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Docusign Stock Plunges More Than 28%!

Likely Cause – Dissipation of Pandemic Panic!


DocuSign stock plunged after reporting its October-quarter earnings and revenue topped Wall Street targets, but revenue guidance for DOCU stock missed expectations.

San Francisco-based  Docusign Inc (NASDAQ: DOCU) shares plummeted more than 28% in after-hours trading Thursday, after the company’s billings and revenue forecast missed expectations and its chief executive admitted a pandemic boom wore off in the quarter.

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expectations for Docusign Earnings

The consensus earnings estimate is $0.46 per share on revenue of $530.63 million; but the Whisper number is higher at $0.52 per share.

The company's guidance was for revenue of $526.00 million to $532.00 million. Consensus estimates are for year-over-year earnings growth of 187.50% with revenue increasing by 38.57%.

Short interest has decreased by 11.9% and overall earnings estimates have been revised lower since the company's last earnings release.

Actual Third-Quarter Results for docusign stock…..

DocuSign reported a loss of $5.7 million in its fiscal third quarter. On a per-share basis, the San Francisco-based company said it had a loss of 3 cents. Earnings, adjusted for stock option expense and pretax expenses, were 58 cents per share. The results exceeded Wall Street expectations. The average estimate of analysts was for earnings of 46 cents per share.

The provider of electronic signature technology posted revenue of $545.5 million in the period, also topping Street forecasts. Analysts expected $530.63 million.

For the current quarter ending in January, DocuSign said it expects revenue in the range of $557 million to $563 million.

Highlights for Docusign Stock…..

  • Total revenue was $545.5 million, an increase of 42% year-over-year. Subscription revenue was $528.6 million, an increase of 44% year-over-year. Professional services and other revenue was $16.9 million, an increase of 4% year-over-year.
  • Billings were $565.2 million, an increase of 28% year-over-year.
  • GAAP gross margin was 79% compared to 74% in the same period last year. Non-GAAP gross margin was 82% compared to 79% in the same period last year.
  • GAAP net loss per basic and diluted share was $0.03 on 198 million shares outstanding compared to $0.31 on 186 million shares outstanding in the same period last year.
  • Non-GAAP net income per diluted share was $0.58 on 208 million shares outstanding compared to $0.22 on 206 million shares outstanding in the same period last year.
  • Net cash provided by operating activities was $105.4 million compared to $57.4 million in the same period last year.
  • Free cash flow was $90.0 million compared to $38.1 million in the same period last year.
  • Cash, cash equivalents, restricted cash and investments were $908.2 million at the end of the quarter.

"Third quarter revenue growth of 42% year-over-year and operating margin of 22% exceeded our expectations. After six quarters of accelerated growth, we saw customers return to more normalized buying patterns, resulting in 28% year-over-year billings growth," said Dan Springer, CEO of DocuSign. "With a $50 billion TAM and 1.11 million customers worldwide, we are confident in the value DocuSign delivers in an increasingly digital anywhere economy."

Positive Features for Docusign Stock…..

DocuSign recently announced several exciting new product capabilities to help businesses move forward including:

  • Expansion of Salesforce Partnership - On October 27, 2021, DocuSign and Salesforce announced an expansion of their global strategic partnership to build new joint solutions that make it easier for customers to accelerate how agreements are facilitated around the world.
  • DocuSign Ventures - DocuSign introduced DocuSign Ventures, a new initiative dedicated to nurturing the growing ecosystem of entrepreneurs and startups that are changing the future of how we all will agree.

 

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