_Agents, which automates fraud, risk and compliance investigation and operations inside RiskOS. "AI is changing fraud on both sides. Fraudsters are using it to attack at scale, and we are using it to defend at scale. Every organization needs real-time and accurate identity intelligence to make trusted decisions and be trusted," said Johnny Ayers, founder and CEO of Socure. "We've dedicated more than 12 years building the industry's most robust identity graph to power the models and solutions that are returning trust to the internet across 6,000+ customers." The Work That Matters: Stories from Q3 - Scaling crypto: Four of the five largest U.S. crypto exchanges now run on Socure. Binance.US selected Socure in September for identity verification, fraud prevention and compliance across onboarding, with document and selfie verification, liveness and watchlist screening running through RiskOS. As crypto matures into regulated, higher-volume use cases, exchanges are consolidating onto fewer identity vendors that can carry both the compliance obligation and the conversion target. - Raising the bar with Circle's Arc for instant settlement and identity decisions at the stablecoin on-ramp since day one. Arc launched its public mainnet with more than 100 institutional and ecosystem builders and a founding validator cohort that included BlackRock, DTCC, Mastercard and Visa. At launch, RiskOS was running identity verification and fraud prevention in the Arc Onramp Experience, the flow in which users move from fiat into USD Coin. Settlement on Arc finalizes in under a second; the decision to trust the counterparty has to keep pace. - Improving the economics of fraud investigation with the acquisition of Fravity. Detection was never the expensive part. U.S. organizations spend roughly $100 billion a year on fraud and compliance operations, and 53% of banks spend at least an hour on every alert. Socure acquired Fravity and is delivering it through RiskOS as RiskOS_Agents. In production, RiskOS_Agents have cut cost per case by up to 80%, resolved cases up to 5 times faster and reduced false positive alerts by up to 70%. - Enabling mobile driver's licenses (mDLs) for Login.gov with next-generation digital identity verification as digital wallet adoption scales. In partnership with Xcelerate Solutions, Socure is bringing its real-time identity verification, fraud detection and behavioral analytics to Login.gov's acceptance of state-issued mobile driver's licenses. Operating within Socure's FedRAMP Moderate environment, the capability verifies tamper-evident credentials remotely, giving users a secure, mobile-first way to access government services. Moving the Market Forward: Product Innovation DocV Omega: Verifying the Identity, Not Just the Document Document verification has historically been a static checkpoint, determining if an ID document is authentic, then delivering a pass or fail. This is exactly what a generated document with injected deepfakes is built to beat. DocV Omega, launched on RiskOS in Q3, answers the harder question: Can the identity presenting this document be trusted? It binds document and biometric evidence to the personally identifiable information (PII), phone, device, network, velocity, geolocation and identity intelligence Socure already holds, in one adaptive model trained on twelve years of confirmed fraud and trusted-user outcomes. The result is multidimensional detection connecting intelligence pillars to provide the most accurate final assessment, rather than individual checks at points in time. - DocV Omega catches 98% of fraud in the riskiest 5% of transactions, including 50% more synthetic document fraud and 43% more injection attacks and deepfakes compared with competitors, while holding a 99% true accept rate and a sub-second response time. - DocV Omega also returns a score, the reasons behind the score, and the underlying raw metadata, so teams can set their own thresholds or build their own models for approval, review or decline in a no-code environment. Global RiskScores: When an Email, a Phone and a Device Are All You Get Across a growing share of transactions, including AI platform sign-ups, prediction-market promotions, ticketing checkouts and agentic commerce purchases, organizations have little consumer information to inform trust decisions. Often, they have only an email address or a phone number and a device signal. Socure has long helped U.S. customers make accurate trust decisions at sign-up, even with limited information, by evaluating phone and email signals alongside device and graph intelligence. In Q3, Socure extended that approach internationally with country-aware Phone RiskScore and Email RiskScore. The scores connect phone and email signals to a device and identity, then assess whether those signals are associated with the correct identity. They compare the device's location with the transaction's location and evaluate hundreds of real-time email, IP and phone risk signals, including domain, tenure, origination and historical fraud in Socure's global graph. They also measure how often and with what velocity the identity appears in a customer's traffic through Socure's Local Graph. This gives organizations richer risk context from limited information. They can make accurate decisions earlier, catch fraud and apply a consistent approach across markets without adding regional vendors or strategies. The proof is in international markets, where fraud patterns and data availability differ from country to country. - A global remittance company extended Phone RiskScore into its fastest-growing international LATAM market and captured 78% of phone fraud in the riskiest 5% of applicants: roughly 50% better than the leading competing solution. - A large U.S. payments provider used Global Email RiskScore to launch in APAC and caught more than 68% of fraud in the riskiest 5% of international applicants. About Socure Socure is the leading AI-native trust infrastructure, providing identity and risk intelligence to the world. Socure is trusted by the largest enterprises and government agencies to mitigate risk with its identity verification, compliance and fraud prevention solutions. Leveraging AI and machine learning, Socure achieves the highest accuracy, automation, and capture rates in the industry. Socure serves more than 6,000 customers in 190+ countries across financial services, government, gaming, health care, telecom, social media, marketplace technology and e-commerce. Socure's customer base includes the top five U.S. banks, four of the Magnificent Seven, the largest HR payroll and workforce providers, four of the five largest U.S. crypto exchanges, the largest sportsbook and prediction market operators, 180 organizations across the public sector and more than 700 fintechs. Leading organizations trust Socure to deliver certainty in identity across onboarding, authentication, payments, account changes, and regulatory compliance. Learn more at www.socure.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20261015531296/en/ Contacts [email protected]

FactSet Research Systems Inc. FDS has reported impressive results for fourth-quarter fiscal 2026, wherein earnings and revenues surpassed the Zacks Consensus Estimate. FDS's adjusted earnings were $4.52 per share, beating the Zacks Consensus Estimate of $4.32 by 4.6%. The figure increased 11.6% from the year-ago quarter. Revenues of $634.7 million topped the consensus mark of $628.2 million by 1% and rose 6.3% year over year. Revenue growth and a lower share count supported adjusted earnings, while organic revenue growth of 7.1% and a 7% increase in organic Annual Subscription Value (ASV) underscored commercial momentum. FactSet Research Systems Inc. price-consensus-eps-surprise-chart | FactSet Research Systems Inc. Quote Organic revenues were $635.5 million in the quarter, up from $593.5 million a year earlier. ASV, which represents forward-looking revenues for the next 12 months from current subscription services, totaled $2.57 billion as of Aug. 31, 2026, compared with $2.41 billion a year earlier. Organic ASV increased $168.2 million year over year to $2.57 billion. Annual ASV retention remained above 95%, while average renewal contract length increased about 30% during the quarter. FactSet also said that AI solutions ASV added in fiscal 2026 more than doubled year over year, reflecting continued adoption of its AI offerings. Americas revenues were $414.3 million compared with $388.7 million in the prior-year quarter, with organic revenues rising 6.7%. Organic ASV in the region increased 7.1% to $1.68 billion. EMEA revenues were $154.8 million, with organic revenue growth of 6.6%, while organic ASV rose 5.2% to $623.6 million. The Asia Pacific revenues reached $65.6 million, and the region posted organic revenue growth of 11.0% and organic ASV growth of 10.6%. Adjusted operating income increased 3.8% year over year to $209.4 million. The adjusted operating