TLDR
- Q4 Revenue reached $776 million, up 9% year-over-year
- Intelligent Agreement Management (IAM) becoming fastest-growing new product in company history
- Dollar net retention rate improved to 101%, highest in six quarters
- Fiscal 2026 revenue guidance shows slower 5% growth
- Company beat analysts’ expectations with quarterly earnings of $0.86 per share
DocuSign, the leading provider of electronic signature technology, has reported strong fourth-quarter results that exceeded analyst expectations, while warning of potential slower growth in the coming fiscal year.
The company announced Q4 revenue of $776.25 million, representing a 9% increase from the same period last year. This figure surpassed the Zacks Consensus Estimate by 2.14%.
For the full fiscal year 2025, DocuSign achieved total revenue of $3 billion, marking an 8% year-over-year growth.
On the earnings front, DocuSign reported non-GAAP diluted earnings per share of $0.86 for Q4, beating the Zacks Consensus Estimate of $0.84 per share. This represents growth from $0.76 per share in the year-ago quarter.
The company’s non-GAAP operating margin for Q4 stood at 28.8%, while the fiscal 2025 non-GAAP operating margin was 29.8%. These figures demonstrate DocuSign’s focus on operational efficiency.
DocuSign’s customer base grew to nearly 1.7 million, representing a 10% increase year-over-year. This expanding user base has contributed to the company’s revenue growth.
Particularly noteworthy is the improvement in DocuSign’s dollar net retention rate, which reached 101% in Q4. This marks the highest level in six quarters, indicating strong customer retention and increased usage among existing clients.
Cash flow remained robust, with Q4 free cash flow hitting $280 million, translating to a 36% margin. For the full fiscal year 2025, free cash flow was $920 million with a 31% margin.
The company ended the fiscal year with a strong balance sheet, reporting $1.1 billion in cash, cash equivalents, and investments. This financial position provides DocuSign with flexibility for future investments and share repurchases.
During fiscal 2025, DocuSign repurchased $684 million worth of shares, demonstrating confidence in its long-term prospects and commitment to returning value to shareholders.
Intelligent Agreement Management
A significant highlight from the earnings call was the success of DocuSign’s new Intelligent Agreement Management (IAM) offering. CEO Allan Thygesen noted that IAM has quickly become the fastest-growing new product in the company’s history.
The IAM solution has shown particular strength in the small and medium-sized business (SMB) and commercial segments. The company is now working to expand its adoption in enterprise and international markets.
Despite these positive results, DocuSign faces some challenges ahead. The fiscal 2026 revenue guidance indicates a slower growth rate of approximately 5% year-over-year, which falls below the 8% growth achieved in fiscal 2025.
Several factors contribute to this projected slowdown, including headwinds from foreign currency rates that are expected to impact both revenue and billings growth.
DocuSign is in the midst of a cloud infrastructure migration, which is anticipated to affect gross margins in fiscal 2026. The company expects this impact to be more pronounced initially before easing in fiscal 2027.
The company’s stock has underperformed the broader market so far in 2025, with shares down about 10.9% since the beginning of the year, compared to the S&P 500’s decline of 4.8%.
Looking Ahead
Looking ahead, CFO Blake Grayson explained that subscription revenue growth is expected to be around 5.8% at the midpoint for fiscal 2026, after adjusting for a 0.7% foreign exchange headwind. He noted that revenue typically lags billings by 6 to 7 quarters due to the company’s average contract duration.
Grayson expressed optimism that fiscal 2026 will be the first year DocuSign anticipates accelerated billings growth, driven by IAM. This should eventually lead to revenue acceleration in future periods.
The transition to IAM in enterprise segments is expected to be more complex and will require significant investment in sales and go-to-market strategies. DocuSign anticipates most IAM growth this year to come from SMB and mid-market segments.
When asked about the current macroeconomic environment, Thygesen stated that the company hasn’t seen material changes in envelope volume trends, and February numbers were as expected. He noted that DocuSign’s diversification across sectors and geographies helps mitigate impacts from individual industry challenges.
The company has demonstrated consistent performance in exceeding analyst expectations, having surpassed consensus EPS estimates in all four quarters of fiscal 2025.
