DocuSign Shares Rise 4.7% Post Q2 Earnings & Revenue Beat

DocuSign, Inc. DOCU reported impressive second-quarter fiscal 2026 results, wherein earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate. In response to the better-than-expected results, the company’s stock has rallied 4.7% since the earnings release on Sept. 4.

DOCU’s EPS (excluding 62 cents from non-recurring items) was 92 cents, which topped the Zacks Consensus Estimate by 9.5% but decreased 5.2% from the year-ago quarter. Total revenues of $800.6 million beat the consensus mark by 2.8% and rose 8.8% from the second quarter of fiscal 2025.

The company’s shares have rallied 42.5% in the past year compared with the industry’s 45.3% rise and the Zacks S&P 500’s 20.6% growth.

DOCU’s Segmental Revenues

Subscription revenues totaled $784.4 million, increasing 9.3% year over year. The figure beat our estimate of $760.2 million. Professional services and other revenues of $16.25 million fell 12.9% from the year-ago quarter, beating our expectation of $17.5 million. Billings amounted to $818 million, up 13% from the year-ago quarter. The figure failed to meet our anticipation of $764.5 million.

The non-GAAP gross margin was 82%, missing our estimate of 83.1%. The non-GAAP gross profit of $656.9 million grew 8.6% year over year and outpaced our expectation of $630.7 million. The non-GAAP operating margin was 29.8%, increasing 240 basis points from the year-ago quarter. It beat our estimate of 27.3%.

Balance Sheet & Cash Flow of DocuSign

DocuSign exited the second quarter of fiscal 2026 with cash and cash equivalents of $600 million compared with $648.6 million at the end of the second quarter of fiscal 2025. Net cash generated by operating activities was $246.1 million for the reported quarter. Free cash flow generated was $217.6 million.

DOCU’s Q3 & FY26 Guidance

For the third quarter of fiscal 2026, the company expects revenues between $804 million and $808 million.

DOCU anticipates subscription revenues in the range of $786-$790 million and billing revenues between $785 million and $795 million. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 80.3-81.3% and 28-29%, respectively.

For fiscal 2026, the company expects revenues between $3.189 billion and $3.201 billion. The Zacks Consensus Estimate for the same is pegged at $3.16 billion.

DOCU anticipates subscription revenues between $3.12 billion and $3.13 billion and billings between $3.325 billion and $3.355 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81-82% and 28.6-29.6%, respectively.

Currently, DocuSign carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

Fiserv, Inc. FI reported mixed second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.

FI’s adjusted EPS of $2.47 topped the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion lagged the consensus estimate by a slight margin but gained 1.7% on a year-over-year basis.

The Interpublic Group of Companies, Inc. IPG reported impressive second-quarter 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate.

IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year but outpaced the Zacks Consensus Estimate of $2.2 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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