margin contracted to 33% from 33.8% due to higher compensation expenses tied to ASV-linked incentive plans and increased technology-related expenses. Adjusted net income rose 4.1% to $160.9 million. The GAAP operating margin fell to 24.7% from 29.7%. FactSet attributed the decline primarily to higher employee compensation costs, including one-time restructuring charges and ASV-linked incentive plans, partly offset by revenue growth. GAAP earnings decreased 15.4% to $3.41 per share. Net cash provided by operating activities was $204.7 million in the fiscal fourth quarter, down 3.5% year over year. The free cash flow declined 0.5% to $177.3 million. Cash and cash equivalents stood at $233.3 million at fiscal year-end, while current and long-term debt totaled $499.4 million and $870.6 million, respectively. FactSet returned more than $179 million to shareholders during the quarter, including $138 million in share repurchases and more than $41 million in dividends. It repurchased 552,064 shares at an average price of $249.90, leaving $356 million available under its repurchase authorization. Full-year GAAP revenues increased 6.7% to $2.48 billion, marking the company's 47th consecutive year of revenue growth. Adjusted earnings rose 6.1% to $18.01 per share, extending FactSet's streak of annual adjusted diluted earnings growth to 30 years. Adjusted operating income increased 1.4% to $855.3 million. For fiscal 2026, net cash from operating activities increased 13.2% to $822.2 million, while the free cash flow rose 14.6% to $707.5 million. The adjusted operating margin was 34.5%, compared with 36.3% a year earlier. FactSet returned $808 million to shareholders during the year and recorded its 27th consecutive annual dividend increase. For fiscal 2027, FactSet expects organic ASV growth of 5-6.5%. Revenues are projected between $2.6 billion and $2.63 billion. The midpoint ($2.62 billion) of the guided range is slightly below the Zacks Consensus Estimate of $2.62 billion. Adjusted operating income is expected to be $903-$925 million. The company forecasts a GAAP operating margin of 31% to 32% and an adjusted operating margin of 34.75% to 35.25%. Adjusted EPS is projected to be $19.25-$19.65. The Zacks Consensus Estimate for fiscal 2027 EPS is pinned at $19.84. The adjusted guidance excludes certain non-recurring benefits or charges that may arise during fiscal 2027. FDS carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Paychex PAYX reported an impressive first-quarter fiscal 2027. PAYX registered adjusted earnings of $1.34 per share, rising 9.8% year over year and beating the Zacks Consensus Estimate of $1.33 by a slight margin. Total revenues rose 5.9% to $1.63 billion, topping the consensus mark of $1.62 billion by a small margin. Docusign, Inc. DOCU posted impressive second-quarter fiscal 2027 results. DOCU reported second-quarter fiscal 2027 adjusted earnings of $1.16 per share, which increased 26.1% year over year and surpassed the Zacks Consensus Estimate of $1.08. Revenues increased 9.4% to $875.7 million and beat the consensus mark of $867.6 million by 0.9%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report Paychex, Inc. (PAYX) : Free Stock Analysis Report Docusign Inc. (DOCU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Docusign, Inc. DOCU reported impressive second-quarter fiscal 2027 results, with both earnings and revenues beating the Zacks Consensus Estimate. However, the better-than-expected results failed to impress the market, as the stock has edged down 2.3% since the earnings release on Sept. 3. DOCU reported second-quarter fiscal 2027 adjusted earnings of $1.16 per share, which increased 26.1% year over year and surpassed the Zacks Consensus Estimate of $1.08. Revenues increased 9.4% to $875.7 million and beat the consensus mark of $867.6 million by 0.9%. The quarter benefited from rising Intelligent Agreement Management (IAM) adoption and stronger operating leverage. IAM accounted for 15.1% of total annual recurring revenue (ARR), up from 12.6% in the first quarter. Docusign Inc. price-consensus-eps-surprise-chart | Docusign Inc. Quote IAM remained central to Docusign's growth strategy. Customers have ingested more than 300 million documents through Agreement Manager, while cumulative active accounts using the company's Model Context Protocol server more than quadrupled during the quarter. Docusign also launched AI assistant and agentic capabilities for contract analysis, redlining and workflow automation. Management said the AI assistant cut the time needed in user testing to summarize, review and finalize agreements such as nondisclosure agreements by half. The company also expanded IAM integrations across Slack, Perplexity and Google Cloud's Gemini Enterprise for Legal. Management said most IAM ARR is being generated from Docusign's existing installed base. Customers moving from e-signature to IAM are also providing meaningful expansion opportunities as the platform adds broader agreement-management capabilities. Total customers increased nearly 10% year over year to more than 1.9 million, driven partly by the digital channel. Dollar net retention among direct customers was 103%, improving modestly from both the prior quarter and year-ago period as expansion contributed more to retention gains. The number of customers spending more than $300,000 in annual contract value rose 14% to nearly 1,300. International operations accounted for 31% of revenues. Reported revenue growth included a 1.3-percentage-point foreign-exchange benefit. Excluding currency and the prior-year impact of digital add-ons, management said revenue growth accelerated by nearly 1 percentage point. Non-GAAP operating income rose 15.9% year over year to $276.8 million. Non-GAAP operating margin expanded 180 basis points to 31.6%, exceeding the midpoint of management's guidance by 160 basis points. Roughly half of the outperformance came from stronger revenues, with the remainder reflecting operating-cost discipline and higher capitalized software costs. Non-GAAP gross margin slipped 30 basis points to 81.7% as the ongoing cloud migration weighed on profitability. Docusign ended the quarter with 7,137 employees, up 3% year over year, with all year-over-year headcount growth coming from lower-cost locations. Stock-based compensation declined to 17% of revenues, down 3 percentage points. Net cash provided by operating activities increased to $334.5 million from $246.1 million a year ago. Free cash flow climbed 35.9% to $295.8 million, while free cash flow margin improved to 34% from 27%, supported by operating leverage and working-capital gains. Cash, cash equivalents and investments totaled $973.1 million at quarter-end, and Docusign had no debt. The company repurchased $306.5 million of stock during the quarter, helping reduce diluted shares outstanding by 8% year over year to 193 million. It retained $2.1 billion under its share repurchase authorization. For the third quarter, Docusign expects revenues of $886-$890 million, representing 9% year-over-year growth at the midpoint and including a 1-percentage-point foreign-exchange tailwind. The current Zacks Consensus Estimate for revenues is pinned at $886.8 million. Non-GAAP gross margin is projected to be in the range of 81.5-81.9%, while non-GAAP operating margin is expected to be between 31.3% and 31.7%. For fiscal 2027, revenues are now expected to be between $3.499 billion and $3.507 billion, with 9% growth at the midpoint. The current consensus estimate for revenues is pegged at $3.5 billion. ARR growth is projected to be in the range of 8.5-9% compared with 8% in fiscal 2026. Management expects IAM to account for 18-19% of total ARR exiting the fourth quarter. Full-year non-GAAP operating margin is forecast at 31-31.5%, while non-GAAP gross margin is expected at 81.5-82%. Currently, Docusign carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Verisk VRSK reported second-quarter 2026 diluted adjusted earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.94 by 2.1%. The figure increased 5.3% from the year-ago quarter. Revenues of $806.3 million topped the consensus mark of $802.4 million by 0.5% and rose 4.3% year over year. Corpay, Inc. CPAY posted impressive second-quarter 2026 results. CPAY reported adjusted earnings per share of $7, rising 36% year over year and surpassing the Zacks Consensus Estimate of $6.60 by 6.1%. Revenues increased 21% to $1.33 billion, beating the consensus mark by 2.6%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Docusign Inc. (DOCU) : Free Stock Analysis Report Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report Corpay, Inc. (CPAY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Sept. 3, 2026 at 5:00 p.m. ET Vice President of Investor Relations - Gary Fuges Chief Executive Officer - Allan Thygesen Chief Financial Officer - Blake Grayson Operator: Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Second Quarter of Fiscal