Docusign's growth is slowing... but they are profitable...

Docusign is maturing.

If you just glance at the headline numbers, Docusign looks like the classic “COVID winner that’s now slowing down.”

By the numbers:

Revenue 9/5/1: 29%/17%/8% (slooow down)

Net Income 9/5/1: N/A, first year of profitability was 2024

Total Equity 9/5/1: 21%/42%/-4.2% (wonder why negative last year)

FCF 5/1: 37%/15%

So that's a bit of a mixed bag... looking into the numbers a bit more to understand the story...

Why did FCF explode in 2025?

FCF exploded in 2024 (up 106% that year)... and that's due to them cutting costs. There were layoffs, reduced sales & marketing intensity, and more of a focus on profitability.

It's important to note: FCF is distorted by Stock-based compensation (as is common in SaaS companies)

But... ooo this is a red flag. There's is very high...

Here are the actual numbers:

• 2025: ~$610M

• 2024: ~$617M

• 2023: ~$539M

• 2022: ~$409M
  
  That's around 20% of revenue. I do not like that. I don't like that at all.

For context, ~$600M of SBC vs ~$900M FCF means roughly 60–70% of free cash flow is coming from stock-based compensation addbacks.

Why did Total Equity go down?

Total equity went down ~$80m

It looks like that's just due to them using cash for a recently announced $2B stock buyback program... which is good to see... still doesn't cover all the SBC though damn.

Overall feelings

A lot of Docusign’s growth wasn’t organic acceleration, it was pulled forward by COVID. Adoption didn’t disappear, it just happened earlier than expected.

The real question now is whether Docusign can re-accelerate growth through products like IAM. Without that, this is likely a mid-single-digit growth, high-margin software business... not necessarily a bad thing if I buy it at a great price.

Sentiment: Slightly Bearish