DocuSign (DOCU) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue reached $830.2 million, up 9% year-over-year, with international revenue comprising 31% of the total and a 1.6% FX benefit.

• Operating margin improved to 32%, and free cash flow margin was 35%, supporting a record $318 million in stock buybacks.

• IAM platform adoption accelerated, now representing 12.6% of total ARR, up from 10.8% last quarter, with expectations to reach 18% by year-end.

• Nearly 1.9 million customers and over a billion users worldwide, with 1,258 customers exceeding $300,000 in ACV.

• Continued innovation in AI-driven agreement management, with new product launches, integrations, and recognition for innovation and trust.

Financial highlights

• Q1 revenue: $830.2 million, up 9% year-over-year, with a 1.6% 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, up 18% year-over-year; operating margin at 32%.

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

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

Outlook and guidance

• 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.

• Q2 revenue guidance: $865–$869 million (8% year-over-year growth); FY27 revenue guidance: $3.49–$3.50 billion (9% growth).

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

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

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