Year 2027 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded and will be available for replay from the Investor Relations section of the website following the call. I will now pass the call over to Gary Fuges, Vice President of Investor Relations. Please go ahead. Gary Fuges: Thank you, operator. Good afternoon, and welcome to DocuSign's Second Quarter of Fiscal Year 2027 Earnings Conference Call. Joining me on today's call are DocuSign's CEO, Allan Thygesen; and CFO, Blake Grayson. The press release announcing our second quarter of fiscal 2027 results was issued earlier today and is posted on our Investor Relations website, along with a published version of our prepared remarks. Before we begin, let me remind everyone that some of our statements on today's call are forward-looking, including any statements regarding future performance. We believe our assumptions and expectations related to these forward-looking statements are reasonable, but they are subject to known and unknown risks and uncertainties that may cause our actual results or performance to be materially different. In particular, our expectations regarding factors affecting our pace of innovation and customer adoption are based on our best estimates at this time and are therefore subject to change. Please read and consider the risk factors in our filings with the SEC, together with the content of this call. Any forward-looking statements are based on our assumptions and expectations to date, and except as required by law, we assume no obligations to update these statements in the light of future events or new information. During this call, we will present GAAP and non-GAAP financial measures. In addition, we provide non-GAAP weighted average share count and information regarding free cash flow and ARR. These non-GAAP measures are not intended to be considered in isolation from, a substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing our performance. For information regarding our non-GAAP financial information, the most directly comparable GAAP measures and a quantitative reconciliation of those figures, please refer to today's earnings press release, which can be found on our website at investor.docusign.com. And with that, I'd like to turn the call over to Allan. Allan Thygesen: Thank you, Gary, and good afternoon, everyone. Q2 capped a strong first half of execution. We delivered further on our road map to accelerate innovation in our Intelligent Agreement Management, or IAM, platform. We unlocked even greater customer value within IAM and further extended IAM's functionality into the tools where our customers work, while driving efficiency as we scale. Our platform strategy is working as reflected in IAM now accounting for 15.1% of total ARR, up from 12.6% in Q1. We generated strong financial results in the second quarter with $876 million in revenue, up 9% year-over-year and a 32% operating margin and approximately $300 million in free cash flow that helped support over $300 million of share repurchases in Q2. As reflected in our increased ARR guidance for fiscal year 2027, we believe we are well positioned for continued execution in the second half of this year and beyond. I'll review our product innovation and go-to-market highlights for the quarter, and then Blake will review our Q2 financial performance and updated guidance. We'll then take your questions. Building on the foundational strength of our market-leading e-signature offering, IAM is uniquely able to aggregate, analyze and unlock the value of an organization's agreement data to improve business decisioning. Point solutions and stand-alone AI tools cannot address the breadth of this challenge securely and at scale the way DocuSign IAM can. Customers have now ingested more than 300 million documents through IAM's Agreement Manager. And we're scaling IAM efficiently. As we outlined in a new series of blog posts, IAM's AI native architecture is processing workloads at significantly lower marginal costs than offerings that route to external LLMs. This is the key reason we were able to significantly increase cumulative documents ingested in IAM sequentially in Q2, while maintaining high gross margins over the same period. Since our last call, we launched key products and integrations to strengthen IAM across every step of the agreement life cycle from new AI assistant and Agentic capabilities, extending IAM into additional surfaces where customers work and increasing the functional specialization of the platform. Taken together, they signal how IAM is delivering more customer value and shifting from managing agreements to acting on them across every function that touches a contract. In August, we launched AI assistant and Agentic capabilities that help organizations unlock greater value and accelerate workflow automation. IAM's new Agentic features include an AI assistant that powers contract analysis and redlining and triggers Agentic workflows, prebuilt agents for common use cases, including document intake and vendor renewal; and Agent Studio, where customers can build, govern and deploy custom agents for specialized uses like executing business playbooks, compliance auditing and evaluating vendor pricing and the ability to embed agents directly into IAM's workflow builder for end-to-end agreement management. This powerful Agentic suite is adding value for business out of the gate. In user testing, the AI assistant cuts the time it takes for customers to summarize, review and finalize agreements like NDAs in half. DocuSign continues to make IAM available across an ecosystem of partners to meet customers where they work via the DocuSign MCP server, the agreement layer for Agentic Enterprise. In June, we announced the general availability of the DocuSign app for the Slack marketplace, providing Agentic contract workflows directly in Slack as well as an integration with Perplexity to help teams automate contracting workflows and facilitating collaboration across their business partners. In August, we also added Google Cloud's Gemini Enterprise for Legal. These are in addition to existing connectors with Anthropic, Gemini, OpenAI and Microsoft Copilot. While still early, MCP adoption continues to ramp with cumulative active accounts more than quadrupling during the quarter. DocuSign as the agreement layer will be open to every agent at the end of this month when DocuSign's MCP server goes GA. Additionally, we're bringing contract lifecycle management into the AI age with the general availability of IAM Agreement Managers integration into DocuSign CLM. All CLM customers can now leverage a single AI-driven repository for eSign and CLM to unify fragmented data, expand access to agreements and its associated data and reduce manual processes and implementation costs. Further, this integration connects CLM's robust workflow capabilities with IAM's next-generation functionality, including AI-powered search and extractions, MCP connectivity to external AI platforms and IAM's new Agentic suite. It's one more step towards expanding IAM further into our existing enterprise base and customer reception has been highly encouraging. In Q2, we made AI-assisted Web Forms generally available, enabling users to transform static documents in interactive shareable forms. The ability to unlock hundreds of millions of legacy documents and their associated data is a game changer, especially for document-intensive industries like financial services, government and health care. Our strategy is resonating with customers and prospects across both direct and digital channels. Our direct sales teams executed well in the quarter with IAM exhibiting strength across all of our geographic regions and customer segments. Here are a few examples of customer wins in Q2. Salesforce is deploying IAM as a trusted system of record for agreements, turning key agreement data into actionable signals that guide decisions. Oppenheimer is using IAM to streamline onboarding, build AI-powered workflows and empower advisers to provide a world-class customer experience to the firm's wealth management clients. SailPoint, a leader in adaptive identity security, is deploying IAM across its organization to accelerate sales contract processing and gain greater visibility into the business. Upstart, an AI lending company is automating customer and borrower workflows to reduce onboarding time lines from months to weeks and accelerate time to revenue. Optimizely, a leading digital experience platform that helps companies build, manage and test their websites is adopting DocuSign IAM to streamline sales agreements and accelerate quote to revenue. IAM's Agreement Desk provides a shared collaborative workspace where teams can review redline and approve contracts faster. And HydroCorp, a leading provider of water safety compliance services has adopted IAM for sales, integrated with Salesforce to eliminate manual handoffs and accelerate sales processes. The