DocuSign Stock Falls 30%. Growth Shows Signs of Slowing as Workers Return to Offices.
DocuSign reduced its forecast for billings for the full year.
Courtesy DocuSign
The Covid-era boost in demand for DocuSign
‘s service appears to be ebbing as more workers return to offices.
The e-signature software company posted quarterly earnings Thursday evening that showed signs of weakening demand and offered guidance for the current quarter that fell shy of estimates. Shares of DocuSign (ticker: DOCU) lost nearly one-fourth of their value in after-hours trading.
“After six quarters of accelerated growth, we saw customers return to more normalized buying patterns,” CEO Dan Springer said in a statement.
For its fiscal third quarter ended Oct. 31, DocuSign posted revenue of $545.5 million, up 42% from a year earlier, and ahead of both the company’s guidance range of $526 million to $532 million and the consensus of $530.7 million. Billings were $565.2 million, up 28%, but below the range of $585 million to $597 million management had told investors to expect.
For the fiscal fourth quarter ending Jan. 31, the company sees revenue of $557 million to $563 million, below the consensus call for $573.8 million. DocuSign expects fourth-quarter billings of $647 million to $659 million.
For the January 2022 fiscal year, the company now sees revenue of $2.083 billion to $2.089 billion, which compares to a previous range of $2.078 billion to $2.088 billion. DocuSign trimmed its full-year billings guidance to a range of $2.335 billion to $2.347 billion, from a previous range of $2.409 billion to $2.429 billion.
In an interview with Barron’s, Springer noted that the company has said for multiple quarters that the Covid-era lift in its business would eventually slow but the company’s October quarter guidance didn’t catch the deceleration in billings that unfolded during the period. He said the slowing was concentrated in the U.S.—growth was more robust in Europe and Asia—and in vertical markets that were strongest during the pandemic, including financial services, health care, and technology.
Springer said that some customers accelerated demand during the pandemic, in effect stockpiling digital signature capacity, and that consumption has returned to a more normal level. “We’d never been through a pandemic, so our forecasting was not everything you’d want it to be,” he said.
In late trading, DocuSign was down nearly 30% to $165.25, the stock’s lowest level in more than a year.
Write to Eric J. Savitz at [email protected]
