TenQ

The Docusign story

Docusign provides electronic signature and agreement management software, with its expansion depending on whether IAM can turn signing relationships into broader contract workflows.

Docusign stock reportTenQ Score 29/36 · every chart and check from its filings
  • $74.65share price, last close
  • $14.0Bmarket value
  • 29/36TenQ Score checks passed
  • 9.8%growth a year the price assumes

The story in brief

  • IAM gains ground. Intelligent Agreement Management represented 15.1% of annual recurring revenue as of July 31, 2026, compared with 12.6% as of April 30, 2026.
  • Cash margins improve. Free cash flow reached $295.8 million in the quarter to July 2026, with its margin increasing to 34% from 27% in the same period a year earlier.
  • Stock compensation matters. Over the last twelve months, Docusign generated $1.2 billion of free cash flow and recorded $606 million of stock-based pay, making cash flow after stock pay an important distinction.

What drives the business

  • Docusign is expanding from electronic signatures into Intelligent Agreement Management, combining eSignature with an AI-powered agreement repository and workflow automation, although it expects standalone eSignature to remain the majority of revenue for the foreseeable future.
  • Subscriptions accounted for 98% of revenue in the fiscal year ended January 31, 2026, with agreements generally lasting one to three years and substantially all multi-year customers paying annually in advance.
  • As of January 31, 2026, Docusign served over 1.8 million customers, including approximately 280,000 direct enterprise and commercial customers, with no single customer accounting for more than 10% of revenue in the fiscal year ended January 31, 2026.
  • Microsoft, SAP, and Salesforce support its expansion through product integrations and joint sales relationships, while the quarter to July 2026 brought new AI contract tools and expanded integrations with Slack, Perplexity, and Google Cloud’s Gemini Enterprise for Legal.
  • Revenue reached $875.7 million in the quarter to July 2026, increasing 9% from a year earlier, while revenue over the last twelve months was $3.4 billion with growth of 8.6%.

What the price assumes

At $68.85, the reverse DCF implies free cash flow after stock pay grows 8.8% a year for ten years, using a 10.3% discount rate.

Docusign delivered 27.0% annual growth in that measure over the last 2 fiscal years, while the TenQ check sets a 15.5% bar by slowing that record halfway to 4%.

The implied growth is below that bar, but the 2.3% earnings yield falls short of the 5.3% Treasury yield used in TenQ’s earnings check.

Value DOCU on your own assumptions

What could change the story

  • IAM adoption must translate into broader growth, because revenue growth of 8.6% over the last twelve months fell below TenQ’s sector growth benchmark of 17.0%.
  • Reported revenue growth in the quarter to July 2026 included a benefit of approximately 1.3% from foreign exchange rates, so the headline increase was not entirely operational.
  • TenQ’s near-term liquidity measure was 0.64 against its 1.50 threshold despite total debt of $0, although annual advance subscription payments help explain the balance sheet’s contract liabilities.
  • Repurchases of $306.5 million exceeded free cash flow of $295.8 million in the quarter to July 2026, and the share count increased 4.1% over 3 years despite sustained repurchases.

What to watch next

  • For the quarter ending October 31, 2026, Docusign expects revenue between $886 million and $890 million, representing 9% growth from a year earlier at the midpoint.
  • For the fiscal year ending January 31, 2027, management expects revenue between $3,499 million and $3,507 million, ARR growth of 8.50% to 9.00%, and IAM to represent approximately 18% to 19% of total ARR at fiscal year end.
  • Subsequent releases will show whether IAM’s rising contribution accompanies stronger total ARR growth, and whether free cash flow margins and stock-based pay support continued growth in cash flow after stock pay.

Sources

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