DocuSign Inc. tops consensus earnings, revenue estimates

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DocuSign Inc. tops consensus earnings, revenue estimates
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DocuSign Inc . (NASDAQ: DOCU ) shares dipped slightly premarket Friday after the company's latest quarterly earnings release.

The company reported third-quarter earnings of $0.79 per share, $0.16 better than the analyst estimate of $0.63. Revenue for the quarter came in at $700.4 million, up 9% YoY and above the consensus estimate of $690.26 million.

DOCU's subscription revenue was $682.4 million, representing an increase of 9% year-over-year, while professional services and other revenue was $18.1 million, representing a decrease of 16% year-over-year. Billings were $691.8 million, an increase of 5% year-over-year.

"DocuSign had a solid third quarter, delivering record non-GAAP operating margin and free cash flow," commented Allan Thygesen, CEO of DocuSign. "We are making progress on product innovation, go-to-market effectiveness, and operational efficiency as we build on our considerable scale and trusted market position and expand beyond e-signature into intelligent agreement management."

Looking ahead, DocuSign sees Q4 2024 (ending January 31, 2024) revenue between $696 and $700 million, above the consensus of $693.73 million. FY2024 revenue is expected to come in from $2.746 billion to $2.75 billion, versus the consensus of $2.73 billion.

Reacting to the report, analysts at Evercore ISI commented that the company reported a solid third-quarter and operating margin upside, but the macro headwinds still linger.

"DocuSign delivered solid F3Q results, highlighted by total revenue growth of ~8.5% vs. our/Street estimates of 6.6%/6.9%, and billings growth of ~4.9% ahead of our/Street estimates of ~1.6%/2%," the analysts remarked. "Margins of ~26.8% were well ahead of expectations as the company continues to focus on efficiency while still investing for growth, primarily in R&D."

"While the macro continues to put pressure on NRR/expansion activity, management expects continued innovation as well as a bigger push internationally to allow NRR/growth to stabilize as the macro improves. While we are encouraged by the improving execution and pockets of consumption improvement, we remain on the sidelines for now until we see more clear signs of reacceleration and evidence that the broader Agreement vision starts to bear fruits," they added.

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