
DocuSign, Inc.

DOCU (DocuSign, Inc.) trades at 2.5x EV/Revenue — attractively valued for a esignature company with best-in-class gross margins (79%) and moderate growth (+9% YoY). The business is profitable at 18% EBIT margins. Forward PE of 11x.
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DocuSign is the market-leading digital agreement platform that eliminates paper contracts through electronic signatures and document management. The company serves 1.8M customers ranging from small businesses to large enterprises who need to sign, send, and manage contracts digitally. They generate revenue through subscription-based software with their core eSignature product and newer Identity and Access Management (IAM) platform.
DocuSign is transitioning from pure-play eSignature to comprehensive agreement management platform, with total ARR of $3.3B growing 8% annually. The company expects growth acceleration in FY27 driven by IAM expansion (targeting $600M+ ARR) and improved customer retention metrics. International markets represent 30%+ of revenue and are growing 15% year-over-year, providing additional runway.
DocuSign has achieved impressive profitability scale with 79.4% gross margins and 30%+ operating margins while generating over $1B in annual free cash flow (33% margin). The company successfully balanced growth investments with margin expansion, achieving first-time 30%+ operating margins in FY26. Management expects to maintain 81.5%-82% gross margins and 30%-30.5% operating margins going forward.
DocuSign dominates the eSignature market with strong network effects from its 1.8M customer base and 200M+ agreements in its Navigator platform. The company's moat stems from workflow integrations, compliance certifications, and switching costs, though it faces competition from Adobe Sign and Microsoft. The newer IAM business competes in a more fragmented market where DocuSign leverages its existing customer relationships for cross-selling.
Q4 results showed solid execution with $837M revenue (+8% YoY) and first-time $1B+ quarterly billings, beating estimates on both revenue and EPS for the fourth consecutive quarter. The company's dollar net retention improved to 102% from 101%, suggesting stabilizing customer trends. Stock buybacks accelerated significantly with expanded $2.6B authorization reflecting management confidence.
Analysts appear cautiously optimistic given consistent earnings beats and improving profitability metrics, though revenue growth remains a key focus area. The Street is likely monitoring IAM adoption rates and overall customer retention as leading indicators of future growth acceleration. Consensus expects modest revenue growth with continued margin expansion and strong cash generation.
DocuSign has successfully evolved from a growth story to a profitable, cash-generative business while building its next growth driver in IAM—the key question is whether the IAM platform can drive meaningful growth reacceleration beyond 2027.
| '25E | '26E | '27E | '28E | |
|---|---|---|---|---|
| Revenue | $3.2B | $3.5B | $3.8B | $4.0B |
| Growth | — | +9% | +8% | +6% |
| EBITDA | — | $1.2B | $1.3B | $1.3B |
| Growth | — | +10% | +3% | |
| FCF | $1.1B | $1.3B | $1.4B | $1.5B |
| Margin | 33% | 36% |
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Docusign, Inc. (DOCU) Q4 2026 Earnings Call Transcript
Docusign Announces Fourth Quarter and Fiscal Year 2026 Financial Results; Announces $2.0 Billion Increase to Share Repurchase Program
| 38% |
| 37% |
| EPS (PF) | $3.79 | $4.43 | $5.08 | $5.44 |
| Growth | — | +17% | +15% | +7% |
| PF Op Inc | — | $1.6B | $1.7B | $1.8B |