DocuSign, Inc. (NASDAQ:DOCU) shares are trading lower Friday. The company reported third quarter financial results on Thursday after the market closed.
What To Know: The company reported adjusted earning per share of $1.01, beating the consensus estimate of 92 cents. In addition, the company reported revenue of $813.35 billion, beating the consensus estimate of $806.91 million.
DocuSign said the quarter reflected strong execution and improved efficiency, supported by continued growth in its Intelligent Agreement Management platform, which now has more than 25,000 customers. Total billings increased 10% year-over-year, and subscription revenue continued to make up the majority of sales.
GAAP gross margin was roughly flat compared to last year, while non-GAAP gross margin declined modestly. Net cash provided by operating activities rose from the prior-year period, and free cash flow increased to $262.9 million. The company ended the quarter with $1.0 billion in cash, cash equivalents and investments.
DocuSign repurchased $215.1 million in common stock during the quarter, up from the prior-year period. Management highlighted increasing customer adoption of its AI-native platform and new integrations across ChatGPT, Anthropic Claude, Gemini Enterprise and multiple enterprise software tools.
The company also noted expanded trust and security certifications, new identity verification capabilities, additional language and regional availability for Navigator, and industry recognition including placement in the Gartner CLM Magic Quadrant and the 2025 Fortune Future 50 list.
Q4 Outlook: The company sees revenue from between $825.00 million and $829.00 million, versus the consensus estimate of $826.84 million.
FY26 Outlook: The company raised its revenue guidance from between $3.18 billion and $3.20 billion to between $3.20 billion and $3.21 billion, versus the consensus estimate of $3.19 billion.
Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.
- Baird analyst William Power maintained a Neutral rating on Docusign and lowered its price target from $90 to $75.
- B of A Securities analyst Brad Sills maintained a Neutral rating on Docusign and lowered its price target from $102 to $82.
- Wedbush analyst Dan Ives maintained a Neutral rating on Docusign and lowered its price target from $85 to $75.
See Also: Meta AI Becomes Real-Time News Hub With New Media Partnerships
DOCU Price Action: At the time of writing, DocuSign shares are trading 6.45% lower at $66.52, according to data from Benzinga Pro.
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