DocuSign, Inc.
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ITEM 1. BUSINESS
Overview
Docusign solutions bring agreements to life, accelerating and simplifying the process of doing business. Docusign’s core offerings — our Intelligent Agreement Management (“IAM”) platform, the world’s leading e-signature solution, and contract lifecycle management (“CLM”) solution — allow organizations to boost productivity, accelerate contract review cycles, and transform agreement data into insights and actions, while providing a customer-centric experience. The Docusign IAM platform is a system of record that enables customers of all sizes to ingest a vast, complex body of agreements into a single repository, build agreement workflows that operate at scale, and take action on high-accuracy insights from agreement data. As of January 31, 2026, over 1.8 million customers and more than a billion users worldwide utilize Docusign to accelerate and simplify the process of doing business, and more than 25,000 customers are on IAM today.
We offer subscriptions to our products to businesses of all sizes, from global enterprises down to very small businesses (“VSBs”). We offer more than 1,100 active partner integrations with the applications that many of our customers already use so that they can create, commit, and manage agreements directly within these applications. We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the periods presented.
We focused initially on selling our products to commercial businesses and VSBs and later expanded our focus to target enterprise customers. As of January 31, 2026, we had a total of over 1.8 million customers, including approximately 280,000 direct enterprise and commercial customers managed through our sales force and partner channels, compared to nearly 1.7 million customers and over 260,000 direct enterprise and commercial customers as of January 31, 2025. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract to access our products. The number of our customers with greater than $300,000 in annualized contract value was 1,205 as of January 31, 2026, compared to 1,131 as of January 31, 2025. Each of our customer types has a different purchasing pattern. VSBs typically become customers by quickly utilizing our digital and self-serve channels and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values, and greater expansion opportunities for us.
We generate substantially all our revenue from sales of subscriptions, which accounted for 98% of our revenue in the year ended January 31, 2026 and 97% of our revenue in the year ended January 31, 2025. Our subscription fees are primarily comprised of fees from customers using our products and access to customer support. Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance.
We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers with deployment and integration services. Professional services and other revenue accounted for the remainder of total revenue in each of the years ended January 31, 2026 and 2025.
Historically, we offered access to most of our products on a subscription basis with prices based on the functionality and the quantity of Envelopes required by our customers. Similar to the physical envelopes historically used to mail paper documents, an Envelope is a digital container used to send one or more documents for signature or approval to one or more recipients. Our customers have the flexibility to put a large number of documents in an Envelope. For several use cases, such as buying a home, multiple Envelopes are used over the course of the process. To drive customer reach and adoption, we also offer certain limited-time or feature-constrained versions of our e-signature solution for free.
In the second quarter of fiscal 2025, we began offering our IAM platform on a user-based subscription basis in specific customer segments and geographies, through our direct sales channel, and in fiscal 2026, we made IAM available across all major geographies where we do business. Our IAM subscription offerings have multiple pricing tiers as well as specialized packages for specific user personas, customer verticals and segments, and departments within an organization. While IAM subscriptions include our core products and solutions, like eSignature, we expect standalone eSignature to continue to represent the majority of our revenue for the foreseeable future given IAM’s early growth phase. For the year ended January 31, 2026, customers using IAM represented approximately 10.8% of our annual recurring revenue.
Docusign, Inc. | 2026 Form 10-K | 4
Our Growth and Investment Strategy
We believe that our market opportunity is large, and we plan to invest to support long-term growth based on the three pillars of our long-term strategy:
Accelerating Product Innovation
The first pillar is to accelerate product innovation through research and development investments, helping our IAM platform address our customers’ agreement management needs comprehensively. We aim to deliver category-leading value in the agreement management market while evolving into a platform company.
◦IAM: In April 2024, we announced the launch of the IAM platform at our annual Momentum customer conference. We rapidly innovated the platform from ideation to launch, leveraging customer feedback. As a platform, IAM includes our industry-leading eSignature product as a core capability and is powered by Docusign Iris, our AI engine. Other capabilities include Navigator, our AI-powered agreement repository that helps customers manage and identify insights from their agreements, and Maestro, our no-code workflow builder that helps customers accelerate agreement processes. Additional AI-powered tools, including Agreement Desk, AI-Assisted Review, and AI contract agents, streamline agreement creation and management.
