Financial Data and Key Metrics Changes - Total revenue for Q3 was $818 million, representing an 8% year-over-year increase, while billings reached $829 million, up 10% year-over-year [6][18] - Non-GAAP operating margin was 31%, with free cash flow growing 25% year-over-year to $263 million, reflecting a 32% margin [7][26] - Non-GAAP diluted EPS for Q3 was $1.01, up from $0.90 last year, while GAAP diluted EPS was $0.40 compared to $0.30 last year [28] Business Line Data and Key Metrics Changes - The Intelligent Agreement Management (IAM) platform saw significant growth, with over 25,000 paying customers by the end of Q3, up from more than 10,000 in April [8][24] - Dollar net retention improved to 102%, up from 100% in the prior year, indicating strong customer engagement and usage [24] - The eSignature business also performed well, with utilization rates at multi-year highs and consistent positive growth in envelopes sent [9][56] Market Data and Key Metrics Changes - International revenue reached approximately 30% of total revenue for the first time, growing 14% year-over-year [10][25] - The number of customers spending over $300,000 annually grew 8% year-over-year, marking the highest quarterly growth in over two years [25] - The IAM platform is expected to contribute a low double-digit percentage share of the subscription revenue by the end of Q4 [24] Company Strategy and Development Direction - The company aims for sustainable, profitable double-digit growth, focusing on operational efficiency and innovation in the IAM platform [7][17] - Strategic initiatives include enhancing go-to-market motions, expanding international presence, and deepening solution selling across customer segments [10][11] - The company plans to transition to reporting annual recurring revenue (ARR) and will no longer report billings starting in fiscal 2027, aiming for better transparency in growth metrics [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early retention rates of IAM customers and the potential for increased eSignature usage post-IAM adoption [8][40] - The company highlighted the importance of trust in AI solutions, noting that 70% of professionals prefer dedicated enterprise contract AI solutions over general-purpose models [16] - Management acknowledged the challenges of year-over-year comparisons due to elevated early renewal activity in the previous fiscal year but remains confident in the business's resilience [19][30] Other Important Information - The company achieved FedRAMP moderate and GovRAMP authorization for IAM, enhancing its credibility in the market [16] - The company repurchased $215 million in shares during Q3, marking the largest quarterly buyback in its history [27] - The IAM platform is positioned as a foundational capability for future growth, with plans for further integration and feature enhancements [45][92] Q&A Session Summary Question: Transition to ARR and its impact - Management indicated that while ARR is not yet disclosed, the trajectory of billings growth serves as a good proxy for business performance moving forward [36][37] Question: Early renewal cohorts and expansion - Management noted that early renewal cohorts are showing strong retention rates, with larger companies likely to expand their IAM deployments over time [39][40] Question: Navigator product and future monetization - The Navigator product is integral to the IAM platform, providing foundational capabilities that enhance overall value without being monetized separately [44][45] Question: Billings growth and subscription revenue guidance - Management explained that the guidance for Q4 reflects a deceleration from Q3 due to prior early renewals and strong growth in the previous year [48][49] Question: Envelopes sent and utilization rates - Management confirmed consistent year-over-year growth in envelopes sent, with utilization rates indicating customers are using more of what they paid for, suggesting future upsell opportunities [52][54] Question: AI contract agents and their impact - Management anticipates that while AI contract agents will not significantly impact financial momentum in the near term, they are strategically important for future growth [85][86] Question: Go-to-market strategy for IAM - Management highlighted the importance of expanding into procurement and HR departments, with a focus on integrated end-to-end workflows for future growth [91][92]

Financial Data and Key Metrics Changes - Revenue for Q3 was $818 million, an increase of 8% year-over-year, while billings reached $829 million, up 10% year-over-year [5][15] - Non-GAAP operating margin was 31%, and free cash flow grew 25% year-over-year to $263 million, representing a 32% margin [5][22] - Non-GAAP diluted EPS for Q3 was $1.01, up from $0.90 last year, while GAAP diluted EPS was $0.40 compared to $0.30 last year [23] Business Line Data and Key Metrics Changes - The Intelligent Agreement Management (IAM) platform saw significant growth, with over 25,000 paying customers by the end of Q3, up from over 10,000 in April [6][20] - Dollar net retention improved to 102%, up from 100% in the prior year, indicating strong customer engagement and usage [20] - The e-signature business also performed well, with utilization rates at multi-year highs and consistent positive growth in envelopes sent [7][40] Market Data and Key Metrics Changes - International revenue reached approximately 30% of total revenue for the first time, growing 14% year-over-year [8][21] - Total customers grew 9% year-over-year, ending the quarter at nearly 1.8 million, with significant growth in customers spending over $300,000 annually [21] - The company hosted momentum events in Sydney, Singapore, and Tokyo, reflecting growing interest in IAM [8] Company Strategy and Development Direction - The company remains focused on delivering sustainable, profitable double-digit growth, with a commitment to operational efficiency and product innovation [5][14] - IAM is positioned as a key growth driver, with plans to enhance its integration with existing business systems and expand its ecosystem of third-party integrations [10][12] - The company is transitioning to reporting Annual Recurring Revenue (ARR) and will no longer report billings starting in