DocuSign outperforms earnings but stocks fall

DocuSign Inc. beat revenue and earnings expectations for its latest quarter while delivering a better-than-expected outlook on those metrics, but the electronic signature company’s shares fell in trading Thursday night.

The company reported a fiscal fourth-quarter net loss of $ 72.4 million, or 38 cents a share, while it posted a net loss of $ 47.4 million, or 26 cents a share, a year earlier. After adjusting for share-based compensation and other expenses, DocuSign DOCU,
+ 5.90%
it earned 37 cents a share, down from 12 cents a share a year earlier. Analysts tracked by FactSet were projecting 22 cents a share.

Revenue for the quarter increased from $ 258 million to $ 410 million, while analysts expected $ 408 million.

DocuSign has been a big winner during the pandemic, with its inventory increasing 200% over the past year as more workplaces flocked to the company’s software for digital signatures and other types of contract management. in a world where more business is done remotely. .

Cynthia Gaylor, CFO, told MarketWatch that the company “is very well positioned in the secular trends that we are seeing” around deal digitization and automation.

Shares in DocuSign fell 3.9% in after-hours trading on Thursday, after rising 5.9% in the regular session.

“The big question now for DocuSign is to what extent a return to more normal workplaces and patterns could affect its growth,” wrote Scott Kessler, Global Technology, Media and Telecommunications Industry Leader at Third Bridge.

The company’s billing outlook for the current quarter implies growth of 35%, he said, which would be a sequential slowdown from the most recent quarter. According to the DocuSign earnings report, billing increased 46% in the last quarter.

Also for the current quarter, DocuSign is forecasting $ 432 million to $ 436 million in revenue, while analysts expected $ 419 million.

Looking ahead to the full fiscal year ending next January, DocuSign expects revenue of $ 1.96 billion to $ 1.973 billion. Analysts were modeling $ 1.89 billion.

Gaylor said DocuSign’s business grew nearly 50% in fiscal 2020, arguing that the company’s guidance “is pretty strong and impressive given how big the business has gotten in a fairly short period of time.”

He believes that DocuSign is still at an early stage in its quest to penetrate what the company considers a $ 50 billion addressable market, with half of that coming from electronic signatures and the other half representing efforts to help customers. to manage contracts more efficiently. While the company faces competition from other document software players, it argued that the company has the most comprehensive solution in a market where “the biggest competition is pen and paper.”

Gaylor expects DocuSign to continue to make a profit even as the economy reopens. DocuSign is working on a remote notary product, which represents “a great example of people not going back to the way things were if they could do it online,” he said. The company is also focused on getting customers who have tried the electronic signature product to add other DocuSign solutions, such as risk assessment and analysis.


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