DocuSign Inc. topped revenue and earnings expectations for its latest quarter while delivering a better-than-expected outlook on those metrics, but shares of the electronic-signature company slipped in late trading Thursday.
The company reported a fiscal fourth-quarter net loss of $72.4 million, or 38 cents a share, whereas it posted a net loss of $47.4 million, or 26 cents a share, a year earlier. After adjusting for stock-based compensation and other expenses, DocuSign
earned 37 cents a share, up from 12 cents a share a year prior. Analysts tracked by FactSet were projecting 22 cents a share.
Revenue for the quarter rose to $410 million from $258 million, while analysts were expecting $408 million.
DocuSign has been a big winner during the pandemic, with its stock up 200% over the past year as more workplaces flocked to the company’s software for obtaining digital signatures and conducting other types of contract management in a world in which more business is being done remotely.
Chief Financial Officer Cynthia Gaylor told MarketWatch that the company “is really well positioned across the secular trends that we’re seeing” around the digitization and automation of agreements.
DocuSign shares were off 3.9% in after-hours trading Thursday, after rising 5.9% in the regular session.
“The big question now for DocuSign is to what extent a return to more normal working places and patterns could dent their growth,” wrote Scott Kessler, the global sector lead for technology, media and telecommunications at Third Bridge.
The company’s billings outlook for the current quarter implies 35% growth, he said, which would be a sequential deceleration from the most recent quarter. According to DocuSign’s earnings release, billings rose 46% in the latest quarter.
Also for the current quarter, DocuSign forecasts $432 million to $436 million in revenue, whereas analysts were looking for $419 million.
Looking ahead to the full fiscal year that ends next January, DocuSign expects revenue of $1.963 billion to $1.973 billion. Analysts were modeling $1.89 billion.
Gaylor said that DocuSign’s business grew nearly 50% in fiscal 2020, arguing that the company’s guidance “is quite solid and impressive given how large the business has become in a fairly short period of time.”
She sees DocuSign as being still early in its quest to penetrate what the company deems a $50 billion addressable market, with half of that coming from e-signatures and the other half representing efforts to help customers more efficiently manage contracts. While the company faces some competition from other document-software players, she 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 seeing benefits even as the economy reopens. DocuSign is working on a remote-notary product, which represents “a great example of people not returning to the way things were if they could do it online,” she said. The company is also focused on getting customers who’ve tried the e-signature product to add other DocuSign solutions, such as risk assessment and analytics.