A：For DocuSign's third quarter fiscal year 2026, revenue was $818 million, up 8% year over year, and billings were $829 million, up 10% year over year. The non-GAAP operating margin was 31%, and free cash flow grew 25% year over year to $263 million with a 32% margin, supporting $215 million in share repurchases.

A：DocuSign is focusing on several strategic pillars: meeting growing demand for DocuSign Intelligent Agreement Management (Iam) and e-signature, improving the go-to-market motion, maintaining a rapid pace of platform evolution and AI innovation, and driving greater operational efficiency.

A：Customer adoption for the intelligent Agreement Management (Iam) platform is strong. By the end of Q3, more than 25,000 paying direct and digital customers had adopted Iam, with over 1,000 new customers in April alone. It is expected to contribute a low double-digit percentage of recurring revenue at year-end. Early retention rates in the first Iam renewal cohorts are encouraging, and customers are increasing their e-signature usage after moving to the I platform.

A：The Iam platform has delivered significant value to customers, with a 75% faster contracting cycle and an 81% improvement in document turnaround time, according to a track record of enterprise customers. One of DocuSign's top 10 customers committed to Iam in the commercial space, with substantial time saved in new document generation. Additionally, net retention improved by two percentage points year over year to 102%, international revenue grew to be approximately 30% of the overall business, and the 2024 Momentum events had three times as many attendees as in 2023.

A：The Iam platform has seen rapid feature addition, including Agreement Desk, a central workspace for teams to process agreements faster, and the introduction of AI contract agents in beta. Integration with other DocuSign products like Assign Navigator and the broader ecosystem are expected to enhance the platform's value. The platform also includes features for handling a large volume of agreements and has a trustworthy AI approach. The integrations with third-party tools and platforms were expanded, including with ChatGPT, Anthropic Cloud Gemini, and enterprise integrations through APIs.

A：DocuSign has received several recognitions for its Iam platform, such as being named a leader in the Gartner Magic Quadrant for CLM for the sixth year in a row, a Salesforce Partner Innovation Award in the tech category for its DocuSign for Salesforce integration, and being honored on the 2025 Fortune Future 50 list and the Inc. Power Partners Awards for supporting entrepreneurs and helping startups grow.

A：DocuSign's third quarter fiscal year 2026 results translated into operational performance marked by strong profitability and cash flow, which allowed the company to execute its largest quarterly dollar buyback in history. Total revenue was $818 million, and subscription revenue was $801 million, both showing year-over-year growth. Q3 billings were $829 million, up 10% year over year with small foreign currency benefits.

A：The outperformance in Q3 was primarily driven by renewal timing and early renewal strength, which accounted for slightly more than half of the outperformance. The quality of early renewals also improved year over year, with a higher percentage of early renewals having expansion and a decrease in those that were flat.

A：In Q4 2026, the company will disclose annual recurring revenue (ARR) including historical data for recent years, provide full year ARR growth guidance, introduce Im as a percentage of ARR as a quarterly reporting metric with guidance for fiscal 2027, and stop reporting billings in fiscal 2027.

A：The company is shifting from reporting billings to ARR to improve investor understanding of how it is managing its long-term growth trajectory and to minimize quarter-to-quarter timing volatility in reporting. The quarterly net new ARR, while small compared to the book of business, is subject to timing volatility similar to billings, which can be highly volatile on a year-over-year basis.

A：The net retention rate (NRR) in Q3 was 102%, which is consistent with the prior year and the same as in Q2 of fiscal 2026. NRR stability was supported by improving consumption and envelope utilization, which were amongst the highest levels seen since early fiscal 2022.

A：International revenue reached approximately 30% of total revenue in Q3 and grew 14% year over year, accelerating slightly from the prior quarter. The company added 9% year-over-year growth in total customers, ending the quarter at nearly 1.8 million. Growth in customers spending over $300,000 annually also accelerated to 8% year over year.

A：In Q3, the non GAAP gross margin was 81.8%, down 70 basis points versus the prior year, and the non GAAP operating income was $257 million, with an operating margin of 31.4%, up nearly two percentage points versus last year. These results were attributed to higher revenue, continued cost discipline, and savings from one-time expense items.

A：In Q3, the company generated $263 million of free cash flow, which is 32% margin, an improvement of over 4 percentage points versus the prior year. The balance sheet remained strong with $1 billion of cash, cash equivalents, and investments, and there was no debt on the balance sheet. The company also purchased $215 million in shares, its largest quarterly dollar buyback in history.

A：The expected guidance for Q4 is total revenue between $825 million and $829 million, a 7% year-over-year increase at the midpoint, and for fiscal 2026, total revenue between $3.208 billion and $3.212 billion, also an 8% year-over-year increase. For full year billings, the company expects growth of 9% year over year at the midpoint. Non GAAP diluted EPS for Q3 was $1.10, up from $0.90 last year, and GAAP diluted EPS was $0.40 versus $0.30 last year.

A：The expectations are for a reacceleration of billings on a full-year basis to align with the transition to ARR. The company is excited about the opportunity for growth due to expansion opportunities and improvements in gross retention within core billings. This is expected to drive the ARR number forward into FY 27 and beyond.

