DocuSign's performance in the second quarter of the fiscal year 2026 was impressive, with revenue reaching $801 million, a 9% increase from last year, and a billing volume of $818 million, up 13% year-over-year. The company achieved a 30% non-GAAP operating profit margin. In this quarter, AI-native intelligent agreement management (IAM) demonstrated significant progress, and its international and enterprise influence is also expanding. The management's ongoing focus on maintaining profitable growth and capital returns to shareholders is particularly noteworthy.

While accelerating bill growth, the company also achieved a record net retention rate increase to 102%, along with an improvement in average transaction size, thanks to better gross retention rates and strong early renewals. International revenue accounted for 29% of total revenue, an increase of 13% year-over-year. This growth in revenue and profitability, combined with capital returns through stock buybacks, demonstrates the company's execution capabilities and the potential returns for investors, especially as the strong performance in billing and net retention rates suggest healthy growth among customers and sustainable expansion in high-value areas.

The adoption rate of IAM products is continuously rising and is working in conjunction with enterprise and AI leadership, expected to account for a low double-digit percentage of company subscription customers by the end of the year. More than half of enterprise accounts have represented at least one closed IAM transaction, with Fortune 1000 clients like Sensata Technologies and T-Mobile adopting advanced contract lifecycle management (CLM) and AI-driven analytics capabilities. In this context, DocuSign recently launched AI features such as DocuSign Navigator, agreement preparation, and SCIM user management, further strengthening product differentiation.

Despite facing ongoing cost pressures from cloud migration, the non-GAAP gross margin remains at 82%. Cloud migration has created an annual cost pressure of approximately 100 basis points on margins, while changes in the compensation mix and a one-time benefit from last year have led to a temporary decline in operating margins. DocuSign maintains a strong cash reserve with $1.1 billion in cash and no debt, and continues to hire cautiously and invest in market-leading excellence and IAM R&D.

Looking ahead, management predicts that third quarter revenue will be between $804 million and $808 million, with a year-over-year growth midpoint of 7%; while the full-year revenue for fiscal year 2026 is expected to be between $3.189 billion and $3.201 billion, also with a 7% year-over-year growth midpoint. The bill for the fiscal year is expected to be between $3.325 billion and $3.355 billion, maintaining a growth midpoint of 7%. Non-GAAP operating margin is expected to be between 28% and 29%, and it is emphasized that IAM customers will contribute a low double-digit percentage of subscription volume by the end of the year, while continuing to focus on delivering capital returns through stock buybacks.