DocuSign Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brent Thill - Jefferies LLC - Analyst : Allan, you raised your full-year guide to 7% growth but guiding billings from 3.5%. I think many are asking thinking about your growth aspirations or the medium term what are the main reasons that are giving you confidence in sustaining that growth? And just for Blake, you mentioned the record margin at 32%, everyone kind of love to hear what your ceiling is over the next year to two in terms of where you think you can go versus continuing to invest. And can you drive continued higher margins while driving that revenue growth? Thanks.

Question: Jacob Roberge - William Blair & Company LLC - Analyst : Hi. Thanks for taking the questions. And great to hear that win rates are improving, the customer bookings are increasing month over month for IAM. I am curious what the -- if you could just expand on the early feedback that you've been getting from customers for that solution? And then why do you think IAM has been able to sell so much quicker in its early stages then what CLM previously did?

Question: Jacob Roberge - William Blair & Company LLC - Analyst : Okay. Very helpful. And then could you just talk about what led to the sales transition during the quarter and if Paula has identified any kind of changes that she wants to make since joining or if it will be more of a continuation of the changes that you've been making in the last year or two. But thanks.

Question: Chris Fountain - RBC Capital Markets - Analyst : Hi. This is Chris Fountain on for Rishi Jaluria. Thanks for taking my question. I wanted to follow up on a point in the prepared remarks you made about margins coming down in the second half just for some more IAM investments. I'm just curious, I guess what's really missing at this point? Is it just more enterprise functionality, or could you just provide some more detail on, I guess, where those dollars are going?

Question: Chris Fountain - RBC Capital Markets - Analyst : Got it. Thank you, Blake. And one quick follow-up, just on the pricing model, how should we think about that for IAM and how it's evolved beyond the kind of historical pricing model? I think in the past, you talked about moving more towards like a seat-based traditional subscription model. Just any update there would be great. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, DOCU.OQ - Q2 2025 DocuSign Inc Earnings Call

Question: Arti Vula - J.P. Morgan Securities LLC - Analyst : Hey, this is Arti Vula on for Mark Murphy. Congrats on the quarter and the milestones, and thanks for taking the question. First, can you guys talk about rolling the IAM platform to more customer segments and international regions for the remainder of the year? Could you double-click there and just maybe provide a little bit of insight as to which types of customers or regions you're prioritizing in the near term? Thanks.

Question: Arti Vula - J.P. Morgan Securities LLC - Analyst : Very helpful, and great insight on the regionalization for the AI. Turning to your remarks about hiring behind strategic initiatives, as well as Lexion kind of contributing to headcount growth, could you help us maybe size the contribution from Lexion? Trying to kind of better understand what the, I guess, organic headcount growth looks like. And maybe also where you're hiring that behind? Is that in R&D or sales and marketing? Or where you're kind of prioritizing your dollars? Thanks.

Question: Arti Vula - J.P. Morgan Securities LLC - Analyst : Great. Thank you. Appreciate it.

Question: Pat Walravens - JMP Securities LLC - Analyst : Great. Thank you and congratulations. Hey, Allan, can I ask you a big-picture question? What's your perspective on sort of the attempts to regulate AI? And then particularly here in California, you have this Senate bill that's sitting on Newsom's desk about safe and secure innovation for frontier artificial intelligence models. Does that impact you? And sort of bigger-picture thoughts would be really helpful.

Question: Pat Walravens - JMP Securities LLC - Analyst : Awesome. All right. Thank you.

Question: Arsenije Matovic - Wolf Research, LLC - Analyst : Hi, this is Arsenije on for Alex Zukin. Thanks for taking the question. On dollar net retention, that has stayed stable at 99%, and it's expected to stay stable, but why is that not expected to expand as it seems you should have a lot of pandemic renewal cohorts going into the second half of this year? And I guess to help investors gain visibility into expansion from long customers, what has the dollar retention been for customers outside of the pandemic renewal cohort? And then, just a quick follow-up. Thanks.

Question: Arsenije Matovic - Wolf Research, LLC - Analyst : Got it. Thank you. And then just to clear up and I guess confirm, last quarter's full year subscription revenue guide included Lexion as the guidance today. Is that correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, DOCU.OQ - Q2 2025 DocuSign Inc Earnings Call

Question: Arsenije Matovic - Wolf Research, LLC - Analyst : Thank you.

Question: Josh Baer - Morgan Stanley & Co. LLC - Analyst : Great. Thanks for the question. You mentioned higher consumption and envelope volumes and utilization a couple of times. I'm wondering if you're suggesting that you could start to see customers come back to you to expand contracts for more envelopes. And related, just wondering how much of your business now is all-you-can-eat type of enterprise license agreements. And does the higher consumption and utilization have the same impact just given like maybe the changing mix of contracts versus prior periods? Thanks.

Question: Josh Baer - Morgan Stanley & Co. LLC - Analyst : That's helpful. And just wondering, do you view the potential for interest rates to move lower as a tailwind for your business, just given the exposure to mortgages and real estate and financial services? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, DOCU.OQ - Q2 2025 DocuSign Inc Earnings Call

Question: Josh Baer - Morgan Stanley & Co. LLC - Analyst : Helpful. Thank you.

Question: Rich Poland - Wells Fargo Securities, LLC - Analyst : Hey, this is Rich Poland on from Michael Turrin. Thanks for taking my question. So, first one, just, I was wondering if you could tease out some of -- like, how meaningful those co-selling arrangements with large ISVs could be? And just kind of how important that is to the partner motion, especially as you scale the IAM business?

Question: Rich Poland - Wells Fargo Securities, LLC - Analyst : Thank you. That's very helpful. And then just as a follow-up, in some of these early IAM deals that you're seeing, I know you talked a little bit about seats and just kind of the potential for that to be a little bit more pervasive across an organization. Are you starting to already see some of those wider seat deployments in an organization, maybe like cross-departments? Or are you typically starting with one department inside an organization and then just kind of expanding from there?

Question: Rich Poland - Wells Fargo Securities, LLC - Analyst : Got it. Makes a lot of sense.

Question: Ian Black - Needham & Company Inc - Analyst : Hi. Thanks for the question. We had a good partner check on the Lexion acquisition. How important is that functionality to the new IAM platform? And when do you expect the acquisition to be integrated? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, DOCU.OQ - Q2 2025 DocuSign Inc Earnings Call