DocuSign (DocuSign (DOCU)) reported fiscal first-quarter results Thursday after the close that beat analyst expectations on both the top and bottom lines. But the market wasn't impressed — shares dropped about 4% in after-hours trading.

Here's the rundown: Revenue came in at $830.2 million, above the consensus estimate of $824.77 million. Adjusted earnings were $1.09 per share, beating the 99 cents analysts were looking for. Revenue grew 9% year-over-year. The company also generated $321.7 million in cash from operations and $289.4 million in free cash flow.

DocuSign also bought back $317.5 million of its own stock during the quarter and ended the period with about $1 billion in cash and investments.

CEO Allan Thygesen pointed to growing demand for the company's AI-native IAM platform, saying in a statement: "In Q1, we saw continued growing demand for DocuSign's AI-native IAM platform with 40,000 customers investing in our rapidly expanding roadmap. We delivered significant innovation this quarter while driving strong financial results through durable revenue growth, substantial free cash flow, and record share buybacks."

Looking ahead, DocuSign guided for second-quarter revenue between $865 million and $869 million, compared to the $866.08 million analysts expected. The company also raised its full-year revenue guidance from $3.484-$3.496 billion to $3.49-$3.502 billion, versus the $3.49 billion consensus.

So why the selloff? The Q2 guidance range straddled expectations, and the raised full-year outlook was only a modest bump. Investors may have been hoping for a bigger beat or a more aggressive raise. The after-hours drop suggests the market wanted more than just a solid quarter.

DocuSign executives will discuss the results on an earnings call at 5 p.m. ET.

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