What happened
Shares of DocuSign (DOCU -1.24%), an electronic signature company, were skyrocketing this morning after the company beat Wall Street's top- and bottom-line estimates in the third quarter.
As a result, the tech stock was up by an impressive 14.4% as of 10:38 a.m. ET.
So what
DocuSign reported non-GAAP (adjusted) earnings of $0.57 in the quarter, which was down only slightly from $0.58 in the year-ago quarter but was far ahead of analysts' consensus estimate of $0.42 per share.
The company's revenue of $645.5 million was up 18% from the year-ago quarter and beat Wall Street's average estimate of $626.8 million.
The driving force behind the company's sales growth came from DocuSign's subscription revenue, which increased 18% year over year to $624.1 million. The company's professional services segment also performed well, with sales rising 27% to $21.4 million.
Investors were also happy to see that DocuSign's billings rose 17% to $659.4 million in the third quarter.
Now what
DocuSign's management issued fourth-quarter guidance that likely left investors in an upbeat mood. The company expects sales in the quarter to be in the range between $637 million and $641 million, compared to analysts' average estimate of $640.5 million.
Investors may have also had their eye on the fact that Piper Sandler analyst Rob Owens upgraded DocuSign's stock to neutral from underweight following the company's third-quarter results. Owens said the "risk of downside appears limited from this level" for the stock.
With strong third-quarter results and the stock upgrade this morning, it's no surprise investors were optimistic about DocuSign today.
