DocuSign (DOCU) Q3 2026 earnings summary

Executive summary

• Q3 FY26 revenue reached $818.4 million, up 8% year-over-year, with billings at $829 million, up 10%, driven by strong demand for core products and the IAM platform, which surpassed 25,000 customers.

• Free cash flow grew 25% year-over-year to $263 million (32% margin), supporting a record $215 million in share repurchases.

• International revenue reached $242 million, representing 30% of total revenue and growing 14% year-over-year.

• Non-GAAP operating margin improved to 31.4%, reflecting strong cost discipline and operational efficiency.

• The company continues to focus on operational efficiency, product innovation, and expanding its go-to-market strategy.

Financial highlights

• Subscription revenue was $801 million, up 9% year-over-year and accounting for 98% of total revenue.

• Non-GAAP operating margin was 31.4%, with non-GAAP operating income of $257 million.

• Non-GAAP gross margin for Q3 was 81.8%, down 70 basis points year-over-year due to cloud migration costs.

• Non-GAAP diluted EPS was $1.01, up from $0.90 last year; GAAP diluted EPS was $0.40, up from $0.30.

• Ended Q3 with $1 billion in cash, cash equivalents, and investments, and no debt.

Outlook and guidance

• Q4 FY26 revenue expected at $825–$829 million (7% YoY growth at midpoint); full-year revenue guidance raised to $3.208–$3.212 billion (8% YoY growth at midpoint).

• Q4 billings expected at $992 million–$1.002 billion (8% YoY growth at midpoint); full-year billings guidance raised to $3.379–$3.389 billion (9% YoY growth at midpoint).

• Non-GAAP gross margin guidance for Q4 is 80.8%–81.2%, and for the year 81.7%–81.8%; non-GAAP operating margin guidance for Q4 is 28.3%–28.7%, and for the year 29.8%–29.9%.

• IAM expected to represent a low double-digit percentage of subscription revenue by year-end.

• Transitioning to ARR as a primary metric in FY27, with new disclosures on IAM's contribution and discontinuation of billings reporting.