DocuSign vs. Spotify: Which Digital Pioneer Delivers More Value?

DocuSign DOCU and Spotify SPOT are both digital leaders that operate on scalable, subscription-based business models with large, global user bases. DocuSign revolutionizes the way agreements are prepared, signed and managed electronically, enabling seamless workflows for individuals and enterprises. Spotify, on the other hand, dominates the audio streaming space, offering music and podcasts to millions of users worldwide.

Both companies leverage cloud technology and data-driven personalization to enhance user experience and drive engagement. Their platforms are widely adopted across industries and geographies. This positions them as essential tools in the modern digital economy.

The Case for DOCU

Docusign continues to enhance its Intelligent Agreement Management (IAM) platform, strengthening its integration capabilities with enterprise powerhouses like Microsoft MSFT and Salesforce CRM. These collaborations are not just cosmetic; they are core to the company's mission of optimizing agreement workflows and delivering AI-driven insights that improve the end-user experience.

By embedding itself more deeply into tools already familiar to business clients — such as Microsoft 365 and Salesforce’s CRM suite — Docusign enables seamless agreement management within platforms that enterprises use daily. This integration simplifies contract processes, accelerates decision-making, and creates a unified ecosystem where legal, sales, and procurement teams can collaborate efficiently.

The IAM platform’s growing synergy also highlights Docusign’s commitment to positioning itself as more than an e-signature solution; it's becoming a comprehensive digital agreement hub. Whether a user is drafting a contract within Microsoft Word or managing client pipelines in Salesforce, Docusign’s IAM helps ensure that documents move swiftly through automated, intelligent workflows. These platform partnerships also deepen customer reliance on DOCU’s services, anchoring it within critical enterprise infrastructure. As more businesses seek to modernize agreement processes, Docusign’s integrations with Microsoft and Salesforce are proving instrumental in extending reach, improving retention and reinforcing its competitive edge in the SaaS landscape.

DOCU solidified its leadership in the e-signature market with a strong first-quarter fiscal 2026 performance. It recorded $764 million in total revenues, an 8% year-over-year increase. Impressively, $746 million of that came from subscriptions, highlighting the stability of its SaaS model. Subscription growth, driven in part by Microsoft and Salesforce-aligned services, reflects how enterprises are deepening their usage of Docusign across contract lifecycles. Net revenue retention improved to 101%, suggesting that customers are spending more on the platform. Though billings growth slowed to 4%, it was more indicative of extended renewal cycles than weakening demand.

What stands out is Docusign’s profitability and capital discipline. The company generated $228 million in free cash flow in the first quarter, translating to a healthy 30% margin. As integrations continue to enhance customer value, the company has also committed to shareholder returns, expanding its buyback authorization. These strategic moves suggest that DOCU is not only focused on growth but also on delivering sustained value. With Microsoft and Salesforce reinforcing its relevance across enterprises, and strong free cash flows backing that momentum, Docusign remains well-positioned to maintain its dominance while evolving into a broader digital agreement ecosystem.

The Case for SPOT

Spotify continues to enhance its platform with innovative features that deepen user engagement and broaden its global footprint. Since the introduction of its AI DJ in 2023, the company has witnessed a steady increase in monthly active users (MAUs), reflecting the appeal of more personalized listening experiences. MAUs grew by 16.9% in the fourth quarter of 2023 compared to the March quarter, followed by a further 10% rise by the end of 2024. In the first quarter of 2025 alone, Spotify added another 3 million users. This consistent growth highlights the effectiveness of its technology-driven content curation in attracting and retaining listeners.

Another new feature, the AI Playlist tool, has gained momentum by allowing premium users to create playlists based on simple prompts. Its rapid adoption led to a significant expansion into more than 40 new markets in April 2025, reinforcing the platform’s global appeal. Spotify has also reported a 4% year-over-year increase in average revenue per user, indicating not just rising user numbers but also improved monetization through value-added features.

Expanding beyond music and podcasts, Spotify recently partnered with ElevenLabs to accept AI-narrated audiobooks. Authors can now create audio versions of their work in 29 languages and distribute them through Spotify, extending their reach to a broader, multilingual audience. This move not only supports independent creators but also strengthens Spotify’s position as a comprehensive audio platform.

By introducing smart, user-friendly tools and expanding content formats, Spotify is building a richer ecosystem that caters to a variety of preferences. These advancements, while powered by sophisticated technology, are subtly woven into the user experience, helping the company grow its user base, increase engagement, and maintain leadership in the digital audio streaming space.

How Do the Estimates Compare for DOCU & SPOT?

The Zacks Consensus Estimate for DOCU’s fiscal 2026 sales indicates year-over-year growth of 6%, and EPS indicates a slight year-over-year decline. EPS estimates have been trending upward over the past 60 days.

The Zacks Consensus Estimate for SPOT’s 2025 sales and EPS indicates year-over-year growth of 21% and 51%, respectively. EPS estimates have been trending slightly downward over the past 60 days.

DOCU Undervalued, SPOT Priced for Growth

While DOCU appears attractively valued with a forward 12-month P/E of 21.83X versus its median of 64.82X, SPOT has a higher forward P/E of 54.06X, slightly below its median of 54.07X.

Winner: DocuSign

While both DocuSign and Spotify are digital leaders, DocuSign stands out with stronger fundamentals and deeper enterprise integration. Its Intelligent Agreement Management (IAM) platform, bolstered by partnerships with Microsoft and Salesforce, positions it as a critical tool in modern business operations. With 98% of revenues from subscriptions and 101% net revenue retention, DocuSign offers predictable growth and customer stickiness. Financially, it delivers robust free cash flow and trades at an attractive valuation. While Spotify shows impressive user growth, DocuSign’s profitability, capital discipline, and enterprise relevance make it the more compelling long-term value play.

While DOCU carries a Zacks Rank #3 (Hold), SPOT has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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