DocuSign, Inc. Q3 FY2026 earnings call

• Go-to-market motion: Driving IAM growth across commercial and enterprise segments, with over 25,000 IAM customers and strong early retention rates. Early IAM renewal cohorts show high retention, and IAM customers increase eSignature usage.
• Product innovation: Launched AgreementDesk and AI contract agents in beta. Have approximately 150 million opted-in customer agreements in Navigator, with 20 million added in October. Leverages proprietary data and unrivaled ecosystem with over a thousand third-party integrations.
• Financials: Non-GAAP operating margin was 31%, free cash flow grew 25% to $263 million, and $215 million in share repurchases were made, the largest quarterly buyback to date.

Revenue for Q3 was $818 million, up 8% year over year. Subscription revenue was $801 million, up 9% year over year. Billings were $829 million, up 10% year over year. International revenue is now approximately 30% of the overall business. The IAM segment had more than 25,000 paying direct and digital customers by the end of Q3, up from more than 10,000 in April, and is on pace to represent a low double-digit percentage of recurring revenue at year-end.

• Q4 2026 total revenue expected $825 million to $829 million (7% y/y midpoint), subscription revenue $808 million to $812 million (7% y/y midpoint). Fiscal 2026 total revenue $3.208 billion to $3.212 billion (8% y/y midpoint), subscription revenue $3.14 billion to $3.144 billion (8% y/y midpoint).
• Q4 2026 billings expected $992 million to $1.002 billion (8% y/y midpoint), fiscal 2026 billings $3.379 billion to $3.389 billion (9% y/y midpoint).
• Non-GAAP gross margin Q4 80.8% to 81.2%, fiscal 2026 81.7% to 81.8%; non-GAAP operating margin Q4 28.3% to 28.7%, fiscal 2026 29.8% to 29.9%.

Forward-looking statements subject to known and unknown risks, including factors affecting customer demand and adoption. Cloud migration transition costs impact gross margin. Timing of renewals can cause variability in billings.

Q: Jake Roberge asks about transition to ARR and reacceleration of ARR.

A: Blake Jeffrey Grayson responds that ARR will be disclosed in March call, and billings growth excluding early components is a proxy for business trajectory.

Q: Tyler Radke asks about underlying growth of business and transition to ARR.

A: Blake Jeffrey Grayson explains revenue deceleration from Q3 to Q4 due to prior year PLG initiatives and early component in Q3.

Q: Mark Murphy asks about envelope sent and utilization rates.

A: Blake Jeffrey Grayson says envelope sent has consistent growth, utilization rates are high, indicating healthy expansion ARR opportunity.

Q: Brent Thill asks about sustaining double-digit growth and M&A.

A: Allan C. Thygesen says retention and new expansion bookings are key levers; Blake Jeffrey Grayson mentions active M&A exploration.

Q: Scott Berg asks about AI contract agents' impact on fiscal 2027.

A: Allan C. Thygesen says AI contract agents are in early days, not meaningfully impactful in fiscal 2027 but strategic.

Q: Brad Sills asks about IAM go-to-market playbook.

A: Allan C. Thygesen details focus on sales, procurement, HR, and customer experience use cases, and platform pricing model testing.

Q: Lucas Arasola asks about IAM customers and hiring expectations.

A: Allan C. Thygesen says most IAM customers are existing eSign customers, and headcount growth is modest with focus on strategic areas.

Q: Alex Zukin asks about early renewal dynamics and billings.

A: Blake Jeffrey Grayson says early renewals are mostly core business, IAM plays a role, and billings guide reflects operational performance.