DocuSign (NASDAQ: DOCU) shares plummeted 16.79% in pre-market trading on Friday, following the release of its first-quarter fiscal 2026 results. Despite beating earnings expectations, the e-signature company's stock took a significant hit due to disappointing billings and a trimmed full-year outlook.

For Q1, DocuSign reported adjusted earnings of $0.90 per share, surpassing the analyst consensus of $0.81. Revenue came in at $763.7 million, up 7.6% year-over-year and beating expectations of $748.13 million. However, billings, a key metric for future revenue, rose only 4% to $739.6 million, falling short of the company's projected range of $741 million to $751 million.

The company's outlook also contributed to the stock's decline. DocuSign lowered its full-year billings forecast to around $3.3 billion, down from its previous projection of up to $3.4 billion. While the company raised its fiscal 2026 revenue guidance to $3.15-$3.16 billion, up from $3.13-$3.14 billion, it appears this wasn't enough to offset concerns about slowing growth and competitive pressures in the digital signature market. The sharp stock decline suggests investors may be worried about DocuSign's long-term growth prospects and its ability to maintain its market position in an increasingly competitive landscape.