time required to prepare a new contract has decreased from 2 to 3 hours to 20 minutes. These examples all demonstrate how DocuSign is reaching across industries and customer sizes to deliver value and transform businesses across the global economy. We're excited about the potential we have in front of us. In closing, we are executing on our strategy. We're accelerating our pace of innovation with efficiency and delivering customer value within our platform and through our integration partners while delivering strong financial results. I'm proud of the DocuSign team's commitment to our mission. By increasing our fiscal year 2027 ARR guidance and IAM's contribution to it, we entered the second half of the year on the front foot, and we're confident in our ability to execute further on our strategy. With that, I'll turn the call over to Blake. Blake Grayson: Thanks, Allan, and good afternoon, everyone. As Allan shared, our Q2 performance reflects continued solid execution across our core priorities. The foundation of that momentum is our deliberate focus on driving product and feature differentiation for our customers via the IAM platform, unlocking productivity and value for their businesses. We are delivering product innovation at a rapid pace, and we're seeing that translate into accelerating IAM adoption, which now accounts for 15.1% of our annual recurring revenue. We have also maintained strong operational discipline, expanding operating margins year-over-year and generating nearly $300 million in free cash flow this quarter while opportunistically redeploying that capital back to shareholders, all while continuing to invest thoughtfully in our core growth engines. I'll now walk you through our financial results for the quarter and our updated outlook for the rest of the year. Q2 revenue was $876 million, up 9% year-over-year on an as-reported basis that included a 1.3 percentage point benefit from foreign exchange rates with international representing 31% of total revenue. After adjusting for the FX tailwind and last year's strength in digital add-ons, year-over-year revenue growth accelerated by nearly 1 percentage point. Our Q2 growth drivers align closely with the trends we've seen over the past several quarters. IAM adoption again slightly exceeded our expectations, continuing its trajectory as an increasingly meaningful part of our business. And that strength was well balanced with solid IAM gains across all regions, including our commercial and enterprise segments. Gross retention remained healthy during the quarter and continued to show steady progress as well. Dollar net retention or DNR, from our direct customers was 103% on a rounded basis, up modestly from last quarter and the prior year. For fiscal 2027, we continue to expect a modest improvement in DNR on a year-over-year basis. Looking ahead, we see an opportunity to further build on this momentum as we deliver greater customer value, particularly by deepening IAM adoption. Total customer growth remained strong in Q2, accelerating to nearly 10% year-over-year to over 1.9 million customers. Accelerating customer growth was driven in particular by our digital channel, while customer engagement across the platform also showed solid momentum, driven by steady year-over-year growth in both envelopes sent and contract utilization, our key measure of customer consumption. We also saw the number of customers spending over $300,000 in ACV grow 14% year-over-year to nearly 1,300, the second quarter in a row of double-digit growth. We remain encouraged by the early adoption of IAM among our larger customers as we continue to demonstrate its strategic value to enterprise companies. Turning to profitability. We continue to balance disciplined expense management with targeted investments in product innovation, specifically across the IAM platform to deliver incremental value to our customers and ultimately accelerate growth. In Q2, non-GAAP gross margins were 81.7%, down slightly compared to the prior year as expected due to our ongoing cloud migration investment. We continue to expect fiscal 2027 gross margins to decline slightly year-over-year due to this migration, which remains on track to be largely complete by the end of this fiscal year. I'm proud of the DocuSign team for helping deliver consistently strong gross margins even as more customers adopt our AI-driven features in the IAM platform. As Allan mentioned, a lot of work goes on behind the scenes to provide not just a great customer experience, but to do so with fiscal discipline. Non-GAAP operating income was $277 million in Q2, up 16% year-over-year. Operating margin was 31.6%, up 180 basis points compared to the prior year and outperformed our guidance midpoint by 160 basis points. Approximately half of the outperformance relative to our guidance was driven by stronger revenue that naturally flowed through to operating profit. The remaining half was driven generally equally between continued operating cost discipline, including managing our hiring ramp and higher capitalized software costs related to more engineering capacity directed toward capitalizable development projects. These capitalized costs are reported in our capital expenditures and do not have an incremental impact on free cash flow. Non-GAAP diluted EPS in Q2 was $1.16, a 26% year-over-year improvement and GAAP diluted EPS was $0.40, a 33% year-over-year improvement. The strong year-over-year growth was driven by a combination of improving operating results, including lower stock-based compensation as well as a declining share count driven partially by our stock buyback activity. We ended Q2 with 7,137 employees, up 3% year-over-year. While we are hiring across all of our global offices, all of our year-over-year headcount growth in Q2 was from lower cost locations, and we generally expect that trend to continue. In Q2, free cash flow was $296 million and up over 35% from the prior year, representing a 34% margin. Strength in Q2 compared to the prior year was driven primarily by improving operating leverage in the business, along with continued gains in working capital management. As a reminder, free cash flow can vary quarter-to-quarter due to the timing of payments and collections. Over the trailing 12-month period, DocuSign has generated $1.2 billion in free cash flow, which is up nearly 3x from the amount we generated in the full year of fiscal 2023. Over the past 3.5 years, DocuSign has been singularly focused on building new sources of long-term value creation for our customers, particularly via IAM while being ever mindful of generating durable and profitable growth. Our balance sheet remains strong, ending the quarter with just under $1 billion of cash, cash equivalents and investments. We have no debt on the balance sheet. In Q2, we repurchased $307 million in stock, which helped reduce our total diluted shares outstanding by 8% year-over-year to 193 million. Our core focus remains on generating strong free cash flow while funding strategic growth initiatives and returning excess capital opportunistically to shareholders. We ended the quarter with $2.1 billion remaining under authorization for future share repurchases. Stock-based compensation expense declined to 17% of revenue in Q2, an improvement of 3 points year-over-year as we continue to focus on improving our efficiency in this area. With that, let me turn to guidance. For the third quarter, as-reported revenue is expected to be in the range of $886 million to $890 million, an increase of 9% year-over-year at the midpoint on an as-reported basis, including a 1 percentage point tailwind from FX. Non-GAAP gross margin is expected to be in the range of 81.5% to 81.9%. Non-GAAP operating margin is expected to be in the range of 31.3% to 31.7%. Non-GAAP fully diluted weighted average shares outstanding is expected to be between 191 million and 196 million. And for fiscal year 2027, we now expect as-reported revenue in the range of $3.499 billion to $3.507 billion, an increase of 9% year-over-year at the midpoint on an as-reported basis, including an approximately 1 percentage point tailwind from FX. Our update to full year revenue guidance includes passing through the entire outperformance we delivered in Q2, plus additional outperformance assumed in the second half of the year, partially offset by incremental foreign currency headwinds of approximately $4 million. We now expect non-GAAP gross margin between 81.5% and 82.0% non-GAAP operating margin between 31.0% and 31.5% non-GAAP fully diluted weighted average shares outstanding between 190 million and 195 million, a meaningful reduction from the prior year as we continue to expect that our buyback activity will be an important driver to more than offsetting dilution. Turning to ARR. We continue to expect an acceleration in full year ARR growth compared to the prior year. More specifically, we now expect fiscal 2027 ARR growth to be in