Please ensure Javascript is enabled for purposes of website accessibility

DocuSign Beats Across the Board, Stock Surges

By Danny Vena - Jun 3, 2021 at 7:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-signature specialist increased investor confidence with a big beat and raise.

DocuSign (DOCU -5.49%) reported results for its fiscal 2022 first quarter (ended April 30, 2021), and investors liked what they saw, sending the stock up as much as 6% in after-hours trading. Revenue of $469 million climbed 58% year over year, eclipsing analysts' consensus estimates of roughly $438 million. Revenue accelerated both year over year and on a sequential basis, illustrating the strength of its growing business.

The top-line growth was powered by subscription revenue that grew 61% to $452 million, or 96% of total sales. Professional-services revenue of $17 million edged 7% higher. Billings, a sales growth metric that factors in changes in deferred subscription revenue, grew 54% to $527 million.

A person on a laptop electronically signing a document using DocuSign.

Image source: DocuSign.

The bottom-line results were equally robust. Adjusted earnings per share (EPS) of $0.44 far exceeded the $0.28 expected by analysts, growing more than threefold from $0.12 in the prior-year quarter. Free cash flow also soared, surging to $123 million, up from just $33 million.

Investors were also intrigued by DocuSign's bullish forecast. The company is guiding for revenue in a range of $479 million to $485 million, which would represent 40% growth at the midpoint of its guidance.

DocuSign also raised its full-year forecast. For the fiscal year ending Jan. 21, 2022, the company is guiding for revenue in a range of $1.963 billion to $1.973 billion, which would represent growth of roughly 40%, up from its previous forecast, which called for 35% growth.

The company released several operational upgrades that bode well for the future growth of its cloud-based technology. The DocuSign Agreement Cloud added new product capabilities including data verification, electronic witness enhancements, and now offers e-signature for Microsoft Teams.

The e-signature specialist also introduced DocuSign Notary, a remote online notarization tool, which employs identity-proofing to help reduce the risk of fraud.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of DocuSign and Microsoft. The Motley Fool owns shares of and recommends DocuSign and Microsoft. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DocuSign Stock Quote
DocuSign
DOCU
$65.92 (-5.49%) $-3.83
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$286.15 (-1.39%) $-4.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.