DocuSign Inc. (NASDAQ:DOCU) stock fell in premarket trading Friday after the electronic signature and agreement management company reported first-quarter fiscal 2027 results that topped Wall Street estimates but issued second-quarter guidance largely in line with expectations and drew a cautious response from analysts.

Revenue, Earnings Beat Estimates

DocuSign reported first-quarter revenue of $830.2 million, up 9% from a year earlier and above analysts’ estimates of $824.8 million.

Adjusted earnings were $1.09 per share, exceeding consensus estimates of 99 cents per share.

The company posted an operating margin of 32% and a free cash flow margin of 35%, reflecting continued profitability and strong cash generation. Net cash provided by operating activities totaled $321.7 million, while free cash flow was $289.4 million.

DocuSign repurchased $318 million of its common stock during the quarter, marking the largest quarterly share buyback in the company’s history.

Read Also: DocuSign Delivers Beat-And-Raise Q1, But Investors Aren't Impressed

AI Platform Adoption Expands

DocuSign said its AI-powered Intelligent Agreement Management, or IAM, platform continues to gain traction. The platform is now used by about 40,000 customers and accounts for 12.6% of annual recurring revenue.

The company has expanded IAM through partnerships with AI companies including Anthropic and OpenAI, integrating third-party AI capabilities into agreement workflows.

Management also highlighted growing enterprise adoption, citing customers including Experian and HSBC. International growth remained strong, particularly in Europe, the Middle East, and Africa.

Outlook And Analyst Reaction

For the second quarter, DocuSign expects revenue between $865 million and $869 million, compared with analyst estimates of $866.1 million.

The company raised its fiscal 2027 revenue guidance to a range of $3.49 billion to $3.502 billion from its prior outlook of $3.484 billion to $3.496 billion. Analysts were expecting revenue of about $3.49 billion.

DocuSign expects IAM to represent about 18% of annual recurring revenue by the end of fiscal 2027. Management said it expects annual recurring revenue growth to accelerate during the year, supported by broader AI adoption, expanding IAM usage and improved customer retention.

Despite the beat-and-raise quarter, several analysts lowered their price forecasts following the report. Wells Fargo maintained its Equal Weight rating and cut its price forecast to $55 from $60. BTIG reiterated a Buy rating but lowered its price forecast to $60 from $70. Needham maintained its Hold rating.

According to analyst consensus data, DocuSign carries a Hold rating with an average price forecast of $58.58.

DOCU Stock Price Activity: Docusign shares were down 4.83% at $48.48 during premarket trading on Friday, according to Benzinga Pro data.

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