the range of 8.5% to 9.0% year-over-year. This compares to 8.0% ARR growth in fiscal 2026. We now expect that IAM ARR will represent between 18% and 19% of total ARR exiting Q4 of fiscal 2027. For detailed commentary on top and bottom line factors to guidance, please see the modeling considerations appendix in the prepared remarks and investor deck presentations on our Investor Relations website. In closing, our Q2 performance builds on a strong start to fiscal 2027, balancing operational efficiency with ongoing IAM platform expansion. We remain encouraged by growing IAM adoption as we drive more value and efficiency for our customers. These results support our actions to raise our full year guidance for ARR, IAM share of total ARR, total revenue, excluding the impact of foreign currency and operating margin. Entering the second half, our focus remains clear: improve the features and experience for our customers across the platform that can help us accelerate ARR growth, drive continued operating leverage and deliver long-term value for shareholders. With that, operator, let's open the call for questions. Operator: [Operator Instructions] Our first question comes from the line of Bill McNamara with Evercore. William McNamara: This is Bill on for Kirk. Looking across the portfolio, which products or offerings are currently outperforming your expectations? And to what extent are those areas contributing to the improvement in dollar net retention to 103% versus 102% last quarter? Allan Thygesen: Yes. Thanks for the question. So we saw outperformance across the board across eSign and IAM and IAM obviously being the main driver of the growth acceleration that we saw and that we are projecting for the remainder of the year. Blake Grayson: Yes. And I'll just take a second to add on top. I would say one of the things that we saw this quarter that is exciting or encouraging for us is that the contribution from expansion is contributing a larger portion of our improvement in dollar net retention as we've seen previously. And so just as a reminder, we made some good retention gains over the past few years. The vast bulk of that has come from retention. And so now we're starting to see is more contribution from the expansion side of the business, which is encouraging. It's a little bit more balanced. I mean, obviously, with the size of the book we have, gross retention is a huge lever for us, but we are seeing expansion play a bigger role in that. Operator: Our next question comes from the line of Alex Zukin with Wolfe Research. Unknown Analyst: This is Jason on for Alex. So on some of your product announcement this quarter, you have shipped IAM connectors into ChatGPT, Slack, Perplexity, Gemini. So essentially, you're embedding the agreement intelligence inside the AI platforms rather than competing with them. So first, maybe can you help us understand the commercial model here? So do you need to upgrade to IAM in order to use those connectors? And also, is there any of that contributing to IAM attach for users today? And how are you viewing those as a separate distribution channel for IAM? Allan Thygesen: Yes. Well, first of all, we -- as you noted, we've announced a number of different integrations. We actually will be sharing news about our MCP server going general availability at the end of the month. So I think that's pretty exciting. In terms of the value to the business, I think customers are still examining exactly how they want to deploy agreements across different tools. We've always had a strategy of being available in any tool that the customer is their source of truth and is the work environment that people want to be in. So long-standing relationships with Salesforce and Microsoft, Workday, SAP and so on. And so this is a logical extension of that as people adopt general purpose chat engines, like, as you mentioned, ChatGPT and Anthropic and Gemini or a powerful tool like Slack or some of the new legal tools, there are now new technologies available to make DocuSign workflow and agreement intelligence available that way. And we think that's a natural extension of our highly successful strategy of a balance of the very powerful tool DocuSign offers itself as well as making it available in any third-party tool that wishes to. Our enterprise clients can even integrate it themselves via using our APIs or using MCP. Operator: Our next question comes from the line of Tyler Radke with Citi. Tyler Radke: Just going back to, I guess, kind of a combination of the strength you saw in large customers, but also top of funnel. And as we think about the IAM capabilities, can you just talk to like how much of this raise and momentum would you attribute to better execution versus sort of new capabilities, new use cases being unlocked by some of the innovation that you've done and the expansion that the IAM suite has been able to unlock. Allan Thygesen: Well, I think it's intrinsic to our IAM strategy to expand the number of use cases for our technology. We've obviously always been very, very strong in sales, and that continues. So for a variety of sales-related use cases, customer experience use cases, we're seeing a lot of interest and deployments now in the procurement area. And HR is another area where people use DocuSign technology. So I'd say it's very broad in terms of the functional applications. From a customer perspective, we are very strong across all customer segments. You see strength both in our commercial and our enterprise business. One noteworthy thing, I think, this quarter is we're really starting to see deal sizes pick up. So at the very top of the book, we saw the largest deal we've ever done in U.S. public sector, the largest deal we've ever done in LatAm, -- taking a slightly broader view, the number of $300,000-plus deals -- we're up 14% year-over-year. That comes from both enterprise and mid-market, but that's another evidence of the overall growth in deal size. And as Blake alluded to on the expansion point, I think there's more to come there. So we're really excited about that, and that's part of what gives us the confidence to raise our ARR outlook. Operator: Our next question comes from the line of Michael Turrin with Wells Fargo. Michael Turrin: If we just kind of parse the growth metrics, the ARR metric is outpacing what we're looking at in terms of constant currency revenue growth. I know we're deemphasizing billings, which has been a bit noisy. But just help us parse what's driving the delta between the growth rates, what makes ARR the better metric in terms of gauging the overall results and what drove confidence in increasing the ARR growth rate for the rest of the year? Blake Grayson: Sure. Let me -- I'll take a stab at this one. The first thing I want to communicate across is the underlying momentum in both revenue and ARR is strong. Bear with me as I walk through this a little bit because on the revenue side, it can be a little complicated. So first, really pleased with Q2 execution, right, beating the high end of the revenue guide. And after you adjust for the incremental headwind from FX relative to the prior guide, we're passing through the entire Q2 beat, and we're also raising the second half revenue expectation slightly. But also remember, there are some components to revenue that are not included in ARR. So that's primarily revenue acceleration from early renewals, digital add-ons, and then there's some professional service fees that can fluctuate as well. But once you adjust revenue for the impact of both FX and those digital add-ons, we're actually accelerating Q2 revenue growth by just under 1 percentage point year-over-year. And our guidance also includes an acceleration year-over-year in the second half as well. I'd encourage folks to look at the extra detail on this. It's in the modeling consideration section of the prepared remarks. And we split it out a little bit more this quarter. So you can see the tailwind from the launch of digital add-ons last year and then the headwinds we started facing in Q4 of '26 as we've been actively working to transition a number of these customers to subscription plans. And so additionally, remember, digital add-on revenues recognized based on usage, where subscription plan revenue is recognized ratably over the period. And then also just importantly, with that kind of noise in there that I've tried to normalize for, the impact from digital add-ons in Q4 of this year should be pretty immaterial. So just -- just stepping back a second, we're pretty excited about the momentum we're seeing from IM adoption because it starts with ARR and then flows eventually through revenue and then also second half shows some acceleration of the revenue line as well. Operator: Our next question comes from the line of Brent Thill with Jefferies. Unknown Analyst: This is Ria on for Brent. Just one on the strength in the customer metrics. I think you mentioned the second quarter of