DOCUSIGN, INC. Q1 FY2026 earnings call

• Innovation: The IAM platform is the fastest-growing offering, with over 10,000 customers. Tens of millions of agreements processed, and usage increased due to UX improvements. New AI-powered capabilities across agreement life cycle phases were announced at Momentum event, with most features available by August. DocuSign Iris, the AI engine for agreement management, was introduced.
• Go-to-Market: Transformation across direct, self-serve, and partner routes, with IAM sales exceeding outlook. Direct customer IAM deal volume exceeded Q4, and international IAM deals up over 50%. Self-serve launched in April, resulting in nearly 1,000 new IAM customers in 3 weeks. Sales force changes included new customer segments, territories, and performance-based compensation.
• Customer Impact: Examples like ServiceTitan deploying IAM, Subaru of America improving efficiency, Primerica reducing processing time, and KPMG enhancing productivity with DocuSign.

DocuSign reported revenue of $764 million in Q1 Fiscal 2026, representing an 8% year-over-year growth. Subscription revenue was $746 million, also up 8% year-over-year. The IAM platform, DocuSign's fastest-growing offering, has over 10,000 customers. Digital revenue grew at more than double the rate of overall revenue. IAM's share of total direct deal volume increased meaningfully quarter-over-quarter, with international IAM deals up over 50% from the previous quarter.

Q2 2026 revenue expected between $777 million and $781 million (6% y-o-y growth midpoint). Fiscal 2026 revenue expected between $3.151 billion and $3.163 billion (6% y-o-y growth midpoint). Q2 2026 subscription revenue expected $760 million to $764 million (6% y-o-y growth midpoint). Fiscal 2026 subscription revenue expected $3.083 billion to $3.095 billion (6.5% y-o-y growth midpoint). Q2 2026 billings expected $757 million to $767 million (5% y-o-y growth midpoint). Fiscal 2026 billings expected $3.285 billion to $3.339 billion (6.5% y-o-y growth midpoint). Non-GAAP gross margin expected 80.5%-81.5% in Q2 and 80.7%-81.7% for fiscal 2026. Non-GAAP operating margin expected 26.5%-27.5% in Q2 and 27.8%-28.8% for fiscal 2026.

Timing of early renewals impacted billings growth, with the impact occurring sooner than anticipated. Economic uncertainty leading to conservatism in bookings outlook. Cloud migration efforts affecting gross margins.

Q: Can you double-click on the go-to-market transition and what exactly is driving the lower early renewals?

A: Changes in compensation to encourage reps to close deals in quarter led to lower early renewals, but sales reps are behaving as expected.

Q: How do you feel about the broader health of the business?

A: IAM adoption is strong, core signed business healthy, with improving gross retention and dollar net retention.

Q: Confidence in second half billings ramp?

A: Expect acceleration in second half, with IAM deal volume ramping and earlier renewal timing assumption adjusted.

Q: Consumption trends?

A: Higher consumption is generally positive, boding well for future, but tricky to disentangle exact drivers.