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Docusign (DOCU, Financials) shares jumped 18.1% to $88.23 as of 12:08 p.m. GMT-4 on Friday following the company's fourth-quarter earnings report, which showed stronger-than-expected results despite a weaker outlook for fiscal 2026.
Docusign forecast total sales between $3.14 billion and $3.15 billion for the fiscal year ending Jan. 31, 2026, somewhat below analysts' expectation of $3.15 billion. With a range from $3.06 billion to $3.07 billion, subscription income is likely to make up most of it. Surpassing the average expectation of $3.2 billion, the business projected billings between $3.3 billion and $3.35 billion.Docusign projects income of $745 million to $749 million for the first quarter of fiscal 2026, therefore deviating from the $757.2 million projection. While billings are expected to run from $741 million to $751 million, subscription income is estimated to range from $729 million to $733 million.Docusign announced adjusted profits per share of $0.86 in the fourth quarter of fiscal 2025, which ended Jan. 31, over the $0.85 projection. Rising 9% annually, revenue exceeded the projected $761.5 million to reach $776.3 million. Professional services and other income added $18.5 million; subscription income came to $757.8 million. Billings came at $923.2 million, an 11% rise from last year. For the quarter, free cash flow came to $279.6 million.Allan Thygesen, Docusign Chief Executive Officer, said the firm positioned itself for future prospects by attaining significant sales growth and profitability in the fourth quarter.Investors responded favorably to the company's performance, especially with regard to the rise in billings, despite the less favorable long-term projection.
This article first appeared on GuruFocus.