double-digit growth in the greater than $300,000 ACV cohort and that deals are also getting larger. Do you mind just touching on a little bit about what's driving the strength in the upmarket in particular? Allan Thygesen: Yes, that's coming very much from the IAM part, but we're also doing well on the signed piece. So there's still some large deals getting signed there. But the bulk of the expansion and growth there is driven by our IAM products. And we're seeing that really across different functions and industries. So there's not a particular pattern. DocuSign has such a big diversified pool of customers. And we still have a long, long way to go. It's exciting to see the progress, but we have an incredible installed base, and we're very excited about the opportunity to help all of them benefit from this next generation of agreement management. Operator: Our next question comes from the line of Chris Quintero with Morgan Stanley. Christopher Quintero: I wanted to get your thoughts on the IAM adoption, specifically around maybe some of the key go-to-market lessons that you've learned as you've rolled it out and gotten some of this early adoption that you're calling out here. Allan Thygesen: Yes. So I think as we've shared before, we've been very pleased with how quickly customers are able to roll out some of the immediately available functionality, things like the intelligent repository and so on. Some of the workflow tools obviously take a little longer because people have to adjust their workflows, but we're really pleased overall with where that's going, and that's obviously key to our long-term health and value with customers. But I'd say all the early signs are very encouraging. Operator: Our next question comes from the line of Patrick Walravens with Citizens. Patrick Walravens: Congratulations you guys. Allan, in your prepared remarks, you talked about IAM is uniquely able to analyze and unlock the value. But then you give this metric, you say that we have now ingested 300 million documents. I was meeting with a lawyer recently who's -- they use both Claude and OpenAI, and he's allowed to upload 20 documents at a time. And you guys have 300 million, right? So can you just explain for investors very simply because I think this is a big part of the investment thesis here. Why is it so important that you guys have ingested so many agreements? What is the benefit to you? What's the competitive advantage that you get from that? Allan Thygesen: Right. I think there's a couple of points there. First, the overall size of the corpus that we've uploaded just allows us to have incredible richness and heterogeneity in our data set. And these are all private consented agreements, not just what's publicly available. And so that gives us the richness and that is, in turn, what powers our accuracy. And then the second point is in order to manipulate very large agreement libraries, and no individual customer obviously has 300 million, but there are customers that have many millions of agreements. you needed to build your architecture such that, that is performant and cost effective. And DocuSign, I think we realized that problem at the beginning and built our system that way. So we're taking advantage, for example, of a variety of preprocessing to make the system performance. This also lowers costs. And so we are able to create the right balance of scalability, performance and accuracy. I think it's a combination of those 2. It's the overall size of the library that gives us a richness and accuracy and detection. And then it's the ability for an individual customer to have these very large agreement libraries and have great experiences for the various users that need to access that. You can't sit there and wait for 5 minutes or upload 10 documents at a time and then figure out you missed one and you got to go back and find the one you're missing. DocuSign has deep familiarity with agreements. As an example, we can extract the prevailing terms from a very large library set of agreements. So often, there will be 50, 100, 200, 300 agreements governing a single relationship between a company and its customer, a company and its vendor and figuring out which terms actually prevail is a significant effort for an individual lawyer. We can do that automatically. So the scalability applies at many levels, and I think it's a very meaningful competitive advantage for us as we go forward. Operator: Our next question comes from the line of Patrick McIlwee with William Blair. Patrick McIlwee: Nice results this quarter. So my question is really, as IAM becomes a larger percentage of ARR, can you help us distinguish how much of that ARR represents migration or reclassification of spend that previously might have sat in core eSIGs or CLM versus truly incremental wallet expansion? Or said another way, when a customer moves from signed to IAM, is there anything you can share in terms of the typical uplift you're seeing in total contract value? Blake Grayson: Sure. Let me take a stab at that. So the bulk of the -- like the IAM kind of the percentage of ARR that we're driving is from our existing installed base. That said, we still have a very healthy NewCo kind of segment that we're driving through that as well. But just with the -- you can imagine with the size and the scale of the customers that we have, we have around 290,000 direct customers right now, 1.9 million total customers. That's a pretty nice situation to have for an installed base. You can go talk to them about this platform. So that's the bulk of it, right, for us to do, but we also have NewCo. With regard to expansion, we don't disclose the level of expansion. We have said and continue to say that it is a meaningful expansion when you see people sign up for IAM for the first time. We also see people upgrade, right, in the middle of their contract that they signed with us. We also have situations where customers may have a retention situation that we use, right, for that for them. We also have situations where enterprises, right? This is very early for us still in the enterprise space, even though we're excited about it, and we are seeing these green shoots of opportunity. There's just a number of reasons, and you've got competitive reasons as well. So there's kind of a list of reasons on the expansion side. But we are seeing a healthy expansion from customers when they upgrade from just an e-signature motion to a much richer, much deeper kind of partnership with DocuSign in that relationship. Operator: Our next question comes from the line of Rishi Jaluria with RBC. Rishi Jaluria: Nice to see continued strength and resilience in the business. Maybe I want to start on IAM, which obviously we've been talking about. But I want to think about the connector side. Can you walk us through mechanically what type of customer does one need to be to actually be leveraging them to the full extent? Is this something that can be a separate distribution channel for IAM? And maybe importantly, as we think about the discovery process of new customers coming to you, can this be beyond distribution channel, even just a discovery channel that via some of these connectors and integration with AI systems, it just brings more customers potentially to top of the funnel. And I got a follow-up. Allan Thygesen: Yes. Yes, it's a super interesting area. First, I'd say, we're seeing just incredible interest in the MCP connector. I think I mentioned on the call that we had a quadrupling of requests on that. It's just a very -- it's an area that lots of people are interested in across all company sizes. I don't think that there's a strong pattern there. I mean, obviously, companies with more IT resources would have more capacity, but we're seeing even smaller companies feel very comfortable using the MCP connector to integrate. And some of our early users of our Agentic rollouts were smaller and midsized companies. So in terms of the distribution questions that you raised, I think it's still very early for people to discover what connectors are available and to -- for that to trigger a buying or connection process. Now if you already have DocuSign and you go to, let's see Slack OpenAI and you see that there's a connector, then you can pretty easily download that. And -- but that doesn't drive incremental revenue. It's an interesting question if you didn't realize that and you go to those sites, does that, in some way, serve as marketing for DocuSign. I think it's still too early for that, but I think we'll get there. I absolutely believe that these platform -- people will build on these platforms and that they will come to them in part looking for what can I connect to with them. And DocuSign is one of the most ubiquitous powerful connectors that lets you access some of the most important highest value data in the enterprise. And so I think it puts us in a great position. Now you, of course, have to have an IAM license to be able