DOCU Shares Fall 18.2% Despite Q1 Earnings & Revenue Beat

Core Insights - DocuSign, Inc. (DOCU) reported strong first-quarter fiscal 2026 results with earnings per share (EPS) and revenues exceeding the Zacks Consensus Estimate, yet the stock declined by 18.2% post-results [1][4] Financial Performance - EPS for the quarter was $0.90, surpassing estimates by 11.1% and increasing 9.8% year-over-year [2][4] - Total revenues reached $763.7 million, beating the consensus by 2.2% and rising 7.6% from the same quarter last year [2][4] - Subscription revenues grew by 8% to $746.2 million, exceeding expectations, while professional services and other revenues fell by 4% to $17.5 million [6][4] - Billings amounted to $739.6 million, a 4% increase year-over-year, but fell short of the anticipated $748.7 million [4][6] Margins and Profitability - Non-GAAP gross margin was 82.3%, exceeding the estimate of 81.4%, with non-GAAP gross profit of $628.7 million, an 8% year-over-year increase [7] - Non-GAAP operating margin improved to 29.5%, up 100 basis points from the previous year, surpassing the estimate of 27.6% [7] Balance Sheet and Cash Flow - At the end of Q1 fiscal 2026, cash and cash equivalents stood at $657.4 million, down from $817.4 million a year earlier [8] - Net cash generated from operating activities was $251.4 million, with free cash flow of $227.8 million for the quarter [8] Guidance - For Q2 fiscal 2026, the company expects revenues between $777 million and $781 million, with subscription revenues projected between $760 million and $764 million [9] - For the full fiscal 2026, revenues are anticipated to be between $3.15 billion and $3.16 billion, aligning with the Zacks Consensus Estimate [10]