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A maker of software that lets people sign documents electronically, Docusign now also sells an AI-powered Intelligent Agreement Management platform for searching and building workflows around contracts. The idea came to co-founder Tom Gonser while digitizing mortgage paperwork, where the "wet-ink" signature was the bottleneck — and the name is a mash-up of "document" and "sign." Founded in 2003, it grew out of Seattle startup DocuTouch, whose e-signature patents Gonser's earlier firm acquired.
Operating margin reached 13.4% as revenue growth ticked up to 9% and expenses stayed flat.
DocuSign's crossed into the teens for the first time. rose 9% to $830.2 million and nearly doubled to $111.3 million as sales, marketing, and R&D expenses were flat . The core e-signature business is generating cash at an accelerating rate, but the company remains dependent on it while the newer IAM platform builds its base.
Key takeaways
rose 85% to $111.3 million from $60.3 million a year ago, and widened 5.5 points to 13.4%, as the 9% increase was not accompanied by any growth in sales and marketing or R&D expense.
growth accelerated to 9% , up from 8% in the prior quarter, driven by a 17% increase in international revenue, which now represents 31% of the total.
Sales and marketing expense was flat as lower event and paid search spending offset higher personnel costs, while R&D expense was also flat as increased headcount costs were offset by higher .
Section summaries
Management's Discussion and Analysis
Q1 FY2027 revenue grew 9% to $830M driven by commercial, enterprise, and digital channels; operating income nearly doubled to $111M.
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Total rose 9% to $830.2M, with subscription revenue at 98% of the total and international revenue up 17% to 31% of total revenue.
held steady at 79%, while cost of increased 9% due to higher hosting costs for IAM platform expansion and cloud data migration.
The provision for income taxes rose to $39.6 million from $1.7 million, driven by higher pre-tax profit and the impact of tax legislation enacted in the prior fiscal year, which caused to rise only 8.5% to $78.2 million despite the near-doubling of .
rose 27% to $289.4 million, and the company repurchased 6.8 million shares for $317.5 million, ending the quarter with $1.0 billion in cash, equivalents, and investments and no debt.
What changed
The growth rate accelerated to 9% from 8% in the prior quarter, settling the question of whether the post-pandemic baseline was drifting lower — at least for now.
reached 13.4%, exceeding the 10% level achieved in the second half of FY2026, as the benefits of three years of restructuring combined with a quarter of flat operating expenses.
The IAM platform's share of was not updated this quarter, leaving open the question of whether its growth beyond the 10.8% reported for FY2026 is continuing.
No disclosure of a reserve, settlement amount, or trial date related to the securities class action was provided, leaving that material financial exposure unresolved.
What to watch
Whether the IAM platform's share of is disclosed in the next quarter and whether it has grown beyond the 10.8% reported for FY2026.
Whether the growth rate can hold at or above 9%, or whether the acceleration was a one-quarter effect from easing comparisons or international expansion.
Whether can sustain the 13.4% level now that sales, marketing, and R&D expenses were flat — a level of cost discipline that may not repeat if investment needs resume.
Any disclosure of a reserve, settlement amount, or trial date related to the securities class action, which remains a material financial exposure.
Sales and marketing expenses were flat as lower event and paid search spending offset personnel cost increases; R&D was also flat as higher headcount costs were offset by capitalized software development.
nearly doubled to $111.3M from $60.3M, driven by growth and , with expanding to 13.4% from 7.9%.
Provision for income taxes surged to $39.6M from $1.7M due to higher pre-tax profit and the impact of the OBBBA enacted in fiscal 2026.
was $321.7M; the company repurchased 6.8M shares for $317.5M and held $1.0B in cash, equivalents, and investments with no outstanding borrowings.
Quantitative and Qualitative Disclosures About Market Risk
Market risk arises mainly from foreign exchange and interest rates; the company does not currently hedge either exposure.
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A hypothetical 100 rise in interest rates would decrease the fair value of the $1.0 billion investment portfolio by approximately $3.0 million.
The investment portfolio consists of highly rated securities such as bank deposits, money market funds, commercial paper, corporate notes, bonds, and U.S. government agency securities.
The company does not use derivative financial instruments to manage interest rate risk and does not invest for trading or speculative purposes.
The undrawn carries floating-rate exposure if borrowed, but no amounts were outstanding as of April 30, 2026.
Foreign currency translation gains and losses are recorded in , while transaction remeasurements flow through interest and other income.
A hypothetical immediate 10% move in the U.S. dollar against other currencies is not expected to have a material effect on operating results, and the company has not hedged foreign currency transactions to date.
We are subject to legal proceedings and claims from time to time in the ordinary course of business. We have received, and may in the future continue to receive claims from third parties asserting, among other things, infringement of their intellectual property rights. Future li…
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We are subject to legal proceedings and claims from time to time in the ordinary course of business. We have received, and may in the future continue to receive claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation may be necessary to defend ourselves, our partners and our customers by determining the scope, enforceability and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
For more information on legal proceedings, refer to ‘Claims and Litigation’ in Note 7 to our consolidated financial statements in this Quarterly Report on Form 10-Q.
Docusign's Q1 FY2027 risk factors emphasize heavy eSignature dependence, AI-driven competitive disruption, and evolving platform adoption challenges.
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A substantial majority of comes from the eSignature product, making the business vulnerable to any decline in its demand or market acceptance without offsetting sales.
Rapid advances in AI and large language models threaten to commoditize core agreement capabilities, enabling new competitors and homegrown customer alternatives that could reduce demand for Docusign's solutions.
The success of the , launched in April 2024, is uncertain; failure to achieve market acceptance or meet evolving customer needs could harm financial results given significant upfront investment.
Docusign faces an evolving, highly competitive market where primary e-signature rival Adobe Acrobat Sign and emerging non-specialist AI solutions pressure pricing and customer retention.
Frequent and sophisticated cyberattacks, including AI-enhanced threats, pose ongoing risks of data breaches, reputational damage, and significant liability despite existing security measures.
Long and unpredictable sales cycles, particularly for enterprise and deals, combined with , make financial forecasting difficult and can delay the impact of sales downturns.