What happened
Shares of DocuSign (DOCU +1.94%) soared 84.9% in 2019, according to data from S&P Global Market Intelligence, largely on the heels of the e-signature specialist's latest two strong quarterly reports.
So what
The software-as-a-service stock skyrocketed nearly 33% in the month of September alone after the company posted exceptional fiscal second-quarter results. Revenue soared 41% year over year to $235.6 million -- well above estimates for closer to $221 million -- on a 39% jump in subscription revenue (to $220.8 million) and a 72% increase in professional services/other sales.
Image source: Getty Images.
More recently, DocuSign effectively sustained that momentum with its third-quarter update in early December. The stock jumped nearly 9% in a single day after the company confirmed its Q3 revenue rose 40% year over year to $249.5 million (above estimates for $239.9 million), translating into adjusted earnings of $0.11 per share (compared with estimates for $0.03 per share).
CEO Dan Springer noted DocuSign is enjoying a "significant expansion of our global customer base," adding, "Customers and partners alike are seeing the benefits of having a single platform that connects and automates the entire agreement process."
Now what
As it stands, DocuSign should be slated to release fiscal fourth-quarter results some time in March. For perspective, the company's own guidance calls for revenue ranging from $263 million to $267 million -- up roughly 33.4% at the midpoint -- with billings of $346 million to $356 million.
Given DocuSign's propensity for underpromising and overdelivering, however, I suspect it might take results near the high ends of those ranges to appease Wall Street's insatiable appetite for growth.
