DocuSign, Inc. DOCU reported impressive third-quarter fiscal 2026 results, wherein earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate.
However, the better-than-expected results failed to impress the market, as the company’s stock has declined 4.9% since the earnings release on Dec. 4.
DOCU’s EPS (excluding 61 cents from non-recurring items) was $1.01, which topped the Zacks Consensus Estimate by 9.8% and increased 12.2% from the year-ago quarter. Total revenues of $818.4 million beat the consensus mark by 1.5% and rose 8.4% from the third quarter of fiscal 2025.
Docusign Inc. Price, Consensus and EPS Surprise
Docusign Inc. price-consensus-eps-surprise-chart | Docusign Inc. Quote
DOCU’s Segmental Revenues
Subscription revenues totaled $800.96 million, increasing 9.02% year over year. The figure beat our estimate of $788.4 million. Professional services and other revenues of $17.39 million fell 13.6% from the year-ago quarter, missing our expectation of $17.70 million. Billings amounted to $829.5 million, up 10% from the year-ago quarter. The figure beat our anticipation of $792.8 million.
The non-GAAP gross margin was 81.8% compared with 82.5% in the same period last year, beating our estimate of 81.1%. The non-GAAP gross profit of $669.5 million grew 7.6% year over year and outpaced our expectation of $653.9 million. The non-GAAP operating margin was 31.4%, increasing 180 basis points from the year-ago quarter. It beat our estimate of 28.1%.
Balance Sheet & Cash Flow of DocuSign
DocuSign exited the third quarter of fiscal 2026 with cash and cash equivalents of $583.29 million compared with $648.6 million at the end of fiscal 2025. Net cash generated by operating activities was $290.3 million for the reported quarter. Free cash flow generated was $262.9 million.
DOCU’s Q4 & FY26 Guidance
For the fourth quarter of fiscal 2026, the company expects revenues between $825 million and $829 million. The mid-point of the guided range ($827 million) is just above the Zacks Consensus Estimate of $826.3 million.
DOCU anticipates subscription revenues in the range of $808-$812 million and billing revenues between $992 million and $1 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be in the range of 80.8-81.2% and 28.3-28.7%, respectively.
For fiscal 2026, the company expects revenues between $3.208 billion and $3.212 billion. The Zacks Consensus Estimate for the same is pegged at $3.21 billion.
DOCU anticipates subscription revenues between $3.140 billion and $3.144 billion, and billings between $3.379 billion and $3.389 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 81.7-81.8% and 29.8-29.9%, respectively.
Currently, DocuSign carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Omnicom Group Inc. OMC reported impressive third-quarter 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Earnings of $2.15 per share beat the consensus estimate by 4.2% and increased 10.3% year over year. Total revenues of $4.04 billion surpassed the consensus estimate by 0.4% and rose 4% year over year. The increase in the top line was led by a 2.6% jump in revenues from organic growth.
ManpowerGroup, Inc. MAN posted impressive third-quarter 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Quarterly adjusted EPS came in at 83 cents, which beat the Zacks Consensus Estimate by 1.2% but decreased 35.7% year over year. Total revenues of $4.63 billion surpassed the consensus estimate by 0.6% and rose 2.3% year over year.
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Docusign Inc. (DOCU) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
