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DocuSign Inc. has exceeded expectations with its headlines released on Thursday, but its actions seem poised to give way to the curse of this week's software.
DocuSign Actions
DOCU, + 2.66%
, which makes software that allows companies to secure digital signatures on their legal documents, has dropped 21 percent after regular business hours after the release of its first quarter earnings report. The sharp drop reminded an analyst of other declines after the profits of the software world: the two Cloudera Inc.
COOL, -40.80%
and Pivotal Software Inc.
PVTL, -0.28%
saw their disappointing results in recent days, while Nutanix Inc.
NTNX, -0.71%
saw its own double-digit decline.
"The Bulls were hoping for a quarterback in the playoffs and you have numbers online with a few weak spots," Wedbush analyst Daniel Ives told MarketWatch. "Combined with what we saw from Cloudera, Pivotal, Box
BOX, + 3.46%
and Nutanix, this has caused concern. "
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The "sweetness" mentioned by Ives was highlighted, DocuSign having increased the metric by 27%, a lower rate than in previous quarters. Management has attributed this performance to a longer sales cycle, which CEO Dan Springer says reflects the company's shift to electronic signature tools for a broader range of services that help businesses manage their business. contracts.
The company finalized its acquisition of SpringCM last fall and uses the assets of this acquisition to provide tools for companies to better prepare their legal documents and then sort various contracts once they are signed.
Springer told MarketWatch that he considered the billing measure a "clutter," since the company's other measures were stronger. "Sometimes, as billing is the only indicator with predictive power, it gets a little more attention than its overall impact," he said.
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For Springer, billing performance is in fact "a good thing" because it indicates that companies can more deliberately look at the more varied services of the company rather than the electronic signature product for which it got its name. He added that companies were now involving more executives in the buying discussions, while companies that only used DocuSign for signing contracts might have just sent the legal team.
Springer said the company may be taking longer to close each deal, but it also doubles its total addressable market to around $ 50 billion by going beyond the signing stage.
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DocuSign achieved earnings per share of 7 cents per quarter for $ 214 million in revenue. Analysts surveyed by FactSet modeled 5 cents per share in adjusted EPS and revenues of $ 208 million.
For the current quarter, which ends in July, DocuSign is forecasting revenues of $ 218 million to $ 222 million, while the FactSet consensus is estimated at $ 220 million.
DocuSign shares were up 37% this year at Thursday's close, versus a 13% gain for the S & P 500
SPX, + 0.61%
.
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