Docusign (NASDAQ:DOCU) reported strong fourth quarter 2026 results that beat analyst expectations for both revenue and earnings, sending its shares up roughly 3%.
The electronic signature and agreement management company posted adjusted earnings per share of $1.01, surpassing the consensus estimate of $0.95.
Revenue reached $836.9 million, slightly above forecasts of about $828.2 million.
Billings for the quarter totaled $1.02 billion, also exceeding expectations of about $997.7 million
Docusign CEO Allan Thygesen highlighted the company’s AI-driven platform as a key driver of growth. “Docusign's AI-native IAM platform has established clear market leadership as the agreement system of action for companies of all sizes,” he said. “In 2026, customers using IAM represented over $350 million in ARR, and Docusign reached record highs for operating margin and free cash flow.”
Wedbush analysts described the results as strong, noting healthy guidance for fiscal 2027 and robust demand for DocuSign’s Identity and Access Management (IAM) platform, alongside traction for eSignature products with AI capabilities.
The firm reported that fiscal 2026 annual recurring revenue came in at $3.272 billion, up from $3.03 billion the prior year, driven by gross new bookings and retention improvements.
The analysts also pointed to international revenue growth of 15%, now representing 30% of total revenue, and a 9% increase in the customer base to 1.82 million, with the number of customers spending more than $300,000 annually rising to 1,205.
Non-GAAP gross and operating margins exceeded both Street estimates and company guidance, while free cash flow surpassed expectations due to efficient collections and billing seasonality.
Looking ahead, DocuSign expects fiscal 2027 ARR to grow between 8.25% and 8.75%, with IAM representing roughly 18% of total ARR by the end of the year, resulting in more than $600 million in ARR. The company projects full-year revenue of $3.484 billion to $3.496 billion, above analyst estimates, while non-GAAP gross margins are expected to range from 81.5% to 82% and operating margins from 30% to 30.5%.
Despite the strong results and guidance, Wedbush maintained a ‘Neutral’ rating on DocuSign, lowering its price target from $75 to $60, citing the need for consistent execution amid a challenging software market.
“While this quarter was a step in the right direction for DOCU, we remain on the sidelines as we believe the company needs to show more consistency in its execution and growth in the face of a rocky software landscape,” the firm wrote.