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DocuSign Beats Across the Board, Stock Surges

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

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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.

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