DocuSign’s Three-Month Rally Reflects Customer Growth and Margin Gains

DocuSign shares climbed 50.8% over the three months covered in a Zacks report, outpacing the industry’s 26.2% gain and the Zacks S&P 500 Composite’s 2.7% return. As of 15:06 UTC on Sept. 29, shares traded at $66.22, down 1.13% since the previous close.

In the second quarter of fiscal 2027, the company’s customer base grew nearly 10% year over year to more than 1.9 million. Dollar net retention among direct customers reached 103%. Customers generating over $300,000 in annual contract value rose 14% to nearly 1,300.

Non-GAAP operating income increased 15.9% to $276.8 million, and the operating margin expanded 180 basis points to 31.6%. Zacks said stronger revenue drove about half of the margin upside, with cost discipline and higher capitalized software costs accounting for the rest.

Operating cash flow rose 36% to $334.5 million, while free cash flow increased 35.9% to $295.8 million. DocuSign repurchased $306.5 million in shares during the quarter and had $2.1 billion in buyback authorization remaining.