Outcome: DocuSign inventory good points after optimistic outcomes

DocuSign enables individuals and companies to collect electronic signatures on documents.


DocuSign Inc.'s chairman of the board said Thursday that the company's stock is more than just a work-from-home name as the maker of technology that enables digital contracts once again beat earnings expectations.

Chief Executive Officer Dan Springer told MarketWatch that he anticipates the trends that are driving DocuSigns
+ 6.11%
A strong momentum this year and one that will last as customers find that the process of creating contracts electronically has far-reaching benefits in terms of cost and efficiency.

DocuSign revenue increased from $ 250 million to $ 382.9 million in the third quarter of fiscal year, while Analysts recorded by FactSet expected $ 361 million. Billings for the period increased from $ 269.4 million to $ 440.4 million. The FactSet consensus was $ 386.6 million.

Shares rose around 3% after close of trading on Thursday.

In addition to electronic signatures, DocuSign offers broader contract management services, including products that enable companies to analyze trends across the volume of past agreements. Springer said that part of the business saw accelerated growth earlier in the year, but some companies put these types of projects on hold because they were concerned about taking on complex projects in the middle of the pandemic. Now, according to Springer, this part of the business is recovering as the companies are better adapted to current reality.

Springer argued that the company was fighting against paper and not against other e-signature providers and that the market was less than 10% penetrated.

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DocuSign acquired Liveoak in July to improve its notary offerings. More states now allow remote notary services. DocuSign is initially focused on providing first-party notary services to companies like banks that have their own notaries that they use when customers sign contracts. Springer said the company also sees opportunities for third-party notary services, such as mom and pop stores, though these may take longer.

He argued that the pandemic could drive jurisdictions that currently don't allow remote notaries to reconsider their policies given the security benefits. "I think there will be almost ubiquitous coverage across the country in the near future," he said.

DocuSign posted a net loss of $ 58.5 million, or 31 cents per share, for the third quarter, compared to a loss of $ 46.6 million, or 26 cents per share, for the year-ago quarter. Adjusted, DocuSign earned 22 cents per share, up from 11 cents per share last year and before the FactSet consensus, which called for 13 cents per share.

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For the January quarter, DocuSign expects revenues of $ 404 to $ 408 million, while the FactSet consensus called for $ 387 million. The company also expects bills of $ 512 million to $ 522 million ahead of the FactSet consensus of $ 503.9 million.

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DocuSign's stock is up more than 200% so far this year than the S&P 500
has increased by 13%.

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