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DocuSign could lose $10 billion in market capitalisation by tomorrow

on Dec 2, 2021
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  • DocuSign Inc beats Wall Street estimates for the fiscal third quarter.
  • The digital document workflow company gave weak future guidance.
  • DocuSign shares slid nearly 30% in after-hours trading on Thursday.

DocuSign Inc (NASDAQ: DOCU) reported its financial results for the third quarter on Thursday that beat Wall Street estimates. Shares of the digital document workflow company, however, tanked nearly 30% after-hours on weak guidance for the future.

Q3 financial results

DocuSign said it earned 58 cents a share in Q3 on an adjusted basis versus the year-ago figure of 22 cents a share. The California-based company generated $545.5 million in sales, representing a year-over-year increase of 42%.

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According to FactSet, experts had forecast 46 cents of adjusted EPS on $532.6 million in sales. At $565.2 million, DocuSign’s billings (up 28%), however, came in shy of $594 million that analysts had anticipated.

If the stock doesn’t recover before market open on Friday, DocuSign will lose over $10 billion in market capitalisation.

CEO Springer’s remarks

The U.S. company now has 1.11 million customers. In the earnings press release, CEO Dan Springer said:

Third quarter operating margin of 22% exceeded our expectations. After six quarters of accelerated growth, we saw customers return to more normalised buying patterns. With a $50 billion TAM, we’re confident in the value DocuSign delivers in an increasingly digital anywhere economy.

Guidance for the future

For the fiscal fourth quarter, DocuSign forecasts up to $563 million in revenue and $647 million to $659 million of billings. In comparison, analysts were calling for $575 million in sales and $705.4 million of billings.

The Nasdaq-listed company now forecasts up to $2.089 billion in revenue this year, roughly in line with the consensus. During Q3, DocuSign expanded its global strategic partnership with Salesforce and also introduced DocuSign Ventures.