Shares of Docusign Inc. plunged more than 17% in late trading today after the company lowered its billings forecast, despite otherwise strong results in its fiscal 2026 first quarter.

For the quarter ended April 30, the electronic signature company reported adjusted earnings per share of 90 cents, up from 82 cents in the same quarter of the previous fiscal year, on revenue of $763.7 million, up 8% year-over-year. Both figures were ahead of the 83 cents per share and revenue of $749.19 million expected by analysts.

Docusign saw subscription revenue in the quarter of $746.2 million, up 8% year-over-year, but professional services revenue fell 40%, t0 $17.5 million. Billings in the quarter inched up 4%, to $739.6 million. The company ended the quarter with more than 1.7 million customers and more than 1 billion users.

Business highlights in the quarter included several product announcements aimed at enhancing the agreement lifecycle through artificial intelligence and automation. Docusign launched Iris, an AI engine designed to power smarter agreement workflows by enabling faster drafting, clearer commitments and improved post-signature management in April.

Docusign also rolled out Workspaces, a central hub that brings together agreements, participants and supporting content in one place. A new Agreement Desk feature, currently in beta, was unveiled to speed up the intake, review and execution of agreements.

The company also improved integrations with Salesforce Inc. and Microsoft Dynamics 365, ensuring smoother data flows between customer relationship management systems and Docusign’s agreement tools. The updates aim to increase engagement and reduce friction for users operating within popular enterprise platforms.

“Q1 was an important quarter for Docusign’s long-term transformation as we delivered on an ambitious product roadmap and surpassed 10,000 Intelligent Agreement Management customers,” Chief Executive Allan Thygesen said in the company’s earnings release. “In Q1, our financial performance was strong across revenue growth and profitability.”

For its fiscal second quarter, Docusign expects revenue of $777 million to $781 million. For the full year, it’s forecasting revenue of $3.151 billion to $3.163 billion, the latter slightly ahead of expectations at the midpoint.

Where the company became unstuck with investors, however, was with a full-year billings outlook of $3.285 billion to $3.339 billion, down from a previous billings outlook of $3.3 billion to $3.354 billion. The downward adjustment may not have been huge, but it was enough to raise concerns about Docusign’s growth prospects moving forward.

Image: Docusign