◦Developer Ecosystem: Part of our evolution into a platform company requires supporting a dynamic community of developers and partners to create new solutions that extend the capabilities of our IAM platform. In November 2024, we hosted Docusign Discover, our first-ever developer-focused conference, and launched Docusign for Developers, giving our partners tools to build apps powered by the IAM platform. Partners can share their apps in the Docusign App Center, adding to the over 1,100 active partner integrations with Docusign products.
◦eSignature and CLM: With a renewed focus on product innovation, these products have seen improved innovation delivery, as a result of our investment in our IAM platform, which brings more AI-powered capabilities across the greater Docusign product portfolio.
◦Core Value Propositions: Docusign is building IAM on the foundation created by our existing customer value propositions and benefits, including eSignature user simplicity, which has generated over 775,000 Apple App Store ratings with an average score of 4.9 out of 5; global footprint and adoption by customers in many jurisdictions that require different legal requirements to complete valid agreements; highly auditable agreements and signatures; stringent security certification standards; and scaled infrastructure that enables delivery of eSignature at over 99.9% availability worldwide.
◦AI Competitive Advantages: As we continue to build deeper innovation into the IAM platform, we will do it with three advantages:
▪#1 - Differentiated and large-scale proprietary data: Models trained on reliable data deliver the most accurate results to customers. One of Docusign’s biggest differentiators is our extensive library of private agreements, covering a wide variety of contract types, clauses, customer segments, jurisdictions, and verticals, which we have processed on our IAM platform with our customers’ consent. By training Iris, our AI engine, on this rich body of private, anonymized, and aggregated data, we believe we can achieve up to a 15 percentage point improvement in precision and recall compared to our models trained on public contract data, which can be transformative, especially when managing business-critical workflows and legal contracts.When customers adopt IAM, their eSignature documents are automatically available in Navigator, and they can include virtually any other agreements as well. To date, opted-in customer agreements ingested into Navigator are approaching 200 million, averaging tens of millions of additional opted-in customer agreements per month.
▪#2 - An expansive ecosystem: At our annual Docusign Discover developer conference in October 2025, we expanded our ecosystem by adding new AI tools and platforms. We announced that IAM will be available in ChatGPT, and can also be connected to Anthropic Claude, Gemini Enterprise, GitHub Copilot, Copilot Studio, and Agentforce, all by using the Model Context Protocol (“MCP”) server that’s currently in beta. At Discover, we also launched APIs that enable customers to connect Navigator and Maestro to third-party systems and proprietary internal apps.
▪#3 - AI solutions at enterprise scale: Our largest customers have millions of agreements in IAM, and our AI models are designed to handle hundreds of millions of agreements efficiently. In addition to scalability, customers tell us that trust is paramount when deploying AI to manage sensitive agreement information. In a recent Docusign survey, 70% of professionals said they trust a dedicated enterprise contract AI solution over a general-purpose model for handling agreements. IAM draws on Docusign’s
Docusign, Inc. | 2026 Form 10-K | 5
years-long track record of delivering highly secure solutions for some of the world’s most security-conscious companies and government entities, and meeting stringent standards of compliance, data security, and privacy protection. During fiscal 2026, IAM achieved FedRAMP Moderate and GovRAMP authorization, and we expanded our identity portfolio by launching CLEAR and Risk-Based Verification. For the second year in a row, Newsweek has named Docusign the most trustworthy software company in the U.S.
Strengthening Our Omnichannel Go-To-Market
The second growth pillar focuses on improving our omnichannel go-to-market (“GTM”) capabilities to better meet the evolving needs of our customers. By strengthening our direct sales, partner, and self-service routes to market, we aim to simultaneously accelerate our ability to scale while reducing our customer acquisition and management costs. This refined approach enables us to reach new customers, more flexibly respond to customer needs, and fuel efficient growth.
◦Direct Sales: Docusign has placed a growing emphasis on customer retention and enhancing customer relationships with its direct sales team. With the launch of IAM, we are focused on delivering greater value to customers through a complete end-to-end agreement management system of record. This requires strengthening our direct sales force’s ability to provide greater consultation and solution education to our customers. At the beginning of fiscal 2026, we made meaningful changes to the direct sales organization, which included introducing new sales segments, territories, and performance-based compensation, all focused on maximizing Docusign’s long-term opportunity and multi-year growth acceleration. We believe the result will be broader IAM deployments across a greater number of use cases vs. our historic eSignature relationships with customers.
