Shares of DocuSign Inc ( DOCU ) tanked in early trading on Friday, despite the company reporting healthy fiscal first-quarter results.

The company's billings missed the guidance, following several quarters of "material outperformance," while the full-year guidance was lowered by 50 basis points (bps), despite currency tailwinds, according to Needham.

The DocuSign ( DOCU ) Analyst: Analyst Scott Berg reaffirmed a Hold rating on the stock.

The DocuSign Thesis: The company reported revenue and non-GAAP earnings of $763.7 million and 90 cents per share, beating estimates, with total revenue growth of 7.6% year-on-year and subscription revenue growth of 7.9%, Berg said in the note.

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Customer adds accelerated to 50,000, from 30,000 in the previous quarter, he added.

IAM adoption continues to climb, with direct customers rising to more than 10,000, the analyst stated. "We believe the solution is currently performing best in the SMB space, with 1,000 self-serve customer adds since the April launch alone," he further wrote.

However, billings growth decelerated to 4.2% year-on-year, from 10.8% in the prior quarter, resulting in a value of $739.6 million that missed guidance of $741–$751 million, Berg said.

Management raised their fiscal 2026 revenue guidance to $3,151-$3,163 million, representing growth of 6.1% at the midpoint, from their prior outlook of 5.3% growth, he added.

DOCU Price Action: Shares of DocuSignhad declined by 18.89% to $75.35 at the time of publication on Friday.

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