Big Announcement from DOCU: SOA

Hey DOCU Fools:

As I noted in my Ticker Take earnings report last week, one key area of growth for DocuSign is in the area of developing a Systems of Agreement Platform, see this post and thread:

https://discussion.fool.com/ticker-take-docu-q4-earnings-3415943…

DocuSign acquired Spring CM to advance this initiative. In the recent earnings Conference Call, CEO Springer discuss the effective integration of Spring CM. Well, today the company announced the launch of the DocuSign Agreement Cloud. You can take a look at the platform here:

https://www.docusign.com/products/agreement-cloud

Here are a few of the highlights from the press release announcing the launch:

**Included in the DocuSign Agreement Cloud are three new products announced today that simplify and accelerate document generation, identity verification, and click-to-agree scenarios. These are in addition to DocuSign’s flagship eSignature product, the recently acquired SpringCM offering for contract lifecycle management, and several other existing DocuSign products.

**Also included in the DocuSign Agreement Cloud are hundreds of integrations to other applications that touch the agreement process, such as those by Salesforce, Microsoft, Google, and SAP. Together, this comprehensive suite defines a new category of cloud software that potentially doubles DocuSign’s existing total available market to an estimated $50 billion globally.

**As part of today’s announcement, three new products are coming to market as part of the broader DocuSign Spring '19 Release.

DocuSign Gen for Salesforce, available on Salesforce AppExchange, enables sales reps and other users to automatically generate signature-ready contracts with a few clicks, directly from within Salesforce. This can result in faster deals, fewer errors, and greater productivity.

DocuSign Click allows organizations to capture consent to standard agreement terms on websites, such as a privacy policy, with a single click. These no-signature-required agreements are a new opportunity for DocuSign to replace in-house or custom solutions, which are costly to maintain and often lack DocuSign’s extensive auditability.

DocuSign ID Verification simply and securely automates the verification of government-issued IDs and European eIDs when they are used in confidential or sensitive transactions. For example, opening a bank account would normally require the signer to physically present a photo ID. DocuSign ID Verification allows this process to be digitized and automated, enabling signers to verify their identity on a mobile device from practically anywhere.

Here what Springer has to say about the launch:

“The DocuSign Agreement Cloud represents the future of our business—and the future is now,” added Springer. “The agreement cloud category is inevitable. It complements other huge categories like CRM, HCM, and ERP, which all connect to the agreement process. At DocuSign, we already lead e-signature. Now, we are broadening to address the entire agreement process.”

The launch of this platform is the first step in accelerating DOCU’s revenue growth and enhancing it Net Retention Rate, IMHO. FY20 is the year to see if this plays out as we hope.

BTW, I like the company’s tag line for the DocuSign Agreement Cloud: Let’s agree to agree, better."

Best, Swift…
Long DOCU
DOCU Ticker Guide

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This DocuBlog lists five new products/features

https://www.docusign.com/blog/unveiling-the-docusign-agreeme…

Denny Schlesinger

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Hey not sure if any of you are still in DOCU but today’s earnings report was disliked by Wall Street. Down 21% post earnings.
I’ve been in since last year. I don’t look at them as the same high growth flyers in the rest of my portfolio but a leader and innovator in their space.
Not sure if I want to sell out after this earnings.
It’s a very small position for me/

Forgot to post:

https://www.fool.com/premium/rule-breakers/coverage/1069/cov…

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Looking at the numbers the only thing that strikes me as negative is the 27% Billings growth. Management’s answer seems odd. Elongated sales cycle?? So did that suddenly start this quarter?

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“Elongated sales cycle,” or the equivalent of the kiss of death.

There should be a dictionary of earnings call phrases. That one would have tens or more of entries and never once a good thing. Not a one time.

The numbers looked good to me but the market saw something. That perhaps is the something.

I don’t own the shares so not of critical interest to me, but one has to wonder why CEOs are not better trained to avoid this standard lingo of doom.

I don’t know if it is dooming here, but such a track record that phrase.

Tinker

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The addition of System of Agreement and complexity of the deals could have possibly elongated the sales cycle but it seems so bogus of an explanation. To me it should have been offset by some of those other complex deals that actually closed quickly but were bigger.

This may be an example of why if given a choice of investing in e-signatures or a unique solution database you invest in the database, even if they are by far the leaders in e-signatures. It just seems to simple a product. And maybe that’s finally playing out but we’ll see. But that was my verdict on DOCU.

Yeah probably wall street playing the safe bet and sitting it out since as you said elongated sales cycle is going to last longer then a Q. Could trade flat for a while but I guess we’ll see.

Thanks

“Elongated sales cycle,” or the equivalent of the kiss of death.

Ha! you called it Tinker!

I just posted my Ticker Take on the quarter…and yes, Springer used that phrase…

Swift…
Long DOCU

Slower billings growth due to elongated sales cycles due to more complex and higher value product portfolio sounds plausible. However, if you are closing less deals than before but if each deal is larger (due to the higher value of products) should’nt the billings growth be the same? This being the first quarter they are selling this SOA product I am inclined to give this a pass. But if this trend of lower billings growth continues it suggests sales execution issues. One positive I observed is that they did raise their full year rev. guidance. If they had any doubts they would not have done that. Another reason I am holding.

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Hi Texmex:

You said: Slower billings growth due to elongated sales cycles due to more complex and higher value product portfolio sounds plausible. However, if you are closing less deals than before but if each deal is larger (due to the higher value of products) should’nt the billings be the same?

Yes; however, not in just one quarter, especially not the first quarter that the platform is offered. Their raise in year end guidance is an obvious sign that they believe this will smooth out over the course of the fiscal year.

Best, Swift…
Long DOCU

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Hi Swift
Agreed. That is kind of what I alluded to and my reason to hold. But if billings does not grow in the coming Q’s it will be a cause for concern.