[ad_1]
On September 5th, DocuSign Electronic Signature Solution Company (DOCU) announced its results for the second quarter of fiscal year 2020 for the period ending July 31, 2019. The company recorded a revenue growth of business of $ 235.6 million, up 12 months from 41%. This result was $ 14.79 million higher than consensus estimates by analysts. The Company also reported non-GAAP (Generally Accepted Accounting Principles) EPS of $ 0.01, which is $ 0.03 lower than the consensus estimate of analysts. DocuSign's GAAP EPS of -0.39 USD was 0.13 USD lower than the consensus estimate.
In its second quarter earnings presentation, DocuSign presented robust revenue guidance for the third quarter and fiscal year 2020. The company expects revenues for the third quarter and fiscal year 2020 of 237. $ 241 million and $ 947 million to $ 951 million, respectively.
Yesterday, DocuSign closed at 46.25 USD, 1.28% less than its previous closing price. However, following the announcement of its second quarter results, the stock rose 22.92% to $ 56.85 during the trading session preceding the sale today.
The main growth drivers of DocuSign
In its second quarter earnings call, DocuSign highlighted the importance of three key growth drivers:
- acquire new customers
- Cross selling to existing customers
- introduce new solutions
DocuSign had 537,000 paying customers at the end of the second quarter, an increase of 25% year-over-year. During the quarter, the company acquired 29,000 new customers, including 4,000 direct customers. Its direct clientele was 64,000 at the end of the second quarter. At the end of the quarter, 370 clients had an annual contract value of more than $ 300,000. This total implied an increase of over 50% year-over-year.
In March, DocuSign announced the launch of DocuSign Agreement Cloud. According to DocuSign's second-quarter earnings call, DocuSign Agreement Cloud includes predefined products and integrations that enable digital automation of the entire agreement process. Strong growth in the customer base and increasing demand for DocuSign Agreement Cloud products resulted in a 47% year-over-year increase in the Company's billings of $ 252 million in the second quarter.
In September 2018, DocuSign acquired SpringCM. The transaction was complemented by cloud-based CLM (Contract Lifecycle Management) software. This software is becoming a powerful growth driver for DocuSign's portfolio.
According to DocuSign's second-quarter earnings call, its eSignature eSignature key signatures and other DocuSign Agreement Agreement Cloud products target an addressable market worth over $ 25.0 billion. To learn how his rival Dropbox also targets the opportunity in the field of electronic signature, do you read Dropbox is targeting the $ 3.2 billion digital signature market?
Revenue distribution and visibility
In the second quarter, DocuSign's Business and Commerce business accounted for 87% of total sales, up one percentage point from the previous year. The company recorded a 31% year-over-year increase in business and commercial customers during the quarter.
Increasing sales of CLM software to SpringCM customers and existing DocuSign customers has proven to be a critical growth driver for the company. It served as a guide for total billings of $ 260 million to $ 270 million in the third quarter and $ 1.06 to $ 1.08 billion for fiscal year 2020.
In the second quarter, DocuSign reported revenue of $ 221 million, up 39% year-over-year. Subscription revenues accounted for 94% of the company's total revenues. DocuSign is primarily involved in long-term engagements with its customers. In the second quarter, 84% of its contracts were for periods greater than 14 months. He also earns 65% of his total contract dollars with an average duration of more than 19 months.
In the second quarter, DocuSign announced a net retention of 113% in dollars. According to the second-quarter earnings call, the expansion of its product portfolio has enabled the sales force to improve the incentive sales activity of its installed base. This expansion has also helped reduce customer churn.
Orientation of margins and expenses
In presenting second quarter results to investors, DocuSign reported a non-GAAP gross margin of 78% to 80% in the third quarter and fiscal year 2020. The company expects that its non-GAAP sales and marketing margin is 48% to 50%. % in the third quarter and fiscal year 2020. It expects its non-GAAP research and development margin to be between 15% and 17% in the third quarter as well as to Fiscal year 2020. Finally, it provides for a general and administrative margin that is not in line with 10% to 12% in the third quarter and 11% to 13% in 2020.
DocuSign forecasts interest and other income of $ 3.0 million to $ 4.0 million in the third quarter and $ 13 million to $ 16 million in 2020. It is based on tax provisions of 1, $ 0 million to $ 2.0 million and $ 6.0 million to $ 8.0 million in the third quarter. the year 2020, respectively. Finally, it expects the diluted non-GAAP weighted average number of its outstanding shares to be between 185 million and 190 million at the end of the third quarter and between 190 million and 195 million at the end of the year. 39, fiscal year 2020.
Analyst Recommendations for DocuSign
The 13 analysts who follow DocuSign have an average indicative price of $ 64.58 on their shares. This objective indicates a potential increase of 39.63% over the next 12 months, based on the previous closing price of the share.
On July 9, FBN Securities initiated the coverage of DocuSign with an "outperformance" and a target price of $ 60. On August 16, DA Davidson and Danske Bank initiated a company cover with "buy" recommendations and target prices of $ 52.
[ad_2]
Source link