DOCU stock rises as DocuSign revenue falls, but top estimates amid lowered expectations

DocuSign (DOCU) reported earnings and revenues for the July quarter that topped estimates amid lowered expectations. The company’s outlook was mixed, but DOCU shares rose on the news on Friday.


The San Francisco-based software maker reported earnings after the market closed on Thursday. DocuSign earnings for the fiscal second quarter came in at 44 cents per share, down 6% from a year earlier but ahead of estimates of 42 cents.

Additionally, the electronic signature software maker said revenue rose 22% to $622.2 million. Analysts had forecast revenue of $602 million. A year earlier, DocuSign earnings were 47 cents a share on sales of $512 million.

Billings, a sales growth measure, rose 9% to $647.7 million against estimates of $601.8 million.

DOCU stock fell 10.5% to close at 64.04 on the stock market today.

DOCU stock: More personal meetings hit Business

For the current quarter ending in October, DocuSign forecast revenue of $626 million at the midpoint of its outlook and billings of $589 million. Analysts had forecast third-quarter revenue of $625 million and billings of $593.4 million.

Demand for DocuSign products increased during the early part of the coronavirus outbreak, but many businesses are resuming face-to-face meetings. In addition to accommodating electronic signatures, the company’s software also automates the submission of contracts over the internet.

DocuSign has a search underway for a new CEO. Chairman Mary Wilderotter was appointed interim CEO on 21 June.

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“We thought the quarter/guide was better than feared, but we came away less confident of a timely turnaround to healthy growth and remain in wait-and-see mode for a new CEO,” RBC Capital analyst Rishi Jaluria said in a report. “DocuSign noted that the company is close to naming a new CEO, suggesting that M&A is off the table for now.”

So far in 2022, DOCU stock had retreated 63% heading into the earnings report. DocuSign has a relative strength rating of just 5 out of a possible 99, according to IBD Stock Checkup.

If you are new to IBD, consider taking a look at the stock trading system and CAN SLIM basics. Recognizing chart patterns for issues like DOCU stocks is a key to investment guidelines.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on wireless 5G, artificial intelligence, cyber security and the cloud.


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