◦Third-Party Channel Partners: In addition, we are increasing our efforts to drive broader customer engagement through third-party channel partners to support the delivery of Docusign’s products, in particular IAM. At the start of fiscal 2026, we relaunched our partner program to align partners with our IAM strategy and build solutions with IAM that deliver value to customers. Within our GTM strategy evolution, we are investing in deeper partner engagement across strategic technology partners like Microsoft, SAP, and Salesforce with whom we have both product integrations and co-selling relationships. We also continue to invest in expanding relationships with independent software vendors (“ISVs”) and system integrators (“SIs”). These efforts are supported by the continued development of our third-party ecosystem called Docusign for Developers which includes software development kits (“SDKs”), application programming interfaces (“APIs”) to launch apps on IAM, an MCP server to integrate with large language models (“LLMs”), and dedicated engagement with partners at our global series of Momentum customer events.
◦Digital E-commerce Sales & Self-Service: We continue to invest in product-led growth and self-service capabilities as cornerstones of our GTM strategy. In fiscal 2026, digital revenue grew faster than overall revenue, demonstrating strong results from our focus on e-commerce capabilities and making it easier for customers to discover, try, and buy from Docusign. We will continue working to remove friction and deliver delight across every step of the digital customer journey to make our experiences seamless and intuitive.
Increasing Operational and Financial Efficiency
Finally, our third growth pillar is to enhance operational and financial efficiency to scale effectively and sustainably. This includes prioritizing investments in infrastructure and technology that best serve our diverse customer base, including our migration to cloud-based infrastructure. Additionally, we continue to evaluate strategic acquisitions and partnerships that align with our growth objectives and expand our product offerings.
We believe these combined efforts will strengthen our ability to retain and grow within our existing customer base, while also attracting new customers.
Increasing International Revenue
International revenue increased by 13% in the year ended January 31, 2026, compared to the year ended January 31, 2025. Our international revenue represented 29%, 28% and 26% of our total revenue in each of the years ended January 31, 2026, 2025, and 2024.
Docusign, Inc. | 2026 Form 10-K | 6
We started our international selling efforts in English-speaking common law countries, such as Canada, the UK and Australia, where we were able to leverage our core technologies due to similar approaches to electronic signature in these jurisdictions and the U.S. We have since made significant investments to be able to offer our products in select civil law countries. For example, in Europe, we offer Standards-Based Signature (“SBS”) technology tailored for the European Union’s (“EU”) electronic Identification, Authentication, and Trust Services (“eIDAS”) regulations. SBS supports signatures that involve digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures.
We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses. As of early fiscal 2026, IAM became available in all major geographies where we do business. We have experienced increased demand across multiple regions and are focusing our sales and marketing resources to capitalize on the potential growth of these markets. Additionally, we expect to continue to develop and enhance our strategic partnerships in key international markets as we grow internationally, with particular focus on IAM.
Our Products
Docusign enables businesses to address each aspect of the agreement process with our product offerings, which are tailored for each step in the agreement lifecycle and, in some cases, for particular market segments, industries or geographic regions. We focus on meeting customer needs by providing them a variety of products and solutions to address their needs.
Key subscriptions include:
•IAM Applications built on our AI-powered IAM platform, enabling customers to gain intelligence and automation across the entire agreement lifecycle — how agreements are created, negotiated, signed, and managed after signature. Three editions (Core, Sales and CX) contain a combination of our key platform capabilities, in particular: our industry-leading eSignature product; Navigator, a unified AI-powered repository of all agreements, including those saved in third-party applications, that surfaces actionable insights and contract details through AI; Maestro, which enables customers to easily build and deploy no-code customized workflows to automate and accelerate agreement processes; Agreement Desk, which enables customers to manage all agreement requests and collaborate with ease in one centralized location, and Docusign App Center, which allows customers to customize and extend agreement processes with third-party applications.
•eSignature enables sending and signing of agreements on a wide variety of devices, from virtually anywhere in the world, securely. We offer multiple editions and add-ons that can be combined to fit the needs of different organizational sizes, industries and regions.
