DocuSign earnings

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1

https://investor.docusign.com/investors/press-releases/press…

Revenue: $511.8 M (49.6% YoY, 9% sequentially)
Subscription: $492.8 M (52.3% YoY, 9% sequentially)
Services: $19.1 M (2.61% YoY, 11.3% sequentially)
Billings: 595.4 M (46.8% YoY, 12.9% sequentially)
Enterprise Customers: 148 (8.82% sequentially)

300k Customers: 714 (6.09% sequentially)

Guidance
Revenue: $532 M (3.94% sequentially)
Billings: $597 M (0.27% sequentially)
Full year billings: $2.4 B (18.9% sequentially from Q3, so this was strange, it means Q3 sucked but Q4 looks a lot better, not sure how this works, but I think this is probably why the stock isn’t tanking 15%)

Pretty meh report. I sold 25% already, still digesting the rest. Everything slowed down pretty materially. CrowdStrike’s report was better despite it being “decent” at best.

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Full year billings: $2.4 B (18.9% sequentially from Q3, so this was strange, it means Q3 sucked but Q4 looks a lot better, not sure how this works, but I think this is probably why the stock isn’t tanking 15%)

Revenue forecast is similarly strange. FY forecast of $2078 to $2088. Q4 midpoint of $573 is 8.3% increase from Q3 midpoint of $529. They’ve never forecast as high as 8.3% in any of the quarters I’ve tracked.

	Revenue			F/cast	F/cast		
	($m)	QoQ	YoY	(mid)	Low	Mid	High
1Q20	$214 						
2Q20	$236 	10.1%		2.8%	$218 	$220 	$222 
3Q20	$250 	5.9%		1.4%	$237 	$239 	$241 
4Q20	$274 	10.0%		6.2%	$263 	$265 	$267 
1Q21	$297 	8.2%	38.8%	2.8%	$280 	$282 	$284 
2Q21	$342 	15.2%	45.2%	7.1%	$316 	$318 	$320 
3Q21	$383 	11.9%	53.5%	5.2%	$358 	$360 	$362 
4Q21	$431 	12.5%	57.0%	6.0%	$404 	$406 	$408 
1Q22	$469 	8.8%	57.9%	1.2%		$436 	
2Q22	$512 	9.2%	49.6%	2.8%	$479 	$482 	$485 
3Q22				3.3%	$526 	$529 	$532 
4Q22				8.3%	$571 	$573 	$575
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You beat me to the punch, but we’re reaching close to the same conclusions.

Best,

bulwnkl

4

I had similar initial thoughts.

I was hoping for a bigger beat. Although my own model, which is pretty conservative, only forecasted 40% growth over the next 12 months, which I’m sure they will beat handily.

The presentation that went with the earnings has some interesting slides:

https://s22.q4cdn.com/408980645/files/doc_financials/2022/q2…

Slide 9, to me is key, which shows +77% growth in international, although it is still only 22% of total revenue.

Docusign, to me, is a long term hold. My expectation is that there is still a lot of room for international growth in the near term for the core e-signature business, and then that will hopefully be followed after by meaningful contribution from the eAgreement cloud products. So I’m fine with their only growing at 50% right now, especially if it doesn’t slow much further too soon. But things change quick, so will definitely have to keep an eye on them.

Did anyone else try listening to their earnings call? It sounded terrible, at least to me. You could hear the operator and the analysts perfectly clear and crisp, but any time that one of the three members of management started speaking (e.g. most of the call), there was this loud feedback on the microphone they were using and it was legitimately painful to listen to. I tried playing it on a couple different devices but it was clearly coming from management’s IT setup. As soon as the MDB call started, I just turned off DOCU’s and jumped right over. I’ll have to wait for the transcript before I can hear how most of the Docusign Q&A went.

Overall, their quarter seems relatively solid, but even despite the deceleration this quarter, if they can keep growing around 50% or even in the mid 40%'s for another year or two, and then grow close to 40% for a couple more years, I expect DOCU will continue to be a really good investment. Unless something major changes, I doubt I will adjust my 15% DOCU allocation very much, at least until we start to see how soon, and how significantly, the eAgreement cloud starts to contribute, which will still likely be at least another 12-24 months away, which does sound a bit like a lifetime right now.

I’m definitely curious to see how other are interpreting these results and guidance

-mekong

24 Likes
5

Runnerguy-
Full year billings: $2.4 B (18.9% sequentially from Q3, so this was strange, it means Q3 sucked but Q4 looks a lot better, not sure how this works, but I think this is probably why the stock isn’t tanking 15%)

I never did put much faith in guidance in the first place. I’m out. Sold my 5% position AH.

I appreciate the move to higher margins - makes me think CLM is moving along. I’m just not waiting around for it with this kind of deceleration in Revenue and Billings growth.

Best,

Jason

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