DocuSign (DOCU) Experiences After-Hours Decline
Shares of DocuSign (DOCU) fell in after-hours trading on Thursday following the company's announcement of its Q1 results. Although the electronic signature firm reported earnings that surpassed expectations, it also lowered its full-year billings guidance, which led to a decline in investor sentiment.
Q1 Earnings Highlights
DocuSign posted adjusted earnings of $0.90 per share, outperforming Wall Street's estimate of $0.81. In addition, the company achieved a revenue increase of 7.6% year-over-year, totaling $763.65 million, which also exceeded the consensus estimate of $748.14 million.
Subscription revenue grew by 8%, reaching $746.2 million, while professional services and other revenue saw a 4% increase to $17.5 million.
Fiscal 2026 Guidance Adjustments
Looking ahead, DocuSign has guided revenue for fiscal 2026 to be between $3.151 billion and $3.163 billion, surpassing analyst expectations of $3.136 billion. The company also projected a non-GAAP operating margin between 27.8% and 28.8%, which aligns with consensus estimates.
However, management has revised the full-year billings guidance to a range of $3.285 billion to $3.339 billion, down from the previous forecast of $3.3 billion to $3.354 billion, contributing to the decline in stock price.
Market Outlook
Currently, Wall Street holds a Hold consensus on DOCU, with an average price target of $92.71, indicating limited upside potential from current levels. This outlook may change as analysts reassess their projections following the earnings report.
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