Docusign (NASDAQ:DOCU) shares plunged more than 17% in early trade on Friday as the electronic document signing company reported mixed earnings for the fiscal first quarter.
A billings miss and lower fiscal 2026 billings guidance overshadowed beats on the top and bottom lines.
Billings were $739.6 million for the quarter, up 4% year-over-year, missing the Street estimates of $746.2 million and the company’s guidance range of $741 million and $751 million.
“The company anticipated a lower rate of early renewals for fiscal year 2026 with Docusign's reps increasingly focus on IAM expansion, but the reduction in early renewals occurred sooner than expected causing lower early renewal billings,” analysts at Wedbush noted.
For fiscal 2026, the company guided billings in the range of $3.285 billion to $3.339 billion, down from its earlier guidance of $3.3 billion to $3.354 billion, in line with Street estimates.
Wedbush attributed the updated guidance to “early renewal considerations while remaining conservative on its bookings outlook due to the macro, partially offset by IAM deal volume ramping and FX rate tailwinds.”
Full-year revenue is expected to be in the range of $3.151 billion to $3.163 billion, above the Street’s $3.130 billion estimate, with subscription revenue expected to be in the range of $3.083 billion to $3.095 billion, above the Street’s $3.067 billion.
For the first quarter, revenue was up 8% year-over-year at $763.7 million, ahead of estimates of $748 million and Docusign’s guidance of $745 million to $749 million.
Earnings per share of $0.90 handily beat estimates of $0.81.
Customers grew to 1.71 million, up from 1.66 million in the previous period, with analysts noting the company’s IAM platform is its fastest-growing offering in history, reaching 10,000 customers since its launch.
“Docusign’s net retention rate came in at 101% (prior period of 101%) as Docusign’s customer contract utilization grew steadily in the quarter,” they added.
Wedbush repeated its ‘Neutral’ rating but lowered its price target to $85 from $100 to reflect a lower multiple.
“While the company's IAM strategy continues to pick up traction, we remain on the sidelines as it will take more time to regain Street confidence in the AI story developing front and center while navigating a more difficult macro backdrop,” they wrote.
Shares of DocuSign traded down 18.6% at about $76 on Friday.