DocuSign (DOCU, Financial) has reported earnings and net profit that surpassed expectations, driven in part by the introduction of AI-enabled content last year. CEO Allan Thygesen indicated that the company is beginning to turn around its core business and has improved operational efficiency. DocuSign is also collaborating with Microsoft and Google, which are not seen as competitors in the agreement management sector.
Following the announcement of stronger-than-expected earnings, DocuSign's stock price surged over 14%. For the fourth quarter of fiscal 2025, the company reported earnings per share of 86 cents, beating the forecast of 85 cents, and revenue of $776 million, exceeding the expected $761 million.
The positive earnings results were partly attributed to DocuSign's new AI content platform, DocuSign IAM, which optimizes agreement processes and has shown promising usage growth. Looking ahead to fiscal 2026, Thygesen anticipates that IAM will contribute a low double-digit percentage to the company's total growth by Q4.
Despite uncertainties in tariffs affecting consumer confidence and demand, Thygesen noted no signs of slowing demand or growth in their transactions. He emphasized the increasing preference for electronic document signing.
Subscription revenue reached $757 million, marking a 9% year-over-year increase. DocuSign forecasts first-quarter revenue to be between $745 million and $749 million, with full-year revenue expected to range from $3.129 billion to $3.141 billion.
The company reported a net profit of $83.5 million, or 39 cents per share, compared to $27.24 million, or 13 cents per share, in the same quarter last year. Revenue for the fourth quarter grew 9% year-over-year to $776 million.
DocuSign went public in 2018 with a valuation of $6 billion. The company's stock soared during the pandemic due to increased demand for remote services but experienced a significant decline after reaching an all-time high in 2021. Allan Thygesen, who previously worked at Google, joined DocuSign in September 2022 after the stock's steep drop. Despite the recent earnings beat, DocuSign's stock has declined over 16% this year.
