What happened
Shares of DocuSign (DOCU 0.10%) plunged on Friday after the e-signature leader warned of slowing growth in the coming year. As of 3 p.m. ET, DocuSign's stock price was down more than 20%.
NASDAQ: DOCU
Key Data Points
So what
DocuSign's revenue rose 35% year over year to $580.8 million in its fiscal 2022 fourth quarter, which ended on Jan. 31. The company's billings -- a closely followed metric that combines sales to new customers, subscription renewals, and additional sales to existing clients -- climbed 25%.
The gains reflect increased spending by businesses on digitalization initiatives during the pandemic, fueled by the growth of remote work and more distributed workforces.
Image source: Getty Images.
Still, DocuSign is not yet profitable based on generally accepted accounting principles (GAAP). The software maker posted a net loss per share of $0.15, compared to $0.38 in the year-ago quarter.
Yet DocuSign's adjusted earnings per share increased 30% to $0.48, which was slightly above Wall Street's estimates. Additionally, its operating and free cash flow jumped 41% and 60%, respectively, to $87.8 million and $70.3 million.
Now what
Investors, however, appeared to focus more on DocuSign's tepid guidance. Management expects revenue to grow roughly 18% to $2.48 billion in fiscal 2023. Analysts had expected full-year revenue of $2.61 billion.
DocuSign's growth is projected to decelerate as more people return to traditional work locations. The company is trying to navigate this trend by ramping up its sales efforts and investing more aggressively in product innovation.
Springer also noted that although DocuSign's growth was slowing, the long-term trend toward digitalization remained intact. "As we head into fiscal 2023, digital transformation and the need to agree from anywhere remains a high priority for organizations across the globe," Springer said. "As people begin to return to the office, they are not returning to paper."
