We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DOCU Shares Fall 18.2% Despite Q1 Earnings & Revenue Beat
Read MoreHide Full Article
Key Takeaways
DOCU's Q1 EPS of $0.90 beat estimates by 11.1% and rose 9.8% YoY; revenues grew 7.6% to $763.7M.
Subscription revenues rose 8%, but billings of $739.6M missed expectations of $748.7M.
Shares fell 18.2% post-earnings despite strong margins and raised guidance for Q2 and fiscal 2026.
DocuSign, Inc. (DOCU - Free Report) reported impressive first-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 investors, as the stock has lost 18.2% since the company released results on June 5.
Image Source: Zacks Investment Research
DOCU’s EPS (excluding 56 cents from non-recurring items) was 90 cents, which surpassed the Zacks Consensus Estimate by 11.1% and increased 9.8% from the year-ago quarter. Total revenues of $763.7 million beat the consensus mark by 2.2% and rose 7.6% from the first quarter of fiscal 2025.
The company’s shares have rallied 49.6% in the past year compared with the industry’s 37.3% rise and the Zacks S&P 500’s 10.8% growth.
Image Source: Zacks Investment Research
DOCU’s Segmental Revenues
Subscription revenues totaled $746.2 million, increasing 8% year over year. The figure beat our estimate of $730.4 million. Professional services and other revenues of $17.5 million fell 4% from the year-ago quarter, beating our expectation of $17 million. Billings amounted to $739.6 million, up 4% from the year-ago quarter. The figure failed to meet our anticipation of $748.7 million.
The non-GAAP gross margin was 82.3%, beating our estimate of 81.4%. The non-GAAP gross profit of $628.7 million grew 8% year over year and outpaced our expectation of $608.4 million. The non-GAAP operating margin was 29.5%, increasing 100 basis points from the year-ago quarter. It beat our estimate of 27.6%.
Balance Sheet & Cash Flow of DocuSign
DocuSign exited the first quarter of fiscal 2026 with cash and cash equivalents of $657.4 million compared with $817.4 million at the end of the first quarter of fiscal 2025. Net cash generated by operating activities was $251.4 million for the reported quarter. Free cash flow generated was $227.8 million.
DOCU’s Q1 & FY26 Guidance
For the second quarter of fiscal 2026, the company expects revenues between $777 million and $781 million. The mid-point of the guided range ($779 million) is above the Zacks Consensus Estimate of $777.7 million.
DOCU anticipates subscription revenues in the range of $760-$764 million and billing revenues between $757 million and $767 million. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 80.5-81.5% and 26.5-27.5%, respectively.
For fiscal 2026, the company expects revenues between $3.15 billion and $3.16 billion. The Zacks Consensus Estimate for the same is $3.15 billion.
DOCU anticipates subscription revenues between $3.08 billion and $3.09 billion and billings between $3.29 billion and $3.34 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 80.7-81.7% and 27.8-28.8%, respectively.
Fiserv, Inc. (FI - Free Report) reported mixed first-quarter 2025 results. The company’s earnings beat the Zacks Consensus Estimate, while revenues missed the mark.
FI’s adjusted earnings per share of $2.14 beat the consensus mark by 2.9% and gained 13.8% year over year. Adjusted revenues of $4.8 billion lagged the consensus estimate by 1.6% but rose 5.5% on a year-over-year basis. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported mixed first-quarter 2025 results. The company’s earnings topped the Zacks Consensus Estimate, while revenues missed the mark.
IPG’s adjusted earnings of 33 cents per share surpassed the Zacks Consensus Estimate by 10% but decreased 8.3% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2 billion missed the consensus estimate by a slight margin and declined 20% year over year. Total revenues of $2.3 billion decreased 7.2% year over year but beat the Zacks Consensus Estimate of $2 billion.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
DOCU Shares Fall 18.2% Despite Q1 Earnings & Revenue Beat
Key Takeaways
DocuSign, Inc. (DOCU - Free Report) reported impressive first-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 investors, as the stock has lost 18.2% since the company released results on June 5.
Image Source: Zacks Investment Research
DOCU’s EPS (excluding 56 cents from non-recurring items) was 90 cents, which surpassed the Zacks Consensus Estimate by 11.1% and increased 9.8% from the year-ago quarter. Total revenues of $763.7 million beat the consensus mark by 2.2% and rose 7.6% from the first quarter of fiscal 2025.
The company’s shares have rallied 49.6% in the past year compared with the industry’s 37.3% rise and the Zacks S&P 500’s 10.8% growth.
Image Source: Zacks Investment Research
DOCU’s Segmental Revenues
Subscription revenues totaled $746.2 million, increasing 8% year over year. The figure beat our estimate of $730.4 million. Professional services and other revenues of $17.5 million fell 4% from the year-ago quarter, beating our expectation of $17 million. Billings amounted to $739.6 million, up 4% from the year-ago quarter. The figure failed to meet our anticipation of $748.7 million.
The non-GAAP gross margin was 82.3%, beating our estimate of 81.4%. The non-GAAP gross profit of $628.7 million grew 8% year over year and outpaced our expectation of $608.4 million. The non-GAAP operating margin was 29.5%, increasing 100 basis points from the year-ago quarter. It beat our estimate of 27.6%.
Balance Sheet & Cash Flow of DocuSign
DocuSign exited the first quarter of fiscal 2026 with cash and cash equivalents of $657.4 million compared with $817.4 million at the end of the first quarter of fiscal 2025. Net cash generated by operating activities was $251.4 million for the reported quarter. Free cash flow generated was $227.8 million.
DOCU’s Q1 & FY26 Guidance
For the second quarter of fiscal 2026, the company expects revenues between $777 million and $781 million. The mid-point of the guided range ($779 million) is above the Zacks Consensus Estimate of $777.7 million.
DOCU anticipates subscription revenues in the range of $760-$764 million and billing revenues between $757 million and $767 million. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 80.5-81.5% and 26.5-27.5%, respectively.
For fiscal 2026, the company expects revenues between $3.15 billion and $3.16 billion. The Zacks Consensus Estimate for the same is $3.15 billion.
DOCU anticipates subscription revenues between $3.08 billion and $3.09 billion and billings between $3.29 billion and $3.34 billion. The non-GAAP gross margin and the non-GAAP operating margin are expected to be 80.7-81.7% and 27.8-28.8%, 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
Fiserv, Inc. (FI - Free Report) reported mixed first-quarter 2025 results. The company’s earnings beat the Zacks Consensus Estimate, while revenues missed the mark.
FI’s adjusted earnings per share of $2.14 beat the consensus mark by 2.9% and gained 13.8% year over year. Adjusted revenues of $4.8 billion lagged the consensus estimate by 1.6% but rose 5.5% on a year-over-year basis. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported mixed first-quarter 2025 results. The company’s earnings topped the Zacks Consensus Estimate, while revenues missed the mark.
IPG’s adjusted earnings of 33 cents per share surpassed the Zacks Consensus Estimate by 10% but decreased 8.3% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2 billion missed the consensus estimate by a slight margin and declined 20% year over year. Total revenues of $2.3 billion decreased 7.2% year over year but beat the Zacks Consensus Estimate of $2 billion.