Docusign Inc (NASDAQ:DOCU) stock fell 19.17% (As on June 6, 11:24:30 AM UTC-4, Source: Google Finance) after the company lowered its billings forecast, despite otherwise strong results in its fiscal 2026 first quarter. Docusign saw subscription revenue in the quarter of $746.2 million, up 8% year-over-year, but professional services revenue fell 40%, t0 $17.5 million. Billings in the quarter inched up 4%, to $739.6 million. The company ended the quarter with more than 1.7 million customers and more than 1 billion users. Non-GAAP gross margin was 82.3% compared to 82.0% in the same period last year. Net cash provided by operating activities was $251.4 million compared to $254.8 million in the same period last year. Free cash flow was $227.8 million compared to $232.1 million in the same period last year. Cash, cash equivalents, restricted cash and investments were $1.1 billion at the end of the quarter.
Moreover, Docusign launched Iris, an AI engine designed to power smarter agreement workflows by enabling faster drafting, clearer commitments and improved post-signature management in April. Docusign also rolled out Workspaces, a central hub that brings together agreements, participants and supporting content in one place. A new Agreement Desk feature, currently in beta, was unveiled to speed up the intake, review and execution of agreements. The company also improved integrations with Salesforce Inc. and Microsoft Dynamics 365, ensuring smoother data flows between customer relationship management systems and Docusign’s agreement tools. The updates aim to increase engagement and reduce friction for users operating within popular enterprise platforms.
DOCU in the first quarter of FY25 has reported the adjusted earnings per share of 90 cents, beating the analysts’ estimates for the adjusted earnings per share of 83 cents. The company had reported the adjusted revenue growth of 8 percent to $763.7 million in the first quarter of FY25, beating the analysts’ estimates for revenue of $749.19 million.
For its fiscal second quarter, Docusign expects revenue of $777 million to $781 million. For the full year, it’s forecasting revenue of $3.151 billion to $3.163 billion, the latter slightly ahead of expectations at the midpoint.
Where the company became unstuck with investors, however, was with a full-year billings outlook of $3.285 billion to $3.339 billion, down from a previous billings outlook of $3.3 billion to $3.354 billion. The downward adjustment may not have been huge, but it was enough to raise concerns about Docusign’s growth prospects moving forward.