DocuSign Reports 8% Revenue Growth to $754.8 Million in Q3 Fiscal 2025

DocuSign, Inc. reported significant financial performance in its latest 10-Q filing for the third quarter of fiscal 2025, ending October 31, 2024. The company achieved total revenue of $754.8 million, an increase of 8% from $700.4 million in the same quarter of the previous year. Subscription revenue, which constitutes approximately 97% of total revenue, rose to $734.7 million, up from $682.4 million year-over-year. For the nine-month period, total revenue reached $2.2 billion, compared to $2.05 billion in the prior year, reflecting a 7% increase. The net income for the quarter was $62.4 million, or $0.30 per diluted share, compared to $38.8 million, or $0.19 per diluted share, in the same quarter last year.

The company noted several strategic developments, including the acquisition of DocuSmart, Inc. (d/b/a Lexion) for $154 million, which is expected to enhance DocuSign's Intelligent Agreement Management (IAM) platform. This acquisition aligns with DocuSign's strategy to integrate advanced contract management capabilities into its offerings. Additionally, the company has expanded its customer base to over 1.6 million, including approximately 256,000 enterprise and commercial customers, marking an increase from 1.4 million total customers and 233,000 enterprise customers a year earlier.

Operationally, DocuSign reported a gross profit of $598.3 million for the quarter, yielding a gross margin of 79%, slightly down from 80% in the previous year. The company’s total operating expenses were $539.3 million, resulting in an operating income of $59 million, compared to $19.7 million in the same quarter last year. The increase in operating income was attributed to a combination of higher subscription revenue and effective cost management, despite rising costs associated with supporting a growing customer base.

In terms of cash flow, DocuSign generated $709.4 million from operating activities in the nine months ended October 31, 2024, consistent with the previous year. However, cash used in investing activities increased significantly to $280.6 million, primarily due to the acquisition of Lexion and investments in property and equipment. The company also repurchased 9.2 million shares of its common stock for $523.7 million during the nine-month period, reflecting its commitment to returning value to shareholders.

Looking ahead, DocuSign remains optimistic about its growth trajectory, emphasizing its focus on product innovation, expanding its international presence, and enhancing operational efficiency. The company plans to continue investing in its IAM platform and exploring strategic acquisitions to bolster its market position. DocuSign's management believes that these initiatives will support sustained revenue growth and profitability in the coming quarters.