•CLM
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our fiscal 2026 Annual Report on Form 10-K. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q and in our fiscal 2026 Annual Report on Form 10-K. Our fiscal year ends January 31.
Executive Overview of Second Quarter Results
Overview
Docusign solutions bring agreements to life, accelerating and simplifying the process of doing business. Docusign’s core offerings — our AI-native IAM platform, the world’s leading e-signature solution, and CLM solution — allow organizations to boost productivity, accelerate contract review cycles, and transform agreement data into insights and actions, while providing a customer-centric experience. The Docusign IAM platform is a system of record that enables customers of all sizes to ingest a vast, complex body of agreements into a single repository, build agreement workflows that operate at scale, and take action on high-accuracy insights from agreement data. As of July 31, 2026, over 1.9 million customers and more than a billion users worldwide utilize Docusign to accelerate and simplify the process of doing business.
We generate substantially all our revenue from sales of subscriptions, which accounted for 98% of our revenue in the three and six months ended July 31, 2026 and 2025. Our subscription fees include the use of our products and access to customer support. Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance. We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers with deployment and integration services.
One pillar of our long-term strategy is to evolve our go-to-market (“GTM”) channels from the historically direct sales-driven approach. We are currently investing in three routes to market, including direct sales, our partner channel, and digital self-service purchasing. We expect that Docusign’s IAM platform will increasingly be offered across all three channels.
We offer subscriptions to our products to businesses of all sizes, from global enterprises down to small and medium-sized businesses (“SMBs”). We offer more than 1,100 active partner integrations with the applications that many of our customers already use so that they can create, commit and manage agreements directly within these applications. We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the periods presented.
We focused initially on selling our products to commercial businesses and SMBs and later expanded our focus to target enterprise customers. The number of our customers with greater than $300,000 in annualized contract value was 1,296 customers as of July 31, 2026 compared to 1,137 customers as of July 31, 2025. Each of our customer types has a different purchasing pattern. SMBs typically become customers by quickly utilizing our digital and self-serve channels and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values and greater expansion opportunities for us.
Docusign, Inc. | 2027 Form 10-Q | 22
Financial Results for the Three and Six Months Ended July 31, 2026 and 2025
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||
| Total revenue | $ | 875,746 | $ | 800,636 | $ | 1,705,981 | $ | 1,564,290 | ||||||||||||||
| Total costs and expenses | 758,125 | 735,409 | 1,477,051 | 1,438,808 | ||||||||||||||||||
| Total stock-based compensation expense | 148,604 | 160,538 | 289,981 | 306,134 | ||||||||||||||||||
| Income from operations | 117,621 | 65,227 | 228,930 | 125,482 | ||||||||||||||||||
| Net income | 77,715 | 62,970 | 155,912 | 135,057 | ||||||||||||||||||
| Net cash provided by operating activities | 334,546 | 246,073 | 656,234 | 497,512 | ||||||||||||||||||
| Purchases of property and equipment | (38,789) | (28,425) | (71,042) | (52,049) | ||||||||||||||||||
Cash, cash equivalents, restricted cash and investments were $990.4 million as of July 31, 2026.
Key Factors Affecting Our Performance
We believe that our future performance will depend on many factors, including the following:
Investing for Growth
We believe that our market opportunity is large, and we plan to invest to support long-term growth. We have two priorities in our long-term strategy. The first is to transform IAM into an end-to-end platform for customers. IAM enables customers to manage agreements across every part of an organization and build workflows in functions including sales, human resources, legal, and procurement.
Our second priority is to expand our AI data and innovation advantage through IAM as the orchestration layer for agreements. At Docusign, we have leveraged differentiated and large-scale proprietary data, built an expansive ecosystem of integrations with leading AI providers, and developed AI solutions that operate at enterprise scale. We aim to deliver category-leading value in the agreement management market while continuing our evolution as a platform company.
We believe these combined efforts will strengthen our ability to retain and grow within our existing customer base, while also attracting new customers.
Growing Customer Base
As of July 31, 2026, we had over 1.9 million total customers, including approximately 289,000 direct customers across our large enterprise, commercial, and small and medium-sized business (SMB) segments, served by our direct sales force. We had over 1.7 million customers, including over 271,000 direct customers as of July 31, 2025.
