Executive Summary
DocuSign Inc, trading on the London Stock Exchange as 0XNH.L, reported QQ2 2025 results illustrating solid top-line momentum with revenue of $736.0 million, up 7% year over year and 3.7% quarter over quarter. Gross margin remained exceptionally healthy at ~78.9%, underpinning a favorable profitability profile, while operating income rose to $57.8 million (7.85% operating margin). A material anomaly in the quarter is the after-tax result: net income of $888.2 million and EPS of $4.34, driven by a large negative tax expense (tax benefit) of â$816.3 million, which creates an outsized net income figure that may not be repeatable. Net cash generation remained robust with operating cash flow of $220.2 million and free cash flow of $197.9 million, contributing to a net cash position of roughly â$483.5 million in the balance sheet (net debt, i.e., net cash). The balance sheet shows enduring liquidity with cash and short-term investments totaling about $938.4 million and total assets of $3.75 billion. Deferred revenue stands at $1.31 billion, signaling steady future revenue recognition and solid ARR. Management commentary (not provided in the dataset) typically emphasizes product expansion (AI-driven CLM, Gen for Salesforce, Negotiate, Analyzer), enterprise adoption, Salesforce ecosystem integration, and FedRAMP offerings, all of which support a durable growth trajectory despite a competitive landscape. Investors should regard the tax-driven earnings spike as non-recurring and focus on underlying cash generation, ARR growth, and margin resilience as authentic read-throughs of underlying demand and operational efficiency.
Key Performance Indicators
QoQ: 11.69% | YoY:774.18%
QoQ: 2 530.96% | YoY:11 910.97%
QoQ: 2 612.50% | YoY:10 750.00%
Key Insights
Revenue: $736.027 million in QQ2 2025, YoY +7.03%, QoQ +3.72%.
GrossProfit: $580.562 million, GrossMargin: 78.88% (0.7888).
OperatingIncome: $57.801 million, OperatingMargin: 7.85% (0.0785).
EBITDA: $99.453 million, EBITDA Margin: 13.51% (0.1351).
NetIncome: $888.211 million, NetIncomeMargin: 120.68% (1.2068) driven by a tax benefit of â$816.324 million.
EPS: $4.34; Diluted EPS: $4.26; WeightedAvgSHOut: 204.6 million; WeightedAvgSHOutDil: 208.274 million.
CashFlow: NetOperatingCashFlow $...
Financial Highlights
Revenue: $736.027 million in QQ2 2025, YoY +7.03%, QoQ +3.72%.
GrossProfit: $580.562 million, GrossMargin: 78.88% (0.7888).
OperatingIncome: $57.801 million, OperatingMargin: 7.85% (0.0785).
EBITDA: $99.453 million, EBITDA Margin: 13.51% (0.1351).
NetIncome: $888.211 million, NetIncomeMargin: 120.68% (1.2068) driven by a tax benefit of â$816.324 million.
EPS: $4.34; Diluted EPS: $4.26; WeightedAvgSHOut: 204.6 million; WeightedAvgSHOutDil: 208.274 million.
CashFlow: NetOperatingCashFlow $220.208 million; FreeCashFlow $197.928 million.
Cash: End of Period $628.027 million; CashAndCashEquivalents $619.064 million; ShortTermInvestments $319.289 million; TotalCashEquivalents $938.353 million.
Balance Sheet: TotalAssets $3.75394B; TotalLiabilities $1.79254B; TotalStockholdersEquity $1.96141B.
Liquidity/Capitalization: CurrentRatio 0.836; QuickRatio 0.836; CashRatio 0.385; NetDebt â$483.463 million; TotalDebt $135.601 million; DeferredRevenue (Current) $1.307565B; LongTermDebt $115.832 million.
Efficiency/Valuation: AssetTurnover 0.196; ROA 0.237; ROE 0.453; P/S 15.60; P/B 5.85; P/CF 52.14; EV/Revenue 152.72; P/E 3.23.
Note: The reported net income is unusually elevated due to a substantial tax benefit, which is unlikely to recur in the near term.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
736.03M |
7.03% |
3.72% |
| Gross Profit |
580.56M |
7.09% |
4.12% |
| Operating Income |
57.80M |
774.18% |
11.69% |
| Net Income |
888.21M |
11 910.97% |
2 530.96% |
| EPS |
4.34 |
10 750.00% |
2 612.50% |
Key Financial Ratios
operatingProfitMargin
7.85%
operatingCashFlowPerShare
$1.08
freeCashFlowPerShare
$0.97
Management Commentary
Note: The earnings transcript data were not provided in the dataset. The following highlights are synthesized themes typically discussed in DocuSign calls and align with the released numbers:
- Strategy and product expansion: Management typically emphasizes continued AI-enabled CLM enhancements, expanded Roles in Salesforce integrations (Gen for Salesforce, Negotiate), and broader adoption of Rooms and Guided Forms across verticals (Real Estate, Mortgage) to deepen cross-sell and expand enterprise ARR.
- Operations and efficiency: Focus on cost discipline in R&D and SG&A to maintain healthy margins while investing in product development and go-to-market capabilities to support durable growth.
- Market conditions and demand: Enterprise demand for eSignature and CLM remains resilient across industries, with favorable tailwinds from digital transformation initiatives and compliance needs. Competitive dynamics continue to pressure pricing and feature differentiation, making continued product leadership critical.
Forward Guidance
No explicit forward guidance is provided in the dataset. Given the mix of a robust gross margin and strong operating cash flow, the underlying trajectory appears favorable for continued healthy cash generation. The key uncertainties include the sustainability of the tax benefit that inflated net income this quarter, potential end-market cyclicality, competitive pressure from adjacent platforms (eSignature/CLM), and execution around Salesforce integration and verticalized rooms solutions. Investors should monitor: (1) ARR growth and net revenue retention, (2) cadence of free cash flow conversion, (3) sustainable operating margins excluding any non-recurring tax items, (4) deferred revenue trajectory and renewal rates, and (5) progress in government and regulated verticals (FedRAMP, real estate, mortgage).