DocuSign shares fell as much as 24% in extended trading on Thursday after the electronic signature software vendor reported weaker-than-expected earnings in its fiscal first quarter.
Here’s how the company did:
- Earnings: 38 cents per share, adjusted, vs. 46 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $588.7 million, vs. $581.8 million as expected by analysts, according to Refinitiv.
For the quarter, which ended on April 30, DocuSign’s revenue grew 25% from a year earlier, according to a statement.
But as investors shift away from a focus on growth to profitability, DocuSign’s miss on earnings is overshadowing its beat on revenue. The stock is down 43% this year as of Thursday’s close, tumbling alongside the rest of the cloud software sector. On Thursday the company reported a net loss of $27.4 million, compared with a net loss of $8.3 million in the year-ago quarter.
DocuSign experienced a wave of growth when the coronavirus arrived and many transactions went online. That pace of business has slowed in recent quarters, and now it’s working to fix go-to-market challenges, CEO Dan Springer said on a conference call with analysts.
The company is moderating its hiring plan “to appropriately balance growth and profitability,” Springer said, noting that the Great Resignation trend of people leaving jobs has brought turnover in the company’s sales organization.
Plus, the macroeconomic environment became more challenging during the quarter, said Cynthia Gaylor, DocuSign’s finance chief.
For the second quarter, DocuSign called for revenue of $600 million to $604 million. The middle of the range, at $602 million, was just above the Refinitiv consensus of $601.7 million.
And for all of 2023, DocuSign sees $2.47 billion to $2.48 billion in revenue, compared to the $2.479 billion Refinitiv consensus.
Earlier this week DocuSign announced an expansion of its partnership with Microsoft.
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