In fiscal 2027, we categorize our total customer base into three groups based on annual recurring revenue (“ARR”). We generally define through a flexible framework companies with ARR (actual or potential) exceeding certain dollar thresholds as enterprise customers, commercial customers, and SMB customers. While the vast majority of our SMB customers are served through digital and self-service channels, a portion of this segment is managed via our direct sales channels and included in our direct customer count. Total customers reflects the aggregate of all segments across both direct and self-service channels.
We believe that our ability to increase the number of customers using our products, particularly the number of enterprise and commercial customers, is an indicator of our market penetration, the growth of our business, and our potential future business opportunities. By increasing awareness of our products, further developing our sales and marketing expertise, and continuing to build features tuned to different industry needs, we have expanded the diversity of our customer base to include organizations of all sizes across nearly every industry.
Increasing International Revenue
International revenue increased by 17% in the six months ended July 31, 2026, compared to the six months ended July 31, 2025. Additionally, our international revenue represented 31% of our total revenue in the three and six month periods ended July 31, 2026, compared to 29% of our total revenue in the three and six month periods ended July 31, 2025.
Docusign, Inc. | 2027 Form 10-Q | 23
We started our international selling efforts in English-speaking common law countries, such as Canada, the UK and Australia, where we were able to leverage our core technologies due to similar approaches to electronic signature in these jurisdictions and the U.S. We have since made significant investments to be able to offer our products in select civil law countries. For example, in Europe, we offer Standards-Based Signature (“SBS”) technology tailored for the European Union’s (“EU”) electronic Identification, Authentication, and Trust Services (“eIDAS”) regulations. SBS supports signatures that involve digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures.
We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force, and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses. We have experienced increased demand across multiple regions and are focusing our sales and marketing resources to capitalize on the potential growth of these markets. Additionally, we expect to continue to develop and enhance our strategic partnerships in key international markets as we grow internationally, with a particular focus on IAM.
Components of Results of Operations
Revenue
We derive revenue primarily from the sale of subscriptions and, to a lesser extent, professional services.
| Revenue | Revenue consists primarily of subscription revenue, which includes fees for the use of our software platform and our technical infrastructure and access to customer support, which includes phone or email support. We typically invoice customers annually in advance. We recognize subscription revenue ratably over the term of the contract subscription period beginning on the date access to our software platform is provided. Revenue also includes professional services revenue, which consists of fees associated with new customers requesting deployment and integration services. We price professional services on a time and materials basis and on a fixed fee basis. We generally have standalone value for our professional services and recognize revenue based on standalone selling price as services are performed or upon completion of services for fixed fee contracts. Other revenue includes amounts derived from sales of on-premises solutions. |
Overhead Allocation
We allocate shared overhead costs, such as facilities (including rent, utilities and depreciation on equipment shared by all departments), information technology, information security and recruiting costs to all departments based on headcount. As such, these allocated overhead costs are reflected in cost of revenue and each operating expense category.
Cost of Revenue
| Cost of Revenue | Cost of Revenue consists primarily of costs related to subscription revenue. These costs primarily consist of expenses related to hosting our software platform and providing support. These expenses consist of employee-related costs, including salaries, bonuses, benefits, stock-based compensation, and other related costs associated with our technical infrastructure, customer success and customer support. These expenses also consist of software and maintenance costs, third-party hosting fees, third-party AI infrastructure costs, outside services associated with the delivery of our subscription services, amortization expense associated with capitalized internal-use software and acquired intangible assets, credit card processing fees and allocated overhead costs. Cost of Revenue also includes costs related to professional services revenue. These costs primarily consist of personnel costs for our professional services delivery team, travel-related costs and allocated overhead costs. |
Docusign, Inc. | 2027 Form 10-Q | 24
Gross Profit and Gross Margin
Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors including our pricing, timing and amount of investment to maintain or expand our hosting capability, the growth of our software platform support and professional services team, stock-based compensation expenses, amortization of costs associated with capitalized internal use software and acquired intangible assets and allocated overhead costs.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. As our revenues continue to increase, our operating expenses as a percentage of revenue may increase or decrease at different rates, driven by the timing of revenue recognition, the timing of hiring, our investments in growth and other factors.
