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DocuSign (DOCU) Beats Earnings & Revenue Estimates in Q3

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DocuSign, Inc. DOCU reported better-than-expected third-quarter fiscal 2022 results.

Non-GAAP earnings per share of 58 cents beat the Zacks Consensus Estimate by 26.1% and increased more than 100% year over year. Revenues of $545.3 million surpassed the consensus mark by 3% and increased 42.5% year over year.

In the quarter, DocuSign unveiled several product capabilities, along with DocuSign Ventures, which aims at co-investing in and partnering with companies, thereby raising early-stage funding for innovation around the agreement process. Areas of interest of this new initiative are agreement process automation and workflows, AI and smart contract technology, digital payment platforms, identity verification and management, legal and compliance automation technologies, and vertical solutions in areas like mortgage and lending.

The company also expanded its global strategic partnership with Salesforce to develop joint solutions that will automate the contract process through AI-based smart solutions that enhance the customer experience of preparing, signing, and managing agreements, and also increase collaboration amongst organizations with Slack functionality.

The company’s shares have declined 24.6% over the past six months compared with 16.6% decline of the industry it belongs to.

DocuSign Price, Consensus and EPS Surprise

DocuSign Price, Consensus and EPS Surprise
DocuSign Price, Consensus and EPS Surprise

DocuSign price-consensus-eps-surprise-chart | DocuSign Quote

Quarter Details

Subscription revenues came in at $528.6 million, up 44% year over year. Professional services revenues increased 4% year over year to $16.9 million. Billings of $565.2 million were up 28% year over year.

Non-GAAP gross profit of $449.4 million increased 48.9% year over year. Non-GAAP gross margin of 82% improved 300 basis points (bps) year over year.

Non-GAAP operating profit of $122.2 million increased more than 100% year over year. Non-GAAP operating margin of 22% improved 900 basis points (bps) year over year.

DocuSign ended the quarter with cash and cash equivalent balance of $503.9 million compared with $518 million at the end of the previous quarter. The company generated $105.4 million of cash from operating activities and Capex was $15.4 million.

Guidance

For the fourth quarter of fiscal 2022, DocuSign expects revenues in the range of $557 million to $563 million, lower than the current Zacks Consensus Estimate of $573.03 million. Billings are expected between $647 million and $669 million.

Non-GAAP gross margin is anticipated to be between 81% and 82%. Non-GAAP operating margin is expected between 17% and 19%.

For fiscal 2022, DocuSign expects revenues in the range of $2.083 billion to $2.089 billion, higher than the current Zacks Consensus Estimate of $2.08 billion. Billings are expected between $2.335 billion and $2.347 billion.

Non-GAAP gross margin is anticipated to be between 81% and 82%. Non-GAAP operating margin is expected between 19% and 21%.

DocuSign currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Business Services Companies

Equifax EFX reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.

Equifax currently carries a Zacks Rank #3 (Hold) with the stock gaining 76.1% over the past year.

IQVIA Holdings IQV reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.

IQVIA Holdings also carries a Zacks Rank #3. Its stock gained 56.7% over the past year.

Omnicom OMC reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

Omnicom carries a Zacks #3 as well, with the stock gaining 6.2% over the past year.


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