DocuSign 2026 Q3 Earnings 34.1% Net Income Growth Despite Mixed Price Action

DocuSign (DOCU) reported fiscal 2026 Q3 earnings on Dec 4, 2025, with revenue and EPS exceeding expectations. The company raised full-year revenue guidance and highlighted IAM platform adoption as a growth driver.

Revenue

DocuSign’s total revenue rose 8.4% year-over-year to $818.35 million, driven by robust subscription revenue. Subscription revenue, the company’s core business, surged 9% to $800.96 million, underscoring strong demand for its digital agreement solutions. Professional services and other revenue contributed $17.39 million, rounding out the total revenue figure. This performance reflects sustained customer investment in DocuSign’s platform, particularly in its Intelligent Agreement Management (IAM) offerings.

Earnings/Net Income

The company’s earnings per share (EPS) increased by 32.3% to $0.41 in Q3 2026, compared to $0.31 in the prior year. Net income also saw significant growth, climbing 34.1% to $83.72 million, marking a record high for Q3 net income in the past nine years. These figures reflect strong earnings growth and a new 9-year high in net income.

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, CEO, emphasized IAM’s role in driving DocuSign’s growth, with over 25,000 customers and low double-digit recurring revenue contribution expected by year-end. He highlighted strategic priorities including AI-driven solutions and operational efficiency, expressing confidence in IAM’s potential to streamline workflows and solidify the company’s leadership in agreement management.

Guidance

DocuSign guided Q4 2026 revenue to $825–829 million (7% YoY growth at midpoint) and full-year revenue to $3.208–3.212 billion (8% YoY growth). The company also announced a shift from billings to annual recurring revenue (ARR) metrics starting Q4 2026 to improve transparency and reduce timing volatility.

Additional News

DocuSign executed its largest quarterly share repurchase of $215 million, reflecting confidence in its financial position. Analysts, however, cut price targets post-earnings, with Wedbush and Piper Sandler reducing their estimates to $75, citing conservative guidance despite solid results. The company also announced IAM’s integration with platforms like ChatGPT and Anthropic Claude, expanding its AI capabilities. These moves underscore DocuSign’s focus on innovation and operational efficiency to drive long-term growth.