| Sales and Marketing Expense | Sales and marketing expense consists primarily of personnel costs, including sales commissions. These expenses also include expenditures related to advertising, marketing, promotional events, and brand awareness activities, as well as allocated overhead costs. We expect sales and marketing expense to continue to increase in absolute dollars as we enhance our product offerings and implement marketing strategies. | ||||
| Research and Development Expense | Research and development expense consists primarily of personnel costs. These expenses also include non-personnel costs, such as subcontracting, consulting and professional fees for third-party development resources, as well as allocated overhead costs. Our research and development efforts focus on maintaining and enhancing existing functionality and adding new functionality. We expect research and development expense to increase in absolute dollars as we invest in the enhancement of our software platform. | ||||
| General and Administrative Expense | General and administrative expense consists primarily of employee-related costs for those employees providing administrative services such as legal, human resources, information technology related to internal systems, accounting, and finance. These expenses also include certain third-party consulting services, certain facilities costs, allocated overhead costs, and lease-related charges. We expect general and administrative expense to increase in absolute dollars to support the overall growth of our operations. |
Interest Expense
Interest expense consists primarily of commitment fees on the undrawn balance of the Credit Facility and the amortization of the associated issuance costs.
Interest Income and Other Income, Net
Interest income and other income, net, consists primarily of interest earned on our cash, cash equivalents and investments, changes in fair value of our strategic investments and foreign currency transaction gains and losses.
Provision for Income Taxes
Our income tax provision consists primarily of U.S. federal, state and foreign income taxes. The difference between the effective tax rate and the federal statutory tax rate is primarily driven by tax expense related to stock-based compensation partially offset by a benefit for the U.S. federal research tax credit.
We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
Docusign, Inc. | 2027 Form 10-Q | 25
Discussion of Results of Operations
The following table summarizes our historical consolidated statements of operations data:
| Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | As % of revenue | 2025 | As % of revenue | 2026 | As % of revenue | 2025 | As % of revenue | ||||||||||||||||||||||||||||||||||||||
Revenue (1) | $ | 875,746 | 100 | % | $ | 800,636 | 100 | % | 1,705,981 | 100 | 1,564,290 | 100 | ||||||||||||||||||||||||||||||||||
Cost of revenue (1) | 177,872 | 20 | 165,463 | 21 | 349,142 | 20 | 322,732 | 21 | ||||||||||||||||||||||||||||||||||||||
| Gross profit | 697,874 | 80 | 635,173 | 79 | 1,356,839 | 80 | 1,241,558 | 79 | ||||||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 313,958 | 36 | 305,450 | 38 | 610,133 | 36 | 601,863 | 38 | ||||||||||||||||||||||||||||||||||||||
| Research and development | 163,582 | 19 | 169,630 | 21 | 323,168 | 19 | 329,077 | 21 | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 102,713 | 12 | 94,866 | 12 | 194,608 | 12 | 185,136 | 12 | ||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 580,253 | 67 | 569,946 | 71 | 1,127,909 | 67 | 1,116,076 | 71 | ||||||||||||||||||||||||||||||||||||||
| Income from operations | 117,621 | 13 | 65,227 | 8 | 228,930 | 13 | 125,482 | 8 | ||||||||||||||||||||||||||||||||||||||
| Interest expense | (569) | — | (828) | — | (1,120) | — | (1,306) | — | ||||||||||||||||||||||||||||||||||||||
| Interest income and other income, net | 7,924 | 1 | 12,061 | 2 | 14,922 | 1 | 26,074 | 2 | ||||||||||||||||||||||||||||||||||||||
| Income before provision for income taxes | 124,976 | 14 | 76,460 | 10 | 242,732 | 14 | 150,250 | 10 | ||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 47,261 | 5 | 13,490 | 2 | 86,820 | 5 | 15,193 | 1 | ||||||||||||||||||||||||||||||||||||||
| Net income | $ | 77,715 | 9 | % | $ | 62,970 | 8 | % | $ | 155,912 | 9 | % | $ | 135,057 | 9 | % | ||||||||||||||||||||||||||||||
(1) Effective in the first quarter of fiscal 2027, we changed the presentation of revenue and cost of revenue in our Consolidated Statements of Operations to combine the financial statement line items labeled “Subscription” and “Professional services and other”.
The following discussion and analysis is for the three and six months ended July 31, 2026, compared to the same period in 2025, unless otherwise stated.
