Docusign (DOCU) Reports Second Quarter Fiscal 2026 Earnings Results

DocuSign, Inc. (DOCU) today announced its financial results for the most recent quarter, revealing a mixed performance. The company reported earnings per share of $0.30, falling short of analysts’ expectations of $0.85, marking a significant miss. However, DocuSign exceeded revenue estimates, posting $800.6 million, which is a $20.5 million beat compared to the forecasted $780.1 million.

Key Highlights:

• Docusign reported Q2 fiscal 2026 revenue of $800.6 million, a 9% year-over-year increase.
• Subscription revenue was $784.4 million, also a 9% year-over-year increase.
• Billings increased by 13% year-over-year to $818.0 million.
• GAAP net income per diluted share was $0.30, down from $4.26 in the same period last year.
• Free cash flow reached $217.6 million, compared to $197.9 million in the previous year.
• New AI-powered capabilities were launched in the Intelligent Agreement Management (IAM) platform.
• Docusign was recognized as a leader in IDC’s MarketScape for AI-Enabled Buy-Side CLM Applications.
• Mike Rosenbaum, CEO of Guidewire, joined Docusign’s board, and James Beer was appointed as the next Board Chair.

Docusign’s CEO, Allan Thygesen, expressed enthusiasm about the company’s performance in Q2, stating, “Q2 was an outstanding quarter, with AI innovation launches and recent go-to-market changes leading to strong performance across the eSignature, CLM, and IAM businesses.” The company achieved one of its highest growth and profitability quarters in recent years, driven by new AI capabilities that enhance the agreement management lifecycle. The launch of features like Agreement Preparation and Docusign ID Verification with CLEAR aims to streamline processes for customers.

Looking ahead, Docusign provided guidance for the upcoming quarter, expecting total revenue between $804 million and $808 million, and subscription revenue between $786 million and $790 million, both reflecting a 7% year-over-year increase. The company anticipates continued growth in billings and non-GAAP gross margins, emphasizing its commitment to leveraging AI advancements to transform agreement technology.

DocuSign, Inc. (DOCU) has experienced a rollercoaster ride in its stock price, with a notable 31.07% increase over the past year, despite a more recent decline of 17.15% over the last three months. This volatility may reflect investor sentiment as the company navigates a competitive landscape. The stock’s current price-to-earnings ratio of 14.37 suggests that it is relatively undervalued compared to its growth potential, especially given its impressive two-year compound annual growth rate (CAGR) of 277.04% in earnings per share. Additionally, DocuSign’s revenue CAGR of 8.20% and free cash flow CAGR of 39.74% indicate a solid foundation for future growth. With a robust net profit margin of 37.29% and a return on invested capital of 72.37%, the company demonstrates strong operational efficiency. As investors weigh these fundamental metrics against recent price fluctuations, DocuSign remains a compelling option for those looking to capitalize on its growth trajectory. However, the recent price dips may prompt caution as the market assesses the sustainability of its performance.

DocuSign, Inc. provides electronic signature software in the United States and internationally. The company provides e-signature solution that enables businesses to digitally prepare, sign, act on, and manage agreements. It also offers CLM, which automates workflows across the entire agreement process; Insights that use artificial intelligence (AI) to search and analyze agreements by legal concepts and clauses; Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce; Negotiate for Salesforce that supports for approvals, document comparisons, and version control; Analyzer, which helps customers understand what they’re signing before they sign it; and CLM+ that provide AI-driven contract lifecycle management. The company provides Guided Forms, which enable complex forms to be filled via an interactive and step-by-step process; Click that supports no-signature-required agreements for standard terms and consents; Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Payments that enables customers to collect signatures and payment; Remote Online Notary is a solution using audio-visual and identify verification technologies to enable notarization; and Monitor using advanced analytics to track DocuSign eSignature web, mobile, and API account. It offers industry-specific cloud offerings, including Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally; Rooms for Mortgage, which offers digital workspace to create and close mortgages; FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct, partner-assisted, and Web-based sales. It serves enterprise, commercial, and small businesses. The company was incorporated in 2003 and is headquartered in San Francisco, California.