to do that and the existing credit model and so on applies for these calls. but it's a very exciting area, but it's still very early, I think, for customers to discover that and to build the whole mechanism for the entire sort of discovery and funnel process, if you will. But we absolutely believe that will be the case. And even today in our sales and marketing, we obviously promoted and it's an important part of people feeling comfortable that the DocuSign platform is future-proof. Rishi Jaluria: Okay. Got it. Super helpful. And then just a quick follow-up and maybe a little bit more philosophical in nature. I mean I think today, we're all having conversations about what happens if the engagement layer goes to Claude or OpenAI. Now historically, DocuSign has always had a lot of it was -- or most of it was being served by APIs used to be 80% of the API call. So maybe as we're all dealing with existential risk, can you talk about some of the learnings that you can gain from e-signature and successfully navigating that providing a workflow without necessarily needing to have that engagement layer as we think about it today and how we should think about applying that to IAM, especially as we think about some of these integrations. Allan Thygesen: Yes. First of all, just on a factual note, I don't think we've ever said that it was 80% of eSign volume that was triggered via API. We've said that it's more than 50%. So just to clarify that. But yes, we do have a lot of experience with people triggering DocuSign functionality from inside all kinds of applications. And we found that, that really augmented our value proposition. And many customers, people who work in contracts more on a daily basis may be DocuSign power users and access the app natively.u Others work in their preferred tool, let's say, Salesforce, for example, and they only experience DocuSign through that, and that's where they trigger the personalization of a contract for sending something for signature and so on. And you can now extend that. As an example, we now offer the ability to access your agreement library from inside of Salesforce. And you could imagine doing the same inside of SAP or other enterprise applications. And now we're adding, as you said, this Agentic and chat layer. I think you're going to have a distribution of users and use cases. And for some users and use cases, they'll want all the functionality and tooling that comes with being in the app. Some will want to stay in their, shall we say, functional application like the names that I mentioned. And some will have quick questions and just want to get in and out and they want to use a general purpose chat engine. And I think enterprise software companies going forward will need to support all those modalities, and we are already doing that. Rishi Jaluria: And I apologize for throwing out the right number. I will remember 50%... Operator: Our next question comes from the line of Will Power with Robert Baird. William Power: Okay. Great. Blake, it'd be great, I think, just to kind of get any updated views on how you think about guidance philosophy, conservatism that you bake in? And I guess kind of what I'm getting to is, is this kind of a 1 point be what investors should generally expect as you lay out guidance? And then a quick second question, just headcount was up a bit, I guess, in the quarter. Just be interesting to kind of know what you're prioritizing. It sounds like it's lower cost areas, but where the hiring is focused. Blake Grayson: Sure. So first on the first question with regards to the size of the beat. Again, great quarter, like really happy Q2 outperforming the top end of our revenue guidance. I think that just from a top-level standpoint, no concerns at all with where we landed. We continue to improve our forecasting here. And I think you've now seen this from us a few quarters in a row. And this question has come up in the past, but it doesn't surprise me as we get better and better at forecasting on that revenue base that those beats, I think it's not something that we think about or plan for, if you will. So no concerns at all on that. With regards to the headcount side, we are very focused on making target, like we said in the prepared remarks, target investment towards IAM. And so there's obviously, just like any company that I think is doing its job well, you are looking at your resource allocation and you're trying to make sure, are you allocating those resources to the most important projects, a road map that we believe that customers will enjoy and be delighted by and then hopefully retain with at a higher rate and then will expand with us at a higher rate as well. Now what we are doing, as you can see, is we're managing it pretty tightly, right? And we are taking advantage of lower-cost locations. And -- but we still are hiring across all of our global offices. And I think that just -- that's been kind of something or a theme that I think you can see from us over the past few years. I mean, if you go back to 4 years ago, our operating margins have gone from the high teens, right, to 32% or so. I think our headcount is down from Q2 of fiscal '23. It's down, I think, around 10% for us over that period, yet our revenue is up 40%. And so we are still investing in the business and being mindful about those things, and I'm just excited about that management, but we are making targeted investments in IAM. Operator: Our last question comes from the line of Matthew Bullock with Bank of America. Jacob Gideon: This is Jacob Gideon on for Matt. Could you just talk a little bit about the pricing and packaging evolution on the e-signature plans, specifically in the digital channel. We've seen kind of the launch of some different consumption models in other non-U.S. geos like Canada. And so I was hoping you could talk about like what's resonating well and maybe what's like motivating some of those changes? Allan Thygesen: Yes. I can quickly comment and Blake, you can jump in as well. Yes, so we are testing different pricing and packaging, and we've been doing that for a long time, and we're testing something in Canada right now, as you mentioned. I think the results look good, but we're not announcing any broader geography changes at this time. But overall, I think our view is, look, eSign continues to be the premium product in the category. It is -- it has better consumer recognition and trust. People tend to respond at higher rates and faster. The tooling for using the product internally at companies is significantly more robust. Security compliance features are richer. It's supported in every market around the world and recognized by regulatory authorities. And so we still have a very, very strong position in sign, and we're, I think, holding our position as the choice of companies that are discriminating and for use cases that are important. And we intend to continue to do that. And we want to make sure that we package and price our sign product for maximum value. And so that's what you're seeing us experiment with. Blake Grayson: And I'll just add on this a little bit, too. I think from the digital side, I'm proud of the team because for those of us that have worked in e-commerce before, like there's a lot of testing that goes on. What is your conversion rate? What do those customers look like after you sign them up? -- how are we doing at the top of the funnel in order to grow our accounts nearly 10% for this quarter. So I would just say testing and the new pricing and packaging is something I think that great digital companies do, and it's something that we're always going to be kind of leaning into. Allan Thygesen: Okay. Thank you, operator, and thank you to all who joined today's call. In closing, our platform strategy is working. We remain focused on delivering even greater value for our customers, accelerating ARR growth and driving continued operating leverage for our shareholders. Thank you all for your support, and we look forward to talking to you next quarter. Operator: This concludes today's teleconference. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Docusign. The Motley Fool has a disclosure policy. DocuSign (DOCU) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