Revenue
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Revenue | $ | 875,746 | $ | 800,636 | 9 | % | $ | 1,705,981 | $ | 1,564,290 | 9 | % | ||||||||||||||||||||
Revenue increased by $75.1 million, or 9%, in the three months ended July 31, 2026 and by $141.7 million, or 9%, in the six months ended July 31, 2026. The increase was primarily due to the expansion of revenue from our commercial and enterprise accounts, as well as our digital channel. We continue to invest in a variety of customer programs and initiatives, which, along with expanded customer use cases, have helped increase our subscription revenue over time.
Cost of Revenue and Gross Margin
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Cost of revenue | $ | 177,872 | $ | 165,463 | 7 | % | $ | 349,142 | $ | 322,732 | 8 | % | ||||||||||||||||||||
| Gross margin | 80 | % | 79 | % | 1 | pts | 80 | % | 79 | % | 1 | pts | ||||||||||||||||||||
Docusign, Inc. | 2027 Form 10-Q | 26
Cost of revenue increased by $12.4 million, or 7%, in the three months ended July 31, 2026 and by $26.4 million, or 8%, in the six months ended July 31, 2026, primarily driven by higher costs to support our growing customer base.
Increases in the three months and six months ended July 31, 2026, primarily consisted of:
•$6.5 million and $12.8 million increase in information technology costs, particularly hosting costs, increased to support the expansion of IAM and to continue our migration of customer data to cloud storage; and
•$4.7 million and $6.5 million increase in depreciation and amortization, primarily attributable to our capitalized software projects.
Additionally, in the six months ended July 31, 2026, partner and reseller fees increased by $6.9 million due to higher transaction volume and merchant processing fees.
Sales and Marketing
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Sales and marketing | $ | 313,958 | $ | 305,450 | 3 | % | $ | 610,133 | $ | 601,863 | 1 | % | ||||||||||||||||||||
| Percentage of revenue | 36 | % | 38 | % | 36 | % | 38 | % | ||||||||||||||||||||||||
Sales and marketing expenses increased by $8.5 million, or 3%, in the three months ended July 31, 2026 and by $8.3 million, or 1%, in the six months ended July 31, 2026, primarily due to investments in our workforce to support long-term growth.
Increases in the three months ended July 31, 2026, primarily consisted of marketing and advertising costs as well as information technology costs. Marketing and advertising costs increased in line with our go-to-market strategy, primarily due to changes in timing of our customer events.
Main drivers in the six months ended July 31, 2026, consisted of an increase in personnel costs due to annual merit increases. This was partially offset by a decrease in marketing and advertising costs in line with our go-to-market strategy, primarily due to a reduction in spending on paid search and customer events.
Research and Development
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Research and development | $ | 163,582 | $ | 169,630 | (4) | % | $ | 323,168 | $ | 329,077 | (2) | % | ||||||||||||||||||||
| Percentage of revenue | 19 | % | 21 | % | 19 | % | 21 | % | ||||||||||||||||||||||||
Research and development expenses decreased by $6.0 million, or 4%, in the three months ended July 31, 2026 and by $5.9 million, or 2%, in the six months ended July 31, 2026. The decrease in both the three months and six months ended July 31, 2026 primarily consisted of personnel costs, including stock-based compensation.
Personnel costs, including stock-based compensation, decreased by $9.8 million in the three months ended July 31, 2026, and $10.0 million in the six months ended July 31, 2026. The decrease was primarily due to an increase in capitalized software development costs and a decrease in stock-based compensation related to executive transitions that occurred in fiscal 2027. This was partially offset by an increase in personnel costs due to higher headcount, annual merit increases, and higher incentive compensation.
General and Administrative
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| General and administrative | $ | 102,713 | $ | 94,866 | 8 | % | $ | 194,608 | $ | 185,136 | 5 | % | ||||||||||||||||||||
| Percentage of revenue | 12 | % | 12 | % | 12 | % | 12 | % | ||||||||||||||||||||||||
General and administrative expenses increased by $7.8 million, or 8%, in the three months ended July 31, 2026 and $9.5 million, or 5%, in the six months ended July 31, 2026, primarily due to investments in our workforce.
