DocuSign Share Price Plummets By 25%

DocuSign

The growth momentum of the Corona-based DocuSign (DOCU) recently slowed down again and caught investors on the wrong foot. The Californian e-signature and document management platform was able to exceed expectations in terms of sales in the first quarter. 

However they caused a shock reaction among investors with a weak forecast. At the end of last week, the share price fell by a quarter. This brings the share price losses in the 2022 stock market year to almost 60%.

DocuSign is Market Leader In Electronic Signatures

Before we go into the recent business development, I would like to present the business model of the US group in detail. Since its founding in 2003, DocuSign has made it its mission to accelerate business processes and make life easier for companies and people around the world. 

The company has pioneered the development of electronic signatures. DocuSign now helps companies link and automate the way contracts are prepared, signed, implemented and managed. This company is one of the market leaders in the field of electronic signatures.

Automation Saves Huge Costs And Ensures Rapid Uptake

The business approach is as simple as it is obvious: outdated, paper-based contract processes are replaced by digital processes. The DocuSign platform offers over 350 preconfigured integrations with popular business apps. In addition, the API allows DocuSign to be embedded and connected to the customer’s website, mobile apps, and custom workflows.

DocuSign now has approximately 1.24 million paying customers and hundreds of millions of users in more than 180 countries using DocuSign to create, upload and send documents that can be electronically signed by multiple parties.

Global Player Continues in Growth Mode

The company is now a true global player with more than 7,400 employees in 15 locations worldwide. In the past quarter, sales climbed to 588 million dollars. This was an impressive increase of 25.5% and was 6.8 million dollars above analysts’ expectations. Compared to the previous quarter (+35%), however, the growth rate declined.

Despite an interim easing of the Corona crisis, new customer acquisition was in full swing. In the first quarter of 2022, DocuSign gained 67,000 new customers to now a total of 1.24 million.

In the process, 96% of total revenue came from well-planned software subscriptions. Billings, meanwhile, increased 16% to $613.6 million. This metric represents the money actually billed to customers in a period.

DocuSign Slips Deeper Into The Red

The bottom line was a net loss of $27.37 million, down significantly from a net loss of $8.35 million in the year-ago quarter.

DocuSign CEO Dan Springer believes the company remains well positioned to benefit from secular trends. However, investors must continue to prepare for slowing growth rates in the future. Management anticipates revenues of between $2.470 billion and $2.482 billion for the current fiscal year.

This means that the technology group is targeting year-on-year growth of at least 17.6%, but this is nowhere near the historical growth rates (+45% last year). Investors are bitterly resentful of the slowdown in growth, as the recent slump in the share price makes clear.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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