Summary
Revenue reached $830.2 million in the quarter ended April 30, 2026, up 8.7% from $763.7 million a year earlier. Gross profit rose 8.7% to $659.0 million, and gross margin held flat at 79.4%. Profitability improved much faster than the top line. Operating income climbed 84.7% to $111.3 million from $60.3 million, which pushed operating margin to 13.4% from 7.9%. Net income was $78.2 million, up 8.5% from $72.1 million, and diluted EPS was $0.40 against $0.34. On a non-GAAP basis, gross margin slipped to 81.5% from 82.3%, while non-GAAP operating margin improved to 32.0% from 29.5%. Subscriptions accounted for 98% of revenue in the quarter.
Cash generation stayed strong. Operating cash flow was $321.7 million, up 27.9% from $251.4 million. Capital expenditures rose 36.5% to $32.3 million from $23.6 million as the company kept funding capitalized software development. Free cash flow, a non-GAAP measure, was $289.4 million compared with $227.8 million. Deferred revenue, the current portion, was $1.56 billion, up 10.0% from $1.42 billion. Remaining performance obligations were $2.30 billion, flat against the prior-year quarter. Management repurchased $317.5 million of stock, or 6.8 million shares, versus $183.4 million a year earlier. Cash, cash equivalents and investments totaled $1.0 billion at quarter end.
IAM accounted for 12.6% of total ARR as of April 30, 2026, up from 10.8% as of January 31, 2026. The company said 40,000 customers are investing in its roadmap. Customers with more than $300,000 in annualized contract value numbered 1,258, up from 1,123 a year earlier. International revenue grew 17% and represented 31% of total revenue, up from 28%. At its Momentum conference in May, Docusign introduced Iris assistant and agents, Agent Studio for custom agents, and an MCP server that connects with Anthropic Claude, Gemini and OpenAI ChatGPT. It also announced partnerships with legal AI platforms Harvey, Legora and CoCounsel by Thomson Reuters, and named Graham Sheldon, most recently chief product officer at UiPath, as its incoming chief product officer.
Guidance for the next quarter, ending July 31, 2026, points to revenue growth of 8% at the midpoint, non-GAAP gross margin of 81.5% to 81.7%, and non-GAAP operating margin of 29.7% to 30.2%. For the full fiscal year ending January 31, 2027, the company guides to revenue growth of 9% at the midpoint, ARR growth of 8.25% to 8.75%, and non-GAAP operating margin of 30.5% to 31.0%. Foreign currency exchange rates added approximately 1.6% to reported revenue growth in the quarter. Without that currency benefit, guided revenue growth would be roughly 1.4 points lower for the July quarter and 1.3 points lower for the fiscal year.
Two pressure points stand out. The tax provision rose sharply on higher pretax profit, a higher forecast annual effective tax rate tied to the OBBBA, and more stock-based compensation tax expense. Interest income and other income, net also fell, partly on foreign currency exchange losses. The filing lists the usual risks: macro conditions, competition, the timing of customer renewals, changes to the sales force and go-to-market model, seasonality, and the cloud migration transition. Liquidity looks comfortable, with a $750.0 million revolving credit facility and no outstanding borrowings as of April 30, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $830.2M | $836.9M | -0.8% | $763.7M | +8.7% |
| Gross profit | $659.0M | $667.1M | -1.2% | $606.4M | +8.7% |
| Gross margin | 79.4% | 79.7% | -0.3 pp | 79.4% | -0.0 pp |
| Research & development | $159.6M | $168.3M | -5.2% | $159.4M | +0.1% |
| Sales & marketing | $296.2M | $305.5M | -3.1% | $296.4M | -0.1% |
| General & administrative | $91.9M | $105.5M | -12.9% | $90.3M | +1.8% |
| Total operating expenses | $547.7M | $579.3M | -5.5% | $546.1M | +0.3% |
| Operating income (loss) | $111.3M | $87.7M | +26.9% | $60.3M | +84.7% |
| Operating margin | 13.4% | 10.5% | +2.9 pp | 7.9% | +5.5 pp |
| Net income (loss) | $78.2M | $90.3M | -13.4% | $72.1M | +8.5% |
| Net margin | 9.4% | 10.8% | -1.4 pp | 9.4% | -0.0 pp |
| Diluted EPS | $0.40 | $0.43 | -$0.03 | $0.34 | +$0.06 |
| Customers | 1,258 | 25,000 | -95.0% | 1,123 | +12.0% |
Risks
Advances in AI have made foundational agreement capabilities such as analyzing, summarizing and comparing text cheaper and easier to replicate, enabling LLMs, hyperscalers and homegrown agents to compete with Docusign. MD&A emphasizes AI data and innovation as a strategic priority, but failure to respond effectively could reduce demand.
The IAM platform may fail to achieve market acceptance or meet evolving customer needs. MD&A makes IAM central to long-term strategy; IAM represented 12.6% of total ARR as of April 30, 2026, and 10.8% as of January 31, 2026, so any slowdown in adoption would hurt growth.
A majority of revenue still comes from eSignature, and slower or declining adoption without corresponding IAM sales could cause operating results to suffer. The risk factor states sales of eSignature subscriptions account for the substantial majority of subscription and professional services revenue.
Docusign is deploying agentic AI workflows and autonomous agents that may act unpredictably, exceed authorization or suffer prompt injection, leading to financial loss, data breaches or regulatory non-compliance. EU AI Act and U.S. state AI laws add compliance costs and potential AI-washing allegations.
Sales cycles with enterprise and commercial customers are long and unpredictable, generally three to nine months and longer for CLM and advanced offerings including IAM. Lengthy evaluation and procurement processes make the timing of revenue and ARR difficult to predict.
Provision for income taxes increased by 2,223% in the three months ended April 30, 2026, driven by higher pretax profit and OBBBA impacts. OECD 15% global minimum tax and ongoing tax audits could increase the effective tax rate and cash tax payments.
International revenue increased by 17% in the three months ended April 30, 2026, and represented 31% of total revenue compared to 28% in the prior-year quarter. Expansion brings regulatory, labor, currency and compliance risks, and interest income and other income, net decreased 50% partly on foreign exchange losses.
SaaS KPIs
All quarters →Total Customers
Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from DOCUSIGN, INC.'s SEC filings for Q1 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.