Docusign, Inc. | 2027 Form 10-Q | 27
Increases in the three months and six months ended July 31, 2026 primarily consisted of personnel costs due to higher headcount, higher incentive compensation, and annual merit increases. Personnel costs increased by $7.1 million in the six months ended July 31, 2026.
Interest Income and Other Income, Net
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Interest income and other income, net | $ | 7,924 | $ | 12,061 | (34) | % | $ | 14,922 | $ | 26,074 | (43) | % | ||||||||||||||||||||
| Percentage of revenue | 1 | % | 2 | % | 1 | % | 2 | % | ||||||||||||||||||||||||
Interest income and other income, net decreased by $4.1 million in the three months ended July 31, 2026 and $11.2 million in the six months ended July 31, 2026. The interest income earned during both the three months and six months ended July 31, 2026 was partially offset by foreign currency exchange losses.
Foreign currency exchange losses increased primarily due to the strengthening of the euro and British pound compared to the U.S. dollar. In the six months ended July 31, 2026, net foreign currency exchange losses increased by $6.5 million. Additionally, interest income decreased due to lower interest rates.
Provision for Income Taxes
| Three Months Ended July 31, | 2026 versus 2025 | Six Months Ended July 31, | 2026 versus 2025 | |||||||||||||||||||||||||||||
| (in thousands, except for percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Provision for income taxes | $ | 47,261 | $ | 13,490 | 250 | % | $ | 86,820 | $ | 15,193 | 471 | % | ||||||||||||||||||||
| Percentage of revenue | 5 | % | 2 | % | 5 | % | 1 | % | ||||||||||||||||||||||||
Provision for income taxes increased by
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-09-17 | Chatwani Robert | President General Mgr, Growth | Sell | -14,676 ×2 | $69.41 | -$1,018,731 |
| 2026-09-16 | Wilderotter Mary Agnes | Director | Sell | -1,096 | $70.60 | -$77,378 |
| 2026-09-14 | Marrs Anna | Director | Sell | -548 | $67.00 | -$36,716 |
| 2026-09-10 | Solvik Peter indirect | Director | Sell | -46,000 ×2 | $65.24 | -$3,001,020 |
| 2026-09-10 | Briggs Teresa | Director | Sell | -548 | $64.60 | -$35,401 |
| 2026-09-08 | GRAYSON BLAKE JEFFREY | Chief Financial Officer | Sell | -30,000 ×4 | $65.57 | -$1,967,091 |
| 2026-09-04 | GRAYSON BLAKE JEFFREY | Chief Financial Officer | Sell | -60,000 ×2 | $70.00 | -$4,200,000 |
| 2026-08-28 | BEER JAMES A | Director | Sell | -450 | $64.02 | -$28,809 |
| 2026-08-07 | GRAYSON BLAKE JEFFREY | Chief Financial Officer | Sell | -15,000 | $60.00 | -$900,000 |
| 2026-07-01 | Thygesen Allan C. | President and CEO | Sell | -26,250 ×2 | $46.02 | -$1,208,131 |
| 2026-07-01 | Shaughnessy James P | Chief Legal Officer | Sell | -12,000 ×2 | $45.54 | -$546,478 |
| 2026-07-01 | GRAYSON BLAKE JEFFREY | Chief Financial Officer | Sell | -15,000 ×2 | $45.55 | -$683,226 |
| 2026-07-01 | Hansen Paula | Chief Revenue Officer | Sell | -6,000 | $45.54 | -$273,240 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-12-04 10-Q expected by 2026-12-07 (in 73 days)
- ~2027-03-18 10-K expected by 2027-03-25 (in 177 days)
- ~2027-06-04 10-Q expected by 2027-06-07 (in 255 days)
- ~2027-09-03 10-Q expected by 2027-09-06 (in 346 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-09-04 10-Q Quarterly Report
- 2026-09-03 8-K Earnings Release; Financial Statements and Exhibits
- 2026-06-05 10-Q Quarterly Report
- 2026-06-04 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-06 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-16 DEF 14A Proxy Statement
- 2026-03-18 10-K Annual Report
- 2026-03-17 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-06 8-K Officer/Director Change
- 2025-12-05 10-Q Quarterly Report
- 2025-12-04 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-05 10-Q Quarterly Report
- 2025-09-04 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-06-06 10-Q Quarterly Report
- 2025-06-05 8-K Earnings Release; Financial Statements and Exhibits