Docusign Stock Sinks as Firm Cuts Billings Outlook on Switch to AI Platform

Key Takeaways

• Docusign's first-quarter billings missed estimates, and it lowered its full-year billings outlook.
• The e-signature software provider blamed the billings issue on its switch to an artificial intelligence-driven agreement platform.
• Docusign beat quarterly profit and sales estimates, and boosted its share repurchase program.

Docusign (DOCU) shares sank 18% Friday, a day after the electronic signing software maker's billings missed estimates and it slashed its full-year billing outlook as the company shifted to an artificial intelligence (AI) model.

The company reported fiscal 2026 first-quarter billings of $739.6 million, while the average estimate by analysts surveyed by Visible Alpha was $747.8 million. For the full year, Docusign sees billings in the range of $3.285 billion to $3.339 billion, down from its previous outlook of $3.300 billion to $3.354 billion.

CEO Allan Thygesen explained on the earnings call that the company expected a decline in billings this year because of "foundational go-to-market changes" as it employed its AI-driven agreement platform, Intelligent Agreement Management (IAM), according to a transcript provided by AlphaSense. However, Thygesen said that "the impact happened sooner than anticipated," which caused a drop in first-quarter early renewals, negatively impacting billings growth.

Q1 Results Top Analysts' Estimates

The news offset better-than-expected first-quarter results. Docusign reported adjusted earnings per share (EPS) of $0.90, with revenue rising 8% year-over-year to $763.7 million. Both exceeded Visible Alpha forecasts.

In addition, the company announced an increase in the current stock buyback program by up to $1.0 billion. The plan's current authorization is $1.4 billion. 

With today's sharp declines, shares of Docusign fell into negative territory this year. 

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