DocuSign (NASDAQ:DOCU) pioneered the e-signature industry and is a dominant presence in the electronic agreement business. However, in this Fool Live video clip, recorded on Sept. 29, contributors Brian Withers and Toby Bordelon discuss why the company could still have a ton of growth potential in the years ahead. 

Brian Withers: Turns out they released earnings earlier in the month and we didn't cover them. But you know what, they were stellar. Even though the stock has pulled back over the course of the month after its initial uptick, listen to these numbers, it's just knocking it out of the park. Revenue up 50%, and they crossed the half-billion-dollar revenue mark in the quarter for the first time. Billings, 52%. Enterprise customers up 49%.

New metric: customers with an annual contract value of greater than $300,000, grew 37% year over year. For the fifth quarter in a row, dollar-based net retention exceeded their high end of their historical range, coming in at 124%. You got to love this one, Toby: Free cash flow, $162 million, or 32% margin in the quarter, compared to $100 million, 29% in the prior year. They exited with $887 million in cash, cash equivalents, restricted cash, and investments.

Although their Contract Lifecycle Management and Agreement Cloud products had some wins in the quarter, it's still not big enough to split it out. But with its 148,000 enterprise customers, double what it had prior to COVID, it's got a huge customer opportunity to drive further engagement with the platform. Look for more wins on this front over the next couple of quarters.

Toby Bordelon: Yeah, I love the potential at DocuSign, I really do. There's so much more they can do and many ways they can grow. Where do you rate them relative to the competition? Because there is actually a lot out there. I think people may not know all the players in the e-signature space and the contract life space. You've got Adobe (NASDAQ:ADBE), you've got Salesforce (NYSE:CRM), names you do know. But others like PandaDoc and Juro or companies people probably have not heard of but are doing e-signature stuff, a lot more, too. This is becoming pretty big. Where do you put DocuSign in that group?

Brian Withers: Yeah, there's really two sets of companies, competitors, as you mentioned, the Adobe and Salesforce going after enterprise, big business. And the PandaDoc, looking at consumers. On the enterprise side, I think Adobe is the biggest threat. They have a service that helps companies develop websites and create better experiences for their customers. An e-signature is just one feature as part of that. I think that's a powerful way to approach the market.

What I see from DocuSign, though, is there's so many use cases internally within a company already, that they don't need this extra functionality, this extra market, and DocuSign has the edge inside the corporate four walls. I watched the enterprise numbers from DocuSign really closely. You mentioned PandaDoc as just one of the multitude of consumer e-signature services. A lot of members reach out to me and let me know about some e-signature service that I've never heard of that they've used and are concerned about DocuSign's moat. This is not something I'm concerned about.

The company only gets 12% of its revenue from these customers, and they have six times more consumer customers than they do enterprise customers. Six times the customer set is getting you 12% a year revenue versus 1X is getting you 88%. Those 148,000 enterprise customers are like gold, and they make up a massive part of its revenue and a really massive part of its growth story.

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