The cloud-based digital signature company's stock has tripled year to date, as the business has demonstrated strong growth during this pandemic.
As more and more businesses hasten to transition to cloud-based solutions as a result of the pandemic, DocuSign's business should continue its robust growth. As CEO Dan Springer mentioned during the company's second-quarter earnings call, customers who have gone digital seldom, if ever, revert to paper-based processes. The company acquired more customers during the first half than the whole of 2019.
Businesses in different sectors are now adopting electronic signatures to cut down on paperwork and time. Mortgage lender Visio Lending, which began using DocuSign earlier this year, has reported an 89% reduction in time taken and 99% signature accuracy, thereby saving the business both resources and money. Another customer, the Commonwealth Bank in Australia, has also used DocuSign's services for commercial lending and home loan paperwork. Both New South Wales and Victoria passed emergency laws that allowed a broader range of documents to be electronically signed as the pandemic swept through the country.
These examples demonstrate how useful DocuSign's services are to different industries. They also highlight how the pandemic is enabling more businesses to formally adopt digital signatures. Even the U.S. Securities and Exchange Commission has permitted the use of electronic signatures to authenticate documents, paving the way for many other government bodies to do so in due course.
The company has just released its third-quarter results for the period ended Oct. 31. The numbers showed that its growth momentum is still intact. Revenue surged 53% year over year to $382.9 million as more businesses signed up for the company's core Agreement Cloud service, while billings increased by 63% year over year to $440.4 million. Although the company still incurred a quarterly net loss due to higher sales and marketing expenses, it has started to generate free cash flow of $38.1 million compared to negative free cash flow of $14.1 million in the same period last year.