DocuSign (DOCU) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue grew 9% year-over-year to $830.2 million, with strong demand for AI-native Intelligent Agreement Management (IAM), now 12.6% of total ARR, and international revenue representing 31% of total.

• Net income rose to $78.2 million, with diluted EPS at $0.40 GAAP and $1.09 non-GAAP, both up year-over-year.

• Free cash flow reached $289.4 million (35% margin), supporting a record $318 million in share buybacks; total authorization for repurchases now $4.5 billion.

• IAM adoption is accelerating, with over 40,000 companies and 1.87 million total customers globally, and significant enterprise traction, especially in North America.

• The company continues to innovate rapidly, launching new AI-driven features, integrations, and expanding its partner ecosystem.

Financial highlights

• Q1 revenue: $830.2 million, up 9% year-over-year, with a 1.6 percentage point FX benefit; international revenue grew 17% to $254 million.

• Non-GAAP gross margin: 81.5%, slightly down year-over-year due to cloud migration; GAAP gross margin: 79.4%.

• Non-GAAP operating income: $266 million (32% margin), up 18% year-over-year; GAAP operating income: $111.3 million.

• Free cash flow: $289.4 million (35% margin), up from $227.8 million last year.

• Diluted weighted average shares outstanding: 196.5 million, down 8% year-over-year.

• Non-GAAP diluted EPS: $1.09, up 21% year-over-year; GAAP diluted EPS: $0.40, up 18%.

Outlook and guidance

• FY27 revenue guidance: $3,490–$3,502 million (9% year-over-year growth); Q2 guidance: $865–$869 million (8% growth).

• FY27 ARR growth expected at 8.25%–8.75%, reaching over $3.5 billion at midpoint; IAM projected to reach 18% of total ARR by year-end.

• Non-GAAP gross margin guidance: 81.5%–82.0% for FY27; operating margin: 30.5%–31.0%.

• Continued reduction in share count expected due to ongoing buybacks.

• Revenue guidance would be 1.3–1.4 percentage points lower excluding FX impact.