DocuSign (DOCU) came out with quarterly earnings of $1.16 per share, beating the Zacks Consensus Estimate of $1.08 per share. This compares to earnings of $0.92 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.41%. A quarter ago, it was expected that this provider of electronic signature technology would post earnings of $1 per share when it actually produced earnings of $1.09, delivering a surprise of +9%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. DocuSign, which belongs to the Zacks Internet - Software industry, posted revenues of $875.75 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 0.94%. This compares to year-ago revenues of $800.64 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. DocuSign shares have lost about 4.4% since the beginning of the year versus the S&P 500's gain of 12%. While DocuSign has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for DocuSign was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.15 on $887.15 million in revenues for the coming quarter and $4.54 on $3.5 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Cognyte Software Ltd. (CGNT), another stock in the same industry, has yet to report results for the quarter ended July 2026. The results are expected to be released on September 9. This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +12.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Cognyte Software Ltd.'s revenues are expected to be $108.7 million, up 11.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Docusign Inc. (DOCU) : Free Stock Analysis Report Cognyte Software Ltd. (CGNT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Docusign Inc.? Here are five stocks we like better. Docusign reported solid second-quarter results, with revenue up 9% year over year to $876 million, non-GAAP operating income rising 16% to $277 million, and free cash flow increasing more than 35% to $296 million. IAM adoption accelerated, reaching 15.1% of total ARR versus 12.6% in the prior quarter. Docusign expanded AI features, agentic tools and integrations, while raising its full-year ARR growth outlook to 8.5%–9.0% and expecting IAM to represent 18%–19% of ARR by fiscal year-end. The company ended the quarter with nearly $1 billion in cash, no debt and $2.1 billion remaining under its buyback authorization after repurchasing $307 million of stock. It also raised its fiscal 2027 revenue outlook to $3.499 billion–$3.507 billion, or roughly 9% growth at the midpoint. Docusign: Another Beat, Another Selloff—Why the Analysts Are Wrong Docusign (NASDAQ:DOCU) reported second-quarter fiscal 2027 revenue of $876 million, up 9% from a year earlier, as adoption of its Intelligent Agreement Management, or IAM, platform increased and the company expanded its artificial intelligence capabilities and integrations. Chief Executive Officer Allan Thygesen said IAM accounted for 15.1% of total annual recurring revenue, or ARR, at the end of the quarter, up from 12.6% in the first quarter. The company raised its full-year ARR growth outlook to a range of 8.5% to 9.0%, compared with 8.0% growth in fiscal 2026, and expects IAM to account for 18% to 19% of total ARR exiting the fourth quarter. → Boarding Call: EHang Secures First-Mover Altitude These 3 Beaten-Down Stocks Just Announced Massive Share Buybacks “Our platform strategy is working,” Thygesen said, citing increased IAM adoption, continued product development and the company’s ability to maintain margins while expanding AI-driven functionality. Docusign’s second-quarter revenue included a 1.3 percentage-point benefit from foreign exchange rates. International revenue represented 31% of the total. Chief Financial Officer Blake Grayson said that, after adjusting for foreign exchange and the prior-year contribution from digital add-ons, revenue growth accelerated by nearly one percentage point year over year. → Medtronic’s Stars Are Aligning for a Price Recovery AI Is Separating Software Winners From Losers, 2 Experts Explain Non-GAAP operating income rose 16% year over year to $277 million. The company reported a non-GAAP operating margin of 31.6%, up 180 basis points from the prior-year period and above the midpoint of its guidance range. Non-GAAP diluted earnings per share increased 26% to $1.16, while GAAP diluted earnings per share rose 33% to $0.40. Free cash flow was $296 million, up more than 35% from the prior-year quarter and equal to a 34% margin. Over the trailing 12 months, Docusign generated $1.2 billion in free cash flow, according to Grayson. → Dutch Bros Sell-Off Creates a Growth Opportunity The company ended the quarter with just under $1 billion in cash equivalents and investments and no debt. It repurchased $307 million of stock during the quarter, reducing total diluted shares outstanding by 8% year over year to 193 million. Docusign had $2.1 billion remaining under its share-repurchase authorization. Non-GAAP gross margin was 81.7%, slightly below the prior-year level due to the company’s cloud migration investments. Docusign said the migration remains on track to be largely completed by the end of fiscal 2027 and expects full-year gross margin to decline slightly year over year. Thygesen said customers had ingested more than 300 million documents through IAM Agreement Manager. He said the platform’s AI-native architecture allows Docusign to process workloads at lower marginal costs than products that route work to external large language models. During August, the company introduced an AI assistant and agentic capabilities for contract analysis, redlining and workflow automation. The release included pre-built agents for document intake and vendor renewals, along with an Agent Studio intended to let customers develop and govern custom agents for uses such as compliance auditing, business playbooks and vendor-pricing evaluation. In user testing, Thygesen said the AI assistant reduced the time required to summarize, review and finalize agreements such as nondisclosure agreements by roughly half. Docusign also continued expanding IAM into third-party tools. The company announced general availability of a Docusign app for Slack in June, integrations with Perplexity and Google Cloud’s Gemini Enterprise for Legal, and existing connectors with Anthropic, Gemini, OpenAI and Microsoft Copilot. Cumulative active accounts using Docusign’s Model Context Protocol, or MCP, capabilities more than quadrupled during the quarter, Thygesen said. The company expects its MCP server to become generally available by the end of the month. Thygesen told analysts that customers need an IAM license to use the connectors, with the company’s existing credit model applying to those calls. While he described the integrations as a potentially important future distribution and discovery channel, he said it remains early for customers to find Docusign through those platforms. Docusign ended the quarter with more than 1.9 million customers, representing nearly 10% year-over-year growth. Grayson said digital-channel activity helped drive the increase, while envelope sending and contract utilization also increased year over year. Dollar net retention among direct customers was 103% on a rounded basis, improving modestly from both the prior quarter and prior year. Grayson said retention gains had historically been the largest contributor to improvement, but expansion is beginning to play a larger role. The number of customers with more than $300,000 in annual contract value rose 14% year over year to nearly 1,300. Thygesen said IAM was the main source of expansion and larger deal activity, though the company also continued to see large eSignature transactions. He said Docusign recorded its largest U.S. public-sector deal and its largest Latin America deal during the quarter. Management cited deployments by Salesforce, Oppenheimer, SailPoint, Upstart, Optimizely and HydroCorp. HydroCorp, which integrated IAM for sales with Salesforce, reduced the time needed to prepare a new contract from two to three hours to 20 minutes, according to Thygesen. For the third quarter, Docusign expects revenue of $886 million to $890 million, representing 9% year-over-year growth at the midpoint on an as-reported basis. It forecast non-GAAP gross margin of 81.5% to 81.9% and non-GAAP operating margin of 31.3% to 31.7%. For fiscal 2027, the company expects revenue of $3.499 billion to $3.507 billion, or 9% growth at the midpoint. The outlook includes an approximately one percentage-point foreign-exchange tailwind, though management said incremental currency headwinds reduced the full-year revenue outlook by about $4 million. Docusign forecast full-year non-GAAP operating margin of 31.0% to 31.5%. Grayson said the company will continue investing selectively in IAM while managing hiring and using lower-cost locations for its year-over-year headcount growth. DocuSign, Inc (NASDAQ: DOCU) is a leading provider of electronic signature and digital transaction management solutions. The company's flagship offering, DocuSign eSignature, enables organizations to send, sign and manage legally binding electronic agreements securely in the cloud. Beyond eSignature, DocuSign's Agreement Cloud combines contract lifecycle management, document generation, and workflow automation to streamline agreement processes from initiation through execution and storage. DocuSign's platform serves a diverse customer base spanning industries such as finance, real estate, healthcare, technology, and government. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Docusign Q2 Earnings Call Highlights" was originally published by MarketBeat. 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