DocuSign, Inc. Q4 FY2026 earnings call

• DocuSign's AI-native Intelligent Agreement Management (IAM) platform established market leadership, with IAM customers generating over $350 million in ARR in 18 months. In fiscal 2027, focus on two priorities: helping customers automate workflows and drive business results, and expanding AI data and innovation advantage. - IAM is an AI-native end-to-end platform transforming agreement management across organizations, with examples like Aon implementing it to surface intelligence in legacy agreements and Bank of Queensland upgrading to IAM via Microsoft Azure Marketplace. - In fiscal 2027, scale IAM with enterprises by adding a top-down C-suite focused sales motion, launch IAM consumption-based subscription pricing in Q1, partner channel emphasizing IAM with over 30% year-over-year growth in Q4 partner-contributed bookings. - Product strategy focuses on delivering more use case value, introducing new IAM SKUs for specific functions, building richer agentic tools for legal teams, strengthening trust and compliance functionality, and expanding IAM extensibility. - Recently launched AI-powered tools bolster IAM's workflow capabilities, and DocuSign is adopting AI across the organization with 60% of new code AI-assisted.

In Q4 2026, revenue was $837 million, up 8% year-over-year. Billings exceeded $1 billion for the first time, growing 10% year-over-year. ARR ended at $3.3 billion, up 8% year-over-year. IAM represented 11% of ARR. For the full year 2026, total revenue was $3.2 billion, up 8% year-over-year, and subscription revenue was $3.2 billion, up 9% year-over-year. ARR grew 8% to nearly $3.3 billion. Billings for Q4 were up 10% and for the full year were $3.4 billion, up 10% year-over-year. Dollar net retention rate was 102% in Q4. IAM represented over $350 million in ARR in Q4, up from 2.3% at the end of fiscal 2025. International revenue surpassed 30% of total revenue in Q4 and grew 15% year over year. Non-GAAP gross margin for Q4 was 81.8%, and for fiscal 2026 was 82.0%. Non-GAAP operating income for Q4 was $247 million, up 10% year-over-year, and for the full year was $968 million, up 9% year-over-year with operating margin reaching 30% for the first time.

• Anticipate accelerating ARR growth in fiscal 2027 with a year-over-year growth rate range of 8.25% to 8.75% or an 8.5% increase to $3.551 billion at midpoint. - Expect total revenue in Q1 2027 to be $822 million to $826 million (8% year-over-year increase at midpoint) and for fiscal 2027 to be $3.484 billion to $3.496 billion (8% year-over-year increase at midpoint). - Non-GAAP gross margin expected to be between 80.8% to 81.2% for Q1 and between 81.5% and 82.0% for fiscal 2027. - Non-GAAP operating margin expected to reach 29.0% to 29.5% for Q1 and 30.0% to 30.5% for fiscal 2027. - Non-GAAP fully diluted weighted average shares outstanding expected to be 196 million to 201 million for Q1 and $190 million to $195 million for fiscal 2027.

• Q: From Rob Owens with Piper Sandler on what's underpinning confidence in acceleration, drivers of growth like gross retention, net retention, top of funnel activity and conservatism in guidance.

A: Overall pleased with business momentum, growth drivers are new expansion bookings and retention, with IAM driving expansion and DNR rates improving. - Q: From Tyler Radke with Citi on IAM growth implied in guidance, why it's linear and what's needed for double-digit growth.

A: IAM's share of ARR is tracking as hoped, with renewal cycles and consultative approach, combination of IAM and gross retention helps reach double-digit growth. - Q: From Mark Murphy with JP Morgan on AI, sovereign AI system IRIS vs working with Anthropic and accuracy advantage.

A: AI has been impactful, advantage in using private consented agreements, benefits from model innovation, and view is to be available in leading chatbots. - Q: From Patrick Walravens with Citizens JMP on Microsoft relationship and stock-based comp.

A: Microsoft partnership is great with them leaning in, stock-based comp has been managed with efforts to decline it as a percentage of revenue. - Q: From Kurt Maturne with Evercore ISI on vertical perspective of IAM and gross retention with IAM customers.

A: Moving towards functional use cases, early renewal cohorts of IAM have better gross and dollar net retention rates than company average. - Q: From Alan Verhoefsky with BTIG on why IAM consumption-based pricing is right, top learnings from quarter on IAM uplift and internal timeline for 10% top-line growth.

A: Consumption-based pricing makes sense for enterprises, validated in trials, and long-term aspiration is achievable but timeline not specified. - Q: From Josh Baer with Morgan Stanley on enterprise opportunity, unlock of enterprise and impact on IAM linearity, pipeline and demand for IAM.

A: Excited about enterprise opportunity, IAM is a platform shift, working to accelerate discussions with customers, including out of cycle deals. - Q: From Alex Zukin with Wolf Research on confidence in non-IAM ARR and consumption-based pricing impact on IAM ARR guide.

A: Retention gains are critical, consumption-based pricing is part of ARR forecast, relevant in enterprise space. - Q: From Rishi Jaluria with RBC Capital Markets on ACV, TCV, LTV of IAM customers and partnerships with model providers.

A: Focus on dollar net retention, partnerships with model providers are well-positioned as DocuSign is system of record for agreements. - Q: From Scott Berg with Needham & Company on A-B testing on self-serve e-sager plans and pricing changes in fiscal 27 guidance.

A: Guidance reflects plans including tests, and testing is ongoing with scaling based on results. - Q: From Brent Sill with Jefferies on AI features traction, momentum and usage through chatbot.

A: AI features like Navigator, automated agreement review, data validation, identity verification, and risk assessment are seeing traction. - Q: From Patrick McElwee with William Blair on IAM net new customers traction and R&D investments with operating margin flat guidance.

A: NewCo is core to growth, primary focus with existing customers, and R&D investments in enterprise, AI, legal tech roadmap, Federal, and security.