fiscal 2027, aiming for better transparency in growth metrics [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, with strong demand for IAM and e-signature solutions [15][20] - The company anticipates continued growth in ARR driven by expansion opportunities and improved retention rates [30][50] - Management acknowledged the importance of maintaining operational efficiency while navigating macroeconomic conditions [22][58] Other Important Information - The company achieved FedRAMP moderate and GovRAMP authorization for IAM, enhancing its credibility in security and compliance [13] - The company plans to continue opportunistic share repurchases, having repurchased $215 million in shares during Q3, the largest quarterly buyback in its history [23][54] Q&A Session Summary Question: Transition to ARR and its impact on growth - Management indicated that while ARR is not yet disclosed, the trajectory of billings growth serves as a good proxy for business performance moving forward [30] Question: Early renewal cohorts and expansion opportunities - Management noted that early renewal cohorts are showing strong retention rates, with larger companies likely to expand their IAM deployments upon renewal [32][34] Question: Future monetization opportunities with Navigator - Navigator is seen as a foundational capability for IAM, with various use cases expected to emerge as the platform matures [35][36] Question: Billings growth and subscription revenue guidance - Management explained that the guidance for Q4 reflects a deceleration from Q3 due to prior year comparisons and early renewal impacts [38] Question: Macro environment impact on envelope volumes - Management reported consistent growth in envelope volumes and utilization rates, indicating strong customer engagement across verticals [40][58]

Financial Data and Key Metrics Changes - Revenue for Q2 was $801 million, up 9% year-over-year, and billings were $818 million, up 13% year-over-year, marking one of the strongest growth quarters in the past two years [5][14] - Non-GAAP operating margins were 30%, with free cash flow margins improving to 27%, supporting $200 million in share repurchases this quarter [5][21] - Non-GAAP diluted EPS for Q2 was $0.92 compared to $0.97 last year, while GAAP diluted EPS was $0.30 versus $4.26 last year [22] Business Line Data and Key Metrics Changes - The e-signature and CLM segments showed improved fundamentals, with strong performance in commercial and enterprise customer segments [5][14] - Dollar net retention increased to 102%, reflecting higher gross retention rates [6][16] - The CLM business grew well into double digits year-over-year in Q2, with significant deals closed, including T-Mobile [9][15] Market Data and Key Metrics Changes - International revenue represented 29% of total revenue and grew 13% year-over-year, with the Asia-Pacific region being the fastest-growing international market [17][18] - Total customers grew 9% year-over-year, ending the quarter above 1.7 million, with large customers spending over $300,000 annually increasing by 7% year-over-year [18] Company Strategy and Development Direction - The company is focused on three strategic pillars: strengthening routes to market, accelerating innovation, and improving operational efficiency [6][14] - The IAM platform is positioned to transform business operations with deeper insights and actionability from agreements, with plans to launch AI agents to expand market opportunities [10][12] - The partnership with the U.S. Federal Government's General Services Administration aims to expand e-signature sales to federal agencies [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for e-signature and IAM, with no significant evidence of macroeconomic weakness impacting contract volumes [30][32] - The company expects total revenue for Q3 to be between $804 to $808 million, reflecting a 7% year-over-year increase at the midpoint [22][23] - Management highlighted the importance of operational execution in improving gross retention rates and the potential for further growth through IAM [52][53] Other Important Information - The company ended Q2 with approximately $1.1 billion in cash and no debt on the balance sheet, indicating a healthy financial position [21] - The cloud migration continues to impact margins, but the company expects to see a gradual easing of these impacts in fiscal 2027 and beyond [25][26] Q&A Session Summary Question: What is driving the improved fundamentals in e-signature? - Management noted strong growth in verticals like financial services and healthcare, with no significant macro weakness observed [29][30] Question: Can you discuss the pipeline for CLM? - Management indicated a positive overall trend but cautioned against overinterpreting Q2 as a breakout quarter [35][36] Question: How is the rollout in new markets progressing? - Management reported encouraging signs of larger deals with enterprise customers and noted that IAM is gaining traction internationally [38][39] Question: What are the economics of adopting IAM? - Management stated that IAM is critical for year-on-year growth and is expected to represent a low double-digit percentage of overall bookings [44][47] Question: What are the drivers behind improved gross retention? - Management highlighted operational execution and proactive engagement with customers as key factors in improving retention rates [52][53] Question: What does the partnership with the U.S. Federal Government mean for the business? - Management expressed optimism about the growth opportunity in the federal sector, although it remains a modest contributor currently [58][59] Question: How have sales reps adapted to the changes made at the beginning of the year? - Management reported positive adaptation among sales reps, with no significant changes planned for the foreseeable future [62][63] Question: How is customer acceptance for AI features progressing? - Management indicated strong customer engagement with AI features, with nearly 100 million agreements ingested for processing [68][70] Question: When will the cloud transition be less of a headwind? - Management expects the peak impact from cloud migration costs to occur this year, with improvements anticipated in FY2027 [75][77]