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DocuSign is trading lower today despite delivering a solid Q3 (Oct) beat. Revenue rose 8.4% yr/yr to $818.4 mln, topping expectations and marking one of its stronger growth quarters in two years. Strength came from continued investment in core e-signature solutions and the expanding Intelligent Agreement Management (IAM) platform.

• Dollar net retention: 102%, up from 100% last year, supported by improved envelope utilization. IAM adoption surpassed 25,000 customers, up sharply from 10,000 in April.
• International revenue: Reached 30% of total revenue for the first time, growing 14% yr/yr.
• Billings: Up 10% yr/yr to $829.5 mln, boosted by early renewals, annual booking shifts, and slight FX help; underlying growth was roughly +8%. Q4 billings guidance: $992--1,002 mln, about +8% growth at the midpoint.
• Note: DOCU will transition away from billings to ARR reporting, including IAM as a % of ARR, to reduce renewal-driven variability. This is the final quarter of billings guidance, with Q4 being the last quarter of reported billings.
• Shares are weaker as investors react to the in-line Q4 revenue guidance, softer than the raised outlook last quarter, and a step down in billings growth versus Q2.

Briefing.com Analyst Insight

DOCU's Q3 results checked many of the right boxes: revenue upside, improving net retention, and clear traction in IAM—an area that is essential for the company's long-term repositioning beyond core e-signature. However, the market is signaling that in-line Q4 revenue guidance is not enough, especially after the company set higher expectations last quarter. The step down in billings growth from Q2 and the muted Q4 billings guide reinforce concerns about the sustainability of DOCU's growth cadence. While moving to ARR should help smooth investor perception over time, we think the near-term sentiment overhang persists until DOCU proves that IAM can consistently accelerate overall growth. For now, DOCU remains a show-me story, with solid fundamentals but limited visibility into reacceleration.