DocuSign, Inc.Full report →1 / 14
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DocuSign, Inc.

Docusign sells subscriptions to electronic-signature and agreement-management software to about 1.8 million customers in over 180 countries; $3.22B of FY2026 revenue, 98% of it subscription, one reportable segment, listed on Nasdaq since 2018.

From $106.99 on 6 December 2024 to $41.75 on 23 February 2026 — 61% over 444 days — and $47.04 on 23 July 2026, 12.7% off the low.
$47.04
Close, 23 Jul 2026
$9.84B
Market cap
4.13%
Adjusted FCF yield, FY2026
−61%
Below the Dec-2024 peak
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As reported

Five years of filed statements, before any argument

FY2022 → FY2026as reported · $
Revenue$3.2B+8%
Gross margin79.4%+0.3pp
Operating margin9.3%+2.6pp
Net income$309M−71%
EPS$1.48−71%
Free cash flow$1.1B+15%
Open the full statements →
Consolidated statements as filed. Fiscal years end 31 January.
  • Scale. FY2026 revenue of $3,219.5M, up 8.2%, with GAAP operating income of $298.6M — the third year of operating profit after a decade of losses.
  • Cash. Operating cash flow of $1,165.0M less $106.4M of capital spending leaves free cash flow of $1,058.6M, the first year above $1B.
  • Balance sheet. About $1.07B of cash and investments, no funded debt, and a $750M revolving facility undrawn and covenant-compliant to May 2030.
The fit

Outside the framework's universe (U2 not met); contested: P5

$9.84B
Market cap1.6% under the $10B universe line
4.13%
Adjusted FCF yield437 bps under the 8–9% band
0.63
Diagnosis reads temporaryspread 0.26 — contested
Low
Confidence tiera load-bearing spread above 0.25
Per-criterion aggregates from the run's deterministic fit tally.
  • The size line. $47.04 on 23 July 2026 times 209,118,000 shares is $9,836.9M, 1.6% under the greater-than-$10B universe line. A share price of $47.82 clears it.
  • The pillars beneath it. Adjusted free cash flow yields 4.13% against an 8–9% band; the year-10 durability gate reads not met at probability 0.575; the diagnosis is contested at 0.63 with a 0.26 spread.
  • The counter-fact. No exclusion was hit, reported free cash flow of $1,058.6M is a 10.76% yield, and revenue has risen every fiscal year on record — the size miss is a price-of-the-day fact.
The gate applied is U2 not met, which resolves to out-of-universe before the pillars are weighed.
The business

An e-signature subscription business that grew fast, then grew 8%

Revenue vs GAAP operating income
Filed consolidated statements of operations; fiscal years end 31 January.
  • What it sells. Subscriptions to electronic signature and a wider agreement-management platform. 98% of FY2026 revenue was subscription, spread across about 1.8 million customers in over 180 countries.
  • One segment. The company reports on a consolidated basis and breaks out only geography: the United States is 71% of revenue, international 29%, and gross margin was 79.4%.
  • The shape of it. Growth fell from 49% in FY2021 to 8.2% in FY2026, while operating income turned from −$173.9M to +$298.6M.
The recurring base

Nine-tenths of recurring revenue still sits in the legacy signature product

Annual recurring revenue at 31 January 2026
ARR of $3,272M, of which the newer platform was 10.8%.
  • The mix. The newer agreement-management platform reached 12.6% of ARR by April 2026 and is guided to about 18% at fiscal year end, which leaves roughly 82% of the base in the older capability.
  • The exposure. The company's own risk factor states that advances in AI have made and may continue to make some foundational capabilities for agreements cheaper and easier to replicate.
  • No signature of harm yet. Dollar net retention was over 102% in Q1 FY2027, more than a point better year over year and sequentially higher for seven quarters, with consumption at multi-year highs.
The dislocation

A 61% fall over 444 days, in four legs, only one of them an earnings event

Daily closes. Peak 6 Dec 2024, trough 23 Feb 2026, $47.04 on 23 Jul 2026.
  • The trigger. On 5 June 2025 the full-year billings guide midpoint was trimmed 0.45%, from $3,327M to $3,312M, on an early-renewal timing change. The stock fell 18.97% the next session on 8.9x average volume.
  • The larger legs. The 30 September 2025 and January–February 2026 declines carried no company numbers cut at all; the second took the stock from $68.40 to $41.75.
  • Fear gauge. Sustained volume in the fall ran 2.24x the pre-peak median, above the 2x reference line but short of a 3–5x washout, and the two heaviest windows sit about eight months apart.
Damage math

The price fell 61%; the estimates behind it moved up

What repriced, and what did not
LineFromToChange
Price, peak to trough$106.99$41.75−61.0%
Reported FCF, FY2024 to FY2026$887M$1,059M+19.4%
Consensus FCF, FY2026e to FY2027e$990M$1,133M+14.5%
Consensus EPS FY2027e, Jan to Jul 2026$4.11$4.53+10.2%
Estimate history against the price path over the same window.
  • Nothing was cut. FY2026 revenue landed at $3,219.5M against the $3,210.7M consensus standing before the trigger, and normalized EPS beat at $3.84 against $3.78.
  • Enterprise value. EV fell about 59%, from roughly $21.4B to roughly $8.8B, while reported free cash flow rose 19% across the same span.
  • The counter-fact. On adjusted free cash flow of about $406M, a +4% perpetuity values the enterprise near $7.3B — under today's $8.8B — so the gap closes on the framework's own owner-earnings basis.
Temporary or permanent

