Docusign Just Posted Strong Earnings--So Why Did the Stock Plunge 6% Overnight?
Docusign reported strong fiscal Q3 earnings with revenue of $818.4 million, up 8% year-over-year, and subscription revenue rising 9%. Despite this, the stock fell 6.3% overnight. The company highlighted growth in its Intelligent Agreement Management platform and AI-native execution. Guidance projects continued growth into 2026, with Q4 revenue expected between $825 million and $829 million. Foreign exchange may impact growth comparisons. Investors are watching AI integrations and enterprise trust developments after the stock's post-earnings decline.
Docusign delivered the kind of fiscal Q3 that could make long-term investors take notice, yet the stock still dropped by 6.3% in overnight trading even after the results. Management pointed to rising momentum across its Intelligent Agreement Management platform, which has now surpassed 25,000 customers and holds roughly 150 million opted-in agreements in the Navigator repository. Revenue reached $818.4 million, up 8% year over year, with subscription revenue climbing 9% to $801.0 million. The company also posted another quarter of stronger cash generation, with operating cash flow rising to $290.3 million and free cash flow reaching $262.9 million.
Inside the product engine, Docusign's narrative could be shifting toward broader AI-native execution. At its Discover'25 event in October, the company said IAM will be available in ChatGPT and is now available in Anthropic Claude, Gemini Enterprise, GitHub Copilot, and Microsoft Copilot Studio through a beta release of its Model Context Protocol server. Developers gained additional tools via new Navigator and Maestro APIs, while the company deepened its enterprise presence through Docusign for Agentforce and secured FedRAMP Moderate and GovRAMP authorization. Navigator also expanded into Brazilian-Portuguese, Spanish, and Japan, signaling a platform that is gradually widening its international reach.
Guidance suggests Docusign could maintain measured growth into early 2026, projecting Q4 revenue between $825 million and $829 million and full-year revenue between $3.208 billion and $3.212 billion. Subscription revenue is expected to rise 7% in Q4 and 8% for the year, while billings could increase 8% and 9% over the same time frames. The company noted that foreign exchange may modestly impact year-over-year growth comparisons. With industry recognition ranging from Gartner's Contract Lifecycle Management leadership to recent Salesforce and Inc. awards, investors could be watching whether accelerating AI integrations and enterprise trust wins eventually reshape sentiment after the stock's post-earnings slide.
