DocuSign 2026 Q3 Earnings Strong Revenue Growth and Record Net Income

DocuSign (DOCU) reported fiscal 2026 Q3 earnings on December 4, 2025, surpassing Wall Street expectations. The company’s revenue grew 8.4% year-over-year to $818.35 million, while earnings per share (EPS) rose 32.3% to $0.41. Guidance for Q4 revenue was slightly below the midpoint of estimates, but full-year revenue projections were raised.

Revenue

DocuSign’s total revenue increased by 8.4% to $818.35 million in Q3 2026, driven by robust performance across its business segments. Subscription revenue, the company’s primary revenue stream, accounted for $800.96 million, reflecting strong demand for its digital agreement solutions. Professional services and other revenue contributed an additional $17.39 million, rounding out the total revenue figure. The growth underscores continued adoption of the Intelligent Agreement Management (IAM) platform and core e-signature products.

Earnings/Net Income

DocuSign’s EPS surged 32.3% to $0.41 in Q3 2026, compared to $0.31 in the prior year, while net income reached $83.72 million—a 34.1% year-over-year increase. This marked the highest net income for a Q3 in nine years, highlighting the company’s improving profitability. The EPS performance was a key highlight, indicating strong operational efficiency and cost management.

Post-Earnings Price Action Review

The strategy of buying DocuSign shares after its revenue beat expectations on the earnings release date and selling them 30 days later delivered moderate returns but underperformed the market. The strategy’s CAGR was 5.04%, trailing the benchmark by 57.56%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.17, the strategy had minimal risk but offered conservative returns, making it suitable for investors seeking stability.

CEO Commentary

Allan Thygesen, President, CEO & Director, emphasized DocuSign’s Q3 2026 performance, noting revenue of $818 million (up 8% YoY) and billings of $829 million (up 10% YoY). He highlighted IAM’s growth, with over 25,000 paying customers, and its value in accelerating contracting cycles. Thygesen underscored strategic priorities: enhancing go-to-market efficiency, advancing AI-driven platform innovation, and operational discipline. He expressed optimism about IAM’s retention rates, international expansion (30% of revenue), and ecosystem partnerships, including AI integrations.

Guidance

DocuSign provided Q4 2026 revenue guidance of $825–$829 million (7% YoY growth at midpoint) and FY 2026 revenue of $3.208–$3.212 billion (8% YoY growth at midpoint). Subscription revenue guidance for Q4 was $808–$812 million (7% YoY growth at midpoint), with FY 2026 at $3.140–$3.144 billion (8% YoY growth at midpoint). Billings guidance for Q4 was $992–$1.002 billion (8% YoY growth at midpoint), with FY 2026 at $3.379–$3.389 billion (9% YoY growth at midpoint). Non-GAAP operating margin guidance for Q4 was 28.3–28.7%, with FY 2026 at 29.8–29.9%. The company also outlined a transition to annual recurring revenue (ARR) reporting in FY 2027, replacing billings, to better reflect long-term growth.

Additional News

1. Strategic AI Integration: DocuSign announced the integration of its IAM platform with AI tools like ChatGPT, Anthropic Claude, and Gemini Enterprise, enhancing contract automation and analytics.

2. Share Repurchase: The company executed its largest quarterly share buyback of $215 million, funded by $263 million in free cash flow, signaling confidence in its financial strength.

3. ARR Transition: DocuSign plans to shift to annual recurring revenue (ARR) reporting in FY 2027, aiming to provide a clearer view of long-term growth and reduce quarterly volatility.

DocuSign’s Q3 results reflect a blend of operational discipline and strategic innovation, with IAM driving growth and AI integrations positioning the company for future scalability. While short-term stock volatility persisted post-earnings, the company’s long-term vision of sustainable, double-digit growth remains intact. Investors will likely monitor IAM adoption rates and the success of the ARR transition as key indicators of future performance.