The diagnosis came back contested rather than decided

0.63
Probability the damage is temporaryjudges at 0.68 / 0.42 / 0.63
0.26
Spread across the panelabove the 0.25 load-bearing line
102%
Dollar net retention, Q1 FY2027from 119–123% in FY2021–FY2022
8.5%
FY2027 ARR growth, guidedfrom 45% revenue growth in FY2022
Trial ruling and the usage series the two briefs argued over.
  • The temporary reading. Earning power grew through the drawdown: FY2026 revenue up 8%, billings of $3,406M up 10%, the first year of free cash flow above $1B, and a triggering billings miss that reversed the same year.
  • The permanent reading. Net retention fell from 119–123% to about 102% and has not returned, remaining performance obligations stalled at $2.4B, and the AI-replication risk sits verbatim in the current filing.
  • Why it stayed open. Reading order moved the panel: a temporary-first mean of 0.68 against a permanent-first mean of 0.525. That sensitivity, with the 0.26 spread, is what sets confidence to low.
Yield versus the bar

Adjusted free cash flow yields 4.13% against a bar of 8–9%

FY2026 free cash flow yield on a $9,836.9M market cap
The fortress band, 8–9%, is the most generous of the framework's three.
  • The adjustment. Free cash flow less stock compensation less average acquisition spend: $1,058.6M less $622.3M less about $30M leaves $406.2M — a 4.13% yield, 437 bps under the band.
  • Which bar applies. Zero funded debt and about $1.07B of cash and investments select the fortress band at 8–9%; a levered balance sheet would be held to 25%.
  • The counter-fact. Reported free cash flow of $1,058.6M clears the 10% default bar outright at 10.76%. The whole difference is the stock compensation the adjusted basis removes.
Stock compensation is missing from the structured cash-flow feed, so adjusted FCF here is derived from the filed statements rather than the deterministic feature.
Year-10 durability

The gate withholds conviction rather than forecasting decline

Reported vs adjusted free cash flow
Adjusted = reported FCF less stock compensation less five-year average acquisitions.
  • The gate. Not met at probability 0.575, four seats unanimous: capital spending runs 3.3% of revenue, the enabling laws are vendor-neutral, and the market is fragmented rather than a duopoly.
  • The consistency test. On the adjusted basis the record is three positive years after two negative ones — a rising ramp rather than the stable rolling five-year average the criterion asks for.
  • The counter-fact. Revenue has risen in every fiscal year on record, reported free cash flow rose to $1,058.6M, and consensus models it reaching about $1,328M by FY2029.
Self-help

Buybacks are scaling, and the share count is still up 2.4% a year

Weighted shares outstanding
Five-year weighted CAGR of +2.4%; the first decline came in FY2026.
  • The hard fail. The framework fails companies whose share count keeps rising. The deterministic trend reads rising, so this criterion is not met whatever cash was deployed.
  • What was deployed. $1.76B of repurchases across FY2023–FY2026, $869.1M of it in FY2026, plus a record $318M in Q1 FY2027 against $2.4B of remaining authorization.
  • The turn. FY2026 buybacks were 1.40x the $622.3M of stock compensation, leaving about $247M of net shrinkage; diluted shares fell 8% year over year to 196.5M in Q1 FY2027.
The clock

Two of three past drawdowns round-tripped inside a year; the deepest never did

This name's own drawdown record
EpisodeDepthTo troughAfter
2018 IPO reset−44.9%82 daysRecovered in 350 days
2021–23 bubble unwind−87.2%432 daysNever recovered the peak
2023 growth scare−43.2%267 daysRecovered in 348 days
Current episode−61.0%444 daysOngoing, 12.7% off the low
Peak-to-trough closes from the daily price record since the 2018 listing.
  • Where this one sits. Deeper than the two episodes that recovered, shallower than the one that did not, and 444 days from peak to trough — the longest slide of the four.
  • What could reset it. Four scheduled prints between September 2026 and June 2027; the FY2027 year-end ARR figure in March 2027 is the first full-year test of the guided acceleration.
  • Instrument context. Implied volatility was 53.9% at 30 days and 56.3% at 180 days on 23 July 2026; open interest at the longest tenors could not be confirmed to a dated source and stays unverified.
What it would take

An 8% adjusted yield needs adjusted free cash flow to roughly double

Adjusted-implied FCF yield vs the fortress band
Consensus reported FCF less modeled stock compensation at 17%, 15% and 12% of revenue, on today's market cap.
  • The arithmetic. An 8% yield on a $9,836.9M market cap requires about $787M of adjusted free cash flow, against $406.2M in FY2026 — close to a doubling.
  • What consensus concedes. Reported free cash flow of $1,133M in FY2027 rising to $1,328M in FY2029 puts the adjusted-implied yield at about 8.3%, and only in FY2029.
  • Where the concession has to come from. Not the cash flow line but the compensation line beneath it — about 19% of revenue falling toward 12%. It reached 17% in Q1 FY2027.
The tally's deterministic re-rating math is unavailable: with stock compensation missing from the structured feed, adjusted FCF and the bar yield are not computable, so these figures come from the filed statements and consensus.
What to watch

A business that grew through a 61% fall, priced under the framework's size line and short of its yield bar

Read the full report →

This distills a fixed fit test built tab by tab, criterion by criterion, from the filed record.

Compiled from the full report · 2026-07-24 · For information, not investment advice.