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HomeMarketDocuSign Stock Spikes as Earnings Crush Estimates

DocuSign Stock Spikes as Earnings Crush Estimates

DocuSign’s revenue increased 18% year over year.

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Tiffany Hagler-Geard/Bloomberg

DocuSign
shares were trading sharply higher in late Thursday trading after the e-signature software company posted better-than-expected results.

The company has had some difficult recent quarters, ousting former CEO Dan Springer earlier this year, then replacing him with former Google marketing exec Allan Thygesen. While demand for the company’s services soared during the pandemic when most businesses went virtual, slowing demand and salesforce churn created issues for the business in recent quarters. For the year through Thursday’s close, DocuSign stock is down more than 71%. 

For its fiscal third quarter ended Oct. 31, DocuSign (ticker:
DOCU
) posted revenue of $645.5 million, up 18% from a year ago and ahead of both the company’s guidance range of $624 million to $628 million and the consensus estimate of $627 million.

In late trading, DocuSign was up as much as 16%. Shares pared their gains, trading around 4% higher to $45.

Billings were $659.4 million, up 17%, and well ahead of the company’s target range of $609 million to $613 million. Non-GAAP gross margin was 83%, ahead of the guidance range of 79% to 81%. Non-GAAP operating margin was 23%, likewise ahead of the target range of 20% to 22%. On an adjusted basis, DocuSign earned 57 cents a share in the quarter, beating consensus by 15 cents. Under generally accepted accounting principles, the company lost 15 cents a share in the latest quarter.

“We delivered solid third-quarter results, and are pleased with the continued progress against our critical priorities,” Thygesen said. 

Guidance was also strong. For the fiscal fourth quarter, DocuSign projects revenue of $637 million to $641 million, at the midpoint of the range just shy of consensus at $640.5 million. The company sees fourth-quarter billings ranging from $705 million to $715 million, with non-GAAP gross margin in the 82% to 83% range.

The company now sees full-year revenue of $2.493 billion to $2.497 billion, up from a previous forecast of $2.47 billion to $2.482 billion.

Write to Eric J. Savitz at eric.savitz@barrons.com

Credit: marketwatch.com

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