TLDR
- DocuSign reported Q1 earnings of $0.90 per share and revenue of $763.7 million, beating Wall Street expectations despite stock dropping 17% after-hours
- JPMorgan lowered price target from $81 to $77 while maintaining neutral rating following billings miss of $6 million below guidance
- Company’s billings reached $740 million, falling short due to timing issues with go-to-market strategy changes rather than demand problems
- Revenue growth has slowed from 12.3% annual average over three years to projected mid-single digits, raising investor concerns about future momentum
- Stock trades at premium valuations of 6.6x trailing revenues compared to S&P 500’s 3x multiple, with analysts suggesting 35% downside potential
DocuSign delivered mixed results in its first quarter fiscal 2026 earnings report, creating uncertainty for investors despite beating key financial metrics.

The electronic signature company reported earnings of $0.90 per share on revenue of $763.7 million for the quarter ending April 2025. Both figures exceeded Wall Street expectations of $0.81 per share and $748.1 million respectively.
Revenue increased 7.6% year-over-year, while earnings jumped 9.8% compared to the same period last year. The company’s Q2 sales outlook of $779 million also topped street estimates.
Docusign, $DOCU, Q1-26. Results:
🔴 -12% Post-Market 🚨📊 Adj. EPS: $0.90 🟢
💰 Revenue: $763.7M 🟢
📈 Net Income: $72.1M
🔎 Strong quarter with robust revenue growth and margin expansion; over 10,000 customers now using Intelligent Agreement Management. pic.twitter.com/krinmbs0eD— EarningsTime (@Earnings_Time) June 5, 2025
However, the positive earnings news was overshadowed by concerning billing figures and growth trajectory concerns. DocuSign’s stock plummeted 17% in after-hours trading following the Thursday, June 5 announcement.
The company’s billings reached $740 million, missing guidance by approximately $6 million. Management attributed this shortfall to timing issues related to go-to-market strategy changes rather than weakening demand.
JPMorgan analysts responded by lowering their price target from $81 to $77 while maintaining a neutral rating on Friday. The investment bank cited the billings miss as a key factor in the downgrade decision.
Slowing Growth Trajectory Raises Red Flags
DocuSign’s growth story appears to be losing steam compared to its pandemic-era boom. The company achieved an average annual revenue growth rate of 12.3% over the past three years.
Current consensus estimates project mid-single-digit sales growth for the coming years. This deceleration has investors questioning whether DocuSign can maintain its premium valuation.
The company trades at 6.6 times trailing revenues and 26 times trailing adjusted earnings as of Thursday’s close at $93. For comparison, the S&P 500 trades at 3 times trailing revenues with similar anticipated growth rates.
DocuSign’s operating margin of 8% also lags behind the benchmark index’s 13%. The company does maintain a strong balance sheet with debt at just 0.7% of equity and cash representing 24% of assets.
Customer Metrics Show Steady Progress
Despite billing concerns, DocuSign’s customer metrics demonstrated healthy expansion. Total customers grew to 1.71 million, representing a 9.6% year-over-year increase.
Enterprise and commercial customers rose to 268,000, up 8.1% from the previous year. The company maintained stable Dollar Net Retention at 101% with expectations for moderate improvement.
DocuSign continues investing in its Identity and Access Management platform, highlighting new innovations and adoption rates. The company is also pursuing AI-driven enhancements, including integration with Salesforce deployments.
For the second quarter, DocuSign forecasts total revenue of $779 million, representing 5.8% year-over-year growth. Management revised fiscal year 2026 billings outlook downward due to early renewal timing and macroeconomic factors.
Morgan Stanley analysts also adjusted their price target from $92 to $86 while maintaining an equalweight rating. They noted ongoing challenges including sales force productivity issues and leadership turnover.
Some analysts suggest the stock could face a 35% decline if valued at 4 times trailing revenues, bringing shares under $60. This assessment assumes DocuSign settles into mid-to-high single-digit growth patterns.
The company faces increased competition from Adobe and market maturation after explosive pandemic growth. However, its expansion into broader agreement management beyond simple signatures could drive future opportunities.
DocuSign’s management projects 6% revenue growth for the full fiscal year while expressing confidence in long-term strategy and double-digit growth potential.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support