Will DocuSign report stock-based compensation below 20% of revenue for full-year FY2026?

The arithmetic strongly favors YES. FY2025 SBC was $610.3M on $2,976.7M revenue (20.5%). FY2026 revenue is guided at $3,208-3,212B, meaning the 20% threshold is ~$642M. SBC would need to grow by $32M (5.2%) from a base that actually DECLINED $6.5M YoY in FY2025 with essentially flat headcount (~6,940). The SBC-to-revenue ratio has already been trending down: 22.3% in FY2024 to 20.5% in FY2025. Even holding SBC perfectly flat at $610M yields 19.0% of guided revenue. The only scenario for NO requires an unusual SBC spike — PSU vesting at very high achievement levels or large one-time equity grants for IAM platform talent — but these would need to exceed the $32M buffer, which is a 5.2% increase from a declining base.

While the base case math favors YES (flat SBC on growing revenue = ~19.0%), I weight the PSU vesting risk more heavily. PSUs are capped at 200% of target and vest based on subscription revenue and FCF achievement — both metrics where DocuSign is performing well. If PSU achievement is at or near maximum, FY2026 could see elevated SBC from PSU vesting. Additionally, SBC jumped 14.5% from FY2023 ($538.7M) to FY2024 ($616.8M), demonstrating that spikes are possible. However, that spike coincided with a hiring wave, while current headcount is essentially flat. The $32M buffer provides meaningful insulation. The question also benefits from three quarters of FY2026 already completed — Q1-Q3 10-Q filings would already show most of the full-year SBC trajectory, leaving only Q4 as the variable.

The prediction context notes that Q1-Q3 FY2026 SBC figures should be available from 10-Q filings, meaning the remaining uncertainty is limited to Q4. If we assume SBC is roughly evenly distributed across quarters (approximately $152-153M per quarter based on FY2025's $610M), then Q1-Q3 SBC would be approximately $456-459M. That leaves Q4 needing to stay below $183-186M (i.e., $642M minus ~$456-459M) to keep full-year below 20%. This is well above the expected quarterly run rate, providing additional buffer. The key risk factor is PSU vesting — DocuSign's PSUs vest based on subscription revenue and FCF targets, both of which appear to be tracking well. However, even with above-target PSU vesting, exceeding the $642M threshold would require an exceptional deviation.

The math here is straightforward and heavily favors YES. Even if SBC stays perfectly flat at $610M, it represents 19.0% of guided revenue ($3,210M). SBC would need to increase by $32M — a 5.2% jump — in an environment where: (1) headcount is flat at ~6,940, (2) SBC actually declined $6.5M from FY2024 to FY2025, and (3) the company is not in a hiring-intensive phase. The trend from 22.3% to 20.5% over just one year shows strong denominator-driven improvement. The only meaningful risk is PSU acceleration at high achievement levels, but this would need to be exceptionally large to overcome the buffer.

The fundamental case is strong for YES — revenue growing 8% while SBC is flat or declining creates mechanical ratio improvement. However, I give slightly higher weight to two risks: (1) PSU vesting — DocuSign's performance share units vest at up to 200% based on subscription revenue and FCF targets, and both metrics are tracking well; if achievement is at 150%+ of target, the PSU component of SBC could be materially above the prior year; (2) IAM talent acquisition — the Myth Meter analysis notes DocuSign is investing in IAM and platform engineering, which could involve sign-on equity grants not yet reflected in prior quarters. Even so, the $32M buffer is substantial, and the three-quarter elapsed timeline limits the impact of any Q4 spike.

The denominator improvement alone does most of the work here. At 8% revenue growth, even if SBC grew at 3% (a modest increase to ~$629M), the ratio would be 19.6% — still below 20%. SBC would need to grow by 5.2% ($32M) to stay at exactly 20%, which would be the first increase in absolute SBC since FY2024 in a flat-headcount environment. The committee's finding that SBC peaked in FY2024 at 22.3% and is already declining supports the thesis that this is a one-way trajectory for now. The unresolved debate about whether improvement is 'meaningful or cosmetic' is irrelevant to the resolution — the question is purely mathematical.

Clear mathematical favorability. SBC $610M flat on $3,210M revenue = 19.0%. $32M growth buffer is large given declining SBC trend and flat headcount. The ratio went from 22.3% to 20.5% in one year — continuing below 20% with 8% revenue growth is the base case, not the outlier.

Strong YES lean. Revenue growth of 8% creates denominator improvement while SBC is flat-to-declining. The $32M buffer before hitting 20% is substantial — roughly the equivalent of 4,000+ RSU grants at average prices, which seems unlikely given flat headcount. Main tail risk is PSU vesting spike, but even at elevated achievement levels, unlikely to close the full gap.

The trajectory is clear: SBC as % of revenue peaked at 22.3% in FY2024, dropped to 20.5% in FY2025, and with 8% revenue growth in FY2026 the ratio continues declining. The question is whether it crosses below 20%, which only requires SBC to stay below $642M — well above the current $610M run rate. Three quarters already elapsed further constrains the outcome toward YES.