A：The company is emphasizing the use of ARR as the primary long-term metric because it reflects how the business is run and how it plans to share performance insights with investors. The ARR is seen as a foundational capability that underpins the company's platform and is integral to its future success.

A：The early renewal cohort data shows very promising signs. These customers are renewing at higher rates than the company's win rate in the renewal business. The company is monitoring these indicators closely and anticipates that the data will be reflected in future projections of ARR. There is optimism about the potential for expansion, especially as companies deploy across more departments within larger organizations.

A：Navigator is a foundational capability within the RM platform, providing significant advantages such as intelligent repositories, obligation management, and automated notifications. It is not monetized separately but is integral to the company's offerings, enhancing revenue accuracy and workflow advantages. Navigator's role is expected to set the stage for future growth and revenue potential.

A：The revenue growth guidance for Q4 is expected to decelerate from Q3, primarily due to two factors. Q3 had an extra positive impact from early adoption which skewed results, and Q4 of the previous year showed significant growth with new feature launches that provided a strong comp. The company encourages investors to consider the difficult year-over-year comparison when evaluating the deceleration.

A：The consistent growth in envelope sent and utilization rates indicates that customers are using a larger proportion of their purchased services, which is a positive sign for the company. It suggests that customers are engaging more with the company's products and could imply a healthy sales opportunity in future periods. The timing of utilization growth is not uniform across customers but is generally an encouraging sign for the company's resiliency and growth.

A：The AI contract agents are in beta, and the company is exploring relatively simple workflows for use cases such as sales and HR. The goal is to automate complex workflows across these use cases, similar to the company's core offerings. The company is also leaning into partnerships with chat platforms that trigger automated actions. At this stage, the focus is on the early beta phase, and more detailed information will be provided as the program matures.

A：A partnership with OpenAI was announced at the developer conference at the end of the last month.

A：The growth in the large customer segment is being driven by both enterprise adoption of Im and a stronger go-to-market motion compared to a year ago.

A：The focus for next year's go-to-market strategy includes complementing the traditional land-and-expand motion across departments with a top-down platform executive-led sell, leaning into ISV partnerships, and engaging more with system integrator partnerships.

A：The company is testing a platform pricing model with tokens and this approach is being very well received, suggesting a move towards this type of pricing in the future.

A：To achieve double-digit growth, the company needs to focus on retention and new expansion bookings, and is making progress in these areas, especially during IIM.

A：The company actively discusses mergers and acquisitions, keeping an eye out for companies and assets that can help with retention or expansion. They have a high bar for acquisition conversations but are very active about it, as evidenced by their efforts to maintain optionality on their balance sheet for potential opportunities.

A：The acquisition of Lexion has been strategic, augmenting the product roadmap, particularly in the areas of workflows and AI. The agreement desk product launched this week was inspired by an earlier Lexion product and has performed well, suggesting the potential for more strategic acquisitions.

A：The company takes capital allocation seriously, redeploying excess capital where it can achieve forward-looking outcomes. They consider M&A opportunities that help in achieving those outcomes and believe in exploring strategic add-ons that align with their growth vision.

A：While AI contract agents may not be a huge contributor to financial momentum next year, they are important for providing visibility to what customers can do in the future. There are plans for trials, but these are not expected to be financially meaningful in the short term, but are strategic for the long run.

A：The primary departments targeted are HR, procurement, and customer experience. The company has seen demand across these four use cases: sales, procurement, HR, and customer experience. There is a particular interest in procurement and HR processes, which are seen as high dollar, low headcount, complex, and in need of efficiency improvements. The company has integrated with various HR software partners to streamline processes such as onboarding.

A：There has been no material change in the business for Q3, and trends have been consistent with strong year-over-year growth across most verticals. Companies are scrutinizing spend, but the consistent resiliency seen is a positive sign. The macro environment is expected to evolve, but nothing has raised concern as of yet.

A：Of the over 25,000 customers across DocuSign's direct and digital business, the vast majority are existing customers upgrading to the new product, with a smaller number of new customers being onboarded directly onto the product.

A：The company projects modest headcount growth while focusing on efficiency gains and maintaining existing ones. Investments will be made disproportionately in areas like product and security, with careful investment in locations that provide the most leverage over time. The company aims to be judicious with hiring and maintain the balance between growth and efficiency.

A：The expansion was driven by the customer's use of DocuSign's Navigator and Navigator Plus services, along with pre-filled and signed workflows using milestone agreement capabilities. The customer is also benefiting from the agreement preparation system that allows the creation of templates and standard agreements.

A：Early renewal dynamics contributed to the upsell dynamic, with the majority of early renewals still related to the core product. The role of the new product in early renewals was not quantified but was mentioned as a part of the renewal process.

A：The Q4 billings guide was raised by $5 million due to operational performance, which is in addition to the $44 million raised for the full year. This implies some outperformance versus the mid-point in Q4. The increase reflects improvements in the core business excluding the impact of early renewal timing and foreign exchange.