DocuSign Shares Decline 4.9% Since Q3 Earnings & Revenue Beat

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

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