DocuSign 2026 Q3 Earnings Strong Revenue Growth and Record Net Income

DocuSign (DOCU) reported fiscal 2026 Q3 earnings on Dec 5, 2025, with revenue rising 8.4% year-over-year to $818.35 million, surpassing expectations. The company raised its full-year revenue guidance to $3.208B–$3.212B, while Q4 guidance of $825M–$829M signaled slightly conservative expectations.

Revenue

DocuSign’s total revenue reached $818.35 million in Q3 2026, driven by robust performance in its subscription business. Subscription revenue accounted for $800.96 million, reflecting a 9% year-over-year increase, while professional services and other revenue contributed $17.39 million. This growth was fueled by strong adoption of its Identity and Access Management (IAM) platform, which now serves 25,000+ customers.

Earnings/Net Income

The company’s earnings per share (EPS) surged 32.3% to $0.41 in Q3 2026, compared to $0.31 in the prior-year period. Net income also reached a nine-year high, growing 34.1% to $83.72 million. These results underscore improved operational efficiency and strong demand for DocuSign’s digital solutions.

Price Action

DOCU shares closed the latest trading day up 1.73%, but declined 5.31% for the week and 7.26% month-to-date. Post-earnings, the stock faced pressure as analysts cut price targets, citing conservative guidance despite solid results.

Post-Earnings Price Action Review

The strategy of buying DOCU when earnings beat and holding for 30 days returned -73.99%, underperforming the benchmark by 159.51%. With a maximum drawdown of 0% and a Sharpe ratio of -0.41, the strategy highlighted heightened risk and volatility, underscoring the market’s skepticism despite strong financial performance.

CEO Commentary

Allan Thygesen, CEO, emphasized Q3 as a “standout quarter,” noting 8% revenue growth and 10% billings growth. He attributed success to IAM adoption and operational efficiency, with 31% non-GAAP margins and 25% free cash flow growth. Strategic priorities include AI-powered platform advancements and ecosystem integrations, reinforcing confidence in long-term growth.

Guidance

DocuSign projected Q4 2026 revenue of $825M–$829M (7% YoY growth at midpoint) and full-year revenue of $3.208B–$3.212B. Subscription revenue for FY2026 is expected to range between $3.14B–$3.144B, up from prior guidance.

Additional News

Recent developments include analyst price target reductions despite “solid” results, driven by conservative guidance. Wedbush and Piper Sandler lowered targets to $75, citing concerns over growth sustainability. Additionally, the stock’s post-earnings decline reflected market focus on slower growth forecasts, despite strong IAM adoption and profitability metrics.

The company’s focus on AI-driven solutions and ecosystem partnerships remains a key differentiator, though near-term execution and market sentiment will shape its trajectory. Investors are advised to monitor guidance revisions and strategic progress in Q4.