DocuSign 2026 Q3 Earnings Beats Expectations with 34.1% Net Income Growth

DocuSign (DOCU) reported fiscal 2026 Q3 earnings on Dec 4, 2025, surpassing expectations with 8.4% revenue growth and a 32.3% rise in EPS. The company raised full-year revenue guidance to $3.208–3.212 billion, reflecting confidence in its IAM platform adoption and operational efficiency. Despite strong results, shares dipped slightly post-announcement, underscoring mixed market sentiment.

Revenue

DocuSign’s total revenue reached $818.35 million in Q3 2026, an 8.4% year-over-year increase from $754.82 million in Q3 2025. Subscription revenue, the company’s core business, led with $800.96 million, driven by sustained demand for its eSignature and IAM solutions. Professional services and other revenue contributed an additional $17.39 million, rounding out the total revenue figure.

Earnings/Net Income

The company’s earnings per share (EPS) surged 32.3% to $0.41 in Q3 2026, compared to $0.31 in Q3 2025. Net income also rose 34.1% to $83.72 million, marking a new 9-year high for the quarter. These results underscore DocuSign’s improved profitability and operational leverage.

Price Action

Following the earnings release, DocuSign’s stock edged down 0.14% on the latest trading day but gained 3.24% over the preceding week. Month-to-date, the stock declined 2.66%, reflecting mixed investor sentiment despite strong financial performance.

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 compound annual growth rate (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 exhibited minimal risk but conservative returns, making it suitable for investors prioritizing stability.

CEO Commentary

Allan Thygesen, President and CEO, highlighted Q3 2026 as a standout quarter, driven by IAM adoption and eSignature growth. Revenue of $818 million and billings of $829 million reflected 8% and 10% year-over-year increases, respectively. Thygesen emphasized operational efficiency, with a 31% non-GAAP operating margin and $263 million in free cash flow, enabling a record $215 million share repurchase. Strategic priorities included scaling IAM (25,000+ customers), accelerating AI innovation (e.g., Agreement Desk and AI contract agents), and expanding international markets (30% revenue from international regions).

Guidance

Blake Grayson, CFO, provided Q4 2026 revenue guidance of $825–829 million (7% YoY growth at midpoint) and full-year revenue of $3.208–3.212 billion (8% YoY growth). Subscription revenue is projected to reach $808–812 million in Q4 and $3.140–3.144 billion for the year. Billings guidance for Q4 stands at $992–1.002 billion (8% YoY growth), with full-year billings of $3.379–3.389 billion (9% YoY growth). The company will transition to annual ARR reporting in Q4 2026, phasing out billings as a metric in 2027.

Additional News

DocuSign announced a $215 million share repurchase in Q3 2026, its largest quarterly buyback to date, funded by $263 million in free cash flow. The company also advanced its transition to annual recurring revenue (ARR) reporting, with IAM integration into platforms like ChatGPT and Anthropic Claude. IAM adoption surpassed 25,000 customers, with low double-digit revenue contribution expected by year-end. Additionally, the company achieved FedRAMP Moderate and GovRAMP authorization for IAM, enhancing its compliance profile.

Key Financial Highlights

• Revenue: $818.35M (+8.4% YoY)

• EPS: $0.41 (+32.3% YoY)

• Net Income: $83.72M (+34.1% YoY)

• Free Cash Flow: $263M (32% margin)

• Share Repurchase: $215M (record high)

DocuSign’s Q3 results highlight its resilience in core markets and strategic focus on IAM, with management expressing confidence in achieving sustainable, double-digit growth through product innovation and operational efficiency.