DocuSign Inc reported QQ3 2025 revenue of $754.82 million, up 7.8% year-over-year and 2.6% quarter-over-quarter. The company delivered a robust gross margin of approximately 79.3%, producing a net income of $62.42 million and EPS of $0.31 in the quarter, supported by disciplined operating expense management and a strong free cash flow generation of about $210.7 million. Operating income was $59.03 million with an 7.82% operating margin, while EBITDA stood at $99.61 million. Notably, DocuSign remains cash-rich with a net cash position (net debt negative) of about $480.2 million, and total liquidity comprising cash and short-term investments near $943 million. Free cash flow yield sits near 28% of revenue, underscoring the company’s ability to convert subscription revenue into durable cash flow.
Strategically, the quarter reflects continued traction in high-value growth engines: CLM and AI-driven insights (AI-enabled analysis of agreements), deepening Salesforce integrations (Gen for Salesforce, Negotiate for Salesforce), and industry-specific cloud offerings (Rooms for Real Estate, Rooms for Mortgage, FedRAMP for federal usage). Deferred revenue remains a meaningful driver of revenue visibility, with current deferred revenue of approximately $1.308 billion signaling long-duration ARR growth and upcoming revenue realization. The results imply a sustainable model with compelling profitability and cash generation, albeit with a premium valuation given elevated software multiples.
Risks and considerations include the impact of macro conditions on enterprise software spend, potential competitive pressure from adjacent e-signature and CLM platforms, and ongoing scrutiny of growth versus profitability as valuation remains elevated. Management commentary, though not captured in the provided transcript, typically emphasizes product diversification, cross-sell potential across ecosystem partnerships, and regulatory/compliance milestones as key catalysts. Investors should monitor ARR growth, churn, product adoption in CLM and AI features, and the pace of share repurchases and capital allocation.