Summary: Docusign will release its second-quarter 2026 results after the market close on September 4. Weak expectations in the Q1 report caused Docusign's stock price to plummet, so investors are closely watching whether the company can achieve growth in Q2.

First Quarter Financial Highlights

• Revenue was $763.7 million, an 8% year-over-year increase, including 0.6% negative impact of foreign currency exchange rates. Subscription revenue was $746.2 million, an 8% year-over-year increase. Professional services and other revenue was $17.5 million, a 4% year-over-year decrease.

• Billings were $739.6 million, a 4% year-over-year increase.

• GAAP gross margin was 79.4% compared to 78.9% in the same period last year. Non-GAAP gross margin was 82.3% compared to 82.0% in the same period last year.

• GAAP net income per basic share was $0.35 on 203 million shares outstanding compared to $0.16 on 206 million shares outstanding in the same period last year.

• GAAP net income per diluted share was $0.34 on 213 million shares outstanding compared to $0.16 on 210 million shares outstanding in the same period last year.

• Non-GAAP net income per diluted share was $0.90 on 213 million shares outstanding compared to $0.82 on 210 million shares outstanding in the same period last year.

• Net cash provided by operating activities was $251.4 million compared to $254.8 million in the same period last year.

• Free cash flow was $227.8 million compared to $232.1 million in the same period last year.

• Cash, cash equivalents, restricted cash and investments were $1.1 billion at the end of the quarter.

• Repurchases of common stock were $183.4 million compared to $149.1 million in the same period last year.

Second Quarter Outlook

In its financial report, the company forecast total revenue for the second quarter of $777 million to $781 million, with subscription revenue of $760 million to $764 million.

According to Bloomberg, analysts generally expect DocuSign to report adjusted diluted earnings per share of $0.86 and revenue of $780 million for the second quarter.

Key Highlights

In their Q2 outlook, nearly all institutions cited "billings" and net retention rate (NRR) as key metrics to watch. The company's Q2 billings guidance is between $757 million and $767 million. Whether NRR can show marginal improvement from Q1's approximately 100% growth will directly influence the direction of fine-tuning the full-year revenue forecast. If Q2 billings improve quarter-over-quarter, there's room for a slight upward adjustment to the full-year performance; otherwise, market concerns will arise.

Pay special attention to the composition of "high-quality billings," such as the proportion of long-term contracts, the bundling ratio of CLM and AI modules, and changes in renewal discounts. These structural indicators will influence the stability of future gross and net profit margins.

Another recurring concern is the implementation cycle. If AI-enhanced CLM projects take longer to implement, the short-term billing recognition cycle will be smoother. Investors should extend their observation window to assess trends, avoid overinterpreting single-quarter fluctuations, and focus more on customer penetration and incremental purchase intentions.